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 0-16210
ANGELES INCOME PROPERTIES, LTD. 6
(Exact name of small business issuer as specified in its charter)
California 95-4106139
(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)
ANGELES INCOME PROPERTIES, LTD. 6
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
March 31, 2000
<TABLE>
<CAPTION>
Assets
<S> <C>
Cash and cash equivalents $ 1,528
Receivables and deposits 267
Restricted escrows 258
Other assets 246
Investment properties:
Land $ 1,632
Buildings and related personal property 14,499
16,131
Less accumulated depreciation (5,771) 10,360
Investment in discontinued operations 2,789
$15,448
Liabilities and Partners' Capital
Liabilities
Accounts payable $ 169
Tenant security deposit liabilities 58
Accrued property taxes 88
Other liabilities 174
Mortgage notes payable 8,392
Partners' Capital
General partner $ 66
Limited partners (47,311 units issued and
outstanding) 6,501 6,567
$15,448
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
b)
ANGELES INCOME PROPERTIES, LTD. 6
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
2000 1999
Revenues: (Restated)
<S> <C> <C>
Rental income $ 865 $ 1,046
Other income 38 116
Gain on sale of investment property -- 1,783
Total revenues 903 2,945
Expenses:
Operating 356 391
General and administrative 76 104
Depreciation 145 151
Interest 169 254
Property tax 122 84
Total expenses 868 984
Income before discontinued operations and
extraordinary item 35 1,961
Income from discontinued operations 234 100
Income before extraordinary item 269 2,061
Extraordinary loss on early extinguishment of debt -- (1,011)
Net income $ 269 $ 1,050
Net income allocated to general partner $ 3 $ 64
Net income allocated to limited partners 266 986
$ 269 $ 1,050
Per limited partnership unit:
Income before discontinued operations and
extraordinary item $ 0.73 $ 39.91
Income from discontinued operations 4.89 2.09
Extraordinary loss on early extinguishment of debt -- (21.16)
Net income $ 5.62 $ 20.84
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
c)
ANGELES INCOME PROPERTIES, LTD. 6
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partner Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 47,384 $ 1 $47,384 $47,385
Partners' capital at
December 31, 1999 47,311 $ 63 $ 6,235 $ 6,298
Net income for the three months
ended March 31, 2000 -- 3 266 269
Partners' capital at
March 31, 2000 47,311 $ 66 $ 6,501 $ 6,567
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
d)
ANGELES INCOME PROPERTIES, LTD. 6
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
2000 1999
Cash flows from operating activities:
<S> <C> <C>
Net income $ 269 $ 1,050
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 232 221
Amortization of loan costs and leasing commissions 15 22
Gain on sale of investment property -- (1,783)
Extraordinary loss in early extinguishment of debt -- 1,011
Change in accounts:
Receivables and deposits 25 25
Other assets 18 (5)
Accounts payable 2 (28)
Tenant security deposit liabilities 6 (2)
Accrued property taxes 88 (54)
Other liabilities (60) (359)
Net cash provided by operating activities 595 98
Cash flows from investing activities:
Property improvements and replacements (241) (56)
Net (deposits to) withdrawals from restricted escrows (13) 22
Proceeds from sale of investment property -- 9,292
Lease commissions paid (4) --
Net cash (used in) provided by investing activities (258) 9,258
Cash flows used in financing activities:
Payments on mortgage notes payable (44) (57)
Repayment of mortgage notes payable -- (6,423)
Prepayment penalty -- (787)
Net cash used in financing activities (44) (7,267)
Net increase in cash and cash equivalents 293 2,089
Cash and cash equivalents at beginning of period 1,235 4,918
Cash and cash equivalents at end of period $ 1,528 $ 7,007
Supplemental disclosure of cash flow information:
Cash paid for interest $ 237 $ 337
Supplemental disclosure of non-cash activities:
Distribution payable to general partner $ -- $ 54
At December 31, 1999 and March 31, 2000, accounts payable and property
improvements and property improvements and replacements were adjusted by
approximately $95,000.
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
e)
ANGELES INCOME PROPERTIES, LTD. 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited consolidated financial statements of Angeles Income
Properties, Ltd. 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 Angeles Realty Corporation II ("ARC II"
or the "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 consolidated
financial statements and footnotes thereto included in the Partnership's Annual
Report on Form 10-KSB for the fiscal year ended December 31, 1999.
Principles of Consolidation
The consolidated financial statements of the Partnership include its 99% limited
partnership interests in Granada AIPL 6, Ltd., AIP 6 GP, LP, Whispering Pines
AIP 6, LP and Lazy Hollow Partners, Ltd. The Partnership may remove the general
partner of all the above partnerships; therefore, the partnerships are
controlled and consolidated by the Partnership. Also included in the
consolidated financial statements are Mesa Dunes GP, LLC, Wakonda Partners, Town
and Country Partners and Mesa Dunes Partners, which are wholly-owned by the
Partnership. All significant inter-entity balances have been eliminated.
Certain reclassifications have been made to the 1999 information to conform to
the 2000 presentation.
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
("IPT") 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 General Partner. The 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 General Partner and its
affiliates for the management and administration of all Partnership activities.
The Partnership Agreement provides for certain payments to affiliates for
services and as reimbursement of certain expenses incurred by affiliates on
behalf of the Partnership.
<PAGE>
The following payments were paid to the General Partner and affiliates during
the three month period ended March 31, 2000 and 1999:
2000 1999
(in thousands)
Property management fees (included in operating
expense) $ 45 $ 56
Reimbursement for services of affiliates
(included in investment properties and general
and administrative expense) 54 73
During the three months ended March 31, 2000 and 1999, affiliates of the General
Partner were entitled to receive 5% of gross receipts from all the Partnership's
residential properties for providing property management services. The
Registrant paid to such affiliates approximately $45,000 and $56,000 for the
three months ended March 31, 2000 and 1999, respectively.
An affiliate of the General Partner received reimbursement of accountable
administrative expenses amounting to approximately $54,000 and $73,000 for the
three months ended March 31, 2000 and 1999, respectively.
Pursuant to the Partnership Agreement, the General Partner is entitled to
receive a distribution equal to 3% of the aggregate disposition price of sold
properties. Pursuant to this provision, during the three months ended March 31,
1999, the Partnership declared and paid a distribution of approximately $54,000
payable to the General Partner related to the sale of Mesa Dunes Mobile Home
Park. These fees are subordinate to the limited partners receiving a preferred
return, as specified in the Partnership Agreement. If the limited partners have
not received their preferred return when the Partnership terminates, the General
Partner will return these amounts to the Partnership.
AIMCO and its affiliates currently own 16,318 limited partnership units in the
Partnership representing 34.491% 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. When voting on
matters, AIMCO would in all likelihood vote the Units it acquired in a manner
favorable to the interest of the General Partner because of their affiliation
with the General Partner.
The Partnership has a first mortgage to Angeles Mortgage Investment Trust
("AMIT") in the amount of $3,302,000, which is secured by Wakonda Shopping
Center and Town & Country Shopping Center. Pursuant to a series of transactions,
affiliates of the General Partner acquired ownership interests in AMIT. On
September 17, 1998, AMIT was merged with and into IPT. Effective February 26,
1999, IPT merged into AIMCO. As a result, AIMCO became the holder of the AMIT
note. The Partnership paid approximately $74,000 and $75,000 in interest expense
on this note to AMIT for each of the three months ended March 31, 2000 and 1999,
respectively.
Note D - Investment in Discontinued Operations
Wakonda Shopping Center and Town & Country Shopping Center are the two
commercial properties owned by the Partnership and represent one segment of the
Partnership's operations. Due to the projected sale of the two commercial
properties in 2000, the net assets of these properties have been classified as
"Investment in discontinued operations" as of March 31, 2000, on the balance
sheet. The investment in discontinued operations on the balance sheet as of
March 31, 2000 includes the investment property and the remaining receivables,
other assets and liabilities of Town & Country Shopping Center and Wakonda
Shopping Center. The results of the commercial segment have been shown as income
from discontinued operations for the three months ended March 31, 2000 and 1999.
Accordingly, the 1999 consolidated statement of operations has been restated to
reflect this presentation. The revenues of these properties were approximately
$583,000 and $451,000 for the three month periods ended March 31, 2000 and 1999,
respectively. Income from operations was approximately $234,000 and $100,000,
for the three month periods ended March 31, 2000 and 1999, respectively.
Note E - Segment Reporting
Description of the types of products and services from which reportable segments
derive their revenues:
The Partnership has two reportable segments: residential and commercial
properties. The Partnership's residential property segment consists of three
apartment complexes, one each in Maryland, Michigan and Texas. The Partnership
rents apartment units to tenants for terms that are typically twelve months or
less. The Partnership's commercial property segment consists of two retail
shopping centers, both located in Iowa. The Partnership rents commercial space
to tenants under various lease terms expiring during 2000 through 2008. Both
properties lease space to various specialty retail outlets, several fast food
enterprises and discount stores and Wakonda also leases space to a grocery
store.
Measurement of segment profit or loss:
The Partnership evaluates performance based on segment profit (loss) before
depreciation. The accounting policies of the reportable segments 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 segments:
The Partnership's reportable segments consist of investment properties that
offer different products and services. The reportable segments are each managed
separately, because they provide services with different types of products and
customers.
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 segments.
<TABLE>
<CAPTION>
2000 Residential Commercial Other Totals
(discontinued)
<S> <C> <C> <C> <C>
Rental income $ 865 $ -- $ -- $ 865
Other income 36 -- 2 38
Interest expense 169 -- -- 169
Depreciation 145 -- -- 145
General and administrative
expense -- -- 76 76
Segment profit (loss) 109 234 (74) 269
Total assets 12,151 2,789 508 15,448
Capital expenditures for
investment properties 142 4 -- 146
</TABLE>
<TABLE>
<CAPTION>
1999 Residential Commercial Other Totals
(discontinued)
<S> <C> <C> <C> <C>
Rental income $ 1,046 $ -- $ -- $ 1,046
Other income 102 -- 14 116
Interest expense 254 -- -- 254
Depreciation 151 -- -- 151
General and administrative
expense -- -- 104 104
Gain on sale of property 1,783 -- -- 1,783
Loss on extraordinary item 1,011 -- -- 1,011
Segment profit (loss) 1,040 100 (90) 1,050
Total assets 14,036 6,475 3,519 24,030
Capital expenditures for
investment properties 52 4 -- 56
</TABLE>
Note F - Sale of Investment Properties
On February 19, 1999, the Partnership sold Mesa Dunes Mobile Home Park to an
unaffiliated third party for net sales proceeds of approximately $9,292,000
after payment of closing costs. A portion of the proceeds were used to pay off
the mortgage encumbering the investment property of approximately $6,423,000.
The Partnership realized a gain of approximately $1,783,000 on the sale during
the first quarter of 1999. The Partnership also realized a loss on the early
extinguishment of debt encumbering the property of approximately $1,011,000
during the first quarter of 1999 consisting of a prepayment penalty and the
write off of unamortized loan costs and mortgage discount. Revenues from Mesa
Dunes included in the accompanying consolidated statements of operations were
approximately $251,000 for the three month period ended March 31, 1999.
Note G - 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 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 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 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 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 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.
Note H - Subsequent Event - Sale of Discontinued Operation
On May 4, 2000, the Partnership sold Wakonda Shopping Center, located in Des
Moines, Iowa, to an unaffiliated third party for a contract price of $2,900,000.
The proceeds from the sale were used to pay off the mortgage encumbering both
Wakonda Shopping Center and Town & Country Shopping Center. The General Partner
anticipates recognizing a gain on sale of investment property during the second
quarter 2000.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
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
discussions 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 two commercial properties and
three 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
Lazy Hollow Apartments 98% 97%
Columbia, Maryland
Homestead Apartments 95% 97%
East Lansing, Michigan
Casa Granada Apartments 93% 95%
Harlingen, Texas
Wakonda Shopping Center 84% 86%
Des Moines, Iowa
Town & Country Shopping Center 91% 99%
Cedar Rapids, Iowa (1)
(1) The decrease in occupancy at Town & Country Shopping Center is due to
losing several tenants at the beginning of the year.
Results from Operations
The Partnership realized net income of approximately $269,000 compared to net
income of approximately $1,050,000 for the three month periods ended March 31,
2000 and 1999, respectively. The decrease in net income is due primarily to a
decrease in total revenues resulting from the gain of approximately $1,783,000
realized on the sale of Mesa Dunes Mobile Home Park in February 1999. This was
partially offset by the extraordinary loss of approximately $1,011,000 on the
early extinguishment of debt encumbering the Mesa Dunes Mobile Home Park during
the first quarter of 1999. See "Part I - Financial Information, Item 1.
Financial Statements, Note F - Sale of Investment Property" for a discussion of
the Mesa Dunes Mobile Home Park property sale. Excluding the operations of Mesa
Dunes and the related gain on the sale of the investment property, income from
continuing operations decreased during the three months ended March 31, 2000 as
compared to the same period in 1999. This decrease at the Partnership's
residential properties is primarily due to an increase in total expenses and a
decrease in total revenues. Total expenses increased primarily as a result of
increased property tax, depreciation, and operating expenses. Property tax
expense increased as a result of an increase in the assessed value of Homestead
Apartments. Depreciation expense increased as a result of fixed asset additions
over the past twelve months. Operating expenses increased primarily due to
salary and utility cost increases at Lazy Holly Apartments. Total revenues
decreased primarily due to a decrease in other income as a result of lower
interest income which declined during the period ended March 31, 2000 as a
result of lower cash balances held in interest bearing accounts.
<PAGE>
Included in general and administrative expenses at both March 31, 2000 and 1999,
are management reimbursements to the General Partner allowed under the
Partnership Agreement. 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.
Wakonda Shopping Center and Town & Country Shopping Center are the two
commercial properties owned by the Partnership and represent one segment of the
Partnership's operations. Due to the projected sale of the two commercial
properties in 2000, the net assets of these properties have been classified as
"Investment in discontinued operations" as of March 31, 2000, on the balance
sheet. The investment in discontinued operations on the balance sheet as of
March 31, 2000 includes the investment property and the remaining receivables,
other assets and liabilities of Town & Country Shopping Center and Wakonda
Shopping Center. The results of the commercial segment have been shown as
"Income from discontinued operations" for the three months ended March 31, 2000
and 1999. The revenues of these properties were approximately $583,000 and
$451,000 for the three month periods ended March 31, 2000 and 1999,
respectively. Income from operations was approximately $234,000 and $100,000,
for the three month periods ended March 31, 2000 and 1999, respectively.
On May 4, 2000, the Partnership sold Wakonda Shopping Center, located in Des
Moines, Iowa, to an unaffiliated third party for a contract price of $2,900,000.
The General Partner anticipates recognizing a gain on sale of investment
property during the second quarter 2000. The proceeds from the sale were used to
pay off the mortgage encumbering both Wakonda Shopping Center and Town & Country
Shopping Center.
As part of the ongoing business plan of the Partnership, the General Partner
monitors the rental market environment 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 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 General Partner will
be able to sustain such a plan.
Liquidity and Capital Resources
At March 31, 2000, the Partnership had cash and cash equivalents of
approximately $1,528,000 versus approximately $7,007,000 at March 31, 1999. For
the three months ended March 31, 1999, cash increased by approximately $293,000
from the Partnership's year ended December 31, 1999. The increase in cash and
cash equivalents is due to approximately $595,000 of cash provided by operating
activities offset by approximately $258,000 of cash used in investing activities
and approximately $44,000 of cash used in financing activities. Cash used in
investing activities consisted of property improvements and replacements, lease
commissions paid, and net deposits to restricted escrows maintained by the
mortgage lenders. Cash used in financing activities consists of mortgage
principle payments. The Registrant invests its working capital reserves in money
market accounts.
On February 19, 1999, the Partnership sold Mesa Dunes Mobile Home Park to an
unaffiliated third party for net sales proceeds of approximately $9,292,000
after payment of closing costs. The Partnership realized a gain of approximately
$1,783,000 on the sale during the first quarter of 1999. The Partnership also
realized a loss on the early extinguishment of debt encumbering the property of
approximately $1,011,000 during the first quarter of 1999 consisting of a
prepayment penalty and the write off of unamortized loan costs and mortgage
discount.
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 properties to adequately maintain the physical
assets and other operating needs of the Registrant and to comply with Federal,
state, and local legal and regulatory requirements. Capital improvements for
each of the Partnership's properties are detailed below.
Lazy Hollow Apartments
The Partnership has budgeted, but is not limited to, capital improvements of
approximately $291,000 for the year 2000, which consist of interior and exterior
building improvements, parking lot improvements, floor covering replacements,
and appliance replacements. During the three months ended March 31, 2000, the
Partnership completed approximately $26,000 of capital improvements at Lazy
Hollow Apartments consisting of major landscaping, lighting improvements,
cabinet and countertop replacements, and floor covering replacements. These
improvements were funded from cash flow from operations. 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.
Homestead Apartments
The Partnership has budgeted capital improvements of approximately $87,000 for
the year 2000, which consist primarily of appliance replacements, floor covering
replacements, and parking lot improvements. During the three months ended March
31, 2000, the Partnership completed approximately $73,000 of capital
improvements at Homestead Apartments consisting primarily of floor covering
replacements, appliance replacements, and major landscaping. These improvements
were funded from cash flow from operations. 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.
Casa Granada Apartments
The Partnership has budgeted capital improvements of approximately $79,000 for
the year 2000, which consist of floor covering replacements, air conditioning
unit replacements, appliances, water heaters, and window treatments. During the
three months ended March 31, 2000, the Partnership completed approximately
$43,000 of capital improvements at Casa Granada Apartments primarily consisting
of exterior painting and building improvements. These improvements were funded
from cash flow from operations. 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.
Wakonda Shopping Center
The Partnership has budgeted capital improvements of approximately $338,000 for
the year 2000, which consist primarily of roof replacements, HVAC upgrades,
tenant improvements, and building improvements. During the three months ended
March 31, 2000, the Partnership completed approximately $2,000 of capital
improvements at Wakonda Shopping Center consisting of office equipment
replacements. These improvements were funded from cash flow from operations.
This property was sold May 4, 2000.
Town and Country Shopping Center
The Partnership has budgeted capital improvements of approximately $75,000 for
the year 2000, which consist of tenant improvements. During the three months
ended March 31, 2000, the Partnership completed approximately $2,000 of capital
improvements at Town and Country Shopping Center for tenant improvements. These
improvements were funded from cash flow from operations. 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 Registrant'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. At March 31, 2000,
the mortgage indebtedness of approximately $8,392,000 has maturity dates ranging
from October 2003 to October 2019. The General Partner will attempt to refinance
such remaining indebtedness and/or sell the properties prior to such maturity
dates. If the properties cannot be refinanced or sold for a sufficient amount,
the Partnership will risk losing such properties through foreclosure.
During the three months ended March 31, 1999, the Partnership declared a
distribution payable of approximately $54,000 payable to the General Partner.
However, this fee is subordinate to the limited partners receiving a preferred
return, as specified in the Partnership Agreement. No distributions were paid
during the three months ended March 31, 2000. The Partnership's distribution
policy is reviewed on a semi-annual basis. Future cash distributions will depend
on the levels of net cash generated from operations, the availability of cash
reserves, and the timing of debt maturities, refinancings, and/or property
sales. There can be no assurance, however, that the Partnership will generate
sufficient funds from operations after required capital expenditures to permit
any further distributions to its partners during the remainder of 2000 or
subsequent periods.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEDINGS
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 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 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 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
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 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.
ANGELES INCOME PROPERTIES, LTD. 6
By: Angeles Realty Corporation II
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 Angeles
Income Properties, LTD 6 2000 First Quarter 10-QSB and is qualified in its
entirety by reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000812564
<NAME> Angeles Income Properties, LTD 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> 1,528
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0 <F1>
<PP&E> 16,131
<DEPRECIATION> 5,771
<TOTAL-ASSETS> 15,448
<CURRENT-LIABILITIES> 0 <F1>
<BONDS> 8,392
0
0
<COMMON> 0
<OTHER-SE> 6,567
<TOTAL-LIABILITY-AND-EQUITY> 15,448
<SALES> 0
<TOTAL-REVENUES> 903
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 868
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 169
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 35
<DISCONTINUED> 234
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 269
<EPS-BASIC> 5.62 <F2>
<EPS-DILUTED> 0
<FN>
<F1> Registrant has an unclassified balance sheet. <F2> Multiplier is 1.
</FN>
</TABLE>
