UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2003
[ ] 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 0-13261
SHELTER PROPERTIES VI
(Exact Name of Registrant as Specified in Its Charter)
South Carolina 57-0755618
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Issuer's telephone number)
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
SHELTER PROPERTIES VI
BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
September 30, 2003
Assets
Cash and cash equivalents $ 294
Receivables and deposits 178
Restricted escrows 247
Other assets 700
Investment properties:
Land $ 2,613
Buildings and related personal property 28,298
30,911
Less accumulated depreciation (19,045) 11,866
$ 13,285
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 34
Tenant security deposit liabilities 94
Accrued property taxes 289
Other liabilities 238
Due to affiliates 342
Mortgage notes payable 18,731
Partners' Deficit
General partners $ (13)
Limited partners (42,324 units issued and
outstanding) (6,430) (6,443)
$ 13,285
See Accompanying Notes to Financial Statements
SHELTER PROPERTIES VI
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per unit data)
Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
(Restated) (Restated)
Revenues:
Rental income $ 1,244 $ 1,293 $ 3,684 $ 3,896
Other income 108 121 317 327
Casualty gain (Note C) -- -- 19 --
Total revenues 1,352 1,414 4,020 4,223
Expenses:
Operating 648 542 1,702 1,632
General and administrative 81 108 264 335
Depreciation 319 308 967 942
Interest 298 378 891 1,065
Property taxes 103 87 290 261
Total expenses 1,449 1,423 4,114 4,235
Loss from continuing operations (97) (9) (94) (12)
Income from discontinued operations -- 154 267 564
Net (loss) income $ (97) $ 145 $ 173 $ 552
Net (loss) income allocated to general
partners (1%) $ (1) $ 1 $ 2 $ 6
Net (loss) income allocated to limited
partners (99%) (96) 144 171 546
$ (97) $ 145 $ 173 $ 552
Per limited partnership unit:
Loss from continuing operations $ (2.27) $ (0.21) $ (2.20) $ (0.28)
Income from discontinued operations -- 3.61 6.24 13.18
Net (loss) income $ (2.27) $ 3.40 $ 4.04 $ 12.90
Distributions per limited partnership unit $ 30.76 $ 13.37 $ 65.09 $103.08
See Accompanying Notes to Financial Statements
SHELTER PROPERTIES VI
STATEMENT OF CHANGES IN PARTNERS' DEFICIT
(Unaudited)
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partners Partners Total
Original capital contributions 42,324 $ 2 $42,324 $42,326
Partners' deficit at
December 31, 2002 42,324 $ (1) $(3,846) $(3,847)
Distributions to partners -- (14) (2,755) (2,769)
Net income for the nine months
ended September 30, 2003 -- 2 171 173
Partners' deficit at
September 30, 2003 42,324 $ (13) $(6,430) $(6,443)
See Accompanying Notes to Financial Statements
SHELTER PROPERTIES VI
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Nine Months Ended
September 30,
2003 2002
Cash flows from operating activities:
Net income $ 173 $ 552
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 967 1,397
Amortization of discounts and loan costs 49 177
Loss on early extinguishment of debt -- 58
Casualty gain (19) --
Change in accounts:
Receivables and deposits 87 (467)
Other assets (86) (72)
Accounts payable (152) (58)
Tenant security deposit liabilities 7 11
Accrued property taxes 227 43
Other liabilities 17 64
Net cash provided by operating activities 1,270 1,705
Cash flows from investing activities:
Property improvements and replacements (411) (1,030)
Net withdrawals from (deposits to) restricted escrows 505 (56)
Insurance proceeds received 25 --
Net cash provided by (used in) investing activities 119 (1,086)
Cash flows from financing activities:
Repayment of mortgage notes payable -- (9,811)
Proceeds from mortgage notes payable -- 14,892
Loan costs paid (18) (483)
Payments on mortgage note payable (349) (610)
Distributions to partners (2,769) (4,367)
Advances from affiliates -- 320
Repayment of advances from affiliates -- (320)
Net cash used in financing activities (3,136) (379)
Net (decrease) increase in cash and cash equivalents (1,747) 240
Cash and cash equivalents at beginning of period 2,041 565
Cash and cash equivalents at end of period $ 294 $ 805
Supplemental disclosure of cash flow information:
Cash paid for interest $ 913 $ 1,252
At December 31, 2001, approximately $139,000 of property improvements and
replacements were included in accounts payable and are included in property
improvements and replacements for the nine months ended September 30, 2002.
See Accompanying Notes to Financial Statements
SHELTER PROPERTIES VI
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited financial statements of Shelter Properties VI (the
"Partnership" or "Registrant") 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. The general
partner responsible for management of the Partnership's business is Shelter
Realty VI Corporation ("the Corporate General Partner"). The Corporate General
Partner is a subsidiary of Apartment Investment and Management Company
("AIMCO"), a publicly traded real estate investment trust. The non-corporate
general partner, AIMCO Properties, L.P., is also an affiliate of AIMCO. 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 and nine month periods ended September
30, 2003, are not necessarily indicative of the results that may be expected for
the fiscal year ending December 31, 2003. 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 December 31, 2002.
Effective January 1, 2002, the Partnership adopted Statement of Financial
Accounting Standards ("SFAS") No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets", which established standards for the way that
business enterprises report information about long-lived assets that are either
being held for sale or have already been disposed of by sale or other means. The
standard requires that results of operations for a long-lived asset that is
being held for sale or has already been disposed of be reported as a
discontinued operation on the statement of operations. As a result, the
accompanying statements of operations for the three and nine months ended
September 30, 2002 have been restated as of January 1, 2002 to reflect the
operations of Nottingham Square Apartments as income from discontinued
operations due to the sale of Nottingham Square in December 2002.
Note B - Reconciliation of Cash Flows
The following is a reconciliation of "Net cash provided by operating activities"
on the accompanying statements of cash flows to "Net cash from operations", as
defined in the partnership agreement of the Partnership (the "Partnership
Agreement"). However, "Net cash from 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.
Nine Months Ended
September 30,
2003 2002
(in thousands)
Net cash provided by operating activities $ 1,270 $ 1,705
Payments on mortgage notes payable (349) (610)
Property improvements and replacements (411) (1,030)
Change in restricted escrows, net 505 (56)
Changes in reserves for net operating
liabilities (100) 479
Additions to operating reserves (915) (488)
Net cash provided by operations $ -- $ --
At September 30, 2003 and 2002, the Corporate General Partner reserved
approximately $915,000 and $488,000, respectively, to fund capital improvements
at its properties.
Note C - Casualty Event
In August 2002, Carriage House Apartments experienced an electrical fire,
causing damage to two units and an outside storage building. A casualty gain of
approximately $19,000 was recorded during the nine months ended September 30,
2003, due to the receipt of insurance proceeds of approximately $25,000 net of
the write off of undepreciated damaged assets of approximately $6,000.
Note D - Refinancing of Mortgage Note Payable
On May 15, 2002, the Partnership refinanced the mortgage encumbering River Reach
Apartments. The refinancing replaced the first mortgage of approximately
$6,048,000 and the second mortgage of approximately $252,000 with a new mortgage
in the amount of $10,654,000. The new mortgage carries a stated interest rate of
7.16% compared to the 7.60% interest rate on the old mortgages. Payments on the
mortgage loan are due monthly until the loan matures on June 1, 2022, at which
time it is scheduled to be fully amortized. Total capitalized loan costs were
approximately $292,000 during the nine months ended September 30, 2002.
Additional loan costs of approximately $11,000 were capitalized during the nine
months ended September 30, 2003. The Partnership recognized a loss on the early
extinguishment of debt of approximately $48,000 during the nine months ended
September 30, 2002 due to the write off of unamortized loan costs and debt
discounts. This amount has been included in interest expense. In addition, the
Partnership was required to deposit approximately $100,000 in a repair escrow
account with the lender in order to complete required repairs at the property
and approximately $87,000 of this amount remains outstanding as of September 30,
2003 and is included in restricted escrows.
On September 16, 2002, the Partnership refinanced the mortgages encumbering
Rocky Creek and Carriage House Apartments. These loans were initially refinanced
under an interim credit facility ("Interim Credit Facility") which had a term of
three months. The Interim Credit Facility included properties in other
partnerships that are affiliated with the Partnership. However, the Interim
Credit Facility created separate loans for each property that were not
cross-collateralized of cross-defaulted with the other property loans. During
the three month term of the Interim Credit Facility, the properties were
required to make interest-only payments. The first month's interest, which was
paid at the date of the refinancing, was calculated at LIBOR plus 70 basis
points. Interest for the following two months was calculated at LIBOR plus 150
basis points and was due monthly.
During December 2002 the loans encumbering Rocky Creek and Carriage House were
sold to Fannie Mae under a permanent credit facility ("Permanent Credit
Facility"). The Permanent Credit Facility has a maturity of five years, with one
five-year extension option. This Permanent Credit Facility also creates separate
loans for each property that are not cross-collateralized or cross-defaulted
with the other property loans. Each note under this Permanent Credit Facility
will begin as a variable rate loan with the option of converting to a fixed rate
loan after three years. The interest rate on the variable rate loans is the
Fannie Mae discounted mortgage-backed security index plus 85 basis points (1.90%
at September 30, 2003), and will reset monthly. In addition, monthly principal
payments are required based on a 30-year amortization schedule, using the
interest rate in effect during the first month that the property is financed by
the Permanent Credit Facility. The loans are prepayable without penalty.
The refinancing of Rocky Creek Apartments loans replaced the first mortgage of
approximately $1,753,000 and second mortgage of approximately $74,000 with a new
mortgage in the amount of $2,340,000. Total capitalized loan costs were
approximately $103,000 during the nine months ended September 30, 2002.
Additional loan costs of approximately $4,000 were capitalized during the nine
months ended September 30, 2003. The Partnership recognized a loss on the early
extinguishment of debt of approximately $6,000 during the nine months ended
September 30, 2002 due to the write off of unamortized loan costs and debt
discounts. This amount is included in interest expense.
The refinancing of Carriage House Apartments loans replaced the first mortgage
of approximately $1,616,000 and second mortgage of approximately $68,000 with a
new mortgage in the amount of $1,898,000. Total capitalized loan costs were
approximately $88,000 during the nine months ended September 30, 2002.
Additional loan costs of approximately $3,000 were capitalized during the nine
months ended September 30, 2003. The Partnership recognized a loss on the early
extinguishment of debt of approximately $4,000 during the nine months ended
September 30, 2002 due to the write off of unamortized loan costs and debt
discounts. This amount is included in interest expense. In addition, the
Partnership was required to deposit approximately $198,000 in a repair escrow
account with the lender in order to complete required repairs at the property
and approximately $160,000 of this amount remains outstanding as of September
30, 2003 and is included in restricted escrows.
Note E - 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 (i) certain
payments to affiliates for services and (ii) reimbursement of certain expenses
incurred by affiliates on behalf of the Partnership.
Affiliates of the Corporate General Partner are entitled to receive 5% of gross
receipts from all of the Partnership's properties as compensation for providing
property management services. The Partnership paid to such affiliates
approximately $197,000 and $351,000 for the nine months ended September 30, 2003
and 2002, respectively, which is included in operating expenses and income from
discontinued operations.
Affiliates of the Corporate General Partner received reimbursements of
accountable administrative expenses amounting to approximately $212,000 and
$326,000 for the nine months ended September 30, 2003 and 2002, respectively,
which are included in general and administrative expenses and investment
properties. Included in these amounts are fees related to construction
management services provided by an affiliate of the Corporate General Partner of
approximately $16,000 and $68,000 for the nine months ended September 30, 2003
and 2002, respectively. The construction management service fees are calculated
based on a percentage of current additions to investment properties.
Pursuant to the Partnership Agreement and in connection with the sale of
Foxfire/Barcelona Village during 2000 and Nottingham Square Apartments in
December 2002, the Corporate General Partner is entitled to a commission of up
to 1% for its assistance in the sale. Payment of such commission is subordinate
to the limited partners receiving a cumulative 7% return on their investment.
This return has not yet been met, and accordingly, the combined fees of
approximately $342,000 have been accrued and are included in due to affiliates
on the accompanying balance sheet at September 30, 2003.
During the nine months ended September 30, 2002, the Partnership paid an
affiliate of the Corporate General Partner approximately $149,000 for brokerage
fees associated with the refinancing of River Reach Apartments, Rocky Creek
Apartments and Carriage House Apartments. This amount is included in other
assets as a loan cost on the accompanying balance sheet.
During the nine months ended September 30, 2002, the Corporate General Partner
advanced the Partnership funds to cover expenses related to the refinancing of
River Reach Apartments totaling approximately $320,000. This advance was repaid
by the Partnership prior to September 30, 2002. Interest was charged at prime
plus 1%. Interest expense on this advance was approximately $1,000 for the nine
months ended September 30, 2002.
The Partnership insures its properties up to certain limits through coverage
provided by AIMCO which is generally self-insured for a portion of losses and
liabilities related to workers compensation, property casualty and vehicle
liability. The Partnership insures its properties above the AIMCO limits through
insurance policies obtained by AIMCO from insurers unaffiliated with the
Corporate General Partner. During the nine months ended September 30, 2003 and
2002, the Partnership was charged by AIMCO and its affiliates approximately
$75,000 and $142,000, respectively, for insurance coverage and fees associated
with policy claims and administration.
Note F - Legal Proceedings
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of California for the County of San Mateo. The plaintiffs named as
defendants, among others, the Partnership, its Corporate General Partner and
several of their affiliated partnerships and corporate entities. The action
purported to assert claims on behalf of a class of limited partners and
derivatively on behalf of a number of limited partnerships (including the
Partnership) that are named as nominal defendants, challenging, among other
things, the acquisition of interests in certain Corporate General Partner
entities by Insignia Financial Group, Inc. ("Insignia") and entities that were,
at one time, affiliates of Insignia; past tender offers by the Insignia
affiliates to acquire limited partnership units; management of the partnerships
by the Insignia affiliates; and the series of transactions which closed on
October 1, 1998 and February 26, 1999 whereby Insignia and Insignia Properties
Trust, respectively, were merged into AIMCO. The plaintiffs sought monetary
damages and equitable relief, including judicial dissolution of the Partnership.
In addition, during the third quarter of 2001, a complaint (the "Heller action")
was filed against the same defendants that are named in the Nuanes action,
captioned Heller v. Insignia Financial Group. On or about August 6, 2001,
plaintiffs filed a first amended complaint. The Heller action was brought as a
purported derivative action, and asserted claims for, among other things, breach
of fiduciary duty, unfair competition, conversion, unjust enrichment, and
judicial dissolution.
On January 8, 2003, the parties filed a Stipulation of Settlement in proposed
settlement of the Nuanes action and the Heller action.
In general terms, the proposed settlement provides for certification for
settlement purposes of a settlement class consisting of all limited partners in
this Partnership and others (the "Partnerships") as of December 20, 2002, the
dismissal with prejudice and release of claims in the Nuanes and Heller
litigation, payment by AIMCO of $9.9 million (which shall be distributed to
settlement class members after deduction of attorney fees and costs of class
counsel and certain costs of settlement) and up to $1 million toward the cost of
independent appraisals of the Partnerships' properties by a Court appointed
appraiser. An affiliate of the Corporate General Partner has also agreed to make
at least one round of tender offers to purchase all of the partnership interests
in the Partnerships within one year of final approval, if it is granted, and to
provide partners with the independent appraisals at the time of these tenders.
The proposed settlement also provided for the limitation of the allowable costs
which the Corporate General Partner or its affiliates will charge the
Partnerships in connection with this litigation and imposes limits on the class
counsel fees and costs in this litigation. On April 11, 2003, notice was
distributed to limited partners providing the details of the proposed
settlement.
On June 13, 2003, the Court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions. On August 12, 2003, an objector
filed an appeal seeking to vacate and/or reverse the order approving the
settlement and entering judgment thereto. The Corporate General Partner intends
to file a respondent's brief in support of the order approving settlement and
entering judgment thereto.
The Corporate General Partner does not anticipate that any costs to the
Partnership, whether legal or settlement costs, associated with these cases will
be material to the Partnership's overall operations.
On August 8, 2003 AIMCO Properties L.P., an affiliate of the Corporate General
Partner, was served with a Complaint in the United States District Court,
District of Columbia alleging that AIMCO Properties L.P. willfully violated the
Fair Labor Standards Act (FLSA) by failing to pay maintenance workers overtime
for all hours worked in excess of forty per week. The Complaint is styled as a
Collective Action under the FLSA and seeks to certify state subclasses in
California, Maryland, and the District of Columbia. Specifically, the plaintiffs
contend that AIMCO Properties L.P. failed to compensate maintenance workers for
time that they were required to be "on-call". Additionally, the Complaint
alleges AIMCO Properties L.P. failed to comply with the FLSA in compensating
maintenance workers for time that they worked in responding to a call while
"on-call". The Complaint also attempts to certify a subclass for salaried
service directors who are challenging their classification as exempt from the
overtime provisions of the FLSA. AIMCO Properties L.P. has filed an answer to
the Complaint denying the substantive allegations. Although the outcome of any
litigation is uncertain, in the opinion of the Corporate General Partner the
claims will not result in any material liability to the Partnership.
The Partnership is unaware of any other pending or outstanding litigation
matters involving it or its investment properties that are not of a routine
nature arising in the ordinary course of business.
Item 2. Management's Discussion and Analysis or Plan of Operation
The matters discussed in this report contain certain forward-looking statements,
including, without limitation, statements regarding future financial performance
and the effect of government regulations. Actual results may differ materially
from those described in the forward-looking statements and will be affected by a
variety of risks and factors including, without limitation: national and local
economic conditions; the terms of governmental regulations that affect the
Registrant and interpretations of those regulations; the competitive environment
in which the Registrant operates; financing risks, including the risk that cash
flows from operations may be insufficient to meet required payments of principal
and interest; real estate risks, including variations of real estate values and
the general economic climate in local markets and competition for tenants in
such markets; litigation, including costs associated with prosecuting and
defending claims and any adverse outcomes, and possible environmental
liabilities. Readers should carefully review the Registrant's financial
statements and the notes thereto, as well as the risk factors described in the
documents the Registrant files from time to time with the Securities and
Exchange Commission.
The Partnership's investment properties consist of four apartment complexes. The
following table sets forth the average occupancy of the properties for each of
the nine months ended September 30, 2003 and 2002:
Average
Occupancy
Property 2003 2002
Rocky Creek Apartments
Augusta, Georgia 94% 93%
Carriage House Apartments
Gastonia, North Carolina 86% 92%
River Reach Apartments
Jacksonville, Florida 96% 96%
Village Gardens Apartments
Fort Collins, Colorado 72% 91%
The Corporate General Partner attributes the decrease in average occupancy at
Carriage House Apartments to difficult market conditions due to the sluggish
economy. The decrease in occupancy at Village Gardens Apartments is due to
military deployments, low mortgage interest rates and a slow economy in Fort
Collins, Colorado.
Results of Operations
The Partnership realized a net loss of approximately $97,000 for the three
months ended September 30, 2003 and net income of approximately $173,000 for the
nine months ended September 30, 2003, compared to net income of approximately
$145,000 and $552,000 for the three and nine months ended September 30, 2002,
respectively. The decrease in net income for the three month period ended
September 30, 2003 is due to a decrease in total revenues, an increase in total
expenses and a decrease in income from discontinued operations. The decrease in
net income for the nine month period ended September 30, 2003 is due to a
decrease in total revenues and a decrease in income from discontinued
operations, partially offset by a decrease in total expenses.
Effective January 1, 2002, the Partnership adopted Statement of Financial
Accounting Standards No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets", which established standards for the way that public business
enterprises report information about long-lived assets that are either being
held for sale or have already been disposed of by sale or other means. The
standard requires that results of operations for a long-lived asset that is
being held for sale or has already been disposed of be reported as a
discontinued operation on the statement of operations. As a result, the
accompanying statement of operations for the three and nine months ended
September 30, 2002 has been restated as of January 1, 2002 to reflect the
operations of Nottingham Square Apartments as income from discontinued
operations due to the property's sale in December 2002.
The income from discontinued operations for the nine months ended September 30,
2003 includes a refund of property taxes of approximately $193,000 and
additional gain on disposal of property due to a change in the estimated costs
of disposal of approximately $74,000 for the sale of Nottingham Square.
On December 20, 2002, the Partnership sold Nottingham Square Apartments to an
unaffiliated third party for $20,000,000. After payment of closing costs of
approximately $327,000, the net proceeds received by the Partnership were
approximately $19,673,000. The Partnership used a portion of the proceeds to
repay the mortgage encumbering the property of approximately $10,300,000. The
sale of the property resulted in a gain on the sale during the fourth quarter of
2002 of approximately $13,106,000. In addition, the Partnership recorded a loss
on early extinguishment of debt of approximately $247,000, as a result of the
write off of unamortized loan costs and debt discounts. Pursuant to the
Partnership Agreement and in connection with the sale, the Corporate General
Partner is entitled to a commission of up to 1% for its assistance with the
sale. Payment of such commission is subordinate to the limited partners
receiving a cumulative 7% return on their investment. This return has not yet
been met and accordingly, approximately $200,000 was accrued and unpaid at
September 30, 2003.
The Partnership recognized a loss from continuing operations of approximately
$97,000 and $94,000 for the three and nine months ended September 30, 2003,
respectively, compared to a loss from continuing operations of approximately
$9,000 and $12,000 for the corresponding periods in 2002. The increase in loss
from continuing operations for the nine months ended September 30, 2003 was due
to a decrease in total revenues partially offset by a decrease in total
expenses. The increase in loss from continuing operations for the three months
ended September 30, 2003 was due to a decrease in total revenues and an increase
in total expenses. Total revenues decreased for both periods due to a decrease
in rental income partially offset by a casualty gain at Carriage House
Apartments during the nine months ended September 30, 2003. Rental income
decreased primarily due to a decrease in occupancy at Carriage House and Village
Gardens Apartments, reduced rental rates at Carriage House and Village Gardens
Apartments and increased concession costs at Rocky Creek and Village Gardens
Apartments partially offset by increased occupancy at Rocky Creek Apartments and
increased rental rates at River Reach and Rocky Creek Apartments.
In August 2002, Carriage House Apartments experienced an electrical fire,
causing damage to two units and an outside storage building. A casualty gain of
approximately $19,000 was recorded during the nine months ended September 30,
2003, due to the receipt of insurance proceeds of approximately $25,000 net of
the write off of undepreciated damaged assets of approximately $6,000.
Total expenses decreased for the nine months ended September 30, 2003 due to
decreases in general and administrative and interest expenses, partially offset
by increases in operating, depreciation, and property tax expenses. Interest
expense decreased primarily due to the refinancing of several of the
Partnership's properties in 2002 resulting in loss on early extinguishment of
debt included in interest expense in 2002 and lowered interest rates for 2003.
Operating expenses increased primarily due to increases in advertising and
maintenance expenses. Advertising expense increased primarily due to increases
in web advertising, newspaper advertising, and referral fees at Village Gardens
Apartments. Maintenance expenses increased primarily due to increases in
contract services at Carriage House and Village Gardens Apartments, painting
supplies and interior building improvements at Carriage House Apartments, and
floor covering repairs at Village Gardens Apartments. Depreciation expense
increased due to fixed asset additions at the Partnership's properties. Property
tax expense increased primarily due to a change in the estimated tax liability
at Rocky Creek and River Reach Apartments.
Total expenses for the three months ended September 30, 2003 increased primarily
due to increases in operating, depreciation and property tax expenses as
discussed above, partially offset by decreased general and administrative (as
discussed below) and interest expenses (as discussed above). Operating expenses
increased for the three month period due to increases in maintenance and
property expenses. Maintenance expense increased due to increased contract
services at River Reach and Village Gardens Apartments. Property expenses
increased due to increased utilities expense at River Reach and Carriage House
Apartments and increases in salaries and related benefits at Rocky Creek, River
Reach and Village Gardens Apartments partially offset by a decrease in salaries
and related benefits at Carriage House Apartments.
General and administrative expenses decreased for the three and nine months
ended September 30, 2003 due to a decrease in the costs of services included in
management reimbursements to the Corporate General Partner allowed under the
Partnership Agreement. In addition to management reimbursements, costs
associated with the quarterly and annual communications with investors and
regulatory agencies and the annual audit required by the Partnership Agreement
are also included in general and administrative expenses.
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
expenses. 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, the Corporate General Partner may use rental concessions and rental
rate reductions to offset softening market conditions, accordingly, there is no
guarantee that the Corporate General Partner will be able to sustain such a
plan.
Liquidity and Capital Resources
At September 30, 2003, the Partnership held cash and cash equivalents of
approximately $294,000 compared to approximately $805,000 at September 30, 2002.
Cash and cash equivalents decreased approximately $1,747,000 since December 31,
2002 due to approximately $3,136,000 of cash used in financing activities
partially offset by approximately $119,000 and $1,270,000 of cash provided by
investing and operating activities, respectively. Cash used in financing
activities consisted of loan costs paid, principal payments on the mortgages
encumbering the Partnership's properties and distributions paid to partners.
Cash provided by investing activities consisted of withdrawals from restricted
escrows maintained by the mortgage lenders and insurance proceeds received,
partially offset by property improvements and replacements. The Partnership
invests its working capital reserves in interest bearing accounts.
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 investment properties to adequately maintain the
physical assets and other operating needs of the Partnership and to comply with
Federal, state and local legal and regulatory requirements. The Corporate
General Partner monitors developments in the area of legal and regulatory
compliance and is studying new federal laws, including the Sarbanes-Oxley Act of
2002. The Sarbanes-Oxley Act of 2002 mandates or suggests additional compliance
measures with regard to governance, disclosure, audit and other areas. In light
of these changes, the Partnership expects that it will incur higher expenses
related to compliance, including increased legal and audit fees. Capital
improvements planned for each of the Registrant's properties are detailed below.
Rocky Creek Apartments
During the nine months ended September 30, 2003, the Partnership completed
approximately $34,000 in capital improvements at Rocky Creek Apartments
primarily consisting of floor covering replacements. The improvements were
funded from operating cash flow. The Partnership evaluates the capital
improvement needs of the property during the year and currently expects to
complete an additional $9,000 in capital improvements during the remainder of
2003. The additional capital improvements will consist primarily of floor
covering replacements. Additional capital improvements may be considered and
will depend on the physical condition of the property as well as replacement
reserves and anticipated cash flow generated by the property.
Carriage House Apartments
During the nine months ended September 30, 2003, the Partnership completed
approximately $171,000 in capital improvements at Carriage House Apartments
primarily consisting of floor covering and appliance replacements, electrical
upgrades and reconstruction costs related to a fire at the property. These
improvements were funded from operating cash flow and insurance proceeds. The
Partnership evaluates the capital improvement needs of the property during the
year and currently expects to complete an additional $3,000 in capital
improvements during the remainder of 2003. The additional capital improvements
will consist primarily of floor covering replacements. Additional capital
improvements may be considered and will depend on the physical condition of the
property as well as replacement reserves and anticipated cash flow generated by
the property.
River Reach Apartments
During the nine months ended September 30, 2003, the Partnership completed
approximately $136,000 in capital improvements at River Reach Apartments
primarily consisting of floor covering and air conditioning unit replacements,
water/sewer and electrical upgrades and roof replacements. These improvements
were funded from operating cash flow. The Partnership evaluates the capital
improvement needs of the property during the year and currently expects to
complete an additional $27,000 in capital improvements during the remainder of
2003. The additional capital improvements will consist primarily of floor
covering replacements. Additional capital improvements may be considered and
will depend on the physical condition of the property as well as replacement
reserves and anticipated cash flow generated by the property.
Village Gardens Apartments
During the nine months ended September 30, 2003, the Partnership completed
approximately $70,000 in capital improvements at Village Gardens Apartments
primarily consisting of floor covering replacements, painting, interior
decoration, and lighting upgrades. These improvements were funded from operating
cash flow and replacement reserves. The Partnership evaluates the capital
improvement needs of the property during the year and currently expects to
complete an additional $23,000 in capital improvements during the remainder of
2003. The additional capital improvements will consist primarily of interior
painting and floor covering replacements. Additional capital improvements may be
considered and will depend on the physical condition of the property as well as
replacement reserves and anticipated cash flow generated by the property.
The additional capital expenditures will be incurred only if cash is available
from operations and Partnership reserves. To the extent that such budgeted
capital improvements are completed, the Partnership's distributable cash flow,
if any, may be adversely affected at least in the short term.
On May 15, 2002, the Partnership refinanced the mortgage encumbering River Reach
Apartments. The refinancing replaced the first mortgage of approximately
$6,048,000 and the second mortgage of approximately $252,000 with a new mortgage
in the amount of $10,654,000. The new mortgage carries a stated interest rate of
7.16% compared to the 7.60% interest rate on the old mortgages. Payments on the
mortgage loan are due monthly until the loan matures on June 1, 2022, at which
time it is scheduled to be fully amortized. Total capitalized loan costs were
approximately $292,000 during the nine months ended September 30, 2002.
Additional loan costs of approximately $11,000 were capitalized during the nine
months ended September 30, 2003. The Partnership recognized a loss on the early
extinguishment of debt of approximately $48,000 during the nine months ended
September 30, 2002 due to the write off of unamortized loan costs and debt
discounts. This amount has been included in interest expense. In addition, the
Partnership was required to deposit approximately $100,000 in a repair escrow
account with the lender in order to complete required repairs at the property
and approximately $87,000 of this amount remains outstanding as of September 30,
2003 and is included in restricted escrows.
On September 16, 2002, the Partnership refinanced the mortgages encumbering
Rocky Creek and Carriage House Apartments. These loans were initially refinanced
under an interim credit facility ("Interim Credit Facility") which had a term of
three months. The Interim Credit Facility included properties in other
partnerships that are affiliated with the Partnership. However, the Interim
Credit Facility created separate loans for each property that were not
cross-collateralized or cross-defaulted with the other property loans. During
the three month term of the Interim Credit Facility, the properties were
required to make interest-only payments. The first month's interest, which was
paid at the date of the refinancing, was calculated at LIBOR plus 70 basis
points. Interest for the following two months was calculated at LIBOR plus 150
basis points and was due monthly.
During December 2002 the loans encumbering Rocky Creek and Carriage House were
sold to Fannie Mae under a permanent credit facility ("Permanent Credit
Facility"). The Permanent Credit Facility has a maturity of five years, with one
five-year extension option. This Permanent Credit Facility also creates separate
loans for each property that are not cross-collateralized or cross-defaulted
with the other property loans. Each note under this Permanent Credit Facility
will begin as a variable rate loan with the option of converting to a fixed rate
loan after three years. The interest rate on the variable rate loans is the
Fannie Mae discounted mortgage-backed security index plus 85 basis points (1.90%
at September 30, 2003), and will reset monthly. In addition, monthly principal
payments are required based on a 30-year amortization schedule, using the
interest rate in effect during the first month that the property is financed by
the Permanent Credit Facility. The loans are prepayable without penalty.
The refinancing of Rocky Creek Apartments loans replaced the first mortgage of
approximately $1,753,000 and second mortgage of approximately $74,000 with a new
mortgage in the amount of $2,340,000. Total capitalized loan costs were
approximately $103,000 during the nine months ended September 30, 2002.
Additional loan costs of approximately $4,000 were capitalized during the nine
months ended September 30, 2003. The Partnership recognized a loss on the early
extinguishment of debt of approximately $6,000 during the nine months ended
September 30, 2002 due to the write off of unamortized loan costs and debt
discounts. This amount is included in interest expense.
The refinancing of Carriage House Apartments loans replaced the first mortgage
of approximately $1,616,000 and second mortgage of approximately $68,000 with a
new mortgage in the amount of $1,898,000. Total capitalized loan costs were
approximately $88,000 during the nine months ended September 30, 2002.
Additional loan costs of approximately $3,000 were capitalized during the nine
months ended September 30, 2003. The Partnership recognized a loss on the early
extinguishment of debt of approximately $4,000 during the nine months ended
September 30, 2002 due to the write off of unamortized loan costs and debt
discounts. This amount is included in interest expense. In addition, the
Partnership was required to deposit approximately $198,000 in a repair escrow
account with the lender in order to complete required repairs at the property
and approximately $160,000 of this amount remains outstanding as of September
30, 2003 and is included in restricted escrows.
The Partnership's assets are thought to be sufficient for any near term needs
(exclusive of capital improvements) of the Partnership. The mortgages
encumbering River Reach and Village Gardens Apartments aggregating approximately
$14,561,000 mature in June 2022 and January 2021, respectively, at which time
the mortgages are scheduled to be fully amortized. The mortgages encumbering
Rocky Creek and Carriage House Apartments aggregating approximately $4,170,000
mature on September 16, 2007 at which time balloon payments totaling
approximately $3,736,000 are due. The Corporate General Partner has the option
to extend the maturity date on the Rocky Creek and Carriage House Apartments
loans for another five years. After that period the Corporate General Partner
will attempt to refinance such indebtedness and/or sell the properties prior to
the optional extended maturity date. If the properties cannot be refinanced or
sold, the Partnership will risk losing such properties through foreclosure.
The Partnership distributed the following amounts during the nine months ended
September 30, 2003 and 2002 (in thousands, except per unit data):
Nine Months Ended Per Limited Nine Months Ended Per Limited
September 30, Partnership September 30, Partnership
2003 Unit 2002 Unit
Operations $ 1,441 $ 33.72 $ 406 $ 9.49
Refinance (1) -- -- 3,961 93.59
Sale (2) 1,328 31.37 -- --
$ 2,769 $ 65.09 $ 4,367 $103.08
(1) From the refinance of River Reach Apartments in 2002.
(2) From the sale of Nottingham Square Apartments in 2002.
Future cash distributions will depend on the levels of net cash generated from
operations, the availability of cash reserves, and the timing of debt
maturities, refinancings, and/or property sales. The Partnership's cash
available for distribution is reviewed on a monthly basis. There can be no
assurance that the Partnership will generate sufficient funds from operations,
after required capital improvements, to permit additional distributions to its
partners during the remainder of 2003 or subsequent periods.
Other
In addition to its indirect ownership of the general partner interests in the
Partnership, AIMCO and its affiliates owned 27,773 limited partnership units
(the "Units") in the Partnership representing 65.62% of the outstanding Units at
September 30, 2003. A number of these Units were acquired pursuant to tender
offers made by AIMCO or its affiliates. It is possible that AIMCO or its
affiliates will acquire additional Units in exchange for cash or a combination
of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO,
either through private purchases or tender offers. Pursuant to the Partnership
Agreement, unitholders holding a majority of the Units are entitled to take
action with respect to a variety of matters that include, but are not limited
to, voting on certain amendments to the Partnership Agreement and voting to
remove the Corporate General Partner. As a result of its ownership of 65.62% of
the outstanding Units, AIMCO and its affiliates are in a position to control all
voting decisions with respect to the Partnership. Although the Corporate General
Partner owes fiduciary duties to the limited partners of the Partnership, the
Corporate General Partner also owes fiduciary duties to AIMCO as its sole
stockholder. As a result, the duties of the Corporate General Partner, as
managing general partner, to the Partnership and its limited partners may come
into conflict with the duties of the Corporate General Partner to AIMCO, as its
sole stockholder.
Critical Accounting Policies and Estimates
The financial statements are prepared in accordance with accounting principles
generally accepted in the United States which require the Partnership to make
estimates and assumptions. The Partnership believes that of its significant
accounting policies, the following may involve a higher degree of judgment and
complexity.
Impairment of Long-Lived Assets
Investment properties are recorded at cost, less accumulated depreciation,
unless considered impaired. If events or circumstances indicate that the
carrying amount of a property may be impaired, the Partnership will make an
assessment of its recoverability by estimating the undiscounted future cash
flows, excluding interest charges, of the property. If the carrying amount
exceeds the aggregate future cash flows, the Partnership would recognize an
impairment loss to the extent the carrying amount exceeds the fair value of the
property.
Real property investments are subject to varying degrees of risk. Several
factors may adversely affect the economic performance and value of the
Partnership's investment properties. These factors include, but are not limited
to, changes in national, regional and local economic climate; local conditions,
such as an oversupply of multifamily properties; competition from other
available multifamily property owners and changes in market rental rates. Any
adverse changes in these factors could cause impairment of the Partnership's
assets.
Revenue Recognition
The Partnership generally leases apartment units for twelve-month terms or less.
Rental income attributable to leases is recognized monthly as it is earned and
the Partnership fully reserves all balances outstanding over thirty days. The
Partnership will offer rental concessions during particularly slow months or in
response to heavy competition from other similar complexes in the area. Any
concessions given at the inception of the lease are amortized over the life of
the lease.
Item 3. Controls and Procedures
(a) Disclosure Controls and Procedures. The Partnership's management, with the
participation of the principal executive officer and principal financial officer
of the Corporate General Partner, who are the equivalent of the Partnership's
principal executive officer and principal financial officer, respectively, has
evaluated the effectiveness of the Partnership's disclosure controls and
procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end
of the period covered by this report. Based on such evaluation, the principal
executive officer and principal financial officer of the Corporate General
Partner, who are the equivalent of the Partnership's principal executive officer
and principal financial officer, respectively, have concluded that, as of the
end of such period, the Partnership's disclosure controls and procedures are
effective.
(b) Internal Control Over Financial Reporting. There have not been any changes
in the Partnership's internal control over financial reporting (as such term is
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the
fiscal quarter to which this report relates that have materially affected, or
are reasonably likely to materially affect, the Partnership's internal control
over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of California for the County of San Mateo. The plaintiffs named as
defendants, among others, the Partnership, its Corporate General Partner and
several of their affiliated partnerships and corporate entities. The action
purported to assert claims on behalf of a class of limited partners and
derivatively on behalf of a number of limited partnerships (including the
Partnership) that are named as nominal defendants, challenging, among other
things, the acquisition of interests in certain Corporate General Partner
entities by Insignia Financial Group, Inc. ("Insignia") and entities that were,
at one time, affiliates of Insignia; past tender offers by the Insignia
affiliates to acquire limited partnership units; management of the partnerships
by the Insignia affiliates; and the series of transactions which closed on
October 1, 1998 and February 26, 1999 whereby Insignia and Insignia Properties
Trust, respectively, were merged into AIMCO. The plaintiffs sought monetary
damages and equitable relief, including judicial dissolution of the Partnership.
In addition, during the third quarter of 2001, a complaint (the "Heller action")
was filed against the same defendants that are named in the Nuanes action,
captioned Heller v. Insignia Financial Group. On or about August 6, 2001,
plaintiffs filed a first amended complaint. The Heller action was brought as a
purported derivative action, and asserted claims for, among other things, breach
of fiduciary duty, unfair competition, conversion, unjust enrichment, and
judicial dissolution.
On January 8, 2003, the parties filed a Stipulation of Settlement in proposed
settlement of the Nuanes action and the Heller action.
In general terms, the proposed settlement provides for certification for
settlement purposes of a settlement class consisting of all limited partners in
this Partnership and others (the "Partnerships") as of December 20, 2002, the
dismissal with prejudice and release of claims in the Nuanes and Heller
litigation, payment by AIMCO of $9.9 million (which shall be distributed to
settlement class members after deduction of attorney fees and costs of class
counsel and certain costs of settlement) and up to $1 million toward the cost of
independent appraisals of the Partnerships' properties by a Court appointed
appraiser. An affiliate of the Corporate General Partner has also agreed to make
at least one round of tender offers to purchase all of the partnership interests
in the Partnerships within one year of final approval, if it is granted, and to
provide partners with the independent appraisals at the time of these tenders.
The proposed settlement also provided for the limitation of the allowable costs
which the Corporate General Partner or its affiliates will charge the
Partnerships in connection with this litigation and imposes limits on the class
counsel fees and costs in this litigation. On April 11, 2003, notice was
distributed to limited partners providing the details of the proposed
settlement.
On June 13, 2003, the Court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions. On August 12, 2003, an objector
filed an appeal seeking to vacate and/or reverse the order approving the
settlement and entering judgment thereto. The Corporate General Partner intends
to file a respondent's brief in support of the order approving settlement and
entering judgment thereto.
The Corporate General Partner does not anticipate that any costs to the
Partnership, whether legal or settlement costs, associated with these cases will
be material to the Partnership's overall operations.
On August 8, 2003 AIMCO Properties L.P., an affiliate of the Corporate General
Partner, was served with a Complaint in the United States District Court,
District of Columbia alleging that AIMCO Properties L.P. willfully violated the
Fair Labor Standards Act (FLSA) by failing to pay maintenance workers overtime
for all hours worked in excess of forty per week. The Complaint is styled as a
Collective Action under the FLSA and seeks to certify state subclasses in
California, Maryland, and the District of Columbia. Specifically, the plaintiffs
contend that AIMCO Properties L.P. failed to compensate maintenance workers for
time that they were required to be "on-call". Additionally, the Complaint
alleges AIMCO Properties L.P. failed to comply with the FLSA in compensating
maintenance workers for time that they worked in responding to a call while
"on-call". The Complaint also attempts to certify a subclass for salaried
service directors who are challenging their classification as exempt from the
overtime provisions of the FLSA. AIMCO Properties L.P. has filed an answer to
the Complaint denying the substantive allegations. Although the outcome of any
litigation is uncertain, in the opinion of the Corporate General Partner the
claims will not result in any material liability to the Partnership.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
4(a), Amended and Restated Certificate and Agreement of
Limited Partnership (included as Exhibit A to the Prospectus
of Registrant dated March 22, 1984 contained in Amendment No.
1 to Registration Statement No. 2-86995, of Registrant filed
March 21, 1984 (the "Prospectus") and incorporated herein by
reference).
31.1 Certification of equivalent of Chief Executive Officer
pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a),
as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.
31.2 Certification of equivalent of Chief Financial Officer
pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a),
as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.
32.1, Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
b) Reports on Form 8-K:
None filed during the quarter ended September 30, 2003.
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
By: Shelter Realty VI Corporation
Corporate General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President
By: /s/Paul J. McAuliffe
Paul J. McAuliffe
Executive Vice President
and Chief Financial Officer
Date: November 12, 2003
Exhibit 31.1
CERTIFICATION
I, Patrick J. Foye, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Shelter Properties
VI;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the
period in which this report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such
evaluation; and
(c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth
fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):
(a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
Date: November 12, 2003
/s/Patrick J. Foye
Patrick J. Foye
Executive Vice President of Shelter Realty
VI Corporation, equivalent of the chief
executive officer of the Partnership
Exhibit 31.2
CERTIFICATION
I, Paul J. McAuliffe, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Shelter Properties
VI;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the
period in which this report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such
evaluation; and
(c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth
fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):
(a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
Date: November 12, 2003
/s/Paul J. McAuliffe
Paul J. McAuliffe
Executive Vice President and Chief Financial
Officer of Shelter Realty VI Corporation,
equivalent of the chief financial officer of
the Partnership
Exhibit 32.1
Certification of CEO and CFO
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-QSB of Shelter Properties VI
Limited Partnership (the "Partnership"), for the quarterly period ended
September 30, 2003 as filed with the Securities and Exchange Commission on the
date hereof (the "Report"), Patrick J. Foye, as the equivalent of the chief
executive officer of the Partnership, and Paul J. McAuliffe, as the equivalent
of the chief financial officer of the Partnership, each hereby certifies,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:
(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 results of operations
of the Partnership.
/s/Patrick J. Foye
Name: Patrick J. Foye
Date: November 12, 2003
/s/Paul J. McAuliffe
Name: Paul J. McAuliffe
Date: November 12, 2003
This certification is furnished with this Report pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Partnership for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended.