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, 1999
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 (781) 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].
There were 3,700 units of limited partnership interests held in the
Partnership at March 15, 2000.
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, 1999. 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,
1999 1998 1997 1996 1995
Ashland Commons Associates March 30, 1984 100% 100% 99% 100% 99%
Ashland, MA (96)
Rockledge Apartments Associates June 22, 1984 97% 97% 98% 97% 98.2%
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>
However, the legislature has issued regulations that allow for a Local
Limited Partnership to elect to be marked to market with a restructuring of
its existing debt. In addition, marked to market may also be accomplished
without restructuring the debt. The legislature also has provided a Local
Limited Partnership the option to "mark-up to market"; that is, upon
expiration of its Section 8 subsidy contract, and if current market rents
exceed contract rents, then the Local Limited Partnership may elect to
contract with HUD at the higher rents for a period of five years as an
incentive to maintain affordable housing.
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,
2000, there were 325 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 1999 1998 1997 1996 1995
Revenue $ 7,297 $ 4,868 $ 2,610 $ 1,389 $ 1,884
Expenses 46,212 45,472 46,464 45,891 46,948
Loss before share of losses of and
distributions from the Local
Limited Partnerships ( 38,915) ( 40,604)( 43,854)( 44,502)( 45,064)
Distribution from Local Limited
Partnership 87,903 87,903 87,903 87,903 87,064
Share of losses of Local Limited
Partnerships - - - - -
Net income $ 48,988 $ 47,299 $ 44,049 $ 43,401 $ 42,000
Net income per weighted average
limited partnership unit $ 12.98 $ 12.53 $ 11.67 $ 11.50 $ 11.12
FINANCIAL POSITION
December 31,
1999 1998 1997 1996 1995
Total assets $ 203,385 $ 155,218 $ 108,175 $ 64,360 $ 20,946
Investment in Local Limited
Partnerships $ -0- $ -0- $ -0- $ -0- $ -0-
Total liabilities $ 16,280 $ 17,101 $ 17,357 $ 17,591 $ 17,578
Total partners' capital $ 187,105 $ 138,117 $ 90,818 $ 46,769 $ 3,368
Cash distributions per
limited partnership unit $ -0- $ -0- $ -0- $ -0- $ 52.97
<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, 1999, 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 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.
However, the legislature has issued regulations that allow for a Local
Limited Partnership to elect to be marked to market with a restructuring of
its existing debt. In addition, marked to market may also be accomplished
without restructuring the debt. The legislature also has provided a Local
Limited Partnership the option to "mark-up to market"; that is, upon
expiration of its Section 8 subsidy contract, and if current market rents
exceed contract rents, then the Local Limited Partnership may elect to
contract with HUD at the higher rents for a period of five years as an
incentive to maintain affordable housing.
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 $87,903 during the years ended December 31, 1999,
1998 and 1997, respectively. These distributions were used to meet the
Partnership's obligations. 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, 1999, 1998 and 1997, 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
$239,501, $120,275 and $89,247, respectively. At December 31, 1999 and
1998, the Partnership's cumulative share of losses of the Local Limited
Partnerships exceeded its investments by $844,600 and $605,099,
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 1999, 1998 and 1997 was due primarily to
cash distributions received of $87,903, $87,903 and $87,903, respectively,
from one Local Limited Partnership which offset the Partnership's net
operating expenses in these years resulting in net income of $48,988,
$47,299, and $44,049, 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
$35,830, $36,651 and $36,907, for 1999, 1998 and 1997, 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. Year 2000 problems may not
surface until after January 1, 2000. Management does not expect the
Partnership to incur any significant expenses related to this issue.
ITEM 7(A) MARKET RISK:
The Partnership maintains cash and cash equivalents in a financial
institution which is insured by the Federal Deposit Insurance Corporation
(FDIC) up to $100,000. The Partnership does not believe these financial
instruments are subject to significant market risk.
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, 57, 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, 34, 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, 42, 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. Ms. Cochran has
tendered her resignation to the Board of Directors effective December 31,
1999. No successor has been elected to date.
ELLIOT J. FEINER, BA, MBA, 61, 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, 67, 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).
ROBERT E. HALLAGAN, BS, MBA, 56, 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, Government
National Mortgage Association (GNMA) approved lender, 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 1,300 units of multi-family
housing and 75,000 square feet of commercial space in Massachusetts, New
York and Indiana. Of the 1,300 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, 2000, 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 Name and Address of Amount and Nature of Percentage of
of Class Beneficial Ownership Beneficial Ownership Class
General
Partnership
Interest APT Asset Management, Inc. $2,000 Capital 2.000%
500 West Cummings Park contribution
Suite 6050 directly
Woburn, MA 01801 owned
Limited
Partnership
Interest John M. Curry $5,000 Capital .1351%
211 Commodore Dr. contribution
Jupiter, FL 33477 (5 units)directly
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 directly
Woburn, MA 01801 (65 units)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, 1999 and 1998 18
Statements of Income for the years ended
December 31, 1999, 1998 and 1997 19
Statements of Partners' Capital (Deficiency) for the years ended
December 31, 1999, 1998 and 1997 20
Statements of Cash Flows for the years ended
December 31, 1999, 1998 and 1997 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, 1999 26
Schedule IV - Mortgage Loans on Real Estate as of December 31,
1999 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, 1999, 1998 and 1997
-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, 1999.
<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,
1999 and 1998, and the related statements of income, partners' capital
(deficiency), and cash flows for each of the three years in the period ended
December 31, 1999. 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, 1999 and 1998, and the results of its operations and its
cash flows for each of the three years in the period ended December
31, 1999 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
February 18, 2000
<PAGE>
APT HOUSING PARTNERS LIMITED PARTNERSHIP
BALANCE SHEETS
ASSETS
December 31,
1999 1998
Investment in Local Limited Partnerships $ - $ -
Cash and cash equivalents 203,385 155,218
Total assets $ 203,385 $ 155,218
LIABILITIES AND PARTNERS' CAPITAL (DEFICIENCY)
Liabilities:
Accrued expenses -
Affiliate $ 7,780 $ 8,601
Professional fees 8,500 8,500
Total liabilities 16,280 17,101
Commitments and contingencies
Partners' capital (deficiency):
General partner ( 35,583) ( 36,563)
Limited partner, 3,700 partnership units
authorized, issued and outstanding 222,688 174,680
Total partners' capital (deficiency) 187,105 138,117
Total liabilities and partners'
capital (deficiency) $ 203,385 $ 155,218
See notes to financial statements
<PAGE>
APT HOUSING PARTNERS LIMITED PARTNERSHIP
STATEMENTS OF INCOME
For the years ended December 31,
1999 1998 1997
Interest income $ 7,297 $ 4,868 $ 2,610
Operating expenses:
Management fees - affiliate 35,830 36,651 36,907
Administrative 10,382 8,821 9,557
Total operating expenses 46,212 45,472 46,464
Loss before share of losses of
and distributions from
Local Limited Partnerships ( 38,915) ( 40,604) ( 43,854)
Distribution from Local Limited
Partnership 87,903 87,903 87,903
Share of losses of Local
Limited Partnerships - - -
Net income $ 48,988 $ 47,299 $ 44,049
Limited partners' interest in
net income $ 48,008 $ 46,353 $ 43,168
Weighted average number of outstanding
limited partnership units 3,700 3,700 3,700
Net income per limited
partnership unit $ 12.98 $ 12.53 $ 11.67
See notes to financial statements
<PAGE>
APT HOUSING PARTNERS LIMITED PARTNERSHIP
STATEMENTS OF PARTNERS' CAPITAL (DEFICIENCY)
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 and 1997
General Limited
Partner Partners Total
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
Net income 946 46,353 47,299
Balance, December 31, 1998 ( 36,563) 174,680 138,117
Net income 980 48,008 48,988
Balance, December 31, 1999 ($ 35,583) $ 222,688 $ 187,105
See notes to financial statements
<PAGE>
APT HOUSING PARTNERS LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
For the years ended December 31,
1999 1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 48,988 $ 47,299 $ 44,049
Adjustments to reconcile net
income to net cash provided
by operating activities:
Change in operating assets and liabilities:
Increase (decrease) in
accrued expenses ( 821) ( 256) ( 234)
Net cash provided by operating
activities 48,167 47,043 43,815
Net increase in cash and cash
equivalents 48,167 47,043 43,815
Cash and cash equivalents,
beginning of year 155,218 108,175 64,360
Cash and cash equivalents,
end of year $ 203,385 $ 155,218 $ 108,175
See notes to financial statements
<PAGE>
APT HOUSING PARTNERS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
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 1997. 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.
Investment securities:
Investment securities are classified as available for sale and as a result
are stated at fair value. Management determines the appropriate
classification of securities at the time of purchase and reevaluates such
determination on each balance sheet date. Amortization of premiums and
accretion of discounts are reflected in interest income. Realized gains and
losses on the sale of securities are included in operations. The cost of
securities sold is determined using the specific identification method.
<PAGE>
APT HOUSING PARTNERS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - CONTINUED
1. Organization and summary of significant accounting policies - continued:
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 at December 31, 1998, a short-term U.S. Treasury Bill with a carry value
of $99,311. Cash equivalents are carried at fair value which approximates
their cost.
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.
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, 1999, 1998 and 1997, the aggregate share of
losses of the Local Limited Partnerships attributable to the Partnership
amounted to $239,501, $120,275 and $89,247, respectively. The
Partnership's cumulative share of losses of the Local Limited Partnerships
exceeded its investments by $844,600 at December 31, 1999 and $605,099 at
December 31, 1998. 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 ($3,893,472) and ($3,805,491) at December 31, 1999
and 1998, respectively.
During 1999, 1998 and 1997, the Partnership received distributions of
$87,903, $87,903, and $87,903, 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, 1999 and 1998 was as follows:
December 31,
1999 1998
Rental property $ 7,597,934 $ 7,597,934
Accumulated depreciation ( 4,572,123) ( 4,305,934)
Cash and cash equivalents 348,807 440,292
Restricted assets and deposits 626,810 675,912
Other assets 107,788 114,401
Total assets 4,109,216 4,522,605
Mortgage loans payable 5,830,851 5,889,508
Other liabilities 173,623 185,879
Total liabilities 6,004,474 6,075,387
Partners' capital (deficiency) ($ 1,895,258) ($ 1,552,782)
Composition of partners' capital (deficiency):
General partners ($ 129,366) ($ 114,294)
Limited Partners ( 1,765,892) ( 1,438,488)
Partners' capital (deficiency) ($ 1,895,258) ($ 1,552,782)
Summarized audited income statement information on a combined basis for the
Local Limited Partnerships for the years ended December 31, 1999, 1998 and
1997 was as follows:
For the years ended December 31,
1999 1998 1997
Revenues $ 1,647,968 $ 1,662,118 $ 1,661,392
Net income (loss) ($ 250,431) ($ 125,537) ($ 92,975)
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, 1999, the Partnership's uninsured cash and
cash equivalent balances totaled $97,970. At December 31, 1998, cash
equivalents included a three month U.S. Treasury Bill which is backed by the
full faith and credit of the U.S. Government and the remainder of the
Partnership's cash and cash equivalent balances were fully insured.
<PAGE>
APT HOUSING PARTNERS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - CONTINUED
4. Cash and cash equivalents -continued:
The Partnership's investment in the U.S. Treasury Bill earned interest at
the rate of 4.00% and it matured on February 11, 1999. The estimated fair
value of the investment approximated its amortized cost and therefore, there
were no significant unrealized gains or losses as of December 31, 1998.
There were no realized gains or losses on the disposition of investment
securities.
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. 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, 1999, 1998 and 1997 amounted to
$35,830, $36,651, and $36,907, respectively. Of these amounts, $7,780 and
$8,601 remained unpaid at December 31, 1999 and 1998, 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, 1999 and 1998 approximate their fair values because of the
short-term maturity of these instruments.
7. Year 2000 considerations (unaudited):
The Partnership recognizes the need to ensure its operations will not be
adversely impacted by Year 2000 software failures. The issue is whether
computer systems and related applications will properly recognize date-
sensitive information when the year changes to 2000. The Partnership
primarily uses commercially licensed software products that have been made
Year 2000 compliant; therefore, management does not anticipate any
significant risk associated with its internal systems. Year 2000 problems
may not surface until after January 1, 2000.
Management is of the opinion that it will not be adversely affected should
its vendors or tenants encounter problems in complying with the Year 2000
software and hardware issues and does not anticipate any interruption of
business.
The financial impact to the Partnership of Year 2000 remediation costs, if
any, is not expected to be significant to the financial statements.
<PAGE>
APT HOUSING PARTNERS LIMITED PARTNERSHIP
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION OF LOCAL LIMITED PARTNERSHIPS
Property Pledged as Collateral
DECEMBER 31, 1999
Cost
Capitalized
Initial Cost to Partnership Subsequent to
Buildings and Acquisition:
Description Encumbrances Land Improvements Improvements
Apartment
Complexes
Rockledge
Apartments
Associates
Wakefield, MA (a) $90,000 $ 1,426,190 $ 462,170
Year of
Gross Amount at which Carried of Period Con-
Buildings and Accuulated struction
Land Improvements Total(c) Depreciation Renovation
$ 90,000 $ 1,888,360 $ 1,978,360 $ 1,272,932 1973
Life on which
Depreciation in
Latest Income
Date Statement is
Acquired Computed
June, 1984 25 years
Cost
Capitalized
Initial Cost to Partnership Subsequent to
Buildings and Acquisition
Description Encumbrances Land Improvements Improvements
Ashland Commons
Associates
Ashland, MA (a) 215,210 5,560,343 ( 155,979) (b)
Gross Amount at which Carried At Close Period
Buildings and Accumulated
Land Improvements Total (c) Depreciation
215,210 5,404,364 5,619,574 3,299,191
Year of Depreciation in
Constru- Latest Income
ction Date Statement is
Renovation Acquired Computed
1982 March, 1984 25 years
$305,210 $6,986,533 $306,191 $305,210 $7,292,724 $7,597,934 $4,572,123
(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 ,1999
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
ear Ended December 31,
1999 1998 1997 1999 1998 1997
Balance at
beginning
of period $7,597,934 $7,597,934 $7,597,934 $4,305,934 $4,039,745 $3,773,556
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 $4,572,123 $4,305,934 $4,039,745
<PAGE>
APT HOUSING PARTNERS LIMITED PARTNERSHIP
SCHEDULE IV
MORTGAGE LOANS ON REAL ESTATE OF LOCAL LIMITED PARTNERSHIPS
DECEMBER 31, 1999
Principal
Peri Amount of Loans
Final odic Subject to
Mort Matu Pay Face Carrying Delinquent
gage Interest rity ment Prior Amount of Amount of Principal
Loan rate(s) Date Terms Liens Mortgages Mortgages(a) or Interest
Rockledge
Apartments
Associates 7.5485% 7/1/19 monthly None $1,477,000 $1,176,466 None
Ashland
Commons
Associates 11.728% 5/1/24 monthly None 5,108,100 4,654,385 None
$6,585,100 $5,830,851
(a) The aggregate carrying amounts for Federal income tax purposes at
December 31, 1999 are the same as those amounts listed above.
Carrying Amount of Mortgages
Year Ended December 31,
1999 1998 1997
Balance at beginning of period $ 5,889,508 $ 5,942,838 $ 5,991,356
Additions during period:
New mortgage loans
Other (describe)
Deductions during period:
Payments of principal ( 58,657) ( 53,330) ( 48,518)
Other (describe)
Balance at end of period $ 5,830,851 $ 5,889,508 $ 5,942,838
<PAGE>
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
REPORT ON FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<PAGE>
CONTENTS
Page
Independent Auditors' Report 3
Financial Statements:
Balance Sheet 4
Statement of Operations 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
January 26, 2000
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, 1999,
1998 and 1997 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
statements 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, 1999, 1998, and 1997 and the results of its operations and its
cash flow for the years then ended in conformity with generally accepted
accounting principles.
<PAGE>
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
DECEMBER 31,
1999 1998 1997
ASSETS
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 3,299,191 3,097,995 2,896,799
Net Property and Equipment 2,320,383 2,521,579 2,722,775
Cash and Cash Equivalents 82,179 182,927 219,932
Rents and Other Receivables 9,012 8,153 5,252
Prepaid Expenses 10,272 10,337 10,322
Escrow Deposits 71,230 57,234 75,536
Restricted Cash -
Tenants' Security Deposits 15,880 14,262 14,612
Reserve for replacements 212,165 286,321 266,538
Residual Receipts Reserve 184,355 174,885 165,700
Deferred Charges 83,617 88,525 93,433
$2,989,093 $3,344,223 $3,574,100
LIABILITIES AND PARTNERS' DEFICIT
LIABILITIES:
Mortgage Loan Payable - Note 2 $4,654,385 $4,685,875 $4,713,895
Accrued Interest Payable 45,489 45,797 46,071
Accounts Payable and
Accrued Expenses 41,891 42,917 58,650
Tenants' Security Deposits
Payable 15,039 14,224 14,612
Prepaid Rents 3,207 6,467 167
TOTAL LIABILITIES 4,760,011 4,795,280 4,833,395
COMMITMENTS AND CONTINGENCIES
Notes 2,3 and 4
PARTNERS' DEFICIT - Note 4
General Partners (130,659) (116,265) (107,636)
Limited Partners (1,640,259) (1,334,792) (1,151,659)
TOTAL PARTNERS' DEFICIT (1,770,918) (1,451,057) (1,259,295)
$2,989,093 $3,344,223 $3,574,100
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,
1999 1998 1997
RENT AND RELATED INCOME $1,233,498 $1,227,708 $1,222,987
OPERATING EXPENSES:
Administrative & Marketing 143,116 142,342 155,371
Utilities 70,427 72,346 57,270
Maintenance and Repair 384,411 256,393 224,503
Real Estate Tax 74,246 73,596 66,827
Interest 570,938 574,518 577,914
Insurance 39,796 34,886 34,885
Depreciation and Amortization 206,104 206,104 206,104
Total Operating Expenses 1,489,038 1,360,185 1,322,874
OPERATING LOSS ( 255,540) ( 132,477) ( 99,887)
OTHER INCOME - Interest 27,724 32,760 37,339
NET INCOME (LOSS) $ (227,816) $ (99,717) $(62,548)
NET INCOME (LOSS) TO GENERAL
PARTNERS $ ( 10,252) $ ( 4,487) $( 2,815)
NET INCOME (LOSS) to LIMITED
PARTNERS $ (217,564) $ (95,230) $(59,733)
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, 1999, 1998, 1997
General Limited
Total Partner Partners
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)
Net Loss ( 99,717) ( 4,487) ( 95,230)
Distributions ( 92,045) ( 4,142) ( 87,903)
BALANCE, at December 31, 1998 (1,451,057) (116,265) (1,334,792)
Net Loss ( 227,816) ( 10,252) ( 217,564)
Distributions ( 92,045) ( 4,142) ( 87,903)
BALANCE, at December 31, 1999 $(1,770,918) $(130,659) $(1,640,259)
Percentage 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
YEAR ENDED DECEMBER 31,
1999 1998 1997
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income (Loss) $(227,816) $( 99,717) $( 62,548)
Adjustments to reconcile Net Income(Loss)
to Net Cash Provided (Used) by Operating
Activities:
Depreciation and Amortization 206,104 206,104 206,104
(Increase) Decrease in Receivables ( 859) ( 2,901) ( 2,193)
(Increase) Decrease in Prepaid Expenses 65 ( 15) 123
(Increase) Decrease in Escrow Deposits ( 13,996) 18,302 ( 14,196)
(Increase) Decrease in Restricted Cash ( 1,618) 350 ( 109)
Increase (Decrease) in Accounts Payable
and Accrued Expenses ( 1,334) ( 16,007) 30,311
Increase (Decrease) in Tenants
Security Deposits 815 ( 388) 700
Increase (Decrease) in Prepaid Rents ( 3,260) 6,300 166
Net Cash Provided (Used) by
Operating Activities ( 41,899) 112,028 158,358
CASH FLOWS FROM INVESTING ACTIVITIES:
(Increase) Decrease in Reserve
for Replacements 74,156 ( 19,783) ( 41,229)
(Increase) Decrease in Residual
Receipts Reserve ( 9,470) ( 9,185) ( 80,242)
Net Cash Provided (Used) by Investing
Activities 64,686 ( 29,968) (121,471)
CASH FLOW FROM FINANCING ACTIVITIES:
Decrease in Mortgage Loan Payable ( 31,490) ( 28,020) ( 24,934)
Distributions to Partners ( 92,045) ( 92,045) ( 92,045)
Net Cash Used by Financing Activities (123,535) (120,065) (116,979)
Net Increase (Decrease) in Cash and
Cash Equivalents (100,748) ( 37,005) ( 80,092)
Cash and Cash Equivalents,
Beginning of Year 182,927 219,932 300,024
Cash and Cash Equivalents,
End of Year $ 82,179 $ 182,927 $ 219,932
Supplemental Disclosure:
Cash Paid During Year of Interest $ 571,180 $ 574,808 $ 576,623
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 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.
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. The 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 for the next five
years will be as follows:
Year Amount
2000 $35,387
2001 39,768
2002 44,691
2003 50,223
2004 56,441
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
for 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 $506 per month for bookkeeping. In addition, the affiliate receives fees
for other services rendered. Further, the management company is reimbursed at
cost for salaries and wages and related employee expenses such as payroll
taxes, health insurance, disability insurance, worker compensation and other
insurance.
<PAGE>
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 4 - CAPITAL DISTRIBUTION RESTRICTION
No distribution of assets may be made except from "surplus cash" as defined in
the regulatory agreement with HUD. Total distributions are limited to $92,045,
per annum as allowed by HUD.
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, tenant's 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 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, 1999, 1998, AND 1997
<PAGE>
CONTENTS
Page
Independent Auditors' Report 3
Financial Statements:
Balance Sheet 4
Statement of Operations 5
Statement of Partners' Equity (Deficit) 6
Statement of Cash Flows 7
Summary of Accounting Policies 8
Notes to Financial Statements 9
<PAGE>
INDEPENDENT AUDITORS' REPORT
January 27, 2000
To the Partners of
Rockledge Apartments Associates
Woburn, Massachusetts
We have audited the accompanying balance sheet of MHFA Project No. 71-187-N
Rockledge Apartments Associates, (a limited partnership) as of December 31,
1999, 1998 and 1997 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 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
statements 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, 1999, 1998, and 1997 and the results of its
operations and its cash flow 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
DECEMBER 31,
1999 1998 1997
ASSETS
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 1,272,932 1,207,939 1,142,946
Net Property and Equipment 705,428 770,421 835,414
Cash and Cash Equivalents 266,628 257,365 243,429
Rents and Other Receivables 4,887 7,386 5,266
Escrow Deposits 17,641 18,387 26,604
Restricted Cash -
Tenants' Security Deposits 26,281 26,611 25,287
Reserve for Replacements 99,258 98,212 104,513
$1,120,123 $1,178,382 $1,240,513
LIABILITIES AND PARTNERS' DEFICIT
LIABILITIES:
Mortgage Loan Payable - Note 2 $1,176,466 $1,203,633 $1,228,943
Note Payable Affiliate (Note 3) 20,046 20,046 28,052
Accrued Interest Payable 1,537 1,695 1,841
Accounts Payable and Accrued Expenses 20,590 29,749 28,731
Tenants' Security Deposits Payable 25,409 24,869 25,287
Prepaid Rents 415 115 3,564
TOTAL LIABILITIES 1,244,463 1,280,107 1,316,418
COMMITMENTS AND CONTIGENCIES
Notes 2,3 and 4
PARTNERS' DEFICIT - Note 4
General Partner 1,293 1,971 2,746
Limited Partner ( 125,633) ( 103,696) ( 78,651)
TOTAL PARTNERS' DEFICIT ( 124,340) ( 101,725) ( 75,905)
$1,120,123 $1,178,382 $1,240,513
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,
1999 1998 1997
RENT AND RELATED INCOME $ 373,637 $ 386,277 $ 383,550
OPERATING EXPENSES:
Administrative & Marketing 86,128 93,960 85,095
Utilities 44,696 42,070 47,791
Maintenance and Repair 151,824 157,588 167,323
Real Estate Tax 37,432 39,577 34,785
Interest 18,788 23,326 25,976
Insurance 5,500 5,956 5,530
Depreciation and Amortization 64,993 64,993 64,993
Total Operating Expenses 409,361 427,470 431,493
OPERATING INCOME (LOSS) ( 35,724) ( 41,193) ( 47,943)
OTHER INCOME - Interest 13,109 15,373 17,516
NET INCOME (LOSS) $( 22,615) $( 25,820) $( 30,427)
NET INCOME (LOSS) TO GENERAL
PARTNERS $( 678) $( 775) $( 913)
NET INCOME (LOSS) to LIMITED
PARTNERS $( 21,937) $( 25,045) $( 29,514)
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' EQUITY (DEFICIT)
FOR YEARS ENDED DECEMBER 31, 1999, 1998, 1997
General Limited
Total Partner Partner
Balance, at December 31, 1996 $( 45,478) $ 3,659 $( 49,137)
Net loss ( 30,427) ( 913) ( 29,514)
BALANCE, at December 31, 1997 ( 75,905) 2,746 ( 78,651)
Net loss ( 25,820) ( 775) ( 25,045)
BALANCE, at December 31, 1998 ( 101,725) 1,971 ( 103,696)
Net loss ( 22,615) ( 678) ( 21,937)
BALANCE, at December 31, 1999 $( 124,340) $ 1,293 $( 125,633)
Percent of interest in
profit and losses 100% 3% 97%
See accompanying summary of accounting policies
and notes of financial statements
<PAGE>
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31,
1999 1998 1997
CASH FLOWS FROM ACTIVITIES:
Net Loss $( 22,615) $( 25,820) $( 30,427)
Adjustments to reconcile Net Loss
to Net Cash Provided (Used) by
Operating Activities:
Depreciation and Amortization 64,993 64,993 64,993
(Increase) Decrease in Receivables 2,499 ( 2,120) ( 1,930)
(Increase) Decrease in Escrow Deposits 746 8,217 ( 10,385)
(Increase) Decrease in Restricted Deposits 330 ( 1,324) ( 184)
Increase (Decrease) in Accounts Payable
and Accrued Expenses ( 9,317) 872 9,793
Increase (Decrease) in Tenants
Security Deposits 540 ( 418) 1,929
Increase (Decrease) in Prepaid Rents 300 ( 3,449) 3,562
Net Cash Provided (Used) by
Operating Activities 37,476 40,951 41,211
CASH FLOW FROM INVESTING ACTIVITIES:
(Increase) Decrease in Reserve
for Replacements ( 1,046) 6,301 68,828
CASH FLOW FROM FINANCING ACTIVITIES:
Decrease in Mortgage Loan Payable ( 27,167) ( 25,310) ( 23,584)
Note Payable - Affiliate - ( 8,006) ( 7,870)
Net Cash Used by Financing Activities ( 27,167) ( 33,316) ( 31,454)
Net Increase (Decrease) in Cash
and Cash Equivalents 9,263 13,936 78,585
Cash and Cash Equivalents,
Beginning of Year 257,365 243,429 164,844
Cash and Cash Equivalents,
End of Year $ 266,628 $ 257,365 $ 243,429
Supplemental Disclosure:
Cash Paid During Year For Interest $ 28,793 $ 22,626 $ 24,488
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 25 year life and a 5 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 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 23, 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 40 year period, in monthly installments of approximately $3,841 (after
interest subsidy payments of $6,597 monthly), including interest at 7.5485% per
annum thru 2018. Principal payments for the next five years are as follows:
2000 $29,163
2001 31,311
2002 33,623
2003 36,113
2004 38,794
The partnership is required to make monthly payments of $7,582 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, tenant's 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 1999 Annual Report on Form 10-K and is qualified in its
entirety by reference to such financial statements.
Item Number Item Description Year End 1999
5-02(1) Cash and cash items $ 203,385
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 203,385
5-02(13) Property, plant and equipment -0-
5-02(14) Accumulated depreciation -0-
5-02(18) Total assets 203,385
5-02(21) Total current liabilities 16,280
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 187,105
5-02(32) Total liabilities and stockholders' equity 203,385
Item Number Item Description Year Ended 1999
5-03(b)1(a) Net sales of tangible products $ -0-
5-03(b)1 Total revenues 95,200
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 46,212
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 48,988
5-03(b)(11) Income tax expense -0-
5-03(b)(14) Income/loss continuing operations 48,988
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 48,988
5-03(b)(20) Earnings per share-primary 12.98
5-03(b)(20) Earnings per share-fully diluted 12.98
<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: March 28, 2000 Jeff E. Ewing - President
APT ASSET MANAGEMENT, INC.
Shared/Bruno/APT401K/APTHS9910K.FS
17
19
See notes to financial statements.
20
See notes to financial statements.
25
52
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 203,385
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 203,385
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 203,385
<CURRENT-LIABILITIES> 16,280
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 187,105
<TOTAL-LIABILITY-AND-EQUITY> 203,385
<SALES> 0
<TOTAL-REVENUES> 95,200
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 46,212
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 48,988
<INCOME-TAX> 0
<INCOME-CONTINUING> 48,988
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 48,988
<EPS-BASIC> 12.98
<EPS-DILUTED> 12.98
</TABLE>
