10-K/A 1 nt6610ka07.txt FORM 10K/A MARCH 31, 2007 UNITED STATES FORM 10-K/A 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, 2004 For the fiscal year ended March, 31, 2005 For the fiscal year ended March, 31, 2006 For the fiscal year ended March, 31, 2007 OR |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission file number: 000-26869 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) California 33-0761578 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 17782 Sky Park Circle, Irvine, CA 92614-6404 (Address of principal executive offices) (zip code) (714) 662-5565 (Telephone Number) 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 (Title of Class) Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act Yes [_] No [X] Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [_] No [X] 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| Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer [_] Accelerated filer [_] Non-accelerated filer [X] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [_] No [X] State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter. 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 EXPLANATORY NOTE WNC Housing Tax Credit Fund VI, L.P., Series 6 is filing this amendment to its Annual Report on Form 10-K for the period ended March 31, 2007 for the following modifications: Item 1. Business was modified to add additional disclosures related to the 15-year compliance period expiration dates. Item 1A Risk Factors was modified to add additional disclosures regarding economic conditions related to the value of real estate, the risks related to the Partnership and the Partnership Agreement and the Partnership's inability to timely file and provide investors with periodic reports. Item 5a was revised to include additional disclosure regarding distributions to the Limited Partners. The amended Form 10-K now includes the auditors report that are referred to in the report of Reznick Group, P.C. dated February 15, 2008. The Item 9A disclosure has been revised to include additional disclosure in the disclosure controls and procedures section. Item 10 was revised to add the information for two Directors of an affiliate of the General Partner. Additional disclosures were added to Item 11 addressing compensation to the General Partner, reimbursement of expenses and sale of interest in properties due to the General Partner. Lastly, the Partnership added Exhibit 99.17 and is filing the statements of operations and cash flows for Boonville Associates I, Limited Partnership for the three years preceding the date of the most recent audited balance sheet, in accordance with Rule 3-09 of Regulations S-X. 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 has commenced operations on August 20, 1998. The Partnership was formed to acquire limited partnership interests in other limited partnerships ("Local Limited Partnerships") which owns multi-family housing complexes ("Housing Complexes") that are eligible for Federal low income housing tax credits ("Low Income Housing Tax Credits"). The local general partners (the "Local General Partners") of each Local Limited Partnership retain responsibility for maintaining, operating and managing the Housing Complex. Each Local Limited Partnership is governed by its agreement of limited partnership or limited liability company operating agreement (the "Local Limited Partnership Agreement"). The general partner of the Partnership is WNC & Associates, Inc. ("Associates" or the "General Partner"). The chairman and president of Associates 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 ("Partnership Units"), at a price of $1,000 per Partnership Unit. Since inception, the Partnership has received and accepted subscriptions for 20,500 Partnership Units in the amount of $20,456,595, net of dealer discounts of $16,100 and volume discounts of $27,305. Holders of Partnership Units are referred to herein as "Limited Partners." The Partnership shall continue in full force and effect until December 31, 2052 unless terminated prior to that date pursuant to the Partnership Agreement (as defined below) or law. DESCRIPTION OF BUSINESS The Partnership's principal business objective is to provide its Limited Partners with Low Income Housing Tax 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 Housing Complex which will qualify for the Low Income Housing Tax Credits. In general, under Section 42 of the Internal Revenue Code, an owner of low income housing can receive the Low Income Housing Tax Credits to be used to reduce Federal taxes otherwise due in each year of a ten-year credit period. Each Housing Complex is subject to a 15 year compliance period (the "Compliance Period"), and under state law may have to be maintained as low income housing for 30 or more years. In general, in order to avoid recapture of Low Income Housing Tax 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 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, dated March 3, 1997 as amended on August 29, 1997 ("Partnership Agreement"), will be accomplished promptly at the end of the Compliance Period. If a Local Limited Partnership is unable to sell its Housing Complex, it is anticipated that the 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 or the Local General Partners 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 Tax Credits. 3 The Partnership invested in fifteen Local Limited Partnerships, none of which had been sold or otherwise disposed as of March 31, 2007, 2006, 2005 and 2004. Each of these Local Limited Partnerships owns a single Housing Complex that was eligible for the Low Income Housing Tax Credits, except for one Local Limited Partnership which owns three Housing Complexes. Certain Local Limited Partnerships may also benefit from additional government programs promoting low- or moderate-income housing. EXIT STRATEGY The Compliance Period for a Housing Complex is generally 15 years following construction or rehabilitation completion. Associates was one of the first in the industry to offer syndicated investments in Low Income Housing Tax Credits. The initial programs are completing their Compliance Periods. The following table reflects the 15-year compliance period of the fifteen Housing Complexes: EXPIRATION DATE FOR 15-YEAR COMPLIANCE PERIOD LOCAL LIMITED PARTNERSHIP NAME 15-YEAR EXPIRATION DATE ----------------------------------------------------------------------- Boonville Associates I, L.P. 2016 Brighton Ridge Apartments L.P. 2014 Cotton Mill Elderly Living Center, L.P. 2016 Country Club Investors, L.P. 2013 Desloge Associates I, L.P. 2014 Kechel Towers, L.P. 2014 Ottawa I, L.P. 2013 Preservation Partners I, L.P. 2013 St. Susanne Associates I, L.P. 2015 Summer Wood Ltd. 2014 Trenton Village Apartments, L.P. 2014 United Development Co. L.P. 97.0, L.P. 2013 Wagner Partnership 99 Limited Partnership 2016 West Liberty Family Apartments, Ltd. 2017 West Mobile County Housing, Ltd. 2014 With that in mind, the General Partner is continuing its review of the Housing Complexes, with special emphasis on the more mature Housing Complexes such as any that have satisfied the IRS compliance requirements. The review considers many factors, including extended use requirements (such as those due to mortgage restrictions or state compliance agreements), the condition of the Housing Complexes, and the tax consequences to the Limited Partners from the sale of the Housing Complexes. Upon identifying those Housing Complexes with the highest potential for a successful sale, refinancing or syndication, the Partnership expects to proceed with efforts to liquidate them. The objective is to maximize the Limited Partners' return wherever possible and, ultimately, to wind down the Partnership. Local Limited Partnership Interests may be disposed of any time by the General Partner in its discretion. As of March 31, 2007, no Housing Complexes have been selected for disposition. While liquidation of the Housing Complexes continues to be evaluated, the dissolution of the Partnership was not imminent as of March 31, 2007. As of March 31, 2007 none of the Housing Complexes had completed the 15 year compliance period. The proceeds from the disposition of any of the Housing Complexes will be used first to pay debts and other obligations per the respective Local Limited Partnership Agreement. Any remaining proceeds will then be paid to the partners of the Local Limited Partnership, including the Partnership, in accordance with the terms of the particular Local Limited Partnership Agreement, the sale of a Housing Complex may be subject to other restrictions and obligations. Accordingly, there can be no assurance that a Local Limited Partnership will be able to sell its Housing Complex. Even if it does so, there can be no assurance that any significant amounts of cash will be distributed to the Partnership. Should such distributions occur, the Limited Partners will be entitled to 4 receive distributions from the proceeds remaining after payment of Partnership obligations and funding of reserves, equal to their capital contributions and their return on investment (as defined in the Partnership Agreement). The General Partners would then be entitled to receive proceeds equal to their capital contributions 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. ITEM 1A. RISK FACTORS Set forth below are the principal risks the Partnership believes are material to the Limited Partners. The Partnership and the Local Limited Partnerships operate in a continually changing business environment and, therefore, new risks emerge from time to time. This section contains some forward-looking statements. For an explanation of the qualifications and limitations on forward-looking statements, see Item 7. (A) RISKS ARISING FROM THE INTERNAL REVENUE CODE RULES GOVERNING LOW INCOME HOUSING TAX CREDITS LOW INCOME HOUSING TAX CREDITS MIGHT NOT BE AVAILABLE. If a Housing Complex does not satisfy the requirements of Internal Revenue Code Section 42, then the Housing Complex will not be eligible for Low Income Housing Tax Credits. LOW INCOME HOUSING TAX CREDITS MIGHT BE LESS THAN ANTICIPATED. The Local General Partners will calculate the amount of the Low Income Housing Tax Credits. No opinion of counsel will cover the calculation of the amount of Low Income Housing Tax Credits. The IRS could challenge the amount of the Low Income Housing Tax Credits claimed for any Housing Complex under any of a number of provisions set forth in Internal Revenue Code Section 42. A successful challenge by the IRS would decrease the amount of the Low Income Housing Tax Credits from the amount paid for by the Partnership. UNLESS A BOND IS POSTED OR A TREASURY DIRECT ACCOUNT IS ESTABLISHED, LOW INCOME HOUSING TAX CREDITS MAY BE RECAPTURED IF HOUSING COMPLEXES ARE NOT OWNED AND OPERATED FOR 15 YEARS. Housing Complexes must comply with Internal Revenue Code Section 42 for the 15-year Compliance Period. Low Income Housing Tax Credits will be recaptured with interest to the extent that a Housing Complex is not rented as low income housing or in some other way does not satisfy the requirements of Internal Revenue Code Section 42 during the Compliance Period. For example, unless a bond is posted or a Treasury Direct Account is established, recapture with interest would occur if: o a Local Limited Partnership disposed of its interest in a Housing Complex during the Compliance Period, or o the Partnership disposed of its interest in a Local Limited Partnership during the Compliance Period. For these purposes, disposition includes transfer by way of foreclosure. It will be up to the Partnership to determine whether to post a bond. There is no obligation under the agreements with the Local Limited Partnerships that the Local Limited Partnerships must do so. There can be no assurance that recapture will not occur. If it does, recapture will be of a portion of all Low Income Housing Tax Credits taken in prior years for that Housing Complex, plus interest. During the first 11 years of the Compliance Period, non-compliance results in one-third of the credits up to that point for the particular Housing Complex being recaptured, plus interest. Between years 12 and 15, the recapture is phased out ratably. SALES OF HOUSING COMPLEXES AFTER 15 YEARS ARE SUBJECT TO LIMITATIONS WHICH MAY IMPACT A LOCAL LIMITED PARTNERSHIP'S ABILITY TO SELL ITS HOUSING COMPLEX. Each Local Limited Partnership executes an extended low income housing commitment with the state in which the Housing Complex is located. The extended low income housing commitment states the number of years that the Local Limited Partnership and any subsequent owners must rent the Housing Complex as low income housing. Under Federal law, the commitment must be for at least 30 years. The commitment actually agreed to may be significantly longer than 30 years. In prioritizing applicants for Low Income Housing Tax Credits, most states give additional points for commitment periods in excess of 30 years. On any sale of the Housing Complex during the commitment period, the purchaser would have to agree to continue to rent the Housing Complex as low income housing for the 5 duration of the commitment period. This requirement reduces the potential market, and possibly the sales price, for the Housing Complexes. The sale of a Housing Complex may be subject to other restrictions. For example, Federal lenders or subsidizers may have the right to approve or disapprove a purchase of a Housing Complex. Accordingly, there can be no assurance that a Local Limited Partnership will be able to sell its Housing Complex. Even if it does so, there can be no assurance that any significant amount of cash will be distributed to the Limited Partners. As a result, a material portion of the Low Income Housing Tax Credits may represent a return of the money originally invested in the Partnership. LIMITED PARTNERS CAN ONLY USE LOW INCOME HOUSING TAX CREDITS IN LIMITED AMOUNTS. The ability of an individual or other non-corporate Limited Partner to claim Low Income Housing Tax Credits on his individual tax return is limited. For example, an individual Limited Partner can use Low Income Housing Tax Credits to reduce his tax liability on: o an unlimited amount of passive income, which is income from entities such as the Partnership, and o $25,000 in income from other sources. However, the use of Low Income Housing Tax Credits by an individual against these types of income is subject to ordering rules, which may further limit the use of Low Income Housing Tax Credits. Some corporate Limited Partners are subject to similar and other limitations. They include corporations which provide personal services, and corporations which are owned by five or fewer shareholders. Any portion of a Low Income Housing Tax Credit which is allowed to a Limited Partner under such rules is then aggregated with all of the Limited Partner's other business credits. The aggregate is then subject to the general limitation on all business credits. That limitation provides that a Limited Partner can use business credits to offset the Limited Partner's annual tax liability equal to $25,000 plus 75% of the Limited Partner's tax liability in excess of $25,000. However, business credits may not be used to offset any alternative minimum tax. All of these concepts are extremely complicated. (B) RISKS RELATED TO INVESTMENT IN LOCAL LIMITED PARTNERSHIPS AND HOUSING COMPLEXES BECAUSE THE PARTNERSHIP HAS FEW INVESTMENTS, EACH INVESTMENT WILL HAVE A GREAT IMPACT ON THE PARTNERSHIP'S RESULTS OF OPERATIONS. Any single Housing Complex experiencing poor operating performance, impairment of value or recapture of Low Income Housing Tax Credits will have a significant impact upon the Partnership as a whole. THE FAILURE TO PAY MORTGAGE DEBT COULD RESULT IN A FORCED SALE OF A HOUSING COMPLEX. Each Local Limited Partnership leverages the Partnership's investment therein by incurring mortgage debt. A Local Limited Partnership's revenues could be less than its debt payments and taxes and other operating costs. If so, the Local Limited Partnership would have to use working capital reserves, seek additional funds, or suffer a forced sale of its Housing Complex, which could include a foreclosure. The same results could occur if government subsidies ceased. Foreclosure would result in a loss of the Partnership's capital invested in the Housing Complex. Foreclosure could also result in a recapture of Low Income Housing Tax Credits, and a loss of Low Income Housing Tax Credits for the year in which the foreclosure occurs. If the Housing Complex is highly-leveraged, a relatively slight decrease in the rental revenues could adversely affect the Local Limited Partnership's ability to pay its debt service requirements. Mortgage debt may be repayable in a self-amortizing series of equal installments or with a large balloon final payment. Balloon payments maturing prior to the end of the anticipated holding period for the Housing Complex create the risk of a forced sale if the debt cannot be refinanced. There can be no assurance that additional funds will be available to any Local Limited Partnership if needed on acceptable terms or at all. THE PARTNERSHIP DOES NOT CONTROL THE LOCAL LIMITED PARTNERSHIPS AND MUST RELY ON THE LOCAL GENERAL PARTNERS. The Local General Partners will make all management decisions for the Local Limited Partnerships and the Housing Complexes. The Partnership has very limited rights with respect to management of the Local Limited Partnerships. The Partnership will not be able to exercise any control with respect to Local Limited Partnership business decisions and operations. Consequently, the success of the Partnership will depend on the abilities of the Local General Partners. 6 HOUSING COMPLEXES SUBSIDIZED BY OTHER GOVERNMENT PROGRAMS ARE SUBJECT TO ADDITIONAL RULES WHICH MAY MAKE IT DIFFICULT TO OPERATE AND SELL HOUSING COMPLEXES. Some or all of the Housing Complexes receive or may receive government financing or operating subsidies in addition to Low Income Housing Tax Credits. The following are risks associated with some such subsidy programs: o Obtaining tenants for the Housing Complexes. Government regulations limit the types of people who can rent subsidized housing. These regulations may make it more difficult to rent the residential units in the Housing Complexes. o Obtaining rent increases. In many cases rents can only be increased with the prior approval of the subsidizing agency. o Limitations on cash distributions. The amount of cash that may be distributed to owners of subsidized Housing Complexes is less than the amount that could be earned by the owners of non-subsidized Housing Complexes. o Limitations on sale or refinancing of the Housing Complexes. A Local Limited Partnership may be unable to sell its Housing Complex or to refinance its mortgage loan without the prior approval of the subsidizer. The subsidizer may withhold such approval in the discretion of the subsidizer. Approval may be subject to conditions, including the condition that the purchaser continues to operate the property as affordable housing for terms which could be as long as 30 years or more. In addition, any prepayment of a mortgage may result in the assessment of a prepayment penalty. o Limitations on transfers of interests in Local Limited Partnerships. The Partnership may be unable to sell its interest in a Local Limited Partnership without the prior approval of the subsidizer. The subsidizer may withhold such approval in the discretion of the subsidizer. Approval may be subject to conditions. o Limitations on removal and admission of Local General Partners. The Partnership may be unable to remove a Local General Partner from a Local Limited Partnership except for cause, such as the violation of the rules of the subsidizer. Regulations may prohibit the removal of a Local General Partner or permit removal only with the prior approval of the subsidizer. Regulations may also require approval of the admission of a successor Local General Partner even upon the death or other disability of a Local General Partner. o Limitations on subsidy payments. Subsidy payments may be fixed in amount and subject to annual legislative appropriations. The rental revenues of a Housing Complex, when combined with the maximum committed subsidy, may be insufficient to meet obligations. Congress or the state legislature, as the case may be, may fail to appropriate or increase the necessary subsidy. In those events, the mortgage lender could foreclose on the Housing Complex unless a workout arrangement could be negotiated. o Possible changes in applicable regulations. Legislation may be enacted which adversely revises provisions of outstanding mortgage loans. Such legislation has been enacted in the past. o Limited Partners may not receive distributions if Housing Complexes are sold. There is no assurance that Limited Partners will receive any cash distributions from the sale or refinancing of a Housing Complex. The price at which a Housing Complex is sold may not be high enough to pay the mortgage and other expenses which must be paid at such time. If that happens, a Limited Partner's return may be derived only from the Low Income Housing Tax Credits and tax losses. UNINSURED CASUALTIES COULD RESULT IN LOSSES AND RECAPTURE. There are casualties which are either uninsurable or not economically insurable. These include earthquakes, floods, wars and losses relating to hazardous materials or environmental matters. If a Housing Complex experienced an uninsured casualty, the Partnership could lose both its invested capital and anticipated profits in such property. Even if the casualty were an insured loss, the Local Limited Partnership might be unable to rebuild the destroyed property. A portion of prior tax credits could be recaptured and future tax credits could be lost if the Housing Complex were not restored within a reasonable period of time. And liability judgments against the Local Limited Partnership could exceed available insurance proceeds or otherwise materially and adversely affect the Local Limited Partnership. The cost of liability and casualty insurance has increased in recent years. Casualty insurance has become more difficult to obtain and may require large deductible amounts. HOUSING COMPLEXES WITHOUT FINANCING OR OPERATING SUBSIDIES MAY BE UNABLE TO PAY OPERATING EXPENSES. If a Local Limited Partnership were unable to pay operating expenses, one result could be a forced sale of its Housing 7 Complex. If a forced sale occurs during the first 15 years of a Housing Complex, a partial recapture of Low Income Housing Tax Credits could occur. In this regard, some of the Local Limited Partnerships may own Housing Complexes which have no subsidies other than Low Income Housing Tax Credits. Those Housing Complexes do not have the benefit of below-market-interest-rate financing or operating subsidies which often are important to the feasibility of low income housing. Those Housing Complexes rely solely on rents to pay expenses. However, in order for any Housing Complex to be eligible for Low Income Housing Tax Credits, it must restrict the rent which may be charged to tenants. Over time, the expenses of a Housing Complex will increase. If a Local Limited Partnership cannot increase its rents, it may be unable to pay increased operating expenses. THE PARTNERSHIP'S INVESTMENT PROTECTION POLICIES WILL BE WORTHLESS IF THE NET WORTH OF THE LOCAL GENERAL PARTNERS IS NOT SUFFICIENT TO SATISFY THEIR OBLIGATIONS. There is a risk that the Local General Partners will be unable to perform their financial obligations to the Partnership. The General Partner has not established a minimum net worth requirement for the Local General Partners. Rather, each Local General Partner demonstrates a net worth which the General Partner believes is appropriate under the circumstances. The assets of the Local General Partners are likely to consist primarily of real estate holdings and similar assets. The fair market value of these types of assets is difficult to estimate. These types of assets cannot be readily liquidated to satisfy the financial guarantees and commitments which the Local General Partners make to the Partnership. Moreover, other creditors may have claims on these assets. No escrow accounts or other security arrangements will be established to ensure performance of a Local General Partner's obligations. The cost to enforce a Local General Partner's obligations may be high. If a Local General Partner does not satisfy its obligations the Partnership may have no remedy, or the remedy may be limited to removing the Local General Partner as general partner of the Local Limited Partnership. FLUCTUATING ECONOMIC CONDITIONS CAN REDUCE THE VALUE OF REAL ESTATE. Any investment in real estate is subject to risks from fluctuating economic conditions. These conditions can adversely affect the ability to realize a profit or even to recover invested capital. Among these conditions are: o the general and local job market, o the availability and cost of mortgage financing, o monetary inflation, o tax, environmental, land use and zoning policies, o the supply of and demand for similar properties, o neighborhood conditions, o the availability and cost of utilities and water. For each of the years ended March 31, 2007, 2006, 2005, 2004 and 2003, a loss in value of the Partnership's investments in Local Limited Partnerships, other than a temporary decline, was recorded as an impairment loss in the Partnership's financial statements. Impairment is measured by comparing the Partnership's carrying amount in the investment to the sum of the total amount of the remaining future Low Income Housing Tax Credits estimated to be allocated to the Partnership and the estimated residual value to the Partnership. For the years ended March 31, 2007, 2006, 2005, 2004 and 2003, impairment loss related to investments in Local Limited Partnerships was $1,054,872, $1,010,154, $408,644, $55,384 and $231,646, respectively. (C) TAX RISKS OTHER THAN THOSE RELATING TO TAX CREDITS In addition to the risks pertaining specifically to Low Income Housing Tax Credits, there are other Federal income tax risks. Additional Federal income tax risks associated with the ownership of Partnership Units and the operations of the Partnership and the Local Limited Partnerships include, but are not limited to, the following: NO OPINION OF COUNSEL AS TO CERTAIN MATTERS. No legal opinion is obtained regarding matters: o the determination of which depends on future factual circumstances, o which are peculiar to individual Limited Partners, or o which are not customarily the subject of an opinion. 8 The more significant of these matters include: o allocating purchase price among components of a property, particularly as between buildings and fixtures, the cost of which is depreciable, and the underlying land, the cost of which is not depreciable, o characterizing expenses and payments made to or by the Partnership or a Local Limited Partnership, o identifying the portion of the costs of any Housing Complex which qualify for historic and other tax credits, o applying to any specific Limited Partner the limitation on the use of tax credits and tax losses. Limited Partners must determine for themselves the extent to which they can use tax credits and tax losses, and o the application of the alternative minimum tax to any specific Limited Partner, or the calculation of the alternative minimum tax by any Limited Partner. The alternative minimum tax could reduce the tax benefits from an investment in the Partnership. There can be no assurance, therefore, that the IRS will not challenge some of the tax positions adopted by the Partnership. The courts could sustain an IRS challenge. An IRS challenge, if successful, could have a detrimental effect on the Partnership's ability to realize its investment objectives. PASSIVE ACTIVITY RULES WILL LIMIT DEDUCTION OF THE PARTNERSHIP'S LOSSES AND IMPOSE TAX ON INTEREST INCOME. The Internal Revenue Code imposes limits on the ability of most investors to claim losses from investments in real estate. An individual may claim these so-called passive losses only as an offset to income from investments in real estate or rental activities. An individual may not claim passive losses as an offset against other types of income, such as salaries, wages, dividends and interest. These passive activity rules will restrict the ability of most Limited Partners to use losses from the Partnership as an offset of non-passive income. THE PARTNERSHIP MAY EARN INTEREST INCOME ON ITS RESERVES AND LOANS. The passive activity rules generally will categorize interest as portfolio income, and not passive income. Passive losses cannot be used as an offset to portfolio income. Consequently, a Limited Partner could pay tax liability on portfolio income from the Partnership. AT RISK RULES MIGHT LIMIT DEDUCTION OF THE PARTNERSHIP'S LOSSES. If a significant portion of the financing used to purchase Housing Complexes does not consist of qualified nonrecourse financing, the "at risk" rules will limit a Limited Partner's ability to claim Partnership losses to the amount the Limited Partner invests in the Partnership. The "at risk" rules of the Internal Revenue Code generally limit a Limited Partner's ability to deduct Partnership losses to the sum of: o the amount of cash the Limited Partner invests in the Partnership, and o the Limited Partner's share of Partnership qualified nonrecourse financing. Qualified nonrecourse financing is non-convertible, nonrecourse debt which is borrowed from a government, or with exceptions, any person actively and regularly engaged in the business of lending money. TAX LIABILITY ON SALE OF A HOUSING COMPLEX OR LOCAL LIMITED PARTNERSHIP INTEREST MAY EXCEED THE CASH AVAILABLE FROM THE SALE. When a Local Limited Partnership sells a Housing Complex it will recognize gain. Such gain is equal to the difference between: o the sales proceeds plus the amount of indebtedness secured by the Housing Complex, and o the adjusted basis for the Housing Complex. The adjusted basis for a Housing Complex is its original cost, plus capital expenditures, minus depreciation. Similarly, when the Partnership sells an interest in a Local Limited Partnership the Partnership will recognize gain. Such gain is equal to the difference between: o the sales proceeds plus the Partnership's share of the amount of indebtedness secured by the Housing Complex, and o the adjusted basis for the interest. The adjusted basis for an interest in a Local Limited Partnership is the amount paid for the interest, plus income allocations and cash distributions, less loss allocations. 9 Accordingly, gain will be increased by the depreciation deductions taken during the holding period for the Housing Complex. In some cases, a Limited Partner could have a tax liability from a sale greater than the cash distributed to the Limited Partner from the sale. ALTERNATIVE MINIMUM TAX LIABILITY COULD REDUCE A LIMITED PARTNER'S TAX BENEFITS. If a Limited Partner pays alternative minimum tax, the Limited Partner could suffer a reduction in benefits from an investment in the Partnership. The application of the alternative minimum tax is personal to each Limited Partner. Tax credits may not be utilized to reduce alternative minimum tax liability. IRS COULD AUDIT THE RETURNS OF THE PARTNERSHIP, THE LOCAL LIMITED PARTNERSHIPS OR THE LIMITED PARTNERS. The IRS can audit the Partnership or a Local Limited Partnership at the entity level with regard to issues affecting the entity. The IRS does not have to audit each Limited Partner in order to challenge a position taken by the Partnership or a Local Limited Partnership. Similarly, only one judicial proceeding can be filed to contest an IRS determination. A contest by the Partnership of any IRS determination might result in high legal fees. AN AUDIT OF THE PARTNERSHIP OR A LOCAL LIMITED PARTNERSHIP ALSO COULD RESULT IN AN AUDIT OF A LIMITED PARTNER. An audit of a Limited Partner's tax returns could result in adjustments both to items that are related to the Partnership and to unrelated items. The Limited Partner could then be required to file amended tax returns and pay additional tax plus interest and penalties. A SUCCESSFUL IRS CHALLENGE TO TAX ALLOCATIONS OF THE PARTNERSHIP OR A LOCAL LIMITED PARTNERSHIP WOULD REDUCE THE TAX BENEFITS OF AN INVESTMENT IN THE PARTNERSHIP. Under the Internal Revenue Code, a partnership's allocation of income, gains, deductions, losses and tax credits must have substantial economic effect. Substantial economic effect is a highly-technical concept. The fundamental principle is two-fold. If a partner will benefit economically from an item of partnership income or gain, that item must be allocated to him so that he bears the correlative tax burden. Conversely, if a partner will suffer economically from an item of partnership deduction or loss, that item must be allocated to him so that he bears the correlative tax benefit. If a partnership's allocations do not have substantial economic effect, then the partnership's tax items are allocated in accordance with each partner's interest in the partnership. The IRS might challenge the allocations made by the Partnership: o between the Limited Partners and the General Partner, o among the Limited Partners, or o between the Partnership and a Local General Partner. If any allocations were successfully challenged, a greater share of the income or gain or a lesser share of the losses or tax credits might be allocated to the Limited Partners. This would increase the tax liability or reduce the tax benefits to the Limited Partners. TAX LIABILITIES COULD ARISE IN LATER YEARS OF THE PARTNERSHIP. After a period of years following commencement of operations by a Local Limited Partnership, the Local Limited Partnership may generate profits rather than losses. A Limited Partner would have tax liability on his share of such profits unless he could offset the income with: o unused passive losses from the Partnership or other investments, or o current passive losses from other investments. In such circumstances, the Limited Partner would not receive a cash distribution from the Partnership with which to pay any tax liability. IRS CHALLENGE TO TAX TREATMENT OF EXPENDITURES COULD REDUCE LOSSES. The IRS may contend that fees and payments of the Partnership or a Local Limited Partnership: o should be deductible over a longer period of time or in a later year, o are excessive and may not be capitalized or deducted in full, o should be capitalized and not deducted, or 10 o may not be included as part of the basis for computing tax credits. Any such contention by the IRS could adversely impact, among other things: o the eligible basis of a Housing Complex used to compute Low Income Housing Tax Credits, o the adjusted basis of a Housing Complex used to compute depreciation, o the correct deduction of fees, o the amortization of organization and offering expenses and start-up expenditures. If the IRS were successful in any such contention, the anticipated Low Income Housing Tax Credits and losses of the Partnership would be reduced, perhaps substantially. CHANGES IN TAX LAW MIGHT REDUCE THE VALUE OF LOW INCOME HOUSING TAX CREDITS. Although all Low Income Housing Tax Credits are allocated to a Housing Complex at commencement of the 10-year credit period, there can be no assurance that future legislation may not adversely affect an investment in the Partnership. For example, legislation could reduce or eliminate the value of Low Income Housing Tax Credits. In this regard, before 1986, the principal tax benefit of an investment in low income housing was tax losses. These tax losses generally were used to reduce an investor's income from all sources on a dollar-for-dollar basis. Investments in low income housing were made in reliance on the availability of such tax benefits. However, tax legislation enacted in 1986 severely curtailed deduction of such losses. NEW ADMINISTRATIVE OR JUDICIAL INTERPRETATIONS OF THE LAW MIGHT REDUCE THE VALUE OF TAX CREDITS. Many of the provisions of the Internal Revenue Code related to low income housing and real estate investments have not been interpreted by the IRS in regulations, rulings or public announcements, or by the courts. In the future, these provisions may be interpreted or clarified by the IRS or the courts in a manner adverse to the Partnership or the Local Limited Partnerships. The IRS constantly reviews the Federal tax rules, and can revise its interpretations of established concepts. Any such revisions could reduce or eliminate tax benefits associated with an investment in the Partnership. STATE INCOME TAX LAWS MAY ADVERSELY AFFECT THE LIMITED PARTNERS. A Limited Partner may be required to file income tax returns and be subject to tax and withholding in each state or local taxing jurisdiction in which: a Housing Complex is located, the Partnership or a Local Limited Partnership engages in business activities, or the Limited Partner is a resident. Corporate Limited Partners may be required to pay state franchise taxes. THE TAX TREATMENT OF PARTICULAR ITEMS UNDER STATE OR LOCAL INCOME TAX LAWS MAY VARY MATERIALLY FROM THE FEDERAL INCOME TAX TREATMENT OF SUCH ITEMS. Nonetheless, many of the Federal income tax risks associated with an investment in the Partnership may also apply under state or local income tax law. The Partnership may be required to withhold state taxes from distributions or income allocations to Limited Partners in some instances. (D) RISKS RELATED TO THE PARTNERSHIP AND THE PARTNERSHIP AGREEMENT THE PARTNERSHIP MAY BE UNABLE TO TIMELY PROVIDE FINANCIAL REPORTS TO THE LIMITED PARTNERS WHICH WOULD ADVERSELY AFFECT THEIR ABILITY TO MONITOR PARTNERSHIP OPERATIONS. Historically, the Partnership has been unable to timely file and provide investors with all its required periodic reports. In some instances, the delay has been substantial. Each Local General Partner is required to retain independent public accountants and to report financial information to the Partnership in a timely manner. There cannot be any assurance that the Local General Partners will satisfy these obligations. If not, the Partnership would be unable to provide to the Limited Partners in a timely manner its financial statements and other reports. That would impact the Limited Partners' ability to monitor Partnership operations. The Partnership's failure to meet its filing requirements under the Securities Exchange Act of 1934 could reduce the liquidity for the Partnership Units due to the unavailability of public information concerning the Partnership. The failure to file could also result in sanctions imposed by the SEC. Any defense mounted by the Partnership in the face of such sanctions could entail legal and other fees, which would diminish cash reserves. LACK OF LIQUIDITY OF INVESTMENT. It is unlikely that a public market will develop for the purchase and sale of Partnership Units. Accordingly, Limited Partners may not be able to sell their Partnership Units promptly or at 11 a reasonable price. Partnership Units should be considered as a long-term investment because the Partnership is unlikely to sell any Local Limited Partnership Interests for at least 15 years. Partnership Units cannot be transferred to tax-exempt or foreign entities, or through a secondary market. The General Partner can deny effectiveness of a transfer if necessary to avoid adverse tax consequences from the transfer. The General Partner does not anticipate that any Partnership Units will be redeemed by the Partnership. THE LIMITED PARTNERS WILL NOT CONTROL THE PARTNERSHIP AND MUST RELY TOTALLY ON THE GENERAL PARTNER. The General Partner will make all management decisions for the Partnership. Management decisions include exercising powers granted to the Partnership by a Local Limited Partnership. Limited Partners have no right or power to take part in Partnership management. Individual Limited Partners will have no recourse if they disagree with actions authorized by a vote of the majority. The Partnership Agreement grants to Limited Partners owning more than 50% of the Partnership Units the right to: o remove the General Partner and elect a replacement general partner, o amend the Partnership Agreement, o terminate the Partnership. Accordingly, a majority-in-interest of the Limited Partners could cause any such events to occur, even if Limited Partners owning 49% of the Partnership Units opposed such action. LIMITATIONS ON LIABILITY OF THE GENERAL PARTNER TO THE PARTNERSHIP. The ability of Limited Partners to sue the General Partner and it affiliates is subject to limitations. The Partnership Agreement limits the liability of the General Partner and it affiliates to the Limited Partners. The General Partner and it affiliates will not be liable to the Limited Partners for acts and omissions: performed or omitted in good faith, and performed or omitted in a manner which the General Partner reasonably believed to be within the scope of its authority and in the best interest of the Limited Partners, provided such conduct did not constitute negligence or misconduct. Therefore, Limited Partners may be less able to sue the General Partner and it affiliates than would be the case if such provisions were not included in the Partnership Agreement. PAYMENT OF FEES TO THE GENERAL PARTNER AND ITS AFFILIATES REDUCES CASH AVAILABLE FOR INVESTMENT IN LOCAL LIMITED PARTNERSHIPS. The General Partner and it affiliates perform many services for the Partnership. They are paid fees for these services, which reduce the amount of the cash available for investment in Local Limited Partnerships. Accordingly, an investor investing directly in a low income housing apartment complex would have a greater amount available for investment than an investor investing in low income housing through the Partnership. ASSOCIATES AND ITS AFFILIATES ARE SERVING AS THE GENERAL PARTNERS OF MANY OTHER PARTNERSHIPS. Depending on their corporate area of responsibility, the officers of Associates initially devote approximately 5% to 50% of their time to the Partnership. These individuals spend significantly less time devoted to the Partnership after the investment of the Partnership`s capital in Local Limited Partnerships. THE INTERESTS OF LIMITED PARTNERS MAY CONFLICT WITH THE INTERESTS OF THE GENERAL PARTNER AND ITS AFFILIATES. The General Partner and its affiliates are committed to the management of more than 100 other limited partnerships that have investments similar to those of the Partnership. The General Partner and its affiliates receive substantial compensation from the Partnership. The General Partner decides how the Partnership's investments in Housing Complexes are managed, and when the investments will be sold. The General Partner may face a conflict in these circumstances because the General Partner's share of fees and cash distributions from the transaction may be more or less than their expected share of fees if a Housing Complex were not sold. The result of these conflicts could be that a Partnership may make investments which are less desirable, or on terms which are less favorable, to the Partnership than might otherwise be the case. The Partnership has not developed any formal process for resolving conflicts of interest. However, the General Partner is subject to a fiduciary duty to exercise good faith and integrity in handling the affairs of the Partnership, and that duty will govern its actions in all such matters. Furthermore, the manner in which the Partnership can operate and sell investments are subject to substantial restrictions in the Partnership Agreement. 12 Anticipated future and existing cash resources of the Partnership are not sufficient to pay existing liabilities of the Partnership. However, substantially all of the existing liabilities of the Partnership are payable to the General Partner and/or its affiliates. The Partnership's accrued payables consist primarily of the asset management fees payable to the General Partner. These accrued payables changed by approximately $(27,000), $4,000, and $(10,000) for the years ended March 31, 2007, 2006 and 2005, respectively. The Partnership's future contractual cash obligations consist solely of its obligations to pay future annual asset management fees. These will equal approximately $64,000 per year through the termination of the Partnership, which must occur no later than December 31, 2052. Though the amounts payable to the General Partner and/or its affiliates are contractually currently payable, the Partnership anticipates that the General Partner and/or its affiliates will not require the payment of these contractual obligations until capital reserves are in excess of the aggregate of the existing contractual obligations and anticipated future foreseeable obligations of the Partnership. The Partnership would be adversely affected should the General Partner and/or its affiliates demand current payment of the existing contractual obligations and or suspend services for this or any other reason. ITEM 5A. a) The Partnership Units are not traded on a public exchange but were sold through a public offering. It is not anticipated that any public market will develop for the purchase and sale of any Partnership Units and none exists. Partnership Units can be assigned or otherwise transferred only if certain requirements in the Partnership Agreement are satisfied. b) At March 31, 2007, 2006, 2005 and 2004, there were 1,032, 1,028, 1,028, and 1,014 Limited Partners, respectively, and 25, 23, 22, and 19, assignees of Partnership Units who were not admitted as Limited Partners, respectively. c) The Partnership was not designed to provide cash distributions to Limited Partners in circumstances other than, perhaps, refinancing or disposition of its investments in Local Limited Partnerships. Any such distributions would be made in accordance with the terms of the Partnership Agreement. For all years presented there were no such distributions paid to the Limited Partners. d) No securities are authorized for issuance by the Partnership under equity compensation plans. e) The Partnership does not issue common stock f) No unregistered securities were sold by the Partnership during the years ended March 31, 2007, 2006, 2005 and 2004. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 13 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 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, 2007, 2006, 2005, 2004 and 2003, and the related statements of operations, partners' equity (deficit) and cash flows for the five year period then ended. 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. We did not audit the financial statements of certain local limited partnerships which investments represent $1,067,348, $1,491,170, and $2,194,533 of the total Partnership assets as of March 31, 2007, 2006 and 2005, respectively, and $(189,836), $(206,630) and $(188,381) of the total Partnership loss for the years ended March 31, 2007, 2006 and 2005, respectively. Those statements were audited by other auditors, whose reports have been furnished to us, and our opinion, insofar as it relates to those local limited partnerships, is based solely on the reports of the other auditors. The March 31, 2002 financial statements were audited by other auditors, and their report thereon, dated June 4, 2003, stated that a significant portion of the financial statements of the local limited partnerships in which the Partnership is a limited partner were audited by other auditors whose reports had been furnished to them. Their opinion, insofar as it relates to the amounts included in the financial statements for the local limited partnerships which were audited by other auditors, was based solely on the reports of the other auditors. Additionally, their report stated that they were unable to obtain audited financial statements for one of the Partnership's 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 loss recorded by the Partnership with respect to its investment in Cotton Mill during the year ended March 31, 2002 totaled $(244,000) (unaudited). The report by the other auditors contained an audit scope limitation paragraph 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. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal controls over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidencesupporting 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 provide a reasonable basis for our opinion. In our opinion, based on our audit and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the financial position of WNC Housing Tax Credit Fund VI, L.P., Series 6 (a California Limited Partnership) as of March 31, 2007, 2006, 2005, 2004 and 2003, and the results of its operations and its cash flows for the five year period then ended in conformity with accounting principles generally accepted in the United States of America. 14 Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedules listed under Item 15(a)(2) in the index are presented for the purpose of complying with the Securities and Exchange Commission's rules and are not part of the basic financial statements. These schedules have been subjected to the auditing procedures applied to the audits of the basic financial statements and, in our opinion, based on our audits, and the reports of other auditors, fairly state in all material respects the financial statement data required to be set forth therein in relation to the basic financial statements taken as a whole. /s/ Reznick Group, P.C. ----------------------- Bethesda, Maryland February 15, 2008 15 Report of Independent Auditors To the Partners of United Development Co., L.P.-2000 We have audited the accompanying balance sheet of United Development Co., L.P.-2000 as of December 31, 2006, and the related statements of operations, changes in partners' capital and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal controls over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of United Development Co., L.P.-2000 at December 31, 2006, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. /s/ Novogradac & Company, LLP ----------------------------- Alpharetta, Georgia June 20, 2007 16
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A CALIFORNIA LIMITED PARTNERSHIP) BALANCE SHEETS MARCH 31, ----------------------------------------------------------------------- 2007 2006 2005 2004 2003 ------------ ------------ ------------ ------------ ------------ ASSETS Cash $ 297,309 $ 349,942 $ 433,376 $ 659,789 $ 722,715 Investments in Local Limited Partnerships, net (Notes 2 and 3) 7,220,253 9,162,119 11,080,713 12,651,097 13,562,908 Other assets 160 160 160 160 7,436 ------------ ------------ ------------ ------------ ------------ Total Assets $ 7,517,722 $ 9,512,221 $ 11,514,249 $ 13,311,046 $ 14,293,059 ============ ============ ============ ============ ============ LIABILITIES AND PARTNERS' EQUITY (DEFICIT) Liabilities: Payables to Local Limited Partnerships (Note 5) $ 52,570 $ 52,570 $ 52,570 $ 209,461 $ 246,175 Accrued expenses -- -- 14,950 12,640 -- Accrued fees and advances due to General Partner and affiliate (Note 3) 89,951 81,478 76,303 62,237 42,903 ------------ ------------ ------------ ------------ ------------ Total Liabilities 142,521 134,048 143,823 284,338 289,078 ------------ ------------ ------------ ------------ ------------ Partners' equity (deficit) General Partner (130,727) (110,697) (90,774) (74,211) (64,438) Limited Partners (25,000 Partnership Units authorized; 20,500 Partnership Units issued and outstanding) 7,505,928 9,488,870 11,461,200 13,100,919 14,068,419 ------------ ------------ ------------ ------------ ------------ Total partners' equity (deficit) 7,375,201 9,378,173 11,370,426 13,026,708 14,003,981 ------------ ------------ ------------ ------------ ------------ Total Liabilities and Partners' Equity $ 7,517,722 $ 9,512,221 $ 11,514,249 $ 13,311,046 $ 14,293,059 ============ ============ ============ ============ ============ See accompanying notes to financial statements 17 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A CALIFORNIA LIMITED PARTNERSHIP) STATEMENTS OF OPERATIONS FOR THE YEARS ENDED MARCH 31, ----------------------------------------------------------------------------------------------- 2007 2006 2005 2004 2003 2002 -------------- -------------- -------------- -------------- -------------- -------------- Reporting fees $ 7,883 $ 12,749 $ 3,500 $ 26,824 $ 13,343 $ 1,250 Distribution Income 79 -- -- -- -- -- -------------- -------------- -------------- -------------- -------------- -------------- Total income 7,962 12,749 3,500 26,824 13,343 1,250 -------------- -------------- -------------- -------------- -------------- -------------- Operating expenses: Amortization (Notes 2 and 3) 48,305 48,508 51,548 51,548 51,548 51,548 Asset management fees (Note 3) 63,892 63,892 63,892 63,893 63,893 59,808 Impairment (Note 2) 1,054,872 1,010,154 408,644 55,384 231,646 -- Accounting and legal fees 3,214 9,173 20,777 29,286 19,372 23,840 Write-off of bad debt (Note 2) -- 11,416 -- 7,276 -- -- Other 6,116 6,548 8,421 11,268 13,047 45,148 -------------- -------------- -------------- -------------- -------------- -------------- Total operating expenses 1,176,399 1,149,691 553,282 218,655 379,506 180,344 -------------- -------------- -------------- -------------- -------------- -------------- Loss from operations (1,168,437) (1,136,942) (549,782) (191,831) (366,163) (179,094) Equity in losses of Local Limited Partnerships (Note 2) (835,959) (857,201) (1,109,658) (790,609) (739,166) (1,136,238) Interest income 1,424 1,890 3,158 5,167 10,418 32,552 -------------- -------------- -------------- -------------- -------------- -------------- Net loss $ (2,002,972) $ (1,992,253) $ (1,656,282) $ (977,273) $ (1,094,911) $ (1,282,780) ============== ============== ============== ============== ============== ============== Net loss allocated to: General Partner $ (20,030) $ (19,923) $ (16,563) $ (9,773) $ (10,949) $ (12,828) ============== ============== ============== ============== ============== ============== Limited Partners $ (1,982,942) $ (1,972,330) $ (1,639,719) $ (967,500) $ (1,083,962) $ (1,269,952) ============== ============== ============== ============== ============== ============== Net loss per Partnership Unit $ (96.73) $ (96.21) $ (79.99) $ (47.20) $ (52.88) $ (61.95) ============== ============== ============== ============== ============== ============== Outstanding weighted Partnership Units 20,500 20,500 20,500 20,500 20,500 20,500 ============== ============== ============== ============== ============== ============== See accompanying notes to financial statements 18 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, 2007, 2006, 2005, 2004, 2003 AND 2002 GENERAL LIMITED PARTNER PARTNERS TOTAL ------------ ------------ ------------ 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 Net loss (10,949) (1,083,962) (1,094,911) ------------ ------------ ------------ Partners' equity (deficit) at March 31, 2003 (64,438) 14,068,419 14,003,981 Net loss (9,773) (967,500) (977,273) ------------ ------------ ------------ Partners' equity (deficit) at March 31, 2004 (74,211) 13,100,919 13,026,708 Net loss (16,563) (1,639,719) (1,656,282) ------------ ------------ ------------ Partners' equity (deficit) at March 31, 2005 (90,774) 11,461,200 11,370,426 Net loss (19,923) (1,972,330) (1,992,253) ------------ ------------ ------------ (110,697) 9,488,870 9,378,173 Partners' equity (deficit) at March 31, 2006 Net loss (20,030) (1,982,942) (2,002,972) ------------ ------------ ------------ Partners' equity (deficit) at March 31, 2007 $ (130,727) $ 7,505,928 $ 7,375,201 ============ ============ ============ See accompanying notes to financial statements 19 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A CALIFORNIA LIMITED PARTNERSHIP) STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED MARCH 31, -------------------------------------------- 2007 2006 2005 ----------- ----------- ----------- Cash flows from operating activities: Net loss $(2,002,972) $(1,992,253) $(1,656,282) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Amortization 48,305 48,508 51,548 Impairment loss 1,054,872 1,010,154 408,644 Equity in losses of Local Limited Partnerships 835,959 857,201 1,109,658 Change in other assets -- -- -- Advances made to a Local Limited Partnership -- (11,416) -- Write off of advances made to a Local Limited Partnership -- 11,416 -- Change in accrued expenses -- (14,950) 2,310 Change in accrued fees and expenses due to General Partner and affiliates 8,473 5,175 14,066 ----------- ----------- ----------- Net cash used in operating activities (55,363) (86,165) (70,056) ----------- ----------- ----------- Cash flows from investing activities: Investments in Local Limited Partnerships, net -- -- (156,857 Loans receivable, net -- -- -- Distributions from Local Limited Partnerships 2,730 2,731 500 ----------- ----------- ----------- Net cash provided by (used in) investing 2,730 2,731 (156,357) activities ----------- ----------- ----------- Net decrease in cash (52,633) (83,434) (226,413) Cash, beginning of year 349,942 433,376 659,789 ----------- ----------- ----------- Cash, end of year $ 297,309 $ 349,942 $ 433,376 =========== =========== =========== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Interest paid $ -- $ -- $ -- =========== =========== =========== Taxes paid $ 800 $ 800 $ 800 =========== =========== =========== See accompanying notes to financial statements 20 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A CALIFORNIA LIMITED PARTNERSHIP) STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED MARCH 31, ------------------------------------------- 2004 2003 2002 ----------- ----------- ----------- Cash flows from operating activities: Net loss $ (977,273) $(1,094,911) $(1,282,780) Adjustments to reconcile net loss to net cash provided by used in operating activities: Amortization 51,548 51,548 51,548 Impairment loss 55,384 231,646 -- Equity in losses of Local Limited Partnerships 790,609 739,166 1,136,238 Change in other assets -- (5,377) (1,889) Advances made to a Local Limited Partnership -- -- -- Write off of advances made to a Local Limited Partnership 7,276 -- -- Change in accrued expenses 12,640 -- -- Change in accrued fees and expenses due to General Partner and affiliates 19,334 (674) 20,625 ----------- ----------- ----------- Net cash used in operating activities (40,482) (78,602) (76,258) ----------- ----------- ----------- Cash flows from investing activities: Investments in Local Limited Partnerships, net (23,791) (10) (335,137) Loans receivable, net -- 50,000 -- Distributions from Local Limited Partnerships 1,347 -- 9,835 ----------- ----------- ----------- Net cash provided by (used in) investing activities (22,444) 49,990 (325,302) ----------- ----------- ----------- Net decrease in cash (62,926) (28,612) (401,560) Cash, beginning of year 722,715 751,327 1,152,887 ----------- ----------- ----------- Cash, end of year $ 659,789 $ 722,715 $ 751,327 =========== =========== =========== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Interest paid $ -- $ -- $ 34,336 =========== =========== =========== Taxes paid $ 800 $ 800 $ 800 =========== =========== =========== See accompanying notes to financial statements
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, 2007, 2006, 2005, 2004, 2003 AND 2002 NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -------------------------------------------------------------------- ORGANIZATION WNC Housing Tax Credit Fund VI, L.P., Series 6, a California Limited Partnership (the "Partnership") was formed on March 3, 1997 under the laws of the State of California, and commenced operations on August 20, 1998. 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 Federal low income housing tax credits ("Low Income Housing Tax Credits"). The local general partners (the "Local General Partners") of each Local Limited Partnership retain responsibility for maintaining, operating and managing the Housing Complexes. The general partner is WNC & Associates, Inc. ("Associates" or the "General Partner"). The chairman and president of Associates own substantially all the outstanding stock of Associates. The business of the Partnership is conducted primarily through Associates, 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 of limited partnership units ("Partnership Units") at $1,000 per Partnership Unit. The offering of Partnership Units has concluded and 20,500 Partnership 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 Low Income Housing Tax Credits of the Partnership. The investors (the "Limited Partners") in the Partnership will be allocated the remaining 99% of these items in proportion to their respective investments. The proceeds from the disposition of any of the Housing Complexes will be used first to pay debts and other obligations per the respective Local Limited Partnership Agreement. Any remaining proceeds will then be paid to the partners of the Local Limited Partnership, including the Partnership, in accordance with the terms of the particular Local Limited Partnership Agreement. The sale of a Housing Complex may be subject to other restrictions and obligations. Accordingly, there can be no assurance that a Local Limited Partnership will be able to sell its Housing Complex. Even if it does so, there can be no assurance that any significant amounts of cash will be distributed to the Partnership. Should such distributions occur, the Limited Partners will be entitled to receive distributions from the proceeds remaining after payment of Partnership obligations and funding reserves, equal to their capital contributions and their return on investment (as defined in the Partnership Agreement). The General Partners would then be entitled to receive proceeds equal to their capital contributions 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. RISKS AND UNCERTAINTIES An investment in the Partnership and the Partnership's investments in Local Limited Partnerships and their Housing Complexes are subject to risks. These risks may impact the tax benefits of an investment in the Partnership, and the amount of proceeds available for distribution to the Limited Partners, if any, on liquidation of the Partnership's investments. Some of those risks include the following: 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, 2007, 2006, 2005, 2004, 2003 AND 2002 NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED ------------------------------------------------------------------------------- The Low Income Housing Tax Credits rules are extremely complicated. Noncompliance with these rules results in the loss of future Low Income Housing Tax Credits and the fractional recapture of Low Income Housing Tax Credits already taken. In most cases the annual amount of Low Income Housing Tax Credits that an individual can use is limited to the tax liability due on the person's last $25,000 of taxable income. The Local Limited Partnerships may be unable to sell the Housing Complexes at a price which would result in the Partnership realizing cash distributions or proceeds from the transaction. Accordingly, the Partnership may be unable to distribute any cash to its Limited Partners. Low Income Housing Tax Credits may be the only benefit from an investment in the Partnership. The Partnership has invested in a limited number of Local Limited Partnerships. Such limited diversity means that the results of operation of each single Housing Complex will have a greater impact on the Partnership. With limited diversity, poor performance of one Housing Complex could impair the Partnership's ability to satisfy its investment objectives. Each Housing Complex is subject to mortgage indebtedness. If a Local Limited Partnership failed to pay its mortgage, it could lose its Housing Complex in foreclosure. If foreclosure were to occur during the first 15 years, the loss of any remaining future Low Income Housing Tax Credits, a fractional recapture of prior Low Income Housing Tax Credits, and a loss of the Partnership's investment in the Housing Complex would occur. The Partnership is a limited partner or non-managing member of each Local Limited Partnership. Accordingly, the Partnership will have very limited rights with respect to management of the Local Limited Partnerships. The Partnership will rely totally on the Local General Partners. Neither the Partnership's investments in Local Limited Partnerships, nor the Local Limited Partnerships' investments in Housing Complexes, are 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 interests in Local Limited Partnerships; limitations on removal of Local General Partners; limitations on subsidy programs; and possible changes in applicable regulations. Uninsured casualties could result in loss of property and Low Income Housing Tax Credits and recapture of Low Income Housing Tax Credits previously taken. The value of real estate is subject to risks from fluctuating economic conditions, including employment rates, inflation, tax, environmental, land use and zoning policies, supply and demand of similar properties, and neighborhood conditions, among others. The ability of Limited Partners to claim tax losses from the Partnership is limited. The IRS may audit the Partnership or a Local Limited Partnership and challenge the tax treatment of tax items. The amount of Low Income Housing Tax Credits and tax losses allocable to the Limited Partners could be reduced if the IRS were successful in such a challenge. The alternative minimum tax could reduce tax benefits from an investment in the Partnership. Changes in tax laws could also impact the tax benefits from an investment in the Partnership and/or the value of the Housing Complexes. No trading market for the Partnership Units exists or is expected to develop. Limited Partners may be unable to sell their Partnership Units except at a discount and should consider their Partnership Units to be a long-term investment. Individual Limited Partners will have no recourse if they disagree with actions authorized by a vote of the majority of Limited Partners. 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, 2007, 2006, 2005, 2004, 2003 AND 2002 NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED ------------------------------------------------------------------------------- EXIT STRATEGY The IRS Compliance Period for a Housing Complex is generally 15 years following construction or rehabilitation completion. Associates was one of the first in the industry to offer syndicated investments in Low Income Housing Tax Credits. The initial programs are completing their compliance periods. With that in mind, the General Partner is continuing its review of the Housing Complexes, with special emphasis on the more mature Housing Complexes such as any that have satisfied the IRS compliance requirements. The review considers many factors, including extended use requirements (such as those due to mortgage restrictions or state compliance agreements), the condition of the Housing Complexes, and the tax consequences to the Limited Partners from the sale of the Housing Complexes. Upon identifying those Housing Complexes with the highest potential for a successful sale, refinancing or syndication, the Partnership expects to proceed with efforts to liquidate them. The objective is to maximize the Limited Partners' return wherever possible and, ultimately, to wind down the Partnership. Local Limited Partnership Interests may be disposed of any time by the General Partner in its discretion. As of March 31, 2007, no Housing Complexes have been selected for disposition. While liquidation of the Housing Complexes continues to be evaluated, the dissolution of the Partnership was not imminent as of March 31, 2007. As of March 31, 2007 none of the Housing Complexes had completed the 15 year compliance period. METHOD OF ACCOUNTING FOR INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS The Partnership accounts for its investments in Local Limited Partnerships using the equity method of accounting, whereby the Partnership adjusts its investment balance for its share of the Local Limited Partnerships' results of operations and for any contributions made and distributions received. The Partnership reviews the carrying amount of an individual investment in a Local Limited Partnership for possible impairment whenever events or changes in circumstances indicate that the carrying amount of such investment may not be recoverable. Recoverability of such investment is measured by the estimated value derived by management, generally consisting of the sum of the remaining future Low Income Housing Tax Credits estimated to be allocable to the Partnership and the estimated residual value to the Partnership. If an investment is considered to be impaired, the Partnership reduces the carrying value of its investment in any such Local Limited Partnership. The accounting policies of the Local Limited Partnerships, generally, are expected to be consistent with those of the Partnership. Costs incurred by the Partnership in acquiring the investments are capitalized as part of the investment account and are being amortized over 30 years. (See Notes 2 and 3) "Equity in losses of Local Limited Partnerships" for each year ended March 31 has been recorded by the Partnership based on nine months of reported results provided by the Local Limited Partnerships for each year ended December 31 and on three months of results estimated by management of the Partnership. Management's estimate for the three-month period is based on either actual unaudited results reported by the Local Limited Partnerships or historical trends in the operations of the Local Limited Partnerships. In subsequent annual financial statements, upon receiving the actual annual results reported by the Local Limited Partnerships, management reverses its prior estimate and records the actual results reported by the Local Limited Partnership. Equity in losses from the Local Limited Partnerships allocated to the Partnership are not recognized to the extent that the investment balance would be adjusted below zero. As soon as the investment balance reaches zero, amortization of the related costs of acquiring the investment are impaired (see Note 3). 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. 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, 2007, 2006, 2005, 2004, 2003 AND 2002 NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED ------------------------------------------------------------------------------- The Partnership does not consolidate the accounts and activities of the Local Limited Partnerships which are considered Variable Interest Entities under Financial Accounting Standards Board Interpretation No. 46-Revised, "Consolidation of Variable Interest Entities", because the Partnership is not considered the primary beneficiary. The Partnership's balance in Investments in Local Limited Partnerships, plus the risk of recapture of Low Income Housing Tax Credits previously recognized on such investments, represents the maximum exposure to loss in connection with such investments. The Partnership's exposure to loss on the Local Limited Partnerships is mitigated by the condition and financial performance of the underlying Housing Complexes as well as the strength of the Local General Partners and their guarantees against Low Income Housing Tax Credit recapture. Distributions received from the Local Limited Partners are accounted for as a reduction of the investment balance. Distributions received after the investment has reached zero are recognized as distribution income. As of March 31, 2007, three investment accounts in Local Limited Partnerships had reached zero. 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 original maturities of three months or less when purchased to be cash equivalents. For all periods presented, the Partnership had no cash equivalents. CONCENTRATION OF CREDIT RISK At March 31, 2007, the Partnership maintained cash balances at a certain financial institution in excess of the federally insured maximum. The Partnership believes it is not exposed to any significant financial risk on cash. NET LOSS PER PARTNERSHIP UNIT Net loss per Partnership Unit is calculated pursuant to STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 128, EARNINGS PER SHARE. Net loss per Partnership Unit includes no dilution and is computed by dividing loss allocated to Limited Partners by the weighted average Partnership Units outstanding during the period. Calculation of diluted net loss per Partnership Unit is not required. 25 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED MARCH 31, 2007, 2006, 2005, 2004, 2003 AND 2002 NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED ------------------------------------------------------------------------------- INCOME TAXES No provision for income taxes has been recorded in the financial statements as any liabilities and or benefits from income taxes flow to the partners of the Partnership and are their obligations and/or benefits. For income tax purposes, the Partnership reports on a calendar year basis. REVENUE RECOGNITION The Partnership is entitled to receive reporting fees from the Local Limited Partnerships. The intent of the reporting fees is to offset (in part) administrative costs incurred by the Partnership in corresponding with the Local Limited Partnerships. Due to the uncertainty of the collection of these fees, the Partnership recognizes reporting fees as collections are made. RECLASSIFICATIONS Certain reclassifications have been made to the 2003 and 2002 financial statements to be consistent with the 2007, 2006, 2005 and 2004 presentation. AMORTIZATION Acquisition fees and costs are being amortized over 30 years using the straight-line method. Amortization expense for the year ended March 31, 2007, 2006, 2005, 2004, 2003 and 2002 was $48,305, $48,508, $51,548, $51,548, $51,548 and $51,548, respectively. IMPAIRMENT A loss in value of an investment in a Local Limited Partnership other than a temporary decline is recorded as an impairment loss. Impairment is measured by comparing the investment's carrying amount to the sum of the total amount of the remaining future Low Income Housing Tax Credits estimated to be allocated to the Partnership and the estimated residual value to the Partnership. For the years ended March 31, 2007, 2006, 2005, 2004, 2003 and 2002 impairment expense related to investments in Local Limited Partnerships was $1,054,872, $1,010,154, $408,644, $55,384, $231,646 and $0, respectively. When the value of the Partnership's investment in a Local Limited Partnership has been reduced to zero, the respective net acquisition fees and costs component of investments in Local Limited Partnerships are impaired. For each of the years ended March 31, 2007, 2006, 2005, 2004, 2003 and 2002 impairment expense related to acquisition fees and costs was $17,828, $31,980, $40,833, $0, $0, and $0, respectively. NOTE 2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS -------------------------------------------------- As of the periods presented, the Partnership had acquired Limited Partnership interests in 15 Local Limited Partnerships, each of which owns one Housing Complex, except for one Local Limited Partnership which owns three Housing Complexes, consisting of an aggregate of 608 apartment units. The respective Local 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 Low Income Housing Tax Credits of the Local Limited Partnerships. 26 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED MARCH 31, 2007, 2006, 2005, 2004, 2003 AND 2002 NOTE 2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS, CONTINUED ------------------------------------------------------------- The Partnership's Investments in Local Limited Partnerships as shown in the balance sheets at March 31, 2007, 2006, 2005, 2004 and 2003 are approximately $(1,642,000), $(642,000), $550,000, $1,041,000, and $1,148,000, respectively, greater than the Partnership's equity at the preceding December 31 as shown in the Local Limited Partnerships' combined condensed 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, impairment losses recorded in the Partnership's investment account and capital contributions payable to the Local Limited Partnerships which were netted against partner capital in the Local Limited Partnership's financial statements. The Partnership's Equity in losses of Local Limited Partnerships is also lower than the Partnership's equity as shown in the Local Limited Partnership's combined condensed financial statements due to the estimated losses recorded by the Partnership for the three month period ended March 31. A loss in value from a Local Limited Partnership other than a temporary decline would be recorded as an impairment loss. Impairment is measured by comparing the investment carrying amount to the sum of the total amount of the remaining Low Income Housing Tax Credits allocated to the Partnership and the estimated residual value of the investment. Accordingly, the Partnership recorded impairment losses of $1,054,872, $1,010,154, $408,644, $55,384, $231,646, and $0, during the years ended March 31, 2007, 2006, 2005, 2004, 2003 and 2002, respectively. At March 31, 2007, 2006 and 2005 the investment accounts in certain Local Limited Partnerships have reached a zero balance. Consequently, a portion of the Partnership's estimate of its share of losses for the years ended March 31, 2007, 2006 and 2005 amounting to approximately $120,000, $116,000 and $14,000, respectively, have not been recognized. As of March 31, 2007, the aggregate share of net losses not recognized by the Partnership amounted to $250,000. The following is a summary of the equity method activity of the investments in the Local Limited Partnerships for the periods presented:
FOR THE YEARS ENDED MARCH 31, ---------------------------------------------- 2007 2006 2005 ------------ ------------ ------------ Investments per balance sheet, beginning of period $ 9,162,119 $ 11,080,713 $ 12,651,097 Capital contributions paid, net -- -- -- Capital contributions payable -- -- -- Impairment loss (1,054,872) (1,010,154) (408,644) Equity in losses of Local Limited Partnerships (835,959) (857,201) (1,109,658) Tax credit adjustments -- -- (34) Amortization of paid acquisition fees and costs (48,305) (48,508) (51,548) Distributions received from Local Limited Partnerships (2,730) (2,731) (500) ------------ ------------ ------------ Investment per balance sheet, end of period $ 7,220,253 $ 9,162,119 $ 11,080,713 ============ ============ ============
27 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED MARCH 31, 2007, 2006, 2005, 2004, 2003 AND 2002 NOTE 2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS, CONTINUED ------------------------------------------------------------- FOR THE YEARS ENDED MARCH 31, ----------------------------------------------- 2004 2003 2002 ------------ ------------ ------------ Investments per balance sheet, beginning of period $ 13,562,908 $ 14,585,268 $ 15,439,696 Capital contributions paid, net -- -- 298,125 Capital contributions payable -- -- 52,605 Impairment loss (55,384) (231,646) -- Equity in losses of Local Limited Partnerships (790,609) (739,166) (1,136,238) Tax credit adjustments (12,923) -- (7,537) Amortization of paid acquisition fees and costs (51,548) (51,548) (51,548) Distributions received from Local Limited Partnerships (1,347) -- (9,835) ------------ ------------ ------------ Investment per balance sheet, end of period $ 12,651,097 $ 13,562,908 $ 14,585,268 ============ ============ ============ FOR THE YEARS ENDED MARCH 31, ----------------------------------------------- 2007 2006 2005 ------------ ------------ ------------ Investments in Local Limited Partnerships, net $ 6,172,991 $ 8,048,724 $ 9,886,830 Acquisition fees and costs, net of accumulated amortization of $499,072, $432,939 and $352,451 1,047,262 1,113,395 1,193,883 ------------ ------------ ------------ Investments per balance sheet, end of period $ 7,220,253 $ 9,162,119 $ 11,080,713 ============ ============ ============ FOR THE YEARS ENDED MARCH 31, ---------------------------------------------- 2004 2003 2002 ------------ ------------ ------------ Investments in Local Limited Partnerships, net $ 11,364,833 $ 12,225,096 $ 13,195,908 Acquisition fees and costs, net of accumulated amortization of $260,070, $208,522 and $156,974 1,286,264 1,337,812 1,389,360 ------------ ------------ ------------ Investments per balance sheet, end of period $ 12,651,097 $ 13,562,908 $ 14,585,268 ============ ============ ============
28 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED MARCH 31, 2007, 2006, 2005, 2004, 2003 AND 2002 NOTE 2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS, CONTINUED ------------------------------------------------------------- The financial information from the individual financial statements of the Local 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 BALANCE SHEETS 2006 2005 2004 2003 2002 ----------- ----------- ----------- ----------- ----------- ASSETS BUILDINGS AND IMPROVEMENT (NET OF ACCUMULATED DEPRECIATION FOR 2006, 2005, 2004, 2003 AND 2002 OF $8,966,000 $7,800,000, $6,611,000, $5,365,000, AND $3,988,000, RESPECTIVELY) $26,583,000 $27,700,000 $28,633,000 $29,509,000 $30,692,000 LAND 1,719,000 1,719,000 1,719,000 1,714,000 1,714,000 DUE FROM AFFILIATES 169,000 120,000 -- -- 170,000 OTHER ASSETS 1,310,000 1,472,000 1,493,000 1,601,000 1,391,000 ----------- ----------- ----------- ----------- ----------- TOTAL ASSETS $29,781,000 $31,011,000 $31,845,000 $32,824,000 $33,967,000 =========== =========== =========== =========== =========== LIABILITIES MORTGAGE AND CONSTRUCTION LOANS PAYABLE $15,539,000 $16,147,000 $16,357,000 $16,168,000 $16,492,000 DUE TO AFFILIATES 1,919,000 1,580,000 1,585,000 1,842,000 1,775,000 OTHER LIABILITIES 745,000 738,000 675,000 460,000 471,000 ----------- ----------- ----------- ----------- ----------- TOTAL LIABILITIES 18,203,000 18,465,000 18,617,000 18,470,000 18,738,000 ----------- ----------- ----------- ----------- ----------- PARTNERS' CAPITAL WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 8,862,000 9,804,000 8,485,000 11,610,000 12,415,000 OTHER PARTNERS 2,716,000 2,742,000 4,743,000 2,744,000 2,814,000 ----------- ----------- ----------- ----------- ----------- TOTAL PARTNERS' EQUITY 11,578,000 12,546,000 13,228,000 14,354,000 15,229,000 ----------- ----------- ----------- ----------- ----------- TOTAL LIABILITIES AND PARTNERS' EQUITY $29,781,000 $31,011,000 $31,845,000 $32,824,000 $33,967,000 =========== =========== =========== =========== ===========
29 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED MARCH 31, 2007, 2006, 2005, 2004, 2003 AND 2002 NOTE 2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS, CONTINUED ------------------------------------------------------------- COMBINED CONDENSED STATEMENTS OF OPERATIONS 2006 2005 2004 ----------- ----------- ----------- REVENUES $ 3,115,000 $ 2,932,000 $ 2,920,000 ----------- ----------- ----------- EXPENSES: OPERATING EXPENSES 2,253,000 1,956,000 2,027,000 INTEREST EXPENSE 657,000 685,000 667,000 DEPRECIATION AND AMORTIZATION 1,166,000 1,192,000 1,234,000 ----------- ----------- ----------- TOTAL EXPENSES 4,076,000 3,833,000 3,928,000 ----------- ----------- ----------- NET LOSS $ (961,000) $ (901,000) $(1,008,000) =========== =========== =========== NET LOSS ALLOCABLE TO THE PARTNERSHIP, BEFORE EQUITY IN LOSSES OF COTTON MILL $ (939,000) $ (882,000) $ (988,000) =========== =========== =========== NET LOSS RECORDED BY THE PARTNERSHIP $ (836,000) $ (857,000) $(1,110,000) =========== =========== =========== 30 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED MARCH 31, 2007, 2006, 2005, 2004, 2003 AND 2002 NOTE 2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS, CONTINUED ------------------------------------------------------------- 2003 2002 2001 ----------- ----------- ----------- REVENUES $ 2,975,000 $ 2,835,000 $ 2,385,000 ----------- ----------- ----------- EXPENSES: OPERATING EXPENSES 1,829,000 1,768,000 1,569,000 INTEREST EXPENSE 681,000 674,000 610,000 DEPRECIATION AND AMORTIZATION 1,252,000 1,251,000 1,086,000 ----------- ----------- ----------- TOTAL EXPENSES 3,762,000 3,693,000 3,265,000 ----------- ----------- ----------- NET LOSS $ (787,000) $ (858,000) $ (880,000) =========== =========== =========== NET LOSS ALLOCABLE TO THE PARTNERSHIP, BEFORE EQUITY IN LOSSES OF COTTON MILL $ (787,000) $ (840,000) $ (862,000) =========== =========== =========== NET LOSS RECORDED BY THE PARTNERSHIP $ (791,000) $ (739,000) $(1,136,000) =========== =========== ===========
Certain Local Limited Partnerships have incurred significant operating losses and/or 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 Low Income Housing Tax Credits could occur. During the years ended March 31, 2003 and 2002, the Partnership advanced one Local Limited Partnership a total of $7,276. These advances were used to fund certain nonrecurring operating expenses consisting primarily of accounting fees. The Partnership determined the recoverability of these advances to be doubtful and accordingly, has reserved the $7,276 as of March 31, 2004. During the year ended March 31, 2006 the Partnership advanced another Local Limited Partnership $11,416 which was determined to be uncollectible and as such the full amount was reserved. NOTE 3 - 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: 31 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED MARCH 31, 2007, 2006, 2005, 2004, 2003 AND 2002 NOTE 3-RELATED PARTY TRANSACTIONS, CONTINUED -------------------------------------------- Acquisition fees of up to 7% of the gross proceeds from the sale of Partnership Units as compensation for services rendered in connection with the acquisition of Local Limited Partnerships. As of all periods presented, the Partnership incurred acquisition fees of $1,435,000. Accumulated amortization of these capitalized costs was $387,738, $337,218, $289,382, $241,546, and $193,710 as of March 31, 2007, 2006, 2005, 2004 and 2003, respectively. Reimbursement of costs incurred by the General Partner or by an affiliate of Associates in connection with the acquisition of Local Limited Partnerships. These reimbursements have not exceeded 2% of the gross proceeds. As of all periods presented, the Partnership had incurred acquisition costs of $111,334 which have been included in Investments in Local Limited Partnerships. Accumulated amortization was $111,334, $95,721, $63,069, $18,524, and $14,812 as of March 31, 2007, 2006, 2005, 2004 and 2003, respectively. An annual asset management fee in an amount equal to 0.2% of the Invested Assets of the Partnership. "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. Management fees of $63,892, $63,892, $63,892, $63,893, $63,893, and $59,808, were incurred during the years ended March 31, 2007, 2006, 2005, 2004, 2003 and 2002, respectively, of which $37,032, $67,580, $54,064, $43,516, $65,110, and $40,548, were paid for the years ended March 31, 2007, 2006, 2005, 2004, 2003 and 2002, respectively. The Partnership reimbursed the General Partner or its affiliates for operating expenses incurred by the Partnership and paid for by the General Partner or its affiliates on behalf of the Partnership. Operating expense reimbursements were approximately $27,700, $13,800, $22,700, $29,000, $44,000 and $33,000 during the years ended March 31, 2007, 2006, 2005, 2004, 2003 and 2002, 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. No such fee was incurred for all periods presented. The accrued fees and expenses due to the General Partner and affiliates consist of the following at: MARCH 31, ------------------------------------------------------- 2007 2006 2005 2004 2003 ------- ------- ------- ------- ------- Asset management fee payable $86,372 $59,512 $63,200 $53,372 $32,995 Expenses paid by the General Partner or an affiliate on behalf of the Partnership 3,579 21,966 13,103 8,865 9,908 ------- ------- ------- ------- ------- Total $89,951 $81,478 $76,303 $62,237 $42,903 ======= ======= ======= ======= ======= 32 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED MARCH 31, 2007, 2006, 2005, 2004, 2003 AND 2002 NOTE 4 - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) ---------------------------------------------------- The following is a summary of the quarterly operations for the years ended March 31: JUNE 30 SEPTEMBER 30 DECEMBER 31 MARCH 31 ----------- ----------- ----------- ----------- 2007 ---- Income $ -- $ 8,000 $ -- $ -- Operating expenses (1,084,000) (33,000) (29,000) (31,000) Loss from operations (1,084,000) (25,000) (29,000) (31,000) Equity in losses of Local Limited Partnerships (209,000) (209,000) (219,000) (199,000) Interest income 1,000 1,000 -- -- Net loss (1,292,000) (233,000) (248,000) (230,000) Net loss available to Limited Partners (1,279,000) (231,000) (245,000) (228,000) Net loss per Partnership Unit (62) (11) (12) (11) JUNE 30 SEPTEMBER 30 DECEMBER 31 MARCH 31 ----------- ----------- ----------- ----------- 2006 ---- Income $ 1,000 $ 8,000 $ -- $ 4,000 Operating expenses (1,040,000) (29,000) (45,000) (36,000) Loss from operations (1,039,000) (21,000) (45,000) (32,000) Equity in losses of Local Limited Partnerships (239,000) (204,000) (204,000) (210,000) Interest income 1,000 -- -- 1,000 Net loss (1,277,000) (225,000) (249,000) (241,000) Net loss available to Limited Partners (1,265,000) (223,000) (247,000) (237,000) Net loss per Partnership Unit (62) (11) (12) (12) 33 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED MARCH 31, 2007, 2006, 2005, 2004, 2003 AND 2002 JUNE 30 SEPTEMBER 30 DECEMBER 31 MARCH 31 ----------- ----------- ----------- ----------- 2005 ---- Income $ 3,000 $ -- $ -- $ 1,000 Operating expenses (456,000) (34,000) (29,000) (34,000) Loss from operations (453,000) (34,000) (29,000) (33,000) Equity in losses of Local Limited Partnerships (264,000) (264,000) (264,000) (318,000) Interest income 1,000 1,000 -- 1,000 Net loss (716,000) (297,000) (293,000) (350,000) Net loss available to Limited Partners (709,000) (294,000) (290,000) (347,000) Net loss per Partnership Unit (35) (14) (14) (17) JUNE 30 SEPTEMBER 30 DECEMBER 31 MARCH 31 ----------- ----------- ----------- ----------- 2004 ---- Income $ 1,000 $ 21,000 $ 2,000 $ 3,000 Operating expenses (35,000) (50,000) (33,000) (101,000) ----------- ----------- ----------- ----------- Loss from operations (34,000) (29,000) (31,000) (98,000) Equity in losses of Local Limited Partnerships (206,000) (206,000) (178,000) (201,000) Interest income 1,000 1,000 1,000 2,000 Net loss (239,000) (234,000) (208,000) (297,000) Net loss available to Limited Partners (237,000) (231,000) (206,000) (294,000) Net loss per Partnership Unit (12) (11) (10) (14) 34 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED MARCH 31, 2007, 2006, 2005, 2004, 2003 AND 2002 JUNE 30 SEPTEMBER 30 DECEMBER 31 MARCH 31 ----------- ----------- ----------- ----------- 2003 ---- Income $ 3,000 $ 3,000 $ 2,000 $ 16,000 Operating expenses (36,000) (38,000) (37,000) (269,000) Equity in losses of Local Limited Partnerships (265,000) (265,000) (176,000) (33,000) Net loss (298,000) (300,000) (211,000) (286,000) Net loss available to Limited Partners (295,000) (297,000) (209,000) (283,000) Net loss per Partnership Unit (14) (15) (10) (14) 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 Local Limited Partnerships (190,000) (189,000) (281,000) (476,000) Net loss (226,000) (226,000) (308,000) (523,000) Net loss available to Limited Partners (224,000) (223,000) (306,000) (517,000) Net loss per Partnership Unit (11) (11) (15) (25)
35 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 6 (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED MARCH 31, 2007, 2006, 2005, 2004, 2003 AND 2002 NOTE 5 - PAYABLES TO LOCAL LIMITED PARTNERSHIPS ----------------------------------------------- Payables to Local 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 Local Limited Partnerships achieving certain operating and development benchmarks (generally within two years of the Partnership's initial investment). 36 ITEM 9A. CONTROLS AND PROCEDURES (a) As of the end of the period covered by this report, the Partnership's General Partner, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer of Associates, carried out an evaluation of the effectiveness of the Partnership's "disclosure controls and procedures" as defined in Securities Exchange Act of 1934 Rule 13a-15 and 15d-15. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, the Partnership's disclosure controls and procedures were not effective to ensure that material information required to be disclosed in the Partnership's periodic report filings with SEC is recorded, processed, summarized and reported within the time period specified by the SEC's rules and forms, consistent with the definition of "disclosure controls and procedures" under the Securities Exchange Act of 1934. The Partnership must rely on the Local Limited Partnerships to provide the Partnership with certain information necessary to the timely filing of the Partnership's periodic reports. Factors in the accounting at the Local Limited Partnerships have caused delays in the provision of such information during past reporting periods, and resulted in the Partnership's inability to file its periodic reports in a timely manner. Once the Partnership has received the necessary information from the Local Limited Partnerships, the Chief Executive Officer and the Chief Financial Officer of Associates believe that the material information required to be disclosed in the Partnership's periodic report filings with SEC is effectively recorded, processed, summarized and reported, albeit not in a timely manner. Going forward, the Partnership will use the means reasonably within its power to impose procedures designed to obtain from the Local Limited Partnerships the information necessary to the timely filing of the Partnership's periodic reports. (b) There were no changes in the Partnership's internal control over financial reporting that occurred during the periods ended March 31, 2007, 2006, 2005, or 2004 that materially affected, or are reasonably likely to materially affect, the Partnership's internal control over financial reporting. PART III. ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT (a) IDENTIFICATION OF DIRECTORS, (b) IDENTIFICATION OF EXECUTIVE OFFICERS, (c) IDENTIFICATION OF CERTAIN SIGNIFICANT EMPLOYEES, (d) FAMILY RELATIONSHIPS, AND (e) BUSINESS EXPERIENCE Neither the General Partner nor the Partnership has directors, executives officers or employees of its own. The business of the Partnership is conducted primarily through Associates. Associates is a California corporation which was organized in 1971. The following biographical information is presented for the officers and employees of Associates with principal responsibility for the Partnership's affairs. Wilfred N. Cooper, Sr. Chairman Wilfred N. Cooper, Jr. President and Chief Executive Officer David N. Shafer, Esq. Executive Vice President Michael J. Gaber Executive Vice President Sylvester P. Garban Senior Vice President - Institutional Investments Thomas J. Riha, CPA Senior Vice President - Chief Financial Officer Thomas J. Hollingsworth Vice President - Asset Management Gregory S. Hand Vice President - Acquisitions Melanie R. Wenk Vice President - Portfolio Management & Accounting Kay L. Cooper Director of WNC & Associates, Inc. Jennifer E. Cooper Director of WNC & Associates, Inc.
In addition to Wilfred N. Cooper, Sr., the directors of Associates are Wilfred N. Cooper, Jr., Kay L. Cooper, and Jennifer Cooper. The principal shareholders of Associates are trusts established by the Coopers. 37 Wilfred N. Cooper, Sr., age 77, is the founder and Chairman of the Board of Directors of Associates, a Director of WNC Capital Corporation, and a general partner in some of the partnerships previously sponsored by Associates. Mr. Cooper has been actively involved in the affordable housing industry since 1968. Previously, during 1970 and 1971, he was founder and a principal of Creative Equity Development Corporation, a predecessor of Associates, and of Creative Equity Corporation, a real estate investment firm. For 12 years before 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. He has testified before committees of the U.S. Senate and the U.S. House of Representatives on matters pertaining to the affordable housing industry. Mr. Cooper is a Life Director of the National Association of Home Builders, a National Trustee for NAHB's Political Action Committee, and a past Chairman of NAHB's Multifamily Council. He is a Life Trustee of the National Housing Conference, and a founder and Director of the California Housing Consortium. He is the husband of Kay Cooper and the father of Wilfred N. Cooper, Jr. Mr. Cooper graduated from Pomona College in 1956 with a Bachelor of Arts degree. Wilfred N. Cooper, Jr., age 44, is President, Chief Executive Officer, Secretary, a Director and a member of the Acquisition Committee of Associates. He is President and a Director of, and a registered principal with, WNC Capital Corporation. He has been involved in real estate investment and acquisition activities since 1988 when he joined Associates. Previously, he served as a Government Affairs Assistant with Honda North America in Washington, D.C. Mr. Cooper serves on the Board of Trustees of the National Housing Conference, and is a member of the Editorial Advisory Board of LIHTC Monthly Report, a Steering Member of the Housing Credit Group of the National Association of Home Builders, a member of the Tax Policy Council for the National Trust for Historic Preservation, a member of the Advisory Board of the New York State Association for Affordable Housing, a member of the Urban Land Institute, a member of the Orange County Advisory Board of US Bank, and a member of Vistage International, a global network of business leaders and chief executives. He is the son of Wilfred Cooper, Sr. and Kay Cooper. Mr. Cooper graduated from The American University in 1985 with a Bachelor of Arts degree. David N. Shafer, age 55, is an Executive Vice President, a member of the Acquisition Committee of, and oversees the New Markets Tax Credit operations of, Associates, and is responsible for the business development activities of WNC Community Preservation Partners. Mr. Shafer has been active in the real estate industry since 1984. Before joining Associates in 1990, he was engaged as an attorney in the private practice of law with a specialty in real estate and taxation. Mr. Shafer is a Director and past President of the California Council of Affordable Housing, and a member of the State Bar of California. Mr. Shafer graduated from the University of California at Santa Barbara in 1978 with a Bachelor of Arts degree, from the New England School of Law in 1983 with a Juris Doctor degree cum laude and from the University of San Diego in 1986 with a Master of Law degree in Taxation. Michael J. Gaber, age 41, is an Executive Vice President, oversees the Originations, and the Acquisitions Departments, and is a member of the Acquisition Committee of Associates. Mr. Gaber has been involved in real estate acquisition, valuation and investment activities since 1989 and has been associated with Associates since 1997. Prior to joining Associates, he was involved in the valuation and classification of major assets, restructuring of debt and analysis of real estate taxes with H.F. Ahmanson & Company, parent of 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. Sylvester P. Garban, age 61, is Senior Vice President - Institutional Investments of Associates and a registered principal with WNC Capital Corporation. Mr. Garban has been involved in domestic and multinational institutional real estate investment activities since 1978. Before joining Associates in 1989, he served as Executive Vice President with MRW, Inc., a commercial real estate development and management firm. He was previously involved in operations management with The Taubman Company, an international regional mall developer. Mr. Garban is a member of the National Association of Affordable Housing Lenders and the Financial Planning Association. He graduated from Michigan State University in 1967 with a Bachelor of Science degree in Business Administration. 38 Thomas J. Riha, age 52, is Senior Vice President - Chief Financial Officer and a member of the Acquisition Committee of Associates. He has been involved in real estate acquisition and investment activities since 1979. Before joining Associates in 1994, Mr. Riha was employed by Trust Realty Advisor, a real estate acquisition and management company, last serving as Vice President - Operations. He is a founding member of the Housing Credit Certified Professional Board of Governors, a national professional certification program administered by the NAHB and the National Affordable Housing Management Association. 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. Thomas J. Hollingsworth, age 56, is Vice President - Asset Management of Associates and oversees WNC's asset management group. Mr. Hollingsworth has been involved in real estate acquisitions, operations and syndication of multifamily properties for over 25 years. Prior to joining WNC in 2005, he was the senior workout specialist at Key Corporation Housing Management, Inc., a division of Key Bank. He has also been responsible for structuring several tax sheltered multifamily acquisitions during his career. Mr. Hollingsworth graduated from the University of Utah in 1973 with a Bachelor of Science degree (cum laude) in Business Administration. Gregory S. Hand, age 44, is Vice President - Acquisitions of, and oversees the property underwriting activities of, Associates. Mr. Hand has been involved in real estate analysis, development and management since 1987. Prior to joining WNC in 1998, he was a portfolio asset manager with a national Tax Credit sponsor with responsibility for the management of $200 million in assets. Prior to that, he was a finance manager with The Koll Company and a financial analyst with The Irvine Company. Mr. Hand graduated from Iowa State University in 1987 with a Bachelor of Business Administration degree in finance. Melanie R. Wenk, age 39, is Vice President - Portfolio Management & Accounting of Associates. She is responsible for overseeing institutional and retail fund portfolio management, including partnership accounting, SEC reporting, quarterly and annual investor reporting, monitoring investment returns for all stabilized WNC institutional funds, and corporate accounting. Prior to joining WNC in 2003, Ms. Wenk was associated as a public accountant with BDO Seidman, LLP. She graduated from the California Polytechnic State University, Pomona, in 1999 with a Bachelor of Science degree in accounting. Kay L. Cooper, age 72, is a Director of WNC & Associates, Inc. and has not otherwise been engaged in business activities during the previous five years. Kay Cooper was the sole proprietor of Agate 108, a manufacturer and retailer of home accessory products, from 1975 until its sale in 1998. She is the wife of Wilfred Cooper, Sr. and the mother of Wilfred Cooper, Jr. Ms. Cooper graduated from the University of Southern California in 1958 with a Bachelor of Science degree. Jennifer E. Cooper, age 46, is a Director of WNC & Associates, Inc. and has not otherwise been engaged in business activities during the previous five years. She is the wife of Wilfred Cooper, Jr. and attended the University of Texas from 1981 to 1986. (f) INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS Two Local Limited Partnerships invested in by other Associates-sponsored public limited partnerships were unable to meet their obligations as they became due, and each has filed a voluntary petition in bankruptcy. The local general partner of one of them is not affiliated with Associates. The original unaffiliated local general partner of the other was removed and replaced with a general partnership wholly-owned by two of the executive officers of Associates identified above. (g) PROMOTERS AND CONTROL PERSONS Inapplicable. (h) AUDIT COMMITTEE FINANCIAL EXPERT, AND (I) IDENTIFICATION OF THE AUDIT COMMITTEE Neither the Partnership nor Associates has an audit committee. (j) CHANGES TO NOMINATING PROCEDURES Inapplicable. 39 (k) COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT None. (l) CODE OF ETHICS Associates has adopted a Code of Ethics which applies to the Chief Executive Officer and Chief Financial Officer of Associates. The Code of Ethics will be provided without charge to any person who requests it. Such requests should be directed to: Investor Relations at (714)662-5565 extension 187. ITEM 11. EXECUTIVE COMPENSATION The General Partner and its affiliates are not permitted under Section 5.6.1 of the Partnership's Agreement of Limited Partnership (the "Agreement," incorporated as Exhibit 3.1 to this report) to receive any salary, fees, profits, distributions or allocations from the Partnership or any Local Limited Partnership in which the Partnership invests except as expressly allowed by the Agreement. The compensation and other economic benefits to the General Partner and its affiliates provided for in the Agreement are summarized below. (a) Compensation for Services For services rendered by the General Partner or an affiliate of the General Partner in connection with the administration of the affairs of the Partnership, the General Partner or any affiliate may receive an annual asset management fee in an amount equal to 0.2% of that portion of Invested Assets in Local Limited Partnerships which are attributable to apartment units receiving government assistance. "Invested Assets" means the sum of the Partnership's original 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. Accrued but unpaid asset management fees for any year are deferred without interest and are payable in subsequent years from any funds available to the Partnership after payment of all other costs and expenses of the Partnership, including any capital reserves then determined by the General Partner to no longer be necessary to be retained by the Partnership, or from the proceeds of a sale or refinancing of Partnership assets. Fees of $63,892, $63,892, $63,892, $63,893, $63,893 and $59,808 were incurred during the years ended March 31, 2007, 2006, 2005, 2004, 2003 and 2002, respectively, of which $37,302, $67,580, $54,064, $43,516, $65,110 and $40,548 were paid for the years ended March 31, 2007, 2006, 2005, 2004, 2003 and 2002, respectively. Subject to a number of terms and conditions set forth in the Agreement, the General Partner and its affiliates may be entitled to compensation for services actually rendered or to be rendered in connection with (i) selecting, evaluating, structuring, negotiating and closing the Partnership's investments in Local Limited Partnership Interests, (ii) property management services actually rendered by the General Partner or its affiliates respecting the Housing Complexes owned by Local Limited Partnerships, or (iii) disposition services in connection with the sale of any Housing Complex owned by a Local Limited Partnership, for which a subordinated disposition fee may be payable. The Partnership had completed its investment stage, so no compensation for the services in (i) was paid during the periods covered by this report and none will be paid in the future. None of the compensation described in (ii) or (iii) above was paid or payable for such services during the periods covered by this report. (b) Operating Expenses The Partnership incurred operating expenses reimbursable to the General Partner or its affiliates in the amounts of approximately $9,331, $32,610, $26,889, $27,915, $30,819 and $33,821 during the years ended March 31, 2007, 2006, 2005, 2004, 2003 and 2002, respectively. The Partnership reimbursed the General Partner or its affiliates for operating expenses of approximately $27,700, $13,800, $22,700, $29,000, $44,000 and $33,000 during the years ended March 31, 2007, 2006, 2005, 2004, 2003 and 2002, respectively. 40 Reimbursement to the General Partner or any of its affiliates of Operating Cash Expenses is subject to specific restrictions in Section 5.3.4 of the Partnership's Agreement of Limited Partnership (the "Agreement," incorporated as Exhibit 3.1 to this report). The Agreement defines "Operating Cash Expenses" as " . . . the amount of cash disbursed by the Partnership . . . in the ordinary course of business for the payment of its operating expenses, such as expenses for management, utilities, repair and maintenance, insurance, investor communications, legal, accounting, statistical and bookkeeping services, use of computing or accounting equipment, travel and telephone expenses, salaries and direct expenses of Partnership employees while engaged in Partnership business, and any other operational and administrative expenses necessary for the prudent operation of the Partnership. Without limiting the generality of the foregoing, Operating Cash Expenses shall include the actual cost of goods, materials and administrative services used for or by the Partnership, whether incurred by the General Partner, an Affiliate of the General Partner or a non-Affiliated Person in performing the foregoing functions. As used in the preceding sentence, actual cost of goods and materials means the actual cost of goods and materials used for or by the Partnership and obtained from entities not Affiliated with the General Partner, and actual cost of administrative services means the pro rata cost of personnel (as if such persons were employees of the Partnership) associated therewith, but in no event to exceed the Competitive amount." The Agreement provides that no such reimbursement shall be permitted for services for which the General Partner or any of its affiliates is entitled to compensation by way of a separate fee. Furthermore, no such reimbursement is to be made for (a) rent or depreciation, utilities, capital equipment or other such administrative items, and (b) salaries, fringe benefits, travel expenses and other administrative items incurred or allocated to any "controlling person" of the General Partner or any affiliate of the General Partner. For the purposes of Section 5.3.4, "controlling person" includes, but is not limited to, any person, however titled, who performs functions for the General Partner or any affiliate of the General Partner similar to those of: (1) chairman or member of the board of directors; (2) executive management, such as president, vice president or senior vice president, corporate secretary or treasurer; (3) senior management, such as the vice president of an operating division who reports directly to executive management; or (4) those holding 5% or more equity interest in the General Partner or any affiliate of the General Partner or a person having the power to direct or cause the direction of the General Partner or any affiliate of the General Partner, whether through the ownership of voting securities, by contract or otherwise. (c) Interest in Partnership The General Partner receives 1% of the Partnership's allocated Low Income Housing Tax Credits, which approximated $21,400, $21,400, $21,300, $21,100, and $20,600 for the General Partner for the years ended December 31, 2006, 2005, 2004, 2003 and 2002, respectively. The General Partner is also entitled to receive 1% of the Partnership's operating income or losses, gain or loss from the sale of property and operating cash distributions. There were no distributions of operating cash to the General Partner during the years ended March 31, 2007, 2006, 2005, 2004, 2003 or 2002. The General Partner has an interest in sale or refinancing proceeds as follows: after the Limited Partners have received a return of their capital plus a specified return on capital, General Partner may receive an amount equal to its capital contribution, less any prior distribution of such proceeds, then the General Partner may receive 10% and the Limited Partners 90% of any remaining proceeds. There were no such distributions to the General Partner during the years ended March 31, 2007, 2006, 2005, 2004, 2003 or 2002. 41 PART IV. ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a)(1) LIST OF FINANCIAL STATEMENTS INCLUDED IN PART II HEREOF Balance Sheets, March 31, 2007, 2006, 2005, 2004 and 2003 Statements of Operations for the years ended March 31, 2007, 2006, 2005, 2004, 2003 and 2002 Statements of Partners' Equity (Deficit) for the years ended March 31, 2007, 2006, 2005, 2004, 2003 and 2002 Statements of Cash Flows for the years ended March 31, 2007, 2006, 2005, 2004, 2003 and 2002 Notes to Financial Statements (a)(2) LIST OF FINANCIAL STATEMENT SCHEDULES INCLUDED IN PART IV HEREOF: Schedule III, Real Estate Owned by Local Limited Partnerships (a)(3) EXHIBITS. 3.1 Agreement of Limited Partnership dated as of March 3, 1997, filed as Exhibit 3.1 to Post-Effective Amendment No. 1 to the Registration Statement, is hereby incorporated herein as Exhibit 3.1. 3.2 First Amendment to Agreement of Limited Partnership dated as of August 29, 1997 filed as Exhibit 3.2 to Post-Effective Amendment No. 6 to registration Statement, is hereby incorporated herein as Exhibit 3.2. 31.1 Certification of the Chief Executive Officer pursuant to Rule 13a-14 and 15d-14, as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002. (filed herewith) 31.2 Certification of the Chief Financial Officer pursuant to Rule 13a-14 and 15d-14, as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002. (filed herewith) 32.1 Section 1350 Certification of the Chief Executive Officer. (filed herewith) 32.2 Section 1350 Certification of the Chief Financial Officer. (filed herewith) 99.1 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 99.1. 99.2 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 99.2. 99.3 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 99.3. 99.4 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 99.4. 99.5 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 99.5. 42 99.6 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 99.6. 99.7 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 99.7. 99.8 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 99.8. 99.9 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 99.9. 99.10 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 99.10. 99.11 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 99.11. 99.12 Amended and Restated Agreement of Limited Partnership of Country Club Limited partners, 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 99.12. 99.13 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 99.13. 99.14 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 99.14. 99.15 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 99.15. 99.16 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 99.16. 99.17 Financial statements of Booneville Associates I, Limited Partnership for the years ended December 31, 2006, 2005 and 2004 together with Independent Auditors' Report thereon; a significant subsidiary of the Partnership. 43 SIGNATURES 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, JR. -------------------------- Wilfred N. Cooper, Jr., President of WNC & Associates, Inc. Date: September 8, 2009 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., Chief Executive Officer, President and Director of WNC & Associates, Inc. (principal executive officer) Date: September 8, 2009 By: /S/ THOMAS J. RIHA ------------------ Thomas J. Riha, Senior Vice-President - Chief Financial Officer of WNC & Associates, Inc. (principal financial officer and principal accounting officer) Date: September 8, 2009 By: /S/ WILFRED N. COOPER, SR. -------------------------- Wilfred N. Cooper, Sr., Chairman of the Board of WNC & Associates, Inc. Date: September 8, 2009 By: /S/ KAY L. COOPER ----------------- Kay L. Cooper Director of WNC & Associates, Inc. Date: September 8, 2009 44 <