-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VcTdNZx9nzc0k4fGBvqVSbgBsh2XmLjRzfAO6iQgCbBKb7KTCtaq7YEfKKJd5ebi dAJVCDUfJJbpcq7ILSSdmw== 0000943906-99-000059.txt : 19990726 0000943906-99-000059.hdr.sgml : 19990726 ACCESSION NUMBER: 0000943906-99-000059 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990723 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WNC HOUSING TAX CREDIT FUND VI LP SERIES 6 CENTRAL INDEX KEY: 0001037156 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF APARTMENT BUILDINGS [6513] IRS NUMBER: 330761578 STATE OF INCORPORATION: CA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 333-24111-01 FILM NUMBER: 99669455 BUSINESS ADDRESS: STREET 1: 3158 REDHILL AVE STREET 2: STE 120 CITY: COSTA MESA STATE: CA ZIP: 92626 BUSINESS PHONE: 7146625565 MAIL ADDRESS: STREET 1: 3158 REDHILL AVE STREET 2: SUITE 120 CITY: COSTA MESA STATE: CA ZIP: 92626 10-K/A 1 FORM 10-K/A NO. 1 FORM 10-K/A AMENDMENT NO.2 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1998 OR o 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: 333-24111 WNC HOUSING TAX CREDIT FUND VI, L.P., Series 6 California 33-0745418 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 3158 Redhill Avenue, Suite 120, Costa Mesa, CA 92626 (714) 662-5565 Securities registered pursuant to Section 12(b) of the Act: NONE Securities registered pursuant to section 12(g) of the Act: NONE 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 ____ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x State the aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant. Inapplicable. DOCUMENTS INCORPORATED BY REFERENCE NONE PART I. Item 1. Business Organization WNC Housing Tax Credit Fund VI, L.P., Series 6 (the "Partnership") was formed under the California Revised Limited Partnership Act on March 3, 1997 and commenced operations on August 20, 1998. The Partnership was formed to invest primarily in other limited partnerships or limited liability companies ("Local Limited Partnerships") which will own and operate multi-family housing complexes that will qualify for low income housing tax credits (the "Low Income Housing Credit"). The general partner of the Partnership is WNC & Associates, Inc. ("Associates" or the "General Partner".) Wilfred N. Cooper, Sr., through the Cooper Revocable Trust, owns just less than 66.8% of the outstanding stock of Associates. John B. Lester, Jr. is the original limited partner of the Partnership and owns, through the Lester Family Trust, just less than 28.6% of the outstanding stock of Associates. The business of the Partnership is conducted primarily through the General Partner, as the Partnership has no employees of its own. Pursuant to a registration statement (Commission File No. 333-24111) which was declared effective on June 23, 1997, a Prospectus dated June 23, 1997 and Supplements dated July 9, 1998, August 20, 1998, November 18, 1998 and December 23, 1998, the Partnership commenced a public offering of 25,000 units of limited partnership interest ("Units"), at a price of $1,000 per Unit. As of December 31, 1998, the Partnership had received and accepted subscriptions for 6,944 Units in the amount of $6,942,250, net of dealer discounts of $1,750, of which $262,500 was represented by promissory notes of the subscribers. Holders of Units are referred to herein as "Limited Partners." Description of Business The Partnership's principal business objective is to provide its Limited Partners with Low Income Housing Credits. The Partnership's principal business therefore consists of investing as a limited partner or non-managing member in Local Limited Partnerships each of which will own and operate a multi-family housing complex (the "Apartment Complex") which will qualify for the Low Income Housing Credit. In general, under Section 42 of the Internal Revenue Code, an owner of low-income housing can receive the Low Income Housing Credit to be used to reduce Federal taxes otherwise due in each year of a ten-year period. The Apartment Complex is subject to a 15-year compliance period (the "Compliance Period"), and under state law may have to be maintained as low income housing for 30 or more years. In general, in order to avoid recapture of Low Income Housing Credits, the Partnership does not expect that it will dispose of its interests in Local Limited Partnerships ("Local Limited Partnership Interests") or approve the sale by any Local Limited Partnership of its Apartment Complex prior to the end of the applicable Compliance Period. Because of (i) the nature of the Apartment Complexes, (ii) the difficulty of predicting the resale market for low-income housing 15 or more years in the future, and (iii) the ability of government lenders to disapprove of transfer, it is not possible at this time to predict whether the liquidation of the Partnership's assets and the disposition of the proceeds, if any, in accordance with the Partnership's Agreement of Limited Partnership, as amended by the First Amendment thereto ("Partnership Agreement"), will be able to be accomplished promptly at the end of the 15-year period. If a Local Limited Partnership is unable to sell its Apartment Complex, it is anticipated that the local general partner ("Local General Partner") will either continue to operate such Apartment Complex or take such other actions as the Local General Partner believes to be in the best interest of the Local Limited Partnership. Notwithstanding the preceding, circumstances beyond the control of the General Partner may occur during the Compliance Period, which would require the Partnership to approve the disposition of a Apartment Complex prior to the end thereof, possibly resulting in recapture of Low Income Housing Credits. As of December 31, 1998, the Partnership had invested in four Local Limited Partnerships. Each of these Local Limited Partnerships owns an Apartment Complex 3 that is or is expected to be eligible for the Low Income Housing Credit. Three of these Local Limited Partnerships are expected to benefit from government programs promoting low- or moderate-income housing. The Partnership's investments in Local Limited Partnerships are subject to the risks incident to the management and ownership of low-income housing and to the management and ownership of multi-unit residential real estate. Some of these risks are that the Low Income Housing Credit could be recaptured and that neither the Partnership's investments nor the Apartment Complexes owned by the Local Limited Partnerships will be readily marketable. To the extent the Apartment Complexes receive government financing or operating subsidies, they may be subject to one or more of the following risks: difficulties in obtaining tenants for the Apartment Complexes: difficulties in obtaining rent increases; limitations on cash distributions; limitations on sales or refinancing of Housing Complexes; limitations on transfers of Local Limited Partnership Interests: limitations on removal of Local General Partners; limitations on subsidy programs; and possible changes in applicable regulations. The Apartment Complexes are or will be subject to mortgage indebtedness. If a Local Limited Partnership does not makes its mortgage payments, the lender could foreclose resulting in a loss of the Apartment Complex and Low Income Housing Credits. As a limited partner or non-managing member of the Local Limited Partnerships, the Partnership will have very limited rights with respect to management of the Local Limited Partnerships, and will rely totally on the general partners or managing members of the Local Limited Partnerships for management of the Local Limited Partnerships. The value of the Partnership's investments will be subject to changes in national and local economic conditions, including unemployment conditions, which could adversely impact vacancy levels, rental payment defaults and operating expenses. This, in turn, could substantially increase the risk of operating losses for the Apartment Complexes and the Partnership. The Apartment Complexes could be subject to loss through foreclosure. In addition, each Local Limited Partnership is subject to risks relating to environmental hazards and natural disasters which might be uninsurable. Because the Partnership's operations will depend on these and other factors beyond the control of the General Partner and the Local General Partners, there can be no assurance that the anticipated Low Income Housing Credits will be available to Limited Partners. In addition Limited Partners are subject to risks in that the rules governing the Low Income Housing Credit are complicated, and the use of credits can be limited. The only material benefit from an investment in Units may be the Low Income Housing Credits. There are limits in the transferability of Units, and it is unlikely that a market for Units will develop. All management decisions will be made by the General Partner. As of December 31, 1998, three of the Apartment Complexes were still under construction and one was partially under construction. The Apartment Complexes were being developed by the respective Local General Partners who acquired the sites and applied for applicable mortgages and subsidies. The Partnership became the principal limited partner or non-managing member in these Local Limited Partnerships pursuant to arm's-length negotiations with the respective Local General Partners. As a limited partner or non-managing member, the Partnership's liability for obligations of each Local Limited Partnership is limited to its investment. The Local General Partners of each Local Limited Partnership retain responsibility for developing, constructing, maintaining, operating and managing the Apartment Complex. Item 2. Properties Through its investments in Local Limited Partnerships, the Partnership holds limited partnership interests in the Apartment Complexes. The following table reflects the status of the four Apartment Complexes as of December 31, 1998 and for the period then ended: 4
WNC Housing Tax Credit Fund VI, L.P. Series 6 --------------------------------------------------------------------------- As of December 31, 1998 --------------------------------------------------------------------------- Partnership Location General Partner Name Number Occupancy Total Amount of Low Income Encumbrances Name of Investment in Investment Housing of Local Units Local Limited Paid Credits Limited Partnerships Eligible Partnerships Basis (1) - ---------------------------------------------------------------------------------------------------------------------------------- Brighton Edgefield, SC The Piedmont 44 73% $ 989,000 $ 396,000 $ - $ 607,000 Ridge Foundation of South Apartments, Carolina, Inc. L.P. Desloge Desloge, MO East Missouri Action 32 0% 1,063,000 872,000 - 634,000 Associates Agency, Inc. I, L.P. Trenton Trenton, MO MBL Development, Co. 32 0% 1,025,000 769,000 - - Village Apartments, L.P. United Memphis, TN Harold E. Buehler, 60 0% 2,813,000 2,119,000 - 539,000 Development Sr. and Jo Ellen Co. L.P. Buehler - -97.0. -- -- ---------- ---------- -- ------- 168 19% $ 5,890,000 $ 4,156,000 $ 1,780,000 === === ============ =========== == ==========
------------------------------- ---------------------------------- For the period August 20, Low Income Housing Credits 1998 through December 31, 1998 ------------------------------- ---------------------------------- Partnership Name Rental Net Income Credits Year to be Income Allocated to First Available Partnership - --------------------------------------------------- ---------------------------------- Brighton Ridge $ 194,000 $ 28,000 98.989% 1999 Apartments L.P. Desloge Associates - - 99.980% 1999 I, L.P. Trenton Village - 8,000 99.890% 1999 Apartments, L.P. United Development - 25,000 99.980% 1999 Co. L.P.-97.0. -------- ------------ -------- $ 194,000 $ 61,000 ========= ============
(1) The apartment complexes are under construction and cost certification has yet to be completed. 5 Trenton (TRENTON): Trenton (population 6,000) is the county seat of Grundy County, Missouri, and is located at the intersection of U.S. Highway 65 and State Highway 6, approximately 100 miles northeast of Kansas City. The major employers for Trenton residents are Nestle, USA (processed foods), Modine Manufacturing (radiators), and Wright Memorial (hospital). The general partner of TRENTON is MBL Development, Co. D. Kim Lingle is the president and owner of MBL Development, Co., which has the primary goal of developing and constructing affordable housing. Mr. Lingle has a background in banking and development. TRENTON is managed by Invesco Properties, Inc. which was formed in May 1998 by D. Kim Lingle. Currently, Invesco Properties, Inc. manages seven properties consisting of 250 units in Missouri and Iowa, all of which qualify for the Low Income Housing Credit ("Tax Credit Properties"). Memphis (UNITED 97.0): Memphis (population 610,000) is in Shelby County, in the southwest corner of Tennessee, at the intersection of Interstate Highways 40 and 55. The major employers for Memphis residents are Federal Express Corporation, the U.S. Government, and the Memphis City Board of Education. The general partner of UNITED 97.0 is Harold E. Buehler, Sr. and Jo Ellen Buehler. UNITED 97.0 is managed by Buehler Enterprises, Inc., a Tennessee corporation which was formed in 1984 by Harold E. Buehler, Sr. Buehler Enterprises, Inc. currently manages approximately 200 units consisting primarily of single-family homes and duplexes in Memphis. Brighton (BRIGHTON): Brighton (population 2,500) is in Edgefield County, South Carolina, on U.S. Highway 25, approximately 25 miles north of Augusta. The major employers for Edgefield residents are Milliken & Co. (fabrics), Riegel Mount Vernon Mills (linens) and Menardi-Criswell (filters). The general partner of BRIGHTON is The Piedmont Foundation of South Carolina, Inc., a South Carolina non-profit corporation ("Piedmont") which was formed in 1996 for the purpose of increasing the supply and improving the quality of housing for low- and moderate-income families in South Carolina by supporting or sponsoring the development of decent, affordable housing units. Insignia Residential Group, L.P., the property manager for BRIGHTON, currently manages over 1,400 properties, 37 of which are currently receiving Low Income Housing Credits. The company has been managing properties for 14 years; Tax Credit Properties for nine years. Desloge (DESLOGE): Desloge (population 4,900) is in St. Francois County, in southeast Missouri on State Route 8, near the intersection with U.S. Highway 67. The major employers for Desloge residents are U.S. Tool Grinding (drill and tool manufacturer), Flat River Glass (pharmaceutical glass manufacturer) and Super Value, Inc. (distribution). East Missouri Action Agency, Inc., the general partner of DESLOGE, has been involved in the administration and management of five affordable housing developments. Lockwood Realty, Inc., a Missouri corporation, the property manager for DESLOGE, has been managing property for 15 years. It currently manages approximately 250 properties consisting of more than 6,000 apartment units. Sixty-four of these properties, consisting of more than 1,500 apartment units, are receiving Low Income Housing Credits. Item 3. Legal Proceedings NONE Item 4. Submission of Matters to a Vote of Security Holders NONE 6 PART II. Item 5. Market for Registrant's Common Equity and Related Stockholder Matters Item 5a. (a) The Units are not traded on a public exchange but are being sold through a public offering. It is not anticipated that any public market will develop for the purchase and sale of any Unit. Units can be assigned only if certain requirements in the Partnership Agreement are satisfied. (b) At December 31, 1998, there were 393 Limited Partners. (c) The Partnership was not designed to provide cash distributions to Limited Partners in circumstances other than refinancing or disposition of its investments in Local Limited Partnerships. The Limited Partners received no Low Income Housing Credits in 1998. Item 5b. The Partnership is conducting an offering pursuant to a registration statement (Commission File No. 333-24111) declared effective on June 23, 1997 and a Prospectus dated June 23, 1997, and Supplements dated November 18, 1998, and December 23, 1998. As of December 31, 1998 the Partnership had received subscriptions for 6,944 Units, for an aggregate amount of capital contributions of $6,942,250, net of dealer discounts of $1,750, in an offering which commenced on July 9, 1998. At December 31, 1998, the above capital contributions consisted of cash of $5,648,835, subscriptions receivable of $1,030,915 and notes receivable of $262,500. At December 31, 1998, approximately $866,800 was paid or due to Associates or WNC Capital Corporation, the dealer-manager for the offering, for selling commissions, wholesaling activities and in reimbursement of other organization and offering expenses. Included therein are selling commissions of approximately $462,800 and wholesaling and other organization and offering expenses of approximately $212,700, which were paid, or will be paid, to non-affiliates. The Partnership has committed funds for the purchase of real estate in excess of amounts raised. At December 31, 1998, approximately $6,383,200 is or will be invested in Local Limited Partnership Interests or Reserves as follows: Paid or to be paid to General Paid or Partner or to be paid affiliate to others Total ----------------- ------------ ----------- Acquisition fees $ 464,500 $ - $ 464,500 Acquisition costs - 28,800 28,800 Local Limited - 5,889,900 5,889,900 Partnerships Investments in - - - reserves or available to be invested ---------- ------------ ------------- Total $ 464,500 $ 5,918,700 $ 6,383,200 =============== ============= ============ 7 Item 6. Selected Financial Data Balance Sheet Information December 31, 1998 ASSETS Cash and cash equivalents $ 372,505 Subscriptions receivable 1,030,915 Investments in limited partnerships, net 6,440,762 Other assets 50,000 -------------- $ 7,894,182 =============== LIABILITIES Payables to limited partnerships $ 1,734,427 Other liabilities 286,592 --------------- 2,021,019 PARTNERS' EQUITY 5,873,163 --------------- $ 7,894,182 =============== 8 Results From Operations August 20, 1998 (Date Operations Commenced) Through December 31, 1998 Loss from operations $ (1,501) Equity in income from limited partnerships 60,610 ---------- Net income $ 59,109 ========== Net income allocated to: General partner $ 591 ========== Limited partners $ 58,518 =========== Net income per limited partner unit $ 16.38 =========== Outstanding weighted limited partner units $ 3,573 =========== Low income housing credit per limited partner unit (for the period ended December 31, 1998): Unit credit: Federal $ - State - ----------- Total $ - =========== Cash Flows Information August 20, 1998 (Date Operations Commenced) Through December 31, 1998 Net cash provided by (used in): Operating activities $ 1,554 Investing activities (4,525,457) Financing activities 4,896,408 ----------------- Net change in cash and cash 372,505 equivalents Cash and cash equivalents, beginning - of period ----------------- Cash and cash equivalents, end of period $ 372,505 ================== 9 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Financial Condition The Partnership's assets at December 31, 1998 consisted primarily of $372,000 in cash, subscriptions receivable from the sale of Units totaling $1,031,000 and aggregate investments in four Local Limited Partnerships of $6,441,000. Liabilities at December 31, 1998 primarily consisted of $1,734,000 of estimated future capital contributions to the Local Limited Partnerships. The Partnership will offer Units for sale to the public until no later than June 23, 1999, at which time total limited partner capital raised is expected to be between $15,000,000 and $20,000,000 ($6,942,250 raised at December 31, 1998). Results of Operations The Partnership commenced operations on August 20, 1998. As a result, there are no comparative results of operations or financial condition from prior periods to report. Net income for the period ended December 31, 1998 was principally composed of equity in income from the Local Limited Partnerships; such income primarily consisting of interest income. Three of the four Local Limited Partnerships were under construction at December 31, 1998 and the fourth Local Limited Partnership commenced operations just prior to December 31, 1998; accordingly, there were no Low Income Housing Credits available for allocation to the partners. Cash Flows Cash flows provided by operating activities for the period ended December 31, 1998 included interest income from cash investments less miscellaneous costs of operations. Cash flows provided by financing activities for the period ended December 31, 1998, primarily consisted of proceeds from the sale of Units of $6,942,000, net of promissory notes of $263,000 and $867,000 in offering costs. Cash flows used in investing activities substantially consisted of capital contributions paid to Local Limited Partnerships of $4,155,000 and capitalized acquisition fees and costs totaling $493,000. Since December 31, 1998 the Partnership has raised equity capital sufficient to satisfy all of its identified obligations. In this regard, the Partnership expects its future cash flows, together with its net available assets at December 31, 1998, to be sufficient to meet all future cash requirements. IMPACT OF THE YEAR 2000 ISSUE The General Partner has assessed the Partnership's exposure to date sensitive computer systems that may not be operative subsequent to 1999. As a result of this assessment, the General Partner has executed a plan to minimize the Partnership's exposure to financial loss and/or disruption of normal business operations that may occur as a result of Year 2000 non-compliant computer systems. Business Computer Systems These systems include both computer hardware and software applications relating to operations such as financial reporting. The Partnership does not maintain its own systems and thus utilizes the computer systems of the General Partner. The General Partner developed a compliance plan for each of its business computer systems, with particular attention given to critical systems. The General Partner contracted with an outside vendor to evaluate, test and repair such systems. The assessment consisted of determining the compliance with Year 2000 of critical computer hardware and software. Incidences of non-compliance were found with respect to computer software applications and were corrected. The vendor found no instances of non-compliance with respect to computer hardware. The Local General Partners or property managers maintain the business computer systems that relate to the operations of the Local Limited Partnerships. The General Partner is in the process of obtaining completed questionnaires from 10 such Local General Partners and property management companies to assess their respective Year 2000 readiness. The General Partner intends to identify those Local General Partners and property management companies that have systems critical to the operations of the Local Limited Partnerships that are not Year 2000 compliant. For those Local General Partners and property management companies which have business computer systems which will not be Year 2000 compliant prior to the Year 2000 and where the lack of such compliance is determined to have a potential material effect on the Partnership's financial condition and results of operations, the General Partner intends to develop contingency plans which may include changing property management companies. Outside Vendors The General Partner has obtained assurances from its suppliers of electrical power and banking and telecommunication services that their critical systems are all Year 2000 compliant. There exists, however, inherent uncertainty that all systems of outside vendors or other third parties on which the General Partner, and thus the Partnership, and the Local General Partners and property management companies, and thus the Local Limited Partnerships, rely will be Year 2000 compliant. Therefore, the Partnership remains susceptible to the consequences of third party critical computer systems being non-compliant. Personal Computers The General Partner has determined that its personal computers and related software critical to the operations of the Partnership are Year 2000 compliant. Item 7A. Quantitative and Qualitative Disclosures About Market Risk NONE Item 8. Financial Statements and Supplementary Data 11 FS-1 REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS To the Partners WNC Housing Tax Credit Fund VI, L.P., Series 6 We have audited the accompanying balance sheet of WNC Housing Tax Credit Fund VI, L.P., Series 6 (a California Limited Partnership) (the "Partnership") as of December 31, 1998, and the related statements of operations, partners' equity (deficit) and cash flows for the period August 20, 1998 (date operations commenced) through December 31, 1998. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit. A significant portion of the financial statements of the limited partnerships in which the Partnership is a limited partner, were audited by other auditors whose reports have been furnished to us. As discussed in Note 3 to the accompanying financial statements, the Partnership accounts for its investments in limited partnerships using the equity method. The portion of the Partnership's investment in limited partnerships audited by other auditors represented 42% of the total assets of the Partnership at December 31, 1998. Our opinion, insofar as it relates to the amounts included in the accompanying financial statements for the limited partnerships which were audited by others, is based solely on the reports of the other auditors. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit and the reports of the other auditors provide a reasonable basis for our opinion. In our opinion, based on our audit and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the financial position of WNC Housing Tax Credit Fund VI, L.P., Series 6 (a California Limited Partnership) as of December 31, 1998, and the results of its operations and its cash flows for the period August 20, 1998 (date operations commenced) through December 31, 1998, in conformity with generally accepted accounting principles. BDO SEIDMAN, LLP Orange County, California April 12, 1999 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A California Limited Partnership) BALANCE SHEET December 31, 1998 1998 ------------ ASSETS Cash and cash equivalents $ 372,505 Subscriptions receivable (Note 8) 1,030,915 Investments in limited partnerships, net (Note 3) 6,440,762 Loan receivable (Notes 2 and 9) 50,000 ------------ $ 7,894,182 LIABILITIES AND PARTNERS' EQUITY (DEFICIT) Liabilities: Payables to limited partnerships (Note 5) $ 1,734,427 Loan payable (Note 6) 113,269 Accrued fees and advances due to General Partner and affiliate (Note 4) 173,323 ---------- Total liabilities 2,021,019 Commitments and contingencies (Note 9) Partners' equity (deficit): General partner (7,977) Limited partners ;25,000 units authorized; 6,944 units outstanding at December 31, 1998 (Note 10) 5,881,140 ---------- Total partners' equity 5,873,163 --------- $ 7,894,182 =========== See accompanying notes to financial statements FS-2 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A California Limited Partnership) STATEMENT OF OPERATIONS For The Period August 20, 1998 (Date Operations Commenced) Through December 31, 1998 1998 ------------ Interest income $ 6,003 -------- Operating expenses: Amortization 3,055 Other 4,449 -------- Total operating expenses 7,504 Loss from operations (1,501) Equity in income from limited partnerships (Note 3) 60,610 -------- Net income $ 59,109 ======== Net income allocated to: General partner $ 591 ======== Limited partners $ 58,518 ======== Net income per limited partner unit $ 16.38 ======== Outstanding weighted limited partner units 3,573 ===== See accompanying notes to financial statements FS-3 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A California Limited Partnership) STATEMENT OF PARTNERS' EQUITY (DEFICIT) For The Period August 20, 1998 (Date Operations Commenced) Through December 31, 1998 General Limited Partner Partners Total ----------- ----------- ----------- Contribution from general partner on August 20, 1998 $ 100 $ 1,000 $ 1,100 Sale of limited partnership units, net of discounts of $1,750 - 6,942,250 6,942,250 Sale of limited partnership units issued for promissory notes receivable (Note 8) - (262,500) (262,500) Offering expenses (8,668) (858,128) (866,796) Net income 591 58,518 59,109 ---------- --------- -------- Partners' equity (deficit) at December 31, 1998 $ (7,977) $ 5,881,140 $ 5,873,163 =========== ========== =========== See accompanying notes to financial statements FS-4 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A California Limited Partnership) STATEMENT OF CASH FLOWS For The Period August 20, 1998 (Date Operations Commenced) Through December 31, 1998 1998 ------------ Cash flows from operating activities: Net income $ 59,109 Adjustments to reconcile net income to net cash provided by operating activities: Amortization 3,055 Equity in income from limited partnerships (60,610) ---------- Net cash provided by operating activities 1,554 ---------- Cash flows from investing activities: Investments in limited partnership, net (4,155,453) Loan receivable (50,000) Capitalized acquisition costs and fees (493,327) Accrued and unpaid acquisition fees and advances due to affiliate of general partner 173,323 ---------- Net cash used in investing activities (4,525,457) ---------- Cash flows from financing activities: Initial partner contributions 1,100 Sale of limited partner units 6,679,750 Subscriptions receivable (1,030,915) Offering expenses (866,796) Increase in loan payable 113,269 --------- Net cash provided by financing activities 4,896,408 --------- Net change in cash and cash equivalents 372,505 Cash and cash equivalents, beginning of period - --------- Cash and cash equivalents, end of period $ 372,505 ========= SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash paid during the year for: Interest $ - ========= Income taxes $ 800 ========= See accompanying notes to financial statements FS-5 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A California Limited Partnership) NOTES TO FINANCIAL STATEMENTS For The Period August 20, 1998 (Date Operations Commenced) Through December 31, 1998 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization WNC Housing Tax Credit Fund VI, L.P., Series 6 (the "Partnership") was formed under the California Revised Limited Partnership Act on March 3, 1997, and commenced operations on August 20, 1998. Prior to August 20, 1998, the Partnership was considered a development-stage enterprise. The Partnership was formed to invest primarily in other limited partnerships ("the Local Limited Partnerships") which will own and operate apartment complexes (the "Apartment Complexes") that will qualify for low income housing credits. The local general partners (the "Local General Partners") of each Local Limited Partnership retain responsibility for developing, constructing, maintaining, operating and managing the Apartment Complex. The general partner is WNC & Associates, Inc. ("WNC" or the "General Partner"). Wilfred N. Cooper, Sr., through the Cooper Revocable Trust, owns 66.8% of the outstanding stock of WNC. John B. Lester, Jr. is the original limited partner of the Partnership and owns, through the Lester Family Trust, 28.6% of the outstanding stock of WNC. The financial statements include only activity relating to the business of the Partnership, and do not give effect to any assets that the partners may have outside of their interests in the Partnership, or to any obligations, including income taxes, of the partners. The Partnership shall continue in full force and effect until December 31, 2052, unless terminated prior to that date, pursuant to the Partnership Agreement or law. Pursuant to the Partnership agreement, the Partnership is authorized to sell 25,000 Units at $1,000 per Unit ("Units") of which 6,944 Units in the amount of $6,942,250, net of discounts of $1,750 for volume purchases, had been sold as of December 31, 1998 (Note 10). The General Partner has a 0.1% interest in operating profits and losses, taxable income and loss and in cash available for distribution from the Partnership. The limited partners will be allocated the remaining 99.9% of these items in proportion to their respective investments. After the limited partners have received proceeds from a sale or refinancing equal to their capital contributions and their return on investment (as defined in the Partnership Agreement) and the General Partner has received a subordinated disposition fee (as described in Note 4), any additional sale or refinancing proceeds will be distributed 90% to the limited partners (in proportion to their respective investments) and 10% to the General Partner. Risks and Uncertainties The Partnership's investments in Local Limited Partnerships are subject to the risks incident to the management and ownership of low-income housing and to the management and ownership of multi-unit residential real estate. Some of these risks are that the low income housing credit could be recaptured and that neither the Partnership's investments nor the Apartment Complexes owned by the Local Limited Partnerships will be readily marketable. To the extent the Apartment Complexes receive government financing or operating subsidies, they may be subject to one or more of the following risks: difficulties in obtaining tenants for the Apartment Complexes: difficulties in obtaining rent increases; limitations on cash distributions; limitations on sales or refinancing of Housing Complexes; limitations on transfers of Local Limited Partnership Interests: limitations on removal of Local General Partners; limitations on subsidy programs; and possible changes in applicable regulations. The Apartment Complexes are or will be subject to mortgage indebtedness. If a Local Limited Partnership does not makes its mortgage payments, the lender could foreclose resulting in a loss of the Apartment Complex and low income housing credits. As a limited FS-6 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A California Limited Partnership) NOTES TO FINANCIAL STATEMENTS - CONTINUED For The Period August 20, 1998 (Date Operations Commenced) Through December 31, 1998 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued partner of the Local Limited Partnerships, the Partnership will have very limited rights with respect to management of the Local Limited Partnerships, and will rely totally on the Local General Partners of the Local Limited Partnerships for management of the Local Limited Partnerships. The value of the Partnership's investments will be subject to changes in national and local economic conditions, including unemployment conditions, which could adversely impact vacancy levels, rental payment defaults and operating expenses. This, in turn, could substantially increase the risk of operating losses for the Apartment Complexes and the Partnership. The Apartment Complexes could be subject to loss through foreclosure. In addition, each Local Limited Partnership is subject to risks relating to environmental hazards and natural disasters which might be uninsurable. Because the Partnership's operations will depend on these and other factors beyond the control of the General Partner and the Local General Partners, there can be no assurance that the anticipated low income housing credits will be available to Limited Partners. In addition Limited Partners are subject to risks in that the rules governing the low income housing credit are complicated, and the use of credits can be limited. The only material benefit from an investment in Units may be the low income housing credits. There are limits in the transferability of Units, and it is unlikely that a market for Units will develop. All management decisions will be made by the General Partner. Method of Accounting For Investments in Local Limited Partnerships The Partnership accounts for its investments using the equity method of accounting, whereby the Partnership adjusts its investment balance for its share of the Local Limited Partnership's results of operations and for any distributions received. The accounting policies of the Local Limited Partnerships are consistent with the Partnership. Costs incurred by the Partnership in acquiring the investments are capitalized as part of the investment and amortized over 15 years (see Note 3). Losses from Local Limited Partnerships allocated to the Partnership will not be recognized to the extent that the investment balance would be adjusted below zero. Offering Expenses Offering expenses consist of underwriting commissions, legal fees, printing, filing and recordation fees, and other costs incurred in connection with the selling of limited partnership interests in the Partnership. The General Partner is obligated to pay all offering and organization costs in excess of 14.5% (including sales commissions) of the total offering proceeds. Offering expenses are reflected as a reduction of limited partners' capital. Through December 31, 1998, the Partnership incurred offering expenses and selling expenses of $403,991 and $462,805, respectively. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. FS-7 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A California Limited Partnership) NOTES TO FINANCIAL STATEMENTS - CONTINUED For The Period August 20, 1998 (Date Operations Commenced) Through December 31, 1998 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued Cash and Cash Equivalents The Partnership considers all highly liquid investments with remaining maturities of three months or less when purchased to be cash equivalents. Cash equivalents consist of a money market account. Concentration of Credit Risk As of December 31, 1998, the Partnership maintained cash balances at certain financial institutions in excess of the federally insured maximum. Net Income Per Limited Partner Unit Net income per limited partnership unit is calculated pursuant to Statement of Financial Accounting Standards No. 128, Earnings Per Share. Net income per unit includes no dilution and is computed by dividing income available to limited partners by the weighted average number of units outstanding during the period. Calculation of diluted net income per unit is not required. Reporting Comprehensive Income In June 1997, the FASB issued Statement of Financial Accounting Standards ("SFAS") No. 130, Reporting Comprehensive Income. This statement establishes standards for reporting the components of comprehensive income and requires that all items that are required to be recognized under accounting standards as components of comprehensive income be included in a financial statement that is displayed with the same prominence as other financial statements. Comprehensive income includes net income as well as certain items that are reported directly within a separate component of Partners' equity and bypass net income. The Partnership adopted the provisions of this statement in 1998. For the years presented, the Partnership has no elements of other comprehensive income, as defined by SFAS No. 130. NOTE 2 - LOAN RECEIVABLE Loans receivable represent amounts loaned by the Partnership to certain Local Limited Partnerships in which the Partnership may invest. These loans will be applied against the first capital contribution due if the Partnership ultimately invests in such entities. In the event that the Partnership does not invest in such entities, the loans are to be repaid with interest at a rate which is equal to the rate charged to the holder (8.25% at December 31, 1998). A loan receivable with a balance of $50,000 at December 31, 1998 was collectible from one Local Limited Partnership, in which an interest was acquired subsequent to December 31, 1998 (see Note 9). FS-8 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A California Limited Partnership) NOTES TO FINANCIAL STATEMENTS - CONTINUED For The Period August 20, 1998 (Date Operations Commenced) Through December 31, 1998 NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS As of December 31, 1998, the Partnership had acquired interests in four Local Limited Partnerships, each of which owns one Apartment Complex consisting of an aggregate of 168 apartment units. As of December 31, 1998, construction or rehabilitation of all of the apartment complexes was still in process. The respective general partners of the Local Limited Partnerships manage the day to day operations of the entities. Significant Local Limited Partnership business decisions require approval from the Partnership. The Partnership, as a limited partner, is generally entitled to 99.9%, as specified in the Local Limited Partnership agreements, of the operating profits and losses of the Local Limited Partnerships upon its acquisition of such investments. The Partnership's investment in Local Limited Partnerships as shown in the balance sheet as of December 31, 1998 is approximately $2,043,000 greater than the Partnership's equity as shown in the Local Limited Partnerships' financial statements. This difference is primarily due to acquisition costs related to the acquisition of the investments that have been capitalized in the Partnership's investment account and are being amortized over 15 years and certain capital contributions accrued but not paid (see Note 5). Following is a summary of the equity method activity of the investment in the Local Limited Partnerships for the period August 20, 1998 through December 31, 1998: Capital contributions paid, net $4,155,453 Capital contributions to be paid 1,734,427 Capitalized acquisition fees and costs 493,327 Equity in income of limited partnership 60,610 Amortization of acquisition fees and costs (3,055) --------- $6,440,762 ========== WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A California Limited Partnership) NOTES TO FINANCIAL STATEMENTS - CONTINUED For The Period August 20, 1998 (Date Operations Commenced) Through December 31, 1998 NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued Approximate combined condensed financial information from the individual financial statements of the Local Limited Partnerships at December 31, 1998 and for the period then ended is as follows: COMBINED CONDENSED BALANCE SHEETS ASSETS Land $ 433,000 Construction in progress 1,748,000 Buildings and improvements, (net of accumulated depreciation of $25,000) 901,000 Other assets (including due from affiliates of $265,000) 4,114,000 --------- $ 7,196,000 =========== LIABILITIES AND PARTNERS' EQUITY Construction loans and mortgage payable $ 1,780,000 Other liabilities (including due to related parties of $ 80,000) 137,000 --------- Total liabilities 1,917,000 --------- PARTNERS' CAPITAL WNC Housing Tax Credit Fund VI, L.P., Series 6 4,398,000 Other partners 881,000 ---------- 5,279,000 ---------- $ 7,196,000 ============ COMBINED CONDENSED STATEMENT OF OPERATIONS Revenues $ 236,000 Expenses 175,000 ------------ Net income $ 61,000 ============ Net income allocable to Partnership $ 61,000 ============ FS-10 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A California Limited Partnership) NOTES TO FINANCIAL STATEMENTS - CONTINUED For The Period August 20, 1998 (Date Operations Commenced) Through December 31, 1998 NOTE 4 - RELATED PARTY TRANSACTIONS Under the terms of the Partnership Agreement, the Partnership is obligated to the General Partner or its affiliates for the following items: Acquisition fees of up to 7% of the gross proceeds from the sale of Partnership Units as compensation for services rendered in connection with the acquisition of Local Limited Partnerships. Through December 31, 1998, the Partnership incurred acquisition fees of $464,555. Accumulated amortization of these capitalized costs was $2,760 at December 31, 1998. Reimbursement of costs incurred by an affiliate of the General Partner in connection with the acquisition of Local Limited Partnerships. These reimbursements will not exceed 1.5% of the gross proceeds. As of December 31, 1998, the Partnership incurred acquisition costs of $28,772 which have been included in limited partnership investments. Accumulated amortization was $295 at December 31, 1998. An annual asset management fee equal to the greater amount of (i) $ 2,000 for each Apartment Complex, or (ii) 0.275% of gross proceeds. In either case, the fee will be decreased or increased annually based on changes to the Consumer Price Index. However, in no event will the maximum amount exceed 0.2% of the invested assets of the Local Limited Partnerships, as defined. As of December 31, 1998, asset management fees had not been incurred. A subordinated disposition fee in an amount equal to 1% of the sales price of real estate sold. Payment of this fee is subordinated to the limited partners receiving a return on investment (as defined in the Partnership Agreement) and is payable only if services are rendered in the sales effort. Accrued fees and advances due the General Partner and affiliate consist of the following at December 31, 1998: 1998 ------- Acquisition fees $ 135,103 Advances due to affiliate made for acquisition costs, organizational, offering and selling expenses 38,220 Accrued asset management fees - --------- $ 173,323 =========== NOTE 5 - PAYABLES TO LIMITED PARTNERSHIPS Payables to Local Limited Partnerships represent amounts which are due at various times based on conditions specified in the limited partnership agreements. These contributions are non-interest bearing, are payable in installments and are due upon the Local Limited Partnerships achieving certain development and operating benchmarks (generally within two years of the Partnership's initial investment). FS-11 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A California Limited Partnership) NOTES TO FINANCIAL STATEMENTS - CONTINUED For The Period August 20, 1998 (Date Operations Commenced) Through December 31, 1998 NOTE 6 - LOAN PAYABLE The Partnership has a $1,000,000 line-of-credit with a bank which expires June 1, 1999. The line bears interest at the prime rate plus 0.50% (8.25% at December 31, 1998) and is secured by subscriptions receivable and guaranteed by WNC. NOTE 7 - INCOME TAXES No provision for income taxes has been recorded in the financial statements as any liability for income taxes is the obligation of the partners of the Partnership. NOTE 8 - SUBSCRIPTIONS AND NOTES RECEIVABLE As of December 31, 1998, the Partnership had received subscriptions for 1,293 units which included subscriptions receivable of $1,030,915, net of dealer discounts, and promissory notes receivable of $262,500. Limited partners who subscribed for ten or more units of Local Limited Partnerships interest ($10,000) could elect to pay 50% of the purchase price in cash upon subscription and the remaining 50% by the delivery of a promissory note payable, together with interest at the rate of 5.5% per annum, due no later than 13 months after the subscription date. Since the promissory notes had not been collected prior to the issuance of the financial statements, the unpaid balance was reflected as a reduction of partners' equity in the financial statements as of December 31, 1998. NOTE 9 - COMMITMENTS AND CONTINGENCIES Subsequent to December 31, 1998, the Partnership acquired two limited partnership interests which required capital contributions totaling approximately $918,000, of which $50,000 has been advanced as of December 31, 1998 and has been reflected in loan receivable in the balance sheet (see Note 2) and $495,000 had been contributed subsequent to December 31, 1998. The Partnership is negotiating to acquire two additional limited partnership interests which would commit the Partnership to additional capital contributions of approximately $3,160,000, of which $1,044,000 has been advanced subsequent to December 31, 1998. NOTE 10 - SUBSEQUENT EVENT From January 1, 1999 through April 12, 1999, the Partnership received subscriptions for an additional 5,534 units, for which it has received cash totaling $5,213,000. FS-12 17 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure (a)(1) (i) On December 16, 1998, Corbin & Wertz, Irvine, California was dismissed as the Partnership's principal independent accountant. (ii) During the last two fiscal years of the Partnership, the reports of Corbin & Wertz respecting the financial statements of the Partnership did not contain an adverse opinion or a disclaimer of opinion, nor were any such reports qualified or modified as to uncertainty, audit scope or accounting principles. (iii) The decision to change accountants was approved by the board of directors of WNC & Associates, Inc., the general partner of the Partnership. (iv) During the last two fiscal years and subsequent interim period of the Partnership there were no disagreements between Corbin & Wertz and the Partnership on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure of the nature described in Item 304(a)(1)(iv) of Securities and Exchange Commission Regulation S-K. (v) During the last two fiscal years and subsequent interim period of the Partnership there were no reportable events of the nature described in Item 304(a)(1)(v) of Securities and Exchange Commission Regulation S-K. (a)(2) On December 16, 1998, BDO Seidman, LLP, Costa Mesa, California was engaged as the Partnership's principal independent accountant. During the last two fiscal years and subsequent interim period of the Partnership, the Partnership did not consult BDO Seidman, LLP regarding (i) either, the application of accounting principles to a specified transaction; or the type of audit opinion that might be rendered on the Partnership's financial statements, or (ii) any matter that was the subject of a disagreement (as defined in Item 304(a)(1)(iv) of Securities and Exchange Commission Regulation S-K) or was a reportable event (as defined in Item 304(a)(1)(v) of Securities and Exchange Commission Regulation S-K). PART III. Item 10. Directors and Executive Officers of the Registrant The Partnership has no directors or executive officers of its own. The following biographical information is presented for the directors and executive officers of Associates which has principal responsibility for the Partnership's affairs. Directors and Executive Officers of WNC & Associates, Inc. The directors of WNC & Associates, Inc. are Wilfred N. Cooper, Sr., who serves as Chairman of the Board, John B. Lester, Jr., David N. Shafer, Wilfred N. Cooper, Jr. and Kay L. Cooper. The principal shareholders of WNC & Associates, Inc. are trusts established by Wilfred N. Cooper, Sr. and John B. Lester, Jr. Wilfred N. Cooper, Sr., age 68, is the founder, Chief Executive Officer and a Director of WNC & Associates, Inc., a Director of WNC Capital Corporation, and a general partner in some of the programs previously sponsored by the Sponsor. Mr. Cooper has been involved in real estate investment and acquisition activities since 1968. Previously, during 1970 and 1971, he was founder and principal of Creative Equity Development Corporation, a predecessor of WNC & Associates, Inc., and of Creative Equity Corporation, a real estate investment 12 firm. For 12 years prior to that, Mr. Cooper was employed by Rockwell International Corporation, last serving as its manager of housing and urban developments where he had responsibility for factory-built housing evaluation and project management in urban planning and development. Mr. Cooper is a Director of the National Association of Home Builders (NAHB) and a National Trustee for NAHB's Political Action Committee, a Director of the National Housing Conference (NHC) and a member of NHC's Executive Committee and a Director of the National Multi-Housing Council (NMHC). Mr. Cooper graduated from Pomona College in 1956 with a Bachelor of Arts degree. John B. Lester, Jr., age 65, is President, a Director, Secretary and a member of the Acquisition Committee of WNC & Associates, Inc., and a Director of WNC Capital Corporation. Mr. Lester has 27 years of experience in engineering and construction and has been involved in real estate investment and acquisition activities since 1986 when he joined the Sponsor. Previously, he was Chairman of the Board and Vice President or President of E & L Associates, Inc., a provider of engineering and construction services to the oil refinery and petrochemical industries which he co-founded in 1973. Mr. Lester graduated from the University of Southern California in 1956 with a Bachelor of Science degree in Mechanical Engineering. Wilfred N. Cooper, Jr., age 36, is Executive Vice President, a Director and a member of the Acquisition Committee of WNC & Associates, Inc. He is President of, and a registered principal with, WNC Capital Corporation, a member firm of the NASD, and is a Director of WNC Management, Inc. He has been involved in investment and acquisition activities with respect to real estate since he joined the Sponsor in 1988. Prior to this, he served as Government Affairs Assistant with Honda North America in Washington, D.C. Mr. Cooper is a member of the Advisory Board for LIHC Monthly Report, a Director of NMHC and an Alternate Director of NAHB. He graduated from The American University in 1985 with a Bachelor of Arts degree. David N. Shafer, age 46, is Senior Vice President, a Director, General Counsel, and a member of the Acquisition Committee of WNC & Associates, Inc., and a Director and Secretary of WNC Management, Inc. Mr. Shafer has been involved in real estate investment and acquisition activities since 1984. Prior to joining the Sponsor in 1990, he was practicing law with a specialty in real estate and taxation. Mr. Shafer is a Director and President of the California Council of Affordable Housing and a member of the State Bar of California. Mr. Shafer graduated from the University of California at Santa Barbara in 1978 with a Bachelor of Arts degree, from the New England School of Law in 1983 with a Juris Doctor degree (cum laude) and from the University of San Diego in 1986 with a Master of Law degree in Taxation. Michael L. Dickenson, age 42, is Vice President and Chief Financial Officer, and a member of the Acquisition Committee of WNC & Associates, Inc., and Chief Financial Officer of WNC Management, Inc. He has been involved with acquisition and investment activities with respect to real estate since 1985. Prior to joining the Sponsor in March 1999, he was the Director of Financial Services at TrizecHahn Centers Inc., a developer and operator of commercial real estate, from 1995 to 1999, a Senior Manager with E&Y Kenneth Leventhal Real Estate Group, Ernst & Young, LLP, from 1988 to 1995, and Vice President of Finance with Great Southwest Companies, a commercial and residential real estate developer, from 1985 to 1988. Mr. Dickenson is a member of the Financial Accounting Standards Committee for the National Association of Real Estate Companies and the American Institute of Certified Public Accountants, and a Director of HomeAid Southern California, a charitable organization affiliated with the building industry. He graduated from Texas Tech University in 1978 with a Bachelor of Business Administration - Accounting degree, and is a Certified Public Accountant in California and Texas. 13 Thomas J. Riha, age 44, is Vice President - Asset Management and a member of the Acquisition Committee of WNC & Associates, Inc. and a Director and Chief Executive Officer of WNC Management, Inc. Mr. Riha has been involved in acquisition and investment activities with respect to real estate since 1979. Prior to joining the Sponsor in 1994, Mr. Riha was employed by Trust Realty Advisor, a real estate acquisition and management company, last serving as Vice President - Operations. Mr. Riha graduated from the California State University, Fullerton in 1977 with a Bachelor of Arts degree (cum laude) in Business Administration with a concentration in Accounting and is a Certified Public Accountant and a member of the American Institute of Certified Public Accountants. Sy P. Garban, age 53, is Vice President - National Sales of WNC & Associates, Inc. and has been employed by the Sponsor since 1989. Mr. Garban has been involved in real estate investment activities since 1978. Prior to joining the Sponsor he served as Executive Vice President by MRW, Inc., a real estate development and management firm. Mr. Garban is a member of the International Association of Financial Planners. He graduated from Michigan State University in 1967 with a Bachelor of Science degree in Business Administration. N. Paul Buckland, age 36, is Vice President - Acquisitions of WNC & Associates, Inc. He has been involved in real estate acquisitions and investments since 1986 and has been employed with WNC & Associates, Inc. since 1994. Prior to that, he served on the development team of the Bixby Ranch which constructed apartment units and Class A office space in California and neighboring states, and as a land acquisition coordinator with Lincoln Property Company where he identified and analyzed multi-family developments. Mr. Buckland graduated from California State University, Fullerton in 1992 with a Bachelor of Science degree in Business Finance. David Turek, age 44, is Vice President - Originations of WNC & Associates, Inc. He has been involved with real estate investment and finance activities since 1976 and has been employed by WNC & Associates, Inc. since 1996. From 1995 to 1996, Mr. Turek served as a consultant for a national Tax Credit sponsor where he was responsible for on-site feasibility studies and due diligence analyses of Tax Credit properties. From 1990 to 1995, he was involved in the development of conventional and tax credit multi-family housing. He is a Director with the Texas Council for Affordable Rural Housing and graduated from Southern Methodist University in 1976 with a Bachelor of Business Administration degree. Kay L. Cooper, age 62, is a Director of WNC & Associates, Inc. Mrs. Cooper was the founder and sole proprietor of Agate 108, a manufacturer and retailer of home accessory products, from 1975 until 1998. She is the wife of Wilfred N. Cooper, Sr., the mother of Wilfred N. Cooper, Jr. and the sister of John B. Lester, Jr. Ms. Cooper graduated from the University of Southern California in 1958 with a Bachelor of Science degree. Item 11. Executive Compensation The Partnership has no officers, employees, or directors. However, under the terms of the Partnership Agreement the Partnership is obligated to the General Partner or its affiliates for the following fees: (a) Organization and Offering Expenses. The Partnership accrued to or paid to the General Partner or its affiliates as of December 31, 1998 approximately $866,800 for selling commissions and other fees and expenses of the Partnership's offering of Units. Of the total accrued or paid, approximately $675,500 was paid or to be paid to unaffiliated persons participating in the Partnership's offering or rendering other services in connection with the Partnership's offering. (b) Acquisition Fees. Acquisition fees in an amount equal to 7.0% of the gross proceeds of the Partnership's offering ("Gross Proceeds"). Through December 31, 1998, the aggregate amount of acquisition fees paid or accrued was approximately $464,500. 14 (c) Acquisition Expense. The Partnership accrued to or paid to the General Partner or its affiliates for acquisition expense expended by such persons on behalf of the Partnership of approximately $28,800. The limit on this reimbursement is 1.5% of Gross Proceeds (d) Annual Asset Management Fee. An annual asset management fee in an amount equal to 0.2% of the Invested Assets of the Partnership, as defined. "Invested Assets" means the sum of the Partnership's investment in Local Limited Partnerships and the Partnership's allocable share of the amount of the indebtedness related to the Apartment Complexes. No annual asset management fees have been paid. (e) Operating Expenses. The Partnership reimbursed the General Partner or its affiliates for operating expenses of approximately $3,000 through December 31, 1998. (f) Subordinated Disposition Fee. The Partnership will pay a subordinated disposition fee in an amount equal to 1% of the sale price received in connection with the sale or disposition of an Apartment Complex. Subordinated disposition fees will be subordinated to the prior return of the Limited Partners' capital contributions and payment of the Return on Investment to the Limited Partners. "Return on Investment" means an annual, cumulative but not compounded, "return" to the Limited Partners (including Low Income Housing Credits) as a class on their adjusted capital contributions commencing for each Limited Partner on the last day of the calendar quarter during which the Limited Partner's capital contribution is received by the Partnership, calculated at the following rates: (i) 11% through December 31, 2008, and (ii) 6% for the balance of the Partnerships term. No disposition fees have been paid. (g) Interest in Partnership. The General Partner will receive 0.1% of the Partnership's allocated Low Income Housing Credits. No Low Income Housing Credits have been allocated. Item 12. Security Ownership of Certain Beneficial Owners and Management (a) Security Ownership of Certain Beneficial Owners None. (b) Security Ownership of Management Neither the General Partner, its affiliates, nor any of the officers or directors of the General Partner or its affiliates own directly or beneficially any Units in the Partnership. (c) Changes in Control The management and control of the General Partner may be changed at any time in accordance with its organizational documents, without the consent or approval of the Limited Partners. In addition, the Partnership Agreement provides for the admission of one or more additional and successor General Partners in certain circumstances. First, with the consent of any other General Partners and a majority-in-interest of the Limited Partners, any General Partner may designate one or more persons to be successor or additional General Partners. In addition, any General Partner may, without the consent of any other General Partner or the Limited Partners, (i) substitute in its stead as General Partner any entity which has, by merger, consolidation or otherwise, acquired substantially all of its assets, stock or other evidence of equity interest and continued its business, or (ii) cause to be admitted to the Partnership an additional General Partner or Partners if it deems such admission to be necessary or desirable so that the Partnership will be classified a partnership for Federal income tax purposes. Finally, a majority-in-interest of the Limited Partners may at any time remove the General Partner of the Partnership and elect a successor General Partner. 15 Item 13. Certain Relationships and Related Transactions All of the Partnership's affairs are managed by the General Partner. The transactions with the General Partner are primarily in the form of fees paid by the Partnership for services rendered to the Partnership, as discussed in Item 11 and in the notes to the Partnership's financial statements. PART IV. Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K (a)(1) Financial statements included in Part II hereof: Independent Auditor's Report Balance Sheet, December 31, 1998 Statement of Operations for the Period August 20, 1998 (Date Operations Commenced) Through December 31, 1998 Statement of Partners' Equity (Deficit) for the Period August 20, 1998 Operations Commenced) Through December 31, 1998 Statement of Cash Flows for the Period August 20, 1998 (Date Operations (Date Commenced) Through December 31, 1998 Notes to Financial Statements (a)(2) Financial statement schedules included in Part IV hereof: Report of Independent Certified Public Accountants on Financial Statements Schedules Schedule III, Real Estate Owned by Local Limited Partnerships (a)(3) Exhibits. 3.1 Agreement of Limited Partnership dated as of March 3, 1997, filed as Exhibit 3.1 to Post-Effective Amendment No. 1 to the Registration Statement, is hereby incorporated herein as Exhibit 3.1. 3.2 First Amendment to Agreement of Limited Partnership dated as of August 29, 1997 filed as Exhibit 3.2 to Post-Effective Amendment No. 6 to registration Statement, is hereby incorporated herein as Exhibit 3.2. 10.1 Amended and Restated Agreement of Limited Partnership of Trenton Village Apts., L.P. filed as exhibit 10.1 to the current report on Form 8-K dated August 11, 1998, is herein incorporated by reference herein as Exhibit 10.1. 10.2 Second Amended and Restated Agreement of Limited Partnership of United Development Co., L.P.-97.0. filed as Exhibit 10.1 to the amendment to the current report on Form 8-K/A dated September 22, 1998, is herein incorporated herein by reference as Exhibit 10.2. 10.3 First Amendment to the Amended and Restated Agreement of Limited Partnership of United Development Co., L.P. -97.0 filed as Exhibit 10.2 to the amendment to the current report on Form 8-K/A dated September 22, 1998 is hereby incorporated herein by reference as Exhibit 10.3. 10.4 Amended and Restated Agreement of Limited Partnership of Desloge Associates I, L.P. filed as Exhibit 10.1 to the current report on Form 8-K dated December 11, 1998, is herein incorporated by reference herein as Exhibit 10.4. 10.5 Amended and Restated Agreement of Limited Partnership of Brighton Ridge Apartments, L.P. filed as Exhibit 10.1 to the amendment to the current report on Form 8/KA dated December 28, 1998, is herein incorporated by reference as Exhibit 10.5. 16 10.6 First Amendment to the Amended and Restated Agreement of Limited Partnership of Brighton Ridge Apartments, L.P. filed as Exhibit 10.2 to the amendment to the current report on Form 8K/A dated December 28, 1998, is hereby incorporated by reference herein as Exhibit 10.6. 10.7 Second Amendment to the Amended and Restated Agreement of Limited Partnership of Brighton Ridge Apartments, L.P. filed as Exhibit 10.3 to the amendment to the current report on Form 8K/A dated December 28, 1998, is hereby incorporated by reference herein as Exhibit 10.7. 21.1 Financial statements of United Development Co., L.P. - 97.0 (60 Homes) for the year ended December 31, 1998, together with auditors report thereon, a significant subsidiary of the Partnership. (b) Reports on Form 8-K. -------------------- 1. A Form 8-K dated September 22, 1998 was filed on October 7, 1998 reporting the acquisition of a Local Limited Partnership Interest under Item 2. No financial statements were included. 2. A Form 8-K/A was filed on October 14, 1998 amending the Form 8-K filed on October 7, 1998. Pro forma financial information respecting the acquisition was included. 3. A Form 8-K/A was filed on October 16, 1998 amending the Form 8-K filed on October 7, 1998. No financial statements were included. 4. A Form 8-K dated December 16, 1998 was filed on December 22, 1998 reporting the dismissal of the Partnership's former auditors and the engagement of new auditors. No financial statements were included. 5. A Form 8-K dated December 11, 1998 was filed on December 23, 1998 reporting the acquisition of a Local Limited Partnership Interest under Item 2. Pro forma financial information respecting the acquisition was included. (c) All exhibits except 21.1 are incorporated herein by reference. -------------------------------------------------------------- (d) Financial statements schedule follows. -------------------------------------- 17 Report of Independent Certified Public Accountants on Financial Statements Schedule To the Partners WNC Housing tax credit Fund VI, L.P., Series 6 The audit referred to in our report dated April 12, 1999, relating to the 1998 financial statements of WNC Housing tax credit Fund VI, L.P., Series 6, which is contained in Item 8 of this Form 10-K, included the audit of the accompanying financial statement schedule. The financial statement schedule is the responsibility of the Partnership's management. Our responsibility is to express an opinion on this financial statement schedule based upon our audit. In our opinion, such financial statement schedule presents fairly, in all material respects, the information set forth therein. BDO SEIDMAN, LLP Orange County, California April 12, 1999 FSS-1
WNC Housing Tax Credit Fund VI, L.P. Series 6 Schedule III, Page 1 of 2 Real Estate Owned by Local Limited Partnerships --------------------------------------------------------------------------------------- As of December 31, 1998 --------------------------------------------------------------------------------------- Investment in Local Limited Partnerships --------------------------------------------------------------------------------------- Partnership Name Location Committed Paid to Date Encumbrances Property Accumulated Net Book and Depreciation Value Equipment - -------------------------------------------------------------------------------------------------------------------- Brighton Ridge Edgefield, $ 989,000 $ 396,000 $ 607,000 $ 1,304,000 $ 25,000 $ 1,279,000 Limited SC Partnership Desloge Desloge, MO 1,063,000 872,000 634,000 135,000 - 135,000 L.P. Trenton Village Trenton, MO 1,025,000 769,000 - 728,000 - 728,000 Apartments, L.P. United Memphis, TN 2,813,000 2,119,000 539,000 940,000 - 940,000 Development Co. 97.0, L.P ---------- ---------- -------- -------- ------- ----------- $ 5,890,000 $ 4,156,000 $ 1,780,000 $ 3,107,000 $ 25,000 $ 3,082,000 ========== =========== ============ ============ ========= ============
------------------------------------------------------------------- For the period August 20, 1998 through December 31, 1998 ------------------------------------------------------------------- Partnership Name Rental Net Year Investment Estimated Income Income Acquired Completion Date - ---------------------------------------------------------------------------------------------- Brighton Ridge Limited $ 194,000 $ 28,000 1998 1999 Partnership Desloge Associates I, L.P. - - 1998 1999 Trenton Village - 8,000 1998 1999 Apartments, L.P. United Development Co. - 25,000 1998 1999 97.0, L.P ---------- --------- $ 194,000 $ 61,000 ========= =========
See Report of Independent Certified Public Accountants on Financial Statement Schedule FSS-2
WNC Housing Tax Credit Fund VI, L.P. Series 6 Schedule III, Page 2 of 2 ------------------------------------------------------------------------------------ Property and Equipment Analysis ------------------------------------------------------------------------------------------------------- For the period August 20, 1998 through December 31, 1998 ------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------- Balance Cost of at Acquisitions Other Real Estate Other Balance Partnership Name 8/20/98 Foreclosure Other Improvements Additions Sold Deductions 12/31/98 - ----------------------------------------------------------------------------------------------------------------------------------- Brighton Ridge Limited $ - $ - $ 72,000 $ 1,232,000 $ - $ - $ - $ 1,304,000 Partnership Desloge Associates I, - - 50,000 85,000 - - - 135,000 L.P. Trenton Village - - 55,000 673,000 - - - 728,000 Apartments, L.P. United Development Co. - - 255,000 685,000 - - - 940,000 97.0, L.P -------- -------- --------- ---------- -------- -------- ---------- ----------- $ - $ - $ 432,000 $ 2,675,000 $ - $ $ - $ 3,107,000 ======== ========== =========== =========== ========= ======== ========== ==========
Accumulated Depreciation Analysis ---------------------------------------------------------------------------- For the period August 20, 1998 through December 31, 1998 ---------------------------------------------------------------------------- Accumulated Balance Balance Depreciation Depreciation Partnership Name 8/20/98 Expense on Property Sold Other 12/31/98 - -------------------------------------------------------------------------------------------------------- Brighton Ridge Limited $ - $ 25,000 $ - $ - $ 25,000 Partnership Desloge Associates I, L.P. - - - - Trenton Village - - - - - Apartments, L.P. United Development Co. - - - - - 97.0, L.P ------- -------- ----------- --------- ---------- $ - $ - $ - $ $ 25,000 ======== ========= ============== ========= =========
See Report of Independent Certified Public Accountants on Financial Statement Schedule FSS-3 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. WNC HOUSING TAX CREDIT FUND VI, L.P., Series 6 By: WNC & Associates, Inc. General Partner By: /s/ John B. Lester, Jr. John B. Lester, Jr. President of WNC & Associates, Inc. Date: July 23, 1999 By: /s/ Michael L. Dickenson Michael L. Dickenson Vice-President - Chief Financial Officer of WNC & Associates, Inc. Date: July 23, 1999 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By /s/ Wilfred N. Cooper, Sr. Wilfred N. Cooper, Sr. Chairman of the Board of WNC & Associates, Inc. Date: July 23, 1999 By: /s/ John B. Lester, Jr. John B. Lester, Jr. Director of WNC & Associates, Inc. Date: July 23, 1999 By: /s/ David N. Shafer David N Shafer Director of WNC & Associates, Inc. Date: July 23, 1999 17 EX-21 2 FINANCIAL STATEMENTS FOR SIGNIFICANT SUBSIDIARY Exhibit Number Exhibit Description EX-21.1 Financial statements for United Development Co. L.P.- 97.0 (60 Homes) as of December 31, 1998, together with auditor's report thereon, a significant subsidiary of the Partnership. UNITED DEVELOPMENT CO., L.P. - 97.0 (60 HOMES) A Tennessee Limited Partnership Financial Statements, Year ended December 31, 1998 UNITED DEVELOPMENT CO., L. P. - 97.0 (60 HOMES) TABLE OF CONTENTS PAGE INDEPENDENT AUDITORS' REPORT 3 FINANCIAL STATEMENTS BALANCE SHEET 4 STATEMENT OF OPERATIONS 5 STATEMENT OF CHANGES IN PARTNERS CAPITAL 6 STATEMENT OF CASH FLOWS 7 NOTES TO FINANCIAL STATEMENTS 8 NOVOGRADAC & COMPANY LLP CERTIFIED PUBLIC ACCOUNTANTS SAN FRANCISCO LOS ANGELES AUSTIN ATLANTA INDEPENDENT AUDITORS REPORT To the Partners United Development Co., L.P. - 97.0 We have audited the accompanying balance sheet of United Development Co., L.P. - 97.0 (the "Partnership"), a Tennessee Limited Partnership, as of December 31, 1998, and the related statements of operations, changes in partners' capital and cash flows for the year then ended. These financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether fir financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Partnership as of December 31, 1998 and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles. NOVAGRADAC & COMPANY, LLP Atlanta Georgia April 9, 1999 UNITED DEVELOPMENT CO., L.P. - 97.0 (60 HOMES) a Tennessee Limited Partnership Balance Sheet December 31, 1998 ASSETS Cash $ 100,710 Restricted Cash 1,749,540 Land 255,143 Construction in progress 684,945 ---------- $ 2,790,338 ========== LIABILITIES AND PARTNERS' CAPITAL Accounts Payable $ 30,839 Accrued interest 5,470 Developer's fee payable 80,000 Construction loan payable 539,029 ---------- Total Liabilities 655,338 Partners' Capital 2,135,000 ---------- $ 2,790,338 ========== See Accompanying Notes 4 UNITED DEVELOPMENT CO., L.P. - 97.0 (60 HOMES) a Tennessee Limited Partnership Statement of Operations Year ended December 31, 1998 NET RENTAL REVENUE $ - OPERATING EXPENSES Total operating expenses - -------- Net operating income - OTHER REVENUE AND (EXPENSES) Interest revenue 25,123 -------- 25,123 -------- Net income $ 25,123 ======== See Accompanying Notes 5 UNITED DEVELOPMENT CO., L.P. - 97.0 (60 HOMES) a Tennessee Limited Partnership Statement of Changes in Partners' Capital Year ended December 31, 1998 Special General Limited Limited Partner Partner Partner Total Partners' Capital, January 1, 1998 $ - $ - $ - $ - Capital contributions 411 2,109,466 2,109,877 Net income 3 3 25,117 25,123 ---------- --------- ----------- ----------- Partners' Capital, December 31, 1998 $ 3 $ 414 $ 2,134,583 $ 2,135,000 ========== ========== =========== =========== See Accompanying Notes 6 UNITED DEVELOPMENT CO., L.P. - 97.0 (60 HOMES) a Tennessee Limited Partnership Statement of Cash Flows Year ended December 31, 1998 Cash flows from operating activities: Net income $ 25,123 Adjustments to reconcile net income to net cash provided by operating activities: - --------- Net cash provided by operating activities 25,123 --------- Cash flows from investing activities: Purchase of land ( 255,143) Increase in construction in progress ( 568,636) ---------- Net cash used in investing activities ( 823,779) ---------- Cash flows from financing activities: Proceeds from mortgage 539,029 Contribution from special limited partner 411 Contribution from limited partner 2,109,466 ---------- Net cash provided by financing activities 2,648,906 ---------- Net increase in cash 1,850,250 Cash at beginning of the year - ---------- Cash at end of the year $1,850,250 ========== Interest Expense - ---------------- The partnership paid $54,243 in interest expense during the year with all of that amount capitalized into construction in progress. See Accompanying Notes 7 UNITED DEVELOPMENT CO., L.P. - 97.0 (60 HOMES) a Tennessee Limited Partnership Notes to the Financial Statements December 31, 1998 1. General United Development Co.,L.P. - 97.0 ( the "Partnership") was formed under the laws of the state of Tennessee, to conduct the business of owning and operating real property located in Memphis, Tennessee. The Partnership owns a 60 home scattered sit unit property (the "property"), currently under construction and developed under the low-income housing tax credit program (LIHC). The Partnership is ninety-nine and eight-tenths percent (99.98%) owned by the Limited Partner, WNC Housing Tax Credit Fund VI, Series 6, a California limited partnership. Harold E. Buehler, Sr. and Jo Ellen Buehler, collectively as the General Partner, owns one-hundredth of one percent (.01%) of the Partnership. The Partnership has received a low income housing tax credit reservation from the Tennessee Housing Development Agency in a aggregate amount of $410,684 to be allocated over ten years. To qualify for the tax credits, the partnership must meet certain requirements. These requirements include attaining a qualified eligible basis sufficient to support the allocation and renting the Property pursuant to Internal Revenue Code Section 42 ("Section 42") which regulates the use of the Property as to occupant eligibility and unit gross rent. In addition, the Partnership must execute a land use restriction agreement, which will require the Property to be in compliance with Section 42 for minimum of fifteen (15) years. 2. Summary of Significant Accounting Policies Basis of Presentation The Partnership prepares its financial statements on the accrual basis of accounting, which is consistent with generally accepted accounting principles. Use of Estimates The financial statements have been prepared in accordance with generally accepted accounting principles. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during the reporting period. Actual results may differ from those estimates. 8 UNITED DEVELOPMENT CO., L.P. - 97.0 (60 HOMES) a Tennessee Limited Partnership Notes to the Financial Statements December 31, 1998 2. Summary of Significant Accounting Policies (continued) Income Taxes Income or loss of the Partnership is allocated .01% to the General Partner, .01% is the Special Limited Partner, and 99.98% to the Limited Partner. No income tax provision has been included in the financial statements since profit or loss of the Partnership is required to be reported by the respective partners on their income tax returns. Economic Concentrations The Partnership operates one property in Memphis, Tennessee. Future operations could be affected by changes in economic or other conditions in that geographical area or by changes in the demand for such housing. 3. Construction Loan Payable The balance sheet reflects a construction loan from South Trust Bank. Per the loan agreement the proceeds of the loan shall be advanced solely for purposes of the construction and completion of the Property. The construction loan has been allocated to each of the 60 homes by South Trust Bank and a deed has been executed for each separate home. The terms are set forth below: Loan Commitment: $1,311,517 (60 Promissory Notes) Maturity Date: Matures December 31, 2013 Interest Rate: 9.75% As of December 31, 1998, the construction loan payable balance was $539,029. Interest is due on the first day of each month until December 31, 2013 when all unpaid interest and principal will be due and payable. The Partnership has a permanent loan commitment from South Trust Bank for an amount not to exceed $1,311,517. The permanent loan will close for each home as each home is placed in service. 4. Commitments and Contingencies The Partnership's low-income housing credits are contingent on its ability to maintain compliance with applicable sections of Section 42. Failure to maintain compliance with occupant eligibility, and/or unit gross rent, or to correct non-compliance within a specific time period could result in recapture of tax credits to be taken plus interest. In addition, such potential noncompliance may require an adjustment to contributed capital by the limited partner. 9 UNITED DEVELOPMENT CO., L.P. - 97.0 (60 HOMES) a Tennessee Limited Partnership Notes to the Financial Statements December 31, 1998 5. Concentration of Credit Risk The FDIC insures total cash balances up to $100,000 per financial institution. At December 31, 1998, amounts on deposit with South Trust Bank did exceed the FDIC limit by $1,750,250. 6. Y2K Disclosure The worldwide challenge facing organizations commonly referred to as the Year 2000 (Y2K) issue is a result of problems that may be encountered with date-related transactions on computer systems that have historically recognized years using two digits versus four digits (i.e. 98 rather than 1998). These systems will potentially recognize "00" as the year 1900 instead of 2000. On the surface the Y2K problem sounds simple enough; however, the implications of this problem are far reaching and could impact a broad range of business services and activities. The Partnership recognizes the potential implications of the Y2K issue on systems that may contain date-related transactions, data, embedded chips, etc. The Partnership has assessed the impact of the Y2K issue on its operations and is now in the process of renovating or replacing, as necessary, the computer applications and business processes to provide for continued services in the new millennium. An assessment of the preparedness of external entities that interface with the Partnership is also ongoing. There can be no assurance that there will not be a material adverse effect on the Partnership if its actions and/or those of related parties fail to address all significant issues in a timely manner. The cost of the partnership's Y2K compliance efforts are expensed as incurred and are being funded with cash flows from operations. At this time, the costs of those efforts are not expected to be material to the Partnership's financial position or the results of its operations in any given period. 10 EX-27 3 FDS --
5 0001037156 WNC HOUSING TAX CREDIT FUND VI, L.P., Series 6 1 US DOLLARS 12-MOS DEC-31-1998 JAN-01-1998 DEC-31-1998 1 372,505 0 0 0 0 1,403,420 0 0 7,894,182 0 0 0 0 0 5,873,163 7,894,182 0 6,003 0 7,504 60,610 0 0 59,109 0 59,109 0 0 0 59,109 16.38 0
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