UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended March 25, 1998
OR
____ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 0-13782
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP
---------------------------------------------------
(Exact name of registrant as specified in its charter)
Massachusetts 13-3228969
------------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
625 Madison Avenue, New York, New York 10022
- - - -------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 421-5333
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Initial Limited Partnership Interests
(Title of Class)
Additional Limited Partnership Interests
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
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
Index to exhibits may be found on page 225
Page 1 of 236
<PAGE>
PART I
Item 1. Business.
General
Cambridge Advantaged Properties Limited Partnership (formerly Hutton Advantaged
Properties Limited Partnership) (the "Partnership") is a limited partnership
which was formed under the laws of the Commonwealth of Massachusetts on June 28,
1984. The General Partners of the Partnership are Assisted Housing Associates
Inc. (formerly Cambridge Assisted Housing Associates Inc.) (the "Assisted
General Partner"), and Related Beta Corporation (the "Related General Partner"),
both of which are Delaware corporations affiliated with The Related Companies,
L.P. ("Related"), a New York limited partnership, and Cambridge/Related
Associates Limited Partnership (formerly Hutton/Related Associates Limited
Partnership) ("Cambridge/Related"), a Massachusetts limited partnership. The
general partners of Cambridge/Related are the Assisted General Partner and the
Related General Partner. The General Partners manage and control the affairs of
the Partnership. See Item 10, Directors and Executive Officers of the
Registrant, below.
On November 25, 1997, an affiliate of the Related General Partner, purchased
100% of the stock of the Assisted General Partner (the "Transfer"), then an
affiliate of Lehman Brothers, Inc. The Assisted General Partner is also a
partner of Cambridge/Related and, therefore, as a result of the Transfer, such
affiliate also acquired the Assisted General Partner's general partner interest
in Cambridge/Related and C/R Special Partnership, the special limited partner of
the Partnership. In connection with the Transfer, the Partnership paid to the
Assisted General Partner the accrued asset management fees owed to it in the
aggregate amount of $1,334,116. See Note 8 - Related Party Transactions to the
Financial Statements included in Item 8. above.
Effective May 19, 1994, the Partnership's name was changed to Cambridge
Advantaged Properties Limited Partnership.
On August 9, 1984, pursuant to a prospectus dated August 9, 1984 as supplemented
by the supplements thereto dated September 7, 1984, October 5, 1984 and November
20, 1984 (as so supplemented the "Prospectus"), the Partnership commenced a
public offering (the "Offering", as so supplemented). Pursuant to the Offering,
the Partnership issued 6,674 Units in 1984, each Unit consisting of one Initial
Limited Partnership Interest and one Warrant to purchase an Additional Limited
Partnership Interest during the period from January 1, 1985 through January 25,
1985, and 5,400 Additional Limited Partnership Interests in 1985. The
Partnership received $53,754,300 (net of offering expenses and sales commissions
of $6,615,700) as a result of the Offering. The Offering was completed in March
1985 and no further issuance of Additional Limited Partnership Interests is
anticipated.
Investment Objectives/Government Incentives
The Partnership was formed to invest, as a limited partner, in other limited
partnerships (referred to herein as "Local Partnerships" or "subsidiary
partnerships"), each of which owns or leases and operates an existing
residential housing development (an "Apartment Complex") which is receiving some
form of local, state or federal assistance, including, without limitation,
mortgage insurance, rental assistance payments, permanent mortgage financing
and/or interest reduction payments ("Government Assistance"). In acquiring its
interests in the Local Partnerships ("Local Partnership Interests"), the
Partnership's investment objectives are, to:
(1) provide current tax benefits in the form of tax losses which Limited
Partners may use to offset taxable income from other sources;
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(2) provide long-term capital appreciation through an increase in the value of
the Partnership's investments in Local Partnerships;
(3) provide cash distributions from sale or refinancing transactions; and
(4) preserve and protect the Partnership's capital.
Federal, state and local government agencies have provided significant
incentives in order to stimulate private investment in government assisted
housing. Notwithstanding these incentives, there remain significant risks. These
risks include, but are not limited to, the uncertainty as to the financial
strength and expertise of the general partners of the Local Partnerships ("Local
General Partners"); the long-term nature of investments in government-assisted
housing which limits the ability of the Partnership to vary its investment
portfolio in response to changing economic, financial and investment conditions;
and changes in local economic circumstances and housing patterns which have an
impact on real estate values. Apartment Complexes benefiting from Government
Assistance also require greater management expertise and may have higher
operating expenses than conventional apartment buildings. See Item 7,
Management's Discussion and Analysis of Financial Condition and Results of
Operations.
Further information concerning the Government Assistance Programs in which the
Local Partnerships participate is contained in the Prospectus under the heading
"Government Programs." See Item 2, Properties, below.
Investments
The Local Partnership Interests owned by the Partnership were acquired from
unaffiliated sellers. The Partnership became the principal limited partner in
these Local 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 Partnerships is limited to
its investment. The Local General Partners of the Local Partnerships retain
responsibility for maintaining, operating and managing the Apartment Complexes.
The Partnership is a limited partner, with an ownership interest of 98.99% in
each of the 52 remaining subsidiary partnerships.
Each Local Partnership also has a special limited partner (the "Local Affiliated
Partner") either C/R Special Partnership or another affiliate of the General
Partners, which, under certain circumstances, has the right to replace the Local
General Partners of the Local Partnership and also has certain rights with
respect to voting on or approving of certain matters, including the sale of the
Apartment Complex. These rights were given to the Local Affiliated Partner
rather than the Partnership so as to avoid claims that by the existence or
exercise of such rights, the Partnership was taking part in the control of the
Local Limited Partnerships' operations and should thereby incur liability as a
General Partner of the Local Partnerships. The Local Affiliated Partner has
agreed to exercise these rights as a fiduciary of the Limited Partners of the
Partnership.
Purchase Money Notes
Purchase money notes in the original amount of $85,458,825 were issued to the
selling partners of the subsidiary partnerships as part of the purchase price
and are secured only by the interest in the subsidiary partnership to which the
note relates (the "Purchase Money Notes"). A portion of these notes, in the
original amount of $31,932,568 are obligations at the subsidiary partnership
level, whereas the remaining $53,526,257 is recorded at the Partnership level.
The Purchase Money Notes generally provided for compound interest at rates
which, in general,
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ranged from 9% to 10% per annum through August 31, 1989. Thereafter, simple
interest has accrued, without further interest thereon, through maturity, August
through December 1996 (unless extended by the Partnership for up to three years
in general). As of March 25, 1998, the maturity dates of each of the Purchase
Money Notes associated with the remaining properties owned by the subsidiary
partnerships were extended for two years (see below). Purchase money notes at
March 25, 1998 and 1997 include $4,336,417 of interest accrued through August
31, 1989.
The Purchase Money Notes, which provide for simple interest through maturity
during the initial term, as extended, will not be in default during the initial
term, as extended, if not less than 60% of the cash flow actually distributed to
the Partnership by the corresponding subsidiary partnership (generated by the
operations, as defined) is applied first to accrued interest and then to current
interest thereon. Any interest not paid currently accrues, without further
interest thereon, through the extended due date of the note. Continued accrual
of such interest beyond the initial term, without payment, reduces the effective
interest rate of 9%. The exact effect is not determinable inasmuch as it is
dependent on the actual future interest payments and ultimate repayment dates of
the notes. Unpaid interest of approximately $85,000,000 and $98,000,000 as of
March 25, 1998 and 1997, respectively, has been accrued and is included in due
to selling partners in the consolidated balance sheets. In general, the interest
on and the principal of each Purchase Money Note is also payable to the extent
of the Partnership's actual receipt of proceeds of the sale or refinancing of
the Apartment Complex, or in some cases the Local Partnership Interest to which
the Purchase Money Note relates.
The Partnership was permitted to extend the term of the Purchase Money Notes for
up to three additional years (four years with respect to three subsidiary
partnerships). In connection with such extensions, the partnership incurred an
extension fee of 1/2% per annum of the outstanding principle balance of the
notes. Through March 25, 1998, the maturity dates of each of the Purchase Money
Notes associated with the remaining properties owned by the subsidiary
partnerships (ranging from August to December 1996) were extended for two years
and extension fees in the amount of $795,643 were incurred by the Partnership.
Such notes are now due with maturity dates ranging from August to December 1998.
Of such fees incurred, $648,126 was accrued and added to the Purchase Money
Notes balance in accordance with the respective note agreements. The extension
fees are being amortized over the term of the extension. The Partnership expects
that upon maturity of the Purchase Money Notes, it will be required to refinance
or sell its investments in the Local Partnerships in order to pay the Purchase
Money Notes. The Partnership cannot sell or otherwise liquidate its investments
in those Local Partnerships which have subsidy agreements with the United States
Department of Housing and Urban Development ("HUD") during the period that such
agreements are in existence without HUD's approval. Based on the historical
operating results of the Local Partnerships and the current economic conditions,
including changes in tax laws, it is uncertain as to whether the proceeds from
such sales will be sufficient to meet the outstanding balances of principal,
accrued interest and extension fees. Management is working with the selling
partners to restructure and/or refinance the notes. No assurance can be given
that management's efforts will be successful. The Purchase Money Notes are
without personal recourse to either the Partnership or any of its partners and
the sellers' recourse, in the event of nonpayment, would be to foreclose on the
Partnership's interests in the respective subsidiary partnerships.
Distributions aggregating approximately $1,474,000, $1,410,000 and $1,390,000
were made to the Partnership during each of the years ended March 25, 1998, 1997
and 1996, respectively, of which approximately $883,000, $813,000 and $834,000,
respectively, was used to pay interest on the Purchase Money Notes. In addition,
approximately $144,000, $117,000 and $105,000 for the 1997, 1996 and 1995 Fiscal
Years, respectively, was paid as "additional" interest on the purchase money
notes. In addition, approximately $1,031,000, $1,744,000 and $1,709,000 was paid
4
<PAGE>
by the subsidiary partnerships as interest on purchase money notes during the
1997, 1996, and 1995 Fiscal Years, respectively.
Tax Matters
The Tax Reform Act of 1986 (the "TRA") provides that as of 1991, the passive
losses generated by the Partnership can only be used to shelter passive income
or, in the alternative, may be carried forward to offset a gain, if any, upon
the sale of properties.
Government Programs and Regulations
The General Partners will carefully analyze the opportunities available upon the
expiration of the properties' contracts with HUD, as well as the tax
consequences of each option to investors. Prior to expiration of the properties'
HUD contracts, and based on the historical operating results and current
economic conditions including changes in tax laws, it is uncertain as to whether
there would be a return to the investors upon the sale of the underlying
properties in the Partnership's portfolio.
The Local Partnerships which receive government assistance are subject to
low-income use restrictions which limit the owners' ability to sell or refinance
the properties. In order to maintain the existing inventory of affordable
housing, Congress passed a series of related acts including the Emergency Low
Income Preservation Act of 1987, the Low-Income Housing Preservation and
Resident Homeownership Act of 1990 and the Housing Opportunity Program Extension
Act of 1996 (the "1996 Act") (together the "Preservation Acts"). In exchange for
maintaining the aforementioned use restrictions, the Preservation Acts provide
financial incentives for owners of government assisted properties. The 1996 Act
provides financial assistance by funding the sale of such properties to
not-for-profit owners and also restores the owners' ability to prepay their HUD
mortgage and convert the property to condominiums or market-rate rental housing.
The following eight Local Partnerships filed for incentives under the
Preservation Acts: Lansing, MI - Cranbrook Manor Apts., Romulus, MI - Oakbrook
Villa Apts., New Bedford, MA - Buttonwood Acres, Wyandotte, MI - Villa Apollo
Associates Limited Partnership and Villa Apollo # 2 Limited Partnership, South
Dartmouth, MA - Solemar, Sterling Heights, MI - Carlton Terrace Apartments, and
San Diego, CA - Lancaster Manor Apartments. The Buttonwood Acres property was
sold on August 11, 1997. The Oakbrook Villa Apts. property entered into a
purchase and sale agreement on April 30, 1998.
Funding for the 1996 Act is subject to appropriations by Congress. Congress
funded $624 million in fiscal year 1996 for the preservation of housing.
Congress has funded approximately $325 million for preservation for 1997 fiscal
year. Moreover only $175 million of the 1997 allocation is available to fund
preservation, while the balance is set aside for rental assistance payments and
for special projects. There is a backlog of properties having a preservation
value in excess of $900 million. Accordingly, no assurance can be given that any
of the local partnerships will obtain such incentives.
In September 1997, Congress enacted the Multi-family Assisted Housing Reform and
Affordability Act of 1997 ("MAHRAA") which provides for the renewal of Section 8
Housing Assistance Payments Contracts ("Section 8 Contracts") to be based upon
market rentals instead of the above-market rentals which is generally the case
under existing Section 8 Contracts. As a result, Section 8 Contracts that are
renewed in the future in projects insured by the Federal Housing Administration
("FHA") may not provide sufficient cash flow to permit owners of properties to
meet the debt service requirements of these existing FHA-insured mortgages.
MAHRAA also provides for the restructuring of these mortgage loans so that the
annual debt
5
<PAGE>
service on the restructured loan (or loans) can be supported by Section 8 rents
established at the market rents. The restructured loans will be held by the
current lender or another lender. There can be no assurance that a property
owner will be permitted to restructure its mortgage indebtedness pursuant to the
new rules implementing MAHRAA or that an owner would choose to restructure the
mortgage if it were able to participate. MAHRAA is supposed to go into effect on
October 28, 1998; regulations implementing the program must be issued prior to
that time. It should be noted that there are many uncertainties as to the
economic and tax impact on a property owner because of the combination of the
reduced Section 8 contract rents and the restructuring of the existing
FHA-insured mortgage loan under MAHRAA.
Sales of Underlying Properties/Local Partnership Interests
On May 2, 1996, the property owned by Bicentennial was sold to a third party for
$1,700,000, resulting in a gain in the amount of $606,195 and forgiveness of
indebtedness income of $11,502,877 as a result of forgiveness of the purchase
money note payable and accrued interest thereon (which were obligations at the
subsidiary partnership level), amounts due to HUD, and amounts due to general
partners and affiliates.
On May 7, 1997, the properties and the related assets and liabilities of
Knollwood I, Ltd., Knollwood II, Ltd., Knollwood III, Ltd., and Knollwood IV,
Ltd. (together, the "Knollwoods") were sold to a third party for $20,750,000,
which took title subject to the principal balance of the associated Purchase
Money Notes in the amount of $6,026,521, resulting in a gain in the amount of
$6,158,870. No proceeds were used to settle the accrued interest on the
associated Purchase Money Notes which amounted to $5,621,969, resulting in
forgiveness of indebtedness income.
On June 30, 1997, the property and related assets and liabilities of Parklane
II, Ltd. ("Parklane") were sold to a third party for $3,712,000 which took title
subject to the principal balance of a portion of the associated Purchase Money
Notes which amounted to $1,252,632, resulting in a gain in the amount of
$830,182. The Partnership used $450,000 of the net proceeds to settle the
remaining principal balance of the Purchase Money Notes and accrued interest
thereon which amounted to $2,821,789, resulting in forgiveness of indebtedness
income of $2,371,789.
On August 1, 1997, the Partnership's Local Partnership Interest in Northgate
Townhouse Apartments ("Northgate") was sold to a third party for $500,000
resulting in a loss in the amount of $824,647. No proceeds were used to settle
the associated Purchase Money Notes and accrued interest which resulted in
forgiveness of indebtedness income of $6,910,594.
On August 1, 1997, the Partnership's Local Partnership Interest in Westminster
Manor Apartments ("Westminster") was sold to a third party for $500,000,
resulting in a loss in the amount of $1,139,486. No proceeds were sold to settle
the associated Purchase Money Notes and accrued interest resulted in forgiveness
of indebtedness income of $8,270,497.
On August 11, 1997, the Partnership's Local Partnership Interest in Buttonwood
Acres at New Bedford ("Buttonwood") was sold back to Buttonwood for $532,750,
resulting in a loss in the amount of $343,493. No proceeds were used to settle
the associated Purchase Money Notes and accrued interest which resulted in
forgiveness of indebtedness income of $4,820,571.
On January 13, 1998, Park of Pecan I & II entered into a purchase and sale
agreement with an unaffiliated third party for a purchase price of $5,275,000
which includes $850,000 in tax exempt second mortgage bonds. The Partnership
will receive these tax exempt bonds as its share of the purchase price. The
contract has since been amended to reflect a lower price adjustment and $600,000
in tax exempt bonds to the Partnership. The closing is expected to occur during
August 1998. However, no assurance can be given that the closing will occur.
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On April 30, 1998, the Oakbrook Villa partnership entered into a purchase and
sale agreement with an unaffiliated third party for a purchase price of
$8,250,000. The closing is expected to occur during July 1998. However, no
assurance can be given that the closing will occur.
On May 22, 1998, the Partnership's Local Partnership Interest in Rockdale West
at New Bedford ("Rockdale") was sold back to Rockdale for $600,000 resulting in
a loss in the amount of approximately $125,000. No proceeds were used to settle
the associated purchase money notes accrued interest which had a total
outstanding balance of approximately $6,803,000.
The Partnership is subject to the risks incident to potential losses arising
from the management and ownership of improved real estate. The Partnership can
also be affected by poor economic conditions generally, however no more than 19%
of the properties are located in any single state. There are also substantial
risks associated with owning properties receiving government assistance, for
example the possibility that Congress may not appropriate funds to enable HUD to
make rental assistance payments. HUD also restricts annual cash distributions to
partners based on operating results and a percentage of the owners equity
contribution. The Partnership cannot sell or substantially liquidate its
investments in subsidiary partnerships during the period that the subsidy
agreements are in existence, without HUD's approval. Furthermore there may not
be market demand for apartments at full market rents when the rental assistance
contracts expire.
Competition
The real estate business is highly competitive and each of the Local
Partnerships in which the Partnership has invested owns an Apartment Complex
which must compete for tenants with other rental housing in its area. However,
the rental assistance and the preferred interest rates on mortgage financing
generally make it possible to offer the apartments to eligible tenants at a cost
to the tenant significantly below the market rate for comparable conventionally
financed apartments in the area.
Employees
The Partnership does not have any employees. All services are performed for the
Partnership by its General Partners and their affiliates. The General Partners
receive compensation in connection with such activities as set forth in Items 11
and 13 herein. In addition, the Partnership reimburses the General Partners and
certain of their affiliates for expenses incurred in connection with the
performance by their employees of services for the Partnership in accordance
with the Partnership Agreement.
Item 2. Properties.
As of March 25, 1998, the Partnership holds a 98.99% limited partnership
interest in each of fifty-two Local Partnerships, which own fifty-two Apartment
Complexes receiving Government Assistance. During the fiscal year ended March
25, 1998, the properties and the related assets and liabilities owned by five
subsidiary partnerships were sold to third parties and the Partnership's Local
Partnership's Interest in three subsidiary partnerships were sold to third
parties and the Local Partnership's general partner, respectively. Through the
fiscal year ended March 25, 1998, the properties and the related assets and
liabilities owned by six subsidiary partnerships were sold to third parties and
the Partnership's Local Partnership Interest in three subsidiary partnerships
were sold to third parties and the Local Partnership's general partner,
respectively (see Item 7. below). Set forth below is certain information
concerning the Apartment Complexes and their operations and finances. See
Schedule III to the financial statements included herein for additional
information pertaining to the Apartment Complexes.
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Each of the Local Partnerships owns one Apartment Complex. The Apartment
Complexes are located in Alabama (10), Arkansas (8), California (2), Florida
(1), Georgia (3), Indiana (3), Kentucky (1), Massachusetts (2), Michigan (9),
Missouri (1), North Carolina (2), Oregon (2), South Carolina (1), Texas (5),
Virginia (1) and Washington (1).
The 52 Apartment Complexes owned by the Local Partnerships at March 25, 1998
contain a total of 6,280 rental units. The largest of the Apartment Complexes
consists of 352 units; the smallest Apartment Complex contains 49 units.
Construction of each Apartment Complex was completed between 1970 and 1983.
The Apartment Complexes are occupied by low, moderate and middle-income tenants,
some of whom are elderly. Each Apartment Complex, except for the Apartment
Complexes owned by Saraland Apartments, Ltd., Park of Pecan I, Ltd. and Park of
Pecan II, Ltd., is located in the vicinity of other housing developments
receiving Government Assistance.
All of the Apartment Complexes are subject to existing permanent first mortgages
(the "Mortgage Loans"). In some cases the Apartment Complexes are also subject
to supplemental mortgages (the "Supplemental Mortgage Loans"). See Schedule III.
<TABLE>
<CAPTION>
LOCAL PARTNERSHIP SCHEDULE
Government
Assistance Percentage of Units
Name and Location Year HUD Occupied at December 31,
(Number of Units) Completed Programs(a) 1997 1996 1995 1994 1993
- - - ----------------- --------- ----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Knollwood I 1978 ss.221(d)(4) (e) 96% 98% 98% 97%
Mobile, AL (192)
Knollwood II 1979 ss.221(d)(4) (e) 99% 99% 99% 97%
Mobile, AL (192)
Knollwood III 1981 ss.221(d)(4) (e) 99% 99% 99% 96%
Mobile, AL (192)
Knollwood, IV 1983 ss.221(d)(4) (e) 98% 97% 97% 96%
Mobile, AL (128)
Parklane II 1977 ss.221(d)(4) (e) 99% 98% 97% 99%
Mobile, AL(140)
Cedarbay 1981 ss.221(d)(4) 88% 84% 89% 90% 93%
Mobile, AL(112)
Northwoods III Apts. 1982 ss.221(d)(4) 96% 96% 99% 97% 97%
Pensacola, FL (112)
Westminster Manor Apts. 1972 ss.221(d)(4) (f) 97% 97% 97% 96%
Arvada, CO (280) HAP
Northgate Townhouse Apts. 1977 ss.221(d)(4) (f) 99% 95% 96% 98%
Thornton, CO (184) HAP
Hackley Village 1971 ss.236 94% 100% 100% 100% 100%
Muskegon, MI (54) HAP
Huntley #1 1972 ss.236 95% 99% 99% 99% 99%
Holt, MI (88) HAP
Huntley #2 1973 ss.236 100% 99% 98% 98% 98%
Holt, MI (72) HAP
Seymour O'Brien Manor Apts. 1972 ss.236 95% 96% 98% 100% 99%
Seymour, IN (56) HAP
Washington Highland Apts. 1972 ss.236 88% 98% 99% 100% 98%
Washington, IN (56) HAP
</TABLE>
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<TABLE>
<CAPTION>
LOCAL PARTNERSHIP SCHEDULE
(continued)
Government
Assistance Percentage of Units
Name and Location Year HUD Occupied at December 31,
(Number of Units) Completed Programs(a) 1997 1996 1995 1994 1993
- - - ----------------- --------- ----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Vincennes Niblack Apts. 1972 ss.236 86% 97% 98% 97% 97%
Vincennes, IN (144) HAP
Casa Ramon Apartments 1974 ss.236 100% 100% 100% 100% 98%
Orange, CA (75) HAP
Nu-Elm Apartments 1972 ss.236 100% 99% 99% 98% 96%
Springfield, MI (72) HAP
Buttonwood Acres 1973 ss.236 (f) 100% 96% 96% 100%
New Bedford, MA (132) HAP(b)
Rockdale West 1974 ss.236 100% 100% 97% 96% 99%
New Bedford, MA (225) HAP(b)
Solemar 1976 (c) 100% 100% 96% 95% 100%
South Dartmouth, MA (200)
Decatur Apartments 1971 ss.236 74% 93% 89% 95% 96%
Decatur, AL (100) HAP
Florence Apartments 1973 ss.236 90% 89% 95% 98% 99%
Florence, AL (96)
Saraland Apartments (g) 1972 ss.236 0% 97% 98% 98% 100%
Saraland, AL (60) HAP
University Garden Apts. 1971 ss.236 100% 100% 100% 100% 100%
Waxahachie, TX (104)
Southside Village Apts. 1972 ss.236 100% 98% 99% 99% 95%
Brownwood, TX (104) HAP
Dickens Ferry Apartments 1972 ss.236 94% 90% 95% 96% 96%
Mobile, AL (80) HAP
Bonnie Doone Apartments 1972 ss.236 93% 88% 94% 98% 96%
Athens, AL (60) HAP
Conifer 208 (Conifer Village) 1972 ss.236 95% 100% 98% 98% 98%
Spokane, WA (64) HAP
Conifer 307 (Fircrest) 1973 ss.236 95% 97% 96% 97% 98%
Beaverton, OR (60) HAP
Conifer 317 (Pinewood) 1974 ss.236 94% 96% 94% 95% 94%
Hillsboro, OR (50)
Bicentennial Apts. 1976 ss.221(d)(4) (d) (d) 71% 79% 77%
Houston, TX (292)
Bellfort Apts. 1979 ss.221(d)(4) 94% 94% 94% 91% 90%
Houston, TX (272) HAP
Cloisters (Sundown) 1974 ss.236 98% 98% 99% 99% 99%
Birmingham, AL (192) HAP
Cabarrus Arms 1974 ss.236 96% 96% 94% 93% 93%
Kannapolis, NC (76) HAP
Summer Arms Apts. 1974 ss.236 100% 91% 96% 98% 97%
Sumter, SC (100) HAP
Lexington Village 1973 ss.236 98% 99% 100% 100% 94%
Conyers, GA (108) HAP
Ware Manor 1971 ss.236 99% 94% 99% 99% 100%
Waycross, GA (84) HAP
</TABLE>
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<TABLE>
<CAPTION>
LOCAL PARTNERSHIP SCHEDULE
(continued)
Government
Assistance Percentage of Units
Name and Location Year HUD Occupied at December 31,
(Number of Units) Completed Programs(a) 1997 1996 1995 1994 1993
- - - ----------------- --------- ----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Nottingham Woods Apts. 1974 ss.236 99% 99% 99% 99% 98%
Oxford, AL (144)
Hathaway Court 1974 ss.236 99% 99% 96% 98% 98%
Covington, KY (159) HAP
Tall Pines 1972 ss.236 98% 100% 98% 99% 95%
La Grange, GA (115) HAP
Shelton Beach Apts. 1975 ss.221(d)(4) 96% 94% 97% 96% 92%
Saraland, AL (112)
Northpointe II 1978 ss.221(d)(4) 94% 98% 98% 97% 95%
Saraland, AL (80)
Caroline Forest Apts. 1973 ss.236 100% 99% 99% 100% 98%
Salem, VI (72)
Park of Pecan I 1979 ss.221(d)(4) 93% 94% 90% 91% 100%
Rosenberg, TX (137)
Park of Pecan II 1978 ss.221(d)(4) 88% 93% 88% 90% 100%
Rosenberg, TX (136)
Villa Apollo No. 1 1971 ss.236 90% 89% 95% 94% 97%
Brownstown Township, MI (112) HAP
Carlton Terrace Apartments 1973 ss.236 99% 99% 99% 100% 99%
Sterling Heights, MI (300)
Cranbrook Manor Apartments 1970 ss.236 82% 80% 93% 96% 95%
Lansing, MI (136) HAP
Oakbrook Villa Apartments 1970 ss.236 84% 90% 94% 94% 97%
Romulus, MI (352) HAP
Pebble Creek 1973 ss.236 99% 98% 100% 100% 97%
East Lansing, MI (186)
Villa Apollo No. 2 1971 ss.236 86% 89% 93% 91% 97%
Brownstown Township, MI (286) HAP
Greenwood Manor 1974 ss.236 94% 92% 99% 93% 96%
Pine Bluff, AR (64) HAP
Malvern Manor 1974 ss.236 100% 96% 97% 99% 100%
Malvern, AR (50) HAP
Hereford Manor 1973 ss.236 94% 98% 98% 99% 98%
Siloam Springs, AR (50) HAP
Henslee Heights 1974 ss.236 97% 99% 99% 98% 99%
Pine Bluff, AR (78) HAP
Oakwood Manor 1972 ss.236 92% 91% 96% 95% 88%
Little Rock, AR (200) HAP
West Scenic Apartments 1971 ss.236 97% 93% 97% 98% 97%
North Little Rock, AR (150)
Robindale East Apartments 1974 ss.236 91% 88% 92% 88% 93%
Blytheville, AR (88) HAP
Southwest Apartments 1970 ss.236 94% 100% 98% 100% 98%
Little Rock, AR (49) HAP
Valley Arms 1975 ss.236 55% 74% 76% 76% 90%
Statesville, NC (100) HAP
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
LOCAL PARTNERSHIP SCHEDULE
(continued)
Government
Assistance Percentage of Units
Name and Location Year HUD Occupied at December 31,
(Number of Units) Completed Programs(a) 1997 1996 1995 1994 1993
- - - ----------------- --------- ----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Lancaster Manor 1970 ss.221(d)(3) 100% 100% 100% 99% 100%
San Diego, CA (248)
</TABLE>
(a) The Partnership invested in Local Partnerships owning existing Apartment
Complexes which receive either Federal or state subsidies. HUD through FHA,
administers a variety of subsidies for low and moderate-income housing. FHA
administers similar housing programs for non-urban areas. The Federal programs
generally provide one or a combination of the following forms of assistance: (i)
mortgage loan insurance, (ii) rental subsidies and (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
Section 236, Section 221(d)(4), Section 221(d)(3) and Section 220. Under all of
these programs, HUD will generally provide insurance equal to 100% of the total
replacement cost of the project to non-profit owners and 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 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. The
most significant difference between the 221(d)(4) program and the 221(d)(3)
program is the maximum amount of the loan which may be obtained. Under the
221(d)(3) program, non profit sponsors may obtain a permanent mortgage equal to
100% of the total replacement cost; no equity contribution is required of a non
profit sponsor. In all other respects the 221(d)(3) program is substantially
similar to the 221(d)(4) program.
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 (the "Section 8 Program"). Apartment Complexes not receiving assistance
through the Section 8 Program ("Section 8 Payments") will generally have
limitations on the amounts 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.
iii) Section 236 Program. As well as providing mortgage insurance, the Section
236 program also provides an interest credit subsidy which reduces the cost of
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 interest payment
required by the terms of the mortgage to pay principal, interest and the annual
mortgage insurance premium and (ii) the monthly payment which would have been
required for principal and interest if the mortgage loan bore interest at the
rate of 1%. These payments are
11
<PAGE>
credited against the amounts otherwise due from the owner of the project, who
makes monthly payments of the balance.
(b) The Local Partnership receives monthly rent supplements from HUD through
MHFA and the New Bedford Housing Authority.
(c) MHFA provides interest credit subsidies pursuant to Section 13A of the
Massachusetts Acts of 1966. The Local Partnership also receives monthly rent
supplements from the Dartmouth Housing Authority and the South Shore Housing
Authority pursuant to Section 707 of the Massachusetts Act of 1966.
(d) The property and the related assets and liabilities were sold during the
fiscal year ended March 25, 1997 (see Item 7. below).
(e) The property and the related assets and liabilities were sold during the
fiscal year ended March 25, 1998 (see Item 7. below).
(f) The Partnership's Local Partnership Interest in these Local Partnerships
were sold during the fiscal year ended March 25, 1998 (see Item 7. below).
(g) During the fiscal year ended March 25, 1998, the Local Partnership's
property was declared unsafe to live due to amounts of Benzene and Aldrene found
to be present in the air of some apartments (see Item 7. below).
All leases are generally for periods not exceeding one to two years and no
tenant occupies more than 10% of the rentable square footage.
Rents from commercial tenants (to which average rental per square foot applies)
comprise less than 5% of the rental revenues of the Partnership. Rents for the
residential units are determined annually by HUD and reflect increases in
consumer price indices in various geographic areas.
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.
Management continuously reviews the insurance coverage of the properties and
believes such coverage is adequate.
See Item 1, Business, above for the general competitive conditions to which the
properties described above are subject.
Real estate taxes are calculated using rates and assessed valuations determined
by the township or city in which the property is located. Such taxes have
approximated 1% of the aggregate cost for the properties as shown in Schedule
III to the financial statements included herein.
Item 3. Legal Proceedings.
This information is incorporated by reference to the discussion of Saraland in
the Results of Operations of Certain Local Partnerships contained in Item 7,
Management's Discussion and Analysis of Financial Condition and Results of
Operations.
12
<PAGE>
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of security holders during the fiscal year
covered by this report through the solicitation of proxies or otherwise.
13
<PAGE>
PART II
Item 5. Market for the Registrant's Limited Partnerships Interests and Related
Security Holder Matters.
As of March 25, 1998, the Partnership had issued and outstanding 12,074 Limited
Partnership Interests, of which 6,674 are Initial Limited Partnership Interests
and 5,400 are Additional Limited Partnership Interests, each representing a
$5,000 capital contribution to the Partnership, for aggregate Gross Proceeds of
$60,370,000. Additional Limited Partnership Interests are the Limited
Partnership Interests acquired upon the exercise of Warrants or sold by the
Partnership upon the nonexercise of the Warrants. The Warrants are rights
granted pursuant to the Partnership Agreement as part of the purchase of an
Initial Limited Partner Interest. No further issuance of Initial Limited
Partnership Interests or Additional Limited Partnership Interests is anticipated
and all Warrants have expired.
The offering of Units consisting of Initial Limited Partnership Interests and
Warrants to purchase Additional Limited Partnership Interests terminated in
1984. The offering of Additional Limited Partnership Interests terminated in
March 1985.
No public market has developed, and it is not anticipated that any public market
will develop, for the secondary purchase and sale of any Limited Partnership
Interests. Limited Partnership Interests may be transferred only if certain
requirements are satisfied, including the rendering of an opinion of counsel to
the Partnership that such transfer would not cause a termination of the
Partnership under Section 708 of the Internal Revenue Code and would not violate
any federal or state securities laws.
As of June 1, 1998, there were approximately 4,496 registered holders of Limited
Partnership Interests.
In March 1998, a distribution of approximately $1,997,000 and $20,000 was paid
to the Limited Partners and General Partners, respectively, from net proceeds
from the sale of properties by Local Partnerships in which the Partnership had
invested (see Item 7. below). Of the total distributions of approximately
$2,017,000 for the year ended March 25, 1998, there was no return of capital
determined in accordance with generally accepted accounting principles. With the
exception of this distribution, the Partnership had made no distributions to its
Limited Partners from its inception on June 28, 1984 to March 28, 1998. There
are no material restrictions upon the Partnership's present or future ability to
make distributions in accordance with the provisions of the Partnership's
Amended and Restated Agreement and Certificate of Limited Partnership. The
Partnership has invested as a limited partner in Local Partnerships owning
Apartment Complexes which receive Governmental Assistance under programs which
in many instances restrict the cash return available to owners. See Item 8,
Footnote 10(f) for a discussion of these restrictions. The Partnership does not
anticipate providing significant cash distributions to its Limited Partners in
circumstances other than refinancing or sale of the Apartment Complexes or the
Local Partnership Interests.
There has recently been an increasing number of requests for the list of holders
of limited partnership interests in limited partnerships such as the
Partnership. Often these requests are made by a person who, only a short time
before making the request, acquired merely a small number of Limited Partnership
Interests in the Partnership and seeks the list for an improper purpose, a
purpose that is not in the best interest of the Partnership or is harmful to the
Partnership. In order to best serve and protect the interests of the Partnership
and all of its investors, the General Partners have adopted a policy with
respect to requests for the Partnership's list of holders of Limited Partnership
Interests. This policy is intended to protect investors
14
<PAGE>
from unsolicited and coercive offers to acquire the interests of holders of
Limited Partnership Interests and does not limit any other rights the General
Partners may have under the Partnership Agreement or applicable law.
15
<PAGE>
Item 6. Selected Financial Data.
The information set forth below presents selected financial data of the
Partnership. Additional detailed financial information is set forth in audited
financial statements and footnotes contained in Item 8 hereof and in the
schedules contained in Item 14 hereof.
<TABLE>
<CAPTION>
Year ended March 25,
----------------------------------------------------------------------------
OPERATIONS 1998 1997 1996 1995 1994
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues $ 37,441,984 $ 37,941,905 $ 37,329,186 $ 35,953,512 $ 34,980,748
Operating expenses (45,106,539) (50,871,861) (48,605,962) (49,555,880) (49,006,411)
Loss on impairment 0 (939,612) (4,343,215) 0 0
of assets
Minority interest 57,040 3,063 (24,042) 3,705 4,627
------------ ------------ ------------ ------------ ------------
Loss before extra- (7,607,515) (13,866,505) (15,644,033) (13,598,663) (14,021,036)
ordinary item
Extraordinary
item-forgiveness 28,257,707 11,502,877 0 0 0
of indebtedness ------------ ------------ ------------ ------------ ------------
Net income (loss) $ 20,650,192 $ (2,363,628) $(15,644,033) $(13,598,663) $(14,021,036)
============ ============ ============ ============ ============
Loss before $ (624) $ (1,137) $ (1,283) $ (1,115) $ (1,150)
extra-ordinary
item per BAC
Extraordinary item
per Unit 2,317 943 0 0 0
------------ ------------ ------------ ------------ ------------
Net income (loss)
per Unit $ 1,693 $ (194) $ (1,283) $ (1,115) $ (1,150)
============ ============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
Year ended March 25,
-----------------------------------------------------------------------
FINANCIAL POSITION 1998 1997 1996 1995 1994
- - - ------------------ ----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Total assets $121,697,254 $157,162,664 $165,610,335 $174,113,560 $181,261,859
============ ============ ============ ============ ============
Long-term $223,047,257 $275,088,044 $281,339,303 $274,288,282 $267,295,459
obligations ============ ============ ============ ============ ============
Total liabilities $230,161,240 $284,145,026 $290,195,162 $283,063,641 $276,571,053
============ ============ ============ ============ ============
Minority interest $ 2,082 $ 116,611 $ 150,518 $ 141,231 $ 183,455
============ ============ ============ ============ ============
</TABLE>
During the years ended March 25, 1994 through 1996, total assets decreased
primarily due to depreciation, partially offset by net additions to property and
equipment. During the same periods, long-term obligations and total liabilities
increased primarily due to accruals of interest on Purchase Money Notes,
partially offset by payments equal to 60% of the cash flow distributions from
the underlying properties. For the years ended March 25, 1997 and 1996, there
were also decreases in assets due to loss on impairment of assets. During the
years ended March 25, 1997 and 1998, total assets decreased primarily due to
depreciation and the sale of properties (see Note 10 in Item 8. Financial
Statements and Supplementary Data), partially offset by net additions to
property and equipment. Long-term obligations and total liabilities decreased
for the years ended March 25, 1997 and 1998 primarily due to the forgiveness of
indebtedness on Purchase Money Notes and amounts due to selling partners as a
result of the sale, principal repayments of mortgage notes payable and payments
of interest on Purchase Money Notes, partially offset by accruals of interest on
Purchase Money Notes.
16
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Liquidity and Capital Resources
General
The Partnership's capital has been invested primarily in 61 Local Partnerships,
in which the Partnership made an initial investment of $50,293,934 (including
acquisition expenses) in the Local Partnerships. These investments are highly
illiquid. During the fiscal year ended March 25, 1998 the property and the
related assets and liabilities owned by five subsidiary partnerships were sold
to third parties and the Partnership's Local Partnership's Interest in three
subsidiary partnerships were sold to third parties and the Local Partnership's
general partner, respectively. Through the fiscal year ended March 25, 1998, the
properties and the related assets and liabilities owned by six subsidiary
partnerships were sold to third parties and the Partnership's Local Partnership
Interest in three subsidiary partnerships were sold to third parties and the
Local Partnership's general partner, respectively. As of March 25, 1998, the
Partnership owned interests in 52 Local Partnerships.
The Partnership records loss contingencies as a charge to income when
information becomes available which indicates that it is probable that an asset
has been impaired or a liability has been incurred as of the date of the
financial statements and the amount of loss can be reasonably estimated. In
addition, the Partnership evaluates the amount of a potential environmental
liability independently from any potential claim for recovery (see below).
During the year ended March 25, 1998, cash and cash equivalents of the
Partnership decreased approximately $641,000. This decrease was primarily due to
acquisitions of property and equipment $2,051,000, principal payments of
purchase money notes $7,598,000, distributions paid $2,017,000 and repayments of
mortgage notes payable $17,358,000 which exceeded cash provided by operating
activities $549,000 a decrease in mortgage escrow deposits $505,000, proceeds
from mortgage notes payable $1,900,000 and net proceeds from sale of property
$25,487,000. Included in the adjustments to reconcile the net income to cash
flow provided by operations is gain on sale of property $4,419,000, forgiveness
of indebtedness income $28,258,000 and depreciation $7,165,000.
The Partnership's primary sources of funds are the cash distributions from
operations of the Local Partnerships in which the Partnership has invested.
These sources are available to meet obligations of the Partnership. However, the
cash distributions received from the Local Partnerships to date have not been
sufficient to meet all such obligations of the Partnership. Accordingly, the
Related General Partner advanced funds totaling approximately $0, $206,000 and
$205,000 during the year ended March 25, 1998, 1997 and 1996, respectively, to
meet the Partnership's third party obligations. In addition, certain fees and
expense reimbursements owed to the General Partners amounting to approximately
$947,000, $1,765,000 and $635,000, were accrued and unpaid as of March 25, 1998,
1997 and 1996, respectively. Without the General Partners' advances and
continued accrual without payment of certain fees and expense reimbursements,
the Partnership will not be in a position to meet its obligations. The General
Partners have continued advancing and allowing the accrual without payment of
these amounts but are under no obligation to do so. However, in connection with
the Related General Partner's acquisition of the stock of the Assisted General
Partner, as noted in Item 10., the Partnership utilized certain net proceeds
from the sale of properties to repay a portion of accrued amounts owed to the
General Partners. Proceeds received from future sales will be used to pay any
outstanding amounts due to the General Partners.
17
<PAGE>
During the years ended March 25, 1998 ("the 1997 Fiscal Year"), 1997 ("the 1996
Fiscal Year") and 1996 ("the 1995 Fiscal Year), the Partnership received
approximately $1,474,000, $1,410,000 and $1,390,000, respectively, of cash flow
distributions from operations of the Local Partnerships. In most cases, 60% of
the cash flow distributions were applied to interest payments on the Purchase
Money Notes, resulting in a net cash inflow of approximately $591,000, $597,000
and $556,000 for Fiscal Years 1997, 1996 and 1995, respectively. At March 25,
1998, 1997 and 1996, approximately $883,000, $813,000, and $834,000,
respectively, of such distributions were required to be remitted as interest
payments on the Purchase Money Notes. Distribution from the sale of investments
aggregating approximately $11,013,000 was made to the Partnership in the 1997
Fiscal Year of which $1,997,000 and $20,000 was paid to the Limited Partners and
General Partners, respectively.
Purchase Money Notes
Purchase money notes in the original amount of $85,458,825 were issued to the
selling partners of the subsidiary partnerships as part of the purchase price
and are secured only by the interest in the subsidiary partnership to which the
note relates (the "Purchase Money Notes"). A portion of these notes, in the
original amount of $31,932,568 are obligations at the subsidiary partnership
level, whereas the remaining $53,526,257 is recorded at the Partnership level.
The Purchase Money Notes generally provided for compound interest at rates
which, in general, ranged from 9% to 10% per annum through August 31, 1989.
Thereafter, simple interest has accrued, without further interest thereon,
through maturity, August through December 1996 (unless extended by the
Partnership for up to three years in general). As of March 25, 1998, the
maturity dates of each of the Purchase Money Notes associated with the remaining
properties owned by the subsidiary partnerships were extended for two years (see
below). Purchase money notes at March 25, 1998 and 1997 include $4,336,417 of
interest accrued through August 31, 1989.
The Purchase Money Notes, which provide for simple interest through maturity
during the initial term, as extended, will not be in default during the initial
term, as extended, if not less than 60% of the cash flow actually distributed to
the Partnership by the corresponding subsidiary partnership (generated by the
operations, as defined) is applied first to accrued interest and then to current
interest thereon. Any interest not paid currently accrues, without further
interest thereon, through the extended due date of the note. Continued accrual
of such interest beyond the initial term, without payment, reduces the effective
interest rate of 9%. The exact effect is not determinable inasmuch as it is
dependent on the actual future interest payments and ultimate repayment dates of
the notes. Unpaid interest of approximately $85,000,000 and $98,000,000 as of
March 25, 1998 and 1997, respectively, has been accrued and is included in due
to selling partners in the consolidated balance sheets. In general, the interest
on and the principal of each Purchase Money Note is also payable to the extent
of the Partnership's actual receipt of proceeds of the sale or refinancing of
the Apartment Complex, or in some cases the Local Partnership Interest to which
the Purchase Money Note relates.
The Partnership was permitted to extend the term of the Purchase Money Notes for
up to three additional years (four years with respect to three subsidiary
partnerships). In connection with such extensions, the Partnership incurred an
extension fee of 1/2% per annum of the outstanding principal balance of the
notes. Through March 25, 1998, the maturity dates of each of the Purchase Money
Notes associated with the remaining properties owned by the subsidiary
partnerships (ranging from August to December 1996) were extended for two years
and extension fees in the amount of $795,643 were incurred by the Partnership.
Such notes are now due with maturity dates ranging from August to December 1998.
Of such fees incurred, $648,126 was accrued and added to the Purchase Money
Notes balance in accordance with the respective note agreements. The extension
fees are being amortized over the term of the extension.
18
<PAGE>
The Partnership expects that upon maturity of the Purchase Money Notes, it will
be required to refinance or sell its investments in the Local Partnerships in
order to pay the Purchase Money Notes. The Partnership cannot sell or otherwise
liquidate its investments in those Local Partnerships which have subsidy
agreements with the United States Department of Housing and Urban Development
("HUD") during the period that such agreements are in existence without HUD's
approval. Based on the historical operating results of the Local Partnerships
and the current economic conditions, including changes in tax laws, it is
uncertain as to whether the proceeds from such sales will be sufficient to meet
the outstanding balances of principal, accrued interest and extension fees.
Management is working with the selling partners to restructure and/or refinance
the notes. No assurance can be given that management's efforts will be
successful. The Purchase Money Notes are without personal recourse to either the
Partnership or any of its partners and the sellers' recourse, in the event of
nonpayment, would be to foreclose on the Partnership's interests in the
respective subsidiary partnerships.
Distributions aggregating approximately $1,474,000, $1,410,000 and $1,390,000
were made to the Partnership during each of the years ended March 25, 1998, 1997
and 1996, respectively, of which approximately $883,000, $813,000 and $834,000,
respectively, was used to pay interest on the Purchase Money Notes. In addition,
approximately $144,000, $117,000 and $105,000 for the 1997, 1996 and 1995 Fiscal
Years, respectively, was paid as "additional" interest on the purchase money
notes. In addition, approximately $1,031,000, $1,744,000 and $1,709,000 was paid
by the subsidiary partnerships as interest on purchase money notes during the
1997, 1996, and 1995 Fiscal Years, respectively.
Government Programs and Regulations
The General Partners will carefully analyze the opportunities available upon the
expiration of the properties' contracts with HUD, as well as the tax
consequences of each option to investors. Prior to expiration of the properties'
HUD contracts, and based on the historical operating results and current
economic conditions including changes in tax laws, it is uncertain as to whether
there would be a return to the investors upon the sale of the underlying
properties in the Partnership's portfolio.
The Local Partnerships which receive government assistance are subject to
low-income use restrictions which limit the owners' ability to sell or refinance
the properties. In order to maintain the existing inventory of affordable
housing, Congress passed a series of related acts including the Emergency Low
Income Preservation Act of 1987, the Low-Income Housing Preservation and
Resident Homeownership Act of 1990 and the Housing Opportunity Program Extension
Act of 1996 (the "1996 Act") (together the "Preservation Acts"). In exchange for
maintaining the aforementioned use restrictions, the Preservation Acts provide
financial incentives for owners of government assisted properties. The 1996 Act
provides financial assistance by funding the sale of such properties to
not-for-profit owners and also restores the owners' ability to prepay their HUD
mortgage and convert the property to condominiums or market-rate rental housing.
The following eight Local Partnerships filed for incentives under the
Preservation Acts: Lansing, MI - Cranbrook Manor Apts., Romulus, MI - Oakbrook
Villa Apts., New Bedford, MA - Buttonwood Acres, Wyandotte, MI - Villa Apollo
Associates Limited Partnership and Villa Apollo # 2 Limited Partnership, South
Dartmouth, MA - Solemar, Sterling Heights, MI - Carlton Terrace Apartments, and
San Diego, CA - Lancaster Manor Apartments. The Buttonwood Acres property was
sold on August 11, 1997. The Oakbrook Villa Apts. property entered into a
purchase and sale agreement on April 30, 1998.
19
<PAGE>
Funding for the 1996 Act is subject to appropriations by Congress. Congress
funded $624 million in fiscal year 1996 for the preservation of housing.
Congress has funded approximately $325 million for preservation for 1997 fiscal
year. Moreover only $175 million of the 1997 allocation is available to fund
preservation, while the balance is set aside for rental assistance payments and
for special projects. There is a backlog of properties having a preservation
value in excess of $900 million. Accordingly, no assurance can be given that any
of the local partnerships will obtain such incentives.
Partnership management fees owed to the general partners amounting to
approximately $833,000 and $1,623,000 were accrued and unpaid as of March 25,
1998 and 1997, respectively.
In September 1997, Congress enacted the Multi-family Assisted Housing Reform and
Affordability Act of 1997 ("MAHRAA") which provides for the renewal of Section 8
Housing Assistance Payments Contracts ("Section 8 Contracts") to be based upon
market rentals instead of the above-market rentals which is generally the case
under existing Section 8 Contracts. As a result, Section 8 Contracts that are
renewed in the future in projects insured by the Federal Housing Administration
("FHA") may not provide sufficient cash flow to permit owners of properties to
meet the debt service requirements of these existing FHA-insured mortgages.
MAHRAA also provides for the restructuring of these mortgage loans so that the
annual debt service on the restructured loan (or loans) can be supported by
Section 8 rents established at the market rents. The restructured loans will be
held by the current lender or another lender. There can be no assurance that a
property owner will be permitted to restructure its mortgage indebtedness
pursuant to the new rules implementing MAHRAA or that an owner would choose to
restructure the mortgage if it were able to participate. MAHRAA is supposed to
go into effect on October 28, 1998; regulations implementing the program must be
issued prior to that time. It should be noted that there are many uncertainties
as to the economic and tax impact on a property owner because of the combination
of the reduced Section 8 contract rents and the restructuring of the existing
FHA-insured mortgage loan under MAHRAA.
Sales of Underlying Properties/Local Partnerships Interest
On May 2, 1996, the property owned by Bicentennial was sold to a third party for
$1,700,000, resulting in a gain in the amount of $606,195 and forgiveness of
indebtedness income of $11,502,877 as a result of forgiveness of the purchase
money note payable and accrued interest thereon (which were obligations at the
subsidiary partnership level), amounts due to HUD, and amounts due to general
partners and affiliates.
On May 7, 1997, the properties and the related assets and liabilities of
Knollwood I, Ltd., Knollwood II, Ltd., Knollwood III, Ltd., and Knollwood IV,
Ltd. (together, the "Knollwoods") were sold to a third party for $20,750,000,
which took title subject to the principal balance of the associated Purchase
Money Notes in the amount of $6,026,521, resulting in a gain in the amount of
$6,158,870. No proceeds were used to settle the accrued interest on the
associated Purchase Money Notes which amounted to $5,621,969, resulting in
forgiveness of indebtedness income.
On June 30, 1997, the property and related assets and liabilities of Parklane
II, Ltd. ("Parklane") were sold to a third party for $3,712,000 which took title
subject to the principal balance of a portion of the associated Purchase Money
Notes which amounted to $1,252,632, resulting in a gain in the amount of
$830,182. The Partnership used $450,000 of the net proceeds to settle the
remaining principal balance of the Purchase Money Notes and accrued interest
thereon which amounted to $2,821,789, resulting in forgiveness of indebtedness
income of $2,371,789.
20
<PAGE>
On August 1, 1997, the Partnership's Local Partnership Interest in Northgate
Townhouse Apartments ("Northgate") was sold to a third party for $500,000
resulting in a loss in the amount of $824,647. No proceeds were used to settle
the associated Purchase Money Notes and accrued interest which resulted in
forgiveness of indebtedness income of $6,910,594.
On August 1, 1997, the Partnership's Local Partnership Interest in Westminster
Manor Apartments ("Westminster") was sold to a third party for $500,000,
resulting in a loss in the amount of $1,139,486. No proceeds were sold to settle
the associated Purchase Money Notes and accrued interest resulted in forgiveness
of indebtedness income of $8,270,497.
On August 11, 1997, the Partnership's Local Partnership Interest in Buttonwood
Acres at New Bedford ("Buttonwood") was sold back to Buttonwood for $532,750,
resulting in a loss in the amount of $343,493. No proceeds were used to settle
the associated Purchase Money Notes and accrued interest which resulted in
forgiveness of indebtedness income of $4,820,571.
On January 13, 1998, Park of Pecan I & II entered into a purchase and sale
agreement with an unaffiliated third party for a purchase price of $5,275,000
which includes $850,000 in tax exempt second mortgage bonds. The Partnership
will receive these tax exempt bonds as its share of the purchase price. The
contract has since been amended to reflect a lower price adjustment and $600,000
in tax exempt bonds to the Partnership. The closing is expected to occur during
August 1998. However, no assurance can be given that the closing will occur.
On April 30, 1998, the Oakbrook Villa partnership entered into a purchase and
sale agreement with an unaffiliated third party for a purchase price of
$8,250,000. The closing is expected to occur during July 1998. However, no
assurance can be given that the closing will occur.
On May 22, 1998, the Partnership's Local Partnership Interest in Rockdale West
at New Bedford ("Rockdale") was sold back to Rockdale for $600,000 resulting in
a loss in the amount of approximately $125,000. No proceeds were used to settle
the associated purchase money notes accrued interest which had a total
outstanding balance of approximately $6,803,000, resulting in forgiveness of
indebtedness income of approximately $6,803,000.
For a discussion of contingencies affecting certain Local Partnerships, see
Results of Operations of Certain Local Partnerships below. Since the maximum
loss the Partnership would be liable for is its net investment in the respective
Local Partnerships, the resolution of the existing contingencies is not
anticipated to impact future results of operations, liquidity or financial
condition in a material way.
Except as described above, management is not aware of any trends or events,
commitments or uncertainties, which have not been otherwise disclosed, that will
or are likely to impact liquidity in a material way. Management believes the
only impact would be from laws that have not yet been adopted. The portfolio is
diversified by the location of the properties around the United States so that
if one area of the country is experiencing downturns in the economy, the
remaining properties in the portfolio may be experiencing upswings. However, the
geographic diversification of the portfolio may not protect against a general
downturn in the national economy.
Results of Operations
Property and equipment to be held and used are carried at cost which includes
the purchase price, acquisition fees and expenses, construction period interest
and any other costs incurred in acquiring the properties. The cost of property
and equipment is depreciated over their estimated useful lives using accelerated
and straight-line methods. Expenditures for repairs and
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maintenance are charged to expense as incurred; major renewals and betterments
are capitalized. At the time property and equipment are retired or otherwise
disposed of, the cost and accumulated depreciation are eliminated from the
assets and accumulated depreciation accounts and the profit or loss on such
disposition is reflected in earnings. A loss on impairment of assets is recorded
when management estimates amounts recoverable through future operations and sale
of the property on an undiscounted basis are below depreciated cost. At that
time property investments themselves are reduced to estimated fair value
(generally using discounted cash flows) when the property is considered to be
impaired and the depreciated cost exceeds estimated fair value.
At the time management commits to a plan to dispose of assets, said assets are
adjusted to the lower of carrying amount or fair value less costs to sell. These
assets are classified as property and equipment-held for sale and are not
depreciated. All property and equipment for subsidiary partnerships whose assets
and liabilities are under sales contracts are classified as assets held for
sale.
Through March 25, 1998, the Partnership has recorded approximately $5,283,000 as
a loss on impairment of assets.
The following is a summary of the results of operations of the Partnership for
the 1997, 1996, and 1995 Fiscal Years.
The results of operations of the Partnership, as well as the Local Partnerships,
excluding gain on sale of property, forgiveness of indebtedness income,
administrative and management-related parties and loss on impairment of assets
remained fairly constant for the 1997, 1996 and 1995 Fiscal Years. Contributing
to the relatively stable operations at the Local Partnerships is the fact that
all of the Apartment Complexes receive Government Assistance. HUD has provided
mortgage insurance to eight of the Local Partnerships pursuant to Section
221(d)(4) of the National Housing Act, and to one Local Partnership pursuant to
Section 221(d)(3) of the National Housing Act. Forty-three of the Local
Partnerships receive mortgage insurance or have entered into interest reduction
agreements with HUD under its Section 236 program and receive interest subsidy
payments from HUD. One Local Partnership receives interest credit subsidies from
MHFA pursuant to Section 13A of the Massachusetts Act of 1966 and monthly rent
supplements pursuant to Section 707 of the Massachusetts Acts of 1966. In
addition, HUD (or MHFA) has provided rental assistance payments for a percentage
of the apartment units owned by 39 of the Local Partnerships pursuant to HAP
Contracts.
The Partnership's primary source of income continues to be its portion of the
Local Partnership's operating results. The majority of Local Partnership income
continues to be in the form of rental income with the corresponding expenses
being divided among operations, depreciation, and mortgage interest. In
addition, the Partnership incurred interest expense relating to the Purchase
Money Notes which were issued when the Local Partnership Interests were
acquired.
Net income (loss) during the 1997, 1996 and 1995 Fiscal Years totaled
$20,528,475, $(2,363,628), and $(15,644,033), respectively.
Excluding 1997, in which the Partnership generated passive income due to sales
of the properties and the related assets and liabilities owned by five
subsidiary partnerships and the Partnership's local partnership interest in
three subsidiary partnerships; the Partnership has met the investment objective
of generating tax benefits in the form of passive losses (which Limited Partners
may use to offset passive income from other sources). This passive income may be
offset by the carry forward of any unused passive losses from prior years;
however to date the
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Partnership has been unable to provide cash distributions to the Limited
Partners other than from the proceeds of sale of underlying properties.
1997 vs 1996
Rental income decreased by 11% for the 1997 Fiscal Year as compared to 1996
Fiscal Year. Excluding Bicentennial, the Knollwoods and Parklane, which sold
their properties and Northgate, Westminster and Buttonwood, in which the
Partnership's interest was sold, rental income increased by approximately 1%
during the 1997 Fiscal Year as compared to 1996 primarily due to rental rate
increases.
A gain on sale of properties and forgiveness of indebtedness income was recorded
in the 1997 Fiscal Year (see Note 10 and 11, respectively, in Item 8. Financial
Statements and Supplemental Data).
Total expenses excluding Bicentennial, the Knollwoods, Parklane, Northgate,
Westminster, Buttonwood, repairs and maintenance, taxes and insurance,
financial, depreciation, and loss in impairment of assets remained fairly
consistent with an increase of approximately 5% for the 1997 Fiscal Year as
compared to the 1996 Fiscal Year.
Other income decreased approximately $226,000 for the 1997 Fiscal Year as
compared to 1996 primarily due to decreases related to the sale of Bicentennial,
the Knollwoods, Parklane, Northgate, Westminster and Buttonwood. Excluding these
properties, such income remained fairly consistent with a decrease of
approximately $66,000 for the 1997 Fiscal Year as compared to the 1996 Fiscal
Year.
Repairs and maintenance, taxes and insurance and depreciation decreased
approximately 17%, 13%, 15% and 16% for the 1997 Fiscal Year as compared to the
1996 Fiscal Year primarily due to the decreases related to the sale of
Bicentennial, the Knollwoods, Parklane, Northgate, Westminster and Buttonwood.
Excluding these properties, such expenses remained fairly consistent with a
decrease of approximately 7%, 5% and 2% for the 1997 Fiscal Year as compared to
the 1996 Fiscal Year.
Financial expense decreased approximately 15% for the 1997 Fiscal Year as
compared to the 1996 Fiscal Year primarily due to the decreases related to the
sale of Bicentennial, the Knollwoods, Parklane, Northgate, Westminster and
Buttonwood. Excluding these properties, such expenses remained fairly consistent
with an increase of approximately 8% for the 1997 Fiscal Year as compared to the
1996 Fiscal Year.
1996 vs 1995
Rental income decreased less than 1% for the 1996 Fiscal Year as compared to the
1995 Fiscal Year. Excluding Bicentennial, which sold its property on May 2,
1996, rental income increased approximately 1% for the 1996 Fiscal Year as
compared to the 1995 Fiscal Year primarily due to rental rate increases.
A gain on sale of property and forgiveness of indebtedness income was recorded
in the 1996 Fiscal Year (see Note 10 and 11, respectively, in Item 8. Financial
Statements and Supplemental Data).
Total expenses excluding Bicentennial, selling and renting, administrative and
management-related parties and depreciation remained fairly consistent with an
increase of approximately 1% for the 1996 Fiscal Year as compared to the 1995
Fiscal Year.
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Selling and renting expenses decreased approximately $37,000 for the 1996 Fiscal
Year as compared to the 1995 Fiscal Year. Excluding Bicentennial, such expenses
increased approximately $37,000 primarily due to an increase in advertising
expenses at two Local Partnerships.
Administrative and management-related parties increased approximately $1,028,000
for the 1996 Fiscal Year as compared to the 1995 Fiscal Year primarily due to an
increase in partnership management fees payable to the General Partners.
Depreciation expense increased approximately $1,955,000 for the 1996 Fiscal Year
as compared to the 1995 Fiscal Year primarily due to a change in depreciation
estimates at two Local Partnerships in the 1995 Fiscal Year.
A loss on impairment of assets was recorded in the 1996 and 1995 Fiscal Years
(see Note 4 in Item 8, Financial Statements and Supplementary Data).
Results of Operations of Certain Local Partnerships
Bellfort Associates, Ltd.
Bellfort Associates, Ltd. ("Bellfort") has been in default on the required
interest payments due on the wraparound purchase note payable to Finger
Companies since 1992. The original maturity date of the note was the twelfth
anniversary of the transaction date or November 1, 1996. However, the debt
agreement allows Bellfort the option to extend the term of the note an
additional year on the twelfth, thirteenth and fourteenth anniversaries. On
November 1, 1996, and November 1, 1997, Bellfort was granted the option to
extend the term to November 1, 1997 and November 1, 1998, respectively, at which
time the principal plus deferred interest is due. Accumulated deferred interest
at December 31, 1997 and 1996 of approximately $3,737,000 and $3,417,000,
respectively, is also subject to 9% interest. The note is secured by a first
lien on and security interest in the Partnership's and Bellfort's special
limited partner's rights, titles and interests in Bellfort. Payments on this
note cannot exceed the required payments on the underlying Multifamily Mortgage
Trust ("MMT") note described below.
The purchase money note wraps around an underlying mortgage note. The underlying
mortgage is collateralized by a deed of trust on the rental property. In June
1996, the underlying mortgage note was sold by HUD, who had assumed the
underlying mortgage note in December 1991, to MMT.
Prior to August 1996, the underlying mortgage note was in default first with HUD
and then with MMT. In order to avoid any acceleration or other exercise of
remedies for the defaulted mortgage, MMT allowed the previous owners to bring
the underlying mortgage note current with a payment of approximately $294,000.
Upon making the underlying mortgage note current, the debt agreement for the
underlying mortgage note payable required monthly payments of approximately
$47,000 with $37,000 relating to principal and interest payments due on the
first of each month and such payments have been made as of December 31, 1997.
Bellfort's operations have not generated sufficient cash flows to service its
existing debt structure, and Bellfort's purchase note payable is due November 1,
1998. Bellfort's forecasted cash flows for 1998 indicate a significant shortfall
of amounts needed to repay such note and the related deferred interest. Bellfort
will be required to renegotiate the terms of the note or to obtain alternative
financing to satisfy the holder. If unsuccessful, Bellfort may be required to
sell the rental property. Management of Bellfort intends to request the
extension of the note for an additional year; however, there can be no assurance
that such an extension will be granted.
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The Partnership's investment in Bellfort has been reduced to zero by prior
years' losses. The minority interest balance was $0 at March 25, 1998 and 1997.
Bellfort's net loss after minority interest amounted to approximately $586,000,
$580,000 and $694,000 for the 1997, 1996 and 1995 Fiscal Years, respectively.
Park of Pecan I, Ltd. and Park of Pecan II, Ltd.
Park of Pecan I, Ltd. ("Park of Pecan I") and Park of Pecan II, Ltd. ("Park of
Pecan II") have experienced operating losses since inception and as of December
31, 1997 have net capital deficiencies aggregating approximately $5,353,000.
Park of Pecan I and II previously funded their operating losses by borrowing
amounts pursuant to an operating deficit guaranty agreement made in connection
with the acquisition of the Apartment Complexes. However, such agreements
expired December 31, 1989 and Park of Pecan I and II have not made arrangements
to obtain an extension or additional funds. If Park of Pecan I and II continue
to experience significant operating losses and are unable to obtain additional
funds they may be unable to continue operations. The Partnership's investments
in Park of Pecan I and II have been reduced to zero by prior years' losses. Park
of Pecan I and II's minority interest balances were $0 at March 25, 1998 and
1997. Park of Pecan I's net loss after minority interest amounted to
approximately $219,000, $158,000 and $196,000 for the 1997, 1996 and 1995 Fiscal
Years, respectively. Park of Pecan II's net loss after minority interest
amounted to approximately $224,000, $170,000 and $185,000 for the 1997, 1996 and
1995 Fiscal Years, respectively.
On January 13, 1998, Park of Pecan I & II entered into a purchase and sale
agreement with an unaffiliated third party for a purchase price of $5,275,000
which includes $850,000 in tax exempt second mortgage bonds. The Partnership
will receive these tax exempt bonds as its share of the purchase price. The
contract has since been amended to reflect a lower price adjustment and $600,000
in tax exempt bonds to the Partnership. The closing is expected to occur during
August 1998. However, no assurance can be given that the closing will occur.
Cranbrook Manor Apartments Limited Partnership
During the year ended December 31, 1997, Cranbrook Manor Apartments Limited
Partnership ("Cranbrook") incurred a net loss of approximately $246,000 and
total liabilities exceeded total assets by approximately $1,697,000 at December
31, 1997. In addition, Cranbrook receives housing assistance payments and a
mortgage interest subsidy from HUD under provisions of Section 8 and Section
236, respectively, of the National Housing Act. Cranbrook entered into housing
assistance agreements (the "Section 8 agreements") with the FHA dated October 1,
1976, September 1, 1982 and November 1, 1991. The Section 8 agreements were
renewed for one year, expiring on September 30, 1998, August 31, 1998 and
October 31, 1998, respectively. Cranbrook 's cash flows may be insufficient to
meet its current obligations in the ordinary course of business. Should cash
flows be insufficient, management plans to pursue a workout agreement with HUD.
There are no assurances that the Section 8 agreement will be renewed under
comparable economic terms to Cranbrook upon the expiration of the agreement. As
of December 31, 1997, it is not possible to estimate the effect of the potential
loss of this subsidy. However, the termination of reduction of the benefits
under this program by the government could have an adverse effect on the
operations of Cranbrook. These factors, among others, indicate that there is
substantial doubt about Cranbrook's ability to continue as a going concern for a
reasonable period of time.
The financial statements do not include any adjustments relating to the
recoverability and classification of liabilities that might be necessary should
Cranbrook be unable to continue as a going concern. Cranbrook's continuation as
a going concern is dependent upon its ability to generate sufficient cash flow
to meet its obligations on a timely basis and to ultimately attain successful
operations. The Partnership's investment in Cranbrook has been reduced to zero
by prior years' losses. The minority interest balance was $0 at March 25, 1998
and 1997. Cran-
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brook's net loss after minority interest amounted to approximately $246,000,
$223,000 and $138,000 for the 1997, 1996 and 1995 Fiscal Years, respectively.
Saraland Apartments, Ltd.
Saraland Apartments, Ltd. ("Saraland") has been designated as a "Superfund" site
on the National Priorities List under the Comprehensive Environmental Response,
Compensation, and Liability Act ("CERCLA"). On March 18, 1992, Redwing Carriers,
Inc., a trucking company which utilized the Saraland site prior to development
of the property as a low-income apartment complex, served an Amended Complaint
on the Partnership and C/R Special Partnership, among others, adding them to the
lawsuit previously commenced against Saraland and the general partners in the
United States District Court for the Southern District of Alabama. That lawsuit
seeks reimbursement for costs previously incurred by Redwing Carriers with
respect to the site, which at the time of the Amended Complaint totaled
approximately $2,000,000, as well as a declaration that each of the defendants
is jointly and severally liable for costs of response or damages resulting from
the release of hazardous substances, among other items of relief. In September
1996, the 11th Circuit Court of Appeals affirmed a lower court's decision
dismissing the Partnership and C/R Special Partnership from the case, and,
accordingly, the Partnership and C/R Special Partnership are no longer subject
to liability in the lawsuit brought by Redwing Carriers, Inc.
During March 1993, the Partnership was named by the United States Environmental
Protection Agency ("EPA") as a "Potentially Responsible Party" under Superfund
in connection with the Saraland Apartment Complex Site.
On July 16, 1993, Saraland, the local general partners (Roar Corporation and the
Estate of Robert Coit), the limited partners (the Partnership and C/R Special
Partnership), and five other parties were named as Respondents in a unilateral
administrative order (the "Order") issued under CERCLA by EPA, directing the
Respondents to implement the EPA-selected remedy for addressing contamination by
hazardous substances at the site. In December 1993, Saraland and its general
partners, the Partnership and C/R Special Partnership informed EPA that they
have "sufficient cause" to not comply with the Order. Redwing Carriers, Inc.
initially advised EPA that it would commence implementation of the Order. It has
recently, however, refused to do so and EPA has now begun implementation of the
remedy.
Since September 1993, EPA has not notified the Partnership whether it intends to
take further legal action. During the 1994 Fiscal Year, EPA determined that
cleanup for the project site could cost between six and ten million dollars. In
or around late 1996, EPA elected to vacate the apartment complex and relocate
all tenants. Given the fact that EPA has not informed the Partnership whether or
not it intends to pursue the Partnership through further legal action, neither
management nor management's counsel are in a position, at this point, to
evaluate the likelihood of an unfavorable outcome or range of any potential
loss. However, the dismissal of the Partnership and C/R Special Partnership from
the Redwing litigation (discussed above) should provide strong grounds upon
which to contest any attempt by EPA to visit liability for undertaking and
funding the remedy and/or relocation upon the Partnership. The Partnership
intends to present a vigorous defense and strongly contests any further legal
action brought by or on behalf of EPA to obtain from the Partnership remedial
funding and/or any other costs associated with this matter. Litigation costs
incurred through March 25, 1998 by the Partnership total approximately $275,000.
On May 13, 1997, a number of residents at the Saraland Apartments complex served
a purported class action complaint upon the Partnership and C/R Special
Partnership, as well as Redwing Carriers, Inc., Saraland, Saraland's general
partners and others alleging that all defendants are liable to the class members
for adverse health consequences and other expenses
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<PAGE>
attendant to hazardous substance exposure caused by the conduct of all
defendants. The complaint alleges causes of action under the following common
law theories of recovery: (1) Breach of Lease/Constructive Eviction; (2)
Trespass to Real Property; (3) Trespass to Personal Property; (4) Trespass to
Persons; (5) Negligence and Wantonness; (6) Ultra-hazardous or Abnormally
Dangerous Activities; (7) Nuisance; (8) Civil Conspiracy; and (9) Fraudulent
Suppression. Given the early stage of this proceeding, it is not possible to
evaluate the likelihood of an unfavorable outcome. Nonetheless, the Partnership
intends to present a vigorous defense and will strongly contest its liability
for the claims made in this action.
During the year ended December 31, 1996, the tenants of Saraland were moved to
temporary housing to facilitate cleanup of the site. Rents continued to be
collected by Saraland from the tenants and HUD. However, as of February 1997,
the EPA, along with other agencies, determined that Saraland is unsafe to live
in due to amounts of Benzine and Aldrine found to be present in the air of some
apartments. There appears to be a substantial likelihood that the EPA will
conclude that the apartments will be torn down in order to remove the
contamination that has been found to exist underneath the buildings. As of April
1997, HUD stopped making Housing Assistance Payments to Saraland and Saraland
stopped making payments on its mortgage.
The above conditions raise substantial doubt about Saraland's ability to
continue as a going concern. These financial statements do not include any
adjustments, other than the impairment loss discussed in Note 4, that might
result from the outcome of these uncertainties. The Partnership's investment in
Saraland was reduced to $0 by prior and current years' losses at March 25, 1998
and 1997, respectively, and the minority interest balance was approximately
$22,000 at each date. Saraland's net (income) loss after minority interest
amounted to approximately $(7,900), $912,000 and $42,000 for the 1997, 1996, and
1995 Fiscal Years, respectively.
Valley Arms, Ltd.
During the year ended December 31, 1997, Valley Arms, Ltd. ("Valley Arms")
incurred a net loss of approximately $79,000 and as of that date, Valley Arms'
total current liabilities exceeded its total current assets by approximately
$1,395,000. As of December 31, 1997, Valley Arms is fifteen months delinquent on
its mortgage payment, subsequent to December 31, 1997, the Partnership filed a
petition of bankruptcy under Chapter 11 of the bankruptcy code. These factors,
among others, raise substantial doubt about Valley Arms' ability to continue as
a going concern. The financial statements do not include any adjustments that
might be necessary if Valley Arms is unable to continue as a going concern.
Valley Arms' continuation as a going concern is dependent upon its ability to
generate sufficient cash flow to meet its obligations on a timely basis, to
comply with the terms of its mortgage, to obtain additional capital
contributions from partners, and ultimately, to attain successful operations.
Management of Valley Arms is making all efforts possible to increase the
occupancy and the rental income of the project and to make the necessary
improvements to enhance the property, in an attempt to improve Valley Arms' cash
flow. Management of Valley Arms is also currently negotiating a sale of the
project. The Partnership's investment in Valley Arms was approximately $481,000
and $560,000 at March 25, 1998 and 1997, respectively, and the minority interest
balance was $0 at each date. Valley Arms' net loss after minority interest
amounted to approximately $79,000, $99,000 and $49,000 for the 1997, 1996 and
1995 Fiscal Years, respectively.
Bonnie Doone Apartments, Ltd.
Bonnie Doone Apartments, Ltd. ("Bonnie Doone") relies on continuance of the
Section 8 rent subsidy contracts which represent 57% of gross income. The
current contracts expire on July 31, 1998 and May 31, 1999 and renewal is
uncertain. Management of Bonnie Doone intends to actively pursue renewal of the
rental subsidy contract with HUD. The Partnership's invest-
27
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ment in Bonnie Doone was approximately $364,000 and $416,000 at March 25, 1998
and 1997, respectively, and the minority interest balance was $0 at each date.
Bonnie Doone's net loss after minority interest amounted to approximately
$52,000, $69,000 and $22,000 for the 1997, 1996 and 1995 Fiscal Years,
respectively.
Dickens Ferry Apartments, Ltd.
Dickens Ferry Apartments, Ltd. ("Dickens Ferry") relies on continuance of the
Section 8 rent subsidy contract which represents 66% of gross income. The
current contracts expire on July 31, 1998 and September 30, 1998 and renewal is
uncertain. Management of Dickens Ferry intends to actively pursue renewal of the
rental subsidy contract with HUD. The Partnership's investment in Dickens Ferry
was approximately $591,000 and $596,000 at March 25, 1998 and 1997,
respectively, and the minority interest balance was $0 at each date. Dickens
Ferry's net (income) loss after minority interest amounted to approximately
$5,000, ($18,000) and $37,000 for the 1997, 1996 and 1995 Fiscal Years,
respectively.
Year 2000 Compliance
As the year 2000 approaches, an issue has emerged regarding how existing
application software programs and operating systems can accommodate this date
value. Failure to adequately address this issue could have potentially serious
repercussions. The General Partners are in the process of working with the
Partnership's service providers to prepare for the year 2000. Based on
information currently available, the Partnership does not expect that it will
incur significant operating expenses or be required to incur material costs to
be year 2000 compliant.
Other
The Partnership's investment as a limited partner in the Local Partnerships is
subject to the risks incident to the management and ownership of improved real
estate. The Partnership's investments also could be adversely affected by poor
economic conditions, which generally could increase vacancy levels, rental
payment defaults, and operating expenses, any or all of which could threaten the
financial viability of one or more of the Local Limited Partnerships.
There also are substantial risks associated with the operation of Apartment
Complexes receiving Government Assistance. These include: governmental
regulations concerning tenant eligibility, which may make it more difficult to
rent units in the Apartment 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 HUD to make the rental assistance payments it
has contracted to make; and the possibility that, when the rental assistance
contracts expire, there may not be market demand for apartments at full market
rents in a Local Partnership's Apartment Complex.
The Local 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. Furthermore, inflation generally does not
impact the fixed long-term financing under which real property investments were
purchased. Inflation also affects the Local Partnerships adversely by increasing
operating costs, such as fuel, utilities, and labor.
There has recently been an increasing number of requests for the list of holders
of limited partnership interests in limited partnerships such as the
Partnership. Often these requests are made by a person who, only a short time
before making the request, acquired merely a small number of Limited Partnership
Interests in the Partnership and seeks the list for an improper
28
<PAGE>
purpose, a purpose that is not in the best interest of the Partnership or is
harmful to the Partnership. In order to best serve and protect the interests of
the Partnership and all of its investors, the General Partners have adopted a
policy with respect to requests for the Partnership's list of holders of Limited
Partnership Interests. This policy is intended to protect investors from
unsolicited and coercive offers to acquire the interests of holders of Limited
Partnership Interests and does not limit any other rights the General Partners
may have under the Partnership Agreement or applicable law.
29
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Item 8. Financial Statements and Supplementary Data.
Sequential
Page
----------
(a) 1. Financial Statements
Independent Auditors' Report 31
Consolidated Balance Sheets at March 25, 1998 and 1997 199
Consolidated Statements of Operations for the Years
Ended March 25, 1998, 1997 and 1996 200
Consolidated Statements of Changes in Partners' Deficit
for the Years Ended March 25, 1998, 1997 and 1996 201
Consolidated Statements of Cash Flows for the Years
Ended March 25, 1998, 1997 and 1996 202
Notes to Consolidated Financial Statements 205
30
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Partners of
Cambridge Advantaged Properties
Limited Partnership and Subsidiaries
We have audited the consolidated balance sheets of Cambridge Advantaged
Properties Limited Partnership and Subsidiaries as of March 25, 1998 and 1997,
and the related consolidated statements of operations, changes in partners'
deficit and cash flows for the years ended March 25, 1998, 1997 and 1996 (the
1997, 1996 and 1995 Fiscal Years, respectively). The 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 for 60 (1997 Fiscal Year), 61 (1996 Fiscal Year)
and 48 (1995 Fiscal Year) subsidiary partnerships whose net losses aggregated
$589,225, $5,140,862 and $7,359,145 for the 1997, 1996 and 1995 Fiscal Years,
respectively, and whose assets constituted 96% and 97% of the Partnership's
assets at March 25, 1998 and 1997, presented in the accompanying consolidated
financial statements. The financial statements of these subsidiary partnerships
were audited by other auditors whose reports thereon have been furnished to us,
and our opinion expressed herein, insofar as it relates to the amounts included
for these subsidiary partnerships, is based solely upon the reports of the other
auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, based upon our audits and the reports of the other auditors, the
accompanying consolidated financial statements referred to above present fairly,
in all material respects, the financial position of Cambridge Advantaged
Properties Limited Partnership and Subsidiaries at March 25, 1998 and 1997, and
the results of their operations and their cash flows for the years ended March
25, 1998, 1997 and 1996, in conformity with generally accepted accounting
principles.
As discussed in Note 11(a), the consolidated financial statements include the
financial statements of eight subsidiary partnerships with significant
contingencies and uncertainties regarding their continuing operations. These
uncertainties raise substantial doubt about these subsidiary partnerships'
abilities to continue as going concerns. The auditors of six (Fiscal 1997)
subsidiary partnerships modified their reports due to the uncertainty of these
subsidiary partnerships' abilities to continue in existence. These six
subsidiary partnerships' net losses aggregated $1,346,174, $2,180,247 and
$1,303,575 for the 1997, 1996 and 1995 Fiscal Years, respectively, and their
assets aggregated $15,764,945 and $17,111,898 at March 25, 1998 and 1997,
respectively. The consolidated financial statements do not include any
adjustments that might result from the outcome of these uncertainties.
As discussed in Note 7, the principal of and all accrued interest on the
purchase money notes are due at maturity which will occur during 1998. The
Partnership expects that upon maturity it will be required to refinance or sell
its investments in the subsidiary partnerships in order to pay the purchase
money notes and related interest obligations. It is uncertain as to whether the
proceeds from such sales will be sufficient to meet the outstanding balances of
the pur-
<PAGE>
chase money notes and accrued interest thereon. The consolidated financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
TRIEN ROSENBERG ROSENBERG
WEINBERG CIULLO & FAZZARI LLP
New York, New York
June 10, 1998
32
<PAGE>
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Knollwood I, Ltd.
We have audited the accompanying statement of changes in net assets in
liquidation of Knollwood I, Ltd. for the year ended December 31, 1997. This
financial statement is the responsibility of the partnership's management. Our
responsibility is to express an opinion on this financial statement based on our
audit.
We conducted our audit 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 statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. 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 statement referred to above present
fairly, in all material respects, the changes in net assets in liquidation for
the year ended December 31, 1997, in conformity with generally accepted
accounting principles.
As described in note A to the financial statement, effective as of
January 1, 1997, the partnership adopted a plan to sell the rental property and
liquidate the partnership in lieu of continuing the business. On May 6, 1997,
the partnership sold the rental property. As a result, the partnership's
financial statement is presented on the liquidation basis of accounting.
Our audit was made for the purpose of forming an opinion on the basic
financial statement taken as a whole. The supplemental information on pages 8
through 10 is presented for purposes of additional analysis and is not a
required part of the basic financial statement. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statement and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statement taken as a whole.
/s/ Resnick Fedder & Silverman
Bethesda, Maryland
January 13, 1998
<PAGE>
[REZNICK FEDDER & SILVERMAN LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Knollwood I, Ltd.
We have audited the accompanying balance sheets of Knollwood I, Ltd. as of
December 31, 1996 and 1995, and the related statements of revenue and expenses,
partners' capital and cash flows for the years then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Knollwood I, Ltd. as of
December 31, 1996 and 1995, and the results of its operations, the changes in
partners' capital and cash flows for the years then ended, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 12
through 14 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Reznick Fedder & Silverman
------------------------------
Bethesda, Maryland
January 10, 1997
-3-
<PAGE>
[Letterhead of Resnick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Knollwood II, Ltd.
We have audited the accompanying statement of changes in net assets in
liquidation of Knollwood II, Ltd. for the year ended December 31, 1997. This
financial statement is the responsibility of the partnership's management. Our
responsibility is to express an opinion on this financial statement based on our
audit.
We conducted our audit 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 statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. 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 statement referred to above present
fairly, in all material respects, the changes in net assets in liquidation for
the year ended December 31, 1997, in conformity with generally accepted
accounting principles.
As described in note A to the financial statement, effective as of
January 1, 1997, the partnership adopted a plan to sell the rental property and
liquidate the partnership in lieu of continuing the business. On May 6, 1997,
the partnership sold the rental property. As a result, the partnership's
financial statement is presented on the liquidation basis of accounting.
Our audit was made for the purpose of forming an opinion on the basic
financial statement taken as a whole. The supplemental information on pages 8
through 10 is presented for purposes of additional analysis and is not a
required part of the basic financial statement. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statement and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statement taken as a whole.
/s/ Resnick Fedder & Silverman
Bethesda, Maryland
January 13, 1998
<PAGE>
[REZNICK FEDDER & SILVERMAN LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Knollwood II, Ltd.
We have audited the accompanying balance sheets of Knollwood II, Ltd. as of
December 31, 1996 and 1995, and the related statements of revenue and expenses,
partners' capital and cash flows for the years then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Knollwood II, Ltd. as of
December 31, 1996 and 1995, and the results of its operations, the changes in
partners' capital and cash flows for the years then ended, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 12
through 14 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Reznick Fedder & Silverman
------------------------------
Bethesda, Maryland
January 10, 1997
-3-
<PAGE>
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Knollwood III, Ltd.
We have audited the accompanying statement of changes in net assets in
liquidation of Knollwood III, Ltd. for the year ended December 31, 1997. This
financial statement is the responsibility of the partnership's management. Our
responsibility is to express an opinion on this financial statement based on our
audit.
We conducted our audit 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 statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. 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 statement referred to above present
fairly, in all material respects, the changes in net assets in liquidation for
the year ended December 31, 1997, in conformity with generally accepted
accounting principles.
As described in note A to the financial statement, effective as of
January 1, 1997, the partnership adopted a plan to sell the rental property and
liquidate the partnership in lieu of continuing the business. On May 6, 1997,
the partnership sold the rental property. As a result, the partnership's
financial statement is presented on the liquidation basis of accounting.
Our audit was made for the purpose of forming an opinion on the basic
financial statement taken as a whole. The supplemental information on pages 8
through 10 is presented for purposes of additional analysis and is not a
required part of the basic financial statement. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statement and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statement taken as a whole.
/s/ Resnick Fedder & Silverman
Bethesda, Maryland
January 13, 1998
<PAGE>
[REZNICK FEDDER & SILVERMAN LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Knollwood III, Ltd.
We have audited the accompanying balance sheets of Knollwood III, Ltd. as
of December 31, 1996 and 1995, and the related statements of revenue and
expenses, partners' capital and cash flows for the years then ended. These
financial statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Knollwood III, Ltd. as of
December 31, 1996 and 1995, and the results of its operations, the changes in
partners' capital and cash flows for the years then ended, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 12
through 14 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Reznick Fedder & Silverman
------------------------------
Bethesda, Maryland
January 10, 1997
-3-
<PAGE>
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Knollwood IV, Ltd.
We have audited the accompanying statement of changes in net assets in
liquidation of Knollwood IV, Ltd. for the year ended December 31, 1997. This
financial statement is the responsibility of the partnership's management. Our
responsibility is to express an opinion on this financial statement based on our
audit.
We conducted our audit 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 statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. 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 statement referred to above presents
fairly, in all material respects, the changes in net assets in liquidation for
the year ended December 31, 1997, in conformity with generally accepted
accounting principles.
As described in note A to the financial statement, effective as of
January 1, 1997, the partnership adopted a plan to sell the rental property and
liquidate the partnership in lieu of continuing the business. On May 6, 1997,
the partnership sold the rental property. As a result, the partnership's
financial statement is presented on the liquidation basis of accounting.
Our audit was made for the purpose of forming an opinion on the basic
financial statement taken as a whole. The supplemental information on pages 8
through 10 is presented for purposes of additional analysis and is not a
required part of the basic financial statement. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statement and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statement taken as a whole.
/s/ Resnick Fedder & Silverman
Bethesda, Maryland
January 13, 1998
<PAGE>
[REZNICK FEDDER & SILVERMAN LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Knollwood IV, Ltd.
We have audited the accompanying balance sheets of Knollwood IV, Ltd. as of
December 31, 1996 and 1995, and the related statements of revenue and expenses,
partners' capital and cash flows for the years then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Knollwood IV, Ltd. as of
December 31, 1996 and 1995, and the results of its operations, the changes in
partners' capital and cash flows for the years then ended, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 12
through 14 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Reznick Fedder & Silverman
------------------------------
Bethesda, Maryland
January 10, 1997
-3-
<PAGE>
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Parklane II, Ltd.
We have audited the accompanying statement of changes in net assets in
liquidation of Parklane II, Ltd. for the year ended December 31, 1997. This
financial statement is the responsibility of the partnership's management. Our
responsibility is to express an opinion on this financial statement based on our
audit.
We conducted our audit 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 statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. 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 statement referred to above present
fairly, in all material respects, the changes in net assets in liquidation for
the year ended December 31, 1997, in conformity with generally accepted
accounting principles.
As described in note A to the financial statement, effective as of
January 1, 1997, the partnership adopted a plan to sell the rental property and
liquidate the partnership in lieu of continuing the business. On June 30, 1997,
the partnership sold the rental property. As a result, the partnership's
financial statement is presented on the liquidation basis of accounting.
Our audit was made for the purpose of forming an opinion on the basic
financial statement taken as a whole. The supplemental information on pages 8
through 10 is presented for purposes of additional analysis and is not a
required part of the basic financial statement. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statement and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statement taken as a whole.
/s/ Resnick Fedder & Silverman
Bethesda, Maryland
January 13, 1998
<PAGE>
[REZNICK FEDDER & SILVERMAN LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Parklane II, Ltd.
We have audited the accompanying balance sheets of Parklane II, Ltd. as of
December 31, 1996 and 1995, and the related statements of revenue and expenses,
partners' capital and cash flows for the years then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Parklane II, Ltd. as of
December 31, 1996 and 1995, and the results of its operations, the changes in
partners' capital and cash flows for the years then ended, in conformity with
generally accepted accounting principles.
-3-
<PAGE>
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 13
through 15 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Reznick Fedder & Silverman
------------------------------
Bethesda, Maryland
January 10, 1997
-4-
<PAGE>
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Cedarbay, Ltd.
We have audited the accompanying balance sheets of Cedarbay, Ltd. as of
December 31, 1997 and 1996, and the related statements of revenue and expenses,
partners' capital and cash flows for the years then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Cedarbay, Ltd. as of
December 31, 1997 and 1996, and the results of its operations, the changes in
partners' capital and cash flows for the years then ended, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 12
through 14 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Resnick Fedder & Silverman
Bethesda, Maryland
January 30, 1998
<PAGE>
[REZNICK FEDDER & SILVERMAN LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Cedarbay, Ltd.
We have audited the accompanying balance sheets of Cedarbay, Ltd. as of
December 31, 1996 and 1995, and the related statements of revenue and expenses,
partners' capital and cash flows for the years then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Cedarbay, Ltd. as of
December 31, 1996 and 1995, and the results of its operations, the changes in
partners' capital and cash flows for the years then ended, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 12
through 14 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Reznick Fedder & Silverman
------------------------------
Bethesda, Maryland
January 17, 1997
-3-
<PAGE>
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Northwoods III Apartments, Ltd.
We have audited the accompanying balance sheets of Northwoods III
Apartments, Ltd. as of December 31, 1997 and 1996, and the related statements of
revenue and expenses, partners' capital and cash flows for the years then ended.
These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Northwoods III
Apartments, Ltd. as of December 31, 1997 and 1996, and the results of its
operations, the changes in partners' capital and cash flows for the years then
ended, 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 information on
pages 13 through 15 is presented for purposes of additional analysis and is not
a required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Resnick Fedder & Silverman
Bethesda, Maryland
January 13, 1998
<PAGE>
[REZNICK FEDDER & SILVERMAN LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Northwoods III Apartments, Ltd.
We have audited the accompanying balance sheets of Northwoods III
Apartments, Ltd. as of December 31, 1996 and 1995, and the related statements of
revenue and expenses, partners' capital and cash flows for the years then ended.
These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Northwoods III Apartments,
Ltd. as of December 31, 1996 and 1995, and the results of its operations, the
changes in partners' capital and cash flows for the years then ended, in
conformity with generally accepted accounting principles.
-3-
<PAGE>
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 13
through 15 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Reznick Fedder & Silverman
------------------------------
Bethesda, Maryland
January 10, 1997
-4-
<PAGE>
[Letterhead of Nessel, Smith, Leff & Borsen, PLLC]
INDEPENDENT AUDITORS' REPORT
WESTMINSTER MANOR APARTMENTS
28777 Northwestern Highway, Suite 100
Southfield, MI 48034
We have audited the accompanying Balance Sheet of WESTMINSTER MANOR APARTMENTS
(a limited partnership) as of July 31, 1997 and the related Statements of
Revenue and Expense, Partners' Equity, Cash Flows and Supplemental Information
on Pages 9-11 for the Seven Months Ended then ended. These financial statements
are the responsibility of the Company'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.
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 WESTMINSTER MANOR APARTMENTS as of
July 31, 1997 and the results of its operations and its cash flows for the Seven
Months Ended then ended, in conformity with generally accepted accounting
principles. The supporting data included in this report have been subjected to
the same auditing procedures applied in the examination of the basic financial
statements and, in our opinion, are presented fairly in all material respects in
relation to the basic financial statements taken as a whole.
/s/ Nessel, Smith, Leff & Borsen, PLLC
NESSEL, SMITH, LEFF & BORSEN, PLLC
Certified Public Accountants
Farmington Hills, MI
January 20, 1998
<PAGE>
[WEINTRAUB, NESSEL & SMITH, PLLC LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Westminster Manor Apartments
28777 Northwestern Highway, Suite 100
Southfield, MI 48034
We have audited the accompanying Comparative Balance Sheet of Westminster Manor
Apartments (a limited partnership) as of December 31, 1996 and 1995 and the
related Comparative Statements of Revenue and Expense, Partners' Equity, and
Cash Flows and, Supplemental Schedules on Pages 9-11 for the years then ended.
These financial statements are the responsibility of the Company'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.
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 Westminster Manor Apartments as of
December 31, 1996 and 1995 and the results of its operations and its cash flows
for the years then ended, in conformity with generally accepted accounting
principles. The supporting data included in this report have been subjected to
the same auditing procedures applied in the examination of the basic financial
statements and, in our opinion, are presented fairly in all material respects in
relation to the basic financial statements taken as a whole.
The accompanying financial statements have been prepared assuming the
partnership will continue as a going concern. As discussed in the notes to the
financial statements, Westminster Manor Apartments does not have the working
capital necessary to cover the costs to cure deficiencies sited in a Department
of Housing and Urban Development inspection report. This raises substantial
doubt about the entity's ability to continue as a going concern.
/s/Weintraub, Nessel & Smith, PLLC
- - - ----------------------------------
WEINTRAUB, NESSEL & SMITH
Certified Public Accountants
Farmington Hills, MI
January 30, 1997
<PAGE>
[Letterhead of Nessel, Smith, Leff & Borsen, PLLC]
INDEPENDENT AUDITORS' REPORT
NORTHGATE TOWNHOUSE APARTMENTS
28777 Northwestern Highway, Suite 100
Southfield, MI
We have audited the accompanying Balance Sheet of NORTHGATE TOWNHOUSE APARTMENTS
(a limited partnership) as of July 31, 1997 and the related Statements of
Revenue and Expense, Partners' Equity, Cash Flows and Supplemental Information
on Pages 8-10 for the seven months then ended. These financial statements are
the responsibility of the Company'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.
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 NORTHGATE TOWNHOUSE APARTMENTS as of
July 31, 1997 and the results of its operations and its cash flows for the seven
months then ended, in conformity with generally accepted accounting principles.
The supporting data included in this report has been subjected to the same
auditing procedures applied in the examination of the basic financial statements
and, in our opinion, are presented fairly in all material respects in relation
to the basic financial statements taken as a whole.
/s/ Nessel, Smith, Leff & Borsen, PLLC
NESSEL, SMITH, LEFF & BORSEN, PLLC
Certified Public Accountants
Farmington Hills, MI
March 10, 1998
<PAGE>
[WEINTRAUB, NESSEL & SMITH, PLLC LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Northgate Townhouse Apartments
28777 Northwestern Highway, Suite 100
Southfield, MI 48034
We have audited the accompanying Comparative Balance Sheet of Northgate
Townhouse Apartments (a limited partnership) as of December 31, 1996 and 1995
and the related Comparative Statements of Revenue and Expense, Partners' Equity,
and Cash Flows and Supplemental Schedules on Page 9-11, for the years then
ended. These financial statements are the responsibility of the Company'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.
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 Northgate Townhouse Apartments as of
December 31, 1996 and 1995 and the results of its operations and its cash flows
for the years then ended, in conformity with generally accepted accounting
principles. The supporting data included in this report have been subjected to
the same auditing procedures applied in the examination of the basic financial
statements and, in our opinion, are presented fairly in all material respects in
relation to the basic financial statements taken as a whole.
/s/ Weintraub, Nessel & Smith, PLLC
- - - ------------------------------------
WEINTRAUB, NESSEL & SMITH, PLLC
Certified Public Accountants
Farmington Hills, MI
January 27, 1997
<PAGE>
[Letterhead of Bordman & Winnick]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Hackley Village Associates #1
We have audited the accompanying balance sheet of Hackley Village Associates #1,
HUD Project #047-44030-LDP-SUP, as of December 31, 1997, and the related
statements of income, and cash flows, and changes in partner's equity for the
year then ended. These financial statements are the responsibility of the
project'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 Hackley Village Associates #1
as of December 31, 1997, and the results of its operations and its cash flows
and its changes in partners' equity for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
the report (shown on pages 9 to 15) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of
Project #047-44030-LDP-SUP. Such information has been subject to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
In accordance with Government auditing Standards, we have also issued a report
dated January 27, 1998, on our consideration of Hackley Village Associates'
internal controls and a report dated January 27, 1998, on its compliance with
laws and regulations.
/s/ Bordman & Winnick
West Bloomfield, MI BORDMAN & WINNICK
January 27, 1998 Certified Public Accountants
EIN 38-2900295
<PAGE>
[BORDMAN & WINNICK LETTERHEAD]
Independent Auditor's Report
- - - ----------------------------
To the Partners of
Hackley Village Associates #1
We have audited the accompanying balance sheet of Project #047-44030-LDP-SUP of
Hackley Village Associates #1 (A Limited Partnership) as at December 31, 1996,
and the related statements of income and expense and changes in partner's equity
for the year then ended. We have also audited the statements of cash flows for
the years ended December 31, 1996 and 1995. These financial statements are the
responsibility of the project'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 Project #047-44030-LDP-SUP as
at December 31, 1996, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supporting data included in the report (shown
on pages 9 to 15) are presented for the purposes of additional analysis and are
not a required part of the financial statements of Project #047-44030-LDP-SUP.
Such information has been subject to the auditing procedures applied in the
audit of financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.
/s/ Bordman & Winnick
---------------------
West Bloomfield, MI BORDMAN & WINNICK
February 11, 1997 Certified Public Accountants
EIN 38-2900295
<PAGE>
[Letterhead of BORDMAN & WINNICK]
Independent Auditor's Report
To the Partners of
Hackley Village Associates #1
We have audited the accompanying balance sheet of Project #047-44030-LDP-SUP of
Hackley Village Associates #1 (A Limited Partnership) as at December 31, 1995,
and the related statements of income and expense and changes in partner's equity
for the year then ended. We have also audited the statements of cash flows for
the years ended December 31, 1994 and 1995. These financial statements are the
responsibility of the project'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 Project #047-44030-LDP-SUP
as at December 31, 1995, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 9 to 15) are presented for the purposes of additional
analysis and are not a required part of the financial statements of Project
#047-44030-LDP-SUP. Such information has been subject to the auditing procedures
applied in the audit of financial statements and, in our opinion, is fairly
stated in all material respects in relation to the financial statements taken as
a whole.
[Signature of Bordman & Winnick]
West Bloomfield, MI BORDMAN & WINNICK
February 10, 1996 Certified Public Accountants
EIN 38-2900295
<PAGE>
[Letterhead of Bordman & Winnick]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Huntley Associates
We have audited the accompanying balance sheet of Project #047-44029 LDP-SUP of
Huntley Associates (A Limited Partnership) as of December 31, 1997, and the
related statements of income and changes in partner's equity for the year then
ended. We have also audited the statements of cash flows for the years ended
December 31, 1996 and 1997. These financial statements are the responsibility of
the project'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 Project #047-44029 LDP-SUP as
at December 31, 1997, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
the report (shown on pages 10 to 12) are presented for the purposes of
additional analysis and are not a required part of the financial statements of
Huntley Associates. Such information has been subjected to the auditing
procedures applied in the audit of financial statements and, in our opinion, is
fairly stated in all material respects in relation to the financial statements
taken as a whole.
In accordance with Government Auditing Standards, we have also issue a report
dated January 15, 1998 on our consideration of Huntley Associates' internal
controls and a report dated January 15, 1998 on its compliance with laws and
regulations.
/s/ Bordman & Winnick
West Bloomfield, MI BORDMAN & WINNICK
January 15, 1998 Certified Public Accountants
EIN 38-2900295
<PAGE>
[BORDMAN & WINNICK LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
- - - ----------------------------
To the Partners of
Huntley Associates
We have audited the accompanying balance sheet of Project #047-44029 LDP-SUP of
Huntley Associates (A Limited Partnership) as of December 31, 1996, and the
related statements of income and changes in partner's equity for the year then
ended. We have also audited the statements of cash flows for the years ended
December 31, 1995 and 1996. These financial statements are the responsibility of
the project'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 Project #047-44029 LDP-SUP as
at December 31, 1996, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 9 to 12) are presented for the purposes of additional
analysis and are not a required part of the financial statements of Huntley
Associates. Such information has been subjected to the auditing procedures
applied in the audit of financial statements and, in our opinion, is fairly
stated in all material respects in relation to the financial statements taken as
a whole.
/s/ Bordman & Winnick
--------------------
West Bloomfield, MI BORDMAN & WINNICK
January 16, 1997 Certified Public Accountants
EIN 38-2900295
<PAGE>
[Letterhead of BORDMAN & WINNICK]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Huntley Associates
We have audited the accompanying balance sheet of Project #047-44029
LDP-SUP of Huntley Associates (A Limited Partnership) as of December 31, 1995,
and the related statements of income and changes in partner's equity for the
year then ended. We have also audited the statements of cash flows for the years
ended December 31, 1994 and 1995. These financial statements are the
responsibility of the project'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 Project #047-44029 LDP-SUP
as at December 31, 1995, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 9 to 12) are presented for the purposes of additional
analysis and are not a required part of the financial statements of Huntley
Associates. Such information has been subjected to the auditing procedures
applied in the audit of financial statements and, in our opinion, is fairly
stated in all material respects in relation to the financial statements taken as
a whole.
[Signature of Bordman & Winnick]
West Bloomfield, MI BORDMAN & WINNICK
January 20, 1996 Certified Public Accountants
EIN 38-2900295
<PAGE>
[Letterhead of Bordman & Winnick]
Independent Auditor's Report
To the Partners of
Huntley Associates #2
We have audited the accompanying balance sheet of Project #047-44063-LDP of
Huntley Associates #2 (A Limited Partnership) as of December 31, 1997, and the
related statements of operations and changes in partner's equity for the year
then ended. We have also audited the statements of cash flows for the years
ended December 31, 1996 and 1997. These financial statements are the
responsibility of the project'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 Project #047-44063-LDP as at
December 31, 1997, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
the report (shown on pages 10 to 15) are presented for the purposes of
additional analysis and are not a required part of the financial statements of
Huntley Associates #2. Such information has been subject to the auditing
procedures applied in the audit of financial statements and, in our opinion, is
fairly stated in all material respects in relation to the financial statements
taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report
dated January 22, 1998 on our consideration of Huntley Associates #2's internal
controls and a report dated January 22, 1998 on its compliance with laws and
regulations.
/s/ Bordman & Winnick
West Bloomfield, MI BORDMAN & WINNICK
January 22, 1998 Certified Public Accountants
EIN 38-2900295
<PAGE>
[BORDMAN & WINNICK LETTERHEAD]
Independent Auditor's Report
- - - ----------------------------
To the Partners of
Huntley Associates #2
We have audited the accompanying balance sheet of Project #047-44063-LDP of
Huntley Associates #2 (A Limited Partnership) as of December 31, 1996, and the
related statements of operations and changes in partner's equity for the year
then ended. We have also audited the statements of cash flows for the years
ended December 31, 1995 and 1996. These financial statements are the
responsibility of the project'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 Project #047-44063-LDP as at
December 31, 1996, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 10 to 15) are presented for the purposes of additional
analysis and are not a required part of the financial statements of Huntley
Associates #2. Such information has been subject to the auditing procedures
applied in the audit of financial statements and, in our opinion, is fairly
stated in all material respects in relation to the financial statements taken as
a whole.
/s/ Bordman & Winnick
---------------------
West Bloomfield, MI BORDMAN & WINNICK
January 25, 1997 Certified Public Accountants
EIN 38-2900295
<PAGE>
[Letterhead of BORDMAN & WINNICK]
Independent Auditor's Report
To the Partners of
Huntley Associates #2
We have audited the accompanying balance sheet of Project #047-44063-LDP of
Huntley Associates #2 (A Limited Partnership) as of December 31, 1995, and the
related statements of operations and changes in partner's equity for the year
then ended. We have also audited the statements of cash flows for the years
ended December 31, 1994 and 1995. These financial statements are the
responsibility of the project'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 Project #047-44063-LDP as at
December 31, 1995, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 10 to 15) are presented for the purposes of additional
analysis and are not a required part of the financial statements of Huntley
Associates #2. Such information has been subject to the auditing procedures
applied in the audit of financial statements and, in our opinion, is fairly
stated in all material respects in relation to the financial statements taken as
a whole.
[Signature of Bordman & Winnick]
West Bloomfield, MI BORDMAN & WINNICK
January 22, 1996 Certified Public Accountants
EIN 38-2900295
<PAGE>
[Letterhead of Bordman & Winnick]
Independent Auditor's Report
To the Partners of
Seymour O'Brien Manor Apartments
We have audited the accompanying balance sheet of Project #073-44152 LDP of
Seymour O'Brien Manor Apartments (a Limited Partnership) as at December 31,
1997, and the related statements of operations and changes in partner's equity
for the year then ended. We have also audited the statements of cash flows for
the years ended December 31, 1996 and 1997. These financial statements are the
responsibility of the project'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 Project #073-44152 LDP as of
December 31, 1997, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
the report (shown on pages 9 to 11) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of
Seymour O'Brien Manor Apartments. Such information has been subject to the
auditing procedures applied in the audit of basic financial statements and, in
our opinion, is fairly stated in all material respects in relation to the
financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report
dated January 29, 1998 on our consideration of Seymour O'Brien Manor Apartments
(a Limited Partnership) internal controls and a report dated January 29, 1998 on
its compliance with laws and regulations.
/s/ Bordman & Winnick
West Bloomfield, MI BORDMAN WINNICK
January 29, 1998 Certified Public Accountants
EIN 38-2900295
<PAGE>
[BORDMAN & WINNICK LETTERHEAD]
Independent Auditor's Report
----------------------------
To the Partners of
Seymour O'Brien Manor Apartments
We have audited the accompanying balance sheet of Project #073-44152 LDP of
Seymour O'Brien Manor Apartments (a Limited Partnership) as at December 31,
1996, and the related statements of operations and changes in partner's equity
for the year then ended. We have also audited the statements of cash flows for
the years ended December 31, 1995 and 1996. These financial statements are the
responsibility of the project'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 Project #073-44152 LDP as of
December 31, 1996, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 9 to 11) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of
Seymour O'Brien Manor Apartments. Such information has been subject to the
auditing procedures applied in the audit of basic financial statements and, in
our opinion, is fairly stated in all material respects in relation to the
financial statements taken as a whole.
/s/ Bordman & Winnick
---------------------
West Bloomfield, MI BORDMAN & WINNICK
January 20, 1997 Certified Public Accountants
EIN 38-2900295
<PAGE>
[Letterhead of BORDMAN & WINNICK]
Independent Auditor's Report
To the Partners of
Seymour O'Brien Manor Apartments
We have audited the accompanying balance sheet of Project #073-44152 LDP of
Seymour O'Brien Manor Apartments (a Limited Partnership) as at December 31,
1995, and the related statements of operations and changes in partner's equity
for the year then ended. We have also audited the statements of cash flows for
the years ended December 31, 1994 and 1995. These financial statements are the
responsibility of the project'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 Project #073-44152 LDP as of
December 31, 1995, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 9 to 11) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of
Seymour O'Brien Manor Apartments. Such information has been subject to the
auditing procedures applied in the audit of basic financial statements and, in
our opinion, is fairly stated in all material respects in relation to the
financial statements taken as a whole.
[Signature of Bordman & Winnick]
West Bloomfield, MI BORDMAN & WINNICK
January 23, 1996 Certified Public Accountants
EIN 38-2900295
<PAGE>
[Letterhead of Bordman & Winnick]
Independent Auditors Report
To the Partners of
Washington Highland Apartments
We have audited the accompanying balance sheet of HUD Project No. 073-44073 of
Washington Highland Apartment (a Limited Partnership) as of December 31, 1997,
and the related statements of operations and changes in partner's equity for the
year then ended. We have also audited the statements of cash flows for the years
ended December 31, 1997 and December 31, 1995. These financial statements are
the responsibility of the project'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 HUD Project No. 073-44073 as of
December 31, 1997, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
the report (shown on pages 9 to 11) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of
Washington Highland Apartments. Such information has been subject to the
auditing procedures applied in the audit of basic financial statements and, in
our opinion, is fairly stated in all material respects in relation to the
financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report
dated January 19, 1998 on our consideration of Washington Highland Apartment (a
Limited Partnership) internal controls and a report dated January 19, 1998 on
its compliance with laws and regulations.
/s/ Bordman & Winnick
West Bloomfield, MI BORDMAN & WINNICK
January 19, 1998 Certified Public Accountants
EIN 38-2900295
<PAGE>
[BORDMAN & WINNICK LETTERHEAD]
Independent Auditors Report
---------------------------
To the Partners of
Washington Highland Apartments
We have audited the accompanying balance sheet of HUD Project No. 073-44073 of
Washington Highland Apartment (a Limited Partnership) as of December 31, 1996,
and the related statements of operations and changes in partner's equity for the
year then ended. We have also audited the statements of cash flows for the years
ended December 31, 1996 and December 31, 1995. These financial statements are
the responsibility of the project'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 HUD Project No. 073-44073 as of
December 31, 1996, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 9 to 11) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of
Washington Highland Apartments. Such information has been subject to the
auditing procedures applied in the audit of basic financial statements and, in
our opinion, is fairly stated in all material respects in relation to the
financial statements taken as a whole.
/s/ Bordman & Winnick
---------------------
West Bloomfield, MI BORDMAN & WINNICK
January 28, 1997 Certified Public Accountants
EIN 38-2900295
<PAGE>
[Letterhead of BORDMAN & WINNICK]
Independent Auditors Report
To the Partners of
Washington Highland Apartments
We have audited the accompanying balance sheet of HUD Project No. 073-44073
of Washington Highland Apartment (a Limited Partnership) as of December 31,
1995, and the related statements of operations and changes in partner's equity
for the year then ended. We have also audited the statements of cash flows for
the years ended December 31, 1995 and December 31, 1994. These financial
statements are the responsibility of the project'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 HUD Project No. 073-44073 as
of December 31, 1995, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 9 to 11) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of
Washington Highland Apartments. Such information has been subject to the
auditing procedures applied in the audit of basic financial statements and, in
our opinion, is fairly stated in all material respects in relation to the
financial statements taken as a whole.
[Signature of Bordman & Winnick]
West Bloomfield, MI BORDMAN & WINNICK
January 29, 1996 Certified Public Accountants
EIN 38-2900295
<PAGE>
[Letterhead of Bordman & Winnick]
Independent Auditor's Report
To the Partners
Vincennes Niblack Apartments
We have audited the accompanying balance sheet of Project #073-58501 LDP of
Vincennes Niblack Apartments (A Limited Partnership) as at December 31, 1997,
and the related statements of operations and changes in partner's equity for the
year then ended. We have also audited the statements of cash flows for the years
ended December 31, 1997 and 1996. These financial statements are the
responsibility of the project'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 Project #073-58501 LDP as at
December 31, 1997, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
the report (shown on pages 9 to 11) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of
Vincennes Niblack Apartments. Such information has been subject to the auditing
procedures applied in the audit of basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report
dated January 24, 1998 on our consideration of Vincennes Niblack Apartments' (A
Limited Partnership) internal controls and reports dated January 24, 1998 on its
compliance with laws and regulations.
/s/ Bordman & Winnick
West Blooimfield, MI BORDMAN & WINNICK
January 24, 1998 Certified Public Accountants
EIN 38-2900295
<PAGE>
[BORDMAN & WINNICK LETTERHEAD]
Independent Auditor's Report
----------------------------
To the Partners
Vincennes Niblack Apartments
We have audited the accompanying balance sheet of Project #073-58501 LDP of
Vincennes Niblack Apartments (A Limited Partnership) as at December 31, 1996,
and the related statements of operations and changes in partner's equity for the
year then ended. We have also audited the statements of cash flows for the years
ended December 31, 1996 and 1995. These financial statements are the
responsibility of the project'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 Project #073-58501 LDP as at
December 31, 1996, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 9 to 11) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of
Vincennes Niblack Apartments. Such information has been subject to the auditing
procedures applied in the audit of basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ Bordman & Winnick
---------------------
West Bloomfield, MI BORDMAN & WINNICK
January 29, 1997 Certified Public Accountants
EIN 38-2900295
<PAGE>
[Letterhead of BORDMAN & WINNICK]
Independent Auditor's Report
To the Partners
Vincennes Niblack Apartments
We have audited the accompanying balance sheet of Project #073-58501 LDP of
Vincennes Niblack Apartments (A Limited Partnership) as at December 31, 1995,
and the related statements of operations and changes in partner's equity for the
year then ended. We have also audited the statements of cash flows for the years
ended December 31, 1995 and 1994. These financial statements are the
responsibility of the project'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 Project #073-58501 LDP as at
December 31, 1995, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 9 to 11) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of
Vincennes Niblack Apartments. Such information has been subject to the auditing
procedures applied in the audit of basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
[Signature of Bordman & Winnick]
West Bloomfield, MI BORDMAN & WINNICK
January 30, 1996 Certified Public Accountants
EIN 38-2900295
<PAGE>
[Letterhead of Bordman & Winnick]
To the Partners of
Casa Ramon Apartments
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying balance sheet of Project #122-44476 LDP-SUP of
Casa Ramon Apartments (A Limited Partnership) as at December 31, 1997, and the
related statements of operations and changes in partner's equity for the year
then ended. We have also audited the statements of cash flows for the years
ended December 31, 1997 and 1996. These financial statements are the
responsibility of the project'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 Project #122-44476 LDP-SUP as
at December 31, 1997, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
the report (shown on pages 9 to 12) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of Casa
Ramon Apartments. Such information has been subject to the auditing procedures
applied in the audit of basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the financial statements
taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report
dated January 23, 1998 on our consideration of Casa Ramon Apartments' internal
controls and a report dated February 20, on its compliance with laws and
regulations.
/s/ Bordman & Winnick
West Bloomfield, MI BORDMAN & WINNICK
January 23, 1998 Certified Public Accountants
EIN 38-2900295
<PAGE>
[BORDMAN & WINNICK LETTERHEAD]
To the Partners of
Casa Ramon Apartments
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying balance sheet of Project #122-44476 LDP-SUP of
Casa Ramon Apartments (A Limited Partnership) as at December 31, 1996, and the
related statements of operations and changes in partner's equity for the year
then ended. We have also audited the statements of cash flows for the years
ended December 31, 1996 and 1995. These financial statements are the
responsibility of the project'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 Project #122-44476 LDP-SUP as
at December 31, 1996, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 9 to 12) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of Casa
Ramon Apartments. Such information has been subject to the auditing procedures
applied in the audit of basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the financial statements
taken as a whole.
/s/ Bordman & Winnick
---------------------
West Bloomfield, MI BORDMAN & WINNICK
February 20, 1997 Certified Public Accountants
EIN 38-2900295
<PAGE>
[Letterhead of BORDMAN & WINNICK]
To the Partners of
Casa Ramon Apartments
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying balance sheet of Project #122-44476
LDP-SUP of Casa Ramon Apartments (A Limited Partnership) as at December 31,
1995, and the related statements of operations and changes in partner's equity
for the year then ended. We have also audited the statements of cash flows for
the years ended December 31, 1995 and 1994. These financial statements are the
responsibility of the project'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 Project #122-44476 LDP-SUP
as at December 31, 1995, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 9 to 12) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of Casa
Ramon Apartments. Such information has been subject to the auditing procedures
applied in the audit of basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the financial statements
taken as whole.
[Signature of Bordman & Winnick]
West Bloomfield, MI BORDMAN & WINNICK
January 31, 1996 Certified Public Accountants
EIN 38-2900295
<PAGE>
[Letterhead of Bordman & Winnick]
Independent Auditor's Report
To the Partners of
Nu-Elm Apartments
We have audited the accompanying balance sheet of Project #084-44035 LDP of
Nu-Elm Apartments (A Limited Partnership) as of December 31, 1997, and the
related statements of operations and changes in partner's equity for the year
then ended. We have also audited the statement of cash flows for the years ended
December 31, 1997 and December 31, 1996. These financial statements are the
responsibility of the project'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 Project #084-44035 LDP as of
December 31, 1997, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
the report (shown on pages 9 to 11) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of Nu-Elm
Apartments. Such information has been subject to the auditing procedures applied
in the audit of basic financial statements and, in our opinion, is fairly stated
in all material respects in relation to the financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also issued a report
dated January 21, 1997 on our consideration of Nu-Elm Apartments (A Limited
Partnership) internal controls and a report dated January 21, 1997 on its
compliance with laws and regulations.
/s/ Bordman & Winnick
West Bloomfield, MI BORDMAN & WINNICK
January 21, 1997 Certified Public Accountants
EIN 38-2900295
<PAGE>
[BORDMAN & WINNICK LETTERHEAD]
Independent Auditor's Report
----------------------------
To the Partners of
Nu-Elm Apartments
We have audited the accompanying balance sheet of Project #084-44035 LDP of
Nu-Elm Apartments (A Limited Partnership) as of December 31, 1996, and the
related statements of operations and changes in partner's equity for the year
then ended. We have also audited the statement of cash flows for the years ended
December 31, 1996 and December 31, 1995. These financial statements are the
responsibility of the project'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 Project #084-44035 LDP as of
December 31, 1996, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 9 to 11) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of Nu-Elm
Apartments. Such information has been subject to the auditing procedures applied
in the audit of basic financial statements and, in our opinion, is fairly stated
in all material respects in relation to the financial statements taken as a
whole.
/s/ Bordman & Winnick
---------------------
West Bloomfield, MI BORDMAN & WINNICK
January 23, 1997 Certified Public Accountants
EIN 38-2900295
<PAGE>
[Letterhead of BORDMAN & WINNICK]
Independent Auditor's Report
To the Partners of
Nu-Elm Apartments
We have audited the accompanying balance sheet of Project #084-44035 LDP of
Nu-Elm Apartments (A Limited Partnership) as of December 31, 1995, and the
related statements of operations and changes in partner's equity for the year
then ended. We have also audited the statement of cash flows for the years ended
December 31, 1995 and December 31, 1994. These financial statements are the
responsibility of the project'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 Project #084-44035 LDP as of
December 31, 1995, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 9 to 11) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of Nu-Elm
Apartments. Such information has been subject to the auditing procedures applied
in the audit of basic financial statements and, in our opinion, is fairly stated
in all material respects in relation to the financial statements taken as a
whole.
[Signature of Bordman & Winnick]
West Bloomfield, MI BORDMAN & WINNICK
January 29, 1996 Certified Public Accountants
EIN 38-2900295
<PAGE>
[Lefkowitz, Garfinkel, Champi & DeRienzo P.C.]
Independent Auditors' Report
The Partners
Buttonwood Acres at New Bedford
(a Limited Partnership)
Quincy, Massachusetts
We have audited the accompanying balance sheet of Buttonwood
Acres at New Bedford (a Limited Partnership) as of August 11, 1997, and the
related statements of operations, partners' equity and cash flows for the period
from January 1, 1997 to August 11, 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 audit.
We conducted our audit 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 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 Buttonwood
Acres at New Bedford (a Limited Partnership) as of August 11, 1997, and the
results of its operations, changes in its partners' equity and cash flows for
the period from January 1, 1997 to August 11, 1997, in conformity with generally
accepted accounting principles.
/s/ Lefkowitz, Garfinkel, Champi & DeRienzo P.C.
Providence, Rhode Island
April 3, 1998
<PAGE>
[LEFKOWITZ, GARFINKEL, CHAMPI & DERIENZO P.C. LETTERHEAD]
Independent Auditors' Report
- - - ----------------------------
The Partners
Buttonwood Acres at New Bedford
(a Limited Partnership)
Quincy, Massachusetts
We have audited the accompanying balance sheet of Buttonwood Acres at New
Bedford (a Limited Partnership), Project No. 71-005-N, as of December 31, 1996,
and the related statements of operations, partners' equity (deficiency) and cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. 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 Buttonwood Acres at New
Bedford (a Limited Partnership) as of December 31, 1996, and the results of its
operations, changes in its partners' equity (deficiency) and cash flows for the
year then ended, in conformity with generally accepted accounting principles.
/s/ Lefkowitz, Garfinkel, Champi & DeRienzo, P.C.
-------------------------------------------------
Providence, Rhode Island
February 7, 1997
<PAGE>
[Letterhead of Lefkowitz, Garfinkel, Champi & DeRienzo P.C.-Providence,
Rhode Island]
Independent Auditors' Report
The Partners
Buttonwood Acres at New Bedford
(a Limited Partnership)
Quincy, Massachusetts
We have audited the accompanying statement of assets, liabilities and
partners equity (deficiency) of Buttonwood Acres at New Bedford (a Limited
Partnership), Project No. 71-005-N, as of December 31, 1995, and the related
statements of operations, partners' equity (deficiency) and cash flows for the
year then ended, all prepared on the basis of accounting and reporting practices
prescribed by the U.S. Department of Housing and Urban Development (regulatory
basis). 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.
As described in Note 1, these financial statements have been prepared in
conformity with the accounting and reporting practices prescribed by the U.S.
Department of Housing and Urban Development, which is a comprehensive basis of
accounting other than generally accepted accounting principles.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the assets, liabilities and partners' equity
(deficiency) of Buttonwood Acres at New Bedford (a Limited Partnership) as of
December 31, 1995, and the results of its operations, changes in its partners'
equity (deficiency) and cash flows for the year then ended, on the basis of
accounting described in Note 1.
As described in Note 1, the Partnership adopted a policy of recording its
depreciation for certain property and equipment using estimated economic lives
as required by the regulatory basis of accounting. Previously, the Partnership
provided for its depreciation using recovery periods allowed by the Internal
Revenue Code.
<PAGE>
Independent Auditors' Report (Continued)
The Partners
Buttonwood Acres at New Bedford
(a Limited Partnership)
In accordance with Government Auditing Standards, we have also issued
reports dated February 5, 1996 on our consideration of the Partnership's
internal control structure and on its compliance with laws and regulations.
This report is intended for the information of the partners and management
of Buttonwood Acres at New Bedford, the Massachusetts Housing Finance Agency,
and HUD. However, this report is a matter of public record and its distribution
is not limited.
[Signature of Lefkowitz, Garfinkel, Champi & DeRienzo P.C.]
February 5, 1996
<PAGE>
[Letterhead of Lefkowitz, Garfinkel, Champi & DeRienzo P.C.]
Independent Auditors' Report
The Partners
Rockdale West at New Bedford
(a Limited Partnership)
Quincy, Massachusetts
We have audited the accompanying balance sheet of Rockdale West
at New Bedford (a Limited Partnership), MHFA Project No. 71-225-N, as of
December 31, 1997, and the related statements of operations, partners' equity
(deficiency) and cash flows for the year then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of Rockdale
West at New Bedford (a Limited Partnership) as of December 31, 1997, and the
results of its operations, changes in partners' equity (deficiency) and cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have also
issued reports dated February 12, 1998 on our consideration of the Partnership's
internal controls and on its compliance with the requirements applicable to the
Partnership's nonmajor HUD-assisted program transactions.
This report is intended for the information of the partners and
management of Rockdale West at New Bedford, the Massachusetts Housing Finance
Agency and HUD. However, this report is a matter of public record and its
distribution is not limited.
/s/ Lefkowitz, Garfinkel, Champi & DeRienzo P.C.
Providence, Rhode Island
February 12, 1998
<PAGE>
[LEFKOWITZ, GARFINKEL, CHAMPI & DERIENZO P.C. LETTERHEAD]
Independent Auditors' Report
- - - ----------------------------
The Partners
Rockdale West at New Bedford
(a Limited Partnership)
Quincy, Massachusetts
We have audited the accompanying balance sheet of Rockdale West at New
Bedford (a Limited Partnership), MHFA Project No. 71-225-N, as of December 31,
1996, and the related statements of operations, partners' equity (deficiency)
and cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. 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 Rockdale West at New Bedford
(a Limited Partnership) as of December 31, 1996, and the results of its
operations, changes in its partners' equity (deficiency) and cash flows for the
year then ended, in conformity with generally accepted accounting principles.
/s/ Lefkowitz, Garfinkel, Champi & DeRienzo, P.C.
-------------------------------------------------
Providence, Rhode Island
February 7, 1997
<PAGE>
[Letterhead of Lefkowitz, Garfinkel, Champi & DeRienzo P.C.- Providence,
Rhode Island]
Independent Auditors' Report
The Partners
Rockdale West at New Bedford
(a Limited Partnership)
Quincy, Massachusetts
We have audited the accompanying statement of assets, liabilities and
partners' equity (deficiency) of Rockdale West at New Bedford (a Limited
Partnership), MHFA Project No. 71-225-N, as of December 31, 1995, and the
related statements of operations, partners' equity (deficiency) and cash flows
for the year then ended, all prepared on the basis of accounting and reporting
practices prescribed by the U.S. Department of Housing and Urban Development
(regulatory basis). 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.
As described in Note 1, these financial statements have been prepared in
conformity with the accounting and reporting practices prescribed by the U.S.
Department of Housing and Urban Development, which is a comprehensive basis of
accounting other than generally accepted accounting principles.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the assets, liabilities and partners' equity
(deficiency) of Rockdale West at New Bedford (a Limited Partnership) as of
December 31, 1995, and the results of its operations, changes in its partners'
equity (deficiency) and cash flows for the year then ended, on the basis of
accounting described in Note 1.
As described in Note 1, the Partnership adopted a policy of recording its
depreciation for certain property and equipment using estimated economic lives
as required by the regulatory basis of accounting. Previously, the Partnership
provided for its depreciation using recovery periods allowed by the Internal
Revenue Code.
<PAGE>
Independent Auditor's Report (Continued)
The Partners
Rockdale West at New Bedford
(a Limited Partnership)
In accordance with Government Auditing Standards, we have also issued
reports dated February 5, 1996 on our consideration of the Partnership's
internal control structure and on its compliance with laws and regulations.
This report is intended for the information of the partners and management
of Rockdale West at New Bedford, the Massachusetts Finance Agency and HUD.
However, this report is a matter of public record and its distribution is not
limited.
[Signature of Lefkowitz, Garfinkel, Champi & DeRienzo P.C.]
February 5, 1996
<PAGE>
[Letterhead of Lefkowitz, Garfinkel, Champi & DeRienzo P.C.]
Independent Auditors' Report
The Partners
Solemar at South Dartmouth Limited Partnership
Quincy, Massachusetts
We have audited the accompanying balance sheet of Solemar at
South Dartmouth Limited Partnership, MHFA Project No. 72-085-N, as of December
31, 1997, and the related statements of operations, partners' equity
(deficiency) and cash flows for the year then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is
to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of Solemar at
South Dartmouth Limited Partnership as of December 31, 1997, and the results of
its operations, changes in partners' equity (deficiency) and cash flows for the
year then ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also
issued a report dated February 12, 1998 on our consideration of the
Partnership's internal control over financial reporting and on its compliance
with laws and regulations.
This report is intended for the information of the partners and
management of Solemar at South Dartmouth Limited Partnership and the
Massachusetts Housing Finance Agency. However, this report is a matter of public
record and its distribution is not limited.
/s/ Lefkowitz, Garfinkel, Champi & DeRienzo P.C.
Providence, Rhode Island
February 12, 1998
<PAGE>
[LEFKOWITZ, GARFINKEL, CHAMPI & DERIENZO P.C. LETTERHEAD]
Independent Auditors' Report
- - - ----------------------------
The Partners
Solemar at South Dartmouth Limited Partnership
Quincy, Massachusetts
We have audited the accompanying balance sheet of Solemar at South
Dartmouth Limited Partnership, MHFA Project No. 72-085-N, as of December 31,
1996, and the related statements of income, partners' equity (deficiency) and
cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Solemar at South Dartmouth
Limited Partnership as of December 31, 1996, and the results of its operations,
changes in partners' equity (deficiency) and cash flows for the year then ended,
in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued
reports dated February 7, 1997 on our consideration of the Partnership's
internal control structure and on its compliance with laws and regulations.
/s/ Lefkowitz, Garfinkel, Champi & DeRienzo, P.C.
-------------------------------------------------
Providence, Rhode Island
February 7, 1997
1
<PAGE>
[Letterhead of Lefkowitz, Garfinkel, Champi & DeRienzo P.C. -
Providence, Rhode Island]
Independent Auditors' Report
The Partners
Solemar at South Dartmouth Limited Partnership
Quincy, Massachusetts
We have audited the accompanying balance sheet of Solemar at South
Dartmouth Limited Partnership, MHFA Project No. 72-085-N, as of December 31,
1995, and the related statements of income, partners' equity (deficiency) and
cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Solemar at South Dartmouth
Limited Partnership as of December 31, 1995, and the results of its operations,
changes in partners' equity (deficiency) and cash flows for the year then ended,
in conformity with generally accepted accounting principles.
As described in Note 1, the Partnership adopted a policy of recording its
depreciation for certain property and equipment using estimated economic lives
as required by generally accepted accounting principles. Previously, the
Partnership provided for its depreciation using recovery periods allowed by the
Internal Revenue Code.
In accordance with Government Auditing Standards, we have also issued
reports dated February 5, 1996 on our consideration of the Partnership's
internal control structure and on its compliance with laws and regulations.
[Signature of Lefkowitz, Garfinkel, Champi & DeRienzo P.C.]
February 5, 1996
<PAGE>
[Letterhead of BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the Partners of
Decatur Apartments, Ltd.
Decatur, Alabama
We have audited the accompanying balance sheet of Decatur Apartments, Ltd. (the
Project), as of December 31, 1997, and the related statements of profit and
loss, changes in partners' equity, and cash flows for the year then ended. These
financial statements are the responsibility of the Project'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.
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 the Project as of December 31,
1997 and the results of its operations, changes in partners' equity and cash
flows for the year then ended in conformity with generally accepted accounting
principles.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
Birmingham, Alabama Federal Employer Identification Number:
January 19, 1998 63-0986156
Audit Principal: E.O. Browder, Jr.
<PAGE>
[BROWDER & ASSOCIATES, P.C. LETTERHEAD]
Independent Auditor's report
----------------------------
To the Partners of
Decatur (Alta Vista) Apartments, Ltd.
Decatur, Alabama
HUD Field Office Director
Birmingham, Alabama
We have audited the accompanying balance sheet of Decatur (Alta Vista)
Apartments, Ltd., Project No. 062-44012-Ltd, as of December 31, 1996, and the
related statements of profit and loss, changes in partners' equity, and cash
flows for the year then ended. These financial statements are the responsibility
of the project'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,
Government Auditing Standards issued by the Comptroller General of the United
States, and the Consolidated Audit Guide for Audits of HUD Programs (the
"Guide") issued by the U.S. Department of Housing and Urban Development, Office
of Inspector General in July 1993. Those standards and the Guide 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 Decatur (Alta Vista)
Apartments, Ltd. as of December 31, 1996, and the results of its operations,
changes in partners' equity and cash flows for the year then ended in conformity
with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Guide, we have also
issued a report dated January 20, 1997 on our consideration of Decatur (Alta
Vista) Apartments, Ltd.'s internal control structure and reports dated January
20, 1997 on compliance with specific requirements applicable to the major HUD
program, specific requirements applicable to the non-major HUD program, specific
requirements applicable to Affirmative Fair Housing and laws and regulations
applicable to the basic financial statements.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part of
the basic financial statements of Decatur (Alta Vista) Apartments, Ltd.. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
- - - ------------------------------
Birmingham, Alabama Federal Employer
January 20, 1997 Identification Number:
63-0986156
Audit Principal: E.O. Browder, Jr.
<PAGE>
[Letterhead of BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the Partners of
Decatur (Alta Vista) Apartments, Ltd.
Decatur, Alabama
HUD Field Office Director
Birmingham, Alabama
We have audited the accompanying balance sheet of Decatur (Alta Vista)
Apartments, Ltd., Project No. 062-44012-LD, as of December 31, 1995, and the
related statements of income, changes in partners' equity, and cash flows for
the year then ended. These financial statements are the responsibility of the
project'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, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide 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 Decatur (Alta Vista)
Apartments, Ltd. as of December 31, 1995, and the results of its operations,
changes in partners' equity and cash flows for the year then ended in conformity
with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Guide, we have
also issued a report dated January 22, 1996 on our consideration of Decatur
(Alta Vista) Apartments, Ltd.'s internal control structure and reports dated
January 22, 1996 on its compliance with laws and regulations applicable to the
basic financial statements, the major HUD program, and the nonmajor HUD program.
Our audit was conducted for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying information included in
the report is presented for the purpose of additional analysis and are not a
required part of the basic financial statements of Decatur (Alta Vista)
Apartments, Ltd. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the financial statements
taken as a whole.
[Signature of Browder & Associates, P.C.]
Birmingham, Alabama Federal Employer
January 22, 1996 Identification Number: 63-0986156
Audit Principal: E.O. Browder, Jr.
<PAGE>
[Letterhead of BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the Partners of
Florence Apartments, Ltd.
Florence, Alabama
We have audited the accompanying balance sheet of Florence Apartments, Ltd. (the
Project), as of December 31, 1997, and the related statements of profit and
loss, changes in partners' equity, and cash flows for the year then ended. These
financial statements are the responsibility of the Project'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.
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 the Project as of December 31,
1997 and the results of its operations, changes in partners' equity and cash
flows for the year then ended in conformity with generally accepted accounting
principles.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
Birmingham, Alabama Federal Employer Identification Number
January 19, 1998 63-0986156
Audit Principal: E.O. Browder, Jr.
<PAGE>
[BROWDER & ASSOCIATES, P.C. LETTERHEAD]
Independent Auditor's Report
----------------------------
To the Partners of
Florence (Hermitage Hills) Apartments, Ltd.
Florence, Alabama
HUD Field Office Director
Birmingham, Alabama
We have audited the accompanying balance sheet of Florence (Hermitage Hills)
Apartments, Ltd., Project No. 062 44083-LD, as of December 31, 1996, and the
related statements of profit and loss, changes in partners' equity, and cash
flows for the year then ended. These financial statements are the responsibility
of the project'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,
Government Auditing Standards issued by the Comptroller General of the United
States, and the Consolidated Audit Guide for Audits of HUD Programs (the
"Guide") issued by the U.S. Department of Housing and Urban Development, Office
of Inspector General in July 1993. Those standards and the Guide 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 Florence (Hermitage Hills)
Apartments, Ltd. as of December 31, 1996, and the results of its operations,
changes in partners' equity and cash flows for the year then ended in conformity
with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Guide, we have also
issued a report dated January 20, 1997 on our consideration of Florence
(Hermitage Hills) Apartments, Ltd.'s internal control structure and reports
dated January 20, 1997 on its compliance with specific requirements applicable
to the major HUD program, specific requirements applicable to Affirmative Fair
Housing, and laws and regulations applicable to the basic financial statements.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part of
the basic financial statements of Florence (Hermitage Hills) Apartments, Ltd.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements, and in our opinion, is fairly stated in
all material respects in relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
- - - ------------------------------
Birmingham, Alabama Federal Employer
January 20, 1997 Identification Number:
63-0986156
Audit Principal: E.O. Browder, Jr.
<PAGE>
[Letterhead of BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the Partners of
Florence Apartments (Hermitage Hills), Ltd.
Florence, Alabama
HUD Field Office Director
Birmingham, Alabama
We have audited the accompanying balance sheet of Florence Apartments
(Hermitage Hills), Ltd., Project No. 062-44083-LD, as of December 31, 1995, and
the related statements of income, changes in partners' equity, and cash flows
for the year then ended. These financial statements are the responsibility of
the project'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, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide 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 Florence Apartments
(Hermitage Hills), Ltd. as of December 31, 1995, and the results of its
operations, changes in partners' equity and cash flows for the year then ended
in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Guide, we have
also issued a report dated January 22, 1996 on our consideration of Florence
Apartments (Hermitage Hills), Ltd.'s internal control structure and reports
dated January 22, 1996 on its compliance with laws and regulations applicable to
the basic financial statements and the major HUD programs.
Our audit was conducted for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying information included in
the report is presented for the purpose of additional analysis and are not a
required part of the basic financial statements of Florence Apartments
(Hermitage Hills), Ltd.. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
[Signature of Browder & Associates, P.C.]
Birmingham, Alabama Federal Employer
January 22, 1996 Identification Number: 63-0986156
Audit Principal: E.O. Browder, Jr.
<PAGE>
[Letterhead of BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the Partners of
Saraland Apartments, Ltd. HUD Field Office Director
Mobile, Alabama Birmingham, AL
We have audited the accompanying balance sheet of Saraland Apartments, Ltd. (the
Project), Project No. 062-44065-LD, as of December 31, 1997, and the related
statements of profit and loss, changes in partners' equity, and cash flows for
the year then ended. These financial statements are the responsibility of the
Project'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 the Project as of December 31,
1997 and the results of its operations, changes in partners' equity and cash
flows for the year then ended in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Project will continue as a going concern. As discussed in the Notes to the
Financial Statements, the Project is located on an Environmental Protection
Agency "Superfund Cleanup" site and has been determined to be uninhabitable. The
Project is a party to related litigation of which the outcome is uncertain.
These conditions raise substantial doubt about its ability to continue as a
going concern. Management's plans regarding those matters also are described in
the footnotes to the financial statements. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated April 1, 1998 on our
consideration of the Project's internal controls and reports dated April 1, 1998
on its compliance with laws and regulations applicable to the basic financial
statements, specific requirements applicable to the major HUD program, specific
requirements applicable to the nonmajor HUD program, and specific requirements
applicable to Fair Housing and Non-Discrimination.
<PAGE>
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
Birmingham, Alabama Federal Employer Identification Number.
April 1, 1998 63-0986156
Audit Principal: E.O. Browder, Jr.
<PAGE>
[LETTERHEAD OF BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the Partners of
Saraland Apartments. Ltd.
Mobile, Alabama
HUD Field Office Director
Birmingham, Alabama
We have audited the accompanying balance sheet of Saraland Apartments,
Ltd., Project No. 062-44065-LD, as of December 31, 1996, and the related
statements of profit and loss, changes in partners' equity, and cash flows for
the year then ended. These financial statements are the responsibility of the
project'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, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide 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 Saraland Apartments, Ltd. as
of December 31, 1996, and the results of its operations, changes in partners'
equity and cash flows for the year then ended in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming that
Saraland Apartments, Ltd. will continue as a going concern. As discussed in Note
J to the financial statements, the project is located on an Environmental
Protection Agency "Superfund Cleanup" site and has been determined to be
uninhabitable. Saraland Apartments, Ltd. is a party to related litigation of
which the outcome is uncertain. These conditions raise substantial doubt about
the project's ability to continue as a going concern. These financial statements
do not include any adjustments, other than the impairment loss discussed in Note
K, that might result from the outcome of these uncertainties.
<PAGE>
In accordance with Government Auditing Standards and the Guide, we have
also issued a report dated May 9, 1997 on our consideration of Saraland
Apartments, Ltd.'s internal control structure and reports dated May 9, 1997 on
its compliance with laws and regulations applicable to the basic financial
statements, the major HUD program, and the non-major HUD program.
Our audit was conducted for the purpose of forming an opinion on the
financial statements taken as a whole. The supporting data included in the
report are presented for the purpose of additional analysis and are not a
required part of the basic financial statements of Saraland Apartments, Ltd.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated in
all material respects in relation to the financial statements taken as a whole.
/s/ illegible
Birmingham, Alabama Federal Employer
May 9, 1997 Identification Number:
63-0986156
Audit Principal: E.O. Browder, Jr.
<PAGE>
[Letterhead of BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the Partners of
Saraland Apartments, Ltd.
Mobile, Alabama
HUD Field Office Director
Birmingham, Alabama
We have audited the accompanying balance sheet of Saraland Apartments,
Ltd., Project No. 062-44065-LD, as of December 31, 1995, and the related
statements of income, changes in partners' equity, and cash flows for the year
then ended. These financial statements are the responsibility of the project'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, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide 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 Saraland Apartments, Ltd. as
of December 31, 1995, and the results of its operations, changes in partners'
equity and cash flows for the year then ended in conformity with generally
accepted accounting principles.
In accordance with Government Auditing Standards and the Guide, we have
also issued a report dated January 22, 1996 on our consideration of Saraland
Apartments, Ltd.'s internal control structure and reports dated January 22, 1996
on its compliance with laws and regulations applicable to the basic financial
statements, the major HUD program, and the nonmajor HUD program.
Our audit was conducted for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying information included in
the report is presented for the purpose of additional analysis and are not a
required part of the basic financial statements of Saraland Apartments, Ltd.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated in
all material respects in relation to the financial statements taken as a whole.
[Signature of Browder & Associates, P.C.]
Birmingham, Alabama Federal Employer
January 22, 1996 Identification Number: 63-0986156
Audit Principal: E.O. Browder, Jr.
<PAGE>
[Letterhead of Crabtree, Crabtree & Hatter, L.L.P.]
INDEPENDENT AUDITOR'S REPORT
To The Partners
University Gardens Apartments LTD.
(A Limited Partnership)
We have audited the accompanying balance sheet of University Gardens Apartments
LTD., Project No. 112-44200 LD, (a limited partnership) as of December 31, 1997
and the related statements of income, changes in partners' equity, and cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards,
Government Auditing Standards, issued by the Comptroller General of the United
States, and the Consolidated Audit Guide for Audits of HUD Programs (the
"Guide") issued by the U.S. Department of Housing and Urban Development, Officer
of Inspector General in August 1997. Those standards and the Guide 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 University Gardens Apartments
LTD. at December 31, 1997 and the results of its operations, changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards and the Guide, we have also
issued a report dated February 6, 1998 on our consideration of University
Gardens Apartments, Ltd.'s internal control structure and reports dated February
6, 1998 on its compliance with laws and regulations applicable to the basic
financial statements, specific requirements applicable to the non-major HUD
program and specific requirements applicable to Affirmative Fair Housing.
<PAGE>
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in this report is
presented for the purpose of additional analysis and is not a required part of
the basic financial statements of University Gardens Apartments, Ltd. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.
/s/ Crabtree, Crabtree & Hatter, L.L.P.
CRABTREE, CRABTREE & HATTER, L.L.P.
Certified Public Accountants
Azle, Texas
February 6, 1998
3318
<PAGE>
[CRABTREE, CRABTREE & HATTER LETTERHEAD]
Independent Auditor's Report
----------------------------
To the Partners of
University Gardens Apartments, Ltd.
Dallas, Texas
We have audited the accompanying balance sheet of University Gardens Apartments,
Ltd., Project No. 112-44200 LD as of December 31, 1996, and the related
statements of profit and loss, changes in partners' equity, and cash flows for
the year then ended. These financial statements are the responsibility of the
project'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,
Government Auditing Standards issued by the Comptroller General of the United
States, and the Consolidated Audit Guide for Audits of HUD Programs (the
"Guide") issued by the U.S. Department of Housing and Urban Development, Office
of Inspector General in July 1993. Those standards and the Guide 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 University Gardens Apartments,
Ltd. as of December 31,1996, and the results of its operations, changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards and the Guide, we have also
issued a report dated February 9, 1997 on our consideration of University
Gardens Apartments, Ltd.'s internal control structure and reports dated February
9, 1997 on its compliance with laws and regulations applicable to the basic
financial statements, specific requirements applicable to the major HUD program,
specific requirements applicable to the non-major HUD program and specific
requirements applicable to Affirmative Fair Housing.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part of
the basic financial statements of University Gardens Apartments, Ltd. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.
/s/ Crabtree, Crabtree & Hatter
- - - -------------------------------
Crabtree, Crabtree & Hatter
Certified Public Accountants
Azle, Texas
February 9, 1997
<PAGE>
[Letterhead of Crabtree, Crabtree & Hatter]
INDEPENDENT AUDITOR'S REPORT
To The Partners
University Gardens Apartments LTD.
(A Limited Partnership)
We have audited the accompanying balance sheet of University Gardens Apartments
LTD., Project No. 112-44200 LD, (a limited partnership) as of December 31, 1995
and the related statements of income, changes in partners' equity, and cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above, present fairly in
all material respects, the financial position of University Gardens Apartments
LTD. at December 31, 1995 and the results of its operations, changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles, applied on a basis consistent with
that of the preceding year.
In accordance with Government Auditing Standards we have also issued a combined
report dated January 31, 1996 on our consideration of the Partnership's internal
control structure applicable to the financial statements and HUD assisted
programs.
<PAGE>
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in this
report (shown on pages 16 to 25) is presented for the purpose of additional
analysis and is not a required part of the basic financial statements of the
Partnership. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the financial statements
taken as a whole.
/s/ Crabtree, Crabtree & Hatter
CRABTREE, CRABTREE & HATTER
Certified Public Accountants
Azle, Texas
January 31, 1996
2982
<PAGE>
[Letterhead of Crabtree, Crabtree & Hatter, L.L.P.]
INDEPENDENT AUDITOR'S REPORT
To The Partners
Southside Village Apartments LTD.
(A Limited Partnership)
We have audited the accompanying balance sheet of Southside Village Apartments
LTD., Project No. 113-44076 LD, (a limited partnership) as of December 31, 1997
and the related statements of income, changes in partners' equity, and cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards,
Government Auditing Standards, issued by the Comptroller General of the United
States, and the Consolidated Audit Guide for Audits of HUD Programs (the
"Guide") issued by the U.S. Department of Housing and Urban Development, Officer
of Inspector General in August 1997. Those standards and the Guide 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 Southside Village Apartments
LTD. at December 31, 1997 and the results of its operations, changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards and the Guide, we have also
issued a report dated February 6, 1998 on our consideration of Southside Village
Apartments, Ltd.'s internal control structure and reports dated February 7, 1998
on its compliance with laws and regulations applicable to the basic financial
statements, specific requirements applicable to the non-major HUD program and
specific requirements applicable to Affirmative Fair Housing.
<PAGE>
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in this report is
presented for the purpose of additional analysis and is not a required part of
the basic financial statements of Southside Village Apartments, Ltd. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.
/s/ Crabtree, Crabtree & Hatter, L.L.P.
CRABTREE, CRABTREE & HATTER, L.L.P.
Certified Public Accountants
Azle, Texas
3323
<PAGE>
[CRABTREE, CRABTREE & HATTER LETTERHEAD]
Independent Auditor's Report
----------------------------
To the Partners of
Southside Village Apartments, Ltd.
Dallas, Texas
We have audited the accompanying balance sheet of Southside Village Apartments,
Ltd., Project No. 112-44076 LD as of December 31, 1996, and the related
statements of profit and loss, changes in partners' equity, and cash flows for
the year then ended. These financial statements are the responsibility of the
project'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,
Government Auditing Standards issued by the Comptroller General of the United
States, and the Consolidated Audit Guide for Audits of HUD Programs (the
"Guide") issued by the U.S. Department of Housing and Urban Development, Office
of Inspector General in July 1993. Those standards and the Guide 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 Southside Village Apartments,
Ltd. as of December 31, 1996, and the results of its operations, changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards and the Guide, we have also
issued a report dated February 10, 1997 on our consideration of Southside
Village Apartments, Ltd.'s internal control structure and reports dated February
10, 1997 on its compliance with laws and regulations applicable to the basic
financial statements, specific requirements applicable to the major HUD program,
specific requirements applicable to the non-major HUD program and specific
requirements applicable to Affirmative Fair Housing.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part of
the basic financial statements of Southside Village Apartments, Ltd. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.
/s/ Crabtree, Crabtree & Hatter
- - - -------------------------------
Crabtree, Crabtree & Hatter
Certified Public Accountants
Azle, Texas
February 10, 1997
<PAGE>
[Letterhead of Crabtree, Crabtree & Hatter]
INDEPENDENT AUDITOR'S REPORT
To The Partners
Southside Village Apartments LTD.
(A Limited Partnership)
We have audited the accompanying balance sheet of Southside Village Apartments
LTD., Project No. 112-44076 LD, (a limited partnership) as of December 31, 1995
and the related statements of income, changes in partners' equity, and cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above, present fairly in
all material respects, the financial position of Southside Village Apartments
LTD. at December 31, 1995 and the results of its operations, changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles, applied on a basis consistent with
that of the preceding year.
In accordance with Government Auditing Standards we have also issued a combined
report dated February 2, 1996 on our consideration of the Partnership's internal
control structure applicable to the financial statements and HUD assisted
programs.
<PAGE>
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in this
report (shown on pages 16 to 24) is presented for the purpose of additional
analysis and is not a required part of the basic financial statements of the
Partnership. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the financial statements
taken as a whole.
/s/ Crabtree, Crabtree & Hatter, L.L.P.
CRABTREE, CRABTREE & HATTER
Certified Public Accountants
Azle, Texas
February 2, 1996
2983
<PAGE>
[Letterhead of BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the Partners of
Dickens Ferry Apartments, Ltd.
Mobile, Alabama
We have audited the accompanying balance sheet of Dickens Ferry Apartments, Ltd.
(the Project), as of December 31, 1997, and the related statements of profit and
loss, changes in partners' equity, and cash flows for the year then ended. These
financial statements are the responsibility of the Project'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.
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 the Project as of December 31,
1997 and the results of its operations, changes in partners' equity and cash
flows for the year then ended in conformity with generally accepted accounting
principles.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
Birmingham, Alabama Federal Employer Identification Number
January 19, 1998 63-0986156
Audit Principal: E.O. Browder, Jr.
<PAGE>
[BROWDER & ASSOCIATES, P.C. LETTERHEAD]
Independent Auditor's Report
----------------------------
To the Partners of
Dickens Ferry Apartments, Ltd.
Mobile, Alabama
HUD Field Office Director
Birmingham, Alabama
We have audited the accompanying balance sheet of Dickens Ferry Apartments,
Ltd., Project No. 062 44055-LD, as of December 31, 1996, and the related
statements of profit and loss, changes in partners' equity, and cash flows for
the year then ended. These financial statements are the responsibility of the
project'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,
Government Auditing Standards issued by the Comptroller General of the United
States, and the Consolidated Audit Guide for Audits of HUD Programs (the
"Guide") issued by the U.S. Department of Housing and Urban Development, Office
of Inspector General in July 1993. Those standards and the Guide 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 Dickens Ferry Apartments, Ltd.
as of December 31, 1996, and the results of its operations, changes in partners'
equity and cash flows for the year then ended in conformity with generally
accepted accounting principles.
In accordance with Government Audition Standards and the Guide, we have also
issued a report dated January 20, 1997 on our consideration of Dickens Ferry
Apartments, Ltd.'s internal control structure and reports dated January 20, 1997
on its compliance with specific requirements applicable to the major HUD
program, specific requirements applicable to the non-major HUD program, specific
requirements applicable to Affirmative Fair Housing, and laws and regulations
applicable to the basic financial statements.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part of
the basic financial statements of Dickens Ferry Apartments, Ltd. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
- - - ------------------------------
Birmingham, Alabama Federal Employer
January 20, 1997 Identification Number:
63-0986156
Audit Principal: E.O. Browder, Jr.
<PAGE>
[Letterhead of BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the Partners of
Dickens Ferry Apartments, Ltd.
Mobile, Alabama
HUD Field Office Director
Birmingham, Alabama
We have audited the accompanying balance sheet of Dickens Ferry Apartments,
Ltd., Project No. 062-44055-LD, as of December 31, 1995, and the related
statements of income, changes in partners' equity, and cash flows for the year
then ended. These financial statements are the responsibility of the project'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, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide 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 Dickens Ferry Apartments,
Ltd. as of December 31, 1995, and the results of its operations, changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards and the Guide, we have
also issued a report dated January 22, 1996 on our consideration of Dickens
Ferry Apartments, Ltd.'s internal control structure and reports dated January
22, 1996 on its compliance with laws and regulations applicable to the basic
financial statements, the major HUD program, and the nonmajor HUD program.
Our audit was conducted for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying information included in
the report is presented for the purpose of additional analysis and are not a
required part of the basic financial statements of Dickens Ferry Apartments,
Ltd. Such information has been subjected to the auditing procedures applied in
the audit of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the financial statements taken as
a whole.
[Signature of Browder & Associates, P.C.]
Birmingham, Alabama Federal Employer
January 22, 1996 Identification Number: 63-0986156
Audit Principal: E.O. Browder. Jr.
<PAGE>
[Letterhead of BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the Partners of
Bonnie Doone Apartments, Ltd.
Athens, Alabama
We have audited the accompanying balance sheet of Bonnie Doone Apartments, Ltd.
(the Project), as of December 31, 1997, and the related statements of profit and
loss, changes in partners' equity, and cash flows for the year then ended. These
financial statements are the responsibility of the Project'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.
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 the Project as of December 31,
1997 and the results of its operations, changes in partners' equity and cash
flows for the year then ended in conformity with generally accepted accounting
principles.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
Birmingham, Alabama Federal Employer Identification Number
January 19, 1998 63-0986156
Audit Principal: E.O. Browder, Jr.
<PAGE>
BROWDER & ASSOCIATES, P.C.
[LETTERHEAD]
Independent Auditor's report
To the Partners of
Bonnie Doone Apartments, Ltd.
Athens, Alabama
HUD Field Office Director
Birmingham, Alabama
We have audited the accompanying balance sheet of Bonnie Doone Apartments, Ltd.,
Project No. 062-44045-LD, as of December 31, 1996, and the related statements of
profit and loss, changes in partners' equity, and cash flows for the year then
ended. These financial statements are the responsibility of the project'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,
Government Auditing Standards issued by the Comptroller General of the United
States, and the Consolidated Audit Guide for Audits of HUD programs (the
"Guide") issued by the U.S. Department of Housing and Urban Development, Office
of Inspector General in July 1993. Those standards and the Guide 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 Bonnie Doone Apartments, Ltd.
as of December 31, 1996, and the results of its operations, changes in partners'
equity and cash flows for the year then ended in conformity with generally
accepted accounting principles.
In accordance with Government Auditing Standards and the Guide, we have also
issued a report dated January 20, 1997 on our consideration of Bonnie Doone
Apartments, Ltd.'s internal control structure and reports dated January 20, 1997
on its compliance with specific requirements applicable to the major HUD
program, specific requirements applicable to the non-major HUD program, specific
requirements applicable to Affirmative Fair Housing, and laws and regulations
applicable to the basic financial statements.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part of
the basic financial statements of Bonnie Doone Apartments, Ltd. Such information
has been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
Birmingham, Alabama Federal Employer
January 20, 1997 Identification Number
63-0986156
Audit Principal: E.O. Browder, Jr.
<PAGE>
[Letterhead of BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the Partners of
Bonnie Doone Apartments, Ltd.
Athens, Alabama
HUD Field Office Director
Birmingham, Alabama
We have audited the accompanying balance sheet of Bonnie Doone Apartments,
Ltd., Project No. 062-44045-LD, as of December 31, 1995, and the related
statements of income, changes in partners' equity, and cash flows for the year
then ended. These financial statements are the responsibility of the project'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, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide 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 Bonnie Doone Apartments,
Ltd. as of December 31, 1995, and the results of its operations, changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards and the Guide, we have
also issued a report dated January 22, 1996 on our consideration of Bonnie Doone
Apartments, Ltd.'s internal control structure and reports dated January 22, 1996
on its compliance with laws and regulations applicable to the basic financial
statements, the major HUD program, and the nonmajor HUD program.
Our audit was conducted for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying information included in
the report are presented for the purpose of additional analysis and are not a
required part of the basic financial statements of Bonnie Doone Apartments, Ltd.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated in
all material respects in relation to the financial statements taken as a whole.
[Signature of Browder & Associates, P.C.]
Birmingham, Alabama Federal Employer
January 22, 1996 Identification Number: 63-0986156
Audit Principal: E.O. Browder, Jr.
<PAGE>
[Letterhead of Blume Loveridge & Co., PLLC]
INDEPENDENT AUDITOR'S REPORT ON FINANCIAL STATEMENTS
Partners
Conifer 208
Tacoma, Washington
We have audited the accompanying balance sheets of Conifer 208 (a limited
partnership), sponsor of FHA Project No. 171-44038, as of December 31, 1997 and
1996, and the related statements of operations, changes in partners' equity and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform an audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Conifer 208, as of December 31,
1997 and 1996, and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information shown on pages
9 to 20 is presented for purposes of additional analysis for the year ended
December 31, 1997, and is not a required part of the basic financial statements.
Such additional information has been subjected to the auditing procedures
applied in the audit of the basic financial statements for that year, and, in
our opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report,
dated January 20, 1998, on our consideration of the Partnership's internal
controls and reports, dated January 20, 1998, on its compliance with laws and
regulations.
/s/ Blume Loveridge & Co., PLLC
Bellevue, Washington
January 20, 1998
<PAGE>
[RULJANCICH BLUME LOVERIDGE & CO. ,PLLC LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT ON FINANCIAL STATEMENTS
Partners
Conifer 208
Tacoma, Washington
We have audited the accompanying balance sheets of Conifer 208 (a limited
partnership), sponsor of FHA Project No. 171-44038, as of December 31, 1996 and
1995, and the related statements of operations, changes in partners' equity and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform an audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Conifer 208, as of December 31,
1996 and 1995, and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report,
dated January 24, 1997, on our consideration of the Partnership's internal
control structure and reports, dated January 24, 1997, on its compliance with
specific requirements applicable to HUD programs.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The additional information shown on pages 9 to 20
is presented for purposes of additional analysis for the year ended December 31,
1996 and is not a required part of the financial statements. Such additional
information has been subjected to the auditing procedures applied in the audit
of the financial statements for that year, and, in our opinion, is fairly stated
in all material respects in relation to the financial statements taken as a
whole.
/s/ Ruljancich, Blume, Loveridge & Co.
Bellevue, Washington
January 24, 1997
Page 1
11100 NE 8th Street, Suite 410 Bellevue, Washington 98004-4441 (206) 453-2088
Fax (206) 646-3368
<PAGE>
[Letterhead of Blume Loveridge & Co., PLLC]
INDEPENDENT AUDITOR'S REPORT ON FINANCIAL STATEMENTS
Partners
Conifer 307 Oreg. Ltd.
Tacoma, Washington
We have audited the accompanying balance sheets of Conifer 307 Oreg. Ltd. (a
limited partnership), sponsor of FHA Project No. 126-44038, as of December 31,
1997 and 1996, and the related statements of operations, changes in partners'
equity and cash flows for the years then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform an audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Conifer 307 Oreg. Ltd., as of
December 31, 1997 and 1996, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information shown on pages
10 to 21 is presented for purposes of additional analysis for the year ended
December 31, 1997, and is not a required part of the basic financial statements.
Such additional information has been subjected to the auditing procedures
applied in the audit of the basic financial statements for that year, and, in
our opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report,
dated January 29, 1998, on our consideration of the Partnership's internal
controls and reports, dated January 29, 1998, on its compliance with laws and
regulations.
/s/ Blume Loveridge & Co., PLLC
Bellevue, Washington
January 29, 1998
<PAGE>
[RULJANCICH BLUME LOVERIDGE & CO., PLLC LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT ON FINANCIAL STATEMENTS
Partners
Conifer 307 Oreg. Ltd.
Tacoma, Washington
We have audited the accompanying balance sheets of Conifer 307 Oreg. Ltd. (a
limited partnership), sponsor of FHA Project No. 126-44038, as of December 31,
1996 and 1995, and the related statements of operations, changes in partners'
equity and cash flows for the years then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform an audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Conifer 307 Oreg. Ltd., as of
December 31, 1996 and 1995, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have also issued a report,
dated January 31, 1997, on our consideration of the Partnership's internal
control structure and reports, dated January 31, 1997, on its compliance with
specific requirements applicable to HUD programs.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The additional information shown on pages 9 to 20
is presented for purposes of additional analysis for the year ended December 31,
1996, and is not a required part of the financial statements. Such additional
information has been subjected to the auditing procedures applied in the audit
of the financial statements for that year, and, in our opinion, is fairly stated
in all material respects in relation to the financial statements taken as a
whole.
/s/ Ruljancich, Blume, Loveridge & Co.
Bellevue, Washington
January 31, 1997
Page 1
11100 NE 8th Street, Suite 410 Bellevue, Washington 98004-4441 (206) 453-2088
Fax (206) 646-3368
<PAGE>
[Letterhead of Blume Loveridge & Co., PLLC]
INDEPENDENT AUDITOR'S REPORT ON FINANCIAL STATEMENTS
Partners
Conifer 317, an Oregon Limited Partnership
Tacoma, Washington
We have audited the accompanying balance sheets of Conifer 317, an Oregon
Limited Partnership, sponsor of FHA Project No. 126-44134, as of December 31,
1997 and 1996, and the related statements of income, changes in partners' equity
and cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform an audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Conifer 317, an Oregon Limited
Partnership, as of December 31, 1997 and 1996, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information shown on pages
9 to 20 is presented for purposes of additional analysis for the year ended
December 31, 1997 and is not a required part of the basic financial statements.
Such additional information has been subjected to the auditing procedures
applied in the audit of the basic financial statements for that year, and, in
our opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report,
dated February 3, 1998, on our consideration of the Partnership's internal
controls and reports, dated February 3, 1998, on its compliance with laws and
regulations.
/s/ Blume Loveridge & Co., PLLC
Bellevue, Washington
February 3, 1998
<PAGE>
[RULJANCICH BLUME LOVERIDGE & CO., PLLC LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT ON FINANCIAL STATEMENTS
Partners
Conifer 317, an Oregon Limited Partnership
Tacoma, Washington
We have audited the accompanying balance sheets of Conifer 317, an Oregon
Limited Partnership, sponsor of FHA Project No. 126-44134, as of December 31,
1996 and 1995, and the related statements of income, changes in partners' equity
and cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform an audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Conifer 317, an Oregon Limited
Partnership, as of December 31, 1996 and 1995, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report,
dated January 27, 1997, on our consideration of the Partnership's internal
control structure and reports, dated January 27, 1997, on its compliance with
specific requirements applicable to HUD programs.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The additional information shown on pages 9 to 20
is presented for purposes of additional analysis for the year ended December 31,
1996 and is not a required part of the financial statements. Such additional
information has been subjected to the auditing procedures applied in the audit
of the financial statements for that year, and, in our opinion, is fairly stated
in all material respects in relation to the financial statements taken as a
whole.
/s/ Ruljancich, Blume, Loveridge & Co.
Bellevue, Washington
January 27, 1997
Page 1
11100 NE 8th Street, Suite 410 Bellevue, Washington 98004-4441 (206) 453-2088
Fax (206) 646-3368
<PAGE>
[DICKEY & WOLF, LLC LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
BiCentennial Associates, Ltd.
Houston, TX
We have audited the accompanying balance sheet of BICENTENNIAL ASSOCIATES, LTD.
(a Texas Limited Partnership) as of December 31, 1996, and the related
statements of operations, changes in partners' equity/(deficit) and cash flows
for the year then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
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 BICENTENNIAL ASSOCIATES, LTD.
as of December 31, 1996, and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.
/s/ DICKEY & WOLF, LLC
DICKEY & WOLF, LLC
Certified Public Accountants
Harrisonville, MO
January 27, 1997
MEMBERS AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
1
<PAGE>
[Letterhead of Dickey & Wolf, LLC)
INDEPENDENT AUDITORS' REPORT
To the Partners
BiCentennial Associates, Ltd.
Houston, TX
We have audited the accompanying balance sheet of BICENTENNIAL ASSOCIATES,
LTD. (a Texas Limited Partnership) as of December 31, 1995, and the related
statements of operations, changes in partners' equity (deficit) and cash flows
for the year then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. 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 BICENTENNIAL ASSOCIATES,
LTD. as of December 31, 1995, and the results of its operations and its cash
flows for the year then ended in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As shown in the financial
statements, the Partnership incurred a net loss of ($5,179,731) during the year
ended December 31, 1995, and at that date was in default on a wraparound
purchase note payable (Note 3). These conditions raise substantial doubt about
the Partnership's ability to continue as a going concern.
The ability of the Partnership to continue depends upon its ability to
obtain additional or restructured financing and ultimately to attain a level of
operating profit sufficient to enable it to meets its obligations. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
[Signature of Dickey & Wolf]
DICKEY & WOLF, LLC
Certified Public Accountants
Harrisonville, MO
January 26, 1996
<PAGE>
[Letterhead of Deloitte & Touche LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners
Bellfort Associates, Ltd.
We have audited the accompanying balance sheets of Bellfort Associates, Ltd.
(the "Partnership"), a Texas limited partnership, as of December 31, 1997 and
1996, and the related statements of operations, partners' 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 conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Bellfort Associates, Ltd. 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.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 4 to the
financial statements, the Partnership's operations have not generated and are
not expected to generate sufficient cash flows to service its existing debt
structure, and the Partnership's purchase note payable is due November 1, 1998.
These matters raise substantial doubt about its ability to continue as a going
concern. The Partnership's plans concerning these matters are also described in
Note 4. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/s/ Deloitte & Touche LLP
February 16, 1998
Houston, Texas
<PAGE>
[DELOITTE & TOUCHE LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Bellfort Associates, Ltd
Houston, Texas
We have audited the accompanying balance sheets of Bellfort Associates, Ltd.
(the "Partnership"), a Texas limited partnership, as of December 31, 1996 and
1995, and the related statements of operations, partners' deficiency, and cash
flows for each of the three years in the period ended December 31,1996. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Bellfort Associates, Ltd. as of December 31,
1996 and 1995, and the results of its operations and its cash flows for each of
the three years in the period ended December 31, 1996 in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 4 to the
financial statements, the Partnership's operations have not generated and are
not expected to generate sufficient cash flows to service its existing debt
structure, and the Partnership's purchase note payable is due November 1, 1997.
These matters raise substantial doubt about its ability to continue as a going
concern. The Partnership's plans concerning these matters are also described in
Note 4. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/s/ Deloitte & Touche LLP
Houston, Texas
February 17, 1997
Deloitte Touche
Tohmatsu
International
-1-
<PAGE>
[Letterhead of WILLIAMS BENATOR & LIBBY, LLP]
INDEPENDENT AUDITORS' REPORT
Partners
Cloisters Associates, Ltd.
Atlanta, Georgia
We have audited the balance sheets of Cloisters Associates, Ltd. as of December
31, 1997 and 1996, and the related statements of operations, changes in
partners' capital (deficit), 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 conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Cloisters Associates, Ltd. at
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.
/s/ Williams Benator & Libby, LLP
Atlanta, Georgia
January 27, 1998
<PAGE>
[WILLIAMS BENATOR & LIBBY, LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
Partners
Cloisters Associates, Ltd.
Atlanta, Georgia
We have audited the balance sheets of Cloisters Associates, Ltd. as of December
31, 1996 and 1995, and the related statements of operations, changes in
partners' capital (deficit), and cash flows for each of the three years in the
period ended December 31, 1996. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Cloisters Associates, Ltd. at
December 31, 1996 and 1995, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1996 in conformity
with generally accepted accounting principles.
/s/ WILLIAMS BENATOR & LIBBY, LLP
Atlanta, Georgia
January 28, 1997
-1-
<PAGE>
[Letterhead of WILLIAMS BENATOR & LIBBY, LLP]
INDEPENDENT AUDITORS' REPORT
Partners
Cabarrus Arms Associates
Atlanta, Georgia
We have audited the balance sheets of Cabarrus Arms Associates as of December
31, 1997 and 1996, and the related statements of operations, changes in
partners' capital (deficit), 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 conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Cabarrus Arms Associates at
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.
/s/ Williams Benator & Libby, LLP
Atlanta, Georgia
January 29, 1998
<PAGE>
[WILLIAMS BENATOR & LIBBY, LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
Partners
Cabarrus Arms Associates
Atlanta, Georgia
We have audited the balance sheets of Cabarrus Arms Associates as of December
31, 1996 and 1995, and the related statements of operations, changes in
partners' capital (deficit), and cash flows for each of the three years in the
period ended December 31, 1996. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Cabarrus Arms Associates at
December 31, 1996 and 1995, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1996 in conformity
with generally accepted accounting principles.
/s/ WILLIAMS BENATOR & LIBBY, LLP
Atlanta, Georgia
February 5, 1997
-1-
<PAGE>
[Letterhead of Mauldin & Jenkins]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Summer Arms Apartments, Ltd.
Sumter, South Carolina
We have audited the accompanying balance sheets of Summer Arms
Apartments, Ltd. (a limited partnership) as of December 31, 1997, 1996 and 1995,
and the related statements of operations, changes in partners' equity and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of Summer Arms
Apartments, Ltd. (a limited partnership) 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.
/s/ Mauldin & Jenkins, LLC
Atlanta, Georgia
January 20, 1998
<PAGE>
[Letterhead of Mauldin & Jenkins]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Lexington Village Company
Conyers, Georgia
We have audited the accompanying balance sheets of Lexington
Village Company (a limited partnership) as of December 31, 1997, 1996 and 1995,
and the related statements of operations, changes in partners' equity and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of Lexington
Village Company (a limited partnership) 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.
/s/ Mauldin & Jenkins, LLC
Atlanta, Georgia
January 26, 1998
<PAGE>
[Letterhead of Mauldin & Jenkins]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Ware Manor Associates
Waycross, Georgia
We have audited the accompanying balance sheets of Ware Manor
Associates (a limited partnership) as of December 31, 1997, 1996 and 1995 and
the related statements of operations, changes in partners' equity and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of Ware Manor
Associates (a limited partnership) 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.
/s/ Mauldin & Jenkins, LLC
Atlanta, Georgia
January 26, 1998
<PAGE>
[Letterhead of WILLIAMS BENATOR & LIBBY, LLP]
INDEPENDENT AUDITORS' REPORT
Partners
Nottingham Woods Apartments Limited
Atlanta, Georgia
We have audited the balance sheets of Nottingham Woods Apartments Limited as of
December 31, 1997 and 1996, and the related statements of operations, changes in
partners' capital (deficit), 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 conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Nottingham Woods Apartments
Limited at 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.
/s/ Williams Benator & Libby, LLP
Atlanta, Georgia
January 29, 1998
<PAGE>
[WILLIAMS BENATOR & LIBBY, LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
Partners
Nottingham Woods Apartments Limited
Atlanta, Georgia
We have audited the balance sheets of Nottingham Woods Apartments Limited as of
December 31, 1996 and 1995, and the related statements of operations, changes
in partners' capital (deficit), and cash flows for each of the three years in
the period ended December 31, 1996. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Nottingham Woods Apartments
Limited at December 31, 1996 and 1995, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1996 in
conformity with generally accepted accounting principles.
/s/ WILLIAMS BENATOR & LIBBY, LLP
Atlanta, Georgia
January 28, 1997
-1-
<PAGE>
[Letterhead of WILLIAMS BENATOR & LIBBY, LLP]
INDEPENDENT AUDITORS' REPORT
Partners
Hathaway Court Associates
Atlanta, Georgia
We have audited the balance sheets of Hathaway Court Associates as of December
31, 1997 and 1996, and the related statements of operations, changes in
partners' capital (deficit), 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 conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Hathaway Court Associates at
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.
/s/ Williams Benator & Libby, LLP
Atlanta, Georgia
January 30, 1998
<PAGE>
[WILLIAMS BENATOR & LIBBY, LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
Partners
Hathaway Court Associates
Atlanta, Georgia
We have audited the balance sheets of Hathaway Court Associates as of December
31, 1996 and 1995, and the related statements of operations, changes in
partners' capital (deficit), and cash flows for each of the three years in the
period ended December 31, 1996. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Hathaway Court Associates at
December 31, 1996 and 1995, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1996 in conformity
with generally accepted accounting principles.
/s/ WILLIAMS BENATOR & LIBBY, LLP
Atlanta, Georgia
February 3, 1997
-1-
<PAGE>
[Letterhead of Mauldin & Jenkins]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Tall Pines Associates
LaGrange, Georgia
We have audited the accompanying balance sheets of Tall Pines
Associates (a limited partnership) as of December 31, 1997, 1996 and 1995, and
the related statements of operations, changes in partners' equity and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of Tall Pines
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.
/s/ Mauldin & Jenkins, LLC
Atlanta, Georgia
January 21, 1998
<PAGE>
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Shelton Beach Apartments, Ltd.
We have audited the accompanying balance sheets of Shelton Beach
Apartments, Ltd. as of December 31, 1997 and 1996, and the related statements of
revenue and expenses, partners' capital and cash flows for the years then ended.
These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Shelton Beach
Apartments, Ltd. as of December 31, 1997 and 1996, and the results of its
operations, the changes in partners' capital and cash flows for the years then
ended, in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 12
through 14 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland
January 13, 1998
<PAGE>
[REZNICK FEDDER & SILVERMAN LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Shelton Beach Apartments. Ltd.
We have audited the accompanying balance sheets of Shelton Beach
Apartments, Ltd. as of December 31, 1996 and 1995, and the related statements of
revenue and expenses, partners' capital and cash flows for the years then ended.
These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Shelton Beach Apartments,
Ltd. as of December 31, 1996 and 1995, and the results of its operations, the
changes in partners' capital and cash flows for the years then ended, in
conformity with generally accepted accounting principles.
-1-
<PAGE>
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 13
through 15 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland
January 10, 1997
-2-
<PAGE>
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Northpointe II, Ltd.
We have audited the accompanying balance sheets of Northpointe II, Ltd.
as of December 31, 1997 and 1996, and the related statements of revenue and
expenses, partners' capital and cash flows for the years then ended. These
financial statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Northpointe II, Ltd.
as of December 31, 1997 and 1996, and the results of its operations, the changes
in partners' capital and cash flows for the years then ended, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 12
through 14 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland
January 13, 1998
<PAGE>
[REZNICK FEDDER & SILVERMAN LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Northpointe II, Ltd.
We have audited the accompanying balance sheets of Northpointe II, Ltd. as
of December 31, 1996 and 1995, and the related statements of revenue and
expenses, partners' capital and cash flows for the years then ended. These
financial statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Northpointe II, Ltd. as of
December 31, 1996 and 1995, and the results of its operations, the changes in
partners' capital and cash flows for the years then ended, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 12
through 14 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland
January 10, 1997
<PAGE>
[Letterhead of KPMG Peat Marwick LLP]
Independent Auditors' Report
The Partners
Caroline Forest Apartments:
We have audited the accompanying balance sheets of Caroline Forest Apartments (a
Virginia Limited Partnership) as of December 31, 1997 and 1996, and the related
statements of operations, changes in partners' equity and cash flows for each of
the years in the three-year 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 conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Caroline Forest Apartments (a
Virginia Limited Partnership) as of December 31, 1997 and 1996, and the results
of its operations and its cash flows for each of the years in the three-year
period ended December 31, 1997 in conformity with generally accepted accounting
principles.
/s/ KPMG Peat Marwick LLP
Roanoke, Virginia
February 2, 1998
<PAGE>
[Letterhead of KPMG Peat Marwick LLP]
Independent Auditors' Report
The Partners
Caroline Forest Apartments:
We have audited the accompanying balance sheet of Caroline Forest Apartments (A
Virginia Limited Partnership) as of December 31, 1995, and the related
statements of operations, changes in partners' equity and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
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 Caroline Forest Apartments (A
Virginia Limited Partnership) as of December 31, 1995, and the results of its
operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
February 9, 1996
<PAGE>
Report of Independent Public Accountant
To the Partners of
Park of Pecan I, Ltd.:
I have audited the accompanying balance sheet of PARK OF PECAN I, LTD., (a
Texas limited partnership) as of December 31, 1997, and the related statements
of loss and partners' deficit and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I 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.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Park of Pecan I, Ltd. as of
December 31, 1997, and the results of its operations and cash flows for the year
then ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 1 to the
financial statements, the Partnership has suffered recurring losses from
operations resulting in a net capital deficiency. The Partnership's financial
position and operating results raise substantial doubt about its ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Randal B. McDonald Jr., CPA
March 2, 1998,
Houston, Texas.
<PAGE>
Report of Independent Public Accountant
To the Partners of
Park of Pecan I, Ltd.:
I have audited the accompanying balance sheet of PARK OF PECAN I, LTD., (a Texas
limited partnership) as of December 31, 1996, and the related statements of
loss and partners' deficit and cash flows for the year then ended. These
financial statements ate the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I 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.
I believe that my audit provides a seasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Park of Pecan I, Ltd. as of
December 31, l996, and the results of its operations and cash flows for the year
then ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 1 to the
financial statements, the Partnership has suffered recurring losses from
operations resulting in a net capital deficiency. The Partnership's financial
position and operating results raise substantial doubt about its ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Randal B. McDonald Jr., CPA
March 10, 1997,
Houston, Texas
<PAGE>
Report of Independent Public Accountant
To the Partners of
Park of Pecan I, Ltd.:
I have audited the accompanying balance sheet of PARK OF PECAN I, LTD., (a Texas
limited partnership) as of December 31, 1995, and the related statements of loss
and partners' deficit and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I 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.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Park of Pecan I, Ltd. as of
December 31, 1995, and the results of its operations and cash flows for the year
then ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 1 to the
financial statements, the Partnership has suffered recurring losses from
operations resulting in a net capital deficiency. The Partnership's financial
position and operating results raise substantial doubt about its ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
[Signature of Randal B. McDonald Jr., CPA]
March 15, 1996,
Houston, Texas.
<PAGE>
Report of Independent Public Accountant
To the Partners of
Park of Pecan II, Ltd.:
I have audited the accompanying balance sheet of PARK OF PECAN II, LTD., (a
Texas limited partnership) as of December 31, 1997, and the related statements
of loss and partners' deficit and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I 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.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Park of Pecan II, Ltd. as of
December 31, 1997, and the results of its operations and cash flows for the year
then ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 1 to the
financial statements, the Partnership has suffered recurring losses from
operations resulting in a net capital deficiency. The Partnership's financial
position and operating results raise substantial doubt about its ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Randal B. McDonald Jr., CPA
March 2, 1998,
Houston, Texas.
<PAGE>
Report of Independent Public Accountant
To the Partners of
Park of Pecan II, Ltd.:
I have audited the accompanying balance sheet of PARK OF PECAN, LTD., (a Texas
limited partnership) as of December 31, 1996, and the related statements of loss
and partners' deficit and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards I require that I 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. I believe that my audit provides a reasonable basis
for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Park of Pecan II, Ltd. as of
December 31, 1996, and the results of its operations and cash flows for the year
then ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 1 to the
financial statements, the Partnership has suffered recurring losses from
operations resulting in a net capital deficiency, The Partnership's financial
position and operating results raise substantial doubt about its ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Randal B. McDonald Jr., CPA
March 10, 1997,
Houston, Texas
<PAGE>
Report of Independent Public Accountant
To the Partners of
Park of Pecan II, Ltd.:
I have audited the accompanying balance sheet of PARK OF PECAN II, LTD., (a
Texas limited partnership) as of December 31, 1995, and the related statements
of loss and partners' deficit and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I 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.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Park of Pecan II, Ltd. as of
December 31, 1995, and the results of its operations and cash flows for the year
then ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 1 to the
financial statements, the Partnership has suffered recurring losses from
operations resulting in a net capital deficiency. The Partnership's financial
position and operating results raise substantial doubt about its ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
[Signature of Randal B. McDonald Jr., CPA]
March 15, 1996,
Houston, Texas.
<PAGE>
[Letterhead of Nessel, Smith, Leff & Borsen, PLLC]
INDEPENDENT AUDITORS' REPORT
To the Partners
Villa Apollo Associates Limited Partnership
28777 Northwestern Highway, Suite 100
Southfield, MI 48034
We have audited the accompanying Comparative Balance Sheet of Villa Apollo
Associates Limited Partnership (a limited partnership) as of December 31, 1997
and 1996 and the related Comparative Statements of Revenue and Expense,
Partners' Deficiency and, Cash Flows and, Supplemental Schedules on Page 9-11
for the years then ended. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audit 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 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 Villa Apollo Associates Limited
Partnership as of December 31, 1997 and 1996 and the results of its operations
and its cash flows for the years then ended, in conformity with generally
accepted accounting principles. The supporting data included in this report have
been subjected to the same auditing procedures applied in the examination of the
basic financial statements and, in our opinion, are presented fairly in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ Nessel, Smith, Leff & Borsen, PLLC
NESSEL, SMITH, LEFF & BORSEN, PLLC
Certified Public Accountants
Farmington Hills, MI
January 29, 1998
<PAGE>
[WEINTRAUB, NESSEL & SMITH, PLLC LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Villa Apollo Associates Limited Partnership
28777 Northwestern Highway, Suite 100
Southfield, MI 48034
We have audited the accompanying Comparative Balance Sheet of Villa Apollo
Associates Limited Partnership (a limited partnership) as of December 31, 1996
and 1995 and the related Comparative Statements of Revenue and Expense,
Partners' Deficiency and, Cash Flows and, Supplemental Schedules on Page 9-11
for the years then ended. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audit 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 I
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 Villa Apollo Associates
Limited Partnership as of December 31, 1996 and 1995 and the results of its
operations and its cash flows for the years then ended, in conformity with
generally accepted accounting principles. The supporting data included in this
report have been subjected to the same auditing procedures applied in the
examination of the basic financial statements and, in our opinion, are presented
fairly in all material respects in relation to the basic financial statements
taken as a whole.
/s/ WEINTRAUB, NESSEL & SMITH, PLLC
WEINTRAUB, NESSEL & SMITH, PLLC
Certified Public Accountants
Farmington Hills, MI
January 29, 1997
<PAGE>
[Letterhead of Nessel, Smith, Leff & Borsen, PLLC]
INDEPENDENT AUDITORS' REPORT
To the Partners
Carlton Terrace Apartments Limited Partnership
28777 Northwestern Highway, Suite 100
Southfield, MI 48034
We have audited the accompanying Comparative Balance Sheet of Carlton Terrace
Apartments Limited Partnership (a limited partnership) as of December 31, 1997
and 1996 and the related Comparative Statements of Revenue and Expense,
Partners' Deficiency, and Cash Flows and, the supplemental information on Pages
9-11 for the years then ended. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audit 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 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 Carlton Terrace Apartments Limited
Partnership as of December 31, 1997 and 1996 and the results of its operations
and its cash flows for the years then ended, in conformity with generally
accepted accounting principles. The supporting data included in this report have
been subjected to the same auditing procedures applied in the examination of the
basic financial statements and, in our opinion, are presented fairly in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ Nessel, Smith, Leff & Borsen, PLLC
NESSEL, SMITH, LEFF & BORSEN, PLLC
Certified Public Accountants
Farmington Hills, MI
January 27, 1998
<PAGE>
[WEINTRAUB, NESSEL & SMITH, PLLC LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Carlton Terrace Apartments Limited Partnership
28777 Northwestern Highway, Suite 100
Southfield, MI 48034
We have audited the accompanying Comparative Balance Sheet of Carlton
Terrace Apartments Limited Partnership (a limited partnership) as of December
31, 1996 and 1995 and the related Comparative Statements of Revenue and Expense,
Partners' Deficiency, and Cash Flows and, the supplemental information on Pages
9-11 for the years then ended. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audit 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 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 Carlton Terrace Apartments
Limited Partnership as of December 31, 1996 and 1995 and the results of its
operations and its cash flows for the years then ended, in conformity with
generally accepted accounting principles. The supporting data included in this
report have been subjected to the same auditing procedures applied in the
examination of the basic financial statements and, in our opinion, are presented
fairly in all material respects in relation to the basic financial statements
taken as a whole.
/s/ WEINTRAUB, NESSEL & SMITH, PLLC
WEINTRAUB, NESSEL & SMITH, PLLC
Certified Public Accountants
Farmington Hill, MI
January 23, 1997
<PAGE>
Independent Auditor's Report
To the Partners
Cranbrook Manor Apartments Limited Partnership
We have audited the accompanying balance sheet of HUD Project No.
047-44002-LDP-SUP, Cranbrook Manor Apartments Limited Partnership (a Michigan
limited partnership), as of December 31, 1997, and the related statements of
profit and loss, changes in partners' deficit and cash flows for the year then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Cranbrook Manor Apartments
Limited Partnership as of December 31, 1997, and the results of its operations,
changes in partners' deficit and cash flows for the year then ended, in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the
Partnership will continue as a going concern. As discussed in Note 1 to the
financial statements, the Partnership is experiencing difficulty in generating
sufficient cash flow to meet its obligations and sustain its operations, which
raises substantial doubt about the Partnership's ability to continue as a going
concern. Management's plan in regard to these matters is also described in Note
1. The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
In accordance with Government Auditing Standards, we have also issued a report
dated January 23, 1998 on our consideration of the Partnership's internal
controls and a report dated January 23, 1998 on its compliance with laws and
regulations.
/s/ Plante & Moran, LLP
January 23, 1998
Bloomfield Hills, Michigan
By: Linda P. Hubbard
----------------------------
Engagement Partner
Federal ID Number: 38-1357951
Phone Number: (248) 644-0300
<PAGE>
[DELOITTE & TOUCHE LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Cranbrook Manor Apartments Limited Partnership
Farmington Hills, Michigan
We have audited the accompanying balance sheet of Cranbrook Manor Apartments
Limited Partnership (a Michigan Limited Partnership) Project No.
047-44002-LDP-SUP, as of December 31, 1996, and the related statements of profit
and loss, changes in partners' deficit and cash flows for the year then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Cranbrook Manor Apartments Limited
Partnership Project No. 047-44002-LDP-SUP as of December 31, 1996, and the
results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 2 to the
financial statements, the Partnership is experiencing difficulty in generating
sufficient cash flow to meet its obligations and sustain its operations, which
raises substantial doubt about the Partnership's ability to continue as a going
concern. Management's plan in regard to these matters is also described in Note
2. The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information of Cranbrook
Manor Apartments Limited Partnership Project No. 047-44002-LDP-SUP on pages 12-
19 is presented for the purpose of additional analysis and is not a required
part of the basic financial statements. This additional information is the
responsibility of the Partnership's management. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects when
considered in relation to the basic financial statements taken as a whole.
Deloitte Touche
Tomatsu
International
<PAGE>
In accordance with Government Auditing Standards, we have also issued a report
dated February 5, 1997 on our consideration of the Partnership's internal
control structure and a report dated February 5, 1997, on its compliance with
laws and regulations.
/s/ Deloitte & Touche LLP
Detroit, Michigan
February 5, 1997
Audit Partner: Richard D. DiBartolomeo
Telephone No.: (313) 396-3670
Federal Tax Employer Identification Number: 13-5133500
<PAGE>
[Letterhead of DELOITTE & TOUCHE LLP - DETROIT, MICHIGAN]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Cranbrook Manor Apartments Limited Partnership
Farmington Hills, Michigan
We have audited the accompanying balance sheet of Cranbrook Manor Apartments
Limited Partnership (a Michigan Limited Partnership) Project No.
047-44002-LDP-SUP, as of December 31, 1995, and the related statements of profit
and loss, changes in partners' deficit and cash flows for the year then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Cranbrook Manor Apartments Limited
Partnership Project No. 047-44002-LDP-SUP as of December 31, 1995, and the
results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 2 to the
financial statements, the Partnership is experiencing difficulty in generating
sufficient cash flow to meet its obligations and sustain its operations, which
raises substantial doubt about the Partnership's ability to continue as a going
concern. Management's plan in regard to these matters is also described in Note
2. The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information of Cranbrook
Manor Apartments Limited Partnership Project No. 047-44002-LDP-SUP on pages
12-18 is presented for the purpose of additional analysis and is not a required
part of the basic financial statements. This additional information is the
responsibility of the Partnership's management. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects when
considered in relation to the basic financial statements taken as a whole.
<PAGE>
In accordance with Government Auditing Standards, we have also issued a report
dated February 8, 1996, on our consideration of the Partnership's internal
control structure and a report dated February 8, 1996, on its compliance with
laws and regulations.
[Signature of Deloitte & Touche, LLP]
February 8, 1996
Audit Partner: Richard D. DiBartolomeo
Telephone No.: (313) 396-3670
Federal Tax Employer Identification Number: 13-5133500
-2-
<PAGE>
Independent Auditor's Report
To the Partners
Oakbrook Villa Apartments Limited Partnership
We have audited the accompanying balance sheet of HUD Project No. 044-44001-LDP,
Oakbrook Villa Apartments Limited Partnership (a Michigan limited partnership),
as of December 31, 1997 and the related statements of profit and loss, changes
in partners' deficit and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Oakbrook Villa Apartments
Limited Partnership as of December 31, 1997, and the results of its operations,
changes in partners' deficit and cash flows for the year then ended, in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated January 23, 1998 on our consideration of the Partnership's internal
controls and a report dated January 23, 1998 on its compliance with laws and
regulations.
/s/ Plante & Moran, LLP
January 23, 1998
Bloomfield Hills, Michigan
By: Linda P. Hubbard
----------------------------
Engagement Partner
Federal ID Number: 38-1357951
Phone Number: (248) 644-0300
<PAGE>
[DELOITTE & TOUCHE LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Oakbrook Villa Apartments Limited Partnership
Farmington Hills, Michigan
We have audited the accompanying balance sheet of Oakbrook Villa Apartments
Limited Partnership (a Michigan Limited Partnership) Project No. 044-44001-LDP
as of December 31, 1996, and the related statements of profit and loss, changes
in partners' deficit, and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Oakbrook Villa Apartments Limited
Partnership Project No. 044-44001 -LDP as of December 31, 1996, and the results
of its operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information of Oakbrook
Villa Apartments Limited Partnership (Project No. 044-44001 -LDP) on pages 11 -
16, is presented for the purpose of additional analysis and is not a required
part of the basic financial statements. This additional information is the
responsibility of the Partnership's management. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects when
considered in relation to the basic financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report
dated February 4, 1997, on our consideration of the Partnership's internal
control structure and a report dated February 4, 1997, on its compliance with
laws and regulations.
/s/ Deloitte Touche LLP
Detroit, Michigan
February 5, 1997
Audit Partner: Richard D. DiBartolomeo
Telephone No.: (313) 396-3670
Federal Tax Employer Identification Number: 13-5133500
Deloitte Touche
Tohmatsu
International
<PAGE>
[Letterhead of DELOITTE & TOUCHE LLP - DETROIT, MICHIGAN]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Oakbrook Villa Apartments Limited Partnership
Farmington Hills, Michigan
We have audited the accompanying balance sheet of Oakbrook Villa Apartments
Limited Partnership (a Michigan Limited Partnership) Project No. 044-44001-LDP
as of December 31, 1995, and the related statements of profit and loss, changes
in partners' deficit, and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Oakbrook Villa Apartments Limited
Partnership Project No. 044-44001-LDP as of December 31, 1995, and the results
of its operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information of Oakbrook
Villa Apartments (Project No. 044-44001-LDP) on pages 11-16, is presented for
the purpose of additional analysis and is not a required part of the basic
financial statements. This additional information is the responsibility of the
Partnership's management. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects when considered in relation
to the basic financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a
report dated February 21, 1996, on our consideration of Oakbrook Villa's
internal control structure and a report dated February 21, 1996, on its
compliance with laws and regulations.
[Signature of Deloitte & Touche, LLP]
February 21, 1996
Audit Partner: Richard D. DiBartolomeo
Telephone No.: (313) 396-3670
Federal Tax Employer Identification Number: 13-5133500
<PAGE>
[Letterhead of Bordman & Winnick]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Pebble Creek LDHA
We have audited the accompanying balance sheet of MSHDA Development No. 277 of
Pebble Creek LDHA (A Michigan Limited Partnership) as of December 31, 1997, and
the related statements of Profit and loss, and changes in accumulated earnings
for the year then ended. We have also audited the statements of cash flows for
the years ended December 31, 1996 and 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 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 above present fairly, in all material
respects, the financial position of MSHDA Development No. 277, Pebble Creek
LDHA, as of December 31, 1997, and the results of its operations and the changes
in cumulative income and its cash flows for the year then ended in conformity
with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information of Pebble
Creek LDHA, MSHDA NO. 277 on pages 8 to 15 is presented for the purposes of
additional analysis and is not a required part of the basic financial
statements. This additional information is the responsibility of the
partnership's management. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report
dated January 27, 1998 on our consideration of the partnership's internal
control structure and a report dated January 27, 1998 on its compliance with
laws and regulations.
/s/ Bordman & Winnick
West Bloomfield, MI BORDMAN & WINNICK
January 27, 1998 Certified Public Accountants
<PAGE>
[BORDMAN & WINNICK LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Pebble Creek LDHA
We have audited the accompanying balance sheet of MSHDA Development No. 277 of
Pebble Creek LDHA (A Michigan Limited Partnership) as of December 31, 1996, and
the related statements of Profit and loss, and changes in accumulated earnings
for the year then ended. We have also audited the statements of cash flows for
the years ended December 31, 1995 and 1996. 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 above present fairly, in all material
respects, the financial position of MSHDA Development No. 277, Pebble Creek
LDHA, as of December 31, 1996, and the results of its operations and the changes
in cumulative income and its cash flows for the year then ended in conformity
with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information of Pebble
Creek LDHA, MSHDA NO. 277 on pages 8 to 15 is presented for the purposes of
additional analysis and is not a required part of the basic financial
statements. This additional information is the responsibility of the
partnership's management. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report
dated January 27, 1997 on our consideration of the partnership's internal
control structure and a report dated January 27, 1997 on its compliance with
laws and regulations.
West Bloomfield, MI /s/ BORDMAN & WINNICK
January 27, 1997 Certified Public Accountants
<PAGE>
[Letterhead of BORDMAN & WINNICK]
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Pebble Creek LDHA
We have audited the accompanying balance sheet of MSHDA Development No. 277 of
Pebble Creek LDHA (A Limited Partnership) as of December 31, 1995, and the
related statements of operations and changes in partner's equity for the year
then ended. We have also audited the statements of cash flows for the years
ended December 31, 1994 and 1995. These financial statements are the
responsibility of the Development'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 MSHDA Development No. 277,
Pebble Creek LDHA, as of December 31, 1995, and the results of its operations
and the changes in partners' equity and cash flows for the year then ended in
conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental data included in the report (shown
on pages 9 to 15) is presented for the purposes of additional analysis and are
not a required part of the financial statements of MSHDA Development No. 277.
Such information has been subject to the auditing procedures applied in the
audit of financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.
[Signature of Bordman & Winnick]
West Bloomfield, MI BORDMAN & WINNICK
January 31, 1996 Certified Public Accountants
<PAGE>
[Letterhead of Nessel, Smith, Leff & Borsen, PLLC]
INDEPENDENT AUDITORS' REPORT
To the Partners
VILLA APOLLO #2 LIMITED PARTNERSHIP
28777 Northwestern Highway, Suite 100
Southfield, MI 48034
We have audited the accompanying Comparative Balance Sheet of VILLA APOLLO #2
LIMITED PARTNERSHIP (a limited partnership) as of December 31, 1997 and 1996 and
the related Comparative Statements of Revenue and Expense, Partners' Deficiency,
and Cash Flows, and Supplemental Schedules on Pages 9-11 for the years then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audit 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 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 Villa Apollo #2 Limited Partnership
as of December 31, 1997 and 1996 and the results of its operations and its cash
flows for the years then ended, in conformity with generally accepted accounting
principles. The supporting data included in this report have been subjected to
the same auditing procedures applied in the examination of the basic financial
statements and, in our opinion, are presented fairly in all material respects in
relation to the basic financial statements taken as a whole.
/s/ Nessel, Smith, Leff & Borsen, PLLC
NESSEL, SMITH, LEFF & BORSEN, PLLC
Certified Public Accountants
Farmington Hills, MI
January 30, 1998
<PAGE>
[WEINTRAUB, NESSEL & SMITH, PLLC LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
VILLA APOLLO #2 LIMITED PARTNERSHIP
28777 Northwestern Highway, Suite 100
Southfield, MI 48034
We have audited the accompanying Comparative Balance Sheet of VILLA APOLLO #2
LIMITED PARTNERSHIP (a limited partnership) as of December 31, 1996 and 1995 and
the related Comparative Statements of Revenue and Expense, Partners' Deficiency,
and Cash Flows, and Supplemental Schedules on Pages 9-11 for the years then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audit 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 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 Villa Apollo #2 Limited Partnership
as of December 31, 1996 and 1995 and the results of its operations and its cash
flows for the years then ended, in conformity with generally accepted accounting
principles. The supporting data included in this report have been subjected to
the same auditing procedures applied in the examination of the basic financial
statements and, in our opinion, are presented fairly in all material respects in
relation to the basic financial statements taken as a whole.
/s/ WEINTRAUB, NESSEL & SMITH, PLLC
WEINTRAUB, NESSEL & SMITH, PLLC
Certified Public Accountants
Farmington Hills, MI
January 29, 1997
<PAGE>
[Letterhead of JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Greenwood Manor, Ltd.:
We have audited the accompanying financial statements of Greenwood Manor, Ltd.
(Project Number 082-44070 LD/SUP) (a limited partnership hereinafter referred to
as the "Partnership") as of December 31, 1997, and for the year then ended,
listed in the foregoing table of contents. These financial statements are the
responsibility of the General Partner. 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 the General Partner, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership as of December 31, 1997, and
the results of its operations, changes in partners' equity, and cash flows for
the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 13, 1998, on our
consideration of Greenwood Manor Ltd.'s internal control and reports dated
January 13, 1998, on its compliance with specific requirements applicable to
major HUD programs, specific requirements applicable to nonmajor HUD
transactions, and specific requirements applicable to fair housing and
non-discrimination.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of the
Partnership on pages 11-14 are presented for the purpose of additional analysis
and are not a required part the basic financial statements of the Partnership,
but are required by the Consolidated Audit Guide for Audits of HUD Programs,
issued by the U.S. Department of Housing and Urban Development, Office of
Inspector General. Such schedules, which are the responsibility of the General
Partner, have been subjected to the auditing procedures applied in our audit of
the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ Jeffrey Phillips Mosley & Scott, P.A.
Little Rock, Arkansas
January 13, 1998
<PAGE>
[LETTERHEAD OF JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.]
INDEPENDENT AUDITORS' REPORT
To The Partners
Greenwood Manor, Ltd.:
We have audited the accompanying financial statements of Greenwood Manor,
Ltd. (Project Number 082-44070 LD/SUP) (a limited partnership hereinafter
referred to as the "Partnership") as of December 31, 1996, and for the year then
ended, listed in the foregoing table of contents. These financial statements are
the responsibility of the General Partner. 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 the General Partner, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership as of December 31, 1996, and
the results of its operations, changes in partners' equity, and cash flows for
the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 13, 1997, on our consideration of Greenwood Manor, Ltd.'s
internal control structure and a report dated January 13, 1997, on its
compliance with laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of the
Partnership on pages 11 - 15 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements of the
Partnership, but are required by the Consolidated Audit Guide for Audits of HUD
Programs, issued July 1993 by the U.S. Department of Housing and Urban
Development, Office of Inspector General. Such schedules, which are the
responsibility of the General Partner, have been subjected to the auditing
procedures applied in our audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.
Little Rock, Arkansas
January 13, 1997
<PAGE>
[Letterhead of JEFFREY, PHILLIPS, MOSLEY & SCOTT, P.A.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Greenwood Manor, Ltd.:
We have audited the accompanying special-purpose balance sheet of Greenwood
Manor, Ltd. (the "Partnership") as of December 31, 1995, and the related
special-purpose statements of profit and loss, partners' equity, and cash flows
for the year then ended. These financial statements are the responsibility of
the General Partner. 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.
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 the
General Partner, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying special-purpose financial statements have been prepared, as
described in Note 1 to the financial statements, for the purpose of
consolidation with those of Cambridge Advantaged Properties Limited Partnership
("Cambridge"), and on the basis of accounting practices specified by the
management of Cambridge. These financial statements are not intended to be a
presentation in conformity with generally accepted accounting principles.
In our opinion, such special-purpose financial statements present fairly, in all
material respects, the financial position of the Partnership at December 31,
1995, and the results of its operations and its cash flows for the year then
ended in conformity with the basis of accounting described in Note 1.
This report is intended solely for the information and use of the partners of
Greenwood Manor, Ltd., management and Cambridge and should not be used for any
other purpose.
[Signature of Jeffrey, Phillips, Mosley & Scott, P.A.]
February 9, 1996
The Lafayette Building Suite 700
523 South Louisiana * Little Rock, Arkansas 72201
(501) 376-6042 * FAX (501) 376-8814
<PAGE>
[Letterhead of JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Malvern Manor, Ltd.:
We have audited the accompanying financial statements of Malvern Manor, Ltd.
(Project Number 082-44049 LD/SUP) (a limited partnership hereinafter referred to
as the "Partnership") as of December 31, 1997, and for the year then ended,
listed in the foregoing table of contents. These financial statements are the
responsibility of the General Partner. 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 the General Partner, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership as of December 31, 1997, and
the results of its operations, changes in partners' equity and cash flows for
the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated January 23, 1998, on our consideration of Malvern Manor, Ltd.'s internal
control and a report dated January 23, 1998, on its compliance with laws and
regulations.
/s/ Jeffrey Phillips Mosley & Scott, P.A.
Little Rock, Arkansas
January 23, 1998
<PAGE>
[LETTERHEAD OF JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.]
INDEPENDENT AUDITORS' REPORT
To The Partners
Malvern Manor, Ltd.:
We have audited the accompanying financial statements of Malvern Manor,
Ltd. (Project Number 082-440496 LD/SUP) (a limited partnership hereinafter
referred to as the "Partnership") as of December 31, 1996, and for the year then
ended, listed in the foregoing table of contents. These financial statements are
the responsibility of the General Partner. 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 the General Partner, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership as of December 31, 1996, and
the results of its operations, changes in partners' equity and cash flows for
the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 16, 1997, on our consideration of Malvern Manor, Ltd.'s
internal control structure and a report dated January 16, 1997, on its
compliance with laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of the
Partnership on pages 11 - 15 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements of the
Partnership, but are required by the Consolidated Audit Guide for Audits of HUD
Programs, issued July 1993 by the U.S. Department of Housing and Urban
Development, Office of Inspector General. Such schedules, which are the
responsibility of the General Partner, have been subjected to the auditing
procedures applied in our audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.
Little Rock, Arkansas
January 16, 1997
<PAGE>
[Letterhead of JEFFREY, PHILLIPS, MOSLEY & SCOTT, P.A.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Malvern Manor, Ltd.:
We have audited the accompanying special-purpose balance sheet of Malvern Manor,
Ltd. (the "Partnership") as of December 31, 1995, and the related
special-purpose statements of profit and loss, partners' equity, and cash flows
for the year then ended. These financial statements are the responsibility of
the General Partner. 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.
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 the
General Partner, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying special-purpose financial statements have been prepared, as
described in Note 1 to the financial statements, for the purpose of
consolidation with those of Cambridge Advantaged Properties Limited Partnership
("Cambridge"), and on the basis of accounting practices specified by the
management of Cambridge. These financial statements are not intended to be a
presentation in conformity with generally accepted accounting principles.
In our opinion, such special-purpose financial statements present fairly, in all
material respects, the financial position of the Partnership at December 31,
1995, and the results of its operations and its cash flows for the year then
ended in conformity with the basis of accounting described in Note 1.
This report is intended solely for the information and use of the partners of
Malvern Manor, Ltd., management and Cambridge and should not be used for any
other purpose.
[Signature of Jeffrey, Phillips, Mosley & Scott, P.A.]
February 8, 1996
The Lafayette Building Suite 700
523 South Louisiana * Little Rock, Arkansas 72201
(501) 376-6042 * FAX (501) 376-8814
<PAGE>
[Letterhead of JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Hereford Manor, Ltd.:
We have audited the accompanying financial statements of Hereford Manor, Ltd.
(Project Number 082-44071 LD/SUP) (a limited partnership hereinafter referred to
as the "Partnership") as of December 31, 1997, and for the year then ended,
listed in the foregoing table of contents. These financial statements are the
responsibility of the General Partner. 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 the General Partner, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership at December 31, 1997, and
the results of its operations, changes in partners' equity and cash flows for
the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and Consolidated Audit Guide
for Audits of HUD Programs issued by the U.S. Department of Housing and Urban
Development, we have also issued a reported dated January 22, 1998, on our
consideration of Hereford's internal control and reports dated January 22, 1998,
on its compliance with specific requirements applicable to major HUD programs,
specific requirements applicable to nonmajor HUD transactions and specific
requirements applicable to fair housing and nondiscrimination.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of the
Partnership on pages 11-14 are presented for the purpose of additional analysis
and are not a required part of the basic financial statements of the
Partnership, but are required by the Consolidated Audit Guide for Audits of HUD
Programs, by the U.S. Department of Housing and Urban Development, Office of
Inspector General. Such schedules, which are the responsibility of the General
Partner, have been subjected to the auditing procedures applied in our audit of
the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ Jeffrey Phillips Mosley & Scott, P.A.
Little Rock, Arkansas
January 22, 1998
<PAGE>
[LETTERHEAD OF JEFFREY PHILLIPS MOSLEY & SCOTT P.A.]
INDEPENDENT AUDITORS' REPORT
To The Partners
Hereford Manor, Ltd.:
We have audited the accompanying financial statements of Hereford Manor,
Ltd. (Project Number 082-44071 LD/SUP) (a limited partnership hereinafter
referred to as the "Partnership") as of December 31, 1996, and for the year then
ended, listed in the foregoing table of contents. These financial statements are
the responsibility of the General Partner. 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 the General Partner, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership at December 31, 1996, and
the results of its operations, changes in partners' equity and cash flows for
the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 20, 1997, on our consideration of Hereford Manor, Ltd.'s
internal control structure and a report dated January 20, 1997, on its
compliance with laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of the
Partnership on pages 11 - 15 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements of the
Partnership, but are required by the Consolidated Audit Guide for Audits of HUD
Programs, issued July 1993 by the U.S. Department of Housing and Urban
Development, Office of Inspector General. Such schedules, which are the
responsibility of the General Partner, have been subjected to the auditing
procedures applied in our audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.
Little Rock, Arkansas
January 20, 1997
<PAGE>
[Letterhead of JEFFREY, PHILLIPS, MOSLEY & SCOTT, P.A.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Hereford Manor, Ltd.:
We have audited the accompanying special-purpose balance sheet of Hereford
Manor, Ltd. (the "Partnership") as of December 31, 1995, and the related
special-purpose statements of profit and loss, partners' equity, and cash flows
for the year then ended. These financial statements are the responsibility of
the General Partner. 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.
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 the
General Partner, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying special-purpose financial statements have been prepared, as
described in Note 1 to the financial statements, for the purpose of
consolidation with those of Cambridge Advantaged Properties Limited Partnership
("Cambridge"), and on the basis of accounting practices specified by the
management of Cambridge. These financial statements are not intended to be a
presentation in conformity with generally accepted accounting principles.
In our opinion, such special-purpose financial statements present fairly, in all
material respects, the financial position of the Partnership at December 31,
1995, and the results of its operations and its cash flows for the year then
ended in conformity with the basis of accounting described in Note 1.
This report is intended solely for the information and use of the partners of
Hereford Manor, Ltd., management and Cambridge and should not be used for any
other purpose.
[Signature of Jeffrey, Phillips, Mosley & Scott, P.A.]
February 7, 1995
The Lafayette Building Suite 700
523 South Louisiana * Little Rock, Arkansas 72201
(501) 376-6042 * FAX (501) 376-8814
<PAGE>
[Letterhead of JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Henslee Heights, Ltd.:
We have audited the accompanying financial statements of Henslee Heights, Ltd.
(Project Number 082-44076 LD/SUP) (a limited partnership hereinafter referred to
as the "Partnership") as of December 31, 1997, and for the year then ended,
listed in the foregoing table of contents. These financial statements are the
responsibility of the General Partner. 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 the General Partner, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership as of December 31, 1997, and
the results of its operations, changes in partners' equity, and cash flows for
the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide of HUD Programs issued by the U.S. Department of Housing and Urban
Development, we have also issued a report dated January 22, 1998, on our
consideration of Henslee Heights, Ltd.'s internal control structure and reports
dated January 22, 1998, on its compliance with specific requirements applicable
to major HUD programs, specific requirements applicable to nonmajor HUD
transactions, and specific requirements applicable to fair housing and
nondiscrimination.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of the
Partnership on pages 11-14 are presented for the purpose of additional analysis
and are not a required part of the basic financial statements of the
Partnership, but are required by the Consolidated Audit Guide for Audits of HUD
Programs, issued by the U.S. Department of Housing and Urban Development, Office
of Inspector General. Such schedules, which are the responsibility of the
General Partner, have been subjected to the auditing procedures applied in our
audit of the basic financial statements and, in our opinion, are fairly stated
in all material respects in relation to the basic financial statements taken as
a whole.
/s/ Jeffrey Phillips Mosley & Scott, P.A.
Little Rock, Arkansas
January 22, 1998
<PAGE>
[LETTERHEAD OF JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.]
INDEPENDENT AUDITORS' REPORT
To The Partners
Henslee Heights, Ltd.:
We have audited the accompanying financial statements of Henslee Heights,
Ltd. (Project Number 082-44076 LD/SUP) (a limited partnership hereinafter
referred to as the "Partnership") as of December 31, 1996, and for the year then
ended, listed in the foregoing table of contents. These financial statements are
the responsibility of the General Partner. 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 the General Partner, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership as of December 31, 1996, and
the results of its operations, changes in partners' equity, and cash flows for
the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 14, 1997, on our consideration of Henslee Heights, Ltd.'s
internal control structure and a report dated January 14, 1997, on its
compliance with laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of the
Partnership on pages 11 - 15 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements of the
Partnership, but are required by the Consolidated Audit Guide for Audits of HUD
Programs, issued July 1993 by the U.S. Department of Housing and Urban
Development, Office of Inspector General. Such schedules, which are the
responsibility of the General Partner, have been subjected to the auditing
procedures applied in our audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.
Little Rock, Arkansas
January 14 1997
<PAGE>
[Letterhead of JEFFREY, PHILLIPS, MOSLEY & SCOTT, P.A.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Henslee Heights, Ltd.:
We have audited the accompanying special-purpose balance sheet of Henslee
Heights, Ltd. (the "Partnership") as of December 31, 1995, and the related
special-purpose statements of profit and loss, partners' equity, and cash flows
for the year then ended. These financial statements are the responsibility of
the General Partner. 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.
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 the
General Partner, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying special-purpose financial statements have been prepared, as
described in Note 1 to the financial statements, for the purpose of
consolidation with those of Cambridge Advantaged Properties Limited Partnership
("Cambridge"), and on the basis of accounting practices specified by the
management of Cambridge. These financial statements are not intended to be a
presentation in conformity with generally accepted accounting principles.
In our opinion, such special-purpose financial statements present fairly, in all
material respects, the financial position of the Partnership at December 31,
1995, and the results of its operations and its cash flows for the year then
ended in conformity with the basis of accounting described in Note 1.
This report is intended solely for the information and use of the partners of
Henslee Heights, Ltd., management and Cambridge and should not be used for any
other purpose.
[Signature of Jeffrey, Phillips, Mosley & Scott, P.A.]
February 12, 1996
The Lafayette Building Suite 700
523 South Louisiana * Little Rock, Arkansas 72201
(501) 376-6042 * FAX (501) 376-8814
<PAGE>
[Letterhead of JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Oakwood Manor, Ltd.:
We have audited the accompanying financial statements of Oakwood Manor, Ltd.
(Project Number 082-44034 LD/SUP) (a limited partnership hereinafter referred to
as the "Partnership") as of December 31, 1997, and for the year then ended,
listed in the foregoing table of contents. These financial statements are the
responsibility of the General Partner. 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 the General Partner, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership as of December 31, 1997, and
the results of its operations, changes in partners' equity, and cash flows for
the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a reported dated February 5, 1998, on our
consideration of Oakwood Manor, Ltd.'s internal control and a report dated
February 5, 1998, on its compliance with specific requirements applicable to
major HUD programs, specific requirements applicable to non-major HUD
transactions and specific requirements applicable to fair housing and
non-discrimination.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of the
Partnership on pages 11-14 are presented for the purpose of additional analysis
and are not a required part of the basic financial statements of the
Partnership, but are required by the Consolidated Audit Guide for Audits of HUD
Programs, issued by the U.S. Department of Housing and Urban Development, Office
of Inspector General. Such schedules, which are the responsibility of the
General Partner, have been subjected to the auditing procedures applied in our
audit of the basic financial statements and, in our opinion, are fairly stated
in all material respects in relation to the basic financial statements taken as
a whole.
/s/ Jeffrey Phillips Mosley & Scott, P.A.
Little Rock, Arkansas
February 5, 1998
<PAGE>
[LETTERHEAD OF JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.]
INDEPENDENT AUDITORS' REPORT
To The Partners
Oakwood Manor, Ltd.:
We have audited the accompanying financial statements of Oakwood Manor,
Ltd. (Project Number 082-44034 LD/SUP) (a limited partnership hereinafter
referred to as the "Partnership") as of December 31, 1996, and for the year then
ended, listed in the foregoing table of contents. These financial statements are
the responsibility of the General Partner. 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 the General Partner, as well as evaluating the overall financial
statement presentation. we believe that our audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership as of December 31, 1996, and
the results of its operations, changes in partners' equity, and cash flows for
the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 29, 1997, on our consideration of Oakwood Manor, Ltd.'s
internal control structure and a report dated January 29, 1997, on its
compliance with laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of the
Partnership on pages 11 - 15 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements of the
Partnership, but are required by the Consolidated Audit Guide for Audits of HUD
Programs, issued July 1993 by the U.S. Department of Housing and Urban
Development, Office of Inspector General. Such schedules, which are the
responsibility of the General Partner, have been subjected to the auditing
procedures applied in our audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.
Little Rock, Arkansas
January 29, 1997
<PAGE>
[Letterhead of JEFFREY, PHILLIPS, MOSLEY & SCOTT, P.A.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Oakwood Manor, Ltd.:
We have audited the accompanying special-purpose balance sheet of Oakwood Manor,
Ltd. (the "Partnership") as of Decemher 31, 1995, and the related
special-purpose statements of profit and loss, partners' equity, and cash flows
for the year then ended. These financial statements are the responsibility of
the General Partner. 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.
Those standards require that we plan and perform the audit to obitain 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 the
General Partner, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying special-purpose financial statements have been prepared, as
described in Note 1 to the financial statements, for the purpose of
consolidation with those of Cambridge Advantaged Properties Limited Partnership
("Cambridge"), and on the basis of accounting practices specified by the
management of Cambridge. These financial statements are not intended to be a
presentation in conformity with generally accepted accounting principles.
In our opinion, such special-purpose financial statements present fairly, in all
material respects, the financial position of the Partnership at December 31,
l995, and the results of its operations and its cash flows for the year then
ended in conformity with the basis of accounting described in Note l.
This report is intended solely for the information and use of the partners of
Oakwood Manor, Ltd., management and Cambridge and should not be used for any
other purpose.
[Signature of Jeffrey, Phillips, Mosley & Scott, P.A.]
January 22, 1996
The Lafayette Building Suite 700
523 South Louisiana * Little Rock, Arkansas 72201
(501) 376-6042 * FAX (501) 376-8814
<PAGE>
[Letterhead of JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.]
INDEPENDENT AUDITORS' REPORT
To the Partners
West Scenic Apartments, Ltd.:
We have audited the accompanying financial statements of West Scenic Apartments,
Ltd. (Project Number 082-44017 LD/SUP) (a limited partnership hereinafter
referred to as the "Partnership") as of December 31, 1997, and for the year then
ended, listed in the foregoing table of contents. These financial statements are
the responsibility of the General Partner. 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 the General Partner, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership as of December 31, 1997, and
the results of its operations, changes in partners' equity, and cash flows for
the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs, we have also issued a report dated February 4,
1998, on our consideration of West Scenic Apartments, Ltd.'s internal control
and reports dated February 4, 1998, on its compliance with specific requirements
applicable to major HUD programs, specific requirements applicable to nonmajor
HUD transactions and specific requirements applicable to fair housing and
non-discrimination.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of the
Partnership on pages 11-14 are presented for the purpose of additional analysis
and are not a required part of the basic financial statements of the
Partnership, but are required by the Consolidated Audit Guide for Audits of HUD
Programs, issued by the U.S. Department of Housing and Urban Development, Office
of Inspector General. Such schedules, which are the responsibility of the
General Partner, have been subjected to the auditing procedures applied in our
audit of the basic financial statements and, in our opinion, are fairly stated
in all material respects in relation to the basic financial statements taken as
a whole.
/s/ Jeffrey Phillips Mosley & Scott, P.A.
Little Rock, Arkansas
February 4, 1998
<PAGE>
[LETTERHEAD OF JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.]
INDEPENDENT AUDITORS' REPORT
To The Partners
West Scenic Apartments, Ltd.:
We have audited the accompanying financial statements of West Scenic
Apartments, Ltd. (Project Number 082-44017 LD/SUP) (a limited partnership
hereinafter referred to as the "Partnership") as of December 31, 1996, and for
the year then ended, listed in the foregoing table of contents. These financial
statements are the responsibility of the General Partner. 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 the General Partner, as well as evaluating the overall financial
statement presentation. we believe that our audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership as of December 31, 1996, and
the results of its operations, changes in partners' equity, and cash flows for
the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 29, 1997, on our consideration of West Scenic Apartments,
Ltd.'s internal control structure and a report dated January 28, 1997, on its
compliance with laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of the
Partnership on pages 11 - 14 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements of the
Partnership, but are required by the Consolidated Audit Guide for Audits of HUD
Programs, issued July 1993 by the U.S. Department of Housing and Urban
Development, Office of Inspector General. Such schedules, which are the
responsibility of the General Partner, have been subjected to the auditing
procedures applied in our audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.
Little Rock, Arkansas
January 28, 1997
<PAGE>
[Letterhead of JEFFREY, PHILLIPS, MOSLEY & SCOTT, P.A.]
INDEPENDENT AUDITORS' REPORT
To the Partners
West Scenic Apartments, Ltd.:
We have audited the accompanying special-purpose balance sheet of West Scenic
Apartments, Ltd. (the "Partnership") as of December 31, 1995, and the related
special-purpose statements of profit and loss, partners' equity, and cash flows
for the year then ended. These financial statements are the responsibility of
the General Partner. 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.
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 the
General Partner, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying special-purpose financial statements have been prepared, as
described in Note 1 to the financial statements, for the purpose of
consolidation with those of Cambridge Advantaged Properties Limited Partnership
("Cambridge"), and on the basis of accounting practices specified by the
management of Cambridge. These financial statements are not intended to be a
presentation in conformity with generally accepted accounting principles.
In our opinion, such special-purpose financial statements present fairly, in all
material respects, the financial position of the Partnership at December 31,
1995, and the results of its operations and its cash flows for the year then
ended in conformity with the basis of accounting described in Note 1.
This report is intended solely for the information and use of the partners of
West Scenic Apartments, Ltd., management and Cambridge and should not be used
for any other purpose.
[Signature of Jeffrey, Phillips, Mosley & Scott, P.A.]
January 23, 1996
The Lafayette Building Suite 700
523 South Louisiana * Little Rock, Arkansas 72201
(501) 376-6042 * FAX (501) 376-8814
<PAGE>
[Letterhead of JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Robindale East Apartments, Ltd.:
We have audited the accompanying financial statements of Robindale East
Apartments, Ltd. (Project Number 082-44045 LD/SUP) (a limited partnership
hereinafter referred to as the "Partnership") as of December 31, 1997, and for
the year then ended, listed in the foregoing table of contents. These financial
statements are the responsibility of the General Partner. 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 the General Partner, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership as of December 31, 1997, and
the results of its operations, changes in partners' equity, and cash flows for
the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated February 9, 1998, on our
consideration of Robindale East Apartments, Ltd.'s internal control and a report
dated February 9, 1998, on its compliance with specific requirements applicable
to major HUD programs, specific requirements applicable to nonmajor HUD
transactions, and specific requirements applicable to fair housing and
non-discrimination.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of the
Partnership on pages 11-14 are presented for the purpose of additional analysis
and are not a required part of the basic financial statements of the
Partnership, but are required by the Consolidated Audit Guide for Audits of HUD
Programs, issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General. Such schedules, which are the responsibility of the
General Partner, have been subjected to the auditing procedures applied in our
audit of the basic financial statements and, in our opinion, are fairly stated
in all material respects in relation to the basic financial statements taken as
a whole.
/s/ Jeffrey Phillips Mosley & Scott, P.A.
Little Rock, Arkansas
February 9, 1998
<PAGE>
[LETTERHEAD OF JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.]
INDEPENDENT AUDITORS' REPORT
To The Partners
Robindale East Apartments, Ltd.:
We have audited the accompanying financial statements of Robindale East
Apartments, Ltd. (Project Number 082-44045 LD/SUP) (a limited partnership
hereinafter referred to as the "Partnership") as of December 31, 1996, and for
the year then ended, listed in the foregoing table of contents. These financial
statements are the responsibility of the General Partner. 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 the General Partner, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership as of December 31, 1996, and
the results of its operations, changes in partners' equity, and cash flows for
the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 31, 1997, on our consideration of Robindale East
Apartments, Ltd.'s internal control structure and a report dated January 31.
1997. on its compliance with laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of the
Partnership on pages 11 - 15 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements of the
Partnership, but are required by the Consolidated Audit Guide for Audits of HUD
Programs, issued July 1993 by the U.S. Department of Housing and Urban
Development, Office of Inspector General. Such schedules, which are the
responsibility of the General Partner, have been subjected to the auditing
procedures applied in our audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.
Little Rock, Arkansas
January 31, 1997
<PAGE>
[Letterhead of JEFFREY, PHILLIPS, MOSLEY & SCOTT, P.A.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Robindale East Apartments, Ltd.:
We have audited the accompanying special-purpose balance sheet of Robindale East
Apartments, Ltd. (the "Partnership") as of December 31, 1995, and the related
special-purpose statements of profit and loss, partners' equity, and cash flows
for the year then ended. These financial statements are the responsibility of
the General Partner. 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.
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 the
General Partner, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying special-purpose financial statements have been prepared, as
described in Note 1 to the financial statements, for the purpose of
consolidation with those of Cambridge Advantaged Properties Limited Partnership
("Cambridge"), and on the basis of accounting practices specified by the
management of Cambridge. These financial statements are not intended to be a
presentation in conformity with generally accepted accounting principles.
In our opinion, such special-purpose financial statements present fairly, in all
material respects, the financial position of the Partnership at December 31,
1995, and the results of its operations and its cash flows for the year then
ended in conformity with the basis of accounting described in Note 1.
This report is intended solely for the information and use of the partners of
Robindale East Apartments, Ltd., management and Cambridge and should not be used
for any other purpose.
[Signature of Jeffrey, Phillips, Mosley & Scott, P.A.]
January 23, 1996
The Lafayette Building Suite 700
523 South Louisiana * Little Rock, Arkansas 72201
(501) 376-6042 * FAX (501) 376-8814
<PAGE>
[Letterhead of JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Southwest Apartments, Ltd.:
We have audited the accompanying financial statements of Southwest Apartments,
Ltd. (Project Number 082-44020 LD/SUP) (a limited partnership hereinafter
referred to as the "Partnership") as of December 31, 1997, and for the year
then ended, listed in the foregoing table of contents. These financial
statements are the responsibility of the General Partner. 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 the General Partner, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership as of December 31, 1997, and
the results of its operations, changes in partners' equity, and cash flows for
the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 22, 1998, on our
consideration of Southwest Apartments, Ltd.'s internal control and reports dated
January 22, 1998, on its compliance with specific requirements applicable to
major HUD programs, specific requirements applicable to nonmajor HUD
transactions and specific requirements applicable to fair housing and
non-discrimination.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of the
Partnership on pages 11-14 are presented for the purpose of additional analysis
and are not a required part of basic financial statements of the Partnership,
but are required by the Consolidated Audit Guide for Audits of HUD Programs,
issued by the U.S. Department of Housing and Urban Development, Office of
Inspector General. Such schedules, which are the responsibility of the General
Partner, have been subjected to the auditing procedures applied in our audit of
the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ Jeffrey Phillips Mosley & Scott, P.A.
Little Rock, Arkansas
January 22, 1998
<PAGE>
[LETTERHEAD OF JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.]
INDEPENDENT AUDITORS' REPORT
To The Partners
Southwest Apartments, Ltd.:
We have audited the accompanying financial statements of Southwest
Apartments, Ltd. (Project Number 082-44020 LD/SUP) (a limited partnership
hereinafter referred to as the "Partnership") as of December 31, 1996, and for
the year then ended, listed in the foregoing table of contents. These financial
statements are the responsibility of the General Partner. 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 the General Partner, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership as of December 31, 1996, and
the results of its operations, changes in partners' equity, and cash flows for
the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 20, 1997, on our consideration of Southwest Apartments,
Ltd.'s internal control structure and a report dated January 20, 1997, on its
compliance with laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of the
Partnership on pages 11 - 15 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements of the
Partnership, but are required by the Consolidated Audit Guide for Audits of HUD
Programs, issued July 1993 by the U.S. Department of Housing and Urban
Development, Office of Inspector General. Such schedules, which are the
responsibility of the General Partner, have been subjected to the auditing
procedures applied in our audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.
Little Rock, Arkansas
January 20, 1997
<PAGE>
[Letterhead of JEFFREY, PHILLIPS, MOSLEY & SCOTT, P.A.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Southwest Apartments, Ltd.:
We have audited the accompanying special-purpose balance sheet of Southwest
Apartments, Ltd. (the "Partnership") as of December 31, 1995, and the related
special-purpose statements of profit and loss, partners' equity, and cash flows
for the year then ended. These financial statements are the responsibility of
the General Partner. 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.
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 the
General Partner, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying special-purpose financial statements have been prepared, as
described in Note 1 to the financial statements, for the purpose of
consolidation with those of Cambridge Advantaged Properties Limited Partnership
("Cambridge"), and on the basis of accounting practices specified by the
management of Cambridge. These financial statements are not intended to be a
presentation in conformity with generally accepted accounting principles.
In our opinion, such special-purpose financial statements present fairly, in all
material respects, the financial position of the Partnership at December 31,
1995, and the results of its operations and its cash flows for the year then
ended in conformity with the basis of accounting described in Note 1.
This report is intended solely for the information and use of the partners of
Southwest Apartments, Ltd., management and Cambridge and should not be used
for any other purpose.
[Signature of Jeffrey, Phillips, Mosley & Scott, P.A.]
February 2, 1996
The Lafayette Building Suite 700
523 South Louisiana * Little Rock, Arkansas 72201
(501) 376-6042 * FAX (501) 376-8814
<PAGE>
[Letterhead of JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Valley Arms, Ltd.:
We have audited the accompanying financial statements of Valley Arms, Ltd.
(Project Number 053-44191 LDP) (a limited partnership hereinafter referred to as
the "Partnership") as of December 31, 1997, and for the year then ended, listed
in the foregoing table of contents. These financial statements are the
responsibility of the General Partner. 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 the General Partner, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership as of December 31, 1997, and
the results of its operations, changes in partners' equity, and cash flows for
the year then ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 1 to the
financial statements, the Partnership has incurred a net loss, its total current
liabilities exceed its total current assets, it is delinquent on its mortgage
payments and it filed a petition for bankruptcy under Chapter 11 subsequent to
December 31, 1997, which raises substantial doubt about its ability to continue
as a going concern. Management's plan regarding those matters are described in
Note 1. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated April 1, 1998, on our
consideration of Valley Arms, Ltd's internal control and a report dated April 1,
1998, on its compliance with specific requirements applicable to major HUD
programs, specific requirements applicable to nonmajor HUD transactions and
specific requirements applicable to fair housing and nondiscrimination.
<PAGE>
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of the
Partnership on pages 13-16 are presented for the purpose of additional analysis
and are not a required part of the basic financial statements of the
Partnership, but are required by the Consolidated Audit Guide for Audits of HUD
Programs, issued by the U.S. Department of Housing and Urban Development, Office
of Inspector General. Such schedules, which are the responsibility of the
General Partner, have been subjected to the auditing procedures applied in our
audit of the basic financial statements and, in our opinion, are fairly stated
in all material respects in relation to the basic financial statements taken as
a whole.
/s/ Jeffrey Phillips Mosley & Scott, P.A.
Little Rock, Arkansas
April 1, 1998
<PAGE>
[LETTERHEAD OF JEFFREY PHILLIPS MOSLEY & SCOTT, PA.]
INDEPENDENT AUDITORS' REPORT
To The Partners
Valley Arms, Ltd.:
We have audited the accompanying financial statements of Valley Arms, Ltd.
(Project Number 053-44191 LDP) (a limited partnership hereinafter referred to as
the "Partnership") as of December 31, 1996, and for the year then ended, listed
in the foregoing table of contents. These financial statements are the
responsibility of the General Partner. 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 the General Partner, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership as of December 31, 1996, and
the results of its operations, changes in partners' equity, and cash flows for
the year then ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 1 to the
financial statements, the Partnership has incurred a net loss, its total current
liabilities exceed its total current assets and it is delinquent on its mortgage
payments, which raises substantial doubt about its ability to continue as a
going concern. Management's plan regarding those matters also are described in
Note 1. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
In accordance with Government Auditing Standards, we have also issued a
report dated January 22, 1997, on our consideration of Valley Arms, Ltd.'s
internal control structure and a report dated January 22, 1997, on its
compliance with laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken Oas a whole. The supplemental schedules of the
<PAGE>
Partnership on pages 12 - 16 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements of the
Partnership' but are required by the Consolidated Audit Guide for Audits of HUD
Programs, issued July 1993 by the U.S. Department of Housing and Urban
Development, Office of Inspector General. Such schedules, which are the
responsibility of the General Partner, have been subjected to the auditing
procedures applied in our audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.
Little Rock, Arkansas
January 22, 1997
<PAGE>
[Letterhead of JEFFREY, PHILLIPS, MOSLEY & SCOTT, P.A.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Valley Arms, Ltd.:
We have audited the accompanying special-purpose balance sheet of Valley Arms,
Ltd. (the "Partnership") as of December 31, 1995, and the related
special-purpose statements of profit and loss, partners' equity, and cash flows
for the year then ended. These financial statements are the responsibility of
the General Partner. 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.
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 the
General Partner, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying special-purpose financial statements have been prepared, as
described in Note 1 to the financial statements, for the purpose of
consolidation with those of Cambridge Advantaged Properties Limited Partnership
("Cambridge"), and on the basis of accounting practices specified by the
management of Cambridge. These financial statements are not intended to be a
presentation in conformity with generally accepted accounting principles.
In our opinion, such special-purpose financial statements present fairly, in all
material respects, the financial position of the Partnership at December 31,
1995, and the results of its operations and its cash flows for the year then
ended in conformity with the basis of accounting described in Note 1.
This report is intended solely for the information and use of the partners of
Valley Arms, Ltd., management and Cambridge and should not be used for any other
purpose.
[Signature of Jeffrey, Phillips, Mosley & Scott, P.A.]
January 30, 1996
The Lafayette Building Suite 700
523 South Louisiana * Little Rock, Arkansas 72201
(501) 376-6042 * FAX (501) 376-8814
<PAGE>
[Letterhead of Bick Fredman & Co.]
Independent Auditor's Report
The General and Limited Partners
Lancaster Manor Associates, Ltd.
Cleveland, Ohio
We have audited the accompanying balance sheets of Lancaster Manor
Associates, Ltd. (a California Limited Partnership), as of December 31, 1997 and
1996, and the related statements of operations, partners' deficit and cash flows
for the years then ended. These financial statements are the responsibility of
the Project's management, our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatements. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Lancaster Manor
Associates, Ltd. as of December 31, 1997 and 1996, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 14, 1998 on our consideration of Lancaster Manor
Associates, Ltd. internal control and reports dated January 14, 1998 on its
compliance with laws and regulations.
/s/ Bick Fredman & Co.
Cleveland, Ohio
January 14, 1998
<PAGE>
[BICK FREDMAN & CO. LETTERHEAD]
Independent Auditor's Report
The General and Limited Partners
Lancaster Manor Associates, Ltd.
Cleveland, Ohio
We have audited the accompanying balance sheets of Lancaster Manor
Associates, Ltd. (a California Limited Partnership), as of December 31, 1996 and
1995, and the related statements of operations. partners, deficit and cash flows
for the years then ended. These financial statements are the responsibility of
the Project's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatements. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Lancaster Manor Associates,
Ltd. as of December 31, 1996 and 1995, and the results of its operations and its
cash flows for the years then ended in conformity with generally accepted
accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 24, 1997 on our consideration of Lancaster Manor
Associates, Ltd.'s internal control structure and a report dated January 24,
1997 on its compliance with laws and regulations.
/s/ Bick Fredman & Co.
Cleveland, Ohio
January 24, 1997
1
<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
March 25,
--------------------------
1997 1998
------------ ------------
<S> <C> <C>
Property and equipment - net, less accumulated
depreciation (Notes 2, 4 and 6) $102,085,627 $140,195,814
Property and equipment -
held for sale (Notes 2, 4, 6 and 7) 4,441,392 0
Cash and cash equivalents (Notes 2 and 11) 1,976,935 2,618,155
Cash - restricted for tenants' security deposits 1,268,097 1,552,990
Mortgage escrow deposits (Notes 5 and 6) 10,231,135 11,055,072
Prepaid expenses and other assets (Note 8) 1,694,068 1,740,633
------------ ------------
Total assets $121,697,254 $157,162,664
============ ============
LIABILITIES AND PARTNERS' DEFICIT
Liabilities
Mortgage notes payable (Note 6) $ 68,915,073 $ 92,002,763
Purchase money notes payable (Note 7) 68,296,196 83,670,532
Due to selling partners (Note 7) 86,156,722 99,414,749
Accounts payable, accrued expenses and
other liabilities 2,769,806 3,370,928
Tenants' security deposits payable 1,183,799 1,441,410
Due to general partners of subsidiaries
and their affiliates 1,361,990 1,737,269
Due to general partners and affiliates (Note 8) 1,477,654 2,507,375
------------ ------------
230,161,240 284,145,026
------------ ------------
Minority interest (Note 2) 2,082 116,611
------------ ------------
Commitments and contingencies (Notes 6, 7, 8 and 11)
Partners' deficit
Limited partners (106,843,883) (125,290,459)
General partners (1,622,185) (1,808,514)
------------ ------------
(108,466,068) (127,098,973)
------------ ------------
Total liabilities and partners' deficit $121,697,254 $157,162,664
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
-33-
<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended March 25,
--------------------------------------------
1998 1997* 1996*
------------ ------------ ------------
<S> <C> <C> <C>
Revenues
Rentals, net $ 31,646,760 $ 35,549,987 $ 35,554,772
Other 1,376,085 1,602,151 1,590,528
Gain on sale of property (Note 10) 4,419,139 606,195 0
------------ ------------ ------------
Total revenue 37,441,984 37,758,333 37,145,300
------------ ------------ ------------
Expenses
Administrative and management 5,894,581 5,491,400 5,381,757
Administrative and management-related
parties (Note 8) 3,222,918 3,445,361 2,417,492
Operating 5,781,810 5,994,143 5,930,235
Repairs and maintenance 8,161,433 9,881,787 9,210,318
Taxes and insurance 3,925,855 4,530,276 4,721,099
Financial, principally interest 10,955,425 12,860,784 14,231,657
Depreciation 7,164,517 8,484,538 6,529,518
Loss on impairment of assets (Note 4) 0 939,612 4,343,215
------------ ------------ ------------
Total expenses 45,106,539 51,627,901 52,765,291
------------ ------------ ------------
Loss before minority interest and
extraordinary item (7,664,555) (13,869,568) (15,619,991)
Minority interest (income) loss
of subsidiaries 57,040 3,063 (24,042)
------------ ------------ ------------
Loss before extraordinary item (7,607,515) (13,866,505) (15,644,033)
Extraordinary item-forgiveness of
indebtedness income (Note 10) 28,257,707 11,502,877 0
------------ ------------ ------------
Net income (loss) $ 20,650,192 $ (2,363,628) $(15,644,033)
============ ============ ============
Limited Partners Share:
Loss before extraordinary item $ (7,531,440) $(13,727,840) $(15,487,593)
Extraordinary item 27,975,130 11,387,848 0
------------ ------------ ------------
Net income (loss) $ 20,443,690 $ (2,339,992) $(15,487,593)
============ ============ ============
Number of units outstanding 12,074 12,074 12,074
============ ============ ============
Loss before extraordinary item per
limited partner unit $ (624) $ (1,137) $ (1,283)
Extraordinary item per limited
partner unit 2,317 943 0
------------ ------------ ------------
Net income (loss) per limited
partnership unit $ 1,693 $ (194) $ (1,283)
============ ============ ============
</TABLE>
*Reclassified for comparative purposes.
See accompanying notes to consolidated financial statements.
-34-
<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
<TABLE>
<CAPTION>
Limited General
Total Partners Partners
------------- ------------- -----------
<S> <C> <C> <C>
Balance - March 26, 1995 $(109,091,312) $(107,462,874) $(1,628,438)
Net loss (15,644,033) (15,487,593) (156,440)
------------- ------------- -----------
Balance - March 25, 1996 (124,735,345) (122,950,467) (1,784,878)
Net loss (2,363,628) (2,339,992) (23,636)
------------- ------------- -----------
Balance - March 25, 1997 (127,098,973) (125,290,459) (1,808,514)
Net income 20,650,192 20,443,690 206,502
Distributions (2,017,287) (1,997,114) (20,173)
------------- ------------- -----------
Balance - March 25, 1998 $(108,466,068) $(106,843,883) $(1,622,185)
============= ============= ===========
</TABLE>
See accompanying notes to consolidated financial statements.
-35-
<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<TABLE>
<CAPTION>
Year Ended March 25,
--------------------------------------------
1998 1997 1996*
------------ ------------ ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 20,650,192 $ (2,363,628) $(15,644,033)
------------ ------------ ------------
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Gain on sale of property (Note 10) (4,419,139) (606,195) 0
Extraordinary item-forgiveness of
indebtedness income (Note 11) (28,257,707) (11,963,912) 0
Depreciation 7,164,517 8,484,538 6,529,518
Loss on sale of property and equipment 0 43,057 27,236
Loss on impairment of assets 0 939,612 4,343,215
Minority interest in (loss) income
of subsidiaries (57,040) (3,063) 24,042
(Increase) decrease in assets:
Cash-restricted for tenants' security deposits 161,347 (42,019) 14,414
Mortgage escrow deposits - operating 52,361 (347,746) (743,534)
Prepaid expenses and other assets 219,148 276,378 (119,129)
Increase (decrease) in liabilities:
Due to selling partners 8,728,681 9,670,592 10,984,742
Payments of interest to selling partners (1,817,708) (1,744,254) (1,709,256)
Accounts payable, accrued expenses and
other liabilities (970,910) 49,130 189,519
Tenants' security deposits payable (135,737) (10,001) 9,987
Due to general partners of subsidiaries
and their affiliates 324,757 131,154 242,872
Due to general partners of subsidiaries
and their affiliates (64,411) (86,812) (199,482)
Due to general partners and affiliates (1,029,721) 1,569,962 (162,396)
------------ ------------ ------------
Total adjustments (20,101,562) 6,360,421 19,431,748
------------ ------------ ------------
Net cash provided by operating activities 548,630 3,996,793 3,787,715
------------ ------------ ------------
Cash flows from investing activities:
Proceeds from sale of property 25,732,750 1,700,000 0
Costs paid relating to sale of property (245,721) (58,136) 0
Acquisitions of property and equipment (2,050,996) (1,435,708) (1,656,763)
Decrease (increase) in mortgage
escrow deposits 504,953 (184,068) (430,701)
------------ ------------ ------------
Net cash provided by (used in)
investing activities 23,940,986 22,088 (2,087,464)
------------ ------------ ------------
Net cash from operating and investing
activities, carried forward 24,489,616 4,018,881 1,700,251
</TABLE>
*Reclassified for comparative purposes.
See accompanying notes to consolidated financial statements.
-36-
<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(CONTINUED)
<TABLE>
<CAPTION>
Year Ended March 25,
------------------------------------------
1998 1997 1996*
------------ ----------- -----------
<S> <C> <C> <C>
Net cash from operating and investing activities,
brought forward 24,489,616 4,018,881 1,700,251
------------ ----------- -----------
Cash flows from financing activities:
Principal payments of purchase money notes (7,598,428) (1,650,000) 0
Proceeds from mortgage notes payable 1,900,000 0 0
Distributions paid (2,017,287) 0 0
Principal payments of mortgage notes payable (17,357,632) (2,371,876) (2,224,465)
Decrease in capitalization of minority interest (57,489) (30,844) (14,755)
------------ ----------- -----------
Net cash used in financing activities (25,130,836) (4,052,720) (2,239,220)
------------ ----------- -----------
Net decrease in cash and cash equivalents (641,220) (33,839) (538,969)
Cash and cash equivalents at beginning of year 2,618,155 2,651,994 3,190,963
------------ ----------- -----------
Cash and cash equivalents at end of year $ 1,976,935 $ 2,618,155 $ 2,651,994
============ =========== ===========
Supplemental disclosure of cash flows information:
Cash paid during the year for interest $ 3,826,430 $ 4,372,432 $ 4,972,715
============ =========== ===========
Supplemental disclosures of noncash investing
and financing activities:
Increase in property and equipment-held for
sale reclassified from property and equipment $ 4,441,392 $ 0 $ 0
Increase in purchase money notes payable due to
the capitalization of prepaid expenses and other
assets 312,799 355,881 0
Forgiveness of indebtedness:
Decrease in purchase money note payable (8,088,707) (4,830,591) 0
Decrease in due to selling partners (20,169,000) (5,681,011) 0
Decrease in due to general partners
of subsidiaries and their affiliates 0 (687,471) 0
Decrease in due to general partners and affiliates 0 (466,035) 0
Decrease in accounts payable, accrued
expenses and other liabilities 0 (298,804) 0
</TABLE>
*Reclassified for comparative purposes.
See accompanying notes to consolidated financial statements.
-37-
<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(CONTINUED)
<TABLE>
<CAPTION>
Year Ended March 25,
-------------------------------------
1998 1997 1996*
------------ ---------- --------
<S> <C> <C> <C>
Summarized below are the components
of the gain on sale of property:
Decrease in property and equipment,
net of accumulated depreciation $ 28,555,274 $1,035,669 $ 0
Decrease in cash - restricted for
tenants' security deposits 123,546 0 0
Decrease in mortgage escrow deposits 266,623 0 0
Decrease in prepaid expenses and
other assets 140,216 0 0
Decrease in mortgage notes payable (7,630,058) 0 0
Increase in accounts payable, accrued
expenses and other liabilities 369,788 0 0
Decrease in tenant's security
deposits payable (121,874) 0 0
Decrease in due to general partners
of subsidiaries and their affiliates (635,625) 0 0
</TABLE>
*Reclassified for comparative purposes.
See accompanying notes to consolidated financial statements.
-38-
<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 25, 1998
NOTE 1 - Organization
Cambridge Advantaged Properties Limited Partnership (the "Partnership") was
formed pursuant to the laws of the State of Massachusetts on June 28, 1984. The
Partnership invests, as a limited partner, in other limited partnerships
(referred to herein as "Local Partnerships" or "subsidiary partnerships"), each
of which owns and operates an existing residential housing development (an
"Apartment Complex") that is financed and/or operated with some form of local,
state or federal assistance, including mortgage insurance, rental assistance
payments, permanent mortgage financing and/or interest reduction payments
("Government Assistance").
The General Partners of the Partnership are Assisted Housing Associates Inc.,
(the "Assisted General Partner"), and Related Beta Corporation (the "Related
General Partner"), both of which are Delaware corporations affiliated with The
Related Companies, L.P. ("Related"), a New York limited partnership, and
Cambridge/Related Associates Limited Partnership (formerly Hutton/Related
Associates Limited Partnership) ("Cambridge/Related"), a Massachusetts limited
partnership. The general partners of Cambridge/Related are the Assisted General
Partner and the Related General Partner. The General Partners manage and control
the affairs of the Partnership.
Pursuant to the public offering, the Partnership received $53,754,000 (net of
offering expenses and sales commissions of $6,615,700) from 4,452 investors in
12,074 limited partnership interests. The offering was completed in March 1985
and no further issuance of initial limited partnership interests or additional
limited partnership interests is anticipated.
As of March 25, 1998, the Partnership holds an interest in 52 Local
Partnerships, each of which owns one Apartment Complex which receives Government
Assistance. During the fiscal year ended March 25, 1998 the properties and the
related assets and liabilities owned by five subsidiary partnerships were sold
to third parties and the Partnership's Local Partnership's Interest in three
subsidiary partnerships were sold to third parties and the Local Partnership's
general partner, respectively. Through the fiscal year ended March 25, 1998, the
properties and the related assets and liabilities owned by six subsidiary
partnerships were sold to third parties and the Partnership's Local Partnership
Interest in three subsidiary partnerships were sold to third parties and the
Local Partnership's general partner, respectively (see Note 10).
The terms of the Limited Partnership Agreement provide, among other things, that
profits and losses, in general, be shared 99% by the limited partners and 1% by
the General Partners.
NOTE 2 - Summary of Significant Accounting Policies
a) Basis of Consolidation
The consolidated financial statements include the accounts of the Partnership
and 60 (5 of which only have activity through the date of sale of their
properties and the related assets and liabilities and 3 of which only have
activity through the date of sale of the Partnership's interest), 61 (1 of which
only had activity through the date of sale of its property and the related
assets and liabilities) and 61 subsidiary partnerships in which the Partnership
is a limited partner for the years ended March 25, 1998, 1997 and 1996,
respectively. The Partnership
-39-
<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 25, 1998
is a limited partner, with an ownership interest of 98.99% in each of the
subsidiary partnerships. Through the rights of the Partnership and/or an
affiliate of a General Partner, which affiliate has a contractual obligation to
act on behalf of the Partnership, to remove the general partner of the
subsidiary partnerships and to approve certain major operating and financial
decisions, the Partnership has a controlling financial interest in the
subsidiary partnerships.
For financial reporting purposes, the Partnership's fiscal year ends March 25.
All subsidiaries have fiscal years ending December 31. Accounts of subsidiaries
have been adjusted for intercompany transactions from January 1 through March
25. The Partnership's fiscal year ends on March 25 in order to allow adequate
time for the subsidiaries financial statements to be prepared and consolidated.
The books and records are maintained on the accrual basis of accounting in
accordance with generally accepted accounting principles ("GAAP").
All intercompany accounts and transactions have been eliminated in
consolidation.
Increases (decreases) in the capitalization of consolidated subsidiaries
attributable to minority interest arise from cash contributions and cash
distributions to the minority interest partners.
Losses attributable to minority interests which exceed the minority interests'
investment in a subsidiary have been charged to the Partnership. Such losses
aggregated $0, $0 and $54,476 for the years ended March 25, 1998, 1997 and 1996,
respectively (the 1997, 1996 and 1995 Fiscal Years). The Partnership's
investment in each subsidiary is equal to the respective subsidiary's partners'
equity less minority interest capital, if any. In consolidation, all subsidiary
partnership losses are included in the Partnership's capital account except for
losses allocated to minority interest capital.
b) Property and Equipment
Property and equipment to be held and used are carried at cost which includes
the purchase price, acquisition fees and expenses, construction period interest
and any other costs incurred in acquiring the properties. The cost of property
and equipment is depreciated over their estimated useful lives using accelerated
and straight-line methods. Expenditures for repairs and maintenance are charged
to expense as incurred; major renewals and betterments are capitalized. At the
time property and equipment are retired or otherwise disposed of, the cost and
accumulated depreciation are eliminated from the assets and accumulated
depreciation accounts and the profit or loss on such disposition is reflected in
earnings. A loss on impairment of assets is recorded when management estimates
amounts recoverable through future operations and sale of the property on an
undiscounted basis are below depreciated cost. At that time property investments
themselves are reduced to estimated fair value (generally using discounted cash
flows) when the property is considered to be impaired and the depreciated cost
exceeds estimated fair value.
At the time management commits to a plan to dispose of assets, said assets are
adjusted to the lower of carrying amount or fair value less costs to sell. These
assets are classified as property and equipment-held for sale and are not
depreciated. All property and equipment for subsidiary partnerships whose assets
and liabilities are under sales contracts are classified as assets held for
sale.
-40-
<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 25, 1998
Through March 25, 1998, the Partnership has recorded approximately $5,283,000 as
a loss on impairment of assets.
c) Interest Subsidies
Interest expense has been reduced by interest subsidies (Note 6).
d) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, cash in banks, and investments
in short-term highly liquid instruments purchased with original maturities of
three months or less.
e) Income Taxes
No provision has been made for income taxes in the accompanying financial
statements since such taxes, if any, are the responsibility of the individual
partners. For income tax purposes, the Partnership has a fiscal year ending
December 31 (Note 9).
f) Loss Contingencies
The Partnership records loss contingencies as a charge to income when
information becomes available which indicates that it is probable that an asset
has been impaired or a liability has been incurred as of the date of the
financial statements and the amount of loss can be reasonably estimated. In
addition, the Partnership evaluates the amount of a potential environmental
liability independently from any potential claim for recovery.
g) Use of 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. Accordingly, actual results
could differ from those estimates.
NOTE 3 - Fair Value of Financial Instruments
The following methods and assumptions were used to estimate the fair value of
each class of financial instruments (all of which are held for non-trading
purposes) for which it is practicable to estimate that value:
Cash and Cash Equivalents, Cash-Restricted for Tenants' Security Deposits and
Mortgage Escrow Deposits
The carrying amount approximates fair value.
Mortgage Notes Payable
The fair value of mortgage notes payable is estimated, where practicable, based
on the borrowing rate currently available for similar loans.
-41-
<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 25, 1998
The estimated fair values of the Partnership's mortgage notes payable are as
follows:
<TABLE>
<CAPTION>
March 25, 1998 March 25, 1997
------------------------- -------------------------
Carrying Carrying
Amount Fair Value Amount Fair Value
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Mortgage Notes Payable for
which it is:
Practicable to estimate fair value $39,318,544 $39,488,393 $43,722,772 $43,993,062
Not practicable to estimate
fair value $29,596,529 (a) $48,279,991 (a)
Purchase money notes
payable for which it is:
Not practicable to estimate
fair value $68,296,196 $83,670,532 (b)
Due to selling partners for
which it is:
Not practicable to estimate
fair value $85,835,988 $99,414,479 (b)
</TABLE>
(a) Management believes it is not practical to estimate the fair value of the
mortgage notes payable because mortgage programs with similar characteristics
are not currently available to the partnerships.
(b) For the reasons discussed in Note 7 it is not practicable to estimate the
fair value of these notes, or accrued interest thereon.
The carrying amount of other financial instruments that require such disclosure
approximates fair value.
NOTE 4 - Property and Equipment and Property and Equipment Held for Sale
The components of property and equipment and their estimated useful lives are as
follows:
March 25
------------------------------ Estimated
1998 1997 Useful Lives
------------- ------------- ------------
Land $ 10,588,409 $ 13,519,192
Buildings and improvements 165,490,058 216,934,795 5 - 40 Years
Furniture and fixtures 9,284,603 9,630,659 3 - 10 Years
------------- -------------
185,363,070 240,084,646
Less: Accumulated depreciation (83,277,443) (99,888,832)
------------- -------------
$ 102,085,627 $ 140,195,814
============= =============
-42-
<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 25, 1998
Property acquisition fees of $5,131,535 were earned by the General Partners of
the Partnership and have been capitalized as a cost of property and equipment.
Depreciation expense for the 1997, 1996 and 1995 Fiscal Years amounted to
$7,164,517, $8,484,538, and $6,529,518 respectively.
As of December 31, 1995, Bicentennial had experienced significant cash flow
problems and was in default on the underlying mortgage and wraparound mortgage
note payable. Beal Bank, the holder of the underlying mortgage had provided
formal notice of their intent to foreclose. As a result of the 1995 loss
combined with a history of operating and cash flow losses, it was determined
that an impairment of property and equipment existed at December 31, 1995. The
impairment loss was determined to be $4,343,215 for the 1995 Fiscal Year. The
amount of the impairment loss was determined based on the difference in the
carrying value of property and equipment (net of depreciation) and the appraisal
provided by Beal Bank, the underlying mortgage holder. The appraisal was dated
January 29, 1996, in the amount $1,050,000. On May 2, 1996 the property owned by
Bicentennial was sold to a third party (see Note 10).
Saraland is located on an EPA Superfund Cleanup Site. During the year ended
December 31, 1996, the tenants of Saraland were moved to temporary housing to
facilitate cleanup of the site. Rents continued to be collected by Saraland from
the tenants and HUD. However, as of February 1997, the EPA, along with other
agencies, determined that Saraland is unsafe to live in due to amounts of
Benzene and Aldrene found to be present in the air of some apartments. There
appears to be a substantial likelihood that the EPA will conclude that the
apartments will be torn down in order to remove the contamination that has been
found to exist underneath the buildings. As of April 1997, HUD stopped making
Housing Assistance Payments to Saraland and Saraland stopped making payments on
its mortgage (see Note 11). Accordingly, for the year ended March 25, 1997, an
impairment loss in the amount of $939,612 has been recognized in the financial
statements. On March 25, 1997, the land and building were written down to zero.
The components of property and equipment held for sale at March 25, 1998 are as
follows:
Land $ 381,624
Buildings and improvements 7,104,044
Furniture and fixtures 174,476
----------
7,660,144
Less: Accumulated depreciation (3,218,752)
----------
$4,441,392
==========
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<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 25, 1998
NOTE 5 - Mortgage Escrow Deposits
Mortgage escrow deposits consist of the following:
<TABLE>
<CAPTION>
March 25,
---------------------------
1998 1997
----------- -----------
<S> <C> <C>
Reserves for replacements $ 5,776,649 $ 6,505,591
Real estate taxes, insurance and other 4,454,486 4,549,481
----------- -----------
$10,231,135 $11,055,072
=========== ===========
</TABLE>
NOTE 6 - Mortgage Notes Payable
The mortgage notes are payable in aggregate monthly installments of
approximately $530,000, including principal and interest at rates varying from
3% to 11.4% per annum, through June 2027. Each subsidiary partnership's mortgage
note payable is collateralized by the land and buildings of the respective
subsidiary partnership, the assignment of certain subsidiary partnership's rents
and leases and is without further recourse.
Under the terms of regulatory agreements with the Secretary of the U.S.
Department of Housing and Urban Development ("HUD"), subsidiary partnerships
with mortgage note balances aggregating approximately $61,168,000 and
$68,800,000 at December 31, 1997 and 1996, respectively, providing for interest
at rates ranging from 3.0% to 11.4% per annum, paid only that portion of the
monthly payments that would be required if the interest rate was in the range of
1% - 3% per annum; the balance was subsidized under Section 236 of the National
Housing Act.
In addition, one subsidiary partnership with mortgage note balances of
approximately $4,469,000 and $4,564,000 at December 31, 1997 and 1996,
respectively, entered into interest reduction subsidy agreements with the
Massachusetts Housing Finance Agency ("MHFA"), which effectively reduced the
interest rates on the mortgage note balances to 7.7%.
Annual principal payment requirements for each of the next five years are
as follows:
<TABLE>
<CAPTION>
Amount
-----------
<S> <C>
1998 $ 3,568,536
1999 2,430,582
2000 2,610,405
2001 2,803,174
2002 3,011,352
Thereafter 54,491,024
-----------
Total $68,915,073
===========
</TABLE>
The mortgage agreements require monthly deposits to replacement reserves of
approximately $164,000 and monthly deposits to escrow accounts for real estate
taxes, hazard, and mortgage insurance and other (Note 5).
-44-
<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 25, 1998
NOTE 7 - Purchase Money Notes Payable
Purchase money notes in the original amount of $85,458,825 were issued to the
selling partners of the subsidiary partnerships as part of the purchase price
and are secured only by the interest in the subsidiary partnership to which the
note relates (the "Purchase Money Notes"). A portion of these notes, in the
original amount of $31,932,568 are obligations at the subsidiary partnership
level, whereas the remaining $53,526,257 is recorded at the Partnership level.
The Purchase Money Notes generally provided for compound interest at rates
which, in general, ranged from 9% to 10% per annum through August 31, 1989.
Thereafter, simple interest has accrued, without further interest thereon,
through maturity, August through December 1996 (unless extended by the
Partnership for up to three years in general). As of March 25, 1998, the
maturity dates of each of the Purchase Money Notes associated with the remaining
properties owned by the subsidiary partnerships were extended for two years (see
below). Purchase money notes at March 25, 1998 and 1997 include $4,336,417 of
interest accrued through August 31, 1989.
The Purchase Money Notes, which provide for simple interest through maturity
during the initial term, as extended, will not be in default during the initial
term, as extended, if not less than 60% of the cash flow actually distributed to
the Partnership by the corresponding subsidiary partnership (generated by the
operations, as defined) is applied first to accrued interest and then to current
interest thereon. Any interest not paid currently accrues, without further
interest thereon, through the extended due date of the note. Continued accrual
of such interest beyond the initial term, without payment, reduces the effective
interest rate of 9%. The exact effect is not determinable inasmuch as it is
dependent on the actual future interest payments and ultimate repayment dates of
the notes. Unpaid interest of approximately $85,000,000 and $98,000,000 as of
March 25, 1998 and 1997, respectively, has been accrued and is included in due
to selling partners in the consolidated balance sheets. In general, the interest
on and the principal of each Purchase Money Note is also payable to the extent
of the Partnership's actual receipt of proceeds of the sale or refinancing of
the Apartment Complex, or in some cases the Local Partnership Interest to which
the Purchase Money Note relates.
The Partnership was permitted to extend the term of the Purchase Money Notes for
up to three additional years (four years with respect to three subsidiary
partnerships). In connection with such extensions, the Partnership incurred an
extension fee of 1/2% per annum of the outstanding principal balance of the
notes. Through March 25, 1998, the maturity dates of each of the Purchase Money
Notes associated with the remaining properties owned by the subsidiary
partnerships (ranging from August to December 1996) were extended for two years
and extension fees in the amount of $795,643 were incurred by the Partnership.
Such notes are now due with maturity dates ranging from August to December 1998.
Of such fees incurred, $648,126 was accrued and added to the Purchase Money
Notes balance in accordance with the respective note agreements. The extension
fees are being amortized over the term of the extension. The Partnership expects
that upon maturity of the Purchase Money Notes, it will be required to refinance
or sell its investments in the Local Partnerships in order to pay the Purchase
Money Notes. The Partnership cannot sell or otherwise liquidate its investments
in those Local Partnerships which have subsidy agreements with the United States
Department of Housing and Urban Development ("HUD") during the period that such
agreements are in existence without HUD's approval. Based on the historical
operating results of the Local Partnerships and the current economic conditions,
including changes in tax laws, it is uncertain as to whether the proceeds from
such sales will be sufficient to meet the outstanding balances of
-45-
<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 25, 1998
principal, accrued interest and extension fees. Management is working with the
selling partners to restructure and/or refinance the notes. No assurance can be
given that management's efforts will be successful. The Purchase Money Notes are
without personal recourse to either the Partnership or any of its partners and
the sellers' recourse, in the event of nonpayment, would be to foreclose on the
Partnership's interests in the respective subsidiary partnerships.
Distributions aggregating approximately $1,474,000, $1,410,000 and $1,390,000
were made to the Partnership during each of the years ended March 25, 1998, 1997
and 1996, respectively, of which approximately $883,000, $813,000 and $834,000,
respectively, was used to pay interest on the Purchase Money Notes. In addition,
approximately $144,000, $117,000 and $105,000 for the 1997, 1996 and 1995 Fiscal
Years, respectively, was paid as "additional" interest on the purchase money
notes. In addition, approximately $1,031,000, $1,744,000 and $1,709,000 was paid
by the subsidiary partnerships as interest on purchase money notes during the
1997, 1996, and 1995 Fiscal Years, respectively.
NOTE 8 - Related Party Transactions
The costs incurred to related parties were as follows:
Year Ended March 25,
--------------------------------------
1998 1997 1996
---------- ---------- ----------
Partnership management fees (a) $1,142,000 $1,142,000 $ 125,000
Expense reimbursement (b) 162,636 172,515 146,205
Property management fees (c) 1,834,532 2,048,346 2,063,787
Local administrative fee (d) 83,750 82,500 82,500
---------- ---------- ----------
$3,222,918 $3,445,361 $2,417,492
========== ========== ==========
(a) After all other expenses of the Partnership are paid, an annual partnership
management fee of up to .5% of invested assets is payable to the Partnership's
General Partners and affiliates. Partnership management fees owed to the General
Partners amounting to $557,755 and $1,623,237 were accrued and unpaid as of
March 25, 1998 and 1997, respectively.
(b) The Partnership reimburses the General Partners and their affiliates for
actual Partnership operating expenses incurred by the General Partners and their
affiliates on the Partnership's behalf. The amount of reimbursement from the
Partnership is limited by the provisions of the Partnership Agreement. Another
affiliate of the Related General Partner performs asset monitoring for the
Partnership. These services include site visits and evaluations of the
subsidiary partnerships' performance. Expense reimbursements and asset
monitoring fees owed to the Related General Partner amounting to $114,167 and
$141,498 were accrued and unpaid as of March 25, 1998 and 1997, respectively.
(c) Property management fees incurred to affiliates of the subsidiary
partnerships amounted to $1,882,302, $2,033,267 and $2,016,617 for the 1997,
1996 and 1995 Fiscal Years, respectively. Property management fees incurred to
affiliates of the Partnership amounted to $21,296, $15,079 and $47,170 for the
1997, 1996 and 1995 Fiscal Years, respectively.
-46-
<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 25, 1998
(d) C/R Special Partnership, the special limited partner, owning a .01%
interest, is entitled to receive a local administrative fee of up to $2,500 per
year from each subsidiary partnership.
Due to local general partners and affiliates at December 31, 1997 and 1996
consists of the following:
<TABLE>
<CAPTION>
December 31,
-----------------------------
1998 1997
---------- ----------
<S> <C> <C>
Operating advances (a) (b) $ 362,288 $ 362,288
Operating deficit loan (b) 455,550 455,550
Management and other fees 544,152 919,431
---------- ----------
$1,361,990 $1,737,269
========== ==========
</TABLE>
(a) Operating advances include three loans payable to local general partners and
affiliates.
(b) These loans are unsecured, noninterest bearing and payable out of available
surplus cash of the respective subsidiary partnership or at the time of sale or
refinancing.
NOTE 9 - Income Taxes
A reconciliation of the financial statement net income (loss) to the income tax
income (loss) for the Partnership and its subsidiaries is as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------
1997 1996 1995
------------ ----------- ------------
<S> <C> <C> <C>
Financial statement net income (loss) $ 20,650,192 $(2,363,628) $(15,644,033)
Difference resulting from parent company
having a different fiscal year for income tax
and financial reporting purposes 606,254 (557,009) 8,678
Difference resulting primarily from depreciation
and amortization expense recorded for financial
reporting purposes and income tax purposes (1,652,343) (2,427,826) (5,031,092)
Loss on impairment of assets recorded for
financial reporting purposes 0 939,612 4,343,215
Difference between gain on sale of assets
recorded for financial reporting purposes and
for income tax purposes 18,645,239 (1,887,492) 0
Difference between a forgiveness of indebtedness
income recorded for financial reporting
purposes and for income tax purposes (3,490,125) 0 0
Other, including accruals for financial reporting
purposes not deductible for tax purposes
until paid 2,208,922 74,416 386,913
------------ ----------- ------------
Income (loss) as shown on the income tax return
for the calendar year ended $ 36,968,139 $(6,221,927) $(15,936,319)
============ =========== ============
</TABLE>
-47-
<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 25, 1998
NOTE 10 - Sale of Properties
On May 2, 1996, the property owned by Bicentennial was sold to a third party for
$1,700,000, resulting in a gain in the amount of $606,195 and forgiveness of
indebtedness income of $11,502,877 as a result of forgiveness of the purchase
money note payable and accrued interest thereon (which were obligations at the
subsidiary partnership level), amounts due to HUD, and amounts due to general
partners and affiliates.
On May 7, 1997, the properties and the related assets and liabilities of
Knollwood I, Ltd., Knollwood II, Ltd., Knollwood III, Ltd., and Knollwood IV,
Ltd. (together, the "Knollwoods") were sold to a third party for $20,750,000,
which took title subject to the principal balance of the associated Purchase
Money Notes in the amount of $6,026,521, resulting in a gain in the amount of
$6,158,870. No proceeds were used to settle the accrued interest on the
associated Purchase Money Notes which amounted to $5,621,969, resulting in
forgiveness of indebtedness income.
On June 30, 1997, the property and related assets and liabilities of Parklane
II, Ltd. ("Parklane") were sold to a third party for $3,712,000 which took title
subject to the principal balance of a portion of the associated Purchase Money
Notes which amounted to $1,252,632, resulting in a gain in the amount of
$830,182. The Partnership used $450,000 of the net proceeds to settle the
remaining principal balance of the Purchase Money Notes and accrued interest
thereon which amounted to $2,821,789, resulting in forgiveness of indebtedness
income of $2,371,789.
On August 1, 1997, the Partnership's Local Partnership Interest in Northgate
Townhouse Apartments ("Northgate") was sold to a third party for $500,000
resulting in a loss in the amount of $824,647. No proceeds were used to settle
the associated Purchase Money Notes and accrued interest which resulted in
forgiveness of indebtedness income of $6,910,594.
On August 1, 1997, the Partnership's Local Partnership Interest in Westminster
Manor Apartments ("Westminster") was sold to a third party for $500,000,
resulting in a loss in the amount of $1,139,486. No proceeds were used to settle
the associated Purchase Money Notes and accrued interest resulted in forgiveness
of indebtedness income of $8,270,497.
On August 11, 1997, the Partnership's Local Partnership Interest in Buttonwood
Acres at New Bedford ("Buttonwood") was sold back to Buttonwood for $532,750,
resulting in a loss in the amount of $343,493. No proceeds were used to settle
the associated Purchase Money Notes and accrued interest which resulted in
forgiveness of indebtedness income of $4,820,571.
NOTE 11 - Commitments and Contingencies
a) Subsidiary Partnerships - Events of Default and Going Concern
The financial statements for six subsidiary partnerships have been prepared
assuming each will continue as a going concern. The circumstances described
below raise substantial doubt about each subsidiary partnership's ability to
continue as a going concern. The auditors for these six subsidiary partnerships
modified their reports on the 1997 Fiscal Year financial statements due to the
uncertainty of each subsidiary partnership's ability to continue as a going
concern. These financial statements do not include any adjustments that would be
necessary in the event the subsidiary partnerships are unable to continue as a
going concern. The
-48-
<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 25, 1998
six subsidiary partnerships are Bellfort Associates, Ltd. ("Bellfort"), Park of
Pecan I, Ltd. ("Park of Pecan I"), Park of Pecan II, Ltd. ("Park of Pecan II"),
Cranbrook Manor Apartments Limited Partnership ("Cranbrook"), Saraland
Apartments, Ltd. ("Saraland") and Valley Arms, Ltd. ("Valley Arms").
Results of Operations of Certain Local Partnerships
- - - ---------------------------------------------------
Bellfort Associates, Ltd.
- - - -------------------------
Bellfort Associates, Ltd. ("Bellfort") has been in default on the required
interest payments due on the wraparound purchase note payable to Finger
Companies since 1992. The original maturity date of the note was the twelfth
anniversary of the transaction date or November 1, 1996. However, the debt
agreement allows Bellfort the option to extend the term of the note an
additional year on the twelfth, thirteenth and fourteenth anniversaries.
Bellfort has been granted the option to extend the term to November 1, 1998, and
has the option to extend the term through October 31, 1999, at which time the
principal plus deferred interest is due. Accumulated deferred interest at
December 31, 1997 and 1996 of approximately $3,737,000 and $3,417,000,
respectively, is also subject to 9% interest. The note is secured by a first
lien on and security interest in the Partnership's and Bellfort's special
limited partner's rights, titles and interests in Bellfort. Payments on this
note cannot exceed the required payments on the underlying Multifamily Mortgage
Trust ("MMT") note described below.
The purchase money note wraps around an underlying mortgage note. The underlying
mortgage is collateralized by a deed of trust on the rental property. In June
1996, the underlying mortgage note was sold by the U.S. Department of Housing
and Urban Development (HUD), who had assumed the underlying mortgage note in
December 1991, to MMT.
Prior to August 1996, the underlying mortgage note was in default first with HUD
and then with MMT. In order to avoid any acceleration or other exercise of
remedies for the defaulted mortgage, MMT allowed the previous owners to bring
the underlying mortgage note current with a payment of approximately $294,000.
Upon making the underlying mortgage note current, the debt agreement for the
underlying mortgage note payable required monthly payments of approximately
$47,000 with $37,000 relating to principal and interest payments due on the
first of each month and such payments have been made as of December 31, 1997.
Bellfort's operations have not generated sufficient cash flows to service its
existing debt structure, and Bellfort's purchase note payable is due November 1,
1998. Bellfort's forecasted cash flows for 1998 indicate a significant shortfall
of amounts needed to repay such note and the related deferred interest. Bellfort
will be required to renegotiate the terms of the note or to obtain alternative
financing to satisfy the holder. If unsuccessful, Bellfort may be required to
sell the rental property. Management of Bellfort intends to request the
extension of the note for an additional year; however, there can be no assurance
that such an extension will be granted.
The Partnership's investment in Bellfort has been reduced to zero by prior
years' losses. The minority interest balance was $0 at March 25, 1998 and 1997.
Bellfort's net loss after minority interest amounted to approximately $586,000,
$580,000 and $694,000 for the 1997, 1996 and 1995 Fiscal Years, respectively.
-49-
<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 25, 1998
Park of Pecan I, Ltd. and Park of Pecan II, Ltd.
- - - ------------------------------------------------
Park of Pecan I, Ltd. ("Park of Pecan I") and Park of Pecan II, Ltd. ("Park of
Pecan II") have experienced operating losses since inception and as of December
31, 1997 have net capital deficiencies aggregating approximately $5,353,000.
Park of Pecan I and II previously funded their operating losses by borrowing
amounts pursuant to operating deficit guaranty agreements made in connection
with the acquisition of the Apartment Complexes. However, such agreements
expired December 31, 1989 and Park of Pecan I and II have not made arrangements
to obtain an extension or additional funds. If Park of Pecan I and II continue
to experience significant operating losses and are unable to obtain additional
funds they may be unable to continue operations. The Partnership's investments
in Park of Pecan I and II have been reduced to zero by prior years' losses. Park
of Pecan I and II's minority interest balances were $0 at March 25, 1998 and
1997. Park of Pecan I's net loss after minority interest amounted to
approximately $219,000, $158,000 and $196,000 for the 1997, 1996 and 1995 Fiscal
Years, respectively. Park of Pecan II's net loss after minority interest
amounted to approximately $224,000, $170,000 and $185,000 for the 1997, 1996 and
1995 Fiscal Years, respectively.
On January 13, 1998, Park of Pecan I & II entered into a purchase and sale
agreement with an unaffiliated third party for a purchase price of $5,275,000
which includes $850,000 in tax exempt second mortgage bonds. The Partnership
will receive these tax exempt bonds as its share of the purchase price. The
contract has since been amended to reflect a lower price adjustment and $600,000
in tax exempt bonds to the Partnership. The closing is expected to occur during
August 1998. However, no assurance can be given that the closing will occur.
Cranbrook Manor Apartments Limited Partnership
- - - ----------------------------------------------
During the year ended December 31, 1997, Cranbrook Manor Apartments Limited
Partnership ("Cranbrook") incurred a net loss of approximately $246,000 and
total liabilities exceeded total assets by approximately $1,697,000 at December
31, 1997. In addition, Cranbrook receives housing assistance payments and a
mortgage interest subsidy from HUD under provisions of Section 8 and Section
236, respectively, of the National Housing Act. Cranbrook entered into housing
assistance agreements (the "Section 8 agreements") with the FHA dated October 1,
1976, September 1, 1982 and November 1, 1991. The Section 8 agreements were
renewed for one year, expiring on September 30, 1998, August 31, 1998 and
October 31, 1998, respectively. Cranbrook 's cash flows may be insufficient to
meet its current obligations in the ordinary course of business. Should cash
flows be insufficient, management plans to pursue a workout agreement with HUD.
There are no assurances that the Section 8 agreement will be renewed under
comparable economic terms to Cranbrook upon the expiration of the agreement. As
of December 31, 1997, it is not possible to estimate the effect of the potential
loss of this subsidy. However, the termination of reduction of the benefits
under this program by the government could have an adverse effect on the
operations of Cranbrook. These factors, among others, indicate that there is
substantial doubt about Cranbrook's ability to continue as a going concern for a
reasonable period of time.
The financial statements do not include any adjustments relating to the
recoverability and classification of liabilities that might be necessary should
Cranbrook be unable to continue as a going concern. Cranbrook's continuation as
a going concern is dependent upon its ability to generate sufficient cash flow
to meet its obligations on a timely basis and to ultimately attain successful
operations. The Partnership's investment in Cranbrook has been reduced to zero
by prior years' losses. The minority interest balance was $0 at March 25, 1998
and 1997. Cran-
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<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 25, 1998
brook's net loss after minority interest amounted to approximately
$246,000, $223,000 and $138,000 for the 1997, 1996 and 1995 Fiscal Years,
respectively.
Saraland Apartments, Ltd.
- - - -------------------------
Saraland Apartments, Ltd. ("Saraland") has been designated as a "Superfund" site
on the National Priorities List under the Comprehensive Environmental Response,
Compensation, and Liability Act ("CERCLA"). On March 18, 1992, Redwing Carriers,
Inc., a trucking company which utilized the Saraland site prior to development
of the property as a low-income apartment complex, served an Amended Complaint
on the Partnership and C/R Special Partnership, among others, adding them to the
lawsuit previously commenced against Saraland and the general partners in the
United States District Court for the Southern District of Alabama. That lawsuit
seeks reimbursement for costs previously incurred by Redwing Carriers with
respect to the site, which at the time of the Amended Complaint totaled
approximately $2,000,000, as well as a declaration that each of the defendants
is jointly and severally liable for costs of response or damages resulting from
the release of hazardous substances, among other items of relief. In September
1996, the 11th Circuit Court of Appeals affirmed a lower court's decision
dismissing the Partnership and C/R Special Partnership from the case, and,
accordingly, the Partnership and C/R Special Partnership are no longer subject
to liability in the lawsuit brought by Redwing Carriers, Inc.
During March 1993, the Partnership was named by the United States Environmental
Protection Agency ("EPA") as a "Potentially Responsible Party" under Superfund
in connection with the Saraland Apartment Complex Site.
On July 16, 1993, Saraland, the local general partners (Roar Corporation and the
Estate of Robert Coit), the limited partners (the Partnership and C/R Special
Partnership), and five other parties were named as Respondents in a unilateral
administrative order (the "Order") issued under CERCLA by EPA, directing the
Respondents to implement the EPA-selected remedy for addressing contamination by
hazardous substances at the site. In December 1993, Saraland and its general
partners, the Partnership and C/R Special Partnership informed EPA that they
have "sufficient cause" to not comply with the Order. Redwing Carriers, Inc.
initially advised EPA that it would commence implementation of the Order. It has
recently, however, refused to do so and EPA has now begun implementation of the
remedy.
Since September 1993, EPA has not notified the Partnership whether it intends to
take further legal action. During the 1994 Fiscal Year, EPA determined that
cleanup for the project site could cost between six and ten million dollars. In
or around late 1996, EPA elected to vacate the apartment complex and relocate
all tenants. Given the fact that EPA has not informed the Partnership whether or
not it intends to pursue the Partnership through further legal action, neither
management nor management's counsel are in a position, at this point, to
evaluate the likelihood of an unfavorable outcome or range of any potential
loss. However, the dismissal of the Partnership and C/R Special Partnership from
the Redwing litigation (discussed above) should provide strong grounds upon
which to contest any attempt by EPA to visit liability for undertaking and
funding the remedy and/or relocation upon the Partnership. The Partnership
intends to present a vigorous defense and strongly contests any further legal
action brought by or on behalf of EPA to obtain from the Partnership remedial
funding and/or any other costs associated with this matter. Litigation costs
incurred through March 25, 1998 by the Partnership total approximately $275,000.
-51-
<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 25, 1998
During the year ended December 31, 1996, the tenants of Saraland were moved to
temporary housing to facilitate cleanup of the site. Rents continued to be
collected by Saraland from the tenants and HUD. However, as of February 1997,
the EPA, along with other agencies, determined that Saraland is unsafe to live
in due to amounts of Benzene and Aldrene found to be present in the air of some
apartments. There appears to be a substantial likelihood that the EPA will
conclude that the apartments will be torn down in order to remove the
contamination that has been found to exist underneath the buildings. As of April
1997, HUD stopped making Housing Assistance Payments to Saraland and Saraland
stopped making payments on its mortgage.
On May 13, 1997, a number of residents at the Saraland Apartments complex served
a purported class action complaint upon the Partnership and C/R Special
Partnership, as well as Redwing Carriers, Inc., Saraland, Saraland's general
partners and others alleging that all defendants are liable to the class members
for adverse health consequences and other expenses attendant to hazardous
substance exposure caused by the conduct of all defendants. Given the early
stage of this proceeding, it is not possible to evaluate the likelihood of an
unfavorable outcome. Nonetheless, the Partnership intends to present a vigorous
defense and will strongly contest its liability for the claims made in this
action.
The above conditions raise substantial doubt about Saraland's ability to
continue as a going concern. These financial statements do not include any
adjustments, other than the impairment loss discussed in Note 4, that might
result from the outcome of these uncertainties. The Partnership's investment in
Saraland was $0 at both March 25, 1998 and 1997, and the minority interest
balance was approximately $22,000 at each date. Saraland's net (income) loss
after minority interest amounted to approximately $(7,900), $912,000 and $42,000
for the 1997, 1996, and 1995 Fiscal Years, respectively.
Valley Arms, Ltd.
- - - -----------------
During the year ended December 31, 1997, Valley Arms, Ltd. ("Valley Arms")
incurred a net loss of approximately $79,000 and as of that date, Valley Arms'
total current liabilities exceeded its total current assets by approximately
$1,395,000. As of December 31, 1997, Valley Arms is fifteen months delinquent on
its mortgage payment, subsequent to December 31, 1997, the Partnership filed a
petition of bankruptcy under Chapter 11 of the bankruptcy code. These factors,
among others, raise substantial doubt about Valley Arms' ability to continue as
a going concern. The financial statements do not include any adjustments that
might be necessary if Valley Arms is unable to continue as a going concern.
Valley Arms' continuation as a going concern is dependent upon its ability to
generate sufficient cash flow to meet its obligations on a timely basis, to
comply with the terms of its mortgage, to obtain additional capital
contributions from partners, and ultimately, to attain successful operations.
Management of Valley Arms is making all efforts possible to increase the
occupancy and the rental income of the project and to make the necessary
improvements to enhance the property, in an attempt to improve Valley Arms' cash
flow. Management of Valley Arms is also currently negotiating a sale of the
project. The Partnership's investment in Valley Arms was approximately $481,000
and $560,000 at March 25, 1998 and 1997, respectively, and the minority interest
balance was $0 at each date. Valley Arms' net loss after minority interest
amounted to approximately $79,000, $99,000 and $49,000 for the 1997, 1996 and
1995 Fiscal Years, respectively.
-52-
<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 25, 1998
b) Subsidiary Partnerships - Other
Bonnie Doone Apartments, Ltd.
- - - -----------------------------
Bonnie Doone Apartments, Ltd. ("Bonnie Doone") relies on continuance of the
Section 8 rent subsidy contracts which represent 57% of gross income. The
current contracts expire on July 31, 1998 and May 31, 1999 and renewal is
uncertain. Management of Bonnie Doone intends to actively pursue renewal of the
rental subsidy contract with HUD. The Partnership's investment in Bonnie Doone
was approximately $364,000 and $416,000 at March 25, 1998 and 1997,
respectively, and the minority interest balance was $0 at each date. Bonnie
Doone's net loss after minority interest amounted to approximately $52,000,
$69,000 and $22,000 for the 1997, 1996 and 1995 Fiscal Years, respectively.
Dickens Ferry Apartments, Ltd.
- - - ------------------------------
Dickens Ferry Apartments, Ltd. ("Dickens Ferry") relies on continuance of the
Section 8 rent subsidy contract which represents 66% of gross income. The
current contracts expire on July 31, 1998 and September 30, 1998 and renewal is
uncertain. Management of Dickens Ferry intends to actively pursue renewal of the
rental subsidy contract with HUD. The Partnership's investment in Dickens Ferry
was approximately $591,000 and $596,000 at March 25, 1998 and 1997,
respectively, and the minority interest balance was $0 at each date. Dickens
Ferry's net (income) loss after minority interest amounted to approximately
$5,000, ($18,000) and $37,000 for the 1997, 1996 and 1995 Fiscal Years,
respectively.
c) Management Agreement
The subsidiary partnerships have entered into management agreements of which
some are with affiliates of the subsidiaries' general partners, which require
annual fees ranging from approximately 4% to 13% of gross rental revenues. Such
management fees amounted to $2,509,259, $2,697,022 and $2,683,574 for the 1997,
1996 and 1995 Fiscal Years, respectively.
d) Uninsured Cash and Cash Equivalents
The Partnership maintains its cash and cash equivalents in various banks.
Accounts at each bank are guaranteed by the Federal Deposit Insurance
Corporation ("FDIC") up to $100,000. As of March 25, 1998, uninsured cash and
cash equivalents approximated $35,000.
e) Housing Assistance Payments Contracts
In September 1997, Congress enacted the Multi-family Assisted Housing Reform and
Affordability Act of 1997 ("MAHRAA") which provides for the renewal of Section 8
Housing Assistance Payments Contracts ("Section 8 Contracts") to be based upon
market rentals instead of the above-market rentals which is generally the case
under existing Section 8 Contracts. As a result, Section 8 Contracts that are
renewed in the future in projects insured by the Federal Housing Administration
("FHA") may not provide sufficient cash flow to permit owners of properties to
meet the debt service requirements of these existing FHA-insured mortgages.
MAHRAA also provides for the restructuring of these mortgage loans so that the
annual debt service on the restructured loan (or loans) can be supported by
Section 8 rents established at the market rents. The restructured loans will be
held by the current lender or another lender. There can be no assurance that a
property owner will be permitted to restructure its mortgage indebtedness
pursuant to the new rules implementing MAHRAA or that an owner would
-53-
<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 25, 1998
choose to restructure the mortgage if it were able to participate. MAHRAA is
supposed to go into effect on October 28, 1998; regulations implementing the
program must be issued prior to that time. It should be noted that there are
many uncertainties as to the economic and tax impact on a property owner because
of the combination of the reduced Section 8 contract rents and the restructuring
of the existing FHA-insured mortgage loan under MAHRAA.
f) Other
The Partnership is subject to the risks incident to potential losses arising
from the management and ownership of improved real estate. The Partnership can
also be affected by poor economic conditions generally, however no more than 19%
of the properties are located in any single state. There are also substantial
risks associated with owning properties receiving government assistance, for
example the possibility that Congress may not appropriate funds to enable HUD to
make rental assistance payments. HUD also restricts annual cash distributions to
partners based on operating results and a percentage of the owner's equity
contribution. The Partnership cannot sell or substantially liquidate its
investments in subsidiary partnerships during the period that the subsidy
agreements are in existence, without HUD's approval. Furthermore, there may not
be market demand for apartments at full market rents when the rental assistance
contracts expire.
NOTE 12 - Subsequent Events
On April 30, 1998, the Oakbrook Villa partnership entered into a purchase and
sale agreement with an unaffiliated third party for a purchase price of
$8,250,000. The closing is expected to occur during July 1998. However, no
assurance can be given that the closing will occur.
On May 22, 1998, the partnership's Local Partnership Interest in Rockdale West
at New Bedford ("Rockdale") was sold back to Rockdale for $600,000 resulting in
a loss in the amount of approximately $125,000. No proceeds were used to settle
the associated purchase money notes accrued interest which had a total
outstanding balance of approximately $6,803,000.
-54-
<PAGE>
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
Not applicable
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 Partners.
Assisted Housing Associates, Inc. ("Assisted General Partner"), Related Beta
Corporation ("The Related General Partner") and Cambridge/Related Associates
Limited Partnership ("Cambridge/Related") are all affiliates of Related. The
general partner of Related is The Related Realty Group, Inc., of which Stephen
M. Ross is president, director and a stockholder. The General Partners will
manage and control the affairs of the Partnership directly and by engaging other
affiliates of Related. The general partners of Cambridge/Related are the
Assisted General Partner and The Related General Partner.
The Assisted General Partner was incorporated in Delaware on June 25, 1985 and
the Related General Partner was incorporated in Delaware on January 23, 1984.
On November 25, 1997, an affiliate of the Related General Partner, purchased
100% of the stock of the Assisted General Partner (the "Transfer"), then an
affiliate of Lehman Brothers, Inc. The Assisted General Partner is also a
partner of Cambridge/Related and, therefore, as a result of the Transfer, such
affiliate also acquired the Assisted General Partner's general partner interest
in Cambridge/Related and C/R Special Partnership, the special limited partner of
the Partnership. In connection with the Transfer, the Partnership paid to the
Assisted General Partner the accrued asset management fees owed to it in the
aggregate amount of $1,334,116. See Note 8 - Related Party Transactions to the
Financial Statements included in Item 8. above.
Certain information concerning the directors and executive officers of the
General Partners is set forth below.
The directors and executive officers of the Related General Partner are as
follows:
<TABLE>
<CAPTION>
Name Position
- - - ---- --------
<S> <C>
Stephen M. Ross Director
J. Michael Fried President and Director
Alan P. Hirmes Vice President
Stuart J. Boesky Vice President
Frank P. Cerbini Vice President
Glenn F. Hopps Treasurer
Lynn A. McMahon Secretary
</TABLE>
-55-
<PAGE>
STEPHEN M. ROSS, 58, is President, Director and shareholder of The Related
Realty Group, Inc., the General Partner of The Related Companies, L.P. He
graduated from the University of Michigan School of Business Administration with
a Bachelor of Science degree and from Wayne State University School of Law with
a Juris Doctor degree. Mr. Ross then received a Master of Laws degree in
taxation from New York University School of Law. He joined the accounting firm
of Coopers & Lybrand in Detroit as a tax specialist and later moved to New York,
where he worked for two large Wall Street investment banking firms in their real
estate and corporate finance departments. Mr. Ross formed the predecessor of The
Related Companies, L.P. in 1972 to develop, manage, finance and acquire
subsidized and conventional apartment developments.
J. MICHAEL FRIED, 54, is President, a Director and a principal shareholder of
Related Capital Corporation ("Capital"), a real estate finance and acquisition
affiliate of Related. In that capacity, he is the chief executive officer of
Capital, and is responsible for initiating and directing all of Capital's
syndication, finance, acquisition and investor reporting activities. Mr. Fried
practiced corporate law in New York City with the law firm of Proskauer Rose
Goetz & Mendelsohn from 1974 until he joined Capital in 1979. Mr. Fried
graduated from Brooklyn Law School with a Juris Doctor degree, magna cum laude;
from Long Island University Graduate School with a Master of Science degree in
Psychology; and from Michigan State University with a Bachelor of Arts degree in
History.
ALAN P. HIRMES, 43, has been a Certified Public Accountant in New York since
1978. Prior to joining Capital in October 1983, Mr. Hirmes was employed by
Weiner & Co., Certified Public Accountants. Mr. Hirmes is also a Vice President
of Capital. Mr. Hirmes graduated from Hofstra University with a Bachelor of Arts
degree.
FRANK P. CERBINI, 41, rejoined Related in 1992 where his primary responsibility
has been disposition of real estate. From 1990 to 1992 he was Marketing Director
at Carlton Property Auctions; during 1992 he was Vice President of USAuction,
Inc. From 1987 to 1990 he was Vice President at Marigold Real Estate, a real
estate development company located in Green-wich, CT. From 1980 to 1986 he was
in the acquisition office at Related Capital Company. He received a Bachelor of
Science in Economics from Manhattan College in 1979.
STUART J. BOESKY, 42, practiced real estate and tax law in New York City with
the law firm of Shipley & Rothstein from 1984 until February 1986 when he joined
Capital. From 1983 to 1984, Mr. Boesky practiced law with the Boston law firm of
Kaye, Fialkow Richard & Rothstein (which subsequently merged with Strook &
Strook & Lavan) and from 1978 to 1980 was a consultant specializing in real
estate at the accounting firm of Laventhol & Horwath. Mr. Boesky graduated from
Michigan State University with a Bachelor of Arts degree and from Wayne State
School of Law with a Juris Doctor degree. He then received a Master of Laws
degree in Taxation from Boston University School of Law.
GLENN F. HOPPS, 35, joined Related in December 1990, and prior to that date Mr.
Hopps was employed by Marks Shron & Company and Weissbarth, Altman and
Michaelson certified public accountants. Mr. Hopps graduated from New York State
University at Albany with a Bachelor of Science Degree in Accounting.
LYNN A. McMAHON, 42, has served as Assistant to the President of Capital. From
1978 to 1983, she was employed at Sony Corporation of America in the Government
Relations Department.
-56-
<PAGE>
The directors and executive officers of the Assisted General Partner are as
follows:
<TABLE>
<CAPTION>
Name Position
- - - ---- --------
<S> <C>
J. Michael Fried President and Director
Alan P. Hirmes Vice President
Stuart J. Boesky Vice President
Marc D. Schnitzer Vice President
Denise L. Kiley Vice President
Glenn F. Hopps Treasurer
Lynn A. McMahon Secretary
</TABLE>
MARC D. SCHNITZER, 37, joined Related in January 1988 after receiving his Master
of Busi-ness Administration degree from The Wharton School of The University of
Pennsylvania in December 1987. From 1983 to 1986, Mr. Schnitzer was a Financial
Analyst with The First Bos-ton Corporation in New York, an international
investment banking firm. Mr. Schnitzer re-ceived a Bachelor of Science degree,
summa cum laude, in Business Administration, from the School of Management at
Boston University in May 1983.
DENISE L. KILEY, 38, is responsible for overseeing the due diligence and asset
management of all multifamily residential properties invested in RCC sponsored
corporate, public and private equity and debt funds. Prior to joining Related in
1990, Ms. Kiley had experience acquiring, financing and asset managing
multifamily residential properties. From 1981 through 1985 she was an auditor
with Price Waterhouse. Ms. Kiley holds a Bachelor of Science in Accounting from
Boston College.
Biographical information with respect to Messrs. Fried, Hirmes, Boesky, Hopps
and Ms. McMahon is set forth above.
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 Partners for their services. However, under the terms of
the Amended and Restated Agreement of Limited Partnership of the Partnership,
the General Partners and their affiliates are entitled to receive compensation
from the Partnership in consideration of certain services rendered to the
Partnership by such parties. In addition, the General Partners collectively hold
a 1% interest in all profits, losses and distributions attributable to
operations and a subordinated 15% interest in such items attributable to sales
and refinancings. See Note 8 to the Financial Statements in Item 8 above, which
information is incorporated herein by reference thereto. Certain directors and
officers of the General Partners receive compensation from the General Partner
and their affiliates for services performed for various affiliated entities
which may include services performed for the Partnership.
Tabular information concerning salaries, bonuses and other types of compensation
payable to executive officers has not been included in this annual report. As
noted above, the Partnership has no executive officers. The levels of
compensation payable to the General Partners and/or
-57-
<PAGE>
their 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.
The General Partners own all of the outstanding general partnership interests in
the Partnership. The General Partners have a 1% interest in all profits, losses
and distributions of the Partnership from operations and a subordinated 15%
interest in such items from sale or refinancing proceeds. Except as aforesaid,
no person is known to own beneficially in excess of 5% of the outstanding
partnership interests.
At March 25, 1998, security ownership by the General Partners and their
affiliates is as listed:
<TABLE>
<CAPTION>
Percentage of
Outstanding
Name of General Partner
Title of Class Beneficial Ownership Amount Interest
- - - -------------- -------------------- ------ ---------------
<S> <C> <C> <C>
General Partnership Assisted Housing
Interest in the Associates Inc. $10 13.2%
Partnership
Related Beta Corporation 6 19.8%
Cambridge/Related Associates
Limited Partnership 4 67.0%
-----
100.0%
</TABLE>
Item 13. Certain Relationships and Related Transactions.
The Partnership has and will continue to have certain relationships with the
General Partners and their affiliates, as discussed below and in Item 11 above
and also Note 8 to the Financial Statements in Item 8 above, 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 Partners.
C/R Special Partnership is the special limited partner of each Local
Partnership, with a .01% interest in profits, losses and distributions from such
Local Partnerships. As set forth in Item 1, C/R Special Partnership has been
admitted to the Local Partnerships for the purpose of monitoring the Local
Partnerships and exercising certain rights under the Local Partnership
Agreements on behalf of the Partnership.
No director or executive officer of any General Partner owns any Initial Limited
Partnership Interests or Additional Limited Partnership Interests.
-58-
<PAGE>
<TABLE>
<CAPTION>
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
Sequential
Page
----------
<S> <C> <C>
(a) 1. Financial Statements
Independent Auditors' Report 31
Consolidated Balance Sheets at March 25, 1998 and 1997 199
Consolidated Statements of Operations for the Years Ended
March 25, 1998, 1997 and 1996 200
Consolidated Statements of Changes in Partners' Deficit for the Years
Ended March 25, 1998, 1997 and 1996 201
Consolidated Statements of Cash Flows for the Years Ended
March 25, 1998, 1997 and 1996 202
Notes to Consolidated Financial Statements 205
(a) 2. Financial Statement Schedules
-----------------------------
Independent Auditors' Report 230
Schedule I - Condensed Financial Information of Registrant 231
Schedule III - Real Estate and Accumulated Depreciation 234
The remaining schedules are omitted because the required information is
included in the financial statements and notes thereto, or they are not
applicable or not required.
(a) 3. Exhibits
--------
(3) Amended and Restated Agreement and Certificate of Limited Partnership
as filed with the Secretary of State of the State of the Commonwealth
of Massachusetts.**
(10A) Form of Escrow Agreement**
(21) Subsidiaries of the Registrant 226
(27) Financial Data Schedule (filed herewith) 236
** Incorporated by reference to exhibits filed with Amendment
No. 1 to Cambridge Advantaged Properties L.P.'s Registration
Statement on Form S-11 Registration File No. 2-91993.
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed during the quarter.
</TABLE>
-59-
<PAGE>
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(Continued)
<TABLE>
<CAPTION>
(c) Subsidiaries of the Registrant (Exhibit 21)
-------------------------------------------
Jurisdiction
of Formation
------------
<S> <C> <C>
Cedar Bay, LTD AL
Northwoods III Apts. LTD AL
Hackley Village Associates MI
Huntley Associates #1 MI
Huntley Associates #2 MI
Seymour O'Brien Manor Apts. MI
Washington Highland Apts. MI
Vincennes Niblack Apts. MI
Casa Ramon Apartments NY
Nu-Elm Apartments MO
Pebble Creek LDHA MI
Rockdale West at New Bedford MA
Solemar at South Dartmouth L.P. MA
Decatur Apartments, LTD TX
Florence Apartments, LTD TX
Saraland Apartments, LTD TX
University Garden Apts. LTD TX
Southside Village Apts., LTD TX
Dickens Ferry Apartments, LTD TX
Bonnie Doone Apartments, LTD TX
Conifer 208 WA
Conifer 307 WA
Conifer 317 WA
Bellfort Associates, LTD TX
Cloisters Associates, LTD GA
Cabarrus Arms Associates, LTD GA
Summer Arms Apts. LTD GA
Lexington Village Company GA
Ware Manor Associates GA
Nottingham Woods Apts., LTD GA
Hathaway Court Associates KY
Tall Pines Associates GA
Shelton Beach Apts., LTD AL
Northpointe II, LTD AL
Caroline Forest Apts. VA
Park of Pecan I, LTD TX
Park of Pecan II, LTD TX
Villa Apollo Associates LTD Ptns. MI
Carlton Terrace Apartments LTD Ptns. MI
Cranbrook Manor Apartments LTD Ptns. MI
Oakbrook Villa Apartments LTD Ptns. MI
Villa Apollo No. 2 LTD Ptns. MI
Greenwood Manor, LTD AR
Malvern Manor AR
Hereford Manor, LTD AR
Henslee Heights, LTD AR
</TABLE>
-60-
<PAGE>
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(Continued)
<TABLE>
<CAPTION>
(c) Subsidiaries of the Registrant (Exhibit 21)
-------------------------------------------
<S> <C> <C>
Jurisdiction
of Formation
------------
Oakwood Manor, LTD AR
West Scenic Apartments, LTD AR
Robindale East Apartments, LTD AR
Southwest Apartments, LTD AR
Valley Arms, LTD AR
Lancaster Manor Associates, LTD OH
(d) Not applicable
</TABLE>
-61-
<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 below on
its behalf by the undersigned, thereunto duly authorized.
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP
(Registrant)
By: RELATED BETA CORPORATION
a General Partner
Date: June 16, 1998
By: /s/ J. Michael Fried
--------------------
J. Michael Fried
President and Director
By: ASSISTED HOUSING ASSOCIATES, INC.
a General Partner
Date: June 16, 1998
By: /s/ J. Michael Fried
--------------------
J. Michael Fried
President and Director
By: CAMBRIDGE AND RELATED ASSOCIATES
LIMITED PARTNERSHIP
By: Related Beta Corporation
Date: June 16, 1998
By: /s/ J. Michael Fried
--------------------
J. Michael Fried
President and Director
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- - - --------------------- ------------------------------------- -------------
<S> <C> <C>
President and Chief Executive Officer
(principal executive officer) and
/s/ Michael Fried Director of Related Beta Corporation
- - - --------------------- and Assisted Housing Associates, Inc. June 16, 1998
J. Michael Fried
Vice President (principal financial
/s/ Alan P. Hirmes officer) of Related Beta Corporation
- - - --------------------- and Assisted Housing Associates, Inc. June 16, 1998
Alan P. Hirmes
Treasurer (principal accounting
/s/ Glenn F. Hopps officer) of Related Beta Corporation
- - - --------------------- and Assisted Housing Associates, Inc. June 16, 1998
Glenn F. Hopps
/s/ Stephen M. Ross Director of Related Beta Corporation June 16, 1998
- - - ---------------------
Stephen M. Ross
</TABLE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Partners of
Cambridge Advantaged Properties
Limited Partnership and Subsidiaries
In connection with our audits of the consolidated financial statements of
Cambridge Advantaged Properties Limited Partnership and Subsidiaries included in
the Form 10-K as presented in our opinion dated June 10, 1998 on pages 31 and
32, and based on the reports of other auditors, we have also audited supporting
Schedule I for the 1997, 1996 and 1995 Fiscal Years and Schedule III at March
25, 1998. In our opinion, and based on the reports of the other auditors
(certain of which were modified due to the uncertainty of these partnerships'
abilities to continue in existence), these consolidated schedules present
fairly, when read in conjunction with the related consolidated financial
statements, the financial data required to be set forth therein.
As discussed in Note 11(a), the consolidated financial statements include the
financial statements of eight subsidiary partnerships with significant
contingencies and uncertainties regarding their continuing operations. These
uncertainties raise substantial doubt about these subsidiary partnerships'
abilities to continue as going concerns. The auditors of six (Fiscal 1997)
subsidiary partnerships modified their reports due to the uncertainty of these
subsidiary partnerships' abilities to continue in existence. These six
subsidiary partnerships' net losses aggregated $1,346,174, $2,180,247 and
$1,303,575 for the 1997, 1996 and 1995 Fiscal Years, respectively, and their
assets aggregated $15,764,945 and $17,111,898 at March 25, 1998 and 1997,
respectively. The consolidated financial statements do not include any
adjustments that might result from the outcome of these uncertainties.
As discussed in Note 7, the principal of and all accrued interest on the
purchase money notes are due at maturity which will occur during 1998. The
Partnership expects that upon maturity it will be required to refinance or sell
its investments in the subsidiary partnerships in order to pay the purchase
money notes and related interest obligations. It is uncertain as to whether the
proceeds from such sales will be sufficient to meet the outstanding balances of
the purchase money notes and accrued interest thereon. The consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
TRIEN ROSENBERG ROSENBERG
WEINBERG CIULLO & FAZZARI LLP
New York, New York
June 10, 1998
<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
Summarized condensed financial information of registrant (not including
consolidated subsidiary partnerships)
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP
CONDENSED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
March 25,
------------------------------
1998 1997
------------ ------------
<S> <C> <C>
Cash and cash equivalents $ 34,753 $ 304,186
Investment in subsidiary partnerships 26,162,868 35,508,089
Other assets 125,398 142,039
------------ ------------
Total assets $ 26,323,019 $ 35,954,314
============ ============
LIABILITIES AND PARTNERS' DEFICIT
Purchase money notes payable $ 38,198,256 $ 53,733,067
Due to general partner and affiliates 873,298 1,970,501
Due to selling partners 63,146,657 78,578,234
Other liabilities 11,390 28,998
------------ ------------
Total liabilities 102,229,601 134,310,800
Partners' deficit (75,906,582) (98,356,486)
------------ ------------
Total liabilities and partners' deficit $ 26,323,019 $ 35,954,314
============ ============
</TABLE>
Investments in subsidiary partnerships are recorded in accordance with the
equity method of accounting, wherein the investments are not reduced below zero.
Accordingly, partners' deficit on the consolidated balance sheet will differ
from partners' deficit shown above.
<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended March 25,
-------------------------------------------
1998 1997 1996
------------ ------------ -----------
<S> <C> <C> <C>
Revenues
Other income $ 68,702 $ 5,788 $ 11,380
------------ ------------ -----------
Total revenues $ 68,702 $ 5,788 $ 11,380
------------ ------------ -----------
Expenses
Administrative and management 455,123 276,068 203,899
Administrative and management-related
parties 1,304,636 1,314,515 271,205
Financial, principally interest 5,768,447 6,524,391 7,450,320
------------ ------------ -----------
Total expenses 7,528,206 8,114,974 7,925,424
------------ ------------ -----------
Loss from operations (7,459,504) (8,109,186) (7,914,044)
Loss on sale of investments in
subsidiary partnerships (2,311,139) 0 0
Forgiveness of indebtedness income 28,257,707 0 0
Distribution income of subsidiary
partnerships in excess of investments 81,676 162,340 0
Equity in income (loss) of subsidiary
partnerships (*) 5,898,451 (2,415,051) 453,824
------------ ------------ -----------
Net income (loss) $ 24,467,191 $(10,361,897) $(7,460,220)
============ ============ ===========
</TABLE>
(*) Includes suspended prior year losses in excess of investment in accordance
with equity method of accounting amounting to $0, $12,415,216, and $0 for years
ending March 25, 1998, 1997 and 1996.
<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents
<TABLE>
<CAPTION>
Year Ended March 25,
-------------------------------------------
1998 1997 1996
------------ ------------ -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 24,467,191 $(10,361,897) $(7,460,220)
------------ ------------ -----------
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Loss on sale of investments in subsidiary
partnerships 2,311,139 0 0
Forgiveness of indebtedness income (28,257,707) 0 0
Equity in (income) loss of subsidiary
partnerships (5,898,451) 2,415,051 (453,824)
(Increase) decrease in other assets 16,641 (137,039) 0
Increase (decrease) in liabilities:
Due to general partners and affiliates (1,097,203) 1,095,291 (25,566)
Due to selling partners 5,768,447 6,524,391 7,450,320
Payments to selling partners (1,031,022) (930,198) (939,195)
Other liabilities (17,608) 8,934 (185,218)
------------ ------------ -----------
Total adjustments (28,205,764) 8,976,430 5,846,517
------------ ------------ -----------
Net cash used in operating activities (3,738,573) (1,385,467) (1,613,703)
------------ ------------ -----------
Cash flows from investing activities:
Proceeds from sale of investments in
subsidiary partnerships 527,181 0 0
Distributions from subsidiaries 12,405,352 1,281,921 1,389,614
------------ ------------ -----------
Net cash provided by investing activities 12,932,533 1,281,921 1,389,614
------------ ------------ -----------
Cash flows from financing activities:
Principal payments of purchase money
notes payable (7,577,873) 0 0
Increase in purchase money notes payable 131,767 206,810 0
Distributions to partners (2,017,287) 0 0
------------ ------------ -----------
Net cash (used in) provided by
financing activities (9,463,393) 206,810 0
------------ ------------ -----------
Net (decrease) increase in cash and cash
equivalents (269,433) 103,264 (224,089)
Cash and cash equivalents, beginning of year 304,186 200,922 425,011
------------ ------------ -----------
Cash and cash equivalents, end of year $ 34,753 $ 304,186 $ 200,922
============ ============ ===========
</TABLE>
<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 25, 1998
<TABLE>
<CAPTION>
Initial Cost Cost (a)
to Partnership Capitalized Gross Amount at which Carried At Close of Period
------------------------- Subsequent to ------------------------------------------------
Subsidiary Partnership's Buildings and Acquisition: Buildings and Accumulated
Residential Property Encumbrances Land Improvements Improvements Land Improvements Total Depreciation
- - - -------------------------- ------------ ---------- ------------- ------------- -------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(10) Pebble Creek $4,136,331 $266,942 $4,968,283 $ 1,055,031 $266,942 $6,023,314 $6,290,256 $2,162,807
(1) Knollwood I(e) 0 311,807 5,924,337 (6,236,144) 0 0 0 0
(1) Knollwood II(e) 0 310,663 5,902,600 (6,213,263) 0 0 0 0
(1) Knollwood III(e) 0 310,257 5,899,971 (6,210,228) 0 0 0 0
(1) Knollwood IV(e) 0 210,423 3,998,047 (4,208,470) 0 0 0 0
(1) Parklane II(e) 0 228,684 4,344,999 (4,573,683) 0 0 0 0
(6) Northwoods III 3,014,045 183,789 3,492,002 32,432 183,789 3,524,434 3,708,223 1,544,016
(1) Northpointe I
(Shelton Beach) 2,321,551 156,968 2,982,380 152,664 156,968 3,135,044 3,292,012 1,359,023
(1) Cedarbay 2,843,441 184,523 3,505,947 7,963 184,523 3,513,910 3,698,433 1,559,414
(1) Northpointe II 1,828,474 118,651 2,254,361 44,589 118,651 2,298,950 2,417,601 1,003,646
(9) Rockdale West 7,014,556 610,192 8,240,035 804,285 610,192 9,044,320 9,654,512 5,948,606
(9) Buttonwood Acres(f) 0 382,930 4,392,292 (4,775,222) 0 0 0 0
(9) Solemar I 6,170,486 567,644 7,359,738 652,157 567,644 8,011,895 8,579,539 2,877,864
(2) West Scenic 2,620,636 201,556 3,893,464 289,536 201,556 4,183,000 4,384,556 1,896,416
(2) Greenwood Manor 1,258,818 84,416 1,603,982 7,187 84,416 1,611,169 1,695,585 729,523
(2) Henslee Heights 1,556,035 107,068 2,035,034 14,106 107,068 2,049,140 2,156,208 789,921
(2) Hereford Manor 947,386 70,391 1,319,817 10,683 70,391 1,330,500 1,400,891 538,374
(2) Oakwood Manor 4,273,974 295,312 5,627,044 509,364 295,312 6,136,408 6,431,720 2,811,020
(2) Robindale East 1,701,352 121,808 2,314,340 175,877 121,808 2,490,217 2,612,025 1,090,462
(12) Valley Arms 2,197,339 257,254 2,648,264 19,408 257,254 2,667,672 2,924,926 981,627
(2) Malvern Manor 1,061,463 73,494 1,396,388 6,479 73,494 1,402,867 1,476,361 546,413
(2) Southwest 945,093 68,995 1,310,896 14,288 68,995 1,325,184 1,394,179 597,957
(3) Lancaster Manor
Associates 5,403,128 392,991 7,476,427 26,220 392,991 7,502,647 7,895,638 3,363,059
(16) Caroline Apartments 1,314,433 122,239 1,804,976 521,553 122,239 2,326,529 2,448,768 1,292,769
(1) Florence Apartments 1,987,558 135,644 2,533,694 244,896 135,644 2,778,590 2,914,234 1,213,107
(1) Saraland Apartments(g) 1,107,809 79,104 1,487,507 (1,566,611) 0 0 0 0
(1) Bonnie Doone 1,272,967 89,034 1,649,278 22,016 89,034 1,671,294 1,760,328 761,903
(13) Pinewood Village
(Conifer 317) 920,174 110,658 1,229,121 267,660 128,622 1,478,817 1,607,439 640,818
(17) Conifer Village
(Conifer 208) 1,102,408 83,189 1,569,170 143,420 81,264 1,714,515 1,795,779 822,685
(13) Fircrest Manor
(Conifer 307) 1,102,975 133,179 1,479,049 115,780 133,179 1,594,829 1,728,008 720,148
(4) Westminster Manor(f) 0 457,575 8,662,800 (9,120,375) 0 0 0 0
(4) Northgate Townhouse(f) 0 336,820 6,280,710 (6,617,530) 0 0 0 0
(15) Pecan Park I 3,266,553 193,864 3,682,091 63,016 193,864 3,745,107 3,938,971 1,654,194
(15) Pecan Park II 3,146,571 187,760 3,481,597 51,816 187,760 3,533,413 3,721,173 1,564,558
(15) Bicentennial Square(d) 0 1,147,629 6,576,179 (7,723,808) 0 0 0 0
(15) Bellfort Arms 7,070,000 1,130,077 6,996,265 1,139 1,130,077 6,997,404 8,127,481 3,151,194
(8) Hathaway Court 3,081,806 217,960 4,157,713 198,381 217,960 4,356,094 4,574,054 2,861,183
(5) Lexington Village 1,894,181 133,830 2,580,297 153,684 133,830 2,733,981 2,867,811 1,743,271
(5) Ware Manor 1,507,778 108,955 2,079,603 161,798 108,955 2,241,401 2,350,356 1,425,083
(14) Summer Arms 1,729,420 123,135 2,381,092 14,390 123,135 2,395,482 2,518,617 1,582,620
(12) Cabarrus Arms 1,288,775 102,987 1,850,151 154,352 102,987 2,004,503 2,107,490 1,252,721
(1) Sundown Apts.
(Cloister) 3,974,713 357,930 5,134,467 289,773 357,930 5,424,240 5,782,170 3,475,166
(5) Tall Pines 1,906,523 166,974 2,657,152 288,149 166,974 2,945,301 3,112,275 1,843,889
(1) Nottingham Woods 2,560,292 185,145 3,556,877 178,110 184,312 3,735,820 3,920,132 2,327,873
(7) Seymour O'Brien Manor 1,111,198 77,893 1,483,726 294,288 77,893 1,778,014 1,855,907 704,257
<CAPTION>
Life on which
Depreciation in
Letest Income
Subsidiary Partnership's Date of Statement is
Residential Property Construction Acquired Computed(b)(c)
- - - -------------------------- ------------ --------- --------------
<C> <C> <C> <C>
(10) Pebble Creek (c) Nov. 1984 5 - 27.5
(1) Knollwood I(e) (c) Sept. 1984 30
(1) Knollwood II(e) (c) Sept. 1984 30
(1) Knollwood III(e) (c) Sept. 1984 30
(1) Knollwood IV(e) (c) Sept. 1984 30
(1) Parklane II(e) (c) Sept. 1984 30
(6) Northwoods III (c) Oct. 1984 15 - 30
(1) Northpointe I
(Shelton Beach) (c) Nov. 1984 15 - 30
(1) Cedarbay (c) Sept. 1984 15 - 30
(1) Northpointe II (c) Nov. 1984 15 - 30
(9) Rockdale West (c) Oct. 1984 15-27
(9) Buttonwood Acres(f) (c) Oct. 1984 20
(9) Solemar I (c) Oct. 1984 15-27
(2) West Scenic (c) Dec. 1984 10 - 30
(2) Greenwood Manor (c) Dec. 1984 30
(2) Henslee Heights (c) Dec. 1984 35
(2) Hereford Manor (c) Dec. 1984 35
(2) Oakwood Manor (c) Dec. 1984 5 - 30
(2) Robindale East (c) Dec. 1984 10 - 30
(12) Valley Arms (c) Dec. 1984 35
(2) Malvern Manor (c) Dec. 1984 35
(2) Southwest (c) Dec. 1984 30
(3) Lancaster Manor
Associates (c) Dec. 1984 30
(16) Caroline Apartments (c) Nov. 1984 28
(1) Florence Apartments (c) Oct. 1984 15 - 30
(1) Saraland Apartments(g) (c) Oct. 1984 30
(1) Bonnie Doone (c) Nov. 1984 27.5 - 30
(13) Pinewood Village
(Conifer 317) (c) Nov. 1984 15 - 30
(17) Conifer Village
(Conifer 208) (c) Nov. 1984 19 - 30
(13) Fircrest Manor
(Conifer 307) (c) Nov. 1984 20 - 30
(4) Westminster Manor(f) (c) Oct. 1984 30
(4) Northgate Townhouse(f) (c) Oct. 1984 30
(15) Pecan Park I (c) Dec. 1984 30
(15) Pecan Park II (c) Dec. 1984 18 - 30
(15) Bicentennial Square(d) (c) Dec. 1984 30 - 40
(15) Bellfort Arms (c) Nov. 1984 30
(8) Hathaway Court (c) Nov. 1984 20
(5) Lexington Village (c) Nov. 1984 12 - 27.5
(5) Ware Manor (c) Nov. 1984 15 - 27.5
(14) Summer Arms (c) Nov. 1984 20
(12) Cabarrus Arms (c) Nov. 1984 7 - 20
(1) Sundown Apts.
(Cloister) (c) Nov. 1984 10 - 20
(5) Tall Pines (c) Nov. 1984 27.5
(1) Nottingham Woods (c) Nov. 1984 10 - 20
(7) Seymour O'Brien Manor (c) Oct. 1984 5 - 27.5
</TABLE>
<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 25, 1998
(continued)
<TABLE>
<CAPTION>
Initial Cost Cost (a)
to Partnership Capitalized Gross Amount at which Carried At Close of Period
Subsidiary ------------------------- Subsequent to ------------------------------------------------
Partnership's Buildings and Acquisition: Buildings and Accumulated
Residential Property Encumbrances Land Improvements Improvements Land Improvements Total Depreciation
- - - ---------------------- ------------ ---------- ------------- ------------- -------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(7) Washington
Highlands 1,135,933 79,571 1,508,983 348,589 79,571 1,857,572 1,937,143 671,314
(7) Vincennes
Niblack 2,561,393 184,718 3,502,697 843,965 184,718 4,346,662 4,531,380 1,499,473
(11) Nu Elm 1,428,764 100,552 1,913,293 375,236 100,552 2,288,529 2,389,081 898,756
(3) Casa Ramon 1,775,369 121,197 2,318,916 283,574 121,197 2,602,490 2,723,687 1,132,702
(10) Hackley
Village 1,056,515 80,562 1,530,639 3,791 80,562 1,534,430 1,614,992 603,592
(10) Huntley
Associates I 1,727,550 125,087 2,376,634 318,585 125,087 2,695,219 2,820,306 1,026,801
(10) Huntley
Associates II 1,307,052 98,140 1,864,671 242,618 98,140 2,107,289 2,205,429 802,168
(1) Decatur 1,957,529 135,554 2,531,304 100,798 135,554 2,632,102 2,767,656 1,174,851
(1) Dickens Ferry 1,555,152 108,914 2,058,001 239,871 108,914 2,297,872 2,406,786 966,810
(15) University
Gardens 1,756,042 127,004 2,288,254 36,097 127,004 2,324,351 2,451,355 1,263,510
(15) Southside
Villages 1,952,070 135,624 2,508,705 18,325 135,624 2,527,030 2,662,654 1,360,369
(10) Carlton Terrace 7,778,403 755,304 8,627,605 116,679 755,304 8,744,284 9,499,588 4,873,371
(10) Apollo Villa 2,590,348 229,304 2,903,658 46,834 229,304 2,950,492 3,179,796 1,646,009
(10) Apollo Villa II 6,426,737 577,304 7,260,975 151,018 577,304 7,411,993 7,989,297 4,143,502
(10) Cranbrook Manor 3,339,852 261,948 3,510,485 610,847 261,948 4,121,332 4,383,280 1,474,569
(10) Oakbrook Villa 8,222,318 411,597 9,143,169 2,762,360 411,597 11,905,529 12,317,126 4,120,811
------------ ----------- ------------ ------------ ----------- ------------ ------------ -----------
$137,211,269 $14,730,719 $222,052,152 $(43,759,657) $10,970,033 $182,053,181 $193,023,214 $86,496,195
============ =========== ============ ============ =========== ============ ============ ===========
<CAPTION>
Life on which
Depreciation in
Subsidiary Letest Income
Partnership's Date of Statement is
Residential Property Construction Acquired Computed(b)(c)
- - - ---------------------- ------------ --------- --------------
<S> <C> <C> <C>
(7) Washington
Highlands (c) Oct. 1984 5 - 27.5
(7) Vincennes
Niblack (c) Oct. 1984 5 - 27.5
(11) Nu Elm (c) Oct. 1984 5 - 27.5
(3) Casa Ramon (c) Oct. 1984 5 - 27.5
(10) Hackley
Village (c) Oct. 1984 15 - 27.5
(10) Huntley
Associates I (c) Oct. 1984 5 - 27.5
(10) Huntley
Associates II (c) Oct. 1984 5 - 27.5
(1) Decatur (c) Oct. 1984 15 - 40
(1) Dickens Ferry (c) Nov. 1984 15 - 40
(15) University
Gardens (c) Nov. 1984 25
(15) Southside
Villages (c) Nov. 1984 25
(10) Carlton Terrace (c) Dec. 1984 25
(10) Apollo Villa (c) Dec. 1984 25
(10) Apollo Villa II (c) Dec. 1984 25
(10) Cranbrook Manor (c) Dec. 1984 5 - 40
(10) Oakbrook Villa (c) Dec. 1984 5 - 40
</TABLE>
(a) No carrying costs have been capitalized since all properties were acquired
after completion of construction.
(b) Furniture and fixtures, included in buildings and improvements, are
depreciated primarily by the straight line method over the estimated useful
lives ranging from 5 to 15 years.
(c) Since all properties were acquired as operating properties, depreciation is
computed using primarily the straight line method over the estimated useful
lives determined by the Partnership at date of acquisition.
(d) The property and the related assets and liabilities were sold during the
fiscal year ended March 25, 1997. See Note 10 in Item 8, Financial
Statements and Supplementary Data.
(e) The property and the related assets and liabilities were sold during the
fiscal year ended March 25, 1998. See Note 10 in Item 8, Financial
Statements and Supplementary Data.
(f) The Partnership's Local Partnership Interests in these Local Partnerships
were sold during the fiscal year ended March 25, 1998. See Note 10 in Item
8, Financial Statements and Supplementary Data.
(g) During the fiscal year ended March 25, 1998, the Local Partnership's
property was declared unsafe to live due to amounts of Benzene and Aldrene
found to be present in the air of some apartments. See Note 11 in Item 8,
Financial Statements and Supplementary Data.
Geographic Locations: (1) Alabama, (2) Arkansas, (3) California, (4) Colorado,
(5) Georgia, (6) Florida, (7) Indiana, (8) Kentucky, (9) Massachusetts, (10)
Michigan, (11) Missouri, (12) North Carolina, (13) Oregon, (14) South Carolina,
(15) Texas, (16) Virginia, (17) Washington.
<TABLE>
<CAPTION>
Cost of Property and Equipment Accumulated Depreciation
------------------------------------------------ ----------------------------------------------
Year Ended March 25,
----------------------------------------------------------------------------------------------------
1998 1997 1996 1998 1997 1996
------------ ------------ ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance at beginning of period $240,084,646 $243,918,076 $246,741,642 $99,888,832 $ 94,655,094 $88,235,454
Additions during period:
Improvements 2,050,996 1,435,708 1,656,763
Depreciation expense 7,164,517 8,484,538 6,529,518
Deductions during period:
Dispositions 49,112,428 3,701,188 137,114 20,557,154 2,622,462 109,878
Loss on impairment 0 1,567,950 4,343,215 0 628,338 0
------------ ------------ ------------ ----------- ----------- -----------
Balance at close of period $193,023,214 $240,084,646 $243,918,076 $86,496,195 $99,888,832 $94,655,094
============ ============ ============ =========== =========== ===========
</TABLE>
At the time the local partnerships were acquired by Cambridge Advantaged
Properties Limited Partnership, the entire purchase price paid by Cambridge
Advantaged Properties Limited Partnership was pushed down to the local
partnerships as property and equipment with an offsetting credit to capital.
Since the projects were in the construction phase at the time of acquisition,
the capital accounts were insignificant at the time of purchase. Therefore,
there are no material differences between the original cost basis for tax and
GAAP.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The Schedule contains summary financial
information extracted from the financial
statements for Cambridge Advantaged Properties
Limited Partnership and is qualified in its
entirety by reference to such financial statements
</LEGEND>
<CIK> 0000748847
<NAME> Cambridge Advantaged Properties Limited Partnership
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-25-1998
<PERIOD-START> MAR-26-1997
<PERIOD-END> MAR-25-1998
<CASH> 13,476,167
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,694,068
<PP&E> 193,023,214
<DEPRECIATION> 86,496,195
<TOTAL-ASSETS> 121,697,254
<CURRENT-LIABILITIES> 6,793,249
<BONDS> 223,367,991
0
0
<COMMON> 0
<OTHER-SE> (108,463,986)
<TOTAL-LIABILITY-AND-EQUITY> 121,697,254
<SALES> 0
<TOTAL-REVENUES> 37,441,984
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 34,151,114
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,955,425
<INCOME-PRETAX> (7,664,555)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 28,257,707
<CHANGES> 0
<NET-INCOME> 20,650,192
<EPS-PRIMARY> 1,693
<EPS-DILUTED> 0
</TABLE>
