FORM 10-QSB--QUARTERLY OR TRANSITIONAL 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 March 31, 2000
[ ] 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 (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, PO 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___
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a)
NATIONAL PROPERTY INVESTORS 6
BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
March 31, 2000
<TABLE>
<CAPTION>
Assets
<S> <C>
Cash and cash equivalents $ 1,313
Receivables and deposits 410
Restricted escrows 421
Other assets 788
Investment properties:
Land $ 4,349
Buildings and related personal property 66,463
70,812
Less accumulated depreciation (48,009) 22,803
$ 25,735
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 61
Tenant security deposit liabilities 255
Accrued property taxes 149
Other liabilities 435
Mortgage notes payable 26,135
Partners' Deficit
General partner $ (561)
Limited partners (109,600 units
issued and outstanding) (739) (1,300)
$ 25,735
</TABLE>
See Accompanying Notes to Financial Statements
<PAGE>
b)
NATIONAL PROPERTY INVESTORS 6
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
2000 1999
(Restated)
Revenues:
<S> <C> <C>
Rental income $2,643 $2,545
Other income 179 160
Casualty gain -- 273
Total revenues 2,822 2,978
Expenses:
Operating 1,084 1,061
Interest 515 515
Depreciation 836 736
General and administrative 135 93
Property taxes 146 146
Total expenses 2,716 2,551
Income before cumulative effect of a change in
accounting principle 106 427
Cumulative effect on prior years of a change in
accounting for the cost of exterior painting and
major landscaping -- 302
Net income $ 106 $ 729
Net income allocated to general partner (1%) $ 1 $ 7
Net income allocated to limited partners (99%) 105 722
$ 106 $ 729
Per limited partnership unit:
Income before cumulative effect of a change in
accounting principle $ 0.96 $ 3.86
Cumulative effect on prior years of a change in
accounting for the cost of exterior painting and
major landscaping -- 2.73
Net income $ 0.96 $ 6.59
Distributions per limited partnership unit $ 5.65 $ --
</TABLE>
See Accompanying Notes to Financial Statements
<PAGE>
c)
NATIONAL PROPERTY INVESTORS 6
STATEMENT OF CHANGES IN PARTNERS' 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 at
December 31, 1999 109,600 $ (556) $ (225) $ (781)
Distributions to partners -- (6) (619) (625)
Net income for the three months
ended March 31, 2000 -- 1 105 106
Partners' deficit at
March 31, 2000 109,600 $ (561) $ (739) $(1,300)
</TABLE>
See Accompanying Notes to Financial Statements
<PAGE>
d)
NATIONAL PROPERTY INVESTORS 6
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
2000 1999
Cash flows from operating activities: (Restated)
<S> <C> <C>
Net income $ 106 $ 729
Adjustments to reconcile net income to net cash (used in)
provided by operating activities:
Depreciation 836 736
Amortization of loan costs 36 36
Casualty gain -- (273)
Cumulative effect on prior years of change in
accounting principle -- (302)
Change in accounts:
Receivables and deposits (48) (24)
Other assets (35) (119)
Accounts payable (67) (376)
Tenant security deposit liabilities 16 (6)
Accrued property taxes (34) (10)
Payable to affiliate (916) --
Other liabilities (27) 2
Net cash (used in) provided by operating activities (133) 393
Cash flows from investing activities:
Property improvements and replacements (352) (627)
Net (deposit to) withdrawals from restricted escrows (115) 373
Net insurance proceeds received -- 343
Net cash (used in) provided by investing activities (467) 89
Cash flows used in financing activities:
Distributions to partners (625) --
Net (decrease) increase in cash and cash equivalents (1,225) 482
Cash and cash equivalents at beginning of period 2,538 1,501
Cash and cash equivalents at end of period $ 1,313 $ 1,983
Supplemental disclosure of cash flow information:
Cash paid for interest $ 479 $ 479
At December 31, 1999 and March 31, 2000, property improvements and replacements
and accounts payable were both adjusted by approximately $101,000 for non-cash
activity.
</TABLE>
See Accompanying Notes to Financial Statements
<PAGE>
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" or "Registrant") 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, 2000, are not necessarily
indicative of the results that may be expected for the fiscal year ending
December 31, 2000. For further information, refer to the financial statements
and footnotes thereto included in the Partnership's Annual Report on Form 10-KSB
for the fiscal year ended December 31, 1999.
Change in Accounting Principle
Effective January 1, 1999, the Partnership changed its method of accounting to
capitalize the cost of exterior painting and major landscaping on a prospective
basis. The Partnership believes that this accounting principle change is
preferable because it provides a better matching of expenses with the related
benefit of the expenditures and it is consistent with industry practice and the
policies of the Managing General Partner. This accounting change was first
reported during the fourth quarter of 1999. Accordingly, net income for the
first quarter of 1999 has been restated to reflect the accounting change as if
it were reported then. This adjustment decreased income before the cumulative
effect of the accounting change for the first quarter of 1999 by approximately
$21,000 ($0.19 per limited partnership unit). The cumulative effect adjustment
of approximately $302,000 is the result of applying the aforementioned change in
accounting principle retroactively and is included in net income for 1999. The
accounting principle change will not have an effect on cash flow, funds
available for distribution or fees payable to the Managing General Partner and
affiliates.
Note B - Transfer of Control
Pursuant to a series of transactions which closed on October 1, 1998 and
February 26, 1999, Insignia Financial Group, Inc. and Insignia Properties Trust
merged into Apartment Investment and Management Company ("AIMCO"), a publicly
traded real estate investment trust, with AIMCO being the surviving corporation
(the "Insignia Merger"). As a result, AIMCO acquired 100% ownership interest in
the Managing General Partner. The Managing General Partner does not believe that
this transaction has had or will have a material effect on the affairs and
operations of the Partnership.
Note C - 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.
<PAGE>
The following transactions with affiliates of the Managing General Partner were
incurred during the three months ended March 31, 2000 and 1999:
2000 1999
(in thousands)
Property management fees (included in operating expenses) $145 $135
Reimbursement for services of affiliates (included in
investment properties, operating and general and
administrative expenses) 58 76
Non accountable reimbursements (included in general and
administrative expenses) 55 --
During the three months ended March 31, 2000 and 1999, affiliates of the
Managing General Partner were entitled to receive 5% of gross receipts from all
of the Partnership's properties for providing property management services. The
Partnership paid to such affiliates approximately $145,000 and $135,000 for the
three months ended March 31, 2000 and 1999, respectively.
Affiliates of the Managing General Partner received reimbursement of accountable
administrative expenses amounting to approximately $58,000 and $76,000 for the
three months ended March 31, 2000 and 1999, respectively.
Also, for services relating to the administration of the Partnership and
operation of the Partnership's 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 earned and received
approximately $55,000 during the three months ended March 31, 2000. No such
reimbursements were earned during the three months ended March 31, 1999.
In addition, approximately $916,000 of incentive management fees resulting from
the sale of The Village Apartments in September 1998 were accrued and were
previously included on the balance sheet as "payable to affiliate". These fees
are payable to the Managing General Partner but were subordinate in payment to
the limited partners receiving a cumulative preferred return specified in the
partnership agreement. The limited partners received their cumulative preferred
return with the February 2000 distribution and the Managing General Partner was
paid the previously accrued incentive management fee.
AIMCO and its affiliates currently own 63,474 limited partnership units in the
Partnership representing 57.914% of the outstanding units. A number of these
units were acquired pursuant to tender offers made by AIMCO or its affiliates.
It is possible that AIMCO or its affiliates will make one or more additional
offers to acquire additional limited partnership interests in the Partnership
for cash or in exchange for units in the operating partnership of AIMCO. Under
the Partnership Agreement, unitholders holding a majority of the Units are
entitled to take action with respect to a variety of matters. As a result of its
ownership of 57.914% of the outstanding units, AIMCO is in a position to
influence all voting decisions with respect to the Registrant. When voting on
matters, AIMCO would in all likelihood vote the Units it acquired in a manner
favorable to the interest of the Managing General Partner because of their
affiliation with the Managing General Partner. However, the affiliate is
required to vote its Units acquired from DeForest Ventures II, L.P. on January
19, 1996 (the date that Insignia Financial Group acquired the stock of National
Property Investors, Inc., the then parent company of the Managing General
Partner), (i) against any proposal to increase the fees and other compensation
payable by the Partnership to the Managing General Partner or to affiliates; and
(ii) on all other matters submitted by it or its affiliates, in proportion to
the votes cast by non-tendering unitholders. Except for the foregoing, no other
limitations are imposed on the affiliate's right to vote each Unit acquired.
Note D - Casualty Events
In November 1998, a fire at Fairway View I caused an estimated $191,000 of
damage to the property of which approximately $186,000 was covered by insurance.
As of March 31, 1999, approximately $76,000 of insurance proceeds relating to
this event have been received. In January 1999, a second fire at Fairway View I
caused an estimated $448,000 of damage to the property of which approximately
$443,000 was covered by insurance. As of March 31, 1999, approximately $237,000
of insurance proceeds, net of expenses, relating to this event had been
received. These fires damaged 19 units and construction was completed during the
fourth quarter of 1999. In addition, Panorama Terrace and Ski Lodge received
insurance proceeds, net of expenses, during the three months ended March 31,
1999 of approximately $30,000 for storm and wind damage. During the three months
ended March 31, 1999, a casualty gain of approximately $273,000 was recognized
consisting of net proceeds discussed above and the write-off of undepreciated
assets damaged during the casualties of approximately $70,000.
Note E - Distributions
During the three months ended March 31, 2000, the Partnership distributed cash
from operations of approximately $625,000 (approximately $619,000 to the limited
partners, $5.65 per limited partnership unit) to the partners. No distributions
were made during the three month period ending March 31, 1999.
Note F - Segment Reporting
Description of the types of products and services from which the reportable
segment derives its revenues:
The Partnership has one reportable segment: residential properties. The
Partnership's residential property segment consists of six apartment complexes
located in Alabama (3), Louisiana (2) and Maryland (1). The Partnership rents
apartment units to tenants for terms that are typically twelve months or less.
Measurement of segment profit or loss:
The Partnership evaluates performance based on segment profit (loss) before
depreciation. The accounting policies of the reportable segment are the same as
those of the Partnership as described in the Partnership's Annual Report on Form
10-KSB for the year ended December 31, 1999.
Factors management used to identify the enterprise's reportable segment:
The Partnership's reportable segment consists of investment properties that
offer similar products and services. Although each of the investment properties
is managed separately, they have been aggregated into one segment as they
provide services with similar types of products and customers.
<PAGE>
Segment information for the three months ended March 31, 2000 and 1999, is shown
in the tables below (in thousands). The "Other" column includes Partnership
administration related items and income and expense not allocated to the
reportable segment.
2000 Residential Other Totals
Rental income $ 2,643 $ -- $ 2,643
Other income 177 2 179
Interest expense 515 -- 515
Depreciation 836 -- 836
General and administrative expense -- 135 135
Segment profit (loss) 239 (133) 106
Total assets 25,534 201 25,735
Capital expenditures for investment
properties 251 -- 251
1999 Residential Other Totals
(Restated)
Rental income $ 2,545 $ -- 2,545
Other income 150 10 160
Casualty gain 273 -- 273
Interest expense 515 -- 515
Depreciation 736 -- 736
General and administrative expense -- 93 93
Cumulative effect on prior years of
change in accounting principle 302 -- 302
Segment profit 812 (83) 729
Total assets 25,916 479 26,395
Capital expenditures for investment
properties 627 -- 627
Note H - Legal Proceedings
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs named as defendants, among others,
the Partnership, the Managing General Partner and several of their affiliated
partnerships and corporate entities. The action purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging the acquisition by Insignia Financial Group, Inc.
("Insignia") and entities which were, at one time, affiliates of Insignia
("Insignia Affiliates") of interests in certain general partner entities, past
tender offers by Insignia Affiliates to acquire limited partnership units, the
management of partnerships by Insignia Affiliates and the Insignia Merger (see
"Note B - Transfer of Control"). The plaintiffs seek monetary damages and
equitable relief, including judicial dissolution of the Partnership. On June 25,
1998, the Managing General Partner filed a motion seeking dismissal of the
action. In lieu of responding to the motion, the plaintiffs have filed an
amended complaint. The Managing General Partner filed demurrers to the amended
complaint which were heard February 1999. Pending the ruling on such demurrers,
settlement negotiations commenced. On November 2, 1999, the parties executed and
filed a Stipulation of Settlement, settling claims, subject to final court
approval, on behalf of the Partnership and all limited partners who own units as
of November 3, 1999. Preliminary approval of the settlement was obtained on
November 3, 1999 from the Superior Court of the State of California, County of
San Mateo, at which time the Court set a final approval hearing for December 10,
1999. Prior to the December 10, 1999 hearing the Court received various
objections to the settlement, including a challenge to the Court's preliminary
approval based upon the alleged lack of authority of class plaintiffs' counsel
to enter the settlement. On December 14, 1999, the Managing General Partner and
its affiliates terminated the proposed settlement. Certain plaintiffs have filed
a motion to disqualify some of the plaintiffs' counsel in the action. The
Managing General Partner does not anticipate that costs associated with this
case will be material to the Partnership's overall operations.
The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature arising in the ordinary course of business.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The matters discussed in this Form 10-QSB contain certain forward-looking
statements and involve risks and uncertainties (including changing market
conditions, competitive and regulatory matters, etc.) detailed in the
disclosures contained in this Form 10-QSB and the other filings with the
Securities and Exchange Commission made by the Registrant from time to time. The
discussion of the Registrant's business and results of operations, including
forward-looking statements pertaining to such matters, does not take into
account the effects of any changes to the Registrant's business and results of
operations. Accordingly, actual results could differ materially from those
projected in the forward-looking statements as a result of a number of factors,
including those identified herein.
The Partnership's investment properties consist of six apartment complexes. The
following table sets forth the average occupancy of the properties for the three
months ended March 31, 2000 and 1999:
Average Occupancy
Property 2000 1999
Ski Lodge Apartments 91% 94%
Montgomery, Alabama (1)
Panorama Terrace II Apartments 93% 97%
Birmingham, Alabama (1)
Place du Plantier Apartments 93% 95%
Baton Rouge, Louisiana
Fairway View Apartments 95% 92%
Baton Rouge, Louisiana (2)
Colony at Kenilworth Apartments 97% 87%
Towson, Maryland (3)
Alpine Village Apartments 96% 97%
Birmingham, Alabama
(1) The Managing General Partner attributes the decrease in occupancy to a
weakened local market.
(2) The Managing General Partner attributes the increase in occupancy to
tenants being placed in a neighboring property, owned by an affiliated
partnership, in 1999 due to a fire that damaged 15 units.
(3) The Managing General Partner attributes the increase in occupancy to
improved marketing efforts and a strong local economy.
Results of Operations
The Partnership's net income for the three months ended March 31, 2000 was
approximately $106,000 compared to net income of approximately $729,000 for the
comparable period in 1999. The decrease in net income is primarily attributable
to the cumulative effect on prior years of a change in accounting principle
recognized during the three months ended March 31, 1999. Income before the
cumulative effect on prior years of a change in accounting principle was
approximately $106,000 and $427,000 for the three months ended March 31, 2000
and 1999, respectively. This decrease in income is primarily attributable to an
increase in total expenses and a decrease in total revenues. The increase in
total expenses is due to an increase in depreciation expense and general and
administrative expense. The increase in depreciation expense is due to
depreciable assets being placed into service over the past year at the
Partnership's properties. The increase in general and administrative expense is
due to an increase in Partnership management fees. The decrease in total
revenues is primarily attributable to the casualty gain recognized in 1999
relating to the two fires at Fairway View I (see discussion below) which was
partially offset by increased rental income and other income. Rental income
increased primarily due to increased occupancy and decreased concessions at
Colony at Kenilworth. Other income increased primarily due to increased laundry
income at Place du Plantier and Fairway View I.
Included in general and administrative expense for the three months ended March
31, 2000 and 1999, are reimbursements to the Managing General Partner allowed
under the Partnership Agreement associated with its management of the
Partnership. In addition, costs associated with the quarterly and annual
communications with investors and regulatory agencies and the annual audit
required by the Partnership Agreement are also included.
Effective January 1, 1999, the Partnership changed its method of accounting to
capitalize the cost of exterior painting and major landscaping on a prospective
basis. The Partnership believes that this accounting principle change is
preferable because it provides a better matching of expenses with the related
benefit of the expenditures and it is consistent with industry practice and the
policies of the Managing General Partner. This accounting change was first
reported during the fourth quarter of 1999. Accordingly, net income for the
first quarter of 1999 has been restated to reflect the accounting change as if
it were reported then. This adjustment decreased income before the cumulative
effect of the accounting change for the first quarter of 1999 by approximately
$21,000 ($0.19 per limited partnership unit). The cumulative effect adjustment
of approximately $302,000 is the result of applying the aforementioned change in
accounting principle retroactively and is included in net income for 1999. The
accounting principle change will not have an effect on cash flow, funds
available for distribution or fees payable to the Managing General Partner and
affiliates.
In November 1998, a fire at Fairway View I caused an estimated $191,000 of
damage to the property of which approximately $186,000 was covered by insurance.
As of March 31, 1999, approximately $76,000 of insurance proceeds relating to
this event have been received. In January 1999, a second fire at Fairway View I
caused an estimated $448,000 of damage to the property of which approximately
$443,000 was covered by insurance. As of March 31, 1999, approximately $237,000
of insurance proceeds, net of expenses, relating to this event had been
received. These fires damaged 19 units and construction was completed during the
fourth quarter of 1999. In addition, Panorama Terrace and Ski Lodge received
insurance proceeds, net of expenses, during the three months ended March 31,
1999 of approximately $30,000 for storm and wind damage. During the three months
ended March 31, 1999, a casualty gain of approximately $273,000 was recognized
consisting of net proceeds discussed above and the write-off of undepreciated
assets damaged during the casualties of approximately $70,000.
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 rents, 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.
Capital Resources and Liquidity
At March 31, 2000, the Partnership had cash and cash equivalents of
approximately $1,313,000 as compared to approximately $1,983,000 at March 31,
1999. For the three months ended March 31, 2000, cash and cash equivalents
decreased by approximately $1,225,000 from the Partnership's year ended December
31, 1999. The decrease in cash and cash equivalents is due to approximately
$625,000 of cash used in financing activities, approximately $467,000 of cash
used in investing activities, and approximately $133,000 of cash used in
operating activities. Cash used in financing activities consists of
distributions to the partners. Cash used in investing activities consists of
property improvements and replacements and net deposits to restricted escrows
maintained by the mortgage lenders. The Partnership invests its working capital
reserves in a money market account.
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, and 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 and to comply with
Federal, state and local legal and regulatory requirements. Capital improvements
for each of the Partnership's properties are detailed below.
Ski Lodge Apartments
Approximately $201,000 has been budgeted for 2000 for capital improvements at
Ski Lodge Apartments consisting primarily of carpet replacement, appliance
replacements, wall coverings, parking lot improvements, and HVAC upgrades. The
Partnership completed approximately $67,000 in capital expenditures at Ski Lodge
Apartments as of March 31, 2000, consisting primarily of interior decorating,
appliance replacements, plumbing fixture replacements, and floor covering
replacements. These improvements were funded from operating cash flow.
Additional improvements may be considered and will depend on the physical
condition of the property as well as replacement reserves and anticipated cash
flow generated by the property.
Panorama Terrace II Apartments
Approximately $49,000 has been budgeted for 2000 for capital improvements at
Panorama Terrace II Apartments consisting primarily of floor covering
replacements, structural improvements, and appliance replacements. The
Partnership completed approximately $24,000 in capital expenditures at Panorama
Terrace II Apartments as of March 31, 2000, consisting primarily of floor
covering replacements, plumbing fixture replacement, and other building
improvements. These improvements were funded from operating cash flow.
Additional improvements may be considered and will depend on the physical
condition of the property as well as replacement reserves and anticipated cash
flow generated by the property.
Place du Plantier Apartments
Approximately $112,000 has been budgeted for 2000 for capital improvements at
Place du Plantier Apartments consisting primarily of floor covering
replacements, appliance replacements, plumbing replacements, and structural
improvements. The Partnership completed approximately $24,000 in capital
expenditures at Place du Plantier Apartments as of March 31, 2000, consisting
primarily of light fixture replacements, floor covering replacements, office
equipment, and appliance replacements. These improvements were funded from
operating cash flow. Additional improvements may be considered and will depend
on the physical condition of the property as well as replacement reserves and
anticipated cash flow generated by the property.
Fairway View I Apartments
Approximately $102,000 has been budgeted for 2000 for capital improvements at
Fairway View I Apartments consisting primarily of floor covering replacements,
appliance replacements, HVAC upgrades, plumbing enhancements, and structural
improvements. The Partnership completed approximately $26,000 in capital
expenditures at Fairway View I Apartments as of March 31, 2000, consisting
primarily of building improvements, HVAC upgrades, office equipment, floor
covering replacements, and appliance replacements. These improvements were
funded from operating cash flow. Additional improvements may be considered and
will depend on the physical condition of the property as well as replacement
reserves and anticipated cash flow generated by the property.
Colony at Kenilworth Apartments
Approximately $539,000 has been budgeted for 2000 for capital improvements at
Colony at Kenilworth Apartments consisting primarily of roof replacement, floor
covering replacements, appliance replacements, lighting upgrades, other building
improvements, and wall coverings. The Partnership completed approximately
$54,000 in capital expenditures at Colony at Kenilworth Apartments as of March
31, 2000, consisting primarily of building improvements, floor covering
replacements, and roof replacements. These improvements were funded from
operating cash flow. Additional improvements may be considered and will depend
on the physical condition of the property as well as replacement reserves and
anticipated cash flow generated by the property.
Alpine Village Apartments
Approximately $160,000 has been budgeted for 2000 for capital improvements at
Alpine Village Apartments consisting primarily of appliance replacements,
plumbing improvements, other building improvements, and floor covering
replacements. The Partnership completed approximately $56,000 in capital
expenditures at Alpine Village Apartments as of March 31, 2000, consisting
primarily of floor covering replacements, plumbing improvements, and appliance
replacements. These improvements were funded from operating cash flow.
Additional improvements may be considered and will depend on the physical
condition of the property as well as replacement reserves and anticipated cash
flow generated by the property.
The additional capital expenditures will be incurred only if cash is available
from operations or from Partnership reserves. To the extent that such budgeted
capital improvements are completed, the Partnership's distributable cash flow,
if any, may be adversely affected at least in the short term.
The Partnership's current assets are thought to be sufficient for any near-term
needs (exclusive of capital improvements) of the Partnership. The mortgage
indebtedness of $26,135,000 requires interest payments only with the full
payment of principal due in November 2003. The Managing General Partner will
attempt to refinance such indebtedness and/or sell the properties prior to such
maturity date. If the properties cannot be refinanced or sold for a sufficient
amount, the Partnership may risk losing such properties through foreclosure.
During the three months ended March 31, 2000, the Partnership distributed cash
from operations of approximately $625,000 (approximately $619,000 to the limited
partners, $5.65 per limited partnership unit) to the partners. No distributions
were made during the three month period ending March 31, 1999. The Partnership's
distribution policy is reviewed on a quarterly basis. Future cash distributions
will depend on the levels of net cash generated from operations, the
availability of cash reserves, and the timing of the debt maturity, refinancing
and/or property sales. There can be no assurance, however, that the Partnership
will generate sufficient funds from operations after required capital
improvements to permit additional distributions to its partners during the
remainder of 2000 or subsequent periods.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs named as defendants, among others,
the Partnership, the Managing General Partner and several of their affiliated
partnerships and corporate entities. The action purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging the acquisition by Insignia Financial Group, Inc.
("Insignia") and entities which were, at one time, affiliates of Insignia
("Insignia Affiliates") of interests in certain general partner entities, past
tender offers by Insignia Affiliates to acquire limited partnership units, the
management of partnerships by Insignia Affiliates and the Insignia Merger (see
"Part 1 - Financial Information, Item 1. Financial Statements, Note B - Transfer
of Control"). The plaintiffs seek monetary damages and equitable relief,
including judicial dissolution of the Partnership. On June 25, 1998, the
Managing General Partner filed a motion seeking dismissal of the action. In lieu
of responding to the motion, the plaintiffs have filed an amended complaint. The
Managing General Partner filed demurrers to the amended complaint which were
heard February 1999. Pending the ruling on such demurrers, settlement
negotiations commenced. On November 2, 1999, the parties executed and filed a
Stipulation of Settlement, settling claims, subject to final court approval, on
behalf of the Partnership and all limited partners who own units as of November
3, 1999. Preliminary approval of the settlement was obtained on November 3, 1999
from the Superior Court of the State of California, County of San Mateo, at
which time the Court set a final approval hearing for December 10, 1999. Prior
to the December 10, 1999 hearing the Court received various objections to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of class plaintiffs' counsel to enter the
settlement. On December 14, 1999, the Managing General Partner and its
affiliates terminated the proposed settlement. Certain plaintiffs have filed a
motion to disqualify some of the plaintiffs' counsel in the action. The Managing
General Partner does not anticipate that costs associated with this case will be
material to the Partnership's overall operations.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
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, 2000.
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant 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/Patrick J. Foye
Patrick J. Foye
Executive Vice President
By: /s/Martha L. Long
Martha L. Long
Senior Vice President
and Controller
Date:
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from National
Property Investors 6 2000 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-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 1,313
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0 <F1>
<PP&E> 70,812
<DEPRECIATION> 48,009
<TOTAL-ASSETS> 25,735
<CURRENT-LIABILITIES> 0 <F1>
<BONDS> 26,135
0
0
<COMMON> 0
<OTHER-SE> (1,300)
<TOTAL-LIABILITY-AND-EQUITY> 25,735
<SALES> 0
<TOTAL-REVENUES> 2,822
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,716
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 515
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 106
<EPS-BASIC> 0.96 <F2>
<EPS-DILUTED> 0
<FN>
<F1> Registrant has an unclassified balance sheet. <F2> Multiplier is 1.
</FN>
</TABLE>
