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
(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, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from.........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, 1997
Assets
Cash and cash equivalents $ 5,295
Receivables and deposits 2,710
Other assets 1,218
Investment properties:
Land $ 5,366
Buildings and related personal property 74,013
79,379
Less accumulated depreciation (48,939) 30,440
$ 39,663
Liabilities and Partners' Capital (Deficit)
Liabilities
Accounts payable $ 356
Tenant security deposits 276
Accrued property taxes 170
Other liabilities 429
Mortgage notes payable 34,481
Partners' Capital (Deficit)
Limited partners' (109,600 units issued and
outstanding) $ 4,459
General partner's (508) 3,951
$ 39,663
See Accompanying Notes to Financial Statements
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,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 3,230 $ 3,223 $ 6,395 $ 6,488
Other income 243 291 522 502
Total revenues 3,473 3,514 6,917 6,990
Expenses:
Operating 1,813 1,738 3,380 3,322
Interest 702 600 1,406 1,200
Depreciation 807 798 1,601 1,581
General and administrative 87 84 147 176
Total expenses 3,409 3,220 6,534 6,279
Net income $ 64 $ 294 $ 383 $ 711
Net income allocated
to general partner (1%) $ 1 $ 3 $ 4 $ 7
Net income allocated
to limited partners (99%) 63 291 379 704
$ 64 $ 294 $ 383 $ 711
Net income per limited
partnership unit $ 0.58 $ 2.65 $ 3.46 $ 6.42
<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' (deficit) capital at
December 31, 1996 109,600 $ (512) $ 4,080 $ 3,568
Net income for the six months
ended June 30, 1997 -- 4 379 383
Partners' (deficit) capital
June 30, 1997 109,600 $ (508) $ 4,459 $ 3,951
<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,
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net income $ 383 $ 711
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 1,601 1,581
Amortization of loan costs 92 51
Change in accounts:
Receivables and deposits (103) (184)
Other assets 4 3
Accounts payable (97) 74
Tenant security deposit liabilities (37) (58)
Accrued property taxes 131 88
Other liabilities (120) 260
Net cash provided by operating activities 1,854 2,526
Cash flows from investing activities:
Property improvements and replacements (1,050) (379)
Deposits to restricted escrows (230) --
Net cash used in investing activities (1,280) (379)
Cash flows from financing activities:
Payments of mortgage notes payable (55) (172)
Loan costs (53) --
Distributions paid (10,621) --
Net cash used in financing activities (10,729) (172)
Net (decrease) increase in cash and cash equivalents (10,155) 1,975
Cash and cash equivalents at beginning of period 15,450 5,450
Cash and cash equivalents at end of period $ 5,295 $ 7,425
Supplemental information:
Cash paid for interest $ 1,314 $ 1,151
<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, 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 in the six months ended June 30, 1997 and 1996 (in thousands):
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Property management fees (included in operating
expenses) $334 $345
Reimbursement for services of affiliates (included in
general and administrative and operating expenses) 120 158
</TABLE>
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 of January 19, 1996, to June 30, 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 sheets of The Village Apartments and the
Partnership's proportionate share of assets, liabilities and equity at June 30,
1997, 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, 1997 and 1996, are summarized
as follows:
(In thousands)
PROPORTIONATE
COMBINED SHARE
June 30, June 30,
1997 1997
Total assets, primarily real estate $ 12,157 $ 9,296
Liabilities, primarily a mortgage payable $ 11,263 $ 8,557
Equity 894 739
Total liabilities and equity $ 12,157 $ 9,296
COMBINED PROPORTIONATE SHARE
Six Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1997 1996 1997 1996
Total revenues $ 2,303 $ 2,240 $ 1,750 $ 1,702
Operating and other expenses $ 1,190 $ 1,214 $ 904 $ 923
Depreciation 382 364 290 276
Mortgage interest 496 501 377 381
Total expenses 2,068 2,079 1,571 1,580
Net income $ 235 $ 161 $ 179 $ 122
<TABLE>
<CAPTION>
COMBINED PROPORTIONATE SHARE
Three Months Ended Three Months Ended
June 30, June 30, June 30, June 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Total revenues $1,167 $1,167 $ 887 $ 886
Operating and other expenses $ 639 $ 614 $ 486 $ 466
Depreciation 193 183 146 139
Mortgage interest 247 250 188 190
Total expenses 1,079 1,047 820 795
Net income $ 88 $ 120 $ 67 $ 91
</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, 1997 and 1996:
Average
Occupancy
Property 1997 1996
Ski Lodge Apartments
Montgomery, Alabama 91% 93%
Panorama Terrace II (formerly
Rocky Ridge Apartments)
Birmingham, Alabama 89% 92%
Place du Plantier Apartments
Baton Rouge, Louisiana 92% 90%
Fairway View Phase I Apartments
Baton Rouge, Louisiana 92% 95%
Colony at Kenilworth Apartments
Towson, Maryland 84% 92%
Alpine Village Apartments
Birmingham, Alabama 94% 92%
The Village Apartments (1)
Voorhees, New Jersey 94% 93%
(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 Panorama
Terrace II to construction of 1,600 new apartment units in the Birmingham area.
Management is currently developing plans which it believes will make Panorama
Terrace II more competitive in the Birmingham market. Occupancy decreased at
Colony at Kenilworth as a result of the loss of approximately 40 corporate units
that were leased to visiting faculty.
The Partnership's net income for the six months ended June 30, 1997, was
approximately $383,000 compared to a net income of approximately $711,000 for
the corresponding period of 1996. The net income for the three months ended June
30, 1997, was approximately $64,000 compared to approximately $294,000 for the
three months ended June 30, 1996. The decrease in net income for the six month
period 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 for the six month period decreased
as a result of significant decreases in occupancy at Colony at Kenilworth and
Panorama Terrace II, as discussed above. Partially offsetting the decrease in
rental income was a decrease in general and administrative expenses for the six
months ended June 30, 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 half of 1996.
Included in operating expense for the six months ended June 30, 1997, is
approximately $142,000 of major repairs and maintenance comprised primarily of
exterior building repairs, major landscaping and swimming pool repairs.
Included in operating expense for the six months ended June 30, 1996 is
approximately $149,000 of major repairs and maintenance comprised primarily of
interior and exterior building repairs and major landscaping.
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, 1997, the Partnership had cash and cash equivalents of $5,295,000,
as compared to $7,425,000 at June 30, 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 which
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 $34,481,000 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 June 30, 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: August 1, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from National
Property Investors 6 1997 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-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 5,295
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 79,379
<DEPRECIATION> 48,939
<TOTAL-ASSETS> 39,663
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 34,481
0
0
<COMMON> 0
<OTHER-SE> 3,951
<TOTAL-LIABILITY-AND-EQUITY> 39,663
<SALES> 0
<TOTAL-REVENUES> 6,917
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 6,534
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,406
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 383
<EPS-PRIMARY> 3.46<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
