10-K 1 n6-62002.txt ANNUAL REPORT FORM 10-K 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 March 31, 2002 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: UNITS OF LIMITED PARTNERSHIP INTEREST 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 No X -------- ------------ 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| 1 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 List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933. The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1980). NONE 2 PART I. Item 1. Business Organization WNC Housing Tax Credit Fund VI, L.P., Series 6 (the "Partnership") is a California Limited Partnership formed under the laws of the State of California on March 3, 1997 and commenced operations on August 20, 1998. The Partnership was formed to acquire limited partnership interests in other limited partnerships or limited liability companies ("Local Limited Partnerships") which own multi-family housing complexes that are eligible for Federal 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"). The chairman and president own substantially all 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 which was declared effective on June 23, 1997, a Prospectus dated June 23, 1997 and Supplements thereto, the Partnership commenced a public offering of 25,000 units of limited partnership interest ("Units"), at a price of $1,000 per Unit. Since inception, the Partnership has received and accepted subscriptions for 20,500 Units in the amount of $20,456,595, net of dealer discounts of $16,100 and volume discounts of $27,305. 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 "Housing 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. In general, under Section 17058 of the California Revenue and Taxation Code, an owner of low-income housing can receive the Low Income Housing Credit to be used against California taxes otherwise due in each year of a four-year period. The Housing Complex is subject to a fifteen 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 Housing Complex prior to the end of the applicable Compliance Period. Because of (i) the nature of the Housing 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 Housing Complex, it is anticipated that the local general partner ("Local General Partner") will either continue to operate such Housing 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 Housing Complex prior to the end thereof, possibly resulting in recapture of Low Income Housing Credits. 3 As of March 31, 2002, the Partnership had invested in fifteen Local Limited Partnerships. Each of these Local Limited Partnerships owns a Housing Complex that is or is expected to be eligible for the Federal Low Income Housing Credit, except for one Local Limited Partnership which owns three Housing Complexes. Certain Local Limited Partnerships may also 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 Housing Complexes owned by the Local Limited Partnerships will be readily marketable. To the extent the Housing 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 Housing 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 Housing Complexes are or will be subject to mortgage indebtedness. If a Local Limited Partnership does not make its mortgage payments, the lender could foreclose resulting in a loss of the Housing 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 Housing Complexes and the Partnership. 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 March 31, 2002, one of the Housing Complexes was still under construction. The Housing Complex was being developed by the Local General Partners who acquired the site and applied for applicable mortgages and subsidies. During the year ended March 31, 2001, two additional Housing Complexes, owned by two Local Limited Partnerships, were acquired, of which neither were operating at the time of acquisition. 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 Housing Complex. Item 2. Properties Through its investments in Local Limited Partnerships, the Partnership holds limited partnership interests in the Housing Complexes. The following table reflects the status of the seventeen Housing Complexes in fifteen Local Limited Partnerships as of the dates and for the periods indicated: 4
------------------------- ----------------------------------------------- As of March 31, 2002 As of December 31, 2001 ------------------------- ----------------------------------------------- Partnership's Estimated Encumbrances Total Investment Amount of Low Income of Local General Partner In Local Limited Investment Number Housing Limited Partnership Name Location Name Partnerships Paid to Date Of Units Occupancy Credits Partnerships ------------------------------------------------------------------------------------------------------------------------------------ Boonville Associates Boonville, Central Missouri I,L.P. Missouri Counties' Human Development Corporation $ 2,195,000 $ 2,195,000 48 100% $3,027,000 $ 808,000 Brighton Ridge Edgefield, The Piedmont Apartments, L.P. South Foundation of Carolina South Carolina, Inc. 926,000 926,000 44 100% 1,302,000 1,012,000 Cotton Mill Elderly Rock Island, Elderly Living Living Center, L.P. Illinois Development, Inc. and Quad Cities Redevelopment Resources, Inc. 1,040,000 1,040,000 31 100% 1,445,000 * Country Club Richmond, Mark-Dana Corporation Investors, L.P. Virginia 305,000 305,000 97 94% 359,000 2,747,000 Desloge Associates I, Desloge, East Missouri Action L.P. Missouri Agency,Inc. 1,059,000 1,059,000 32 94% 1,629,000 604,000 Kechel Towers, L.P. Logansport, Compass Square Indiana Development Corporation 1,348,000 1,191,000 23 100% 1,258,000 517,000 Ottawa I, L.P. Oglesby, Michael K. Illinois Moore 403,000 403,000 32 91% 592,000 1,491,000 Preservation Pontiac and Michael K. Moore and Partners Taylorville, Affordable Housing I, L.P Illinois Development Fund, Inc. 514,000 514,000 60 92% 756,000 2,028,000 St. Susanne Mt. Vernon, Southwind Community Associates I, L.P. Missouri Development 255,000 255,000 16 100% 337,000 657,000 Summer Wood Camden, ACHR Housing Ltd. Alabama Corporation 1,237,000 1,237,000 32 97% 1,707,000 849,000
* Results of Cotton Mill Elderly Living Center, L.P. have not been audited and thus have been excluded. See Note 3 to the financial statements and report of independent certified public accountants. 5
------------------------- ----------------------------------------------- As of March 31, 2002 As of December 31, 2001 ------------------------- ----------------------------------------------- Partnership's Estimated Encumbrances Total Investment Amount of Low Income of Local General Partner In Local Limited Investment Number Housing Limited Partnership Name Location Name Partnerships Paid to Date Of Units Occupancy Credits Partnerships ------------------------------------------------------------------------------------------------------------------------------------ Trenton Village Trenton, MBL Development, Co. Apartments, L.P. Missouri 1,018,000 1,018,000 32 100% 1,497,000 696,000 United Development Memphis, Harold E. Buehler, Sr. Co.,L.P. - 97.0. Tennessee and JoEllen Buehler 2,813,000 2,813,000 60 100% 4,107,000 1,291,000 Wagner Partnership Wagner, Lutheran Social Services 99 Limited South of South Dakota and Partnership Dakota Weinburg Investments, Inc. 245,000 208,000 26 92% 334,000 759,000 West Liberty Family West Liberty, Joe B. Curd, Jr. and Apartments, Ltd. Kentucky Janie Sheets Curd 351,000 298,000 20 (1) 474,000 (1) West Mobile County Theodore, Apartment Developers, Housing, Ltd. Alabama Inc. and Thomas H. Cooksey 1,858,000 1,858,000 55 93% 2,543,000 1,357,000 ------------ ----------- ---- --- ------------ ----------- $ 15,567,000 $15,320,000 608 96% $ 21,367,000 $14,816,000 ============ =========== === === ============ ===========
(1) The apartment complexes are under construction and cost certification has yet to be completed. 6
--------------------------------------- ---------------------------------------------- For the year ended December 31, 2001 Low Income Housing Credits -------------------------------------------------------------------- ---------------------------------------------- Partnership Name Credits Allocated Year to be First Partnership Name Rental Income Net Income/(loss) to Partnership Available -------------------------------------------------------------------- ---------------------------------------------- Boonville Associates I, L.P. $19,000 $ (84,000) 99.97% 2001 Brighton Ridge Apartments L.P. 240,000 (34,000) 98.989% 1999 Cotton Mill Elderly Living Center, L.P. * * 99.98% 2000 Country Club Investors, L.P. 532,000 (52,000) 66.99% 1999 Desloge Associates I, L.P. 90,000 (57,000) 99.89% 1999 Kechel Towers, L.P. 87,000 (84,000) 99.98% 1999 Ottawa I, L.P. 137,000 (82,000) 99.98% 1999 Preservation Partners I, L.P. 246,000 (71,000) 99.98% 1999 St. Susanne Associates I, L.P. 65,000 (18,000) 99.98% 2000 Summer Wood Ltd. 68,000 (84,000) 99.98% 1999 Trenton Village Apartments, L.P. 111,000 (38,000) 99.98% 1999 United Development Co. L.P. 97.0, L.P. 464,000 (98,000) 99.98% 1999 Wagner Partnership 99 Limited Partnership 42,000 (45,000) 99.98% 2001 West Liberty Family Apartments, Ltd. (1) (1) 99.98% 2002 West Mobile County Housing, Ltd. 199,000 (133,000) 99.98% 2000 ------------ ----------- $ 2,300,000 $ (880,000) ============ ===========
(1) The apartment complexes are under construction and cost certification has yet to be completed. * Results of Cotton Mill Elderly Living Center, L.P. have not been audited and thus have been excluded. See Note 3 to the financial statements and report of independent certified public accountants. 7 Item 3. Legal Proceedings NONE Item 4. Submission of Matters to a Vote of Security Holders NONE 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 and none exists. Units can be assigned only if certain requirements in the Partnership Agreement are satisfied. (b) At March 31, 2002, there were 1,059 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. (d) No unregistered securities were sold by the Partnership during the year ended March 31, 2002. Item 6. Selected Financial Data Selected Balance Sheet information for the Partnership is as follows:
March 31 December 31 -------------------------------------------- ---------------------------- 2002 2001 2000 1999 1998 ------------ ------------- ------------ ------------- ------------ ASSETS Cash and cash equivalents $ 751,327 $ 1,152,887 $ 4,501,538 $ 2,690,665 $ 372,505 Subscriptions receivable - - - 893,370 1,030,915 Investments in limited partnerships, net 14,585,268 15,439,696 13,829,634 7,748,624 6,440,762 Loans receivable 50,000 50,000 154,878 - - Other assets 2,059 170 31,378 1,043,530 50,000 ------------ ------------- ------------ ------------- ------------ $ 15,388,654 $ 16,642,753 $ 18,517,428 $ 12,376,189 $ 7,894,182 ============ ============= ============ ============= ============ LIABILITIES Payables to limited partnerships $ 246,185 $ 238,129 $ 1,252,287 $ 2,137,275 $ 1,734,427 Loan payable - - - - 113,269 Accrued fees and expenses due to general partner and affiliates 43,577 22,952 35,171 184,291 173,323 PARTNERS' EQUITY 15,098,892 16,381,672 17,229,970 10,054,623 5,873,163 ------------ ------------- ------------ ------------- ------------ $ 15,388,654 $ 16,642,753 $ 18,517,428 $ 12,376,189 $ 7,894,182 ============ ============= ============ ============= ============
8 Selected results of operations, cash flows and other information for the Partnership is as follows for the years ended March 31, 2002, 2001 and 2000, the three months ended March 31, 1999 and the period from August 20, 1998 (Date Operations Commenced) to December 31, 1998:
For the For the three period from months August 20, For the years ended ended 1998 to March 31 March 31 December 31 ---------------------------------------------- ------------- ------------- 2002 2001 2000 1999 1998 ------------- ------------ ------------ ------------- ------------- Net income(loss) from operations $ (146,542) $ (39,047) $ 97,572 $ (3,249) $ (1,501) Equity in income(loss) of limited partnerships (1,136,238) (813,901) (520,281) 47,263 60,610 Other losses - - (85,727) - - ------------- ------------ ------------ ------------- ------------- Net income (loss) $ (1,282,780) $ (852,948) $ (508,436) $ 44,014 $ 59,109 ============= ============ ============ ============= ============= Net income (loss) allocated to: General partner $ (12,828) $ (8,529) $ (5,084) $ 440 $ 591 ============= ============ ============ ============= ============= Limited partners $ (1,269,952) $ (844,419) $ (503,352) $ 43,574 $ 58,518 ============= ============ ============ ============= ============= Net income (loss) per limited partner unit $ (61.95) $ (41.19) $ (25.55) $ 4.26 $ 16.38 ============= ============ ============ ============= ============= Outstanding weighted limited partner units 20,500 20,500 19,697 10,218 3,573 ============= ============ ============ ============= ============= For the For the three period from months August 20, For the years ended ended 1998 to March 31 March 31 December 31 ---------------------------------------------- ------------- ------------- 2002 2001 2000 1999 1998 ------------- ------------ ------------ ------------- ------------- Net cash provided by (used in): Operating activities $ (76,258) $ 56,115 $ 28,533 $ 34,356 $ 1,554 Investing activities (325,302) (3,403,846) (6,692,518) (1,914,981) (4,525,457) Financing activities - (920) 8,474,858 4,198,785 4,896,408 ------------- ------------ ------------ ------------- ------------- Net change in cash and cash equivalents (401,560) (3,348,651) 1,810,873 2,318,160 372,505 Cash and cash equivalents, beginning of period 1,152,887 4,501,538 2,690,665 372,505 - ------------- ------------ ------------ ------------- ------------- Cash and cash equivalents, end of period $ 751,327 $ 1,152,887 $ 4,501,538 $ 2,690,665 $ 372,505 ============= ============ ============ ============= =============
9
Low Income Housing Credit per Unit was as follows for the period ended December 31: 2001 2000 1999 1998 -------------- --------------- -------------- ------------- Federal $ 84 $ 72 $ 25 $ - State - - - - -------------- --------------- -------------- ------------- Total $ 84 $ 72 $ 25 $ - ============== =============== ============== =============
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Forward Looking Statements With the exception of the discussion regarding historical information, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and other discussions elsewhere in this Form 10-K contain forward looking statements. Such statements are based on current expectations subject to uncertainties and other factors which may involve known and unknown risks that could cause actual results of operations to differ materially from those projected or implied. Further, certain forward-looking statements are based upon assumptions about future events which may not prove to be accurate. Risks and uncertainties inherent in forward looking statements include, but are not limited to, our future cash flows and ability to obtain sufficient financing, level of operating expenses, conditions in the low income housing tax credit property market and the economy in general, as well as legal proceedings. Historical results are not necessarily indicative of the operating results for any future period. Subsequent written and oral forward looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by cautionary statements in this Form 10-K and in other reports we filed with the Securities and Exchange Commission. The following discussion should be read in conjunction with the Consolidated Financial Statements and the Notes thereto included elsewhere in this filing. Financial Condition The Partnership's assets at March 31, 2002 consisted primarily of $751,000 in cash, aggregate investments in fifteen Local Limited Partnerships of $14,586,000 and loan receivable and other assets of $52,000. Liabilities at March 31, 2002 primarily consisted of $246,000 of estimated future capital contributions to the Local Limited Partnerships and $44,000 of accrued fees and advances due to the General Partner and affiliates. The Partnership offered Units for sale to the public until June 23, 1999, at which time total limited partner capital raised was $20,500,000. Results of Operations Year Ended March 31, 2002 Compared to Year Ended March 31, 2001. The Partnerships net loss for the year ended March 31, 2002 was $(1,283,000), reflecting an increase of $(430,000) from the net loss experienced for the year ended March 31, 2001 of $(853,000). The increase in net loss is due to an increase in the equity in losses of limited partnerships which increased by $(322,000) due the maturity in the rent-up of the fourteen local limited partnerships in operation and by a reduction in interest income of $99,000 along with an increase in operating expense of $9,000. Year Ended March 31, 2001 Compared to Year Ended March 31, 2000. The Partnerships net loss for the year ended March 31, 2001 was $(853,000), reflecting an increase of $(345,000) from the net loss experienced for the year ended March 31, 2000 of $(508,000). The increase in net loss is due to an increase in the equity in losses of limited partnerships which increased by $(294,000) due the placement in service of two additional local limited partnerships and the maturity in the rent-up of the other twelve local limited partnerships and by a reduction in income of $104,000, offset by an increase in other operating expense of $33,000 and decrease in losses recognized from sale of securities in the prior year of $(86,000). 10 Cash Flows Year Ended March 31, 2002 Compared to Year Ended March 31, 2001. The net decrease in cash during the year ended March 31, 2001 was $(402,000), compared to a net decrease in cash for the year ended March 31, 2001 of $(3,349,000). This change of $2,947,000 was primarily due to a decline in investing activities related to purchase of Limited Partnership interests of approximately $3,079,000 offset by an increase of $132,000 in cash used in operating activities. Year Ended March 31, 2001 Compared to Year Ended March 31, 2000. The net decrease in cash during the year ended March 31, 2001 was $(3,349,000), compared to a net increase in cash for the year ended March 31, 2000 of $1,811,000. This change of $(5,160,000) was primarily due to a decrease in cash provided by financing activities of $8,476,000 as the Partnership completed its offering, offset by a decline in investing activities related to purchase of Limited Partnership interests of approximately $3,001,000. Other Matters As of July 17, 2002, the Partnership had not obtained audited financial statements for one of its investments, Cotton Mill Elderly Living Center, L.P. ("Cotton Mill") as of and for the year ended December 31, 2001. As a result of this limitation in scope, the Partnership's Independent Certified Public Accountants have qualified their report with respect to their audit of the Partnership's 2002 financial statements. Furthermore, the Partnership has not included the financial information of Cotton Mill in the combined condensed financial statements presented elsewhere herein. The Partnership's investment in Cotton Mill totaled $770,000 (unaudited) at March 31, 2002. The Partnership's interest in the results of operations of Cotton Mill totaled $(244,000) (unaudited) for the year ended March 31, 2002. Certain Local Limited Partnerships have incurred significant operating losses and have working capital deficiencies. In the event these Local Limited Partnerships continue to incur significant operating losses, additional capital contributions by the Partnership and/or the Local General Partner may be required to sustain the operations of such Local Limited Partnerships. If additional capital contributions are not made when they are required, the Partnership's investment in certain of such Local Limited Partnerships could be impaired, and the loss and recapture of the related tax credits could occur. The Partnership expects its future cash flows, together with its net available assets at March 31, 2002, to be sufficient to meet all future cash requirements. Impact of New Accounting Pronouncement In October 2001, the FASB issued Statement of Financial Accounting Standards No 144, Accounting for the Impairment or Disposal of Long-Lived Assets ("SFAS 144"), which addresses accounting and financial reporting for the impairment or disposal of long-lived assets. SFAS 144 is effective for fiscal years beginning after December 15, 2001, and generally, is to be applied prospectively. The Partnership has not yet completed its evaluation of the impact of SFAS 144 on its financial position or results of operations. Item 7A. Quantitative and Qualitative Disclosures About Market Risk NOT APPLICABLE Item 8. Financial Statements and Supplementary Data 11 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 sheets of WNC Housing Tax Credit Fund VI, L.P., Series 6 (a California Limited Partnership) (the "Partnership") as of March 31, 2002 and 2001, and the related statements of operations, partners' equity (deficit) and cash flows for the years ended March 31, 2002, 2001 and 2000. 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 audits. 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 financial statements, the Partnership accounts for its investments in limited partnerships using the equity method. The portion of the Partnership's investments in limited partnerships audited by other auditors represented 77% and 67% of the total assets of the Partnership at March 31, 2002 and 2001, respectively. Our opinion, insofar as it relates to the amounts included in the financial statements for the limited partnerships which were audited by others, is based solely on the reports of the other auditors. Except as discussed in the following paragraph, we conducted our audits in accordance with auditing standards generally accepted in the United States of America. 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 audits and the reports of the other auditors provide a reasonable basis for our opinion. As more thoroughly discussed in Note 3 to the financial statements, the Partnership was unable to obtain audited financial statements for one of its investments, Cotton Mill Elderly Living Center, L.P. ("Cotton Mill"), as of and for the year ended December 31, 2001. The Partnership's investment in Cotton Mill totaled $770,000 (unaudited) as of March 31, 2002. The results of operations recorded by the Partnership with respect to its investment in Cotton Mill during the year ended March 31, 2002 totaled $(244,000) (unaudited). In our opinion, except for the effects of such adjustments and disclosures, if any, as might have been determined to be necessary had an audit of the 2001 financial statements of Cotton Mill been obtained, 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 March 31, 2002 and 2001, and the results of its operations and its cash flows for the years ended March 31, 2002, 2001, and 2000, in conformity with accounting principles generally accepted in the United States of America. /s/BDO SEIDMAN, LLP BDO SEIDMAN, LLP Orange County, California July 17, 2002 12 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A California Limited Partnership) BALANCE SHEETS
March 31 ---------------------------------- 2002 2001 -------------- ------------- ASSETS Cash and cash equivalents $ 751,327 $ 1,152,887 Investments in limited partnerships, net (Notes 3 and 4) 14,585,268 15,439,696 Loan receivable (Note 2) 50,000 50,000 Other assets 2,059 170 -------------- ------------- $ 15,388,654 $ 16,642,753 ============== ============= LIABILITIES AND PARTNERS' EQUITY (DEFICIT) Liabilities: Payables to limited partnerships (Note 6) $ 246,185 $ 238,129 Accrued fees and advances due to General Partner and affiliate (Note 4) 43,577 22,952 -------------- ------------- Total liabilities 289,762 261,081 -------------- ------------- Commitments and contingencies Partners' equity (deficit) (Note 8) General partner (53,489) (40,661) Limited partners (25,000 units authorized; 20,500 units issued and outstanding) 15,152,381 16,422,333 -------------- ------------- Total partners' equity 15,098,892 16,381,672 -------------- ------------- $ 15,388,654 $ 16,642,753 ============== =============
See accompanying notes to financial statements 13 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A California Limited Partnership) STATEMENTS OF OPERATIONS
For the Years Ended March 31 --------------------------------------------------------- 2002 2001 2000 -------------- ----------------- ---------------- Interest income $ 32,552 $ 118,871 $ 237,012 Reporting fee income 1,250 13,885 - -------------- ----------------- ---------------- Total income 33,802 132,756 237,012 -------------- ----------------- ---------------- Operating expenses: Amortization (Notes 3 and 4) 51,548 51,548 45,616 Management fees (Note 4) 59,808 58,310 54,064 Other 68,988 61,945 39,760 -------------- ----------------- ---------------- Total operating expenses 180,344 171,803 139,440 -------------- ----------------- ---------------- Income (loss) from operations (146,542) (39,047) 97,572 Other expenses and losses: Equity in losses of limited partnerships (Note 3) (1,136,238) (813,901) (520,281) Loss from sale of securities (Note 9) - - (85,727 -------------- ----------------- ---------------- Total other expenses and losses (1,136,238) (813,901) (606,008) -------------- ----------------- ---------------- Net loss $ (1,282,780) (852,948) $ (508,436) ============== ================= ================ Net loss allocated to: General partner $ (12,828) $ (8,529) $ (5,084) ============== ================= ================ Limited partners $ (1,269,952) $ (844,419) $ (503,352) ============== ================= ================ Net loss per limited partner unit $ (61.95) $ (41.19) $ (25.55) ============== ================= ================ Outstanding weighted limited partner units 20,500 20,500 19,697 ============== ================= ================
See accompanying notes to financial statements 14 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A California Limited Partnership) STATEMENTS OF PARTNERS' EQUITY (DEFICIT) For The Years Ended March 31, 2002, 2001 and 2000
General Limited Total Partner Partners --------------- --------------- --------------- Partners' equity (deficit) at March 31, 1999 $ (13,659) $ 10,068,282 $ 10,054,623 Sale of limited partnership units, net of discounts - 8,718,260 8,718,260 Collection of notes receivable (Note 8) - 304,000 304,000 Offering expenses (13,385) (1,325,092) (1,338,477) Net loss (5,084) (503,352) (508,436) --------------- --------------- --------------- Partners' equity (deficit) at March 31, 2000 (32,128) 17,262,098 17,229,970 Collection of notes receivable (Note 8) - 5,000 5,000 Offering expenses (4) (346) (350) Net loss (8,529) (844,419) (852,948) --------------- --------------- --------------- Partners' equity (deficit) at March 31, 2001 (40,661) 16,422,333 16,381,672 Net loss (12,828) (1,269,952) (1,282,780) --------------- --------------- --------------- Partners' equity (deficit) at March 31, 2002 $ (53,489) $ 15,152,381 $ 15,098,892 =============== =============== ===============
See accompanying notes to financial statements 15 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A California Limited Partnership) STATEMENTS OF CASH FLOWS
For The Years Ended March 31 ------------------------------------------------- 2002 2001 2000 --------------- -------------- -------------- Cash flows from operating activities: Net loss $ (1,282,780) $ (852,948) $ (508,436) Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Amortization 51,548 51,548 45,616 Equity in losses of limited partnerships 1,136,238 813,901 520,281 Change in other assets (1,889) 31,208 (31,378) Change in accrued fees and expenses due to general partner and affiliates 20,625 12,406 2,450 --------------- -------------- -------------- Net cash (used in) provided by operating activities (76,258) 56,115 28,533 --------------- -------------- -------------- Cash flows from investing activities: Investments in limited partnership, net (335,137) (3,487,688) (5,783,619) Loans receivable, net - 104,878 (154,878) Capitalized acquisition costs and fees - - (704,746) Accrued and unpaid acquisition fees and advances due to affiliate of general partner - (19,055) (49,275) Distributions from limited partnerships 9,835 (1,981) - --------------- -------------- -------------- Net cash used in investing activities (325,302) (3,403,846) (6,692,518) --------------- -------------- -------------- Cash flows from financing activities: Sale of limited partner units - - 8,718,260 Subscriptions receivable - 5,000 1,197,370 Offering expenses - (5,920) (1,440,772) --------------- -------------- -------------- Net cash (used in) provided by financing activities - (920) 8,474,858 --------------- -------------- -------------- Net change in cash and cash equivalents (401,560) (3,348,651) 1,810,873 Cash and cash equivalents, beginning of period 1,152,887 4,501,538 2,690,665 --------------- -------------- -------------- Cash and cash equivalents, end of period/year $ 751,327 $ 1,152,887 $ 4,501,538 =============== ============== ============== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION - Interest paid $ 34,336 $ 17,633 $ 10,397 =============== ============== ============== Taxes paid $ 800 $ 800 $ 800 =============== ============== ==============
See accompanying notes to financial statements 16 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A California Limited Partnership) NOTES TO FINANCIAL STATEMENTS For The Years Ended March 31, 2002, 2001 and 2000 NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -------------------------------------------------------------------- Organization ------------ WNC Housing Tax Credit Fund VI, L.P., Series 6 (the "Partnership") was formed on March 3, 1997 under the laws of the State of California, 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 own and operate multi-family housing complexes (the "Housing Complexes") that are eligible for low income housing tax credits. The local general partners (the "Local General Partners") of each Local Limited Partnership retain responsibility for developing, constructing, maintaining, operating and managing the Housing Complex. The general partner is WNC & Associates, Inc. ("WNC" or the "General Partner"). The chairman and president own substantially all the outstanding stock of WNC. The business of the Partnership is conducted primarily through WNC, as the Partnership has no employees of its own. 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. 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 agreement authorized the sale of up to 25,000 units at $1,000 per Unit ("Units"). As of March 31, 2002 and 2001, 20,500 units, representing subscriptions in the amount of $20,456,595, net of discounts of $27,305 for volume purchases and dealer discounts of $16,100 had been accepted. The General Partner has a 1% interest in operating profits and losses, taxable income and losses, cash available for distribution from the Partnership and tax credits of the Partnership. The limited partners will be allocated the remaining 99% 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 proceeds equal to its capital contribution and a subordinated disposition fee (as described in Note 4) from the remainder, 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. 17 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A California Limited Partnership) NOTES TO FINANCIAL STATEMENTS - CONTINUED For The Years Ended March 31, 2002, 2001 and 2000 NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued ------------------------------------------------------------------------------- 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 Housing Complexes owned by the Local Limited Partnerships will be readily marketable. To the extent the Housing 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 Housing 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 Housing Complexes are or will be subject to mortgage indebtedness. If a Local Limited Partnership does not make its mortgage payments, the lender could foreclose resulting in a loss of the Housing Complex and low income housing credits. As a limited 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 Housing Complexes and the Partnership. 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 on 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 in Limited Partnerships 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 30 years (see Note 3). Losses from Local Limited Partnerships for the years ended March 31, 2002, 2001 and 2000 have been recorded by the Partnership based on nine months of reported results provided by the Local Limited Partnerships and on three months of results estimated by management of the Partnership. 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. 18 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A California Limited Partnership) NOTES TO FINANCIAL STATEMENTS For The Years Ended March 31, 2002, 2001 and 2000 NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued ------------------------------------------------------------------------------- Offering Expenses ----------------- Offering expenses consist of underwriting commissions, legal fees, printing, filing and recordation fees, and other costs incurred 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 and amounted to $2,817,761, $2,817,761 and $2,817,412 as of March 31, 2002, 2001 and 2000, respectively. Use of Estimates ---------------- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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. 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. As of March 31, 2002 and 2001, the Partnership had cash equivalents of $0 and $815,000, respectively. Concentration of Credit Risk ---------------------------- At March 31, 2002, the Partnership maintained cash balances at a certain financial institution in excess of the federally insured maximum. Net Income Per Limited Partner Unit ----------------------------------- Net income per limited partner 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 ------------------------------ The Statement of Financial Accounting Standards ("SFAS") No. 130, Reporting Comprehensive Income established standards for the reporting and display of comprehensive income (loss) and its components in a full set of general-purpose financial statements. The Partnership had no items of other comprehensive income during the years ended March 31, 2002, 2001 and 2000, as defined by SFAS No. 130. New Accounting Pronouncement ---------------------------- In October 2001, the FASB issued Statement of Financial Accounting Standards No 144, Accounting for the Impairment or Disposal of Long-Lived Assets ("SFAS 144"), which addresses accounting and financial reporting for the impairment or disposal of long-lived assets. SFAS 144 is effective for fiscal years beginning after December 15, 2001, and generally, is to be applied prospectively. The Partnership has not yet completed its evaluation of the impact of SFAS 144 on its financial position or results of operations. 19 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A California Limited Partnership) NOTES TO FINANCIAL STATEMENTS For The Years Ended March 31, 2002, 2001 and 2000 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 are generally 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 (11.5% and 11.5% at March 31, 2002 and 2001, respectively). A loan receivable with a balance of $50,000 at March 31, 2002 and 2001 was due from one Local Limited Partnership, in which an interest was not acquired. Subsequent to March 31, 2002, the loan was repaid. NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS -------------------------------------------- As of March 31, 2002 and 2001, the Partnership had acquired Limited Partnership interests in fifteen and fourteen Local Limited Partnerships, respectively, each of which owns one Housing Complex, except for one Local Limited Partnership which owns three Housing Complexes, consisting of an aggregate of 608 and 588 apartment units, respectively. As of March 31, 2002, construction or rehabilitation of one of the Housing 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, taxable income and losses and tax credits of the Local Limited Partnerships. As of July 17, 2002, the Partnership had not obtained audited financial statements for one of its investments, Cotton Mill Elderly Living Center, L.P. ("Cotton Mill"), as of and for the year ended December 31, 2001. As a result, the Partnership has not included the financial information of Cotton Mill in the combined condensed financial statements presented herein. The Partnership's investment in Cotton Mill totaled $770,000 (unaudited) at March 31, 2002. The Partnership's estimate of its interest in the results of operations of Cotton Mill totaled $(244,000) (unaudited) for the year ended March 31, 2002. The combined condensed financial statements presented herein for December 31, 2000 previously included total assets of $2,194,000 and net losses of $25,000 for Cotton Mill. The combined condensed financial statements presented herein for December 31, 1999 previously included net income of $2,000 for Cotton Mill. The combined condensed financial information presented in this footnote for 2000 and 1999 has been restated to exclude the accounts of Cotton Mill. The Partnership's investment in Local Limited Partnerships as reflected in the balance sheets at March 31, 2002 and 2001 are approximately $2,193,000 and $2,547,000, respectively, greater than the Partnership's equity at the preceding December 31 as shown in the Local Limited Partnerships' combined financial statements presented below. This difference is primarily due to acquisition, selection, and other costs related to the acquisition of the investments which have been capitalized in the Partnership's investment account, and capital contributions payable to the limited partnerships which were netted against partner capital in the Local Limited Partnership's financial statements (see Note 6). The Partnership's investment is also lower than the Partnership's equity as shown in the Local Limited Partnership's combined financial statements due to the estimated losses recorded by the Partnership for the three month period ended March 31 and due to the exclusion of the Cotton Mill from the combined condensed financial information. Equity in losses of the Local Limited Partnerships is recognized in the financial statements until the related investment account is reduced to a zero balance. Losses incurred after the investment account is reduced to zero are not recognized. If the Local Limited Partnerships report net income in future years, the Partnership will resume applying the equity method only after its share of such net income equals the share of net losses not recognized during the period(s) the equity method was suspended. 20 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A California Limited Partnership) NOTES TO FINANCIAL STATEMENTS For The Years Ended March 31, 2002, 2001 and 2000 NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued ------------------------------------------------------- Distributions received by limited partners are accounted for as a reduction of the investment balance. Distributions received after the investment has reached zero are recognized as income. As of March 31, 2002, no investment accounts in Local Limited Partnerships had reached a zero balance. Following is a summary of the equity method activity of the investment in the Local Limited Partnerships for the periods presented:
For The Years Ended March 31, ------------------------------------------------------- 2002 2001 2000 ------------- -------------- -------------- Investments per balance sheet, beginning of period $ 15,439,696 $ 13,829,634 $ 7,748,624 Capital contributions paid, net 298,125 2,403,096 5,211,780 Capital contributions to be paid 52,605 36,689 805,242 Equity in income/(losses) of limited partnerships (1,136,238) (813,901) (520,281) Tax credit adjustments (7,537) 33,745 (74,861) Capitalized acquisition fees and costs - - 704,746 Amortization of paid acquisition fees and costs (51,548) (51,548) (45,616) Distributions received (9,835) 1,981 - ------------- -------------- -------------- Investment per balance sheet, end of period $ 14,585,268 $ 15,439,696 $ 13,829,634 ============= ============== ==============
The financial information from the individual financial statements of the Limited Partnerships include rental and interest subsidies. Rental subsidies are included in total revenues and interest subsidies are generally netted in interest expense. Approximate combined condensed financial information from the individual financial statements of the Local Limited Partnerships as of December 31 and for the years then ended is as follows: (Combined condensed financial information for Cotton Mill Elderly Living Center has been excluded from the presentation below). COMBINED CONDENSED BALANCE SHEETS
2001 2000 (Restated) ---------------- ---------------- ASSETS Buildings and improvements (net of accumulated depreciation for 2001 and 2000 of $2,815,000 and $1,515,000, respectively) $ 28,712,000 $ 25,737,000 Land 1,414,000 1,360,000 Construction in progress 170,000 - Other assets (including due from affiliates for 2001 and 2000 of $447,000 and $46,000, respectively) 1,759,000 3,898,000 ---------------- ---------------- $ 32,055,000 $ 30,995,000 ================ ================
21 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A California Limited Partnership) NOTES TO FINANCIAL STATEMENTS For The Years Ended March 31, 2002, 2001 and 2000 NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued ------------------------------------------------------- COMBINED CONDENSED BALANCE SHEETS, Continued
2001 2000 (Restated) ---------------- ---------------- LIABILITIES AND PARTNERS' EQUITY Mortgage and construction loans payable $ 14,816,000 $ 13,622,000 Other liabilities (including payables to affiliates for 2001 and 2000 of $1,791,000 and $1,482,000, respectively) 2,254,000 1,869,000 ---------------- ---------------- 17,070,000 15,491,000 ---------------- ---------------- PARTNERS' CAPITAL WNC Housing Tax Credit Fund VI, L.P., Series 6 12,392,000 12,893,000 Other partners 2,593,000 2,611,000 ---------------- ---------------- 14,985,000 15,504,000 ---------------- ---------------- $ 32,055,000 $ 30,995,000 ================ ================
COMBINED CONDENSED STATEMENTS OF OPERATIONS
2001 2000 1999 (Restated) (Restated) ----------------- ----------------- ------------------- Revenues $ 2,385,000 $ 2,131,000 $ 1,389,000 ----------------- ----------------- ------------------- Expenses: Operating expenses 1,569,000 1,300,000 779,000 Interest expense 610,000 602,000 429,000 Depreciation and amortization 1,086,000 981,000 563,000 ----------------- ----------------- ------------------- Total expenses 3,265,000 2,883,000 1,771,000 ----------------- ----------------- ------------------- Net loss $ (880,000) $ (752,000) $ (382,000) ================= ================= =================== Net loss allocable to the Partnership, before equity in losses of Cotton Mill $ (862,000) $ (734,000) $ (343,000) ================= ================= =================== Net loss recorded by the Partnership, before equity in income (losses) of Cotton Mill $ (892,000) $ (789,000) $ (522,000) Net loss of Cotton Mill recorded by the Partnership (unaudited) (244,000) (25,000) 2,000 ----------------- ----------------- ------------------- Net loss recorded by the Partnership $ (1,136,000) $ (814,000) $ (520,000) ================= ================= ===================
22 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A California Limited Partnership) NOTES TO FINANCIAL STATEMENTS For The Years Ended March 31, 2002, 2001 and 2000 NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued ------------------------------------------------------- Certain Local Limited Partnerships have incurred significant operating losses and have working capital deficiencies. In the event these Local Limited Partnerships continue to incur significant operating losses, additional capital contributions by the Partnership and/or the Local General Partner may be required to sustain the operations of such Local Limited Partnerships. If additional capital contributions are not made when they are required, the Partnership's investment in certain of such Local Limited Partnerships could be impaired, and the loss and recapture of the related tax credits could occur. NOTE 4 - RELATED PARTY TRANSACTIONS ----------------------------------- Under the terms of the Partnership Agreement, the Partnership has paid or 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 Units as compensation for services rendered in connection with the acquisition of Local Limited Partnerships. As of March 31, 2002 and 2001, the Partnership incurred acquisition fees of $1,435,000. Accumulated amortization of these capitalized costs was $145,874 and $98,038 for March 31, 2002 and 2001, respectively. Reimbursement of costs incurred by an affiliate of the General Partner in connection with the acquisition of Local Limited Partnerships. These reimbursements have not exceeded 1.5% of the gross proceeds. As of March 31, 2002 and 2001, the Partnership incurred acquisition costs of $111,334, which have been included in investments in limited partnerships. Accumulated amortization was $11,100 and $7,388 as of March 31, 2002 and 2001, respectively. An annual asset management fee not to exceed 0.2% of the Invested Assets (defined as the Partnership's capital contributions plus reserves of the Partnership of up to 5% of gross proceeds plus its allocable percentage of the mortgage debt encumbering the Housing Complexes) of the Local Limited Partnerships. Management fees of $59,808, $58,310 and $54,064, were incurred during the years ended March 31, 2002, 2001 and 2000, respectively, of which $40,548, $53,904 and $51,614, were paid during the years ended March 31, 2002, 2001 and 2000, respectively. 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 preferred return of 12% through December 31, 2008 and 6% thereafter (as defined in the Partnership Agreement) and is payable only if the General Partner or its affiliates render services in the sales effort. The accrued fees and expenses due to the General Partner and affiliates consist of the following:
March 31 -------------------------------- 2002 2001 ------------- --------------- Asset management fee payable $ 34,212 $ 14,952 Reimbursement for expenses paid by the General partner or an affiliate 9,365 8,000 ------------- --------------- $ 43,577 $ 22,952 ============= ===============
23 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A California Limited Partnership) NOTES TO FINANCIAL STATEMENTS For The Years Ended March 31, 2002, 2001 and 2000 NOTE 5 - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) ---------------------------------------------------- The following is a summary of the quarterly operations for the years ended March 31, 2002 and 2001:
June 30 September 30 December 31 March 31 --------------- --------------- --------------- --------------- 2002 ---- Income $ 15,000 $ 5,000 $ 9,000 $ 4,000 Operating expenses 51,000 42,000 36,000 51,000 Equity in losses of limited partnerships (190,000) (189,000) (281,000) (476,000) --------------- --------------- --------------- --------------- Net loss $ (226,000) $ (226,000) $ (308,000) $ (523,000) =============== =============== =============== =============== Loss available to limited partner $ (224,000) $ (223,000) $ (306,000) $ (517,000) =============== =============== =============== =============== Loss per limited partnership unit $ (11) $ (11) $ (15) $ (25) =============== =============== =============== =============== 2001 ---- Income $ 62,000 $ 30,000 $ 20,000 $ 21,000 Operating expenses 35,000 54,000 45,000 38,000 Equity in losses of limited partnerships (88,000) (142,000) (142,000) (442,000) --------------- --------------- --------------- --------------- Net loss (61,000) $ (166,000) $ (167,000) $ (459,000) =============== =============== =============== =============== Loss available to limited partner $ (61,000) $ (165,000) $ (165,000) $ (453,000) =============== =============== =============== =============== Loss per limited partnership unit $ (3) $ (8) $ (8) $ (22) =============== =============== =============== ===============
24 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A California Limited Partnership) NOTES TO FINANCIAL STATEMENTS For The Years Ended March 31, 2002, 2001 and 2000 NOTE 6 - PAYABLES TO LIMITED PARTNERSHIPS ----------------------------------------- Payables to limited partnerships represent amounts which are due at various times based on conditions specified in the Local Limited Partnership agreements. These contributions are payable in installments and are generally due upon the limited partnerships achieving certain operating and development benchmarks (generally within two years of the Partnership's initial investment). NOTE 7 - INCOME TAXES --------------------- No provision for income taxes has been recorded in the accompanying financial statements as any liability for income taxes is the obligation of the partners of the Partnership. NOTE 8 - SUBSCRIPTIONS AND NOTES RECEIVABLE ------------------------------------------- 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. Subscriptions and notes receivable collected subsequent to year-end are recorded as a capital contribution and an asset in the accompanying financial statements. Any unpaid balance is reflected as a reduction of partners' equity in the accompanying financial statements. From April 1, 1999 through June 23, 1999, the date of closing the fund, the Partnership received subscriptions for an additional 8,724 Units, for which it has received net cash totaling $8,718,260. Notes receivable totaling $5,000 remained outstanding as of March 31, 2000. Such notes were collected in full during 2001. NOTE 9 - LOSS FROM SALE OF SECURITIES ------------------------------------- The $(85,727) realized loss experienced in fiscal 2000 from the sale of securities was the result of market fluctuations that reduced the values of certain tax-exempt investments by $85,727. In order to avoid future losses, these investments were liquidated in October 1999. The cash generated from the sale of these investments was reinvested in tax-exempt, auction rate preferred instruments that are highly liquid and diversified securities backed by 200% collateral. 25 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure NOT APPLICABLE 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, David N. Shafer, Wilfred N. Cooper, Jr. and Kay L. Cooper. The principal shareholder of WNC & Associates, Inc. is a trust established by Wilfred N. Cooper, Sr. Wilfred N. Cooper, Sr., age 71, 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 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. Wilfred N. Cooper, Jr., age 39, is President, Chief Operating Officer, a Director, Secretary 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 50, is Executive 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. Thomas J. Riha, age 47, became Chief Financial Officer effective January 2001. Prior to his appointment as Chief Financial Officer he was 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. 26 Sy P. Garban, age 56, 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 of 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. Michael J. Gaber, age 36, is Vice President - Acquisitions and a member of the Acquisitions Committee of WNC & Associates, Inc. Mr. Gaber has been involved in real estate acquisition, valuation and investment activities since 1989 and has been employed with WNC since 1997. Prior to joining WNC & Associates, Inc., he was involved in the valuation and classification of major assets, restructuring of debt and analysis of real estate taxes with the H.F. Ahmanson company, parent to Home Savings of America. Mr. Gaber graduated from the California State University, Fullerton in 1991 with a Bachelor of Science degree in Business Administration - Finance. David Turek, age 47, 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 65, 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. and the mother of Wilfred N. Cooper, Jr. Ms. Cooper graduated from the University of Southern California in 1958 with a Bachelor of Science degree. 27 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 or paid to the General Partner or its affiliates as of March 31, 2002, 2001 and 2000 approximately $2,817,761, $2,817,761 and $2,817,412, respectively, for selling commissions and other fees and expenses of the Partnership's offering of Units. Of the total accrued or paid, approximately $1,391,595, $1,391,595 and $1,391,245 as of March 31, 2002, 2001 and 2000, respectively, 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") allocable to each of Local Limited Partnerships. As of March 31, 2002 and 2001, the aggregate amount of acquisition fees paid or accrued was approximately $1,435,000. (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 $111,334 as of March 31, 2002, 2001 and 2000, respectively. 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. "Invested Assets" means the sum of the Partnership's Investment in Local Limited Partnerships and the Partnership's allocable share of mortgage loans on and other debts related to the Housing Complexes owned by such Local Limited Partnerships. Fees of $59,808, $58,310 and $54,064 were incurred during the years ended March 31, 2002, 2001 and 2000, respectively, of which $40,548, $53,904 and $51,614 were paid for the years ended March 31, 2002, 2001 and 2000, respectively. (e) Subordinated Disposition Fee. A subordinated disposition fee in an amount equal to 1% of the sale price received in connection with the sale or disposition of a Housing 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) 12% through December 31, 2008, and (ii) 6% for the balance of the Partnerships term. No disposition fees have been paid. (f) Operating Expenses. The Partnership reimbursed the General Partner or its affiliates for operating expenses of approximately $33,000, $46,000 and $17,000 during the years ended March 31, 2002, 2001 and 2000, respectively. (g) Interest in Partnership. The General Partner will receive 1% of the Partnership's allocated Low Income Housing Credits. No Low Income Housing Credits have been allocated. The General Partner is also entitled to receive 1% of cash distributions. There have been no distributions of cash to the General Partner. 28 Item 12. Security Ownership of Certain Beneficial Owners and Management (a) Security Ownership of Certain Beneficial Owners ----------------------------------------------- No person is known to own beneficially in excess of 5% of the outstanding units. (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. Item 13. Certain Relationships and Related Transactions The General Partner manages all of the Partnership's affairs. The transactions with the General Partner are primarily in the form of fees paid by the Partnership for services rendered to the Partnership and the General Partner's interest in the Partnership, as discussed in Item 11 and in the notes to the Partnership's financial statements. 29 PART IV. Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K (a)(1) Financial statements included in Part II hereof: ----------------------------------------------- Report of Independent Certified Public Accountants Balance Sheets, March 31, 2002 and 2001 Statements of Operations for the years ended March 31, 2002, 2001 and 2000 Statements of Partners' Equity (Deficit) for the years ended March 31, 2002, 2001 and 2000 Statements of Cash Flows for the years ended March 31, 2002, 2001 and 2000 Notes to Financial Statements (a)(2) Financial statement schedules included in Part IV hereof: -------------------------------------------------------- Report of Independent Certified Public Accountants on Financial Statement Schedules Schedule III, Real Estate Owned by Local Limited Partnerships (b) Reports on form 8-K ------------------- NONE (c) 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. 10.6 Amended and Restated Agreement of Limited Partnership of Preservation Partners I Limited Partnership filed as Exhibit 10.1 to the current report on Form 8-K dated January 29, 1999, is herein incorporated by reference as Exhibit 10.6. 30 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. 10.8 Amended and Restated Agreement of Limited Partnership of Ottawa I Limited Partnership filed as Exhibit 10.2 to the current report on Form 8-K dated January 29, 1999, is herein incorporated by reference as Exhibit 10.8. 10.9 Amended and Restated Agreement of Limited Partnership of Summer Wood, Ltd. Filed as Exhibit 10.1 to the current report on Form 8-K dated May 7, 1999, is herein incorporated by reference as Exhibit 10.9. 10.10 Amended and Restated Agreement of Limited Partnership of West Mobile County Housing Ltd filed as Exhibit 10.1 to the current report on Form 8-K dated July 16, 1999, is herein incorporated by reference as Exhibit 10.10. 10.11 Amended and Restated Agreement of Limited Partnership of Cotton Mill Elderly Living Center, L.P. filed as Exhibit 10.11 to the current report Form 10-K dated August 10, 2000, is herein incorporated by reference as Exhibit 10.11. 10.12 Amended and Restated Agreement of Limited Partnership of Country Club Investors, L.P. filed as Exhibit 10.12 to the current report Form 10-K dated August 10, 2000, is herein incorporated by reference as Exhibit 10.12. 10.13 Amended and Restated Agreement of Limited Partnership of Kechel Tower L.P. filed as Exhibit 10.13 to the current report Form 10-K dated August 10, 2000, is herein incorporated by reference as Exhibit 10.13. 10.14 Amended and Restated Agreement of Limited Partnership of St. Susanne Associates I, L.P. filed as Exhibit 10.14 to the current report Form 10-K dated August 10, 2000, is herein incorporated by reference as Exhibit 10.14. 10.15 Amended and Restated Agreement of Limited Partnership of Boonville Associates I, L.P. filed as Exhibit 10.15 to the current report Form 10-K dated July 31, 2001, is herein incorporated by reference as Exhibit 10.15. 10.16 Amended and Restated Agreement of Limited Partnership of Wagner Partnership 99 Limited Partnership filed as Exhibit 10.16 to the current report Form 10-K dated July 31, 2001, is herein incorporated by reference as Exhibit 10.16. (d) Financial statement schedules follow as set forth in subsection (a)(2) ----------------------------------------------------------------------- hereof. ------- 31 32 Report of Independent Certified Public Accountants on Financial Statement Schedules To the Partners WNC Housing Tax Credit Fund VI, L.P., Series 6 The audits referred to in our report dated July 17, 2002, relating to the 2002, 2001 and 2000 financial statements of WNC Housing Tax Credit Fund VI, L.P., Series 6 (the "Partnership"), which are contained in Item 8 of this Form 10-K, included the audit of the accompanying financial statement schedules. The financial statement schedules are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statement schedules based upon our audits. The opinion to the financial statements contains an audit scope limitation paragraph describing the inability of the Partnership to obtain audited financial statements of one Local Limited Partnership. In our opinion, except for the effect of such audit scope limitation, such financial statement schedules present fairly, in all material respects, the information set forth therein. /s/BDO SEIDMAN, LLP BDO SEIDMAN, LLP Orange County, California July 17, 2002 32 WNC Housing Tax Credit Fund VI, L.P. Series 6 Schedule III Real Estate Owned by Local Limited Partnerships March 31, 2002
-------------------------------------- -------------------------------------------------- As of March 31, 2002 As of December 31, 2001 -------------------------------------- -------------------------------------------------- Partnership's Total Investment Amount of Encumbrances in Local Limited Investment of Local Limited Property and Accumulated Net Book Partnership Name Location Partnerships Paid to Date Partnerships Equipment Depreciation Value ------------------------------------------------------------------------------------------------------------------------------------ Boonville Associates Boonville, I, L.P. Missouri $ 2,195,000 $ 2,195,000 $ 808,000 $ 3,881,000 $ 49,000 $ 3,832,000 Brighton Ridge Edgefield, South Limited Partnership Carolina 926,000 926,000 1,012,000 2,378,000 234,000 2,144,000 Cotton Mill Elderly Rock Island, Living Center, L.P. Illinois 1,040,000 1,040,000 * * * * Country Club Richmond, Investors, L.P. Virginia 305,000 305,000 2,747,000 3,727,000 625,000 3,102,000 Desloge Associates Desloge, I, L.P. Missouri 1,059,000 1,059,000 604,000 2,071,000 185,000 1,886,000 Kechel Towers, L.P. Logansport, Indiana 1,348,000 1,191,000 517,000 1,895,000 152,000 1,743,000 Ottowa I, L.P. Oglesby, Illinois 403,000 403,000 1,491,0000 2,021,000 251,000 1,770,000 Preservation Pontiac and Partners I, L.P. Taylorville, Illinois 514,000 514,000 2,028,000 2,657,000 331,000 2,326,000 St. Susanne Mt. Vernon, Associates I, L.P. Missouri 255,000 255,000 657,000 996,000 43,000 953,000 Summer Wood, Camden, Ltd. Alabama 1,237,000 1,237,000 849,000 2,116,000 179,000 1,937,000
* Results of Cotton Mill Elderly Living Center, L.P. have not been audited and thus have been excluded. See Note 3 to the financial statements and report of independent certified public accountants. 33 WNC Housing Tax Credit Fund VI, L.P. Series 6 Schedule III Real Estate Owned by Local Limited Partnerships March 31, 2002
-------------------------------------- -------------------------------------------------- As of March 31, 2002 As of December 31, 2001 -------------------------------------- -------------------------------------------------- Partnership's Total Investment Amount of Encumbrances in Local Limited Investment of Local Limited Property and Accumulated Net Book Partnership Name Location Partnerships Paid to Date Partnerships Equipment Depreciation Value ------------------------------------------------------------------------------------------------------------------------------------ Trenton Village Trenton, Apartments, L.P. Missouri 1,018,000 1,018,000 696,000 2,123,000 121,000 2,002,000 United Development Co. Memphis, 97.0, L.P. Tennessee 2,813,000 2,813,000 1,291,000 4,448,000 400,000 4,048,000 Wagner Partnership Wagner, Associates I, L.P. South Dakota 245,000 208,000 759,000 1,280,000 18,000 1,262,000 West Liberty Family West Liberty, Apartments, Ltd. Kentucky 351,000 298,000 (1) 290,000 (1) 290,000 West Mobile County Theodore, Housing, Ltd. Alabama 1,858,000 1,858,000 1,357,000 3,228,000 227,000 3,001,000 ------------- ------------ ------------ ------------ ----------- ------------ $ 15,567,000 $ 15,320,000 $ 14,816,000 $ 33,111,000 $ 2,815,000 $ 30,296,000 ============= ============ ============ ============ =========== ============
(1) The apartment complexes are under construction and cost certification has yet to be completed. * Results of Cotton Mill Elderly Living Center, L.P. have not been audited and thus have been excluded. See Note 3 to the financial statements and report of independent certified public accountants. 34 WNC Housing Tax Credit Fund VI, L.P. Series 6 Schedule III Real Estate Owned by Local Limited Partnerships March 31, 2002
------------------------------------------------------------------------------- For the year ended December 31, 2001 ------------------------------------------------------------------------------- Year Rental Net Income Investment Estimated Useful Life Partnership Name Income (Loss) Acquired Status (Years) -------------------------------------------------------------------------------------------------------------------- Boonville Associates I, L.P. $ 19,000 $ (84,000) 2000 2001 Brighton Ridge Limited Partnership 240,000 (34,000) 1998 1999 Cotton Mill Elderly Living Center, L.P. * * 1999 2000 Country Club Investors, L.P. 532,000 (52,000) 1999 1998 Desloge Associates I, L.P. 90,000 (57,000) 1998 1999 Kechel Towers, L.P. 87,000 (84,000) 1998 1999 Ottawa I, L.P. 137,000 (82,000) 1999 1999 Preservation Partners I, L.P. 246,000 (71,000) 1999 1999 St. Susanne Associates I, L.P. 65,000 (18,000) 1999 2000 Summer Wood Ltd. 68,000 (84,000) 1999 1999 Trenton Village Apartments, L.P. 111,000 (38,000) 1998 1999 United Development Co. 97.0, L.P. 464,000 (98,000) 1998 1999 Wagner Partnership 99 Limited Partnership 42,000 (45,000) 2000 2001 West Liberty Family Apartments, Ltd. (1) (1) 2001 2002 West Mobile County Housing, Ltd. 199,000 (133,000) 1999 2000 ------------ ----------- $ 2,300,000 $ (880,000) ============ ===========
(1) The apartment complexes are under construction and cost certification has yet to be completed. * Results of Cotton Mill Elderly Living Center, L.P. have not been audited and thus have been excluded. See Note 3 to the financial statements and report of independent certified public accountants. 35 WNC Housing Tax Credit Fund VI, L.P. Series 6 Schedule III Real Estate Owned by Local Limited Partnerships March 31, 2001
-------------------------------------- -------------------------------------------------- As of March 31, 2001 As of December 31, 2000 -------------------------------------- -------------------------------------------------- Partnership's Total Investment Amount of Encumbrances in Local Limited Investment of Local Limited Property and Accumulated Net Book Partnership Name Location Partnerships Paid to Date Partnerships Equipment Depreciation Value ------------------------------------------------------------------------------------------------------------------------------------ Boonville Associates Boonville, I, L.P. Missouri $ 2,195,000 $ 2,195,000 $ - $ 779,000 $ - $ 779,000 Brighton Ridge Edgefield, South Limited Partnership Carolina 926,000 926,000 1,048,000 2,378,000 159,000 2,219,000 Cotton Mill Elderly Rock Island, Living Center, L.P. Illinois 1,040,000 1,040,000 ** ** ** ** Country Club Richmond, Investors, L.P. Virginia 305,000 268,000 2,777,000 3,696,000 506,000 3,190,000 Desloge Associates Desloge, I, L.P. Missouri 1,059,000 1,059,000 622,000 2,071,000 107,000 1,964,000 Kechel Towers, L.P. Logansport, Indiana 1,291,000 1,127,000 520,000 1,895,000 85,000 1,810,000 Ottowa I, L.P. Oglesby, Illinois 403,000 403,000 1,501,0000 1,998,000 165,000 1,833,000 Preservation Pontiac and Partners I, L.P. Taylorville, Illinois 514,000 514,000 2,043,000 2,629,000 215,000 2,414,000 St. Susanne Mt. Vernon, Associates I, L.P. Missouri 255,000 255,000 660,000 991,000 24,000 967,000
** Results of Cotton Mill Elderly Living Center were not audited in 2001 and thus have been excluded to aid in comparability. See Note 3 to the financial statements and report of independent certified public accountants. 36 SWNC Housing Tax Credit Fund VI, L.P. Series 6 Schedule III Real Estate Owned by Local Limited Partnerships March 31, 2001
-------------------------------------- -------------------------------------------------- As of March 31, 2001 As of December 31, 2000 -------------------------------------- -------------------------------------------------- Partnership's Total Investment Amount of Encumbrances in Local Limited Investment of Local Limited Property and Accumulated Net Book Partnership Name Location Partnerships Paid to Date Partnerships Equipment Depreciation Value ------------------------------------------------------------------------------------------------------------------------------------ Summer Wood, Camden, Ltd. Alabama 1,237,000 1,237,000 850,000 2,116,000 98,000 2,018,000 Trenton Village Trenton, Apartments, L.P. Missouri 1,018,000 1,018,000 711,000 2,123,000 69,000 2,054,000 United Development Co. Memphis, 97.0, L.P. Tennessee 2,813,000 2,813,000 1,304,000 4,216,000 - 4,216,000 Wagner Partnership Wagner, Associates I, L.P. South Dakota 245,000 208,000 219,000 492,000 - 492,000 West Mobile County Theodore, Housing, Ltd. Alabama 1,858,000 1,858,000 1,367,000 3,228,000 87,000 3,141,000 ------------- ------------ ------------ ------------ ----------- ------------ $ 15,159,000 $ 14,921,000 $ 13,622,000 $ 28,612,000 $ 1,515,000 $ 27,097,000 ============= ============ ============ ============ =========== ============
37 WNC Housing Tax Credit Fund VI, L.P. Series 6 Schedule III Real Estate Owned by Local Limited Partnerships March 31, 2001
------------------------------------------------------------------------------- For the year ended December 31, 2000 ------------------------------------------------------------------------------- Year Rental Net Income Investment Estimated Useful Life Partnership Name Income (Loss) Acquired Status (Years) -------------------------------------------------------------------------------------------------------------------- Boonville Associates I, L.P. $ - $ - 2000 2001 Brighton Ridge Limited Partnership 213,000 (57,000) 1998 1999 Cotton Mill Elderly Living Center, L.P. ** ** 1999 2000 Country Club Investors, L.P. 537,000 (51,000) 1999 1998 Desloge Associates I, L.P. 90,000 (64,000) 1998 1999 Kechel Towers, L.P. 92,000 (118,000) 1998 1999 Ottawa I, L.P. 156,000 (53,000) 1999 1999 Preservation Partners I, L.P. 237,000 (84,000) 1999 1999 St. Susanne Associates I, L.P. 56,000 (12,000) 1999 2000 Summer Wood Ltd. 63,000 (91,000) 1999 1999 Trenton Village Apartments, L.P. 111,000 (15,000) 1998 1999 United Development Co. 97.0, L.P. 416,000 (123,000) 1998 1999 Wagner Partnership 99 Limited Partnership 4,000 (1,000) 2000 2001 West Mobile County Housing, Ltd. 102,000 (83,000) 1999 2000 ----------- ------------- $ 2,077,000 $ (752,000) =========== ==============
** Results of Cotton Mill Elderly Living Center were not audited in 2001 and thus have been excluded to aid in comparability. See Note 3 to the financial statements and report of independent certified public accountants. 38 41 WNC Housing Tax Credit Fund VI, L.P. Series 6 Schedule III Real Estate Owned by Local Limited Partnerships March 31, 2000
-------------------------------------- -------------------------------------------------- As of March 31, 2000 As of December 31, 1999 -------------------------------------- -------------------------------------------------- Partnership's Total Investment Amount of Encumbrances in Local Limited Investment of Local Limited Property and Accumulated Net Book Partnership Name Location Partnerships Paid to Date Partnerships Equipment Depreciation Value ------------------------------------------------------------------------------------------------------------------------------------ Brighton Ridge Edgefield, South Limited Partnership Carolina $ 926,000 $ 892,000 $ 1,165,000 $ 2,378,000 $ 84,000 $ 2,294,000 Cotton Mill Elderly Rock Island, Living Center, L.P. Illinois 1,040,000 1,040,000 - ** - ** Country Club Richmond, Investors, L.P. Virginia 305,000 268,000 2,806,000 3,692,000 384,000 3,308,000 Desloge Associates Desloge, I, L.P. Missouri 1,059,000 1,059,000 630,000 2,065,000 31,000 2,034,000 Kechel Towers, L.P. Logansport, Indiana 1,348,000 1,191,000 1,349,000 1,909,000 16,000 1,893,000 Ottowa I, L.P. Oglesby, Illinois 403,000 383,000 1,510,0000 1,989,000 79,000 1,910,000 Preservation Pontiac and Partners I, L.P. Taylorville, Illinois 515,000 490,000 2,056,000 2,580,000 97,000 2,483,000 St. Susanne Mt. Vernon, Associates I, L.P. Missouri 255,000 204,000 74,000 227,000 - 227,000 Summer Wood, Camden, Ltd. Alabama 1,237,000 1,158,000 965,000 2,118,000 13,000 2,105,000
** Results of Cotton Mill Elderly Living Center were not audited in 2001 and thus have been excluded to aid in comparability. See Note 3 to the financial statements and report of independent certified public accountants. 39 WNC Housing Tax Credit Fund VI, L.P. Series 6 Schedule III Real Estate Owned by Local Limited Partnerships March 31, 2002
-------------------------------------- -------------------------------------------------- As of March 31, 2000 As of December 31, 1999 -------------------------------------- -------------------------------------------------- Partnership's Total Investment Amount of Encumbrances in Local Limited Investment of Local Limited Property and Accumulated Net Book Partnership Name Location Partnerships Paid to Date Partnerships Equipment Depreciation Value ------------------------------------------------------------------------------------------------------------------------------------ Trenton Village Trenton, Apartments, L.P. Missouri 1,018,000 922,000 726,000 2,123,000 17,000 2,106,000 United Development Co. Memphis, 97.0, L.P. Tennessee 2,813,000 2,541,000 1,311,000 4,448,000 58,000 4,390,000 West Mobile County Theodore, Housing, Ltd. Alabama 1,831,000 1,350,000 666,000 2,216,000 - 2,216,000 ------------- ------------ ------------ ------------ ----------- ------------ $ 12,750,000 $ 11,498,000 $ 13,258,000 $ 25,745,000 $ 779,000 $ 24,966,000 ============= ============ ============ ============ =========== ============
40 WNC Housing Tax Credit Fund VI, L.P. Series 6 Schedule III Real Estate Owned by Local Limited Partnerships March 31, 2000
------------------------------------------------------------------------------- For the year ended December 31, 2001 ------------------------------------------------------------------------------- Year Rental Net Income Investment Estimated Useful Life Partnership Name Income (Loss) Acquired Status (Years) -------------------------------------------------------------------------------------------------------------------- Brighton Ridge Limited Partnership $ 167,000 $ (62,000) 1998 1999 Cotton Mill Elderly Living Center, L.P. - ** 1999 2000 Country Club Investors, L.P. 523,000 (90,000) 1999 1998 Desloge Associates I, L.P. 47,000 (15,000) 1998 1999 Kechel Towers, L.P. 18,000 13,000 1998 1999 Ottawa I, L.P. 117,000 (51,000) 1999 1999 Preservation Partners I, L.P. 234,000 (130,000) 1999 1999 St. Susanne Associates I, L.P. - - 1999 2000 Summer Wood Ltd. 6,000 (16,000) 1999 1999 Trenton Village Apartments, L.P. 28,000 (16,000) 1998 1999 United Development Co. 97.0, L.P 175,000 (15,000) 1998 1999 West Mobile County Housing, Ltd. - - 1999 2000 ------------- ------------- $ 1,315,000 $ (382,000) ============= =============
** Results of Cotton Mill Elderly Living Center were not audited in 2001 and thus have been excluded to aid in comparability. See Note 3 to the financial statements and report of independent certified public accountants. 41 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/ Wilfred N. Cooper, Sr. -------------------------- Wilfred N. Cooper, Sr., Chairman and Chief Executive Officer of WNC & Associates, Inc. Date: August 08, 2002 By: /s/ Thomas J. Riha ------------------ Thomas J. Riha, Vice-President and Chief Financial Officer of WNC & Associates, Inc. Date: August 08, 2002 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, Jr. ------------------------- Wilfred N. Cooper, Jr., President and Chief Operating Officer of WNC & Associates, Inc. Date: August 08, 2002 By: /s/ David N. Shafer ------------------- David N Shafer, Director of WNC & Associates, Inc. Date: August 08, 2002 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report on Form 10-K of WNC Housing Tax Credit Fund VI, L.P., Series 6 (the "Partnership") for the year ended March 31, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), and pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, I, Wilfred N. Cooper, Sr., Chairman and Chief Executive Officer of WNC & Associates, Inc., general partner [of the general partner] of the Partnership, hereby certify that: 1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Partnership. /s/WILFRED N. COOPER, SR. Wilfred N. Cooper, Sr. Chairman and Chief Executive Officer of WNC & Associates, Inc. August 8, 2002 42 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report on Form 10-K of WNC Housing Tax Credit Fund VI, L.P., Series 6 (the "Partnership") for the year ended March 31, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), and pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, I, Thomas J. Riha, Chief Financial Officer of WNC & Associates, Inc., general partner [of the general partner] of the Partnership, hereby certify that: 1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Partnership. /s/THOMAS J. RIHA Thomas J. Riha Chief Financial Officer of WNC & Associates, Inc. August 8, 2002 43