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: 0-24855
WNC HOUSING TAX CREDIT FUND VI, L.P., Series 5
California 33-0745418
(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
-------- ------------
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. |X|
1
State the aggregate market value of the voting and non-voting common equity held
by non-affiliates of the registrant.
INAPPLICABLE
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and the Part
of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is
incorporated: (1) Any annual report to security holders; (2) Any proxy or
information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or
(c) under the Securities Act of 1933. The listed documents should be clearly
described for identification purposes (e.g., annual report to security holders
for fiscal year ended December 24, 1980).
2
PART 1.
Item 1. Business
Organization
WNC Housing Tax Credit Fund, VI, L.P., Series 5 (the "Partnership") was formed
under the California Revised Limited Partnership Act on March 3, 1997 and
commenced operations on August 29, 1997. 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 president and chairman 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. As of the close of the public offering on July 9, 1998, the Partnership
had received and accepted subscriptions for 25,000 Units in the amount of
$24,918,175 net of volume and dealer discounts of $81,825. 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 fifteen 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 fifteen 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
- ------------------------------------------------------------------------------------------------------------------------------------
Apartment Apartment Developers,
Housing of Theodore, Inc. and Thomas H.
Theodore Alabama Cooksey $ 1,188,000 $ 1,188,000 40 98% $ 2,015,000 $ 1,140,000
Austin Gateway, Austin, Gary L.
Ltd. Texas Kersch 131,000 131,000 10 100% 157,000 388,000
Bradley Villas
Limited Bradley,
Partnership Arkansas Horizon Bank 501,000 501,000 20 90% 628,000 520,000
Chillicothe Plaza Chillicothe, MBL Development Co.
Apts.L.P. Missouri 972,000 972,000 28 100% 1,555,000 727,000
Concord Apartment Orlando, New Communities, LLC,
Partners, L.P. Florida a Colorado limited
liability Company 470,000 470,000 26 92% 782,000 281,000
El Reno Housing El Reno, Cowen Properties, Inc.,
Associates Limited Oklahoma an Oklahoma Corporation
Partnership 3,040,000 2,836,000 100 93% 4,407,000 2,367,000
Enhance, L.P. Baton Rouge, Olsen Securities Corp.
Louisiana 620,000 620,000 23 96% 867,000 636,000
Hillcrest Marshalltown, WNC & Associates
Heights, L.P. Iowa 609,000 609,000 32 88% 681,000 574,000
Hughes Villas Hughes, Billy Wayne Bunn
Limited Partnership Arkansas 182,000 182,000 20 95% 337,000 758,000
5
------------------------- -----------------------------------------------
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
- ------------------------------------------------------------------------------------------------------------------------------------
Mansur Wood Living Carbon Cliff, Elderly Living
Center, L.P. Illinois Development, Inc. 6,446,000 6,446,000 115 90% 8,956,000 *
Mark Twain Senior Oakland, Thomas P. Lam and
Community Limited California Marilyn S. Lam
Partnership 740,000 715,000 106 99% 1,145,000 1,433,000
Murfreesboro Villas Murfreesboro Industrial
Limited Murfreesboro, Development
Partnership Arkansas Corporation 685,000 685,000 24 50% 130,000 634,000
Spring Valley Terrace Mayer, Spring Valley Terrace,
Apartments, LLC Arizona Inc. 716,000 716,000 20 75% 590,000 722,000
United Harold E. Buehler, Sr.
Development Memphis, and Jo Ellen
Co.,L.P. - 97.1 Tennessee Buehler 1,845,000 1,845,000 40 100% 2,693,000 885,000
United Harold E. Buehler, Sr.
Development Co., Memphis, and Jo Ellen
L.P. - 97.2 Tennessee Buehler 743,000 743,000 20 100% 1,061,000 371,000
------------ ------------ --- ---- ------------ ------------
$ 18,888,000 $ 18,659,000 624 91% $ 26,004,000 $ 11,436,000
============ ============ === === ============ ============
* Results of Mansur Wood Living Center, L.P. have not been audited and have
thus been excluded. See Note 2 to the financial statements and report of
independent certified public accountants.
6
--------------------------------------------------------------------
For the year ended December 31, 2001
--------------------------------------------------------------------
Net Income (loss) Low Income Housing
Partnership Name Rental Income Credits Allocated
- --------------------------------------------------------------------------------------------------------------------
Apartment Housing of Theodore $ 142,000 $ (64,000) 98.99%
Austin Gateway, Ltd. 71,000 (21,000) 99.98%
Bradley Villas Limited Partnership 59,000 (25,000) 99.00%
Chillicothe Plaza Apts. L.P. 96,000 (19,000) 99.97%
Concord Apartment Partners, L.P. 100,000 (29,000) 99.98%
El Reno Housing Associates Limited Partnership 364,000 (369,000) 99.98%
Enhance, L.P. 89,000 (78,000) 99.98%
Hillcrest Heights, L.P. 151,000 (50,000) 99.99%
Hughes Villas Limited Partnership 85,000 (20,000) 99.00%
Mansur Wood Living Center, L.P. * * 99.98%
Mark Twain Senior Community Limited Partnership 531,000 (57,000) 98.99%
Murfreesboro Villas Limited Partnership 53,000 (46,000) 99.00%
Spring Valley Terrace Apartments, LLC 58,000 (42,000) 99.98%
United Development Co., L.P. - 97.1 287,000 (75,000) 99.98%
United Development Co., L.P. - 97.2 109,000 (27,000) 99.98%
----------- ----------
$ 2,195,000 $(922,000)
=========== ==========
* Results of Mansur Wood Living Center, L.P. have not been audited and have
thus been excluded. See Note 2 to the financial statements and report of
independent certified public accountants.
7
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 1,394 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 6. Selected Financial Data
Selected balance sheet information for the Partnership is as follows:
March 31 December 31
------------------------------------------------------------- -----------------------------
2002 2001 2000 1999 1998 1997
------------ ------------ ------------ ------------ ------------ -------------
ASSETS
Cash and cash equivalents $ 1,288 $ 90,481 $ 574,137 $ 3,103,129 $ 3,521,888 $ 4,889,574
Funds held in escrow
disbursement account 204,125 256,649 243,595 4,834,997 5,505,543 608,850
Marketable securities - - 50,073 - - -
Subscriptions and notes
receivable - - - 38,600 879,800 631,885
Investments in limited
partnerships, net 16,200,256 17,555,917 19,293,654 19,968,445 19,927,953 2,398,460
Loans receivable - - - - - 878,894
Other assets 11,113 18,822 23,798 30,814 68,482 5,042
------------ ------------ ------------ ------------ ------------ -------------
$ 16,416,782 $ 17,921,869 $ 20,185,257 $ 27,975,985 $ 29,903,666 $ 9,412,705
============ ============ ============ ============ ============ =============
LIABILITIES
Payables to limited
partnerships $ 229,030 $ 229,030 $ 272,207 $ 6,131,391 $ 8,051,777 $ 860,671
Accrued fees and expenses
due to general partner
and affiliates 169,478 66,298 123,718 159,973 97,387 361,900
------------ ------------ ------------ ------------ ------------ -------------
398,508 295,328 395,925 6,291,364 8,149,164 1,222,571
------------ ------------ ------------ ------------ ------------ -------------
PARTNERS' EQUITY 16,018,274 17,626,541 19,789,332 21,684,621 21,754,502 8,190,134
------------ ------------ ------------ ------------ ------------ -------------
$ 16,416,782 $ 17,921,869 $ 20,185,257 $ 27,975,985 $ 29,903,666 $ 9,412,705
============ ============ ============ ============ ============ =============
8
Selected results of operations, cash flows, and other information for the
Partnership is as follows for the periods indicated:
For the
Period
August 29,
1997 (date
operations
For the Months For the Year commenced)
For the Years Ended Months Ended Ended through
March 31 March 31 December 31 December 31
--------------------------------------------- -------------- -------------- ------------
2002 2001 2000 1999 1998 1997
------------ ------------ ------------- -------------- -------------- ------------
(Loss) income from
operations $ (242,642) $ (358,909) $ (458,580) $ (21,156) $ 164,828 $ (87)
Realized loss -
marketable securities - - (188,483) - - -
Equity in (losses)
income of limited
partnerships (1,365,625) (1,803,882) (1,139,225) (22,000) (110,194) 2,395
------------ ------------ ------------- -------------- -------------- ------------
Net (loss) income $ (1,608,267) $ (2,162,791) $ (1,786,288) $ (43,156) $ 54,634 $ 2,308
============ ============ ============= ============== ============== ============
Net (loss) income
allocated to:
General Partner $ (16,083) $ (21,628) $ (17,863) $ (431) $ 546 $ 23
============ ============ ============= ============== ============== ============
Limited Partners $ (1,592,184) $ (2,141,163) $ (1,768,425) $ (42,725) $ 54,088 $ 2,285
============ ============ ============= ============== ============== ============
Net (loss) income per
limited partner unit $ (63.69) $ (85.65) $ (70.74) $ (1.71) $ 2.57 $ 1.13
============ ============ ============= ============== ============== ============
Outstanding weighted
limited partner units 25,000 25,000 25,000 25,000 21,008 2,029
============ ============ ============= ============== ============== ============
For the
Period
August 29,
1997 (date
operations
For the Months For the Year commenced)
For the Years Ended Months Ended Ended through
March 31 March 31 December 31 December 31
--------------------------------------------- -------------- -------------- ------------
2002 2001 2000 1999 1998 1997
------------ ------------ ------------- -------------- -------------- ------------
Net cash provided by
(used in):
Operating activities $ (17,046) $ (59,867) $ (209,600) $ 15,016 $ (115,775) $ 1,839
Investing activities (72,147) (423,789) (2,248,991) (1,248,250) (14,513,730) (2,962,516)
Financing activities - - (70,401) 814,475 13,261,819 7,850,251
------------ ------------- -------------- -------------- ------------- --------------
Net change in cash and
cash equivalents (89,193) (483,656) (2,528,992) (418,759) (1,367,686) 4,889,574
Cash and cash
equivalents, beginning
of period 90,481 574,137 3,103,129 3,521,888 4,889,574 -
------------ ------------- -------------- -------------- ------------- --------------
Cash and cash
equivalents, end of
period $ 1,288 $ 90,481 $ 574,137 $ 3,103,129 $ 3,521,888 $ 4,889,574
============ ============= ============== ============== ============= ==============
9
Low Income Housing Credit per Unit was as follows for the years ended December 31:
2001 2000 1999 1998 1997
-------------- --------------- -------------- ------------- -------------
Federal $ 111 $ 84 $ 48 $ 21 $ -
State - - - - -
-------------- --------------- -------------- ------------- -------------
Total $ 111 $ 84 $ 48 $ 21 $ -
============== =============== ============== ============= =============
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.
Financial Condition
The Partnership's assets at March 31, 2002 consisted primarily of $1,300 in
cash, $204,000 in cash in escrow, and aggregate investments in the fifteen Local
Limited Partnerships of $16,200,000. Liabilities at March 31, 2002 primarily
consisted of $229,000 due to limited partnerships, $77,000 in annual asset
management fees payable and $92,000 in advances and other payables due to the
General Partner or affiliates.
10
Results of Operations
Year Ended March 31, 2002 Compared to Year Ended March 31, 2001. The
Partnership's net loss for the year ended March 31, 2002 was $(1,608,000),
reflecting a decrease of $555,000 from the $(2,163,000) of net loss experienced
for the year ended March 31, 2001. The change is primarily due to a decrease in
equity in losses of limited partnerships of $438,000 to $(1,366,000) for the
year ended March 31, 2002 from $(1,804,000) for the year ended March 31, 2001
and a decrease in operating expenses of $159,000. The decrease in operating
expenses consisted primarily of a decrease in advances to a Local Limited
Partnership written off totaling $40,000 during the year ended March 31, 2002,
compared with advances of $229,000 to the same partnership in 2001 which were
also written off in full. An additional $18,000 advanced to two other
partnerships was also written off in full. The above decrease of $171,000 was
offset by a marginal increase in other operating expenses of $12,000. Offsetting
the above changes, reporting fees decreased by $26,000 and interest income
decreased by $16,000 due to significant aggregate capital contributions paid to
certain Local Limited Partnerships during the year ended March 31, 2001
resulting in a significantly lower average cash balance for the year ended March
31, 2002.
Year Ended March 31, 2001 Compared to Year Ended March 31, 2000. The
Partnership's net loss for the year ended March 31, 2001 was $(2,163,000),
reflecting an increase of $(377,000) from the $(1,786,000) of net loss
experienced for the year ended March 31, 2000. The change is primarily due to an
increase in equity in losses of limited partnerships of $(665,000) to
$(1,804,000) for the year ended March 31, 2001 from $(1,139,000) for the year
ended March 31, 2000. In addition, the change is due to a decrease in advances
to a Local Limited Partnership written off totaling $229,015 during the year
ended March 31, 2001, compared with advances of $402,243 to the same partnership
in 2000 which were also written off in full. Furthermore, interest income
decreased by $102,943 due to significant aggregate capital contributions paid to
certain Local Limited Partnerships during the year ended March 31, 2000
resulting in a significantly lower average cash balance for the year ended March
31, 2001.
Cash Flows
Year Ended March 2002 Compared to Year Ended March 31, 2001. The net decrease in
cash during the year ended March 31, 2002 was $(89,000), compared to a net
decrease in cash for the year ended March 31, 2000 of $(484,000). The change was
primarily due to a decrease in cash used in investing activities related to
purchase of Limited Partnership interests of approximately $155,000 together
with a decrease in cash advanced to a Local Limited Partnership of $237,000
offset by a decrease in sales of marketable securities of $50,000 and an
increase of $10,000 in distributions from limited partnerships. Offsetting the
$352,000 decrease in cash used in investing activities is a $7,000 increase in
cash used in operating activities.
Year Ended March 31, 2001 Compared to Year Ended March 31, 2000. The net
decrease in cash during the year ended March 31, 2001 was $(484,000), compared
to a net decrease in cash for the year ended March 31, 2000 of $(2,529,000). The
change was primarily due to a decrease in cash used in investing activities
related to purchase of Limited Partnership interests of approximately $1,593,000
together with a decrease in cash paid to a Local Limited Partnership of
$115,000.
During the years ended March 31, 2002, 2001 and 2000, accrued payables, which
consist of related party management fees and advances due to the General
Partner, increased by $103,000, and decreased by $58,000 and $36,000,
respectively.
Other Matters
As of July 16, 2002, the Partnership had not obtained audited financial
statements for one of its investments, Mansur Wood Living Center, L.P., ("Mansur
Wood"), as of and for the year ended December 31, 2001. As a result of this
limitation in scope, the Partnership's Independent Certified Public Accountants
have qualified their report with respect to their audit of the Partnership's
2002 financial statements. Furthermore, the Partnership has not included the
financial information of Mansur Wood in the combined condensed financial
statements presented elsewhere herein. The Partnership's investment in Mansur
Wood totaled $5,479,000 (unaudited) at March 31, 2002. The Partnership's
interest in the results of operations of Mansur Wood totaled $(514,000)
(unaudited) for the year ended March 31, 2002.
11
During the years ended March 31, 2002, 2001 and 2000, the Partnership advanced
cash in the amount of $671,484 to one of the Local Limited Partnerships in which
it has a Limited Partnership interest. Of the $671,484 of advances, $40,226,
$229,015, and $402,243 was written off during the years ended March 31, 2002,
2001 and 2000, respectively. Advances were made to augment the Local Limited
Partnership's cash flows which were not sufficient to support the operating
costs of the property. Such advances have been expensed in full in the financial
statements presented elsewhere herein. Subsequent to year end, the respective
property has continued to rent up and Section 8 certifications have been
obtained for approximately 100% of the units. Such certifications should enable
the property to charge market rents applicable to multi-family housing complexes
and attain a positive cash flow. During the year ended March 31, 2002, the
Partnership advanced cash in the amount of $17,654 to two other Local Limited
Partnerships which advances were written off in full in 2002.
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.
The Partnership does not expect 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. Accordingly, WNC and Associates, Inc. has
agreed to provide advances sufficient to fund the operations and working capital
requirements of the Partnership through April 1, 2003.
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.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
Item 8. Financial Statements and Supplementary Data
12
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
--------------------------------------------------
To the Partners
WNC Housing Tax Credit Fund VI, L.P., Series 5
We have audited the accompanying balance sheets of WNC Housing Tax Credit Fund
VI, L.P., Series 5 (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 years ended March 31, 2002, 2001 and
2000. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits. 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 48% and 84% of the total assets of the Partnership at March 31, 2002
and 2001, respectively. 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.
Except as discussed in the following paragraph, 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 audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits and the reports of the other auditors provide a
reasonable basis for our opinion.
As more thoroughly discussed in Note 2 to the financial statements, the
Partnership was unable to obtain audited financial statements for one of its
investments, Mansur Wood Living Center, L.P., ("Mansur Wood"), as of and for the
year ended December 31, 2001. The Partnership's investment in Mansur Wood
totaled $5,479,000 (unaudited) as of March 31, 2002. The results of operations
recorded by the Partnership with respect to its investment in Mansur Wood during
the year ended March 31, 2002, totaled $(514,000) (unaudited).
In our opinion, except for the effects of such adjustments and disclosures, if
any, as might have been determined to be necessary had an audit of the 2001
financial statements of Mansur Wood been obtained, 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 5 (a California Limited
Partnership) as of March 31, 2002 and 2001, and the results of its operations
and its cash flows for the years ended March 31, 2002, 2001 and 2000, in
conformity with accounting principles generally accepted in the United States of
America.
The Partnership currently has insufficient working capital to fund its
operations. As discussed in Note 3 to the accompanying financial statements, WNC
& Associates, Inc., has agreed to provide advances sufficient enough to fund the
operations and working capital requirements of the Partnership through April 1,
2003.
/s/BDO SEIDMAN, LLP
BDO SEIDMAN, LLP
Orange County, California
July 16, 2002
13
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
(A California Limited Partnership)
BALANCE SHEETS
March 31
----------------------------------
2002 2001
--------------- ---------------
ASSETS
Cash and cash equivalents $ 1,288 $ 90,481
Funds held in escrow disbursement account 204,125 256,649
Investments in limited partnerships (Notes 2 and 3) 16,200,256 17,555,917
Other assets 11,113 18,822
--------------- ---------------
$ 16,416,782 $ 17,921,869
=============== ===============
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities:
Payables to limited partnerships (Note 5) $ 229,030 $ 229,030
Accrued fees and expenses due to General
Partner and affiliates (Note 3) 169,478 66,298
--------------- ---------------
Total liabilities 398,508 295,328
--------------- ---------------
Commitments and contingencies
Partners' equity (deficit)
General Partner (88,910) (72,827)
Limited Partners (25,000 units authorized,
25,000 units issued and outstanding) 16,107,184 17,699,368
--------------- ---------------
Total partners' equity 16,018,274 17,626,541
--------------- ---------------
$ 16,416,782 $ 17,921,869
=============== ===============
See accompanying notes to financial statements
14
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
For the Years
Ended March 31
---------------------------------------------------
2002 2001 2000
------------- ------------- --------------
Interest income $ 10,758 $ 27,074 $ 130,017
Reporting fees - 26,000 -
------------- ------------- --------------
Total income 10,758 53,074 130,017
------------- ------------- --------------
Operating expenses:
Amortization (Notes 2 and 3) 64,536 64,536 64,459
Asset management fees (Note 3) 70,068 69,869 67,180
Write off of advances to Local Limited
Partnerships (Note 7) 57,880 229,015 402,243
Other 60,916 48,563 54,715
------------- ------------- --------------
Total operating expenses 253,400 411,983 588,597
------------- ------------- --------------
Loss from operations (242,642) (358,909) (458,580)
Realized loss - marketable securities - - (188,483)
Equity in losses of limited
partnerships (Note 2) (1,365,625) (1,803,882) (1,139,225)
------------- ------------- --------------
Net loss $ (1,608,267) $ (2,162,791) $ (1,786,288)
============= ============= ==============
Net loss allocated to:
General Partner $ (16,083) $ (21,628) $ (17,863)
============= ============= ==============
Limited Partners $ (1,592,184) $ (2,141,163) $ (1,768,425)
============= ============= ==============
Net loss per limited partner unit $ (63.69) $ (85.65) $ (70.74)
============= ============= ==============
Outstanding weighted limited partner units 25,000 25,000 25,000
============= ============= ==============
See accompanying notes to financial statements
15
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
(A California Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
For the Years Ended March 31, 2002, 2001 and 2000
General Limited Total
Partner Partners
--------------- --------------- ---------------
Partners' equity (deficit) at March 31, 1999 $ (32,246)$ 21,716,867 $ 21,684,621
Offering expenses (1,090) (107,911) (109,001)
Net loss (17,863) (1,768,425) (1,786,288)
--------------- --------------- ---------------
Partners' equity (deficit) at March 31, 2000 (51,199) 19,840,531 19,789,332
Net loss (21,628) (2,141,163) (2,162,791)
--------------- --------------- ---------------
Partners' equity (deficit) at March 31, 2001 (72,827) 17,699,368 17,626,541
Net loss (16,083) (1,592,184) (1,608,267)
--------------- --------------- ---------------
Partners' equity (deficit) at March 31, 2002 $ (88,910)$ 16,107,184 $ 16,018,274
=============== =============== ===============
See accompanying notes to financial statements
16
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
For the Years
Ended March 31
----------------------------------------------
2002 2001 2000
------------- -------------- -------------
Cash flows from operating activities:
Net loss $ (1,608,267) $ (2,162,791) $ (1,786,288)
Adjustments to reconcile net loss to net cash
used in operating activities:
Amortization 64,536 64,536 64,459
Equity in losses of limited partnerships 1,365,625 1,803,882 1,139,225
Write off of advances to Local Limited
Partnership 57,880 229,015 402,243
Change in amounts due from affiliates - 4,976 (23,798)
Change in other assets - - 30,814
Change in accrued fees and expenses due to
general partner and affiliates 103,180 515 (36,255)
------------- -------------- -------------
Net cash used in operating activities (17,046) (59,867) (209,600)
------------- -------------- -------------
Cash flows from investing activities:
Investments in limited partnerships (84,500) (173,858) (6,370,474)
Funds held in escrow disbursement account 52,524 (13,054) 4,591,402
Sale (purchase) of marketable securities - 50,073 (50,073)
Capitalized acquisition costs and fees - - (18,103)
Distributions from limited partnerships 10,000 - 500
Advances to Local Limited Partnerships (50,171) (286,950) (402,243)
------------- -------------- -------------
Net cash used in investing activities (72,147) (423,789) (2,248,991)
------------- -------------- -------------
Cash flows from financing activities:
Capital contributions - - 38,600
Offering expenses - - (109,001)
------------- --------- ----- -------------
Net cash (used in) provided by financing activities - - (70,401)
------------- -------------- --------------
Net decrease in cash and cash equivalents (89,193) (483,656) (2,528,992)
Cash and cash equivalents, beginning of period 90,481 574,137 3,103,129
------------- -------------- -------------
Cash and cash equivalents, end of period $ 1,288 $ 90,481 $ 574,137
============= ============== =============
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Taxes paid $ 800 $ 800 $ 800
============= ============== =============
See accompanying notes to financial statements
17
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Years Ended March 31, 2002, 2001 and 2000
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ---------------------------------------------------
Organization
- ------------
WNC Housing Tax Credit Fund VI, L.P., Series 5, a California Limited Partnership
(the "Partnership"), was formed on March 3, 1997 under the laws of the State of
California, and commenced operations on August 29, 1997. 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 corporation. The chairman and president own substantially all of the
outstanding stock of WNC. The business of the Partnership is conducted primarily
through WNC, as the Partnership has no employees of its own.
The Partnership shall continue in full force and effect until December 31, 2052,
unless terminated prior to that date, pursuant to the partnership agreement or
law.
The financial statements include only activity relating to the business of the
Partnership, and do not give effect to any assets that the partners may have
outside of their interests in the Partnership, or to any obligations, including
income taxes, of the partners.
The partnership agreement authorized the sale of up to 25,000 units at $1,000
per Unit ("Units"). The offering of Units concluded on July 9, 1998 at which
time 25,000 Units representing subscriptions in the amount of $24,918,175, net
of discount of $54,595 for volume purchases and $27,230 for dealer discounts,
had been accepted. The General Partner has a 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% 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.
18
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the Years Ended March 31, 2002, 2001 and 2000
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 Partnerships' results of operations
and for any distributions received. The accounting policies of the Local Limited
Partnerships' 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 (see Notes 2 and 3).
Losses from limited partnerships for the years ended March 31, 2002, 2001 and
2000 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. Losses from the limited
partnerships allocated to the Partnership will not be recognized to the extent
that the investment balance would be adjusted below zero.
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 14.5%
(including sales commissions) of the total offering proceeds. Offering expenses
are reflected as a reduction of limited partners' capital and amounted to
$3,357,441 as of March 31, 2002, 2001 and 2000.
19
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the Years Ended March 31, 2002, 2001 and 2000
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 cash equivalents of $0 and $50,000,
respectively. Of this amount, $0 and $50,000, respectively, consist of tax
exempt instruments collateralized by tax exempt municipal bonds from various
municipalities throughout the United States. These instruments generate tax
exempt yields and generally have 35 day or less maturities.
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 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 loss 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 - INVESTMENTS IN LIMITED PARTNERSHIPS
- --------------------------------------------
As of March 31, 2002 and 2001, the Partnership had acquired limited partnership
interests in 15 Local Limited Partnerships, each of which owns one Housing
Complex consisting of an aggregate of 624 apartment units. 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%, 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.
20
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the Years Ended March 31, 2002, 2001 and 2000
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
- -------------------------------------------------------
As of July 16, 2002, the Partnership had not obtained audited financial
statements for one of its investments, Mansur Wood Living Center, L.P. ("Mansur
Wood"), as of and for the year ended December 31, 2001. As a result, the
Partnership has not included the financial information of Mansur Wood in the
combined condensed financial statements presented herein. The Partnership's
investment in Mansur Wood totaled $5,479,000 (unaudited) at March 31, 2002. The
Partnership's estimate of its interest in the results of operations of Mansur
Wood totaled $(514,000) (unaudited) for the year ended March 31, 2002. The
combined condensed financial statements presented herein for December 31, 2000
previously included total assets of $10,785,000 and net losses of $448,000 for
Mansur Wood. The combined condensed financial statements presented herein for
December 31, 1999 previously included net income of $112,000 for Mansur Wood.
The combined condensed financial information presented in this footnote for 2000
and 1999 has been restated to exclude the accounts of Mansur Wood.
The Partnership's investments in limited partnerships as reflected in the
balance sheets at March 31, 2002 and 2001, are approximately $7,207,000 and
$7,650,000, respectively, greater than the Partnership's combined equity at the
preceding December 31 as shown in the Local Limited Partnerships' combined
financial statements presented below. This difference is primarily due to
acquisition, selection, and other costs related to the acquisition of the
investments which have been capitalized in the Partnership's investment account
and to capital contributions payable to the limited partnerships which were
netted against partner capital in the Local Limited Partnerships' financial
statements (see Note 5). The Partnership's investment is also lower than the
Partnership's equity as shown in the Local Limited Partnership's combined
financial statements due to the losses recorded by the Partnership for the three
month period ended March 31 and due to the exclusion of Mansur Wood from the
combined condensed financial information.
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 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 Years Ended
March 31
------------------------------------------------------
2002 2001 2000
---------------- ---------------- ---------------
Investments per balance sheet,
beginning of period $ 17,555,917 $ 19,293,654 $ 19,968,445
Capital contributions paid 84,500 130,681 511,290
Capitalized acquisition fees and costs - - 18,103
Distributions received (10,000) - (500)
Equity in losses of limited partnerships (1,365,625) (1,803,882) (1,139,225)
Amortization of capitalized acquisition fees
and costs (64,536) (64,536) (64,459)
---------------- ---------------- ---------------
Investments in limited partnerships,
end of period $ 16,200,256 $ 17,555,917 $ 19,293,654
================ ================ ===============
21
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the Years Ended March 31, 2002, 2001 and 2000
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
- -------------------------------------------------------
The financial information from the individual financial statements of the Local
Limited Partnerships include rental and interest subsidies. Rental subsidies are
included in total revenues and interest subsidies are generally netted against
interest expense. Approximate combined condensed financial information from the
individual financial statements of the individual financial statements of the
Local Limited Partnerships as of December 31 and for the years then ended is as
follows (Combined condensed financial information for Mansur Wood Living Center,
L.P. has been excluded from the presentation below):
COMBINED CONDENSED BALANCE SHEETS
2001 2000
(Restated)
--------------- ---------------
ASSETS
Land $ 2,148,000 $ 2,199,000
Buildings and improvements, net of accumulated
depreciation for 2001 and 2000 of $3,399,000 and
$2,502,000, respectively 19,970,000 20,432,000
Other assets 851,000 923,000
--------------- ---------------
$ 22,969,000 $ 23,554,000
=============== ===============
LIABILITIES
Mortgage and construction loans payable $ 11,436,000 $ 11,420,000
Due to related parties 2,219,000 2,020,000
Other liabilities 435,000 429,000
--------------- ---------------
14,090,000 13,869,000
--------------- ---------------
PARTNERS' CAPITAL
WNC Housing Tax Credit Fund VI, L.P., Series 5 8,993,000 9,906,000
Other partners (114,000) (221,000)
--------------- ---------------
8,879,000 9,685,000
--------------- ---------------
$ 22,969,000 $ 23,554,000
=============== ===============
22
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the Years Ended March 31, 2002, 2001 and 2000
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
- -------------------------------------------------------
COMBINED CONDENSED STATEMENTS OF OPERATIONS
2001 2000 1999
(Restated) (Restated)
--------------- --------------- ---------------
Revenues $ 2,254,000 $ 1,945,000 $ 1,616,000
--------------- --------------- ---------------
Expenses:
Operating expenses 1,634,000 1,551,000 1,216,000
Interest expense 653,000 693,000 510,000
Depreciation and amortization 889,000 897,000 752,000
--------------- --------------- ---------------
Total expenses 3,176,000 3,141,000 2,478,000
--------------- --------------- ---------------
Net loss $ (922,000) $ (1,196,000) $ (862,000)
=============== =============== ===============
Net loss allocable to the Partnership, before equity
in income (losses) of Mansur Wood $ (920,000) $ (1,192,000) $ (972,000)
=============== =============== ===============
Net loss recorded by the Partnership, before equity in
losses of Mansur Wood $ (852,000) $ (1,360,000) $ (1,250,000)
Net income (loss) of Mansur Wood recorded by the
Partnership (unaudited) (514,000) (444,000) 111,000
--------------- --------------- ---------------
Net loss recorded by the Partnership $ (1,366,000) $ (1,804,000) $ (1,139,000)
=============== =============== ===============
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.
NOTE 3 - 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 up to 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 $1,750,000.
Accumulated amortization of these capitalized costs was $234,834 and
$176,494, as of March 31, 2002 and 2001, respectively.
Reimbursement of costs incurred by the General Partner in connection
with the acquisition of Local Limited Partnerships. These
reimbursements have not exceeded 1.5% of the gross proceeds. As of
March 31, 2002 and 2001, the Partnership incurred acquisition costs of
$185,734, which have been included in investments in limited
partnerships. Accumulated amortization of these capitalized costs was
$23,637 and $17,441, as of March 31, 2002 and 2001, respectively.
23
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the Years Ended March 31, 2002, 2001 and 2000
NOTE 3 - RELATED PARTY TRANSACTIONS, continued
- ----------------------------------------------
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
$70,068, $69,869 and $67,180 were incurred during the years ended
March 31, 2002, 2001 and 2000, respectively, of which $16,795, $67,180
and $92,882 were paid during the years ended March 31, 2002, 2001 and
2000, respectively.
A subordinated disposition fee in an amount equal to 1% of the sales
price of real estate sold. Payment of this fee is subordinated to the
limited partners receiving a preferred return of 12% through December
31, 2008 and 6% thereafter (as defined in the Partnership Agreement)
and is payable only if the General Partner or its affiliates render
services in the sales effort.
The accrued fees and expenses due to General Partner and affiliates consisted of
the following as of:
March 31
--------------------------------------
2002 2001
----------------- ----------------
Asset management fee payable $ 77,437 $ 24,164
Advances from WNC 92,041 42,134
----------------- ----------------
Total $ 169,478 $ 66,298
================= ================
The Partnership currently has insufficient working capital to fund its
operations. WNC and Associates, Inc., the general partner of the General Partner
of the Partnership, has agreed to provide advances sufficient enough to fund the
operations and working capital requirements of the Partnership through April 1,
2003.
NOTE 4 - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
- ----------------------------------------------------
The following is a summary of the quarterly operations for the years ended March
31, 2002 and 2001:
June 30 September 30 December 31 March 31
--------------- --------------- --------------- ---------------
2002
----
Income $ - $ - $ - $ 11,000
Operating expenses (47,000) (90,000) (56,000) (60,000)
Equity in losses of limited
partnerships (409,000) (409,000) (408,000) (140,000)
--------------- --------------- --------------- ---------------
Net loss $ (456,000) $ (499,000) $ (464,000) $ (189,000)
=============== =============== =============== ===============
Loss available to limited partners $ (452,000) $ (494,000) $ (460,000) $ (186,000)
=============== =============== =============== ===============
Loss per limited partner unit $ (18) $ (20) $ (18) $ (7)
=============== =============== =============== ===============
24
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the Years Ended March 31, 2002, 2001 and 2000
NOTE 4 - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED), continued
- ---------------------------------------------------------------
June 30 September 30 December 31 March 31
--------------- --------------- --------------- ---------------
2001
----
Income $ 4,000 $ 6,000 $ 3,000 $ 40,000
Operating expenses (45,000) (70,000) (147,000) (150,000)
Equity in losses of limited
partnerships (350,000) (370,000) (311,000) (773,000)
--------------- --------------- --------------- ---------------
Net loss $ (391,000) $ (434,000) $ (455,000) $ (883,000)
=============== =============== =============== ===============
Loss available to limited partners $ (387,000) $ (430,000) $ (451,000) $ (873,000)
=============== =============== =============== ===============
Loss per limited partner unit $ (15) $ (17) $ (18) $ (35)
=============== =============== =============== ===============
NOTE 5 - 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 6 - 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 7 - WRITE OFF OF ADVANCES TO A LOCAL LIMITED PARTNERSHIP
- -------------------------------------------------------------
During the years ended March 31, 2002, 2001 and 2000, the Partnership advanced
cash in the amount of $671,484 to one of the Local Limited Partnerships in which
it has a Limited Partnership interest. Of the $671,484 of advances, $40,226,
$229,015, and $402,243 was written off during the years ended March 31, 2002,
2001 and 2000, respectively. Advances were made to augment the Local Limited
Partnership's cash flows which were not sufficient to support the operating
costs of the property. Such advances have been expensed in full in the
accompanying financial statements. Subsequent to year end, the respective
property has continued to rent up and Section 8 certifications have been
obtained for approximately 100% of the units. Such certifications should enable
the property to charge market rents applicable to multi-family housing complexes
and attain a positive cash flow. During the year ended March 31, 2002, the
Partnership advanced cash in the amount of $17,654 to two other Local Limited
Partnerships which advances were written off in full in 2002.
25
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.
26
Sy P. Garban, age 56, is Vice President - Institutional Investments 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, 2001 and 2000
approximately $3,357,000, for selling commissions and other fees and
expenses of the Partnership's offering of Units. Of the total accrued
or paid, approximately $2,607,000, was paid or to be paid to
unaffiliated persons participating in the Partnership's offering or
rendering other services in connection with 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, 2001 and 2000, the aggregate amount of acquisition fees
paid or accrued was approximately $1,750,000.
(c) Acquisition Expense. The Partnership reimbursed the General Partner or
its affiliates as of March 31, 2002, 2001 and 2000 for acquisition
expense, not to exceed 1.5% of the Gross Proceeds, expended by such
persons on behalf of the Partnership aggregating $186,000.
(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 on and other debts related to the
Housing Complexes owned by such Local Limited Partnerships. Fees of
$70,000, $70,000 and $67,000, were incurred for the years ended March
31, 2002, 2001 and 2000. The Partnership paid the General Partner or
its affiliates $17,000, $67,000 and $93,000, of those fees during the
years ended March 31, 2002, 2001 and 2000, respectively.
(e) Operating Expenses. The Partnership reimbursed the General Partner or
its affiliates for operating expenses of approximately $113,000,
$55,000 and $83,000, during the years ended March 31, 2002, 2001 and
2000, respectively, expended by such persons on behalf of the
Partnership.
27
(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) 12%
through December 31, 2008, and (ii) 6% for the balance of the
Partnerships term. No disposition fees have been paid.
(g) Interest in Partnership. The General Partner will receive 1% of the Low
Income Housing Credits. The General Partner was allocated Low Income
Housing Credits of $28,094, $21,257 and $1,190 for the years ended
December 31, 2001, 2000 and 1999, respectively. The General Partners
are also entitled to receive 1% of cash distributions. There were no
distributions of cash to the General Partner during the years ended
March 31, 2002, 2001 and 2000.
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.
28
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
Balance Sheets, March 31, 2002 and 2001
Statements of Operations for the years ended March 31, 2002, 2001
and 2000
Statements of Partners' Equity (Deficit) for the years ended
March 31, 2002, 2001 and 2000
Statements of Cash Flows for the years ended March 31, 2002,
2001 and 2000
Notes to Financial Statements
(a)(2) Financial statement schedules included in Part IV hereof:
--------------------------------------------------------
Report of Independent Certified Public Accountants on Financial
Statement Schedules
Schedule III - Real Estate Owned by Local Limited Partnerships
(b) Reports on Form 8-K.
-------------------
1. None
(c) Exhibits.
--------
3.1 Agreement of Limited Partnership dated as of March 3, 1997 included as
Exhibit 3.1 to the Form 10-K filed for the year ended December 31,
1997, is hereby incorporated herein as Exhibit 3.1.
3.2 First Amendment to Agreement of Limited Partnership dated August 29,
1997 included as Exhibit 3.2 to the Form 10-K filed for the year ended
December 31, 1997, is hereby incorporated as Exhibit 3.2.
10.1 Amended and Restated Agreement of Limited Partnership of Chillicothe
Plaza Apts., L.P. filed as exhibit 10.1 to the current report on Form
8-K dated November 11, 1997, is herein incorporated by reference as
Exhibit 10.1.
10.2 Amended and Restated Agreement of Spring Valley Terrace Apartments,
L.L.C. filed as Exhibit 10.3 to Post-effective Amendment No. 1 to
Registration statement, is herein incorporated by reference as Exhibit
10.2.
10.3 Amended and Restated Agreement of Limited Partnership of El Reno
Housing Associates Limited Partnership filed as Exhibit 10.1 to the
current report on Form 8-K dated January 15, 1998, is herein
incorporated by reference as Exhibit 10.3.
10.4 Second Amended and Restated Agreement of Limited Partnership of Hughes
Villas Limited Partnership filed as Exhibit 10.2 to the current report
on Form 8-K dated January 15, 1998, is herein incorporated by reference
as Exhibit 10.4.
10.5 First Amendment to Second Amended and Restated Agreement of Limited
Partnership of Hughes Villas Limited Partnership filed as Exhibit 10.3
to the current report on Form 8-K dated January 15, 1998, is herein
incorporated by reference as Exhibit 10.5.
10.6 Amended and Restated Agreement of Limited Partnership of Mark Twain
Senior Community Limited Partnership filed as Exhibit 10.3 to the
current report on Form 8-K dated January 15, 1998, is herein
incorporated by reference as Exhibit 10.6.
10.7 Amended and Restated Agreement of Limited Partnership of Bradley
Villas, L.P. filed as Exhibit 10.1 to Form 8-K dated April 1, 1998 is
herein incorporated as Exhibit 10.7.
29
10.8 Amended and Restated Agreement of Limited Partnership of Murfreeburo
Villas filed as Exhibit 10.5 to Form 8-K dated April 1, 1998 is herein
incorporated as Exhibit 10.8.
10.9 Amended and Restated Agreement of Limited Partnership of United
Development Co., L.P. - 97-2 filed as Exhibit 10.3 to Form 8-K dated
April 30, 1998 is herein incorporated as Exhibit 10.9.
10.10 Second Amended and Restated Agreement of Limited Partnership of United
Development Co., L.P. - 97-2 filed as Exhibit 10.2 to Form 8-K dated
April 30, 1998 is herein incorporated as Exhibit 10.10.
10.11 Second Amended and Restated Agreement of Limited Partnership of United
Development Co., L.P. - 97-1 filed as Exhibit 10.3 to Form 8-K dated
April 30, 1998 is herein incorporated as Exhibit 10.11.
10.12 Second Amended and Restated Agreement of Limited Partnership of Concord
Apartment Partners, L.P. filed as Exhibit 10.1 to Form 8-K dated May
31, 1998 is herein incorporated as Exhibit 10.12.
10.13 Amended and Restated Agreement of Limited Partnership of Mansur Wood
Living Center, L.P. filed as Exhibit 10.1 to Form 8-K dated September
19, 1998 is herein incorporated as Exhibit 10.13.
10.14 Amended and Restated Agreement of Apartment Housing of Theodore, LTD
filed as Exhibit 10.23 to Post-Effective Amendment No 3 to Registration
Statement dated May 1, 1998 is herein incorporated as Exhibit 10.14.
10.15 Amended and Restated Agreement of Limited Partnership of Enhance, L.P.
filed as Exhibit 10.15 to Form 10-K dated November 13, 2000 is herein
incorporated as Exhibit 10.15.
10.16 Second Amended and Restated Agreement of Limited Partnership of Austin
Gateway, Ltd.
(d) Financial statement schedules follow, as set forth in subsection (a)(2)
------------------------------------
hereof.
30
Report of Independent Certified Public Accountants on
Financial Statement Schedules
To the Partners
WNC Housing Tax Credit Fund VI, L.P., Series 5
The audits referred to in our report dated July 16, 2002, relating to the 2002,
2001 and 2000 financial statements of WNC Housing Tax Credit Fund VI, L.P.,
Series 5 (the "Partnership"), which is 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. The opinion to the financial
statements contains an audit scope limitation paragraph describing the inability
of the Partnership to obtain audited financial statements of one Local Limited
Partnership and an emphasis paragraph related to the Partnership's insufficient
working capital.
In our opinion, except for the effect of such audit scope limitation, such
financial statement schedules present fairly, in all material respects, the
financial information set forth therein.
/s/BDO SEIDMAN, LLP
BDO SEIDMAN, LLP
Orange County, California
July 16, 2002
31
WNC Housing Tax Credit Fund VI, L.P., Series 5
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
- ------------------------------------------------------------------------------------------------------------------------------------
Apartment Housing Theodore,
of Theodore Alabama $ 1,188,000 $ 1,188,000 $ 1,140,000 $ 2,346,000 $ 244,000 $ 2,102,000
Austin Gateway, Austin,
Ltd. Texas 131,000 131,000 388,000 647,000 60,000 587,000
Bradley Villas Bradley,
Limited Partnership Arkansas 501,000 501,000 520,000 999,000 115,000 884,000
Chillicothe Chillicothe,
Plaza Apts. L.P. Missouri 972,000 972,000 727,000 1,899,000 119,000 1,780,000
Concord Apartment Orlando,
Partners, L.P. Florida 470,000 470,000 281,000 445,000 98,000 347,000
El Reno Housing Associates El Reno,
Limited Partnership Oklahoma 3,040,000 2,836,000 2,367,000 5,984,000 650,000 5,334,000
Enhance, L.P. Baton Rouge, 620,000 620,000 636,000 1,416,000 199,000 1,217,000
Louisiana
Hillcrest Marshalltown,
Heights, L.P. Iowa 609,000 609,000 574,000 1,219,000 117,000 1,092,000
Hughes Villas Hughes,
Limited Partnership Arkansas 182,000 182,000 758,000 986,000 164,000 822,000
Mansur Wood Carbon Cliff,
Living Center, L.P. Illinois 6,446,000 6,446,000 * * * *
Mark Twain Senior Community Oakland,
Limited Partnership California 740,000 715,000 1,433,000 2,693,000 875,000 1,818,000
Murfreesboro Villas Murfreesboro,
Limited Partnership Arkansas 685,000 685,000 634,000 1,258,000 142,000 1,116,000
* Results of Mansur Wood Living Center, L.P. have not been audited and
have thus been excluded. See Note 2 to the financial statements and
report of independent certified public accountants.
32
WNC Housing Tax Credit Fund VI, L.P., Series 5
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
- ------------------------------------------------------------------------------------------------------------------------------------
Spring Valley Terrace Mayer,
Apartments, LLC Arizona 716,000 716,000 722,000 1,449,000 131,000 1,318,000
United Development Memphis,
Co., L.P. - 97.1 Tennessee 1,845,000 1,845,000 885,000 3,099,000 300,000 2,799,000
United Development Memphis,
Co., L.P. - 97.2 Tennesse 743,000 743,000 371,000 1,087,000 185,000 902,000
----------- ----------- ----------- ----------- ---------- -----------
$18,888,000 $18,659,000 $11,436,000 $25,517,000 $3,399,000 $22,118,000
=========== =========== =========== =========== ========== ===========
33
WNC Housing Tax Credit Fund VI, L.P., Series 5
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2002
-------------------------------------------------------------------------------
For the year ended December 31, 2001
-------------------------------------------------------------------------------
Year
Rental Net Income Investment Estimated Useful Life
Partnership Name Income (Loss) Acquired Status (Years)
- --------------------------------------------------------------------------------------------------------------------
Apartment Housing of Theodore $ 142,000 $ (64,000) 1998 Completed 40.0
Austin Gateway, Ltd. 71,000 (21,000) 2000 Completed 40.0
Bradley Villas Limited Partnership 59,000 (25,000) 1998 Completed 40.0
Chillicothe Plaza Apts. L.P. 96,000 (19,000) 1997 Completed 50.0
Concord Apartment Partners, L.P. 100,000 (29,000) 1998 Completed 30.0
El Reno Housing Associates Limited
Partnership 364,000 (369,000) 1998 Completed 40.0
Enhance, L.P. 89,000 (78,000) 2000 Completed 27.5
Hillcrest Heights, L.P. 151,000 (50,000) 1998 Completed 27.0
Hughes Villas Limited Partnership 85,000 (20,000) 1998 Completed 40.0
Mansur Wood Living Center, L.P. * * 1998 Completed 27.5
Mark Twain Senior Community Limited
Partnership 531,000 (57,000) 1998 Completed 27.5
Murfreesboro Villas Limited
Partnership 53,000 (46,000) 1998 Completed 40.0
Spring Valley Terrace Apartments,
LLC 58,000 (42,000) 1997 Completed 40.0
United Development Co., L.P. - 97.1
287,000 (75,000) 1998 Completed 27.5
United Development Co., L.P. - 97.2 109,000 (27,000) 1998 Completed 27.5
---------- ----------
$2,195,000 $(922,000)
========== ==========
* Results of Mansur Wood Living Center, L.P. have not been audited and have
thus been excluded. See Note 2 to the financial statements and report of
independent certified public accountants.
34
WNC Housing Tax Credit Fund VI, L.P., Series 5
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2001
-------------------------------------- --------------------------------------------------
As of March 31, 2001 As of December 31, 2000
-------------------------------------- --------------------------------------------------
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
- ------------------------------------------------------------------------------------------------------------------------------------
Apartment Housing Theodore,
of Theodore Alabama $ 1,188,000 $ 1,188,000 $ 1,148,000 $ 2,345,000 $ 156,000 $ 2,189,000
Austin Gateway, Austin,
Ltd. Texas 131,000 131,000 278,000 429,000 49,000 380,000
Bradley Villas Bradley,
Limited Partnership Arkansas 501,000 501,000 526,000 1,000,000 84,000 916,000
Chillicothe Chillicothe,
Plaza Apts. L.P. Missouri 972,000 972,000 746,000 1,899,000 73,000 1,826,000
Concord Apartment Orlando,
Partners, L.P. Florida 470,000 470,000 286,000 442,000 73,000 369,000
El Reno Housing Associates El Reno,
Limited Partnership Oklahoma 3,040,000 2,836,000 2,367,000 5,984,000 420,000 5,564,000
Enhance, L.P. Baton Rouge, 620,000 620,000 644,000 1,416,000 141,000 1,275,000
Louisiana
Hillcrest Marshalltown,
Heights, L.P. Iowa 609,000 609,000 583,000 1,210,000 83,000 1,127,000
Hughes Villas Hughes,
Limited Partnership Arkansas 182,000 182,000 761,000 986,000 135,000 851,000
Mansur Wood Carbon Cliff,
Living Center, L.P. Illinois 6,446,000 6,446,000 * * * *
Mark Twain Senior Community Oakland,
Limited Partnership California 740,000 715,000 1,447,000 2,529,000 759,000 1,770,000
Murfreesboro Villas Murfreesboro,
Limited Partnership Arkansas 685,000 685,000 640,000 1,258,000 101,000 1,157,000
* Results of Mansur Wood Living Center, L.P. were not audited in 2001 and
have thus been excluded to aid comparability. See Note 2 to the financial
statements and report of independent certified public accountants.
35
WNC Housing Tax Credit Fund VI, L.P., Series 5
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2001
-------------------------------------- --------------------------------------------------
As of March 31, 2001 As of December 31, 2000
-------------------------------------- --------------------------------------------------
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
- ------------------------------------------------------------------------------------------------------------------------------------
Spring Valley Terrace Mayer,
Apartments, LLC Arizona 716,000 716,000 722,000 1,449,000 93,000 1,356,000
United Development Memphis,
Co., L.P. - 97.1 Tennessee 1,845,000 1,845,000 898,000 3,099,000 191,000 2,908,000
United Development Memphis,
Co., L.P. - 97.2 Tennesse 743,000 743,000 374,000 1,087,000 144,000 943,000
----------- ----------- ----------- ----------- ---------- -----------
$18,888,000 $18,659,000 $11,420,000 $25,133,000 $2,502,000 $22,631,000
=========== =========== =========== =========== ========== ===========
36
WNC Housing Tax Credit Fund VI, L.P., Series 5
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2001
-------------------------------------------------------------------------------
For the year ended December 31, 2002
-------------------------------------------------------------------------------
Year
Rental Net Income Investment Estimated Useful Life
Partnership Name Income (Loss) Acquired Status (Years)
- --------------------------------------------------------------------------------------------------------------------
Apartment Housing of Theodore $ 136,000 $ (98,000) 1998 Completed 40.0
Austin Gateway, Ltd. 58,000 1,000 2000 Completed 40.0
Bradley Villas Limited Partnership 60,000 (28,000) 1998 Completed 40.0
Chillicothe Plaza Apts. L.P. 93,000 (21,000) 1997 Completed 50.0
Concord Apartment Partners, L.P. 98,000 (21,000) 1998 Completed 30.0
El Reno Housing Associates Limited
Partnership 191,000 (582,000) 1998 Completed 40.0
Enhance, L.P. 67,000 (47,000) 2000 Completed 27.5
Hillcrest Heights, L.P. 142,000 (29,000) 1998 Completed 27.0
Hughes Villas Limited Partnership 91,000 (18,000) 1998 Completed 40.0
Mansur Wood Living Center, L.P. * * 1998 Completed 27.5
Mark Twain Senior Community Limited
Partnership 469,000 (108,000) 1998 Completed 27.5
Murfreesboro Villas Limited
Partnership 53,000 (44,000) 1998 Completed 40.0
Spring Valley Terrace Apartments,
LLC 54,000 (36,000) 1997 Completed 40.0
United Development Co., L.P. - 97.1
258,000 (129,000) 1998 Completed 27.5
United Development Co., L.P. - 97.2 119,000 (36,000) 1998 Completed 27.5
---------- ------------
$1,889,000 $(1,196,000)
========== ============
* Results of Mansur Wood Living Center, L.P. were not audited in 2001 and
have thus been excluded to aid comparability. See Note 2 to the financial
statements and report of independent certified public accountants.
37
WNC Housing Tax Credit Fund VI, L.P., Series 5
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2000
-------------------------------------- --------------------------------------------------
As of March 31, 2000 As of December 31, 1999
-------------------------------------- --------------------------------------------------
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
- ------------------------------------------------------------------------------------------------------------------------------------
Apartment Housing Theodore,
of Theodore Alabama $ 1,188,000 $ 1,188,000 $ 1,155,000 $ 2,345,000 $ 55,000 $ 2,290,000
Bradley Villas Bradley,
Limited Partnership Arkansas 501,000 501,000 533,000 1,000,000 54,000 946,000
Chillicothe Chillicothe,
Plaza Apts. L.P. Missouri 972,000 972,000 764,000 1,899,000 27,000 1,872,000
Concord Apartment Orlando,
Partners, L.P. Florida 470,000 470,000 290,000 442,000 50,000 392,000
El Reno Housing Associates El Reno,
Limited Partnership Oklahoma 3,040,000 2,836,000 2,367,000 5,984,000 185,000 5,799,000
Enhance, L.P. Baton Rouge, 620,000 620,000 545,000 1,366,000 87,000 1,279,000
Louisiana
Hillcrest Marshalltown,
Heights, L.P. Iowa 609,000 609,000 592,000 1,210,000 49,000 1,161,000
Hughes Villas Hughes,
Limited Partnership Arkansas 182,000 182,000 763,000 986,000 105,000 881,000
Mansur Wood Carbon Cliff,
Living Center, L.P. Illinois 6,446,000 6,446,000 * * * *
Mark Twain Senior Community Oakland,
Limited Partnership California 740,000 715,000 1,459,000 2,518,000 670,000 1,848,000
Murfreesboro Villas Murfreesboro,
Limited Partnership Arkansas 685,000 685,000 640,000 1,258,000 61,000 1,197,000
* Results of Mansur Wood Living Center, L.P. were not audited in 2001 and
have thus been excluded to aid comparability. See Note 2 to the financial
statements and report of independent certified public accountants.
38
Sp
WNC Housing Tax Credit Fund VI, L.P., Series 5
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2000
-------------------------------------- --------------------------------------------------
As of March 31, 2000 As of December 31, 1999
-------------------------------------- --------------------------------------------------
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
- ------------------------------------------------------------------------------------------------------------------------------------
Spring Valley Terrace Mayer,
Apartments, LLC Arizona 696,000 676,000 725,000 1,428,000 54,000 1,374,000
United Development Memphis,
Co., L.P. - 97.1 Tennessee 1,845,000 1,821,000 898,000 3,166,000 91,000 3,075,000
United Development Memphis,
Co., L.P. - 97.2 Tennesse 743,000 743,000 378,000 1,111,000 105,000 1,006,000
----------- ----------- ----------- ----------- ---------- -----------
$18,737,000 $18,464,000 $11,109,000 $24,713,000 $1,593,000 $23,120,000
=========== =========== =========== =========== ========== ===========
39
WNC Housing Tax Credit Fund VI, L.P., Series 5
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2000
-------------------------------------------------------------------------------
For the year ended December 31, 2002
-------------------------------------------------------------------------------
Year
Rental Net Income Investment Estimated Useful Life
Partnership Name Income (Loss) Acquired Status (Years)
- --------------------------------------------------------------------------------------------------------------------
Apartment Housing of Theodore $ 57,000 $ (54,000) 1998 Completed 40.0
Bradley Villas Limited Partnership 64,000 (21,000) 1998 Completed 40.0
Chillicothe Plaza Apts. L.P. 44,000 (23,000) 1997 Completed 50.0
Concord Apartment Partners, L.P. 94,000 (30,000) 1998 Completed 30.0
El Reno Housing Associates Limited
Partnership 59,000 (390,000) 1998 Completed 40.0
Enhance, L.P. 83,000 (81,000) 2000 Completed 27.5
Hillcrest Heights, L.P. 138,000 (31,000) 1998 Completed 27.0
Hughes Villas Limited Partnership 90,000 (18,000) 1998 Completed 40.0
Mansur Wood Living Center, L.P. * * 1998 2000 27.5
Mark Twain Senior Community Limited
Partnership 500,000 (113,000) 1998 Completed 27.5
Murfreesboro Villas Limited
Partnership 43,000 (48,000) 1998 Completed 40.0
Spring Valley Terrace Apartments,
LLC 32,000 (59,000) 1997 Completed 40.0
United Development Co., L.P. - 97.1
249,000 47,000 1998 Completed 27.5
United Development Co., L.P. - 97.2 103,000 (41,000) 1998 Completed 27.5
----------- -----------
$ 1,556,000 $ (862,000)
=========== ===========
* Results of Mansur Wood Living Center, L.P. were not audited in 2001 and
have thus been excluded to aid comparability. See Note 2 to the financial
statements and report of independent certified public accountants.
40
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 5
By: WNC & Associates, Inc. General Partner
By: /s/ Wilfred N. Cooper, Jr.
-------------------------
Wilfred N. Cooper, Jr. President and
Chief Operating Officer of WNC & Associates, Inc.
Date: August 7, 2002
By: /s/ Thomas J. Riha
------------------
Thomas J. Riha Vice-President and
Chief Financial Officer of WNC & Associates, Inc.
Date: August 7, 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 7, 2002
By: /s/ David N. Shafer
-------------------
David N Shafer Director of WNC & Associates, Inc.
Date: August 7, 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 5 (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
41
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 5 (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
42