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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
Form 10-Q
 
(Mark One)
 
        x  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
              SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended June 30, 2002
 
or
 
        ¨  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
              SECURITIES EXCHANGE  ACT OF 1934
 
For the transition period from __________ to __________
 
Commission file number 0-23656
 
 
WELLS REAL ESTATE FUND VI, L.P.
(Exact name of registrant as specified in its charter)
 
Georgia
  
58-2022628
(State of other jurisdiction of incorporation or organization)
  
(I.R.S. Employer Identification No.)
     
6200 The Corners Parkway, Suite 250,
Atlanta, Georgia
  
30092
(Address of principal executive offices)
  
(Zip Code)
     
Registrant’s telephone number, including area code (770) 449-7800
 
(Former name, former address and former fiscal year, if changed since last report)
 
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  ¨
 

Table of Contents
Form 10-Q
Wells Real Estate Fund VI, L.P.
(A Georgia Public Limited Partnership)
 
INDEX
 
           
Page No.
PART I.
          
Item 1.
        
  3
         
  4
         
  5
         
  6
         
  7
         
  8
Item 2.
        
13
PART II.
        
16
    
17
      
      
             

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Table of Contents
 
PART I.    FINANCIAL INFORMATION
 
Effective July 3, 2002, Wells Real Estate Fund VI (the “Partnership”) engaged Ernst & Young LLP (“Ernst & Young”) as its principal accountants to audit the Partnership’s financial statements. In accordance with the relief granted to former auditing clients of Arthur Andersen LLP in SEC Release No. 34-45589, Ernst & Young completed its review of the unaudited financial statements of the Partnership for the quarter ended March 31, 2002 pursuant to Rule 10-01(d) of Regulation S-X within the 60-day period allowed pursuant to the SEC Release, and no material modifications to the previously reported financial information were required.

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WELLS REAL ESTATE FUND VI, L.P.
 
(A Georgia Public Limited Partnership)
 
BALANCE SHEETS
 
    
(unaudited)
June 30,
2002
   
December 31, 2001
ASSETS:
              
Investments in joint ventures (Note 2)
   
$
15,116,593
   
$
16,403,394
Cash and cash equivalents
   
 
11,240
   
 
27,895
Due from affiliates
   
 
1,355,829
   
 
462,092
Prepaid expenses and other assets
   
 
1,590
   
 
910
    
  
Total assets
   
$
16,485,252
   
$
16,894,291
    
  
LIABILITIES AND PARTNERS’ CAPITAL
              
Liabilities:
              
Partnership distribution payable
   
$
448,700
   
$
461,250
Accounts payable
   
 
0
   
 
2,534
    
  
Total liabilities
   
 
448,700
   
 
463,784
    
  
Partners’ Capital
              
Limited Partners:
              
Class A—2,243,716 units as of June 30, 2002 and 2,236,360 units as of December 31, 2001
   
 
16,036,552
   
 
16,430,507
Class B— 256,284 units as of June 30, 2002 and 263,640 units as of December 31, 2001
   
 
0
   
 
0
    
  
Total partners’ capital
   
 
16,036,552
   
 
16,430,507
    
  
Total liabilities and partners’ capital
   
$
16,485,252
   
$
16,894,291
    
  
 
The accompanying notes are an integral part of these balance sheets.

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Table of Contents
 
WELLS REAL ESTATE FUND VI, L.P.
 
(A Georgia Public Limited Partnership)
 
STATEMENTS OF INCOME
 
    
(unaudited)
Three Months Ended
   
(unaudited)
Six Months Ended
    
June 30, 2002
   
June 30,
2001
   
June 30, 2002
   
June 30, 2001
REVENUES:
                            
Equity in income of joint ventures (Note 2)
   
$
283,965
   
$
263,651
   
$
549,866
   
$
507,646
Interest income
   
 
0
   
 
411
   
 
861
   
 
423
    
  
  
  
    
 
283,965
   
 
264,062
   
 
550,727
   
 
508,069
    
  
  
  
EXPENSES:
                            
Legal and accounting
   
 
3,609
   
 
3,250
   
 
13,278
   
 
12,900
Computer costs
   
 
1,795
   
 
4,307
   
 
3,850
   
 
5,107
Partnership administration
   
 
17,526
   
 
20,948
   
 
30,525
   
 
30,881
    
  
  
  
    
 
22,930
   
 
28,505
   
 
47,653
   
 
48,888
    
  
  
  
NET INCOME
   
$
261,035
   
$
235,557
   
$
503,074
   
$
459,181
    
  
  
  
NET INCOME ALLOCATED TO CLASS A LIMITED PARTNERS
   
$
261,035
   
$
235,557
   
$
503,074
   
$
459,181
    
  
  
  
NET LOSS ALLOCATED TO CLASS B LIMITED PARTNERS
   
$
0
   
$
0
   
$
0
   
$
0
    
  
  
  
NET INCOME PER WEIGHTED AVERAGE CLASS A LIMITED PARTNER UNIT
   
$
0.12
   
$
0.11
   
$
0.23
   
$
0.21
    
  
  
  
NET LOSS PER CLASS B LIMITED PARTNER UNIT
   
$
0
   
$
0
   
$
0
   
$
0
    
  
  
  
CASH DISTRIBUTION PER CLASS A LIMITED PARTNER UNIT
   
$
0.20
   
$
0.21
   
$
0.40
   
$
0.43
    
  
  
  
 
The accompanying notes are an integral part of these statements.

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WELLS REAL ESTATE FUND VI, L.P.
 
(A Georgia Public Limited Partnership)
 
STATEMENTS OF PARTNERS’ CAPITAL
 
FOR THE YEAR ENDED DECEMBER 31, 2001
AND THE SIX MONTHS ENDED JUNE 30, 2002 (UNAUDITED)
 
    
Limited Partners
       
    
Class A
     
Class B
   
Total Partners’
  
    
Units
   
Amount
     
Units
     
Amount
   
Capital
  
BALANCE, December 31, 2000
   
2,198,969
   
$
17,118,806
 
   
301,031
 
   
$
0
   
$
17,118,806
 
Net income
   
0
   
 
1,190,997
 
   
0
 
   
 
0
   
 
1,190,997
 
Partnership distributions
   
0
   
 
(1,879,296
)
   
0
 
   
 
0
   
 
(1,879,296
)
Class B conversion elections
   
37,391
   
 
0
 
   
(37,391
)
   
 
0
   
 
0
 
    
  
  
  
  
BALANCE, December 31, 2001
   
2,236,360
   
 
16,430,507
 
   
263,640
 
   
 
0
   
 
16,430,507
 
Net income
   
0
   
 
503,074
 
   
0
 
   
 
0
   
 
503,074
 
Partnership distributions
   
0
   
 
(897,029
)
   
0
 
   
 
0
   
 
(897,029
)
Class B conversion elections
   
7,356
   
 
0
 
   
(7,356
)
   
 
0
   
 
0
 
    
  
  
  
  
BALANCE, June 30, 2002
    (unaudited)
   
2,243,716
   
$
16,036,552
 
   
256,284
 
   
$
0
   
$
16,036,552
 
    
  
  
  
  
 
The accompanying notes are an integral part of these statements.

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Table of Contents
 
WELLS REAL ESTATE FUND VI, L.P.
 
(A Georgia Public Limited Partnership)
 
STATEMENTS OF CASH FLOWS
 
    
(unaudited)
Six Months Ended
  
    
June 30, 2002
     
June 30, 2001
  
CASH FLOW FROM OPERATING ACTIVITIES:
                 
Net income
   
$
503,074
 
   
$
459,181
 
Adjustments to reconcile net income to net cash used in operating activities:
                 
Equity in income of joint venture
   
 
(549,866
)
   
 
(507,646
)
Changes in assets and liabilities:
                 
Prepaid expenses and other assets
  
 
(680
)
   
 
(1,550
)
Accounts payable
   
 
(2,534
)
   
 
(2,000
)
    
  
Net cash used in operating activities
   
 
(50,006
)
   
 
(52,015
)
    
  
CASH FLOW FROM INVESTING ACTIVITIES:
                  
Distributions received from joint ventures
   
 
942,930
 
   
 
1,000,170
 
    
  
CASH FLOW FROM FINANCING ACTIVITIES:
                  
Partnership distributions paid
   
 
(909,579
)
   
 
(963,040
)
    
  
NET DECREASE IN CASH AND CASH EQUIVALENTS
   
 
(16,655
)
   
 
(14,885
)
CASH AND CASH EQUIVALENTS, beginning of year
   
 
27,895
 
   
 
28,855
 
    
  
CASH AND CASH EQUIVALENTS, end of period
   
$
11,240
 
   
$
13,970
 
    
  
 
 
The accompanying notes are an integral part of these statements.

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Table of Contents
 
WELLS REAL ESTATE FUND VI, L.P.
 
(A Georgia Public Limited Partnership)
 
CONDENSED NOTES TO FINANCIAL STATEMENTS
 
JUNE 30, 2002 (UNAUDITED)
 
1.
 
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
(a)
 
Organization and Business
 
Wells Real Estate Fund VI, L.P. (the “Partnership”) is a Georgia public limited partnership with Leo F. Wells, III and Wells Partners, L.P. (“Wells Partners”), a Georgia nonpublic limited partnership, serving as the General Partners. The Partnership was formed on December 1, 1992, for the purpose of acquiring, developing, constructing, owning, operating, improving, leasing, and otherwise managing income producing properties for investment purposes. The Partnership has two classes of limited partnership interests, Class A and Class B units. The limited partners have the right to change their prior elections to have some or all of their units treated as Class A units or Class B units one time during each quarterly accounting period and may vote to, among other things, (a) amend the partnership agreement, subject to certain limitations, (b) change the business purpose or investment objectives of the Partnership, and (c) add or remove a general partner. A majority vote on any of the above described matters will bind the Partnership without the concurrence of the general partners. Each limited partnership unit has equal voting rights regardless of class.
 
On April 5, 1993, the Partnership commenced a public offering of its limited partnership units pursuant to a Registration Statement filed on Form S-11 under the Securities Act of 1933. The Partnership terminated its offering on April 4, 1994 upon receiving and accepting gross offering proceeds of $25,000,000 representing subscriptions from 1,793 Class A and Class B limited partners.
 
The Partnership owns interests in all of its real estate assets through joint ventures with other Wells Real Estate Funds. As of June 30, 2002, the Partnership owned interests in the following eight properties through the affiliated joint ventures listed below:
 
Joint Venture
  
Joint Venture Partners
  
Properties
Fund II-III-VI-VII Associates
  
—Fund II and III Associates*
—Wells Real Estate Fund VI, L.P.
—Wells Real Estate Fund VII, L.P.
  
1.  Holcomb Bridge Property
     An office/retail center located in     Roswell, Georgia
Fund V-VI Associates
  
—Wells Real Estate Fund V, L.P.
—Wells Real Estate Fund VI, L.P.

  
2.  Stockbridge Village II
     Two retail buildings located in     Clayton county, Georgia
3.  Hartford Building
     A four story office building located     in Hartford, Connecticut

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Fund V-VI-VII Associates
  
—Wells Real Estate Fund V, L.P.
—Wells Real Estate Fund VI, L.P.
—Wells Real Estate Fund VII, L.P.
  
4.  Marathon Building
     A three-story office building located     in Appleton, Wisconsin
Fund VI-VII Associates
  
—Wells Real Estate Fund VI, L.P.
—Wells Real Estate Fund VII, L.P.
  
5.  Stockbridge Village I Expansion
     A retail shopping center expansion     located in Stockbridge, Georgia
6.  Stockbridge Village III
     Two retail buildings located in     Stockbridge, Georgia
Fund VI-VII-VIII Associates
  
—Wells Real Estate Fund VI, L.P.
—Wells Real Estate Fund VII, L.P.
—Wells Real Estate Fund VIII, L.P.
  
7.  BellSouth Building
     A four-story office building located     in Jacksonville, Florida
8.  Tanglewood Commons
     A retail center located in     Clemmons, North Carolina
 
*
 
Fund II-III Associates is a joint venture between Fund II and IIOW Associates and Wells Real Estate Fund III, L.P.; Fund II and Fund IIOW Associates is a joint venture between Wells Real Estate Fund II and Wells Real Estate Fund II-OW.
 
Each of the above properties was acquired on an all cash basis. For further information regarding the foregoing joint ventures and properties, refer to the report filed for the Partnership on Form 10-K for the year ended December 31, 2001.
 
On October 1, 2001, Fund I-II-IIOW-VI-VII Associates, a joint venture among the Partnership, Wells Real Estate Fund I, Fund II and IIOW Associates, and Wells Real Estate Fund VII, L.P., sold the Cherokee Commons property to an unrelated third party. The Cherokee Commons property is a retail shopping center located in Cherokee County, Georgia. The portion of the proceeds from the sale of the Cherokee Commons property attributable to the Partnership in the amount of $886,212 is included in due from affiliates in the accompanying balance sheet as of June 30, 2002.
 
On June 28, 2002, Fund VI-VII-VIII Associates entered into an agreement to sell an out parcel of land at Tanglewood Commons for a gross selling price of approximately $560,000. Pursuant to the terms of the agreement, this transaction is currently subject to a due diligence period, during which the purchaser has the right to terminate the contract. Accordingly, there are no assurances that this sale will close.