-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SbVRcMQOw613Asu22xnZm4bcgnHAMRFZXi+Fa+uR6jhDmmE5PY5ZDUEuJlLuXOEL 3ljGErmjnIcwTjX8rZu5QA== 0000730013-96-000002.txt : 19960314 0000730013-96-000002.hdr.sgml : 19960314 ACCESSION NUMBER: 0000730013-96-000002 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960131 FILED AS OF DATE: 19960312 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SHELTER PROPERTIES VI LIMITED PARTNERSHIP CENTRAL INDEX KEY: 0000730013 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 570755618 STATE OF INCORPORATION: SC FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-13261 FILM NUMBER: 96534057 BUSINESS ADDRESS: STREET 1: ONE SINSIGNIA FINANCIAL PLAZA STREET 2: P O BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 8032391000 MAIL ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLZ STREET 2: P O BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 10QSB 1 FORM 10-QSB--QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Quarterly or Transitional Report (As last amended by 34-32231, eff. 6/3/93.) U. S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended January 31, 1996 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period.........to......... Commission file number 0-13261 SHELTER PROPERTIES VI LIMITED PARTNERSHIP (Exact name of small business issuer as specified in its charter) South Carolina 57-0755618 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Insignia Financial Plaza, P.O. Box 1089 Greenville, South Carolina 29602 (Address of principal executive offices) (Zip Code) Issuer's telephone number (864) 239-1000 Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X . No . PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS a) SHELTER PROPERTIES VI LIMITED PARTNERSHIP BALANCE SHEET (Unaudited) January 31, 1996 Assets Cash: Unrestricted $ 2,764,400 Restricted--tenant security 194,680 Accounts receivable 17,656 Escrow for taxes 366,704 Restricted escrows 1,538,462 Other assets 649,406 Investment properties: Land $ 4,949,503 Buildings and related personal 45,506,088 50,455,591 Less accumulated depreciation (21,465,313) 28,990,278 $34,521,586 Liabilities and Partners' Capital (Deficit) Liabilities Accounts payable $ 208,903 Tenant security deposits 184,907 Accrued taxes 489,356 Other liabilities 320,971 Mortgage notes payable 27,776,492 Partners' Capital (Deficit) General partners $ (302,703) Limited partners (42,324 units issued and outstanding) 5,843,660 5,540,957 $34,521,586 See Accompanying Notes to Financial Statements b) SHELTER PROPERTIES VI LIMITED PARTNERSHIP STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended January 31, 1996 1995 Revenues: Rental income $ 2,312,276 $ 2,517,856 Other income 155,625 141,083 Total revenues 2,467,901 2,658,939 Expenses: Operating 558,227 625,268 General and administrative 54,393 57,379 Property management fees 122,776 132,426 Maintenance 339,379 362,870 Depreciation 480,526 533,637 Interest 633,806 717,443 Property taxes 220,259 231,185 Total expenses 2,409,366 2,660,208 Loss on disposal of property (3,626) (6,467) Casualty gain (1,047) -- Net income (loss) $ 53,862 $ (7,736) Net income (loss) allocated to general partner (1%) $ 539 $ (77) Net income (loss) allocated to limited partners (99%) 53,323 (7,659) $ 53,862 $ (7,736) Net income (loss) per limited partnership unit $ 1.26 $ (.18) See Accompanying Notes to Financial Statements
c) SHELTER PROPERTIES VI LIMITED PARTNERSHIP STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT) (Unaudited)
Limited Partnership General Limited Units Partners Partners Total Original capital contributions 42,324 $ 2,000 $42,324,000 $42,326,000 Partners' capital (deficit) at October 31, 1995 42,324 $(303,242) $ 5,790,337 $ 5,487,095 Net income for the three months ended January 31, 1996 -- 539 53,323 53,862 Partners' capital (deficit) at January 31, 1996 42,324 $(302,703) $ 5,843,660 $ 5,540,957 See Accompanying Notes to Financial Statements
d) SHELTER PROPERTIES VI LIMITED PARTNERSHIP STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended January 31, 1996 1995 Cash flows from operating activities: Net income (loss) $ 53,862 $ (7,736) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation 480,526 533,637 Amortization of discounts and loan costs 73,462 79,289 Loss on disposal of property 3,626 6,467 Casualty loss 1,047 -- Change in accounts: Restricted cash 550 (2,572) Accounts receivable (1,089) (15,447) Escrows for taxes 33,435 47,006 Other assets 31,885 28,107 Accounts payable (78,427) (109,066) Tenant security deposit liabilities (184) 607 Accrued taxes (77,053) (87,724) Other liabilities (43,270) (23,239) Net cash provided by operating activities 478,370 449,329 Cash flows from investing activities: Property improvements and replacements (281,806) (226,062) Deposits to restricted escrows (12,828) (35,858) Receipts from restricted escrows 14,390 931 Net insurance proceeds from property damages 35,586 -- Net cash used in investing activities (244,658) (260,989) Cash flows from financing activities: Payments on mortgage notes payable (178,870) (184,545) Partners' distributions (1,000,000) -- Net cash used in financing activities (1,178,870) (184,545) Net (decrease) increase in cash (945,158) 3,795 Cash at beginning of period 3,709,558 1,035,305 Cash at end of period $ 2,764,400 $1,039,100 Supplemental disclosure of cash flow information: Cash paid for interest $ 560,346 $ 638,154 See Accompanying Notes to Financial Statements
e) SHELTER PROPERTIES VI LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS (Unaudited) Note A - Basis of Presentation The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of the Corporate General Partner, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended January 31, 1996, are not necessarily indicative of the results that may be expected for the fiscal year ending October 31, 1996. For further information, refer to the financial statements and footnotes thereto included in the Partnership's annual report on Form 10-KSB for the year ended October 31, 1995. Cash and Cash Equivalents: Unrestricted - Unrestricted cash includes cash on hand and in banks, money market funds and Certificates of Deposit with original maturities less than 90 days. At certain times, the amount of cash deposited at a bank may exceed the limit on insured deposits. Restricted cash - tenant security deposits - The Partnership requires security deposits from lessees for the duration of the lease and such deposits are considered restricted cash. Deposits are refunded when the tenant vacates, provided the tenant has not damaged its space and is current on its rental payments. Certain reclassifications have been made to the 1995 information to conform to the 1996 presentation. Note B - Reconciliation of Cash Flows The following is a reconciliation of the subtotal on the accompanying statements of cash flows captioned "net cash provided by operating activities" to "net cash used in operations", as defined in the partnership agreement. However, "net cash used in operations" should not be considered an alternative to net income as an indicator of the Partnership's operating performance or to cash flows as a measure of liquidity. Three Months Ended January 31, 1996 1995 Net cash provided by operating activities $ 478,370 $ 449,329 Payments on mortgage notes payable (178,870) (184,545) Property improvements and replacements (281,806) (226,062) Deposits to (from) operations to restricted escrows, net 1,562 (34,927) Changes in reserves for net operating liabilities 134,153 162,328 Additional reserves (155,000) (237,000) Net cash used in operations $ (1,591) $ (70,877) The Corporate General Partner reserved an additional $155,000 on January 31, 1996, to fund capital improvements and repairs at the properties. On January 31, 1995, the General Partner reserved $237,000 due to the funding requirements of the Reserve Escrow having not been met. Note C Transactions with Affiliated Parties The Partnership has no employees and is dependent on the Corporate General Partner and its affiliates for the management and administration of all partnership activities. The partnership agreement provides for payments to affiliates for services and the reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. Balances and other transactions with Insignia Financial Group, Inc. and affiliates in 1996 and 1995 are as follows: For the Three Months Ended January 31, 1996 1995 Property management fees $122,776 $132,426 Reimbursement for services of affiliates 32,493 34,760 The Partnership insures its properties under a master policy through an agency and insurer unaffiliated with the Corporate General Partner. An affiliate of the Corporate General Partner acquired, in the acquisition of a business, certain financial obligations from an insurance agency which was later acquired by the agent who placed the current year's master policy. The current agent assumed the financial obligations to the affiliate of the Corporate General Partner, who receives payments on these obligations from the agent. The amount of the Partnership's insurance premiums accruing to the benefit of the affiliate of the Corporate General Partner by virtue of the agent's obligations is not significant. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Partnership's investment properties consist of six apartment complexes. The following table sets forth the average occupancy of the properties for the three months ended January 31, 1996 and 1995: Average Occupancy Property 1996 1995 Rocky Creek Augusta, Georgia 77% 88% Carriage House Gastonia, North 97% 97% Nottingham Square Des Moines, Iowa 95% 92% Foxfire/Barcelona Durham, North Carolina 98% 98% River Reach Jacksonville, Florida 98% 99% Village Gardens Fort Collins, Colorado 93% 96% The Corporate General Partner attributes the decrease in occupancy at Rocky Creek to an increase in the number of tenants purchasing homes as mortgage rates are lower than in the prior year. Also contributing to the decrease was the downsizing of the employment base with lay-offs in the region. Occupancy also decreased at Village Gardens due to competition from several new apartment complexes in the area. Occupancy increased at Nottingham Square as a result of capital improvements completed in 1995 making the property more attractive while maintaining lower average rental rates as compared to the competition in the region. The Partnership's net income for the three months ended January 31, 1996, was $53,862. The Partnership reported net loss of $7,736 for the corresponding period of 1995. The increase in net income is primarily due to the reduction of expenses as a result of the sale of Marble Hills and an increase in other income as a result of increased tenant charges and interest income at the remaining properties. Tenant charges increased due to an increase in parking and deposit forfeitures and application fees at Foxfire. Interest income increased due to an increase in the restricted escrow balances and higher interest rates during the quarter. In addition, revenues and expenses have decreased due to the sale of Marble Hills in the fourth quarter of 1995. During the first quarter of 1996, the Partnership recorded a casualty loss resulting from a fire which destroyed 3 units at Nottingham Square. Although, the damage was covered by insurance, the damage resulted in a loss of $1,047, arising from proceeds received of $43,141 which were less than the basis of the property plus expenses to replace the interiors damaged. As part of the ongoing business plan of the Partnership, the Corporate General Partner monitors the rental market environment of each of its investment properties to assess the feasibility of increasing rents, maintaining or increasing occupancy levels and protecting the Partnership from increases in expense. As part of this plan, the Corporate General Partner attempts to protect the Partnership from the burden of inflation-related increases in expenses by increasing rents and maintaining a high overall occupancy level. However, due to changing market conditions, which can result in the use of rental concessions and rental reductions to offset softening market conditions, there is no guarantee that the Corporate General Partner will be able to sustain such a plan. At January 31, 1996, the Partnership reported unrestricted cash of $2,764,400 versus $1,039,100 for the same period of 1995. Net cash provided by operations increased primarily due to the increase in net income as discussed above. Also contributing to the change was a decrease in cash used by accounts payable due to the timing of payments. Net cash used in investing activities decreased primarily due to insurance proceeds received as a result of the fire discussed above. Offsetting the decrease in net cash used in investing activities was an increase in property improvements and replacements. Net cash used in financing activities increased due to a distribution made to partners during the first quarter of 1996. The Partnership has no material capital programs scheduled to be performed in 1996, although certain routine capital expenditures and maintenance expenses have been budgeted. These capital expenditures and maintenance expenses will be incurred only if cash is available from operations or is received from the capital reserve account. The sufficiency of existing liquid assets to meet future liquidity and capital expenditure requirements is directly related to the level of capital expenditures required at the property to adequately maintain the physical assets and other operating needs of the Partnership. Such assets are currently thought to be sufficient for any near-term needs of the Partnership. The mortgage indebtedness of $27,776,492, net of discount, is amortized over 257 months with a balloon payment of $23,007,741 due on November 15, 2002, at which time the properties will either be refinanced or sold. On September 29, 1995, the Partnership sold Marble Hills Apartments to an unaffiliated party. The buyer assumed the mortgages, payable to Bank of America. The total outstanding balance on the mortgage notes payable, including interest, was $3,352,538. The Partnership received net proceeds of $2,412,138 after payment of closing costs. This disposition resulted in a gain of $1,296,229. No cash distributions were paid in 1995. However, at October 31, 1995, distributions of proceeds from the sale of Marble Hills of $1,000,000 had been declared which were paid in the first quarter of 1996. Future cash distributions will depend on the levels of net cash generated from operations, refinancing, property sales and cash reserves. Distributions may also be restricted by the requirement to deposit net operating income (as defined in the mortgage note) into the Reserve Account until the $1,000 per apartment unit is funded for each respective property. PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits: Exhibit 27, Financial Data Schedule, is filed as an exhibit to this report. b) Reports on Form 8-K filed during the quarter ended January 31, 1996: None. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SHELTER PROPERTIES VI LIMITED PARTNERSHIP By: Shelter Realty VI Corporation Corporate General Partner By:/s/ William H. Jarrard, Jr. William H. Jarrard, Jr. President and Director By:/s/ Ronald Uretta Ronald Uretta Treasurer (Principal Financial Officer and Principal Accounting Officer) Date: March 12, 1996 EX-27 2
5 This schedule contains summary financial information extracted from Shelter Properties VI 1996 1st Quarter 10-QSB and is qualified in its entirety by refernce to such 10-QSB filing. 0000730013 SHELTER PROPERTIES VI 1 3-MOS OCT-31-1996 JAN-31-1996 2,764,400 0 17,656 0 0 0 50,455,591 21,465,313 34,521,586 0 27,776,492 0 0 0 5,540,957 34,521,586 0 2,467,901 0 0 2,409,366 0 633,806 0 0 0 0 0 0 53,862 1.26 0 The Partnership has an unclassified balance sheet.
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