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
[X] Quarterly Report Pursuant to Section 13 or 15(d) of The Securities
Exchange Act of 1934
For the quarterly period ended March 31, 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 (I.R.S. Employer
incorporation or organization) Identification No.)
One Insignia Financial Plaza
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)
March 31, 1996
<TABLE>
<CAPTION>
<S> <C> <C>
Assets
Cash and cash equivalents $ 6,544
Escrows for taxes and insurance 371
Other assets 1,044
Investment properties:
Land $ 5,366
Buildings and related personal property 71,719
77,085
Less accumulated depreciation (44,991) 32,094
$ 40,053
Liabilities and Partners' Capital (Deficit)
Liabilities
Accounts payable and accrued expenses $ 766
Tenant security deposits 357
Mortgage payable 24,627
Partners' Capital (Deficit)
Limited partners (109,600 units issued and
outstanding) $ 14,708
General partner (405) 14,303
$ 40,053
<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
March 31,
1996 1995
<S> <C> <C>
Revenues:
Rental income $ 3,265 $ 3,172
Other income 211 199
Total revenues 3,476 3,371
Expenses:
Operating 1,584 1,555
Interest 600 610
Depreciation 783 894
General and administrative 92 111
Total expenses 3,059 3,170
Net income $ 417 $ 201
Net income allocated to general partner (1%) $ 4 $ 2
Net income allocated to limited partners (99%) 413 199
$ 417 $ 201
Net income per limited partnership unit $ 3.77 $ 1.82
<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 Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 109,600 $ 1 $ 54,800 $ 54,801
Partners' (deficit) capital at
December 31, 1995 109,600 $ (409) $ 14,295 $ 13,886
Net income for the three
months ended March 31, 1996 -- 4 413 417
Partners' (deficit) capital at
March 31, 1996 109,600 $ (405) $ 14,708 $ 14,303
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
d) NATIONAL PROPERTY INVESTORS 6
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income $ 417 $ 201
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation 783 894
Amortization of loan costs 25 26
Change in accounts:
Escrows for taxes and insurance (97) (113)
Other assets (48) (47)
Accounts payable and accrued expenses 293 76
Tenant security deposit liabilities (35) (23)
Net cash provided by operating activities 1,338 1,014
Cash flows from investing activities:
Property improvements and replacements (150) (82)
Net cash used in investing activities (150) (82)
Cash flows from financing activities:
Payments of mortgage notes payable (94) (77)
Net cash used in financing activities (94) (77)
Net increase in cash and cash equivalents 1,094 855
Cash and cash equivalents at beginning of period 5,450 2,436
Cash and cash equivalents at end of period $ 6,544 $ 3,291
Supplemental information:
Cash paid for interest $ 637 $ 584
<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 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 month period ended March 31, 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 NPI Equity Investments,
Inc. ("NPI Equity" or 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 Three Months Ended
March 31,
1996 1995
<S> <C> <C>
Property management fees (included in operating
expenses) $173,000 $164,000
Reimbursement for services of affiliates (included
in general and administrative expenses) 64,000 96,000
</TABLE>
For the period from January 19, 1996, to March 31, 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.
Note B - Transactions with Affiliated Parties (continued)
Included in operating expenses for the three months ended March 31, 1995, are
insurance premiums of approximately $89,000 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% 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% 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 March 31,
1996, and the condensed, combined statements of operations of The Village
apartments and the Partnership's proportionate share of revenues and expenses
for the periods ended March 31, 1996 and 1995, are summarized as follows:
<TABLE>
<CAPTION>
(In thousands)
PROPORTIONATE
COMBINED SHARE
<S> <C> <C>
March 31, March 31,
1996 1996
Total assets, primarily real estate $12,925 $ 9,879
Liabilities, primarily a mortgage
payable $11,553 $ 8,777
Equity 1,372 1,102
Total liabilities and equity $12,925 $ 9,879
</TABLE>
Note C - Tenant-In-Common Property - continued
<TABLE>
<CAPTION>
COMBINED PROPORTIONATE SHARE
March 31, December 31, March 31, December 31,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Total revenue $ 1,073 $ 1,082 $ 816 $ 823
Operating and other expenses $ 600 $ 550 $ 457 $ 418
Depreciation 181 186 137 142
Mortgage interest 251 254 191 193
Total expenses 1,032 990 785 753
Net income $ 41 $ 92 $ 31 $ 70
</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
three months ended March 31, 1996 and 1995:
Average
Occupancy
Property 1996 1995
Ski Lodge Apartments
Montgomery, Alabama 92% 93%
Rocky Ridge Apartments
Birmingham, Alabama 93% 98%
Place du Plantier Apartments
Baton Rouge, Louisiana 91% 97%
Fairway View Phase I Apartments
Baton Rouge, Louisiana 94% 98%
Colony at Kenilworth Apartments
Towson, Maryland 94% 94%
Alpine Village Apartments
Birmingham, Alabama 92% 98%
The Village Apartments (1)
Voorhees, New Jersey 91% 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, and lower
interest rates which continue to encourage home purchases. Occupancy decreased
at Place du Plantier and Fairway View Phase I as a result of new construction in
the Baton Rouge area. In addition, construction of additional apartment
complexes is underway in this already competitive market. The Village
experienced a decline in occupancy as a result of an extremely cold winter which
caused unusually high electric bills. Tenant turnover increased due to tenants
moving to competing properties which offered gas heating. Occupancy at The
Village is expected to improve in the spring as the weather becomes warmer.
Despite the overall drop in occupancy at the Partnership's properties, rental
income at all of the properties, except The Village, increased as a result of
increases in rental rates.
The Partnership's net income for the three months ended March 31, 1996, was
approximately $417,000 compared to a net income of approximately $201,000 for
the corresponding period of 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, a decrease
in and general and administrative expenses contributed to the increase in net
income. General and administrative expenses declined as a result of a decrease
in expense reimbursements to the General Partner in the first quarter of 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 March 31, 1996, the Partnership had unrestricted cash of $6,544,000, as
compared to $3,291,000 at March 31, 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 increase in
cash used in investing activities is due to increased property improvements and
replacements in 1996.
The Managing General Partner has extended to the Partnership a $500,000 line of
credit. As 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 $24,627,000 matures at various times with balloon
payments due at maturity at which time the properties will either be refinanced
or sold. 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 three
months 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 from the
inception of the Partnership 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: A Form 8-K dated January 19, 1996, was filed
reporting the change in control of the Registrant.
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
/s/William H. Jarrard, Jr.
William H. Jarrard, Jr.
President and Director
/s/Ronald Uretta
Ronald Uretta
Principal Financial Officer
and Principal Accounting Officer
Date: May 14, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from National
Property Investors 6 1996 First Quarter 10-QSB filing 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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 6,544
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 77,085
<DEPRECIATION> 44,991
<TOTAL-ASSETS> 40,053
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 24,627
0
0
<COMMON> 0
<OTHER-SE> 14,303
<TOTAL-LIABILITY-AND-EQUITY> 40,053
<SALES> 0
<TOTAL-REVENUES> 3,476
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,059
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 600
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 417
<EPS-PRIMARY> 3.77
<EPS-DILUTED> 0
<FN>
<F1>The Registrant has an unclassified balance sheet.
</FN>
</TABLE>
