FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2002
OR
|X| 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: 333-67670
WNC HOUSING TAX CREDIT FUND VI, L.P., Series 9
California 33-0974533
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3158 Redhill Avenue, Suite 120
Costa Mesa, CA 92626
(Address of principal executive offices)
(714) 662-5565
(Telephone number)
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 whether the registrant is an accelerated filer (as
defined in rule 12b-2 of the Exchange Act).
Yes No X
--------- ----------
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 9
(A California Limited Partnership)
INDEX TO FORM 10-Q
For the Quarterly Period Ended December 31, 2002
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets,
December 31, 2002 and March 31, 2002.............................3
Statements of Operations
For the three months and nine months ended
December 31, 2002 .............................................4
Statement of Partners' Equity (Deficit)
For the nine months ended December 31, 2002 .....................5
Statement of Cash Flows
For the nine months ended December 31, 2002 ....................6
Notes to Financial Statements....................................7
Item 2. Management's Discussion and Analysis of Financial Condition ....13
Item 3. Quantitative and Qualitative Disclosures about Market Risk......14
Item 4. Controls and Procedures.........................................14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings...............................................14
Item 5. Other information...............................................14
Item 6. Exhibits and Reports on Form 8-K................................14
Signatures...............................................................15
Certifications...........................................................16
2
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 9
(A California Limited Partnership)
BALANCE SHEETS
December 31, 2002 March 31, 2002
----------------- --------------
(unaudited)
ASSETS
Cash and cash equivalents $ 1,869,972 $ 1,221,805
Investments in limited partnerships, net (Note 2) 8,686,366 173,781
Subscriptions and interest receivable 771,990 364,026
----------------------- -----------------------
$ 11,328,328 $ 1,759,612
======================= =======================
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities:
Accrued fees and expenses due to
General Partner and affiliates (Note 3) $ 220,694 $ 228,940
Other liabilities - 6,900
Payables to limited partnerships (Note 4) 1,108,132 -
----------------------- -----------------------
Total liabilities 1,328,826 235,840
----------------------- -----------------------
Commitments and contingencies
Partners' equity (deficit):
General partner (1,542) 92
Limited Partners (25,000 units authorized
and 12,456 and 1,933 units issued and outstanding
at December 31 and March 31, 2002) 10,001,044 1,523,680
----------------------- -----------------------
Total partners' equity 9,999,502 1,523,772
----------------------- -----------------------
$ 11,328,328 $ 1,759,612
======================= =======================
See accompanying notes to financial statements
3
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 9
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
For the Three Months and Nine Months Ended December 31, 2002
(unaudited)
2002 2002
------------------ ---------------------
Three Nine
Months Months
------------------ ---------------------
Interest income $ 4,615 $ 15,349
------------------ ---------------------
Total income 4,615 15,349
------------------ ---------------------
Operating expenses:
Amortization (Note 2) 6,410 13,642
Asset management fees (Note 3) 25,683 57,947
Legal and accounting 3,255 3,495
Other 1,252 4,012
------------------ ---------------------
Total operating expenses 36,600 79,096
------------------ ---------------------
Loss from operations (31,985) (63,747)
Equity in losses of
limited partnerships (Note 2) (231,563) (245,775)
------------------ ---------------------
Net loss $ (263,548) $ (309,522)
================== =====================
Net loss allocated to:
General Partner $ (264) $ (310)
================== =====================
Limited Partners $ (263,284) $ (309,212)
================== =====================
Net loss per weighted limited
partner unit $ (26) $ (46)
================== =====================
Outstanding weighted limited
partner units 10,292 6,711
================== =====================
See accompanying notes to financial statements
4
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 9
(A California Limited Partnership)
STATEMENT OF PARTNERS' EQUITY (DEFICIT)
For the Nine Months Ended December 31, 2002
(unaudited)
General Limited
Partner Partners Total
--------------- ---------------- ------------------
Partners' equity at March 31, 2002 $ 92 $ 1,523,680 $ 1,523,772
Sales of Limited Partnerships units,
net of discounts of $4,815 - 10,518,185 10,518,185
Less Limited Partnership units issued for
promissory notes receivable - (408,992) (408,992)
Offering expenses (1,324) (1,322,617) (1,323,941)
Net loss (310) (309,212) (309,522)
--------------- ---------------- ------------------
Partners' equity (deficit) at December 31, 2002 $ (1,542) $ 10,001,044 $ 9,999,502
=============== ================ ==================
See accompanying notes to financial statements
5
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 9
(A California Limited Partnership)
STATEMENT OF CASH FLOWS
For the Nine Months Ended December 31, 2002
(unaudited)
Cash flows from operating activities:
Net loss $ (309,522)
Adjustments to reconcile net loss to net
cash used in operating activities:
Amortization 13,642
Equity in losses of limited partnerships 245,775
Change in accrued fees and expenses due to
General Partner and affiliates, net 43,563
------------------------
Net cash used by operating activities (6,542)
------------------------
Cash flows from investing activities:
Investments in limited partnerships, net (6,699,589)
Capitalized acquisition fees (931,321)
------------------------
Net cash used in investing activities (7,630,910)
------------------------
Cash flows from financing activities:
Sales of limited partner units 9,701,227
Offering expenses (1,415,608)
------------------------
Net cash provided by financing activities 8,285,619
------------------------
Net increase in cash and cash equivalents 648,167
Cash and cash equivalents, beginning of period 1,221,805
------------------------
Cash and cash equivalents, end of period $ 1,869,972
========================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Taxes paid $ 800
========================
During the nine months ended December 31, 2002, the Partnerships sold
limited partnership units for promissory notes totaling $580,000.
See accompanying notes to financial statements
6
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 9
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the Quarterly Period Ended December 31, 2002
(unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- --------------------------------------------------------------------
General
- -------
The accompanying condensed unaudited financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America for interim financial information and with the instructions to Form 10-Q
for quarterly reports under Section 13 or 15(d) of the Securities Exchange Act
of 1934. Accordingly, they do not include all of the information and footnotes
required by accounting principles generally accepted in the United States of
America for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the three months and
nine months ended December 31, 2002 are not necessarily indicative of the
results that may be expected for the fiscal year ending March 31, 2003. For
further information, refer to the financial statements and footnotes thereto
included in the Partnerships's annual report on Form 10-K for the fiscal year
ended March 31, 2002.
Organization
- ------------
WNC Housing Tax Credit Fund VI, L.P., Series 9, (a California Limited
Partnership) (the "Partnership") was formed on July 17, 2001 under the laws of
the state of California and commenced operations on August 3, 2001, the
effective date of its public offering pursuant to the Securities and Exchange
Commission's approval of the Partnership's Pre-Effective Amendment No. 1 to Form
S-11 initially filed on August 16, 2001. Prior to August 3, 2001, the
Partnership was considered a development-stage enterprise. The Partnership was
formed to invest primarily in other limited partnerships (the "Local Limited
Partnerships") which own and operate multi-family housing complexes (the
"Housing Complexes") that are eligible for low income housing tax credits. The
local general partners (the "Local General Partners") of each Local Limited
Partnership will retain responsibility for maintaining, operating and managing
the Housing Complex.
WNC & Associates, Inc. ("Associates") is the general partner of the Partnership
(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.
The financial statements include only activity relating to the business of the
Partnership, and does not give effect to any assets that the partners may have
outside of their interests in the Partnership, or to any obligations, including
income taxes, of the partners.
The Partnership shall continue in full force and effect until December 31, 2062
unless terminated prior to that date, pursuant to the partnership agreement or
law.
The Partnership agreement authorized the sale of up to 25,000 units at $1,000
per Unit ("Units"). As of December 31, 2002, 12,456 Units, representing
subscriptions in the amount of $12,451,185, net of dealer discounts of $3,290
and volume discounts of $1,525, 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 of the
Partnership. 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 orrefinancing
proceeds will be distributed 90% to the limited partners (in proportion to their
respective investments) and 10% to the General Partner.
7
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 9
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the Quarterly Period Ended December 31, 2002
(unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
- -------------------------------------------------------------------------------
Risks and Uncertainties
- -----------------------
The Partnership's investments in Local Limited Partnerships are subject to the
risks incident to the management and ownership of low-income housing and to the
management and ownership of multi-unit residential real estate. Some of these
risks are that the low income housing credit could be recaptured and that
neither the Partnership's investments nor the Housing Complexes owned by the
Local Limited Partnerships will be readily marketable. To the extent the
HousingComplexes 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 makes 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 in the transferability of Units, and it
is unlikely that a market for Units will develop. All management decisions will
be made by the General Partner.
Method of Accounting for Investments in Limited Partnerships
- ------------------------------------------------------------
The Partnership intends to account for its investments in limited partnerships
using the equity method of accounting, whereby the Partnership will adjust its
investment balance for its share of the Local Limited Partnership's results of
operations and for any distributions received. The accounting policies of the
Local Limited Partnerships are expected to be consistent with those of the
Partnership. Costs incurred by the Partnership in acquiring the investments will
be capitalized as part of the investment and amortized over 30 years.
Offering Expenses
- -----------------
Offering expenses are expected to consist of underwriting commissions, legal
fees, printing, filing and recordation fees, and other costs incurred in
connection with the selling of limited partnership interests in the Partnership.
The General Partner is obligated to pay all offering and organization costs
excluding selling commissions and dealer manager fees. Offering expenses will be
reflected as a reduction of limited partners' capital and amounted to $1,575,231
as of December 31, 2002.
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.
8
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 9
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the Quarterly Period Ended December 31, 2002
(unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
- -------------------------------------------------------------------------------
Cash and Cash Equivalents
- -------------------------
The Partnership considers all highly liquid investments with remaining maturity
of three months or less when purchased to be cash equivalents. As of December
31, 2002 and March 31, 2002, the Partnership had no cash equivalents.
Concentration of Credit Risk
- ----------------------------
At December 31, 2002, the Partnership maintained a cash balance at a certain
financial institution in excess of the maximum federally insured amounts.
Net Loss Per Limited Partner Unit
- ---------------------------------
Net loss per limited partner unit is calculated pursuant to Statement of
Financial Accounting Standards No. 128, Earnings Per Share. Net loss per unit
includes no dilution and is computed by dividing loss 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
for all the periods presented, as defined by SFAS No. 130.
New Accounting Pronouncements
- -----------------------------
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. SFAS 144
is not expected to have a material impact on the Partnership's financial
position or results of operations.
In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities." SFAS No. 146 addresses accounting and
reporting for costs associated with exit or disposal activities and nullifies
Emerging Issues Task Force Issue No. 94-3, "Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity (Including
Certain Costs Incurred in a Restructuring)." SFAS No. 146 requires that a
liability for a cost associated with an exit or disposal activity be recognized
and measured initially at fair value when the liability is incurred. SFAS No.
146 is effective for exit or disposal activities that are initiated after
December 31, 2002, with early application encouraged. SFAS 146 is not expected
to have a material impact on the Partnership's financial position or results of
operations.
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS
- --------------------------------------------
As of December 31, 2002, the Partnership has acquired limited partnership
interests in 10 Local Limited Partnerships, each of which owns one Housing
Complex except one that owns three, consisting of an aggregate of 394 apartment
units. As of December 31, 2002, construction or rehabilitation of four of the
Housing Complexes were 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
9
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 9
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the Quarterly Period Ended December 31, 2002
(unaudited)
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
- -------------------------------------------------------
to 99.9%, as specified in the Local Limited Partnership agreements, of the
operating profits and losses, taxable income and losses and tax credits of the
Local Limited Partnerships.
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 December 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
local limited partnerships as of:
December 31, 2002 March 31, 2002
--------------------- ------------------
Investments in limited partnerships, beginning of
period $ 173,781 $ -
Capital contributions paid, net 6,699,589 -
Capital contributions payable 1,108,132 -
Capitalized acquisition fees and costs 964,281 173,970
Equity in loss of limited partnership (245,775) -
Amortization of capitalized acquisition fees and costs (13,642) (189)
--------------------- ------------------
Investments in limited partnerships, end of period $ 8,686,366 $ 173,781
===================== ==================
Selected financial information for the nine months ended December, 2002 from the
unaudited combined condensed financial statements of the limited partnerships in
which the Partnership has invested as follows:
COMBINED CONDENSED STATEMENT OF OPERATIONS
2002
-------------------
Revenue $ 961,000
-------------------
Expenses:
Interest expense 360,000
Depreciation 155,000
Operating expenses 692,000
-------------------
Total expenses 1,207,000
-------------------
Net loss $ (246,000)
===================
Net loss allocable to the
Partnership $ (246,000)
===================
Net loss recorded by the
Partnership $ (246,000)
===================
10
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 9
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the Quarterly Period Ended December 31, 2002
(unaudited)
NOTE 3 - RELATED PARTY TRANSACTIONS
- -----------------------------------
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) 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 December 31, 2002, the Partnership
incurred acquisition fees of $871,920. Accumulated amortization of these
capitalized costs was $11,042 and $147 as of December 31, 2002 and March
31, 2002, respectively.
(b) 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 December 31,
2002, the Partnership incurred acquisition costs of $249,120. Accumulated
amortization of these capitalized costs was $2,676 and $42 as of December
31, 2002 and March 31, 2002, respectively.
(c) An annual asset management fee not to exceed 0.5% 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. Asset management fees of $57,947 accrued during the nine
months ended December 31, 2002. The Partnership paid the General Partner or
its affiliates $10,000 of these fees during the nine months ended December
31, 2002.
(d) 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.
Accrued fees and expenses due to the General Partner and affiliates consisted of
the following as of:
December 31, 2002 March 31, 2002
--------------------- ---------------------
Acquisition fees payable $ 54,600 $ 29,120
Acquisition costs payable 15,800 8,320
Organization, offering, and selling costs payable 23,400 16,640
Commissions payable 75,543 173,970
Asset management fees payable 47,947 -
Reimbursements for expenses paid by the
General Partner or an affiliate 3,404 890
--------------------- ---------------------
Total $ 220,694 $ 228,940
===================== =====================
NOTE 4 - PAYABLES TO LIMITED PARTNERSHIPS
- -----------------------------------------
Payables to limited partnerships amounting to $1,108,132 at December 31, 2002
and $0 at March 31, 2002 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).
11
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 9
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the Quarterly Period Ended December 31, 2002
(unaudited)
NOTE 5 - INCOME TAXES
- ---------------------
No provision for income taxes will be recorded in the financial statements as
any liability for income taxes is the obligation of the partners of the
Partnership.
NOTE 6 - SUBSCRIPTIONS AND NOTES RECEIVABLE
- -------------------------------------------
As of December 31, 2002, the Partnership had received subscriptions for 12,456
units which included subscriptions receivable of $768,250 and promissory notes
of $560,492, of which $768,250 of the subscriptions receivables were collected
after December 31, 2002 and prior to the issuance of these financial statements,
leaving an unpaid balance of $560,492. Limited partners who subscribed for ten
or more units of limited partner interests ($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 7 - SUBSEQUENT EVENTS
- --------------------------
From January 1 to February 11 2003, the Partnership received subscriptions for
additional 557 Units, for which it has received $160,000.
12
Item 2. Management's Discussion And Analysis Of Financial Condition
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-Q 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-Q 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 December 31, 2002 consisted primarily of $1,870,000
in cash, $768,000 in subscriptions receivable, and aggregate investments in the
ten Local Limited Partnerships of $8,686,000. Liabilities at December 31, 2002
primarily consisted of $1,108,000 due to limited partnerships and $221,000 in
advances and other payables due to the General Partner or affiliates.
Results of Operations
The Partnership commenced operations on August 3, 2001 and had no operations to
report for December 31, 2001. As a result, there are no comparative results of
operations or financial condition from prior periods to report.
The Partnership's net loss for the three months ended December 31, 2002 was
$(264,000). The net loss is due to loss from operations of $(32,000) and equity
in losses of limited partnerships of $(232,000). The partnership's operating
expenses consisted primarily of asset management fees, amortization and other
operating expenses, offset by interest income.
The Partnership's net loss for the nine months ended December 31, 2002 was
$(310,000). The net loss is due to loss from operations of $(64,000) and equity
in losses of limited partnerships of $(246,000). The partnership's operating
expenses consisted primarily of asset management fees of $58,000 and
amortization of $14,000, which was offset by interest income of $15,000.
It is not expected that any of the local limited partnerships will generate cash
from operations sufficient to provide distributions to investors in any
significant amount. Cash from operations, if any, would first be used to meet
operating expenses of the Partnerships. Operating expenses include the asset
management fee.
Investments in local limited partnerships are not readily marketable. Such
investments may be affected by adverse general economic conditions, which in
turn, could substantially increase the risk of operating losses for the
apartment complexes, the local limited partnerships and the Partnership. These
problems may result from a number of factors, many of which cannot be
controlled. Nevertheless, WNC & Associates, Inc. anticipates that capital raised
from the sale of the Units will be sufficient to fund the Partnership's future
investment commitments and proposed operations.
The capital needs and resources of the Partnership are expected to undergo major
changes during its first several years of operations as a result of the
completion of its offering of Units and its acquisition of investments.
Thereafter, The Partnership' capital needs and resources are expected to be
relatively stable.
13
Cash Flows
Net increase in cash during the nine-month period ended December 31, 2002 was
$648,000. Net cash flows used in investing activities was $(7,631,000) for the
nine-month period ended December 31, 2002, due primarily to net capital
contributions paid to Local Limited Partnerships of $(6,700,000) along with net
acquisition costs and fees of $(931,000). Net cash flows from financing
activities of $8,286,000 during the nine months ended December 31, 2002
consisted of net sales of limited partnership units of $9,701,000, offset by
offering expenses of $1,416,000 for the nine month period ended December 31,
2002.
Item 3: Quantitative and Qualitative Disclosures Above Market Risk
Not Applicable
Item 4. Controls and Procedures
Within the 90 days prior to the date of this report, the General Partner of the
Partnership carried out an evaluation, under the supervision and with the
participation of the General Partnership's management, including the General
Partnership's Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of the Partnership's disclosure
controls and procedures pursuant to Exchange Act Rule 13a- 14. Based upon that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that the Partnership's disclosure controls and procedures are effective. There
were no significant changes in the Partnership's internal controls or in other
factors that could significantly affect these controls subsequent to the date of
their evaluation.
14
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 5. Other Information
Wilfred N. Cooper, Jr. has assumed the role of Chief Executive Officer of WNC &
Associates. Wilfred N. Cooper, Sr. who previously held the role of Chief
Executive Officer remains the Chairman of The Board.
Item 6. Exhibits and Reports on Form 8-K
(a) Reports on Form 8-K.
1. A Form 8-K/A was filed on October 11, 2002 amending the Form 8-K dated
August 2, 2002. Pro forma financial information relating to the
acquisition was included.
2. A Form 8-K/A was filed on October 11, 2002 amending the Form 8-K dated
August 12, 2002. Pro forma financial information relating to the
acquisition was included.
3. A Form 8-K/A was filed on October 11, 2002 amending the Form 8-K dated
August 29, 2002. Pro forma financial information relating to the
acquisition was included.
4. A Form 8-K/A was filed on October 11, 2002 amending the Form 8-K dated
July 31, 2002. Pro forma financial information relating to the
acquisition was included.
5. A Form 8-K dated December 6, 2002 was filed on December 20, 2002
reporting the acquisition of a Local Limited Partnership. No financial
statements were included.
(b) Exhibits.
99.1 Certification pursuant to 18 U.S.C. Section 1350 as adapted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
15
Pursuant to the requirements 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 9
- ----------------------------------------------
By: WNC & Associates, Inc., General Partner
By: /s/ Wilfred N. Cooper, Jr.
-------------------------
Wilfred N. Cooper, Jr.
President - Chief Executive Officer of WNC & Associates, Inc.
Date: February 11 2003
By: /s/ Thomas J. Riha
- -----------------------
Thomas J. Riha
Vice President - Chief Financial Officer of WNC & Associates, Inc.
Date: February 11 2003
16
CERTIFICATIONS
I, Wilfred N. Cooper, Jr., certify that:
1. I have reviewed this quarterly report on Form 10-Q of WNC HOUSING TAX
CREDIT FUND VI, L.P., SERIES 9;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: February 11 2003
/s/ Wilfred N. Cooper, Jr.
- --------------------------
President and Chief Executive Officer of WNC & Associates, Inc.
17
CERTIFICATIONS
I, Thomas J. Riha, certify that:
1. I have reviewed this quarterly report on Form 10-Q of WNC HOUSING TAX
CREDIT FUND VI, L.P., SERIES 9;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: February 11 2003
/s/Thomas J. Riha
- -----------------
Vice-President - Chief Financial Officer of WNC & Associates, Inc.
18