SECURITIES AND EXCHANGE COMMISSION
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, 1997
Commission File Number 2-84474
APT HOUSING PARTNERS LIMITED PARTNERSHIP
A Massachusetts Limited Partnership
I.R.S. Employer Identification No. 04-2791736
500 West Cummings Park, Suite 6050, Woburn, Massachusetts 01801
Registrant's Telephone Number, Including Area Code (617) 935-4200
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].
DOCUMENTS INCORPORATED BY REFERENCE
NONE
TOTAL NUMBER OF PAGES 50
INDEX TO EXHIBITS AT PAGE 15
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PART I
ITEM 1. BUSINESS:
General
APT HOUSING PARTNERS LIMITED PARTNERSHIP (the "Partnership") is a limited
partnership which was formed under the laws of the Commonwealth of
Massachusetts on June 8, 1983. The General Partner of the Partnership is
APT Asset Management, Inc., a Massachusetts corporation. APT Asset
Management, Inc. is a wholly owned subsidiary of APT Financial Services,
Inc. (a Delaware Corporation) whose majority shareholder is John M. Curry.
The Partnership's business is to invest, as a limited partner, in Local
Limited Partnerships owning government-assisted housing developments and to
provide its partners current tax benefits, potential appreciation in real
estate investments, distribution of net capital transaction proceeds and
distributable cash to the extent available.
On September 30, 1983, the Partnership offered for sale 9,000 units of
limited partnership interests at $1,000 each pursuant to a prospectus dated
September 30, 1983. The offering was subsequently amended on March 30, 1984
to provide for 3,700 units of limited partnership interests at $1,000 each.
The public offering was managed by American Investment Team, Inc. ("AIT")
("the dealer manager"), an affiliate of the General Partner of the
Partnership. The minimum investment allowed was $5,000.
The Partnership received $3,700,000 of subscriptions for limited partnership
interests during the period September 30, 1983 through April 30, 1984 from
329 Investors. No further issuance of partnership interests is anticipated.
The net proceeds ($3,071,000) of the public offering were primarily used to
purchase limited partnership interests in existing multi-family rental
housing developments known as Ashland Commons Associates, Rockledge
Apartments Associates and Historic Cohoes II. The Partnership's investments
in each Local Limited Partnership represents 95.5%, 97% and 97%,
respectively. On December 18, 1986 the Partnership withdrew its 97%
investment interest in Historic Cohoes II and received its original
investment of $1,321,234 from the Local Limited Partnership.
A distribution of the same amount was made to the Limited Partners on
April 3, 1987.
Federal, state or local government agencies have provided significant
incentives in order to stimulate private investment in government-assisted
housing. The intent of these incentives was to reduce certain market risks and
provide investors (i) tax benefits, (ii) limited cash distributions and
(iii) long-term capital appreciation. Notwithstanding these factors, there
remain significant risks. These risks include, but are not limited to, the
financial strength of the local general partners. The long-term nature of
investments in government-assisted housing limits the ability of the
Partnership to vary its investment portfolio in response to changing
economic, financial and investment conditions; such investments are also
subject to changes in local economic circumstances and housing patterns
which have an impact on real estate values. These housing developments
also require greater management expertise and may have higher operating
expenses than conventional housing developments.
The Partnership became the principal limited partner in these Local Limited
Partnerships pursuant to Local Limited Partnership agreements entered into
with the local general partners. As a limited partner, the Partnership's
liability for obligations of the Local Limited Partnerships is limited to
its investment. The local general partners of the Local Limited
Partnerships retain responsibility for maintaining, operating and managing
the housing developments. Under certain circumstances, the Partnership has
the right to replace the local general partner of the Local Limited
Partnerships.
<PAGE>
John M. Curry is a General Partner in one of the Local Limited Partnerships.
An affiliated company in which John M. Curry is the President, is the
General Partner in the other Local Limited Partnership.
Although each of the Local Limited Partnerships in which the Partnership
has invested owns a housing development which must compete for tenants in
the market place, the rental assistance and below market interest
rates on mortgage financing provided by government-assisted housing
programs make it possible to offer apartments to eligible tenants at a cost
to the tenant significantly below the market rate for comparable
conventionally-financed apartments in the area.
The Internal Revenue Service (IRS) scrutinizes, in general, "tax shelters"
that generate tax losses in any taxable year. The Local Limited
Partnerships will deduct certain fees such as General Partners' fees and
other expenses on the basis that such expenses constitute ordinary and
necessary expenses of carrying on the business. If the federal income tax
information return filed annually by the Partnership or by any Local Limited
Partnership are audited, no assurance can be given as to what extent the
deductions claimed for these fees will be allowed. Any disallowance by the
IRS that is not successfully rebutted will have the effect of increasing
the taxable income or decreasing the taxable loss of each Limited Partner
for the year in question.
The Limited Partners do not have a right to participate in the management of
the Partnership or its operations. However, a majority in interest of the
Limited Partners have the authority to (1) approve or disapprove the sale of
all or substantially all of the assets of the Partnership in a single
transaction or a related series of transactions, (2)dissolve the
Partnership, (3) remove the General Partner, for cause, or (4) elect a
substitute General Partner. Limited Partners holding 10% or more of the
limited partnership interests have the right to call meetings of the
Partnership and propose amendments to the Partnership Agreement.
As a Limited Partner of each of the Local Limited Partnerships, the
Partnership does not have the right to participate in the management of
such Local Limited Partnerships or their operations. The Partnership
retains certain rights with respect to voting on or approving certain
matters, including the sale of the housing developments. By the existence
or exercise of such rights, it could be asserted that the Partnership was
taking part in the control of the Local Limited Partnerships' operations
and should thereby incur liability for all debts and obligations of the
Local Limited Partnerships. If this were found to be the case, the
Partnership interest in one Local Limited Partnership could be reached by
creditors of another Local Limited Partnership. The Partnership
has received opinions of counsel for the Local Limited Partnerships that
the existence and exercise of such rights will not subject it to liability
as a Local General Partner of the Local Limited Partnership.
Holders of the Partnership's limited partnership interests will need to bear
the economic risk of their investment for an indefinite period of time.
Transferability of the limited partnership interests is restricted so as
not to cause a termination of the Partnership for tax purposes. In
California, Maine, New Hampshire, Pennsylvania and South Carolina,
transferability of the limited partnership interests is restricted to
transferees meeting the investor suitability standards. In addition, a
transfer of limited partnership interests is subject to the consent of the
General Partner, which may be withheld in its sole discretion.
<PAGE>
Losses recognized for tax purposes from the ownership and operations of the
housing developments decline over time. This occurs because the tax
advantages of accelerated depreciation are greatest in earlier years and
decline over the life of the housing developments, and because those
portions of the level mortgage payment attributable to deductible interest
likewise decrease with the passage of time. In addition, the benefits to
be received in the form of tax savings in future years may decline as a
result of the enactment of the Tax Reform Act of 1986, depending
on the individual circumstances of each Limited Partner. For these reasons,
among others, it is not anticipated that any public market will develop for
the purchase and sale of limited partnership interests. Consequently,
holders of limited partnership interests in the Partnership may not be able
to liquidate their investments in the event of an emergency and limited
partnership interests probably will not be readily acceptable as collateral
for loans. Moreover, should a limited partner dispose of his limited
partnership interest, he will realize taxable income to the extent that his
allocable share of the mortgage debt obligations plus the other
consideration he receives upon such disposition exceeds his tax basis,
while at the same time he may not receive sufficient cash to pay such taxes.
Competition
The real estate rental business in which the Local Limited Partnerships are
engaged is highly competitive and the properties owned by the Local Limited
Partnerships are expected to be subject to active competition from similar
properties in their respective vicinities. The Local Limited Partnerships
compete with many other entities providing residential rental housing
through government-assisted and conventionally-financed housing developments.
Some of these entities are owned by large real estate operators with
significantly greater resources than the Partnership as well as local
organizations which own and operate a relatively small number of properties.
The Local Limited Partnerships believe that they have a reputation for
providing safe, clean, quality residential housing which enables them to
compete effectively for tenants. While the Local Limited Partnerships
believe that they will continue to compete effectively for tenants, there
can be no assurance that they will do so or that they will not encounter
further increased competition in the future due to changes in the various
government-assisted housing programs and from rehabilitated or new housing
developments in their respective vicinities.
Employees
The Partnership does not have any direct employees. All services are
performed for the Partnership by its General Partner and its affiliates.
The General Partner receives compensation in connection with such activities
as set forth in Item 11. In addition, the Partnership reimburses the
General Partner and certain of its affiliates for expenses incurred in
connection with the performance by their employees of services for the
Partnership in accordance with the Partnership's Amended and Restated
Agreement and Certificate of Limited Partnership (the "Partnership
Agreement").
<PAGE>
ITEM 2. PROPERTIES:
The Partnership holds limited partnership interests in two (2) Local Limited
Partnerships as of December 31, 1997. Set forth is a schedule of the Local
Limited Partnerships including certain information concerning the
Apartment Complexes.
Name and Location % of Units Occupied
(Number of Units) Date Acquired at December 31,
1997 1996 1995 1994 1993
Ashland Commons Associates March 30, 1984 99% 100% 99% 100% 99%
Ashland, MA (96)
Rockledge Apartments
Associates June 22, 1984 98% 97% 98.2% 100% 100%
Wakefield, MA (60)
The Local Limited Partnerships in which the Partnership has invested own
existing Apartment Complexes which receive either Federal or State
subsidies. The U.S. Department of Housing and Urban Development (HUD),
through the Federal Housing Administration (FHA), administers a variety of
subsidy programs for low- and moderate-income housing developments. The
Federal programs generally provide one of a combination of the
following forms of assistance: (i) mortgage loan insurance (ii) rental
subsidies, (iii) reduction of mortgage interest payments.
i) HUD provides mortgage insurance for rental housing projects pursuant to a
number of sections of Title II of the National Housing Act ("NHA")
including, among others, Section 236 and Section 221(d)(4). Under
these programs, HUD will generally provide insurance equal to 90% of
the total replacement cost to limited-distribution owners. Mortgages
are provided by institutions approved by HUD, including banks, savings
and loan companies and local housing authorities. Section 221(d)(4)
of the NHA provides for federal insurance of private construction
and permanent mortgage loans to finance new construction of rental
apartment complexes containing five or more units.
ii) Many of the tenants in HUD insured projects receive some form of
rental assistance payments, primarily through the Section 8 Housing
Assistance Payments Program ("Section 8 Program"). Apartment
Complexes receiving assistance through the Section 8 Program will
generally have limitations on the amount of rent which may be charged.
One requirement imposed by HUD regulations effective for apartment
complexes initially approved for Section 8 payments on or after
November 5, 1979 is to limit the amount of the owner's annual cash
distributions from operations to 10% of the owner's equity investment
in an apartment complex if the apartment complex is intended for
occupancy by families and to 6% of the owner's equity investment in an
apartment complex intended for occupancy by elderly persons. The
owner's equity investment in the apartment complex is 10% of the
project's replacement cost as determined by HUD.
HUD released the American Community Partnerships Act (the "ACPA").
The ACPA is HUD's blueprint for providing for the nation's housing needs in
an era of static or decreasing budget authority. Two key proposals
in the ACPA that could affect the Local Limited Partnerships are: A
discontinuation of project-based Section 8 subsidy payments and an attendant
reduction in debt on properties that were supported by the Section 8 payments.
The ACPA calls for a transition during which the project-based Section 8
would be converted to a tenant-based voucher system. Any FHA insured debt
would then be "marked-to-market"; that is, revalued in light of the reduced
income stream, if any. Currently, any Section 8 subsidy contract that
expires, HUD is renewing on a year to year basis until such time as a new
program is implemented, if any. The impact of ACPA, if enacted in its
present form, is not presently determinable.
<PAGE>
Several industry sources have already commented to HUD and Congress
that in the event the ACPA were fully enacted in its present form, the
reduction in mortgage indebtedness would be considered taxable income to
limited partners in the Partnership. Legislative relief has been proposed
to exempt "mark-to-market" debt from cancellation of indebtedness income
treatment.
iii) The Section 236 Program, as well as providing mortgage insurance,
also provides a subsidy which reduces the debt service on a project
mortgage, thereby enabling the owner to charge the tenants lower
rents for their apartments. Interest credit subsidy payments are
made monthly by HUD directly to the mortgagee of the project. Each
payment is in an amount equal to the difference between (i) the
monthly payment required by the terms of the mortgage to pay
principal and interest and (ii) the monthly payment which would have
been required for principal and interest if the mortgage loan
provided for interest at the rate of 1%. These payments are credited
against the amounts otherwise due from the owner of the project, who
makes monthly payments of the balance.
All tenant leases are generally for periods not greater than one to
two years and no tenant occupies more than 10% of the rentable square footage.
Management continuously reviews the physical state of the properties
and budgets improvements when required which are generally funded from cash
flow from operations or release of replacement reserve escrows. No
improvements are expected to require additional financing.
See Item 1, Business, above for the general competitive conditions
to which the properties described herein are subject.
Real estate taxes are calculated using rates and assessed valuations
determined by the town or city in which the property is located.
ITEM 3. LEGAL PROCEEDINGS:
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
None.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S LIMITED PARTNERSHIP
INTERESTS AND RELATED SECURITY HOLDER MATTERS:
Limited partnership interests are not traded in a public market but were
sold through a public offering managed by American Investment Team, Inc. It
is not anticipated that any public market will develop for the purchase and
sale of any limited partnership interest. Limited partnership interests
may be transferred only if certain requirements are satisfied. As of
March 15, 1998, there were 326 registered holders of an aggregate of 3,700
units of limited partnership interests in the Partnership.
<PAGE>
The Partnership has invested in Local Limited Partnerships owning housing
developments which receive governmental assistance under programs which
restrict the cash return available to housing development owners. The
Partnership does not anticipate providing significant cash distributions to
its limited partners in circumstances other than a refinancing or sale.
On February 24, 1995, the Partnership distributed $200,000 to the partners,
of which $196,000 or $52.97 per unit of limited partnership interest, was
distributed to the Limited Partners. The Partnership does not anticipate
that it will make any further cash distributions.
ITEM 6. SELECTED FINANCIAL DATA:
The information set forth below presents selected financial data of the
Partnership. Additional financial information is set forth in the audited
financial statements in Part IV, Item 14, beginning on page 15.
Year Ended December 31,
OPERATIONS 1997 1996 1995 1994 1993
Revenue $ 2,610 $ 1,389 $ 1,884 $ 4,843 $ 1,507
Expenses 46,464 45,891 46,948 46,713 47,799
Loss before share of
losses of and
distributions from the
Local Limited
Partnerships ( 43,854) ( 44,502) ( 45,064) ( 41,870) ( 46,292)
Distribution from Local
Limited Partnership 87,903 87,903 87,064 82,255 96,546
Share of losses of Local
Limited Partnerships - - - - -
Net income $ 44,049 $ 43,401 $ 42,000 $ 40,385 $ 50,254
Net income per weighted
average limited
partnership unit $ 11.67 $ 11.50 $ 11.12 $ 10.70 $ 13.31
FINANCIAL POSITION
December 31,
1997 1996 1995 1994 1993
Total assets $ 108,175 $ 64,360 $ 20,946 $ 179,140 $ 138,681
Investment in Local
Limited Partnerships $ -0- $ -0- $ -0- $ -0- $ -0-
Total liabilities $ 17,357 $ 17,591 $ 17,578 $ 17,772 $ 17,698
Total partners'capital $ 90,818 $ 46,769 $ 3,368 $ 161,368 $ 120,983
Cash distributions per
limited partnership
unit $ -0- $ -0- $ 52.97 $ -0- $ -0-
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS:
Liquidity and Capital Resources
The Partnership's primary source of funds were the proceeds of its public
offering. Other sources of liquidity include interest earned on funds and
cash distributions from operations of the Local Limited Partnerships in
which the Partnership has invested. These sources of liquidity are
available to meet obligations of the Partnership.
The Partnership received $3,700,000 in gross proceeds from the sale of
partnership interests pursuant to the public offering, resulting in net
proceeds available for investment, after volume discounts, establishment of
working capital reserves, payment of sales commissions, acquisition fees
and offering expenses, of $3,071,000.
As of December 31, 1997, the Partnership has invested all of the net
proceeds available for investment.
The Partnership's commitment to investments requiring initial capital
contributions has been paid. The Partnership has no other significant
capital commitments.
HUD released the American Community Partnerships Act (the "ACPA"). The
ACPA is HUD's blueprint for providing for the nation's housing needs in an
era of static or decreasing budget authority. Two key proposals in
the ACPA that could affect the Local Limited Partnerships are: A
discontinuation of project based Section 8 subsidy payments and an
attendant reduction in debt on properties that were supported by the
Section 8 payments. The ACPA calls for a transition during which the
project based Section 8 would be converted to a tenant based voucher system.
Any FHA insured debt would them be "marked-to-market", that is revalued in
light of the reduced income stream, if any. Currently, any Section 8
subsidy contract that expires, HUD is renewing on a year to year basis until
such time as a new program is implemented, if any. The impact of ACPA, if
enacted in its present form, is not presently determinable.
Several industry sources have already commented to HUD and Congress that in
the event the ACPA were fully enacted in its present form, the reduction in
mortgage indebtedness would be considered taxable income to limited partners
in the Partnership. Legislative relief has been proposed to exempt
"mark-to-market" debt from cancellation of indebtedness income treatment.
Cash distributions received from a Local Limited Partnership amounted to
$87,903, $87,903, and $87,064 during the years ended December 31, 1997,
1996 and 1995, respectively. These distributions were used to meet the
Partnership's obligations and, in 1995, to make distributions to its
partners. The Partnership has invested in Local Limited Partnerships owning
housing developments which receive governmental assistance under programs
which restrict the cash return available to the housing development owners.
The Partnership believes that it will continue to receive cash distributions
from a Local Limited Partnership in an amount sufficient to meet its operating
expenses. However, there can be no assurance that cash distributions
received will be adequate to allow the Partnership to make any further cash
distributions to its partners.
Management is not aware of any trends or events, commitments or
uncertainties that will impact liquidity in a material way. Management
believes the only impact would be for laws that have not yet been adopted.
<PAGE>
Results of Operations
The Partnership was formed to provide various benefits to its limited
partners as discussed in Part I, Item 1 of this Report. It is anticipated
that the Local Limited Partnerships in which the Partnership has invested
will primarily produce tax losses of approximately $17,000 per $5,000
investment in approximately 14 to 17 full years of Partnership operations,
with approximately $11,000 of such tax losses occurring during the first 5
full years of Partnership operations (assuming the applicability of current
laws, regulations and court decisions). The benefits received in the form
of tax savings may be reduced due to the enactment of the Tax Reform Act of
1986, depending on the individual circumstances of each Limited Partner.
There can be no assurance that the Partnership will be able to attain its
investment objectives. The Partnership will not seek to sell its interest
in any housing development or Local Limited Partnership until proceeds of
such sale would supply sufficient cash to enable its Limited Partners to pay
applicable taxes. Proceeds of such sales will not be reinvested. It is not
expected that any of the Local Limited Partnerships in which the Partnership
has invested will generate cash flow sufficient to provide for distributions
to Limited Partners in any material amount.
Except for the operating balance of cash, the Partnership's assets consist
primarily of limited partnership interests in Local Limited Partnerships
owning government-assisted housing developments. The Partnership accounts
for its investments in the Local Limited Partnerships using the equity
method of accounting. Under the equity method of accounting, the investment
cost is subsequently adjusted for the Partnership's share of each Local
Limited Partnership's results of operations and cash distributions. The
Partnership's share in the loss of each Local Limited Partnership is not
recognized to the extent that the investment balance would become negative.
For the years ended December 31, 1997, 1996 and 1995, the aggregate share of
losses of the Local Limited Partnerships attributable to the Partnership and
not included in the statements of income for those years amounted to $89,247,
$11,813, and $22,868, respectively. At December 31, 1997 and 1996, the
Partnership's cumulative share of losses of the Local Limited Partnerships
exceeded its investments by $484,824 and 395,577, respectively, and,
accordingly, have not been reflected in the Partnership's financial
statements in accordance with the equity method of accounting because the
investment balances have been reduced to zero.
The Partnership's net income in 1997, 1996 and 1995 was due primarily to
cash distributions received of $87,903, $87,903 and $87,064, respectively,
from one Local Limited Partnership which offset the Partnership's net
operating expenses in these years resulting in net income of $44,049,
$43,401, and $42,000, respectively.
The Partnership incurs an annual program management fee payable to
American Securities Team, Inc. ("AST") commencing in January, 1997 and to
American Investment Team, Inc. ("AIT"), for the years prior thereto, both
affiliates of the General Partner, for managing the affairs of the
Partnership and for providing investor services to the limited partners.
The fee to the affiliate is equal to .5% of invested assets plus the Local
Limited Partnerships' annualized outstanding nonrecourse debt. The fee
amounted to $36,907, $37,141, and $37,353, for 1997, 1996 and 1995,
respectively.
Administrative expenses consist of professional fees.
<PAGE>
Other
The Partnership's investment as a Limited Partner in the Local Limited
Partnerships is subject to the risks incident to the potential losses
arising from management and ownership of improved real estate. The
Partnership's investments also could be adversely affected by poor economic
conditions, generally, which could increase vacancy levels, increase rental
payment defaults, or increase operating expenses. Any or all of these
circumstances could threaten the financial viability of one or both of the
Local Limited Partnerships.
There are also substantial risks associated with the operations of
Apartment Complexes receiving government assistance. These include:
governmental regulations concerning tenant eligibility which may make it
more difficult to rent apartments in the complexes; difficulties in
obtaining government approval for rent increases; limitations on the
percentage of income which low and moderate income tenants may pay as rent;
the possibility that Congress may not appropriate funds to enable the U.S.
Department of Housing and Urban Development to make the rental assistance
payments it has contracted to make; and that, when the rental assistance
contracts expire, there may not be market demand for apartments at full
market rents in a Local Limited Partnership's Apartment Complex.
The Local Limited Partnerships are impacted by inflation in several ways.
Inflation allows for increases in rental rates generally to reflect the
impact of higher operating and replacement costs. Inflation also affects
the Local Limited Partnerships adversely by increasing operating costs,
such as fuel, utilities and labor.
The Partnership has evaluated the potential impact of the situation
commonly referred to as the "Year 2000 Problem". The Year 2000 Problem,
which is common to most companies, concerns the inability of information
systems, primarily computer software programs, to properly recognize and
process date sensitive information related to the year 2000. Management
does not expect the Partnership to incur any significant expenses related to
this issue.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA:
The financial statements and supplementary data required by this item are
set forth under Item 14 of Part IV beginning on page 15 and are incorporated
herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE:
Not applicable
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT:
The Partnership has no directors or executive officers. The Partnership's
affairs are managed and controlled by the General Partner. Certain
information concerning the director and executive officers of the General
Partner is set forth below:
JOHN M. CURRY, BS, MBA, CPM, GSP, RR, 55, is the founder, Chairman,
Director, and Shareholder of APT Financial Services, Inc., and its
subsidiaries. Mr. Curry has been responsible for the construction of over
4,000 units of multi-family housing at a cost of over $120,000,000 and
240,000 square feet of commercial space. Mr. Curry is a graduate of the
University of San Francisco (BS, 1968) and the Harvard Graduate School of
Business Administration (MBA, 1970). He is a licensed Real Estate Broker in
Massachusetts and New York and a licensed Builder in Massachusetts. His
professional memberships include the Institute of Real Estate Management
with the classification of Certified Property Manager, the Greater Boston
Real Estate Board, Builders Association of Greater Boston, and is listed in
Who's Who in America.
JEFF E. EWING, BS, CPA, 32, is the President, Chief Financial Officer,
Director and Shareholder of APT Financial Services, Inc. Mr. Ewing joined
the company in December 1992, becoming its controller, and in December 1994,
he became the Company's President and Chief Financial Officer. He is
responsible for new business development, corporate operations and the
development, implementation and review of all financial reporting systems
as well as compliance with applicable tax and regulatory requirements.
Prior to joining APT, Mr. Ewing was employed by Congress Realty Group of
Companies as assistant controller and the accounting firm of Robert Ercolini
and Company as a senior auditor. Mr. Ewing is a Certified Public Accountant
in the Commonwealth of Massachusetts and a NASD registered Financial and
Operations Principal. Mr. Ewing received his B.S. in Accountancy from
Bentley College and is a member of the American Institute of Certified
Public Accountants and the Massachusetts Society of Certified Public
Accountants.
THERESE M. COCHRAN, CPM, 40, is a Director and Shareholder of APT
Financial Services, Inc. and the President of American Properties Team, Inc.,
a wholly-owned subsidiary of APT Financial Services, Inc. She is responsible
for the operations of the management company and new business development.
Ms. Cochran currently serves as an Executive Member of the Community
Associates Institute, is the Chairperson of the CAI Legislative Action
Committee and is a member of the Institute of Real Estate Management having
earned the designation of Certified Property Manager.
ELLIOT J. FEINER, BA, MBA, 59, is a Director and Shareholder of APT
Financial Services, Inc. and its subsidiaries. Mr. Feiner graduated from
Brown University (BA-Economics, 1959) and Suffolk University (MBA, 1962).
He is a Certified Public Accountant. Mr. Feiner was Vice President of
Finance for FMR Investment Management Services, Inc., a subsidiary of the
Fidelity Group, and is currently self-employed.
<PAGE>
J. STEWART HARVEY, JR., BSBA, MBA, 65, is a Director and Shareholder of APT
Financial Services, Inc., and its subsidiaries. Mr. Harvey is Managing
Director of Aberdeen American Inc., an investment firm. He has held the
position since 1985. Prior to this, Mr. Harvey was Vice President and
Director of Gardner and Preston Moss, Inc. He was Vice President and
Director of Research for Fidelity Management and Research Company, the
largest mutual funds firm in the country. Mr. Harvey is a graduate of
Boston University (BSBA, 1960) and Northeastern University (MBA-Finance, 1966).
MICHAEL LEMOYNE KENNEDY, BA, JD, was a Director and Shareholder of APT
Financial Services, Inc., and its subsidiaries. Mr. Kennedy was Chairman of
Citizens Energy Corporation, a non-profit energy company. Citizens Energy,
through its partnership with Medco Containment, provides at cost, AZT to
low-income AIDS patients in several states. Mr. Kennedy was a graduate of
Harvard College (BA, 1980) and the University of Virginia Law School
(JD, 1984). Mr. Kennedy was also an active member of the boards of the
Robert F. Kennedy Memorial, the John F. Kennedy Library Foundation, the
Friends of Boston's Long Island Shelter, and The Pacific National Bank,
Santa Ana, CA. During 1997, Mr. Kennedy passed away at the age of 39 and a
replacement director has not been selected.
ROBERT E. HALLAGAN, BS, MBA, 54, is a Director and Shareholder of APT
Financial Services, Inc., and its subsidiaries. Mr. Hallagan is President
of Heidrick & Struggles, Inc., a worldwide executive search firm. He has
been associated with the company since 1976. Prior to this, he was an
Executive Vice President and Treasurer for Hawthorne Securities, and for
the Boston Stock Exchange. Mr. Hallagan is a graduate of Deerfield Academy,
Williams College (BS, 1966), and Harvard Graduate School of Business
(MBA, 1970).
AFFILIATES:
APT FINANCIAL SERVICES INC., ("APT" OR "Company") is a Delaware corporation
organized on April 19, 1983. The Company's principal office is located at
500 West Cummings Park, Woburn, MA. APT Financial Services, Inc. and its
wholly-owned subsidiaries, American Properties Team, Inc., APT Asset
Management, Inc., American Securities Team, Inc. and American Investment
Team, Inc. form a real estate service company providing property management,
asset management, syndication, development and investor services to third-
party owners, affiliates and partners.
AMERICAN PROPERTIES TEAM, INC. ("APT") is a Massachusetts corporation
organized on March 4, 1977. APT provides property management services to
third party entities, primarily condominium associations. Currently, the
Company manages approximately 4,000 condominium units in Massachusetts.
APT ASSET MANAGEMENT, INC. is a Massachusetts corporation organized on
August 17, 1982. The company has developed over $100 million in residential
and commercial properties. In addition, APT Asset Management, Inc. serves
as the General Partner for ten real estate limited partnerships one of which
is publicly registered. The company conducts strategic planning for the
limited partnerships including development, recapitalization, refinancing
and sales.
AMERICAN INVESTMENT TEAM, INC. ("AIT") is a Massachusetts corporation
organized on August 13, 1982. AIT is an approved U.S. Department of Housing
and Urban Development ("HUD") Title II nonsupervised mortgagee and was,
until January 1, 1997, a NASD registered broker-dealer for both public and
private placements. Until January 1, 1997, the company also served as
investor services agent for over 570 clients who have invested $30 million
of equity in the Company's developments.
AMERICAN SECURITIES TEAM, INC. ("AST") is a Massachusetts corporation
organized on December 19, 1996. AST commenced operations on January 1, 1997,
at which date it acquired AIT's NASD registered broker-dealer and investor
services operations. The company serves as investor services agent for over
570 clients who have invested $30 million of equity in the Company's
developments.
<PAGE>
APT MANAGEMENT, INC. (formerly known as Curry Management, Inc.) is a
Massachusetts corporation organized on June 19, 1987. The company provides
property management services to both multi-family and commercial properties.
Currently, the company manages over 5,000 units of multi-family housing and
75,000 square feet of commercial space in Massachusetts, New York and
Indiana. Of the 5,000 units under management, 1,200 are subsidized units
through Federal and State programs including Section 8, Section 13A, and
Section 236.
ITEM 11. EXECUTIVE COMPENSATION:
The Partnership has no officers or directors. The Partnership does not pay
or accrue any fees, salaries or other forms of compensation to directors or
officers of the General Partner for their services. Under the terms of the
Partnership Agreement, the General Partner and affiliates are entitled to
receive compensation from the Partnership in consideration of certain
services rendered to the Partnership by such parties. In addition, an
affiliate of the General Partner, American Securities Team, Inc., receives
from the Partnership an annual program management fee equal to .5% of
invested assets plus the Local Limited Partnerships' annualized outstanding
nonrecourse mortgage debt. The Local Limited Partnerships pay fees ranging
from 4.5% to 6% of gross revenue collected to APT Management, Inc., an
affiliate of the General Partner, for management of properties owned by the
Local Limited Partnerships.
Further, the Local Limited Partnerships have incurred $1,373,195 of fees
from inception with their local general partners or affiliates for
development, construction, administration and various operating and
construction deficit guarantees.
Included in these fees of the Local Limited Partnerships are fees totaling
$618,929 paid or to be paid to John M. Curry or affiliated companies.
Tabular information concerning salaries, bonuses and other types of
compensation payable to executive officers has not been included in the
annual report. As noted above, the Partnership has no executive officers.
The levels of compensation payable to the General Partner and/or its
affiliates is limited by the terms of the Partnership Agreement and may not
be increased therefrom on a discretionary basis.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT:
(a) Security Ownership of Certain Beneficial Owners
The General Partner owns all of the outstanding general partnership
interests of APT Housing Partners Limited Partnership. One person is known
to own beneficially in excess of 5% of the outstanding limited partnership
interests.
<PAGE>
As of March 15, 1998, the ownership interests by the General Partner and
its affiliates and holders of 5% or greater of outstanding limited
partnership interests is as listed:
Title of Name and Address of Amount and Nature of Percentage of
Class Beneficial Ownership Beneficial Ownership Class
General APT Asset Management,Inc. $2000 Capital 2.000%
Partner- 500 West Cummings Park contribution
ship Suite 6050 directly
Interest Woburn, MA 01801 owned
Limited John M. Curry $5,000 Capital .1351%
Partner- 211 Commodore Dr. contribution
ship Jupiter, FL 33477 (5 units) directly
Interest owned
Chistopher Burden $275,000 Capital 7.4324%
731 Hospital Trust Bldg. contribution
Providence, RI 02903 (275 units)directly
owned
APT Asset Management, Inc. $7,000 Capital 1.7568%
500 West Cummings Park contribution
Suite 6050 (65 units)directly
Woburn, MA 01801 owned
(b) Changes in Control
None
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS:
The Partnership has and will continue to have certain relationships with
affiliates of the General Partner, as discussed in Item 11 and also Note 5
to the financial statements in Item 14, which is incorporated herein by
reference. However, there have been no direct financial transactions
between the Partnership and the directors and officers of the General Partner.
<PAGE>
PART IV
ITEM 14. FINANCIAL STATEMENTS, SCHEDULES, EXHIBITS AND REPORTS ON FORM 8K:
Page
(a) 1. Financial Statements
Independent Auditor's Report of Robert Ercolini & Company LLP 16 - 17
Balance Sheets as of December 31, 1997 and 1996 18
Statements of Income for the years ended
December 31, 1997, 1996 and 1995 19
Statements of Partners' Capital (Deficiency) for the years
ended December 31, 1997, 1996 and 1995 20
Statements of Cash Flows for the years ended
December 31, 1997, 1996 and 1995 21
Notes to Financial Statements 22 - 25
(a) 2. Financial Statement Schedules
Schedules Applicable to Local Limited Partnerships
Schedule III - Real Estate and Accumulated Depreciation as of
December 31, 1997 26
Schedule IV - Mortgage Loans on Real Estate as of December 31,
1997 27
All other financial statement schedules have been omitted because
the required information is shown in the financial statements or
notes thereto or they are not applicable.
Individual financial statements of the Local Limited Partnerships
for the years ended December 31, 1997, 1996 and 1995
-Ashland Commons Associates 28 - 37
-Rockledge Apartments Associates 38 - 47
(a) 3. Exhibits
The exhibits listed on the accompanying Index to Exhibits on page
48 are filed as part of this report or incorporated herein by
reference.
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Partnership during the
fiscal quarter ended December 31, 1997.
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Partners of
APT Housing Partners Limited Partnership
Woburn, Massachusetts
We have audited the accompanying balance sheets of APT Housing Partners
Limited Partnership (a Massachusetts Limited Partnership) as of December
31, 1997 and 1996, and the related statements of income, partners' capital
(deficiency), and cash flows for each of the three years in the period ended
December 31, 1997. 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 did not audit the
financial statements of Ashland Commons Associates and Rockledge Apartments
Associates ("Local Limited Partnerships"), the investments in which, as
discussed in Note 3 to the financial statements, are accounted for by the
equity method of accounting. The Partnership's cumulative share of losses
of and distributions from the Local Limited Partnerships have exceeded its
investments therein. Accordingly, the Partnership has reduced the
investments to zero and has suspended application of the equity method.
The financial statements of the Local Limited Partnerships were audited by
other auditors whose reports have been furnished to us, and our opinion,
insofar as it relates to the amounts included for the Local 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 audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits and the
reports of 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 APT Housing Partners Limited Partnership
as of December 31, 1997 and 1996, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1997
in conformity with generally accepted accounting principles.
<PAGE>
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed in
the accompanying index on page 15 are presented for purposes of complying
with the Securities and Exchange Commission's rules and are not a required
part of the basic financial statements. These schedules have been subjected
to the auditing procedures applied in the audits of the basic financial
statements. In our opinion, which insofar as it relates to amounts included
for the Local Limited Partnerships, is based on the reports of other
auditors, these schedules fairly state in all material respects the
financial data required to be set forth therein in relation to the basic
financial statements taken as a whole.
Robert Ercolini & Company LLP
Boston, Massachusetts
March 15, 1998
<PAGE>
APT HOUSING PARTNERS LIMITED PARTNERSHIP
BALANCE SHEETS
ASSETS
December 31,
1997 1996
Investment in Local Limited Partnerships $ - $ -
Cash and cash equivalents 108,175 64,360
Total assets $108,175 $ 64,360
LIABILITIES AND PARTNERS' CAPITAL (DEFICIENCY)
Liabilities:
Accrued expenses -
Affiliate $ 8,857 $ 9,091
Professional fees 8,500 8,500
Total liabilities 17,357 17,591
Commitments and contingencies
Partners' capital (deficiency):
General partner ( 37,509) ( 38,390)
Limited partner, 3,700 partnership units
authorized, issued and outstanding 128,327 85,159
Total partners' capital (deficiency) 90,818 46,769
Total liabilities and partners'
capital (deficiency) $ 108,175 $ 64,360
See notes to financial statements.
<PAGE>
APT HOUSING PARTNERS LIMITED PARTNERSHIP
STATEMENTS OF INCOME
For the years ended December 31,
1997 1996 1995
Interest income $ 2,610 $ 1,389 $ 1,884
Operating expenses:
Management fees - affiliate 36,907 37,141 37,353
Administrative 9,557 8,750 9,595
Total operating expenses 46,464 45,891 46,948
Loss before share of losses of
and distributions from
Local Limited Partnerships ( 43,854) ( 44,502) ( 45,064)
Distribution from Local Limited
Partnership 87,903 87,903 87,064
Share of losses of Local
Limited Partnerships - - -
Net income $ 44,049 $ 43,401 $ 42,000
Limited partners' interest in
net income $ 43,168 $ 42,533 $ 41,160
Weighted average number of outstanding
limited partnership units 3,700 3,700 3,700
Net income per limited
partnership unit $ 11.67 $ 11.50 $ 11.12
See notes to financial statements
<PAGE>
APT HOUSING PARTNERS LIMITED PARTNERSHIP
STATEMENTS OF PARTNERS' CAPITAL (DEFICIENCY)
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 and 1995
General Limited
Partner Partners Total
Balance, December 31, 1994 ($ 36,098) $ 197,466 $ 161,368
Net income 840 41,160 42,000
Distributions ( 4,000) ( 196,000) ( 200,000)
Balance, December 31, 1995 ( 39,258) 42,626 3,368
Net income 868 42,533 43,401
Balance, December 31, 1996 ( 38,390) 85,159 46,769
Net income 881 43,168 44,049
Balance, December 31, 1997 ($ 37,509) $ 128,327 $ 90,818
See notes to financial statements
<PAGE>
APT HOUSING PARTNERS LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
For the years ended December 31,
1997 1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 44,049 $ 43,401 $ 42,000
Adjustments to reconcile net income to
net cash provided by operating activities:
Change in operating assets and liabilities:
Increase (decrease) in accrued
expenses ( 234) 13 ( 194)
Net cash provided by operating activities 43,815 43,414 41,806
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to limited partners - - ( 196,000)
Distributions to general partner - - ( 4,000)
Net cash used in financing activities - - ( 200,000)
Net increase (decrease) in cash and
cash equivalents 43,815 43,414 ( 154,194)
Cash and cash equivalents, beginning
of year 64,360 20,946 179,140
Cash and cash equivalents, end of year $ 108,175 $ 64,360 $ 20,946
See notes to financial statements
<PAGE>
APT HOUSING PARTNERS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
1. Organization and summary of significant accounting policies:
Organization:
APT Housing Partners Limited Partnership ("the Partnership"), organized as
a Massachusetts Limited Partnership on June 8, 1983, was formed to invest
in other Local Limited Partnerships ("the Local Limited Partnerships") which
own and operate existing residential rental housing developments that are
financed or operated with assistance from Federal, state and/or local
governmental agencies. The Partnership has limited partnership interests in
two Local Limited Partnerships, with a total of 156 residential apartment
units, located within the Commonwealth of Massachusetts.
The general partner of the Partnership is APT Asset Management, Inc. APT
Asset Management, Inc. also owns 65 limited partnership units which it
acquired at an aggregate cost of $7,000 during 1996. The Partnership
Agreement, as amended, authorized the issuance of 3,700 limited partnership
units, all of which were issued and are outstanding.
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 the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Investment in Local Limited Partnerships:
The Partnership accounts for its investments in the Local Limited
Partnerships by the equity method. Accordingly, the investments are carried
at cost, adjusted for the Partnership's proportionate share of earnings or
losses. The Partnership's share of losses on an investment is recognized
only to the extent of the investment. Distributions received are reflected
as reductions of the investments. Once an investment balance has been
reduced to zero, subsequent distributions received by the Partnership are
recognized as income.
Income taxes:
Federal and state income taxes are not included in the accompanying
financial statements because these taxes, if any, are the responsibility of
the individual Partners.
Statement of cash flows:
For purposes of the statement of cash flows, the Partnership considers all
highly liquid debt instruments purchased with a maturity of three months or
less to be cash equivalents. Cash equivalents consist of money market funds
and are carried at cost which approximates their market values.
<PAGE>
APT HOUSING PARTNERS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - CONTINUED
1. Organization and summary of significant accounting policies - continued:
Net income per limited partnership unit:
Net income per limited partnership unit is computed by dividing net
income available to limited partnership units by the weighted average
number of outstanding limited partnership units during the year.
2. Allocation of benefits:
In accordance with the Partnership Agreement, income, losses, credits
and distributions are allocated 2% to the General Partner and 98% to the
Limited Partners.
During 1995, the Partnership made distributions of $4,000 to the General
Partner and $196,000 to the Limited Partners. The distributions to the
Limited Partners amounted to $52.97 per limited partnership unit.
3. Investment in Local Limited Partnerships:
The Partnership has investments in two Local Limited Partnerships, Ashland
Commons Associates ("Ashland") and Rockledge Apartments Associates
("Rockledge"). The Partnership's investments consist of $1,143,695 for
a 95.5% limited partnership interest in Ashland which owns an apartment
complex of 96 units located in Ashland, Massachusetts and $543,900 for a
97% limited partnership interest in Rockledge which owns an apartment
complex of 60 units located in Wakefield, Massachusetts.
The Local Limited Partnerships receive governmental assistance under
programs which restrict the payment of annual cash distributions to the
owners to specified maximum distributable amounts and to available
surplus cash, as defined in the applicable Regulatory Agreement between
the governmental agency and the Local Limited Partnership. Undistributed
amounts are cumulative and may be distributed in subsequent years if
there is available surplus cash. Based upon the Partnership's ownership
interest in each of the Local Limited Partnerships, the maximum annual
distributable amounts that can be made to the Partnership from Ashland
and Rockledge are $87,903 and $9,552, respectively.
For the years ended December 31, 1997, 1996 and 1995, the aggregate share
of losses of the Local Limited Partnerships attributable to the
Partnership amounted to $89,247, $11,813, and $22,868, respectively. The
Partnership's cumulative share of losses of the Local Limited
Partnerships exceeded its investments by $484,824 at December 31, 1997
and $395,577 at December 31, 1996. Accordingly, the investments have
been reduced to zero and have not been reflected in the accompanying
financial statements, and the Partnership has discontinued the
application of the equity method. The Partnership will resume applying
the equity method only after its allocable share of the net income of the
Local Limited Partnerships equals the share of net losses not previously
recognized during the period the equity method was suspended.
The Partnership's tax bases of the investments in the Local Limited
Partnerships aggregate and ($3,622,117) and ($3,469,767) at December 31,
1997 and 1996, respectively.
During 1997, 1996 and 1995, the Partnership received distributions of
$87,903, $87,903, and $87,064,respectively, from Ashland which were
received subsequent to the reduction of the Partnership's investment
balance to zero. Accordingly, these distributions have been included as
income in the accompanying statements of income.
<PAGE>
APT HOUSING PARTNERS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - CONTINUED
3. Investment in Local Limited Partnerships - continued:
Summarized audited balance sheet information on a combined basis for the
Local Limited Partnerships as of December 31, 1997 and 1996 was as follows:
December 31,
1997 1996
Rental property $ 7,597,934 $ 7,597,934
Accumulated depreciation ( 4,039,745) ( 3,773,556)
Cash and cash equivalents 463,361 464,868
Restricted assets and deposits 678,790 601,273
Other assets 114,273 119,041
Total assets 4,814,613 5,009,560
Mortgage loans payable 5,942,838 5,991,356
Other liabilities 206,975 168,384
Total liabilities 6,149,813 6,159,740
Partners' capital (deficiency) ($ 1,335,200) ($ 1,150,180)
Composition of partners' capital (deficiency):
General partners ($ 104,890) ($ 97,262)
Limited Partners ( 1,230,310) ( 1,052,918)
Partners' capital (deficiency) ($ 1,335,200) ($ 1,150,180)
Summarized audited income statement information on a combined basis for
the Local Limited Partnerships for the years ended December 31, 1997, 1996
and 1995 was as follows:
For the years ended December 31,
1997 1996 1995
Revenues $ 1,661,392 $ 1,662,166 $ 1,655,345
Net income (loss) ($ 92,975) ($ 12,079) ($ 19,241)
4. Cash and cash equivalents:
The Partnership maintains cash and cash equivalent balances in a financial
institution located in the Commonwealth of Massachusetts. Accounts in the
institution are insured by the Federal Deposit Insurance Corporation (FDIC)
up to $100,000. At December 31, 1997, the Partnership's uninsured cash and
cash equivalent balances totaled $10,612. At December 31, 1996, the
Partnership's cash and cash equivalent balances were fully insured.
<PAGE>
APT HOUSING PARTNERS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - CONTINUED
5. Transactions with related parties:
Commencing in January, 1997, American Securities Team, Inc., an affiliate
of the General Partner of the Partnership, receives an annual program
management fee. In 1996 and 1995, this fee was paid to American
Investment Team, Inc., also an affiliate of the General Partner of the
Partnership. This fee is for managing the affairs of the Partnership and
for providing investor services to the Limited Partners. The fee is equal
to .5% of invested assets plus the Local Limited Partnerships' annualized
outstanding nonrecourse mortgage debt. Program management fees charged to
operations for the years ended December 31, 1997, 1996 and 1995 amounted to
$36,907, $37,141, and $37,353, respectively. Of these amounts, $8,857 and
$9,091 remained unpaid at December 31, 1997 and 1996, respectively.
6. Fair value of financial instruments:
The fair values of the Partnership's financial instruments have been
determined at a specific point in time, based on relevant market information
and information about the financial instrument. Estimates of fair value
are subjective in nature and involve uncertainties and matters of significant
judgment and therefore cannot be determined with precision. Changes in
assumptions could affect the estimates.
The carrying amounts of cash and cash equivalents and accrued expenses at
December 31, 1997 and 1996 approximate their fair values because of the
short-term maturity of these instruments.
<PAGE>
APT HOUSING PARTNERS LIMITED PARTNERSHIP
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION OF LOCAL LIMITED PARTNERSHIPS
Property Pledged as Collateral
DECEMBER 31, 1997
Life
on
which
Depre
Cost ciati-
Intial Cost Capita- on in
to Partnership lized Year Latest
______________ Subseq- Gross Amount at of Income
Build- uent to which Carried At Con- Stat
ings Acqui Close of Period Accum struc ement
and sition: ________________ ulated tion/ Date is
Descr- Encum- Impro- Impro- Improv- Deprec Renov Acqu Compu
iption brances Land vements vements Land ments Total iation ation ired ted
_____ ______ ____ ______ _______ ____ _____ _____ ______ _____ ____ _____
Apart-
ment
Comp-
lexes
Rock-
ledge
Apart-
ments
Assoc-
iates
Wake-
field,
MA (a)$90,000 $1,426,190 $462,170 $90,000 $1,888,360 $1,978,360 $1,142,946
1973 June,1984 25 years
Ashl-
and
Commons
Assoc-
iates
Ashl-
and,
MA (a)215,210 5,560,343(155,979) (b)215,210 5,404,364 5,619,574 2,896,799
1982 March, 1984 25 years
$305,210 $6,986,533 $306,191 $305,210 $7,292,724 $7,597,934 $4,039,745
(a) Properties are subject to mortgage notes as shown in Schedule IV.
(b) Net of retirements
(c) The aggregate cost for Federal income tax purposes at December 31 ,1997
is as follows:
Rockledge Apartments
Associates - $ 1,978,360
Ashland Commons
Associates - 4,970,347
Total $ 6,948,707
Cost of Property and Equipment Accumulated Depreciation
Year Ended December 31,
1997 1996 1995 1997 1996 1995
Balance at
beginning of
period $7,597,934 $7,597,934 $7,597,934 $3,773,556 $3,507,367 $3,241,178
Additions
during
period
Improvements
Depreciation
expense 266,189 266,189 266,189
Reductions
during period:
Dispositions
Balance at
end of
period $7,597,934 $7,597,934 $7,597,934 $4,039,745 $3,773,556 $3,507,367
<PAGE>
APT HOUSING PARTNERS LIMITED PARTNERSHIP
SCHEDULE IV
MORTGAGE LOANS ON REAL ESTATE OF LOCAL LIMITED PARTNERSHIPS
DECEMBER 31, 1997
Principal
Amount
of Loans
Subject to
Final Periodic Face Carrying Delinquent
Mortgage Interest Maturity Payment Prior Amount of Amount of Principal
Loan rate(s) Date Terms Leins Mortgages Mortgages(a) or Interest
_______ _______ ________ ______ _____ __________ ___________ ___________
Rockledge
Apartments
Associates 7.5485% 7/1/19 monthly None $ 1,477,000 $ 1,228,943 None
Ashland
Commons
Associates 11.728% 5/1/24 monthly None 5,108,100 4,713,895 None
$ 6,585,100 $ 5,942,838
(a) The aggregate carrying amounts for Federal income tax purposes at
December 31, 1997 are the same as those amounts listed above.
Carrying Amount of Mortgages
Year Ended December 31,
1997 1996 1995
Balance at beginning of period $ 5,991,356 $ 6,035,522 $ 6,075,751
Additions during period:
New mortgage loans
Other (describe)
Deductions during period:
Payments of principal ( 48,518) ( 44,166) ( 40,229)
Other (describe)
Balance at end of period $ 5,942,838 $ 5,991,356 $ 6,035,522
<PAGE>
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
REPORT ON FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995
<PAGE>
CONTENTS
Page
Auditors' Report 3
Financial Statements:
Balance Sheet 4
Statement of Profit and Loss 5
Statement of Partners' Deficit 6
Statement of Cash Flows 7
Summary of Accounting Policies 8
Notes to Financial Statements 9
<PAGE>
INDEPENDENT AUDITORS' REPORT
February 3, 1998
To the Partners of
Ashland Commons Associates
Woburn, Massachusetts
We have audited the accompanying balance sheet of Ashland Commons Associates,
HUD Project No. 023-35279, (a limited partnership) as of December 31, 1997,
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 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 Ashland Commons
Associates as of December 31, 1997, 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.
<PAGE>
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
BALANCE SHEET
ASSETS
DECEMBER 31,
1997 1996 1995
Property and Equipment
(Mortgaged) - Note 2
Land $ 215,210 $ 215,210 $ 215,210
Building 5,030,902 5,030,902 5,030,902
Equipment and Furnishings 373,462 373,462 373,462
5,619,574 5,619,574 5,619,574
Less:
Accumulated Depreciation 2,896,799 2,695,603 2,494,407
Net Property and Equipment 2,722,775 2,923,971 3,125,167
Cash and Cash Equivalents 219,932 300,024 320,686
Rents and Other Receivables 5,252 3,059 3,452
Prepaid Expenses 10,322 10,445 10,454
Escrow Deposits 75,536 61,340 68,513
Restricted Cash -
Tenants' Security Deposits 14,612 14,503 12,643
Reserve for Replacements 266,538 225,309 185,439
Residual Receipts Reserve 165,700 85,458 61,366
Deferred Charges 93,433 98,341 103,249
$ 3,574,100 $ 3,722,450 $ 3,890,969
LIABILITIES AND PARTNERS' DEFICIT
LIABILITIES:
Mortgage Loan Payable -
Note 2 $ 4,713,895 $ 4,738,829 $ 4,761,016
Accrued Interest Payable 46,071 46,314 46,531
Accounts Payable and Accrued
Expenses 58,650 28,096 89,787
Tenants' Security Deposits
Payable 14,612 13,912 12,643
Prepaid Rents 167 1 87
TOTAL LIABILITIES 4,833,395 4,827,152 4,910,064
COMMITMENTS AND CONTINGENCIES
Notes 2,3 and 4
PARTNERS' DEFICIT - Note 4
General Partners (107,636) (100,679) (96,827)
Limited Partners (1,151,659) (1,004,023) (922,268)
TOTAL PARTNERS' DEFICIT (1,259,295) (1,104,702) (1,019,095)
$ 3,574,100 $ 3,722,450 $ 3,890,969
See accompanying summary of accounting policies
and notes to financial statements.
<PAGE>
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31,
1997 1996 1995
RENT AND RELATED INCOME $ 1,222,987 $ 1,232,925 $ 1,221,215
OPERATING EXPENSES:
Administrative and Marketing 155,371 162,765 155,877
Utilities 57,270 33,938 42,785
Maintenance and Repair 224,503 169,617 191,553
Real Estate Tax 66,827 72,905 75,666
Interest 577,914 580,735 583,309
Insurance 34,885 35,575 35,487
Depreciation and Amortization 206,104 206,104 206,104
Total Operating Expenses 1,322,874 1,261,639 1,290,781
OPERATING LOSS (99,887) (28,714) (69,566)
OTHER INCOME - Interest 37,339 35,152 32,704
NET INCOME (LOSS) $ (62,548) $ 6,438 $ (36,862)
NET INCOME (LOSS) TO GENERAL
PARTNERS $ (2,815) $ 290 $ (1,659)
NET INCOME (LOSS) TO LIMITED
PARTNERS $ (59,733) $ 6,148 $ (35,203)
See accompanying summary of accounting policies
and notes to financial statements.
<PAGE>
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
STATEMENT OF PARTNERS' DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
General Limited
Total Partner Partners
BALANCE, at December 31, 1994 $ (891,066) $ (91,066) $ (800,000)
Net loss (36,862) (1,659) (35,203)
Distributions (91,167) (4,102) (87,065)
BALANCE, at December 31, 1995 (1,019,095) (96,827) (922,268)
Net income 6,438 290 6,148
Distributions (92,045) (4,142) (87,903)
BALANCE, at December 31, 1996 (1,104,702) (100,679) (1,004,023)
Net loss (62,548) (2,815) (59,733)
Distributions (92,045) (4,142) (87,903)
BALANCE, at December 31, 1997 $ (1,259,295) $ (107,636) $ (1,151,659)
Percent of interest in profit
and losses 100% 4.5% 95.5%
See accompanying summary of accounting policies
and notes to financial statements.
<PAGE>
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
STATEMENT OF CASH FLOWS
YEARS ENDED DECEMBER 31,
1997 1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ (62,548) $ 6,438 $ (36,862)
Adjustments to reconcile Net Income (Loss)
to Net Cash (Used) by Operating Activities:
Depreciation and Amortization 206,104 206,104 206,104
(Increase) Decrease in Receivables (2,193) 393 14,289
(Increase) Decrease in Prepaid Expenses 123 9 25,100
(Increase) Decrease in Escrow Deposits (14,196) 7,173 (29,564)
(Increase) Decrease in Restricted Cash (109) (1,860) 1,155
Increase (Decrease) in Accounts Payable
and Accrued Expenses 30,311 (61,908) (29,673)
Increase (Decrease) in Tenants Security
Deposits 700 1,269 (814)
Increase (Decrease) in Prepaid Rents 166 (86) 55
Net Cash Provided (Used) by Operating
Activities 158,358 157,532 149,790
CASH FLOWS FROM INVESTING ACTIVITIES:
(Increase) Decrease in Reserve for
Replacements (41,229) (39,870) (22,245)
(Increase) Decrease in Residual Receipts
Reserve (80,242) (24,092) (11,965)
Net Cash Provided (Used) by Investing
Activities (121,471) (63,962) (34,210)
CASH FLOWS FROM FINANCING ACTIVITIES:
Decrease in Mortgage Loan Payable (24,934) (22,187) (19,743)
Distributions to Partners (92,045) (92,045) (91,167)
Net Cash Used by Financing Activities (116,979) (114,232) (110,910)
Net Increase (Decrease) in Cash and
Cash Equivalents (80,092) (20,662) 4,670
Cash and Cash Equivalents,
Beginning of Year 300,024 320,686 316,016
Cash and Cash Equivalents,
End of Year $ 219,932 $300,024 $320,686
Supplemental Disclosure:
Cash Paid During Year For Interest $ 576,623 $ 587,042 $ 583,419
See accompanying summary of accounting policies
and notes to financial statements.
<PAGE>
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING
Financial Statements are prepared on the accrual basis and all development
and construction costs were capitalized. The partnership, for tax purposes,
charged to expense certain costs, such as interest and real estate taxes
during construction. Accordingly, the cost of property and equipment shown
in these statements includes $649,227 which has been deducted
for tax purposes.
The balance sheet does not give effect to any assets that the partners may
have outside their interest in the partnership, nor to any personal
obligations, including income taxes, of the individual partners.
PROPERTY, EQUIPMENT AND DEPRECIATION
Property and equipment are stated at cost. Depreciation of buildings is
based on a 25 year life using the straight-line method for financial
reporting purposes. For income tax purposes, accelerated depreciation
methods are used.
AMORTIZATION
Amortization of financing costs is based on a forty year life using the
straight-line method for both financial reporting and income tax purposes.
INCOME TAXES
The partnership, as an entity, is not subject to income tax. The partners'
share of the loss for tax purposes is includable in their income tax returns.
CASH AND CASH EQUIVALENTS
For purposes of statement of cash flows, the Partnership considers all
highly liquid debt instruments purchased with a maturity of three months or
less to be cash equivalents.
ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures.
<PAGE>
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - GENERAL
Ashland Commons Associates is a Massachusetts limited partnership which was
formed on September 29, 1982 for the purpose of owning, rehabilitating and
operating a multi-unit apartment complex containing 96 residential units
under the provisions of Section 221 (d)(4) of the National Housing Act. The
partnership has a Section 8 contract with HUD to receive rent subsidy equal
to approximately 83% of the total rental income. This contract expires
September, 2002.
NOTE 2 - MORTGAGE LOAN PAYABLE
The mortgage note is insured by the Federal Housing Administration (FHA)
and is payable in monthly installments of approximately $48,283, including
interest at 11.728% per annum, through 2024. Annual principal payments will
average approximately $35,868 each year for the next five years.
The partnership is required to make monthly payments of $2,094 into a fund
for replacements. Withdrawals from this fund can only be made upon the
approval of the Federal Housing Commissioner.
The partnership and its partners have no personal liability on the mortgage
loan; the mortgaged property is the only collateral for the loan.
NOTE 3 - RELATED PARTY TRANSACTIONS
The partnership pays a 4.5% management fee based on gross revenues
collected, which, at present, is capped at $43 PUPM, to an affiliate of a
general partner, and also $506 per month for bookkeeping. Further, the
management company is reimbursed at cost for salaries and wages and related
employee expenses such as payroll taxes, health insurance, disability
insurance, workers compensation and other insurance.
NOTE 4 - CAPITAL DISTRIBUTION RESTRICTION
No distribution of assets may be made except from "surplus cash" as defined
in the regulatory agreement with the Federal Housing Administration. Total
distributions are limited to $92,045 per annum as allowed by MHFA.
<PAGE>
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
NOTES TO FINANCIAL STATEMENTS
Continued
NOTE 5 - FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of the Partnership's financial instruments have been
determined at a specific point in time, based on relevant market information
and information about the financial instrument. Estimates of fair value are
subjective in nature and involve uncertainties and matters of significant
judgement and therefore cannot be determined with precision.
Changes in assumptions could affect the estimates.
The carrying amounts of cash and cash equivalents, tenants' security
deposits cash, tenant's accounts receivable, restricted deposits and funded
reserves, and accounts payable and other liabilities approximate their fair
market values because of the short-term maturity of these instruments.
The Partnership obtained its mortgage financing under Section 221(d)(4) of
the National Housing Act, as amended, and is supported by a Section 8 rent
subsidy contract. Currently, no new mortgages are being insured and
supported under these combined programs. Accordingly, management does not
believe that it is practicable to estimate the fair value of its mortgage
loan. Additional information pertinent to the value of this loan is
provided in Note 2.
<PAGE>
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
REPORT ON FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995
<PAGE>
CONTENTS
Page
Auditors' Report 3
Financial Statements:
Balance Sheet 4
Statement of Profit and Loss 5
Statement of Partners' Deficit 6
Statement of Cash Flows 7
Summary of Accounting Policies 8
Notes to Financial Statements 9
<PAGE>
INDEPENDENT AUDITORS' REPORT
February 4, 1998
To the Partners of
Rockledge Apartments Associates
Woburn, Massachusetts
We have audited the accompanying balance sheet of Rockledge Apartments
Associates, Project No. 71-187-N, (a limited partnership) as of December
31, 1997, 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 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 Rockledge Apartments
Associates as of December 31, 1997, 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.
<PAGE>
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
BALANCE SHEET
ASSETS
DECEMBER 31,
1997 1996 1995
Property and Equipment
(Mortgaged) - Note 2
Land $ 90,000 $ 90,000 $ 90,000
Building 1,624,825 1,624,825 1,624,825
Equipment and Furnishings 263,535 263,535 263,535
1,978,360 1,978,360 1,978,360
Less:
Accumulated Depreciation 1,142,946 1,077,953 1,012,960
Net Property and Equipment 835,414 900,407 965,400
Cash and Cash Equivalents 243,429 164,844 204,669
Rents and Other Receivables 5,266 7,196 14,340
Escrow Deposits 26,604 16,219 17,420
Restricted Cash -
Tenants' Security Deposits 25,287 25,103 24,086
Reserve for Replacements 104,513 173,341 118,074
Deferred Charges -- -- 55
$ 1,240,513 $ 1,287,110 $ 1,344,044
LIABILITIES AND PARTNERS' DEFICIT
LIABILITIES:
Mortgage Loan Payable -
Note 2 $ 1,228,943 $ 1,252,527 $ 1,274,506
Note payable -
Affiliate (Note 3) 28,052 35,922 43,665
Accrued Interest Payable 1,841 1,977 2,104
Accounts Payable and Accrued
Expenses 28,731 18,802 26,862
Tenants' Security Deposits
Payable 25,287 23,358 23,868
Prepaid Rents 3,564 2 --
TOTAL LIABILITIES 1,316,418 1,332,588 1,371,005
COMMITMENTS AND CONTINGENCIES
Notes 2,3 and 4
PARTNERS' DEFICIT - Note 4
General Partner 2,746 3,659 4,215
Limited Partner (78,651) (49,137) (31,176)
TOTAL PARTNERS' DEFICIT (75,905) (45,478) (26,961)
$ 1,240,513 $ 1,287,110 $ 1,344,044
See accompanying summary of accounting policies
and notes to financial statements.
<PAGE>
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31,
1997 1996 1995
RENT AND RELATED INCOME $ 383,550 $ 375,241 $ 386,168
OPERATING EXPENSES:
Administrative and Marketing 85,095 85,653 69,742
Utilities 47,791 46,256 44,090
Maintenance and Repair 167,323 157,368 125,273
Real Estate Tax 34,785 24,035 43,163
Interest 25,976 28,648 30,822
Insurance 5,530 5,598 5,578
Depreciation and Amortization 64,993 65,048 65,137
Total Operating Expenses 431,493 412,606 383,805
OPERATING INCOME (LOSS) (47,943) (37,365) 2,363
OTHER INCOME - Interest 17,516 18,848 15,258
NET INCOME (LOSS) $ (30,427) $ (18,517) $ 17,621
NET INCOME (LOSS) TO GENERAL
PARTNERS $ (913) $ (556) $ 529
NET INCOME (LOSS) TO LIMITED
PARTNERS $ (29,514) $ (17,961) $ 17,092
See accompanying summary of accounting policies
and notes to financial statements.
<PAGE>
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
STATEMENT OF PARTNERS' DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
General Limited
Total Partner Partners
BALANCE, at December 31, 1994 $ (44,582) $ 3,686 $ (48,268)
Net income 17,621 529 17,092
BALANCE, at December 31, 1995 (26,961) 4,215 (31,176)
Net loss (18,517) (556) (17,961)
BALANCE, at December 31, 1997 (45,478) 3,659 (49,137)
Net loss (30,427) (913) (29,514)
BALANCE, at December 31, 1997 $ (75,905) $ 2,746 $ (78,651)
Percent of interest in profit
and losses 100% 3% 97%
See accompanying summary of accounting policies
and notes to financial statements.
<PAGE>
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31,
1997 1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ (30,427) $ (18,517) $ 17,621
Adjustments to reconcile Net Income (Loss)
to Net Cash (Used) by Operating Activities:
Depreciation and Amortization 64,993 65,048 65,137
(Increase) Decrease in Receivables 1,930 7,144 (3,540)
(Increase) Decrease in Prepaid Expenses -- -- 5,745
(Increase) Decrease in Escrow Deposits (10,385) 1,201 (3,394)
(Increase) Decrease in Restricted Cash (184) (1,017) (3,256)
Increase (Decrease) in Accounts Payable
and Accrued Expenses 9,793 (8,187) 5,757
Increase (Decrease) in Tenants Security
Deposits 1,929 (510) 3,619
Increase (Decrease) in Prepaid Rents 3,562 2 (90)
Net Cash Provided (Used) by Operating
Activities 41,211 45,164 87,599
CASH FLOWS FROM INVESTING ACTIVITIES:
(Increase) Decrease in Reserve for
Replacements 68,828 (55,267) 4,628
Net Cash Provided (Used) by Investing
Activities 68,828 (55,267) 4,628
CASH FLOWS FROM FINANCING ACTIVITIES:
Decrease in Mortgage Loan Payable (23,584) (21,979) (20,486)
Note payable - affiliate (7,870) (7,743) (1,812)
Net Cash Used by Financing Activities (31,454) (29,722) (22,298)
Net Increase (Decrease) in Cash and
Cash Equivalents 78,585 (39,825) 69,929
Cash and Cash Equivalents,
Beginning of Year 164,844 204,669 134,740
Cash and Cash Equivalents,
End of Year $ 243,429 $164,844 $204,669
Supplemental Disclosure:
Cash Paid During Year For Interest $ 24,488 $ 26,220 $ 33,645
See accompanying summary of accounting policies
and notes to financial statements.
<PAGE>
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING
Financial Statements are prepared on the accrual basis and all development
and construction costs were capitalized.
The balance sheet does not give effect to any assets that the partners may
have outside their interest in the partnership, nor to any personal
obligations, including income taxes, of the individual partners.
PROPERTY, EQUIPMENT AND DEPRECIATION
Property and equipment are stated at cost. Depreciation of buildings and
equipment is based on a twenty-five year life and a five year life
respectively. The ACRS method is used for tax purposes.
INCOME TAXES
The partnership, as an entity, is not subject to income tax. The partners'
share of the loss for tax purposes is includable in their income tax returns.
ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures.
CASH AND CASH EQUIVALENTS
For purposes of the statement of cash flows, the partnership considers all
highly liquid debt instruments purchased with a maturity date of three months
or less to be cash equivalents.
<PAGE>
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - GENERAL
Rockledge Apartments Associates is a Massachusetts limited partnership
which was formed on February 24, 1973 for the purpose of owning,
rehabilitating and operating a multi-unit apartment complex containing 60
residential units. The partnership has a contract with HUD to receive rent
subsidy equal to approximately 84% of the total rental income. The contract
expires in May, 2018.
NOTE 2 - MORTGAGE LOAN PAYABLE
The mortgage note is payable to the Massachusetts Housing Finance Agency
(MHFA) over a forty year period, in monthly installments of approximately
$3,841 (after interest subsidy payments of $6,597 monthly), including
interest at 7.5485% per annum, through 2018. Principal payments for the
next five years are as follows:
1998 $ 25,310
1999 27,116
2000 29,163
2001 31,311
2002 33,623
The partnership is required to make monthly payments of $7,418 to MHFA for
real estate taxes, insurance, and a reserve for replacements. Withdrawals
must have the approval of MHFA.
The partnership and its partners have no personal liability on the mortgage
loan; the mortgaged property is the only collateral for the loan.
NOTE 3 - NOTE PAYABLE
The note payable to affiliate bears interest at the rate of 12% per annum
for a period of 15 years at which time the note is payable in
full. Interest is payable only from Distributable Cash and residual amounts
of Net Capital Transactions proceeds.
<PAGE>
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 4 - RELATED PARTY TRANSACTIONS
The partnership pays to an affiliate of a general partner a monthly
management fee of 6% of rents collected and a monthly bookkeeping fee of
$385, and an annual fee of $1,862 to another affiliate of a general partner.
NOTE 5 - CAPITAL DISTRIBUTION RESTRICTION
No distribution of assets may be made except from "surplus cash" as defined
in the regulatory agreement with the MHFA. Annual distributions are limited
to $9,847, as allowed by MHFA.
NOTE 6 - FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of the Partnership's financial instruments have been
determined at a specific point in time, based on relevant market information
and information about the financial instrument. Estimates of fair value are
subjective in nature and involve uncertainties and matters of significant
judgement and therefore cannot be determined with precision. Changes in
assumptions could affect the estimates.
The carrying amounts of cash and cash equivalents, tenants' security
deposits cash, tenant's accounts receivable, restricted deposits and funded
reserves, and accounts payable and other liabilities approximate their fair
market values because of the short-term maturity of these instruments.
The Partnership obtained its mortgage financing under Section 236 of the
National Housing Act, as amended, and is supported by a Section 8 rent
subsidy contract. Currently, no new mortgages are being insured under
these combined programs. Accordingly, management does not believe that it
is practicable to estimate the fair value of its mortgage loan. Additional
information pertinent to the value of this loan is provided in Note 2.
<PAGE>
INDEX TO EXHIBITS
Sequentially
Exhibit Numbered
No. Description Page
(3) Articles of Incorporation and By-laws: The
registrant is not incorporated. The partnership
Agreement was filed with the registrant's Registration
Statement on Form S-11 (#2-84474) and is incorporated
herein by reference.
(10.1) Purchase and Sale Agreement, dated as of March
30, 1984, relating to Ashland Commons Associates
(filed with Registrant's Form 8-K dated March 30,
1984 and incorporated herein by reference).
(10.2) Purchase and Sale Agreement, dated as of April 30, 1984,
relating to Historic Cohoes, II (filed with
Registrant's Form 8-K dated April 30,1984 and
incorporated herein by reference).
(10.3) Purchase and Sale Agreement, dated as of June 22,
1984, relating to Rockledge Apartment Associates
(filed with Registrant's Form 8-K dated June 22,
1984 and incorporated herein by reference).
(10.4) Withdrawal of APT Housing Partners Limited Partners
as a Limited Partner in a Local Limited Partnership,
dated as of December 18, 1986, relating to Historic
Cohoes, II, (filed with Registrant's Form 8-K dated
March 30, 1987 and incorporated herein by reference).
(27) Financial data schedule. 49
<PAGE>
APT HOUSING PARTNERS LIMITED PARTNERSHIP
FINANCIAL DATA SCHEDULE
This schedule contains summary financial information extracted from the
balance sheet and statement of income on pages 18 through 19 of the
Partnership's 1997 Annual Report on Form 10-K and is qualified in its
entirety by reference to such financial statements.
Item Number Item Description Year End
1997
5-02(1) Cash and cash items $ 108,175
5-02(2) Marketable securities -0-
5-02(3)(a)(1)Notes and accounts receivable-trade -0-
5-02(4) Allowance for doubtful accounts -0-
5-02(6) Inventory -0-
5-02(9) Total current assets 108,175
5-02(13) Property, plant and equipment -0-
5-02(14) Accumulated depreciation -0-
5-02(18) Total assets 108,175
5-02(21) Total current liabilities 17,357
5-02(22) Bonds, mortgages and similar debt -0-
5-02(28) Preferred stock-mandatory redemption -0-
5-02(29) Preferred stock-no mandatory redemption -0-
5-02(30) Common stock -0-
5-02(31) Other stockholders' equity 90,818
5-02(32) Total liabilities and stockholders' equity 108,175
Item Number Item Description Year Ended
1997
5-03(b)1(a) Net sales of tangible products $ -0-
5-03(b)1 Total revenues 90,513
5-03(b)2(a) Cost of tangible goods sold -0-
5-03(b)2 Total costs and expenses applicable to sales and
revenues -0-
5-03(b)3 Other costs and expenses 46,464
5-03(b)5 Provision for doubtful accounts and notes -0-
5-03(b)(8) Interest and amortization of debt discount -0-
5-03(b)(10) Income before taxes and other items 44,049
5-03(b)(11) Income tax expense -0-
5-03(b)(14) Income/loss continuing operations 44,049
5-03(b)(15) Discontinued operations -0-
5-03(b)(17) Extraordinary items -0-
5-03(b)(18) Cumulative effect- changes in accounting principles -0-
5-03(b)(19) Net income or loss 44,049
5-03(b)(20) Earnings per share-primary 11.67
5-03(b)(20) Earnings per share-fully diluted 11.67
<PAGE>
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.
APT HOUSING PARTNERS LIMITED PARTNERSHIP
By: APT Asset Management, Inc.
General Partner
By:[SIGNATURE]
Date Jeff E. Ewing - President
APT ASSET MANAGEMENT, INC.
WP7/APT/APTH97S.10K
See notes to financial statements.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 108175
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 108175
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 108175
<CURRENT-LIABILITIES> 17357
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 90818
<TOTAL-LIABILITY-AND-EQUITY> 108175
<SALES> 0
<TOTAL-REVENUES> 90513
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 46464
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 44049
<INCOME-TAX> 0
<INCOME-CONTINUING> 44049
<DISCONTINUED> 0
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<CHANGES> 0
<NET-INCOME> 44049
<EPS-PRIMARY> 11.67
<EPS-DILUTED> 11.67
</TABLE>
