UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
FORM 10-Q
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED JUNE 30, 2000
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ______ to _______ .
Commission File Number: 0-13129
PAINE WEBBER INCOME PROPERTIES SIX LIMITED PARTNERSHIP
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(Exact name of registrant as specified in its charter)
Delaware 04-2829686
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
265 Franklin Street, Boston, Massachusetts 02110
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 439-8118
--------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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>
PAINE WEBBER INCOME PROPERTIES SIX LIMITED PARTNERSHIP
BALANCE SHEETS
June 30, 2000 and September 30, 1999 (Unaudited)
(In thousands)
ASSETS
------
June 30 September 30
------- ------------
Cash and cash equivalents $ 3,663 $ 12,665
Accounts receivable - affiliates - 879
-------- --------
$ 3,663 $ 13,544
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LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
Losses of joint venture in excess of
investments and advances $ 752 $ 765
Accounts payable - affiliates - 13
Accrued expenses and other liabilities 20 21
Partners' capital 2,891 12,745
-------- --------
$ 3,663 $ 13,544
======== ========
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
For the nine months ended June 30, 2000 and 1999 (Unaudited)
(In thousands)
General Limited
Partners Partners
-------- --------
Balance at September 30, 1998 $(1,367) $ 6,102
Cash distributions (14) (10,656)
Net income 101 9,986
------- -------
Balance at June 30, 1999 $(1,280) $ 5,432
======= =======
Balance at September 30, 1999 $(1,187) $13,932
Cash distributions (6) (9,788)
Net loss - (60)
------- -------
Balance at June 30, 2000 $(1,193) $ 4,084
======= =======
See accompanying notes.
<PAGE>
PAINE WEBBER INCOME PROPERTIES SIX LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
For the three and nine months ended June 30, 2000 and 1999 (Unaudited)
(In thousands, except per Unit data)
Three Months Ended Nine Months Ended
June 30, June 30,
------------------ -----------------
2000 1999 2000 1999
---- ---- ---- ----
Revenues:
Interest and other income $ 65 $ 72 $ 233 $ 221
Expenses:
Management fees - 18 35 90
General and administrative 125 79 318 222
------ ------ ------- -------
125 97 353 312
------ ------ ------- -------
Operating loss (60) (25) (120) (91)
Partnership's share of
gain on sale of operating
investment property - - - 9,906
Partnership's share of ventures'
income (losses) (145) 152 60 272
------ ------ ------- -------
Net income (loss) $ (205) $ 127 $ (60) $10,087
====== ====== ======= =======
Net income (loss) per Limited
Partnership Unit $(3.39) $ 2.10 $ (1.00) $166.44
====== ====== ======= =======
Cash distributions per Limited
Partnership Unit $ - $ 4.47 $163.14 $177.01
====== ====== ======= =======
The above net income (loss) and cash distributions per Limited Partnership
Unit are based upon the 60,000 Units of Limited Partnership Interest outstanding
for each period.
See accompanying notes.
<PAGE>
PAINE WEBBER INCOME PROPERTIES SIX LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
For the nine months ended June 30, 2000 and 1999 (Unaudited)
Increase (Decrease) in Cash and Cash Equivalents
(In thousands)
2000 1999
---- ----
Cash flows from operating activities:
Net income (loss) $ (60) $ 10,087
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating
activities:
Partnership's share of gain on sale
of operating investment property - (9,906)
Partnership's share of ventures' income (60) (272)
Changes in assets and liabilities:
Accounts receivable - affiliates 879 -
Accounts payable - affiliates (13) (6)
Accrued expenses and other liabilities (1) 8
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Total adjustments 805 (10,176)
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Net cash provided by (used in) operating
activities 745 (89)
Cash flows from investing activities:
Distributions from joint ventures 397 14,689
Contributions to joint ventures (350) (99)
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Net cash provided by investing activities 47 14,590
Cash flows from financing activities:
Cash distributions to partners (9,794) (10,670)
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Net (decrease) increase in cash and cash equivalents (9,002) 3,831
Cash and cash equivalents, beginning of period 12,665 1,344
------- --------
Cash and cash equivalents, end of period $ 3,663 $ 5,175
======= ========
See accompanying notes.
<PAGE>
PAINE WEBBER INCOME PROPERTIES SIX
LIMITED PARTNERSHIP
Notes to Financial Statements
(Unaudited)
1. General
-------
The accompanying financial statements, footnotes and discussion should be
read in conjunction with the financial statements and footnotes contained in the
Partnership's Annual Report for the year ended September 30, 1999. In the
opinion of management, the accompanying financial statements, which have not
been audited, reflect all adjustments necessary to present fairly the results
for the interim period. All of the accounting adjustments reflected in the
accompanying interim financial statements are of a normal recurring nature.
The accompanying financial statements have been prepared on the accrual
basis of accounting in accordance with generally accepted accounting principles
which require management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosures of contingent assets
and liabilities as of June 30, 2000 and September 30, 1999 and revenues and
expenses for the nine months ended June 30, 2000 and 1999. Actual results could
differ from the estimates and assumptions used.
The Partnership is currently focusing on potential disposition strategies
for the remaining investment in its portfolio. It had been contemplated that a
sale of the Partnership's Mall Corners investment, which would be followed by an
orderly liquidation of the Partnership, could be completed by the end of
calendar year 1999. However, because of the July 1999 announced closing of an
anchor tenant at Mall Corners, as well as other current vacancies at the
property, the Partnership has been exploring its strategic alternatives, and the
disposition plan for the Mall Corners investment has not yet been finalized. A
liquidation of the Partnership is now not expected to be completed until the
fourth quarter of calendar year 2000 at the earliest. There are no assurances,
however, that a sale of the remaining investment and a liquidation of the
Partnership will be completed within this time frame (see Note 2).
2. Investments in Joint Ventures
-----------------------------
As of June 30, 2000, the Partnership has an investment in one remaining
joint venture which owns an operating investment property (three at October 1,
1998) as more fully described in the Partnership's Annual Report. During the
first quarter of fiscal 1999, on November 16, 1998, Kentucky-Hurstbourne
Associates sold its operating investment property, the Hurstbourne Apartments,
to an unrelated party for $22.9 million. The sale generated net proceeds of
approximately $12,941,000 to the Partnership after the repayment of the
outstanding first mortgage loan of approximately $8,124,000, accrued interest of
approximately $30,000, a prepayment penalty of $187,000, closing proration
adjustments of approximately $380,000, closing costs of approximately $266,000
and a payment of approximately $972,000 to the Partnership's co-venture partner
for its share of the net proceeds in accordance with the terms of the joint
venture agreement. As a result of the sale of the Hurstbourne property, the
Partnership made a special distribution of $9,300,000, or $155 per original
$1,000 Unit, to the Limited Partners on December 15, 1998. Approximately
$3,641,000 of the Hurstbourne net sale proceeds were retained and added to the
Partnership's cash reserves to ensure that the Partnership has sufficient
capital resources to fund its share of potential capital improvement expenses at
the Mall Corners Shopping Center (see below).
On September 30, 1999, Regent's Walk Associates, a joint venture in which
the Partnership had an interest, sold its operating investment property, the
Regent's Walk Apartments, located in Overland Park, Kansas, to an affiliate of
its unaffiliated joint venture partner for $17.75 million. The sale generated
net proceeds of approximately $8,068,000, after the assumption of the
outstanding first mortgage loan of approximately $8,624,000, accrued interest of
approximately $51,000, closing proration adjustments of approximately $189,000,
and a payment of approximately $818,000 to the Partnership's non-affiliated
co-venture partner for its share of the net proceeds in accordance with the
terms of the joint venture agreement. In addition, as a result of the Regent's
Walk sale, the Partnership received $117,000 which had been held in escrow at
the property plus $257,000 as a result of operations of the property through the
date of sale. The Partnership made a special distribution to the Limited
Partners of $9,180,000, or $153 per original $1,000 investment, on October 15,
1999 to Unitholders of record on the September 30, 1999 sale date. Of the
$153.00 total, $140.30 resulted from the sale of Regent's Walk and $12.70 was
from Partnership reserves that exceed expected future requirements.
With the fiscal 1999 sales of the Hurstbourne and Regent's Walk
properties, the Partnership's only remaining real estate investment is a joint
venture interest in the Mall Corners Shopping Center, a 304,000 square foot
retail center in suburban Atlanta, Georgia. The property was 50% occupied as of
June 30, 2000. During the quarter ended December 31, 1999, the Partnership
initiated the Right of First Offer provision of the Mall Corners joint venture
agreement. In accordance with the agreement, the Partnership gave formal notice
to the co-venture partner that it was being given the opportunity to make a
first offer for the purchase of the property at a specified sales price of $22
million. The co-venturer had until January 31, 2000 to notify the Partnership of
its intent to purchase the property and to put up a non-refundable deposit in
connection with the transaction. While the co-venturer expressed an interest in
completing a transaction at the specified price, it did not abide by the terms
of the joint venture agreement by making the required deposit on or before
January 31, 2000. As a result, during the second quarter of fiscal 2000 the
Partnership negotiated with a third party prospective purchaser for a potential
sale of Mall Corners at terms no less favorable than those specified in the
first offer notice; however, the parties were unable to formalize a purchase and
sale agreement. During the current quarter, the Partnership again notified its
joint venture partner that the opportunity was being given to the joint venture
partner to exercise its Right of First Offer to purchase the property at a
specified sales price of approximately $21 million. While the joint venture
partner again expressed an interest in completing a transaction at the specified
price, the parties instead reached an agreement whereby the joint venture
partner agreed to waive its Right of First Offer in return for a payment from
the Partnership of $350,000. The $350,000 payment has been recorded as an
additional investment in the Mall Corners joint venture on the accompanying
balance sheet as of June 30, 2000.
The purchase of the Right of First Offer waiver allows the Partnership to
proceed with a sale of the property in its sole authority. During the third
quarter of fiscal 2000, discussions were re-opened with another prospective
buyer who had previously expressed interest in acquiring the property. On May
30, 2000, the Partnership entered into a purchase and sale agreement with this
prospective buyer. This purchase and sale agreement was terminated on July 11,
2000 at the conclusion of the buyer's due diligence period. Subsequently, the
Partnership had been having discussions with this prospective buyer about
possibly proceeding with a sale transaction. These discussions have since been
terminated. The Partnership is currently engaged in preliminary discussions with
another prospective buyer who had previously expressed interest in acquiring the
property. If these discussions do not continue and result in the execution of a
definitive sales contract during the next quarter, then the Partnership will
have to reconsider its strategic alternatives with respect to the Mall Corners
property. The ultimate outcome of this situation and, consequently, the
prospects for a near term liquidation of the Partnership are uncertain at the
present time.
The joint ventures are accounted for on the equity method because the
Partnership does not have a voting control interest in the ventures. Under the
equity method the ventures are carried at cost adjusted for the Partnership's
share of the ventures' earnings and losses and distributions. Summarized
operations of the joint ventures for the three and nine months ended June 30,
2000 and 1999 are as follows:
CONDENSED COMBINED SUMMARY OF OPERATIONS
For the three and nine months ended June 30, 2000 and 1999
(in thousands)
Three Months Ended Nine Months Ended
June 30, June 30,
------------------ -----------------
2000 1999 2000 1999
---- ---- ---- ----
Rental revenues and expense
recoveries $ 840 $ 1,611 $ 2,719 $ 5,344
Interest and other income 4 - 19 22
------ ------- ------- -------
844 1,611 2,738 5,366
Property operating expenses 280 502 720 1,773
Interest expense 327 507 987 1,794
Depreciation and amortization 382 450 971 1,527
------ ------- ------- -------
989 1,459 2,678 5,094
------ ------- ------- -------
Operating income (145) 152 60 272
Gain on sale of operating
investment property - - - 10,922
------ ------- ------- -------
Net income (loss) $ (145) $ 152 $ 60 $11,194
====== ======= ======= =======
Net income (loss):
Partnership's share of
combined income (loss) $ (145) $ 152 $ 60 $10,178
Co-venturers' share of
combined income (loss) - - - 1,016
------ ------- ------- -------
$ (145) $ 152 $ 60 $11,194
====== ======= ======= =======
<PAGE>
The Partnership's share of the combined income (loss) of the joint
ventures is presented as follows on the accompanying statements of operations
(in thousands):
Three Months Ended Nine Months Ended
June 30, June 30,
------------------ -----------------
2000 1999 2000 1999
---- ---- ---- ----
Partnership's share of
ventures' income (losses) $ (145) $ 152 $ 60 $ 272
Partnership's share of gain
on sale of operating
investment property - - - 9,906
------ ------- ------- -------
$ (145) $ 152 $ 60 $10,178
====== ======= ======= =======
3. Related Party Transactions
--------------------------
The Adviser earned total management fees of $35,000 and $90,000 for the
nine-month periods ended June 30, 2000 and 1999, respectively. Regular quarterly
distributions to the Limited Partners, upon which the management fees are based,
were suspended effective for the quarter ended March 31, 2000. Since
distributions are no longer being paid, no basic management fees have been
earned by the Adviser subsequent to the quarter ended December 31, 1999. Asset
management fees, which are earned upon the payment of operating distributions to
the Limited Partners, will not be earned subsequent to March 31, 2000 unless
quarterly distributions are reinstated. Accounts payable - affiliates at
September 30, 1999 consisted of management fees payable to the Adviser.
Included in general and administrative expenses for the nine-month periods
ended June 30, 2000 and 1999 is $80,000 and $86,000, respectively, representing
reimbursements to an affiliate of the Managing General Partner for providing
certain financial, accounting and investor communication services to the
Partnership.
Also included in general and administrative expenses for the nine-month
periods ended June 30, 2000 and 1999 is $6,000 and $2,000, respectively,
representing fees earned by an affiliate, Mitchell Hutchins Institutional
Investors, Inc., for managing the Partnership's cash assets.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Information Relating to Forward-Looking Statements
--------------------------------------------------
The following discussion of financial condition includes forward-looking
statements which reflect management's current views with respect to future
events and financial performance of the Partnership. These forward-looking
statements are subject to certain risks and uncertainties, including those
identified in Item 7 of the Partnership's Annual Report on Form 10-K for the
year ended September 30, 1999 under the heading "Certain Factors Affecting
Future Operating Results," which could cause actual results to differ materially
from historical results or those anticipated. The words "believe," "expect,"
"anticipate," and similar expressions identify forward-looking statements.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which were made based on facts and conditions as they existed as of
the date of this report. The Partnership undertakes no obligation to publicly
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
Liquidity and Capital Resources
-------------------------------
As discussed further in the Annual Report, on November 16, 1998,
Kentucky-Hurstbourne Associates, a joint venture in which the Partnership had an
interest, sold its operating investment property, the Hurstbourne Apartments,
located in Louisville, Kentucky, to an unrelated party for $22.9 million. The
sale generated net proceeds of approximately $12,941,000 to the Partnership
after the repayment of the outstanding first mortgage loan of approximately
$8,124,000, accrued interest of approximately $30,000, a prepayment penalty of
$187,000, closing proration adjustments of approximately $380,000, closing costs
of approximately $266,000 and a payment of approximately $972,000 to the
Partnership's co-venture partner for its share of the net proceeds in accordance
with the terms of the joint venture agreement. As a result of the sale of the
Hurstbourne property, the Partnership made a special distribution of $9,300,000,
or $155 per original $1,000 Unit, to the Limited Partners on December 15, 1998.
Approximately $3,641,000 of the Hurstbourne net sale proceeds were retained and
added to the Partnership's cash reserves to ensure that the Partnership has
sufficient capital resources to fund its share of potential capital improvement
expenses at the Mall Corners Shopping Center.
On September 30, 1999, Regent's Walk Associates, a joint venture in which
the Partnership had an interest, sold its operating investment property, the
Regent's Walk Apartments, located in Overland Park, Kansas, to an affiliate of
its unaffiliated joint venture partner for $17.75 million. The sale generated
net proceeds of approximately $8,068,000, after the assumption of the
outstanding first mortgage loan of approximately $8,624,000, accrued interest of
approximately $51,000, closing proration adjustments of approximately $189,000,
and a payment of approximately $818,000 to the Partnership's non-affiliated
co-venture partner for its share of the net proceeds in accordance with the
terms of the joint venture agreement. In addition, as a result of the Regent's
Walk sale, the Partnership received $117,000 which had been held in escrow at
the property plus $257,000 as a result of operations of the property through the
date of sale. The Partnership made a special distribution to the Limited
Partners of $9,180,000, or $153 per original $1,000 investment, on October 15,
1999 to Unitholders of record on the September 30, 1999 sale date. Of the
$153.00 total, $140.30 resulted from the sale of Regent's Walk and $12.70 was
from Partnership reserves that exceed expected future requirements.
With the fiscal 1999 sales of the Hurstbourne and Regent's Walk
properties, the Partnership's only remaining real estate investment is a joint
venture interest in the Mall Corners Shopping Center, a 304,000 square foot
retail center in suburban Atlanta, Georgia. As previously reported, the
Partnership has been focusing on potential disposition strategies for the
remaining investment in its portfolio. As part of the efforts to prepare the
remaining property for sale, the Partnership continues to work with the
property's leasing and management team to develop and implement programs that
will protect and enhance value and maximize cash flow. The Partnership had
previously reported that, although no assurances could be given, it was
contemplated that a liquidation of the Partnership could be completed by
calendar year-end 1999. However, because of the July 1999 announced closing of
Upton's, an anchor tenant at Mall Corners, as well as other current vacancies at
the property, the Partnership has been exploring its strategic alternatives, and
the disposition plan for the Mall Corners investment has not yet been finalized.
A liquidation of the Partnership is now not expected to be completed until the
fourth quarter of calendar year 2000 at the earliest. As discussed further
below, there are no assurances, however, that a sale of the remaining investment
and a liquidation of the Partnership will be completed within this time frame.
As of June 30, 2000, the Mall Corners Shopping Center, located in the
suburban Atlanta, Georgia market, was 50% occupied, as compared to an occupancy
level of 73% at September 30, 1999. As previously reported, the owner of
Upton's, an anchor tenant that leased 16% of the Center's rentable area,
announced on July 19, 1999 that all of the stores in the chain would be closed.
At the end of the first quarter of fiscal 2000, Upton's closed its operations
and vacated the premises. During the quarter ended June 30, 2000, the
Partnership and its co-venture partner reached a settlement with Upton's on a
termination agreement under which the tenant agreed to pay the sum of $1,200,000
in return for a release from its remaining lease obligation, which was to have
run through September 2005. The Mall Corners' mortgage lender required that 100%
of this termination payment be held in escrow for use to fund future leasing
expenses. In addition, another tenant, Suit Max, discontinued its operation at
the Center during the quarter ended December 31, 1999 and vacated 16,530 square
feet, or 5% of the Center's leasable area. During the quarter ended June 30,
2000, the Partnership and its co-venture partner reached a settlement with Suit
Max on a termination agreement whereby the tenant agreed to pay the sum of
$215,000 in return for a release from its remaining lease obligation, which was
to have run through February 2004. This termination payment was released to the
joint venture in April 2000. Three other tenants also vacated approximately
8,000 square feet, or 3% of the Center's leasable area, during the first
quarter. During the second quarter, two of these spaces, comprising 1,845 square
feet, were released. During the third quarter, another new lease was signed for
950 square feet. The 50% occupancy level reflects the vacancy for the Upton's
and Suit Max stores described above, which together represent 21% of the
center's leasable area, the former Levitz Furniture store, which represented 16%
of the Center's leasable area, the former movie theatre that occupied 8% of the
leasable area and several shop space stores that represent 5% of the leaseable
area. The property's leasing team continues to work with prospective tenants for
the existing vacant space. In particular, the leasing team has been negotiating
a possible lease with a potential replacement tenant to occupy the 16,530 square
feet formerly occupied by Suit Max. It is uncertain at the present time whether
these negotiations will result in an executed lease agreement. As also
previously reported, the store formerly occupied by Toys R Us that abuts Mall
Corners Shopping Center remains vacant. While the closing of the Toys R Us store
does not have a direct financial impact on Mall Corners, its vacancy continues
to have a negative impact on the Center's appearance and the number of shoppers
entering the Center.
During the quarter ended December 31, 1999, the Partnership initiated the
Right of First Offer provision of the Mall Corners joint venture agreement. In
accordance with the agreement, the Partnership gave formal notice to the
co-venture partner that it was being given the opportunity to make a first offer
for the purchase of the property at a specified sales price of $22 million. The
co-venturer had until January 31, 2000 to notify the Partnership of its intent
to purchase the property and to put up a non-refundable deposit in connection
with the transaction. While the co-venturer expressed an interest in completing
a transaction at the specified price, it did not abide by the terms of the joint
venture agreement by making the required deposit on or before January 31, 2000.
As a result, during the second quarter of fiscal 2000 the Partnership negotiated
with a third party prospective purchaser for a potential sale of Mall Corners at
terms no less favorable than those specified in the first offer notice; however,
the parties were unable to formalize a purchase and sale agreement. During the
current quarter, the Partnership again notified its joint venture partner that
the opportunity was being given to the joint venture partner to exercise its
Right of First Offer to purchase the property at a specified sales price of
approximately $21 million. While the joint venture partner again expressed an
interest in completing a transaction at the specified price, the parties instead
reached an agreement whereby the joint venture partner agreed to waive its Right
of First Offer in return for a payment from the Partnership of $350,000. The
$350,000 payment has been recorded as an additional investment in the Mall
Corners joint venture on the accompanying balance sheet as of June 30, 2000.
The purchase of the Right of First Offer waiver allows the Partnership to
proceed with a sale of the property in its sole authority. During the third
quarter of fiscal 2000, discussions were re-opened with another prospective
buyer who had previously expressed interest in acquiring the property. On May
30, 2000, the Partnership entered into a purchase and sale agreement with this
prospective buyer. This purchase and sale agreement was terminated on July 11,
2000 at the conclusion of the buyer's due diligence period. Subsequently, the
Partnership had been having discussions with this prospective buyer about
possibly proceeding with a sale transaction. These discussions have since been
terminated. The Partnership is currently engaged in preliminary discussions with
another prospective buyer who had previously expressed interest in acquiring the
property. If these discussions do not continue and result in the execution of a
definitive sales contract during the next quarter, then the Partnership will
have to reconsider its strategic alternatives with respect to the Mall Corners
property. The ultimate outcome of this situation and, consequently, the
prospects for a near term liquidation of the Partnership are uncertain at the
present time.
In light of the current leasing status at Mall Corners, there remains the
potential need for significant capital at the property to pay for re-leasing
expenses, in the event that a near term sale cannot be completed. Consequently,
during fiscal 2000 the Managing General Partner recommended that the
Partnership's regular quarterly distributions be suspended until further notice.
As a result, after the payment made on February 15, 2000 for the quarter ended
December 31, 1999, no further quarterly distributions are planned.
At June 30, 2000, the Partnership had available cash and cash equivalents
of approximately $3,663,000. Such cash and cash equivalents will be utilized for
Partnership requirements such as the payment of operating expenses and the
funding of future operating deficits or capital improvements at the remaining
joint venture. The source of future liquidity and distributions to the partners
is expected to be from cash generated from the operations of the Partnership's
remaining income-producing investment property and proceeds from the sale or
refinancing of such property. Such sources of liquidity are expected to be
sufficient to meet the Partnership's needs on both a short-term and long-term
basis.
Results of Operations
Three Months Ended June 30, 2000
--------------------------------
The Partnership reported a net loss of $205,000 for the three months ended
June 30, 2000, as compared to net income of $127,000 for the same period in the
prior year. This unfavorable change in the Partnership's net operating results
was mainly due to an unfavorable change in the Partnership's share of ventures'
income (losses) for the current three-month period. The prior period results
included income of $61,000 from the Regent's Walk joint venture which was sold
during the fourth quarter of fiscal 1999. In addition, the net operating results
of the Mall Corners joint venture declined during the current fiscal year
primarily due to a reduction in rental revenues as a result of the increase in
vacancy at the property, as discussed further above. In addition, general and
administrative expenses increased by $46,000 for the current three-month period
mainly due to legal fees incurred in connection with the negotiations with the
Partnership's co-venture partner in the Mall Corners joint venture over the
Right of First Offer provision of the joint venture agreement, as discussed
further above. A decline in the Partnership's management fees for the current
three-month period slightly offset the unfavorable change in the Partnership's
share of ventures' income (losses) and the increase in general and
administrative expenses. Management fees were lower in the current period as a
result of a decrease in the Partnership's distributable cash, upon which the
management fees are based.
Nine Months Ended June 30, 2000
-------------------------------
The Partnership reported a net loss of $60,000 for the nine months ended
June 30, 2000, as compared to net income of $10,087,000 for the same period in
the prior year. This unfavorable change in the Partnership's net operating
results was mainly the result of the Partnership's share of the gain on the sale
of the Hurstbourne Apartments, of $9,906,000, recognized in the first quarter of
fiscal 1999. In the current fiscal year, there was also a decrease of $212,000
in the Partnership's share of ventures' income and an increase of $29,000 in the
Partnership's operating loss. The decrease in the Partnership's share of
ventures' income was mainly due to the inclusion in the prior period results of
income of $129,000 from the Regent's Walk joint venture which was sold during
the fourth quarter of fiscal 1999. In addition, the net operating results of the
Mall Corners joint venture declined during the current fiscal year primarily due
to a reduction in rental revenues as a result of the increase in vacancy at the
property, as discussed further above.
The increase in the Partnership's operating loss resulted from a $96,000
increase in general and administrative expenses which was partially offset by a
$12,000 increase in interest and other income and a $55,000 reduction in
management fees. General and administrative expenses increased mainly due to
legal fees incurred during the current period in connection with the
negotiations with the Partnership's co-venture partner in the Mall Corners joint
venture over the Right of First Offer provision of the joint venture agreement,
as discussed further above. The increase in interest and other income resulted
from higher average outstanding cash balances in the current period due to the
receipt and temporary investment of the proceeds from the sale of Regent's Walk
prior to the distribution to the Limited Partners which occurred on October 15,
1999. Management fees were lower in the current period as a result of a decrease
in the Partnership's distributable cash, upon which the management fees are
based.
<PAGE>
PART II
Other Information
Item 1. Legal Proceedings NONE
-------------------------
Item 2. through 5. NONE
------------------
Item 6. Exhibits and Reports on Form 8-K
----------------------------------------
(a) Exhibits: NONE
(b) Reports on Form 8-K: NONE
<PAGE>
PAINE WEBBER INCOME PROPERTIES SIX LIMITED PARTNERSHIP
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Partnership has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
PAINE WEBBER INCOME PROPERTIES SIX
LIMITED PARTNERSHIP
By: Sixth Income Properties Fund, Inc.
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Managing General Partner
By: /s/ Walter V. Arnold
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Walter V. Arnold
Senior Vice President
and Chief Financial Officer
Dated: August 17, 2000
