FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2002
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to ___________
Commission file number: 0-24855
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
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
- ----------- -----------
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
(A California Limited Partnership)
INDEX TO FORM 10-Q
For the Quarter Ended June 30, 2002
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets
June 30, 2002 and March 31, 2002 3
Statements of Operations
For the Three Months Ended June 30, 2002 and 2001 4
Statement of Partners' Equity (Deficit)
For the Three Months Ended June 30, 2002 5
Statements of Cash Flows
For the Three Months Ended June 30, 2002 and 2001 6
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 13
Item 3. Quantitative and Qualitative Disclosures about Market Risks 15
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 6. Exhibits and Reports on Form 8-K 15
Signatures 16
Certification Pursuant To 18 U.S.C. Section 1350 17
2
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
(A California Limited Partnership)
BALANCE SHEETS
June 30, 2002 March 31, 2002
------------------------ ----------------------
(unaudited)
ASSETS
Cash and cash equivalents $ 3,490 $ 1,288
Funds held in escrow disbursement account 204,125 204,125
Investments in limited partnerships, net (Note 2) 15,829,109 16,200,256
Other assets (Note 6) 27,113 11,113
------------------------ ----------------------
$ 16,063,837 $ 16,416,782
======================== ======================
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities: 229,030 $ 229,030
Payables to limited partnerships (Note 4) $
Accrued fees and expenses due to 218,467 169,478
------------------------ ----------------------
General Partner and affiliates (Note 3)
447,497 398,508
------------------------ ----------------------
Total liabilities
Commitments and contingencies
Partners' equity (deficit): (92,929) (88,910)
General Partner
Limited Partners (25,000 units authorized, 15,709,269 16,107,184
------------------------ ----------------------
25,000 units issued and outstanding)
15,616,340 16,018,274
------------------------ ----------------------
Total partners' equity
$ 16,063,837 $ 16,416,782
======================== ======================
See accompanying notes to financial statements
3
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
For the Three Months Ended June 30, 2002 and 2001
(unaudited)
2002 2001
Three Three
Months Months
----------------------------- ----------------------------
Interest income $ 2 $ 608
----------------------------- ----------------------------
Operating expenses:
Amortization (Note 2) 16,134 16,134
Asset management fees (Note 3) 17,517 17,517
Legal and accounting fees 8,275 7,349
Other 4,997 6,346
----------------------------- ----------------------------
Total operating expenses 46,923 47,346
----------------------------- ----------------------------
Loss from operations (46,921) (46,738)
Equity in losses of
limited partnerships (Note 2) (355,013) (409,441)
----------------------------- ----------------------------
Net loss $ (401,934) $ (456,179)
============================= ============================
Net loss allocated to:
General Partner $ (4,019) $ (4,562)
============================= ============================
Limited Partners $ (397,915) $ (451,617)
============================= ============================
Net loss per weighted limited
partner unit $ (16) $ (18)
============================= ============================
Outstanding weighted limited
partner units 25,000 25,000
============================= ============================
See accompanying notes to financial statements
4
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
(A California Limited Partnership)
STATEMENT OF PARTNERS' EQUITY (DEFICIT)
For the Three Months Ended June 30, 2002
(unaudited)
General Limited
Partner Partners Total
----------------- ----------------- ------------------
Partners' equity (deficit) at March 31, 2002 $ (88,910) $ 16,107,184 $ 16,018,274
Net loss for the three months ended
June 30, 2002 (4,019) (397,915) (401,934)
----------------- ----------------- ------------------
Partners' equity (deficit) at June 30, 2002 $ (92,929) $ 15,709,269 $ 15,616,340
================= ================= ==================
See accompanying notes to financial statements
5
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
For the Three Months Ended June 30, 2002 and 2001
(unaudited)
2002 2001
------------------- --------------------
Cash flows from operating activities:
Net loss $ (401,934) $ (456,179)
Adjustment to reconcile net loss to
net cash used in operating activities:
Amortization 16,134 16,134
Equity in losses of limited partnerships 355,013 409,441
Other assets (16,000) (33,000)
Accrued fees and expenses due to General Partner
and affiliates 48,989 48,117
------------------- --------------------
Net cash provided by (used in) operating activities 2,202 (15,487)
------------------- --------------------
Cash flows from investing activities:
Investments in limited partnerships - (84,500)
Distributions from limited partnerships - 10,000
------------------- --------------------
Net cash used in investing activities - (74,500)
------------------- --------------------
Net increase (decrease) in cash and cash equivalents 2,202 (89,987)
Cash and cash equivalents, beginning of period 1,288 90,481
------------------- --------------------
Cash and cash equivalents, end of period $ 3,490 $ 494
=================== ====================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Taxes paid $ 800 $ 800
=================== ====================
See accompanying notes to financial statements
6
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Quarter Ended June 30, 2002
(unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ---------------------------------------------------
General
- -------
The accompanying condensed unaudited financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America for interim financial information and with the instructions to Form 10-Q
for quarterly reports under Section 13 or 15(d) of the Securities Exchange Act
of 1934. Accordingly, they do not include all of the information and footnotes
required by accounting principles generally accepted in the United States of
America for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the three months
ended June 30, 2002 are not necessarily indicative of the results that may be
expected for the fiscal year ending March 31, 2003. For further information,
refer to the financial statements and footnotes thereto included in the
Partnership's annual report on Form 10-K for the fiscal year ended March 31,
2002.
Organization
- ------------
WNC Housing Tax Credit Fund VI, L.P., Series 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 of the Partnership is WNC & Associates, Inc. ("Associates").
The chairman and president own substantially all of the outstanding stock of
Associates. The business of the Partnership is conducted primarily through
Associates, as the Partnership has no employees of its own.
The 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 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 4) 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.
7
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the Quarter Ended June 30, 2002
(unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
- --------------------------------------------------------------
Risks and Uncertainties
- -----------------------
The Partnership's investments in Local Limited Partnerships are subject to the
risks incident to the management and ownership of low-income housing and to the
management and ownership of multi-unit residential real estate. Some of these
risks are that the low income housing credit could be recaptured and that
neither the Partnership's investments nor the Housing Complexes owned by the
Local Limited Partnerships will be readily marketable. To the extent the Housing
Complexes receive government financing or operating subsidies, they may be
subject to one or more of the following risks: difficulties in obtaining tenants
for the Housing Complexes; difficulties in obtaining rent increases; limitations
on cash distributions; limitations on sales or refinancing of Housing Complexes;
limitations on transfers of Local Limited Partnership Interests; limitations on
removal of Local General Partners; limitations on subsidy programs; and possible
changes in applicable regulations. The Housing Complexes are or will be subject
to mortgage indebtedness. If a Local Limited Partnership does not make its
mortgage payments, the lender could foreclose resulting in a loss of the Housing
Complex and low-income housing credits. As a limited partner of the Local
Limited Partnerships, the Partnership will have very limited rights with respect
to management of the Local Limited Partnerships, and will rely totally on the
Local General Partners of the Local Limited Partnerships for management of the
Local Limited Partnerships. The value of the Partnership's investments will be
subject to changes in national and local economic conditions, including
unemployment conditions, which could adversely impact vacancy levels, rental
payment defaults and operating expenses. This, in turn, could substantially
increase the risk of operating losses for the Housing Complexes and the
Partnership. In addition, each Local Limited Partnership is subject to risks
relating to environmental hazards and natural disasters, which might be
uninsurable. Because the Partnership's operations will depend on these and other
factors beyond the control of the General Partner and the Local General
Partners, there can be no assurance that the anticipated low income housing
credits will be available to Limited Partners.
In addition, Limited Partners are subject to risks in that the rules governing
the low income housing credit are complicated, and the use of credits can be
limited. The only material benefit from an investment in Units may be the low
income housing credits. There are limits on the transferability of Units, and it
is unlikely that a market for Units will develop. All management decisions will
be made by the General Partner.
Method of Accounting for Investments in Limited Partnerships
- ------------------------------------------------------------
The Partnership accounts for its investments in limited partnerships using the
equity method of accounting, whereby the Partnership adjusts its investment
balance for its share of the Local Limited Partnership's results of operations
and for any distributions received. The accounting policies of the Local Limited
Partnership's are consistent with those of the Partnership. Costs incurred by
the Partnership in acquiring the investments are capitalized as part of the
investment account and are being amortized over 30 years (see Note 2).
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 June 30, 2002 and March 31, 2002.
8
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the Quarter Ended June 30, 2002
(unaudited)
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
June 30, 2002 and March 31, 2002, the Partnership had $0 cash equivalents.
Concentration of Credit Risk
- ----------------------------
At June 30, 2002 and March 31, 2002, the Partnership maintained cash balances at
certain financial institutions in excess of the federally insured maximum.
Net Loss Per Weighted Limited Partner Unit
- ------------------------------------------
Net loss per weighted 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
for all periods presented, 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 does not expect SFAS 144 to have a material impact on the
Partnership's financial position or results of operations.
Reclassification
- ----------------
Certain prior period balances have been reclassified to conform to the
presentation for the three months ended June 30, 2002.
9
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the Quarter Ended June 30, 2002
(unaudited)
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS
- --------------------------------------------
As of June 30, 2002 and March 31, 2002, 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.
As of August 20, 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 statement of operations presented herein. The Partnership's
investment in Mansur Wood totaled $5,354,000 (unaudited) at June 30, 2002. The
Partnership's estimate of its interest in the results of operations of Mansur
Wood totaled $(125,000) (unaudited) for the period ended June 30, 2002. The
combined condensed statement of operations presented herein for June 30, 2001
previously included a net loss of $111,000 for Mansur Wood. The combined
condensed financial information presented in this footnote for 2001 has been
restated to exclude the accounts of Mansur Wood.
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 June 30, 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 as of:
For the Three Months For the Year
Ended Ended
June 30, 2002 March 31, 2002
---------------------- ------------------
Investments in limited partnerships, beginning of
period $ 16,200,256 $ 17,555,917
Capital contributions paid, net - 84,500
Equity in losses of limited partnerships (355,013) (1,365,625)
Distributions received from limited partnerships - (10,000)
Amortization of capitalized acquisition fees and costs (16,134) (64,536)
---------------------- ------------------
Investments in limited partnerships, end of period $ 15,829,109 $ 16,200,256
====================== ==================
10
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the Quarter Ended June 30, 2002
(unaudited)
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
- -------------------------------------------------------
Selected financial information for the three months ended June 30, 2002 from the
combined financial statements of the Local Limited Partnerships in which the
Partnership has invested is as follows (combined condensed financial information
for Mansur Wood Living Center, L.P. has been excluded from the presentation
below):
COMBINED CONDENSED STATEMENT OF OPERATIONS
2002 2001
------------------- -----------------
(Restated)
Revenues $ 563,000 $ 486,000
------------------- -----------------
Expenses:
Interest expense 163,000 173,000
Depreciation and amortization 222,000 224,000
Operating expenses 409,000 388,000
------------------- -----------------
Total expenses 794,000 785,000
------------------- -----------------
Net loss $ (231,000) $ (299,000)
=================== =================
Net loss allocable to the Partnership,
before equity in losses of Mansur Wood $ (230,000) $ (298,000)
=================== =================
Net loss recorded by the Partnership,
before equity in losses of Mansur Wood (230,000) (298,000)
Net loss of Mansur Wood
recorded by the Partnership (unaudited) (125,000) (111,000)
------------------- -----------------
Net loss recorded by the Partnership $ (355,000) $ (409,000)
=================== =================
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
- -----------------------------------
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) 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 $17,517 were incurred for each of the
three months ended June 30, 2002 and 2001, of which $0 and $16,795 was paid
during the three months ended June 30, 2002 and 2001, respectively.
(b) 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.
11
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the Quarter Ended June 30, 2002
(unaudited)
NOTE 3 - RELATED PARTY TRANSACTIONS, continued
- ----------------------------------------------
Accrued fees and expenses due to the General Partner and affiliates consisted of
the following:
June 30, 2002 March 31, 2002
----------------------- ------------------
Advances from WNC $ 123,513 $ 92,041
Asset management fee payable 94,954 77,437
----------------------- ------------------
Total $ 218,467 $ 169,478
======================= ==================
The Partnership currently has insufficient working capital to fund operations.
WNC & Associates, Inc. has agreed to provide advances sufficient enough to fund
the operations and working capital requirements of the partnership through at
least August 20, 2003.
NOTE 4 - 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 5 - INCOME TAXES
- ---------------------
No provision for income taxes has been recorded in the financial statements, as
any liability for income taxes is the obligation of the partners of the
Partnership.
NOTE 6 - ADVANCES TO LIMITED PARTNERSHIPS
- -----------------------------------------
During the quarter ended June 30, 2002, the Partnership advanced $19,000 to one
of the local limited partnerships in which it has an interest. Through August
20, 2002, an additional $15,000 has been advanced to this same local limited
partnership.
12
Item 2. 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-Q contain
forward-looking statements. Such statements are based on current expectations
subject to uncertainties and other factors, which may involve known and unknown
risks that could cause actual results of operations to differ materially from
those, projected or implied. Further, certain forward-looking statements are
based upon assumptions about future events, which may not prove to be accurate.
Risks and uncertainties inherent in forward-looking statements include, but are
not limited to, our future cash flows and ability to obtain sufficient
financing, level of operating expenses, conditions in the low income housing tax
credit property market and the economy in general, as well as legal proceedings.
Historical results are not necessarily indicative of the operating results for
any future period.
Subsequent written and oral forward-looking statements attributable to us or
persons acting on our behalf are expressly qualified in their entirety by
cautionary statements in this Form 10-Q and in other reports we filed with the
Securities and Exchange Commission. The following discussion should be read in
conjunction with the Consolidated Financial Statements and the Notes thereto
included elsewhere in this filing.
The following discussion and analysis compares the results of operations for the
fiscal quarters ended June 30, 2002 and 2001, and should be read in conjunction
with the condensed financial statements and accompanying notes included within
this report.
Financial Condition
The Partnership's assets at June 30, 2002 consisted primarily of $3,000 in cash,
$204,000 in restricted cash, aggregate investments in the fifteen Local Limited
Partnerships of $15,829,000 and $27,000 in other assets. Liabilities at June 30,
2002 primarily consisted of $229,000 due to Local Limited Partnerships, $95,000
in annual asset management fees, $123,000 in advances and other payables due to
the General Partner or affiliates.
Results of Operations
Three Months Ended June 30, 2002 Compared to Three Months Ended June 30, 2001.
The Partnership's net loss for the three months ended June 30, 2002 was
$(402,000), reflecting a decrease of $(54,000) from the $(456,000) net loss for
the three months ended June 30, 2001. The change was due to a decrease in equity
in losses of Local Limited Partnerships of $(54,000) from $(409,000) for the
three months ended June 30, 2001 to $(355,000) for the three months ended June
30, 2002.
Cash Flows
Three Months Ended June 30, 2002 Compared to Three Months Ended June 30, 2001.
Net increase in cash during the three months ended June 30, 2002 was $2,000
compared to net cash decrease for the three months ended June 30, 2001 of
$(90,000) reflecting an increase of $92,000. The increase in net cash is due
primarily to $75,000 decrease in net cash used in investing activities, to $0
for the three months ended June 30, 2002 from $(75,000) for the three months
ended June 30, 2001. In addition, there was an approximately $17,000 decrease in
net cash used in operating activities of $(15,000) from the three months ended
June 30, 2001 to $2,000 cash provided by investing activities for the three
months ended June 30, 2002.
13
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations, Continued
During the three months ended June 30, 2002 accrued fees and expenses increased
by $49,000 and consist primarily of related party management fees and advances
due to the General Partner. The General Partner does not anticipate that the
accrued fees and advances will be paid until such time as capital reserves are
in excess of foreseeable working capital requirements of the partnership
The Partnership does not expect its future cash flows, together with its net
available assets at June 30, 2002, to be sufficient to meet all currently
foreseeable future cash requirements. Accordingly, WNC & Associates, Inc. has
agreed to provide advances sufficient enough to fund the operations and working
capital requirements of the partnership through at least August 20, 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 does not expect SFAS 144 to have a material impact on the
Partnership's financial position or results of operations.
14
Item 3. Quantitative and Qualitative Disclosures About Market Risks
None.
Part II. Other Information
Item 1. Legal Proceedings
None.
Item 6. Exhibits and Reports on Form 8-K
None.
15
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
WNC HOUSING TAX CREDIT FUND VI, L.P., Series 5
By: WNC & Associates, Inc. General Partner
By: /s/Wilfred N. Cooper, Jr.
-------------------------
Wilfred N. Cooper, Jr.,
President and Chief Operating Officer
WNC & Associates, Inc.
Date: August 20, 2002
By: /s/ Thomas J. Riha
-------------------
Thomas J. Riha
Vice President and Chief Financial Officer
WNC & Associates, Inc.
Date: August 20, 2002
16
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 Quarterly Report on Form 10-Q of WNC Housing Tax
Credit VI, L.P., Series 5 (the "Partnership") for the period ended June 30, 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 20, 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 Quarterly Report on Form 10-Q of WNC Housing Tax
Credit VI, L.P., Series 5 (the "Partnership") for the period ended June 30, 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
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Thomas J. Riha
Chief Financial Officer of WNC & Associates, Inc.
August 20, 2002
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