FORM 10-QSB.--QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
(As last amended by 34-32231, eff. 6/3/93.)
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(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, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period.........to.........
Commission file number 0-11864
NATIONAL PROPERTY INVESTORS 6
(Exact name of small business issuer as specified in its charter)
California 13-3140364
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
One Insignia Financial Plaza, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
Issuer's telephone number
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a) NATIONAL PROPERTY INVESTORS 6
BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
June 30, 1996
<TABLE>
<CAPTION>
<S> <C> <C>
Assets
Cash and cash equivalents $ 7,425
Escrows for taxes and insurance 383
Other assets 1,042
Investment properties:
Land $ 5,366
Buildings and related personal property 71,948
77,314
Less accumulated depreciation (45,789) 31,525
$ 40,375
Liabilities and Partners' Capital (Deficit)
Liabilities
Accounts payable and accrued expenses $ 895
Tenant security deposits 334
Mortgage payable 24,549
Partners' Capital (Deficit)
Limited partners' (109,600 units issued and
outstanding) $ 14,999
General partner's (402) 14,597
$ 40,375
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
b) NATIONAL PROPERTY INVESTORS 6
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 3,223 $ 3,195 $ 6,488 $ 6,367
Other income 291 219 502 418
Total revenues 3,514 3,414 6,990 6,785
Expenses:
Operating 1,738 1,843 3,322 3,398
Interest 600 608 1,200 1,218
Depreciation 798 894 1,581 1,788
General and administrative 84 121 176 232
Total expenses 3,220 3,466 6,279 6,636
Net income (loss) $ 294 $ (52) $ 711 $ 149
Net income (loss) allocated
to general partner (1%) $ 3 $ (1) $ 7 $ 1
Net income (loss) allocated
to limited partners (99%) 291 (51) 704 148
$ 294 $ (52) $ 711 $ 149
Net income (loss) per
limited partnership unit $ 2.65 $ (.47) $ 6.42 $ 1.35
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
c) NATIONAL PROPERTY INVESTORS 6
STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partner's Partners' Total
<S> <C> <C> <C> <C>
Original capital contributions 109,600 $ 1 $ 54,800 $ 54,801
Partners' capital (deficit) at
December 31, 1995 109,600 $ (409) $ 14,295 $ 13,886
Net income for the six months
ended June 30, 1996 -- 7 704 711
Partners' capital (deficit) at
June 30, 1996 109,600 $ (402) $ 14,999 $ 14,597
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
d) NATIONAL PROPERTY INVESTORS 6
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income $ 711 $ 149
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 1,581 1,788
Amortization of loan costs 51 52
Change in accounts:
Escrows for taxes and insurance (109) (190)
Other assets (72) (53)
Accounts payable and accrued expenses 422 206
Tenant security deposit liabilities (58) (59)
Net cash provided by operating activities 2,526 1,893
Cash flows from investing activities:
Property improvements and replacements (379) (404)
Net cash used in investing activities (379) (404)
Cash flows from financing activities:
Payments of mortgage notes payable (172) (157)
Net cash used in financing activities (172) (157)
Net increase in cash and cash equivalents 1,975 1,332
Cash and cash equivalents at beginning of period 5,450 2,436
Cash and cash equivalents at end of period $ 7,425 $ 3,768
Supplemental information:
Cash paid for interest $ 1,151 $ 1,166
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
e) NATIONAL PROPERTY INVESTORS 6
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited financial statements of National Property Investors 6
(the "Partnership") have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of NPI Equity Investments, Inc. ("NPI Equity" or the "Managing General
Partner"), all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
three and six month periods ended June 30, 1996, are not necessarily indicative
of the results that may be expected for the fiscal year ending December 31,
1996. For further information, refer to the financial statements and footnotes
thereto included in the Partnership's annual report on Form 10-K for the year
ended December 31, 1995.
Certain reclassifications have been made to the 1995 information to conform to
the 1996 presentation.
Note B - Transactions with Affiliated Parties
The Partnership has no employees and is dependent on the Managing General
Partner and its affiliates for the management and administration of all
partnership activities. The Partnership Agreement provides for payments to
affiliates for services and as reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership.
The following transactions with affiliates of Insignia Financial Group, Inc.
("Insignia"), National Property Investors, Inc. ("NPI"), and affiliates of NPI
were charged to expense in 1996 and 1995:
<TABLE>
<CAPTION>
For the Six Months Ended
June 30,
1996 1995
<S> <C> <C>
Property management fees (included in operating
expenses) $345,000 $330,000
Reimbursement for services of affiliates (included
in general and administrative and operating
expenses) 158,000 207,000
</TABLE>
For the period from January 19, 1996, to June 30, 1996, the Partnership insured
its properties under a master policy through an agency and insurer unaffiliated
with the Managing General Partner. An affiliate of the Managing General Partner
acquired, in the acquisition of a business, certain financial obligations from
an insurance agency which was later acquired by the agent who placed the current
year's master policy. The current agent assumed the financial obligations to
the affiliate of the Managing General Partner who received payments on these
obligations from the agent. The amount of the Partnership's insurance premiums
accruing to the benefit of the affiliate of the Managing General Partner by
virtue of the agent's obligations is not significant.
For the period ended June 30, 1995, NPI Equity was paid fees of $7,000 relating
to the successful real estate tax appeals on the Partnership's investment
properties. These fees are included in operating expenses. NPI Equity is a
wholly-owned subsidiary of NPI.
Included in operating expenses for the six months ended June 30, 1995, are
insurance premiums of approximately $177,000 which were paid to the Managing
General Partner under a master insurance policy arranged for by the Managing
General Partner.
NPI Equity is the general partner of the Partnership. NPI Equity is a wholly
owned subsidiary of NPI.
On August 17, 1995, the stockholders of NPI entered into an agreement to sell to
IFGP Corporation, a Delaware corporation, an affiliate of Insignia, a Delaware
corporation, all of the issued and outstanding common stock of NPI for an
aggregate purchase price of $1,000,000. The closing of the transactions
contemplated by the above mentioned agreement (the "Closing") occurred on
January 19, 1996.
Upon the Closing, the officers and directors of NPI and the Managing General
Partner resigned and IFGP Corporation caused new officers and directors of each
of those entities to be elected.
Note C - Tenant-In-Common Property
The Partnership currently owns The Village Apartments, as a tenant-in-common
with National Property Investors 5 ("NPI 5"), an affiliated public limited
partnership. NPI 5 acquired a 24.028 percent undivided interest with the
Partnership owning the remaining 75.972 percent. The property is accounted for
using the proportionate consolidation method. The financial statements and
supplementary data reflect the Partnership's 75.972 percent proportionate share
of historical cost of this property.
The condensed, combined balance sheets of The Village Apartments and the
Partnership's proportionate share of assets, liabilities and equity at June 30,
1996, and the condensed, combined statements of operations of The Village
Apartments and the Partnership's proportionate share of revenues and expenses
for the six and three month periods ended June 30, 1996 and 1995, are summarized
as follows:
<TABLE>
<CAPTION>
(In thousands)
PROPORTIONATE
COMBINED SHARE
June 30, June 30,
1996 1996
<S> <C> <C>
Total assets, primarily real estate $13,093 $10,007
Liabilities, primarily a mortgage payable $11,601 $ 8,814
Equity 1,492 1,193
Total liabilities and equity $13,093 $10,007
</TABLE>
Note C - Tenant-In-Common Property - (continued)
<TABLE>
<CAPTION>
COMBINED PROPORTIONATE SHARE
Six Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Total revenues $ 2,240 $ 2,168 $ 1,702 $ 1,647
Operating and other expenses $ 1,214 $ 1,204 $ 923 $ 915
Depreciation 364 373 276 283
Mortgage interest 501 507 381 385
Total expenses 2,079 2,084 1,580 1,583
Net income $ 161 $ 84 $ 122 $ 64
</TABLE>
<TABLE>
<CAPTION>
COMBINED PROPORTIONATE SHARE
Three Months Ended Three Months Ended
June 30, June 30, June 30, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Total revenues $ 1,167 $ 1,086 $ 886 $ 825
Operating and other expenses $ 614 $ 654 $ 466 $ 497
Depreciation 183 187 139 142
Mortgage interest 250 253 190 192
Total expenses 1,047 1,094 795 831
Net income $ 120 $ (8) $ 91 $ (6)
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The Partnership's investment properties consist of seven apartment complexes.
The following table sets forth the average occupancy of the properties for the
six months ended June 30, 1996 and 1995:
Average
Occupancy
Property 1996 1995
Ski Lodge Apartments
Montgomery, Alabama 93% 93%
Rocky Ridge Apartments
Birmingham, Alabama 92% 98%
Place du Plantier Apartments
Baton Rouge, Louisiana 90% 96%
Fairway View Phase I Apartments
Baton Rouge, Louisiana 95% 98%
Colony at Kenilworth Apartments
Towson, Maryland 92% 93%
Alpine Village Apartments
Birmingham, Alabama 92% 98%
The Village Apartments (1)
Voorhees, New Jersey 93% 95%
(1) This property was purchased as a tenancy in common with National Property
Investors 5, an affiliated public partnership, which acquired a 24.028%
undivided interest, with the Partnership owning the remaining 75.972%.
The Managing General Partner attributes the decreases in occupancy at Rocky
Ridge and Alpine Village to layoffs at a large area corporation, an increased
number of home purchases, and the construction of three new apartment
communities in the area. Occupancy decreased at Place du Plantier and Fairway
View Phase I as a result of newly constructed units becoming available in the
already competitive Baton Rouge market. Despite the overall drop in occupancy
at the Partnership's properties, rental income at all of the properties, except
Place du Plantier, increased as a result of increases in rental rates.
The Partnership's net income for the six months ended June 30, 1996, was
approximately $711,000 compared to a net income of approximately $149,000 for
the corresponding period of 1995. The net income for the three months ended June
30, 1996, was approximately $294,000 compared to a net loss of approximately
$52,000 for the three months ended June 30, 1995. The increase in net income is
partially due to increased rental revenues as a result of rental rate increases
at all properties. Also contributing to the increased net income was an
increase in other income due to increased interest income resulting from
additional cash reserves held by the Partnership. In addition to increased
revenues, decreases in depreciation expense and general and administrative
expenses contributed to the increase in net income. Depreciation expense
decreased as a result of certain assets becoming fully depreciated in 1995.
General and administrative expenses were reduced as a result of a decrease in
expense reimbursements paid to affiliates of the Managing General Partner in
1996.
As part of the ongoing business plan of the Partnership, the Managing General
Partner monitors the rental market environment of each of its investment
properties to assess the feasibility of increasing rent, maintaining or
increasing occupancy levels and protecting the Partnership from increases in
expense. As part of this plan, the Managing General Partner attempts to protect
the Partnership from the burden of inflation-related increases in expenses by
increasing rents and maintaining a high overall occupancy level. However, due
to changing market conditions, which can result in the use of rental concessions
and rental reductions to offset softening market conditions, there is no
guarantee that the Managing General Partner will be able to sustain such a plan.
At June 30, 1996, the Partnership had unrestricted cash of $7,425,000, as
compared to $3,768,000 at June 30, 1995. Net cash provided by operating
activities increased primarily as a result of the increase in net income as
discussed above. Also contributing to the increase in cash provided by
operating activities was an increase in prepayments of rent. The decrease in
cash used in investing activities is due to decreased property improvements and
replacements in 1996.
The Managing General Partner has extended to the Partnership a $500,000 line of
credit. At the present time, the Partnership has no outstanding amounts due
under this line of credit. Based on present plans, the Managing General Partner
does not anticipate the need to borrow in the near future. Other than cash and
cash equivalents, the line of credit is the Partnership's only unused source of
liquidity.
The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the various properties to adequately maintain the
physical assets and other operating needs of the Partnership. Such assets are
currently thought to be sufficient for any near-term needs of the Partnership.
The mortgage indebtedness of $24,549,000 matures at various times with balloon
payments due at maturity at which time the properties will either be refinanced
or sold. Currently, the Managing General Partner is attempting to refinance all
the Partnership's properties with the exception of The Village Apartments.
Future cash distributions will depend on the levels of net cash generated from
operations, property sales, and the availability of cash reserves. No cash
distributions were made in 1995 or during the first six months of 1996.
Currently, the Managing General Partner is evaluating the feasibility of a cash
distribution of cash reserves in 1996. At this time, it appears that the
original investment objective of capital growth will not be attained and that
investors will not receive a return of all of their invested capital.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibit 27, Financial Data Schedule, is filed as an exhibit to this
report.
b) Reports on Form 8-K: None filed during the quarter ended June 30, 1996.
SIGNATURES
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.
NATIONAL PROPERTY INVESTORS 6
By: NPI EQUITY INVESTMENTS, INC.
Its Managing General Partner
By: /s/William H. Jarrard, Jr.
William H. Jarrard, Jr.
President and Director
By: /s/Ronald Uretta
Ronald Uretta
Principal Financial Officer
and Principal Accounting Officer
Date: August 8, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from National
Property Investors 6 1996 Second Quarter 10-QSB and is qualified in its entirety
by reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000708870
<NAME> NATIONAL PROPERTY INVESTORS 6
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 7,425
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 77,314
<DEPRECIATION> 45,789
<TOTAL-ASSETS> 40,375
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 24,549
0
0
<COMMON> 0
<OTHER-SE> 14,597
<TOTAL-LIABILITY-AND-EQUITY> 40,375
<SALES> 0
<TOTAL-REVENUES> 6,990
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 6,279
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,200
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 711
<EPS-PRIMARY> 6.42<F2>
<EPS-DILUTED> 0
<FN>
<F1>The Registrant has an unclassified balance sheet.
<F2>Multipler is 1.
</FN>
</TABLE>
