FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2002
OR
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number: 333-76435
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 No X
-------- ------------
ndicate 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".) The chairman and president own substantially all 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. Such offering is closed. As of March 31, 2002, the Partnership had
received and accepted subscriptions for 9,814 Units in the amount of $9,807,585,
net of volume and dealer discounts of $6,415. 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, 2002, the Partnership had invested in six Local Limited
Partnerships. Each of these Local Limited Partnerships owns a Housing Complex
that is eligible for the federal Low Income Housing Credit. Certain Local
Limited Partnerships may also benefit from government programs promoting low- or
moderate-income housing.
The Partnership's investments in Local Limited Partnerships are subject to the
risks incident to the management and ownership of low-income housing and to the
management and ownership of multi-unit residential real estate. Some of these
risks are that the Low Income Housing Credit could be recaptured and that
neither the Partnership's investments nor the Housing Complexes owned by the
Local Limited Partnerships will be readily marketable. To the extent the Housing
Complexes receive government financing or operating subsidies, they may be
subject to one or more of the following risks: difficulties in obtaining tenants
for the Housing Complexes; difficulties in obtaining rent increases; limitations
on cash distributions; limitations on sales or refinancing of Housing Complexes;
limitations on transfers of Local Limited Partnership Interests; limitations on
removal of Local General Partners; limitations on subsidy programs; and possible
changes in applicable regulations. The Housing Complexes are 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
Through its investments in Local Limited Partnerships, the Partnership holds
limited partnership interests in the Housing Complexes. The following table
reflects the status of the six Housing Complexes as of the dates and for the
periods indicated:
4
------------------------- -----------------------------------------------
As of March 31, 2002 As of December 31, 2001
------------------------- -----------------------------------------------
Partnership's Estimated Encumbrances
Total Investment Amount of Low Income of Local
General Partner In Local Limited Investment Number Housing Limited
Partnership Name Location Name Partnerships Paid to Date Of Units Occupancy Credits Partnerships
- ------------------------------------------------------------------------------------------------------------------------------------
505 West Main, L.P. Vermillion, Lewis f. Weinberg,
South Dakota Weinberg Investments,
Inc. and Sioux Falls
Environmental Access,
Inc. $ 1,178,000 $ 1,055,000 30 0% $ 1,592,000 $ 400,000
Atkins
Terrace, L.P. Atkins, River Valley Planning &
Arkansas Development Corporation 263,000 147,000 25 100% 360,000 455,000
Broadway Glenwood, Glenwood Planning &
Terrace, L.P. Arkansas Development Corporation 205,000 115,000 15 0% 281,000 341,000
Butler Plaza Butler, MBL Development
Apartments, L.P. Missouri Company 891,000 757,000 20 100% 1,231,000 144,000
TCM Haven Ltd. College Twin City Mission
Station, Housing
Texas Services Inc. 1,165,000 1,048,000 24 88% 1,504,000 326,000
Untitled Development Memphis, Harold E. Buehler, Sr.,
Co., L.P. - 98.0 Tennessee and Jo Ellen Buehler 3,483,000 3,309,000 101 80% 4,613,000 1,883,000
------------ ----------- ----- ----- ---------- ----------
$ 7,185,000 $ 6,431,000 215 71.9% $ 9,581,000 $3,549,000
============ =========== ===== ===== ========== ==========
5
- -----------------------------------------------------------------------------------------------------------------------
For the year ended
December 31, 2001 Low Income Housing Credits
- ------------------------------------------------------------------------------------------------------------------------
Net Credits Allocated Year to be
Partnership Name Rental Income (Loss) Income to Partnership First Available
- ------------------------------------------------------------------------------------------------------------------------
505 West Main, L.P. $ - $ (1,000) 99.98% 2002
Atkins Terrace, L.P. 13,000 1,000 99.98% 2002
Broadway Terrace, L.P. 6,000 (13,000) 99.98% 2002
Butler Plaza Apartments, L.P. - - 99.98% 2001
TCM Haven Ltd. 35,000 (5,000) 99.98% 2001
Untitled Development Co., L.P. -
98.0 264,000 81,000 99.98% 2002
--------- ---------
$ 318,000 $ 63,000
========= ========
6
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, 2002, there were 497 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 year
ended March 31, 2002.
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, 2002, the Partnership had received subscriptions for 9,814
Units, for an aggregate amount of capital contributions of $9,807,585, net of
dealer discounts of $6,370 and volume discounts of $45. At March 31, 2002,
approximately $1,269,405 was paid 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 $680,565 which were paid or
were to be paid to non-affiliates. At March 31, 2002, approximately $8,538,225
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 3/31/2002 $ 686,980 $ - $ 686,980
Acquisition Costs through 3/31/2002 196,280 - 196,280
Reserves or available to be invested - 7,654,965 7,654,965
--------------- --------------- ---------------
Total $ 883,260 $ 7,654,965 $ 8,538,225
=============== =============== ===============
7
Item 6. Selected Financial Data
Selected balance sheet information for the Partnership is as follows:
March 31
------------------------------------
2002 2001
---------------- ---------------
ASSETS
Cash and cash equivalents $ 1,127,639 $ 2,108,647
Loans receivable 100,000 -
Subscriptions and notes
receivable - 333,194
Investments in limited partnerships, net 8,173,367 277,895
---------------- ---------------
$ 9,401,006 $ 2,719,736
================ ===============
LIABILITIES
Payables to limited partnerships $ 753,283 $ -
Accrued fees and expenses due to
general partner and affiliates 12,891 66,858
PARTNERS' EQUITY 8,634,832 2,652,878
---------------- ---------------
$ 9,401,006 $ 2,719,736
================ ===============
Selected results of operations, cash flows, and other information for the
Partnership is as follows:
For the period
from
November 17,
2000 (date
For the year operations
ended commenced) to
March 31, 2002 March 31, 2001
---------------- ----------------
Net income $ 92,834 $ 2,718
================ ================
Net income allocated to:
General partner $ 93 $ 27
================ ================
Limited partners $ 92,741 $ 2,691
================ ================
Net income per limited partner
unit $ 11.48 $ 0.96
================ ================
Outstanding weighted limited
partner units 8,081 2,803
================ ================
8
For the period
from
November 17,
2000 (date
For the year operations
ended commenced) to
March 31, 2002 March 31, 2001
--------------- ----------------
Net cash provided by (used in):
Operating activities $ 30,989 $ 2,257
Investing activities (7,198,031) (247,050)
Financing activities 6,186,034 2,353,440
--------------- ----------------
Net change in cash and cash
equivalents (981,008) 2,108,647
Cash and cash equivalents,
beginning of period 2,108,647 -
--------------- ----------------
Cash and cash equivalents, end
of period $ 1,127,639 $ 2,108,647
=============== ================
Low Income Housing Credit per Unit was as follows for the period ended December 31:
2001 2000
--------------- ----------------
Federal $ 5 $ -
State - -
--------------- ----------------
Total $ 5 $ -
=============== ================
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Forward Looking Statements
With the exception of the discussion regarding historical information,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and other discussions elsewhere in this Form 10-K contain forward
looking statements. Such statements are based on current expectations subject to
uncertainties and other factors which may involve known and unknown risks that
could cause actual results of operations to differ materially from those
projected or implied. Further, certain forward-looking statements are based upon
assumptions about future events which may not prove to be accurate.
Risks and uncertainties inherent in forward looking statements include, but are
not limited to, our future cash flows and ability to obtain sufficient
financing, level of operating expenses, conditions in the low income housing tax
credit property market and the economy in general, as well as legal proceedings.
Historical results are not necessarily indicative of the operating results for
any future period.
Subsequent written and oral forward looking statements attributable to us or
persons acting on our behalf are expressly qualified in their entirety by
cautionary statements in this Form 10-K and in other reports we filed with the
Securities and Exchange Commission. The following discussion should be read in
conjunction with the Consolidated Financial Statements and the Notes thereto
included elsewhere in this filing.
9
Financial Condition
The Partnership's assets at March 31, 2002 consisted primarily of $1,128,000 in
cash, $8,173,000 in subscriptions receivable, and loans receivable of $100,000.
Liabilities at March 31, 2002 consisted of $753,000 in payables to limited
partnerships and $13,000 in advances and other payables due to the General
Partner or affiliates.
Results of Operations
Year Ended March 31, 2002 Compared to Year Ended March 31, 2001. The
Partnership's net income for the year ended March 31, 2002 was $93,000
reflecting an increase of $90,000 from the net income of $3,000 experienced for
the year ended March 31, 2001. The increase in net income is primarily due to
equity in income of limited partnerships of $98,000 for the year ended March 31,
2002 compared to zero for the year ended March 31, 2001, offset with a change in
income(loss) from operations of $8,000. The increase in equity in income of
limited partnerships was mainly due to the addition of six Local Limited
Partnerships.
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
Year Ended March 31, 2002 Compared to Year Ended March 31, 2001. Net cash used
during the year ended March 31, 2002 was $(981,000), compared to net cash
provided for the year ended March 31, 2001 of $2,109,000. Net cash flows used in
investing activities increased by $(6,951,000) to $(7,198,000) for the year
ended March 31, 2002 from $(247,000), due primarily to an increase in capital
contributions paid to Local Limited Partnerships of $6,732,000. Net cash flows
from financing activities increased by $3,833,000 to net cash provided from
financing activities of $6,186,000 for the year ended March 31, 2002 from net
cash provided by financing activities of $2,353,000 for the year ended March 31,
2001 as a result of the sale of Units during the year ended March 31, 2002. Net
cash flows from operating activities increased by $29,000 to net cash provided
from operating activities of $31,000 for the year ended March 31, 2002 from net
cash provided by operating activities of $2,000 for the year ended March 31,
2001.
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.
Other Matters
Certain Local Limited Partnerships have incurred significant operating losses
and have working capital deficiencies. In the event these Local Limited
Partnerships continue to incur significant operating losses, additional capital
contributions by the Partnership and/or the Local General Partner may be
required to sustain the operations of such Local Limited Partnerships. If
additional capital contributions are not made when they are required, the
Partnership's investment in certain of such Local Limited Partnerships could be
impaired, and the loss and recapture of the related tax credits could occur.
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, 2002, to be sufficient to meet all currently foreseeable future cash
requirements.
Impact of New Accounting Pronouncement
In October 2001, the FASB issued Statement of Financial Accounting Standards No.
144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS
144"), which addresses accounting and financial reporting for the impairment or
disposal of long-lived assets. SFAS 144 is effective for fiscal years beginning
after December 15, 2001, and generally, is to be applied prospectively. The
Partnership has not yet completed its evaluation of the impact of SFAS 144 on
its financial position or results of operations.
10
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
NONE.
Item 8. Financial Statements and Supplementary Data
11
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
--------------------------------------------------
To the Partners
WNC Housing Tax Credit Fund VI, L.P., Series 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, 2002 and 2001, and the related statements of operations, partners'
equity (deficit) and cash flows for the year ended March 31, 2002 and 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. A significant portion of the financial statements
of the limited partnerships in which the Partnership is a limited partner were
audited by other auditors whose reports have been furnished to us. As discussed
in Note 2 to the financial statements, the Partnership accounts for its
investments in limited partnerships using the equity method. The portion of the
Partnership's investment in limited partnerships audited by other auditors
represented 69% of the total assets of the Partnership at March 31, 2002. Our
opinion, insofar as it relates to the amounts included in the financial
statements for the limited partnerships which were audited by others, is based
solely on the reports of the other auditors.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits and the reports of
the other auditors provide a reasonable basis for our opinion.
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, 2002 and 2001,
and the results of its operations and its cash flows for the year ended March
31, 2002 and for the period November 17, 2000 (date operations commenced)
through 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
July 17, 2002
12
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 8
(A California Limited Partnership)
BALANCE SHEETS
March 31
-----------------------------
2002 2001
------------- -------------
ASSETS
Cash and cash equivalents $ 1,127,639 $ 2,108,647
Investments in limited partnerships, net (Notes 2 and 3) 8,173,367 277,895
Subscriptions and notes receivable (Note 8) - 333,194
Loans receivable 100,000 -
------------- -------------
$ 9,401,006 $ 2,719,736
============= =============
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities:
Payables to limited partnerships $ 753,283 $ -
Accrued fees and expenses due to General
Partner and affiliates (Note 3) 12,891 66,858
------------- -------------
Total liabilities 766,174 66,858
------------- -------------
Commitments and contingencies (Note 6)
Partners' equity (deficit) (Note 8)
General partner (369) (59)
Limited partners (25,000 units authorized, 9,814 and 3,093 units
outstanding at March 31, 2002 and 2001, respectively) 8,635,201 2,652,937
------------- -------------
Total partners' equity 8,634,832 2,652,878
------------- -------------
$ 9,401,006 $ 2,719,736
============= =============
See accompanying notes to financial statements
13
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 8
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
For the Year Ended March 31, 2002, and
For The Period November 17, 2000 (Date Operations Commenced)
through March 31, 2001
For The Period
November 17,
2000 (Date
Operations
For the year Commenced)
ended through
March 31, 2002 March 31, 2001
--------------------------------------
Interest income $ 58,186 $ 8,800
----------------- ------------------
Operating expenses:
Amortization (Notes 2 and 3) 22,605 475
Asset management fees (Note 3) 11,820 -
Legal and accounting 22,840 -
Other 6,170 5,607
----------------- ------------------
Total operating expenses 63,435 6,082
----------------- ------------------
Income (loss) from operations (5,249) 2,718
----------------- ------------------
Equity in income of limited partnerships (Note 2) 98,083 -
----------------- ------------------
Net income $ 92,834 $ 2,718
================= ==================
Net income allocated to:
General partner $ 93 $ 27
================= ==================
Limited partners $ 92,741 $ 2,691
================= ==================
Net income per limited partner unit $ 11.48 $ 0.96
================= ==================
Outstanding weighted limited partner units 8,081 2,803
================= ==================
See accompanying notes to financial statements
14
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 8
(A California Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
For the Year Ended March 31, 2002, and
For The Period November 17, 2000 (Date Operations Commenced)
through March 31, 2001
General Limited Total
Partner Partners
--------------- -------------- ---------------
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 8) - (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
Sale of limited partnership units, net of discounts
of $4,665 - 6,716,335 6,716,335
Offering expenses (403) (871,812) (872,215)
Collection of promissory notes receivable (Note 8) - 45,000 45,000
Net income 93 92,741 92,834
--------------- -------------- ---------------
Partners' equity (deficit) at March 31, 2002 $ (369) $ 8,635,201 $ 8,634,832
=============== ============== ===============
See accompanying notes to financial statements
15
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 8
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
For the Year Ended March 31, 2002, and
For The Period November 17, 2000 (Date Operations Commenced)
through March 31, 2001
For The Period
November 17,
2000 (Date
Operations
For the year Commenced)
ended through
March 31, 2002 March 31, 2001
--------------------------------------
Cash flows from operating activities:
Net income $ 92,834 $ 2,718
Adjustments to reconcile net income to
net cash provided by operating activities:
Amortization 22,605 475
Equity in income of limited partnerships (98,083) -
Change in interest receivable - (194)
Change in due to general partner and affiliates 13,633 (742)
----------------- ------------------
Net cash provided by operating activities 30,989 2,257
----------------- ------------------
Cash flows from investing activities:
Investments in limited partnerships, net (6,431,914) -
Capitalized acquisition costs and fees (666,117) (247,050)
Loan receivable (100,000) -
----------------- ------------------
Net cash used in investing activities (7,198,031) (247,050)
----------------- ------------------
Cash flows from financing activities:
Capital contributions 7,094,529 2,714,350
Offering expenses (908,495) (360,910)
----------------- ------------------
Net cash provided by financing activities 6,186,034 2,353,440
----------------- ------------------
Net increase (decrease) in cash and cash equivalents (981,008) 2,108,647
Cash and cash equivalents, beginning of period 2,108,647 -
----------------- ------------------
Cash and cash equivalents, end of period $ 1,127,639 $ 2,108,647
================= ==================
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Taxes paid $ 800 $ -
================= ==================
See accompanying notes to financial statements
16
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 8
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Year Ended March 31, 2002, and
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. The chairman and president own substantially all
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, 2002, 9,814 Units, representing
subscriptions in the amount of $9,807,585, net of dealer discounts of $6,370 and
volume discounts of $45, 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 3) from the remainder, any additional sale or refinancing
proceeds will be distributed 90% to the limited partners (in proportion to their
respective investments) and 10% to the General Partner.
17
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 8
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the Year Ended March 31, 2002, and
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 (Notes 3 and 4).
Equity in income of limited partnerships for the year ended March 31, 2002 have
been recorded by the Partnership based on nine months of reported results
provided by the Local Limited Partnerships and on three months of results
estimated by management of the Partnership. Equity in losses of the limited
partnerships allocated to the Partnership will not be 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 accelerated to the extent of losses available.
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 partners' capital and amounted
to $1,269,405 and $397,190 as of March 31, 2002 and 2001.
18
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 8
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the Year Ended March 31, 2002, and
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 accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could materially differ from those
estimates.
Cash and Cash Equivalents
- -------------------------
The Partnership considers all highly liquid investments with remaining
maturities of three months or less when purchased to be cash equivalents. As of
March 31, 2002 and 2001, the Partnership had no cash equivalents.
Concentration of Credit Risk
- ----------------------------
At March 31, 2002, 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 partner unit is calculated pursuant to Statement of
Financial Accounting Standards No. 128, Earnings Per Share. Net income per unit
includes no dilution and is computed by dividing income available to limited
partners by the weighted average number of units outstanding during the period.
Calculation of diluted net income per unit is not required.
Reporting Comprehensive Income
- ------------------------------
The Statement of Financial Accounting Standards ("SFAS") No. 130, Reporting
Comprehensive Income established standards for the reporting and display of
comprehensive income (loss) and its components in a full set of general-purpose
financial statements. The Partnership had no items of other comprehensive income
during the years ended March 31, 2002, 2001 and 2000, as defined by SFAS No.
130.
New Accounting Pronouncement
- ----------------------------
In October 2001, the FASB issued Statement of Financial Accounting Standards No.
144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS
144"), which addresses accounting and financial reporting for the impairment or
disposal of long-lived assets. SFAS 144 is effective for fiscal years beginning
after December 15, 2001, and generally, is to be applied prospectively. The
Partnership has not yet completed its evaluation of the impact of SFAS 144 on
its financial position or results of operations.
NOTE 2 - LOANS RECEIVABLE
- -------------------------
Loans receivable represent amounts loaned by the Partnership to certain Local
Limited Partnerships in which the Partnership may invest. These loans are
generally applied against the first capital contribution due if the Partnership
ultimately invests in such entities. In the event that the Partnership does not
invest in such entities, the loans are to be repaid with interest at a rate
which is equal to the rate charged to the holder. At March 31, 2002, a loan
receivable of $100,000 were due from one Local Limited Partnership.
19
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 8
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the Year Ended March 31, 2002, and
For The Period November 17, 2000 (Date Operations Commenced)
through March 31, 2001
NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS
- --------------------------------------------
As of March 31, 2002, the Partnership has acquired limited partnership interests
in six Local Limited Partnerships, each of which owns one Housing Complex
consisting of an aggregate of 215 apartment units. As of March 31, 2002
construction or rehabilitation of four of the Housing Complexes was still in
process. The respective general partners of the Local Limited Partnerships
manage the day-to-day operations of the entities. Significant Local Limited
Partnership business decisions require approval from the Partnership. The
Partnership, as a limited partner, is generally entitled to 99.98%, as specified
in the Local Limited Partnership agreements, of the operating profits and
losses, taxable income and losses and tax credits of the Local Limited
Partnerships.
The Partnership's investments in limited partnerships as reflected in the
balance sheets at March 31, 2002, are approximately $1,899,000 greater than the
Partnership's equity as shown in the Local Limited Partnerships' combined
financial statements. This difference is primarily due to acquisition,
selection, and other costs related to the acquisition of the investments which
have been capitalized in the Partnership's investment account and to capital
contributions payable to the limited partnerships which were netted against
partner capital in the Local Limited Partnerships' financial statements (see
Note 4).
Equity in losses of the Local Limited Partnerships is recognized in the
financial statements until the related investment account is reduced to a zero
balance. Losses incurred after the investment account is reduced to zero are not
recognized. If the Local Limited Partnerships report net income in future years,
the Partnership will resume applying the equity method only after its share of
such net income equals the share of net losses not recognized during the
period(s) the equity method was suspended.
Distributions received by limited partners are accounted for as a reduction of
the investment balance. Distributions received after the investment has reached
zero are recognized as income. As of March 31, 2002, no investment accounts in
Local Limited Partnerships had reached a zero balance.
The following is a summary of the equity method activity of the investments in
limited partnerships for the periods presented:
For The Period
November 17,
2000 (Date
Operations
For the year Commenced)
ended through
March 31, 2002 March 31, 2001
--------------------------------------
Investments per balance sheet, beginning of period $ 277,895 $ -
Capital contributions paid, net 6,431,914 -
Capital contributions payable 753,283 -
Capitalized acquisition fees and costs 634,797 278,370
Equity in income of Limited Partnerships 98,083 -
Amortization of paid acquisition fees and costs (22,605) (475)
--------------------- ---------------------
Investments in limited partnerships, end of period $ 8,173,367 $ 277,895
===================== =====================
20
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 8
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the Year Ended March 31, 2002, and
For The Period November 17, 2000 (Date Operations Commenced)
through March 31, 2001
NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
- -------------------------------------------------------
The financial information from the individual financial statements of the
Limited Partnerships include rental and interest subsidies. Approximate combined
condensed financial information from the individual financial statements of the
Local Limited Partnerships as of December 31 and for the year then ended are as
follows:
COMBINED CONDENSED BALANCE SHEET
2001
------------------
ASSETS
Buildings and improvements (net of accumulated depreciation
for 2001 of $85,000) $ 6,273,000
Land 383,000
Construction in progress 3,467,000
Other assets 845,000
------------------
$ 10,968,000
==================
LIABILITIES AND PARTNERS' EQUITY
Mortgage and construction loans payable $ 3,549,000
Other liabilities (including payables to affiliates for 2001
of $601,000) 795,000
------------------
4,344,000
------------------
PARTNERS' CAPITAL
WNC Housing Tax Credit Fund VI, L.P., Series 8 6,274,000
Other partners 350,000
------------------
6,624,000
------------------
$ 10,968,000
==================
COMBINED CONDENSED STATEMENT OF OPERATIONS
2001
------------------
Revenues $ 339,000
------------------
Expenses:
Operating expenses 117,000
Interest expense 74,000
Depreciation and amortization 85,000
------------------
Total expenses 276,000
------------------
Net income $ 63,000
==================
Net income allocable to the Partnership $ 63,000
==================
Net income recorded by the Partnership $ 98,000
==================
Certain Local Limited Partnerships have incurred significant operating losses
and have working capital deficiencies. In the event these Local Limited
Partnerships continue to incur significant operating losses, additional capital
contributions by the Partnership and/or the Local General Partner may be
required to sustain the operations of such Local Limited Partnerships. If
additional capital contributions are not made when they are required, the
Partnership's investment in certain of such Local Limited Partnerships could be
impaired, and the loss and recapture of the related tax credits could occur.
21
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 8
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the Year Ended March 31, 2002, and
For The Period November 17, 2000 (Date Operations Commenced)
through March 31, 2001
NOTE 4 - 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, 2002 and 2001, the
Partnership incurred acquisition fees of $686,980 and $216,510 which
have been included in investments in limited partnerships. Accumulated
amortization of these capitalized costs was $17,444 as of March 31,
2002.
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, 2002 and 2001, the Partnership incurred acquisition costs of
$196,280 and $61,860, respectively, which have been included in
investments in limited partnerships. Accumulated amortization was
$5,159 as of March 31, 2002.
An annual asset management fee not to exceed 0.2% of the invested
assets (defined as the Partnership's capital contributions plus
reserves of the Partnership of up to 5% of gross proceeds plus its
allocable percentage of the mortgage debt encumbering the housing
complexes) of the Local Limited Partnerships. Management fees of
$11,820 and $0 were incurred during the periods ended March 31, 2002
and 2001, 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 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:
March 31
----------------------------------
2002 2001
--------------- ---------------
Acquisition fees payable $ - $ 24,360
Acquisition expenses payable - 6,960
Organizational, offering and selling costs payable - 20,880
Commissions payable - 15,400
Asset management fees payable 11,820 -
Reimbursements for expenses paid by the General Partner or an affiliate 1,071 (742)
--------------- ---------------
Total $ 12,891 $ 66,858
=============== ===============
22
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 8
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the Year Ended March 31, 2002, and
For The Period November 17, 2000 (Date Operations Commenced)
through March 31, 2001
NOTE 5 - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
- ----------------------------------------------------
The following is a summary of the quarterly operations for the year ended March 31, 2002:
June 30 September 30 December 31 March 31
--------------- --------------- --------------- ---------------
2002
----
Income $ 12,000 $ 21,000 $ 18,000 $ 7,000
Operating expenses (6,000) (21,000) (17,000) (19,000)
--------------- --------------- --------------- ---------------
Equity in income (losses) of
limited partnerships - (17,000) (36,000) 151,000
--------------- --------------- --------------- ---------------
Net income (loss) $ 6,000 $ (17,000) $ (35,000) $ 139,000
=============== =============== =============== ===============
Income (loss) available to
limited partner $ 6,000 $ (17,000) $ (35,000) $ 139,000
=============== =============== =============== ===============
Earnings (loss) per limited
partnership unit $ 1 $ (2) $ (4) $ 16
=============== =============== =============== ===============
NOTE 6 - PAYABLES TO LIMITED PARTNERSHIPS
- -----------------------------------------
Payables to limited partnerships represent amounts which are due at various
times based on conditions specified in the respective limited partnership
agreements. These contributions are payable in installments and are generally
due upon the limited partnerships achieving certain development and operating
benchmarks (generally within two years of the Partnership's initial investment).
NOTE 7 - INCOME TAXES
- ---------------------
No provision for income taxes has been recorded in the accompanying financial
statements, as any liability for income taxes is the obligation of the partners
of the Partnership.
NOTE 8 - SUBSCRIPTIONS AND NOTES RECEIVABLE
- -------------------------------------------
As of March 31, 2002, the Partnership had received subscriptions for 9,814
units, for an aggregate amount of capital contributions of $9,807,585, net of
dealer discounts of $6,370 and volume discounts of $45.
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. 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 9 - SUBSEQUENT EVENT
- -------------------------
Payments to Local Limited Partnerships subsequent to March 31, 2002 and through
July 17, 2002 totaled $116,500.
23
Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
NOT APPLICABLE
PART III
Item 10. Directors and Executive Officers of the Registrant
The Partnership has no directors or executive officers of its own. The following
biographical information is presented for the directors and executive officers
of Associates which has principal responsibility for the Partnership's affairs.
Directors and Executive Officers of WNC & Associates, Inc.
The directors of WNC & Associates, Inc. are Wilfred N. Cooper, Sr., who serves
as Chairman of the Board, David N. Shafer, Wilfred N. Cooper, Jr. and Kay L.
Cooper. The principal shareholder of WNC & Associates, Inc. is a trust
established by Wilfred N. Cooper, Sr.
Wilfred N. Cooper, Sr., age 71, is the founder, 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.
Wilfred N. Cooper, Jr., age 39, 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 50, is Executive Vice President, a Director, General
Counsel, and a member of the Acquisition Committee of WNC & Associates, Inc.,
and a Director and Secretary of WNC Management, Inc. Mr. Shafer has been
involved in real estate investment and acquisition activities since 1984. Prior
to joining the Sponsor in 1990, he was practicing law with a specialty in real
estate and taxation. Mr. Shafer is a Director and President of the California
Council of Affordable Housing and a member of the State Bar of California. Mr.
Shafer graduated from the University of California at Santa Barbara in 1978 with
a Bachelor of Arts degree, from the New England School of Law in 1983 with a
Juris Doctor degree (cum laude) and from the University of San Diego in 1986
with a Master of Law degree in Taxation.
Thomas J. Riha, age 47, became Chief Financial Officer effective January 2001.
Prior to his appointment as Chief Financial Officer he was Vice President -
Asset Management and a member of the Acquisition Committee of WNC & Associates,
Inc. and a Director and Chief Executive Officer of WNC Management, Inc. Mr. Riha
has been involved in acquisition and investment activities with respect to real
estate since 1979. Prior to joining the Sponsor in 1994, Mr. Riha was employed
by Trust Realty Advisor, a real estate acquisition and management company, last
serving as Vice President - Operations. Mr. Riha graduated from the California
State University, Fullerton in 1977 with a Bachelor of Arts degree (cum laude)
in Business Administration with a concentration in Accounting and is a Certified
Public Accountant and a member of the American Institute of Certified Public
Accountants.
24
Sy P. Garban, age 56, is Vice President - National Sales of WNC & Associates,
Inc. and has been employed by the Sponsor since 1989. Mr. Garban has been
involved in real estate investment activities since 1978. Prior to joining the
Sponsor he served as Executive Vice President of MRW, Inc., a real estate
development and management firm. Mr. Garban is a member of the International
Association of Financial Planners. He graduated from Michigan State University
in 1967 with a Bachelor of Science degree in Business Administration.
Michael J. Gaber, age 36, is Vice President - Acquisitions and a member of the
Acquisitions Committee of WNC & Associates, Inc. Mr. Gaber has been involved in
real estate acquisition, valuation and investment activities since 1989 and has
been employed with WNC since 1997. Prior to joining WNC & Associates, Inc., he
was involved in the valuation and classification of major assets, restructuring
of debt and analysis of real estate taxes with the H.F. Ahmanson company, parent
to Home Savings of America. Mr. Gaber graduated from the California State
University, Fullerton in 1991 with a Bachelor of Science degree in Business
Administration - Finance.
David Turek, age 47, is Vice President - Originations of WNC & Associates, Inc.
He has been involved with real estate investment and finance activities since
1976 and has been employed by WNC & Associates, Inc. since 1996. From 1995 to
1996, Mr. Turek served as a consultant for a national Tax Credit sponsor where
he was responsible for on-site feasibility studies and due diligence analyses of
Tax Credit properties. From 1990 to 1995, he was involved in the development of
conventional and tax credit multi-family housing. He is a Director with the
Texas Council for Affordable Rural Housing and graduated from Southern Methodist
University in 1976 with a Bachelor of Business Administration degree.
Kay L. Cooper, age 65, is a Director of WNC & Associates, Inc. Mrs. Cooper was
the founder and sole proprietor of Agate 108, a manufacturer and retailer of
home accessory products, from 1975 until 1998. She is the wife of Wilfred N.
Cooper, Sr. and the mother of Wilfred N. Cooper, Jr. Ms. Cooper graduated from
the University of Southern California in 1958 with a Bachelor of Science degree.
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, 2002 and 2001
approximately $1,269,000 and $397,000 for selling commissions and other
fees and expenses of the Partnership's offering of Units. Of the total
accrued or paid, approximately $681,000 and $212,000 as of March 31,
2002 and 2001 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, 2002 and 2001 the aggregate amount of acquisition fees paid
or accrued was approximately $687,000 and $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,
2002 and 2001, the aggregate amount of acquisition fees paid or accrued
was approximately $196,000 and $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. Fees were
approximately $12,000 and $0 for the year ended March 31, 2002, and for
the period November 17, 2000 (date of operations commenced) through
March 31, 2001.
(e) Operating Expenses. The Partnership reimbursed the General Partner or
its affiliates for operating expenses of approximately $208,362 and
$6,348 during the year ended March 31, 2002 and for the period November
17, 2000 (date operations commenced) through March 31, 2001, expended
by such persons on behalf of the Partnership.
25
(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 receives 0.1% of the Low
Income Housing Credits which approximated $49 and $0 for the years
ended December 31, 2001 and 2000. The General Partners are also
entitled to receive 0.1% of cash distributions. There were no
distributions of cash to the General Partner during the year ended
March 31, 2002 and 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.
26
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, 2002 and 2001
Statements of Operations for the year ended March 31, 2002 and for the
period November 17, 2000 (Date Operations Commenced) through March
31, 2001
Statements of Partners' Equity (Deficit) for the year ended March 31,
2002 and for the period November 17, 2000 (Date Operations Commenced)
through March 31, 2001
Statements of Cash Flows for the year ended March 31, 2002 and 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.
10.5 First Amendment to the Amended and Restated Agreement of Limited
Partnership of TCM Haven, Limited Partnership filed in Post-Effective
Amendment dated November 27, 2001 is hereby incorporated herein by
reference as Exhibit 10.5.
10.6 First Amendment to the Amended and Restated Agreement of Limited
Partnership of Atkins Terrace Limited Partnership filed in
Post-Effective Amendment dated November 27, 2001 is hereby incorporated
herein by reference as Exhibit 10.6.
10.7 First Amendment to the Amended and Restated Agreement of Limited
Partnership of Broadway Terrace Limited Partnership filed in
Post-Effective Amendment dated November 27, 2001 is hereby incorporated
herein by reference as Exhibit 10.7.
21.1 Financial Statements of United Development Co., L.P., 98.0, as of and
for the year ended December 31, 2001 together with Independent Auditors
Report thereon; a significant subsidiary of the Partnership.
27
Report of Independent Certified Public Accountants on
Financial Statement Schedules
To the Partners
WNC Housing Tax Credit Fund VI, L.P., Series 8
The audits referred to in our report dated July 17, 2002, relating to the 2002
and 2001 financial statements of WNC Housing Tax Credit Fund VI, L.P., Series 8
(the "Partnership"), which are contained in Item 8 of this Form 10-K, included
the audit of the accompanying financial statement schedules. The financial
statement schedules are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statement schedules
based upon our audits.
In our opinion, such financial statement schedules present fairly, in all
material respects, the information set forth therein.
/s/BDO SEIDMAN, LLP
BDO SEIDMAN, LLP
Orange County, California
July 17, 2002
28
WNC Housing Tax Credit Fund VI, L.P., Series 8
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2002
-------------------------------------- --------------------------------------------------
As of March 31, 2002 As of December 31, 2001
-------------------------------------- --------------------------------------------------
Partnership's
Total Investment Amount of Encumbrances
in Local Limited Investment of Local Limited Property and Accumulated Net Book
Partnership Name Location Partnerships Paid to Date Partnerships Equipment Depreciation Value
- ------------------------------------------------------------------------------------------------------------------------------------
505 West Main, L.P. Vermillion,
South Dakota $ 1,178,000 $ 1,055,000 $ 400,000 $ 1,523,000 - $1,523,000
Atkins Terrace, L.P. Atkins, Arkansas 263,000 147,000 455,000 589,000 $ (3,000) 586,000
Broadway Terrace, L.P. Glenwood, Arkansas 205,000 115,000 341,000 454,000 (2,000) 452,000
Butler Plaza Apartments, L.P. Butler, Missouri 891,000 757,000 144,000 1,348,000 - 1,348,000
TCM Haven Ltd. College Station,
Texas 1,165,000 1,048,000 326,000 1,490,000 (19,000) 1,471,000
Untitled Development Memphis,
Co., L.P. -98.0 Tennessee 3,483,000 3,309,000 1,883,000 4,804,000 (61,000) 4,743,000
------------ ---------- ----------- ------------ ---------- ------------
$ 7,185,000 $6,431,000 $ 3,549,000 $ 10,208,000 $ (85,000) $ 10,123,000
============ ========== =========== ============ ========== ============
29
WNC Housing Tax Credit Fund VI, L.P., Series 8
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2002
-------------------------------------------------------------------------------
For the year ended December 31, 2002
-------------------------------------------------------------------------------
Year
Rental Net Income Investment Estimated Useful Life
Partnership Name Income (Loss) Acquired Status (Years)
- ----------------------------------------------------------------- ---------------------------------------------------
Under
505 West Main, L.P. - $ (1,000) 2001 Construction 40 2002
Under
Construction/
Atkins Terrace, L.P. $ 13,000 1,000 2001 Rehabilitation 30 2002
Under
Broadway Terrace, L.P. 6,000 (13,000) 2001 Construction 30 2002
Butler Plaza Apartments, L.P. - - 2001 Completed 2001
TCM Haven Ltd. 35,000 (5,000) 2001 Completed 40 2001
Untitled Development Co., L.P. - Under
98.0 264,000 81,000 2001 Construction 27.5 2002
--------- --------
$ 318,000 $ 63,000
========= ========
30
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 and
and Operating Officer of WNC & Associates, Inc.
Date: August 07, 2002
By: /s/ Thomas J. Riha
------------------
Thomas J. Riha Vice-President and
Chief Financial Officer of WNC & Associates, Inc.
Date: August 07, 2002
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
By /s/ Wilfred N. Cooper, Sr.
--------------------------
Wilfred N. Cooper, Sr. Chairman and Chief Executive Officer of
WNC & Associates, Inc.
Date: August 07, 2002
By: /s/ David N. Shafer
-------------------
David N Shafer Director of WNC & Associates, Inc.
Date: August 07, 2002
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report on Form 10-K of WNC Housing Tax Credit Fund
VI, L.P., Series 8 (the "Partnership") for the year ended March 31, 2002 as
filed with the Securities and Exchange Commission on the date hereof (the
"Report"), and pursuant to 18 U.S.C. section 1350, as adopted pursuant to
section 906 of the Sarbanes-Oxley Act of 2002, I, Wilfred N. Cooper, Sr.,
Chairman and Chief Executive Officer of WNC & Associates, Inc., general partner
[of the general partner] of the Partnership, hereby certify that:
1. The Report fully complies with the requirements of section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material
respects, the financial condition and result of operations of the
Partnership.
/s/WILFRED N. COOPER, SR.
Wilfred N. Cooper, Sr.
Chairman and Chief Executive Officer of WNC & Associates, Inc.
August 7, 2002
31
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report on Form 10-K of WNC Housing Tax Credit Fund
VI, L.P., Series 8 (the "Partnership") for the year ended March 31, 2002 as
filed with the Securities and Exchange Commission on the date hereof (the
"Report"), and pursuant to 18 U.S.C. section 1350, as adopted pursuant to
section 906 of the Sarbanes-Oxley Act of 2002, I, Thomas J. Riha, Chief
Financial Officer of WNC & Associates, Inc., general partner [of the general
partner] of the Partnership, hereby certify that:
1. The Report fully complies with the requirements of section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material
respects, the financial condition and result of operations of the
Partnership.
/s/THOMAS J. RIHA
Thomas J. Riha
Chief Financial Officer of WNC & Associates, Inc.
August 7, 2002
32