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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2001
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: 333-76435
WNC HOUSING TAX CREDIT FUND VI, L.P., Series 8
California 33-0761517
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3158 Redhill Avenue, Suite 120, Costa Mesa, CA 92626
(714) 662-5565
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to section 12(g) of the Act:
UNITS OF LIMITED PARTNERSHIP INTEREST
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------- -------
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. |X|
1
State the aggregate market value of the voting and non-voting common equity held
by non-affiliates of the registrant.
INAPPLICABLE
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and the Part
of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is
incorporated: (1) Any annual report to security holders; (2) Any proxy or
information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or
(c) under the Securities Act of 1933. The listed documents should be clearly
described for identification purposes (e.g., annual report to security holders
for fiscal year ended December 24, 1980).
2
PART 1.
Item 1. Business
Organization
WNC Housing Tax Credit Fund, VI, L.P., Series 8 (the "Partnership") was formed
under the California Revised Limited Partnership Act on June 16, 1997 and
commenced operations on November 17, 2000, the effective date of its public
offering pursuant to the Securities and Exchange Commission's approval of the
Partnership's Pre-Effective Amendment No. 5 to Form S-11 initially filed on July
16, 1999. The Partnership was formed to invest primarily in other limited
partnerships or limited liability companies which will own and operate
multifamily housing complexes that are eligible for low-income housing federal
and, in certain cases, California income tax credits ("Low Income Housing
Credit").
The general partner of the Partnership is WNC & Associates, Inc.
("Associates" or the "General Partner".) Wilfred N. Cooper, Sr., through the
Cooper Revocable Trust, owns 66.8% of the outstanding stock of Associates. John
B. Lester, Jr. was the original limited partner of the Partnership and owns,
through the Lester Family Trust, 28.6% of the outstanding stock of Associates.
Wilfred N. Cooper, Jr., President of Associates, owns 2.1% of the outstanding
stock of Associates. The business of the Partnership is conducted primarily
through Associates, as the Partnership has no employees of its own.
Pursuant to a registration statement filed with the Securities and Exchange
Commission on June 23, 1997, the Partnership commenced a public offering of
25,000 units of Limited Partnership Interest ("Units"), at a price of $1,000 per
Unit. As of March 31, 2001, the Partnership had received and accepted
subscriptions for 3,093 Units in the amount of $3,091,250 net of volume and
dealer discounts of $1,750, of which $45,000 was represented by promissory notes
of the subscribers. Holders of Units are referred to herein as "Limited
Partners."
Description of Business
The Partnership's principal business objective is to provide its Limited
Partners with Low Income Housing Credits. The Partnership's principal business
therefore consists of investing as a limited partner or non-managing member in
Local Limited Partnerships each of which will own and operate a multi-family
housing complex (the "Housing Complex") which will qualify for the Low Income
Housing Credit. In general, under Section 42 of the Internal Revenue Code, an
owner of low-income housing can receive the Low Income Housing Credit to be used
to reduce Federal taxes otherwise due in each year of a ten-year period. In
general, under Section 17058 of the California Revenue and Taxation Code, an
owner of low-income housing can receive the Low Income Housing Credit to be used
against California taxes otherwise due in each year of a four-year period. The
Housing Complex is subject to a fifteen-year compliance period (the "Compliance
Period"), and under state law may have to be maintained as low income housing
for 30 or more years.
In general, in order to avoid recapture of Low Income Housing Credits, the
Partnership does not expect that it will dispose of its interests in Local
Limited Partnerships ("Local Limited Partnership Interests") or approve the sale
by any Local Limited Partnership of its Housing Complex prior to the end of the
applicable Compliance Period. Because of (i) the nature of the Housing
Complexes, (ii) the difficulty of predicting the resale market for low-income
housing 15 or more years in the future, and (iii) the ability of government
lenders to disapprove of transfer, it is not possible at this time to predict
whether the liquidation of the Partnership's assets and the disposition of the
proceeds, if any, in accordance with the Partnership's Agreement of Limited
Partnership, as amended "by Supplements thereto" (the "Partnership Agreement"),
will be able to be accomplished promptly at the end of the 15-year period. If a
Local Limited Partnership is unable to sell its Housing Complex, it is
anticipated that the local general partner ("Local General Partner") will either
continue to operate such Housing Complex or take such other actions as the Local
General Partner believes to be in the best interest of the Local Limited
Partnership. Notwithstanding the preceding, circumstances beyond the control of
the General Partner 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 Credits.
3
As of March 31, 2001, the Partnership had not made any investments in Local
Limited Partnerships.
The Partnership's investments in Local Limited Partnerships are subject to the
risks incident to the management and ownership of low-income housing and to the
management and ownership of multi-unit residential real estate. Some of these
risks are that the Low Income Housing Credit could be recaptured and that
neither the Partnership's investments nor the Housing Complexes owned by the
Local Limited Partnerships will be readily marketable. To the extent the Housing
Complexes receive government financing or operating subsidies, they may be
subject to one or more of the following risks: difficulties in obtaining tenants
for the Housing Complexes; difficulties in obtaining rent increases; limitations
on cash distributions; limitations on sales or refinancing of Housing Complexes;
limitations on transfers of Local Limited Partnership Interests; limitations on
removal of Local General Partners; limitations on subsidy programs; and possible
changes in applicable regulations. The Housing Complexes are subject to mortgage
indebtedness. If a Local Limited Partnership does not make its mortgage
payments, the lender could foreclose resulting in a loss of the Housing Complex
and Low Income Housing Credits. As a limited partner or non-managing member of
the Local Limited Partnerships, the Partnership will have very limited rights
with respect to management of the Local Limited Partnerships, and will rely
totally on the general partners or managing members of the Local Limited
Partnerships for management of the Local Limited Partnerships. The value of the
Partnership's investments will be subject to changes in national and local
economic conditions, including unemployment conditions, which could adversely
impact vacancy levels, rental payment defaults and operating expenses. This, in
turn, could substantially increase the risk of operating losses for the Housing
Complexes and the Partnership. In addition, each Local Limited Partnership is
subject to risks relating to environmental hazards and natural disasters, which
might be uninsurable. Because the Partnership's operations will depend on these
and other factors beyond the control of the General Partner and the Local
General Partners, there can be no assurance that the anticipated Low Income
Housing Credits will be available to Limited Partners.
In addition, Limited Partners are subject to risks in that the rules governing
the Low Income Housing Credit are complicated, and the use of credits can be
limited. The only material benefit from an investment in Units may be the Low
Income Housing Credits. There are limits on the transferability of Units, and it
is unlikely that a market for Units will develop. All Partnership management
decisions are made by the General Partner.
As a limited partner or non-managing member, the Partnership's liability for
obligations of each Local Limited Partnership is limited to its investment. The
Local General Partners of each Local Limited Partnership retain responsibility
for developing, constructing, maintaining, operating and managing the Housing
Complexes.
Item 2. Properties
None
4
Item 3. Legal Proceedings
NONE
Item 4. Submission of Matters to a Vote of Security Holders
NONE
PART II.
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
Item 5a.
(a) The Units are not traded on a public exchange but are being sold
through a public offering. It is not anticipated that any public market
will develop for the purchase and sale of any Unit. Units can be
assigned only if certain requirements in the Partnership Agreement are
satisfied.
(b) At March 31, 2001, there were 171 Limited Partners.
(c) The Partnership was not designed to provide cash distributions to
Limited Partners in circumstances other than refinancing or disposition
of its investments in Local Limited Partnerships.
(d) No unregistered securities were sold by the Partnership during the
period from November 17, 2000 (date operations commenced) to March 31,
2001.
Item 5b.
The Partnership conducted an offering pursuant to a registration statement
(Commission File No. 333-76435) which was declared effective on September 3,
1999. As of March 31, 2001, the Partnership had received subscriptions for 3,093
Units, for an aggregate amount of capital contributions of $3,091,250, net of
dealer discounts of $1,750. At March 31, 2001, the above capital contributions
consisted of cash of $2,713,250, subscriptions receivable of $333,000 and notes
receivable of $45,000. At March 31, 2001, approximately $397,190 was paid or due
to Associates or WNC Capital Corporation, the dealer-manager for the offering,
for selling commissions, wholesaling activities and in reimbursement of other
organization and offering expenses. Included therein are selling commissions of
approximately $211,610 which were paid or were to be paid to non-affiliates. At
March 31, 2001, approximately $2,644,060 is invested or available to be invested
in Local Limited Partnership Interests or Reserves as follows:
Paid or to be
Paid to Paid or to be
Affiliates Paid to Others Total
--------------- ---------------- ---------------
Acquisition Fees through 3/31/2001 $ 216,510 $ - $ 216,510
Acquisition Costs through 3/31/2001 61,860 - 61,860
Reserves or available to be invested - 2,316,060 2,316,060
--------------- ---------------- ---------------
Total $ 278,370 $ 2,316,060 $ 2,594,430
=============== ================ ===============
5
Item 6. Selected Financial Data
Selected balance sheet information for the
Partnership is as follows:
March 31
----------------
2001
----------------
ASSETS
Cash and cash equivalents $ 2,108,647
Subscriptions and notes
receivable 333,194
Prepaid acquisition fees and costs, net 277,895
----------------
$ 2,719,736
================
LIABILITIES
Accrued fees and expenses due to
general partner and affiliates $ 66,858
----------------
66,858
----------------
PARTNERS' EQUITY 2,652,878
----------------
$ 2,719,736
================
Selected results of operations, cash flows, and other information
for the Partnership for the period from November 17, 2000 (date
operations commenced) to March 31, 2001:
2001
----------------
Net income $ 2,718
================
Net income allocated to:
General partner $ 27
================
Limited partners $ 2,691
================
Net income per limited partner
unit $ 0.96
================
Outstanding weighted limited
partner units 2,803
================
6
March 31
----------------
2001
----------------
Net cash provided by (used in):
Operating activities $ 2,257
Investing activities (247,050)
Financing activities 2,353,440
----------------
Net change in cash and cash
equivalents 2,108,647
Cash and cash equivalents,
beginning of period -
----------------
Cash and cash equivalents, end
of period $ 2,108,647
================
Low Income Housing Credit per Unit was as follows for the
period ended December 31, 2000:
Federal $ -
State -
-----------------
Total $ -
=================
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operation
Forward Looking Statements
With the exception of the discussion regarding historical information,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and other discussions elsewhere in this Form 10-K contain forward
looking statements. Such statements are based on current expectations subject to
uncertainties and other factors which may involve known and unknown risks that
could cause actual results of operations to differ materially from those
projected or implied. Further, certain forward-looking statements are based upon
assumptions about future events which may not prove to be accurate.
Risks and uncertainties inherent in forward looking statements include, but are
not limited to, our future cash flows and ability to obtain sufficient
financing, level of operating expenses, conditions in the low income housing tax
credit property market and the economy in general, as well as legal proceedings.
Historical results are not necessarily indicative of the operating results for
any future period.
Subsequent written and oral forward looking statements attributable to us or
persons acting on our behalf are expressly qualified in their entirety by
cautionary statements in this Form 10-K and in other reports we filed with the
Securities and Exchange Commission. The following discussion should be read in
conjunction with the Consolidated Financial Statements and the Notes thereto
included elsewhere in this filing.
Financial Condition
The Partnership's assets at March 31, 2001 consisted primarily of $2,109,000 in
cash, $333,000 in subscriptions receivable, prepaid acquisition fees and costs
of $278,000. Liabilities at March 31, 2000 consisted of $67,000 in advances and
other payables due to the General Partner or affiliates.
7
The Partnership will offer Units for sale to the public until approximately
September 2001, at which time total limited partner capital is expected to be
approximately $13,000,000 ($3,092,000 raised at March 31, 2001).
Results of Operations
The Partnership commenced operations on November 17, 2000. As a result, there
are no comparative results of operations or financial condition from prior
periods to report. Net income for the period ended March 31, 2001 was
principally composed of interest income, offset by amortization and other
operating expenses. Accordingly, there were no Low Income Housing Credits
available for allocation to the partners.
Cash Flows
Cash flows provided by operating activities for the period ended March 31, 2001
included interest income from cash investments less miscellaneous costs of
operations. Cash flows provided by financing activities for the period ended
March 31, 2001, primarily consisted of proceeds from the sale of Units of
$2,714,350, net of promissory notes of $45,000, subscriptions receivable of
$333,000 and dealer and volume discounts of $1,750, less offering expenses paid
of $360,910.
Cash flows used in investing activities consisted of capitalized acquisition
fees and costs totaling $247,050.
Since March 31, 2001, the Partnership has raised equity capital sufficient to
satisfy all of its identified obligations. In this regard, the Partnership
expects its future cash flows, together with its net available assets at March
31, 2001, to be sufficient to meet all currently foreseeable future cash
requirements.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
NONE.
Item 8. Financial Statements and Supplementary Data
8
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners
WNC Housing Tax Credit Fund VI, L.P., Series 8
We have audited the accompanying balance sheet of WNC Housing Tax Credit Fund
VI, L.P., Series 8 (a California Limited Partnership) (the "Partnership") as of
March 31, 2001, and the related statements of operations, partners' equity
(deficit) and cash flows for the period November 17, 2000 (date operations
commenced) through March 31, 2001. 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 auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our 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 WNC Housing Tax Credit Fund
VI, L.P., Series 8 (a California Limited Partnership) as of March 31, 2001, and
the results of its operations and its cash flows for the year ended March 31,
2001 in conformity with accounting principles generally accepted in the United
States of America.
/s/ BDO SEIDMAN, LLP
BDO SEIDMAN, LLP
Orange County, California
May 29, 2001
9
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 8
(A California Limited Partnership)
BALANCE SHEET
March 31, 2001
2001
--------------
ASSETS
Cash and cash equivalents $ 2,108,647
Subscriptions and notes receivable (Note 4) 333,194
Prepaid acquisition fees and costs 277,895
--------------
$ 2,719,736
==============
LIABILITIES AND PARTNERS' EQUITY
(DEFICIT)
Liabilities:
Accrued fees and expenses due to General
Partner and affiliates (Note 2) $ 66,858
--------------
Total liabilities 66,858
--------------
Commitments and contingencies (Note 5)
Partners' equity (deficit) (Notes 4 and 6)
General partner (59)
Limited partners (25,000 units authorized,
3,093 units outstanding at March 31, 2001) 2,652,937
--------------
Total partners' equity 2,652,878
--------------
$ 2,719,736
==============
See accompanying notes to financial statements
10
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 8
(A California Limited Partnership)
STATEMENT OF OPERATIONS
For The Period November 17, 2000 (Date Operations Commenced)
through March 31, 2001
2001
-----------------
Interest income $ 8,800
-----------------
Operating expenses:
Amortization (Note 2) 475
Other 5,607
-----------------
Total operating expenses 6,082
-----------------
Income from operations 2,718
-----------------
Net income $ 2,718
=================
Net income allocated to:
General partner $ 27
=================
Limited partners $ 2,691
=================
Net income per limited partner unit $ 0.96
=================
Outstanding weighted limited partner units 2,803
=================
See accompanying notes to financial statements
11
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 8
(A California Limited Partnership)
STATEMENT OF PARTNERS' EQUITY (DEFICIT)
For The Period November 17, 2000 (Date Operations Commenced)
through March 31, 2001
General Limited
Partner Partners Total
------------- ------------- --------------
Contribution from General
Partner and initial limited
partner on November 17, 2000 $ 100 $ 1,000 $ 1,100
Sale of limited partnership
units, net of discounts of
$1,750 - 3,091,250 3,091,250
Sale of limited partnership
units issued for promissory
notes receivable (Note 4) - (45,000) (45,000)
Offering expenses (186) (397,004) (397,190)
Net income 27 2,691 2,718
------------- ------------- --------------
Partners' equity (deficit) at
March 31, 2001 (59) $ 2,652,937 $ 2,652,878
============= ============== ==============
See accompanying notes to financial statements
12
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 8
(A California Limited Partnership)
STATEMENT OF CASH FLOWS
For The Period November 17, 2000 (Date Operations Commenced)
through March 31, 2001
2001
---------------
Cash flows from operating activities:
Net income $ 2,718
Adjustments to reconcile net income to
net cash provided by operating activities:
Amortization 475
Change in interest receivable (194)
Change in due to general partner and affiliates (742)
---------------
Net cash provided by operating
activities 2,257
---------------
Cash flows from investing activities:
Capitalized acquisition costs and fees (247,050)
---------------
Net cash used in investing activities (247,050)
---------------
Cash flows from financing activities:
Capital contributions 2,714,350
Offering expenses (360,910)
---------------
Net cash provided by financing activities 2,353,440
---------------
Net increase in cash and cash
equivalents 2,108,647
Cash and cash equivalents, beginning of period -
---------------
Cash and cash equivalents, end of period $ 2,108,647
===============
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Taxes paid $ -
===============
See accompanying notes to financial statements
13
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 8
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For The Period November 17, 2000 (Date Operations Commenced)
through March 31, 2001
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
WNC Housing Tax Credit Fund VI, L.P., Series 8, a California Limited Partnership
(the "Partnership"), was formed on June 16, 1997 under the laws of the state of
California, and commenced operations on November 17, 2000, the effective date of
its public offering pursuant to the Securities and Exchange Commission's
approval of the Partnership's Post Effective Amendment No. 5 to Form S-11
initially filed on July 16, 1999. Prior to November 17, 2000, the Partnership
was considered a development-stage enterprise. The Partnership was formed to
invest primarily in other limited partnerships and limited liability companies
(the "Local Limited Partnerships") which own and operate multi-family housing
complexes (the "Housing Complex") that are eligible for low income housing
credits. The local general partners (the "Local General Partners") of each Local
Limited Partnership retain responsibility for maintaining, operating and
managing the Housing Complex.
The general partner is WNC & Associates, Inc. ("WNC") (the "General Partner"),
a California limited partnership. Wilfred N. Cooper, Sr., through the Cooper
Revocable Trust, owns 66.8% of the outstanding stock of WNC. John B. Lester was
the original limited partner of the Partnership and owns, through the Lester
Family Trust, 28.6% of the outstanding stock of WNC. Wilfred N. Cooper, Jr.,
President of WNC, owns 2.1% of the outstanding stock of WNC.
The Partnership shall continue in full force and effect until December 31, 2060,
unless terminated prior to that date, pursuant to the partnership agreement or
law.
The financial statements include only activity relating to the business of the
Partnership, and do not give effect to any assets that the partners may have
outside of their interests in the Partnership, or to any obligations, including
income taxes, of the partners.
The partnership agreement authorized the sale of up to 25,000 units at $1,000
per Unit ("Units"). As of March 31, 2001, 3,093 Units, representing
subscriptions in the amount of $3,091,250, net of $1,750 for dealer discounts,
had been accepted. The General Partner has a 0.1% interest in operating profits
and losses, taxable income and losses, in cash available for distribution from
the Partnership and tax credits. The limited partners will be allocated the
remaining 99.9% interest in proportion to their respective investments.
After the limited partners have received proceeds from a sale or refinancing
equal to their capital contributions and their return on investment (as defined
in the Partnership Agreement) and the General Partner has received proceeds
equal to its capital contribution and a subordinated disposition fee (as
described in Note 2) 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.
14
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 8
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Period November 17, 2000 (Date Operations Commenced)
through March 31, 2001
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
Risks and Uncertainties
The Partnership's investments in Local Limited Partnerships are subject to the
risks incident to the management and ownership of low-income housing and to the
management and ownership of multi-unit residential real estate. Some of these
risks are that the low income housing credit could be recaptured and that
neither the Partnership's investments nor the Housing Complexes owned by the
Local Limited Partnerships will be readily marketable. To the extent the Housing
Complexes receive government financing or operating subsidies, they may be
subject to one or more of the following risks: difficulties in obtaining tenants
for the Housing Complexes; difficulties in obtaining rent increases; limitations
on cash distributions; limitations on sales or refinancing of Housing Complexes;
limitations on transfers of Local Limited Partnership Interests; limitations on
removal of Local General Partners; limitations on subsidy programs; and possible
changes in applicable regulations. The Housing Complexes are or will be subject
to mortgage indebtedness. If a Local Limited Partnership does not make its
mortgage payments, the lender could foreclose resulting in a loss of the Housing
Complex and low-income housing credits. As a limited partner of the Local
Limited Partnerships, the Partnership will have very limited rights with respect
to management of the Local Limited Partnerships, and will rely totally on the
Local General Partners of the Local Limited Partnerships for management of the
Local Limited Partnerships. The value of the Partnership's investments will be
subject to changes in national and local economic conditions, including
unemployment conditions, which could adversely impact vacancy levels, rental
payment defaults and operating expenses. This, in turn, could substantially
increase the risk of operating losses for the Housing Complexes and the
Partnership. In addition, each Local Limited Partnership is subject to risks
relating to environmental hazards and natural disasters, which might be
uninsurable. Because the Partnership's operations will depend on these and other
factors beyond the control of the General Partner and the Local General
Partners, there can be no assurance that the anticipated low income housing
credits will be available to Limited Partners.
In addition, Limited Partners are subject to risks in that the rules governing
the low income housing credit are complicated, and the use of credits can be
limited. The only material benefit from an investment in Units may be the low
income housing credits. There are limits on the transferability of Units, and it
is unlikely that a market for Units will develop. All management decisions will
be made by the General Partner.
Method of Accounting for Investments in Limited Partnerships
The Partnership accounts for its investments in limited partnerships using the
equity method of accounting, whereby the Partnership adjusts its investment
balance for its share of the Local Limited Partnership's results of operations
and for any distributions received. The accounting policies of the Local Limited
Partnership's are 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.
Offering Expenses
Offering expenses consist of underwriting commissions, legal fees, printing,
filing and recordation fees, and other costs incurred in connection with selling
limited partnership interests in the Partnership. The General Partner is
obligated to pay all offering and organization costs in excess of 4% (excluding
sales commissions and the dealer manager fee) of the total offering proceeds.
Offering expenses are reflected as a reduction of limited partners' capital and
amounted to $397,190 as of March 31, 2001.
15
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 8
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Period November 17, 2000 (Date Operations Commenced)
through March 31, 2001
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenues and expenses during the reporting period.
Actual results could materially differ from those estimates.
Cash and Cash Equivalents
The Partnership considers all highly liquid investments with remaining
maturities of three months or less when purchased to be cash equivalents. As of
March 31, 2001, the Partnership had no cash equivalents.
Concentration of Credit Risk
At March 31, 2001, the Partnership maintained cash balances at certain financial
institutions in excess of the federally insured maximum.
Net Income Per Limited Partner Unit
Net income per limited partnership unit is calculated pursuant to Statement of
Financial Accounting Standards No. 128, Earnings Per Share. Net income per unit
includes no dilution and is computed by dividing income available to limited
partners by the weighted average number of units outstanding during the period.
Calculation of diluted net income per unit is not required.
Reporting Comprehensive Income
In June 1997, the FASB issued Statement of Financial Accounting Standards
("SFAS") No. 130, Reporting Comprehensive Income. This statement establishes
standards for reporting the components of comprehensive income and requires that
all items that are required to be recognized under accounting standards as
components of comprehensive income be included in a financial statement that is
displayed with the same prominence as other financial statements. Comprehensive
income includes net income as well as certain items that are reported directly
within a separate component of partners' equity and bypass net income. For the
periods presented, the Partnership has no elements of other comprehensive
income, as defined by SFAS No. 130.
16
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 8
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Period November 17, 2000 (Date Operations Commenced)
through March 31, 2001
NOTE 2 - RELATED PARTY TRANSACTIONS
Under the terms of the Partnership Agreement, the Partnership has paid or is
obligated to the General Partner or their affiliates for the following items:
Acquisition fees of 7% of the gross proceeds from the sale of Units as
compensation for services rendered in connection with the acquisition
of Local Limited Partnerships. As of March 31, 2001, the Partnership
incurred acquisition fees of $216,510. Accumulated amortization of
these capitalized costs was $369, as of March 31, 2001.
Acquisition costs of 2% of the gross proceeds from the sale of Units as
full reimbursement of costs incurred by the General Partner in
connection with the acquisition of Local Limited Partnerships. As of
March 31, 2001, the Partnership incurred acquisition costs of $61,860.
An annual asset management fee not to exceed 0.2% of the invested
assets (defined as the Partnership's capital contributions plus
reserves of the Partnership of up to 5% of gross proceeds plus its
allocable percentage of the mortgage debt encumbering the housing
complexes) of the Local Limited Partnerships. No management fees were
incurred during the period ended March 31, 2001.
A subordinated disposition fee in an amount equal to 1% of the sales
price of real estate sold. Payment of this fee is subordinated to the
limited partners receiving a return on investment (as defined in the
Partnership Agreement) and is payable only if the General Partner or
its affiliates render services in the sales effort.
The accrued fees and expenses due to General Partner and affiliates consist of
the following at March 31, 2001:
2001
---------------
Acquisition fees payable $ 24,360
Acquisition expenses payable 6,960
Organizational, offering and selling costs payable 20,880
Commissions payable 15,400
Reimbursements for expenses paid by the General
Partner or an affiliate (742)
---------------
Total $ 66,858
===============
NOTE 3 - INCOME TAXES
No provision for income taxes has been recorded in the accompanying financial
statements, as any liability for income taxes is the obligation of the partners
of the Partnership.
17
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 8
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Period November 17, 2000 (Date Operations Commenced)
through March 31, 2001
NOTE 4 - SUBSCRIPTIONS AND NOTES RECEIVABLE
As of March 31, 2001, the Partnership had received subscriptions for 3,093 units
which included subscriptions receivable of $333,000 and promissory notes of
$45,000, of which all of the subscription receivables were collected and $0 of
the promissory notes were collected after March 31, 2001 and prior to the
issuance of these financial statements, leaving an unpaid balance of $45,000.
Limited partners who subscribed for ten or more units of limited partnerships
interest ($10,000) could elect to pay 50% of the purchase price in cash upon
subscription and the remaining 50% by the delivery of a promissory note payable,
together with interest at a rate equal to the three month treasury bill rate as
of the date of execution of the promissory note, due no later than 13 months
after the subscription date.
NOTE 5 - COMMITMENTS AND CONTINGENCIES
From April 1, 2001 to May 29, 2001, the Partnership acquired three Local Limited
Partnership interests which required capital contributions of $5,605,559. Of
this amount, $2,486,225 has been contributed during the period from April 1,
2001 to May 29, 2001.
NOTE 6 - SUBSEQUENT EVENT
>From April 1, 2001 to May 29, 2001, the Partnership received subscriptions for
an additional 1,490 Units, for which it has received $993,668 in cash, and
$35,000 in notes receivable under the terms described in Note 4.
18
Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
NOT APPLICABLE
PART III
Item 10. Directors and Executive Officers of the Registrant
The Partnership has no directors or executive officers of its own. The following
biographical information is presented for the directors and executive officers
of Associates which has principal responsibility for the Partnership's affairs.
Directors and Executive Officers of WNC & Associates, Inc.
The directors of WNC & Associates, Inc. are Wilfred N. Cooper, Sr., who
serves as Chairman of the Board, John B. Lester, Jr., David N. Shafer, Wilfred
N. Cooper, Jr. and Kay L. Cooper. The principal shareholders of WNC &
Associates, Inc. are trusts established by Wilfred N. Cooper, Sr. and John B.
Lester, Jr.
Wilfred N. Cooper, Sr., age 69, is the founder, Chairman, Chief Executive
Officer and a Director of WNC & Associates, Inc., a Director of WNC Capital
Corporation, and a general partner in some of the programs previously sponsored
by the Sponsor. Mr. Cooper has been involved in real estate investment and
acquisition activities since 1968. Previously, during 1970 and 1971, he was
founder and principal of Creative Equity Development Corporation, a predecessor
of WNC & Associates, Inc., and of Creative Equity Corporation, a real estate
investment firm. For 12 years prior to that, Mr. Cooper was employed by Rockwell
International Corporation, last serving as its manager of housing and urban
developments where he had responsibility for factory-built housing evaluation
and project management in urban planning and development. Mr. Cooper is a
Director of the National Association of Home Builders (NAHB) and a National
Trustee for NAHB's Political Action Committee, a Director of the National
Housing Conference (NHC) and a member of NHC's Executive Committee and a
Director of the National Multi-Housing Council (NMHC). Mr. Cooper graduated from
Pomona College in 1956 with a Bachelor of Arts degree.
John B. Lester, Jr., age 66, is Vice-Chairman, a Director, and a member of
the Acquisition Committee of WNC & Associates, Inc., and a Director of WNC
Capital Corporation. Mr. Lester has 27 years of experience in engineering and
construction and has been involved in real estate investment and acquisition
activities since 1986 when he joined the Sponsor. Previously, he was Chairman of
the Board and Vice President or President of E & L Associates, Inc., a provider
of engineering and construction services to the oil refinery and petrochemical
industries, which he co-founded in 1973. Mr. Lester graduated from the
University of Southern California in 1956 with a Bachelor of Science degree in
Mechanical Engineering.
Wilfred N. Cooper, Jr., age 37, is President, Chief Operating Officer, a
Director and a member of the Acquisition Committee of WNC & Associates, Inc. He
is President of, and a registered principal with, WNC Capital Corporation, a
member firm of the NASD, and is a Director of WNC Management, Inc. He has been
involved in investment and acquisition activities with respect to real estate
since he joined the Sponsor in 1988. Prior to this, he served as Government
Affairs Assistant with Honda North America in Washington, D.C. Mr. Cooper is a
member of the Advisory Board for LIHC Monthly Report, a Director of NMHC and an
Alternate Director of NAHB. He graduated from The American University in 1985
with a Bachelor of Arts degree.
David N. Shafer, age 48, is Executive Vice President, a Director, General
Counsel, and a member of the Acquisition Committee of WNC & Associates, Inc.,
and a Director and Secretary of WNC Management, Inc. Mr. Shafer has been
involved in real estate investment and acquisition activities since 1984. Prior
to joining the Sponsor in 1990, he was practicing law with a specialty in real
estate and taxation. Mr. Shafer is a Director and President of the California
Council of Affordable Housing and a member of the State Bar of California. Mr.
Shafer graduated from the University of California at Santa Barbara in 1978 with
a Bachelor of Arts degree, from the New England School of Law in 1983 with a
Juris Doctor degree (cum laude) and from the University of San Diego in 1986
with a Master of Law degree in Taxation.
19
Thomas J. Riha, age 46, became Chief Financial Officer effective January 2001.
Prior to his appointment as Chief Financial Officer he was Vice President -
Asset Management and a member of the Acquisition Committee of WNC & Associates,
Inc. and a Director and Chief Executive Officer of WNC Management, Inc. Mr. Riha
has been involved in acquisition and investment activities with respect to real
estate since 1979. Prior to joining the Sponsor in 1994, Mr. Riha was employed
by Trust Realty Advisor, a real estate acquisition and management company, last
serving as Vice President - Operations. Mr. Riha graduated from the California
State University, Fullerton in 1977 with a Bachelor of Arts degree (cum laude)
in Business Administration with a concentration in Accounting and is a Certified
Public Accountant and a member of the American Institute of Certified Public
Accountants.
Sy P. Garban, age 54, is Vice President - National Sales of WNC & Associates,
Inc. and has been employed by the Sponsor since 1989. Mr. Garban has been
involved in real estate investment activities since 1978. Prior to joining the
Sponsor he served as Executive Vice President of MRW, Inc., a real estate
development and management firm. Mr. Garban is a member of the International
Association of Financial Planners. He graduated from Michigan State University
in 1967 with a Bachelor of Science degree in Business Administration.
N. Paul Buckland, age 37, is Vice President - Acquisitions and a member of the
Acquisition Committee of WNC & Associates, Inc. He has been involved in real
estate acquisitions and investments since 1986 and has been employed with WNC &
Associates, Inc. since 1994. Prior to that, he served on the development team of
the Bixby Ranch that constructed apartment units and Class A office space in
California and neighboring states, and as a land acquisition coordinator with
Lincoln Property Company where he identified and analyzed multi-family
developments. Mr. Buckland graduated from California State University, Fullerton
in 1992 with a Bachelor of Science degree in Business Finance.
David Turek, age 45, is Vice President - Originations of WNC & Associates, Inc.
He has been involved with real estate investment and finance activities since
1976 and has been employed by WNC & Associates, Inc. since 1996. From 1995 to
1996, Mr. Turek served as a consultant for a national Tax Credit sponsor where
he was responsible for on-site feasibility studies and due diligence analyses of
Tax Credit properties. From 1990 to 1995, he was involved in the development of
conventional and tax credit multi-family housing. He is a Director with the
Texas Council for Affordable Rural Housing and graduated from Southern Methodist
University in 1976 with a Bachelor of Business Administration degree.
Kay L. Cooper, age 63, is a Director of WNC & Associates, Inc. Mrs. Cooper
was the founder and sole proprietor of Agate 108, a manufacturer and retailer of
home accessory products, from 1975 until 1998. She is the wife of Wilfred N.
Cooper, Sr., the mother of Wilfred N. Cooper, Jr. and the sister of John B.
Lester, Jr. Ms. Cooper graduated from the University of Southern California in
1958 with a Bachelor of Science degree.
Item 11. Executive Compensation
The Partnership has no officers, employees, or directors. However, under the
terms of the Partnership Agreement the Partnership is obligated to the General
Partner or its affiliates for the following fees:
(a) Organization and Offering Expenses. The Partnership accrued or paid the
General Partner or its affiliates as of March 31, 2000 approximately
$922,885 for selling commissions and other fees and expenses of the
Partnership's offering of Units. Of the total accrued or paid,
approximately $493,000 was paid or to be paid to unaffiliated persons
participating in the Partnership's offering.
(b) Acquisition Fees. Acquisition fees in an amount equal to 7.0% of the
gross proceeds of the Partnership's Offering ("Gross Proceeds"). As
of March 31, 2001 the aggregate amount of acquisition fees paid or
accrued was approximately $217,000.
(c) Acquisition Expense. The Partnership reimbursed the General Partner for
acquisition expenses in an amount equal to 2% of the Gross Proceeds,
pursuant to the terms of the partnership agreement. As of March 31,
2001, the aggregate amount of acquisition fees paid or accrued was
approximately $62,000.
(d) Annual Asset Management Fee. An annual asset management fee in an
amount equal to 0.2% of the Invested Assets of the Partnership.
"Invested Assets" is defined as the sum of the Partnership's Investment
in Local Limited Partnerships and the Partnership's allocable share of
the amount of the mortgage loans and other debts related to the Housing
Complexes owned by such Local Limited Partnerships. No fees were
incurred for the period November 17, 2000 (date of operations
commenced) through March 31, 2001.
20
(e) Operating Expenses. The Partnership reimbursed the General Partner or
its affiliates for operating expenses of approximately $6,348 during
the period November 17, 2000 (date operations commenced) through March
31, 2001, expended by such persons on behalf of the Partnership.
(f) Subordinated Disposition Fee. A subordinated disposition fee in an
amount equal to 1% of the sale price received in connection with
the sale or disposition of an Apartment Complex or Local Limited
Partnership Interest. Subordinated disposition fees will be
subordinated to the prior return of the Limited Partners' capital
contributions and payment of the Return on Investment to the Limited
Partners. "Return on Investment" means an annual, cumulative but not
compounded, "return" to the Limited Partners (including Low Income
Housing Credits) as a class on their adjusted capital contributions
commencing for each Limited Partner on the last day of the calendar
quarter during which the Limited Partner's capital contribution is
received by the Partnership, calculated at the following rates:
(i) 11% through December 31, 2010, and (ii) 6% for the balance of the
Partnerships term. No disposition fees have been paid.
(g) Interest in Partnership. The General Partner will receive 1% of the Low
Income Housing Credits. No Low Income Housing Credits were allocated
for the period ended December 31, 2000. The General Partners are also
entitled to receive 1% of cash distributions. There were no
distributions of cash to the General Partner during the period November
17, 2000 (date operations commenced) through March 31, 2001.
Item 12. Security Ownership of Certain Beneficial Owners and Management
(a) Security Ownership of Certain Beneficial Owners
No person is known to own beneficially in excess of 5% of the
outstanding Units.
(b) Security Ownership of Management
Neither the General Partner, its affiliates, nor any of the officers or
directors of the General Partner or its affiliates own directly or
beneficially any Units in the Partnership.
(c) Changes in Control
The management and control of the General Partner may be changed at any
time in accordance with its organizational documents, without the
consent or approval of the Limited Partners. In addition, the
Partnership Agreement provides for the admission of one or more
additional and successor General Partners in certain circumstances.
First, with the consent of any other General Partners and a
majority-in-interest of the Limited Partners, any General Partner may
designate one or more persons to be successor or additional General
Partners. In addition, any General Partner may, without the consent of
any other General Partner or the Limited Partners, (i) substitute in
its stead as General Partner any entity which has, by merger,
consolidation or otherwise, acquired substantially all of its assets,
stock or other evidence of equity interest and continued its business,
or (ii) cause to be admitted to the Partnership an additional General
Partner or Partners if it deems such admission to be necessary or
desirable so that the Partnership will be classified a partnership for
Federal income tax purposes. Finally, a majority-in-interest of the
Limited Partners may at any time remove the General Partner of the
Partnership and elect a successor General Partner.
Item 13. Certain Relationships and Related Transactions
The General Partner manages all of the Partnership's affairs. The transactions
with the General Partner are primarily in the form of fees paid by the
Partnership for services rendered to the Partnership and the General Partner's
interest in the Partnership, as discussed in Item 11 and in the notes to the
Partnership's financial statements.
21
PART IV.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a)(1) Financial statements included in Part II hereof:
Report of Independent Certified Public Accountants
Independent Auditors' Report
Balance Sheet, March 31, 2001
Statement of Operations for the period November 17, 2000 (Date
Operations Commenced) through March 31, 2001 Statement of Partners'
Equity (Deficit) for the period November 17, 2000 (Date Operations
Commenced) through March 31, 2001 Statement of Cash Flows for the
period November 17, 2000 (Date Operations Commenced) through March 31,
2001 Notes to Financial Statements
(b) Reports on Form 8-K.
NONE.
(c) Exhibits.
3.1 First Amended and Restated Agreement of Limited Partnership dated as of
September 3, 2000 filed as Exhibit 3.1 to Post-Effective Amendment No.
4 to the Registration Statement on Form S-11 filed on September 18,
2000 is hereby incorporated herein by reference as Exhibit 3.1.
10.1 Escrow Agreement filed as Exhibit 10.1 to Pre-Effective Amendment No. 3
to the Registration Statement on Form S-11 filed on August 18, 1999 is
hereby incorporated herein by reference as Exhibit 10.1.
10.2 Amended and Restated Agreement of Limited Partnership of Butler Plaza
Apts., II L.P. filed as Exhibit 10.1 to the Current Report on Form 8-K
dated April 19,2001 is hereby incorporated herein by reference as
Exhibit 10.2.
10.3 Second Amended and Restated Agreement of Limited Partnership of United
Development Co., L.P. - 98.0 filed as Exhibit 10.1 to the Current
Report on Form 8-K dated June 6, 2001 is hereby incorporated herein by
reference as Exhibit 10.3.
10.4 Amended and Restated Agreement of Limited Partnership of 505 West Main
Limited Partnership filed as Exhibit 10.2 to the Current Report on Form
8-K dated June 6, 2001 is hereby incorporated herein by reference as
Exhibit 10.4.
22
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 8
By: WNC & Associates, Inc. General Partner
By: /s/ Wilfred N. Cooper, Jr.
-------------------------
Wilfred N. Cooper, Jr. President - Chief Operating Officer of
WNC & Associates, Inc.
Date: June 8, 2001
By: /s/ Thomas J. Riha
-------------------------
Thomas J. Riha Vice-President - Chief Financial Officer
of WNC & Associates, Inc.
Date: June 8, 2001
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
By /s/ Wilfred N. Cooper, Sr.
--------------------------
Wilfred N. Cooper, Sr. Chairman of the Board of WNC & Associates, Inc.
Date: June 8, 2001
By: /s/ John B. Lester, Jr.
-------------------------
John B. Lester, Jr. Director of WNC & Associates, Inc.
Date: June 8, 2001
By: /s/ David N. Shafer
-------------------------
David N Shafer Director of WNC & Associates, Inc.
Date: June 8, 2001
23