<PAGE> 1
Washington, D.C. 20549
-----------------------
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
-----------------------------------
For the Fiscal Year Ended DECEMBER 31, 1996
Commission File Number
2-68983
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REAL ESTATE ASSOCIATES LIMITED III
A CALIFORNIA LIMITED PARTNERSHIP
I.R.S. Employer Identification No. 95-3547611
----------
9090 Wilshire Blvd., Suite 201, Beverly Hills, California 90211
Registrant's Telephone Number, Including Area Code (310) 278-2191
Securities Registered Pursuant to Section 12(b) or 12(g) of the Act:
NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed with the Commission by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding twelve months (or 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
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [X]
<PAGE> 2
PART I.
ITEM 1. BUSINESS:
Real Estate Associates Limited III ("REAL III" or the "Partnership") is a
limited partnership which was formed under the laws of the State of California
on July 25, 1980. On January 5, 1981, Real Estate Associates Limited III
offered 3,000 units consisting of 6,000 Limited Partnership Interests and
Warrants to purchase a maximum of 6,000 Additional Limited Partnership
Interests through a public offering managed by Lehman Brothers Inc.
The general partners of Real Estate Associates Limited III are National
Partnership Investments Corp. ("NAPICO"), a California Corporation (the
"Corporate General Partner"), and Coast Housing Investments Associates, a
Limited Partnership formed under the California Limited Partnership Act and
consisting of Messrs. Nicholas G. Ciriello, an unrelated individual, as general
partner, and Charles H. Boxenbaum as limited partner. The business of REAL III
is conducted primarily by its general partners as REAL III has no employees of
its own.
Casden Investment Corporation ("CIC") owns 100 percent of NAPICO's stock. The
current members of NAPICO's Board of Directors are Charles H. Boxenbaum, Bruce
E. Nelson, Alan I. Casden, Henry C. Casden and Brian D. Goldberg.
REAL III holds limited partnership interests in 26 local limited partnerships
as of December 31, 1996, and a general partner interest in Real Estate
Associates ("REA") which in turn holds limited partnership interests in an
additional 6 limited partnerships; therefore, REAL III holds directly or
indirectly through REA, investments in thirty-two local limited partnerships.
The general partners of REA are REAL III and NAPICO. Each of the limited
partnerships owns a low income housing project which is subsidized and/or has a
mortgage note payable to or insured by agencies of the federal or local
government.
In order to stimulate private investment in low income housing, the federal
government and certain state and local agencies have provided significant
ownership incentives, including among others, interest subsidies, rent
supplements, and mortgage insurance, with the intent of reducing certain market
risks and providing investors with certain tax benefits, plus limited cash
distributions and the possibility of long-term capital gains. There remain,
however, significant risks. The long-term nature of investments in government
assisted housing limits the ability of REAL III to vary its portfolio in
response to changing economic, financial and investment conditions; such
investments are also subject to changes in local economic circumstances and
housing patterns, as well as rising operating costs, vacancies, rent collection
difficulties, energy shortages and other factors which have an impact on real
estate values. These projects also require greater management expertise and
may have higher operating expenses than conventional housing projects.
The partnerships in which REAL III has invested were, at least initially,
organized by private developers who acquired the sites, or options thereon, and
applied for applicable mortgage insurance and subsidies. REAL III became the
principal limited partner in these local limited partnerships pursuant to
arm's-length negotiations with these developers, or others, who act as general
partners. As a limited partner, REAL III's liability for obligations of the
local limited partnership is limited to its investment. The local general
partner of the local limited partnership retains responsibility for developing,
constructing, maintaining, operating and managing the Project. Under certain
circumstances, REAL III has the right to replace the general partner of the
local limited partnerships.
Although each of the partnerships in which REAL III has invested generally owns
a project which must compete in the market place for tenants, interest
subsidies and rent supplements from governmental agencies make it possible to
offer these dwelling units to eligible "low income" tenants at a cost
significantly below the market rate for comparable conventionally financed
dwelling units in the area.
<PAGE> 3
During 1996, the projects in which REAL III had invested were substantially
rented. The following is a schedule of the status as of December 31, 1996, of
the projects owned by local limited partnerships in which REAL III is a limited
partner.
SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL III HAS AN INVESTMENT
DECEMBER 31, 1996
<TABLE>
<CAPTION>
Units Authorized
For Rental
Assistance Under
Section 8 or
Other Rent
No. of Supplement Units Percentage of
Name & Location Units Program Occupied Total Units
- --------------- ------ ------------ -------- -----------
<S> <C> <C> <C> <C>
Bowin Place 193 191/ 0 184 97%
Detroit, MI
Casa de las Hermanitas 88 88/ 0 87 99%
Los Angeles, CA
Charlotte Lakeview, Riverview 553 114/153 520 94%
Residential Project
Rochester, NY
Creekview Apts. 80 80/ 0 80 100%
Stroudsburg, PA
Foothill Gardens 54 54/ 0 54 100%
Los Angeles, CA
Frazier Park Apts. 60 60/ 0 60 100%
Baldwin Park, CA
Gary Manor 198 198/ 0 194 98%
Gary, IN
Grandview Homes 26 26/ 0 26 100%
Los Angeles, CA
Hidden Pines Apts. 40 40/ 0 40 100%
Greenville, MI
Highlawn Place Apartments 133 133/ 0 132 99%
Huntington, WV
Jenks School Apts. 83 82/ 0 82 99%
Pawtucket, RI
</TABLE>
<PAGE> 4
SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL III HAS AN INVESTMENT
DECEMBER 31, 1996 (CONTINUED)
<TABLE>
<CAPTION>
Units Authorized
For Rental
Assistance Under
Section 8 or
Other Rent
No. of Supplement Units Percentage
Name & Location Units Program Occupied Total Units
- --------------- ------ ------------ -------- -----------
<S> <C> <C> <C> <C>
Kern Villa 49 49/ 0 48 98%
Los Angeles, CA
Lakeside Apts. 32 0/ 13 29 91%
Stuart, FL
New Baltimore 101 101/ 0 99 99%
New Baltimore, MI
Panorama Park Apts. 66 66/ 0 65 98%
Bakersfield, CA
Ramblewood Apts. 64 0/ 13 40 64%
Fort Payne, AL
Santa Maria Apts. 86 86/ 0 86 100%
San German, Puerto Rico
Senior Chateau on the Hill 185 183/ 0 181 98%
Cincinnati, OH
Sheraton Towers 97 97/ 0 97 100%
High Point, NC
South Bay Villa 80 80/ 0 80 100%
Los Angeles, CA
Sunset Grove Apts. 22 22/ 0 21 95%
Carson City, MI
Sunshine Canyon 26 26/ 0 26 96%
Stanton, MI
Tujunga Gardens 54 53/ 0 51 98%
Los Angeles, CA
Twenty-nine Palms 48 47/ 0 44 94%
Twenty-nine Palms, CA
</TABLE>
<PAGE> 5
SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL III HAS AN INVESTMENT
DECEMBER 31, 1996 (CONTINUED)
<TABLE>
<CAPTION>
Units Authorized
For Rental
Assistance Under
Section 8 or
Other Rent
No. of Supplement Units Percentage
Name & Location Units Program Occupied Total Units
- --------------- ------ ------------ -------- -----------
<S> <C> <C> <C> <C>
Village Apts. 51 51/ 0 51 100%
La Follette, TN
Village of Kaufman 68 68/ 0 65 96%
Kaufman, TX
Village Grove Apts. 104 None 97 93%
Corona, CA
Vincente Geigel 80 80/ 0 80 100%
Polanco Apts.
Isabela, Puerto Rico
Vista De Jagueyes 73 73/ 0 73 100%
Aguas Buenas, PR
Westgate Apts. 72 33/ 16 64 89%
Albertville, AL
Wilderness Trail Manor 124 124/ 0 124 100%
Pineville, KY
Wilkes Towers 72 72/ 0 70 97%
Wilkesboro, NC
----- --------- ----- ----
TOTALS 3,062 2,377/195 2,949 96%
===== ========= =====
</TABLE>
<PAGE> 6
ITEM 2. PROPERTIES:
Through its investment in local limited partnerships, REAL III holds interests
in real estate properties. See Item 1 and Schedule XI for information
pertaining to these properties.
ITEM 3. LEGAL PROCEEDINGS:
As of December 31, 1996, REAL III's Corporate General Partner was plaintiff or
defendant in several lawsuits. None of these suits were related to REAL III.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
Not applicable.
PART II.
ITEM 5. MARKET FOR THE REGISTRANT'S PARTNERSHIP INTERESTS AND RELATED
SECURITY HOLDER MATTERS
The Limited Partnership Interests are not traded on a public exchange but were
sold through a public offering managed by Lehman Brothers Inc. It is not
anticipated that any public market will develop for the purchase and sale of
any Partnership interest. Limited Partnership Interests may be transferred
only if certain requirements are satisfied. At December 31, 1996 there were
2,086 registered holders of units in REAL III. One distribution in the
aggregate amount of $3,345,000 (or $584 per unit) was made in 1989. This
represented the proceeds from the sale of one of the Partnership's real estate
investments. The Partnership has invested in certain government assisted
projects under programs which in many instances restrict the cash return
available to Project owners. The Partnership was not designed to provide cash
distributions to investors in circumstances other than refinancing or
disposition of its investment in the limited partnerships.
<PAGE> 7
ITEM 6. SELECTED FINANCIAL DATA:
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------------------------------------
1996 1995 1994 1993 1992
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Loss From Operations $ (518,472) $ (567,421) $ (577,031) $ (586,269) $ (486,954)
Distributions From
Limited Partnerships
Recognized as Income 858,869 765,514 683,491 987,697 378,194
Equity in Income of
Limited Partnerships
and Amortization of
Acquisition Costs 383,682 887,919 539,729 708,865 712,014
------------ ------------ ------------ ------------ ------------
Net Income $ 724,079 $ 1,086,012 $ 646,189 $ 1,110,293 $ 603,254
============ ============ ============ ============ ============
Net Income per Limited
Partnership Interest $ 63 $ 95 $ 56 $ 96 $ 52
============ ============ ============ ============ ============
Total assets $ 10,933,018 $ 10,185,039 $ 9,095,839 $ 8,489,578 $ 7,496,667
============ ============ ============ ============ ============
Investments in Limited
Partnerships $ 1,063,487 $ 930,576 $ 690,570 $ 679,271 $ 491,166
============ ============ ============ ============ ============
Notes Payable $ 1,510,000 $ 1,510,000 $ 1,510,000 $ 1,510,000 $ 1,510,000
============ ============ ============ ============ ============
</TABLE>
<PAGE> 8
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS:
LIQUIDITY
The Partnership's primary sources of funds include interest income on money
market investments and certificates of deposit and distributions from local
partnerships in which the Partnership has invested.
CAPITAL RESOURCES
REAL III received $14,320,000 in subscriptions for units of Limited Partnership
Interests (at $5,000 per unit) during the period March 31, l981 to October 30,
1981, pursuant to a registration statement on Form S-11. As of March 10, 1982,
REAL III received an additional $14,320,000 in subscriptions pursuant to the
exercise of warrants and the sale of Additional Limited Partnership Interests.
RESULTS OF OPERATIONS
The Partnership was formed to provide various benefits to its partners as
discussed in Item 1. It is anticipated that the local limited partnerships in
which REAL III has invested could produce tax losses for as long as 20 years.
The Partnership will seek to defer income taxes from capital gains by not
selling any projects or project interests within 10 years, except to qualified
tenant cooperatives, or when proceeds of the sale would supply sufficient cash
to enable the partners to pay applicable taxes.
Tax benefits will decline over time as the advantages of accelerated
depreciation are greatest in the earlier years, as deductions for interest
expense decrease as mortgage principal is amortized, and as the Tax Reform Act
of 1986 limits the deductions available.
The Partnership accounts for its investments in the local limited partnerships
on the equity method, thereby adjusting its investment balance by its
proportionate share of the income or loss of the local limited partnerships.
Losses incurred after the limited partnership investment account is reduced to
zero are not recognized.
Distributions received from limited partnerships are recognized as return of
capital until the investment balance has been reduced to zero or to a negative
amount equal to future capital contributions required. Subsequent
distributions received are recognized as income. Overall distributions from
limited partnerships continue to be favorable. This primarily due, to improved
operating results at several of the properties.
Except for certificates of deposit and money market funds, the Partnership's
investments are entirely interests in other limited partnerships owning
government assisted projects. Funds temporarily not required for such
investments in projects are invested in certificates of deposit and money
market funds which provide substantial amounts of interest as reflected in the
statements of operations. These investments are converted to cash to meet
obligations as they arise. The Partnership intends to continue investing
available funds in this manner.
A recurring Partnership expense is the annual management fee. The fee is
payable to the Corporate General Partner of the Partnership and is calculated
as a percentage of the Partnership's invested assets. The management fee is
paid to the corporate general partner for its continuing management of
Partnership affairs. The fee is payable beginning with the month following the
Partnership's initial investment in a local limited partnership.
Operating expenses, exclusive of management fees and interest of the
Partnership, consist substantially of professional fees for services rendered
to the Partnership. Operating expenses did not vary significantly for the
years presented.
<PAGE> 9
The Partnership, as a Limited Partner in the local limited partnerships in
which it has invested, is subject to the risks incident to the construction,
management, and ownership of improved real estate. The Partnership investments
are also subject to adverse general economic conditions, and, accordingly, the
status of the national economy, including substantial unemployment and
concurrent inflation, could increase vacancy levels, rental payment defaults,
and operating expenses, which in turn, could substantially increase the risk of
operating losses for the projects.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA:
The Financial Statements and Supplementary Data are listed under Item 14.
ITEM 9. CHANGES WITH AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE:
Not applicable.
<PAGE> 10
REAL ESTATE ASSOCIATES LIMITED III
(A California limited partnership)
FINANCIAL STATEMENTS,
FINANCIAL STATEMENT SCHEDULES
AND INDEPENDENT PUBLIC ACCOUNTANTS' REPORT
DECEMBER 31, 1996
<PAGE> 11
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of
Real Estate Associates Limited III
(A California limited partnership)
We have audited the accompanying balance sheets of Real Estate Associates
Limited III (a California limited partnership) as of December 31, 1996 and
1995, and the related statements of operations, partners' equity (deficiency)
and cash flows for each of the three years in period ended December 31, 1996.
Our audits also included the financial statement schedules listed in the index
on item 14. These financial statements and financial statement schedules are
the responsibility of the management of the Partnership. Our responsibility is
to express an opinion on these financial statements and financial statement
schedules based on our audits. We did not audit the financial statements of
certain limited partnerships, the investments in which are reflected in the
accompanying financial statements using the equity method of accounting. The
investments in these limited partnerships represent 4 percent and 3 percent of
total assets as of December 31, 1996 and 1995, respectively, and the equity in
income of these limited partnerships represents 23 percent, 33 percent and 34
percent of the total net income of the Partnership for the years ended December
31, 1996, 1995 and 1994, respectively, and represent a substantial portion of
the investee information in Note 2 and the financial statement schedules. The
financial statements of these limited partnerships are audited by other
auditors. Their reports have been furnished to us and our opinion, insofar as
it relates to the amounts included for these limited partnerships, is based
solely on the reports of the other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe our audits and the reports of other
auditors provide a reasonable basis for our opinion.
In our opinion, based on our audits and the reports of other auditors, the
financial statements referred to above present fairly, in all material
respects, the financial position of Real Estate Associates Limited III as of
December 31, 1996 and 1995, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1996 in
conformity with generally accepted accounting principles. Also, in our
opinion, based on our audits and the reports of other auditors, such financial
statement schedules, when considered in relation to the basic financial
statements taken as a whole, present fairly in all material respects the
information set forth therein.
DELOITTE & TOUCHE LLP
Los Angeles, California
March 26, 1997
<PAGE> 12
[LOGO]
[COOPERS & LYBRAND LETTERHEAD]
Report of Independent Accountants
To the Partners of
Bowin Place Associates
Limited Dividend Housing Association
We have audited the accompanying balance sheets of Bowin Place Associates
Limited Dividend Housing Association (A Michigan Limited Partnership, MSHDA
Development Number 551), as of December 31, 1996 and 1995, and the related
statements of operations, changes in partners' deficit, and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bowin Place Associates Limited
Dividend Housing Association, MSHDA No. 551, as of December 31, 1996 and 1995,
and the results of its operations, and its cash flows for the years then ended
in conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The other financial information of Bowin
Place Associates Limited Dividend Housing Association, MSHDA No. 551, on pages
8 through 16 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. This additional information is
the responsibility of the Partnership's management. Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report
dated January 27, 1997 on our consideration of Bowin Place Associates Limited
Dividend Housing Association's internal control structure and a report dated
January 27, 1997 on its compliance with laws and regulations.
/s/ COOPERS & LYBRAND
Cleveland, Ohio
January 27, 1997
<PAGE> 13
[LOGO]
[NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
The Partners
Casa De Las Hermanitas Apartments
Culver City, California
We have audited the accompanying balance sheets of Casa De Las Hermanitas
Apartments (a California partnership), CHFA Project No. 78-30-S, as of December
31, 1996 and 1995 and the related statements of operations, partners' equity
and cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits Provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Casa De Las Hermanitas
Apartments as of December 31, 1996 and 1995, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
In accordance with Government Auditing Standards we have also issued reports
dated January 30, 1997, on our consideration of Casa De Las Hermanitas
Apartments' Internal Control Structure and on its compliance with laws and
regulations applicable to the California Housing Finance Agency's financial
assistance programs.
/s/ NANAS STERN, BIERS, NEINSTEIN AND CO. LLP
January 30, 1997
<PAGE> 14
[LOGO]
[REZNICK FEDDER & SILVERMAN LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Charlotte Lake River Associates
We have audited the accompanying balance sheets of Charlotte Lake River
Associates as of December 31, 1996 and 1995, and the related statements of
operations, partners' equity (deficit) and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Charlotte Lake River
Associates as of December 31, 1996 and 1995, and the results of its operations,
the changes in its partners' equity (deficit) and its cash flows for the years
then ended, in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 19
through 49 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
<PAGE> 15
In accordance with Government Auditing Standards and the "Consolidated
Audit Guide for Audits of HUD Programs," we have also issued reports dated
February 21, 1997 on our consideration of Charlotte Lake River Associates'
internal control structure and on its compliance with specific requirements
applicable to major HUD programs, affirmative fair housing, and laws and
regulations applicable to the financial statements.
Boston, Massachusetts Federal Identification Number
February 21, 1997 52-1088612
Audit Principal: Philip A. Weitzel
<PAGE> 16
[LOGO]
[PARENTE, RANDOLPH, ORLANDO, CAREY & ASSOCIATES LETTERHEAD]
REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
To the Partners
Creekview Associates:
We have audited the accompanying balance sheets of Creekview Associates (a
limited partnership), FHA Project No. 034-35150-LD, as of December 31, 1996 and
1995, and the related statements of income, partners' deficit and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Creekview Associates (a
limited partnership) as of December 31, 1996 and 1995, and the results of its
operations, changes in partners' deficit and its cash flows for the years then
ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 29, 1997 on our
consideration of Creekview Associates' (a limited partnership) internal control
structure, and reports dated January 29, 1997, on its compliance with specific
requirements applicable to major HUD programs and specific requirements
applicable to Affirmative Fair Housing.
<PAGE> 17
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information on pages 14 to 22 is presented for purposes of additional analysis
and is not a required part of the basic financial statements of Creekview
Associates (a limited partnership). Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ PARENTE, RANDOLPH, ORLANDO, CAREY & ASSOCIATES
Wilkes-Barre, Pennsylvania
January 29, 1997
<PAGE> 18
[LOGO]
[NANAS, STERN, BIERS, NEINSTE1N AND CO. LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
The Partners
Foothill Gardens
Culver City, California
We have audited the accompanying balance sheet of Foothlil Gardens (a
California partnership), Project No. 122-35515-PM-L8, as of December 31, 1996
and the related statements of operations, partners' equity and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Foothill Gardens as of
December 31, 1996, and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards we have also issued reports
dated January 31, 1997 on our consideration of Foothill Gardensl Internal
Control Structure and on its compliance with requirements applicable to U.S.
Department of Housing and Urban Development financial assistance programs.
/s/ NANAS, STERN, BIERS, NEINSTE1N AND CO. LLP
January 31, 1997
<PAGE> 19
[LOGO]
[NANAS, STERN. BIERS, NEINSTEIN AND CO. LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
The Partners
Frazier Park Apartments
Culver City, California
We have audited the accompanying balance sheet of Frazier Park Apartments (a
California partnership), Project No. 122-35513-PM-L8, as of December 31, 1996
and the related statement of operations, partners' equity and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Frazier Park Apartments as of
December 31, 1996, and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards we have also issued a report
dated January 27, 1997 on our consideration of Frazier Park Apartments'
Internal Control Structure and on its compliance with requirements applicable
to U.S. Department of Housing and Urban Development financial assistance
programs.
/s/ NANAS, STERN, BIERS, NEINSTE1N AND CO. LLP
January 27, 1997
<PAGE> 20
[LOGO]
[COOPERS & LYBRAND LETTERHEAD]
Report of Independent Accountants
To the Partners of
Gary Manor Associate
We have audited the accompanying balance sheets of Gary Manor Associates (An
Indiana Limited Partnership, FHA Project Number 073-35322-PM-L8) as of December
31, 1996 and 1995, and the related statements of operations, changes in
partners' deficit, and cash flows for the years then ended. These financial
statements are the responsibility of the Partnershipls management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Gary Manor Associates as of
December 31, 1996 and 1995, and the results of its operations, and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have also issued a report
dated February 5, 1997 on our consideration of Gary Manor Associates internal
control structure and a report dated February 5, 1997 on its compliance with
laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The other financial information indexed
on page 9 is presented for purposes of additional analysis, and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ COOPERS & LYBRAND
Cleveland, Ohio
February 5, 1997
<PAGE> 21
[LOGO]
[NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
The Partners
Grandview Homes
Culver City, California
We have audited the accompanying balance sheet of Grandview Homes (a California
partnership), Project No. 122-35502-PM-L8, as of December 31, 1996 and the
related statements of operations, partners' equity and cash flows for the year
then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Grandview Homes as of December
31, 1996, and the results of its operations and its cash flows for the year
then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards we have also issued reports
dated January 30, 1997 on our consideration of Grandview Homes' Internal
Control Structure and on its compliance with requirements applicable to U.S.
Department of Housing and Urban Development financial;assistance programs.
/s/ NANAS, STERN, BIERS, NEINSTE1N AND CO. LLP
January 30, 1997
<PAGE> 22
[LOGO]
[MANER, COSTERISAN & ELLIS, P.C. LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Hidden Pines, A Limited Partnership
Lansing, Michigan
January 10, 1997
We have audited the accompanying balance sheets of Hidden Pines, A Limited
Partnership as of December 31, 1996 and 1995, and the related statements of net
loss, partners' deficit and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
As discussed in Note 1 to the financial statements, the Partnership
depreciates its buildings using the accelerated cost recovery method which
provides for the depreciation of real property over a fifteen year life.
Generally accepted accounting principles require that depreciation be computed
over the estimated useful life of the asset. As a result of this departure from
generally accepted accounting principles, property and equipment, less
accumulated depreciation, is understated and partners' deficit is overstated by
$679,536 and $668,926 at December 31, 1996 and 1995, respectively.
Additionally, depreciation expense and net loss are overstated by $10,610 and
$19,714 for the years ended December 31, 1996 and 1995, respectively.
In our opinion, except for the effects of understating the useful life of
real property as discussed in the preceding paragraph, the financial statements
referred to above present fairly, in all material respects, the financial
position of Hidden Pines, A Limited Partnership as of December 31, 1996 and
1995, and the results of its operations and its cash flows for the years then
ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 10, 1997 on our consideration of the Partnership's
internal control structure and a report dated January 10, 1997 on its
compliance with laws and regulations.
/s/ MANER COSTERISAN & ELLIS, P.C.
<PAGE> 23
[LOGO
[COOPERS & LYBRAND LETTERHEAD]
Report of Independent Accountants
To the Partners of
Highlawn Place Limited Partnership
We have audited the accompanying balance sheets of Highlawn Place Limited
Partnership (A West Virginia Limited Partnership, FHA Project Number
045-35076-PM-WAH-R-L8) as of December 31, 1996 and 1995, and the related
statements of operations, changes in partners' deficit, and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Highlawn Place Limited
Partnership as of December 31, 1996 and 1995, and the results of its
operations, and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note E to the
financial statements, the Partnership's rental income subsidy agreement expires
December 6, 1997. This agreement provided approximately 71% of the
Partnership's gross potential rent in 1996. There are no assurances that this
agreement will be renewed, or renewed under comparable terms to the Partnership
upon the expiration of the current agreement. This uncertainty raises
substantial doubt about the Partnership's ability to continue as a going
concern. The Partnership's management plans in regards to this matter are also
described in Note E. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
In accordance with Government Auditing Standards, we have also issued a report
dated January 28, 1997 on our consideration of Highlawn Place Limited
Partnership's internal control structure and a report dated January 28, 1997 on
its compliance with laws and regulations.
<PAGE> 24
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The other financial information indexed
on page 11 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ COOPERS & LYBRAND
Cleveland, Ohio
January 28, 1997
<PAGE> 25
[LOGO]
[D'AMBRA & ASSOCIATES, P.C. LETTERHEAD]
Independent Auditors' Report
To the Partners of
300 Broadway Associates
(a Limited Partnership)
We have audited the accompanying balance sheet of 300 Broadway Associates (a
Limited Partnership), HUD Project No. RI-43-H023-110, as of December 31, 1996,
and the related statements of income, partners' equity (deficiency) and cash
flow for the year then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 300 Broadway Associates (a
Limited Partnership) as of December 31, 3996, and the results of its
operations, the changes in partners' equity deficiency) and its cash flow for
the year then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated February 3, 1997, on our
consideration of 300 Broadway Associates' internal control structure and
reports dated February 3, 1997, on its compliance with specific requirements
applicable to major HUD program and specific requirements applicable to
Affirmative Fair Housing.
/s/ D'AMBRA & ASSOCIATES, P.C.
January 23, 1997
<PAGE> 26
[LOGO]
[NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
The Partners
Kern Villa
Culver City, California
We have audited the accompanying balance sheet of Kern Villa (a California
partnership), Project No. 122-35510-PM-L8, as of December 31, 1996 and the
related statement of operations, partners' equity statement of cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Kern Villa as of December 31,
1996, and the results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards we have also issued reports
dated January 28, 1997 on our consideration of Kern Villa's Internal Control
Structure and on its compliance with requirements applicable to U.S.
Department of Housing and Urban Development financial assistance programs.
/s/ NANA, STERN BIERS, NEINSTEIN AND CO. LLP
January 28, 1997
<PAGE> 27
[LOGO]
[COOPERS & LYBRAND LETTERHEAD]
Report of Independent Accountants
To the Partners of
New Baltimore Towers
We have audited the accompanying balance sheets of New Baltimore Towers (A
Michigan Limited Partnership, Project Number MI-28-0010-008) as of December 31,
1996 and 1995, and the related statements of operations, changes in partners'
deficit, and cash flows for the years then ended. These financial statements
are the responsibility of the Partnerships management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of New Baltimore Towers as of
December 31, 1996 and 1995, and the results of its operations, and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have also issued a report
dated February 7, 1997 on our consideration of New Baltimore Towers' internal
control structure and a report dated February 7, 1997 on its compliance with
laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The other financial information of New
Baltimore Towers on page 9, is presented for purposes of additional analysis
and is not a required part of the basic financial statements. Such information
has been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ COOPERS & LYBRAND
Cleveland, Ohio
February 7, 1997
<PAGE> 28
[LOGO]
[NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
The Partners
Panorama Park Apartments
Culver City, California
We have audited the accompanying balance sheet of Panorama Park Apartments (a
California partnership), Project No. 122-35496-PM-L8, as of December 31, 1996
and the related statements of operations, partners' equity and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Panorama Park Apartments as of
December 31, 1996, and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.
In accordance with Govemment Auditing Standards we have also issued reports
dated January 30, 1997 on our consideration of Panorama Park Apartments'
Internal Control Structure and on its compliance with requirements applicable
to U.S. Department of Housing and Urban Developrpent financial assistance
programs.
/s/ DONALD W. CASEY, CPA, P.C.
January 30, 1997
<PAGE> 29
[LOGO]
[DONALD W. CAUSEY, CPA, P.C.]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Alabama Properties, Ltd. V
Fort Payne, Alabama
I have audited the accompanying balance sheets of Alabama Properties, Ltd. V, a
limited partnership, RHS Project No.: 01-025-630792246 as of December 31, 1996
and 1995, and the related statements of operations, partners' deficit and cash
flows for the years then ended. These financial statements are the
responsibility of the partnership's management. My responsibility is to express
an opinion on these financial statements based on my audits.
I conducted the audits in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States, and the U.S. Department of Agriculture, Farmers Home
Administration Audit Program. Those standards require that I plan and perform
the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. I believe that the audits provide a
reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Alabama Properties, Ltd. V,
RHS Project No.: 01-025-630792246 as of December 31. 1996 and 1995, and the
results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 11 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Year End Report and Analysis (Form FmHA 1930-8) Parts I
through III for the year ended December 31, 1996 and 1995, is presented for
purposes of complying with the requirements of the Rural Housing Services and
is also not a required part of the basic financial statements. Such information
has been subjected to the audit procedures applied in the audit of the basic
financial statements and, in my opinion is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
In accordance with Government Auditing Standards, I have also issued a report
dated January 27, 1997 on my consideration of Alabama Properties, Ltd. V,
internal control structure and a report dated January 27, 1997 on its
compliance with laws and regulations.
/s/ DONALD W. CAUSEY, CPA, P.C.
January 27, 1997
<PAGE> 30
[LOGO]
[SANTIAGO, RILEY & REZNICK LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Santa Maria Limited Dividend
Partnership Associates
We have audited the accompanying balance sheets of Santa Maria Limited
Dividend Partnership Associates (the Partnership) as of December 31, 1996 and
1995, and the related statements of operations, partners' deficit and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
Except as discussed in the following paragraph, we conducted our audits in
accordance with generally accepted auditing standards and Government Auditing
Standards, issued by the Comptroller General of the United States. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
The Partnership has not maintained certain customary accounting records and
supporting documents relating to transactions with a general partner as
discussed in Note F. We were unable to satisfy ourselves by other auditing
procedures as to the possible effects of transactions with the general partner.
<PAGE> 31
In our opinion, except for the effects, if any, of the items discussed in
the third paragraph, the financial statements referred to above present fairly,
in all material respects, the financial position of Santa Maria Limited
Dividend Partnership Associates as of December 31, 1996 and 1995, and the
results of its operations, changes in partners' deficit, and its cash flows for
the years then ended in conformity with generally accepted accounting
principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 16
through 19 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
has been subjected to the auditing procedures applied in the audits of the
basic financial statements and, in our opinion, except for the effects, if any,
of the items discussed in the third paragraph, such information is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
In accordance with Government Auditing Standards, we have also issued
reports dated January 13, 1997, on our consideration of Santa Maria Limited
Dividend Partnership Associates' internal control structure and on its
compliance with laws and regulations applicable to the financial statements.
/s/ Santiago, Riley & Reznick
San Juan, Puerto Rico
January 13, 1997
<PAGE> 32
[LOGO]
[COOPERS & LYBRAND LETTERHEAD]
Report of Independent Accountants
To the Partners of
Senior Chateau, Ltd.
We have audited the accompanying balance sheets of Senior Chateau, Ltd. (An
Ohio Limited Partnership, FHA Project Number 046-3 5471-PM-WAH-L8) as of
December 31, 1996 and 1995, and the related statements of operations, changes
in partners' deficit, and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Senior Chateau, Ltd. as of
December 31, 1996 and 1995, and the results of its operations, and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have also issued a report
dated February 6, 1997 on our consideration of Senior Chateau, Ltd.'s internal
control structure and a report dated February 6, 1997 on its compliance with
laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The other financial information of
Senior Chateau, Ltd., as indexed on page 10 is presented for purposes of
additional analysis and is not a required part of the basic financial
statements. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/ COOPERS & LYBRAND
Cleveland, Ohio
February 6, 1997
<PAGE> 33
[LOGO]
[TURLINGTON AND COMPANY, L.L.P. LETTERHEAD]
Certified Public Accountants
INDEPENDENT AUDITORS' REPORT ON AUDITED FINANCIAL STATEMENTS AND
SUPPLEMENTAL INFORMATION
To the Partners
Sheraton Towers, Ltd.
HUD Field Office Director
Greensboro, North Carolina
We have audited the accompanying balance sheet of Sheraton Towers, Ltd., HUD
Project No. 053-35278-PM-SR-WAH-L8 (a North Carolina limited partnership), as
of December 31, 1996, and the related statements of profit and loss, partners'
equity, and cash flows for the year then ended. These financial statements are
the responsibility of the partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Sheraton Towers, Ltd. at
December 31, 1996, and the results of its operations, and the changes in
partners' equity, and cash flows for the year then ended, in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U. S. Department of Housing and
Urban Development, we have also issued a report dated January 10, 1997 on our
consideration of Sheraton Towers, Ltd.'s internal control structure, and
reports dated January 10, 1997 on its compliance with specific requirements
applicable to major HUD programs, and specific requirements applicable to
Affirmative Fair Housing.
Our audit was made for the purpose of formulating the opinion stated above.
The supplemental information identified in the Table of Contents is presented
for purposes of additional analysis and is not a required part of the basic
financial statements of Sheraton Towers, Ltd. Such information has been
<PAGE> 34
INDEPENDENT AUDITORS' REPORT ON AUDITED FINANCIAL STATEMENTS AND
SUPPLEMENTAL INFORMATION (CONTINUED)
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated, in all material
respects, in relation to the basic financial statements taken as a whole.
/s/ TURLINGTON AND COMPANY, L.L.P.
January 10, 1997
<PAGE> 35
[LOGO]
[NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
The Partners
South Bay Villa
Culver City, California
We have audited the accompanying balance sheet of South Bay Villa (a California
partnership), Project No. 122-35449-PM-L8, as of December 31, 1996 and the
related statements of operations, partners' equity and cash flows for the year
then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of South Bay Villa as of December
31, 1996, and the results of its operations and its cash flows for the year
then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards we have also issued reports
dated January 30, 1997 on our consideration of South Bay Villa's Internal
Control Structure and on its compliance with requirements applicable to U.S.
Department of Housing and Urban Development financial assistance programs.
/s/ NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP
January 30, 1997
<PAGE> 36
[LOGO]
[MANER, COSTERISAN & ELLIS, P.C. LETTERHEAD]
January 10, 1997
To the Partners
Sunset Grove, A Limited Partnership
Lansing, Michigan
We have compiled the accompanying balance sheets of Sunset Grove, A Limited
Partnership, as of December 31, 1996 and 1995, and the related statements of
operations, partners' deficit and cash flows for the years then ended, in
accordance with Statements on Standards for Accounting and Review Services
issued by the American Institute of Certified Public Accountants.
A compilation is limited to presenting in the form of financial statements
information that is the representation of management. We have not audited or
reviewed the accompanying financial statements and, accordingly, do not express
an opinion or any other form of assurance on them. However, we did become aware
of a departure from generally accepted accounting principles that is described
in the following paragraph.
As discussed in Note 1 to the financial statements, the Partnership
depreciates its buildings using the accelerated cost recovery method which
provides for the depreciation of real property over a fifteen year life.
Generally accepted accounting principles require that depreciation be computed
over the estimated useful life of the asset. As a result of this departure from
generally accepted accounting principles, property, plant and equipment, less
accumulated depreciation is understated and net partners' deficit is overstated
by $333,532 at December 31, 1996 ($326,198 at December 31, 1995).
Additionally, depreciation expense is overstated, and net income is understated
by $7,334 at December 31, 1996 ($10,293 for the year ended December 31, 1995).
/s/ MANER, COSTERISAN & ELLIS, P.C.
<PAGE> 37
[LOGO]
[MANER, COSTERISAN & ELLIS, P.C. LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Sunshine Canyon, A Limited Partnership
Lansing, Michigan
January 10, 1997
We have audited the accompanying balance sheets of Sunshine Canyon, A
Limited Partnership as of December 31, 1996 and 1995, and the related
statements of net loss, partners' deficit and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
As discussed in Note 1 to the financial statements, the Partnership
depreciates its buildings using the accelerated cost recovery method which
provides for the depreciation of real property over a fifteen year life.
Generally accepted accounting principles require that depreciation be computed
over the estimated useful life of the asset. As a result of this departure from
generally accepted accounting principles, property, plant and equipment, less
accumulated depreciation, is understated and partners' deficit is overstated by
$411,690 and $397,957 at December 31, 1996 and 1995, respectively.
Additionally, depreciation expense and net loss are overstated by $13,733 and
$15,281 for the years ended December 31, 1996 and 1995, respectively.
In our opinion, except for the effects of understating the useful life of
real property as discussed in the preceding paragraph, the financial statements
referred to above present fairly, in all material respects, the financial
position of Sunshine Canyon, A Limited Partnership as of December 31, 1996 and
1995, and the results of its operations and its cash flows for the years then
ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 10, 1997 on our consideration of the Partnership's
internal control structure and a report dated January 10, 1997 on its
compliance with laws and regulations.
/s/ MANER, COSTERISAN & ELLIS, P.C.
<PAGE> 38
[LOGO]
[NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
The Partners
Tujunga Gardens
Culver City, California
We have audited the accompanying balance sheet of Tujunga Gardens (a California
partnership), Project No. 122-35516-PM-L8, as of December 31, 1996 and the
related statements of operations, partners' equity and cash flows for the year
then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Tujunga Gardens as of December
31, 1996, and the results of its operations and its cash flows for the year
then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards we have also issued reports
dated February 5, 1997 on our consideration of Tujunga Gardens' Internal
Control Structure and on its compliance with requirements applicable to U.S.
Department of Housing and Urban Development financial assistance programs.
/s/ NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP
February 5, 1997
<PAGE> 39
[ALTSCHULER, MELVIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS
AND SUPPLEMENTARY INFORMATION REQUIRED BY
FARMERS HOME ADMINISTRATION
To the Partners of
The Twentynine Palms Partnership
We have audited the accompanying balance sheets of THE TWENTYNINE PALMS
PARTNERSHIP (a limited partnership), FmHA Project No. CA16-R000-010 (the
"Partnership") as of December 31, 1996 and 1995, and the related statements of
operations, changes in partners' deficiency and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The Twentynine Palms
Partnership as of December 31, 1996 and 1995, and the results of its
operations, changes in its partners' deficiency, and its cash flows for the
years then ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated February 17, 1997 on our consideration of the Partnership's internal
control structure and a report dated February 17, 1997 on its compliance with
laws and regulations.
<PAGE> 40
Our audits were conducted for the purpose of forming an opinion on the
financial statements taken as a whole. The 1996 supplementary information is
presented for purposes of additional analysis and is not a required part of the
financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the 1996 financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ ALTSCHULER, MELVIN AND GLASSER LLP
Los Angeles, California
February 17, 1997
<PAGE> 41
[LOGO]
[SANTIAGO, RILEY & REZNICK LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Marina Del Rey Limited Dividend
Partnership Associates
We have audited the accompanying balance sheets of Marina Del Rey Limited
Dividend Partnership Associates (the Partnership) as of December 31, 1996 and
1995, and the related statements of operations, partners' deficit and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
Except as discussed in the following paragraph, we conducted our audits in
accordance with generally accepted auditing standards and Government Auditing
Standards, issued by the Comptroller General of the United States. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
The Partnership has not maintained certain customary accounting records and
supporting documents relating to transactions with a general partner as
discussed in Note F. We were unable to satisfy ourselves by other auditing
procedures as to the possible effects of transactions with the general partner.
<PAGE> 42
In our opinion, except for the effects, if any, of the items discussed in the
third paragraph above, the financial statements referred to above present
fairly, in all material respects, the financial position of Marina Del Rey
Limited Dividend Partnership Associates as of December 31, 1996 and 1995, and
the results of its operations, changes in partners' deficit and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 16
through 19 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
has been subjected to the auditing procedures applied in the audits of the
basic financial statements and, in our opinion, except for the effects, if any,
of the items discussed in the third paragraph above, such information is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
In accordance with Government Auditing Standards, we have also issued reports
dated January 13, 1997, on our consideration of Marina Del Rey Limited Dividend
Partnership Associates' internal control structure and on its compliance with
laws and regulations applicable to the financial statements.
/s/ SANTIAGO, RILEY & REZNICK
San Juan, Puerto Rico
January 13, 1997
<PAGE> 43
[LOGO]
[BORING & GOINS, P.C. LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Village Apartments, Ltd.
LaFollette, TN
We have audited the accompanying balance sheets of Village Apartments, Ltd. (A
Limited Partnership) as of December 31, 1996 and 1995, and the related
statements of income, partners' capital (deficit), and cash flows for the years
then ended. These financial statements are the responsibility of management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Village Apartments, Ltd. (A
Limited Partnership) as of December 31, 1996 and 1995, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/ BORING & GOINS, P.C.
January 31, 1997
<PAGE> 44
[ALTSCHULER, MELVIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Village Grove, Ltd.
We have audited the accompanying balance sheets of VILLAGE GROVE, LTD. (a
limited partnership) as of December 31, 1996 and 1995, and the related
statements of operations, changes in partners' deficiency and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Village Grove, Ltd. at
December 31, 1996 and 1995, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
/s/ ALTSCHULER, MELVIN & GLASSER LLP
Los Angeles, California
January 29, 1997
<PAGE> 45
[LOGO]
[HORWATH VELEZ SEMPRIT & CO. LETTERHEAD]
INDEPENDENT AUDITORS' REPORT ON
FINANCIAL STATEMENTS
Partners
Vista Housing Associates
(A Limited Partnership)
Hato Rey, Puerto Rico
We have audited the accompanying balance sheets of Vista Housing Associates (a
limited partnership), HUD Project No. 056-35094-LD-L8, as of December 31, 1996
and 1995 and the related statements of profit and loss (Form HUD-92410),
partners' equity deficiency, and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Vista Housing Associates as of
December 31, 1996 and 1995, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
/s/ HORWATH VELEZ SEMPRIT & CO.
January 24, 1997
Stamp number 1411411 was
affixed to the original of this
report.
<PAGE> 46
[RODNEY L. STEPLETON LETTERHEAD]
Independent Auditor's Report
To the Partners
Westgate Apartments, Limited
Albertville, Alabama
I have audited the accompanying balance sheets of Westgate Apartments, Limited,
(a limited partnership) as of December 31, 1996 and 1995, and the related
statements of income, partners equity (deficit), and cash flows for the years
then ended. These financial statements are the responsibility of the
Partnership's management. My responsibility in to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards
and Governmental Auditing Standards issued by the Comptroller General of the
United States. Those standards require that I plan and perform my audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. I believe that my audit provides a reasonable basis for
my opinion.
In my opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Westgate Apartments, Limited
as of December 31, 1996 and 1995, and the results of operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
/s/ RODNEY L. STEPLETON
February 24, 1997
<PAGE> 47
[LOGO]
[COOPERS & LYBRAND LETTERHEAD]
Report of Independent
To the Partners of
Wilderness Trail, Ltd.
We have audited the accompanying balance sheets of Wilderness Trail, Ltd. (A
Kentucky Limited Partnership, FHA Project Number 083-35280-L8-PM-WAH) as of
December 31, 1996 and 1995, and the related statements of operations, changes
in partners' deficit, and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Wilderness Trail, Ltd. as of
December 31, 1996 and 1995, and the results of its operations, and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have also issued a report
dated February 7, 1997 on our consideration of Wilderness Trail, Ltd.'s
internal control structure and a report dated February 7, 1997 on its
compliance with laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The other financial information indexed
on page 9 is presented for purposes of additional analysis, and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ COOPERS & LYBRAND
Cleveland, Ohio
February 7, 1997
<PAGE> 48
[LOGO]
[TURLINGTON AND COMPANY, L.L.P. LETTERHEAD]
INDEPENDENT AUDITORS' REPORT ON AUDITED FINANCIAL STATEMENTS
AND SUPPLEMENTAL INFORMATION
To the Partners
Wilkes Towers, Ltd.
HUD Field Office Director
Greensboro, North Carolina
We have audited the accompanying balance sheet of Wilkes Towers, Ltd., HUD
Project No. 053-35264-PM-SR-WAH-L8 (a North Carolina limited partnership), as
of December 31, 1996, and the related statements of profit and loss, partners'
equity, and cash flows for the year then ended. These financial statements are
the responsibility of the partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Wilkes Towers, Ltd. at
December 31, 1996, and the results of its operations, and the changes in
partners' equity, and cash flows for the year then ended, in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U. S. Department of Housing and
Urban Development, we have also issued a report dated January 8, 1997 on our
consideration of Wilkes Towers, Ltd.'s internal control structure, and reports
dated January 8, 1997 on its compliance with specific requirements applicable
to major HUD programs, and specific requirements applicable to Affirmative Fair
Housing.
Our audit was made for the purpose of formulating the opinion stated above.
The supplemental information identified in the Table of Contents is presented
for purposes of additional analysis and is not a required part of the basic
financial statements of Wilkes Towers, Ltd. Such information has been subjected
<PAGE> 49
INDEPENDENT AUDITORS' REPORT ON AUDITED FINANCIAL STATEMENTS
AND SUPPLEMENTAL INFORMATION (CONTINUED)
to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated, in all material respects, in
relation to the basic financial statements taken as a whole.
/s/ TURLINGTON AND COMPANY, L.L.P.
January 8, 1997
<PAGE> 50
REAL ESTATE ASSOCIATES LIMITED III
(a California limited partnership)
BALANCE SHEETS
DECEMBER 31, 1996 AND 1995
ASSETS
<TABLE>
<CAPTION>
1996 1995
------------ -----------
<S> <C> <C>
INVESTMENTS IN LIMITED PARTNERSHIPS (Note 2) $ 1,063,487 $ 930,576
CASH AND CASH EQUIVALENTS (Note 1) 9,734,531 9,028,963
SHORT TERM INVESTMENTS (Note 1) - 125,000
OTHER ASSETS 135,000 100,500
------------ -----------
TOTAL ASSETS $ 10,933,018 $10,185,039
============ ===========
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES:
Notes payable (Notes 3 and 7) $ 1,510,000 $ 1,510,000
Interest payable (Notes 3 and 7) 374,603 344,762
Accounts payable 7,450 13,391
------------ -----------
1,892,053 1,868,153
------------ -----------
COMMITMENTS AND CONTINGENCIES (Notes 4 and 5)
PARTNERS' EQUITY (DEFICIENCY):
General partners (108,566) (115,807)
Limited partners 9,149,531 8,432,693
------------ -----------
9,040,965 8,316,886
------------ -----------
TOTAL LIABILITIES AND PARTNERS' EQUITY $ 10,933,018 $10,185,039
============ ===========
</TABLE>
The accompanying notes are integral part of these financial statements.
<PAGE> 51
REAL ESTATE ASSOCIATES LIMITED III
(a California limited partnership)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
1996 1995 1994
----------- ---------- ----------
<S> <C> <C> <C>
INTEREST AND OTHER INCOME $ 302,466 $ 267,189 $ 181,750
----------- ---------- ----------
OPERATING EXPENSES:
Legal and accounting 150,156 135,191 86,950
Management fees - general partner (Note 4) 454,800 454,800 454,800
Interest (Note 3) 151,000 151,000 151,000
Administrative (Note 4) 64,982 93,619 66,031
----------- ---------- ----------
Total operating expenses 820,938 834,610 758,781
----------- ---------- ----------
LOSS FROM OPERATIONS (518,472) (567,421) (577,031)
DISTRIBUTIONS FROM LIMITED PARTNERSHIPS RECOGNIZED 858,869 765,514 683,491
AS INCOME (Note 2)
EQUITY IN INCOME OF LIMITED
PARTNERSHIPS AND AMORTIZATION OF ACQUISITION
COSTS (Note 2) 383,682 887,919 539,729
----------- ---------- ----------
NET INCOME $ 724,079 $1,086,012 $ 646,189
=========== ========== ==========
NET INCOME PER LIMITED PARTNERSHIP INTEREST (Note 1) $ 63 $ 95 $ 56
=========== ========== ==========
</TABLE>
The accompanying notes are integral part of these financial statements.
<PAGE> 52
REAL ESTATE ASSOCIATES LIMITED III
(a California limited partnership)
STATEMENTS OF PARTNERS' EQUITY (DEFICIENCY)
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
General Limited
Partners Partners Total
----------- ----------- ------------
<S> <C> <C> <C>
EQUITY (DEFICIENCY),
January 1, 1994 $ (133,129) $ 6,717,814 $ 6,584,685
Net income for 1994 6,462 639,727 646,189
----------- ----------- ------------
EQUITY (DEFICIENCY),
December 31, 1994 (126,667) 7,357,541 7,230,874
Net income for 1995 10,860 1,075,152 1,086,012
----------- ----------- ------------
EQUITY (DEFICIENCY),
December 31, 1995 (115,807) 8,432,693 8,316,886
Net income for 1996 7,241 716,838 724,079
----------- ----------- ------------
EQUITY (DEFICIENCY),
December 31, 1996 $ (108,566) $ 9,149,531 $ 9,040,965
=========== =========== ============
</TABLE>
The accompanying notes are integral part of these financial statements.
<PAGE> 53
REAL ESTATE ASSOCIATES LIMITED III
(a California limited partnership)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
1996 1995 1994
---------- ---------- ----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 724,079 $1,086,012 $ 646,189
Adjustments to reconcile net income to net cash
provided by operating activities:
Equity in income of limited partnerships and
amortization of acquisition costs (383,682) (887,919) (539,729)
Decrease (increase) in other assets (34,500) (50,500) (50,000)
Increase (decrease) in interest and other payables 23,900 3,188 (39,928)
---------- ---------- ----------
Net cash provided by operating activities 329,797 150,781 16,532
---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Distribution from limited partnerships
recognized as return of capital 255,471 647,913 554,025
Capital contributions and advances
to limited partnerships (4,700) - (25,595)
Decrease in short term investments 125,000 1,021,022 53,978
---------- ---------- ----------
Net cash provided by investing activities 375,771 1,668,935 582,408
---------- ---------- ----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 705,568 1,819,716 598,940
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 9,028,963 7,209,247 6,610,307
---------- ---------- ----------
CASH AND CASH EQUIVALENTS, END OF YEAR $9,734,531 $9,028,963 $7,209,247
========== ========== ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for interest $ 121,159 $ 150,245 $ 186,216
========== ========== ==========
</TABLE>
The accompanying notes are integral part of these financial statements.
<PAGE> 54
REAL ESTATE ASSOCIATES LIMITED III
(A California limited partnership)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Real Estate Associates Limited III (the Partnership) was formed under
the California Limited Partnership Act on July 25, 1980. The
Partnership was formed to invest either directly or indirectly in other
partnerships which own and operate primarily federal, state and local
government-assisted housing projects. The general partners are National
Partnership Investments Corp. (NAPICO), the corporate general partner,
and Coast Housing Investment Associates (CHIA), a limited partnership.
Casden Investment Corporation owns 100 percent of NAPICO's stock. The
limited partner of CHIA is an officer of NAPICO.
These financial statements include the accounts of Real Estate
Associates Limited III and Real Estate Associates ("REA"), a California
general partnership in which the Partnership holds a 99.9 percent
general partner interest. Losses in excess of the minority interest in
equity that would otherwise be attributed to the minority interest are
being allocated to the Partnership.
The Partnership offered 3,000 units and issued 2,864 units of limited
partner interests through a public offering. Each unit was comprised of
two limited partner interests and a warrant granting the investor the
right to purchase two additional limited partner interests. An
additional 5,728 interests were issued from the exercise of the warrants
and the sale of interests associated with warrants not exercised. The
general partners have a 1 percent interest in profits and losses of the
Partnership. The limited partners have the remaining 99 percent
interest in proportion to their respective investments.
The Partnership shall be dissolved only upon the expiration of 52
complete calendar years (December 31, 2032) from the date of the
formation of the Partnership or the occurrence of other events as
specified in the terms of the Partnership agreement.
Upon total or partial liquidation of the Partnership or the disposition
or partial disposition of a project or project interest and distribution
of the proceeds, the general partners will be entitled to a liquidation
fee as stipulated in the Partnership agreement. The limited partners
will have a priority return equal to their invested capital attributable
to the project(s) or project interest(s) sold and shall receive from the
sale of the project(s) or project interest(s) an amount sufficient to
pay state and federal income taxes, if any, calculated at the maximum
rate then in effect. The general partners' liquidation fee may accrue
but shall not be paid until the limited partners have received
distributions equal to 100 percent of their capital contributions.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles 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 reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
5
<PAGE> 55
REAL ESTATE ASSOCIATES LIMITED III
(A California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Method of Accounting for Investments in Limited Partnerships
The investments in limited partnerships are accounted for on the equity
method. Acquisition, selection and other costs related to the
acquisition of the projects are capitalized as part of the investment
account and are being amortized on a straight line basis over the
estimated lives of the underlying assets, which is generally 30 years.
Net Income Per Limited Partnership Interest
Net income per limited partnership interest was computed by dividing the
limited partners' share of net income by the number of limited
partnership interests outstanding during the year. The number of
limited partnership interests was 11,456 for all years presented.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash and bank certificates of
deposit with an original maturity of three months or less. The
Partnership has its cash and cash equivalents on deposit primarily with
one high credit quality financial institution. Such cash and cash
equivalents are in excess of the FDIC insurance limit.
Short Term Investments
Short term investments consist of bank certificates of deposit and other
securities with original maturities ranging from more than three months
to twelve months. The fair value of these securities, which have been
classified as held for sale, approximates their carrying value.
Impairment of Long-Lived Assets
The Partnership reviews long-lived assets to determine if there has been
any permanent impairment whenever events or changes in circumstances
indicate that the carrying amount of the asset may not be recoverable.
If the sum of the expected future cash flows is less than the carrying
amount of the assets, the Partnership recognizes an impairment loss.
2. INVESTMENTS IN LIMITED PARTNERSHIPS
The Partnership holds limited partnership interests in 26 limited
partnerships. In addition, the Partnership holds a general partner
interest in REA. NAPICO is also a general partner in REA. REA, in
turn, holds limited partner interests in six additional limited
partnerships. In total, therefore, the Partnership holds interests,
either directly or indirectly through REA, in 32 partnerships which own
residential low income rental projects consisting of 3,062 apartment
units. The mortgage loans of these projects are payable to or insured
by various governmental agencies.
6
<PAGE> 56
REAL ESTATE ASSOCIATES LIMITED III
(A California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
The Partnership, as a limited partner, is entitled to between 75 percent
and 99 percent of the profits and losses of the limited partnerships it
has invested in directly. The Partnership is also entitled to 99.9
percent of the profits and losses of REA. REA holds a 99 percent
interest in each of the limited partnerships in which it has invested.
Equity in losses of limited partnerships is recognized in the financial
statements until the limited partnership investment account is reduced
to a zero balance. Losses incurred after the limited partnership
investment account is reduced to zero are not recognized. The
cumulative amount of the unrecognized equity in losses of certain
limited partnerships was approximately $20,515,000 and $19,672,000 as of
December 31, 1996 and 1995, respectively.
Distributions from limited partnerships are recognized as a reduction of
capital until the investment balance has been reduced to zero.
Subsequent distributions received are recognized as income.
The following is a summary of the investments in limited partnerships and
reconciliation to the limited partnership accounts:
<TABLE>
<CAPTION>
1996 1995
---------- ---------
<S> <C> <C>
Investment balance, beginning of year $ 930,576 $ 690,570
Equity in income of limited partnerships 389,655 893,892
Amortization of capitalized acquisition costs and fees (5,973) (5,973)
Capital contributions to limited partnerships 4,700 -
Cash distributions recognized as return of capital (255,471) (647,913)
---------- ---------
Investment balance, end of year $1,063,487 $ 930,576
========== =========
</TABLE>
The difference between the investment in the accompanying balance sheets
at December 31, 1996 and 1995, and the deficiency per the limited
partnerships' combined financial statements is due primarily to the
cumulative unrecognized equity in losses of certain limited
partnerships, costs capitalized to the investment account and cumulative
distributions recognized as income.
Selected financial information from the combined financial statements at
December 31, 1996 and 1995 and for each of the three years in the period
ended December 31, 1996, of the limited partnerships in which the
Partnership has invested directly or indirectly, is as follows:
7
<PAGE> 57
REAL ESTATE ASSOCIATES LIMITED III
(A California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
Balance Sheets
<TABLE>
<CAPTION>
1996 1995
-------- --------
(in thousands)
<S> <C> <C>
Land and buildings, net $ 55,007 $ 57,454
======== ========
Total assets $ 68,387 $ 71,818
======== ========
Mortgages payable $ 88,987 $ 90,573
======== ========
Total liabilities $ 95,492 $ 97,506
======== ========
Deficiency of Real Estate Associates Limited III $(27,400) $(25,837)
======== ========
Equity of other partners $ 295 $ 149
======== ========
</TABLE>
Statements of Operations
<TABLE>
<CAPTION>
1996 1995 1994
------- ------- -------
(in thousands)
<S> <C> <C> <C>
Total revenue $22,387 $22,082 $21,540
======= ======= =======
Interest expense $ 7,032 $ 6,914 $ 7,074
======= ======= =======
Depreciation $ 3,757 $ 3,722 $ 3,700
======= ======= =======
Total expenses $23,222 $22,278 $22,514
======= ======= =======
Net loss $ (835) $ (196) $ (974)
======= ======= ========
Net loss allocable to the Partnership $ (453) $ (184) $ (962)
======= ======= =======
</TABLE>
Land and buildings, above, have been adjusted for the amount by which
the investments in the limited partnerships exceed the Partnership's
share of the net book value of the underlying net assets of the investee
which are recorded at historical costs. Depreciation on the adjustment
is provided for over the estimated remaining useful lives of the
properties.
An affiliate of NAPICO is the general partner in one of the limited
partnerships included above, and another affiliate receives property
management fees of 5 percent of its revenue. The affiliate received
property management fees of $16,128, $16,128 and $14,976 in 1996, 1995
and 1994, respectively.
8
<PAGE> 58
REAL ESTATE ASSOCIATES LIMITED III
(A California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
The following sets forth the significant data for this partnership,
reflected in the accompanying financial statements using the equity
method of accounting:
<TABLE>
<CAPTION>
1996 1995 1994
------- ------- -------
(in thousands)
<S> <C> <C> <C>
Total assets $ 1,023 $ 1,132
======= =======
Total liabilities $ 1,775 $ 1,834
======= =======
Deficiency of Real Estate Associates
Limited III $ (875) $ (826)
======= =======
Equity of other partners $ 123 $ 124
======= =======
Total revenues $ 366 $ 370 $ 378
======= ======= =======
Net loss $ (47) $ (46) $ (33)
======= ======= =======
</TABLE>
3. NOTES PAYABLE
Certain of the Partnership's investments involved purchases of
partnership interests from partners who subsequently withdrew from the
operating partnership. The Partnership is obligated on non-recourse
notes payable of $1,510,000, bearing interest at 10 percent, to the
sellers of the partnership interests. These notes are payable by the
Partnership through REA, and have principal maturity dates in June 2020
and March 2024 or upon the sale or refinancing of the underlying
partnership properties. These notes and the related interest are
collaterized by REA's investment in the respective limited partnerships
and are payable only out of cash distributions from the investee
partnerships, as defined in the notes. Unpaid interest is due at
maturity of the notes.
Maturity dates on the notes payable are as follows:
<TABLE>
<CAPTION>
Years Ending December 31
------------------------
<S> <C>
1997 $ -
1998 -
1999 -
2000 -
2001 -
Thereafter 1,510,000
----------
$1,510,000
==========
</TABLE>
9
<PAGE> 59
REAL ESTATE ASSOCIATES LIMITED III
(A California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
4. FEES AND EXPENSES DUE GENERAL PARTNER
Under the terms of the Restated Certificate and Agreement of Limited
Partners, the Partnership is liable to NAPICO for an annual management
fee equal to .4 percent of the original invested assets of the limited
partnerships. Invested assets is defined as the costs of acquiring
project interests, including the proportionate amount of the mortgage
loans related to the Partnership's interest in the capital accounts of
the respective partnerships.
The Partnership reimburses NAPICO for certain expenses. The
reimbursement to NAPICO was $32,176, $29,927 and $28,835 in 1996, 1995
and 1994, respectively, and is included in operating expenses.
5. CONTINGENCIES
The corporate general partner of the Partnership is a plaintiff in
various lawsuits and has also been named a defendant in other lawsuits
arising from transactions in the ordinary course of business. In the
opinion of management and the corporate general partner, the claims will
not result in any material liability to the Partnership.
6. INCOME TAXES
No provision has been made for income taxes in the accompanying
financial statements since such taxes, if any, are the liability of the
individual partners. The major differences in tax and financial
reporting result from the use of different bases and depreciation
methods for the properties held by the limited partnerships.
Differences in tax and financial losses also arise as losses are not
recognized for financial reporting purposes when the investment balance
has been reduced to zero.
7. FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, "Disclosure about
Fair Value of Financial Instruments," requires disclosure of fair value
information about financial instruments, when it is practicable to
estimate that value. The notes payable are collateralized by the
Partnership's investments in the investee limited partnerships and are
payable only out of cash distributions from the investee partnerships.
The operations generated by the investee limited partnerships are
subject to various government rules, regulations and restrictions which
make it impracticable to estimate the fair value of the notes payable
and related accrued interest. The carrying amount of other assets and
liabilities reported on the balance sheets that require such disclosure
approximates fair value due to their short-term maturity.
10
<PAGE> 60
REAL ESTATE ASSOCIATES LIMITED III
(A California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
8. FOURTH QUARTER ADJUSTMENT
The Partnership's policy is to record its equity in income of limited
partnerships on a quarterly basis, using estimated financial information
furnished by the various local operating general partners. The equity
in income reflected in the accompanying annual financial statements is
based primarily upon audited financial statements of the investee
limited partnerships. The decrease of approximately $42,000, between
the estimated nine-month equity in income and the actual total for 1996
equity in income has been recorded in the fourth quarter.
11
<PAGE> 61
SCHEDULE
REAL ESTATE ASSOCIATES LIMITED III
INVESTMENTS IN LIMITED PARTNERSHIPS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
Year Ended December 31, 1996
----------------------------------------------------------------------------------
Cash Equity
Balance Distri- in Balance
January Capital butions Income December
Limited Partnerships 1, 1996 Contributions Received (Loss) 31, 1996
- -------------------- --------- ------------- --------- -------- ----------
<S> <C> <C> <C> <C> <C>
Bowin Place $ 519,960 $ $ (39,860) $116,865 $ 596,965
Casa de las Hermanitas 21,171 (21,171)
Charlotte
Creekview Apartments
Foothill Gardens
Frazier Park Apartments
Gary Manor
Grandview Homes (19,948) 19,948
Hidden Pines Apartments
Highlawn Place (154,434) 154,434
Jenks School Apartments 389,445 (41,229) 118,306 466,522
Kern Villa
Lakeside Apartments 4,700 (4,700)
New Baltimore Towers
Panorama Park Apartments
Ramblewood Apartments
Santa Maria Apartments
Senior Chateau
Sheraton Towers
South Bay Villa
Sunset Grove Apartments
Sunshine Canyon Apartments
Tujunga Gardens
Twenty-Nine Palms Apartments
Vicente Geigel Polanco Apts.
Village Apartments
Village Apartments (Kaufman)
Village Grove Apartments
Vista De Jagueyes
Westgate Apartments
Wilderness Trail Manor
Wilkes Towers
--------- ------------ --------- -------- ----------
$ 930,576 $ 4,700 $(255,471) $383,682 $1,063,487
========= ============ ========= ======== ==========
</TABLE>
<PAGE> 62
SCHEDULE
(Continued)
REAL ESTATE ASSOCIATES LIMITED III
INVESTMENTS IN LIMITED PARTNERSHIPS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
Year Ended December 31, 1995
----------------------------------------------------------------------------------
Cash Equity
Balance Distri- in Balance
January Capital butions Income December
Limited Partnerships 1, 1995 Contributions Received (Loss) 31, 1995
- -------------------- ------- ------------- -------- ------ --------
<S> <C> <C> <C> <C> <C>
Bowin Place $ 365,973 $ $ (39,861) $ 193,848 $ 519,960
Casa de las Hermanitas (76,359) 97,530 21,171
Charlotte
Creekview Apartments
Foothill Gardens (23,532) 23,532
Frazier Park Apartments
Gary Manor
Grandview Homes (36,969) 36,969
Hidden Pines Apartments
Highlawn Place (122,066) 122,066
Jenks School Apartments 324,597 (36,972) 101,820 389,445
Kern Villa
Lakeside Apartments
New Baltimore Towers (53,207) 53,207
Panorama Park Apartments (14,448) 14,448
Ramblewood Apartments
Santa Maria Apartments
Senior Chateau (146,237) 146,237
Sheraton Towers
South Bay Villa (98,262) 98,262
Sunset Grove Apartments
Sunshine Canyon Apartments
Tujunga Gardens
Twenty-Nine Palms Apartments
Vicente Geigel Polanco Apts.
Village Apartments
</TABLE>
<PAGE> 63
SCHEDULE
(Continued)
REAL ESTATE ASSOCIATES LIMITED III
INVESTMENTS IN LIMITED PARTNERSHIPS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
Year Ended December 31, 1995
----------------------------------------------------------------------------------
Cash Equity
Balance Distri- in Balance
January Capital butions Income December
Limited Partnerships 1, 1995 Contributions Received (Loss) 31, 1995
- -------------------- ------- ------------- -------- ------ --------
<S> <C> <C> <C> <C> <C>
Village Apartments (Kaufman)
Village Grove Apartments
Vista De Jagueyes
Westgate Apartments
Wilderness Trail Manor
Wilkes Towers
---------- ------------ --------- -------- --------
TOTAL $ 690,570 $ - $(647,913) $887,919 $930,576
========= ============ ========= ======== ========
</TABLE>
<PAGE> 64
SCHEDULE
(Continued)
REAL ESTATE ASSOCIATES LIMITED III
INVESTMENTS IN LIMITED PARTNERSHIPS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
Year Ended December 31, 1994
----------------------------------------------------------------------------------
Cash Equity
Balance Distri- in Balance
January Capital butions Income December
Limited Partnerships 1, 1994 Contributions Received (Loss) 31, 1994
- -------------------- ------- ------------- -------- ------ --------
<S> <C> <C> <C> <C> <C>
Bowin Place $ 283,974 $ $ (39,861) $ 121,860 $ 365,973
Casa de las Hermanitas 106,770 (106,770)
Charlotte
Creekview Apartments
Foothill Gardens
Frazier Park Apartments (9,900) 9,900
Gary Manor
Grandview Homes (22,839) 22,839
Hidden Pines Apartments
Highlawn Place (184,826) 184,826
Jenks School Apartments 288,527 (78,002) 114,072 324,597
Kern Villa
Lakeside Apartments
New Baltimore Towers (69,370) 69,370
Panorama Park Apartments (17,888) 17,888
Ramblewood Apartments
Santa Maria Apartments
Senior Chateau (131,339) 131,339
Sheraton Towers
South Bay Villa
Sunset Grove Apartments
Sunshine Canyon Apartments
Tujunga Gardens
Twenty-Nine Palms Apartments 25,595 (25,595)
Vicente Geigel Polanco Apts.
Village Apartments
</TABLE>
<PAGE> 65
SCHEDULE
(Continued)
REAL ESTATE ASSOCIATES LIMITED III
INVESTMENTS IN LIMITED PARTNERSHIPS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
Year Ended December 31, 1994
----------------------------------------------------------------------------------
Cash Equity
Balance Distri- in Balance
January Capital butions Income December
Limited Partnerships 1, 1994 Contributions Received (Loss) 31, 1994
- -------------------- ------- ------------- -------- ------ --------
<S> <C> <C> <C> <C> <C>
Village Apartments (Kaufman)
Village Grove Apartments
Vista De Jagueyes
Westgate Apartments
Wilderness Trail Manor
Wilkes Towers
--------- --------- --------- -------- --------
TOTAL $ 679,271 $ 25,595 $(554,025) $539,729 $690,570
========= ========= ========= ======== ========
</TABLE>
<PAGE> 66
SCHEDULE III
REAL ESTATE ASSOCIATES LIMITED III
REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY HELD BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL III HAS INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
Buildings, Furnishings
& Equipment - Initial
Cost to Partnership
Number Outstanding and Amount Carried
of Mortgage at Close of Accumulated Construction
Partnership/Location Units Loan Land Period Total Depreciation Period
- -------------------- ------ ----------- ---------- ------------ ------------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Bowin Place 193 $ 5,161,300 $ 752,729 $ 5,781,928 $ 6,534,657 $ 3,896,669 (A)
Detroit, Michigan
Casa De Las Hermanitas 88 3,090,809 405,578 3,809,605 4,215,183 1,998,937 1981
Los Angeles, California
Charlottle Lakeview 553 12,645,387 551,500 18,346,056 18,897,558 14,208,342 (A)
Rochester, NY
Creekview Apartments 80 2,056,157 237,473 2,378,896 2,616,369 1,027,428 1981-1982
Stroudsburg, Pennsylvania
Foothill Gardens 54 2,056,529 309,626 2,443,612 2,753,238 1,311,905 1981
Los Angeles, California
Frazier Park Apartments 60 2,721,661 439,987 3,276,813 3,716,800 1,672,940 1981-1982
Baldwin Park, California
Gary Manor 198 5,487,281 399,715 6,971,514 7,371,229 4,625,805 (A)
Gary, Indiana
Grandview Homes 26 1,251,937 324,293 1,377,730 1,702,023 732,048 1981
Los Angeles, California
Hidden Pines Apartments 40 1,375,624 43,954 1,648,093 1,692,047 1,624,937 1981
Greenville, Michigan
Highlawn Place 133 2,812,446 310,653 3,339,423 3,650,076 2,345,843 (A)
Huntington, West Virginia
Jenks School Apartments 83 2,430,799 96,740 3,601,999 3,698,739 1,705,873 1981-1982
Pawtucket, Rhode Island
Kern Villa 49 2,346,520 384,091 2,795,915 3,180,006 1,477,778 1981-1982
Los Angeles, California
Lakeside Apartments 32 914,103 72,336 1,011,212 1,083,548 770,273 1980-1981
Stuart, Florida
New Baltimore Towers 101 2,134,604 455,282 3,127,429 3,582,711 2,358,798 (A)
New Baltimore, MD
Panorama Park Apartments 66 2,827,518 680,296 3,253,405 3,933,701 1,680,129 1981-1982
Bakersfield, California
Ramblewood Apartments 64 1,083,149 53,267 1,964,786 2,018,053 957,098 1980-1981
Fort Payne, Alabama
Santa Maria Apartments 86 2,823,515 86,106 3,249,929 3,336,035 1,873,578 1981-1982
San German, Puerto Rico
Senior Chateau 185 4,073,872 408,863 4,987,805 5,396,668 3,354,149 (A)
Cincinnati, Ohio
Sheraton Towers 97 2,785,694 50,546 3,485,502 3,536,048 1,353,717 1981-1982
High Point, North Carolina
South Bay Villa 80 3,605,475 365,333 4,609,170 4,974,503 2,435,312 1980-1981
San Pedro, California
Sunset Groove Apartments 22 665,257 19,432 800,585 820,017 777,759 1981-1982
Carson City, Michigan
Sunshine Canyon Apartments 26 841,362 20,262 995,887 1,016,149 955,295 1981-1982
Stanton, Michigan
The Village Apartments 68 1,715,852 152,573 1,955,690 2,108,263 1,004,163 1980-1981
Kaufman, Texas
Tujunga Gardens 54 2,014,729 325,492 2,390,317 2,715,809 1,276,991 1981
Los Angeles, California
Twenty-Nine Palms Apts. 48 1,612,053 111,617 1,921,064 2,032,681 1,166,408 1981-1982
Twenty-Nine Palms, California
Village Apartments 51 1,440,107 65,245 1,694,026 1,759,271 1,138,954 1981-1982
La Follette, Tennessee
Village Grove Apartments 104 3,483,104 416,000 4,559,583 4,975,583 2,534,292 1974
Corona, California
Vicente Geigel Polanco Apts. 80 2,579,965 107,685 2,877,208 2,984,893 1,620,665 1981-1982
Issabela, Puerto Rico
Vista De Jagueyes 73 2,597,902 102,554 3,242,444 3,344,998 1,914,595 1981-1982
Aguas Buenas, Puerto Rico
Westgate Apartments 72 1,089,131 80,000 1,475,381 1,555,381 698,063 1980-1981
Albertville, Alabama
Wilderness Trail Manor 124 5,231,477 191,542 6,539,862 6,731,404 3,901,034 1982
Pineville, Kentucky
Wilkes Towers 72 2,031,360 32,471 2,303,197 2,335,668 894,701 1981-1982
Wilkesboro, North Carolina
Additional basis of real
estate due to REAL III's
capital contribution to
investee limited Partnership 769,172 9,502,360 10,271,532 6,238,952
------ ----------- ---------- ------------ ------------ -----------
TOTAL 3,062 $88,986,679 $8,822,413 $121,718,426 $130,540,839 $75,533,431
</TABLE>
<PAGE> 67
SCHEDULE III
(CONTINUED)
REAL ESTATE ASSOCIATES LIMITED III
REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY
HELD BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL III HAS INVESTMENTS
DECEMBER 31, 1996, 1995 AND 1994
NOTES: 1. Each local limited partnership has developed, owns and
operates the housing project. Substantially all project
costs, including construction period interest expense, were
capitalized by the limited partnerships.
2. Depreciation is provided for by various methods over
the estimated useful lives of the Projects. The
estimated composite useful lives of the buildings are
generally from 25 to 40 years.
3. Investments in property and equipment:
<TABLE>
<CAPTION>
Buildings,
Furnishings,
Land and Equipment Total
---------- ------------- ------------
<S> <C> <C> <C>
Balance, January 1, 1994 $8,567,053 $119,239,144 $127,806,197
Net additions during 1994 39,791 469,127 508,918
---------- ------------ ------------
Balance, December 31, 1994 8,606,844 119,708,271 128,315,115
Net additions during 1995 79,359 826,700 906,059
---------- ------------ ------------
Balance, December 31, 1995 8,686,203 120,534,971 129,221,174
Net additions during 1996 136,210 1,183,455 1,319,665
---------- ------------ ------------
Balance, December 31, 1996 $8,822,413 $121,718,426 $130,540,839
========== ============ ============
</TABLE>
<PAGE> 68
SCHEDULE III
(Continued)
REAL ESTATE ASSOCIATES LIMITED III
REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY
HELD BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL III HAS INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
Buildings,
Furnishings,
And
Accumulated Depreciation: Equipment
- ------------------------- -----------
<S> <C>
Balance, January 1, 1994 $64,656,275
Net additions during 1994 3,687,594
-----------
Balance, December 31, 1994 68,343,869
Net additions during 1995 3,423,206
-----------
Balance, December 31, 1995 71,767,075
Net additions during 1996 3,766,356
-----------
Balance, December 31, 1996 $75,533,431
===========
</TABLE>
<PAGE> 69
SCHEDULE
(CONTINUED)
REAL ESTATE ASSOCIATES LIMITED III
INVESTMENTS IN, EQUITY IN EARNINGS OF, AND DIVIDENDS RECEIVED
FROM AFFILIATES AND OTHER PERSONS
YEARS ENDED
DECEMBER 31, 1996, 1995 AND 1994
NOTES: 1. Equity in losses of the limited partnerships represents the
Partnership's allocable share of the net loss from the
limited partnerships for the year. Equity in losses of the
limited partnerships will be recognized until the investment
balance is reduced to zero or below zero to an amount equal
to future capital contributions to be made by the
Partnership.
2. Cash distributions from the local limited partnerships will
be treated as a return on the investment and will reduce the
investment balance until such time as the investment is
reduced to an amount equal to additional contributions.
Distributions subsequently received will be recognized as
income.
<PAGE> 70
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT:
REAL ESTATE ASSOCIATES LIMITED III (the "Partnership") has no directors or
executive officers of its own.
National Partnership Investment Corp. ("NAPICO" or "the Managing General
Partner") is a wholly-owned subsidiary of Casden Investment Company, an
affiliate of The Casden Company. The following biographical information is
presented for the directors and executive officers of NAPICO with principal
responsibility for the Partnership's affairs.
CHARLES H. BOXENBAUM, 67, Chairman of the Board of Directors and Chief
Executive Officer of NAPICO.
Mr. Boxenbaum has been associated with the NAPICO since its inception. He
has been active in the real estate industry since 1960, and prior to joining
NAPICO was a real estate broker with the Beverly Hills firm of Carl Rhodes
Company.
Mr. Boxenbaum has been a guest lecturer at national and state realty
conventions, certified properties exchanger's seminars, Los Angeles Town Hall,
National Association of Home Builders, International Council of Shopping
Centers, Society of Conventional Appraisers, California Real Estate
Association, National Institute of Real Estate Brokers, Appraisal Institute,
various mortgage banking seminars, and the North American Property Forum held
in London, England. In 1963, he was the winner of the Snyder Award, the
highest annual award offered by the National Association of Real Estate Boards
for Best Exchange. He is one of the founders and a past director of the
First Los Angeles Bank, organized in November 1974. Mr. Boxenbaum was a member
of the Board of Directors of the National Housing Council. Mr. Boxenbaum
received his Bachelor of Arts degree from the University of Chicago.
BRUCE E. NELSON, 45, President and a director of NAPICO.
Mr. Nelson joined the NAPICO in 1980 and became President in February 1989.
He is responsible for the operations of all NAPICO sponsored limited
partnerships. Prior to that he was primarily responsible for the securities
aspects of the publicly offered real estate investment programs. Mr. Nelson
is also involved in the identification, analysis, and negotiation of real
estate investments.
From February 1979 to October 1980, Mr. Nelson held the position of Associate
General Counsel at Western Consulting Group, Inc., private residential and
commercial real estate syndicators. Prior to that time Mr. Nelson was
engaged in the private practice of law in Los Angeles. Mr. Nelson received
his Bachelor of Arts degree from the University of Wisconsin and is a
graduate of the University of Colorado School of Law. He is a member of the
State Bar of California and is a licensed real estate broker in California and
Texas.
ALAN I. CASDEN, 51, Chairman of The Casden Company, an affiliate of Casden
Properties (formerly CoastFed Properties), a director and member of the audit
committee of NAPICO, and chairman of the Executive Committee of NAPICO.
Mr. Casden is Chairman of the Board, Chief Executive Officer and sole
shareholder of The Casden Company and Casden Investment Company. Prior to
that, he was the president and chairman of Mayer Group, Inc., which he joined
in 1975. He is also chairman of Mayer Management, Inc., a real estate
management firm. Mr. Casden has been involved in approximately $3 billion
of real estate financings and sales and has been responsible for the
development and construction of more than 12,000 apartment units and 5,000
single-family homes and condominiums.
<PAGE> 71
Mr. Casden is a member of the American Institute of Certified Public
Accountants and of the California Society of Certified Public Accountants.
Mr. Casden is a member of the advisory board of the National Multi-Family
Housing Conference, the Multi- Family Housing Council, and the President's
Council of the California Building Industry Association. He also serves on
the advisory board to the School of Accounting of the University of Southern
California. He holds a Bachelor of Science and a Masters in Business
Administration degree from the University of Southern California.
HENRY C. CASDEN, 53, President, Chief Operating Officer and Secretary of
The Casden Company and a director and secretary of NAPICO.
Mr. Casden has been President and Chief Operating Officer of The Casden
Company, as well as a director of NAPICO since February 1988. He became
secretary of both companies in late 1994. From 1982 to 1988, Mr. Casden was
of counsel and a partner in the Los Angeles law firm of Troy, Casden & Gould.
From 1978 to 1981, he was of counsel and a partner in the Los Angeles law firm
of Loeb & Loeb. From 1972 to 1978, Mr. Casden was a member of the
Beverly Hills law firm of Fink & Casden, Professional Corporation.
Mr. Casden received his Bachelor of Arts degree from the University of
California at Los Angeles, and is a graduate of the University of San
Diego Law School. Mr. Casden is a member of the State Bar of California
and has numerous professional affiliations.
BRIAN D. GOLDBERG, 33, Chief Financial Officer of The Casden Company and a
director of NAPICO.
Mr. Goldberg joined The Casden Company in 1990 as Vice President of Finance
and became Chief Financial Officer in March 1991. Prior to joining The
Casden Company, Mr. Goldberg was with Arthur Andersen & Co., an international
public accounting firm, from August 1985 until July 1990 in their Los
Angeles office. He received his bachelor of science degree in Accounting
from the University of Denver. Mr. Goldberg is a member of the American
Institute of Certified Public Accountants and the California Society of
Certified Public Accountants.
SHAWN HORWITZ, 37, Executive Vice President and Chief Financial Officer.
Mr. Horwitz joined NAPICO in 1990 and is responsible for the financial
affairs of NAPICO and the limited partnerships sponsored by NAPICO. Prior to
joining NAPICO, Mr. Horwitz was President of Star Sub Shops, Inc., a
corporation engaged in the business of selling fast food franchises, for
approximately one year, was an audit manager in the real estate industry group
for Altschuler, Melvin & Glasser for six years, and was an auditor with Arthur
Young & Co. for 3 years.
Mr. Horwitz received his Bachelor of Commerce degree in accounting from Rhodes
University in South Africa and is a member of the Illinois Society of Certified
Public Accountants, the American Institute of Certified Public Accountants
and the South African Institute of Chartered Accountants.
BOB SCHAFER, 55, Senior Vice President and Corporate Controller.
Mr. Schafer joined NAPICO in 1984 and is the Corporate Controller
responsible for the financial reporting function of the Company. Prior to
this, he was a Group and Division Controller at Bergen Brunswig for over
eight years, Controller at a Flintkote subsidiary for over four years, and
Assistant Controller at an electronics subsidiary of General Electric for
two years.
Mr. Schafer is a member of the California Society of Certified Public
Accountants. He holds a Bachelor of Science degree in accounting from
Woodbury University, Los Angeles.
<PAGE> 72
PATRICIA W. TOY, 67, Senior Vice President - Communications and Assistant
Secretary.
Mrs. Toy joined NAPICO in 1977, following her receipt of an MBA from the
Graduate School of Management, UCLA. From 1952 to 1956, Mrs. Toy served as a
U.S. Naval Officer in communications and personnel assignments. She holds a
Bachelor of Arts Degree from the University of Nebraska.
MARK L. WALTHER, 36, Executive Vice President, General Counsel and Assistant
Secretary.
Mr. Walther joined NAPICO in 1987 and is responsible for the legal affairs of
the NAPICO sponsored limited partnerships. Prior to joining NAPICO, Mr. Walther
worked in the San Francisco law firm of Browne and Kahn which specialized in
construction litigation. Mr. Walther received his Bachelor of Arts Degree in
Political Science from the University of California, Santa Barbara and is a
graduate of the University of California, Davis, School of Law. He is a member
of the State Bar of Hawaii.
<PAGE> 73
ITEM 11. MANAGEMENT RENUMERATION AND TRANSACTIONS
Real Estate Associates Limited III has no officers, employees or
directors. However, under the terms of the Restated Certificate and
Agreement of Limited Partnership, the Partnership is obligated to pay the
Corporate General Partner an annual management fee The annual management
fee is approximately equal to .4 percent of the invested assets,
including the Partnership's allocable share of the mortgages related to real
estate properties held by local limited partnerships is to be paid to the
general partners. The fee is earned beginning in the month the Partnership
makes its initial contribution to the limited partnership. In addition, the
Partnership reimburses the Corporate General Partner for certain expenses.
An affiliate of the Corporate General Partner is responsible for the on-site
property management for a property owned by a limited partnership in which
the Partnership has invested.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT:
(a) Security Ownership of Certain Beneficial Owners
The general partners own all of the outstanding general
partnership interests of REAL III; no person is known to own
beneficially in excess of 5% of the outstanding limited partnership
interests.
(b) At December 31, 1996, security ownership of management is as
listed:
<TABLE>
<CAPTION>
Amount and Percentage of
Nature of Outstanding
Name of Beneficial Limited
Title of Class Beneficial Owner Owner Partner Interests
- -------------- ---------------- ---------- -----------------
<S> <C> <C> <C>
Limited Partnership Interest Coast Housing Investments
Associates (CHIA)
9090 Wilshire Blvd., #201
Beverly Hills, CA 90211 30,000 *
Limited Partnership Interest Charles H. Boxenbaum
780 Latimer Road
Santa Monica, CA 90402 17,500 *
Limited Partnership Interest Bruce E. Nelson
7036 Grasswood Avenue
Malibu, CA 90265 5,000 *
</TABLE>
* Cumulative Limited Partnership interests owned by corporate officers or the
general partner is less than 1% interest of total outstanding Limited
Partnership interests.
<PAGE> 74
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS:
The Partnership has no officers, directors or employees of its own. All of
its affairs are managed by the Corporate General Partner, National
Partnership Investments Corp. The transactions with the Corporate General
Partner are primarily in the form of fees paid by the Partnership to the
general partner for services rendered to the Partnership, as discussed in Item
11 and in the notes to the accompanying financial statements.
ITEM 14. FINANCIAL STATEMENTS, SCHEDULES, EXHIBITS AND REPORT ON FORM 8-K:
FINANCIAL STATEMENTS
Report of Independent Public Accountants.
Balance Sheets as of December 31, 1996 and 1995.
Statements of Operations for the years ended December 31, 1996, 1995 and 1994.
Statements of Partners' Equity (Deficiency) for the years ended December 31,
1996, 1995 and 1994.
Statements of Cash Flow for the years ended December 31, 1996, 1995 and 1994.
Notes to Financial Statements.
FINANCIAL STATEMENT SCHEDULES
APPLICABLE TO REAL ESTATE ASSOCIATES LIMITED III, REAL ESTATE ASSOCIATES AND
THE LIMITED PARTNERSHIPS IN WHICH REAL ESTATE ASSOCIATES LIMITED III AND REAL
ESTATE ASSOCIATES HAVE INVESTMENTS:
Schedule - Investments in Limited Partnerships, December 31, 1996, 1995 and
1994.
Schedule III - Real estate and accumulated depreciation, December 31, 1996.
The remaining schedules are omitted because the required information is
included in the financial statements and notes thereto or they are not
applicable or not required.
EXHIBITS
(3) Articles of incorporation and bylaws: The registrant is not
incorporated. The Partnership Agreement was filed with Form S-11
#268983 incorporated herein by reference.
(10) Material contracts: The registrant is not party to any material
contracts, other than the Restated Certificate and Agreement of Limited
Partnership dated January 5, 1981, and the thirty-three contracts
representing the Partnership investment directly or indirectly in local
limited partnerships as previously filed at the Securities Exchange
Commission, File 268983 which is hereby incorporated by reference.
(13) Annual report to security holders: page 10.
<PAGE> 75
REPORTS ON FORM 8-K
A report on Form 8-K dated February 14, 1997, was filed with the Securities
and Exchange Commission. This Form 8-K disclosed that the registrant became
aware of an entity conducting a tender offer for units in the registrant.
The general partners on behalf of the registrant, by letter, transmitted on or
about February 14, 1997, advised the limited partners that the general
partners expressed no opinion regarding this offer, but urged the limited
partners to consult with their tax advisors about the tax consequences that
could result from a sale of their units.
<PAGE> 76
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Los
Angeles, State of California.
REAL ESTATE ASSOCIATES LIMITED III
By: NATIONAL PARTNERSHIP INVESTMENTS CORP.
The General Partner
______________________________________________
Charles H. Boxenbaum
Chairman of the Board of Directors
and Chief Executive Officer
______________________________________________
Bruce E. Nelson
Director and President
______________________________________________
Alan I. Casden
Director
______________________________________________
Henry C. Casden
Director
______________________________________________
Brian D. Goldberg
Director
______________________________________________
Shawn D. Horwitz
Executive Vice President and
Chief Financial Officer
______________________________________________
Bob E. Schafer
Senior Vice President and Corporate Controller
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
PARTNERSHIP'S STATEMENTS OF EARNINGS AND BALANCE SHEETS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 9,734,531
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 9,734,531
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 10,993,018
<CURRENT-LIABILITIES> 7,450
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 9,040,965
<TOTAL-LIABILITY-AND-EQUITY> 10,993,018
<SALES> 0
<TOTAL-REVENUES> 1,545,017
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 669,938
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 151,000
<INCOME-PRETAX> 724,079
<INCOME-TAX> 0
<INCOME-CONTINUING> 724,079
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 724,079
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
