FORM 10-K/A
AMENDMENT NO.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 1998
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: 333-24111
WNC HOUSING TAX CREDIT FUND VI, L.P., Series 6
California 33-0745418
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3158 Redhill Avenue, Suite 120, Costa Mesa, CA 92626
(714) 662-5565
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to section 12(g) of the Act:
NONE
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 X No ____
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K 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>
State the aggregate market value of the voting and non-voting common equity
held by non-affiliates of the registrant. Inapplicable.
DOCUMENTS INCORPORATED BY REFERENCE
NONE
<PAGE>
PART I.
Item 1. Business
Organization
WNC Housing Tax Credit Fund VI, L.P., Series 6 (the "Partnership") was formed
under the California Revised Limited Partnership Act on March 3, 1997 and
commenced operations on August 20, 1998. The Partnership was formed to invest
primarily in other limited partnerships or limited liability companies ("Local
Limited Partnerships") which will own and operate multi-family housing complexes
that will qualify for low income housing tax credits (the "Low Income Housing
Credit").
The general partner of the Partnership is WNC & Associates, Inc. ("Associates"
or the "General Partner".) Wilfred N. Cooper, Sr., through the Cooper Revocable
Trust, owns just less than 66.8% of the outstanding stock of Associates. John B.
Lester, Jr. is the original limited partner of the Partnership and owns, through
the Lester Family Trust, just less than 28.6% of the outstanding stock of
Associates. The business of the Partnership is conducted primarily through the
General Partner, as the Partnership has no employees of its own.
Pursuant to a registration statement (Commission File No. 333-24111) which was
declared effective on June 23, 1997, a Prospectus dated June 23, 1997 and
Supplements dated July 9, 1998, August 20, 1998, November 18, 1998 and December
23, 1998, the Partnership commenced a public offering of 25,000 units of limited
partnership interest ("Units"), at a price of $1,000 per Unit. As of December
31, 1998, the Partnership had received and accepted subscriptions for 6,944
Units in the amount of $6,942,250, net of dealer discounts of $1,750, of which
$262,500 was represented by promissory notes of the subscribers. Holders of
Units are referred to herein as "Limited Partners."
Description of Business
The Partnership's principal business objective is to provide its Limited
Partners with Low Income Housing Credits. The Partnership's principal business
therefore consists of investing as a limited partner or non-managing member in
Local Limited Partnerships each of which will own and operate a multi-family
housing complex (the "Apartment Complex") which will qualify for the Low Income
Housing Credit. In general, under Section 42 of the Internal Revenue Code, an
owner of low-income housing can receive the Low Income Housing Credit to be used
to reduce Federal taxes otherwise due in each year of a ten-year period. The
Apartment Complex is subject to a 15-year compliance period (the "Compliance
Period"), and under state law may have to be maintained as low income housing
for 30 or more years.
In general, in order to avoid recapture of Low Income Housing Credits, the
Partnership does not expect that it will dispose of its interests in Local
Limited Partnerships ("Local Limited Partnership Interests") or approve the sale
by any Local Limited Partnership of its Apartment Complex prior to the end of
the applicable Compliance Period. Because of (i) the nature of the Apartment
Complexes, (ii) the difficulty of predicting the resale market for low-income
housing 15 or more years in the future, and (iii) the ability of government
lenders to disapprove of transfer, it is not possible at this time to predict
whether the liquidation of the Partnership's assets and the disposition of the
proceeds, if any, in accordance with the Partnership's Agreement of Limited
Partnership, as amended by the First Amendment thereto ("Partnership
Agreement"), will be able to be accomplished promptly at the end of the 15-year
period. If a Local Limited Partnership is unable to sell its Apartment Complex,
it is anticipated that the local general partner ("Local General Partner") will
either continue to operate such Apartment Complex or take such other actions as
the Local General Partner believes to be in the best interest of the Local
Limited Partnership. Notwithstanding the preceding, circumstances beyond the
control of the General Partner may occur during the Compliance Period, which
would require the Partnership to approve the disposition of a Apartment Complex
prior to the end thereof, possibly resulting in recapture of Low Income Housing
Credits.
As of December 31, 1998, the Partnership had invested in four Local Limited
Partnerships. Each of these Local Limited Partnerships owns an Apartment Complex
3
<PAGE>
that is or is expected to be eligible for the Low Income Housing Credit. Three
of these Local Limited Partnerships are expected to benefit from government
programs promoting low- or moderate-income housing.
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 Apartment Complexes owned by the
Local Limited Partnerships will be readily marketable. To the extent the
Apartment 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 Apartment 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 Apartment
Complexes are or will be subject to mortgage indebtedness. If a Local Limited
Partnership does not makes its mortgage payments, the lender could foreclose
resulting in a loss of the Apartment Complex and Low Income Housing Credits. As
a limited partner or non-managing member 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 general partners or
managing members 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 Apartment Complexes and the Partnership. The Apartment
Complexes could be subject to loss through foreclosure. 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 in 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.
As of December 31, 1998, three of the Apartment Complexes were still under
construction and one was partially under construction. The Apartment Complexes
were being developed by the respective Local General Partners who acquired the
sites and applied for applicable mortgages and subsidies. The Partnership became
the principal limited partner or non-managing member in these Local Limited
Partnerships pursuant to arm's-length negotiations with the respective Local
General Partners. As a limited partner or non-managing member, the Partnership's
liability for obligations of each Local Limited Partnership is limited to its
investment. The Local General Partners of each Local Limited Partnership retain
responsibility for developing, constructing, maintaining, operating and managing
the Apartment Complex.
Item 2. Properties
Through its investments in Local Limited Partnerships, the Partnership holds
limited partnership interests in the Apartment Complexes. The following table
reflects the status of the four Apartment Complexes as of December 31, 1998 and
for the period then ended:
4
<PAGE>
<TABLE>
<CAPTION>
WNC Housing Tax Credit Fund VI, L.P. Series 6
---------------------------------------------------------------------------
As of December 31, 1998
---------------------------------------------------------------------------
Partnership Location General Partner Name Number Occupancy Total Amount of Low Income Encumbrances
Name of Investment in Investment Housing of Local
Units Local Limited Paid Credits Limited
Partnerships Eligible Partnerships
Basis (1)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Brighton Edgefield, SC The Piedmont 44 73% $ 989,000 $ 396,000 $ - $ 607,000
Ridge Foundation of South
Apartments, Carolina, Inc.
L.P.
Desloge Desloge, MO East Missouri Action 32 0% 1,063,000 872,000 - 634,000
Associates Agency, Inc.
I, L.P.
Trenton Trenton, MO MBL Development, Co. 32 0% 1,025,000 769,000 - -
Village
Apartments,
L.P.
United Memphis, TN Harold E. Buehler, 60 0% 2,813,000 2,119,000 - 539,000
Development Sr. and Jo Ellen
Co. L.P. Buehler
- -97.0.
-- -- ---------- ---------- -- -------
168 19% $ 5,890,000 $ 4,156,000 $ 1,780,000
=== === ============ =========== == ==========
</TABLE>
<TABLE>
<CAPTION>
------------------------------- ----------------------------------
For the period August 20, Low Income Housing Credits
1998 through December 31, 1998
------------------------------- ----------------------------------
Partnership Name Rental Net Income Credits Year to be
Income Allocated to First Available
Partnership
- --------------------------------------------------- ----------------------------------
<S> <C> <C> <C> <C>
Brighton Ridge $ 194,000 $ 28,000 98.989% 1999
Apartments L.P.
Desloge Associates - - 99.980% 1999
I, L.P.
Trenton Village - 8,000 99.890% 1999
Apartments, L.P.
United Development - 25,000 99.980% 1999
Co. L.P.-97.0. -------- ------------ --------
$ 194,000 $ 61,000
========= ============
</TABLE>
(1) The apartment complexes are under construction and cost certification has
yet to be completed.
5
<PAGE>
Trenton (TRENTON): Trenton (population 6,000) is the county seat of Grundy
County, Missouri, and is located at the intersection of U.S. Highway 65 and
State Highway 6, approximately 100 miles northeast of Kansas City. The major
employers for Trenton residents are Nestle, USA (processed foods), Modine
Manufacturing (radiators), and Wright Memorial (hospital). The general partner
of TRENTON is MBL Development, Co. D. Kim Lingle is the president and owner of
MBL Development, Co., which has the primary goal of developing and constructing
affordable housing. Mr. Lingle has a background in banking and development.
TRENTON is managed by Invesco Properties, Inc. which was formed in May 1998 by
D. Kim Lingle. Currently, Invesco Properties, Inc. manages seven properties
consisting of 250 units in Missouri and Iowa, all of which qualify for the Low
Income Housing Credit ("Tax Credit Properties").
Memphis (UNITED 97.0): Memphis (population 610,000) is in Shelby County, in the
southwest corner of Tennessee, at the intersection of Interstate Highways 40 and
55. The major employers for Memphis residents are Federal Express Corporation,
the U.S. Government, and the Memphis City Board of Education. The general
partner of UNITED 97.0 is Harold E. Buehler, Sr. and Jo Ellen Buehler. UNITED
97.0 is managed by Buehler Enterprises, Inc., a Tennessee corporation which was
formed in 1984 by Harold E. Buehler, Sr. Buehler Enterprises, Inc. currently
manages approximately 200 units consisting primarily of single-family homes and
duplexes in Memphis.
Brighton (BRIGHTON): Brighton (population 2,500) is in Edgefield County, South
Carolina, on U.S. Highway 25, approximately 25 miles north of Augusta. The major
employers for Edgefield residents are Milliken & Co. (fabrics), Riegel Mount
Vernon Mills (linens) and Menardi-Criswell (filters). The general partner of
BRIGHTON is The Piedmont Foundation of South Carolina, Inc., a South Carolina
non-profit corporation ("Piedmont") which was formed in 1996 for the purpose of
increasing the supply and improving the quality of housing for low- and
moderate-income families in South Carolina by supporting or sponsoring the
development of decent, affordable housing units. Insignia Residential Group,
L.P., the property manager for BRIGHTON, currently manages over 1,400
properties, 37 of which are currently receiving Low Income Housing Credits. The
company has been managing properties for 14 years; Tax Credit Properties for
nine years.
Desloge (DESLOGE): Desloge (population 4,900) is in St. Francois County, in
southeast Missouri on State Route 8, near the intersection with U.S. Highway 67.
The major employers for Desloge residents are U.S. Tool Grinding (drill and tool
manufacturer), Flat River Glass (pharmaceutical glass manufacturer) and Super
Value, Inc. (distribution). East Missouri Action Agency, Inc., the general
partner of DESLOGE, has been involved in the administration and management of
five affordable housing developments. Lockwood Realty, Inc., a Missouri
corporation, the property manager for DESLOGE, has been managing property for 15
years. It currently manages approximately 250 properties consisting of more than
6,000 apartment units. Sixty-four of these properties, consisting of more than
1,500 apartment units, are receiving Low Income Housing Credits.
Item 3. Legal Proceedings
NONE
Item 4. Submission of Matters to a Vote of Security Holders
NONE
6
<PAGE>
PART II.
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
Item 5a.
(a) The Units are not traded on a public exchange but are being sold through a
public offering. It is not anticipated that any public market will develop for
the purchase and sale of any Unit. Units can be assigned only if certain
requirements in the Partnership Agreement are satisfied.
(b) At December 31, 1998, there were 393 Limited Partners.
(c) The Partnership was not designed to provide cash distributions to Limited
Partners in circumstances other than refinancing or disposition of its
investments in Local Limited Partnerships. The Limited Partners received no Low
Income Housing Credits in 1998.
Item 5b.
The Partnership is conducting an offering pursuant to a registration statement
(Commission File No. 333-24111) declared effective on June 23, 1997 and a
Prospectus dated June 23, 1997, and Supplements dated November 18, 1998, and
December 23, 1998. As of December 31, 1998 the Partnership had received
subscriptions for 6,944 Units, for an aggregate amount of capital contributions
of $6,942,250, net of dealer discounts of $1,750, in an offering which commenced
on July 9, 1998. At December 31, 1998, the above capital contributions consisted
of cash of $5,648,835, subscriptions receivable of $1,030,915 and notes
receivable of $262,500. At December 31, 1998, approximately $866,800 was paid or
due to Associates or WNC Capital Corporation, the dealer-manager for the
offering, for selling commissions, wholesaling activities and in reimbursement
of other organization and offering expenses. Included therein are selling
commissions of approximately $462,800 and wholesaling and other organization and
offering expenses of approximately $212,700, which were paid, or will be paid,
to non-affiliates.
The Partnership has committed funds for the purchase of real estate in excess of
amounts raised. At December 31, 1998, approximately $6,383,200 is or will be
invested in Local Limited Partnership Interests or Reserves as follows:
Paid or to be
paid to General Paid or
Partner or to be paid
affiliate to others Total
----------------- ------------ -----------
Acquisition fees $ 464,500 $ - $ 464,500
Acquisition costs - 28,800 28,800
Local Limited - 5,889,900 5,889,900
Partnerships
Investments in - - -
reserves or
available to be
invested ---------- ------------ -------------
Total $ 464,500 $ 5,918,700 $ 6,383,200
=============== ============= ============
7
<PAGE>
Item 6. Selected Financial Data
Balance Sheet Information
December 31, 1998
ASSETS
Cash and cash equivalents $ 372,505
Subscriptions receivable 1,030,915
Investments in limited partnerships, net 6,440,762
Other assets 50,000
--------------
$ 7,894,182
===============
LIABILITIES
Payables to limited partnerships $ 1,734,427
Other liabilities 286,592
---------------
2,021,019
PARTNERS' EQUITY 5,873,163
---------------
$ 7,894,182
===============
8
<PAGE>
Results From Operations
August 20, 1998 (Date Operations Commenced)
Through December 31, 1998
Loss from operations $ (1,501)
Equity in income from limited
partnerships 60,610
----------
Net income $ 59,109
==========
Net income allocated to:
General partner $ 591
==========
Limited partners $ 58,518
===========
Net income per limited partner unit $ 16.38
===========
Outstanding weighted limited partner units $ 3,573
===========
Low income housing credit per limited partner unit (for the period ended
December 31, 1998):
Unit credit: Federal $ -
State -
-----------
Total $ -
===========
Cash Flows Information
August 20, 1998 (Date Operations Commenced)
Through December 31, 1998
Net cash provided by (used in):
Operating activities $ 1,554
Investing activities (4,525,457)
Financing activities 4,896,408
-----------------
Net change in cash and cash 372,505
equivalents
Cash and cash equivalents, beginning -
of period -----------------
Cash and cash equivalents, end of period $ 372,505
==================
9
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Financial Condition
The Partnership's assets at December 31, 1998 consisted primarily of $372,000 in
cash, subscriptions receivable from the sale of Units totaling $1,031,000 and
aggregate investments in four Local Limited Partnerships of $6,441,000.
Liabilities at December 31, 1998 primarily consisted of $1,734,000 of estimated
future capital contributions to the Local Limited Partnerships.
The Partnership will offer Units for sale to the public until no later than June
23, 1999, at which time total limited partner capital raised is expected to be
between $15,000,000 and $20,000,000 ($6,942,250 raised at December 31, 1998).
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 period ended December 31, 1998 was principally
composed of equity in income from the Local Limited Partnerships; such income
primarily consisting of interest income. Three of the four Local Limited
Partnerships were under construction at December 31, 1998 and the fourth Local
Limited Partnership commenced operations just prior to December 31, 1998;
accordingly, there were no Low Income Housing Credits available for allocation
to the partners.
Cash Flows
Cash flows provided by operating activities for the period ended December 31,
1998 included interest income from cash investments less miscellaneous costs of
operations. Cash flows provided by financing activities for the period ended
December 31, 1998, primarily consisted of proceeds from the sale of Units of
$6,942,000, net of promissory notes of $263,000 and $867,000 in offering costs.
Cash flows used in investing activities substantially consisted of capital
contributions paid to Local Limited Partnerships of $4,155,000 and capitalized
acquisition fees and costs totaling $493,000.
Since December 31, 1998 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
December 31, 1998, to be sufficient to meet all future cash requirements.
IMPACT OF THE YEAR 2000 ISSUE
The General Partner has assessed the Partnership's exposure to date sensitive
computer systems that may not be operative subsequent to 1999. As a result of
this assessment, the General Partner has executed a plan to minimize the
Partnership's exposure to financial loss and/or disruption of normal business
operations that may occur as a result of Year 2000 non-compliant computer
systems.
Business Computer Systems
These systems include both computer hardware and software applications relating
to operations such as financial reporting. The Partnership does not maintain its
own systems and thus utilizes the computer systems of the General Partner. The
General Partner developed a compliance plan for each of its business computer
systems, with particular attention given to critical systems. The General
Partner contracted with an outside vendor to evaluate, test and repair such
systems. The assessment consisted of determining the compliance with Year 2000
of critical computer hardware and software. Incidences of non-compliance were
found with respect to computer software applications and were corrected. The
vendor found no instances of non-compliance with respect to computer hardware.
The Local General Partners or property managers maintain the business computer
systems that relate to the operations of the Local Limited Partnerships. The
General Partner is in the process of obtaining completed questionnaires from
10
<PAGE>
such Local General Partners and property management companies to assess their
respective Year 2000 readiness. The General Partner intends to identify those
Local General Partners and property management companies that have systems
critical to the operations of the Local Limited Partnerships that are not Year
2000 compliant. For those Local General Partners and property management
companies which have business computer systems which will not be Year 2000
compliant prior to the Year 2000 and where the lack of such compliance is
determined to have a potential material effect on the Partnership's financial
condition and results of operations, the General Partner intends to develop
contingency plans which may include changing property management companies.
Outside Vendors
The General Partner has obtained assurances from its suppliers of electrical
power and banking and telecommunication services that their critical systems are
all Year 2000 compliant. There exists, however, inherent uncertainty that all
systems of outside vendors or other third parties on which the General Partner,
and thus the Partnership, and the Local General Partners and property management
companies, and thus the Local Limited Partnerships, rely will be Year 2000
compliant. Therefore, the Partnership remains susceptible to the consequences of
third party critical computer systems being non-compliant.
Personal Computers
The General Partner has determined that its personal computers and related
software critical to the operations of the Partnership are Year 2000 compliant.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
NONE
Item 8. Financial Statements and Supplementary Data
11
<PAGE>
FS-1
INDEPENDENT AUDITORS' REPORT
To the Partners
WNC Housing Tax Credit Fund VI, L.P., Series 6
We have audited the accompanying balance sheet of WNC Housing Tax Credit Fund
VI, L.P., Series 6 (a California Limited Partnership) (the "Partnership") as of
December 31, 1998, and the related statements of operations, partners' equity
(deficit) and cash flows for the period August 20, 1998 (date operations
commenced) through 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 audit. We did not audit
the financial statements of the limited partnership or the limited liability
corporation in which WNC Housing Tax Credit Fund VI, L.P., Series 6 is a limited
partner and investor member, respectively. These investments, as discussed in
Note 3 to the financial statements, are accounted for by the equity method. The
investments in these entities represented 82% of the total assets of WNC Housing
Tax Credit Fund VI, L.P., Series 6 at December 31, 1998. Substantially all of
the financial statements of the limited partnership were audited by other
auditors whose reports have been furnished to us, and our opinion, insofar as it
relates to the amounts included for such limited partnerships, is based solely
on the reports of the other auditors.
We conducted our audit 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 audit and the reports of the other auditors provide a
reasonable basis for our opinion.
In our opinion, based on our audit and the reports of other auditors, the
financial statements referred to above present fairly, in all material respects,
the financial position of WNC Housing Tax Credit Fund VI, L.P., Series 6 (a
California Limited Partnership) as of December 31, 1998, and the results of its
operations and its cash flows for the period August 20, 1998 (date operations
commenced) through December 31, 1998, in conformity with generally accepted
accounting principles.
BDO SEIDMAN, LLP
Orange County, California
April 12, 1999
<PAGE>
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6
(A California Limited Partnership)
BALANCE SHEET
December 31, 1998
1998
------------
ASSETS
Cash and cash equivalents $ 372,505
Subscriptions receivable (Note 8) 1,030,915
Investments in limited partnerships, net (Note 3) 6,440,762
Loan receivable (Notes 2 and 9) 50,000
------------
$ 7,894,182
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities:
Payables to limited partnerships (Note 5) $ 1,734,427
Loan payable (Note 6) 113,269
Accrued fees and advances due to General Partner
and affiliate (Note 4) 173,323
----------
Total liabilities 2,021,019
Commitments and contingencies (Note 9)
Partners' equity (deficit):
General partner (7,977)
Limited partners ;25,000 units authorized; 6,944
units outstanding at December 31, 1998 (Note 10) 5,881,140
----------
Total partners' equity 5,873,163
---------
$ 7,894,182
===========
See accompanying notes to financial statements
FS-2
<PAGE>
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6
(A California Limited Partnership)
STATEMENT OF OPERATIONS
For The Period August 20, 1998 (Date Operations
Commenced) Through December 31, 1998
1998
------------
Interest income $ 6,003
--------
Operating expenses:
Amortization 3,055
Other 4,449
--------
Total operating expenses 7,504
Loss from operations (1,501)
Equity in income from limited partnerships (Note 3) 60,610
--------
Net income $ 59,109
========
Net income allocated to:
General partner $ 591
========
Limited partners $ 58,518
========
Net income per limited partner unit $ 16.38
========
Outstanding weighted limited partner units 3,573
=====
See accompanying notes to financial statements
FS-3
<PAGE>
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6
(A California Limited Partnership)
STATEMENT OF PARTNERS' EQUITY (DEFICIT)
For The Period August 20, 1998 (Date Operations
Commenced) Through December 31, 1998
General Limited
Partner Partners Total
----------- ----------- -----------
Contribution from general partner on
August 20, 1998 $ 100 $ 1,000 $ 1,100
Sale of limited partnership units,
net of discounts of $1,750 - 6,942,250 6,942,250
Sale of limited partnership units issued
for promissory notes receivable (Note 8) - (262,500) (262,500)
Offering expenses (8,668) (858,128) (866,796)
Net income 591 58,518 59,109
---------- --------- --------
Partners' equity (deficit) at
December 31, 1998 $ (7,977) $ 5,881,140 $ 5,873,163
=========== ========== ===========
See accompanying notes to financial statements
FS-4
<PAGE>
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6
(A California Limited Partnership)
STATEMENT OF CASH FLOWS
For The Period August 20, 1998 (Date Operations
Commenced) Through December 31, 1998
1998
------------
Cash flows from operating activities:
Net income $ 59,109
Adjustments to reconcile net income to net cash provided by
operating activities:
Amortization 3,055
Equity in income from limited partnerships (60,610)
----------
Net cash provided by operating activities 1,554
----------
Cash flows from investing activities:
Investments in limited partnership, net (4,155,453)
Loan receivable (50,000)
Capitalized acquisition costs and fees (493,327)
Accrued and unpaid acquisition fees and advances due to
affiliate of general partner 173,323
----------
Net cash used in investing activities (4,525,457)
----------
Cash flows from financing activities:
Initial partner contributions 1,100
Sale of limited partner units 6,679,750
Subscriptions receivable (1,030,915)
Offering expenses (866,796)
Increase in loan payable 113,269
---------
Net cash provided by financing activities 4,896,408
---------
Net change in cash and cash equivalents 372,505
Cash and cash equivalents, beginning of period -
---------
Cash and cash equivalents, end of period $ 372,505
=========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the year for:
Interest $ -
=========
Income taxes $ 800
=========
See accompanying notes to financial statements
FS-5
<PAGE>
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For The Period August 20, 1998 (Date Operations
Commenced) Through December 31, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
WNC Housing Tax Credit Fund VI, L.P., Series 6 (the "Partnership") was formed
under the California Revised Limited Partnership Act on March 3, 1997, 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 will own and operate apartment complexes (the "Apartment
Complexes") that will qualify for low income housing credits. The local general
partners (the "Local General Partners") of each Local Limited Partnership retain
responsibility for developing, constructing, maintaining, operating and managing
the Apartment 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 financial statements include only activity relating to the business of the
Partnership, and do not give effect to any assets that the partners may have
outside of their interests in the Partnership, or to any obligations, including
income taxes, of the partners.
The Partnership shall continue in full force and effect until December 31, 2052,
unless terminated prior to that date, pursuant to the Partnership Agreement or
law.
Pursuant to the Partnership agreement, the Partnership is authorized to sell
25,000 Units at $1,000 per Unit ("Units") of which 6,944 Units in the amount of
$6,942,250, net of discounts of $1,750 for volume purchases, had been sold as of
December 31, 1998 (Note 10). The General Partner has a 0.1% interest in
operating profits and losses, taxable income and loss and in cash available for
distribution from the Partnership. The limited partners will be allocated the
remaining 99.9% 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 a
subordinated disposition fee (as described in Note 4), 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.
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 Apartment Complexes owned by the
Local Limited Partnerships will be readily marketable. To the extent the
Apartment 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 Apartment 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 Apartment
Complexes are or will be subject to mortgage indebtedness. If a Local Limited
Partnership does not makes its mortgage payments, the lender could foreclose
resulting in a loss of the Apartment Complex and low income housing credits. As
a limited
FS-6
<PAGE>
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Period August 20, 1998 (Date Operations
Commenced) Through December 31, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
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
Apartment Complexes and the Partnership. The Apartment Complexes could be
subject to loss through foreclosure. 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 in 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 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).
Losses from Local Limited Partnerships allocated to the Partnership will not be
recognized to the extent that the investment balance would be adjusted below
zero.
Offering Expenses
Offering expenses consist of underwriting commissions, legal fees, printing,
filing and recordation fees, and other costs incurred in connection 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. Through December 31,
1998, the Partnership incurred offering expenses and selling expenses of
$403,991 and $462,805, 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.
FS-7
<PAGE>
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Period August 20, 1998 (Date Operations
Commenced) Through December 31, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
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. Cash
equivalents consist of a money market account.
Concentration of Credit Risk
As of December 31, 1998, the Partnership maintained cash balances at certain
financial institutions in excess of the federally insured maximum.
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.
Reporting Comprehensive Income
In June 1997, the FASB issued Statement of Financial Accounting Standards
("SFAS") No. 130, Reporting Comprehensive Income. This statement establishes
standards for reporting the components of comprehensive income and requires that
all items that are required to be recognized under accounting standards as
components of comprehensive income be included in a financial statement that is
displayed with the same prominence as other financial statements. Comprehensive
income includes net income as well as certain items that are reported directly
within a separate component of Partners' equity and bypass net income. The
Partnership adopted the provisions of this statement in 1998. For the years
presented, the Partnership has no elements of other comprehensive income, as
defined by SFAS No. 130.
NOTE 2 - LOAN RECEIVABLE
Loans receivable represent amounts loaned by the Partnership to certain Local
Limited Partnerships in which the Partnership may invest. These loans will be
applied against the first capital contribution due if the Partnership ultimately
invests in such entities. In the event that the Partnership does not invest in
such entities, the loans are to be repaid with interest at a rate which is equal
to the rate charged to the holder (8.25% at December 31, 1998). A loan
receivable with a balance of $50,000 at December 31, 1998 was collectible from
one Local Limited Partnership, in which an interest was acquired subsequent to
December 31, 1998 (see Note 9).
FS-8
<PAGE>
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Period August 20, 1998 (Date Operations
Commenced) Through December 31, 1998
NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS
As of December 31, 1998, the Partnership had acquired interests in four Local
Limited Partnerships, each of which owns one Apartment Complex consisting of an
aggregate of 168 apartment units. As of December 31, 1998, construction or
rehabilitation of all of the apartment complexes was still in process. The
respective general partners of the Local Limited Partnerships manage the day to
day operations of the entities. Significant Local Limited Partnership business
decisions require approval from the Partnership. The Partnership, as a limited
partner, is generally entitled to 99.9%, as specified in the Local Limited
Partnership agreements, of the operating profits and losses of the Local Limited
Partnerships upon its acquisition of such investments.
The Partnership's investment in Local Limited Partnerships as shown in the
balance sheet as of December 31, 1998 is approximately $2,043,000 greater than
the Partnership's equity as shown in the Local Limited Partnerships' financial
statements. This difference is primarily due to acquisition costs related to the
acquisition of the investments that have been capitalized in the Partnership's
investment account and are being amortized over 15 years and certain capital
contributions accrued but not paid (see Note 5).
Following is a summary of the equity method activity of the investment in the
Local Limited Partnerships for the period August 20, 1998 through December 31,
1998:
Capital contributions paid, net $4,155,453
Capital contributions to be paid 1,734,427
Capitalized acquisition fees and costs 493,327
Equity in income of limited partnership 60,610
Amortization of acquisition fees and costs (3,055)
---------
$6,440,762
==========
<PAGE>
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Period August 20, 1998 (Date Operations
Commenced) Through December 31, 1998
NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
Approximate combined condensed financial information from the individual
financial statements of the Local Limited Partnerships at December 31, 1998 and
for the period then ended is as follows:
COMBINED CONDENSED BALANCE SHEETS
ASSETS
Land $ 433,000
Construction in progress 1,748,000
Buildings and improvements, (net of
accumulated depreciation of $25,000) 901,000
Other assets (including due from
affiliates of $265,000) 4,114,000
---------
$ 7,196,000
===========
LIABILITIES AND PARTNERS' EQUITY
Construction loans and mortgage payable $ 1,780,000
Other liabilities (including due to
related parties of $ 80,000) 137,000
---------
Total liabilities 1,917,000
---------
PARTNERS' CAPITAL
WNC Housing Tax Credit Fund VI, L.P., Series 6 4,398,000
Other partners 881,000
----------
5,279,000
----------
$ 7,196,000
============
COMBINED CONDENSED STATEMENT OF OPERATIONS
Revenues $ 236,000
Expenses 175,000
------------
Net income $ 61,000
============
Net income allocable to Partnership $ 61,000
============
FS-10
<PAGE>
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Period August 20, 1998 (Date Operations
Commenced) Through December 31, 1998
NOTE 4 - RELATED PARTY TRANSACTIONS
Under the terms of the Partnership Agreement, the Partnership is obligated to
the General Partner or its affiliates for the following items:
Acquisition fees of up to 7% of the gross proceeds from the sale of
Partnership Units as compensation for services rendered in connection with
the acquisition of Local Limited Partnerships. Through December 31, 1998,
the Partnership incurred acquisition fees of $464,555. Accumulated
amortization of these capitalized costs was $2,760 at December 31, 1998.
Reimbursement of costs incurred by an affiliate of the General Partner in
connection with the acquisition of Local Limited Partnerships. These
reimbursements will not exceed 1.5% of the gross proceeds. As of December
31, 1998, the Partnership incurred acquisition costs of $28,772 which have
been included in limited partnership investments. Accumulated amortization
was $295 at December 31, 1998.
An annual asset management fee equal to the greater amount of (i) $ 2,000
for each Apartment Complex, or (ii) 0.275% of gross proceeds. In either
case, the fee will be decreased or increased annually based on changes to
the Consumer Price Index. However, in no event will the maximum amount
exceed 0.2% of the invested assets of the Local Limited Partnerships, as
defined. As of December 31, 1998, asset management fees had not been
incurred.
A subordinated disposition fee in an amount equal to 1% of the sales price
of real estate sold. Payment of this fee is subordinated to the limited
partners receiving a return on investment (as defined in the Partnership
Agreement) and is payable only if services are rendered in the sales
effort.
Accrued fees and advances due the General Partner and affiliate consist of the
following at December 31, 1998:
1998
-------
Acquisition fees $ 135,103
Advances due to affiliate made for acquisition costs,
organizational, offering and selling expenses 38,220
Accrued asset management fees -
---------
$ 173,323
===========
NOTE 5 - PAYABLES TO LIMITED PARTNERSHIPS
Payables to Local Limited Partnerships represent amounts which are due at
various times based on conditions specified in the limited partnership
agreements. These contributions are non-interest bearing, are payable in
installments and are due upon the Local Limited Partnerships achieving certain
development and operating benchmarks (generally within two years of the
Partnership's initial investment).
FS-11
<PAGE>
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Period August 20, 1998 (Date Operations
Commenced) Through December 31, 1998
NOTE 6 - LOAN PAYABLE
The Partnership has a $1,000,000 line-of-credit with a bank which expires June
1, 1999. The line bears interest at the prime rate plus 0.50% (8.25% at December
31, 1998) and is secured by subscriptions receivable and guaranteed by WNC.
NOTE 7 - INCOME TAXES
No provision for income taxes has been recorded in the financial statements as
any liability for income taxes is the obligation of the partners of the
Partnership.
NOTE 8 - SUBSCRIPTIONS AND NOTES RECEIVABLE
As of December 31, 1998, the Partnership had received subscriptions for 1,293
units which included subscriptions receivable of $1,030,915, net of dealer
discounts, and promissory notes receivable of $262,500. Limited partners who
subscribed for ten or more units of Local Limited Partnerships interest
($10,000) could elect to pay 50% of the purchase price in cash upon subscription
and the remaining 50% by the delivery of a promissory note payable, together
with interest at the rate of 5.5% per annum, due no later than 13 months after
the subscription date. Since the promissory notes had not been collected prior
to the issuance of the financial statements, the unpaid balance was reflected as
a reduction of partners' equity in the financial statements as of December 31,
1998.
NOTE 9 - COMMITMENTS AND CONTINGENCIES
Subsequent to December 31, 1998, the Partnership acquired two limited
partnership interests which required capital contributions totaling
approximately $918,000, of which $50,000 has been advanced as of December 31,
1998 and has been reflected in loan receivable in the balance sheet (see Note 2)
and $495,000 had been contributed subsequent to December 31, 1998. The
Partnership is negotiating to acquire two additional limited partnership
interests which would commit the Partnership to additional capital contributions
of approximately $3,160,000, of which $1,044,000 has been advanced subsequent to
December 31, 1998.
NOTE 10 - SUBSEQUENT EVENT
From January 1, 1999 through April 12, 1999, the Partnership received
subscriptions for an additional 5,534 units, for which it has received cash
totaling $5,213,000.
FS-12
<PAGE>
17 Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
(a)(1) (i) On December 16, 1998, Corbin & Wertz, Irvine, California was
dismissed as the Partnership's principal independent accountant.
(ii) During the last two fiscal years of the Partnership, the
reports of Corbin & Wertz respecting the financial statements of the
Partnership did not contain an adverse opinion or a disclaimer of opinion,
nor were any such reports qualified or modified as to uncertainty, audit
scope or accounting principles.
(iii) The decision to change accountants was approved by the board
of directors of WNC & Associates, Inc., the general partner of the
Partnership.
(iv) During the last two fiscal years and subsequent interim period
of the Partnership there were no disagreements between Corbin & Wertz and
the Partnership on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure of the
nature described in Item 304(a)(1)(iv) of Securities and Exchange
Commission Regulation S-K.
(v) During the last two fiscal years and subsequent interim period
of the Partnership there were no reportable events of the nature described
in Item 304(a)(1)(v) of Securities and Exchange Commission Regulation S-K.
(a)(2) On December 16, 1998, BDO Seidman, LLP, Costa Mesa, California was
engaged as the Partnership's principal independent accountant. During the
last two fiscal years and subsequent interim period of the Partnership,
the Partnership did not consult BDO Seidman, LLP regarding (i) either, the
application of accounting principles to a specified transaction; or the
type of audit opinion that might be rendered on the Partnership's
financial statements, or (ii) any matter that was the subject of a
disagreement (as defined in Item 304(a)(1)(iv) of Securities and Exchange
Commission Regulation S-K) or was a reportable event (as defined in Item
304(a)(1)(v) of Securities and Exchange Commission Regulation S-K).
PART III.
Item 10. Directors and Executive Officers of the Registrant
The Partnership has no directors or executive officers of its own. The following
biographical information is presented for the directors and executive officers
of Associates which has principal responsibility for the Partnership's affairs.
Directors and Executive Officers of WNC & Associates, Inc.
The directors of WNC & Associates, Inc. are Wilfred N. Cooper, Sr., who
serves as Chairman of the Board, John B. Lester, Jr., David N. Shafer, Wilfred
N. Cooper, Jr. and Kay L. Cooper. The principal shareholders of WNC &
Associates, Inc. are trusts established by Wilfred N. Cooper, Sr. and John B.
Lester, Jr.
Wilfred N. Cooper, Sr., age 68, is the founder, Chief Executive Officer
and a Director of WNC & Associates, Inc., a Director of WNC Capital Corporation,
and a general partner in some of the programs previously sponsored by the
Sponsor. Mr. Cooper has been involved in real estate investment and acquisition
activities since 1968. Previously, during 1970 and 1971, he was founder and
principal of Creative Equity Development Corporation, a predecessor of WNC &
Associates, Inc., and of Creative Equity Corporation, a real estate investment
12
<PAGE>
firm. For 12 years prior to that, Mr. Cooper was employed by Rockwell
International Corporation, last serving as its manager of housing and urban
developments where he had responsibility for factory-built housing evaluation
and project management in urban planning and development. Mr. Cooper is a
Director of the National Association of Home Builders (NAHB) and a National
Trustee for NAHB's Political Action Committee, a Director of the National
Housing Conference (NHC) and a member of NHC's Executive Committee and a
Director of the National Multi-Housing Council (NMHC). Mr. Cooper graduated from
Pomona College in 1956 with a Bachelor of Arts degree.
John B. Lester, Jr., age 65, is President, a Director, Secretary and a
member of the Acquisition Committee of WNC & Associates, Inc., and a Director of
WNC Capital Corporation. Mr. Lester has 27 years of experience in engineering
and construction and has been involved in real estate investment and acquisition
activities since 1986 when he joined the Sponsor. Previously, he was Chairman of
the Board and Vice President or President of E & L Associates, Inc., a provider
of engineering and construction services to the oil refinery and petrochemical
industries which he co-founded in 1973. Mr. Lester graduated from the University
of Southern California in 1956 with a Bachelor of Science degree in Mechanical
Engineering.
Wilfred N. Cooper, Jr., age 36, is Executive Vice President, a Director
and a member of the Acquisition Committee of WNC & Associates, Inc. He is
President of, and a registered principal with, WNC Capital Corporation, a member
firm of the NASD, and is a Director of WNC Management, Inc. He has been involved
in investment and acquisition activities with respect to real estate since he
joined the Sponsor in 1988. Prior to this, he served as Government Affairs
Assistant with Honda North America in Washington, D.C. Mr. Cooper is a member of
the Advisory Board for LIHC Monthly Report, a Director of NMHC and an Alternate
Director of NAHB. He graduated from The American University in 1985 with a
Bachelor of Arts degree.
David N. Shafer, age 46, is Senior Vice President, a Director, General
Counsel, and a member of the Acquisition Committee of WNC & Associates, Inc.,
and a Director and Secretary of WNC Management, Inc. Mr. Shafer has been
involved in real estate investment and acquisition activities since 1984. Prior
to joining the Sponsor in 1990, he was practicing law with a specialty in real
estate and taxation. Mr. Shafer is a Director and President of the California
Council of Affordable Housing and a member of the State Bar of California. Mr.
Shafer graduated from the University of California at Santa Barbara in 1978 with
a Bachelor of Arts degree, from the New England School of Law in 1983 with a
Juris Doctor degree (cum laude) and from the University of San Diego in 1986
with a Master of Law degree in Taxation.
Michael L. Dickenson, age 42, is Vice President and Chief Financial
Officer, and a member of the Acquisition Committee of WNC & Associates, Inc.,
and Chief Financial Officer of WNC Management, Inc. He has been involved with
acquisition and investment activities with respect to real estate since 1985.
Prior to joining the Sponsor in March 1999, he was the Director of Financial
Services at TrizecHahn Centers Inc., a developer and operator of commercial real
estate, from 1995 to 1999, a Senior Manager with E&Y Kenneth Leventhal Real
Estate Group, Ernst & Young, LLP, from 1988 to 1995, and Vice President of
Finance with Great Southwest Companies, a commercial and residential real estate
developer, from 1985 to 1988. Mr. Dickenson is a member of the Financial
Accounting Standards Committee for the National Association of Real Estate
Companies and the American Institute of Certified Public Accountants, and a
Director of HomeAid Southern California, a charitable organization affiliated
with the building industry. He graduated from Texas Tech University in 1978 with
a Bachelor of Business Administration - Accounting degree, and is a Certified
Public Accountant in California and Texas.
13
<PAGE>
Thomas J. Riha, age 44, is Vice President - Asset Management and a member
of the Acquisition Committee of WNC & Associates, Inc. and a Director and Chief
Executive Officer of WNC Management, Inc. Mr. Riha has been involved in
acquisition and investment activities with respect to real estate since 1979.
Prior to joining the Sponsor in 1994, Mr. Riha was employed by Trust Realty
Advisor, a real estate acquisition and management company, last serving as Vice
President - Operations. Mr. Riha graduated from the California State University,
Fullerton in 1977 with a Bachelor of Arts degree (cum laude) in Business
Administration with a concentration in Accounting and is a Certified Public
Accountant and a member of the American Institute of Certified Public
Accountants.
Sy P. Garban, age 53, is Vice President - National Sales of WNC &
Associates, Inc. and has been employed by the Sponsor since 1989. Mr. Garban has
been involved in real estate investment activities since 1978. Prior to joining
the Sponsor he served as Executive Vice President by MRW, Inc., a real estate
development and management firm. Mr. Garban is a member of the International
Association of Financial Planners. He graduated from Michigan State University
in 1967 with a Bachelor of Science degree in Business Administration.
N. Paul Buckland, age 36, is Vice President - Acquisitions of WNC &
Associates, Inc. He has been involved in real estate acquisitions and
investments since 1986 and has been employed with WNC & Associates, Inc. since
1994. Prior to that, he served on the development team of the Bixby Ranch which
constructed apartment units and Class A office space in California and
neighboring states, and as a land acquisition coordinator with Lincoln Property
Company where he identified and analyzed multi-family developments. Mr. Buckland
graduated from California State University, Fullerton in 1992 with a Bachelor of
Science degree in Business Finance.
David Turek, age 44, is Vice President - Originations of WNC & Associates,
Inc. He has been involved with real estate investment and finance activities
since 1976 and has been employed by WNC & Associates, Inc. since 1996. From 1995
to 1996, Mr. Turek served as a consultant for a national Tax Credit sponsor
where he was responsible for on-site feasibility studies and due diligence
analyses of Tax Credit properties. From 1990 to 1995, he was involved in the
development of conventional and tax credit multi-family housing. He is a
Director with the Texas Council for Affordable Rural Housing and graduated from
Southern Methodist University in 1976 with a Bachelor of Business Administration
degree.
Kay L. Cooper, age 62, is a Director of WNC & Associates, Inc. Mrs. Cooper
was the founder and sole proprietor of Agate 108, a manufacturer and retailer of
home accessory products, from 1975 until 1998. She is the wife of Wilfred N.
Cooper, Sr., the mother of Wilfred N. Cooper, Jr. and the sister of John B.
Lester, Jr. Ms. Cooper graduated from the University of Southern California in
1958 with a Bachelor of Science degree.
Item 11. Executive Compensation
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 to or paid to
the General Partner or its affiliates as of December 31, 1998 approximately
$866,800 for selling commissions and other fees and expenses of the
Partnership's offering of Units. Of the total accrued or paid, approximately
$675,500 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 December 31,
1998, the aggregate amount of acquisition fees paid or accrued was approximately
$464,500.
14
<PAGE>
(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 $28,800. 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 of the Partnership, as defined. "Invested
Assets" means the sum of the Partnership's investment in Local Limited
Partnerships and the Partnership's allocable share of the amount of the
indebtedness related to the Apartment Complexes. No annual asset management fees
have been paid.
(e) Operating Expenses. The Partnership reimbursed the General Partner or its
affiliates for operating expenses of approximately $3,000 through December 31,
1998.
(f) Subordinated Disposition Fee. The Partnership will pay a subordinated
disposition fee in an amount equal to 1% of the sale price received in
connection with the sale or disposition of an Apartment 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) 11% through December 31, 2008, and (ii) 6% for the balance
of the Partnerships term. No disposition fees have been paid.
(g) Interest in Partnership. The General Partner will receive 0.1% of the
Partnership's allocated Low Income Housing Credits. No Low Income Housing
Credits have been allocated.
Item 12. Security Ownership of Certain Beneficial Owners and Management
(a) Security Ownership of Certain Beneficial Owners
None.
(b) Security Ownership of Management
Neither the General Partner, its affiliates, nor any of the officers or
directors of the General Partner or its affiliates own directly or beneficially
any Units in the Partnership.
(c) Changes in Control
The management and control of the General Partner may be changed at any time in
accordance with its organizational documents, without the consent or approval of
the Limited Partners. In addition, the Partnership Agreement provides for the
admission of one or more additional and successor General Partners in certain
circumstances.
First, with the consent of any other General Partners and a majority-in-interest
of the Limited Partners, any General Partner may designate one or more persons
to be successor or additional General Partners. In addition, any General Partner
may, without the consent of any other General Partner or the Limited Partners,
(i) substitute in its stead as General Partner any entity which has, by merger,
consolidation or otherwise, acquired substantially all of its assets, stock or
other evidence of equity interest and continued its business, or (ii) cause to
be admitted to the Partnership an additional General Partner or Partners if it
deems such admission to be necessary or desirable so that the Partnership will
be classified a partnership for Federal income tax purposes. Finally, a
majority-in-interest of the Limited Partners may at any time remove the General
Partner of the Partnership and elect a successor General Partner.
15
<PAGE>
Item 13. Certain Relationships and Related Transactions
All of the Partnership's affairs are managed by the General Partner. The
transactions with the General Partner are primarily in the form of fees paid by
the Partnership for services rendered to the Partnership, as discussed in Item
11 and in the notes to the Partnership's financial statements.
PART IV.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a)(1) Financial statements included in Part II hereof:
Independent Auditor's Report
Balance Sheet, December 31, 1998
Statement of Operations for the Period August 20, 1998 (Date Operations
Commenced) Through December 31, 1998
Statement of Partners' Equity (Deficit) for the Period August 20, 1998
Operations Commenced) Through December 31, 1998
Statement of Cash Flows for the Period August 20, 1998 (Date Operations
(Date Commenced) Through December 31, 1998
Notes to Financial Statements
(a)(2) Financial statement schedules included in Part IV hereof:
Report of Independent Certified Public Accountants on Financial Statements
Schedules
Schedule III, Real Estate Owned by Local Limited Partnerships
(a)(3) Exhibits.
3.1 Agreement of Limited Partnership dated as of March 3, 1997, filed as Exhibit
3.1 to Post-Effective Amendment No. 1 to the Registration Statement, is hereby
incorporated herein as Exhibit 3.1.
3.2 First Amendment to Agreement of Limited Partnership dated as of August 29,
1997 filed as Exhibit 3.2 to Post-Effective Amendment No. 6 to registration
Statement, is hereby incorporated herein as Exhibit 3.2.
10.1 Amended and Restated Agreement of Limited Partnership of Trenton Village
Apts., L.P. filed as exhibit 10.1 to the current report on Form 8-K dated August
11, 1998, is herein incorporated by reference herein as Exhibit 10.1.
10.2 Second Amended and Restated Agreement of Limited Partnership of United
Development Co., L.P.-97.0. filed as Exhibit 10.1 to the amendment to the
current report on Form 8-K/A dated September 22, 1998, is herein incorporated
herein by reference as Exhibit 10.2.
10.3 First Amendment to the Amended and Restated Agreement of Limited
Partnership of United Development Co., L.P. -97.0 filed as Exhibit 10.2 to the
amendment to the current report on Form 8-K/A dated September 22, 1998 is hereby
incorporated herein by reference as Exhibit 10.3.
10.4 Amended and Restated Agreement of Limited Partnership of Desloge Associates
I, L.P. filed as Exhibit 10.1 to the current report on Form 8-K dated December
11, 1998, is herein incorporated by reference herein as Exhibit 10.4.
10.5 Amended and Restated Agreement of Limited Partnership of Brighton Ridge
Apartments, L.P. filed as Exhibit 10.1 to the amendment to the current report on
Form 8/KA dated December 28, 1998, is herein incorporated by reference as
Exhibit 10.5.
16
<PAGE>
10.6 First Amendment to the Amended and Restated Agreement of Limited
Partnership of Brighton Ridge Apartments, L.P. filed as Exhibit 10.2 to the
amendment to the current report on Form 8K/A dated December 28, 1998, is hereby
incorporated by reference herein as Exhibit 10.6.
10.7 Second Amendment to the Amended and Restated Agreement of Limited
Partnership of Brighton Ridge Apartments, L.P. filed as Exhibit 10.3 to the
amendment to the current report on Form 8K/A dated December 28, 1998, is hereby
incorporated by reference herein as Exhibit 10.7.
21.1 Financial statements of United Development Co., L.P. - 97.0 (60 Homes) for
the year ended December 31, 1998, together with auditors report thereon, a
significant subsidiary of the Partnership.
(b) Reports on Form 8-K.
--------------------
1. A Form 8-K dated September 22, 1998 was filed on October 7, 1998 reporting
the acquisition of a Local Limited Partnership Interest under Item 2. No
financial statements were included.
2. A Form 8-K/A was filed on October 14, 1998 amending the Form 8-K filed on
October 7, 1998. Pro forma financial information respecting the
acquisition was included.
3. A Form 8-K/A was filed on October 16, 1998 amending the Form 8-K filed on
October 7, 1998. No financial statements were included.
4. A Form 8-K dated December 16, 1998 was filed on December 22, 1998
reporting the dismissal of the Partnership's former auditors and the
engagement of new auditors. No financial statements were included.
5. A Form 8-K dated December 11, 1998 was filed on December 23, 1998
reporting the acquisition of a Local Limited Partnership Interest under
Item 2. Pro forma financial information respecting the acquisition was
included.
(c) All exhibits except 21.1 are incorporated herein by reference.
--------------------------------------------------------------
(d) Financial statements schedule follows.
--------------------------------------
17
<PAGE>
Report of Independent Certified Public Accountants on
Financial Statements Schedule
To the Partners
WNC Housing tax credit Fund VI, L.P., Series 6
The audit referred to in our report dated April 12, 1999, relating to the 1998
financial statements of WNC Housing tax credit Fund VI, L.P., Series 6, which is
contained in Item 8 of this Form 10-K, included the audit of the accompanying
financial statement schedule. The financial statement schedule is the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on this financial statement schedule based upon our audit.
In our opinion, such financial statement schedule presents fairly, in all
material respects, the information set forth therein.
BDO SEIDMAN, LLP
Orange County, California
April 12, 1999
FSS-1
<PAGE>
<TABLE>
<CAPTION>
WNC Housing Tax Credit Fund VI, L.P.
Series 6
Schedule III, Page 1 of 2
Real Estate Owned by Local Limited
Partnerships
---------------------------------------------------------------------------------------
As of December 31, 1998
---------------------------------------------------------------------------------------
Investment in Local
Limited Partnerships
---------------------------------------------------------------------------------------
Partnership Name Location Committed Paid to Date Encumbrances Property Accumulated Net Book
and Depreciation Value
Equipment
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Brighton Ridge Edgefield, $ 989,000 $ 396,000 $ 607,000 $ 1,304,000 $ 25,000 $ 1,279,000
Limited SC
Partnership
Desloge Desloge, MO 1,063,000 872,000 634,000 135,000 - 135,000
L.P.
Trenton Village Trenton, MO 1,025,000 769,000 - 728,000 - 728,000
Apartments, L.P.
United Memphis, TN 2,813,000 2,119,000 539,000 940,000 - 940,000
Development Co.
97.0, L.P ---------- ---------- -------- -------- ------- -----------
$ 5,890,000 $ 4,156,000 $ 1,780,000 $ 3,107,000 $ 25,000 $ 3,082,000
========== =========== ============ ============ ========= ============
</TABLE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------
For the period August 20, 1998 through December 31, 1998
-------------------------------------------------------------------
Partnership Name Rental Net Year Investment Estimated
Income Income Acquired Completion Date
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Brighton Ridge Limited $ 194,000 $ 28,000 1998 1999
Partnership
Desloge Associates I, L.P. - - 1998 1999
Trenton Village - 8,000 1998 1999
Apartments, L.P.
United Development Co. - 25,000 1998 1999
97.0, L.P ---------- ---------
$ 194,000 $ 61,000
========= =========
</TABLE>
See Report of Independent Certified Public Accountants
on Financial Statement Schedule
FSS-2
<PAGE>
<TABLE>
<CAPTION>
WNC Housing Tax Credit Fund VI, L.P. Series 6
Schedule III, Page 2 of 2
------------------------------------------------------------------------------------
Property and Equipment Analysis
-------------------------------------------------------------------------------------------------------
For the period August 20, 1998 through
December 31, 1998
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
Balance Cost of
at Acquisitions Other Real Estate Other Balance
Partnership Name 8/20/98 Foreclosure Other Improvements Additions Sold Deductions 12/31/98
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Brighton Ridge Limited $ - $ - $ 72,000 $ 1,232,000 $ - $ - $ - $ 1,304,000
Partnership
Desloge Associates I, - - 50,000 85,000 - - - 135,000
L.P.
Trenton Village - - 55,000 673,000 - - - 728,000
Apartments, L.P.
United Development Co. - - 255,000 685,000 - - - 940,000
97.0, L.P
-------- -------- --------- ---------- -------- -------- ---------- -----------
$ - $ - $ 432,000 $ 2,675,000 $ - $ $ - $ 3,107,000
======== ========== =========== =========== ========= ======== ========== ==========
</TABLE>
<TABLE>
Accumulated Depreciation
Analysis
----------------------------------------------------------------------------
For the period August 20, 1998 through December 31, 1998
----------------------------------------------------------------------------
Accumulated Balance
Balance Depreciation Depreciation
Partnership Name 8/20/98 Expense on Property Sold Other 12/31/98
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Brighton Ridge Limited $ - $ 25,000 $ - $ - $ 25,000
Partnership
Desloge Associates I, L.P. - - - -
Trenton Village - - - - -
Apartments, L.P.
United Development Co. - - - - -
97.0, L.P
------- -------- ----------- --------- ----------
$ - $ - $ - $ $ 25,000
======== ========= ============== ========= =========
</TABLE>
See Report of Independent Certified Public Accountants
on Financial Statement Schedule
FSS-3
<PAGE>
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.
WNC HOUSING TAX CREDIT FUND VI, L.P., Series 6
By: WNC & Associates, Inc. General Partner
By: /s/ John B. Lester, Jr.
John B. Lester, Jr. President of WNC & Associates, Inc.
Date: April 29, 1999
By: /s/ Michael L. Dickenson
Michael L. Dickenson Vice-President - Chief Financial Officer
of WNC & Associates, Inc.
Date: April 29, 1999
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
By /s/ Wilfred N. Cooper, Sr.
Wilfred N. Cooper, Sr. Chairman of the Board of WNC & Associates, Inc.
Date: April 29, 1999
By: /s/ John B. Lester, Jr.
John B. Lester, Jr. Director of WNC & Associates, Inc.
Date: April 29, 1999
By: /s/ David N. Shafer
David N Shafer Director of WNC & Associates, Inc.
Date: April 29, 1999
17
Exhibit
Number Exhibit Description
EX-21.1 Financial statements for United Development Co.
L.P.- 97.0 (60 Homes) as of December 31, 1998,
together with auditor's report thereon, a
significant subsidiary of the Partnership.
<PAGE>
UNITED DEVELOPMENT CO., L.P. - 97.0 (60 HOMES)
A Tennessee Limited Partnership
Financial Statements,
Year ended December 31, 1998
<PAGE>
UNITED DEVELOPMENT CO., L. P. - 97.0 (60 HOMES)
TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITORS' REPORT 3
FINANCIAL STATEMENTS
BALANCE SHEET 4
STATEMENT OF OPERATIONS 5
STATEMENT OF CHANGES IN PARTNERS CAPITAL 6
STATEMENT OF CASH FLOWS 7
NOTES TO FINANCIAL STATEMENTS 8
<PAGE>
NOVOGRADAC
& COMPANY LLP
CERTIFIED PUBLIC ACCOUNTANTS
SAN FRANCISCO LOS ANGELES
AUSTIN ATLANTA
INDEPENDENT AUDITORS REPORT
To the Partners
United Development Co., L.P. - 97.0
We have audited the accompanying balance sheet of United Development Co., L.P. -
97.0 (the "Partnership"), a Tennessee Limited Partnership, as of December 31,
1998, and the related statements of operations, changes in partners' capital and
cash flows for the year then ended. These financial statements based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether fir 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 overall financial statement presentation. We believe that our
audit provides 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 the Partnership as of December
31, 1998 and the results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting principles.
NOVAGRADAC & COMPANY, LLP
Atlanta Georgia
April 9, 1999
<PAGE>
UNITED DEVELOPMENT CO., L.P. - 97.0 (60 HOMES)
a Tennessee Limited Partnership
Balance Sheet
December 31, 1998
ASSETS
Cash $ 100,710
Restricted Cash 1,749,540
Land 255,143
Construction in progress 684,945
----------
$ 2,790,338
==========
LIABILITIES AND PARTNERS' CAPITAL
Accounts Payable $ 30,839
Accrued interest 5,470
Developer's fee payable 80,000
Construction loan payable 539,029
----------
Total Liabilities 655,338
Partners' Capital 2,135,000
----------
$ 2,790,338
==========
See Accompanying Notes
4
<PAGE>
UNITED DEVELOPMENT CO., L.P. - 97.0 (60 HOMES)
a Tennessee Limited Partnership
Statement of Operations
Year ended December 31, 1998
NET RENTAL REVENUE $ -
OPERATING EXPENSES
Total operating expenses -
--------
Net operating income -
OTHER REVENUE AND (EXPENSES)
Interest revenue 25,123
--------
25,123
--------
Net income $ 25,123
========
See Accompanying Notes
5
<PAGE>
UNITED DEVELOPMENT CO., L.P. - 97.0 (60 HOMES)
a Tennessee Limited Partnership
Statement of Changes in Partners' Capital
Year ended December 31, 1998
Special
General Limited Limited
Partner Partner Partner Total
Partners' Capital,
January 1, 1998 $ - $ - $ - $ -
Capital contributions 411 2,109,466 2,109,877
Net income 3 3 25,117 25,123
---------- --------- ----------- -----------
Partners' Capital,
December 31, 1998 $ 3 $ 414 $ 2,134,583 $ 2,135,000
========== ========== =========== ===========
See Accompanying Notes
6
<PAGE>
UNITED DEVELOPMENT CO., L.P. - 97.0 (60 HOMES)
a Tennessee Limited Partnership
Statement of Cash Flows
Year ended December 31, 1998
Cash flows from operating activities:
Net income $ 25,123
Adjustments to reconcile net income to net cash
provided by operating activities:
-
---------
Net cash provided by operating activities 25,123
---------
Cash flows from investing activities:
Purchase of land ( 255,143)
Increase in construction in progress ( 568,636)
----------
Net cash used in investing activities ( 823,779)
----------
Cash flows from financing activities:
Proceeds from mortgage 539,029
Contribution from special limited partner 411
Contribution from limited partner 2,109,466
----------
Net cash provided by financing activities 2,648,906
----------
Net increase in cash 1,850,250
Cash at beginning of the year -
----------
Cash at end of the year $1,850,250
==========
Interest Expense
- ----------------
The partnership paid $54,243 in interest expense during the year with all of
that amount capitalized into construction in progress.
See Accompanying Notes
7
<PAGE>
UNITED DEVELOPMENT CO., L.P. - 97.0 (60 HOMES)
a Tennessee Limited Partnership
Notes to the Financial Statements
December 31, 1998
1. General
United Development Co.,L.P. - 97.0 ( the "Partnership") was formed
under the laws of the state of Tennessee, to conduct the business of
owning and operating real property located in Memphis, Tennessee. The
Partnership owns a 60 home scattered sit unit property (the
"property"), currently under construction and developed under the
low-income housing tax credit program (LIHC).
The Partnership is ninety-nine and eight-tenths percent (99.98%) owned
by the Limited Partner, WNC Housing Tax Credit Fund VI, Series 6, a
California limited partnership. Harold E. Buehler, Sr. and Jo Ellen
Buehler, collectively as the General Partner, owns one-hundredth of one
percent (.01%) of the Partnership.
The Partnership has received a low income housing tax credit
reservation from the Tennessee Housing Development Agency in a
aggregate amount of $410,684 to be allocated over ten years. To qualify
for the tax credits, the partnership must meet certain requirements.
These requirements include attaining a qualified eligible basis
sufficient to support the allocation and renting the Property pursuant
to Internal Revenue Code Section 42 ("Section 42") which regulates the
use of the Property as to occupant eligibility and unit gross rent. In
addition, the Partnership must execute a land use restriction
agreement, which will require the Property to be in compliance with
Section 42 for minimum of fifteen (15) years.
2. Summary of Significant Accounting Policies
Basis of Presentation
The Partnership prepares its financial statements on the accrual basis
of accounting, which is consistent with generally accepted accounting
principles.
Use of Estimates
The financial statements have been prepared in accordance with
generally accepted accounting principles. 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 amount of revenue and expenses during the reporting period.
Actual results may differ from those estimates.
8
<PAGE>
UNITED DEVELOPMENT CO., L.P. - 97.0 (60 HOMES)
a Tennessee Limited Partnership
Notes to the Financial Statements
December 31, 1998
2. Summary of Significant Accounting Policies (continued)
Income Taxes
Income or loss of the Partnership is allocated .01% to the General
Partner, .01% is the Special Limited Partner, and 99.98% to the Limited
Partner. No income tax provision has been included in the financial
statements since profit or loss of the Partnership is required to be
reported by the respective partners on their income tax returns.
Economic Concentrations
The Partnership operates one property in Memphis, Tennessee. Future
operations could be affected by changes in economic or other conditions
in that geographical area or by changes in the demand for such housing.
3. Construction Loan Payable
The balance sheet reflects a construction loan from South Trust Bank.
Per the loan agreement the proceeds of the loan shall be advanced
solely for purposes of the construction and completion of the Property.
The construction loan has been allocated to each of the 60 homes by
South Trust Bank and a deed has been executed for each separate home.
The terms are set forth below:
Loan Commitment: $1,311,517 (60 Promissory Notes)
Maturity Date: Matures December 31, 2013
Interest Rate: 9.75%
As of December 31, 1998, the construction loan payable balance was
$539,029. Interest is due on the first day of each month until December
31, 2013 when all unpaid interest and principal will be due and
payable. The Partnership has a permanent loan commitment from South
Trust Bank for an amount not to exceed $1,311,517. The permanent loan
will close for each home as each home is placed in service.
4. Commitments and Contingencies
The Partnership's low-income housing credits are contingent on its
ability to maintain compliance with applicable sections of Section 42.
Failure to maintain compliance with occupant eligibility, and/or unit
gross rent, or to correct non-compliance within a specific time period
could result in recapture of tax credits to be taken plus interest. In
addition, such potential noncompliance may require an adjustment to
contributed capital by the limited partner.
9
<PAGE>
UNITED DEVELOPMENT CO., L.P. - 97.0 (60 HOMES)
a Tennessee Limited Partnership
Notes to the Financial Statements
December 31, 1998
5. Concentration of Credit Risk
The FDIC insures total cash balances up to $100,000 per financial
institution. At December 31, 1998, amounts on deposit with South Trust
Bank did exceed the FDIC limit by $1,750,250.
6. Y2K Disclosure
The worldwide challenge facing organizations commonly referred to as
the Year 2000 (Y2K) issue is a result of problems that may be
encountered with date-related transactions on computer systems that
have historically recognized years using two digits versus four digits
(i.e. 98 rather than 1998). These systems will potentially recognize
"00" as the year 1900 instead of 2000. On the surface the Y2K problem
sounds simple enough; however, the implications of this problem are far
reaching and could impact a broad range of business services and
activities.
The Partnership recognizes the potential implications of the Y2K issue
on systems that may contain date-related transactions, data, embedded
chips, etc. The Partnership has assessed the impact of the Y2K issue on
its operations and is now in the process of renovating or replacing, as
necessary, the computer applications and business processes to provide
for continued services in the new millennium. An assessment of the
preparedness of external entities that interface with the Partnership
is also ongoing. There can be no assurance that there will not be a
material adverse effect on the Partnership if its actions and/or those
of related parties fail to address all significant issues in a timely
manner.
The cost of the partnership's Y2K compliance efforts are expensed as
incurred and are being funded with cash flows from operations. At this
time, the costs of those efforts are not expected to be material to the
Partnership's financial position or the results of its operations in
any given period.
10
<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> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<EXCHANGE-RATE> 1
<CASH> 372,505
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,403,420
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 7,894,182
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,873,163
<TOTAL-LIABILITY-AND-EQUITY> 7,894,182
<SALES> 0
<TOTAL-REVENUES> 6,003
<CGS> 0
<TOTAL-COSTS> 7,504
<OTHER-EXPENSES> 60,610
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 59,109
<INCOME-TAX> 0
<INCOME-CONTINUING> 59,109
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 59,109
<EPS-PRIMARY> 16.38
<EPS-DILUTED> 0
</TABLE>
