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, 1998
                                                            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 General Partner of the Partnership is ATEL Financial Corporation
(ATEL).

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 ATEL  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, 1998, 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 ATEL, 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 ATEL,  would not satisfy the
general credit rating criteria for the portfolio.


<PAGE>

During 1998, 1997 and 1996 certain lessees generated significant portions of the
Partnership's total lease revenues as follows:

                                                                1998  1997  1996
                                                                ----  ----  ----
         Lessee                  Type of Equipment
NEC Electronics                  Semiconductor manufacturing     12%   10%    *
Consolidated Rail Corporation    Locomotives & intermodal
                                 containers                      10%   10%   14%

                                 * Less than 10%.

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 ATEL 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.

ATEL 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, 1998, 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 *
        ---------     ----------------    ----------        ----------
Office automation         $ 3,401,411         $ 614,438       $ 3,624,015
Transportation              3,376,753         2,736,976         1,401,893
Manufacturing                 635,084           240,000           397,992
Construction                  452,811           216,367           368,001
Materials handling            244,702           101,500           218,184
Railcars                      195,208           191,303            14,316
Containers                    160,077           169,344            22,426
Other                         101,024            53,426            42,174
                      ----------------  ----------------  ----------------
                          $ 8,567,070       $ 4,323,354       $ 6,089,001
                      ================  ================  ================

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


<PAGE>

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, 1998 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, 1998,  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

No material legal  proceedings are currently  pending against the Partnership or
against any of its assets.


<PAGE>

On December  31,  1997,  Quaker Coal  Company  requested a  moratorium  on lease
payments from January  through  March 1998. No lease  payments were made through
June of 1998. As a result, ATEL declared the lease in default. Subsequently, the
lessee cured the outstanding payments,  however, ATEL has insisted on additional
damages including for diminishment in value of the equipment.  ATEL is currently
negotiating a settlement with the lessee.


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, 1998, a total of 6,445 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 1998  operations was $0.0833 per Unit.
The  distributions  were made in  February  1998  through  December  1998 and in
January 1999. For each quarterly  distribution  (made in April, July and October
1998 and in January 1999) the rate was $0.25 per Unit.  Distributions  were from
1998 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 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.


<PAGE>

ATEL 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>
                                              1998             1997             1996            1995
                                              ----             ----             ----            ----
<S>                                               <C>             <C>              <C>             <C>     
Distributions of net income (loss)                $ 0.06          $ (0.18)         $ (0.23)        $ (0.19)
Return of investment                                0.94             1.18             1.16            0.97
                                         ---------------- ---------------- ---------------- ---------------
Distributions per unit                              1.00             1.00             0.93            0.78
Differences due to timing of
   distributions                                    0.00             0.00             0.07            0.22
                                         ---------------- ---------------- ---------------- ---------------
Nominal distribution rates from above             $ 1.00           $ 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, 1998, 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>

                                              1998             1997             1996            1995             1994
                                              ----             ----             ----            ----             ----
<S>                                          <C>             <C>              <C>              <C>                      <C>
Gross revenues                               $36,149,061     $ 36,485,165     $ 25,729,470     $ 6,444,037              $ -

Net income (loss)                               $710,923     $ (2,297,964)    $ (2,210,330)     $ (602,674)             $ -

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

Net income (loss) per Unit, based on
   weighted average Units
   outstanding                                    $ 0.06          $ (0.18)         $ (0.23)        $ (0.19)             $ -

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

Total Assets                                $140,096,180    $ 170,290,581    $ 192,831,691    $ 96,883,645            $ 600

Non-recourse Debt                            $65,164,309     $ 77,647,591     $ 80,789,732       $ 836,181              $ -

Total Partners' Capital                      $66,322,437     $ 78,274,435     $ 93,201,156    $ 50,576,037            $ 600
</TABLE>



<PAGE>

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 ATEL's  success in re-leasing or selling the equipment as it comes off
lease.

The  Partnership  participates  with ATEL and  certain  of its  affiliates  in a
$90,000,000  revolving line of credit with a financial institution that includes
certain financial covenants.  The line of credit expires on January 31, 2000. As
of December 31, 1998, the  Partnership  had $5,100,000 of borrowings  under this
line of credit and the remaining availability was $13,070,344.

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 ATEL and providing
for cash  distributions  to the Limited  Partners.  At December  31,  1998,  the
Partnership had no commitments to purchase lease assets.

As of December 31, 1998,  all cash  balances  consisted of amounts  reserved for
distributions in January 1999, generated from operations in 1998.

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.  ATEL envisions no such  requirements  for
operating purposes.

The  Partnership's  long-term  borrowings  are  generally  non-recourse  to  the
Partnership,  that is, the only  recourse of the lender is to the  equipment  or
corresponding lease acquired with the loan proceeds. ATEL 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.


<PAGE>

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:

           1998 vs. 1997:

Cash flows from operations  increased by $179,668 compared to 1997. The increase
was not  significant  and resulted from a number of offsetting  fluctuations  of
revenues, expenses and changes in operating accounts.

Cash flows from investing activities in 1998 consisted of proceeds from sales of
lease assets ($3,357,017) and rents from direct financing leases ($428,622).

Sources  of  cash  from  financing  activities  consisted  of  the  proceeds  on
non-recourse   debt  ($4,199,995)  and  borrowings  under  the  line  of  credit
($2,200,000).  The most significant uses of cash related to financing activities
were  distributions  to  the  limited  partners  ($12,500,645),   repayments  of
non-recourse  debt  ($15,747,720) and repayments of borrowings under the line of
credit ($5,850,000).

           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 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.


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).  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 are not comparable to 1997.


<PAGE>

            1998 vs. 1997

Operations  resulted  in net income of  $710,923  in 1998  compared to a loss of
$2,297,964 in 1997. Operating lease revenues decreased by $1,007,698 compared to
1997. This decrease resulted from scheduled lease  terminations and asset sales.
This decrease in lease  revenues was largely  offset by an increase in the gains
recognized  on the sales of assets  coming off  lease.  Gains on sales of assets
increased  by  $759,639.  Overall,  revenues  decreased by $336,104 or about one
percent.

Expenses  decreased by $3,344,991  compared to 1997. Most  significant  were the
decreases in depreciation and amortization and interest  expenses.  Depreciation
and amortization  expense  decreased by $1,403,401.  This decrease resulted from
the  sales  of  operating  lease  assets  noted  above.  Interest  decreased  by
$1,436,195 as a result of decreased debt balances compared to 1997. Non-recourse
debt balances have been reduced as a result of scheduled debt payments.

            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.


Impact of the Year 2000

The year 2000 issue is the result of certain  computer  programs  being  written
using two digits  rather than four to define the  applicable  year. As a result,
these  programs are not designed to make the  transition to the year 2000.  This
computer  software problem is commonly referred to as the "year 2000" (or "Y2K")
issue. Computer programs with date-sensitive  applications may, if not modified,
fail or miscalculate  dates,  causing system failures,  the inability to process
transactions or other disruptions of operations.


<PAGE>

ATEL uses, and on behalf of the Partnership uses, primarily third party software
and is  communicating  with key software vendors to ensure that the systems used
by General  Partner and the Partnership are not impacted by the year 2000 issue.
Currently,  all of ATEL's critical  software  systems are believed by ATEL to be
Y2K  compliant  except one.  Compliance  of this final  system is expected to be
obtained in the first half of 1999. Based on discussions with ATEL's third party
software  vendor,  ATEL believes that any cost to be incurred by the Partnership
to bring this system into  compliance  will not be material.  ATEL's third party
software  vendor for the system in question  has  indicated  that it expects the
cost of compliance to be included in the annual upgrade and maintenance cost for
the  software  system,  and that the  total  incremental  amount of such cost is
expected to be minimal.  Any such cost would be  allocated  by ATEL over the six
public funds (including the Partnership)  under its management which use or will
use the software.  This  allocation  would be based on the relative size of each
such program and its proportionate  allocation of the expected minimal cost will
in itself be  minimal.  In no event will  offering  proceeds  be  required to be
committed to any such  expenditure.  If any cost is incurred by the Partnership,
it would be an operating expense funded out of operating revenues.

The ultimate impact of the year 2000 issue on the  Partnership  will depend to a
great extent on the manner in which the issue is  addressed by those  businesses
whose operational  capability is important to the Partnership.  Failure of these
businesses to be Y2K  compliant  may impact  credit  quality or cause a delay in
payments made to the Partnership. ATEL has contacted those businesses with which
the  Partnership  currently  has  material  relationships  in order  to  request
verification of Y2K  compliance.  ATEL believes that each of those entities will
have a material self interest in resolving any year 2000 issue affecting its own
operations.

Equipment  purchased by the  Partnership may include  technology  subject to the
year 2000  issue.  Potential  year 2000  issues  will be among the many  factors
considered   by  ATEL  and  its   affiliates  in  analyzing  and  pricing  lease
transactions  for acquisition by the  Partnership.  The lessees of the equipment
will select  such  equipment  and may be  expected to consider  year 2000 issues
themselves in determining the suitability of the equipment for the lessee's use.
Most equipment is subject to fixed term,  non-cancelable,  triple net leases. In
addition, new equipment may be covered by manufacturer's warranties. As a result
of such triple net provisions and warranties, repairs or modifications necessary
to  correct  year 2000  issues  will most  likely be the  responsibility  of the
manufacturers or the lessees,  and the Partnership's rights to lease payments as
a triple net lessor will not be affected by any functional  issues affecting the
equipment.  It is expected that the lease terms for such  equipment  will extend
well beyond the year 2000.

As a result of the year 2000 issue,  the  Partnership  may experience  increased
costs resulting from delayed  payments from lessees,  the costs  associated with
the collection of those payments,  or costs  associated  with manual  processing
efforts in the event of a Y2K related system  failure.  In any event,  ATEL does
not expect these  increased costs to be significant or that such costs will have
any material adverse effect on the operations of the Partnership.  Nevertheless,
the  impact of year 2000  issues  cannot be  predicted  with  certainty  and the
Partnership may be affected both by the impact these issues have on parties with
which it has  direct  contractual  and other  relationships  as well as by their
impact on financial institutions and the national and international economy as a
whole.  Accordingly,  there can be no assurance  that year 2000 issues might not
have  some  adverse  impact  on  the  operating   results   experienced  by  the
Partnership.



<PAGE>

Item 7a.  QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

The Partnership,  like most other companies, is exposed to certain market risks,
including  primarily  changes in interest rates.  The  Partnership  believes its
exposure to other market risks including  foreign  currency  exchange rate risk,
commodity  risk and equity price risk are  insignificant  to both its  financial
position and results of operations.

In  general,  the  Partnership  manages its  exposure  to interest  rate risk by
obtaining fixed rate debt which is coterminous with the Partnership's fixed rate
lease  receivables.  Furthermore,  the Partnership has historically been able to
maintain  a stable  spread  between  its cost of funds and lease  yields in both
periods of rising and falling rates.  Nevertheless,  the Partnership  frequently
funds leases with its floating  rate line of credit and is therefore  exposed to
interest rate risk until fixed rate financing is arranged,  or the floating rate
line of credit is repaid. As of December 31, 1998, $5,100,000 was outstanding on
the floating rate line of credit.

To hedge  its  interest  rate risk  related  to this  variable  rate  debt,  the
Partnership  may enter into  interest  rate swaps.  As of December 31, 1998,  no
swaps or other  derivative  financial  instruments were held by the Partnership.
The  Partnership  does not hold or issue  derivative  financial  instruments for
speculative purposes.


Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See the  Report  of  Independent  Auditors,  Financial  Statements  and Notes to
Financial Statements attached hereto at pages 11 through 24.

<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,  1998 and 1997,  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, 1998. 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, 1998 and 1997,  and the results of its  operations  and its
cash flows for each of the three years in the period ended December 31, 1998, in
conformity with generally accepted accounting principles.





                                                               ERNST & YOUNG LLP
San Francisco, California
January 29, 1999

<PAGE>

                      ATEL CASH DISTRIBUTION FUND VI, L.P.

                                 BALANCE SHEETS

                           DECEMBER 31, 1998 AND 1997


                                     ASSETS

                                                 1998             1997
                                                 ----             ----
Cash and cash equivalents                         $ 744,132        $ 739,701

Accounts receivable                               9,786,041       10,694,629

Investments in equipment and leases             129,566,007      158,856,251
                                            ---------------- ----------------
Total assets                                  $ 140,096,180     $170,290,581
                                            ================ ================




                       LIABILITIES AND PARTNERS' CAPITAL


Non-recourse debt                              $ 65,164,309      $77,647,591

Line of credit                                    5,100,000        8,750,000

Accounts payable and accruals:
   General Partner                                  171,050          314,358
   Equipment purchases                              255,252          255,252
   Other                                            604,768          415,660

Accrued interest payable                          2,275,444        4,108,922

Unearned lease income                               202,920          524,363
                                            ---------------- ----------------
                                                 73,773,743       92,016,146

Partners' capital (deficit):
     General Partner                               (409,182)        (254,015)
     Limited Partners                            66,731,619       78,528,450
                                            ---------------- ----------------
Total partners' capital                          66,322,437       78,274,435
                                            ---------------- ----------------
Total liabilities and partners' capital       $ 140,096,180     $170,290,581
                                            ================ ================


                             See accompanying notes.



<PAGE>

                      ATEL CASH DISTRIBUTION FUND VI, L.P.

                            STATEMENTS OF OPERATIONS

                  YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

<TABLE>
<CAPTION>

                                                              1998            1997             1996
                                                              ----            ----             ----
Revenues:

Leasing activities:
<S>                                                         <C>             <C>               <C>        
   Operating leases                                         $ 35,178,175    $ 36,185,873      $25,480,263
   Direct financing leases                                       137,159         243,423          215,650
   Gain (loss) on sales of assets                                786,070          26,431         (107,873)
Interest income                                                   23,292          19,461           66,348
Other                                                             24,365           9,977           75,082
                                                         ---------------- --------------- ----------------
                                                              36,149,061      36,485,165       25,729,470

Expenses:

Depreciation and amortization                                 26,193,147      27,596,548       19,298,500
Interest                                                       6,557,551       7,993,746        5,773,463
Equipment and incentive management fees to affiliates          1,394,138       1,492,716        1,061,856
Other                                                            693,512         807,883          612,698
Administrative cost reimbursements to General Partner            427,872         435,759          748,745
Provision for losses and impairments                              97,528         364,852          257,814
Professional fees                                                 74,390          91,625          186,724
                                                         ---------------- --------------- ----------------
                                                              35,438,138      38,783,129       27,939,800
                                                         ---------------- --------------- ----------------
Net income (loss)                                              $ 710,923    $ (2,297,964)    $ (2,210,330)
                                                         ================ =============== ================

Net income (loss):
   General Partner                                               $ 7,109       $ (22,980)       $ (22,103)
   Limited Partners                                              703,814      (2,274,984)      (2,188,227)
                                                         ---------------- --------------- ----------------
                                                               $ 710,923    $ (2,297,964)    $ (2,210,330)
                                                         ================ =============== ================

Net income (loss) per Limited Partnership unit                    $ 0.06         $ (0.18)         $ (0.23)

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



                             See accompanying notes.


<PAGE>

                      ATEL CASH DISTRIBUTION FUND VI, L.P.

                    STATEMENT OF CHANGES IN PARTNERS' CAPITAL

                  YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996


<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 paid to affiliates                                     (5,919,485)                      (5,919,485)
Other syndication costs paid 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 paid 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
Distributions to limited partners ($1.00 per Unit)                             (12,500,645)                     (12,500,645)
Distributions to General Partner                                                                  (162,276)        (162,276)
Net income                                                                         703,814           7,109          710,923
                                                          ---------------- ---------------- --------------- ----------------
Balance December 31, 1998                                      12,500,050     $ 66,731,619      $ (409,182)     $66,322,437
                                                          ================ ================ =============== ================
</TABLE>






                             See accompanying notes.

<PAGE>

                      ATEL CASH DISTRIBUTION FUND VI, L.P.

                            STATEMENTS OF CASH FLOWS

                  YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996


<TABLE>
<CAPTION>
                                                                                1998            1997             1996
                                                                                ----            ----             ----
<S>                                                                            <C>             <C>              <C>        
Operating activities:
Net income (loss)                                                                $ 710,923    $ (2,297,964)    $ (2,210,330)
Adjustment to reconcile net income (loss) to net cash provided by
   operating activities:
     Depreciation and amortization                                              26,193,147      27,596,548       19,298,500
     Provision for losses and impairments                                           97,528         364,852          257,814
    (Gain) loss  on sales of assets                                               (786,070)        (26,431)         107,873
     Changes in operating assets and liabilities:
         Accounts receivable                                                    (3,891,412)     (4,496,371)      (4,191,555)
         Accounts payable, General Partner                                        (143,308)        269,288       (1,233,996)
         Accounts payable, other                                                   189,108             652          297,525
         Accrued interest payable                                                2,030,965       2,362,716        1,515,239
         Unearned lease income                                                    (321,443)        126,480           99,150
                                                                           ---------------- --------------- ----------------
Net cash provided by operating activities                                       24,079,438      23,899,770       13,940,220
                                                                           ---------------- --------------- ----------------

Investing activities:
Purchases of equipment on operating leases                                               -      (2,661,808)    (113,775,023)
Purchases of equipment on direct financing leases                                        -         (94,469)      (1,177,807)
Purchases of residual value interests                                                    -               -         (379,551)
Initial direct lease costs paid to affiliate                                             -               -       (2,716,021)
Reduction of net investment in direct financing leases                             428,622         685,665          501,623
Proceeds from sales of assets                                                    3,357,017         406,362          636,397
                                                                           ---------------- --------------- ----------------
Net cash provided by (used in) investing activities                              3,785,639      (1,664,250)    (116,910,382)
                                                                           ---------------- --------------- ----------------

Financing activities:
Capital contributions received                                                           -               -       62,310,370
Payment of syndication costs to General Partner                                          -         (41,174)      (8,682,278)
Distributions to Limited Partners                                              (12,500,645)    (12,475,238)      (8,719,731)
Distributions to General Partner                                                  (162,276)       (112,345)         (72,912)
Borrowings under line of credit                                                  2,200,000       3,210,974       64,426,319
Repayments of borrowings under line of credit                                   (5,850,000)    (10,059,231)     (87,196,734)
Proceeds of non-recourse debt                                                    4,199,995      10,701,894       84,675,980
Repayments of non-recourse debt                                                (15,747,720)    (13,844,035)      (4,722,429)
                                                                           ----------------- -------------- ----------------
Net cash (used in) provided by financing activities                            (27,860,646)    (22,619,155)     102,018,585
                                                                           ----------------- -------------- ----------------

Net increase (decrease) in cash and cash equivalents                                 4,431        (383,635)        (951,577)
Cash and cash equivalents at beginning of period                                   739,701       1,123,336        2,074,913
                                                                           ----------------- -------------- ----------------
Cash and cash equivalents at end of period                                       $ 744,132       $ 739,701      $ 1,123,336
                                                                           ================ =============== ================
</TABLE>



<PAGE>

                      ATEL CASH DISTRIBUTION FUND VI, L.P.

                            STATEMENTS OF CASH FLOWS
                                   (Continued)

                  YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

<TABLE>
<CAPTION>

                                                                                1998            1997             1996
                                                                                ----            ----             ----

Supplemental disclosures of cash flow information:
<S>                                                                            <C>             <C>              <C>        
Cash paid during the year for interest                                         $ 4,526,586     $ 5,631,030      $ 4,258,224
                                                                           ================ =============== ================

Schedule of non-cash transactions:

Offset of accounts receivable and debt service per lease and debt agreement:
Accrued interest payable                                                      $ (3,864,443)
Non-recourse debt                                                                 (935,557)
                                                                           ----------------
Accounts receivable                                                           $ (4,800,000)
                                                                           ================
</TABLE>








                             See accompanying notes.

<PAGE>

                      ATEL CASH DISTRIBUTION FUND VI, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1998


1.  Organization and Partnership matters:

ATEL Cash  Distribution  Fund VI, L.P. (the  Partnership),  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)  (ATEL'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  ATEL on  behalf  of the  Partnership,  incurred  costs  in
connection with the  organization,  registration  and issuance of the Units. The
amount of such costs to be born by the  Partnership  was 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, 1998,  the original  terms of the leases  ranged from six months to
twenty years.

Pursuant to the Limited Partnership  Agreement,  ATEL receives  compensation and
reimbursements for services rendered on behalf of the Partnership (Note 5). ATEL
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
estimated residual values of the equipment 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, 1998


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):

                                                  1998            1997
                                                  ----            ----
Financial statement basis of net assets         $ 66,322,437    $ 78,274,435
Tax basis of net assets                           23,162,026      39,757,262
                                             ---------------- ---------------
Difference                                      $ 43,160,411    $ 38,517,173
                                             ================ ===============

The  primary  differences  between  the tax basis of net assets and the  amounts
recorded in the financial statements are the result of differences in 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 income  (loss)  reported in these  financial
statements  to  the  loss  reported  on the  Partnership's  federal  tax  return
(unaudited):
                                                   1998            1997
                                                   ----            ----
Net income (loss) per financial statements          $ 710,923    $ (2,297,964)
Adjustment to depreciation expense                 (6,669,671)    (19,855,425)
Other adjustments to revenues and expenses          1,928,904        (644,595)
Provision for losses and impairments                   97,528         364,852
                                              ---------------- ---------------
Net loss per federal tax return                  $ (3,932,316)  $ (22,433,132)
                                              ================ ===============

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, 1998.

<PAGE>

                      ATEL CASH DISTRIBUTION FUND VI, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1998


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.  Such  estimates  primarily
relate to the determination of residual values at the end of the lease term.

Reserve for losses and impairments:

The  Partnership  maintains a reserve on its investments in equipment and leases
for losses and impairments which are inherent in the portfolio as of the balance
sheet date. The General Partner's evaluation of the adequacy of the allowance is
a judgmental  estimate that is based on a review of individual leases, past loss
experience and other factors.  While the General Partner  believes the allowance
is adequate to cover known losses, it is reasonably  possible that the allowance
may change in the near term.  However,  such  change is not  expected  to have a
material  effect on the financial  position or future  operating  results of the
Partnership.  It is the Partnership's policy to charge off amounts which, in the
opinion  of the  General  Partner,  are  not  recoverable  from  lessees  or the
disposition of the collateral.


3. Investments in equipment and leases:

As of December 31, 1998, 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,
                                              1997           Additions        of Leases     Dispositions         1998
                                              ----           ---------        ---------     ------------         ----
<S>                                         <C>                 <C>          <C>              <C>              <C>         
Net investment in operating leases          $152,814,493                     $ (25,325,663)   $ (1,041,781)    $126,447,049
Net investment in direct financing
   leases                                      2,850,933                          (428,622)     (1,199,595)       1,222,716
Assets held for sale or lease                    428,609                                 -        (329,571)          99,038
Residual value interests                         379,551                                 -               -          379,551
Reserve for losses and impairments              (687,558)       $ (97,528)               -               -         (785,086)
Initial direct costs, net of accumulated
   amortization of $2,423,318 in 1998
   and $2,366,645 in 1997                      3,070,223                -         (867,484)              -        2,202,739
                                         ---------------- ---------------- ---------------- --------------- ----------------
                                            $158,856,251        $ (97,528)   $ (26,621,769)   $ (2,570,947)    $129,566,007
                                         ================ ================ ================ =============== ================
</TABLE>


<PAGE>

                      ATEL CASH DISTRIBUTION FUND VI, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1998


3.  Investments in equipment and leases (continued):

Operating leases:

Property on operating  leases consists of the following as of December 31, 1997,
additions and dispositions during 1998 and as of December 31, 1998:

<TABLE>
<CAPTION>
                                                                  Reclass-
                              December 31,                      ifications or   December 31,
                                   1997           Additions     Dispositions         1998
                                   ----           ---------     ------------         ----
<S>                              <C>              <C>              <C>             <C>         
Transportation                   $100,087,024                        ($121,730)     $99,965,294
Construction                       32,643,774                         (465,037)      32,178,737
Manufacturing                      30,738,706                         (652,232)      30,086,474
Materials handling                 18,710,808                         (267,899)      18,442,909
Office automation                  13,068,112                       (2,582,956)      10,485,156
Miscellaneous                       3,683,663                         (229,912)       3,453,751
Communications                        658,185                                -          658,185
Medical                               343,409                                -          343,409
Food processing                       317,520                                -          317,520
                              ---------------- ---------------- --------------- ----------------
                                  200,251,201                       (4,319,766)     195,931,435
Less accumulated depreciation     (47,436,708)    ($25,325,663)      3,277,985      (69,484,386)
                              ---------------- ---------------- --------------- ----------------
                                 $152,814,493     ($25,325,663)    ($1,041,781)    $126,447,049
                              ================ ================ =============== ================
</TABLE>

Direct financing leases:

As of December 31, 1998 and 1997, 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, 1998 and 1997:

<TABLE>
<CAPTION>
                                                                 1998            1997
                                                                 ----            ----
<S>                                                              <C>             <C>       
Total minimum lease payments receivable                          $1,369,085      $1,853,748
Estimated residual values of leased equipment (unguaranteed)        255,570       1,483,554
                                                            ---------------- ---------------
Investment in direct financing leases                             1,624,655       3,337,302
Less unearned income                                               (401,939)       (486,369)
                                                            ---------------- ---------------
Net investment in direct financing leases                        $1,222,716      $2,850,933
                                                            ================ ===============
</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, 1998


3.  Investments in equipment and leases (continued):

At December 31, 1998,  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
                  1999     $27,025,091         $345,493      $27,370,584
                  2000      20,285,928          259,074       20,545,002
                  2001      10,777,239          158,238       10,935,477
                  2002       4,847,069          112,480        4,959,549
                  2003       3,050,287           98,760        3,149,047
            Thereafter      12,975,397          395,040       13,370,437
                       ---------------- ---------------- ----------------
                           $78,961,011       $1,369,085      $80,330,096
                       ================ ================ ================

Reserves for losses and impairments:

Activity in the reserve for losses and impairments consists of the following:

                          Balance 12/31/95                       $ 64,892
                          Provision                               257,814
                                                          ----------------
                          Balance 12/31/96                        322,706
                          Provision                               364,852
                                                          ----------------
                          Balance 12/31/97                        687,558
                          Provision                                97,528
                                                          ----------------
                          Balance 12/31/98                      $ 785,086
                                                          ================


4.  Non-recourse debt:

At December 31, 1998,  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,
1998, the carrying value of the pledged assets is approximately $87,364,383. The
notes mature from 1999 through 2016.

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

        Year ending
        December 31,     Principal        Interest           Total
                 1999     $18,635,830       $5,177,815      $23,813,645
                 2000      15,889,562        3,714,499       19,604,061
                 2001       8,834,242        2,531,010       11,365,252
                 2002       5,755,960        1,831,550        7,587,510
                 2003       5,488,995        1,241,942        6,730,937
           Thereafter      10,559,720        4,302,772       14,862,492
                      ---------------- ---------------- ----------------
                          $65,164,309      $18,799,588      $83,963,897
                      ================ ================ ================

<PAGE>

                      ATEL CASH DISTRIBUTION FUND VI, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1998


5.  Related party transactions:

The  terms  of the  Limited  Partnership  Agreement  provide  that  ATEL  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 ATEL in providing administrative services to the Partnership.  Administrative
services provided include  Partnership  accounting,  investor  relations,  legal
counsel  and lease  and  equipment  documentation.  ATEL 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 ATEL 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  ATEL  record  time  incurred  in  performing
administrative  services on behalf of all of the Partnerships  serviced by ATEL.
ATEL  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.

ATEL and/or Affiliates earned fees, commissions and reimbursements,  pursuant to
the Limited Partnership Agreement as follows during 1998, 1997 and 1996:

<TABLE>
<CAPTION>
                                                                                      1998            1997             1996
                                                                                      ----            ----             ----
<S>                                                                                  <C>             <C>              <C>        
Incentive  management  fees  (computed  as 3.25% of  distributions  of cash from
operations,  as defined in the  Limited  Partnership  Agreement)  and  equipment
management  fees (computed as 3.5% 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).                     $ 1,394,138     $ 1,492,716      $ 1,061,856

Administrative cost reimbursements to ATEL                                               427,872         435,759          748,745

Reimbursement of other syndication costs                                                       -          41,174        2,762,793

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

Acquisition fees equal to 3% 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
                                                                                 ---------------- --------------- ----------------
                                                                                     $ 1,822,010     $ 1,969,649      $13,208,900
                                                                                 ================ =============== ================
</TABLE>

<PAGE>

                      ATEL CASH DISTRIBUTION FUND VI, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1998


6.  Partners' capital:

As of December 31, 1998 and 1997,  12,500,050 Units were issued and outstanding,
including the 50 Units issued to the Initial Limited Partners. The Partnership's
registration  statement  with the  Securities  and  Exchange  Commission  became
effective  November 23,  1994.  The  Partnership  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% of Distributions of Cash from Operations to the Limited Partners,
1% of Distributions of Cash from Operations to ATEL and 3.25% to an affiliate of
ATEL as an Incentive  Management Fee, 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 ATEL will receive as an Incentive  Management Fee, 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 ATEL's credit committee review. The leases provide for the return
of the equipment upon default.

As of December 31, 1998, 1997 and 1996 there were  concentrations  (greater than
10%) of equipment  leased to lessees in certain  industries  (as a percentage of
total equipment cost) as follows:

                                       1998            1997             1996
                                       ----            ----             ----
    Rail transportation                 22%             21%              27%
    Other transportation services       13%             12%              12%
    Electronics manufacturing           12%             14%               *
    Business services                   10%             11%              11%
    * Less than 10%.


<PAGE>

                      ATEL CASH DISTRIBUTION FUND VI, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1998


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

During 1998,  two  customers  each  comprised 12 % and 10% of the  Partnership's
revenues  from leases.  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.


8.  Lines of credit:

The  Partnership  participates  with ATEL and  certain  of its  Affiliates  in a
$90,000,000  revolving credit  agreement with a group of financial  institutions
which  expires on January  31,  2000.  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 ATEL.

During  1998,  the  Partnership  borrowed  $2,200,000  under the line of credit.
Repayments  on the line of credit were  $5,850,000  during  1998 and  $5,100,000
remained outstanding as of December 31, 1998. At December 31, 1998, the rates on
such  borrowings  varied from 6.28% to 7.75%.  Interest on the line of credit is
based on either the thirty day LIBOR rate or the bank's prime rate.

The credit agreement  includes certain  financial  covenants  applicable to each
borrower.  The  Partnership  was in compliance with its covenants as of December
31, 1998. At December 31, 1998, $13,070,344 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-term maturity of these instruments.

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,  1998  is
$67,645,653.

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  ATEL 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

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

Vasco H. Morais           Senior Vice President, Secretary and General Counsel 
                          for ACG, AFC, ALC, AIS and AEC

William J. Bullock        Director of Asset Management of AEC

Carl W. Magnuson          Vice President - Syndication of ALC

Barbara F. Medwadowski    Vice President - Syndication of ALC

James A. Kamradt          Director of Pricing and Syndication of ALC

Thomas D. Sbordone        Senior Vice President - Marketing of ALC

Russell H. Wilder         Vice President - Credit of AEC

John P. Scarcella         Vice President of ASC


<PAGE>

A. J. Batt, age 62, 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 48, 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.

Donald E. Carpenter, age 50, 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 40, 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,  a J.D.  degree in 1986 from Golden Gate  University Law
School and an MBA (Finance) in 1997 from Golden Gate University.  Mr. Morais has
been an active member of the State Bar of California since 1986.

William J.  Bullock,  age 35,  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.


<PAGE>

Carl  W.  Magnuson,  age  55,  joined  ATEL in  1994  and is  Vice  President  -
Syndication for ALC. Mr. Magnuson is responsible for acquiring third party lease
transactions  and debt placement.  Prior to joining ATEL he was a Regional Group
Manager and Portfolio  Sales Manager for Bell  Atlantic  Systems  Leasing for 10
years.  From 1983 to 1984 he was Vice President and Chief  Financial  Officer of
the Handi-Kup  Company,  a plastics  manufacturer,  and from 1981 to 1982 he was
Controller for the Cyclotron  Corporation,  engaged in nuclear medicine research
and  development.  From 1978 to 1981 he was Executive  Vice President of Shannon
Financial Corporation, a middle market leasing corporation. From 1975 to 1978 he
was a Deputy Program Manager for the Watkins Johnson Company.  From 1968 to 1973
Mr.  Magnuson was an engineering  duty officer in the U. S. Navy.  Mr.  Magnuson
received a B.S. in Engineering  Science and an M.S. in Applied  Mathematics from
the Rensselaer Polytechnic Institute, an MS in Industrial Engineering/Operations
Research  from  Stanford  University,  and an  M.B.A.  from  the  University  of
California at Berkeley.

Barbara F.  Medwadowski,  age 59,  joined  ATEL in 1997 and is vice  president -
syndication  for ALC. Ms.  Medwadoski is responsible  for acquiring  third party
lease  transactions.  Prior to joining ATEL, she was a syndications  manager for
Mellon US Leasing  (successor to USL Capital and U.S.  Leasing  Corporation) for
nine  years.  From 1985 to 1987,  she was a vice  president  with Great  Western
Leasing where she acquired lease and loan transactions from intermediaries. From
1982 through 1984, she was a portfolio  manager with U.S.  Leasing  Corporation.
Ms. Medwadowski  received an M.B.A.  degree from the University of California at
Berkeley in 1982. From 1964 through 1979, she was a senior  researcher in lipids
and  lipoproteins  at the  University of California  at Berkeley.  In 1964,  she
earned  an  M.S.  degree  in  nutrition  and  in  1961 a B.S.  degree  in  child
development, each from the University of California at Berkeley

James A. Kamradt,  age 37,  Director of Pricing and  Syndication for ALC, joined
ATEL in 1997. Mr. Kamradt is involved in the pricing of lease  transactions  and
the placement of debt to leverage certain  transactions.  From 1985 to 1997, Mr.
Kamradt managed his own private consulting business,  providing underwriting and
operational services for numerous leasing companies.  Prior to that, Mr. Kamradt
was the National Operations Officer for the computer leasing division of Phoenix
American;  and Regional Credit Manager for Dana Commercial  Credit  Corporation.
Mr.  Kamradt  received  his  B.S.  from  Michigan   Technological   University's
Engineering  School of Business,  and his M.B.A. from Haas School of Business of
the University of California, Berkeley.

Thomas D.  Sbordone,  age 40, is Senior Vice  President - Marketing  for ALC. He
joined ATEL in 1993, as a regional  vice  president in the  northeastern  United
States.  Mr.  Sbordone is currently  responsible  for new  business  development
within the eastern  U.S.,  including  management  of filed sales  personnel  and
directly interfacing with ATEL's existing and prospective clients to achieve the
company's lease investment  objectives.  Prior to joining ATEL, Mr. Sbordone was
employed, from 1985, by American Finance Group, a Boston-based equipment lessor.
While there, Mr. Sbordone's various responsibilities  involved lease origination
of vendor finance  relationships.  Mr. Sbordone  earned a B.S., with honors,  in
finance and marketing from  Northeastern  University,  and has attended  Bentley
College Graduate School of Business.

Russell  H.  Wilder,  age 44,  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.


<PAGE>

John P. Scarcella,  age 37, 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 ATEL and their  Affiliates.  The amount of such remuneration paid for
the years ended December 31, 1998,  1997 and 1996 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 ATEL. Of
this amount, the majority is expected to be reallowed to other broker/dealers.

Through  December  31,  1996,  $11,875,000  of  such  commissions  (the  maximum
allowable) had been paid to ATEL or its affiliates. Of that amount,  $10,163,554
was reallowed to other broker/dealers.

Acquisition Fees

Acquisition fees were paid to ATEL 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 paid to ATEL or their  affiliates  was not to exceed 3% of the
aggregate  purchase  price of  equipment  acquired  with the net proceeds of the
offering and was not to exceed 4.5% of the Gross Proceeds of the Offering.

Through  December  31,  1996,  $5,625,000  of such fees (the  maximum  allowable
amount) had been paid to ATEL 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,  ATEL 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% of the gross lease revenues from "operating" leases, as
defined,  and (ii) 2% of gross lease  revenues  from "full  payout"  leases,  as
defined, which contain net lease provisions.

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


<PAGE>

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,  ATEL 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  ATEL  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 ATEL 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,
ATEL 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, ATEL 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) ATEL 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) ATEL or its affiliates have rendered  substantial  re-leasing
services in connection  with such re-lease and (iv) ATEL 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 ATEL. See financial  statements included in Item 8, Part I of
this report for amounts allocated to ATEL in 1998, 1997 and 1996.


Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
            MANAGEMENT

Security Ownership of Certain Beneficial Owners

At  December  31,  1998  no  investor  is  known  to  the  Partnership  to  hold
beneficially more than 5% of the issued and outstanding Units.


<PAGE>

Security Ownership of Management

The shareholders of ATEL 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.

ATEL 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.



<PAGE>

                                     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, 1998 and 1997

                          Statements of Operations for the years ended December 
                          31, 1998, 1997 and 1996

                          Statements of Changes in Partners' Capital for the 
                          years ended December 31, 1998, 1997 and 1996

                          Statements of Cash Flows for the years ended December 
                          31, 1998, 1997 and 1996

                          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 1998
                          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: 3/26/1999

                               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 executive       3/26/1999
-------------------------officer of ATEL Financial Corporation
        A. J. Batt      




       /s/ Dean Cash     Executive vice president and director         3/26/1999
-------------------------of ATEL Financial Corporation
        Dean Cash       



 /s/ Donald E. Carpenter Principal financial officer of registrant;    3/26/1999
-------------------------principalfinancial officer of ATEL Financial
   Donald E. Carpenter   Corporation Principal accounting officer 
                         of registrant; principal 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.