<PAGE>
                                                                   EXHIBIT 19.1


                    FIDUCIARY CAPITAL PENSION PARTNERS, L.P.
--------------------------------------------------------------------------------








                          ----------------------------
                             SECOND QUARTER REPORT
                                      2001

<PAGE>


                    FIDUCIARY CAPITAL PENSION PARTNERS, L.P.
--------------------------------------------------------------------------------

                              MESSAGE TO INVESTORS

Dear Investor:

As of June 30, 2001, the Fund's net asset value per Unit was $0.66 and the Fund
held portfolio investments in three companies.

PORTFOLIO UPDATE

R.B.M. Precision Metal Products, Inc. ("RBM") On April 5, 2001, RBM (i) prepaid
the $1,290,000 of RBM notes held by the Fund at par, plus accrued interest, and
(ii) repurchased its common stock and warrants held by the Fund for $46,909.

Niigata Engineering Co., Ltd. ("Niigata") The Fund holds non-interest-bearing
receivables, which were purchased from LMC Corporation ("LMC") at a discount.
The Fund received the most recent semiannual payment from Niigata during May
2001. There are two remaining payments, which are due on November 21, 2001 in
the amount of $25,361 and on May 21, 2002 in the amount of $28,179.

LMC Corporation and WasteMasters, Inc. There have been no significant
developments with regard to the Fund's investments in LMC and WasteMasters, Inc.
since the Fund's previous report. See Note 5 to the financial statements and
Management's Discussion and Analysis for a current description of these
investments.

PERIODIC UNIT REPURCHASE POLICY

Pursuant to the terms of the Fund's periodic unit repurchase policy, the Fund
has annually offered to purchase from Investors, up to 7.5% of its outstanding
Units for an amount equal to the current net asset value per Unit, net of a 2%
fee, which is retained by the Fund to offset expenses incurred in connection
with the Repurchase Offer. If the number of tendered Units in any year exceeds
7.5% of the outstanding Units, the Fund's General Partners may vote to
repurchase up to an additional 2% of the outstanding Units. If Units in excess
of this amount are tendered, Units are repurchased on a prorated basis, after
giving priority to Investors owning less than 100 Units.

The 2001 Repurchase Offer will occur during the fourth quarter of 2001. The
Repurchase Offer schedule provides for a mailing to Investors on October 9, 2001
and the deadline for tendering Units for repurchase will be October 31, 2001.
The repurchase price will be based on the net asset value per Unit on November
14, 2001 and payment for tendered Units will be made on November 21, 2001.


                          ----------------------------
                                      ONE

<PAGE>

                    FIDUCIARY CAPITAL PENSION PARTNERS, L.P.
--------------------------------------------------------------------------------

DISSOLUTION AND LIQUIDATION OF THE FUND

In accordance with the Fund's Partnership Agreement, the Fund's term expired on
December 31, 2000. Accordingly, as provided for in the Agreement, the
dissolution of the Fund was effective as of December 31, 2000. The General
Partners are now proceeding with the final liquidation and distribution of the
Fund's assets in accordance with a plan of liquidation that was adopted by the
General Partners on March 2, 2001.

It is currently anticipated that the final liquidation of the Fund will be
completed prior to December 31, 2001. A cash distribution of $1.00 per Unit was
paid to Investors on May 10, 2001 and it is anticipated that the Fund will make
one additional cash distribution during 2001. It is currently expected that this
additional distribution will be less than $0.50 per Unit.

                              * * * * * * * * * *

If you have any questions concerning your investment in the Fund, please call us
at 800-866-7607.

Sincerely,


/s/ PAUL BAGLEY

Paul Bagley, Chairman
FCM Fiduciary Capital Management Company


/s/ W. DUKE DEGRASSI

W. Duke DeGrassi, President
FCM Fiduciary Capital Management Company

August 19, 2001



                          ----------------------------
                                      TWO
<PAGE>

                    FIDUCIARY CAPITAL PENSION PARTNERS, L.P.
--------------------------------------------------------------------------------
                            SCHEDULE OF INVESTMENTS


<Table>
<Caption>
JUNE 30, 2001 (UNAUDITED)
--------------------------------------------------------------------------------
PRINCIPAL
AMOUNT/                                INVESTMENT     AMORTIZED             % OF TOTAL
SHARES       INVESTMENT                   DATE          COST        VALUE   INVESTMENTS
---------    ----------                ----------     ---------     -----   -----------
<S>          <C>                        <C>           <C>           <C>     <C>
MANAGED COMPANIES:

$1,632,960    LMC Corporation, 12.00%
              Senior Subordinated        11/01/96
              Revolving Notes             through
              due 10/31/00(1)            01/13/99    $1,632,960     $     1

$14,096       LMC Corporation, 12.00%    02/07/00
              Promissory Notes            through
              due 8/7/00(2)              04/11/00        14,096           1
                                                     ----------     -------     -----
                                                      1,647,056           2       0.0%
                                                     ----------     -------     -----
    Total Investments in Managed Companies
      (0.0% of net assets)                            1,647,056           2       0.0
                                                     ----------     -------     -----

NON-MANAGED COMPANIES:

$53,540       Niigata Engineering        12/01/99
              Co., Ltd.,                  through
              Receivables(3)             12/10/99        49,961      49,961
                                                     ----------     -------     -----
                                                         49,961      49,961     100.0
                                                     ----------     -------     -----
821,376 sh.   WasteMasters, Inc.,
              Common Stock(4)*           06/03/98     1,097,307           1
                                                     ----------     -------     -----
                                                      1,097,307           1       0.0
                                                     ----------     -------     -----
    Total Investment in Non-Managed Companies
      (11.2% of net assets)                           1,147,268      49,962     100.0
                                                     ----------     -------     -----
    Total Investments (11.2% of net assets)          $2,794,324     $49,964     100.0%
                                                     ==========     =======     =====
</Table>

(1)  The accrual of interest on the notes was discontinued by the Fund effective
     July 1, 1999.

(2)  The Fund has not accrued any interest on these notes.

(3)  These are non-interest bearing receivables, which were purchased from LMC
     Corporation ("LMC") at a discount. Payments are due on November 21, 2001 in
     the amount of $25,361 and on May 21, 2002 in the amount of $28,179.

(4)  See Note 5 regarding significant issues concerning the ownership and
     transferability of this stock.

 *   Non-income producing security.

     The accompanying notes to financial statements are an integral part of
                                 this schedule.



                          ----------------------------
                                      THREE
<PAGE>

                    FIDUCIARY CAPITAL PENSION PARTNERS, L.P.
--------------------------------------------------------------------------------
                                 BALANCE SHEETS


<Table>
<Caption>
JUNE 30, 2001 AND DECEMBER 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
                                                       2001           2000
                                                       ----           ----
<S>                                                 <C>            <C>
ASSETS:
  Investments:
    Portfolio investments, at value:
       Managed companies (amortized cost -
         $1,647,056 and $2,986,240, respectively)   $         2    $ 1,336,911
       Non-managed companies (amortized cost -
         $1,147,268 and $1,168,992, respectively)        49,962         71,686
            Total investments                            49,964      1,408,597
                                                    -----------    -----------
  Cash and cash equivalents                             518,862            100
  Accrued interest receivable                             1,601         17,772
  Other assets                                            8,085         20,514
                                                    -----------    -----------
    Total assets                                    $   578,512    $ 1,446,983
                                                    ===========    ===========
LIABILITIES:
  Payable to affiliates                             $    25,894    $     4,950
  Accounts payable and accrued liabilities              105,381        111,089
                                                    -----------    -----------
    Total liabilities                                   131,275        116,039
                                                    -----------    -----------

COMMITMENTS AND CONTINGENCIES

NET ASSETS:
  Managing General Partner                              (83,850)      (124,842)
  Limited Partners (equivalent to $0.66
    and $1.81 respectively, per limited
    partnership unit based on 805,741
    units outstanding)                                  531,087      1,455,786
                                                    -----------    -----------
      Net assets                                        447,237      1,330,944
                                                    -----------    -----------
         Total liabilities and net assets           $   578,512    $ 1,446,983
                                                    ===========    ===========
</Table>


  The accompanying notes to financial statements are an integral part of these
                             financial statements.


                          ----------------------------
                                      FOUR
<PAGE>

                    FIDUCIARY CAPITAL PENSION PARTNERS, L.P.
--------------------------------------------------------------------------------
                            STATEMENTS OF OPERATIONS


<Table>
<Caption>
FOR THE THREE MONTHS ENDED JUNE 30, 2001 AND 2000 (UNAUDITED)
--------------------------------------------------------------------------------
                                                       2001         2000
                                                       ----         ----
<S>                                                 <C>          <C>
INVESTMENT INCOME:
  Income:
     Interest                                       $  11,787    $  51,451
                                                    ---------    ---------
       Total investment income                         11,787       51,451
                                                    ---------    ---------
  Expenses:
     Fund administration fees                          31,132       29,582
     Administrative expenses                           17,576       17,224
     Independent General Partner fees
       and expenses                                    10,440       11,214
     Professional fees                                  7,178        3,285
     Other expenses                                    14,735       33,721
     Investment advisory fees                              --       19,185
                                                    ---------    ---------
       Total expenses                                  81,061      114,211
                                                    ---------    ---------
NET INVESTMENT LOSS                                   (69,274)     (62,760)
                                                    ---------    ---------
REALIZED AND UNREALIZED GAIN (LOSS)
  ON INVESTMENTS:
     Net realized loss on investments                  (2,275)          --
     Net change in unrealized loss on investments       2,275           --
                                                    ---------    ---------
       Net loss on investments                             --           --
NET DECREASE IN NET ASSETS                          ---------    ---------
   RESULTING FROM OPERATIONS                        $ (69,274)   $ (62,760)
                                                    =========    =========
</Table>


  The accompanying notes to financial statements are an integral part of these
                             financial statements.


                          ----------------------------
                                      FIVE
<PAGE>

                    FIDUCIARY CAPITAL PENSION PARTNERS, L.P.
--------------------------------------------------------------------------------
                            STATEMENTS OF OPERATIONS

<Table>
<Caption>
FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000 (UNAUDITED)
--------------------------------------------------------------------------------
                                                       2001        2000
                                                       ----        ----
<S>                                                 <C>          <C>
INVESTMENT INCOME:
  Income:
     Interest                                       $  55,271    $ 104,866
                                                    ---------    ---------
       Total investment income                         55,271      104,866
                                                    ---------    ---------
  Expenses:
     Fund administration fees                          61,747       59,164
     Administrative expenses                           35,035       34,448
     Independent General Partner fees
       and expenses                                    20,904       21,701
     Professional fees                                 14,597       22,246
     Other expenses                                    33,808       54,332
     Investment advisory fees                              --       38,370
                                                    ---------    ---------
       Total expenses                                 166,091      230,261
                                                    ---------    ---------
NET INVESTMENT LOSS                                  (110,820)    (125,395)
                                                    ---------    ---------
REALIZED AND UNREALIZED GAIN (LOSS)
  ON INVESTMENTS:
     Net realized loss on investments                  (2,275)          --
     Net change in unrealized loss on investments       2,275           --
                                                    ---------    ---------
       Net loss on investments                             --           --
                                                    ---------    ---------
NET DECREASE IN NET ASSETS
   RESULTING FROM OPERATIONS                        $(110,820)   $(125,395)
                                                    =========    =========
</Table>

  The accompanying notes to financial statements are an integral part of these
                             financial statements.


                          ----------------------------
                                       SIX
<PAGE>

                    FIDUCIARY CAPITAL PENSION PARTNERS, L.P.
--------------------------------------------------------------------------------
                            STATEMENTS OF CASH FLOWS


<Table>
<Caption>
FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000 (UNAUDITED)
--------------------------------------------------------------------------------
                                                             2001           2000
                                                             ----           ----
<S>                                                      <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net decrease in net assets resulting from
     operations                                          $  (110,820)   $  (125,395)
  Adjustments to reconcile net decrease in net assets
     resulting from operations to net cash used in
     operating activities:
        Accreted discount on portfolio investments            (3,637)       (16,225)
        Change in assets and liabilities:
           Accrued interest receivable                        16,171          1,069
           Other assets                                       12,429         15,517
           Payable to affiliates                              20,944         37,203
           Accounts payable and accrued liabilities           (5,708)        (4,248)
        Net realized loss on investments                       2,275             --
        Net change in unrealized loss on investments          (2,275)            --
                                                         -----------    -----------
           Net cash used in operating activities             (70,621)       (92,079)
                                                         -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of portfolio investments                              --        (94,602)
   Proceeds from dispositions of portfolio investments     1,362,270         36,931
   Sale of temporary investments, net                             --        374,820
                                                         -----------    -----------
     Net cash provided by investing activities             1,362,270        317,149
                                                         -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
   General Partner capital contributions                      40,993             --
   Cash distributions paid to partners                      (813,880)      (263,575)
                                                         -----------    -----------
     Net cash used in financing activities                  (772,887)      (263,575)
                                                         -----------    -----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS         518,762        (38,505)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                 100        130,566
                                                         -----------    -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD               $   518,862    $    92,061
                                                         ===========    ===========
</Table>

      The accompanying notes to financial statements are an integral part
                         of these financial statements.


                          ----------------------------
                                      SEVEN
<PAGE>

                    FIDUCIARY CAPITAL PENSION PARTNERS, L.P.
--------------------------------------------------------------------------------
                       STATEMENTS OF CHANGES IN NET ASSETS

<Table>
<Caption>
FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND FOR
THE YEAR ENDED DECEMBER 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
                                                         2001           2000
                                                         ----           ----
<S>                                                  <C>            <C>
(Decrease) increase in net assets from operations:
   Net investment loss                               $  (110,820)   $  (222,801)
   Net realized loss on investments                       (2,275)    (5,131,299)
   Net change in unrealized loss on investments            2,275      5,996,978
                                                     -----------    -----------
   Net (decrease) increase in net assets
       resulting from operations                        (110,820)       642,878
General Partner capital contributions                     40,993         28,831
Distributions                                           (813,880)            --
Repurchase of limited partnership units                       --        (28,184)
                                                     -----------    -----------
   Total (decrease) increase in net assets              (883,707)       643,525
Net assets:
   Beginning of period                                 1,330,944        687,419
                                                     -----------    -----------
   End of period (including no undistributed
     net investment income)                          $   447,237    $ 1,330,944
                                                     ===========    ===========
</Table>


      The accompanying notes to financial statements are an integral part
                         of these financial statements.


                          ----------------------------
                                      EIGHT
<PAGE>

                    FIDUCIARY CAPITAL PENSION PARTNERS, L.P.
--------------------------------------------------------------------------------
                       SELECTED PER UNIT DATA AND RATIOS
                                  (UNAUDITED)

<Table>
<Caption>
                                           FOR THE THREE MONTHS            FOR THE SIX MONTHS
                                                ENDED JUNE 30,                ENDED JUNE 30,
                                           --------------------            -------------------
                                           2001            2000            2001            2000
                                           ----            ----            ----            ----
<S>                                     <C>             <C>             <C>             <C>
PER UNIT DATA:
   Investment Income                    $        --     $      0.06     $      0.06     $      0.12
   Expenses                                   (0.10)          (0.13)          (0.21)          (0.26)
                                        -----------     -----------     -----------     -----------
     Net Investment loss                      (0.10)          (0.07)          (0.15)          (0.14)
   Distributions Declared to Partners         (1.00)             --           (1.00)             --
                                        -----------     -----------     -----------     -----------
     Net Decrease in net asset value          (1.10)          (0.07)          (1.15)          (0.14)
       Net Asset Value:
         Beginning of Period                   1.76            0.91            1.81            0.98
                                        -----------     -----------     -----------     -----------
         End of Period                  $      0.66     $      0.84     $      0.66     $      0.84
                                        ===========     ===========     ===========     ===========
RATIOS (ANNUALIZED):
   Ratio of expenses to average
     net assets                               36.91%          76.60%          32.27%          73.71%
   Ratio of net investment loss
     to average net assets                   (31.75)%        (42.09)%        (21.53)%        (40.14)%
Number of limited partnership
   units at end of period                   805,741         869,796         805,741         869,796
</Table>

         The accompanying notes to financial statements are an integral
                part of these selected per unit data and ratios.


                          ----------------------------
                                      NINE
<PAGE>

                    FIDUCIARY CAPITAL PENSION PARTNERS, L.P.
--------------------------------------------------------------------------------
                          NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2001 (UNAUDITED)

1. GENERAL

The accompanying unaudited interim condensed financial statements include all
adjustments (consisting solely of normal recurring adjustments) which are, in
the opinion of FCM Fiduciary Capital Management Company ("FCM"), the Managing
General Partner of Fiduciary Capital Pension Partners, L.P. (the "Fund"),
necessary to fairly present the financial position of the Fund as of June 30,
2001 and the results of its operations, changes in net assets and its cash flows
for the period then ended.

These financial statements should be read in conjunction with the Significant
Accounting Policies and other Notes to Financial Statements included in the
Fund's annual audited financial statements for the year ended December 31, 2000.

2.INVESTMENT ADVISORY FEES

As compensation for its services as investment adviser, FCM was entitled to
receive, subject to certain limitations, a subordinated monthly fee at the
annual rate of 1% of the Fund's available capital, as defined in the Partnership
Agreement. The investment advisory fees for 2000 were not paid during 2000 due
to the failure of the Fund to satisfy the applicable subordination provisions.
During March 2001, in connection with the adoption of the plan of liquidation
for the Fund, FCM permanently waived its rights to receive any future investment
advisory fees from the Fund, retroactive to January 1, 2000. As a result, the
quarterly accruals for investment advisory fees that were made during 2000 were
reversed as of December 31, 2000 and the Fund did not record any investment
advisory fees during the six months ended June 30, 2001.

3. FUND ADMINISTRATION FEES

As compensation for its services as fund administrator, FCM receives a monthly
fee at the annual rate of 0.45% of net proceeds available for investment, as
defined in the Partnership Agreement. Fund administration fees of $61,747 were
paid by the Fund for the six months ended June 30, 2001. FCM is also reimbursed,
subject to various limitations, for administrative expenses incurred in
providing accounting and investor services to the Fund. The Fund reimbursed FCM
for administrative expenses of $35,035 for the six months ended June 30, 2001.


                          ----------------------------
                                       TEN
<PAGE>

                    FIDUCIARY CAPITAL PENSION PARTNERS, L.P.
--------------------------------------------------------------------------------
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)


4. INDEPENDENT GENERAL PARTNER FEES AND EXPENSES

As compensation for services rendered to the Fund, each of the Independent
General Partners receives from the Fund and Fiduciary Capital Partners, L.P., an
affiliated fund, (collectively, the "Funds") an annual fee of $30,000, payable
monthly in arrears, together with all out-of-pocket expenses. Each Fund's
allocation of these fees and expenses is based on the relative number of
outstanding Units. Fees and expenses paid by the Fund for the six months ended
June 30, 2001 totaled $20,904.

5. COMMITMENTS AND CONTINGENCIES

WasteMasters, Inc. ("WasteMasters") The Fund acquired its WasteMasters stock,
which trades on the OTC Bulletin Board System, from Nikko Trading of America
Corporation ("Nikko") on June 3, 1998. The stock was subject to a 24-month
lock-up period through May 2000. Upon expiration of the lock-up period, the Fund
requested that WasteMasters issue the Fund a new stock certificate without the
restrictive legend that existed on the Fund's original certificate, so that the
stock could be sold. WasteMasters refused to comply with this request because of
a court order during March 2000 that authorized the cancellation of all
WasteMasters stock that had been issued to Nikko, including the shares that
Nikko had previously transferred to the Fund. At this time, the Fund is
uncertain as to how, or when, these issues regarding the ownership and
transferability of its WasteMasters stock will be resolved. The Fund has
retained counsel and WasteMasters' attorneys are considering the Fund's request
to be treated as a bona fide purchaser of the shares from Nikko. Others are in
the same position as the Fund and have requested similar treatment.
WasteMasters' attorneys have indicated that they will not be in a position to
make a determination as to the Fund's position as a bona fide purchaser until
other ongoing litigation is resolved. There can be no assurance that a
conclusion favorable to the Fund will be achieved, or that a determination will
be made prior to the final liquidation of the Fund.


                          ----------------------------
                                     ELEVEN
<PAGE>

                    FIDUCIARY CAPITAL PENSION PARTNERS, L.P.
--------------------------------------------------------------------------------
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                       FINANCIAL CONDITION AND RESULTS OF
                                   OPERATIONS


The following discussion should be read in conjunction with the Fund's unaudited
Financial Statements and the Notes thereto. This report contains, in addition to
historical information, forward-looking statements that include risks and other
uncertainties. The Fund's actual results may differ materially from those
anticipated in these forward-looking statements. While the Fund cannot always
predict what factors would cause actual results to differ materially from those
indicated by the forward-looking statements, factors that might cause such a
difference include general economic and business conditions, competition and
other factors discussed elsewhere in this report. Readers are urged to consider
statements that include the terms "believes", "expects", "plans", "anticipates",
"intends" or the like to be uncertain and forward-looking. The Fund undertakes
no obligation to release publicly any revisions to these forward-looking
statements to reflect events or circumstances after the date hereof or to
reflect the occurrence of anticipated or unanticipated events.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2001, the Fund held portfolio investments in one Managed Company
and two Non-Managed Companies, with an aggregate original cost of approximately
$2.8 million. The value of these portfolio investments, which were made through
the reinvestment of proceeds from the sale of other portfolio investments,
represents approximately 11.2% of the Fund's net assets as of June 30, 2001.

The Fund's investment period ended on December 31, 1995. Although the Fund has
been permitted to make additional investments in existing portfolio companies
since 1995, the Fund is no longer permitted to acquire investments in new
portfolio companies. Consequently, the Fund has been in a liquidation mode since
1995.

As provided for in the Partnership Agreement, the Fund's term expired, and the
dissolution of the Fund was effective, as of December 31, 2000. The General
Partners are proceeding with the final liquidation and distribution of the
Fund's assets in accordance with a plan of liquidation that was adopted by the
General Partners on March 2, 2001. It is currently anticipated that the
liquidation of the Fund will be completed prior to December 31, 2001. A cash
distribution of $1.00 per Unit was paid to Limited Partners on May 10, 2001 and
it is anticipated that the Fund will make one or more additional cash
distributions during 2001. It is currently anticipated that these additional
distributions will total less than $0.50 per Unit.

On April 5, 2001, R.B.M. Precision Metal Products, Inc. ("RBM") (i) prepaid the
$1,290,000 of RBM notes held by the Fund at par, plus accrued interest, and (ii)
repurchased its common stock and warrants held by the Fund for $46,909.


                          ----------------------------
                                     TWELVE
<PAGE>

                    FIDUCIARY CAPITAL PENSION PARTNERS, L.P.
--------------------------------------------------------------------------------
As of June 30, 2001, the Fund's remaining liquid assets were invested in money
market funds. These funds are available to fund the 2001 repurchase offer, to
pay Fund expenses and for distribution to the partners. The Fund does not
anticipate making any additional follow-on investments in existing portfolio
companies.

Pursuant to the terms of the Fund's periodic unit repurchase policy, the Fund
has annually offered to purchase from its Limited Partners, up to 7.5% of its
outstanding Units for an amount equal to the current net asset value per Unit,
net of a fee (not to exceed 2%) to be retained by the Fund to offset expenses
incurred in connection with the repurchase offer. If the number of tendered
Units in any year exceeds 7.5% of the outstanding Units, the Fund's General
Partners may vote to repurchase up to an additional 2% of the outstanding Units.
If Units in excess of this amount are tendered, Units are purchased on a pro
rata basis after giving priority to Limited Partners owning less than 100 Units.

If, as presently anticipated, the liquidation of the Fund is not completed prior
to October 2001, the Fund will make a repurchase offer during October 2001. If
the plan of liquidation is proceeding as anticipated, the net asset value per
Unit at the time of the repurchase offer is anticipated to be a nominal amount.

Accrued interest receivable decreased $16,171 from $17,772 at December 31, 2000
to $1,601 at June 30, 2001. This decrease resulted primarily from the prepayment
of the RBM notes as of April 5, 2001.

Payables to affiliates increased $20,944 from $4,950 at December 31, 2000 to
$25,894 at June 30, 2001. This increase resulted primarily from an increase in
the amount of reimbursements due FCM for expenses incurred on behalf of the
Fund.

RESULTS OF OPERATIONS

                         INVESTMENT INCOME AND EXPENSES

The Fund's net investment loss was $69,274 for the three months ended June 30,
2001 as compared to a net investment loss of $62,760 for the corresponding
period of the prior year. Net investment loss per limited partnership unit
increased from $0.07 to $0.10 and the ratio of net investment loss to average
net assets decreased from 42.09% to 31.75% for the three months ended June 30,
2001 as compared to the corresponding period of the prior year.

The Fund's net investment loss was $110,820 for the six months ended June 30,
2001 as compared to a net investment loss of $125,395 for the corresponding
period of the prior year. Net investment loss per limited partnership unit
increased from $0.14 to $0.15 and the ratio of net investment loss to average
net assets decreased from 40.14% to 21.53% for the six months ended June 30,
2001 as compared to the corresponding period of the prior year.


                          ----------------------------
                                    THIRTEEN
<PAGE>

                    FIDUCIARY CAPITAL PENSION PARTNERS, L.P.
--------------------------------------------------------------------------------
The net investment losses for both the three and six month periods ended June
30, 2001 decreased primarily as a result of a decrease in total expenses as
compared to the corresponding period of the prior year. The impact of the
decrease in total expenses was partially offset by a decrease in investment
income.

Investment income decreased $39,664 and $49,595, or 77.1% and 47.3%, for the
three and six month periods ended June 30, 2001, as compared to the
corresponding period of the prior year. These decreases resulted primarily from
the sale of the Fund's RBM notes during April 2001, a decrease in the amount of
the Fund's temporary and money market investments, and a decrease in the balance
of the Niigata Engineering Co., Ltd. ("Niigata") receivables. The amount of the
Fund's temporary and money market investments decreased because of cash
distributions made by the Fund during February 2000 and May 2001 that
constituted a return of capital, the Fund's repurchase of 7.36% of its Units
during the fourth quarter of 2000, and operating losses incurred by the Fund.
These decreases were partially offset by the proceeds received from the sale of
the Fund's RBM investments during April 2001. The balance of the Niigata
receivables decreased because of payments received from Niigata during May and
November of 2000 and May 2001.

Total expenses decreased $33,150 and $64,170, or 29.0% or 27.9%, for the three
and six month periods ended June 30, 2001, as compared to the corresponding
period of the prior year. These decreases resulted primarily from decreases in
investment advisory fees, professional fees and other expenses.

The Fund's obligation to pay the monthly investment advisory fees to FCM was
subject to the Fund satisfying applicable subordination provisions as set forth
in the Partnership Agreement. The investment advisory fees were not paid during
2000 due to the failure of the Fund to satisfy these subordination provisions.
During March 2001, in connection with the adoption of the plan of liquidation
for the Fund, FCM permanently waived its rights to receive any future investment
advisory fees from the Fund, retroactive to January 1, 2000. As a result, the
quarterly accruals for investment advisory fees that were made during 2000 were
reversed as of December 31, 2000 and the Fund did not record any investment
advisory fees during the six months ended June 30, 2001.

The decreases in professional fees for the six months ended June 30, 2001 and in
other expenses for both the three and six month periods ended June 30, 2001
resulted primarily from decreases in legal fees and other expenses incurred in
connection with the Fund's investments in LMC Corporation ("LMC").

                       REALIZED GAIN (LOSS) ON INVESTMENTS

On April 5, 2001, RBM (i) prepaid the $1,290,000 of RBM notes held by the Fund
at par, plus accrued interest, and (ii) repurchased its common stock and
warrants held by the Fund for $46,909. In the aggregate, the Fund realized a net
loss of $2,275 from these transactions.


                          ----------------------------
                                    FOURTEEN
<PAGE>

                    FIDUCIARY CAPITAL PENSION PARTNERS, L.P.
--------------------------------------------------------------------------------
                    NET UNREALIZED GAIN (LOSS) ON INVESTMENTS

FCM values the Fund's portfolio investments on a weekly basis utilizing a
variety of methods. For securities that are publicly traded and for which market
quotations are available, valuations are set by the closing sales or an average
of the closing bid and ask prices, as of the valuation date.

Fair value for securities that are not traded in any liquid public markets or
that are privately held are determined pursuant to valuation policies and
procedures that have been approved by the Independent General Partners and
subject to their supervision. There is a range of values that are reasonable for
such investments at any particular time. Each such investment is valued
initially based upon its original cost to the Fund ("cost method"). The cost
method is used until significant developments affecting the portfolio company
provide a basis for use of an appraisal valuation. Appraisal valuations are
based upon such factors as the portfolio company's earnings, cash flow and net
worth, the market prices for similar securities of comparable companies and an
assessment of the portfolio company's future financial prospects. In a case of
unsuccessful operations, the appraisal may be based upon liquidation value.
Appraisal valuations are necessarily subjective. The Fund also may use, when
available, third-party transactions in a portfolio company's securities as the
basis of valuation ("private market method"). The private market method is used
only with respect to completed transactions or firm offers made by
sophisticated, independent investors.

As of December 31, 2000, the Fund had recorded $2,746,635 of unrealized loss on
investments. The net decrease in unrealized loss on investments during the six
months ended June 30, 2001 and cumulative net unrealized loss on investments as
of June 30, 2001 consisted of the following components:

<Table>
<Caption>
                                         Net Changes in
                                    Unrealized Gain (Loss)     Net Unrealized
                                         During the Six          Gain (Loss)
                                         Months Ended           Recorded As of
       Portfolio Company                 June 30, 2001          June 30, 2001
       -----------------            ----------------------      -------------
<S>                                 <C>                         <C>
Unrealized losses recorded during
 prior periods with respect to
 investments disposed of during the
 six months ended June 30, 2001              $2,275              $         --
LMC                                              --                (1,647,054)
WasteMasters                                     --                (1,097,306)
                                             ------              ------------
                                             $2,275              $ (2,744,360)
                                             ======              ============
</Table>

On April 28, 2000, LMC filed for Chapter 11 bankruptcy protection. On November
9, 2000, LMC's secured lender, CIT, repossessed LMC's assets that had been
pledged as collateral on a line of credit (all of LMC's assets except for its
real property). On January 17, 2001, CIT conducted a foreclosure sale of the
repossessed assets. The


                          ----------------------------
                                     FIFTEEN
<PAGE>


                    FIDUCIARY CAPITAL PENSION PARTNERS, L.P.
--------------------------------------------------------------------------------
proceeds of the foreclosure sale totaled less than the amount of LMC's
indebtedness to CIT. LMC is currently attempting to sell its real property. All
proceeds realized from the sale will be payable to LMC's creditors, including
the Fund.

The Fund wrote its LMC investment down by $459,200 and $282,720 during 1995 and
1997, respectively. As a result of the above-discussed developments, the Fund
created additional reserves of $6,238,506 and $240,894 against the carrying
values of the Fund's LMC investment during the years ended December 31, 1999 and
2000, respectively. As of December 31, 2000, the Fund wrote the cost of all of
its LMC equity investments off as realized losses. There is a possibility that
the Fund could recover a small portion of its investment in LMC debt during 2001
out of proceeds derived from the sale of LMC's real property.

During June 1998, the Fund exchanged its Atlas Environmental, Inc. ("Atlas")
subordinated notes and warrants for 821,376 shares of common stock in
WasteMasters, a waste management company headquartered in El Reno, Oklahoma. The
Fund's WasteMasters stock, which was acquired from Nikko Trading of America
Corporation ("Nikko"), was subject to a 24-month lock-up period through May
2000. Upon expiration of the lock-up period, the Fund requested that
WasteMasters issue the Fund a new stock certificate without the restrictive
legend that existed on the Fund's original certificate, so the stock could be
sold. WasteMasters refused to comply with this request because of a court order
during March 2000 that authorized the cancellation of all WasteMasters stock
that had been issued to Nikko, including the shares that Nikko had previously
transferred to the Fund. At this time, the Fund is uncertain as to how, or when,
these issues regarding the ownership and transferability of its WasteMasters
stock will be resolved. The Fund has retained counsel and WasteMasters'
attorneys are considering the Fund's request to be treated as a bona fide
purchaser of the shares from Nikko. Others are in the same position as the Fund
and have requested similar treatment. WasteMasters' attorneys have indicated
that they will not be in a position to make a determination as to the Fund's
position as a bona fide purchaser until other ongoing litigation is resolved.
There can be no assurance that a conclusion favorable to the Fund will be
achieved, or that a determination will be made prior to the final liquidation of
the Fund.

The WasteMasters common stock, which trades on the OTC Bulletin Board System
("WAST"), closed at $1.78 (an average of the closing bid and ask prices) on June
3, 1998 (the date of the exchange). However, due to a number of factors,
including the speculative nature of the WasteMasters stock, the two-year lock-up
period and the relative size of the Fund's stock position, the Fund recorded the
WasteMasters stock at the same nominal value that the Atlas securities had
previously been carried by the Fund.

The Fund recorded a realized loss of $2,125,574 on the exchange, which is equal
to the amount of the loss that the Fund claimed for income tax purposes from the
disposition of the Atlas securities. The balance of the unrealized loss
previously recorded by the Fund with respect to the Atlas securities continues
to be carried by the Fund as an unrealized loss.


                          ----------------------------
                                     SIXTEEN
<PAGE>

                    FIDUCIARY CAPITAL PENSION PARTNERS, L.P.
--------------------------------------------------------------------------------
During June 2001, WasteMasters filed two Forms 8-K with the Securities and
Exchange Commission describing a corporate reorganization plan, in which a
WasteMasters subsidiary, Environmental Energy Services, Inc. became
WasteMasters' parent corporation, followed by a sale of the WasteMasters
corporate entity for a nominal amount. These described transactions appear to
represent an effort by the company to rid itself of certain of WasteMasters'
liabilities and lawsuits, while effectively continuing in business under a
revised corporate structure. Notwithstanding these filings, as of July 24, 2001
the stock continues to trade under the name of WasteMasters.

Both the 52-week low and the current bid price (July 24, 2001) for the
WasteMasters common stock are $0.02 per share.



                          ----------------------------
                                    SEVENTEEN