SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(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, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE CHANGE ACT OF 1934
For the transition period from to
Commission file number 2-77330
Property Resources Fund VI
(Exact name of registrant as specified in its charter)
California
(State or other jurisdiction of incorporation or organization)
94-2838890
(I.R.S. Employer Identification No.)
P. O. Box 7777, San Mateo, California 94403-7777
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (415) 312-2000
N/A
Former name, former address and former fiscal year, if changed since last report
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
Limited Partnership Units Outstanding as of June 30, 1995: 21,585
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
PROPERTY RESOURCES FUND VI
(A CALIFORNIA LIMITED PARTNERSHIP)
BALANCE SHEETS
JUNE 30, 1995 AND DECEMBER 31, 1994
(Dollars in 000's)
<TABLE>
<CAPTION>
(Unaudited) (Audited)
1995 1994
---- ----
ASSETS
<S> <C> <C>
Rental property:
Land $ 2,239 $ 2,239
Land improvements 748 748
Buildings and improvements 7,145 7,124
Furnishings and equipment 976 951
11,108 11,062
Less: accumulated depreciation 3,983 3,841
7,125 7,221
Cash and cash equivalents 238 131
Note receivable 427 493
Other assets 44 115
Total assets $ 7,834 $ 7,960
LIABILITIES AND PARTNERS' CAPITAL
(DEFICIT)
Notes payable $ 5,435 $5,639
Note payable to affiliate 1,718 1,724
Due to General Partner 644 805
Accrued interest due to General Partner 467 435
Tenants' deposits and other liabilities 162 246
Total liabilities 8,426 8,849
Partners' capital (deficit):
Limited partners, 21,585 units issued and
outstanding (106) (388)
General Partner (486) (501)
Total partners' capital (deficit) (592) (889)
Total liabilities and partners' capital
(deficit) $ 7,834 $ 7,960
</TABLE>
See notes to financial statements.
<PAGE>
Item 1. Financial Statements
(continued)
PROPERTY RESOURCES FUND VI
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTH PERIODS ENDED JUNE 30, 1995 AND 1994
(Unaudited)
(Dollars in 000's except per share amounts)
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Revenue:
Rent $569 $571
Interest 12 12
Other - 30
Total revenue 581 613
Expenses:
Interest - 139
Depreciation and amortization 74 80
Operating 273 280
Related party 94 95
General and administrative 5 8
Total expenses 446 602
Net income $135 $ 11
Net income allocable to limited partners $ 128 $ 10
Net income allocable to General Partner $ 7 $ 1
Net income per $500 limited partnership unit-
based on 21,585 units outstanding $ 5.93 $ .46
</TABLE>
See notes to financial statements.
<PAGE>
Item 1. Financial Statements
(continued)
PROPERTY RESOURCES FUND VI
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
FOR THE SIX MONTH PERIODS ENDED JUNE 30, 1995 AND 1994
(Unaudited)
(Dollars in 000's except per share amounts)
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Revenue:
Rent $1,168 $1,139
Interest 22 24
Other - 30
Total revenue 1,190 1,193
Expenses:
Interest - 291
Depreciation and amortization 148 163
Operating 537 564
Related party 193 187
General and administrative 15 31
Total expenses 893 1,236
Net income (loss) $ 297 $(43)
Net income (loss) allocable to limited partners $ 282 $(41)
Net income (loss) allocable to General Partner $ 15 $ (2)
Net income (loss) per $500 limited partnership
unit-
based on 21,585 units outstanding $ 13.06 $ (1.90)
</TABLE>
See notes to financial statements.
<PAGE>
Item 1. Financial Statements
(continued)
PROPERTY RESOURCES FUND VI
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENT OF PARTNERS' CAPITAL (DEFICIT)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1995
(Unaudited)
(Dollars in 000's)
<TABLE>
<CAPTION>
Limited Partners
General
Units Amount Partner Total
<S> <C> <C> <C> <C>
Balance, beginning of period 21,585 $(388) $(501) $(889)
Net Income - 282 15 297
Balance, end of period 21,585 $(106) $(486) $(592)
</TABLE>
See notes to financial statements.
<PAGE>
Item 1. Financial Statements
(continued)
PROPERTY RESOURCES FUND VI
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTH PERIODS ENDED JUNE 30, 1995 AND 1994
(Unaudited)
(Dollars in 000's)
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $297 $(43)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 148 163
Amortization of capitalized interest on debt
restructuring - (139)
Increase in accrued interest 32 144
Decrease in other assets 65 24
Decrease in tenants' deposits and other
liabilities (84) (46)
Total adjustments 161 146
Net cash provided by operating activities 458 103
Cash flow from investing activities:
Improvements to rental property (46) (18)
Proceeds from sale of rental property - 265
Principal received on note receivable 66 50
Net cash provided by investing activities 20 297
Cash flows from financing activities:
Principal payments on notes payable (210) (21)
Principal payments to General Partner (161) -
Net cash used in financing activities (371) (21)
Net increase in cash and cash equivalents 107 379
Cash and cash equivalents, beginning of period 131 116
Cash and cash equivalents, end of period $238 $495
</TABLE>
See notes to financial statements.
Item 1. Financial Statements
(continued)
PROPERTY RESOURCES FUND VI
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1995
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited financial statements contain all adjustments
(consisting of normal recurring accruals) which are necessary, in the opinion of
management, for a fair presentation. The statements, which do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements, should be read in conjunction with
the Partnership's financial statements for the year ended December 31, 1994.
NOTE 2 - TRANSACTIONS WITH GENERAL PARTNER AND AFFILIATES
Under the partnership agreement, the General Partner and its affiliates may
receive compensation for services rendered to the Partnership and may receive
reimbursement for certain expenses incurred on behalf of the Partnership. During
the six month period ended June 30, 1995, the Partnership made or accrued the
following payments to the General Partner or affiliates:
Property management fees, charged to related party expense $48,000
Reimbursement of data processing expenses, charged to
related party expense 22,000
Interest on advances from the General Partner, based on the
prime rate, charged to related party expense 33,000
Interest on Promissory note, collateralized by Interest on advances from the
General Partner, based on the prime rate, charged to related party the
property Clearlake Village Apartments, charged to related party expense 90,000
$193,000
NOTE 3 - NOTE RECEIVABLE
On November 15, 1994, the promissory note receivable in the amount of $515,000,
collateralized by a second deed of trust against 1600 Dell Avenue Office
complex, was amended for a principal paydown of $15,000 and an agreement to pay
an additional $35,000 on or before January 31, 1995. Fully amortized principal
and interest payments are due monthly in the amount of $9,863 commencing on
December 15, 1994 until maturity on November 15, 1999. As of June 30, 1995, the
outstanding balance of the note was $427,000.
Item 1. Financial Statements
(continued)
PROPERTY RESOURCES FUND VI
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1995
NOTE 4 - Grouse Run Apartments
On October 1, 1994, the Grouse Run note payable was amended. The amendment
provides for fixed interest at 9.96%, amortized on a 30-year schedule. A
principal payment of $800,000 was made by the Partnership concurrent with the
effective date of the amendment. The note's maturity date was extended to
October 1, 1999. As of June 30, 1995, the amended note's face value principal
balance was $3,862,000.
The amended note payable is classified as a troubled debt restructuring and, in
accordance with Statement of Financial Accounting Standards No. 15, the
Partnership is carrying the amended note equal to the total future cash payments
payable and is not recognizing interest expense between the restructuring and
the maturity of the amended note.
NOTE 5- SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
For the six month period ended June 30, 1995, the Partnership paid interest on
the note payable to affiliate of $90,000.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 2. Management's Discussion
and Analysis of Financial Condition
and Results of Operations
Results of Operations
Comparison of the six month periods ended June 30, 1995 and 1994
Net income for the six month period ended June 30, 1995 amounted to $297,000, an
increase of $340,000 as compared to net loss of $43,000 in 1994. The increase is
due to the following factors: an increase in rental revenue of $29,000; a
decrease in interest and dividends of $2,000; a decrease in other revenue of
$30,000; a decrease in interest expense of $291,000; a decrease in depreciation
and amortization of $15,000; a decrease in operating expenses of $27,000; an
increase in related party of $6,000, and a decrease in general and
administrative expense of $16,000.
Rental revenue from the Partnership's properties amounted to $1,168,000 and
$1,139,000 for the six month periods ended June 30, 1995 and 1994, respectively.
The increase in rental revenue of $29,000 for the six month period ended June
30, 1995 when compared to the same period in 1994 is attributable to an increase
in the average occupancy rate at Clearlake Village Apartments. For the six month
periods ended June 30, 1995 and 1994 the average occupancy rate at Clearlake
Village Apartments was 94% and 89%, respectively.
Interest revenue decreased $2,000, due to the reduced balance of the note
receivable.
Other revenue decreased $30,000, due to the sale of Space Savers One and Three
in June, 1994.
Total expenses decreased by $343,000, or 28%, from $1,236,000 in 1994 to
$893,000. The decrease in total expenses is attributable to the following
factors: a decrease in interest expense of $291,000, or 100%; a decrease in
depreciation and amortization of $15,000, or 9%; a decrease in operating
expenses of $27,000, or 5%; an increase in related party expense of $6,000, or
3%; and a decrease in general and administrative expense of $16,000, or 52%.
Interest expense decreased $291,000, due to the sale of Space Savers One and
Three in June, 1994 and to the amended Grouse Run note payable in October, 1994.
The amended Grouse Run note payable is classified as a troubled debt
restructuring and, in accordance with Statement of Financial Accounting
Standards No. 15, the Partnership is carrying the amended note equal to the
total future cash payments payable and is not recognizing interest expense
between the restructuring and the maturity of the amended note.
Depreciation and amortization expense decreased $15,000, as a result of the sale
of Space Savers One and Three in the second quarter of 1994.
Operating expenses decreased $27,000, as a result of a decrease in property
taxes, payroll and utility expenses.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 2. Management's Discussion
and Analysis of Financial Condition
and Results of Operations
Liquidity and Capital Resources
In July, 1983, the Partnership completed a public offering of its limited
partnership units with total proceeds of $10,795,500 from the sale of 21,585
limited partnership units. The Partnership acquired five properties with an
aggregate cost of $23,526,000.
As of June 30, 1995, the Partnership had two operating properties: Clearlake
Village Apartments and Grouse Run Apartments. The buildings and the land upon
which the buildings are located are owned directly by the Partnership in fee.
All Partnership properties are subject to mortgages.
As of June 30, 1995, cash and cash equivalents totaled $238,000. As of June 30,
1995, the General Partner had advanced, $644,000 plus accrued interest of
$467,000, to the Partnership to pay for various capital improvements and to
support operating cash flow deficits. The General Partner presently intends to
continue to make such advances to the Partnership as necessary. Consequently,
management believes that the Partnership's current sources of funds will be
adequate to meet both its short-term and long-term capital commitments and
operating requirements.
The Partnership presently believes that funds available from improved operations
and from its note receivable due in 1999 will permit it to repay advances owed
to the General Partner. The Partnership also believes that the present trend
toward improved operations at its properties will permit it to repay the Grouse
Run note payable due in 1999 either from the sale of a property or a loan
refinancing.
Impact of Inflation
The Partnership's management believes that inflation may have a positive effect
on the Partnership's property portfolio, but this effect generally will not be
fully realized until such properties are sold or exchanged.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports an Form 8-K
(a) Not applicable
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Registrant during the quarter
ended June 30, 1995.
<PAGE>
SIGNATURE
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.
PROPERTY RESOURCES FUND VI
By: /S/ David P. Goss
David P. Goss
Chief Executive Officer
Date: August 12, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FUNANCIAL INFORMATION EXTRACTED FROM REGISTRANT'S
CONSOLIDATED FINANCIAL STATEMENTS FOR THE QUARTER ENDED JUNE 30, 1995 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 238
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 11,108
<DEPRECIATION> 3,983
<TOTAL-ASSETS> 7,834
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> (592)
<TOTAL-LIABILITY-AND-EQUITY> 7,834
<SALES> 0
<TOTAL-REVENUES> 1,190
<CGS> 0
<TOTAL-COSTS> 893
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 297
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
