<PAGE>   1
                                                                    EXHIBIT 19.1





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









                                   ----------

                              FIRST QUARTER REPORT
                                      2001



<PAGE>   2

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

                             SCHEDULE OF INVESTMENTS

MARCH 31, 2001 (UNAUDITED)

<Table>
<Caption>
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%
                                                        ----------  ----------      -----
$1,290,000        R.B.M. Precision Metal
                  Products, Inc., 13.00%
                  Senior Subordinated
                  Secured Notes due
                  5/24/02(3)                 05/24/95    1,265,888   1,290,000
12,603.7 sh.      R.B.M. Precision Metal
                  Products, Inc., Warrants
                  to Purchase
                  Common Stock(3)*           05/24/95       73,295      23,400
12,717 sh.        R.B.M. Precision Metal
                  Products, Inc., Common
                  Stock(3)*                  12/09/98            1      23,509
                                                        ----------  ----------      -----
                                                         1,339,184   1,336,909       94.8
                                                        ----------  ----------      -----
         Total Investments in Managed
           Companies (102.1% of net assets)              2,986,240   1,336,911       94.8
                                                        ----------  ----------      -----

NON-MANAGED COMPANIES:

$78,901           Niigata Engineering        12/01/99
                  Co., Ltd.,                 through
                  Receivables(4)             01/03/00       73,621      73,621
                                                        ----------  ----------      -----
                                                            73,621      73,621        5.2
                                                        ----------  ----------      -----
821,376 sh.       WasteMasters, Inc.,
                  Common Stock(5)*           06/03/98    1,097,307           1
                                                        ----------  ----------      -----
                                                         1,097,307           1        0.0
                                                        ----------  ----------      -----
         Total Investment in
           Non-Managed Companies
           (5.6% of net assets)                          1,170,928      73,622        5.2
                                                        ----------  ----------      -----
         Total Investments (107.7% of net assets)       $4,157,168  $1,410,533      100.0%
                                                        ==========  ==========      =====
</Table>



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



                                   ----------

                                       ONE
<PAGE>   3

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

                       SCHEDULE OF INVESTMENTS (CONTINUED)

(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)  On April 5, 2001, R.B.M. Precision Metal Products, Inc. ("RBM") prepaid
     these notes at face value, plus accrued interest, and purchased the common
     stock and warrants for $46,909.

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

(5)  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.



                                   ----------

                                       TWO
<PAGE>   4

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

                                 BALANCE SHEETS

MARCH 31, 2001 AND DECEMBER 31, 2000 (UNAUDITED)

<Table>
<Caption>
                                                       2001            2000
                                                   ------------    ------------
<S>                                                <C>             <C>
ASSETS:
  Investments:
    Portfolio investments, at value:
      Managed companies (amortized cost -
        $2,986,240)                                $  1,336,911    $  1,336,911
      Non-managed companies (amortized cost -
        $1,170,928 and $1,168,992, respectively)         73,622          71,686
                                                   ------------    ------------
           Total investments                          1,410,533       1,408,597
  Cash and cash equivalents                              20,338             100
  Accrued interest receivable                            16,374          17,772
  Other assets                                           15,035          20,514
                                                   ------------    ------------
     Total assets                                  $  1,462,280    $  1,446,983
                                                   ============    ============
LIABILITIES:
  Payable to affiliates                            $     47,740    $      4,950
  Accounts payable and accrued liabilities              104,904         111,089
                                                   ------------    ------------
     Total liabilities                                  152,644         116,039
                                                   ------------    ------------

COMMITMENTS AND CONTINGENCIES

NET ASSETS:
  Managing General Partner                             (104,604)       (124,842)
  Limited Partners (equivalent to $1.76
    and $1.81 respectively, per limited
    partnership unit based on 805,741
    units outstanding)                                1,414,240       1,455,786
                                                   ------------    ------------
      Net assets                                      1,309,636       1,330,944
                                                   ------------    ------------
         Total liabilities and net assets          $  1,462,280    $  1,446,983
                                                   ============    ============
</Table>

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



                                   ----------

                                      THREE
<PAGE>   5

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

                            STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000 (UNAUDITED)

<Table>
<Caption>
                                          2001          2000
                                       ----------    ----------
<S>                                    <C>           <C>
INVESTMENT INCOME:
  Income:
    Interest                           $   43,484    $   53,415
                                       ----------    ----------
       Total investment income             43,484        53,415
                                       ----------    ----------
  Expenses:
    Fund administration fees               30,615        29,582
    Administrative expenses                17,459        17,224
    Independent General Partner fees
      and expenses                         10,464        10,487
    Professional fees                       7,419        18,961
    Other expenses                         19,073        20,611
    Investment advisory fees                   --        19,185
                                       ----------    ----------
       Total expenses                      85,030       116,050
                                       ----------    ----------
NET INVESTMENT LOSS                       (41,546)      (62,635)
                                       ----------    ----------
NET DECREASE IN NET ASSETS
         RESULTING FROM OPERATIONS     $  (41,546)   $  (62,635)
                                       ==========    ==========
</Table>



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



                                   ----------

                                      FOUR
<PAGE>   6

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

                            STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000 (UNAUDITED)

<Table>
<Caption>
                                                             2001          2000
                                                          ----------    ----------
<S>                                                       <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net decrease in net assets resulting from
    operations                                            $  (41,546)   $  (62,635)
  Adjustments to reconcile net decrease in net assets
    resulting from operations to net cash used in
    operating activities:
      Accreted discount on portfolio investments              (1,936)       (8,642)
      Change in assets and liabilities:
        Accrued interest receivable                            1,398         1,826
        Other assets                                           5,479         7,759
        Payable to affiliates                                 42,790        19,671
      Accounts payable and accrued liabilities                (6,185)       (6,639)
                                                          ----------    ----------
        Net cash used in operating activities                     --       (48,660)
                                                          ----------    ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of portfolio investments                               --       (89,469)
  Sale of temporary investments, net                              --       374,820
                                                          ----------    ----------
    Net cash provided by investing activities                     --       285,351
                                                          ----------    ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  General partner capital contributions                       20,238            --
  Cash distributions paid to partners                             --      (263,575)
                                                          ----------    ----------
    Net cash provided by (used in) financing activities      (20,238)     (263,575)
                                                          ----------    ----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS          20,238       (26,884)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                 100       130,566
                                                          ----------    ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                $   20,338    $  103,682
                                                          ==========    ==========
</Table>



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



                                   ----------

                                      FIVE
<PAGE>   7

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

                       STATEMENTS OF CHANGES IN NET ASSETS

FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND FOR
THE YEAR ENDED DECEMBER 31, 2000 (UNAUDITED)

<Table>
<Caption>
                                                         2001            2000
                                                     ------------    ------------
<S>                                                  <C>             <C>
(Decrease) increase in net assets from operations:
  Net investment loss                                $    (41,546)   $   (222,801)
  Net realized gain on investments                             --      (5,131,299)
  Net change in unrealized loss on investments                 --       5,996,978
                                                     ------------    ------------
    Net (decrease) increase in net assets
      resulting from operations                           (41,546)        642,878
General partner capital contribution                       20,238          28,831
Repurchase of limited partnership units                        --         (28,184)
                                                     ------------    ------------
  Total (decrease) increase in net assets                 (21,308)        643,525
Net assets:
  Beginning of period                                   1,330,944         687,419
                                                     ------------    ------------
  End of period (including no undistributed
    net investment income)                           $  1,309,636    $  1,330,944
                                                     ============    ============
</Table>



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



                                   ----------

                                       SIX
<PAGE>   8

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

                        SELECTED PER UNIT DATA AND RATIOS

FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000 (UNAUDITED)

<Table>
<Caption>
                                        2001             2000
                                    ------------     ------------
<S>                                 <C>              <C>
PER UNIT DATA:
  Investment income                 $       0.06     $       0.06
  Expenses                                 (0.11)           (0.13)
                                    ------------     ------------
    Net investment loss and net
      decrease in net asset value          (0.05)           (0.07)
      Net asset value:
        Beginning of period                 1.81             0.98
                                    ------------     ------------
        End of period               $       1.76     $       0.91
                                    ============     ============
RATIOS (ANNUALIZED):
  Ratio of expenses to average
    net assets                             25.76%           70.75%
  Ratio of net investment loss
    to average net assets                 (12.59)%         (38.19)%
Number of limited partnership
  units at end of period                 805,741          869,796
</Table>



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



                                   ----------

                                      SEVEN
<PAGE>   9

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

                          NOTES TO FINANCIAL STATEMENTS


MARCH 31, 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 March 31,
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 three months ended March 31, 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 $30,615 were
paid by the Fund for the three months ended March 31, 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 $17,459 for the three months ended March 31,
2001.



                                   ----------

                                      EIGHT
<PAGE>   10

                    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 three months ended
March 31, 2001 totaled $10,464.

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.



                                   ----------

                                      NINE
<PAGE>   11

                    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 March 31, 2001, the Fund held portfolio investments in two Managed
Companies and two Non-Managed Companies, with an aggregate original cost of
approximately $4.2 million. The value of these portfolio investments, which were
made through the reinvestment of proceeds from the sale of other portfolio
investments, represents approximately 107.7% of the Fund's net assets as of
March 31, 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 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 and that additional
distributions to Limited Partners during 2001 will total between $1.00 and $1.50
per Unit.

During December 2000, RBM and the Fund began negotiating a transaction in which
RBM would prepay the RBM notes held by the Fund and purchase the RBM common
stock and warrants held by the Fund. In this transaction, which was consummated
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) purchased the RBM stock and warrants
held by the Fund for $46,909.



                                   ----------

                                       TEN
<PAGE>   12

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


As of March 31, 2001, the Fund's remaining liquid assets were invested in money
market funds. These funds, along with the cash proceeds received during April
2001 from the RBM transaction, 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.

During April 2001, the Fund declared a cash distribution of $1.00 per Unit which
will be paid to the Fund's partners on May 10, 2001.

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.

Payables to affiliates increased $42,790 from $4,950 at December 31, 2000 to
$47,740 at March 31, 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 $41,546 for the three months ended March 31,
2001 as compared to a net investment loss of $62,635 for the corresponding
period of the prior year. Net investment loss per limited partnership unit
decreased from $0.07 to $0.05 and the ratio of net investment loss to average
net assets decreased from 38.19% to 12.59% for the three months ended March 31,
2001 as compared to the corresponding period of the prior year.

The net investment loss for the three months ended March 31, 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.



                                   ----------

                                     ELEVEN
<PAGE>   13

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


Investment income decreased $9,931, or 18.6%, for the three months ended March
31, 2001, as compared to the corresponding period of the prior year. This
decrease resulted primarily from 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 (i) a cash
distribution made by the Fund during February 2000 that constituted a return of
capital, (ii) purchases of additional LMC follow-on investments (including the
Niigata receivables), (iii) the Fund's repurchase of 7.36% of its Units during
the fourth quarter of 2000, and (iv) operating losses incurred by the Fund. The
balance of the Niigata receivables decreased because of payments received from
Niigata during May and November of 2000.

Total expenses decreased $31,020, or 26.7%, for the three months ended March 31,
2001, as compared to the corresponding period of the prior year. This decrease
resulted primarily from decreases in professional and investment advisory fees.

Professional fees decreased because prior year legal fees included a significant
amount of fees incurred in connection with LMC related litigation. 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 three months ended March 31, 2001.

                    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



                                   ----------

                                     TWELVE
<PAGE>   14

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


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. There were no changes to these unrealized losses on investments
during the three months ended March 31, 2001. The cumulative net unrealized loss
on investments as of March 31, 2001 consisted of the following components:

<Table>
<Caption>
                                       Net Changes in
                                   Unrealized Gain (Loss)    Net Unrealized
                                      During the Three         Gain (Loss)
                                        Months Ended         Recorded As of
Portfolio Company                      March 31, 2001        March 31, 2001
-----------------                  ----------------------    --------------
<S>                                <C>                       <C>
LMC                                $                   --    $   (1,647,054)
RBM                                                    --            (2,275)
WasteMasters                                           --        (1,097,306)
                                   ----------------------    --------------
                                   $                   --    $   (2,746,635)
                                   ======================    ==============
</Table>

LMC experienced significant cash flow shortfalls in December 1999 and January
2000. These cash flow shortfalls, combined with significant reductions in the
cash available under LMC's revolving line of credit with CIT, forced a cessation
of production of equipment and severely curtailed LMC's ability to fulfill
orders for spare parts. Substantially all of LMC's employees were terminated
during December 1999 and January 2000.

While LMC held discussions with several potential purchasers of its business, in
whole or in part, no meaningful offers were received. LMC did consummate a
consignment joint venture with respect to its spare parts business during March
2000.

LMC received a notice of default, dated April 6, 2000, from CIT with respect to
its revolving line of credit. On April 28, 2000, LMC filed for Chapter 11
bankruptcy protection. On November 9, 2000, CIT repossessed LMC's assets that
had been pledged as collateral on the 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 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.



                                   ----------

                                    THIRTEEN
<PAGE>   15

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


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 December 2000, RBM and the Fund began negotiating a transaction in which
RBM would prepay the RBM notes held by the Fund and purchase the RBM common
stock and warrants held by the Fund. In this transaction, which was consummated
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) purchased the RBM stock and warrants
held by the Fund for $46,909.

As of December 31, 2000, the Fund adjusted the carrying value of its RBM
investments to amounts equal to the proceeds received from RBM during April
2001.

During June 1998, the Fund exchanged its 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
("WASTE"), 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, FCM recorded the
WasteMasters stock at the same nominal value that the Atlas securities had
previously been carried by the Fund.



                                   ----------

                                    FOURTEEN
<PAGE>   16

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


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.

The 52-week low for the WasteMasters common stock is $0.02 per share and the
current bid price (April 30, 2001) is $0.05 per share.



                                   ----------

                                     FIFTEEN
<PAGE>   17



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



















                                   ----------
                                  ANNUAL REPORT
                                      2000



<PAGE>   18

--------------------------------------------------------------------------------

                                    CONTENTS



<Table>
<S>                                                                   <C>
         Fund Profile and Financial Highlights                        One

         Message to Investors                                         Two

         Schedule of Investments                                      Four

         Balance Sheets                                               Six

         Statements of Operations                                     Seven

         Statements of Cash Flows                                     Eight

         Statements of Changes in Net Assets                          Nine

         Selected Per Unit Data and Ratios                            Ten

         Notes to Financial Statements                                Eleven

         Report of Independent Public Accountants                     Fifteen

         Management's Discussion and Analysis of Financial
         Condition and Results of Operations                          Sixteen
</Table>



<PAGE>   19

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

                                  FUND PROFILE

Fiduciary Capital Pension Partners, L.P. (the "Fund") is a Delaware limited
partnership that commenced operations on August 14, 1990. The Fund elected to
operate as a business development company under the Investment Company Act of
1940. The investment objective of the Fund was to provide current income and
capital appreciation by investing primarily in subordinated debt and related
equity securities issued as the mezzanine financing of privately structured,
friendly leveraged buyouts, leveraged acquisitions and leveraged
recapitalizations.

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

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 and that
distributions to Limited Partners during 2001 will total between $1.00 and $1.50
per Unit.

                              FINANCIAL HIGHLIGHTS


<Table>
<Caption>
                                                        As of or for the Year Ended December 31
                                                 2000        1999        1998        1997        1996
                                               --------    --------    --------    --------    --------
                                                        (in thousands, except per Unit amounts)
<S>                                            <C>         <C>         <C>         <C>         <C>
  Total Investment Income                      $    202    $    316    $    607    $  1,370    $  1,329
  Net Investment (Loss) Income                     (223)       (279)         58         831         772
  Net Realized and Unrealized
    Gain (Loss) on Investments                      866      (6,084)       (945)       (294)     (1,143)
  Cash Distributions Declared to Partners            --       1,118       2,758       3,151       1,423
  Cash Utilized to Repurchase Units                  28         297         753       1,163       1,440
  Total Assets                                    1,447       1,472       9,248      14,352      17,441
  Net Assets                                      1,331         687       8,466      12,864      16,640
  Value of Investments                            1,409       1,302       8,506      13,949      17,105

Per Unit of Limited Partnership Interest:
  Net Investment (Loss) Income(1)                 (0.25)      (0.30)       0.05        0.75        0.64
  Net Realized and Unrealized
    Gain (Loss) on Investments(1)                  0.99       (6.52)      (0.82)      (0.27)      (0.95)
  Cash Distributions Declared to Partners(2)         --        1.20        2.71        2.90        1.20
  Net Asset Value                                  1.81        0.98        9.19       12.66       15.08
</Table>

(1)  Calculated using the weighted average number of Units outstanding during
     the years ended December 31, 2000, 1999, 1998, 1997 and 1996 of 862,795,
     932,412, 1,010,959, 1,095,362 and 1,186,294, respectively.

(2)  Distribution amounts are reflected during the year in which the cash for
     the distribution was generated. A portion of the actual cash distributions
     are paid subsequent to such year.



                                   ----------

                                       ONE
<PAGE>   20
                    FIDUCIARY CAPITAL PENSION PARTNERS, L.P.
--------------------------------------------------------------------------------

                              MESSAGE TO INVESTORS


Dear Investor:

This Annual Report includes a discussion of recent developments with respect to
the Fund and its remaining portfolio investments and the Fund's audited
financial statements for the year ended December 31, 2000. Unaudited interim
financial statements for the first quarter of 2001 are also enclosed along with
this Annual Report.

HIGHLIGHTS

     o A cash distribution of $1.00 per Unit was paid to Investors on May 10,
2001. Cumulative distributions paid to Investors since the Fund's inception
during 1990 now total between $17.61 and $17.29 on a per Unit ($20.00 cost)
basis, depending upon the closing in which the particular Units were issued.

     o The Fund's net asset value per Unit was $1.81 at December 31, 2000 and
$1.76 at March 31, 2001 as compared to $0.98 at December 31, 1999.

     o The Fund redeemed 7.36% of its outstanding Units during November 2000
pursuant to its annual repurchase offer.

CUMULATIVE DISTRIBUTIONS AND NET ASSET VALUE PER UNIT

                                    [GRAPH]
<Table>
<Caption>
                              1995      1996      1997      1998      1999      2000
                             ------    ------    ------    ------    ------    ------
<S>                          <C>       <C>       <C>       <C>       <C>       <C>
Cumulative Distributions       8.58      9.78     12.68     15.41     16.61     16.61
Net Asset Value               16.61     15.08     12.66      9.19      0.98      1.81
</Table>

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 or more additional cash distributions during 2001. It is currently expected
that these additional distributions will total less than $0.50 per Unit.

During December 2000, R.B.M. Precision Metal Products, Inc. ("RBM") and the Fund
began negotiating a transaction in which RBM would prepay the RBM notes held by
the Fund and purchase the RBM common stock and warrants held by the Fund. In
this transaction, which was consummated 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)
purchased the RBM stock and warrants held by the Fund for $46,909.

The cash available for distribution during 2001 will be derived primarily from
the proceeds received from RBM. A portion of the Fund's cash will be used to
fund the 2001 Repurchase Offer (see discussion below) and to pay expenses
incurred by the Fund during, and subsequent to, the liquidation.

The Fund's remaining assets include an investment in LMC Corporation ("LMC"),
which is in bankruptcy, and an equity interest in WasteMasters, Inc.
("WasteMasters"), which is in legal dispute. At present, it is not expected that
any material amounts will be derived from either the LMC or WasteMasters
investments.

2001 REPURCHASE OFFER

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.

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 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.


                                   ----------

                                       TWO
<PAGE>   21

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

                        MESSAGE TO INVESTORS (CONTINUED)

SUSPENSION OF RECOGNITION OF TRANSFERS

Due to (i) the limited amount of time remaining prior to the final liquidation
of the Fund, (ii) the low remaining net asset value per Unit, and (iii) the
valuation uncertainties associated with the liquidation of the Fund's remaining
assets, the General Partners have permanently suspended the recognition of any
further transfers of Units other than certain transfers between related parties
and transfers by operation of law, e.g. transfers at death.

PORTFOLIO UPDATE

R.B.M. Precision Metal Products, Inc. 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)
purchased the RBM stock and warrants held by the Fund for $46,909.

LMC Corporation LMC experienced significant cash flow shortfalls in December
1999 and January 2000. These cash flow shortfalls, combined with significant
reductions in the cash available under LMC's revolving line of credit with CIT,
forced a cessation of production of equipment and severely curtailed LMC's
ability to fulfill orders for spare parts. Substantially all of LMC's employees
were terminated during December 1999 and January 2000.

While LMC held discussions with several potential purchasers of its business, in
whole or in part, no meaningful offers were received. LMC did consummate a
consignment joint venture with respect to its spare parts business during March
2000.

LMC received a notice of default, dated April 6, 2000, from CIT with respect to
its revolving line of credit. On April 28, 2000, LMC filed for Chapter 11
bankruptcy protection. On November 9, 2000, CIT repossessed LMC's assets that
had been pledged as collateral on the 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 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 would be payable to LMC's
creditors, including the Fund.

The Fund recorded significant unrealized losses on its LMC investment between
1995 and 2000, resulting in its investment currently being carried at a
negligible amount. 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.

WasteMasters, Inc. The Fund's WasteMasters stock (OTC-BB symbol "WASTE"), 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. Accordingly, the Fund is
currently carrying this investment at a neglible amount.

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

May 14, 2001



                                   ----------

                                      THREE
<PAGE>   22

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

                             SCHEDULE OF INVESTMENTS


DECEMBER 31, 2000

<Table>
<Caption>
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 due             through
                  8/7/00(2)                       04/11/00            14,096               1
                                                                  ----------      ----------           -----
                                                                   1,647,056               2             0.0%
                                                                  ----------      ----------           -----
$1,290,000        R.B.M. Precision Metal
                  Products, Inc., 13.00%
                  Senior Subordinated
                  Secured Notes due
                  5/24/02(3)                      05/24/95         1,265,888       1,290,000
12,603.7 sh.      R.B.M. Precision Metal
                  Products, Inc., Warrants to
                  Purchase Common Stock(3)*       05/24/95            73,295          23,400
12,717 sh.        R.B.M. Precision Metal
                  Products, Inc., Common
                  Stock(3)*                       12/09/98                 1          23,509
                                                                  ----------      ----------           -----
                                                                   1,339,184       1,336,909            94.9
                                                                  ----------      ----------           -----
  Total Investments in Managed Companies (100.4% of net assets)    2,986,240       1,336,911            94.9
                                                                  ----------      ----------           -----

NON-MANAGED COMPANIES:

$78,901           Niigata Engineering             12/01/99
                  Co., Ltd.,                       through
                  Receivables(4)                  01/03/00            71,685          71,685
                                                                  ----------      ----------           -----
                                                                      71,685          71,685             5.1
                                                                  ----------      ----------           -----
821,376 sh.       WasteMasters, Inc.,
                  Common Stock(5)*                06/03/98         1,097,307               1
                                                                  ----------      ----------           -----
                                                                   1,097,307               1             0.0
                                                                  ----------      ----------           -----
  Total Investment in Non-Managed Companies (5.4% of net assets)   1,168,992          71,686             5.1
                                                                  ----------      ----------           -----
  Total Investments (105.8% of net assets)                        $4,155,232      $1,408,597           100.0%
                                                                  ----------      ----------           -----
</Table>



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



                                   ----------

                                      FOUR
<PAGE>   23

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

                       SCHEDULE OF INVESTMENTS (CONTINUED)

DECEMBER 31, 2000

----------

(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)  On April 5, 2001, R.B.M. Precision Metal Products, Inc. ("RBM") prepaid
     these notes at face value, plus accrued interest, and purchased the common
     stock and warrants for $46,909.

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

(5)  See Note 13 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.



                                   ----------

                                      FIVE
<PAGE>   24

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

                                 BALANCE SHEETS

DECEMBER 31, 2000 AND 1999

<Table>
<Caption>
                                                       2000            1999
                                                   ------------    ------------
<S>                                                <C>             <C>
ASSETS:
  Investments
    Portfolio investments, at fair value:
      Managed companies (amortized cost -
        $2,986,240 and $8,530,780, respectively)   $  1,336,911    $    884,473
      Non-managed companies (amortized cost -
        $1,168,992 and $1,139,911, respectively)         71,686          42,605
    Temporary investments, at amortized cost                 --         374,820
                                                   ------------    ------------
      Total investments                               1,408,597       1,301,898
  Cash and cash equivalents                                 100         130,566
  Accrued interest receivable                            17,772          19,126
  Other assets                                           20,514          20,834
                                                   ------------    ------------
    Total assets                                   $  1,446,983    $  1,472,424
                                                   ============    ============
LIABILITIES:
  Due to affiliates                                $      4,950    $     28,161
  Accounts payable and accrued liabilities              111,089         493,269
  Distributions payable to partners                          --         263,575
                                                   ------------    ------------
    Total liabilities                                   116,039         785,005
                                                   ------------    ------------

COMMITMENTS AND CONTINGENCIES

NET ASSETS:
  Managing General Partner                             (124,842)       (166,208)
  Limited Partners (equivalent to $1.81
    and $0.98, respectively, per limited
    partnership unit based on 805,741
    and 869,796 units outstanding)                    1,455,786         853,627
                                                   ------------    ------------
      Total net assets                                1,330,944         687,419
                                                   ------------    ------------
        Total liabilities and net assets           $  1,446,983    $  1,472,424
                                                   ============    ============
</Table>



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



                                   ----------

                                       SIX
<PAGE>   25

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

                            STATEMENTS OF OPERATIONS

FOR EACH OF THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998

<Table>
<Caption>
                                                        2000            1999            1998
                                                    ------------    ------------    ------------
<S>                                                 <C>             <C>             <C>
INVESTMENT INCOME:
  Income:
    Interest                                        $    201,612    $    314,326    $    596,296
    Other income                                              --           1,412          11,058
                                                    ------------    ------------    ------------
      Total investment income                            201,612         315,738         607,354
                                                    ------------    ------------    ------------
  Expenses:
    Fund administration fees                             118,327         118,327         118,327
    Liquidation expenses                                  81,829              --              --
    Administrative expenses                               68,895          68,895          68,895
    Independent General Partner fees and expenses         42,881          53,861          52,076
    Professional fees                                     29,997         210,116         141,780
    Other expenses                                        82,484          61,734          66,185
    Investment advisory fees                                  --          82,162         102,251
                                                    ------------    ------------    ------------
      Total expenses                                     424,413         595,095         549,514
                                                    ------------    ------------    ------------
NET INVESTMENT (LOSS) INCOME                            (222,801)       (279,357)         57,840
                                                    ------------    ------------    ------------
REALIZED AND UNREALIZED
  GAIN (LOSS) ON INVESTMENTS:
    Net realized (loss) gain on investments           (5,131,299)        410,023      (2,497,650)
    Net change in unrealized loss on investments       5,996,978      (6,494,039)      1,552,695
                                                    ------------    ------------    ------------
      Net gain (loss) on investments                     865,679      (6,084,016)       (944,955)
                                                    ------------    ------------    ------------
NET INCREASE (DECREASE) IN NET
  ASSETS RESULTING FROM OPERATIONS                  $    642,878    $ (6,363,373)   $   (887,115)
                                                    ============    ============    ============
</Table>

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



                                   ----------

                                      SEVEN
<PAGE>   26

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

                            STATEMENTS OF CASH FLOWS

FOR EACH OF THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998

<Table>
<Caption>
                                                                    2000            1999            1998
                                                                ------------    ------------    ------------
<S>                                                             <C>             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net increase (decrease) in net assets
    resulting from operations                                   $    642,878    $ (6,363,373)   $   (887,115)
  Adjustments to reconcile net increase (decrease)
    in net assets resulting from operations to
    net cash (used in) provided by operating activities:
      Accreted discount on portfolio investments                     (26,497)        (12,987)        (11,424)
      Interest income received in stock                                   --         (69,360)             --
      Change in assets and liabilities:
        Accrued interest receivable                                    1,354          66,430         (17,592)
        Other assets                                                     320           6,400          31,692
        Due to affiliates                                            (23,211)          2,413          (8,048)
        Accounts payable and accrued liabilities                      60,791          16,798           2,227
      Net realized loss (gain) on investments                      5,131,299        (410,023)      2,497,650
      Net change in unrealized loss on investments                (5,996,978)      6,494,039      (1,552,695)
                                                                ------------    ------------    ------------
          Net cash (used in) provided by operating activities       (210,044)       (269,663)         54,695
                                                                ------------    ------------    ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of portfolio investments                                  (83,036)       (737,894)     (2,868,290)
  Proceeds from dispositions of portfolio investments                 50,722         423,824       1,124,615
  Sale (purchase) of temporary investments, net                      374,820       1,522,403       6,297,597
                                                                ------------    ------------    ------------
      Net cash provided by investing activities                      342,506       1,208,333       4,553,922
                                                                ------------    ------------    ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  General Partner capital contribution                                28,831              --              --
  Cash distributions paid to partners                               (263,575)     (1,139,801)     (3,503,484)
  Repurchase of limited partnership units                            (28,184)       (296,973)       (752,571)
                                                                ------------    ------------    ------------
    Net cash used in financing activities                           (262,928)     (1,436,774)     (4,256,055)
                                                                ------------    ------------    ------------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                (130,466)       (498,104)        352,562
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                       130,566         628,670         276,108
                                                                ------------    ------------    ------------
CASH AND CASH EQUIVALENTS AT END OF YEAR                        $        100    $    130,566    $    628,670
                                                                ============    ============    ============
NONCASH INVESTING AND FINANCING ACTIVITIES:
  Investments exchanged for other investments                   $         --    $         --    $  1,360,801
                                                                ============    ============    ============
</Table>



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



                                   ----------

                                      EIGHT
<PAGE>   27

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

                       STATEMENTS OF CHANGES IN NET ASSETS


FOR EACH OF THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998

<Table>
<Caption>
                                                                   2000            1999            1998
                                                               ------------    ------------    ------------
<S>                                                            <C>             <C>             <C>
Increase (decrease) in net assets resulting from operations:
  Net investment (loss) income                                 $   (222,801)   $   (279,357)   $     57,840
  Net realized (loss) gain on investments                        (5,131,299)        410,023      (2,497,650)
  Net change in unrealized loss on investments                    5,996,978      (6,494,039)      1,552,695
                                                               ------------    ------------    ------------
      Net increase (decrease) in net assets
        resulting from operations                                   642,878      (6,363,373)       (887,115)
General Partner capital contribution                                 28,831              --              --
Repurchase of limited partnership units                             (28,184)       (296,973)       (752,571)
Distributions to partners from -
  Net investment income                                                  --              --         (85,585)
  Realized gain on investments                                           --              --      (1,402,287)
  Return of capital                                                      --      (1,118,426)     (1,270,116)
                                                               ------------    ------------    ------------
    Total increase (decrease) in net assets                         643,525      (7,778,772)     (4,397,674)

Net assets:

  Beginning of year                                                 687,419       8,466,191      12,863,865
                                                               ------------    ------------    ------------
  End of year (including no undistributed net
    investment income)                                         $  1,330,944    $    687,419    $  8,466,191
                                                               ============    ============    ============
</Table>



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



                                   ----------

                                      NINE
<PAGE>   28

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

                        SELECTED PER UNIT DATA AND RATIOS

FOR EACH OF THE YEARS ENDED DECEMBER 31, 2000, 1999, 1998, 1997 AND 1996

<Table>
<Caption>
                                                     2000             1999             1998             1997             1996
                                                 ------------     ------------     ------------     ------------     ------------
<S>                                              <C>              <C>              <C>              <C>              <C>
PER UNIT DATA:
  Investment income(1)                           $       0.23     $       0.34     $       0.53     $       1.24     $       1.11
  Expenses(1)                                           (0.48)           (0.64)           (0.48)           (0.49)           (0.47)
                                                 ------------     ------------     ------------     ------------     ------------
    Net investment (loss) income(1)                     (0.25)           (0.30)            0.05             0.75             0.64
  Net realized (loss) gain on investments(1)            (5.83)            0.44            (2.17)            2.64            (2.88)
  Net change in unrealized loss
    on investments(1)                                    6.82            (6.96)            1.35            (2.91)            1.93
  Effect of unit repurchases on
    net asset value                                      0.09            (0.19)            0.01               --            (0.02)
  Distributions declared to partners -                     --            (1.20)           (2.71)           (2.90)           (1.20)
                                                 ------------     ------------     ------------     ------------     ------------
    Net increase (decrease) in net asset value           0.83            (8.21)           (3.47)           (2.42)           (1.53)
      Net asset value:
        Beginning of year                                0.98             9.19            12.66            15.08            16.61
                                                 ------------     ------------     ------------     ------------     ------------
        End of year                              $       1.81     $       0.98     $       9.19     $      12.66     $      15.08
                                                 ============     ============     ============     ============     ============
RATIOS:
  Ratio of expenses to average net assets               61.31%            9.87%            5.15%            3.60%            2.92%
  Ratio of net investment (loss) income to
    average net assets                                 (32.19)%          (4.63)%           0.54%            5.55%            4.05%
Number of limited partnership units
  at end of year                                      805,741          869,796          940,336        1,020,142        1,104,881
</Table>

----------

(1)  Calculated using the weighted average number of limited partnership units
     outstanding during the years ended December 31, 2000, 1999, 1998, 1997 and
     1996 of 862,795, 932,412, 1,010,959, 1,095,362 and 1,186,294, respectively.



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



                                   ----------

                                       TEN
<PAGE>   29

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

                          NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2000 AND 1999

1.       ORGANIZATION AND PURPOSE

Fiduciary Capital Pension Partners, L.P. (the "Fund"), a Delaware limited
partnership, was formed on October 20, 1988 to operate as a business development
company under the Investment Company Act of 1940. The Fund's operations
commenced on August 14, 1990.

FCM Fiduciary Capital Management Company ("FCM"), the Managing General Partner
of, and the investment adviser to, the Fund, is responsible, subject to the
supervision of the Independent General Partners, for overseeing and monitoring
the Fund's investments.

The investment objective of the Fund was to provide current income and capital
appreciation by investing primarily in subordinated debt and related equity
securities issued as the mezzanine financing of privately structured, friendly
leveraged buyouts, leveraged acquisitions and leveraged recapitalizations. These
investments are referred to herein as "portfolio investments". Managed companies
are those to which significant managerial assistance is offered.

As provided for in the Fund's Second Amended and Restated Agreement of Limited
Partnership (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 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 separate fund, Fiduciary Capital Partners, L.P. ("FCP"), was also formed on
October 20, 1988 for taxable investors with investment objectives, policies and
restrictions similar to those of the Fund. While the Fund and FCP have
co-invested in each of the portfolio investments, each fund is accounted for
separately. Each fund's participation in the portfolio investments is in
proportion to the amount of capital that each fund had available for investment
at the time each investment was acquired. Certain expenses are allocated between
the funds based on the amount of each fund's total capital. The accompanying
financial statements include only the activities of the Fund.

2.       SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Accounting Method The Fund maintains its accounting records, prepares financial
statements and files its tax returns using the accrual method of accounting.

Realized and Unrealized Gain or Loss on Investments Realized gains and losses
are recorded upon disposition of investments and are calculated based upon the
difference between the proceeds and the cost basis determined using the specific
identification method. All other changes in the valuation of investments, as
determined by FCM, are included as changes in the unrealized appreciation or
depreciation of investments in the Fund's Statements of Operations.

Valuation of Investments FCM values the Fund's 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. The
Fund discounts these closing market prices between 5% and 20% to reflect lack of
liquidity if the Fund's securities are subject to legal or contractual trading
restrictions, or to reflect the potential market impact which could result from
the sale of the securities, if the Fund and FCP combined own a material
percentage of the outstanding securities. The amount of the discount varies
based upon the type of restriction, the time remaining on the restriction and
the size of the holding.

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 which 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"). Debt
securities with attached warrants for the purchase of common stock are initially
recorded at a discount from face value equal to the estimated relative value of
the warrants at date of investment. The discount is amortized to income as an
adjustment to yield from the debt securities. Face value less unamortized
discount represents the "amortized cost" of the debt securities.

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



                                   ----------

                                     ELEVEN
<PAGE>   30

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

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)


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.

Temporary investments with maturities of less than 60 days are stated at
amortized cost, which approximates market value. Under this method, temporary
investments are valued at cost when purchased and thereafter a constant
proportionate amortization of any discount or premium is recorded until maturity
of the investment.

Cash and Cash Equivalents The Fund considers investments in money market funds
to be cash equivalents.

Interest Receivable on Notes Notes are placed on non-accrual status in the event
of a default (after any applicable grace period expires) or if FCM determines
that there is no reasonable expectation of collecting the interest.

Investment Transactions The Fund records portfolio investment transactions on
the date on which it obtains an enforceable right to demand the securities or
payment thereof and records temporary investment transactions on the trade date.
Realized gains and losses on investments are determined on the basis of specific
identification for both accounting and tax purposes.

Liquidation Expenses The dissolution of the Fund was effective as of December
31, 2000 and it is anticipated that the liquidation of the Fund will be
completed prior to December 31, 2001. Therefore, as of December 31, 2000 the
Fund accrued an estimate of the expenses that are expected to be incurred
subsequent to the final liquidation in winding up the Fund's activities.

Income Taxes No provision for income taxes has been made in the financial
statements because taxes on Fund income are the responsibility of the individual
partners rather than the Fund.

3.        ALLOCATIONS OF PROFITS, LOSSES AND CASH DISTRIBUTIONS

Pursuant to the Partnership Agreement, all income derived from temporary
investments will be distributed and allocated 99% to the Limited Partners and 1%
to FCM. Net investment income will, in general, be distributed and allocated:
(i) 99% to the Limited Partners and 1% to FCM until the Limited Partners have
received a cumulative non-compounded preferred return of 9% per annum on their
capital contributions to the Fund, then (ii) 70% to the Limited Partners and 30%
to FCM until FCM has received 10% of all current and prior distributions and
allocations, and thereafter, (iii) 90% to the Limited Partners and 10% to FCM.

Proceeds from capital transactions will, in general, be distributed and
allocated: (i) 99% to the Limited Partners and 1% to FCM until the Limited
Partners have received a cumulative, non-compounded preferred return of 9% per
annum on their capital contribution to the Fund from net investment income,
capital transactions, or both, then (ii) 100% to the Limited Partners until they
have received a return of their capital contributions to the Fund, and
thereafter, (iii) 80% to the Limited Partners and 20% to FCM.

Prior to 1998, cash distributions and earnings of the Fund were allocated 99% to
the Limited Partners and 1% to FCM. The Fund's 1998 loss was allocated
approximately 88% to the Limited Partners and approximately 12% to FCM, and the
portion of the 1998 cash distributions that exceeded the partners' cumulative
preferred return amount was allocated 100% to the Limited Partners.
Approximately 100% of the Fund's 1999 loss was allocated to the Limited
Partners, and 1999 distributions were allocated 99% to the Limited Partners and
1% to FCM. The Fund's 2000 income was allocated approximately 98% to the Limited
Partners and approximately 2% to FCM. The Fund did not pay any 2000
distributions.

4.       CAPITAL CONTRIBUTIONS

Upon formation of the Fund, FCM contributed $4,000 for its general partner
interest in the Fund. Units of limited partnership interest ("Units") were then
sold in a public offering. The Fund held three closings between August 14, 1990
and October 18, 1990, receiving gross offering proceeds of $29,796,000.
Commissions and other offering costs were charged against proceeds resulting in
net capital contributions from Limited Partners of $26,294,970. FCM made
additional capital contributions totaling $28,831 during 2000.

5.       PERIODIC UNIT REPURCHASE PLAN

The Fund's Limited Partners adopted a periodic unit repurchase plan during 1993.
Pursuant to the terms of the repurchase policy, the Fund has annually offered to
repurchase 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%), 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



                                   ----------

                                     TWELVE
<PAGE>   31

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

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)


amount are tendered, Units are purchased on a pro-rated basis, after giving
priority to Limited Partners owning less than 100 Units.

Repurchases of Units since the adoption of the plan are summarized as follows:

<Table>
<Caption>
                       Units Repurchased         Net Asset Value per Unit
                     ----------------------      ------------------------
                               Percentage
    Date of                  of Outstanding                    Net of the
Repurchase Offer     Number       Units          Gross           2% Fee
----------------     ------  --------------      -----         ----------
<S>                 <C>      <C>                <C>            <C>
November 1993        61,850       4.15%         $18.33           $17.96
November 1994       130,951       9.17%          18.35            17.98
November 1995       100,435       7.74%          19.51            19.12
November 1996        91,683       7.66%          15.71            15.40
November 1997        84,739       7.67%          13.72            13.45
November 1998        79,806       7.82%           9.43             9.24
November 1999        70,540       7.50%           4.21             4.13
November 2000        64,055       7.36%           0.44             0.43
</Table>

6.        INVESTMENT ADVISORY FEES

As compensation for its services as investment adviser, FCM is entitled to
receive a subordinated monthly investment advisory fee equal, on an annual
basis, to 1% of the Fund's available capital, as defined in the Partnership
Agreement, net of certain fees received directly by FCM from the Fund's
portfolio companies. Investment advisory fees of $82,162 and $102,251 were paid
by the Fund for 1999 and 1998, respectively. The investment advisory fees for
2000, in the amount of $69,386, were not paid 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, FCM permanently waived
its rights to receive any future investment advisory fees from the Fund,
retroactive to January 1, 2000. As a result, the Fund did not record the
investment advisory fees for 2000 as an expense.

7.       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 $118,327 were
incurred each year by the Fund during 2000, 1999 and 1998. 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 $68,895 each year during 2000, 1999 and 1998.

8.       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 FCP 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 of $42,881, $53,861 and $52,076 were
incurred by the Fund for 2000, 1999 and 1998, respectively.

9.       OTHER RELATED PARTY TRANSACTIONS

FCM and its affiliates are entitled to reimbursement of direct expenses paid on
behalf of the Fund. Such reimbursements amounted to $187,841, $260,320 and
$238,068 during 2000, 1999 and 1998, respectively.

10.      PORTFOLIO INVESTMENTS

The Fund's portfolio investments consist primarily of high-yield private
placement securities issued as the mezzanine financing of privately structured,
friendly leveraged buyouts, leveraged acquisitions and leveraged
recapitalizations, and are generally linked with an equity participation. The
risk of loss upon default by an issuer is greater than with investment grade
securities because high-yield securities are generally unsecured and are usually
subordinated to other creditors of the issuer. Also, these issuers usually have
higher levels of indebtedness and are more sensitive to adverse economic
conditions than investment grade issuers. Most of these securities are subject
to resale restrictions and generally there is no quoted market for such
securities.

Although the Fund cannot eliminate the risks associated with its investments in
these high-yield securities, it has established risk management procedures. The
Fund subjected each prospective investment to rigorous analysis, and made only
those investments that were recommended by FCM and that met the Fund's
investment guidelines or that were otherwise approved by the Independent General
Partners. The Fund also has procedures in place to continually monitor its
portfolio companies.

As of December 31, 2000, the Fund held portfolio investments in two Managed
Companies, with an aggregate cost of approximately $3.0 million, and two
Non-Managed Companies, with an aggregate cost of approximately $1.2 million.
During the year ended December 31, 2000, the Fund acquired additional follow-on
investments in Niigata Engineering Co., Ltd. and LMC at a cost of $83,036.

During 2000, the Fund wrote off its equity investments in LMC, which filed for
Chapter 11 bankruptcy protection during 2000. In addition, the Fund reversed
amounts that had previously been accrued for certain known potential liabilities
related to former investments of the Fund. In total, the Fund recorded net
realized losses of $5,131,299 during 2000.



                                   ----------

                                    THIRTEEN
<PAGE>   32

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

                    NOTES TO FINANCIAL STATEMENTS (Continued)


None of the Fund's portfolio investments are pledged or otherwise encumbered.

11.      UNREALIZED GAIN (LOSS) ON INVESTMENTS

As of December 31, 1999, the Fund had recorded net unrealized loss on
investments of $8,743,613. During 2000, the Fund recorded $240,894 of additional
unrealized loss and $663,606 of unrealized gain on investments. In addition, the
Fund disposed of investments during 2000 with respect to which the Fund had
recorded $5,574,266 of unrealized loss during prior years. Therefore, at
December 31, 2000, the Fund had recorded net unrealized loss on investments of
$2,746,635.

12.      NON-ACCRUAL STATUS OF INVESTMENTS

In accordance with the Fund's accounting policies, the Fund stopped accruing
interest on the LMC Senior Subordinated Revolving Notes effective July 1, 1999
and has not recorded any interest on the LMC Promissory Notes that were acquired
during 2000. In addition, the Fund did not record interest income with respect
to the RBM Senior Subordinated Secured Notes during the period from August 25,
1998 through May 24, 1999. The Fund received RBM common stock in payment of the
interest due with respect to this nine-month period and the stock was valued at
$1 by the Fund at the time of its receipt.

13.       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.

14.      RECONCILIATION TO INCOME TAX METHOD OF ACCOUNTING

The following is a reconciliation of the net increase in net assets resulting
from operations in the accompanying financial statements to the taxable income
reported for federal income tax purposes:

<Table>
<Caption>
                                2000            1999            1998
                            ------------    ------------    ------------
<S>                         <C>             <C>             <C>
Net increase (decrease)
  in net assets resulting
  from operations per
  financial statements      $    642,878    $ (6,363,373)   $   (887,115)
Increase (decrease)
  resulting from:
    Change in unrealized
      loss on investments     (5,996,978)      6,494,038      (1,552,695)
    Realized gains and
      losses on
      investments               (442,971)          5,631      (2,919,771)
    Interest income                   --           7,690         133,320
    Other                         70,868          11,606         (11,221)
                            ------------    ------------    ------------
Taxable income (loss) per
  federal income tax
  return                    $ (5,726,203)   $    155,592    $ (5,237,482)
                            ============    ============    ============
</Table>

The following is a reconciliation of the amount of the Fund's net assets as
shown in the accompanying financial statements and the tax bases of the Fund's
net assets:

<Table>
<Caption>
                                    2000           1999           1998
                                ------------   ------------   ------------
<S>                             <C>            <C>            <C>
Net assets per
  financial statements          $  1,330,944   $    687,419   $  8,466,191
    Unrealized loss on
      investments                  2,746,635      8,743,612      2,249,574
    Syndication, organization
      and start-up costs, net        953,049      2,517,779      2,851,719
    Realized gains and losses
      on investments                      --        442,971        437,340
    Distributions payable                 --        263,575        284,950
    Additional stock and
      note basis                     141,012        141,012        133,322
    Accrued expenses                 102,577         34,524         22,800
                                ------------   ------------   ------------
Tax bases of net assets         $  5,274,217   $ 12,830,892   $ 14,445,896
                                ============   ============   ============
</Table>



                                   ----------

                                    FOURTEEN
<PAGE>   33

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

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Partners of
Fiduciary Capital Pension Partners, L.P.:

We have audited the accompanying balance sheets of Fiduciary Capital Pension
Partners, L.P. (a Delaware limited partnership) as of December 31, 2000 and
1999, including the schedule of investments as of December 31, 2000, and the
related statements of operations, cash flows and changes in net assets for each
of the three years in the period ended December 31, 2000 and the selected per
unit data and ratios for each of the five years in the period then ended. These
financial statements and per unit data and ratios are the responsibility of the
partnership's managing general partner. Our responsibility is to express an
opinion on these financial statements and per unit data and ratios based on our
audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and per
unit data and ratios are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of December 31, 2000 and 1999 by correspondence with the custodian. An
audit also includes assessing the accounting principles 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.

As discussed in Note 2, the financial statements include investment securities
valued at $1,408,597 at December 31, 2000 (105.8% of net assets) and $927,078 at
December 31, 1999 (134.9% of net assets) whose values have been estimated by the
managing general partner in the absence of readily ascertainable market values.
However, because of the inherent uncertainty of valuation, the managing general
partner's estimate of values may differ significantly from the values that would
have been used had a ready market existed for the securities and the differences
could be material.

In our opinion, the financial statements and selected per unit data and ratios
referred to above present fairly, in all material respects, the financial
position of Fiduciary Capital Pension Partners, L.P. as of December 31, 2000 and
1999, and the results of its operations, its cash flows and the changes in its
net assets for each of the three years in the period ended December 31, 2000,
and the selected per unit data and ratios for each of the five years in the
period then ended, in conformity with accounting principles generally accepted
in the United States.

/s/ Arthur Andersen LLP

Denver, Colorado
April 24, 2001.



                                   ----------

                                     FIFTEEN
<PAGE>   34

                    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 audited
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 can not 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 and the effects of
competition on the business of the portfolio companies 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

During 1990, the Fund completed a public offering of its Units. Net offering
proceeds available to the Fund, after deducting commissions and other offering
costs, totaled $26,298,970.

The Fund's Limited Partners adopted a periodic unit repurchase plan during 1993.
Pursuant to the terms of the 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 purchase
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.

Repurchases of Units since the adoption of the plan are summarized as follows:

<Table>
<Caption>
                        Units Repurchased         Net Asset Value per Unit
                     -----------------------      ------------------------
                                Percentage
    Date of                   of Outstanding                    Net of the
Repurchase Offer     Number        Units          Gross           2% Fee
----------------     ------   --------------      -----         ----------
<S>                 <C>       <C>                 <C>           <C>
November 1993        61,850        4.15%          $18.33          $17.96
November 1994       130,951        9.17%           18.35           17.98
November 1995       100,435        7.74%           19.51           19.12
November 1996        91,683        7.66%           15.71           15.40
November 1997        84,739        7.67%           13.72           13.45
November 1998        79,806        7.82%            9.43            9.24
November 1999        70,540        7.50%            4.21            4.13
November 2000        64,055        7.36%            0.44            0.43
</Table>

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 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 and that additional
distributions to Limited Partners during 2001 will total between $1.00 and $1.50
per Unit.

As of December 31, 2000, the Fund held portfolio investments in two Managed
Companies, with an aggregate cost of approximately $3.0 million, and two
Non-Managed Companies, with an aggregate cost of approximately $1.2 million.
These portfolio investments, which were made through the reinvestment of
proceeds from the sale of other portfolio investments, represented approximately
105.8% of the Fund's net assets as of December 31, 2000. When acquired, these
portfolio investments generally consisted of high-yield subordinated debt,
linked with an equity participation or a comparable participation feature. These
securities were typically issued in private placement transactions and were
subject to certain restrictions on transfer or sale, thereby limiting their
liquidity.

During December 2000, RBM and the Fund began negotiating a transaction in which
RBM would prepay the RBM notes held by the Fund and purchase the RBM common
stock and warrants held by the Fund. In this transaction, which was consummated
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) purchased the RBM stock and warrants
held by the Fund for $46,909.

The cash proceeds received during April 2001 from the RBM transaction 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.

Due to affiliates decreased $23,211 from $28,161 at December 31, 1999 to $4,950
at December 31, 2000. This decrease resulted primarily from a reduction in the
amount of reimbursements due FCM for expenses incurred on behalf of the Fund
and, as discussed below, the fact that no investment advisory fees were payable
to FCM for 2000.



                                   ----------

                                     SIXTEEN
<PAGE>   35

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

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


Accounts payable and accrued liabilities decreased $382,180 from $493,269 at
December 31, 1999 to $111,089 at December 31, 2000. This decrease resulted
primarily from the reversal of amounts that had previously been accrued for
certain known potential liabilities related to former investments of the Fund
(see discussion below). These reserves represented approximately $443,000, or
90%, of the total accounts payable and accrued liabilities at December 31, 1999.
The impact of the reversal of these reserves was partially offset by the
accrual, as of December 31, 2000, of $81,829 of estimated expenses that are
expected to be incurred in winding up the activities of the Fund subsequent to
final liquidation.

Distributions payable to partners decreased from $263,575 at December 31, 1999
to zero at December 31, 2000. This decrease resulted from a decrease in the per
Unit distribution rate from $0.30 for the three months ended December 31, 1999
to zero for the three months ended December 31, 2000.

As discussed above, the dissolution of the Fund was effective as of December 31,
2000 and the General Partners are proceeding with the 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 and that additional distributions to Limited Partners during 2001 will
total between $1.00 and $1.50 per Unit.

As of December 31, 1999, the Fund had accrued approximately $443,000 for certain
known potential liabilities related to two former investments of the Fund. The
accruals were reversed as of December 31, 2000 because the applicable statutes
of limitation had expired with respect to a portion of the potential liabilities
and because FCM and its partners agreed to indemnify the Fund with respect to
any remaining potential liabilities associated with these two former
investments.

The Fund may be exposed to other unasserted legal claims encountered in the
course of its activities, past and present. Management does not believe that any
such possible claims would have a material impact on the operating results,
financial position or cash flows of the Fund.

RESULTS OF OPERATIONS

                         INVESTMENT INCOME AND EXPENSES

The Fund's investment income consists primarily of interest income earned from
the various debt investments held by the Fund. Major expenses include fund
administration fees, liquidation expenses, administrative expenses and
professional fees and other expenses related to the Fund's portfolio
investments.

                              2000 Compared to 1999

The Fund's net investment loss was $222,801 for the year ended December 31, 2000
on total investment income of $201,612 as compared to a net investment loss of
$279,357 on total investment income of $315,738 for the prior year. Net
investment loss per limited partnership unit decreased from $0.30 to $0.25 and
the ratio of net investment loss to average net assets increased from 4.63% to
32.19% for the year ended December 31, 2000 in comparison to the prior year. The
ratio of net investment loss to average net assets increased even though the net
investment loss decreased, both in the aggregate and on a per Unit basis, due to
a significant decrease in the Fund's average net assets for the year ended
December 31, 2000 in comparison to the prior year.

Net investment loss for the year ended December 31, 2000 decreased primarily as
a result of a decrease in total expenses in comparison to the prior year. The
favorable impact of the decrease in total expenses was partially offset by a
smaller decrease in investment income.

Investment income decreased $114,126, or 36.1%, for the year ended December 31,
2000 in comparison to the prior year. This decrease resulted primarily from the
decision to stop accruing interest on the Fund's LMC debt investments effective
July 31, 1999 and a decrease in the amount of the Fund's temporary and money
market investments. The amount of the temporary and money market investments
decreased because of (i) cash distributions made by the Fund during 1999 that
constituted a return of capital, (ii) purchases of additional LMC follow-on
investments (including the Niigata receivables), and (iii) the Fund's repurchase
of Units during the fourth quarters of 1999 and 2000. The negative effect of
these items was partially offset by interest income earned on the Niigata
receivables and an increase in the interest income earned on the RBM
subordinated debt investment. As discussed below, the Fund did not record any
interest income on the RBM notes during the period from August 25, 1998 through
May 24, 1999.

Total expenses decreased $170,682, or 28.7%, for the year ended December 31,
2000 in comparison to the prior year. This decrease resulted primarily from
decreases in professional and investment advisory fees. Independent General
Partner fees and expenses also decreased, although by a smaller amount. These
decreases were partially offset by increases in other expenses incurred in
connection with the Fund's LMC investments and the accrual of estimated expenses
that are expected to be incurred in winding up the activities of the Fund
subsequent to final liquidation.



                                   ----------

                                    SEVENTEEN
<PAGE>   36

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

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


Professional fees decreased because prior year legal fees included a significant
amount of fees incurred in connection with LMC related litigation. The Fund's
obligation to pay the monthly investment advisory fees to FCM is 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
Fund did not record the investment advisory fees for 2000 as an expense.

                              1999 Compared to 1998

The Fund's net investment loss was $279,357 for the year ended December 31, 1999
on total investment income of $315,738 as compared to net investment income of
$57,840 on total investment income of $607,354 for the prior year. Net
investment income (loss) per limited partnership unit decreased from $0.05 to
$(0.30) and the ratio of net investment income (loss) to average net assets
decreased from 0.54% to (4.63)% for the year ended December 31, 1999 in
comparison to the prior year.

Net investment income (loss) for the year ended December 31, 1999 decreased
primarily as a result of a decrease in investment income in comparison to the
prior year. Total expenses also increased, though by a much smaller amount.

Investment income decreased $291,616, or 48.0%, for the year ended December 31,
1999 in comparison to the prior year. This decrease resulted primarily from a
decrease in the amount of the Fund's temporary investments and the decisions not
to record interest on the Fund's LMC notes during the period from July 1, 1999
through December 31, 1999 and the Fund's RBM notes during the period from August
25, 1998 through May 24, 1999 (see discussions below). The amount of the Fund's
temporary investments decreased because of (i) return of capital distributions
by the Fund, (ii) the Fund's repurchase of Units during the fourth quarters of
1998 and 1999, (iii) purchases of additional follow-on investments, and (iv) the
incurrence of net investment losses by the Fund.

Total expenses increased $45,581, or 8.3%, for the year ended December 31, 1999
in comparison to the prior year. This increase resulted primarily from an
increase in professional fees. This increase was partially offset by a decrease
in investment advisory fees.

Professional fees increased primarily as a result of increases in legal fees
incurred in connection with LMC related litigation. Investment advisory fees
decreased primarily as a result of (i) the repurchase of Units during the fourth
quarters of 1998 and 1999, (ii) the payment of quarterly cash distributions
during 1998 that exceeded the Limited Partners' Preferred Return (as defined in
the Fund's Partnership Agreement), and (iii) losses realized by the Fund during
the second quarter of 1998 with respect to the Mobile Technology, Inc. ("MTI"),
Atlas and AR Accessories Group, Inc. ("ARA") portfolio investments. All three of
these items decreased the amount of the Fund's available capital (as defined in
the Partnership Agreement), which is the base with respect to which the
investment advisory fees are calculated.

                     NET REALIZED GAIN (LOSS) ON INVESTMENTS

The Fund realized net losses of $5,131,299 during the year ended December 31,
2000, net gains of $410,023 during the year ended December 31, 1999 and net
losses of $2,497,650 during the year ended December 31, 1998.

During 2000, the Fund wrote off the cost of its LMC equity investments,
resulting in realized losses of $5,574,270. These losses were partially offset
by approximately $443,000 of realized gains resulting from the reversal of
previously established accruals for certain known potential liabilities related
to two former investments of the Fund, as discussed above.

The net realized gains for 1999 resulted from gains from the sale of the Fund's
remaining KEMET Corporation common stock, net of losses resulting from
adjustments relating to certain previously held investments. The net realized
losses for 1998 resulted from losses on the Fund's ARA, MTI and Atlas
investments and an additional realized gain on the Fund's Huntington Holdings,
Inc. investment.

                    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.



                                   ----------

                                    EIGHTEEN
<PAGE>   37

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

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


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 will be used only with respect to completed transactions
or firm offers made by sophisticated, independent investors.

Prior to 1998, the Fund had recorded cumulative net unrealized loss on
investments of $3,802,269. During 1998, the Fund recorded $1,944,753 of
unrealized loss on investments. In addition, the Fund disposed of investments
during 1998 with respect to which the Fund had recorded $3,497,448 of net
unrealized loss during prior years. Therefore, at December 31, 1998, the Fund
had net unrealized loss on investments of $2,249,574.

During 1999, the Fund recorded $6,238,506 of unrealized losses on investments.
In addition, the Fund disposed of investments during 1999 with respect to which
the Fund had recorded $255,533 of net unrealized gains during prior years.
Therefore, at December 31, 1999, the Fund had net unrealized losses on
investments totaling $8,743,613.

The net increase in unrealized losses on investments during 2000 and the
cumulative net unrealized losses on investments at December 31, 2000, consisted
of the following components:

<Table>
<Caption>
                              Net Changes       Net Unrealized
                             in Unrealized       Gain (Loss)
                              Gain (Loss)       Recorded as of
Portfolio Investment          During 2000      December 31, 2000
--------------------         -------------     -----------------
<S>                          <C>               <C>
Unrealized losses recorded
  during prior years with
  respect to LMC equity
  investments that were
  written off during 2000      $5,574,266         $        --
LMC                              (240,894)         (1,647,054)
RBM                               663,606              (2,275)
WasteMasters                           --          (1,097,306)
                               ----------         -----------
                               $5,996,978         $(2,746,635)
                               ==========         ===========
</Table>

LMC experienced significant cash flow shortfalls in December 1999 and January
2000. These cash flow shortfalls, combined with significant reductions in the
cash available under LMC's revolving line of credit with CIT, forced a cessation
of production of equipment and severely curtailed LMC's ability to fulfill
orders for spare parts. Substantially all of LMC's employees were terminated
during December 1999 and January 2000.

While LMC held discussions with several potential purchasers of its business, in
whole or in part, no meaningful offers were received. LMC did consummate a
consignment joint venture with respect to its spare parts business during March
2000.

LMC received a notice of default, dated April 6, 2000, from CIT with respect to
its revolving line of credit. On April 28, 2000, LMC filed for Chapter 11
bankruptcy protection. On November 9, 2000, CIT repossessed LMC's assets that
had been pledged as collateral on the 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 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 would 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 the fourth quarter of 1998, RBM encountered financial difficulties
resulting primarily from significant declines in sales to Digital Equipment
Corporation ("DEC"), which occurred as a result of DEC being acquired by Compaq
Computer Corp. As a result of these financial difficulties, RBM restructured its
debt. As part of this restructuring, RBM's subordinated lenders, including the
Fund, agreed to accept shares of RBM's common stock as payment for the next
three quarterly interest payments beginning with the payment that was due during
November 1998. As a consequence, the Fund's ownership of RBM, on a fully diluted
basis, increased from 5.9% to 7.2%, assuming exercise of its warrants. The
restructuring was designed to provide RBM with a period of time in which to
secure additional customers and return to a more stable financial position under
which RBM could meet its interest obligations to its creditors, including the
Fund.

As a result of these developments, the Fund recorded aggregate writedowns of
$665,881 relating to RBM during the year ended December 31, 1998. In addition,
the Fund placed a $1 aggregate valuation on the RBM common stock that was
received in pay-



                                   ----------

                                    NINETEEN
<PAGE>   38

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

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

ments of the interest with respect to the nine-month period beginning August 25,
1998 and ending May 24, 1999. RBM resumed paying the quarterly interest payments
in cash, commencing with the quarterly interest payment due on August 24, 1999.

During December 2000, RBM and the Fund began negotiating a transaction in which
RBM would prepay the RBM notes held by the Fund and purchase the RBM common
stock and warrants held by the Fund. In this transaction, which was consummated
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) purchased the RBM stock and warrants
held by the Fund for $46,909.

The Fund recorded unrealized gains of $663,606 with respect to its various RBM
portfolio investments as of December 31, 2000, in order to adjust the carrying
value of the investments to amounts equal to the proceeds received from RBM
during April 2001.

During June 1998, the Fund exchanged its 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, FCM 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.

The 52-week low for the WasteMasters common stock is $0.02 per share and the
current bid price (April 5, 2001) is $0.055 per share.

INFLATION AND CHANGING PRICES

Inflation has had no material impact on the operations or financial condition of
the Fund from inception through December 31, 2000. However, inflation and
changing prices, in addition to other factors, may effect the value and the
eventual selling price of the Fund's remaining investments.



                                   ----------

                                     TWENTY
<PAGE>   39

                                                                FUND INFORMATION


                                        FIDUCIARY CAPITAL PENSION PARTNERS, L.P.
                                                     1530 16th Street, Suite 200
                                                          Denver, Colorado 80202
                                                                  (800) 866-7607


                                                        MANAGING GENERAL PARTNER
                                        FCM Fiduciary Capital Management Company


                                                                        AUDITORS
                                                             Arthur Andersen LLP
                                                                Denver, Colorado


                                                                   LEGAL COUNSEL
                                                                 Lyle B. Stewart
                                                                Denver, Colorado


                                                                  TRANSFER AGENT
                                                             GEMISYS Corporation
                                                             Englewood, Colorado


                                                     A copy of the Annual Report
                                                 on Form 10-K, as filed with the
                                             Securities and Exchange Commission,
                                             will be furnished without charge to
                                           Limited Partners upon request. A copy
                                             can also be obtained from the SEC's
                                                EDGAR Database on the World Wide
                                         Web at: http://www.sec.gov/edgarhp.htm.