SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[x] Annual report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended March 31, 1997 or
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[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ________ to ________
Commission file number 0-17696
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AMERICAN AFFORDABLE HOUSING II LIMITED PARTNERSHIP
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(Exact name of registrant as specified in its charter)
Massachusetts 04-2992309
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Boston Place, Suite 2100, Boston, MA 02108-4406
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(Address of principle executive offices) (Zip Code)
Registrant's telephone number, including area code (617)624-8900
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Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
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None None
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Securities registered pursuant to Section 12(g) of the Act:
Class A Limited Partner Interests
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(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
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Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K( 229.405 of this chapter)
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. __
|xx|
DOCUMENTS INCORPORATED BY REFERENCE
The following documents of the Registrant are incorporated by
reference:
Form 10-K
Parts Documents
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Parts III and IV Prospectus of the registrant dated
September 22, 1988, as supplemented
<PAGE>
AMERICAN AFFORDABLE HOUSING II LIMITED PARTNERSHIP
(a Massachusetts limited partnership)
FORM 10-K ANNUAL REPORT FOR THE YEAR ENDED
March 31,1997
TABLE OF CONTENTS
PART I
Item 1. Business
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Submission of Matters to a Vote
of Security-Holders
PART II
Item 5. Market for the Registrant's Class A Limited Partner
Interests and Related Security-Holder Matters
Item 6. Selected Financial Data
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of
Operations
Item 8. Financial Statements and Supplementary Data
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
PART III
Item 10. Directors and Executive Officers
of the Registrant
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial
Owners and Management
Item 13. Certain Relationships and Related Transactions
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K
Signatures
PART I
Item I. Business
American Affordable Housing II Limited Partnership (the "Partnership") is
a limited partnership which was formed under the laws of the Commonwealth of
Massachusetts on May 13, 1987. The general partners of the Partnership are
Boston Capital Associates Limited Partnership, a Massachusetts limited
partnership, and C & M Associates, d/b/a Boston Capital Associates, a
Massachusetts general partnership (the "General Partners"). The Partnership
was formed to acquire limited partner interests in limited partnerships (the
"Operating Partnerships"), each of which was to own and operate an apartment
complex for low- and moderate income tenants. Each apartment complex
qualified for the low-income housing tax credit under Section 42 of the
Internal Revenue Code of 1986, as amended, (the "Code"), and some apartment
complexes also qualified for the historic rehabilitation tax credit under
Section 48 of the Code. Section 236 (f) (ii) of the National Housing Act, as
amended, in Section 101 of the Housing and Urban Development Act of 1965, as
amended, each provide for the making by HUD of rent supplement payments to low
income tenants in properties which receive other forms of federal assistance
such as Tax Credits. The payments for each tenant, which are made directly to
the owner of their property, generally are in such amounts as to enable the
tenant to pay rent equal to 30% of the adjusted family income. Some of the
Apartment Complexes in which the Partnership has invested are receiving such
rent supplements from HUD.
HUD has been in the process of converting rent supplement assistance to
assistance paid not to the owner of the Apartment Complex, but directly to
the individuals. At this time, the Partnership is unable to predict whether
Congress will continue rent supplement programs payable directly to owners of
the Apartment Complex.
The investment objectives of the Partnership are (i) to provide Investors
with tax benefits during the first ten years of operations in the form of (a)
low-income housing and historic rehabilitation tax credits which may be
applied against the Investors' Federal income tax liability arising from, in
the case of individuals, active and portfolio income on a limited basis from
passive income, and in the case of corporations, against Federal income tax
liability from active and passive income and, as to certain corporations,
against all income and (b) passive losses which may be used to reduce an
Investor's income in the same manner, (ii) to preserve and protect the capital
of the Partnership, (iii) provide long-term capital appreciation through
increases in the value of the Partnership's investments, and (iv) provide cash
distributions from Capital Transaction proceeds. The General Partners are
currently of the belief that the Partnership's investment objectives will be
met. Current distributions are not an investment objective of the
Partnership.
The offering of Class A Limited Partner interests (the "Units") in the
Partnership (the "Public Offering") began on February 2, 1988 and was
concluded on September 21, 1988. Investors purchasing 26,501 Units
contributed $26,501,000 to the Partnership. The Partnership held interests in
50 Operating Partnerships at March 31, 1997. See Item 2.
1
Item 2. Properties
As of its fiscal year ending March 31, 1997, the Partnership held Limited
Partnership interests in the Operating Partnerships described below. In each
instance the Apartment Complex owned by the applicable Operating Partnership
is eligible for the Federal Housing Tax Credit. Occupancy of a unit in each
Apartment Complex which initially complied with the Minimum Set-Aside Test
(i.e., occupancy by tenants with incomes equal to no more than a certain
percentage of area median income) and the Rent Restriction Test (i.e., gross
rent charged tenants does not exceed 30% of the applicable income standards)
is referred to hereinafter as "Qualified Occupancy." Each of the Operating
Partnerships and each of the respective Apartment Complexes are described more
fully in the Prospectus or applicable report on Form 8-K. The General
Partners believe that there is adequate casualty insurance on the properties.
Please refer to Item 7. "Management's Discussion and Analysis of Financial
Condition and Results of Operations" for a more detailed discussion of
operational difficulties experienced by certain of the Operating Partnerships.
2<PAGE>
American Affordable Housing II Limited Partnership
PROPERTY PROFILES AS OF March 31, 1997
Mortgage
Balance Construc- Qualified Capital
As of tion Occupancy Contrib-
Property Name Location Units 12/31/96 Completion 3/31/97 uted
- ------------------------------------------------------------------------------
Anacapa Lake Havasu,
Apartments AZ 40 1,433,758 4/88 100% 348,915
Anthony Garden Green Valley,
Apartments AZ 100 3,882,768 3/89 98% 751,267
Blairview Blairsville, 42
Apartments PA 1,435,155 12/88 95% 308,388
Bloomfield Bloomfield,
Apartments MO 16 369,786 6/88 100% 62,878
Boardman Lake Travers City,
II Apartments MI 32 980,035 5/89 100% 202,700
Bowdoinham Bowdoinham,
Estates ME 25 1,299,909 5/89 100% 308,824
Brookhollow Brookshire,
Apartments TX 48 897,422 8/88 100% 160,000
Center Way Shelbyville,
Apartments TN 20 612,304 7/88 100% 136,620
Carthage Carthage,
Court NY 32 1,279,872 10/88 100% 270,000
Casa Belen,
Valencia NM 39 1,485,168 12/88 100% 303,000
Cedar Forest Brewton,
Apartments AL 33 955,813 6/88 100% 219,696
Charters Cove St. Ignace,
Apartments MI 24 773,971 5/88 100% 166,200
Deer Crossing Farmington,
Apartments ME 24 1,185,442 4/89 95% 312,920
3
American Affordable Housing II Limited Partnership
PROPERTY PROFILES AS OF March 31, 1997
Continued
- --------- Mortgage
Balance Construc- Qualified Capital
As of tion Occupancy Contrib-
Property Name Location Units 12/31/96 Completion 3/31/97 uted
- ------------------------------------------------------------------------------
East Ridge Southwest Harbor,
Estates ME 25 1,252,660 9/88 100% 294,771
Fairbanks Flats Beloit,
Apartments WI 24 548,419 12/88 100% 313,040
Fredericktown Fredericktown,
Apartments II MO 16 371,993 5/88 100% 79,670
Harbor Hill Bar Harbor,
Estates ME 25 1,251,913 2/89 100% 325,500
Harbour Oaks East China,
Apartments MI 32 899,612 11/88 100% 191,500
Harvest View Garden City,
MO 16 384,818 6/88 100% 86,785
Kersey Kersey,
Apartments CO 32 1,058,122 10/88 100% 226,000
Kingsley Park Essex,
Apartments MD 312 10,904,217 10/88 100% 1,750,000
Liberty Center Jacksonville,
FL 109 1,277,379 10/88 100% 1,014,770
Malone Senior Malone,
Housing NY 40 1,486,842 11/88 97% 309,000
Maple Tree Mapleton,
Estates ME 25 1,240,254 4/89 100% 325,500
Michelle Manor Green Valley,
Apartments AZ 24 909,966 9/88 100% 174,264
Middleburg Bluffs Middleburg,
FL 45 1,415,556 3/89 100% 375,283
4<PAGE>
American Affordable Housing II Limited Partnership
PROPERTY PROFILES AS OF March 31, 1997
Continued
- --------- Mortgage
Balance Construc- Qualified Capital
As of tion Occupancy Contrib-
Property Name Location Units 12/31/96 Completion 3/31/97 uted
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Nicollete Minneapolis,
Island Homes MN 22 1,125,729 12/88 100% 713,000
Paige Hall Minneapolis,
Apartments MN 69 2,253,150 4/89 100% 472,336
Partridge McMinnville,
Meadows TN 48 1,402,032 10/88 97% 296,461
Perramond Madawaska,
Estates ME 25 1,185,153 4/89 100% 287,000
Pine Knoll Smithfield,
Manor NC 33 1,362,736 5/89 100% 309,450
Pine Ridge Port St. Joe,
Apartments FL 50 1,485,199 6/88 100% 384,180
Pine Terrace Callahan,
Apts. Phase III FL 40 1,194,369 1/89 100% 309,500
Platteville Platteville,
Apartments CO 16 546,248 10/88 100% 120,000
River Place Holyoke,
Apartments MA 100 4,203,973 3/89 100% 1,824,000
Sara Pepper Dixfield,
Place ME 12 650,966 3/88 100% 171,189
Silver Pines Fryeburg,
Apartments ME 25 1,412,819 8/88 100% 351,547
South Estates Nebraska City,
NE 15 419,989 7/88 100% 85,911
South View III Marionville,
MO 8 194,582 5/88 100% 42,100
5
American Affordable Housing II Limited Partnership
PROPERTY PROFILES AS OF March 31, 1997
Continued
- --------- Mortgage
Balance Construc- Qualified Capital
As of tion Occupancy Contrib-
Property Name Location Units 12/31/96 Completion 3/31/97 uted
- ------------------------------------------------------------------------------
Southview Place Lovington,
Apts NM 48 1,104,597 2/89 100% 245,602
Spring Hollow Springfield,
Apartments GA 52 1,443,357 3/88 100% 321,860
Stokes Rowe Philadelphia,
PA 16 1,054,279 6/88 100% 673,000
Story Hill Washburn,
Estates ME 24 1,212,524 1/89 100% 322,425
Suncrest Newport,
Apartments TN 32 973,789 5/88 100% 210,960
Lodging House at Boston,
300 Shamut Ave., MA 15 643,623 12/88 100% 508,000
The
Village Chase Zephyrhills,
Apts FL 48 1,491,267 4/89 100% 386,368
Village Walk Zephyrhills,
Apartments FL 43 1,396,003 3/89 100% 362,500
Washington Mews Dorchester,
MA 20 484,673 12/88 100% 510,000
Wildwood Statesboro,
Villas II GA 58 1,480,337 9/88 100% 369,260
Willowbrook Immokalee,
Place FL 41 1,322,484 3/88 100% 328,711
6<PAGE>
Item 3. Legal Proceedings
None.
Item 4. Submission of Matters to a Vote of Security-Holders
None.
7
PART II
Item 5. Market for the Registrant's Class A Limited Partner
Interests and Related Security-Holder Matters
There is no established public trading market for the Units and it is
not anticipated that any public market will develop for the purchase and sale
of any Units.
As of March 31, 1997, the Partnership had 2,348 registered holders of
an aggregate of 26,501 Units.
The Partnership made no distributions to its Limited Partners from
Operating Partnership cash flow from its inception on May 13, 1987 through
March 31, 1997. Because the Partnership invested in Operating Partnerships
owning apartment complexes which receive government assistance, the cash
distributions which may be made by the Operating Partnerships are often
restricted. The Partnership does not anticipate that it will provide
significant cash distributions to its Limited Partners in circumstances other
than refinancing or sale of apartment complexes by the Operating Partnerships.
8<PAGE>
Item 6. Selected Financial Data
The information set forth below presents selected financial data of the
Partnership for each of the years in the five year period ended March 31,
1997. Additional detailed financial information is set forth in the audited
financial statements listed in Item 14 hereof.
March 31, March 31, March 31, March 31, March 31,
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
Operations
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Interest Income $ 743 $ 783 $ 520 $ 223 $ 491
Other Income 1,470 - 1,650 1,050 1,225
Share of Losses
from Operating
Partnerships (795,677) (1,047,309) (1,392,030) (1,579,365) (2,757,632)
Operating Expenses (477,380) (516,882) (503,107) (500,666) (557,233)
--------- --------- --------- --------- ----------
Net Loss $(1,270,844) $(1,563,408)$(1,892,967)$(2,078,758)$(3,313,149)
========= ========= ========= ========= ==========
Net Loss per Unit of
Limited Partnership
Interest $ (47.48) $ (58.40)$ (70.72)$ (77.66)$ (123.77)
========= ========= ========= ========= ==========
March 31, March 31, March 31, March 31, March 31,
Balance Sheet 1997 1996 1995 1994 1993
- ------------- ------- -------- -------- -------- ------
Total Assets $ 3,409,282 $ 4,274,839 $ 5,344,896 $ 6,635,981 $8,233,394
========= ========= ========= ========= =========
Total Liabilities$ 3,542,681 $ 3,137,394 $ 2,644,043 $ 2,042,161 $1,560,816
========= ========= ========= ========= ==========
Partners' Equity $ (133,399) $ 1,137,445 $ 2,700,853 $ 4,593,820 $6,672,578
========= ========= ========= ========= ==========
Other Data
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Credit Per BAC* $ 130.05 $ 114.28 $ 131.60 $ 131.29 $ 129.21
========= ========= ========= ========= ==========
* The credit per BAC data is reported for the calendar year which ends in the
third quarter of the related fiscal year.
9<PAGE>
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity
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The Partnership's primary source of funds was the proceeds of its Public
Offering. Other sources of liquidity have included (i) interest earned on
capital contributions held pending investment or held for working capital
reserves and (ii) cash distributions, if any, from operations of the Operating
Partnerships in which the Partnership has invested. Both of these sources of
liquidity are available to meet the obligations of the Partnership. The
Partnership is currently accruing the annual asset management fees. Asset
management fees accrued during the year ended March 31, 1997 were $441,858
and total asset management fees accrued as of March 31, 1997 were $3,400,766.
Pursuant to the Partnership Agreement, such liabilities will be deferred until
the Partnership receives sale or refinancing proceeds from Operating
Partnerships, and at that time proceeds from such sales or refinancing would
be used to satisfy such liabilities.
Affiliates of the General Partners have advanced $98,415 to the
Partnership to pay certain operating expenses. This and any additional
advances will be repaid, without interest, from available cash flow, reporting
fees or the proceeds of sales or refinancing of the Partnership's interests in
Operating Partnerships. The Partnership anticipates that as the Operating
Partnerships continue to mature more cash flow and reporting fees will be
generated. Cash flow and reporting fees will be added to the Partnership's
Working Capital and will be available to meet future third party obligations
of the Partnership. The Partnership is currently and will continue to
aggressively pursue available cash flow and reporting fees. No significant
distributions of cash flow from the Operating Partnerships are anticipated on
a long term or short term basis due to the restrictions on rents which
apply to low-income apartment complexes.
During 1995 an affiliate of the General Partners funded $100,375,
interest free, to the Partnership so that it could make a $100,375 loan to the
Operating Partnership Washington Mews. The loan enabled the Operating
Partnership to refinance its mortgage at a more favorable rate, and will be
repaid by the Operating Partnership with surplus cash from operations over the
course of the next three years. As repayments are received from Washington
Mews, they will be used to repay the funding, free of interest, from the
General Partners' affiliate. As of March 31, 1997 Washington Mews has paid
the Partnership $60,375. This has been repaid to the affiliate leaving a
balance of $40,000 as of March 31, 1997.
Capital Resources
- -----------------
The Partnership received $26,501,000 in subscriptions for Units (at $1,000
per Unit) during the period February 2, 1988 to September 21, 1988 pursuant to
the Public Offering, resulting in net proceeds available for investment in
Operating Partnerships (after payment of acquisition fees and expenses and
10
funding of a reserve) of approximately $18,550,700. As of March 31, 1997, the
Partnership had committed to investments requiring cash payments of
$18,613,793, all of which has been paid. At March 31, 1997, the Partnership
held working capital of $14,290. Since the Partnership has completed funding
of all investments, it anticipates that there should be no significant need
for capital resources in the future.
Results of Operations
- ---------------------
The Partnership was formed with the investment objectives set forth above
under Item 1. The Partnership incurred an annual asset management fee to
Boston Capital Asset Management Limited Partnership (formerly Boston Capital
Communications Limited Partnership) in an amount equal to 0.5% of the
aggregate cost of the apartment complexes owned by the Operating Partnerships,
less the amount of certain partnership management and reporting fees paid or
payable by the Operating Partnerships. The annual asset management fee
incurred for the fiscal year ended March 31, 1997 and 1996 was $426,748 and
$461,029, respectively. Because the Partnership is not expected to receive
any significant cash flow from the Operating Partnerships in subsequent years,
the annual asset management fee is currently being deferred and is expected to
be paid from the proceeds of sales or refinancing of the Partnership's
interests in Operating Partnerships. During the fiscal years ended March 31,
1997 and 1996, the Partnership received $10,351 and $14,441 in distributions
of cash flow and $15,110 and 10,212 of reporting fees from the Operating
Partnerships, respectively.
The Partnership expects that all of its cash receipts will be used to pay
operating expenses. The Partnership had interest income of $743 and $783 in
the fiscal years ended March 31, 1997 and 1996, respectively. No other
significant source of income is anticipated.
As of December 31, 1996 and 1995 the Partnership held limited partnership
interests in 50 Operating Partnerships. In each instance the Apartment
Complex owned by the applicable Operating Partnership is eligible for the
Federal Housing Tax Credit. Occupancy of a unit in each Apartment Complex
which initially complied with the Minimum Set-Aside Test (i.e., occupancy
by tenants with incomes equal to no more than a certain percentage of area
median income) and the Rent Restriction Test (i.e., gross rent
charged tenants does not exceed 30% of the applicable income standards)
is referred to hereinafter as "Qualified Occupancy". Each of the Operating
Partnerships and each of the respective Apartment Complexes are described more
fully in the Prospectus or applicable report on Form 8-K. The General
Partners believe that there is adequate casualty insurance on the properties.
The Operating Partnership, California Investors II, was experiencing
operating difficulties and as a result, the holder of the first mortgage had a
receiver appointed. The Investment General Partners believed that it was in
the best interest of the Partnership to sell the property owned by
California Investors II. After restructuring and workout negotiations over
the course of the past 18 months, the property was sold to the lender for
proceeds sufficient to cover all outstanding liabilities of the Operating
11
Partnership. The Investment Partnership was subjected to a one time recapture
event which reduced investors' 13.1% annual tax credit as a percentage of
capital invested to 11.4% for the calendar year 1995. Calendar year 1996's
tax credit as a percentage of capital invested was back up to 13%.
As of March 31, 1997 and 1996 the Qualified Occupancy for the
Partnership was 99.6% and 99.8%, respectively.
For the years ended December 31, 1996 and 1995 the Operating Partnerships
reflected a net (loss) income of $(23,552) and $514,305, respectively, when
adjusted for depreciation which is a non-cash item. The current year loss is
the result of a one time non-cash impairment loss incurred by one of the
Operating Partnerships. When adjusted for the impairment loss the Operating
Partnerships reflect a net income of $359,448 for 1996.
For the tax years ended December 31, 1996 and 1995 the Partnership
generated $2,592,190 and $2,600,113 in passive income tax losses that were
passed through to the investors. The Partnership also provided $130 and $114,
respectively, in tax credits per BAC to the investors for the tax years ended
December 31, 1996 and 1995, respectively. The Partnership has fully invested
in 50 Operating Partnerships and as a result the operations of the Partnership
should remain relatively consistent on an annual basis going forward.
Recent Accounting Statements Not Yet Adopted
- --------------------------------------------
In February 1997, the Financial Accounting Board issued Statement of
Financial Accounting Standards ("SFAS') No. 128, "Earnings per Share" and SFAS
No. 129, "Disclosure of Information about Capital Structure." SFAS No. 128
provides accounting and reporting standards for the amount of earnings per
share. SFAS No. 129 requires the disclosure in summary from within the
financial statements of the pertinent rights and privileges of the various
securities outstanding. SFAS No. 128 and SFAS No. 129 are effective for
fiscal years ending after December 31, 1997 and earlier application is not
permitted.
The implementation of these standards is not expected to materially impact
the Partnership's financial statements because the Partnership's earnings per
share would not be significantly affected and the disclosures regarding the
capital structure in the financial statements would not be significantly
changed.
Item 8. Financial Statements and Supplementary Data
The financial statements of the Partnership are listed in Item 14 as being
filed as a part of this Report and are incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
12<PAGE>
PART III
--------
Item 10. Directors and Executive Officers of the Registrant
(a), (b), (c), (d) and (e)
The Partnership has no directors or executives officers of its own. The
following biographical information is presented for the partners of the
General Partners and affiliates of those partners (including Boston Capital
Partners, Inc. ("Boston Capital")) with principal responsibility for the
Partnership's affairs.
Herbert F. Collins, age 67, is co-founder and Chairman of the Board of Boston
Capital Corporation. Founded in 1974, Boston Capital, through its five
companies, offers a wide range of investment banking services to its domestic
and international clients. Mr. Collins has received Presidential appointments
from both President George Bush and President Bill Clinton. In 1992, President
Bush appointed Mr. Collins to the Presidential Advisory Committee on the Arts
at The Kennedy Center. In 1995, Mr. Collins was appointed by President Clinton
to the Thrift Depositor Protection Oversight Board. Mr. Collins is Chairman-
emeritus of the Council for Rural Housing and Development and former Chairman
of the Federal Home Loan Bank Board of Boston. Mr. Collins currently serves as
a member of the National Rural Housing Council, the Fannie Mae Housing Impact
Advisory Council, and is a member of the board of the National Housing
Conference. Mr. Collins is also involved with a number of civic and
charitable organizations with a particular interest in assisting disadvantaged
urban youth. These activities include serving on the boards of Youth Build -
Boston, the I Have a Dream Foundation, the Pine Street Inn and The Ron Burton
Training Village. Mr. Collins is a graduate of Harvard College and served in
the U.S. Marine Corps. He and his wife, Sheila, have six children. They reside
in Gloucester, Massachusetts.
John P. Manning, age 49, is co-founder, President and Chief Executive Officer
of Boston Capital Partners, Inc., and serves as member of the Investment
Committee. He has twenty-five years of experience in the financing,
development and operation of multi-family housing, especially affordable
housing. In addition to his responsibilities at Boston Capital, Mr. Manning
has been a proactive leader in the industry. He served as a member of the
Mitchell-Danforth Task Force, established by Senators Mitchell and Danforth in
1990, to review and reform the Low Income Housing Tax Credit. He was the
founding President of the Affordable Housing Tax Credit Coalition, is a member
of the board of the National Leased Housing Association and sits on the
Advisory Board of the Housing Development Reporter, three Washington D.C.
based housing organizations. In 1996, he was asked to be a judge by the FNMA
Foundation for its prestigious Maxwell Awards, given to the most outstanding
affordable housing projects in America. He served as a member of the
Massachusetts Housing Policy Committee, Executive Office of Communities &
Development, having been appointed by the Governor of Massachusetts. In
similar capacities, Mr. Manning has been asked to testify as an expert witness
before the U.S. House Ways and Means Committee and the U.S. Senate Finance
Committee, on the efficacy of the Low Income Housing Tax Credit, private
sector participation and the effects on the capital markets and the economy.
13<PAGE>
In 1996, President Clinton appointed him to the President's Advisory Committee
on the Arts at the John F. Kennedy Center for the Performing Arts, Washington,
D.C. Mr. Manning graduated from Boston College.
Richard J. DeAgazio, age 52, is Executive Vice President of Boston Capital
Partners, Inc., and is President of Boston Capital Services, Inc., Boston
Capital's NASD registered broker/dealer. Mr. DeAgazio formally served on the
national Board of Governors of the National Association of Securities Dealers
(NASD), was the Vice Chairman of the NASD's District 11 Committee, and served
as Chairman of the NASD's Statutory Disqualification Subcommittee of the
National Business Conduct Committee. He also served on the NASD State Liaison
Committee and the Direct Participation Program Committee. He is a founder and
past President of the National Real Estate Investment Association, past
President of the Real Estate Securities and Syndication Institute
(Massachusetts Chapter) and the Real Estate Investment Association. Prior to
joining Boston Capital in 1981, Mr. DeAgazio was the Senior Vice President and
Director of the Brokerage Division of Dresdner Securities (USA), Inc., an
international investment banking firm owned by four major European banks, and
was a Vice President of Burgess & Leith/Advest. He has been a member of the
Boston Stock Exchange since 1967. He graduated from Northeastern University.
Christopher W. Collins, age 42, is an Executive Vice President and a principal
of Boston Capital Partners, Inc., and is responsible for, among other areas,
overseeing the investment portfolio of funds sponsored by Boston Capital and
the acquisition of real estate investments on behalf of such funds. Mr.
Collins has had extensive experience in real estate development activities,
having founded and directed the American Development Group, a comprehensive
real estate development firm, and has also had extensive experience in the
area of acquiring real estate investments. He is on the Board of Directors of
the National Multi-Housing Council and a member of the Massachusetts Housing
Finance Agency Multi-Family Advisory Committee. He graduated from the
University of New Hampshire.
Anthony A. Nickas, age 36, is Senior Vice President and Chief Financial
Officer of Boston Capital Partners, Inc. and has over fourteen years
experience in the accounting and finance fields. Mr. Nickas has supervised the
financial aspects of both the Project Development and Property Management
Affiliates. Prior to joining Boston Capital in 1987, he was Assistant Director
of Accounting and Financial Reporting for the Yankee Companies, Inc., and was
an Audit Supervisor for Wolf & Company of Massachusetts, P.C., a regional
certified public accounting firm based in Boston. He graduated with honors
from Norwich University.
(f) Involvement in certain legal proceedings.
None.
(g) Promoters and control persons.
None.
14<PAGE>
Item 11. Executive Compensation
(a), (b), (c), (d) and (e)
The Partnership has no officers or directors. However, under the terms of
the Amended and Restated Agreement and Certificate of Limited Partnership of
the Partnership, the Partnership has paid or accrued obligations to the
General Partners and their affiliates for the following fees during the 1997
fiscal year:
1. An annual asset management fee based on .5 percent of the aggregate
cost of all apartment complexes acquired by the Operating Partnerships has
been accrued as payable to Boston Capital Asset Management Limited Partnership
(formerly Boston Capital Communications Limited Partnership). The annual asset
management fee accrued during the year ended March 31, 1997 was $441,858. The
fee is payable without interest as sufficient funds become available.
2. The Partnership has reimbursed affiliates of the General Partners a
total of $2,303 for amounts charged to operations during the year ended March
31, 1997. The reimbursement includes, but may not be limited to postage,
printing, travel, and overhead allocations.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The General Partners named in Item 1 own all of the outstanding general
partner interests in the Partnership. The General Partners have a 1% interest
in all profits, losses, tax credits and distributions of the Partnership. No
person is known to own beneficially in excess of 5% of the outstanding limited
partnership interests. In addition, no individuals listed in Item 10 are
known to own any units.
Item 13. Certain Relationships and Related Transactions
The Partnership has no officers or directors. However, under the terms of
the Public Offering, various kinds of compensation and fees are payable to the
General Partners and their affiliates during the organization and operation of
the Partnership. Additionally, the General Partners will receive
distributions from the Partnership if there is cash available for distribution
or residual proceeds as defined in the Partnership Agreement. The amounts and
kinds of compensation and fees are described on pages 9 to 11 of the
Prospectus under the caption "Compensation of General Partners and Affiliate",
which is incorporated herein by reference. See Note B of Notes to Financial
Statements in Item 14 of this Annual Report on Form 10-K for amounts accrued
or paid to the General Partners and their affiliates during the period from
April 1, 1993 through March 31, 1997.
15<PAGE>
PART IV
-------
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form
8-K
(a) 1. Financial Statements
--------------------
American Affordable Housing II Limited Partnership
Independent Auditors' Report
Balance Sheets, March 31, 1997 amd 1996
Statements of Operations, Years ended March 31, 1997, 1996
and 1995
Statements of Changes in Partners' Capital, Years ended March 31,
1997, 1996, and 1995
Statements of Cash Flows, Years ended March 31, 1997, 1996
and 1995
Notes to Financial Statements, Years ended March 31, 1997, 1996
and 1995
Liberty Center, Ltd.
Independent Auditors' Report
Balance Sheets, December 31, 1996 and 1995
Statements of Operations, Years ended December 31, 1996 and
1995
Statements of Cash Flow, Years ended December 31, 1996 and
1995
Statements of Changes in Partners' Capital, Years ended December 31,
1996 and 1995
Notes to Financial Statements, Years ended December 31, 1996 and
1995
16
Riverplace Apartments
Independent Auditors' Report
Balance Sheets, December 31, 1996 and 1995
Statements of Operations, Years ended December 31, 1996 and
1995
Statements of Changes in Partners' Capital, Years ended December 31,
1996 and 1995
Statements of Cash Flow, Years ended December 31, 1996 and
1995
Notes to Financial Statements, Years ended December 31, 1996 and
1995
(a) 2. Financial Statement Schedules
-----------------------------
Schedule III - Real Estate and Accumulated Depreciation
Notes to Schedule III
Schedules not listed are omitted because of the absence of the conditions
under which they are required or because the information is included in the
financial statements or the notes hereto.
17
<PAGE>
(a) 3. Exhibits
--------
(3) Amended and Restated Certificate and Agreement of Limited
Partnership. (1)
(4) Instruments defining the rights of security holders, including
indentures (same as Exhibit (3)).
(9) None.
(10) None.
(11) None.
(12) None.
(13) None.
(16) None.
(18) None.
(19) None.
(22) Subsidiaries of the Registrant.
(23) None.
(24) None.
(25) None.
(28) Independent Auditors' Reports for Operating Partnerships.
(29) None.
(a) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed during the period ending March
31, 1997.
(b) Exhibits
Same as Item 14(a)3. above.
(c) Financial Statement Schedules
See Items (a)1. and (a)2. above.
18<PAGE>
SIGNATURES
----------
Pursuant to the requirements of Section 13 of the Securities Exchange Act
of 1934, the Registrant has duly caused this Report to be signed on its behalf
by the undersigned, thereunto duly authorized.
American Affordable Housing II
Limited Partnership
By: Boston Capital Associates Limited
Partnership, General Partner
By: Boston Capital Associates,
General Partner
By: /s/ John P. Manning
------------------------------
J. P. Manning, Partner
By: Boston Capital Associates, General
Partner
By:/s/ John P. Manning
------------------------------
John P. Manning, Partner
Date:
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:
SIGNATURE TITLE DATE
- --------- ----- ----
Boston Capital Associates General Partner June 30, 1997
Limited Partnership
By: Boston Capital Associates,
General Partner
By: /s/ John P. Manning
----------------------------
John P. Manning, Partner
19
SIGNATURES
----------
Pursuant to the requirements of Section 13 of the Securities Exchange Act
of 1934, the Registrant has duly caused this Report to be signed on its behalf
by the undersigned, thereunto duly authorized.
American Affordable Housing II
Limited Partnership
By: Boston Capital Associates Limited
Partnership, General Partner
By: Boston Capital Associates,
General Partner
By:__________________________
John P. Manning,
Partner
By: Boston Capital Associates, General
Partner
By:___________________________
John P. Manning, Partner
Date:
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:
SIGNATURE TITLE DATE
- --------- ----- ----
Boston Capital Associates General Partner June 30, 1997
Limited Partnership
By: Boston Capital Associates,
General Partner
By: ________________________
John P. Manning, Partner
19<PAGE>
SIGNATURE TITLE DATE
- --------- ----- ----
Boston Capital Associates General Partner
By: /s/ John P. Manning
------------------------ June 30, 1997
John P. Manning, Partner -------------
/s/ Herbert F. Collins
------------------------ June 30, 1997
Herbert F. Collins General Partner -------------
of Boston Capital
Associates, Principal
Executive Officer,
Principal Financial
Officer and Principal
Accounting Officer
/s/ John P. Manning
------------------------ June 30, 1997
John P. Manning General Partner -------------
of Boston Capital
20<PAGE>
SIGNATURE TITLE DATE
- --------- ----- ----
Boston Capital Associates General Partner
By: ________________________ June 30, 1997
John P. Manning, Partner -------------
________________________ June 30, 1997
Herbert F. Collins General Partner -------------
of Boston Capital
Associates, Principal
Executive Officer,
Principal Financial
Officer and Principal
Accounting Officer
________________________ General Partner June 30, 1997
John P. Manning of Boston Capital -------------
Associates, Principal
Executive Officer,
Principal Financial
Officer and Principal
Accounting Officer
20
INDEX TO EXHIBITS
-----------------
Exhibit Description of Exhibit
- ------- ----------------------
Page
- ----
(22) Subsidiary of the registrant
21<PAGE>
Exhibit (22)
22<PAGE>
Subsidiaries of the Registrant
------------------------------
Each of the Operating Partnerships listed in the chart included in Item 2 may
be considered a subsidiary of the Partnership.
23<PAGE>
<PAGE> 1
FINANCIAL STATEMENTS AND
INDEPENDENT AUDITORS' REPORT
AMERICAN AFFORDABLE HOUSING II
LIMITED PARTNERSHIP
MARCH 31, 1997 AND 1996
<PAGE>
<PAGE> 2
American Affordable Housing II Limited Partnership
TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITORS' REPORT 3
FINANCIAL STATEMENTS
BALANCE SHEETS 5
STATEMENTS OF OPERATIONS 6
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL 7
STATEMENTS OF CASH FLOWS 8
NOTES TO FINANCIAL STATEMENTS 9
SCHEDULE III - REAL ESTATE AND ACCUMULATED
DEPRECIATION 18
Schedules not listed are omitted because of the absence of the conditions
under which they are required or because the information is included in the
financial statements or the notes thereto.
<PAGE>
<PAGE> 3
Reznick Fedder & Silverman
Certified Public Accountants * Business Consultants
A Professional Corporation
4520 East-West Highway * Suite 300 * Bethesda, MD 20814-3319
(301) 652-9100 * Fax (301) 652-1848
INDEPENDENT AUDITORS' REPORT
To the Partners
American Affordable Housing II
Limited Partnership
We have audited the accompanying balance sheets of American
Affordable Housing II Limited Partnership as of March 31, 1997 and 1996, and
the related statements of operations, changes in partners' capital and cash
flows for each of the three years in the period ended March 31, 1997. These
financial statements are the responsibility of the partnership's management.
Our responsibility is to express an opinion on these financial statements
based on our audits. We did not audit the financial statements of certain
operating partnerships in which American Affordable Housing II Limited
Partnership owns a limited partnership interest. Investments in such
partnerships comprise 35% and 45% of the assets as of March 31, 1997 and
1996, and 9%, 12% and 21% of the partnership loss for each of the three
years in the period ended March 31, 1997, of American Affordable Housing II
Limited Partnership. The financial statements of these partnerships were
audited by other auditors, whose reports have been furnished to us, and our
opinion, insofar as it relates to information relating to these
partnerships, is based solely on the reports of the other auditors.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits and
the reports of the other auditors provide a reasonable basis for our
opinion.
- 3 -
<PAGE>
<PAGE> 4
In our opinion, based on our audits and the reports of the other
auditors referred to above, the financial statements referred to above
present fairly, in all material respects, the financial position of American
Affordable Housing II Limited Partnership as of March 31, 1997 and 1996, and
the results of its operations and its cash flows for each of the three years
in the period ended March 31, 1997, in conformity with generally accepted
accounting principles.
We have also audited the related financial statement schedule
listed in Form 10-K, item 14(a) of American Affordable Housing II Limited
Partnership as of March 31, 1997. In our opinion, the schedule presents
fairly the information required to be set forth therein, in conformity with
generally accepted accounting principles.
Bethesda, Maryland
June 27, 1997
- 4 -<PAGE>
Marshall & Shafer, P.C.
Certified Public Accountants
10497 Town & Country Way, Suite 420
Houston, Texas 77024
713 / 973-8378 FAX 713 / 973-8377
INDEPENDENT AUDITOR'S REPORT
March 10, 1997
To the Partners
Brookhollow Manor, Ltd.
We have audited the accompanying balance sheet of Brookhollow Manor, Ltd. as
of December 31, 1996 and 1995, and the related statements of operations,
partners' equity (deficit), and cash flow 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, and the U.S. Department of Agriculture, Farmers Home
Administration Audit Program. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the accompanying financial statements referred to above
present fairly, in all material respects, the financial position of
Brookhollow Manor, Ltd. as of December 31, 1996 and 1995, and the results of
its operation 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 our
reports dated March 10, 1997, on our consideration of Brookhollow Manor,
Ltd.'s internal control and on its compliance with laws and regulations.
Marshall & Shafer, P.C.
Houston, Texas
<PAGE>
Humiston, Skokan, Warren & Eichenberger
A Professional Corporation
Certified Public Accountants
West Des Moines, Iowa
INDEPENDENT AUDITORS' REPORT
To the Partners
Fairbanks Flats, Limited Partnership
West Des Moines, Iowa
We have audited the accompanying balance sheets of FAIRBANKS FLATS, 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 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 Fairbanks Flats, Limited .
Partnership as of December 31, 1996 and 1995 and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note H to the
financial statements, the Partnership has suffered recurring losses from
operations and has a net partnership deficiency, which raise substantial doubt
about its ability to continue as a going concern. Management's plans
regarding those matters also are described in Note H. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
January 24, 1997<PAGE>
Mueller, Walla & Albertson, P.C.
Certified Public Accountants
10714 Manchester Road Suite 202
Kirkwood, Missouri 63122
(314) 822-6575
INDEPENDENT AUDITORS' REPORT
The Partners
Fredericktown Associates II, L.P.
Fredericktown, Missouri
We have audited the accompanying balance sheets of Fredericktown Associates
II, L.P. (a limited partnership) as of December 31, 1996 and 1995, and the
related statements of operations, 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 Fredericktown Associates II,
L.P. as of December 31, 1996 and 1995, and the results of its operations,
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 included
on page 12 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.
Mueller, Walla & Albertson, P.C.
Certified Public Accountants
January 14, 1997
Members American Institute Of Certified Public Accountants
Missouri Society Of Certified Public Accountants<PAGE>
Hunter & Pleiman, PA
Certified Public Accountants
4209 Baymeadows Road, Suite I
Jacksonville, Florida 32217
Lewis B. Hunter, Jr., CPA
Thomas C. Pleiman, Jr., CPA
Phone: (904) 367-0852 Fax: (904) 731-0352
INDEPENDENT AUDITOR'S REPORT
To the Partners
Liberty Center, Ltd.
We have audited the accompanying balance sheets of Liberty Center, Ltd. as of
December 31, 1996 and 1995, and the related statements of operations,
partners' equity and cash flows 'for the years then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our 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 Liberty Center. Ltd. as of
December 31 1996 and 1995, and the results of its operations and its cash
flows for the year then ended in conformity with generally accepted accounting
principles.
As we discussed in Note J to the financial statements, certain expenses have
been decreased due to a change in the method of calculation by management
resulting in an overstatement of previously reported loss. The financial
statements for the year 1995 have been revised and restated to reflect these
changes.
May 10, 1997<PAGE>
Boothe, Vassar, Fox and Fox
Certified Public Accountants
1001 East Farm Road 700
Big Spring, Texas 79720
915-263-1324 Fax 915-263-2124
INDEPENDENT AUDITORS' REPORT
To the Partners
Lovington Housing Associates, Ltd. dba Southview Place Apts.
We have audited the accompanying balance sheets of Lovington Housing
Associates, Ltd. dba Southview Place Apts. as of December 31, 1996, and the
related statements of income, 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. The December 31, 1995
financial statements of Lovington housing Associates, LTD. were audited by
other auditors, whose report dated April 5, 1996 expressed an unqualified
opinion on those statements.
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 Lovington Housing Associates,
Ltd. dba Southview Place Apts. as of December 3 1, 1996, and the results of
its operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards issued by the Comptroller
General of the United States, we have also issued a report dated January 29,
1997, on our consideration of Lovington Housing Associates, Ltd. dba Southview
Place Apt. 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 accompanying supplementary
information shown on Pages 16 through 18 is presented for purposes 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 basic financial statements taken as a whole.
BOOTHE, VASSAR, FOX AND FOX
January 29, 1997
Big Spring, Texas
A Partnership Composed of Professional Corporations<PAGE>
Larson, Allen, Weishair & Co., LLP
Certified Public Accountants
INDEPENDENT AUDITOR S REPORT
Partners
Nicollet Island Historic Homes,
(a Minnesota Limited Partnership)
St Paul, Minnesota
We have audited the accompanying balance sheets of Nicollet Island Historic
Homes, (a Minnesota Limited Partnership) as of December 31, 1996 and 1995, and
the related statements of operations, partners equity (deficit) and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership s management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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 Nicollet Island Historic Homes, A
Minnesota 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.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on page
12 is presented for purposes of additional analysis and is not a required part
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.
LARSON, ALLEN, WEISHAIR & CO., LLP
Saint Paul, Minnesota
January 14, 1997<PAGE>
Certified Public Accountants
Mahoney, Ulbrich, Christiansen & Russ P.A.
Suite 800 Capital Centre
386 North Wabasha
Saint Paul, Minnesota 55102
Telephone 612-227-6695 Fax 612-227-9796
The Partners
Paige Hall Limited Partnership
Minneapolis, Minnesota
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying balance sheets of Paige Hall Limited
Partnership as of December 31, 1996 and 1995, and the related statements of
operations, 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 audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Paige Hall 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.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on page 9
is presented for the 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.
Saint Paul, Minnesota
January 18, 1997<PAGE>
Bernard Robinson & Company, L.L.P.
Certified Public Accountants since 1947
Mailing Address:
P.O. Box 19608
Greensboro, NC 27419-9608
Fax 910-547-0840
Offices:
109 Muirs Chapel Road
Greensboro, NC 24710
Telephone 910-294-4494
INDEPENDENT AUDITOR'S REPORT
To the Partners
Pine Knoll Development Company
D/B/A Pine Knoll Manor
Smithfield, North Carolina
We have audited the accompanying balance sheets of Pine Knoll Development
Company (a North Carolina limited partnership) as of December 31, 1996 and
1995, and the related statements of operations, partners' equity, and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Pine Knoll Development
Company 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 23, 1997 on our consideration of the internal control system of
Pine Knoll Development Company and a report dated January 23, 1997 on its
compliance with laws and regulations.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information listed
in the table of contents is presented for purposes 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
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.
Greensboro, North Carolina
January 23, 1997<PAGE>
ALLARD, ALLARD, TRIGGS & COMPANY, P.C.
Certified Public Accountants
259 Page Boulevard
Springfield, Massachusetts 01104
Telephone: (413) 785-1414 Fax: (413) 739-9618
Colleen E. Allard, C.P.A.
Roger D. Allard, C.P.A.
Barry W. Crowley, C.P.A.
Martin R. Triggs, C.P.A. - 1947-1980
INDEPENDENT AUDITORS' REPORT
To the Partners
Riverplace Apartments Limited Partnership
We have audited the accompanying balance sheet of Riverplace Apartments
Limited Partnership as of December 31, 1996 and 1995 and the related
statements of operations, partners' equity, and cash flows for the years then
ended. The financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on the 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 Riverplace 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.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
schedules on pages 13-15 are presented only for analysis purposes and are not
a required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements. All information included in the schedules is the
representation of the management of Riverplace Apartments Limited Partnership.
We did not become aware of any material modifications that should be made to
this supplementary information.
January 31, 1997<PAGE>
GLOVER & GLOVER
Certified Public Accountants
206 Wilson Pike Circle
Brentwood, Tennessee 37027
(615) 370-0341 Fax 370-0342
M. Lawrence Glover, CPA
Byron L. Glover, CPA
Members: American Institute of CPAS - Tennessee Society of CPAs
INDEPENDENT AUDITORS REPORT
To the Partners
Shelbyville FH, Ltd.
We have audited the accompanying balance sheets of Shelbyville FH, Ltd. (a
Tennessee limited partnership), RHS Project No.: 48 002 621246065, as of
December 31, 1996 and 1995, and the related statements of operations,
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 and Government Auditing Standards issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Shelbyville FH, 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
16 and 17 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 audit 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.
Brentwood, Tennessee
March 17, 1997<PAGE>
GLOVER & GLOVER
Certified Public Accountants
206 Wilson Pike Circle
Brentwood, Tennessee 37027
(615) 370-0341 Fax (370-0342
To the Partners
Suncrest, Ltd.
We have audited the accompanying balance sheets of Suncrest, Ltd. (a Tennessee
limited partnership), RHS Project No.: 48 015 621251107, as of December 31,
1996 and 1995, and the related statements of operations, 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 and Government Auditing Standards issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Suncrest, 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
15 and 16 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 audit 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.
Brentwood, Tennessee
March 17, 1997<PAGE>
GLOVER & GLOVER
Certified Public Accountants
206 Wilson Pike Circle
Brentwood, Tennessee 37027
To the Partners
Warren Properties, Ltd.
We have audited the accompanying balance sheets of Warren Properties, Ltd. (a
Tennessee limited partnership), FmHA Project No.: 48 089 621237357, as of
December 31, 1996 and 1995, and the related statements of operations,
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 and Government Auditing Standards issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Warren Properties, 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
16 and 17 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 audit 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.
Brentwood, Tennessee
March 17, 1997<PAGE>
Ziner & Company, P.C.
Certified Public Accountant
INDEPENDENT AUDITORS' REPORT
To the Partners of
300 Shawmut Avenue Limited Partnership
We have audited the accompanying balance sheets of 300 Shawmut Avenue Limited
Partnership (a Massachusetts limited partnership) as of December 31, 1995 and
1994 and the related statements of operations, partners' equity, and cash
flows for the years 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 audits.
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 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 the general partner, 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 300 Shawmut Avenue Limited
Partnership as of December 31, 1995 and 1994, and the results of its
operations, its changes in partners' equity and its cash flows for the years
then ended in conformity with generally accepted accounting principles.
January 9, 1996
7 Winthrop Square Boston, Massachusetts 02110-1256
Phone (617) 542-8880 Fax (617) 542-8715<PAGE>
Christensen, Rucki & Co.
Certified Public Accountants
109 South Main Street
Sheridan, Wyoming 82801
Telephone (307) 674-6609 Fax (307) 674-7017
John P. Croff, C.P.A. 1922-1974 Gordon Macalister, C.P.A. 1916-1976
Curtis W. Christensen, C.P.A. Steven W. Rucki, C.P.A.
INDEPENDENT AUDITORS' REPORT
To the Partners
Belen Apartments, A Limited Partnership
Sheridan, Wyoming 82801
We have audited the accompanying balance sheets of Belen Apartments, A Limited
Partnership, as of December 31, 1995 and 1994 and the related statements of
operations, partners' equity (deficit) and cash flows for the years then
ended. These financial statements are the responsibility of Belen Apartments,
A Limited Partnership's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles-used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Belen Apartments, A Limited
Partnership as of December 31, 1995 and 1994 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, 1996 on our consideration of Belen Apartments, A Limited
Partnership's internal control structure and a report dated January 31, 1996
on its compliance with laws and regulations.
The accompanying supplementary information shown on pages 15 and 16 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.
Christensen, Rucki & Co.
Certified Public Accountants
Sheridan, Wyoming
January 31, 1996<PAGE>
JAMES KNUTZEN & ASSOCIATES, C.P.A.'s, PA
Suite 230
3100 University Boulevard South
Jacksonville, Florida 32216
(904) 725-5832 Fax (904) 727-6835
James Knutzen, C.P.A., M.B.A. Christina E. Gibson, C.P.A.
Raju Iyer, C.P.A. Gregory Korn, C.P.A.
Todd Middlemas, C.P.A. Wilson Trammell, C.P.A.
INDEPENDENT AUDITORS' REPORT
To the Partners of
Immokalee RRH, Ltd.
We have audited the accompanying balance sheets of Immokalee RRH, Ltd. (a
Florida Limited Partnership), FmHA Project No.:09-11-263201371 as of December
31, 1995 and 1994, and the related statements of operations, partners, equity
(deficit) and cash f lows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Immokalee RRH, Ltd. (a
Florida Limited Partnership) as of December 31, 1995 and 1994, and the results
of its operations, partners' equity (deficit), and cash flows for the years
then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated February 15, 1996 on our consideration of Immokalee RRH, Ltd. Is
internal control structure and a report dated February 15, 1996 on its
compliance with laws and regulations.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information on pages 14
- - 17 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.
James Knutzen & Associates, C.P.A.'s, P.A.
Jacksonville, Florida
February 15, 1996<PAGE>
Hunter & Pleiman, PA
Certified Public Accountants
4217 Baymeadows Road, Suite 2
Jacksonville, Florida 32217
Phone:(904) 367-0852 Fax:(904) 731-0352
Lewis B. Hunter, Jr., CPA
Thomas C. Pleiman, Jr., CPA
INDEPENDENT AUDITOR'S REPORT
To the Partners
Liberty Center, Ltd.
We have audited the accompanying balance sheets of Liberty Center, Ltd. as of
December 31, 1995 and 1994, and the related statements of operations,
partners' equity and cash flows for the years then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our 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 Liberty Center, Ltd. as of
December 31, 1995 and 1994, and the results of its operations and its cash
flows for the year then ended in conformity with generally accepted accounting
principles.
As we discussed in Note J to the financial statements, certain expenses have
been decreased due to a change in the method of calculation by management
resulting in an overstatement of previously reported loss. The financial
statements have been revised and restated to reflect these changes.
November 18, 1996<PAGE>
Larson, Allen, Weishair & Co., LLP
Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT
Partners
Nicollet Island Historic Homes,
A Minnesota Limited Partnership
St. Paul, Minnesota
We have audited the accompanying balance sheets of Nicollet Island Historic
Homes, A Minnesota Limited Partnership as of December 31, 1995 and 1994, and
the related statements of operations, partners' equity (deficit) and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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 Nicollet Island Historic Homes, A
Minnesota Limited Partnership as of December 31, 1995 and 1994, 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 supplemental information on page
11 is presented for purposes of additional analysis and is not a required part
of the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the basic financial statements taken as a whole.
LARSON, ALLEN, WEISHAIR & CO., LLP
Saint Paul, Minnesota
January 22, 1996<PAGE>
FEGLEY & ASSOCIATES
A Professional Corporation
Certified Public Accountant
2250 Hickory Road, Suite 20
Plymouth Meeting, PA 19462
Phone (610) 825-7400 Fax (610) 825-1297
INDEPENDENT AUDITORS' REPORT
To the Partners
The Stokes Rowe Partnership
We have audited the accompanying balance sheets of The Stokes Rowe Partnership
as of December 31, 1995 and 1994, and the related statements of operations,
partners I equity, and cash flows f or 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 The Stokes Rowe Partnership
as of December 31, 1995 and 1994, and the results of its operations and its
cash flows for the years then ended in conformity with generally accepted
accounting principles.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages
20 and 21 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
January 26, 1996<PAGE>
GLOVER & GLOVER
Certified Public Accountants
206 Wilson Pike Circle
Brentwood, Tennessee 37027
(615) 370-0341 Fax 370-0342
Lawrence Glover, CPA Byron L. Glover, CPA
Members: American Institute of CPAs - Tennessee Society of CPAs
To the Partners
Shelbyville FH, Ltd.
We have audited the accompanying balance sheets of Shelbyville FH, Ltd. (a
Tennessee limited partnership), FmHA Project No.: 48 002 621246065, as of
December 31, 1995 and 1994, and the related statements of operations,
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 an
our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Shelbyville FH, Ltd. as of
December 31, 1995 and 1994, 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
16 and 17 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 audit 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.
Brentwood, Tennessee
March 1, 1996<PAGE>
GLOVER & GLOVER
Certified Public Accountants
206 Wilson Pike Circle
Brentwood, Tennessee 37027
(615) 370-0341 Fax 370-0342
M. Lawrence Glover, CPA Byron L. Glover, CPA
Members: American Institute of CPAs - Tennessee Society of CPAs
To the Partners
Suncrest, Ltd.
We have audited the accompanying balance sheets of Suncrest, Ltd. (a Tennessee
limited partnership), FmHA Project No.: 48 015 621251107, as of December 31,
1995 and 1994, and the related statements of operations, 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 and Government Auditing Standards issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Suncrest, Ltd. as of December
31, 1995 and 1994, 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
15 and 16 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 audit 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.
Brentwood, Tennessee
March 1, 1996<PAGE>
GLOVER & GLOVER
Certified Public Accountants
206 Wilson Pike Circle
Brentwood, Tennessee 37027
(615) 370-0341 Fax 370-0342
M. Lawrence Glover, CPA
Byron L. Glover, CPA
Members: American Institute of CPAs - Tennessee Society of CPAs
To the Partners
Warren Properties, Ltd.
We have audited the accompanying balance sheets of Warren Properties, Ltd. (a
Tennessee limited partnership), FmHA Project No.: 48 089 621237357, as of
December 31, 1995 and 1994, and the related statements of operations,
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 and Government Auditing Standards issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Warren Properties, Ltd. as of
December 31, 1995 and 1994, 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
16 and 17 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 audit 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.
Brentwood, Tennessee
March 1, 1996<PAGE>
Bernard, Johnson & Company, P.C.
Certified Public Accountants and Business Advisors
INDEPENDENT AUDITORS' REPORT
To the Partners
Washington Mews Limited Partnership
We have audited the accompanying balance sheets of Washington Mews Limited
Partnership as of December 31, 1995, and the related statements of operations,
partners' equity and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our 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 Washington Mews 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.
The accompanying financial statements for the year ended December 31, 1994
were compiled by us. A compilation is limited to presenting in the form of
financial statements information that is the representation of management. We
have not audited or reviewed the 1994 financial statements and, accordingly,
do not express an opinion or any other form of assurance on them.
Topsfiled, Massachusetts
January 12, 1996
15 Main Street, Topsfiled, MA 01983; Tel (508)887-2220; Fax (508)887-5443
54 Court Street, Plymouth, NH 03801; Tel (603)436-8110; Fax (603)427-0888
<PAGE>
Curtis W. Christensen & Co.
Certified Public Accountants
109 South Main Street
Sheridan, Wyoming 82801
Telephone (307) 674-6609 Fax (307) 674-7017
John P. Croff, C.P.A. 1922-1974
Gordon Macalister, C.P.A. 1916-1976
Curtis W. Christensen, C.P.A.
Steven W. Rucki, C. P. A.
INDEPENDENT AUDITORS' REPORT
To the Partners
Belen Apartments, A Limited Partnership
Sheridan, Wyoming 82801
We have audited the accompanying balance sheets of Belen Apartments, A Limited
Partnership, as of December 31, 1994 and 1993, and the related statements of
operations and changes in partners' equity and cash flows 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 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 fee 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 Belen Apartments, A limited
Partnership as of December 31, 1994 and 1993, and the result 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 supplemental information on page
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.
Curtis W. Christensen & Co.
Certified Public Accountants
Sheridan, Wyoming
January 31, 1995<PAGE>
Fecteau & Company, P.C.
Certified Public Accountants
Advisors of Taxation
INDEPENDENT AUDITORS' REPORT
To the Partners
Carthage Court Housing Company
Rochester, New York
We have audited the accompanying balance sheets of Carthage Court Housing
Company as of December 31, 1994 and 1993, and the related statements of
operations, partners' deficit, and cash flows for the years then ended. 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 audit.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards issued by the Comptroller of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by Management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Carthage Court Housing
Company as of December 31, 1994 and 1993 and the results of its operations and
its cash flows for the years then ended in conformity with generally accepted
accounting principles.
Fecteau & Company, P.C.
January 20, 1995
Albany, NY
Executive Woods, 4 Atrium Drive, Albany, NY 12205
(518)438-7400
Fax (518)438-7444
Member
American Institute of Certified Public Accountants
(Private Companies Practice Section & Tax Division)
New York State Society of CPA's<PAGE>
Humiston, Skokan, Warren & Eichenberger
A Professional Corporation
Certified Public Accountants
West Des Moines, Iowa
INDEPENDENT AUDITORS' REPORT
To the Partners
Fairbanks Flats, Limited Partnership
West Des Moines, Iowa
We have audited the accompanying balance sheets of FAIRBANKS FLATS, LIMITED
PARTNERSHIP as of December 31, 1994 and 1993, and the related statements of
operations, partners' equity (deficit) and cash flows for the years then
ended. These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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 Fairbanks Flats, Limited .
Partnership as of December 31, 1994 and 1993 and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
January 20, 1995<PAGE>
Curtis W. Christensen & Co.
Certified Public Accountants
109 South Main Street
Sheridan, Wyoming 82801
Telephone (307) 674-6609 Fax (307) 674-7017
John P. Croff, C.P.A. 1922-1974
Gordon Macalister, C.P.A. 1916-1976
Curtis W. Christensen, C.P.A.
Steven W. Rucki, C. P. A.
INDEPENDENT AUDITORS' REPORT
To the Partners
Kersey Apartments, A Limited Partnership
Sheridan, Wyoming 82801
We have audited the accompanying balance sheets of Kersey Apartments, A
Limited Partnership, as of December 31, 1994 and 1993, and the related
statements of operations and changes in partners' equity and cash flows 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 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 fee 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 Kersey Apartments, A limited
Partnership as of December 31, 1994 and 1993, and the result 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 supplemental information on page
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.
Curtis W. Christensen & Co.
Certified Public Accountants
Sheridan, Wyoming
January 31, 1995<PAGE>
Fecteau & Company, P.C.
Certified Public Accountants
Advisors of Taxation
INDEPENDENT AUDITORS' REPORT
To the Partners
Malone Housing Redevelopment Company
Rochester, New York
We have audited the accompanying balance sheets of Malone Housing
Redevelopment Company as of December 31, 1994 and 1993, and the related
statements of operations, partners' deficit, and cash flows for the years then
ended. 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 audit.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards issued by the Comptroller of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by Management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Malone Housing Redevelopment
Company as of December 31, 1994 and 1993 and the results of its operations and
its cash flows for the years then ended in conformity with generally accepted
accounting principles.
Fecteau & Company, P.C.
January 20, 1995
Albany, NY
Executive Woods, 4 Atrium Drive, Albany, NY 12205
(518)438-7400
Fax (518)438-7444
Member
American Institute of Certified Public Accountants
(Private Companies Practice Section & Tax Division)
New York State Society of CPA's<PAGE>
Bernard Robinson & Company, L.L.P.
Certified Public Accountants since 1947
Mailing Address Offices
P.O. Box 19608 109 Muris Chapel Road
Greensboro, NC 27419-9608 Greensboro, NC 27419-9608
Fax 910-547-0840 Tel. 910-294-4494
INDEPENDENT AUDITOR'S REPORT
To the Partners
Pine Knoll Development Company Limited Partnership
(A North Carolina Limited Partnership)
Smithfield, North Carolina
We have audited the accompanying balance sheet of Pine Knoll Development
Company Limited Partnership ( A North Carolina Limited Partnership) as of
December 31, 1994 and 1993, and the related statements of operations,
partners' equity, and cash flow for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Pine Knoll Development
Company Limited Partnership as of December 31, 1994 and 1993, and the results
of its operation and its cash flows for the years 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 supplementary information on pages
11 through 16 is presented for the purposes of additional analysis and is not
a required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
Certified Public Accountants
Greensboro, North Carolina
January 20, 1995
<PAGE>
Curtis W. Christensen & Co.
Certified Public Accountants
109 South Main Street
Sheridan, Wyoming 82801
Telephone (307) 674-6609 Fax (307) 674-7017
John P. Croff, C.P.A. 1922-1974
Gordon Macalister, C.P.A. 1916-1976
Curtis W. Christensen, C.P.A.
Steven W. Rucki, C. P. A.
INDEPENDENT AUDITORS' REPORT
To the Partners
Platteville Apartments, A Limited Partnership
Sheridan, Wyoming 82801
We have audited the accompanying balance sheets of Platteville Apartments, A
Limited Partnership, as of December 31, 1994 and 1993, and the related
statements of operations and changes in partners' equity and cash flows 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 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 fee 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 Platteville Apartments, A
limited Partnership as of December 31, 1994 and 1993, and the result 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 supplemental information on page
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.
Curtis W. Christensen & Co.
Certified Public Accountants
Sheridan, Wyoming
January 31, 1995
<PAGE>
<PAGE> 5
American Affordable Housing II Limited Partnership
BALANCE SHEETS
March 31,
<TABLE>
1997 1996
----------------- -----------------
ASSETS
<S> <C> <C>
INVESTMENTS IN OPERATING LIMITED
PARTNERSHIPS (notes A and D) $ 3,347,143 $ 4,153,171
OTHER ASSETS
Cash 14,290 34,944
Note receivable (note C) 40,000 78,875
Other assets 7,849 7,849
---------------- ----------------
$ 3,409,282 $ 4,274,839
================ ================
LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES
Due to affiliates (note B) $ 3,539,181 $ 3,133,894
Accounts payable 3,500 3,500
---------------- ----------------
3,542,681 3,137,394
---------------- ----------------
PARTNERS' CAPITAL
Limited partners
Units of limited partnership
interest, consisting of 50,000
authorized units, $1,000 stated
value per unit; issued and
outstanding - 26,501 units 97,841 1,355,977
General partners (231,240) (218,532)
---------------- ----------------
(133,399) 1,137,445
---------------- ----------------
$ 3,409,282 $ 4,274,839
================ ================
</TABLE>
See notes to financial statements
- 5 -
<PAGE>
<PAGE> 6
American Affordable Housing II Limited Partnership
STATEMENTS OF OPERATIONS
Years ended March 31,
<TABLE>
1997 1996 1995
----------- ---------- ----------
<S> <C> <C> <C>
Income
Interest income $ 743 $ 783 $ 520
Miscellaneous income 1,470 - 1,650
----------- ----------- -----------
2,213 783 2,170
----------- ----------- -----------
Share of losses from operating
limited partnerships (note A) (795,677) (1,047,309) (1,392,030)
Expenses
Professional fees 36,450 39,192 35,661
General and administrative expense
(note B) 14,182 16,661 15,997
Asset management fee (note B) 426,748 461,029 451,449
----------- ----------- -----------
(1,273,057) (1,564,191) (1,895,131)
----------- ----------- -----------
NET LOSS $(1,270,844) $(1,563,408) $(1,892,967)
=========== =========== ===========
Net loss allocated to general
partners $ (12,708) $ (15,634) $ (18,930)
=========== =========== ===========
Net loss allocated to limited
partners $(1,258,136) $(1,547,774) $(1,874,037)
=========== =========== ===========
Net loss per unit of limited
partnership interest $ (47.48) $ (58.40) $ (70.72)
=========== =========== ===========
</TABLE>
See notes to financial statements
- 6 -
<PAGE> 7
American Affordable Housing II Limited Partnership
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
Years ended March 31, 1997, 1996 and 1995
<TABLE>
Limited General
partners partners Total
----------- ---------- -----------
<S> <C> <C> <C>
Partners' capital (deficit),
March 31, 1994 $ 4,777,788 $ (183,968) $ 4,593,820
Net loss (1,874,037) (18,930) (1,892,967)
----------- ---------- -----------
Partners' capital (deficit),
March 31, 1995 2,903,751 (202,898) 2,700,853
Net loss (1,547,774) (15,634) (1,563,408)
----------- ---------- -----------
Partners' capital (deficit),
March 31, 1996 1,355,977 (218,532) 1,137,445
Net loss (1,258,136) (12,708) (1,270,844)
----------- ---------- -----------
Partners' capital (deficit),
March 31, 1997 $ 97,841 $ (231,240) $ (133,399)
=========== ========== ===========
</TABLE>
See notes to financial statements
- 7 -
<PAGE>
<PAGE> 8
American Affordable Housing II Limited Partnership
STATEMENTS OF CASH FLOWS
Years ended March 31,
<TABLE>
1997 1996 1995
---------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities
Net loss $(1,270,844) $(1,563,408) $(1,892,967)
Adjustments to reconcile net loss
to net cash provided by (used in)
operating activities
Cash flows from operating
limited partnerships 10,351 14,441 7,560
Share of losses from operating
limited partnerships 795,677 1,047,309 1,392,030
Increase in accounts payable - 3,029 471
Increase in due to affiliates 405,287 490,322 601,411
----------- ----------- -----------
Net cash provided by (used
in) operating activities (59,529) (8,307) 108,505
----------- ----------- -----------
Cash flows from investing activities
Advance to an operating limited
partnership - - (100,375)
Repayment by an operating limited
partnership 38,875 16,500 5,000
----------- ----------- -----------
Net cash provided by (used
in) investing activities 38,875 16,500 (95,375)
----------- ----------- -----------
NET INCREASE (DECREASE) IN
CASH (20,654) 8,193 13,130
Cash, beginning 34,944 26,751 13,621
----------- ----------- -----------
Cash, end $ 14,290 $ 34,944 $ 26,751
=========== =========== ===========
Supplemental schedule of noncash
investing and financing activities
The partnership has increased its
investments in operating limited
partnerships for amounts required
to be reversed by the operating
limited partnerships for low in-
come tax credits not generated by
the operating limited partnerships
$ - $ - $ (20,857)
=========== =========== ===========
</TABLE>
See notes to financial statements
- 8 -
<PAGE>
<PAGE> 9
American Affordable Housing II Limited Partnership
NOTES TO FINANCIAL STATEMENTS
March 31, 1997, 1996 and 1995
NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
American Affordable Housing II Limited Partnership (the "partnership")
was formed under the laws of the Commonwealth of Massachusetts on May
13, 1987, for the purpose of acquiring, holding, and disposing of
limited partnership interests in operating limited partnerships which
were established to acquire, develop, rehabilitate, operate and own
newly constructed, existing or rehabilitated apartment complexes which
qualify for the Low-Income Housing Tax Credit established by the Tax
Reform Act of 1986. Certain of the apartment complexes may also qualify
for the Historic Rehabilitation Tax Credit for their rehabilitation of
certified historic structures; accordingly, the apartment complexes are
restricted as to rent charges and operating methods and are subject to
the provisions of Section 42(g)(20) of the Internal Revenue Code
relating to the rehabilitation investment credit. The general partners
of the partnership are Boston Capital Associates Limited Partnership and
Boston Capital Associates.
In accordance with the limited partnership agreement, profits, losses
and cash flow (subject to certain priority allocations and distri-
butions) and tax credits are allocated 99% to the limited partners and
1% to the general partners.
Pursuant to the Securities Act of 1933, the partnership filed a Form S-
11 Registration Statement with the Securities and Exchange Commission,
effective September 21, 1987, which covered the offering (the "Public
Offering") of the partnership's units of limited partnership interest,
as well as the units of limited partnership interest offered by American
Affordable Housing I, III, IV and V Limited Partnerships. The
partnership registered 50,000 units of limited partnership interest at
$1,000 each unit for sale to the public. During 1988, the partnership
sold 26,501 units of limited partnership interest, representing
$26,501,000 of capital contributions.
Income Taxes
No provision or benefit for income taxes has been included in these
financial statements since taxable income or loss passes through to, and
is reportable by, the partners individually.
Investments in Operating Limited Partnerships
The partnership accounts for its investments in operating limited
partnerships using the equity method of accounting. Under the equity
method of accounting, the partnership adjusts its investment cost for
its share of each operating partnership's results of operations and for
any distributions received or accrued. However, the partnership
recognizes an individual operating partnership's losses only to the
extent that the partnership's share of losses of the operating
partnership does not exceed the carrying amount of its investment.
Unrecognized losses will be suspended and offset against future
individual operating partnership's income.
- 9 -
<PAGE> 10
American Affordable Housing II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
March 31, 1997, 1996 and 1995
NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Investments in Operating Limited Partnerships (Continued)
A loss in value of an investment in an operating partnership other than
a temporary decline would be recorded as an impairment loss. Impairment
is measured by comparing the investment carrying amount to the sum of
the total amount of the remaining tax credits allocated to the fund and
the estimated residual value of the investment.
Capital contributions to operating partnerships are adjusted by tax
credit adjusters. Tax credit adjusters are defined as adjustments to
operating partnership capital contributions due to reductions in actual
tax credits from those originally projected. The fund records tax
credit adjusters as a reduction in investment in operating partnerships
and capital contributions payable.
The operating partnerships maintain their financial statements based on
a calendar year and the fund utilizes a March 31 year end. The fund
records losses and income from the operating partnerships on a calendar
year basis which is not materially different from losses and income
generated if the operating partnerships utilized a March 31 year end.
The fund records capital contributions payable to the operating
partnerships once there is a binding obligation to fund a specified
amount. The operating partnerships record capital contributions from
the fund when received.
The fund records acquisition cost as an increase in its investment in
operating partnerships. Certain operating partnerships have not
recorded the acquisition costs as a capital contribution from the fund.
These differences are shown as reconciling items in Note D.
Fiscal Year
For financial reporting purposes, the partnership uses a March 31 year
end, whereas for income tax reporting purposes, the partnership uses a
calendar year. The operating limited partnerships use a calendar year
for both financial and income tax reporting.
Net Loss per Unit of Limited Partnership Interest
Net loss per unit of limited partnership interest is calculated based
upon the number of units outstanding. For each of the three years in
the period ended March 31, 1997, 26,501 units were outstanding.
- 10 -
<PAGE>
<PAGE> 11
American Affordable Housing II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
March 31, 1997, 1996 and 1995
NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and expenses
during the reporting period. Actual results could differ from those
estimates.
Adoption of Accounting Standard
On April 1, 1996, the Operating Partnerships adopted Statement of
Financial Accounting Standards ("SFAS") No. 121, "Accounting for
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
of." This standard requires that long-lived assets and certain
identifiable intangibles held and used by an entity be reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may be recoverable. Implementation of this
standard did not materially impact the partnership's financial statements.
Recent Accounting Statements Not Yet Adopted
In February 1997, the Financial Accounting Board issued Statement of
Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share"
and SFAS No. 129, "Disclosure of Information about Capital Structure."
SFAS No. 128 provides accounting and reporting standards for the amount
of earning per share. SFAS No. 129 requires the disclosure in summary
form within the financial statements of pertinent rights and privileges
of the various securities outstanding. SFAS No. 128 and SFAS No. 129 are
effective for fiscal years ending after December 31, 1997 and earlier
application is not permitted.
The implementation of these standards is not expected to materially
impact the partnership's financial statements because partnership's
earnings per share would not be significantly affected and the
disclosures regarding the capital structure in the financial statements
would not be significantly changed.
NOTE B - RELATED PARTY TRANSACTIONS
During the years ended March 31, 1997, 1996 and 1995, the partnership
entered into several transactions with various affiliates of the general
partners, including Boston Capital Partners, Inc. and Boston Capital
Asset Management Limited Partnership (formerly Boston Capital
Communications Limited Partnership), as follows:
- 11 -
<PAGE>
<PAGE> 12
American Affordable Housing II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
March 31, 1997, 1996 and 1995
NOTE B - RELATED PARTY TRANSACTIONS (Continued)
General and administrative expenses of $2,303, $3,665 and $931 incurred
by Boston Capital Asset Management Limited Partnership and Boston
Capital Partners, Inc. were charged to operations during the years ended
March 31, 1997, 1996 and 1995, respectively. At March 31, 1997 and 1996,
the unpaid general and administrative expenses totaled $98,415 and
$96,112, respectively.
During fiscal year ended March 31, 1995, Boston Capital Asset Management
Limited Partnership advanced the partnership $95,375 in order to fund an
advance made to an operating limited partnership as more fully described
in note C. The advance is noninterest bearing and due on demand. The
amount still owed at the end of fiscal year 1997 and 1996 was $40,000
and $78,875, respectively.
An annual asset management fee based on 0.5 percent of the aggregate
cost of all apartment complexes acquired by the operating limited
partnerships has been accrued as payable to Boston Capital Asset
Management Limited Partnership. The aggregate cost is comprised of the
capital contributions made by the partnership to the operating limited
partnership and 99% of the permanent financing at the operating limited
partnership level. At March 31, 1997 and 1996, the unpaid asset
management fees totaled $3,400,766 and $2,958,907, respectively. The
fee is payable without interest as sufficient funds become available.
The asset management fees charged to operations during the years ended
March 31, 1997, 1996 and 1995 were $441,858, $471,241, and $471,241,
respectively, which are netted with reporting fees paid by the operating
limited partnerships. During the years ended March 31, 1997, 1996 and
1995, the amount of reporting fees paid by the operating limited
partnership was $15,110, $10,212 and $19,792, respectively.
NOTE C - NOTE RECEIVABLE
Note receivable consists of an advance made to an operating limited
partnership during the fiscal year ended March 31, 1995. The note is
secured by a second mortgage on the property owned by the operating
limited partnership, which bears interest at 6% per annum and is due
December 31, 1997. The carrying amount of the note receivable
approximates fair value as of March 31, 1997.
NOTE D - INVESTMENTS IN OPERATING LIMITED PARTNERSHIPS
At March 31, 1997 and 1996, the partnership has limited partnership
equity interests in 50 operating limited partnerships, which own
apartment complexes.
- 12 -<PAGE>
<PAGE> 13
American Affordable Housing II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
March 31, 1997, 1996 and 1995
NOTE D - INVESTMENTS IN OPERATING LIMITED PARTNERSHIPS (Continued)
Under the terms of the partnership's investment in each operating
limited partnership, the partnership was required to make capital
contributions to the operating limited partnerships. These
contributions were payable in installments over several years upon each
operating limited partnership achieving specified levels of construction
and/or operations. All contributions have been made to the operating
limited partnerships as of March 31, 1997 and 1996. The partnership has
no further obligation to make any additional contributions.
The partnership's investments in operating limited partnerships at March
31, 1997 and 1996 are summarized as follows:
<TABLE>
1997 1996
---------------- ----------------
<S> <C> <C>
Capital contributions paid to
operating limited partnerships,
net of tax credit adjusters of
$213,468 and $213,468, respectively $ 19,473,665 $ 19,473,665
Acquisition costs of operating
limited partnerships 2,492,705 2,492,705
Cumulative losses from operating
limited partnerships (18,551,222) (17,755,545)
Cumulative distributions from
operating limited partnerships (68,005) (57,654)
---------------- ----------------
Investment per balance sheet 3,347,143 4,153,171
Acquisition costs not included in net
assets of operating limited
partnerships (see note A) (122,748) (122,748)
Loss from operating limited
partnerships of $253,315 and
$875,460 for the three months
ended March 31, 1990 and 1989
which the operating limited
partnerships have not included in
partners' capital (see note A) 1,128,775 1,128,775
Tax credit adjusters not accounted
for in net assets of operating
limited partnerships (see note A) (121,349) (121,349)
Loss of operating limited
partnerships not recognized under
the equity method of accounting
(see note A) (5,367,151) (3,233,770)
Other adjustments (135,644) (193,307)
---------------- ----------------
Equity per operating limited
partnerships' combined financial
statements $ (1,270,974) $ 1,610,772
================ ================
</TABLE>
- 13 -<PAGE>
<PAGE> 14
American Affordable Housing II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
March 31, 1997, 1996 and 1995
NOTE D - INVESTMENTS IN OPERATING LIMITED PARTNERSHIPS (Continued)
The combined summarized balance sheets of the operating limited
partnerships at December 31, 1996 and 1995 are as follows:
COMBINED SUMMARIZED BALANCE SHEETS
<TABLE>
1996 1995
---------------- ----------------
ASSETS
<S> <C> <C>
Buildings and improvements, net of
accumulated depreciation of
$25,600,972 and $22,649,944 $ 64,412,398 $ 67,449,252
Land 4,399,669 4,449,946
Other assets 5,551,097 5,561,997
---------------- ----------------
$ 74,363,164 $ 77,461,195
================ ================
LIABILITIES AND PARTNERS' CAPITAL
Mortgages payable $ 69,637,032 $ 69,864,238
Accounts payable and accrued expenses 2,474,611 2,614,244
Other liabilities 2,468,177 2,238,330
---------------- ----------------
74,579,820 74,716,812
---------------- ----------------
PARTNERS' CAPITAL
American Affordable Housing II (1,270,974) 1,610,772
Limited Partnership
Other partners 1,054,318 1,133,611
---------------- ----------------
(216,656) 2,744,383
---------------- ----------------
$ 74,363,164 $ 77,461,195
================ ================
</TABLE>
- 14 -
<PAGE>
<PAGE> 15
American Affordable Housing II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
March 31, 1997, 1996 and 1995
NOTE D - INVESTMENTS IN OPERATING LIMITED PARTNERSHIPS (Continued)
The combined summarized statements of operations of the operating
limited partnerships for the years ended December 31, 1996, 1995 and
1994 are as follows:
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
<TABLE>
1996 1995 1994
---------------- ---------------- ----------------
<S> <C> <C> <C>
Revenue
Rental $ 10,513,559 $ 9,835,175 $ 11,419,864
Interest and other 356,532 551,831 580,081
---------------- ---------------- ----------------
10,870,091 10,387,006 11,999,945
---------------- ---------------- ----------------
Expenses
Interest 3,937,805 3,215,662 4,848,518
Depreciation and amortization 2,998,290 3,054,807 3,288,332
Taxes and insurance 1,420,744 1,458,100 1,449,573
Repairs and maintenance 1,595,969 1,707,222 1,425,577
Operating expenses 3,929,125 3,491,717 3,885,811
---------------- ---------------- ----------------
13,881,933 12,927,508 14,897,811
---------------- ---------------- ----------------
NET LOSS $ (3,011,842) $ (2,540,502) $ (2,897,866)
================ ================ ================
Net loss allocated to American
Affordable Housing II Limited
Partnership * $ (2,929,058) $ (2,342,459) $ (2,765,480)
================ ================ ================
Net income (loss) allocated to other
partners $ (82,784) $ (198,043) $ (132,386)
================ ================ ================
</TABLE>
* Amount includes $2,133,381 and $1,295,150 and $1,373,450 for the years
ended December 31, 1996, 1995, and 1994, respectively, of loss not
recognized under the equity method of accounting as described in note A.
- 15 -
<PAGE>
<PAGE> 16
American Affordable Housing II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
March 31, 1997, 1996 and 1995
NOTE E - RECONCILIATION OF FINANCIAL STATEMENT NET LOSS TO TAX RETURN
The partnership's net loss for financial reporting and tax return
purposes are reconciled as follows:
<TABLE>
Year ended March 31,
------------------------------------------------------
1997 1996 1995
---------------- ---------------- ----------------
<S> <C> <C> <C>
Net loss for financial reporting
purposes $ (1,270,844) $ (1,563,408) $ (1,892,967)
Operating limited partnership rents
received in advance 1,993 2,695 -
Related party expenditures 19,424 78,092 87,804
Asset management fee not deductible
for tax purposes until paid 441,858 452,569 471,241
Excess of tax depreciation over book
depreciation on operating limited
partnership assets (394,135) (435,751) (404,280)
Difference due to fiscal year for
book purposes and calendar year for
tax purposes 142 463,144 20,334
Operating limited partnership net
loss not allowed for financial
reporting under equity method 2,133,381 (1,295,150) (1,373,450)
Other 716,565 360,055 (24,378)
---------------- ---------------- ----------------
Net loss for income tax purposes $ (2,618,378) $ (1,937,754) $ (3,115,696)
================ ================ ================
</TABLE>
- 16 -
<PAGE>
<PAGE> 17
American Affordable Housing II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
March 31, 1997, 1996 and 1995
NOTE E - RECONCILIATION OF FINANCIAL STATEMENT NET LOSS TO TAX RETURN
(Continued)
The difference between the investments in operating limited partnerships
for tax purposes and financial statement purposes are primarily due to
the differences in the losses not recognized under the equity method of
accounting, the three month period due to fiscal year reporting and the
historic tax credits taken for income tax purposes. At March 31, 1997
and 1996, the differences are as follows:
<TABLE>
1997 1996
---------------- ----------------
<S> <C> <C>
Investment in operating limited
partnerships - tax basis $ (2,126,023) $ 476,911
Add back losses not recognized under
the equity method 5,367,151 3,233,770
Estimated share of loss of $253,315
and $875,460 for the three months
ended March 31, 1990 and 1989 due
to fiscal year reporting (1,128,775) (1,128,775)
Historic tax credits 651,016 651,016
Other 583,774 920,249
---------------- ----------------
Investment in operating limited
partnerships - as reported $ 3,347,143 $ 4,153,171
================ ================
</TABLE>
- 17 -<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
American Affordable Housing II Limited Partnership
Schedule III - Real Estate and Accumulated Depreciation
March 31, 1997
Subsequent
Initial capitalized Gross amount at which
cost to company Costs** carried at close of period
--------------- ----------- --------------------------
Buildings Buildings Accum. Con- Acq- Depre-
Encum- and im- Improve- and im- Depre- struct uired ciation
Description brances Land provements ments Land provements Total ciation Date Date Life
- ------------------------------------------------------------------------------------------------------------------------------
Anthony Garden
Apartments 3,882,768 501,332 2,632,779 1,726,182 501,322 4,358,961 4,860,283 1,003,698 3/89 10/88 5-50
Belen Apts. 1,485,168 54,000 1,468,653 498,235 87,960 1,966,888 2,054,848 592,451 12/88 12/88 5-27.5
Blairview
Associates 1,435,155 80,814 1,705,626 1,804 80,814 1,707,430 1,788,244 649,909 12/88 3/89 5-27.5
Bloomfield
Associates 369,786 11,500 466,419 6,986 11,500 473,405 484,905 158,044 6/88 6/88 5-27.5
Boardman Lake
Apartments 980,035 60,200 590,096 669,774 60,200 1,259,870 1,320,070 426,252 5/89 10/88 5-27.5
Bowdoinham
Associates 1,299,909 95,132 966,112 685,647 65,132 1,651,759 1,716,891 481,904 5/89 11/88 5-27.5
Brewton Ltd. 955,813 72,500 1,211,379 4,023 72,500 1,215,402 1,287,902 406,461 6/88 8/88 5-27.5
- 18 -<PAGE>
American Affordable Housing II Limited Partnership
Schedule III - Real Estate and Accumulated Depreciation
March 31, 1997
Subsequent
Initial capitalized Gross amount at which
cost to company Costs** carried at close of period
--------------- ----------- --------------------------
Buildings Buildings Accum. Con- Acq- Depre-
Encum- and im- Improve- and im- Depre- struct uired ciation
Description brances Land provements ments Land provements Total ciation Date Date Life
- ------------------------------------------------------------------------------------------------------------------------------
Bridgeview 773,971 12,000 1,012,110 3,204 12,000 1,015,314 1,027,314 379,289 5/88 8/88 5-27.5
Brookhollow
Manor, Ltd. 897,422 25,080 1,003,839 167,533 25,080 1,171,372 1,196,452 360,930 8/88 10/88 5-27.5
Carthage Court
Housing 1,279,872 18,000 1,568,266 43,506 18,000 1,611,772 1,629,772 509,085 10/88 12/88 5-27.5
Deer Crossing
Associates 1,185,442 73,102 1,565,336 14,289 73,102 1,579,625 1,652,727 344,702 4/89 4/89 5-27.5
East China
Township 899,612 52,039 1,140,464 18,921 52,039 1,159,385 1,211,424 416,243 11/88 8/88 5-27.5
East Ridge
Associates 1,252,660 70,000 1,602,988 3,388 70,000 1,606,376 1,676,376 514,052 9/88 8/88 5-27.5
Fairbanks Flats 548,419 40,000 883,522 (352,620)b 40,000 530,902 570,902 222,621 12/88 7/88 5-27.5
Fredericktown
Associates 371,993 20,000 456,784 13,296 20,000 470,080 490,080 153,349 5/88 6/88 5-27.5
- 19 -
<PAGE>
American Affordable Housing II Limited Partnership
Schedule III - Real Estate and Accumulated Depreciation
March 31, 1997
Subsequent
Initial capitalized Gross amount at which
cost to company Costs** carried at close of period
--------------- ----------- --------------------------
Buildings Buildings Accum. Con- Acq- Depre-
Encum- and im- Improve- and im- Depre- struct uired ciation
Description brances Land provements ments Land provements Total ciation Date Date Life
- ------------------------------------------------------------------------------------------------------------------------------
Garden City
Family Hsg. 384,818 14,775 483,300 4,000 14,775 487,300 502,075 134,547 6/88 6/88 5-35
Harbor Hill
Associates 1,251,913 65,132 1,443,798 151,679 65,132 1,595,477 1,660,609 482,059 2/89 11/88 5-27.5
Immokalee
RRH, Ltd. 1,322,484 107,000 1,573,636 17,690 107,000 1,591,326 1,698,326 412,982 3/88 5/88 5-27.5
Kersey Apts. 1,058,122 90,000 1,270,768 98,387 92,040 1,369,155 1,461,195 436,940 10/88 10/88 5-27.5
Kingsley Park
Associates 10,904,217 521,725 12,281,821 137,089 521,725 12,418,910 12,940,635 3,863,791 10/88 3/88 5-27.5
Lake Havasu
Invsmt. Grp. 1,433,758 176,845 1,595,306 0 176,845 1,595,306 1,772,151 426,972 4/88 3/88 5-50
Liberty Center,
Ltd. 1,277,379 198,000 2,480,840 12,339 198,000 2,493,179 2,691,179 516,959 10/88 12/88 5-27.5
Lovington
Housing Assoc. 1,104,597 30,000 1,464,954 42,828 30,000 1,507,782 1,537,782 301,924 2/89 2/89 5-27.5
- 20 -<PAGE>
American Affordable Housing II Limited Partnership
Schedule III - Real Estate and Accumulated Depreciation
March 31, 1997
Subsequent
Initial capitalized Gross amount at which
cost to company Costs** carried at close of period
--------------- ----------- --------------------------
Buildings Buildings Accum. Con- Acq- Depre-
Encum- and im- Improve- and im- Depre- struct uired ciation
Description brances Land provements ments Land provements Total ciation Date Date Life
- ------------------------------------------------------------------------------------------------------------------------------
Malone Housing
Redevelopment 1,486,842 64,900 1,788,215 64,607 64,900 1,852,822 1,917,722 567,834 11/88 12/88 5-27.5
Maple Tree
Associates 1,240,254 65,132 1,464,954 149,404 65,132 1,614,358 1,679,490 475,608 4/89 5/89 5-27.5
Marionville
Family Hsg. 194,582 19,825 230,104 0 19,825 230,104 249,929 56,430 5/88 6/88 5-35
Michelle Manor
Apartments 909,966 131,945 1,009,687 (14,586)a 131,945 995,101 1,127,046 230,800 9/88 10/88 5-50
Middleburg
Assoc. Ltd. 1,415,556 104,000 1,155,947 261,514 104,000 1,417,461 1,521,461 455,730 3/89 10/88 5-27.5
Nebraska City
Senior Hsg. 419,989 27,119 516,617 0 27,119 516,617 543,736 147,153 7/88 6/88 5-35
Nicollet Island
Historic Homes 1,125,729 0 1,875,059 77,972 0 1,953,031 1,953,031 490,502 12/88 11/88 7-27.5
Paige Hall Ltd. 2,253,150 633,666 2,544,140 695,094 0 3,239,234 3,239,234 776,162 4/89 3/89 7-27.5
- 21 -
American Affordable Housing II Limited Partnership
Schedule III - Real Estate and Accumulated Depreciation
March 31, 1997
Subsequent
Initial capitalized Gross amount at which
cost to company Costs** carried at close of period
--------------- ----------- --------------------------
Buildings Buildings Accum. Con- Acq- Depre-
Encum- and im- Improve- and im- Depre- struct uired ciation
Description brances Land provements ments Land provements Total ciation Date Date Life
- ------------------------------------------------------------------------------------------------------------------------------
Perramond
Associates 1,185,153 88,813 1,487,597 72,817 28,000 1,560,414 1,588,414 340,997 4/89 4/89 7-27.5
Pine Knoll
Devpmt. Co. 1,362,736 45,000 803,220 766,531 197,426 1,569,751 1,767,177 491,828 5/89 10/88 5-27.5
Pine Ridge Ltd. 1,485,199 110,000 1,899,826 10,545 110,000 1,910,371 2,020,371 630,085 6/88 7/88 5-27.5
Pine Terrace
Ltd. 1,194,369 61,500 1,188,396 326,353 61,500 1,514,749 1,576,249 478,858 1/89 12/88 5/27.5
Plattevill
Apartments 546,248 45,000 659,035 51,818 46,301 710,853 757,154 215,944 10/88 10/88 5-27.5
Riverplace
Apts. 4,203,973 175,260 6,463,578 274,140 175,260 6,737,718 6,912,978 1,470,992 3/89 9/88 5-27.5
Sara Pepper
Associates 650,966 67,200 740,378 50,503 22,000 790,881 812,881 192,765 3/88 5/88 5-27.5
Shawmut Ave 643,623 69,325 1,145,503 60,576 69,325 1,206,079 1,275,404 306,541 12/88 11/88 5-34
- 22 -
<PAGE>
American Affordable Housing II Limited Partnership
Schedule III - Real Estate and Accumulated Depreciation
March 31, 1997
Subsequent
Initial capitalized Gross amount at which
cost to company Costs** carried at close of period
--------------- ----------- --------------------------
Buildings Buildings Accum. Con- Acq- Depre-
Encum- and im- Improve- and im- Depre- struct uired ciation
Description brances Land provements ments Land provements Total ciation Date Date Life
- ------------------------------------------------------------------------------------------------------------------------------
Shelbyville FH,
Ltd. 612,304 13,000 736,830 0 13,000 736,830 749,830 183,733 7/88 10/88 5-27.5
Silver Pines
Associates 1,412,819 170,050 1,684,846 2,732 171,317 1,687,578 1,858,895 407,527 8/88 8/88 5-27.5
Springfield Ltd.1,443,357 66,000 1,864,463 30,155 66,000 1,894,618 1,960,618 640,538 3/88 5/88 5-27.5
Stokes Rowe
Ltd. Ptnrshp. 1,054,279 7,321 1,914,238 5,168 7,321 1,919,406 1,926,727 415,825 6/88 6/88 5-27.5
Suncrest, Ltd. 973,789 50,000 1,141,518 4,176 50,000 1,145,694 1,195,694 276,164 5/88 10/88 5-27.5
Village Chase of
Zephyrhills,
Ltd. 1,491,267 151,350 490,589 1,332,111 151,350 1,822,700 1,974,050 571,379 4/89 12/88 7-27.5
Village Walk of
Zephyrhills,
Ltd. 1,396,003 133,650 619,248 1,077,169 133,650 1,696,417 1,830,067 525,623 3/89 12/88 7-27.5
- 23 -<PAGE>
American Affordable Housing II Limited Partnership
Schedule III - Real Estate and Accumulated Depreciation
March 31, 1997
Subsequent
Initial capitalized Gross amount at which
cost to company Costs** carried at close of period
--------------- ----------- --------------------------
Buildings Buildings Accum. Con- Acq- Depre-
Encum- and im- Improve- and im- Depre- struct uired ciation
Description brances Land provements ments Land provements Total ciation Date Date Life
- -----------------------------------------------------------------------------------------------------------------------------
Warren
Properties,
Ltd. 1,402,032 70,000 1,648,427 9,720 70,000 1,658,147 1,728,147 423,735 10/88 10/88 5-27
Washington
Mews LP. 484,673 55,225 1,921,104 (579,746) 55,225 1,341,358 1,396,583 550,023 12/88 8/88 5-27.5
Wilder
Associates 1,212,524 62,947 1,519,472 55,362 62,947 1,574,834 1,637,781 473,509 1/89 11/88 5-27.5
Wildwood Villas 1,480,337 100,960 1,872,065 7,203 100,960 1,879,268 1,980,228 609,523 9/88 9/88 5-27.5
---------- --------- ---------- --------- --------- ---------- ---------- ----------
69,637,032 4,978,364 81,253,852 8,759,518 4,399,669 90,013,370 94,413,039 25,600,972
========== ========= ========== ========= ========= ========== ========== ==========
Since the Operating Partnerships maintain a calendar year end the information reported on this schedule is as of December 31,
1996.
a Decrease due to reallocation of acquistion costs.
b Decrease due to impairment.
**There were no carrying costs as of December 31, 1996. The column has been ommitted for presentation purposes
- 24 -
</TABLE> <PAGE>
Notes to Schedule III
American Affordable Housing II Limited Partnership
Reconciliation of Land, Building & Improvements current year changes
Balance at beginning of period-04/01/92..........................$100,538,670
Additions during period:
Acquisitions through foreclosure..................$ 0
Other acquisitions................................ 0
Improvements, etc................................. 37,387
Other............................................. 0
----------
$ 37,387
Deductions during period:
Cost of real estate sold..........................$ 0
Other............................................. 0
----------
$ 0
-----------
Balance at close of period - 03/31/93............................$100,576,057
Additions during period:
Acquisitions through foreclosure..................$ 0
Other acquisitions................................ 0
Improvements, etc................................. 230,965
Other............................................. 0
----------
$ 230,965
Deductions during period:
Cost of real estate sold..........................$ 0
Other............................................. 0
----------
$ 0
-----------
Balance at close of period - 03/31/94............................$100,807,022
Additions during period:
Acquisitions through foreclosure..................$ 0
Other acquisitions................................ 0
Improvements, etc................................. 237,425
Other............................................. 0
----------
$ 237,425
Deductions during period:
Cost of real estate sold..........................$ 0
Other............................................. 0
----------
$ 0
-----------
Balance at close of period - 03/31/95............................$101,044,447
- 25 -<PAGE>
Notes to Schedule III-Continued
American Affordable Housing II Limited Partnership
Reconciliation of Land, Building & Improvements current year changes-Continued
Balance at close of period - 03/31/95............................$101,044,447
Additions during period:
Acquisitions through foreclosure.................$ 0
Other acquisitions............................... 0
Improvements, etc................................ 367,972
Other............................................ 0
-----------
$ 367,972
Deductions during period:
Cost of real estate sold.........................$(6,044,508)
Other............................................ (818,769)
----------
$ (6,863,277)
-----------
Balance at close of period - 03/31/96............................$ 94,549,142
Additions during period:
Acquisitions through foreclosure.................$ 0
Other acquisitions............................... 0
Improvements, etc................................ 246,927
Other............................................ 0
-----------
$ 246,927
Deductions during period:
Cost of real estate sold.........................$ 0
Other............................................ (383,000)
----------
$ (383,000)
-----------
Balance at close of period - 03/31/97............................$ 94,413,039
===========
- 26 -
<PAGE>
Notes to Schedule III - Continued
American Affordable Housing II Limited Partnership
Reconciliation of Accumulated Depreceiation current year changes
Balance at beginning of period - 04/01/92............................$11,032,545
Current year expense.....................................$3,313,285
---------
Balance at close of period - 3/31/93.................................$14,345,830
Current year expense.....................................$3,266,272
---------
Balance at close of period - 3/31/94.................................$17,612,102
Current year expense.....................................$3,206,264
---------
Balance at close of period - 3/31/95.................................$20,818,366
Current year expense.....................................$1,831,578
---------
Balance at close of period - 3/31/96.................................$22,649,944
Current year expense.....................................$2,951,028
---------
Balance at close of period - 3/31/97.................................$25,600,972
==========
- 27 -
LIBERTY CENTER, LTD.
Financial Statements
December 31, 1996 and 1995<PAGE>
Hunter & Pleiman, PA
Certified Public Accountants
420 Baymeadows Road, Suite 1
Jacksonville, FL 32217
Lewis B. Hunter, Jr., CPA. Phone: (904)367-0852
Thomas C. Pleiman, Jr., C.P.A. Fax: (904)731-0352
INDEPENDENT AUDITORS' REPORT
To the Partners
Liberty Center, Ltd.
We have audited the accompanying balance sheet of Liberty Center, Ltd. as of
December 31, 1996 and 1995 and the related statements of operations, partners'
equity, and cash flows for the years then ended. These financial statements
are the responsibility of the partnership's management. Our responsibility is
to express an opinion on the 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 Liberty Center, 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.
As we discussed in Note J to the financial statements, certain expenses have
been decreased due to a change in the method of calculation by management
resulting in an overstatement of previously reported loss. The financial
statements for the year 1995 have been revised and restated to reflect these
changes.
May 10, 1997
<PAGE>
Liberty Center, Ltd.
Balance Sheets
December 31, 1996 and 1995
Assets
1995 1995
Current assets: ---- ----
Cash and cash equivalents $ 99,584 $ 100,801
Accounts Receivable 14,516
Prepaid Expenses 1,281
--------- ---------
Total Current Assets 114,100 102,082
--------- ---------
Property and Equipment, at cost:
Land 198,000 198,000
Building and improvements 2,487,005 2,487,005
Equipment 6,174 6,174
Less Accumulated Depreciation (516,959) (454,137)
--------- ---------
2,174,220 2,237,042
--------- ---------
Other assets:
Organization and loan costs less
amortization 6,400 4,210
--------- ---------
Total other assets 6,400 4,210
--------- ---------
Total assets $2,294,720 $2,343,334
========= =========
See Independent Auditors' Report and Notes to Financial Statements.
<PAGE>
Liabilities and Partners' Equity
Current Liabilities
Current portion of notes payable $ 187,718 $ 172,528
Accrued interest, due within one year 3,948 6,248
Accounts payable and accrued expenses 54,525 46,085
--------- ---------
Total current liabilities 246,191 224,861
--------- ---------
Long-Term Liabilities
Notes payable - net of current portion 1,089,661 1,281,874
Accrued interest, due after one year 423,956 359,165
Advances form affiliates 96,278 65,045
Tenant security deposits 1.372 5,450
--------- ---------
Total long-term liabilities 1,611,267 1,711,534
--------- ---------
Total Liabilities 1,857,458 1,936,395
--------- ---------
Partners' Equity
General partner (12,933) (13,236)
Limited partner 450,195 420,175
--------- ---------
Total partners' equity 437,262 406,939
--------- ---------
Total liabilities and partners'
equity $2,294,720 $2,343,334
========= =========
See Independent Auditors' Report and Notes to Financial Statements.
<PAGE>
Liberty Center, Ltd.
Statements of Operation
For the Years ended December 31, 1996 and 1995
1996 1995
Rental revenues $489,333 $478,989
Interest and dividends 2,028 2,482
------- -------
491,361 481,471
------- -------
Expenses
Depreciation and amortization 62,822 62,822
General and administrative 11,466 47,686
Insurance 44,867 43,705
Interest 120,484 139,562
Legal and professional services 14,954 12,065
Maintenance and repairs 27,453 12,057
Management fees 21,600 18,570
Salaries - operations 91,540 87,861
Security - outside services 9,111 3,665
Taxes 22,740 31,714
Utilities 34,001 41,693
------- -------
Total expenses 461,038 501,400
------- -------
Net income (loss) from operations $ 30,323 $(19,929)
======= =======
See Independent Auditors' Report and Notes to Financial Statements.
Liberty Center, Ltd.
Statements of Cash Flows
For the Years ended December 31, 1996 and 1995
1996 1995
Cash flow from operating activities ---- ----
Net income (loss) $ 30,323 $( 19,929)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation 62,822 62,822
Changes in asset and liabilities:
Decrease (increase) in tenant receivables (14,516) 209
Decrease (increase) in prepaid expenses
and other assets (909) 2,637
Increase (decrease) in accounts payable
and accrued expenses 8,440 (7,522)
Increase (decrease) in net security
deposits (4,078) 281
Net cash (used for) provided ------- -------
by operations 82,082 38,498
------- -------
Cash flows from investing activities
Increase in accrued interest 62,491 64,791
Net cash provided by investing ------- -------
activities 62,491 64,791
------- -------
Cash flows from financing activities
Repayment of long-term debt (177,023) (115,905)
Increase in advances from affiliates 31,233 9,004
Net cash used for financing ------- -------
activities (145,790) (106,901)
------- -------
Net decrease in cash and cash equivalents (1,217) (3,612)
Cash and cash equivalents at beginning of year 100,801 104,413
------- -------
Cash and cash equivalents at end of year $ 99,584 $ 100,801
======= =======
See Independent Auditors' Report and Notes to Financial Statements.<PAGE>
Liberty Center, Ltd.
Statement of Partners' Equity
For the Years ended December 31, 1996 and 1995
Investor
General Limited
Partner Partner Total
------- -------- -----
Partners' equity December 31, 1994 ($13,037) $439,905 $426,868
Loss (loss) ($199) ($19,730) ($19,929)
Distributions $0 $0 $0
Partners' equity December 31, 1995 ($13,236) $420,175 $406,939
Loss (loss) 303 30,020 30,323
Distributions 0 0
---------------------------------
Partners' equity December 31, 1996 ($12,933) $450,195 $437,262
=================================
See Independent Auditors' Report and Notes to Financial Statements.
<PAGE>
Liberty Center, Ltd.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
A summary of the significant accounting policies consistently applied in the
preparation of the accompanying financial statements follows.
Capitalization and Depreciation
- --------------------------------
Land, buildings and improvements are recorded at cost. Depreciation is
provided for in amounts sufficient to relate the cost of depreciable assets to
operations over their estimated service lives using the straight-line method.
Improvements are capitalized, while expenditures for maintenance and repairs
are charged to expense as incurred. Upon disposal of depreciable property,
the appropriate property accounts are to be reduced by the related costs and
accumulated depreciation. The resulting gains and losses are to be reflected
in the statement of operations.
Amortization
- ------------
Organization costs are amortized over sixty (60) months using the straight-
line method. Loan costs are amortized over the term of the loan using the
straight-line method.
Income Taxes
- ------------
No provision or benefit for income taxes has been included in these financial
statements since taxable income or loss passes through to, and is reportable
by, the partners individually.
Cash and Cash Equivalents
- -------------------------
The partnership considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents. Cash equivalents
include $97,725 in money market deposits (Note C) at December 31, 1996 and
1995, respectively.
NOTE B - ORGANIZATION
------------
Liberty Center, Ltd. was organized under the laws of the State of Florida on
June 28, 1988, for the purpose of constructing and operating a 109-unit low
income residential apartment project known as Liberty Center.<PAGE>
NOTE C - CERTIFICATES OF DEPOSIT, MONEY MARKETS AND
------------------------------------------
MARKETABLE EQUITY SECURITIES
----------------------------
Prior to amending the operating reserve agreement June 29, 1993, certificates
of deposit, money market funds and marketable equity securities have been
established under an agreement between the limited an genera partners which
provides that such funds are available to fund any excess of operating
expenses over operating income for a period of sixth (60) months. Interest
earned on these funds is allocated and distributed to the general partner
annually.
The operating reserve agreement was amended June 29, 1993, establishing an
operating reserve of $100,000 and allowing for a distribution to the general
partner of part of the operating reserve. The purpose was substantially the
same as that of the prior agreement. A distribution to the general partner of
this operating reserve is allowed if certain profitability objectives are met.
The operating reserve account totaled $97,736 and $95,725 at December 31, 1996
and 1995, respectively.
NOTE D - PARTNERS' CAPITAL CONTRIBUTIONS
-------------------------------
The partnership has one general partner, The Harris Group, Inc. one investor
limited partner - American Affordable Housing II. As of December 31, 1995,
the general partner and the investor limited partner have made capital
contributions of $1,014,521 and $1,220,553, respectively.
NOTE E - ACCRUED INTEREST
----------------
The second mortgage provides for deferral of interest payments based upon
projected cash flow as determined annually by the lender. In addition, a
portion of the deferred interest payable on the second mortgage may be
forgiven based upon the project maintaining a very low income set-aside for a
period longer than that required. Interest forgiven increases with each year
the project is extended. No interest has been forgiven at December 31, 1996.
The following is a schedule of accrued interest payable:
December 31
1996 1995
---- ----
First mortgage payable (Note F) $ 3,948 $ 6,248
Second mortgage payable (Note F) 423,956 359,165
------- -------
427,904 365,413
Less amount due within one year (3,948) (6,248)
------- -------
$423,956 $359,165
======= =======
NOTE F - NOTES PAYABLE
------------- December 31
The following is a schedule of notes payable: -----------
1996 1995
Mortgage note payable to a bank monthly at ---- ----
$18,710 including interest at 8.5% until
August, 1989, secured by first mortgage on
apartment project. $ 557,480 $ 734,503
Mortgage note payable at 9% to The Florida
Housing Finance Agency; interest payments
only as determined by lender annually based
on cash flow, with a balloon payment in 2004;
secured by second mortgage on apartment
project. (Note E) 719,899 719,899
--------- ---------
$1,277,379 $1,454,402
Less amount due in one year (187,718) (172,528)
--------- ---------
$1,089,661 $1,281,874
========= =========
Aggregate maturities of long-term debt for the next five year are estimated as
follows:
1997 187,718
1998 204,246
1999 165,516
---------
Total $ 557,480
Later years 719,899
---------
$1,277,379
=========
NOTE G - TRANSACTIONS WITH AFFILIATED AND RELATED PARTIES
------------------------------------------------
Annual Investor Service Fee
- ---------------------------
An annual investor service fee of $8,000 is payable to Boston Capital
Communication, Inc., an affiliate of American Affordable Housing II Limited
Partnership, an investor limited partner which holds a 99% interest in the
partnership, for services to be rendered in reporting to the investor limited
partner.
Management Fees
- ---------------
In accordance with the partnership agreement, the partnership pays management
fees for services rendered in connection with the leasing and operation of the
project. Fees are paid to Liberty Center for the Homeless, Inc. and Harris
Group, Inc. Management fees charged to operations for the year ended December
31, 1996 and 1995, $21,600 and $20,027, respectively.
<PAGE>
NOTE H - PARTNERSHIP PROFITS AND LOSSES AND DISTRIBUTIONS
------------------------------------------------
All profits and losses prior to the first date on which an investor limited
partner was admitted (December 31, 1988) were allocated 100% to the general
partner. Upon admission of the investor limited partner, the interest of the
general partner was reduced to 1%.
Distributable cash flow is defined in the partnership agreement as the sum of
all cash receipts less disbursements for operating activities, including the
annual investor service fee.
Distributable cash flow is payable annually as follows:
1) 50% to the investor limited partner and 50% to the general partner.
Gain, if any, from a sale or refinancing is allocable as follows:
1) To all partners having negative balances in their capital accounts prior
to the distribution of any sale or refinancing proceeds, an amount of such
gain to increase their negative balance to zero.
2) To partners who have received or will receive a distribution of sale or
refinancing proceeds in excess of their capital accounts, an amount of such
gain, if any, equal to such excess; and
3) The remainder of such gain, if any, 50% to the limited partner and 50% to
the general partners.
Loss from refinancing is allocable 50% to the limited partner and 50% to the
general partners.
Interest earned on certificates of deposit, marketable securities and money
market funds is allocable 100% to the general partner. (Note C)
The partnership agreement provides for a special distribution to the general
partner in the amount of $100,000.
NOTE I - CHANGE IN CALCULATION OF EXPENSES
---------------------------------
In the years ended December 31, 1995, the management of the partnership agreed
to share and allocate expenses incurred by the partnership and another
residential apartment project located contiguous to the partnership's project.
Management upon making more complete analysis, determined that a better method
of allocation was appropriate. The financial statements for 1995 reflect this
new allocation and have been revised and restated from the financial
statements previously issued dated May 2, 1996. The losses from operation in
the previously issued statements were $45,486 for the year ended December 31,
1995.<PAGE>
FINANCIAL STATEMENTS AND INDEPENDENT
AUDITORS' REPORT
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
DECEMBER 31, 1996 AND 1995<PAGE>
C O N T E N T S
PAGE
INDEPENDENT AUDITORS' REPORT 3
FINANCIAL STATEMENTS
BALANCE SHEETS 4-5
STATEMENT OF OPERATIONS 6
STATEMENT OF PARTNERS' EQUITY (DEFICIT) 7
STATEMENT OF CASH FLOWS 8
NOTES TO FINANCIAL STATEMENTS 9-13
SUPPLEMENTAL INFORMATION
SCHEDULES OF RENTING, ADMINISTRATIVE,
OPERATING, MAINTENANCE, TAXES AND
INSURANCE, AND INTEREST EXPENSE 14-16<PAGE>
ALLARD, ALLARD, TRIGGS & COMPANY, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
259 PAGE BOULEVARD
SPRINGFIELD, MASSACHUSETTS 01104
------
TELEPHONE: (413) 785-1414
FAX: (413) 739-9618
COLLEEN E. ALLARD, C.P.A.
ROGER D. ALLARD, C.P.A.
BARRY W. CROWLEY, C.P.A. MARTIN R. TRIGGS, C.P.A. - 1947-1980
INDEPENDENT AUDITORS' REPORT
To the Partners
Riverplace Apartments Limited Partnership
We have audited the accompanying balance sheet of Riverplace Apartments
Limited Partnership as of December 31, 1996 and 1995 and the related
statements of operations, partners' equity, and cash flows for the years then
ended. The financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on the 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 Riverplace 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.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
schedules on pages 13-15 are presented only for analysis purposes and are not
a required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements. All information included in the schedules is the
representation of the management of Riverplace Apartments Limited Partnership.
We did not become aware of any material modifications that should be made to
this supplementary information.
January 31, 1997
-3-
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
BALANCE SHEETS
DECEMBER 31, 1996 AND 1995
ASSETS
1995 1995
CURRENT ASSET ---- ----
Cash $ 760 $ 1,087
Accounts Receivable - Tenants 7,151 9,026
Accounts Receivable Subsidy 23,625 23,838
Miscellaneous Receivable 1,509 721
Prepaid Insurance 20,713 22,473
--------- ---------
Total Current Assets 53,758 57,145
--------- ---------
RESTRICTED DEPOSITS AND FUNDED RESERVES
Tenants' Security Deposits 12,685 14,209
Replacement Reserve Escrow 195 459
--------- ---------
12,880 14,668
--------- ---------
RENTAL PROPERTY - AT COST
Buildings 6,361,051 6,361,051
Furniture and Equipment 375,604 343,669
Motor Vehicles 1,063 1,063
--------- ---------
6,737,718 6,705,783
Less Accumulated Depreciation 1,470,992 1,282,153
--------- ---------
5,266,726 5,423,630
--------- ---------
Land 175,260 175,260
--------- ---------
OTHER ASSETS
Organization Costs, Less Accum. Amort.
of $93,944 (1996) and $90,795 (1995) 46,580 49,729
--------- ---------
$5,555,204 $5,720,432
========= =========
The accompanying notes are an integral part of these statements.
-4-<PAGE>
LIABILITIES AND PARTNERS' EQUITY
CURRENT LIABILITIES
Accounts Payable - Trade $ 104,540 $ 116,039
Accounts Payable - Housing Authority 3,462
Current Maturities of Long-Term Debt 48,000 53,500
Accrued Expenses 73,543 68,438
--------- ---------
Total Current Liabilities 229,545 237,977
--------- ---------
DEPOSIT LIABILITY
Tenants' Security Deposits 12,748 12,381
--------- ---------
LONG-TERM LIABILITIES
Mortgage Payable 4,203,973 4,251,693
Less Current Maturities ( 48,000) ( 53,500)
--------- ---------
4,155,973 4,198,193
--------- ---------
Due To Related Parties 109,189 67,808
--------- ---------
Total Liabilities 4,507,455 4,516,359
PARTNERS' EQUITY 1,047,749 1,204,073
--------- ---------
$5,555,204 $5,720,432
========= =========
The accompanying notes are an integral part of these statements.
-5-<PAGE>
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
STATEMENT OF OPERATIONS
DECEMBER 31, 1996 AND 1995
1996 1995
Revenue ---- ----
Rents $ 1,057,648 $ 1,054,100
Laundry and Miscellaneous Income 3,037 4,518
Interest Income 314 997
--------- ---------
1,060,999 1,059,615
--------- ---------
Expenses
Renting 15,049 6,849
Administrative 85,294 83,578
Management Fee 62,985 63,164
Operating 267,760 279,930
Maintenance 70,167 87,237
Taxes 19,207 13,289
Insurance 80,888 105,704
Interest on Mortgage 422,765 427,638
Other Interest 1,220 216
Depreciation and Amortization 191,988 188,496
--------- ---------
1,217,323 1,256,101
--------- ---------
Net Loss From Rental Operations $( 156,324)$( 196,486)
========= =========
The accompanying notes are an integral part of these statements.
-6-
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
STATEMENT OF PARTNERS' EQUITY
DECEMBER 31, 1996 AND 1995
General Limited
Total Partners Partner
----- -------- -------
Partners' Equity $ 960,438 $ 24,068 $ 936,370
Payment Of Subscription
Receivable 1,216,000 1,216,000
Distributions (Note F) ( 162,278) (137,615) ( 24,663)
Cumulative Net (Loss) ( 613,601) ( 6,136) ( 607,465)
--------- ------- ---------
Partners' Equity
December 31, 1994 1,400,559 (119,683) 1,520,242
Net (Loss) 1995 (Note G) ( 196,486) ( 1,965) ( 194,521)
--------- ------- ---------
Partners' Equity
December 31, 1995 $ 1,204,073 $(121,648) $ 1,325,721
Net (Loss) 1996 (Note G) ( 156,324) ( 1,563) ( 154,761)
--------- ------- ---------
Partners' Equity
December 31, 1996 $ 1,047,749 $(123,211) $ 1,170,960
========= ======= =========
Percentage (Note F) 100% 1% 99%
==== ==== ====
The accompanying notes are an integral part of these statements.
-7-<PAGE>
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1996 AND 1995
1996 1995
Cash Flow From Operating Activities ---- ----
Net Loss $(156,324) $(196,486)
Adjustments to Reconcile Net Loss
to Net Cash Provided (Used) By
Operating Activities
Depreciation 188,839 185,347
Amortization 3,149 3,149
(Increase) Decrease in Accounts
Receivable - Tenant 1,875 ( 2,076)
(Increase) Decrease in Accounts
Receivable - Subsidy 213 ( 4,083)
(Increase) Decrease in Miscellaneous
Receivables ( 788) 1,263
(Increase) Decrease in Prepaid Insurance 1,760 ( 8,098)
Increase (Decrease) in Accounts Payable ( 11,499) 62,441
Increase (Decrease) in Accounts Payable -
Housing Authority 3,462
Increase (Decrease) in Accrued Expenses 5,105 5,054
Net Security Deposits Received (Paid) 1,891 2,048
Net Cash Provided (Used) by ------- -------
Operating Activities 37,683 48,559
------- -------
Cash Flows From Investing Activities
Deposits To Reserve For Replacements ( 21,170) ( 21,775)
Withdrawals From Reserves 21,434 46,863
Purchase of Fixed Assets ( 31,935) ( 54,128)
Net Cash Privided by (Used In) ------- -------
Investing Activities ( 31,671) ( 29,040)
------- -------
Cash Flows From Financing Activities
Increase (Decrease) in Related Party Debt 41,381 25,514
Repayment of Long-Term Debt ( 47,720) ( 52,710)
Distribution to General Partners -
Net Cash Provided by (Used In) ------- -------
Financing Activities ( 6,339) ( 27,196)
------- -------
Net Increase (Decrease) in Cash Equivalents ( 327) ( 7,677)
Cash and Equivalents, Beginning of Year 1,087 8,764
------- -------
Cash and Equivalents, End of Year $ 760 $ 1,087
======= =======
Supplemental Schedule of Cash Flow
Information:
Cash Paid During The Year For
Interest $ 424,379 $ 428,299
======= =======
The accompanying notes are an integral part of these statements.
-8-<PAGE>
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
NOTE A - SUMMARY OF ACCOUNTING POLICIES
A summary of the significant accounting policies consistently applied in the
preparation of the accompanying financial statements follows.
Capitalization and Depreciation
- --------------------------------
Land, buildings and improvements are recorded at cost. Depreciation is
provided for in amounts sufficient to relate the cost of depreciable assets to
operations over their estimated service lives using the straight-line method.
Improvements are capitalized, while expenditures for maintenance and repairs
are charged to expense as incurred. Upon disposal of depreciable property,
the appropriate property accounts are to be reduced by the related costs and
accumulated depreciation. The resulting gains and losses are to be reflected
in the statement of operations.
Amortization
- ------------
Mortgage costs are amortized above the term of the mortgage loan using the
effective interest method.
Pre-opening and organization costs are amortized over sixty months using the
straight-line method.
Income Taxes
- ------------
No provision or benefit for income taxes has been included in these financial
statements since taxable income or loss passes through to, and is reportable
by, the partners individually.
NOTE B - ORGANIZATION
Riverplace Apartments Limited Partnership was organized under the laws of the
State of Massachusetts on March 11, 1988, for the purpose of acquiring and
operating a 100-unit low income residential apartment project known as
Riverplace Apartments Limited Partnership located in Holyoke, Massachusetts
at:
292-298 Elm Street 22-24 Northeast Street
298-300 Chestnut Street 532 South Bridge Street
302-304 Chestnut Street 527 South Summer Street
82-82 1/2 Park Street 177-185 West Street
44 Lyman Street
-9-
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1996
NOTE C - PARTNERS' CAPITAL CONTRIBUTIONS
The partnership has three general partners - Mark A. Berezin, Herbert G.
Berezin, and Stephen L. Berezin, and one investor limited partner - American
Affordable Housing II Limited Partnership. As of December 31, 1996 and 1995,
each general partner and the investor limited partner have made capital
contributions of $3 and $2,186,118 respectively.
NOTE D - LONG-TERM DEBT
Long-Term Debt
- --------------
The mortgage loan is $4,500,000 with interest and principal payable for 30
years. The interest rate for the first 3 years after the conversion date
shall be the greater of the 3 year United States Treasury Note Rate in Effect
on the conversion date plus 2.5% per annum or 10% per annum. The rate shall be
adjusted every 3 years to a rate equal to 2.5% plus the then 3 year treasury
note rate in effect. The current interest rate is 10%.
The partnership buildings are pledged as collateral for the mortgage.
The mortgage loan is nonrecourse debt by deeds of trust on the related real
estate.
Aggregated maturities of long-term debt for the next five years are as
follows:
1997 $ 48,000
1998 $ 50,000
1999 $ 52,000
2000 $ 54,000
2001 $ 56,000
In accordance with the Housing Authority agreement, a reserve for replacements
is to be funded $21,143 annually. In 1996, the account was funded $21,170
including interest.
-10-<PAGE>
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1996
NOTE E - TRANSACTIONS WITH THE AFFILIATES AND RELATED PARTIES
Acquisition Costs
- -----------------
The partnership acquired land and buildings for $1,732,802 in 1988, from a
partnership owned by the general partners. These costs have been capitalized
into the basis of the real estate.
Management Fees
- ---------------
In accordance with the partnership agreement, the partnership paid Marken
Properties, Inc., a related party of general partners, management fees of
$62,985 and $63,164 in 1996 and 1995 for services rendered in connection with
the leasing and operation of the project. The fee for its services is equal
to approximately 6% of the project's rental income.
Annual Investor Service Fee
- ---------------------------
An annual investor service fee of $5,500 is payable to Boston Capital
Communication, Inc., an affiliate of American Affordable Housing II Limited
Partnership, an investor limited partner which holds a 99% interest in the
partnership, for services to be rendered in reporting to the investor limited
partner. For the years ended December 31, 1996 and 1995, $5,500 was charged
to operations.
Development Fee
- ---------------
The partnership has incurred and paid a development fee of $1,596,410 to HMSB
Inc., a corporation wholly owned by the general partners, for services
rendered to the partnership for overseeing the construction of the project.
Amounts Due to Related Parties
- ------------------------------
Amounts due to related parties and affiliates at December 31, 1996 and 1995,
are as follows:
1996 1995
---- ----
Interstate Plumbing and Heating Inc.,
related party of the general partners,
for operating supplies. 1,006 9,413
Hampden Contractors Inc., a related
party of the general partners for oil
and heating contract service. 9,744 21,612
Marken Properties Inc., a related
party of the general partners for
management fees and general
administrative expense. 59,894 36,783
-11-<PAGE>
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
NOTE E - TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
(CONTINUED)
Holyoke House Apartments, a related
party of the general partners for
administrative expenses. 2,214
Sargeant West Apartments,Associates, a
related party of the general partners
for administrative expenses 2,049
Various related party entities for
insurance premiums 34,282
------- -------
$ 109,189 $ 67,808
======= =======
The three limited partners own 100% of the outstanding stock of several
companies which provide services to the project, including management of the
premises. During 1996, the total amount paid or accrued by the partnership to
the related parties for goods and services approximated $316,168.
NOTE F - PARTNERSHIP PROFITS AND LOSSES AND DISTRIBUTIONS
All profits and losses prior to the first date on which an investor limited
partner was admitted were allocated 1% to the general partners and 99% to the
special limited partner capital. Upon admission of the additional limited
partner, the interest of the special limited partner was reduced to zero.
Distributable cash flow is payable annually, first to the payment of the
investor service fee, next to any accrued and unpaid annual Partnership
Management fee and next 50% to the Investment Limited Partners and 50% to the
General Partners.
Distributable cash flow is defined in the partnership agreement as the sum of
all cash receipts less disbursements for operating activities, including the
annual investor service fee.
In accordance with the proposed regulatory agreement, the annual distribution
is limited to $2,700, and is cumulative. Further, that until the fifteenth
anniversary of the admission date, all cash flow shall be paid into a reserve
account to fund the cost of paying increased debt service on the mortgage due
to rate increases and costs of refinancing. Any funds remaining in the
reserve account shall be disbursed to the partners on the fifteenth
anniversary or at any earlier time approved by Boston Capital and the general
partners. A special distribution of $4,073 was made to the General Partners
in 1989.
-12-<PAGE>
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1996
NOTE F - PARTNERSHIP PROFITS AND LOSSES AND DISTRIBUTIONS
(CONTINUED)
Distributable cash flow is payable as follows:
1. 50% to the investor limited partner and 50% to the general partners.
Gain, if any, from a sale or refinancing is allocable as follows:
1. To all partners having negative balances in their capital
accounts prior to the distribution of any sale or refinancing
proceeds, an amount of such gain to increase their negative
balance to zero;
2. To partners who have received or will receive a distribution of
sale or refinancing proceeds in excess of their capital
accounts, an amount of such gain, if any, equal to such excess;
and
3. The remainder of such gain, if any, 50% to the limited partners
and 50% to the general partners.
Loss from a sale or refinancing are allocable, first to all partners having
positive balances, until the positive balances equal zero, the remaining loss,
if any to the general partners.
During 1990, the Investor Limited Partner reduced its capital contribution by
$24,663 to reflect low income housing credit realized for the year ended
December 31, 1989.
NOTE G - TAXABLE INCOME (LOSS)
A reconciliation of financial statement net earnings (loss) to taxable
income (loss) of the partnership for the years ended December 31, 1996 and
1995 are as follows:
1996 1995
---- ----
Financial statement net earnings
(loss) $(156,324) $(196,486)
Adjustments
Other Timing Difference ( 1,761)
Excess of depreciation for income
tax purposes over financial
reporting purposes ( 71,754) ( 84,078)
------- -------
Taxable income (loss) as
shown on tax return $(229,839) $(280,564)
======= =======
-13-
SUPPLEMENTAL INFORMATION
-14-<PAGE>
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
SCHEDULES OF RENTING, ADMINISTRATIVE, OPERATING, MAINTENANCE,
TAXES AND INSURANCE, AND INTEREST EXPENSES
YEARS ENDED DECEMBER 31, 1996 AND 1995
1996 1995
---- ----
Renting Expenses
Collections $ 3,462 $ 1,187
Credit Check 1,280 820
Miscellaneous 10,307 4,842
-------- --------
$ 15,049 $ 6,849
======== ========
Administrative Expenses
Office Salaries and Fringe Benefits $ 43,384 $ 39,605
Office Expense 12,780 11,954
Legal 2,050 4,835
Auditing 7,500 7,500
Telephone 4,208 4,672
Accounting Fee 5,500 5,500
Computer Fees 1,527 1,921
Advertising 1,145 391
Miscellaneous 7,200 7,200
-------- --------
$ 85,294 $ 83,578
======== ========
Management Fee $ 62,985 $ 63,164
======== ========
Operating Expenses
Maintenance Wages & Fringe Benefits $ 71,919 $ 66,595
Cleaning Supplies & Contract 7,315 12,937
Fuel/Oil 65,765 49,395
Gas 12,991 11,108
Electricity 10,580 15,724
Water and Sewer 75,901 113,864
Exterminating 12,200 1,097
Garbage and Trash 11,089 9,210
-------- --------
$ 267,760 $ 279,930
======== ========
-15-<PAGE>
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
SCHEDULES OF RENTING, ADMINISTRATIVE, OPERATING, MAINTENANCE,
TAXES AND INSURANCE, AND INTEREST EXPENSES - CONTINUED
YEARS ENDED DECEMBER 31, 1996 AND 1995
1996 1995
---- ----
Maintenance Expenses
Grounds Supplies $ 89 $ 48
Grounds Contract 117
Repairs Material 20,347 28,911
Repairs Contract 16,412 27,146
HVAC Repairs and Maintenance 8,521 11,773
Snow Removal 928 1,147
Decorating Supplies 8,231 7,857
Decorating Contract 9,114 5,675
Vehicle/Maintenance Equipment 6,525 4,563
-------- --------
$ 70,167 $ 87,237
======== ========
Taxes and Insurance Expense
Real Estate Taxes $ 19,207 $ 13,289
Property Insurance 80,888 105,704
-------- --------
$ 100,095 $ 118,993
======== ========
Interest Expense
Interest on First Mortgage $ 422,765 $ 427,638
Other Interest 1,220 216
-------- --------
$ 423,985 $ 427,854
======== ========
-16-
<TABLE> <S> <C>
<ARTICLE> CT
<CIK> 0000815024
<NAME> AMERICAN AFFORDABLE HOUSING II LIMITED PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> APR-01-1996
<PERIOD-END> MAR-31-1997
<TOTAL-ASSETS> 3,409,282
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 3,409,282
<TOTAL-REVENUES> 2,213
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,273,057)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,270,844)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
