FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
OR
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to ___________
Commission file number: 0-26869
WNC HOUSING TAX CREDIT FUND VI, L.P.,
Series 6
California 33-0761578
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3158 Redhill Avenue, Suite 120
Costa Mesa, CA 92626
(Address of principal executive offices)
(714) 662-5565
(Telephone number)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes No _ X _
<PAGE>
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6
INDEX TO FORM 10-Q
For the Quarter Ended June 30, 1999
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheet, June 30, 1999 and March 31, 1999 3
Statement of Operations
For the Period ended June 30, 1999 4
Statement of Partners' Equity
For the Period ended June 30, 1999 5
Statement of Cash Flows
For the Period ended June 30, 1999 6
Notes to Financial Statements 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 14
Item 3. Quantitative and Qualitative Disclosures About Market Risks 16
PART II. OTHER INFORMATION
Item 1 Legal Proceedings 16
Item 6. Exhibits and Reports on Form 8-K 16
Signatures 17
2
<PAGE>
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6
(A California Limited Partnership)
BALANCE SHEETS
June 30, 1999 March 31, 1999
------------- --------------
(Unaudited)
ASSETS
Cash and cash equivalents $ 8,112,911 $ 2,690,665
Subscription receivable - Note 7 348,243 893,370
Investment in limited
partnerships - Note 3 9,709,823 7,748,624
Loans receivable - Note 2 1,440,242 1,043,530
----------- -----------
$ 19,611,219 $ 12,376,189
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Liabilities:
Payable to limited partnerships -Note 5 $ 2,563,832 $ 2,137,275
Accrued fees and expenses due to
general partner and affiliates - Note 4 174,131 184,291
----------- -----------
2,737,963 2,321,566
----------- -----------
Partners' equity (deficit):
General partner (25,480) (13,659)
Limited partners (25,000 units Authorized;
20,500 and 11,776 units outstanding at
June 30, 1999 and March 31, 1999,
respectively) 16,898,736 10,068,282
----------- -----------
Total partners' equity 16,873,256 10,054,623
----------- -----------
$ 19,611,219 $ 12,376,189
=========== ===========
See accompanying notes to financial statements
3
<PAGE>
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6
(A California Limited Partnership)
STATEMENT OF OPERATIONS
For the Three Months Ended June 30, 1999
(Unaudited)
1999
----
Interest income $ 42,019
---------
Operating expenses:
Amortization - Note 3 7,102
Asset Management fees - Note 4 8,644
Legal and accounting 6,346
Other expense (2,750)
---------
Total operating expenses 19,342
---------
Net income from operations 22,677
---------
Equity in income from limited partnership - Note 3 12,668
---------
Net income $ 35,345
=========
Net income allocated to:
General partner $ 353
=========
Limited partners $ 34,992
=========
Net Income per weighted limited partner units $ 1.56
=========
See accompanying notes to financial statements
4
<PAGE>
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6
(A California Limited Partnership)
STATEMENT OF PARTNERS' EQUITY
For the Three Months Ended June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
General Limited
Partner Partners Total
------- -------- -----
<S> <C> <C> <C>
Partners equity (deficit) at March 31, 1999 $ (13,659) $ 10,068,282 $ 10,054,623
Sale of limited partnerships units,
net of discounts 8,718,260 8,718,260
Sale of limited partnerships issued for,
Promissory notes receivable (717,600) (717,600)
Offering expenses (12,174) (1,205,198) (1,217,372)
Net Income 353 34,992 35,345
--------- ------------- ------------
Partners' equity (deficit), $ (25,480) $ 16,898,736 $ 16,873,256
June 30, 1999 ========= ============= ============
</TABLE>
See accompanying notes to financial statements
5
<PAGE>
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6
(A California Limited Partnership)
STATEMENT OF CASH FLOWS
For the Three Months Ended June 30, 1999
(Unaudited)
1999
----
Cash flows from operating activities:
Net income $ 35,345
Adjustments to reconcile net income to net
cash provided by operating activities:
Equity in income of limited partnerships (12,668)
Amortization 7,102
Asset management fee 8,644
Change in other assets (2,648)
Change in accrued fees and expenses due to
general partner and affiliates 2,168
-----------
Net cash provided by operating activities 37,943
-----------
Cash flows from investing activities:
Investment in limited partners (216,973)
Loans receivable (1,040,242)
Capitalized Acquisition fees and costs (695,608)
-----------
Net cash used in investing activities (1,952,823)
-----------
Cash flows from financing activities:
Sale of limited partner units, net of discounts 7,660,060
Subscriptions receivable 888,375
Offering expenses (1,211,309)
-----------
Net cash provided by financing activities 7,337,126
-----------
Net increase in cash and cash equivalents 5,422,246
Cash and cash equivalents, beginning of period 2,690,665
-----------
Cash and cash equivalent, end of period $ 8,112,911
===========
See accompanying notes to financial statements
6
<PAGE>
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6
(A California Limited Partnership)
STATEMENT OF CASH FLOWS - (CONTINUED)
For the Three Months Ended June 30, 1999
(Unaudited)
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING AND INVESTING ACTIVITIES:
The Partnership has incurred but did not pay-
Capital contributions in connection with
investments in limited partnerships $ 643,530
========
A loan receivable was applied to a note payable
in connection with investments in limited partnerships $ 643,530
========
The Partnership has incurred but did not pay -
Acquisition fees and cost in connection with
investments in limited partnerships $ 27,036
========
The Partnership has received subscriptions for Units $ 340,600
========
The Partnership has received notes for Units $ 717,600
========
The Partnership has received discounts for Units $ 5,740
========
The Partnership has incurred but did not pay -
Offering expenses in connection with the subscription of Units $ 6,063
========
See accompanying notes to financial statements
7
<PAGE>
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
June 30, 1999
(Unaudited)
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General
The information contained in the following notes to the financial statements is
condensed from that which would appear in the annual financial statements;
accordingly, the financial statements included herein should be reviewed in
conjunction with the audited financial statements and related notes thereto
contained in the WNC Housing Tax Credit Fund VI, L.P., Series 6 (the
"Partnership") Annual Report for the year end March 31, 1999 (audited).
Accounting measurements at interim dates inherently involve greater reliance on
estimates than at year end. The results of operations for the interim period
presented are not necessarily indicative of the results for the entire year.
In the opinion of the General Partner, the accompanying unaudited financial
statements contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the financial position as of June 30, 1999
and the results of operations and changes in cash flows for the three months
ended.
Organization
WNC Housing Tax Credit Fund VI, L.P., Series 6 (the "Partnership") was formed on
March 3, 1997 under the laws of the State of California, and commenced
operations on August 20, 1998. Prior to August 20, 1998, the Partnership was
considered a development-stage enterprise. The Partnership was formed to invest
primarily in other limited partnerships ("the Local Limited Partnerships") which
own and operate multi-family housing complexes (the "Housing Complexes") that
are eligible for low income housing tax credits. The local general partners (the
"Local General Partners") of each Local Limited Partnership retain
responsibility for developing, constructing, maintaining, operating and managing
the Housing Complex.
The general partner is WNC & Associates, Inc. ("WNC" or the "General Partner").
Wilfred N. Cooper, Sr., through the Cooper Revocable Trust, owns 66.8% of the
outstanding stock of WNC. John B. Lester, Jr. is the original limited partner of
the Partnership and owns, through the Lester Family Trust, 28.6% of the
outstanding stock of WNC.
The Partnership agreement authorized the sale of up to 25,000 units at $1,000
per Unit ("Units"). As of March 31, 1999, 11,776 Units, representing
subscriptions in the amount of $11,738,335, net of discounts of $ 27,305 for
volume purchases and dealer discounts of $10,360, had been accepted (see Note
10). As of December 31, 1998, 6,944 Units representing subscriptions in the
amount of $6,942,250, net of discounts of $1,750 for volume purchases, had been
accepted. The General Partner has a 1% interest in operating profits and losses,
taxable income and losses, cash available for distribution from the Partnership
and tax credits of the Partnership. The limited partners will be allocated the
remaining 99% of these items in proportion to their respective investments.
After the limited partners have received proceeds from a sale or refinancing
equal to their capital contributions and their return on investment (as defined
in the Partnership Agreement) and the General Partner has received proceeds
equal to its capital contribution and a subordinated disposition fee (as
described in Note 4) from the remainder, any additional sale or refinancing
proceeds will be distributed 90% to the limited partners (in proportion to their
respective investments) and 10% to the General Partner.
8
<PAGE>
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINIUED
June 30, 1999
(Unaudited)
NOTE 1 - ORGANIZATION AND OTHER MATTERS, continued
Risks and Uncertainties
The Partnership's investments in Local Limited Partnerships are subject to the
risks incident to the management and ownership of low-income housing and to the
management and ownership of multi-unit residential real estate. Some of these
risks are that the low income housing credit could be recaptured and that
neither the Partnership's investments nor the Housing Complexes owned by the
Local Limited Partnerships will be readily marketable. To the extent the Housing
Complexes receive government financing or operating subsidies, they may be
subject to one or more of the following risks: difficulties in obtaining tenants
for the Housing Complexes; difficulties in obtaining rent increases; limitations
on cash distributions; limitations on sales or refinancing of Housing Complexes;
limitations on transfers of Local Limited Partnership Interests; limitations on
removal of Local General Partners; limitations on subsidy programs; and possible
changes in applicable regulations. The Housing Complexes are or will be subject
to mortgage indebtedness. If a Local Limited Partnership does not make its
mortgage payments, the lender could foreclose resulting in a loss of the Housing
Complex and low income housing credits. As a limited partner of the Local
Limited Partnerships, the Partnership will have very limited rights with respect
to management of the Local Limited Partnerships, and will rely totally on the
Local General Partners of the Local Limited Partnerships for management of the
Local Limited Partnerships. The value of the Partnership's investments will be
subject to changes in national and local economic conditions, including
unemployment conditions, which could adversely impact vacancy levels, rental
payment defaults and operating expenses. This, in turn, could substantially
increase the risk of operating losses for the Housing Complexes and the
Partnership. In addition, each Local Limited Partnership is subject to risks
relating to environmental hazards and natural disasters which might be
uninsurable. Because the Partnership's operations will depend on these and other
factors beyond the control of the General Partner and the Local General
Partners, there can be no assurance that the anticipated low income housing
credits will be available to Limited Partners.
In addition, Limited Partners are subject to risks in that the rules governing
the low income housing credit are complicated, and the use of credits can be
limited. The only material benefit from an investment in Units may be the low
income housing credits. There are limits on the transferability of Units, and it
is unlikely that a market for Units will develop. All management decisions will
be made by the General Partner.
Method of Accounting For Investments in Local Limited Partnerships
The Partnership accounts for its investments in Limited Partnerships using the
equity method of accounting, whereby the Partnership adjusts its investment
balance for its share of the Local Limited Partnership's results of operations
and for any distributions received. The accounting policies of the Local Limited
Partnerships are consistent with the Partnership. Costs incurred by the
Partnership in acquiring the investments are capitalized as part of the
investment and amortized over 15 years (see Note 3).
9
<PAGE>
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINIUED
June 30, 1999
(Unaudited)
NOTE 1 - ORGANIZATION AND OTHER MATTERS, continued
Offering Expenses
Offering expenses consist of underwriting commissions, legal fees, printing,
filing and recordation fees, and other costs incurred with the selling of
limited partnership interests in the Partnership. The General Partner is
obligated to pay all offering and organization costs in excess of 14.5%
(including sales commissions) of the total offering proceeds. Offering expenses
are reflected as a reduction of limited partners' capital and amounted to
$2,696,307 and $1,478,935 as of June 30, 1999 and March 31, 1999, respectively.
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 materially differ from those estimates.
Cash and Cash Equivalents
The Partnership considers all highly liquid investments with remaining
maturities of three months or less when purchased to be cash equivalents. As of
March 31, 1999 and December 31, 1998 the Partnership had cash equivalents of
$52,271 and $6,087, respectively.
Net Income Per Limited Partner Unit
Net income per limited partnership unit is calculated pursuant to Statement of
Financial Accounting Standards No. 128, Earnings Per Share. Net income per unit
includes no dilution and is computed by dividing income available to limited
partners by the weighted average number of units outstanding during the period.
Calculation of diluted net income per unit is not required.
NOTE 2 - LOANS RECEIVABLE
Loans receivable represent amounts advanced by the Partnership to two Local
Limited Partnerships. The Partnership at June 30, 1999, applied the advances
against the first capital contributions due upon the purchase of the Local
Limited Partnership in July 1999
10
<PAGE>
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINIUED
June 30, 1999
(Unaudited)
NOTE 3 - INVESTMENT IN LIMITED PARTNERSHIPS
Following is a summary of the equity method activity of the investments in
limited partnerships for the periods presented:
June 30, 1999 March 31, 1999
------------- --------------
Investment balance, beginning of period $ 7,748,624 $ 6,440,762
Capital contribution paid, net - 514,697
Capital contribution payable 643,530 402,848
Loan receivable applied 643,530 -
Equity in Income of limited partnerships 12,669 47,263
Capitalized acquisition fees and costs 668,572 348,261
Amortization of capitalized
acquisition costs (7,102) (5,207)
----------- -----------
Investment balance,
End of period $ 9,709,823 $ 7,748,624
=========== ===========
Selected financial information from the financial statements of the limited
partnerships with operations for the three months ended June 30, 1999 is as
follows:
1999
----
Total revenue $ 146,076
-----------
Interest expense 23,995
Depreciation 29,509
Operating expenses 79,903
-----------
Total expenses 133,407
Net loss $ 12,669
===========
Net loss allocable to the
Partnership $ 12,668
===========
11
<PAGE>
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINIUED
June 30, 1999
(Unaudited)
NOTE 4 - RELATED PARTY TRANSACTIONS
The Partnership has no officers, employees, or directors. However, under the
terms of the Partnership Agreement the Partnership is obligated to the General
Partner or its affiliates for the following fees:
(a) Organization and Offering Expenses. The Partnership accrued or paid to the
General Partner or its affiliates as of June 30, 1999 and March 30, 1999
approximately $2,696,307 and $1,478,935, respectively, for selling
commissions and other fees and expenses of the Partnership's offering of
Units. Of the total accrued or paid, approximately $2,081,307 and
$1,125,655 as of June 30, 1999 and March 30, 1999, respectively, was paid
or to be paid to unaffiliated persons participating in the Partnership's
offering or rendering other services in connection with the Partnership's
offering.
(b) Acquisition Fees. Acquisition fees in an amount equal to 7.0% of the gross
proceeds of the Partnership's offering ("Gross Proceeds"). Through June 30,
1999 and March 31, 1999, the aggregate amount of acquisition fees paid or
accrued was approximately $1,435,000 and $789,740, respectively.
(c) Acquisition Expense. The Partnership accrued to or paid to the General
Partner or its affiliates for acquisition expense expended by such persons
on behalf of the Partnership of approximately $75,160 and $51,849 as of
June 30, 1999 and March 31, 1999, respectively. The limit on this
reimbursement is 1.5% of Gross Proceeds.
(d) Annual Asset Management Fee. An annual asset management fee in an amount
equal to 0.2% of the Invested Assets. "Invested Assets" means the sum of
the Partnership's Investment in Local Limited Partnerships and the
Partnership's allocable share of mortgage loans on and other debts related
to the Housing Complexes owned by such Local Limited Partnerships. Fees of
$8,644 and $8,096 were incurred during the three months ended June 30, 1999
and March 31, 1999, respectively, of which $0 were paid during the three
months ended June 31, 1999 and March 31, 1999.
(e) Subordinated Disposition Fee. A subordinated disposition fee in an amount
equal to 1% of the sale price received in connection with the sale or
disposition of a Housing Complex. Subordinated disposition fees will be
subordinated to the prior return of the Limited Partners' capital
contributions and payment of the Return on Investment to the Limited
Partners. "Return on Investment" means an annual, cumulative but not
compounded, "return" to the Limited Partners (including Low Income Housing
Credits) as a class on their adjusted capital contributions commencing for
each Limited Partner on the last day of the calendar quarter during which
the Limited Partner's capital contribution is received by the Partnership,
calculated at the following rates: (i) 12% through December 31, 2008, and
(ii) 6% for the balance of the Partnerships term. No disposition fees have
been paid.
(f) Interest in Partnership. The General Partner will receive 1% of the
Partnership's allocated Low Income Housing Credits. No Low Income Housing
Credits have been allocated. The General Partner is also entitled to
receive 1% of cash distributions. There have been no distributions of cash
to the General Partner.
12
<PAGE>
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINIUED
June 30, 1999
(Unaudited)
NOTE 4 - RELATED PARTY TRANSACTIONS, continued
The accrued fees and expenses due to the General Partner and affiliates consist
of the following:
June 30, March 31,
1999 1999
------- --------
Acquisition fees $ 63,210 $ 68,330
Asset management fee payable 16,740 8,096
Commissions payable to affiliate 29,638 29,129
Reimbursement for expenses paid by
the General partner or an affiliate 64,543 78,736
--------- ---------
$ 174,131 $ 184,291
========= =========
NOTE 5 - PAYABLES TO LIMITED PARTNERSHIPS
Payables to limited partnerships represent amounts which are due at various
times based on conditions specified in the limited partnership agreements. These
contributions are payable in installments and are due upon the Local Limited
Partnerships achieving certain operating and development benchmarks (generally
within two years of the Partnership's initial investment).
NOTE 6 - INCOME TAXES
No provision for income taxes has been recorded in the accompanying financial
statements as any liability for income taxes is the obligation of the partners
of the Partnership.
NOTE 7 - SUBSCRIPTIONS AND NOTES RECEIVABLE
During the three months period ending June 30, 1999, the Partnership received
subscriptions for 8,724 Units which included subscriptions receivable of
$340,600, net of dealer discounts, and promissory notes receivable of $717,600.
NOTE 8 - COMMITMENTS AND CONTINGENCIES
During the three months period ending June 30, 1999, the Partnership acquired
three limited partnerships interests which required capital contributions
totaling approximately $4,158,418, of which $1,043,530 has been advanced as of
March 31, 1999 and has been reflected in loans receivable in the balance sheet
(see Note 2) and $1,440,425 had been contributed during the three months period
ending June 30, 1999.
13
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operation
Financial Condition
The Partnership's assets at June 30, 1999 consisted primarily of $8,112,911 in
cash, subscriptions receivable from the sale of Units totaling $348,243,
aggregate investments in six Local Limited Partnerships of $9,709,823 and
deposits on two prospective acquisitions of $1,440,242. Liabilities at June 30,
1999 primarily consisted of $2,563,832 of estimated future capital contributions
to the Local Limited Partnerships and $174,131 of accrued fees and advances due
to the General Partner and affiliates.
The Partnership offered Units for sale to the public until June 23, 1999, at
which time total limited partner capital raised was $20,500,000 ($11,776,000
raised at March 31, 1999).
Results of Operations
The Partnership commenced operations on August 20, 1998. As a result, there are
no comparative results of operations or financial condition from prior periods
to report. Net income for the three months ended June 30, 1999 was principally
composed of equity in income from the Local Limited Partnerships, consisting of
both operations and interest income. As of March 31, 1999, three of the Local
Limited Partnerships were under construction. During the three months ended
March 31, 1999, four additional Housing Complexes, owned by two Local Limited
Partnerships, were acquired, all of which were operating at the time of
acquisition. All of the Housing Complexes acquired during the three months ended
March 31, 1999 were undergoing rehabilitation as of June 30, 1999. All such
Housing Complexes have continued operations during the rehabilitation.
Accordingly, there were no Low Income Housing Credits available for allocation
to the partners.
Cash Flows
Cash flows provided by operating activities for the periods ended March 31, 1999
and December 31, 1998 included interest income from cash investments less
miscellaneous costs of operations. Cash flows provided by financing activities
for the period ended June 30, 1999, primarily consisted of net proceeds from the
sale of Units of $7,660,000, the collection of $888,000 of subscriptions
receivable, and net cash used in operating activities of $38,000, offset by
$1,211,000 in offering costs. Cash flows used in investing activities
substantially consisted of loans receivable paid of $1,040,000, capital
contributions paid to Local Limited Partnerships of $217,000, capitalized
acquisition fees and costs totaling $696,000.
Since June 31, 1999, the Partnership has raised equity capital sufficient to
satisfy all of its identified obligations. In this regard, the Partnership
expects its future cash flows, together with its net available assets at June
31, 1999, to be sufficient to meet all future cash requirements.
Impact of Year 2000
WNC & Associates, Inc.
Status of Readiness
Information Technology (IT) Systems. The Partnership relies on the IT systems of
WNC, its general partner. IT systems include computer hardware and software used
to produce financial reports and tax return information. This information is
then used to generate reports to investors and regulatory agencies, including
the Internal Revenue Service and the Securities and Exchange Commission. The IT
systems of WNC are year 2000 compliant.
14
<PAGE>
Non-IT Systems. The Partnership also relies on the non-IT systems of WNC. Non-IT
systems include machinery and equipment such as telephones, voice mail and
electronic postage equipment. Except for one telephone system, the non-IT
systems of WNC are year 2000 compliant. The one telephone system will require
the replacement of one computer and one software application, both of which will
be completed on or before October 1, 1999.
Service Providers. WNC also relies on the IT and non-IT systems of service
providers. Service providers include utility companies, financial institutions,
telecommunications carriers, municipalities, and other outside vendors. WNC has
obtained verbal assurances from its material service providers (electrical power
provider, financial institutions and telecommunications carriers) that their IT
and non-IT systems are year 2000 compliant. There can be no assurance that this
compliance information is correct. There also can be no assurance that the
systems of other, less-important service providers and outside vendors will be
year 2000 compliant.
Costs to Address Year 2000 Issues
The cost to address year 2000 issues for WNC has been less than $20,000. The
cost to replace the telephone system noted above will be less than $5,000. The
cost to deal with potential year 2000 issues of other outside vendors cannot be
estimated at this time.
Risk of Year 2000 Issues
The most reasonable and likely result from non-year 2000 compliance of systems
of the service providers noted above will be the disruption of normal business
operations for WNC. This disruption would, in turn, lead to delays in performing
reporting and fiduciary responsibilities on behalf of the Partnership. The worst
case scenario would be the replacement of a service provider. These delays would
likely be temporary and would likely not have a material effect on the
Partnership or WNC.
Local Limited Partnerships
Status of Readiness
WNC is in the process of obtaining year 2000 certifications from each Local
General Partner of each Local Limited Partnership. Those certifications will
represent to the Partnership that the IT and non-IT systems critical to the
operation of the Housing Complexes and investor reporting to the Partnership are
year 2000 compliant. These certifications will also represent to the Partnership
that the IT and non-IT systems of property management companies, independent
accountants, electrical power providers, financial institutions and
telecommunications carriers used by the Local Limited Partnership are year 2000
compliant.
There can be no assurance that the representations in the certifications will be
correct. There also can be no assurance that the systems of other,
less-important service providers and outside vendors, upon which the Local
Limited Partnerships rely, will be year 2000 compliant.
Costs to Address Year 2000 Issues
There will be no cost to the Partnership as a result of assessing year 2000
issues for the Local Limited Partnerships. The cost to deal with potential year
2000 issues of the Local Limited Partnerships cannot be estimated at this time.
15
<PAGE>
Risk of Year 2000 Issues
There may be Local General Partners who indicate that they or their property
management company are not year 2000 compliant and do not have plans to become
year 2000 compliant before the end of 1999. There may be other Local General
Partners who are unwilling to respond to the certification request. The most
likely result of either non-compliance or failure to respond will be the removal
and replacement of the property management company and/or the Local General
Partner with year 2000 compliant operators.
Item 3: Quantitative and Qualitative Disclosures Above Market Risks
None
Part II. Other Information
Item 1. Legal Proceedings
None
Item 6. Exhibits and Reports on Form 8-K
1. A report on Form 8-K/A dated September 15, 1999 was filed on September
16, 1999 reporting the Proforma Balance Sheet for the acquisition of
West Mobile County Housing, Ltd.
2. A report on Form 8-K dated May 13, 1999 was filed on May 14, 1999
reporting the change in fiscal year end to March 31.
16
<PAGE>
Pursuant to the requirements 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.
WNC HOUSING TAX CREDIT FUND VI, L.P., Series 6 and Series 6
By: WNC & Associates, Inc. General Partner
By: /s/ John B. Lester, Jr.
John B. Lester, Jr., President
WNC & Associates, Inc.
Date: September 14, 1999
By: /s/ Michael L. Dikenson
Michael L. Dikenson, Vice President - Chief Financial Officer
WNC & Associates, Inc.
Date: September 14, 1999
17
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001037156
<NAME> WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6
<MULTIPLIER> 1
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-START> APR-01-1999
<PERIOD-END> JUN-30-1999
<EXCHANGE-RATE> 1
<CASH> 8,112,911
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 8,112,911
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 19,611,219
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 16,873,256
<TOTAL-LIABILITY-AND-EQUITY> 19,611,219
<SALES> 0
<TOTAL-REVENUES> 42,019
<CGS> 0
<TOTAL-COSTS> 19,342
<OTHER-EXPENSES> 12,668
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 35,345
<INCOME-TAX> 0
<INCOME-CONTINUING> 35,345
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 35,345
<EPS-BASIC> 1.56
<EPS-DILUTED> 0
</TABLE>
