FORM 10-QSB--QUARTERLY REPORT UNDER SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
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, 1997
[ ] 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, 1997
Assets
Cash and cash equivalents $ 5,053
Receivables and deposits 2,514
Other assets 1,239
Investment properties:
Land $ 5,366
Buildings and related personal property 73,287
78,653
Less accumulated depreciation (48,132) 30,521
$ 39,327
Liabilities and Partners' Capital (Deficit)
Liabilities
Accounts payable $ 139
Tenant security deposits 299
Accrued property taxes 104
Other liabilities 389
Mortgage payable 34,509
Partners' Capital (Deficit)
Limited partners' (109,600 units issued and
outstanding) $ 4,396
General partner's (509) 3,887
$ 39,327
See Accompanying Notes to Financial Statements
b) NATIONAL PROPERTY INVESTORS 6
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months
Ended March 31,
1997 1996
Revenues:
Rental income $ 3,165 $ 3,265
Other income 279 211
Total revenues 3,444 3,476
Expenses:
Operating 1,567 1,584
Interest 704 600
Depreciation 794 783
General and administrative 60 92
Total expenses 3,125 3,059
Net income $ 319 $ 417
Net income allocated to general partner (1%) $ 3 $ 4
Net income allocated to limited partners (99%) 316 413
$ 319 $ 417
Net income per limited partnership unit $ 2.88 $ 3.77
Distribution per limited partnership unit $ 95.94 $ --
See Accompanying Notes to Financial Statements
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' (deficit) capital at
December 31, 1996 109,600 $ (512) $ 4,080 $ 3,568
Net income for the three
months ended March 31, 1997 -- 3 316 319
Partners' (deficit) capital at
March 31, 1997 109,600 $ (509) $ 4,396 $ 3,887
<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,
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net income $ 319 $ 417
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation 794 783
Amortization of loan costs 46 25
Change in accounts:
Receivables and deposits (23) (152)
Other assets 29 7
Accounts payable (314) 76
Tenant security deposit liabilities (14) (35)
Accrued property taxes 65 42
Other liabilities (160) 175
Net cash provided by operating activities 742 1,338
Cash flows from investing activities:
Property improvements and replacements (324) (150)
Deposits to restricted escrows (114) --
Net cash used in investing activities (438) (150)
Cash flows from financing activities:
Mortgage principal payments (27) (94)
Loan costs (53) --
Distributions paid (10,621) --
Net cash used in financing activities (10,701) (94)
Net (decrease) increase in cash and cash equivalents (10,397) 1,094
Cash and cash equivalents at beginning of period 15,450 5,450
Cash and cash equivalents at end of period $ 5,053 $ 6,544
Supplemental information:
Cash paid for interest $ 657 $ 637
<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 month period ended March 31, 1997, are not necessarily indicative of the
results that may be expected for the fiscal year ending December 31, 1997. For
further information, refer to the financial statements and footnotes thereto
included in the Partnership's annual report on Form 10-KSB for the year ended
December 31, 1996.
Certain reclassifications have been made to the 1996 information to conform to
the 1997 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.
Pursuant to a series of transactions which closed during 1996, affiliates of
Insignia Financial Group, Inc. ("Insignia") acquired all of the issued and
outstanding shares of stock of NPI Equity and National Property Investors, Inc.
("NPI"). In connection with these transactions, affiliates of Insignia
appointed new officers and directors of NPI Equity and NPI.
The following transactions with affiliates of Insignia, NPI, and affiliates of
NPI were incurred during the three month periods ended March 31, 1997 and 1996
(in thousands):
Three Months Ended
March 31,
1997 1996
Property management fees (included in operating
expenses) $162 $173
Reimbursement for services of affiliates, including
$35,000 of construction services reimbursements
in 1997 (included in general and administrative
and operating expenses, and investment properties) 86 64
For services relating to the administration of the Partnership and operation of
partnership properties, the Managing General Partner is entitled to receive
payment for non-accountable expenses up to a maximum of $150,000 per year, based
upon the number of Partnership units sold, subject to certain limitations. The
Managing General Partner was entitled to receive $150,000 in 1996. The
Partnership accrued such fees in 1996 and paid these fees in January 1997.
For the period from January 19, 1996, to March 31, 1997, 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 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%. 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 sheet of The Village Apartments and the
Partnership's proportionate share of assets, liabilities and equity at March 31,
1997, and the condensed, combined statements of operations of The Village
apartments and the Partnership's proportionate share of revenues and expenses
for the three month periods ended March 31, 1997 and 1996, are summarized as
follows:
(In thousands)
PROPORTIONATE
COMBINED SHARE
Total assets, primarily real estate $12,060 $ 9,222
Liabilities, primarily a mortgage payable $11,255 $ 8,551
Equity 805 671
Total liabilities and equity $12,060 $ 9,222
<TABLE>
<CAPTION>
COMBINED PROPORTIONATE SHARE
Three Months Ended Three Months Ended
March 31, March 31, March 31, March 31,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Total revenue $ 1,136 $ 1,073 $ 863 $ 816
Operating and other expenses $ 551 $ 600 $ 418 $ 457
Depreciation 189 181 144 137
Mortgage interest 249 251 189 191
Total expenses 989 1,032 751 785
Net income $ 147 $ 41 $ 112 $ 31
</TABLE>
NOTE D - DISTRIBUTIONS
The Partnership declared a distribution of approximately $10,621,000 in 1996
payable to its partners. The distribution was paid in January 1997, with
approximately $10,515,000 being paid to the limited partners ($95.94 per limited
partnership unit) and approximately $106,000 being paid to the Managing General
Partner. The distribution represents net proceeds from the mortgage
refinancings and cash from operations.
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, 1997 and 1996:
Average
Occupancy
Property 1997 1996
Ski Lodge Apartments
Montgomery, Alabama 89% 92%
Rocky Ridge Apartments
Birmingham, Alabama 86% 93%
Place du Plantier Apartments
Baton Rouge, Louisiana 93% 91%
Fairway View Phase I Apartments
Baton Rouge, Louisiana 92% 94%
Colony at Kenilworth Apartments
Towson, Maryland 84% 94%
Alpine Village Apartments
Birmingham, Alabama 91% 92%
The Village Apartments (1)
Voorhees, New Jersey 93% 91%
(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 decrease in occupancy at Rocky Ridge
to construction of 1,600 new apartment units in the Birmingham area. Management
is currently developing plans which it believes will make Rocky Ridge more
competitive in the Birmingham market. Occupancy decreased at Colony at
Kenilworth as a result of the need for capital improvements. With the
property's refinancing in 1996, a capital reserve of approximately $575,000 was
established to be used for necessary improvements.
The Partnership's net income for the three months ended March 31, 1997, was
approximately $319,000 compared to a net income of approximately $417,000 for
the corresponding period of 1996. The decrease in net income is primarily due
to an increase in interest expense and a decrease in rental income. Interest
expense increased as a result of the financing of Ski Lodge Apartments in 1996.
Prior to the financing the property did not have any debt encumbering the
property. Rental income decreased as a result of significant decreases in
occupancy at Colony at Kenilworth and Rocky Ridge, as discussed above. Partially
offsetting the decrease in rental income was an increase in other income and a
decrease in general and administrative expenses. Other income increased
primarily as a result of increased interest income due to higher average cash
balances in the three months ended March 31, 1997, compared to the corresponding
period in 1996. Also contributing to the increase in other income was an
increase in miscellaneous charges to tenants during the first quarter of 1997.
General and administrative expenses decreased primarily due to increased expense
reimbursements in 1996, related to the costs incurred in connection with the
transition and relocation of the administrative offices during the first quarter
of 1996.
Included in operating expense is approximately $54,000 of major repairs and
maintenance comprised primarily of exterior building repairs and swimming pool
repairs for the three months ended March 31, 1997. Included in operating
expense for the three months ended March 31, 1996 is approximately $68,000 of
major repairs and maintenance comprised primarily of exterior building repairs.
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, 1997, the Partnership had unrestricted cash of $5,053,000, as
compared to $6,544,000 at March 31, 1996. Net cash provided by operating
activities decreased primarily as a result of decreases in accounts payable and
other liabilities related to the timing of payments. The increase in cash used
in investing activities is due to increased property improvements and
replacements and deposits to restricted escrows, which were established on
properties refinanced in 1996. The increase in cash used in financing
activities is due primarily to the $10,621,000 distribution to partners. The
distribution was declared in 1996 and paid in January 1997.
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 $34,509,000 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, refinancings, and the availability of
cash reserves. In January 1997, the Partnership distributed $10,621,000. This
distribution was declared in December 1996 and it primarily represented net
proceeds received from property refinancings in 1996. The distribution also
included some cash from operations. No other distributions were made in 1996 or
1997. Currently the Managing General Partner is evaluating the feasibility of a
cash distribution from cash reserves in August 1997.
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 March 31, 1997.
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
Vice President and Treasurer
Date: May 8, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from National
Property Investors 6 1997 First 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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 5,053
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 78,653
<DEPRECIATION> 48,132
<TOTAL-ASSETS> 39,327
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 34,509
0
0
<COMMON> 0
<OTHER-SE> 3,887
<TOTAL-LIABILITY-AND-EQUITY> 39,327
<SALES> 0
<TOTAL-REVENUES> 3,444
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,125
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 704
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 319
<EPS-PRIMARY> 2.88<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
