Form 10K

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

           |X|  Annual report  pursuant to section 13 or 15(d) of the
                Securities Exchange Act of 1934 (no fee required) For
                the Year Ended December 31, 1997
                                                 OR
           |_|  Transition  report pursuant to section 13 or 15(d) of
                the Securities Exchange Act of 1934 (no fee required)
                For the transition period from ____ to ____

                        Commission File number 000-28368

                      ATEL Cash Distribution Fund VI, L.P.

      California                                               94-3207229
(State or other jurisdiction of                            (I. R. S. Employer
incorporation or organization)                             Identification No.)

          235 Pine Street, 6th Floor, San Francisco, California 94104
                    (Address of principal executive offices)

        Registrant's telephone number, including area code (415) 989-8800
        Securities registered pursuant to section 12(b) of the Act: None

Securities  registered pursuant to section 12(g) of the Act: Limited Partnership
Units

Indicate  by a check  mark  whether  the  registrant  (1) has filed all  reports
required to be filed by section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.
                                 Yes |X| No |_|

State the aggregate market value of voting stock held by  non-affiliates  of the
registrant.
Inapplicable

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None



Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of  Regulation  S-K  (ss.229.405)  is not  contained  herein,  and  will  not be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information  statements  incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. |X|




<PAGE>

                                     PART I

Item 1:  BUSINESS

General Development of Business

ATEL Cash  Distribution  Fund VI, L.P. (the  Partnership),  was formed under the
laws of the State of California in June 1994. The Partnership was formed for the
purpose  of  acquiring  equipment  to  engage  in  equipment  leasing  and sales
activities.

The  Partnership  conducted  a public  offering of  12,500,000  units of Limited
Partnership  interest  (Units),  at a price of $10 per Unit.  As of November 23,
1996, the Partnership had received  subscriptions for 12,500,000  ($125,000,000)
Limited Partnership Units in addition to the Initial Limited Partners' Units. On
January 3, 1995, the Partnership  commenced  operations in its primary  business
(leasing activities).

The Partnership's  principal objectives are to invest in a diversified portfolio
of  equipment  which will (i)  preserve,  protect  and return the  Partnership's
invested  capital;  (ii) generate  substantial  distributions to the partners of
cash  from  operations  and cash from  sales or  refinancing,  with any  balance
remaining after certain minimum  distributions to be used to purchase additional
equipment  during the  reinvestment  period,  ending December 31, 2002 and (iii)
provide  significant  distributions  following the reinvestment period and until
all  equipment  has been  sold.  The  Partnership  is  governed  by its  Limited
Partnership Agreement.

Narrative Description of Business

The  Partnership  has acquired and intends to acquire various types of equipment
and to lease such  equipment  pursuant to  "Operating"  leases and "Full Payout"
leases,  where  "Operating"  leases  are  defined  as being  leases in which the
minimum  lease  payments  during the initial  lease term do not recover the full
cost of the  equipment  and "Full  Payout"  leases  recover such cost. It is the
intention of the General Partner that no more than 50% of the aggregate purchase
price of equipment will be subject to "Operating"  leases upon final  investment
of the Net Proceeds of the  Offering and that no more than 20% of the  aggregate
purchase price of equipment will be invested in equipment acquired from a single
manufacturer.

The Partnership only purchases equipment for which a lease exists or for which a
lease will be entered into at the time of the purchase.  During early 1997,  the
Partnership  completed its initial  acquisition stage with the investment of the
net proceeds  from the public  offering of Units.  As noted above,  however,  it
intends  to  continue  to invest  any cash flow in  excess  of  certain  amounts
required to be distributed to the Limited Partners in additional items of leased
equipment through December 31, 2002.

As of December 31, 1997, the  Partnership  had purchased  equipment with a total
acquisition price of $208,275,158.

The  Partnership's  objective  is to  lease a  minimum  of 75% of the  equipment
acquired  with the net  proceeds of the  offering  to lessees  which (i) have an
aggregate credit rating by Moody's Investor  Service,  Inc. of Baa or better, or
the credit  equivalent as determined by the General Partner,  with the aggregate
rating weighted to account for the original equipment cost for each item leased;
or  (ii)  are  established   hospitals  with  histories  of   profitability   or
municipalities.  The balance of the  original  equipment  portfolio  may include
equipment leased to lessees which,  although deemed  creditworthy by the General
Partner, would not satisfy the general credit rating criteria for the portfolio.

During 1997, 1996 and 1995 certain lessees generated significant portions of the
Partnership's total lease revenues as follows:

                                                                1997  1996  1995
                                                                ----  ----  ----
         Lessee                     Type of Equipment
Consolidated Rail Corporation       Locomotives & intermodal
                                    containers                  10%    14%   *
NEC Electronics                     Semiconductor manufacturing 10%     *    *
The Atchison, Topeka and Santa Fe
   Railroad Company                 Containers & Chassis         *      *   17%
Peerless Eagle Coal Company         Construction Equipment       *      *   11%

* Less than 10%.

These percentages are not expected to be comparable in future periods.

The equipment leasing industry is highly competitive.  Equipment  manufacturers,
corporations, partnerships and others offer users an alternative to the purchase
of most types of equipment with payment terms which vary widely depending on the
lease term and type of  equipment.  The ability of the  Partnership  to keep the
equipment leased and/or operating and the terms of the acquisitions,  leases and
dispositions  of equipment  depends on various factors (many of which are not in
the control of the General Partner or the Partnership), such as general economic
conditions, including the effects of inflation or recession, and fluctuations in
supply and demand for various  types of equipment  resulting  from,  among other
things, technological and economic obsolescence.

The General  Partner will seek to limit the amount  invested in equipment to any
single lessee to not more than 20% of the aggregate  purchase price of equipment
owned at any time during the reinvestment period.

The business of the Partnership is not seasonal.

The Partnership has no full time employees.

Equipment Leasing Activities:

Through December 31, 1997, the Partnership has disposed of certain leased assets
as set forth below:

                        Original
                    Equipment Cost,                         Excess of
Type of                 Excluding                           Rents Over
Equipment          Acquisition Fees      Sale Price         Expenses *
---------          ----------------      ----------         ----------
Transportation           $1,088,875           $517,851         $391,655
Office automation           738,620             89,403          703,990
Containers                  150,304            160,523           18,611
Railcars                    195,209            191,303           14,316
Printers                     12,142             12,179            1,662
                    ----------------  -----------------  ---------------
                         $2,185,150           $971,259       $1,130,235
                    ================  =================  ===============

* Includes only those expenses directly related to the production of the related
rents.

The Partnership has acquired a diversified portfolio of equipment. The equipment
has been leased to lessees in various industries. The following tables set forth
the types of equipment acquired by the Partnership through December 31, 1997 and
the industries to which the assets have been leased.

<TABLE>
<CAPTION>
                                       Purchase price excluding  Percentage of total
       Asset types                          acquisition fees         acquisitions
       -----------                          ----------------         ------------
<S>                                            <C>                           <C>
Transportation, rail cars                       $39,275,195                   18.86%
Manufacturing                                    30,469,834                   14.63%
Transportation, other                            24,476,511                   11.75%
Materials handling                               24,043,881                   11.54%
Railroad locomotives                             22,353,332                   10.73%
Transportation, intermodal containers            21,694,688                   10.42%
Mining equipment                                 18,557,225                    8.91%
Office automation                                13,824,024                    6.64%
Construction                                      9,259,221                    4.45%
Other                                             4,321,247                    2.07%
                                            ----------------        ----------------
                                               $208,275,158                  100.00%
                                            ================        ================
</TABLE>
<TABLE>
<CAPTION>

                                       Purchase price excluding  Percentage of total
   Industry of lessee                       acquisition fees         acquisitions
   ------------------                       ----------------         ------------
<S>                                            <C>                           <C>
Transportation, rail                            $55,950,904                   26.86%
Electronics manufacturing                        29,030,626                   13.94%
Business services                                28,360,969                   13.62%
Mining                                           24,793,242                   11.90%
Transportation, other                            23,217,066                   11.15%
Manufacturing, other                             18,922,229                    9.09%
Oil & gas                                        16,535,633                    7.94%
Other                                             6,182,198                    2.97%
Communications                                    5,282,291                    2.53%
                                            ----------------        ----------------
                                               $208,275,158                  100.00%
                                            ================        ================
</TABLE>

For further information regarding the Partnership's equipment lease portfolio as
of December 31, 1997,  see Note 3 to the financial  statements,  Investments  in
equipment  and  leases,   set  forth  in  Item  8,   Financial   Statements  and
Supplementary Data.


Item 2.  PROPERTIES

The  Partnership  does not own or lease any real  property,  plant or materially
important  physical  properties  other than the equipment  held for lease as set
forth in Item 1.


Item 3.  LEGAL PROCEEDINGS

Inapplicable.


Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Inapplicable.


                                     PART II

Item 5.  MARKET FOR REGISTRANT'S LIMITED PARTNERSHIP UNITS
              AND RELATED MATTERS

Market Information

The Units are transferable  subject to restrictions on transfers which have been
imposed under the securities  laws of certain  states.  However,  as a result of
such restrictions, the size of the Partnership and its investment objectives, to
the General Partner's knowledge,  no established public secondary trading market
has developed and it is unlikely  that a public  trading  market will develop in
the future.

Holders

As of December 31, 1997, a total of 6,401 investors were record holders of Units
in the Partnership.

Dividends

The  Partnership  does not make  dividend  distributions.  However,  the Limited
Partners of the  Partnership are entitled to certain  distributions  as provided
under the Limited Partnership Agreement.

The rate for monthly  distributions  from 1997  operations was $0.0833 per Unit.
The  distributions  were made in  February  1997  through  December  1997 and in
January 1998. For each quarterly  distribution  (made in April, July and October
1997 and in January 1998) the rate was $0.25 per Unit.  Distributions  were from
1997 cash  flows  from  operations.  The  amounts  paid to holders of Units were
adjusted  based on the length of time  within  the  previous  calendar  month or
quarter that the Units were outstanding.

The rate for monthly  distributions  from 1996  operations was $0.0833 per Unit.
The  distributions  were made in  February  1996  through  December  1996 and in
January 1997. For each quarterly  distribution  (made in April, July and October
1996 and in January 1997) the rate was $0.25 per Unit.  Distributions  were from
1996 cash  flows  from  operations.  The  amounts  paid to holders of Units were
adjusted  based on the length of time  within  the  previous  calendar  month or
quarter that the Units were outstanding.

The Partnership  commenced regular monthly  distributions in February 1995 (from
January 1995 operations) and regular quarterly distributions in April 1995 (from
1995 first quarter operations).  The rate for each of the monthly  distributions
from 1995  operations  was  $.0833  per  Unit.  The  distributions  were made in
February  1995  through  December  1995  and in  January  1996.  For each of the
quarterly  distributions  (made in April,  July and October  1995 and in January
1996)  the rate was $.25 per Unit.  Distributions  were  from  cash  flows  from
operations in 1995.

The General  Partner  shall have sole  discretion in  determining  the amount of
distributions;  provided, however, that the General Partner will not reinvest in
equipment,  but will  distribute,  subject to payment of any  obligations of the
Partnership,  such  available  cash  from  operations  and  cash  from  sales or
refinancing  as may be  necessary  to cause total  distributions  to the Limited
Partners  for each year during the  reinvestment  period to equal the  following
amounts per unit:  $1.00 in 1997 and 1998; $1.05 in 1999 and 2000; $1.10 in 2001
and 2002.

Holders  may make the  election  without  charge to receive  distributions  on a
monthly basis.

The following table presents summarized  information regarding  distributions to
Limited Partners:

<TABLE>
<CAPTION>
                                               1997             1996            1995
                                               ----             ----            ----
<S>                                                 <C>              <C>             <C>
Distributions of net loss                          ($0.18)          ($0.23)         ($0.19)
Return of investment                                 1.18             1.16            0.97
                                          ---------------- ---------------- ---------------
Distributions per unit                               1.00             0.93            0.78
Differences due to timing of distributions           0.00             0.07            0.22
                                          ---------------- ---------------- ---------------
Nominal distribution rates from above               $1.00            $1.00           $1.00
                                          ================ ================ ===============
</TABLE>


Item 6.  SELECTED FINANCIAL DATA

The following  table  presents  selected  financial  data of the  Partnership at
December 31, 1997,  1996,  1995 and 1994.  This financial data should be read in
conjunction with the financial  statements and related notes included under Item
8 of this report.

<TABLE>
<CAPTION>
                                                                  1997             1996            1995             1994
                                                                  ----             ----            ----             ----
<S>                                                          <C>              <C>              <C>                    <C>
Gross revenues                                                $36,485,165      $25,729,470      $6,444,037               -

Net loss                                                      ($2,297,964)     ($2,210,330)      ($602,674)              -

Weighted average Limited Partner Units
   outstanding                                                 12,500,050        9,424,045       3,154,291              50

Net loss per Unit, based on weighted average
   Units outstanding                                               ($0.18)          ($0.23)         ($0.19)              -

Distributions per Unit, based on weighted average
   Units outstanding                                                $1.00            $0.93           $0.78               -

Total Assets                                                 $170,290,581     $192,831,691     $96,883,645            $600

Non-recourse Debt                                             $77,647,591      $80,789,732        $836,181               -

Total Partners' Capital                                       $78,274,435      $93,201,156     $50,576,037            $600
</TABLE>


Item 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
             CONDITION AND RESULTS OF OPERATIONS


Capital Resources and Liquidity

The Partnership  commenced its offering on November 23, 1994. As of December 31,
1994,  all of the proceeds of the offering were held by the escrow  agent.  Upon
sale of the minimum  amount of Units of  $1,200,000  and receipt of the proceeds
thereof on January 3, 1995, the  Partnership  commenced  operations.  During the
funding period and until the  Partnership's  initial  portfolio of equipment had
been  purchased,  funds  which  had been  received,  but  which had not yet been
invested in leased  equipment,  were  invested in  interest-bearing  accounts or
high-quality/short-term  commercial  paper.  The  Partnership's  public offering
provided for a total maximum capitalization of $125,000,000 and was completed as
of November  23,  1996.  As of that date  subscriptions  had been  received  and
accepted for $125,000,000.

During the funding  period,  the  Partnership's  primary  source of liquidity is
subscription  proceeds from the public  offering of Units.  The liquidity of the
Partnership  will vary in the future,  increasing  to the extent cash flows from
leases and  proceeds of asset sales exceed  expenses,  and  decreasing  as lease
assets are acquired,  as  distributions  are made to the limited partners and to
the extent expenses exceed cash flows from leases and proceeds from asset sales.

As another source of liquidity, the Partnership has contractual obligations with
a diversified group of lessees for fixed lease terms at fixed rental amounts. As
the initial  lease  terms  expire,  the  Partnership  will  re-lease or sell the
equipment.  The future  liquidity  beyond the  contractual  minimum rentals will
depend on the General  Partner's  success in re-leasing or selling the equipment
as it comes off lease.

The  Partnership  participates  with the  General  Partner  and  certain  of its
affiliates in a $90,000,000  revolving  line of credit (which has been increased
to  $105,000,000  through  March 31,  1998) with a  financial  institution  that
includes certain financial covenants.  The line of credit expires on October 28,
1998.  As of December 31, 1997,  the  Partnership  had  $8,750,000 of borrowings
under this line of credit and the remaining availability was $17,754,812.

The Partnership  anticipates reinvesting a portion of lease payments from assets
owned in new leasing  transactions.  Such reinvestment will occur only after the
payment  of  all  obligations,   including  debt  service  (both  principal  and
interest), the payment of management and acquisition fees to the General Partner
and providing for cash  distributions to the Limited  Partners.  At December 31,
1997, the Partnership had no commitments to purchase lease assets.

As of December 31, 1997,  all cash  balances  consisted of amounts  reserved for
distributions in January 1998, generated from operations in 1997.

The Partnership  currently has available adequate reserves to meet its immediate
cash requirements,  but in the event those reserves were found to be inadequate,
the  Partnership  would  likely be in a position  to borrow  against its current
portfolio  to meet such  requirements.  The General  Partner  envisions  no such
requirements for operating purposes.

The  Partnership's  long-term  borrowings are expected to be non-recourse to the
Partnership,  that is, the only  recourse of the lender will be to the equipment
or  corresponding  lease  acquired with the loan proceeds.  The General  Partner
expects that aggregate borrowings in the future will be approximately 40%-50% of
aggregate  equipment  cost. In any event,  the Agreement of Limited  Partnership
limits such borrowings to 50% of the total cost of equipment, in aggregate.  The
Partnership  may  only  incur  additional  debt  to the  extent  that  the  then
outstanding  balance of all such debt,  including the additional  debt, does not
exceed  50% of  the  original  cost  of  the  lease  assets  then  owned  by the
Partnership,  including  any such  assets  purchased  with the  proceeds of such
additional debt.

The  Partnership  commenced  regular  distributions,  based on cash  flows  from
operations,  beginning with the month of January 1995. See Items 5 and 6 of this
report for additional information regarding the distributions.

If  inflation  in the general  economy  becomes  significant,  it may affect the
Partnership  inasmuch as the residual  (resale) values and rates on re-leases of
the  Partnership's  leased  assets may  increase as the costs of similar  assets
increase.  However,  the  Partnership's  revenues from existing leases would not
increase,  as such rates are generally fixed for the terms of the leases without
adjustment for inflation.

If interest rates increase  significantly,  the lease rates that the Partnership
can obtain on future  leases will be expected to increase as the cost of capital
is a significant  factor in the pricing of lease  financing.  Leases  already in
place, for the most part, would not be affected by changes in interest rates.


Cash Flows:

                     1997 vs. 1996:

In 1997, the Partnership's primary sources of cash were the rents from operating
leases and proceeds of non-recourse debt.

Cash flows from operations  increased from $13,940,220 in 1996 to $23,899,770 in
1997. The increase was due to increased operating lease rents compared to 1996.

In 1997,  sources of cash from investing  activities  consisted of proceeds from
sales of lease  assets and cash flows from  direct  financing  leases.  The cash
flows from direct  financing  leases has increased due to  acquisitions of lease
assets in 1996 and in 1997.  Uses of cash in investing  activities  consisted of
lease assets purchases.

In 1997,  sources of cash from financing  activities  consisted of debt proceeds
(non-recourse and line of credit). Borrowings under the line of credit were used
primarily to purchase lease assets. Proceeds from non-recourse debt were used to
repay borrowings under the line of credit and to purchase lease assets.

Distributions to limited partners increased due to the increased number of Units
outstanding in 1997 compared to 1996.

                     1996 vs. 1995

In 1996,  the  Partnership's  primary  sources of cash were the  proceeds of its
public offering of Limited  Partnership Units (Units),  proceeds of non-recourse
debt and borrowings under the line of credit.

Cash flows from  operations  increased from $4,354,020 in 1995 to $13,940,220 in
1996. The increase was due to increased operating lease rents compared to 1995.

In 1996,  sources of cash from investing  activities  consisted of proceeds from
sales of lease  assets and cash flows from  direct  financing  leases.  The cash
flows from direct financing leases increased due to acquisitions of lease assets
in 1995 and in 1996. The Partnership's  first year of operations was 1995 and in
that year,  there were no  significant  dispositions  of  assets.  In 1996,  the
proceeds from sales of assets increased to $636,397 compared to $54,156 in 1995.
Uses of cash in investing  activities  consisted of lease assets  purchases  and
payment of related acquisition fees to an affiliate of the General Partner.

In 1996, sources of cash from financing  activities consisted of proceeds of the
Partnership's  offering  of Units and debt  proceeds  (non-recourse  and line of
credit). The Partnership's  offering was concluded in November 1996.  Borrowings
under the line of credit were used primarily to purchase lease assets.  Proceeds
from  non-recourse  debt were used to repay  borrowings under the line of credit
and to purchase lease assets.

Distributions to limited partners increased due to the increased number of Units
outstanding in 1996 compared to 1995.


Results of Operations

As of January 3, 1995,  subscriptions  for the  minimum  amount of the  offering
($1,200,000) had been received and accepted by the Partnership. As of that date,
the  Partnership   commenced   operations  in  its  primary  business   (leasing
activities).  There  were no  operations  in 1994.  Because of the timing of the
commencement of operations and the fact that the initial portfolio  acquisitions
were not completed  until early 1997, the results of operations in 1996 and 1995
are not  comparable  to 1997 and are not  expected  to be  comparable  to future
periods.

                     1997 vs. 1996

Revenues in 1997  increased  to  $36,485,165  compared to  $25,729,470  in 1996.
Almost all of the  Partnership's  revenues are generated from operating  leases.
These rents have increased as a result of 1996 asset acquisitions contributing a
full year's revenues in 1997 compared to only a part of 1996.

Depreciation  and  interest  are  the  most  significant  Partnership  expenses.
Depreciation  expense is directly  related to the  Partnership's  investment  in
operating  leases  and is  therefore  also  directly  related  to  the  revenues
generated  by those  assets.  The 1996  acquisitions  which led to 1997  revenue
increases also gave rise to the 1997 increase in depreciation expense.

In 1997, the Partnership's  average  indebtedness was about $91,000,000 compared
to about  $68,000,000  in 1996.  This  increase  in the  average  amount of debt
carried by the  Partnership led to the $2,220,283  increase in interest  expense
compared to 1996.

Administrative  costs  decreased  from $748,745 in 1996 to $435,759 in 1997. The
decrease  was  related  to  the  decrease  in  administrative  activities  which
coincided  with  the  termination  of  the  Partnership's  offering  of  Limited
Partnership Units in November 1996.

Management   fees  are  related  to  lease   revenues  and  to  the  amounts  of
distributions to the limited partners. In 1997, both of these factors increased.
Revenues increased as noted above and distributions increased as a result of the
larger number of Units outstanding (on average) in 1997 compared to 1996.

                     1996 vs. 1995

The Partnership's  revenues  increased from $6,444,037 in 1995 to $25,729,470 in
1996. The increase was due to increased  operating lease  revenues.  In 1995 and
1996, the original cost of assets under operating  leases increased from none at
the beginning of 1995 to $199,982,098 by the end of 1996. These acquisitions led
to the increased lease revenues noted.

Depreciation  expense is directly  related to  operating  lease  assets.  As the
amount  of  such  assets  has  increased  due to  acquisitions,  the  amount  of
depreciation has likewise increased.

The increase in interest expense compared to 1995 is due to increased amounts of
debt outstanding in 1996 compared to 1995.

Equipment  and  incentive   management   fees  are  based  on  lease  rents  and
distributions to the limited  partners,  respectively.  Both of these underlying
factors increased in 1996 and this resulted in the increase in management fees.


Impact of the Year 2000

The year 2000 issue is the result of computer  programs  being written using two
digits rather than four to define the  applicable  year.  Any computer  programs
that have time  sensitive  software may  recognize a date using "00" as the year
1900  rather  than the year  2000.  This  could  result in a system  failure  or
miscalculation causing disruptions of operations, including, among other things,
a  temporary  inability  to process  transactions  or engage in  similar  normal
business activities.

The  Partnership  believes  that it will not be  required  to modify or  replace
significant  portions of its software and that the year 2000 issue will not pose
significant  operational problems for its computer systems. The Partnership does
not expect  that the costs  related to the year 2000 issue will be  significant.
Ultimately,  the potential impact of the year 2000 issue will depend not only on
the corrective measures the Partnership undertakes, but also on the way in which
the year  2000  issue is  addressed  by  businesses  and  other  entities  whose
financial  condition or operational  capability is important to the Partnership.
Therefore,  the Partnership is communicating to these parties to ensure they are
aware of the year  2000  issue,  to learn  how they are  addressing  it,  and to
evaluate any likely impact on the Partnership.


Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See Financial  Statements and Notes to Financial  Statements  attached hereto at
pages 9 through 21.

<PAGE>

                         REPORT OF INDEPENDENT AUDITORS






The Partners
ATEL Cash Distribution Fund VI, L.P.


We have audited the accompanying  balance sheets of ATEL Cash  Distribution Fund
VI,  L.P.  as of  December  31,  1997  and 1996 and the  related  statements  of
operations,  changes in partners' capital,  and cash flows for each of the three
years in the period ended December 31, 1997. These financial  statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  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.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of ATEL Cash Distribution Fund VI,
L.P. at December  31,  1997 and 1996 and the results of its  operations  and its
cash flows for each of the three years in the period ended December 31, 1997, in
conformity with generally accepted accounting principles.





                                                               ERNST & YOUNG LLP
San Francisco, California
February 6, 1998

<PAGE>

                      ATEL CASH DISTRIBUTION FUND VI, L.P.

                                 BALANCE SHEETS

                           DECEMBER 31, 1997 AND 1996


                                     ASSETS

                                                     1997             1996
                                                     ----             ----
Cash and cash equivalents                              $739,701      $1,123,336

Accounts receivable                                  10,694,629       6,198,258

Investments in equipment and leases                 158,856,251     185,510,097
                                                ---------------- ---------------
Total assets                                       $170,290,581    $192,831,691
                                                ================ ===============




                       LIABILITIES AND PARTNERS' CAPITAL


Non-recourse debt                                   $77,647,591     $80,789,732

Lines of credit                                       8,750,000      15,598,257

Accounts payable and accruals:
   General Partner                                      314,358          45,070
   Equipment purchases                                  255,252         638,379
   Other                                                415,660         415,008

Accrued interest payable                              4,108,922       1,746,206

Unearned lease income                                   524,363         397,883
                                                ---------------- ---------------
                                                     92,016,146      99,630,535

Partners' capital:
     General Partner                                   (254,015)       (118,690)
     Limited Partners                                78,528,450      93,319,846
                                                ---------------- ---------------
Total partners' capital                              78,274,435      93,201,156
                                                ---------------- ---------------
Total liabilities and partners' capital            $170,290,581    $192,831,691
                                                ================ ===============


                             See accompanying notes.



<PAGE>

                      ATEL CASH DISTRIBUTION FUND VI, L.P.

                            STATEMENTS OF OPERATIONS

                  YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995


<TABLE>
<CAPTION>
                                                              1997            1996             1995
                                                              ----            ----             ----
Revenues:

Leasing activities:
<S>                                                          <C>             <C>              <C>
   Operating leases                                          $36,185,873     $25,480,263      $6,291,439
   Direct financing leases                                       243,423         215,650          94,398
   Gain (loss) on sales of assets                                 26,431        (107,873)          3,819
Interest income                                                   19,461          66,348          50,388
Other                                                              9,977          75,082           3,993
                                                        ----------------- --------------- ---------------
                                                              36,485,165      25,729,470       6,444,037

Expenses:

Depreciation and amortization                                 27,596,548      19,298,500       4,976,075
Interest                                                       7,993,746       5,773,463         931,651
Equipment and incentive management fees to affiliates          1,492,716       1,061,856         362,581
Other                                                            807,883         612,698         121,541
Administrative cost reimbursements to General Partner            435,759         748,745         539,009
Provision for losses and impairments                             364,852         257,814          64,892
Professional fees                                                 91,625         186,724          50,962
                                                        ----------------- --------------- ---------------
                                                              38,783,129      27,939,800       7,046,711
                                                        ----------------- --------------- ---------------
Net loss                                                     ($2,297,964)    ($2,210,330)      ($602,674)
                                                        ================================= ===============

Net loss:
   General Partner                                              ($22,980)       ($22,103)        ($6,027)
   Limited Partners                                           (2,274,984)     (2,188,227)       (596,647)
                                                        ----------------- --------------- ---------------
                                                             ($2,297,964)    ($2,210,330)      ($602,674)
                                                        ================= =============== ===============

Net loss per Limited Partnership unit                             ($0.18)         ($0.23)         ($0.19)

Weighted average number of units outstanding                  12,500,050       9,424,045       3,154,291
</TABLE>



                             See accompanying notes.
<PAGE>



                      ATEL CASH DISTRIBUTION FUND VI, L.P.

                    STATEMENT OF CHANGES IN PARTNERS' CAPITAL

                  YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995


<TABLE>
<CAPTION>
                                                                          Limited Partners     General
                                                               Units           Amount          Partner            Total
<S>                                                            <C>             <C>               <C>           <C>
Balance December 31, 1995                                       6,269,013      $50,599,712        ($23,675)    $50,576,037

Capital contributions received                                  6,231,037       62,310,370                      62,310,370
Less selling commissions to affiliates                                          (5,919,485)                     (5,919,485)
Other syndication costs to affiliates                                           (2,762,793)                     (2,762,793)
Distributions to limited partners ($0.93 per Unit)                              (8,719,731)                     (8,719,731)
Distributions to General Partner                                                                   (72,912)        (72,912)
Net loss                                                                        (2,188,227)        (22,103)     (2,210,330)
                                                          ---------------- ---------------- --------------- ---------------
Balance December 31, 1996                                      12,500,050       93,319,846        (118,690)     93,201,156
Other syndication costs to affiliates                                              (41,174)                        (41,174)
Distributions to limited partners ($1.00 per Unit)                             (12,475,238)                    (12,475,238)
Distributions to General Partner                                                                  (112,345)       (112,345)
Net loss                                                                        (2,274,984)        (22,980)     (2,297,964)
                                                          ---------------- ---------------- --------------- ---------------
Balance December 31, 1997                                      12,500,050      $78,528,450       ($254,015)    $78,274,435
                                                          ================ ================ =============== ===============
</TABLE>




                             See accompanying notes.

<PAGE>

                      ATEL CASH DISTRIBUTION FUND VI, L.P.

                            STATEMENTS OF CASH FLOWS

                  YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995


<TABLE>
<CAPTION>
                                                               1997            1996             1995
                                                               ----            ----             ----
<S>                                                           <C>            <C>              <C>
Operating activities:
Net loss                                                      ($2,297,964)    ($2,210,330)      ($602,674)
Adjustment to reconcile net loss to net cash provided by
   operating activities:
     Depreciation and amortization                             27,596,548      19,298,500       4,976,075
     Provision for losses and impairments                         364,852         257,814          64,892
    (Gain) loss  on sales of assets                               (26,431)        107,873          (3,819)
     Changes in operating assets and liabilities:
         Accounts receivable                                   (4,496,371)     (4,191,555)     (2,006,703)
         Accounts payable, General Partner                        269,288      (1,233,996)      1,279,066
         Accounts payable, other                                      652         297,525         117,483
         Accrued interest payable                               2,362,716       1,515,239         230,967
         Unearned lease income                                    126,480          99,150         298,733
                                                         ----------------- --------------- ---------------
Net cash provided by operating activities                      23,899,770      13,940,220       4,354,020
                                                         ----------------- --------------- ---------------

Investing activities:
Purchases of equipment on operating leases                     (2,661,808)   (113,775,023)    (87,041,903)
Purchases of equipment on direct financing leases                 (94,469)     (1,177,807)     (2,961,829)
Purchases of residual value interests                                   -        (379,551)              -
Initial direct lease costs paid to affiliate                            -      (2,716,021)     (2,908,979)
Reduction of net investment in direct financing leases            685,665         501,623         195,884
Proceeds from sales of assets                                     406,362         636,397          54,156
                                                         ----------------- --------------- ---------------
Net cash used in investing activities                          (1,664,250)   (116,910,382)    (92,662,671)
                                                         ----------------- --------------- ---------------

Financing activities:
Capital contributions received                                          -      62,310,370      62,689,630
Payment of syndication costs to General Partner                   (41,174)     (8,682,278)     (9,026,548)
Distributions to Limited Partners                             (12,475,238)     (8,719,731)     (2,467,223)
Distributions to General Partner                                 (112,345)        (72,912)        (17,748)
Borrowings under lines of credit                                3,210,974      64,426,319      70,038,370
Repayments of borrowings under lines of credit                (10,059,231)    (87,196,734)    (31,669,698)
Proceeds of non-recourse debt                                  10,701,894      84,675,980         943,536
Repayments of non-recourse debt                               (13,844,035)     (4,722,429)       (107,355)
                                                         ----------------- --------------- ---------------
Net cash (used in) provided by financing activities           (22,619,155)    102,018,585      90,382,964
                                                         ----------------- --------------- ---------------

Net (decrease) increase in cash and cash equivalents             (383,635)       (951,577)      2,074,313
Cash and cash equivalents at beginning of period                1,123,336       2,074,913             600
                                                         ----------------- --------------- ---------------
Cash and cash equivalents at end of period                       $739,701      $1,123,336      $2,074,913
                                                         ================================= ===============

Supplemental disclosures of cash flow information:
Cash paid during the year for interest                         $5,631,030      $4,258,224        $700,684
                                                         ================================= ===============
</TABLE>
                             See accompanying notes.

<PAGE>

                      ATEL CASH DISTRIBUTION FUND VI, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1997


1.  Organization and Partnership matters:

ATEL Cash  Distribution  Fund VI, L.P. (the Fund),  was formed under the laws of
the State of California on June 29, 1994, for the purpose of acquiring equipment
to engage in equipment leasing and sales activities. Contributions in the amount
of $600 were received as of July 21, 1994, $100 of which represented the General
Partner's (ATEL Financial Corporation's)  continuing interest, and $500 of which
represented the Initial Limited Partners' capital investment.

Upon the sale of the  minimum  amount of Units of Limited  Partnership  interest
(Units) of  $1,200,000  and the  receipt of the  proceeds  thereof on January 3,
1995, the Partnership commenced operations.

The Partnership or the General Partner on behalf of the Partnership,  will incur
costs in  connection  with the  organization,  registration  and issuance of the
Units.  The amount of such costs to be born by the Partnership is limited to 15%
of Gross  Proceeds of up to  $25,000,000  and 14% of Gross Proceeds in excess of
$25,000,000.

The Partnership's business consists of leasing various types of equipment. As of
December 31, 1997,  the original  terms of the leases  ranged from one to twenty
years.

Pursuant to the Limited  Partnership  Agreement,  the General  Partner  receives
compensation  and   reimbursements  for  services  rendered  on  behalf  of  the
Partnership  (Note 5).  The  General  Partner is  required  to  maintain  in the
Partnership  reasonable  cash reserves for working  capital,  the  repurchase of
Units and contingencies.


2. Summary of significant accounting policies:

Equipment on operating leases:

Revenues  from  operating  leases  are  recognized  evenly  over the life of the
related leases.

Equipment on operating leases is stated at cost.  Depreciation is being provided
by use of the  straight-line  method over the terms of the related leases to the
equipment's' estimated residual values at the end of the leases.

Direct financing leases:

Income from direct  financing  lease  transactions  is reported on the financing
method  of  accounting,  in which the  Partnership's  investment  in the  leased
property is reported as a  receivable  from the lessee to be  recovered  through
future rentals. The income portion of each rental payment is calculated so as to
generate a constant rate of return on the net receivable outstanding.


<PAGE>

                      ATEL CASH DISTRIBUTION FUND VI, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1997


2. Summary of significant accounting policies (continued):

Statements of cash flows:

For purposes of the Statements of Cash Flows, cash and cash equivalents includes
cash in banks and cash equivalent investments with original maturities of ninety
days or less.

Income taxes:

The  Partnership  does not provide for income  taxes since all income and losses
are the liability of the  individual  partners and are allocated to the partners
for inclusion in their individual tax returns.

The tax basis of the  Partnership's  net assets and liabilities  varies from the
amounts presented in these financial statements (unaudited)

                                                 1997             1996
                                                 ----             ----
  Financial statement basis of net assets       $78,274,435     $93,201,156
  Tax basis of net assets                        39,757,262      74,777,978
                                            ---------------- ---------------
  Difference                                    $38,517,173     $18,423,178
                                            ================ ===============

The  primary  differences  between  the tax basis of net assets and the  amounts
recorded in the financial  statements are the accounting for  syndication  costs
and  differences  between  the  depreciation   methods  used  in  the  financial
statements and the Partnership's tax returns.

The following  reconciles the net loss reported in these financial statements to
the loss reported on the Partnership's federal tax return (unaudited):

                                               1997             1996
                                               ----             ----
  Net loss per financial statements           ($2,297,964)    ($2,210,330)
  Adjustment to depreciation expense          (19,855,425)    (26,173,869)
  Adjustments to lease revenues                  (601,760)        806,994
  Adjustments to other expenses                   (42,835)              -
  Provision for losses                            364,852         257,814
                                          ---------------- ---------------
  Net loss per federal tax return            ($22,433,132)   ($27,319,391)
                                          ================ ===============

Per unit data:

Net income and distributions per unit are based upon the weighted average number
of units outstanding during the period.

Credit Risk:

Financial   instruments   which   potentially   subject   the   Partnership   to
concentrations  of credit risk  include cash and cash  equivalents  and accounts
receivable.  The  Partnership  places  its  cash  deposits  and  temporary  cash
investments  with  creditworthy,   high  quality  financial  institutions.   The
concentration  of such deposits and temporary cash  investments is not deemed to
create a significant  risk to the  Partnership.  Accounts  receivable  represent
amounts  due from  lessees  in  various  industries,  related  to  equipment  on
operating and direct financing  leases.  See Note 7 for a description of lessees
by industry as of December 31, 1997.


<PAGE>

                      ATEL CASH DISTRIBUTION FUND VI, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1997


2. Summary of significant accounting policies (continued):

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.


3. Investments in equipment and leases:

As of December 31, 1997, the  Partnership's  investments in equipment and leases
consist of the following:

<TABLE>
<CAPTION>
                                                                            Depreciation
                                                                             Expense or       Reclass-
                                          December 31,                      Amortization    ifications or   December 31,
                                               1996          Additions       of Leases      Dispositions         1997
                                               ----          ---------       ---------      ------------         ----
<S>                                          <C>               <C>            <C>                <C>          <C>
Net investment in operating leases           $177,700,195      $2,278,681     ($26,400,161)      ($764,222)   $152,814,493
Net investment in direct financing
   leases                                       3,442,129          94,469         (685,665)              -       2,850,933
Assets held for sale or lease                      44,318               -                -         384,291         428,609
Residual value interests                          379,551               -                -               -         379,551
Reserve for losses                               (322,706)       (364,852)               -               -        (687,558)
Initial direct costs, net of accumulated
   amortization of $2,366,645 in 1997
   and $1,220,992 in 1996                       4,266,610               -       (1,196,387)              -       3,070,223
                                          ---------------- --------------- ---------------- --------------- ---------------
                                             $185,510,097      $2,008,298     ($28,282,213)      ($379,931)   $158,856,251
                                          ================ =============== ================ =============== ===============
</TABLE>


<PAGE>

                      ATEL CASH DISTRIBUTION FUND VI, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1997


3.  Investments in equipment and leases (continued):

Operating leases:

Property on operating  leases consists of the following as of December 31, 1996,
additions and dispositions during 1997 and as of December 31, 1997:

<TABLE>
<CAPTION>
                                                                        Reclass-
                                    December 31,                      ifications or   December 31,
                                         1996          Additions      Dispositions         1997
                                         ----          ---------      ------------         ----
<S>                                    <C>              <C>                <C>          <C>
Transportation                         $101,516,495                      ($1,429,471)   $100,087,024
Construction                             32,643,774                                -      32,643,774
Manufacturing                            30,738,706                                -      30,738,706
Materials handling                       18,727,504                          (16,696)     18,710,808
Office automation                        11,352,842       $2,278,681        (563,411)     13,068,112
Miscellaneous                             3,683,663                -               -       3,683,663
Communications                              658,185                -               -         658,185
Medical                                     343,409                -               -         343,409
Food processing                             317,520                -               -         317,520
                                    ---------------- ---------------- --------------- ---------------
                                        199,982,098        2,278,681      (2,009,578)    200,251,201
Less accumulated depreciation           (22,281,903)     (26,400,161)      1,245,356     (47,436,708)
                                    ---------------- ---------------- --------------- ---------------
                                       $177,700,195     ($24,121,480)      ($764,222)   $152,814,493
                                    ================ ================ =============== ===============
</TABLE>

Direct financing leases:

As of December 31, 1997 and 1996, investment in direct financing leases consists
of railroad tank cars and various  office  automation  equipment.  The following
lists the components of the Partnership's  investment in direct financing leases
as of December 31, 1997:

<TABLE>
<CAPTION>
                                                                    1997            1996
                                                                    ----            ----
<S>                                                                 <C>             <C>
Total minimum lease payments receivable                             $1,853,748      $2,620,307
Estimated residual values of leased equipment (unguaranteed)         1,483,554       1,452,053
                                                              ----------------- ---------------
Investment in direct financing leases                                3,337,302       4,072,360
Less unearned income                                                  (486,369)       (630,231)
                                                              ----------------- ---------------
Net investment in direct financing leases                           $2,850,933      $3,442,129
                                                              ================= ===============
</TABLE>

All of the property on leases was acquired in 1997, 1996 and 1995.


<PAGE>

                      ATEL CASH DISTRIBUTION FUND VI, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1997


3.  Investments in equipment and leases (continued):

At December 31, 1997,  the aggregate  amounts of future  minimum lease  payments
under operating and direct financing leases are as follows:

                                        Direct
      Year ending      Operating       Financing
     December 31,       Leases          Leases           Total

              1998      $28,322,056        $546,194      $28,868,250
              1999       24,652,930         305,789       24,958,719
              2000       20,243,198         245,719       20,488,917
              2001       12,995,731         149,766       13,145,497
              2002        4,909,149         112,480        5,021,629
        Thereafter       21,192,554         493,800       21,686,354
                    ---------------- --------------- ----------------
                       $112,315,618      $1,853,748     $114,169,366
                    ================ =============== ================


4.  Non-recourse debt:

At December 31, 1997,  non-recourse  debt consists of notes payable to financial
institutions.  The notes are due in varying  monthly,  quarterly and semi-annual
payments.  Interest on the notes is at rates from 6.37% to 14.98%. The notes are
secured by assignments of lease payments and pledges of assets.  At December 31,
1997, the carrying value of the pledged assets is approximately $89,912,648. The
notes mature from 1997 through 2016.

Future minimum payments of non-recourse debt are as follows:

              Year ending
             December 31,      Principal        Interest          Total

                       1998     $16,122,984       $7,791,846     $23,914,830
                       1999      18,004,634        4,912,259      22,916,893
                       2000      15,297,422        3,494,887      18,792,309
                       2001       8,154,489        2,368,107      10,522,596
                       2002       5,012,964        1,720,382       6,733,346
                 Thereafter      15,055,098        5,505,192      20,560,290
                            ---------------- ---------------- ---------------
                                $77,647,591      $25,792,673    $103,440,264
                            ================ ================ ===============


<PAGE>

                      ATEL CASH DISTRIBUTION FUND VI, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1997


5.  Related party transactions:

The terms of the Limited Partnership  Agreement provide that the General Partner
and/or   Affiliates   are  entitled  to  receive   certain  fees  for  equipment
acquisition, management and resale and for management of the Partnership.

The Limited Partnership Agreement allows for the reimbursement of costs incurred
by the General Partner in providing  administrative services to the Partnership.
Administrative  services  provided  include  Partnership  accounting,   investor
relations,  legal  counsel and lease and  equipment  documentation.  The General
Partner  is not  reimbursed  for  services  where it is  entitled  to  receive a
separate  fee as  compensation  for  such  services,  such  as  acquisition  and
disposition of equipment. Reimbursable costs incurred by the General Partner are
allocated  to the  Partnership  based upon  actual time  incurred  by  employees
working on Partnership  business and an allocation of rent and other costs based
on utilization studies.

Substantially  all  employees  of the General  Partner  record time  incurred in
performing administrative services on behalf of all of the Partnerships serviced
by the General  Partner.  The General Partner believes that the costs reimbursed
are the lower of (i) actual costs incurred on behalf of the  Partnership or (ii)
the amount the  Partnership  would be  required to pay  independent  parties for
comparable  administrative  services  in the same  geographic  location  and are
reimbursable in accordance with the Limited Partnership Agreement.

The  General   Partner   and/or   Affiliates   earned  fees,   commissions   and
reimbursements,  pursuant to the Limited Partnership Agreement as follows during
1997, 1996 and 1995:

<TABLE>
<CAPTION>
                                                                                      1997            1996             1995
                                                                                      ----            ----             ----
<S>                                                                                   <C>            <C>             <C>
Incentive  management  fees  (computed  as 3.25% (4%  prior to July 1,  1995) of
distributions  of cash from  operations,  as defined in the Limited  Partnership
Agreement) and equipment  management fees (computed as 3.5% (5% prior to July 1,
1995) of gross  revenues  from  operating  leases,  as  defined  in the  Limited
Partnership Agreement plus 2% of gross revenues from full payout leases, as
defined in the Limited Partnership Agreement).                                        $1,492,716      $1,061,856        $362,581

Administrative costs reimbursed to General Partner                                       435,759         748,745         539,009

Selling commissions (equal to 9.5% of the selling price of the
Limited Partnership units, deducted from Limited Partners' capital)                            -       5,919,485       5,955,515

Reimbursement of other syndication costs                                                       -       2,762,793       3,071,033

Acquisition  fees  equal to 3% (3.25%  prior to July 1,  1995) of the  equipment
purchase  price,  for evaluating and selecting  equipment to be acquired (not to
exceed approximately 4.5% of Gross
Proceeds, included in investment in leases)                                                    -       2,716,021       2,908,979
                                                                                ----------------- --------------- ---------------
                                                                                      $1,928,475     $13,208,900     $12,837,117
                                                                                ================= =============== ===============
</TABLE>

<PAGE>

                      ATEL CASH DISTRIBUTION FUND VI, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1997


6.  Partners' capital:

As of December 31, 1997, 12,500,050 Units were issued and outstanding, including
the 50 Units issued to the Initial  Limited  Partners.  The Fund's  registration
statement with the Securities and Exchange  Commission became effective November
23, 1994. The Fund is authorized to issue up to 12,500,000 Units, in addition to
those issued to the Initial Limited Partners.

The Partnership Net Profits, Net Losses, and Tax Credits are to be allocated 99%
to the Limited Partners and 1% to the General Partner.

Available Cash from Operations and Cash from Sales and  Refinancing,  as defined
in the Limited Partnership Agreement, shall be distributed as follows:

First,  95.75%  (95%  prior  to July 1,  1995)  of  Distributions  of Cash  from
Operations to the Limited Partners,  1% of Distributions of Cash from Operations
to the General  Partner and 3.25% (4% prior to July 1, 1995) to an  affiliate of
the General Partner as Incentive Management  Compensation,  99% of Distributions
of Cash from Sales or  Refinancing  to the Limited  Partners and 1% of Cash from
Sales or Refinancing to the General Partner.

Second,  the balance to the Limited  Partners  until the Limited  Partners  have
received  Aggregate  Distributions in an amount equal to their Original Invested
Capital, as defined,  plus a 10% per annum cumulative  (compounded daily) return
on their Adjusted Invested Capital.

Third, an affiliate of the General Partner will receive as Incentive  Management
Compensation, 4% of remaining Cash from Sales or Refinancing.

Fourth, the balance to the Limited Partners.


7. Concentration of credit risk and major customers:

The Partnership  leases equipment to lessees in diversified  industries.  Leases
are subject to the General Partner's credit committee review. The leases provide
for the return of the equipment upon default.

As of December 31, 1997, 1996 and 1995 there were  concentrations  (greater than
10%) of equipment  leased to lessees in certain  industries  (as a percentage of
total equipment cost) as follows:

                                     1997    1996    1995
                                     ----    ----    ----
  Rail transportation                21%      27%    36%
  Electronics manufacturing          14%       *      *
  Other transportation services      12%      12%    18%
  Business services                  11%      11%     *
  Oil and gas                         *        *     13%
  * Less than 10%.


<PAGE>

                      ATEL CASH DISTRIBUTION FUND VI, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1997


7. Concentration of credit risk and major customers (continued):

During 1997, two customers each comprised 10% of the Partnership's revenues from
leases.  During 1996, one customer  comprised 14% of the Partnership's  revenues
from  leases.   During  1995,  two  customers  comprised  17%  and  11%  of  the
Partnership's revenues from leases.


8.  Lines of credit:

The  Partnership  participates  with the  General  Partner  and  certain  of its
Affiliates in a $90,000,000 revolving credit agreement (which has been increased
to $105,000,000  through March 31, 1998) with a group of financial  institutions
which  expires on October  28,  1998.  The  agreement  includes  an  acquisition
facility and a warehouse facility which are used to provide bridge financing for
assets on leases.  Draws on the acquisition  facility by any individual borrower
are secured only by that  borrower's  assets,  including  equipment  and related
leases.  Borrowings on the warehouse facility are recourse jointly to certain of
the Affiliates, the Partnership and the General Partner.

During  1997,  the  Partnership  borrowed  $3,210,974  under the line of credit.
Repayments  on the line of credit were  $10,059,231  during 1997 and  $8,750,000
remained outstanding as of December 31, 1997. At December 31, 1997, the rates on
such borrowings varied from 7.47% to 8.5%.

The credit agreement  includes certain  financial  covenants  applicable to each
borrower.  The  Partnership  was in compliance with its covenants as of December
31, 1997. At December 31, 1997, $17,754,812 was available under this agreement.


9. Fair value of financial instruments:

The following  methods and  assumptions  were used to estimate the fair value of
each class of financial  instrument for which it is practicable to estimate that
value.

Cash and cash equivalents:

The carrying amount of cash and cash equivalents approximates fair value because
of the short maturity of these instruments.


<PAGE>

                      ATEL CASH DISTRIBUTION FUND VI, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1997


9. Fair value of financial instruments (continued):

Non-recourse debt:

The  fair  value  of the  Partnership's  non-recourse  debt is  estimated  using
discounted cash flow analyses,  based on the Partnership's  current  incremental
borrowing rates for similar types of borrowing arrangements.  The estimated fair
value  of  the   Partnership's   non-recourse  debt  at  December  31,  1997  is
$80,459,283.

Line of credit:

The  carrying  amounts  of the  Partnership's  variable  rate  lines  of  credit
approximate fair value.
<PAGE>

Item 9.  CHANGES IN AND DISAGREEMENTS WITH AUDITORS ON
           ACCOUNTING AND FINANCIAL DISCLOSURES

Inapplicable.



                                    PART III

Item 10.  DIRECTORS AND EXECUTIVE OFFICERS

The  registrant  is a Limited  Partnership  and,  therefore,  has no officers or
directors.

All of the outstanding capital stock of ATEL Financial  Corporation (the General
Partner) is held by ATEL Capital  Group  ("ACG"),  a holding  company  formed to
control the General  Partner and  affiliated  companies  pursuant to a corporate
restructuring  completed in July 1994.  The  outstanding  capital  stock of ATEL
Capital Group is owned 75% by A. J. Batt and 25% by Dean Cash,  and was obtained
in the  restructuring in exchange for their capital  interests in ATEL Financial
Corporation.

Each of ATEL Leasing Corporation  ("ALC"),  ATEL Equipment  Corporation ("AEC"),
ATEL  Investor  Services  ("AIS") and ATEL  Financial  Corporation  ("AFC") is a
wholly-owned  subsidiary  of ATEL Capital  Group and  performs  services for the
Partnership.  Acquisition  services are  performed for the  Partnership  by ALC,
equipment  management,  lease  administration and asset disposition services are
performed by AEC, investor relations and  communications  services are performed
by AIS and general administrative  services for the Partnership are performed by
AFC. ATEL Securities  Corporation ("ASC"), is a wholly-owned  subsidiary of ATEL
Financial Corporation.

The officers and directors of ATEL Capital Group, ATEL Financial Corporation and
their affiliates are as follows:

A. J. Batt                 Chairman of the Board of Directors of ACG, AFC, ALC,
                           AEC, AIS and ASC; President and Chief Executive
                           Officer of ACG, AFC and AEC

Dean L. Cash               Director, Executive Vice President and Chief
                           Operating Officer of ACG, AFC, and AEC; Director,
                           President and Chief Executive Officer of ALC, AIS
                           and ASC

F. Randall Bigony          Senior Vice President and Chief Financial Officer of
                           ACG, AFC, ALC, AIS and AEC

Donald E. Carpenter        Vice President and Controller of ACG, AFC, ALC, AEC
                           and AIS; Chief Financial Officer of ASC

Vasco H. Morais            General Counsel for ACG, AFC, ALC, AIS and AEC

William J. Bullock         Director of Asset Management of AEC

Russell H. Wilder          Vice President - Credit of AEC

John P. Scarcella          Vice President of ASC

A. J. Batt, age 61, founded ATEL in 1977 and has been its president and chairman
of the  board of  directors  since  its  inception.  From  1973 to 1977,  he was
employed by GATX  Leasing  Corporation  as  manager-data  processing  and equity
placement for the lease underwriting department, which was involved in equipment
financing  for  major  corporations.  From  1967 to 1973  Mr.  Batt was a senior
technical representative for General Electric Corporation, involved in sales and
support  services for computer  time-sharing  applications  for corporations and
financial  institutions.  Prior to that time, he was employed by North  American
Aviation as an  engineer  involved in the Apollo  project.  Mr. Batt  received a
B.Sc.  degree with honors in  mathematics  and physics  from the  University  of
British Columbia in 1961.

Dean L. Cash,  age 47, joined ATEL as director of marketing in 1980 and has been
a vice president since 1981,  executive vice president since 1983 and a director
since  1984.   Prior  to  joining  ATEL,   Mr.  Cash  was  a  senior   marketing
representative for Martin Marietta Corporation, data systems division, from 1979
to 1980.  From 1977 to 1979,  he was employed by General  Electric  Corporation,
where he was an applications  specialist in the medical  systems  division and a
marketing  representative in the information  services division.  Mr. Cash was a
systems  engineer  with  Electronic  Data  Systems  from  1975 to 1977,  and was
involved in maintaining and developing software for commercial applications. Mr.
Cash received a B.S.  degree in psychology and mathematics in 1972 and an M.B.A.
degree with a  concentration  in finance in 1975 from Florida State  University.
Mr. Cash is an arbitrator with the American Arbitration Association.

F.  Randall  Bigony,  age 40,  joined  ATEL in  1992  to  review  administrative
operations  within  ATEL  Financial  Corporation  and to develop  and  implement
functional  plans to  support  company  growth.  He  currently  oversees  ATEL's
accounting, MIS and treasury functions. From 1987 until joining ATEL, Mr. Bigony
was  president  of F.  Randall  Bigony & Co., a  consulting  firm that  provided
financial and strategic  planning  services to emerging growth  companies.  From
1983 to 1987,  he was a manager  with the  accounting  firm of Ernst &  Whinney,
serving  clients in its management  consulting  practice.  Mr. Bigony received a
B.A.  degree in business  from the  University  of  Massachusetts  and an M.B.A.
degree in finance from the University of California,  Berkeley. He is a founding
board member and acting  treasurer  of the I Have a Dream  Foundation - Bay Area
Chapter.

Donald E. Carpenter, age 49, joined ATEL in 1986 as controller. Prior to joining
ATEL, Mr. Carpenter was an audit supervisor with Laventhol & Horwath,  certified
public accountants in San Francisco, California, from 1983 to 1986. From 1979 to
1983,  Mr.  Carpenter  was an  audit  senior  with  Deloitte,  Haskins  & Sells,
certified public accountants,  in San Jose,  California.  From 1971 to 1975, Mr.
Carpenter was a Supply Corp officer in the U. S. Navy. Mr. Carpenter  received a
B.S. degree in mathematics  (magna cum laude) from California State  University,
Fresno in 1971 and completed a second major in accounting in 1978. Mr. Carpenter
has been a California certified public accountant since 1981.

Vasco H. Morais, age 39, joined ATEL in 1989 as general counsel to provide legal
support in the  drafting  and  reviewing  of lease  documentation,  advising  on
general corporate law matters, and assisting on securities law issues. From 1986
to 1989,  Mr.  Morais was  employed  by the  BankAmeriLease  Companies,  Bank of
America's  equipment leasing  subsidiaries,  providing in-house legal support on
the  documentation  of  tax-oriented  and non-tax  oriented direct and leveraged
lease transactions, vendor leasing programs and general corporate matters. Prior
to the BankAmeriLease  Companies,  Mr. Morais was with the Consolidated  Capital
Companies in the Corporate and Securities Legal Department  involved in drafting
and reviewing  contracts,  advising on corporate law matters and  securities law
issues.  Mr.  Morais  received  a B.A.  degree  in 1982 from the  University  of
California in Berkeley and a J.D. degree in 1986 from Golden Gate University Law
School. Mr.
Morais has been an active member of the State Bar of California since 1986.

William J.  Bullock,  age 34,  joined  ATEL in 1991,  as the  director  of asset
management. He assumed responsibility for the disposition of off-lease equipment
and  residual  valuation  analysis on new lease  transactions.  Prior to joining
ATEL,  Mr.  Bullock  was a senior  member of the  equipment  group at  McDonnell
Douglas  Finance  Corporation  ("MDFC")  responsible for managing its $4 billion
portfolio of leases.  Mr. Bullock was involved in negotiating sales and renewals
as well as preparing and  inspecting  equipment.  Prior to joining MDFC in 1989,
Mr. Bullock was the Senior  Negotiator at Equitable  Leasing (a subsidiary of GE
Capital Equipment Corp.) in San Diego. At Equitable, he handled the end-of-lease
negotiations  and equipment  dispositions of a portfolio  comprised of equipment
leased primarily to Fortune 200 companies.  Mr. Bullock has been a member of the
Equipment Lessors  Association  ("ELA") since 1987 and has authored ELA industry
articles.  He  received a B.S.  degree in  Finance in 1987 from San Diego  State
University and is pursuing his M.B.A.

Russell  H.  Wilder,  age 43,  joined  ATEL in  1992 as Vice  President  of ATEL
Business Credit, a wholly-owned  subsidiary of ACG. Immediately prior to joining
ATEL,  Mr.  Wilder was a personal  property  broker  specializing  in  equipment
leasing  and  financing  and an  outside  contractor  in the areas of credit and
collections.  From 1985 to 1990 he was Vice President and Manager of Leasing for
Fireside Thrift Co., a Teledyne subsidiary,  and was responsible for all aspects
of setting up and  managing  the  department,  which  operated as a small ticket
lease  funding  source.  From  1983 to  1985 he was  with  Wells  Fargo  Leasing
Corporation  as  Assistant  Vice  President  in the credit  department  where he
oversaw all credit analysis on  transactions in excess of $2 million.  From 1978
to 1983 he was District Credit Manager with  Westinghouse  Credit  Corporation's
Industrial Group and was responsible for all non-marketing operations of various
district offices. Mr. Wilder holds a B.S. with Honors in Agricultural  Economics
and Business  Management from the University of California at Davis. He has been
awarded the Certified Lease Professional  designation by the Western Association
of Equipment Lessors.

John P. Scarcella,  age 36, joined ATEL Securities as vice president in 1992. He
is involved in the marketing of securities offered by ASC. Prior to joining ASC,
from 1987 to 1991,  he was  employed  by Lansing  Pacific  Fund,  a real  estate
investment  trust in San Mateo,  California  and acted as  director  of investor
relations.   From  1984  to  1987,   Mr.   Scarcella   acted  as  broker  dealer
representative  for Lansing  Capital  Corporation,  where he was involved in the
marketing of direct  participation  programs and REITs. Mr. Scarcella received a
B.S.C.  degree with emphasis in investment finance in 1983 and an M.B.A.  degree
with a concentration in marketing in 1991 from Santa Clara University.


Item 11.  EXECUTIVE COMPENSATION

The  registrant  is a Limited  Partnership  and,  therefore,  has no officers or
directors.

Set forth hereinafter is a description of the nature of remuneration paid and to
be  paid to the  General  Partner  and  their  Affiliates.  The  amount  of such
remuneration  paid for the years ended  December 31, 1997,  1996 and 1995 is set
forth in Item 8 of this  report  under the  caption  "Financial  Statements  and
Supplementary  Data  -  Notes  to  the  Financial  Statements  -  Related  party
transactions,"  at Note 5 thereof which  information is hereby  incorporated  by
reference.

Selling Commissions

The  Partnership  will pay  selling  commissions  in the amount of 9.5% of Gross
Proceeds,  as defined,  to ATEL  Securities  Corporation,  an  affiliate  of the
General  Partner.  Of this  amount,  the majority is expected to be reallowed to
other broker/dealers.

Through  December  31, 1997,  $11,875,000  of such  commissions  had been either
accrued  or paid to the  General  Partner  or its  affiliates.  Of that  amount,
$10,163,554 was reallowed to other broker/dealers.

Acquisition Fees

Acquisition fees are to be paid to the General Partner for services  rendered in
finding,  reviewing and evaluating  equipment to be purchased by the Partnership
and rejecting equipment not to be purchased by the Partnership. The total amount
of acquisition fees to be paid to the General Partner or their affiliates is not
to exceed 3% (3.25% prior to July  1,1995) of the  aggregate  purchase  price of
equipment  acquired with the net proceeds of the offering and not to exceed 4.5%
of the Gross Proceeds of the Offering.

Through  December  31,  1997,  $5,625,000  of such fees (the  maximum  allowable
amount) had been paid to the General Partner or its affiliates.

Equipment Management Fees

As compensation for its services  rendered  generally in managing or supervising
the management of the  Partnership's  equipment and in supervising other ongoing
services  and  activities  including,  among  others,  arranging  for  necessary
maintenance  and  repair of  equipment,  collecting  revenue,  paying  operating
expenses,  determining  the  equipment  is  being  used in  accordance  with all
operative  contractual  arrangements,  property  and  sales tax  monitoring  and
preparation  of  financial  data,  the  General  Partner or its  affiliates  are
entitled to receive  management  fees which are payable for each fiscal  quarter
and are to be in an amount  equal to (i) 3.5% (5% prior to July 1,  1995) of the
gross revenues from "operating"  leases and (ii) 2% of gross revenues from "full
payout" leases which contain net lease provisions.

See Notes to the  financial  statements  included  at Item 8 of this  report for
amounts paid.

Incentive Management Fees

As compensation  for its services  rendered in establishing  and maintaining the
composition of the  Partnership's  equipment  portfolio and its  acquisition and
debt strategies and supervising fund  administration  including  supervising the
preparation  of reports and  maintenance  of financial and operating data of the
Partnership,  Securities and Exchange  Commission and Internal  Revenue  Service
filings,  returns and reports,  the General Partner shall be entitled to receive
the Incentive  management fee which shall be payable for each fiscal quarter and
shall be an amount equal to 1% of cash distributions  from operations,  sales or
refinancing  and  3.25% (4% prior to July 1,  1995) of cash  distributions  from
operations to an affiliate of the General Partner until such time as the Limited
Partners have received  aggregate  distributions  of cash from  operations in an
amount equal to their original  invested  capital plus a 10% per annum return on
their average adjusted  invested capital (as defined in the Limited  Partnership
Agreement).  Thereafter,  the incentive  management fee paid to the affiliate of
the General Partner shall be 4% of all  distributions  of cash from  operations,
sales or refinancing.

See Notes to the  financial  statements  included  at Item 8 of this  report for
amounts paid.

Equipment Resale Fees

As compensation for services  rendered in connection with the sale of equipment,
the General  Partner  shall be entitled to receive an amount equal to the lesser
of (i) 3% of the sales  price of the  equipment,  or (ii)  one-half  the  normal
competitive  equipment sales commission charged by unaffiliated parties for such
services.  Such fee is payable only after the Limited  Partners  have received a
return of their adjusted invested capital (as defined in the Limited Partnership
Agreement) plus 10% of their adjusted invested capital per annum calculated on a
cumulative basis,  compounded  daily,  commencing the last day of the quarter in
which the limited  partner was admitted to the  Partnership.  To date, none have
been accrued or paid.

Equipment Re-lease Fee

As compensation  for providing  re-leasing  services,  the General Partner shall
receive fees equal to 2% of the gross rentals or the comparable competitive rate
for such services relating to comparable  equipment,  whichever is less, derived
from the re-lease provided that (i) the General Partner or their affiliates have
and will maintain  adequate  staff to render such  services to the  Partnership,
(ii) no such  re-lease  fee is  payable  in  connection  with  the  re-lease  of
equipment to a previous lessee or its  affiliates,  (iii) the General Partner or
its affiliates have rendered substantial  re-leasing services in connection with
such re-lease and (iv) the General Partner or its affiliates are compensated for
rendering  equipment  management  services.  To date,  none have been accrued or
paid.

General Partner's Interest in Operating Proceeds

Net income, net loss and investment tax credits are allocated 99% to the Limited
Partners and 1% to the general  partner.  See financial  statements  included in
Item 8, Part I of this report for amounts  allocated  to the General  Partner in
1997, 1996 and 1995.


Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
            MANAGEMENT

Security Ownership of Certain Beneficial Owners

At  December  31,  1997  no  investor  is  known  to  the  Partnership  to  hold
beneficially more than 5% of the issued and outstanding Units.

Security Ownership of Management

The  shareholders  of the  General  Partner  are  beneficial  owners of  Limited
Partnership Units as follows:

<TABLE>
<CAPTION>
  (1)                                  (2)                             (3)                              (4)
                                Name and Address of            Amount and Nature of                Percent
  Title of Class                Beneficial Owner               Beneficial Ownership               of Class

<S>                             <C>                            <C>                                 <C>
Limited Partnership Units       A. J. Batt                     Initial Limited Partner Units       0.0004%
                                235 Pine Street, 6th Floor     25 Units ($250)
                                San Francisco, CA 94104        (owned by wife)

Limited Partnership Units       Dean Cash                      Initial Limited Partner Units       0.0004%
                                235 Pine Street, 6th Floor     25 Units ($250)
                                San Francisco, CA 94104        (owned by wife)
</TABLE>

Changes in Control

The Limited Partners have the right, by vote of the Limited Partners owning more
than 50% of the  outstanding  limited  Partnership  units,  to  remove a General
Partner.

The General Partner may at any time call a meeting of the Limited  Partners or a
vote of the  Limited  Partners  without a meeting,  on matters on which they are
entitled  to vote,  and shall call such  meeting  or for vote  without a meeting
following  receipt of a written request therefor of Limited Partners holding 10%
or more of the total outstanding Limited Partnership units.


Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The  responses  to Item 1 of this report  under the caption  "Equipment  Leasing
Activities," Item 8 of this report under the caption  "Financial  Statements and
Supplemental  Data  -  Notes  to  the  Financial   Statements  -  Related  party
transactions"  at Note 5 thereof,  and Item 11 of this report  under the caption
"Executive Compensation," are hereby incorporated herein by reference.


                                     PART IV

Item 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
               ON FORM 8-K

                      (a) Financial Statements and Schedules
                        1. Financial Statements
                           Included in Part II of this report:
                           Report of Independent Auditors

                           Balance Sheets at December 31, 1997 and 1996

                           Statements of Operations for the years ended December
                              31, 1997, 1996 and 1995

                           Statements of Changes in Partners' Capital for the
                              years ended December 31, 1997, 1996 and 1995

                           Statements of Cash Flows for the years ended December
                              31, 1997, 1996 and 1995

                           Notes to Financial Statements

                        2. Financial Statement Schedules
                           Allschedules  for  which  provision  is  made  in the
                              applicable    accounting    regulations   of   the
                              Securities   and  Exchange   Commission   are  not
                              required  under the  related  instructions  or are
                              inapplicable, and therefore have been omitted.

                      (b)  Reports  on Form 8-K for the  fourth  quarter of 1997
                           None

                      (c)  Exhibits
                           (3)and  (4)   Agreement   of   Limited   Partnership,
                              included  as  Exhibit  B  to  Prospectus  (Exhibit
                              28.1), is incorporated  herein by reference to the
                              report on Form 10K for the period  ended  December
                              31, 1994 (File No. 33-81952).





<PAGE>

                                   SIGNATURES


Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.



     Date:  3/27/1998

       ATEL Cash Distribution Fund VI, L.P.
                            (Registrant)


       By:  ATEL Financial Corporation,
            General Partner of Registrant



                      By:  /s/  A. J. Batt
                           -------------------------------------------------
                           A. J. Batt,
                           President and Chief Executive Officer of
                           ATEL Financial Corporation (General
                           Partner)




                      By:   /s/ Dean Cash
                           -------------------------------------------------
                           Dean Cash,
                           Executive Vice President of ATEL
                           Financial Corporation (General Partner)




<PAGE>

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has  been  signed  below  by the  persons  in the  capacities  and on the  dates
indicated.


        SIGNATURE                            CAPACITIES             DATE



             /s/ A. J. Batt        President, chairman and chief   3/27/1998
---------------------------------- executive officer of ATEL
               A. J. Batt          Financial Corporation



              /s/ Dean Cash        Executive vice president and    3/27/1998
---------------------------------- director of ATEL Financial
                Dean Cash          Corporation



          /s/ F. Randall Bigony    Principal financial officer     3/27/1998
---------------------------------- of registrant; principal
            F. Randall Bigony      financial officer of ATEL
                                   Financial Corporation



         /s/ Donald E. Carpenter   Principal accounting officer    3/27/1998
---------------------------------- of registrant; principal
           Donald E. Carpenter     accounting officer of ATEL
                                   Financial Corporation




Supplemental  Information to be Furnished With Reports Filed Pursuant to Section
15(d) of the Act by Registrants Which Have Not Registered Securities Pursuant to
Section 12 of the Act:

No proxy  materials  have been or will be sent to  security  holders.  An annual
report will be furnished to security  holders  subsequent  to the filing of this
report on Form 10-K, and copies thereof will be furnished  supplementally to the
Commission when forwarded to the security holders.