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 March 31, 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
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Property Resources Fund VI
- - - - ---------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
California 94-2838890
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
P. O. Box 7777, San Mateo, California 94403-7777
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (415) 312-2000
N/A
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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 March 31, 1995: 21,585
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
PROPERTY RESOURCES FUND VI
(A CALIFORNIA LIMITED PARTNERSHIP)
BALANCE SHEETS
MARCH 31, 1995 AND DECEMBER 31, 1994
<TABLE>
<CAPTION>
(Unaudited) (Audited)
1995 1994
---- ----
<S> <C> <C>
ASSETS
Rental property:
Land $ 2,239,000 $ 2,239,000
Land improvements 748,000 748,000
Buildings and improvements 7,124,000 7,124,000
Furnishings and equipment 960,000 951,000
- - - - ----------------------------------------------------- ------------------------ -----------------------
11,071,000 11,062,000
Less: accumulated
depreciation 3,912,000 3,841,000
- - - - ----------------------------------------------------- ------------------------ -----------------------
7,159,000 7,221,000
Cash and cash equivalents 161,000 131,000
Note receivable 440,000 493,000
Other assets 105,000 115,000
- - - - ----------------------------------------------------- ------------------------ -----------------------
Total assets $ 7,865,000 $ 7,960,000
===================================================== ======================== =======================
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Notes payable $ 5,537,000 $5,639,000
Note payable to affiliate 1,721,000 1,724,000
Due to General Partner 713,000 805,000
Accrued interest due to
General Partner 452,000 435,000
Tenants' deposits and other
liabilities 169,000 246,000
- - - - ----------------------------------------------------- ------------------------ -----------------------
Total liabilities 8,592,000 8,849,000
- - - - ----------------------------------------------------- ------------------------ -----------------------
Partners' capital (deficit):
Limited partners, 21,585
units issued and
outstanding (234,000) (396,000)
General Partner (493,000) (493,000)
- - - - ----------------------------------------------------- ------------------------ -----------------------
Total partners' capital (deficit) (727,000) (889,000)
- - - - ----------------------------------------------------- ------------------------ -----------------------
Total liabilities and
partners' capital
(deficit) $ 7,865,000 $ 7,960,000
===================================================== ======================== =======================
</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 MARCH 31, 1995 AND 1994
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Revenue:
Rent $599,000 $568,000
Interest 10,000 12,000
- - - - ----------------------------------------------------------- --------------------- --------------------
Total revenue 609,000 580,000
- - - - ----------------------------------------------------------- --------------------- --------------------
Expenses:
Interest - 152,000
Depreciation and amortization 74,000 83,000
Operating 264,000 284,000
Related party 99,000 92,000
General and administrative 10,000 23,000
- - - - ----------------------------------------------------------- --------------------- --------------------
Total expenses 447,000 634,000
- - - - ----------------------------------------------------------- --------------------- --------------------
Net income (loss) $162,000 $(54,000)
=========================================================== ===================== ====================
Net income (loss) allocable to
limited partners 154,000 $(51,000)
=========================================================== ===================== ====================
Net income (loss) allocable to
General Partner $ 8,000 $ (3,000)
=========================================================== ===================== ====================
Net income (loss) per $500
limited partnership unit-
based on 21,585 units
outstanding $ 7.51 $ (2.36)
=========================================================== ===================== ====================
</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 THREE MONTH PERIOD ENDED MARCH 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
Limited Partners
General
Units Amount Partner Total
----------------- --------------------- ------------------------ ---------------------
<S> <C> <C> <C> <C>
Balance, beginning of period 21,585 $(388,000) $(501,000) $(889,000)
Net Income - 154,000 8,000 162,000
- - - - ------------------------------------------------ --------------------- ------------------------ ---------------------
Balance, end of period 21,585 $(234,000) $(493,000) $(727,000)
================================================ ===================== ======================== =====================
</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 THREE MONTH PERIODS ENDED MARCH 31, 1995 AND 1994
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 162,000 $(54,000)
- - - - ----------------------------------------------------------------------------------------------- -----------------------
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 74,000 83,000
Amortization of capitalized interest on debt restructuring - (69,000)
Increase in accrued interest 17,000 70,000
Decrease in other assets 7,000 20,000
Decrease in tenants' deposits and other liabilities (77,000) (86,000)
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Total adjustments 21,000 18,000
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Net cash provided by (used in) operating activities 183,000 (36,000)
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Cash flow from investing activities:
Improvements to rental property (9,000) (8,000)
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Net cash used in investing activities (9,000) (8,000)
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Cash flows from financing activities:
Principal payments on notes payable (105,000) (11,000)
Principal received on note receivable 53,000 50,000
Principal payments to General Partner (92,000) -
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Net cash provided by (used in) financing activities (144,000) 39,000
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Net increase (decrease) in cash and cash equivalents 30,000 (5,000)
Cash and cash equivalents, beginning of period 131,000 116,000
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Cash and cash equivalents end of period $161,000 $111,000
=============================================================================================== =======================
</TABLE>
See notes to financial statements.
<PAGE>
Item 1. Financial Statements
(continued)
PROPERTY RESOURCES FUND VI
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 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 three month period ended March 31, 1995, the Partnership made or accrued the
following payments to the General Partner or affiliates:
Property management fees, charged to related
party expense $26,000
Reimbursement of data processing expenses,
charged to related party expense 11,000
Interest on advances from the General
Partner, based on the prime rate, charged
to related party expense expense 17,000
Interest on Promissory note, collateralized
by the property Clearlake Village
Apartments,charged to related
party expense 45,000
--------------------
$99,000
====================
<PAGE>
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 March 31, 1995, the
outstanding balance of the note was $440,000.
Item 1. Financial Statements
(continued)
PROPERTY RESOURCES FUND VI
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 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 March 31, 1995, the amended note's face value principal
balance was $3,869,000.
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 three month period ended March 31, 1995, the Partnership paid interest
on the note payable to affiliate of $45,000.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 2. Management's Discussion
and Analysis of Financial Condition
and Results of Operations
Results of Operations
COMPARISON OF THREE MONTH PERIODS ENDED MARCH 31, 1995 AND 1994
Net income for the quarter ended March 31, 1995 amounted to $162,000, an
increase of $216,000 as compared to net loss of $54,000 in 1994. The increase is
due to the following factors: an increase in rental revenue of $31,000; a
decrease in interest and dividends of $2,000; a decrease in interest expense of
$152,000; a decrease in depreciation and amortization of $9,000; a decrease in
operating expenses of $20,000; an increase in related party of $7,000, and a
decrease in general and administrative expense of $13,000.
Rental revenue from the Partnership's properties amounted to $599,000 and
$568,000 for the quarter ended March 31, 1995 and 1994, respectively. The
increase in rental revenue of $31,000 for the quarter ended March 31, 1995 when
compared to the same period in 1994 is attributable to an increase in the
average occupancy rate at Clearlake Village Apartments and Space Savers One &
Three. For the quarter ended March 31, 1995 and 1994 the average occupancy rate
at Clearlake Village Apartments was 92% and 86% and at Space Savers One and
Three it was 93% and 90%, respectively.
Interest revenue decreased $2,000, due to the reduced balance of the note
receivable.
Total expenses decreased by $187,000, or 29%, from $634,000 in 1994 to $447,000.
The decrease in total expenses is attributable to the following factors: a
decrease in interest expense of $152,000, or 100%; a decrease in depreciation
and amortization of $9,000, or 11%; a decrease in operating expenses of $20,000,
or 7%; an increase in related party expense of $7,000, or 8%; and a decrease in
general and administrative expense of $13,000, or 57%.
Interest expense decreased $152,000, 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 $9,000, as a result of the sale
of Space Savers One and Three in the second quarter of 1994.
Operating expenses decreased $20,000, as a result of a decrease in payroll,
property taxes and extraordinary expenses.
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 March 31, 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.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 2. Management's Discussion
and Analysis of Financial Condition
and Results of Operations
Liquidity and Capital Resources (Continued)
As of March 31, 1995, cash and cash equivalents totaled $161,000. As of March
31, 1995, the General Partner had advanced $713,000 plus accrued interest of
$452,000 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 March 31, 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
Chief Executive Officer
Date: May 12, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM REGISTRANT'S
CONSOLIDATED FINANCIAL STATEMENTS FOR THE QUARTER ENDED MARCH 31, 1995 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 161
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 11,071
<DEPRECIATION> 3,912
<TOTAL-ASSETS> 7,865
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 7,865
<SALES> 0
<TOTAL-REVENUES> 609
<CGS> 0
<TOTAL-COSTS> 447
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 162
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
