<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended June 30, 1999 or
-------------------------------------------
[ ] 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 0-23656
---------------------------------
Wells Real Estate Fund VI, L.P.
-------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Georgia 58-2022628
- ------------------------------- -------------------
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification no.)
3885 Holcomb Bridge Road, Norcross, Georgia 30092
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (770) 449-7800
--------------
- -------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
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
----- -----
1
<PAGE>
Form 10-Q
---------
Wells Real Estate Fund VI, L.P.
-------------------------------
INDEX
-----
Page No.
--------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets - June 30, 1999
and December 31, 1998.................................... 3
Statements of Income for the Three Months and Six Months
Ended June 30, 1999 and 1998............................ 4
Statement of Partners' Capital
for the Year Ended December 31, 1998,
and the Six Months Ended June 30, 1999................... 5
Statements of Cash Flows for the Six Months
Ended June 30, 1999 and 1998............................. 6
Condensed Notes to Financial Statements................... 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations............................................... 8
PART II. OTHER INFORMATION............................................. 20
2
<PAGE>
WELLS REAL ESTATE FUND VI, L.P.
(a Georgia Public Limited Partnership)
Balance Sheets
<TABLE>
<CAPTION>
Assets June 30, 1999 December 31, 1998
------ ------------- -----------------
<S> <C> <C>
Investment in joint ventures (Note 2) $18,331,929 $18,753,866
Cash and cash equivalents 142,792 145,888
Due from affiliates 477,890 427,734
Deferred project costs 557 888
Prepaid expenses and other assets 300 300
----------- -----------
Total assets $18,953,468 $19,328,676
=========== ===========
Liabilities and Partners' Capital
---------------------------------
Liabilities:
Partnership distribution payable $ 449,998 $ 427,995
----------- -----------
Partners' capital:
Class A - 2,188,724 units outstanding 18,503,470 18,608,322
Class B - 311,276 units outstanding 0 292,359
----------- -----------
Total partners' capital 18,503,470 18,900,681
----------- -----------
Total liabilities and partners' capital $18,953,468 $19,328,676
=========== ===========
</TABLE>
See accompanying condensed notes to financial statements.
3
<PAGE>
WELLS REAL ESTATE FUND VI, L.P.
(a Georgia Public Limited Partnership)
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
June 30, 1999 June 30, 1998 June 30, 1999 June 30, 1998
-------------------- --------------------- --------------------- --------------------
<S> <C> <C> <C> <C>
Revenues:
Equity in income of joint
ventures (Note 2) $280,972 $ 236,419 $ 532,184 $ 466,983
Interest income 1,583 2,997 3,119 6,592
-------- --------- --------- ---------
282,555 239,416 535,303 473,575
-------- --------- --------- ---------
Expenses:
Legal and accounting 9,615 9,730 18,855 14,501
Computer costs 1,861 1,837 4,681 3,854
Partnership administration 12,701 12,788 32,073 23,006
Amortization of organization
costs 0 0 0 1,563
-------- --------- --------- ---------
24,177 24,355 55,609 42,924
-------- --------- --------- ---------
Net income $258,378 $ 215,061 $ 479,694 $ 430,651
======== ========= ========= =========
Net loss allocated to General
Partners $ 0 $ 0 $ 0 $ 0
Net income allocated to Class A
Limited Partners $332,375 $ 444,414 $ 784,940 $ 889,918
Net loss allocated to Class B
Limited Partners $(73,997) $(229,353) $(305,246) $(459,267)
Net income per Class A Limited
Partner Unit $ 0.15 $ 0.21 $ 0.36 $ 0.42
Net loss per Class B Limited Partner $ (0.24) $ (0.68) $ (0.98) $ (1.36)
Unit
Cash distribution per Class A
Limited Partner Unit $ 0.21 $ 0.20 $ 0.40 $ 0.40
</TABLE>
See accompanying condensed notes to financial statements.
4
<PAGE>
WELLS REAL ESTATE FUND VI, L.P.
(a Georgia Public Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 1998 AND THE SIX MONTHS ENDED
JUNE 30,1999
<TABLE>
<CAPTION>
Limited Partners
----------------
Class A Class B Total
------------------------ ----------------------- General Partners'
Units Amount Units Amount Partners Capital
--------- ------------- ---------- ----------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, December 31, 1997 2,158,895 $18,525,190 341,105 $1,260,483 $0 $19,785,673
Net income (loss) 0 1,770,058 0 (914,270) 0 855,788
Partnership distributions 0 (1,740,780) 0 0 0 (1,740,780)
Class B conversion elections 28,862 53,854 (28,862) ( 53,854) 0 0
--------- ----------- ------- ---------- -- -----------
BALANCE, December 31, 1998 2,187,757 18,608,322 312,243 292,359 0 18,900,681
Net income (loss) 0 784,940 0 (305,246) 0 479,694
Partnership distributions 0 (876,905) 0 0 0 (876,905)
Class B conversion elections 967 (12,887) (967) 12,887 0 0
--------- ----------- ------- ---------- -- -----------
BALANCE, June 30, 1999 2,188,724 $18,503,470 311,276 $ 0 $0 $18,503,470
========= =========== ======= ========== == ===========
</TABLE>
See accompanying condensed notes to financial statements.
5
<PAGE>
WELLS REAL ESTATE FUND VI, L.P.
(a Georgia Public Limited Partnership)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Six Months Ended
------------------------
June 30, 1999 June 30, 1998
------------- -------------
<S> <C> <C>
Cash flow from operating activities:
Net income $ 479,694 $ 430,651
Adjustments to reconcile net income to net
cash used in operating activities:
Equity in income of joint venture (532,184) (466,983)
Amortization of organization costs 0 1,563
---------- ---------
Net cash used in operating activities (52,490) (34,769)
Cash flow from investing activities:
Distributions received from joint
ventures 912,238 905,299
Investment in joint ventures (7,942) (57,938)
---------- ---------
Net cash provided by investing
activities 904,296 847,361
---------- ---------
Cash flow from financing activities:
Partnership distributions paid (854,902) (865,836)
---------- ---------
Net decrease in cash and cash
equivalents (3,096) (53,244)
Cash and cash equivalents, beginning of year 145,888 268,337
---------- ----------
Cash and cash equivalents, end of period $ 142,792 $ 215,093
========== ==========
Supplemental schedule of noncash
investing activities:
Deferred project costs applied to
joint ventures $ 331 $ 0
========== ==========
</TABLE>
See accompanying condensed notes to financial statements.
6
<PAGE>
WELLS REAL ESTATE FUND VI, L.P.
(A Georgia Public Limited Partnership)
Condensed Notes to Financial Statement
(1) Summary of Significant Accounting Policies
------------------------------------------
(a) General
-----------
Wells Real Estate Fund VI, L.P. (the "Partnership") is a Georgia public
limited partnership having Leo F. Wells, III and Wells Partners, L.P., as
General Partners. The Partnership was formed on December 1, 1992, for the
purpose of acquiring, developing, owning, operating, improving, leasing,
and otherwise managing for investment purposes income producing commercial
properties.
On April 5, 1993, the Partnership commenced a public offering of its
limited partnership units pursuant to a Registration Statement on Form S-11
filed under the Securities Act of 1933. The Partnership terminated its
offering on April 4, 1994, and received gross proceeds of $25,000,000
representing subscriptions from 2,500,000 Limited Partners Units, composed
of 1,933,218 Class A and 566,782 Class B Limited Partnership Units.
The Partnership owns interests in properties through its equity ownership
in the following joint ventures: Fund V and Fund VI Associates, a joint
venture between the Partnership and Wells Real Estate Fund V, L.P. ( the
"Fund V - Fund VI Joint Venture"); (ii) Fund V, Fund VI, and Fund VII
Associates, a joint venture between the Partnership, Wells Real Estate Fund
V, L.P. and Wells Real Estate Fund VII, L.P. (the "Fund V-VI-VII Joint
Venture"); (iii) Fund VI and Fund VII Associates, a joint venture between
the Partnership and Wells Real Estate Fund VII, L.P. (the "Fund VI-VII
Joint Venture"); (iv) Fund II, Fund III, Fund VI and Fund VII Associates, a
joint venture between the Partnership, Fund II and Fund III Associates, and
Wells Real Estate Fund VII, L.P., (the "Fund II,III,VI,VII Joint Venture");
(v) Fund VI, Fund VII and Fund VIII Associates, a joint venture between the
Partnership, Wells Real Estate Fund VII, L.P. and Wells Real Estate Fund
VIII, L.P. (the "Fund VI,VII,VIII Joint Venture"); and (vi) Fund I, II,
II-OW, VI, VII Associates, a joint venture between the Partnership, Wells
Estate Fund I, Wells Real Estate Fund II, Wells Real Estate Fund II-OW,
and Wells Real Estate Fund VII, L.P. (the "Fund I,II,II-OW,VI,VII Joint
Venture").
As of June 30, 1999, the Partnership owned interests in the following
properties through its ownership of the foregoing joint ventures: (i) a
four story office building located in Hartford, Connecticut (the "Hartford
Building") and (ii) two retail buildings located in Clayton County, Georgia
(the "Stockbridge Village II") which are owned by the Fund V - Fund VI
Joint Venture; (iii) a three-story office building located in Appleton
Wisconsin (the "Marathon Building") which is owned by the Fund V-VI-VII
Joint Venture; (iv) two retail buildings located in Clayton County, Georgia
(the "Stockbridge Village III") which are owned by the Fund VI - Fund VII
Joint Venture; (v) a shopping center expansion located in Clayton County,
Georgia (the Stockbridge Village I Expansion") which is owned by the Fund
VI - Fund VII Joint Venture; (vi) an office/retail center located in
Roswell, Georgia (the "880 Holcomb Bridge") which is owned by
7
<PAGE>
the Fund II-III-VI-VII Joint Venture; and (vii) a four story office building
located in Jacksonville, Florida (the "BellSouth Property") and (viii) a
shopping center located in Clemmons, North Carolina ( the "Tanglewood Commons")
which is owned by the Fund VI - VII - VIII Joint Venture; and (ix) a retail
shopping center located in Cherokee County, Georgia (the "Cherokee Commons")
which is owned by the Fund I-II-II-OW-VI-VII Joint Venture. All of the foregoing
properties were acquired on an all cash basis. For further information regarding
these joint ventures and properties, refer to the Partnership's Form 10-K for
the year ended December 31, 1998.
(b) Basis of Presentation
- --------------------------
The financial statements of Wells Real Estate Fund VI, L.P. ( the "Partnership")
have been prepared in accordance with instructions to Form 10-Q and do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. These quarterly
statements have not been examined by independent accountants, but in the opinion
of the General Partners, the statements for the unaudited interim periods
presented include all adjustments, which are of a normal and recurring nature,
necessary to present a fair presentation of the results for such periods. For
further information, refer to the financial statements and footnotes included in
the Partnership's Form 10-K for year ended December 31, 1998.
(2) Investment in Joint Ventures
----------------------------
The Partnership owns interests in nine properties through its investment in
joint ventures of which three are office buildings and six are retail buildings.
The Partnership does not have control over the operations of the joint ventures;
however, it does exercise significant influence. Accordingly, investment in
joint ventures is recorded on the equity method. For further information, refer
to Form 10-K of the Partnership for the year ended December 31, 1998.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
- --------------------------------------------------------------------------------
OF OPERATIONS.
- --------------
The following discussion and analysis should be read in conjunction with
accompanying financial statements of the Partnership and notes thereto. This
Report contains forward-looking statements, within the meaning of Section 27A of
the Securities Act of 1933 and 21E of the Securities Exchange Act of 1934,
including discussion and analysis of the financial condition of the Partnership,
anticipated capital expenditures required to complete certain projects, amounts
of cash distributions anticipated to be distributed to Limited Partners in the
future and certain other matters. Readers of this Report should be aware that
there are various factors that could cause actual results to differ materially
from any forward-looking statement made in this Report, which include
construction costs which may exceed estimates, construction delays, lease-up
risks, inability to obtain new tenants upon expiration of existing leases, and
the potential need to fund tenant improvements or other capital expenditures out
of operating cash flow.
8
<PAGE>
Results of Operations and Changes in Financial Conditions
- ---------------------------------------------------------
(a) General
- -----------
As of June 30, 1999, the properties owned by the Partnership were 97% as
compared to 94% occupied at June 30, 1998. Gross revenues of the Partnership
were $535,303 for the six months ended June 30, 1999, as compared to $473,575
for the six months ended June 30, 1998. The increase in revenues is attributed
primarily to funds invested in joint ventures, which increased the income
generated from the joint ventures, which offset the reduction in interest income
due to decreased funds available to earn interest.
Expenses of the Partnership were $55,609 for 1999, as compared to $42,924 for
1998. The increase in expenses for 1999, as compared to 1998, was primarily due
to increased partnership administration expenses and accounting fees.
Net income of the Partnership was $479,694 for the six months ended June 30,
1999, as compared to $430,651 for the same period in 1998. The increase in net
income for 1999, from 1998, is due primarily to increased revenues partially
offset by increased expenses as noted above.
Net cash used in operating activities increased from $34,769 in 1998 to $52,490
in 1999. This increase was due primarily to increased expenses and decreased
interest income. Net cash provided by investing activities increased for the six
months ended June 30, 1999, as compared to the same period in 1998, due
primarily to a decrease in investments in joint ventures and an increase in
joint venture distributions. Partnership distributions also decreased slightly
in 1999, as compared to 1998. These changes produced cash and cash equivalents
of $215,093 and $142,792 at June 30, 1998, and 1999, respectively.
The Partnership made cash distributions to Limited Partners holding Class A
Units of $.21 for the three months ended June 30, 1999 as compared to
distributions of $.20 per Class A Unit for the same period in 1998. No cash
distributions were made to Limited Partners holding Class B Units or to the
General Partners.
The Partnership expects to continue to meet its short-term liquidity
requirements and budget demands generally through net cash provided by
operations which the Partnership believes will continue to be adequate to meet
both operating requirements and distributions to Limited Partners. At this
time, given the nature of the joint ventures in which the Partnership has
invested, there are no know improvements and renovations to the properties
expected to be funded from cash flow from operations.
Year 2000
- ---------
The Partnership is presently reviewing the potential impact of Year 2000
compliance issues on its information systems and business operations. A full
assessment of Year 2000 compliance issues was begun in late 1997 and was
completed by March 31, 1999. Renovations and replacements of equipment have
been and are being made as warranted. The costs incurred by the Partnership and
its affiliates thus far for renovations and replacements have been immaterial.
As of June 30, 1999, all testing of systems has been completed.
9
<PAGE>
As to the status of the Partnerships' information technology systems, it is
presently believed that all major systems and software are Year 2000 compliant.
At the present time, it is believed that all major non-information technology
systems are Year 2000 compliant. The cost to upgrade any noncompliance systems
is believed to be immaterial.
The Partnership has confirmed with the Partnership's vendors, including third-
party service providers such as banks, that their systems are Year 2000
compliant.
The Partnership relies on computers and operating systems provided by equipment
manufacturers, and also on application software designed for use with its
accounting, property management and investment portfolio tracking. The
Partnership has preliminary determined that any costs, problems or uncertainties
associated with the potential consequences of Year 2000 issues are not expected
to have a material impact on the future operations or financial condition of the
Partnership. The Partnership will perform due diligence as to the Year 2000
readiness of each property owned by the Partnership and each property
contemplated for purchase by the Partnership.
The Partnership's reliance on embedded computer systems (i.e. microcontrollers)
is limited to facilities related matters, such as office security systems and
environmental control systems.
The Partnership is currently formulating contingency plans to cover any areas of
concern. Alternate means of operating the business are being developed in the
unlikely circumstance that the computer and phone systems are rendered
inoperable. An off-site facility from which the Partnership could operate is
being sought as well as alternate means of communication with key third-party
vendors. A written plan is being developed for testing and dispensation to each
staff member of the General Partner of the Partnership.
Management believes that the Partnership's risk of Year 2000 problems is
minimal. In the unlikely event there is a problem, the worst case scenarios
would include the risks that the elevator or security systems within the
Partnership's properties would fail or the key third-party vendors upon which
the Partnership relies would be unable to provide accurate investor information.
In the event that the elevator shuts down, the Partnership has devised a plan
for each building whereby the tenants will use the stairs until the elevators
are fixed. In the event that the security system shuts down, the Partnership
has devised a plan for each building to hire temporary on-site security guards.
In the event that a third-party vendor has Year 2000 problems relating to
investor information, the Partnership intends to perform a full system back-up
of all investor information as of December 31, 1999, so that the Partnership
will have accurate hard-copy investor information.
10
<PAGE>
Property Operations
- -------------------
As of June 30, 1999, the Partnership owned interests in the following
operational properties:
The Hartford Building/Fund V - Fund VI Joint Venture
----------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
June 30, 1999 June 30, 1998 June 30,1999 June 30, 1998
------------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Revenues:
Rental Income $179,375 $179,375 $358,750 $358,750
-------- -------- -------- --------
Expenses:
Depreciation 73,008 73,005 146,016 146,010
Management & leasing expenses 7,242 7,242 14,484 12,898
Other operating expenses (456) 4,566 4,863 9,788
-------- -------- -------- --------
79,794 84,813 165,363 168,696
-------- -------- -------- --------
Net income $ 99,581 $ 94,562 $193,387 $190,054
======== ======== ======== ========
Occupied % 100% 100% 100% 100%
Partnership Ownership % in the
Fund V-VI Joint Venture 53.6% 53.5% 53.6% 53.5%
Cash Distribution to Partnership $ 93,343 $ 90,494 $183,519 $180,637
Net Income Allocated to the
Partnership $ 53,339 $ 50,562 $103,544 $101,622
</TABLE>
Net income increased and expenses decreased for the six months ended June
30, 1999, as compared to 1998, due primarily to a greater insurance
reimbursement from the tenant in 1999, which was recorded in the second
quarter of 1999, in other operating expenses.
The Partnership's ownership interest in the Fund V - Fund VI Joint Venture
increased due to additional fundings by the Partnership, which caused an
increase in the Partnership's ownership interest in the Fund V - Fund VI
Joint Venture.
11
<PAGE>
Stockbridge Village II/Fund V - Fund VI Joint Venture
-----------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
June 30, 1999 June 30, 1998 June 30,1999 June 30, 1998
-------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental Income $95,902 $58,944 $155,310 $117,888
------- ------- -------- --------
Expenses:
Depreciation 25,992 25,425 51,735 51,128
Management & leasing expenses 10,120 7,072 17,009 15,674
Other operating expenses 3,008 19,669 16,283 24,193
------- ------- -------- --------
39,120 52,166 85,027 90,995
------- ------- -------- --------
Net income $56,782 $ 6,778 $ 70,283 $ 26,893
======= ======= ======== ========
Occupied % 100% 72% 100% 72%
Partnership Ownership % in the
Fund V-VI Joint Venture 53.6% 53.5% 53.6% 53.5%
Cash Distribution to Partnership $42,700 $16,285 $ 58,156 $ 39,850
Net Income Allocated to the
Partnership $30,414 $ 3,624 $ 37,640 $ 14,380
</TABLE>
Net income and cash distribution to the Partnership increased in 1999, as
compared to 1998, due primarily to increased occupancy and a reduction in
landscape expenses, parking lot repairs and other operating expenses.
The Partnership's ownership percentage in the Fund V - Fund VI Joint
Venture increased due to additional fundings by the Partnership, which
caused a increase in the Partnership's ownership interest in the Fund V -
Fund VI Joint Venture.
12
<PAGE>
The Marathon Building/Fund V-VI-VII Joint Venture
-------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
June 30, 1999 June 30, 1998 June 30,1999 June 30, 1998
------------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Revenues:
Rental Income $242,754 $243,184 $485,508 $485,938
-------- -------- -------- --------
Expenses:
Depreciation 87,647 87,646 175,293 175,292
Management & leasing expenses 6,443 9,890 22,687 19,780
Other operating expenses 2,865 3,099 10,411 6,741
-------- -------- -------- --------
96,955 100,635 208,391 201,813
-------- -------- -------- --------
Net income $145,799 $142,549 $277,117 $284,125
======== ======== ======== ========
Occupied % 100% 100% 100% 100%
Partnership Ownership % in the
Fund V-VI-VII Joint Venture 41.8% 41.8% 41.8% 41.8%
Cash Distribution to Partnership $ 98,552 $ 97,267 $191,047 $194,128
Net Income Allocated to the
Partnership $ 60,988 $ 59,629 $115,918 $118,850
</TABLE>
The increase in management and leasing fees for the six months ended June
30, 1999, was due to an underaccrual of fees from 1998. The increase in
operating expenses was due primarily to increases in accounting and
administrative fees.
Cash distributions allocated to the Partnership and net income allocated to
the Partnership remained relatively stable for the six months ended June
30, 1999 and 1998.
13
<PAGE>
Stockbridge Village III / Fund VI - Fund VII Joint Venture
- ----------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
June 30, 1999 June 30, 1998 June 30, 1999 June 30, 1998
------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $76,001 $59,509 $156,602 $118,753
------- ------- -------- --------
Expenses:
Depreciation 22,457 22,778 45,043 45,492
Management & leasing expenses 13,183 8,133 18,739 16,364
Other operating expenses 6,611 36,137 9,578 69,354
------- ------- -------- --------
42,251 67,048 73,360 131,210
------- ------- -------- --------
Net income (loss) $33,750 $(7,539) $ 83,242 $(12,457)
======= ======= ======== ========
Occupied % 100% 82% 100% 82%
Partnership's Ownership % in the
Fund VI-VII Joint Venture 43.7% 43.1% 43.7% 43.1%
Cash distribution to Partnership $24,450 $ 7,080 $ 53,537 $ 15,205
Net income (loss) allocated to the
Partnership $14,750 $(3,246) $ 36,379 $ (5,369)
</TABLE>
Net income increased for the six months ended June 30, 1999, as compared to the
same period in 1998, due to an increase in occupancy and a decrease in other
operating expenses due to a bad debt reserve recorded in 1998, which
overinflated 1998 expenses.
The Partnership's ownership percentage in the Fund VI-Fund VII Joint Venture
increased to 43.7% for 1999, as compared to 43.1% in 1998, due to additional
fundings by the Partnership.
14
<PAGE>
Holcomb Bridge Road Project / Fund II, III, VI, VII Joint Venture
-----------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
June 30, 1999 June 30, 1998 June 30, 1999 June 30, 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $227,761 $208,645 $457,824 $421,880
-------- -------- -------- --------
Expenses:
Depreciation 94,128 94,129 188,257 188,033
Management & leasing expenses 42,063 29,888 80,937 59,252
Other operating expenses 387 13,797 24,781 36,830
-------- -------- -------- --------
136,578 137,814 293,975 284,115
-------- -------- -------- --------
Net income $ 91,183 $ 70,831 $163,849 $137,765
======== ======== ======== ========
Occupied % 94% 100.0% 94% 100.0%
Partnership Ownership % 26.9% 26.4% 26.9% 26.4%
Cash distributed to the Partnership $ 51,534 $ 46,848 $ 91,058 $ 92,783
Net income allocated to the
Partnership $ 24,492 $ 18,904 $ 44,010 $ 36,902
</TABLE>
Rental income has increased for the six months ended June 30, 1999, as compared
to the same period in 1998, due primarily to an underestimate of straight line
rent adjustments in 1998. The expenses went down due to common area maintenance
reimbursements. Tenants are billed an estimated amount for the current year
common area maintenance which is then reconciled the second quarter of the
following year and the difference is billed to the tenant.
15
<PAGE>
Stockbridge Village I Expansion / Fund VI - Fund VII Joint Venture
- ------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
June 30, 1999 June 30, 1998 June 30, 1999 June 30, 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $66,480 $74,595 $144,626 $145,682
------- ------- -------- --------
Expenses:
Depreciation 32,648 35,002 74,203 69,654
Management & leasing expenses 8,437 10,229 17,727 19,737
Other operating expenses (3,805) 4,856 986 14,377
------- ------- -------- --------
37,280 50,087 92,916 103,768
------- ------- -------- --------
Net income $29,200 $24,508 $ 51,710 $ 41,914
======= ======= ======== ========
Occupied % 86% 79% 86% 79%
Partnership Ownership % 43.7% 43.1% 43.7% 43.1%
Cash distributed to the Partnership $33,747 $23,503 $ 64,893 $ 44,955
Net income allocated to the
Partnership $12,761 $10,554 $ 22,598 $ 18,020
</TABLE>
The Partnership's ownership percentage in the Fund VI-Fund VII Joint Venture
increased to 43.7% for 1999, as compared to 43.1% in 1998, due to additional
funding by the Partnership.
Net income increased for the six months ended June 30, 1999, as compared to the
same period in 1998, due to an increase in occupancy and a decrease in other
operating expenses due to common area maintenance reimbursements being greater
in 1999. Tenants are billed an estimated amount for the current year common area
maintenance which is then reconciled the second quarter of the following year
and the difference billed to the tenant.
16
<PAGE>
BellSouth Building / Fund VI - Fund VII - Fund VIII Joint Venture
- -----------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
June 30, 1999 June 30, 1998 June 30, 1999 June 30, 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $380,277 $380,277 $760,554 $760,554
Interest income 1,160 2,098 2,302 4,172
-------- -------- -------- --------
381,437 382,375 762,856 764,726
-------- -------- -------- --------
Expenses:
Depreciation 111,606 110,953 223,212 221,842
Management & leasing expenses 49,041 47,381 96,933 95,196
Other operating expenses 106,051 102,655 209,835 190,065
-------- -------- -------- --------
266,698 260,989 529,980 507,103
-------- -------- -------- --------
Net income $114,739 $121,386 $232,876 $257,623
======== ======== ======== ========
Occupied % 100% 100% 100% 100%
Partnership's Ownership % in the
Fund VI-VII-VIII Joint Venture 34.3% 34.3% 34.3% 34.3%
Cash distribution to Partnership $ 80,382 $ 82,434 $161,927 $169,933
Net income allocated to the
Partnership $ 39,299 $ 41,575 $ 79,761 $ 88,237
</TABLE>
Net income has decreased slightly due primarily to increased expenditures in
electricity, HVAC repairs, lighting replacement and various other operating
expenses.
17
<PAGE>
Tanglewood Commons / Fund VI - VII - VIII Joint Venture
- -------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended Five Months Ended
------------------ ---------------- -----------------
June 30, 1999 June 30, 1998 June 30, 1999 June 30, 1998
------------- ------------- ---------------- -----------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $193,288 $182,139 $386,319 $364,752
Interest income 2,353 4,587 5,289 9,725
-------- -------- -------- --------
195,641 186,726 391,608 374,477
-------- -------- -------- --------
Expenses:
Depreciation 64,677 61,059 126,102 121,486
Management & leasing expenses 17,537 15,032 32,642 29,851
Other operating expenses 10,367 (19,872) 29,448 5,230
-------- -------- -------- --------
92,581 56,219 188,192 156,567
-------- -------- -------- --------
Net income $103,060 $130,507 $203,416 $217,910
======== ======== ======== ========
Occupied % 91% 87% 91% 87%
Partnership's Ownership % in the
Fund VI-VII-VIII Joint Venture 34.3% 34.3% 34.3% 34.3%
Cash distribution to Partnership $ 57,863 $ 65,564 $113,578 $115,696
Net income allocated to the
Partnership $ 35,299 $ 44,699 $ 69,671 $ 74,635
</TABLE>
Rental income, depreciation expense and management and leasing expenses have
increased in 1999, as compared to 1998, due to the increased occupancy at the
center. Other operating expenses increased in 1999 over 1998, due primarily to
a timing difference in billing tenants for common area maintenance expenses.
Tenants are billed an estimated amount for the current year common area
maintenance which is then reconciled the second quarter of the following year
and the difference billed to the tenant.
18
<PAGE>
Cherokee Commons/ Fund I, II, II-OW, VI, VII Joint Venture
- ----------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
June 30, 1999 June 30, 1998 June 30, 1999 June 30, 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $237,232 $225,705 $464,615 $454,682
Interest income 19 19 39 41
-------- -------- -------- --------
237,251 225,724 464,654 454,723
-------- -------- -------- --------
Expenses:
Depreciation 111,415 110,564 221,527 221,127
Management & leasing expenses 26,135 18,737 51,129 44,488
Other operating expenses 9,772 1,919 (19,643) 5,050
-------- -------- -------- --------
147,322 131,220 253,013 270,665
-------- -------- -------- --------
Net income $ 89,929 $ 94,504 $211,641 $184,058
======== ======== ======== ========
Occupied % 96% 91% 96% 91%
Partnership Ownership % 10.7% 10.7% 10.7% 10.7%
Cash distributed to the Partnership $ 20,320 $ 22,720 $ 44,680 $ 42,876
Net income allocated to the
Partnership $ 9,630 $ 10,120 $ 22,663 $ 19,709
</TABLE>
Rental income increased in 1999 over 1998, due primarily to increased occupancy.
The decrease in operating expenses for the six month period ended June 30, 1999,
as compared to the same period in 1998, was due to common area maintenance
reimbursement billings. Tenants are billed an estimated amount for the current
year common are maintenance which is then reconciled the second quarter of the
following year and the difference billed to the tenant. The increase in
operating expenses for the three month period ended June 30, 1999 was due to
increased expenditures for tenant improvements, HVAC repairs and a partial
demolition of a tenant suite.
19
<PAGE>
PART II - OTHER INFORMATION
- ---------------------------
ITEM 6 (b) No reports on Form 8-K were filed during the second quarter of
1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WELLS REAL ESTATE FUND VI, L.P.
(Registrant)
Dated: August 10, 1999 By: /s/ Leo F. Wells, III
-----------------------------------
Leo F. Wells, III, as Individual
General Partner and as President,
Sole Director and Chief Financial
Officer of Wells Capital, Inc., the
General Partner of Wells Partners, L.P.
20
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 142,792
<SECURITIES> 18,331,929
<RECEIVABLES> 477,890
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 857
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 18,953,468
<CURRENT-LIABILITIES> 449,998
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 18,503,470
<TOTAL-LIABILITY-AND-EQUITY> 18,953,468
<SALES> 0
<TOTAL-REVENUES> 535,303
<CGS> 0
<TOTAL-COSTS> 55,609
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 479,694
<INCOME-TAX> 479,694
<INCOME-CONTINUING> 479,694
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 479,694
<EPS-BASIC> .36
<EPS-DILUTED> 0
</TABLE>
