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, 1999 or
--------------
[ ] 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
- -----------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Massachusetts 04-2992309
- ------------------------------ --------------------
(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
--------------------- ----------------------
None None
- ----------------------------------- -------------------------
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
----- -----
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
--------- ---------
Parts III and IV Prospectus of the registrant dated
September 22, 1988, as supplemented
AMERICAN AFFORDABLE HOUSING II LIMITED PARTNERSHIP
(a Massachusetts limited partnership)
FORM 10-K ANNUAL REPORT FOR THE YEAR ENDED
March 31,1999
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, 1999. See Item 2.
1
Item 2. Properties
As of its fiscal year ending March 31, 1999, 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
American Affordable Housing II Limited Partnership
PROPERTY PROFILES AS OF March 31, 1999
Mortgage
Balance Construc-
Qualified Capital
As of tion
Occupancy Contrib-
Property Name Location Units 12/31/98 Completion
3/31/99 uted
- ----------------------------------------------------------------
- ------------
Anacapa Lake Havasu,
Apartments AZ 40 $1,424,641 4/88
100% $348,915
Anthony Garden Green Valley,
Apartments AZ 100 3,864,835 3/89
97% 751,267
Blairview Blairsville, 42
Apartments PA 1,428,626 12/88
95% 308,388
Bloomfield Bloomfield,
Apartments MO 16 367,900 6/88
100% 62,878
Boardman Lake Travers City,
II Apartments MI 32 976,308 5/89
100% 202,700
Bowdoinham Bowdoinham,
Estates ME 25 1,275,576 5/89
100% 308,824
Brookhollow Brookshire,
Apartments TX 48 893,009 8/88
100% 160,000
Center Way Shelbyville,
Apartments TN 20 609,780 7/88
100% 136,620
Carthage Carthage,
Court NY 32 1,274,664 10/88
100% 270,000
Casa Belen,
Valencia NM 39 1,480,955 12/88
100% 303,000
Cedar Forest Brewton,
Apartments AL 33 951,156 6/88
100% 219,696
Charters Cove St. Ignace,
Apartments MI 24 770,228 5/88
100% 166,200
Deer Crossing Farmington,
Apartments ME 24 1,179,722 4/89
100% 312,920
3
American Affordable Housing II Limited
Partnership
PROPERTY PROFILES AS OF March 31, 1999
Continued
- --------- Mortgage
Balance Construc-
Qualified Capital
As of tion
Occupancy Contrib-
Property Name Location Units 12/31/98 Completion
3/31/99 uted
- -----------------------------------------------------------------
- ------------
East Ridge Southwest Harbor,
Estates ME 25 $1,249,521 9/88
100% $294,771
Fairbanks Flats Beloit,
Apartments* WI 24 N/A 12/88
N/A 313,040
Fredericktown Fredericktown,
Apartments II MO 16 370,063 5/88
100% 79,670
Harbor Hill Bar Harbor,
Estates ME 25 1,217,492 2/89
100% 325,500
Harbour Oaks East China,
Apartments MI 32 896,023 11/88
100% 191,500
Harvest View Garden City,
MO 16 382,840 6/88
100% 86,785
Kersey Kersey,
Apartments CO 32 1,181,296 10/88
100% 226,000
Kingsley Park Essex,
Apartments MD 312 9,881,279 10/88
100% 1,750,000
Liberty Center Jacksonville,
FL 109 1,116,473 10/88
100% 1,014,770
Malone Senior Malone,
Housing NY 40 1,479,298 11/88
97% 309,000
Maple Tree Mapleton,
Estates ME 25 1,234,411 4/89
100% 325,500
Michelle Manor Green Valley,
Apartments AZ 24 905,633 9/88
100% 174,264
Middleburg Bluffs Middleburg,
FL 45 1,410,283 3/89
100% 375,283
*Refer to note in Results of Operations for information on
Fairbanks Flats.
4
American Affordable Housing II Limited Partnership
PROPERTY PROFILES AS OF March 31, 1999
Continued
- --------- Mortgage
Balance Construc-
Qualified Capital
As of tion
Occupancy Contrib-
Property Name Location Units 12/31/98 Completion
3/31/99 uted
- -----------------------------------------------------------------
- ------------
Nicollete Minneapolis,
Island Homes MN 22 $1,097,120 12/88 100%
$713,000
Paige Hall Minneapolis,
Apartments MN 69 2,253,150 4/89 100%
472,336
Partridge McMinnville,
Meadows TN 48 1,396,347 10/88 97%
296,461
Perramond Madawaska,
Estates ME 25 1,179,613 4/89 100%
287,000
Pine Knoll Smithfield,
Manor NC 33 1,357,555 5/89 100%
309,450
Pine Ridge Port St. Joe,
Apartments FL 50 1,477,962 6/88 100%
384,180
Pine Terrace Callahan,
Apts. Phase III FL 40 1,189,642 1/89 100%
309,500
Platteville Platteville,
Apartments CO 16 544,014 10/88 100%
120,000
River Place Holyoke,
Apartments MA 100 4,092,919 3/89 100%
1,824,000
Sara Pepper Dixfield,
Place ME 12 633,048 3/88 100%
171,189
Silver Pines Fryburg,
Apartments ME 25 1,377,034 8/88 100%
351,547
South Estates Nebraska City,
NE 15 417,939 7/88 100%
85,911
South View III Marionville,
MO 8 193,582 5/88 100%
42,100
5
American Affordable Housing II Limited Partnership
PROPERTY PROFILES AS OF March 31, 1999
Continued
- --------- Mortgage
Balance Construc-
Qualified Capital
As of tion
Occupancy Contrib-
Property Name Location Units 12/31/98 Completion
3/31/99 uted
- -----------------------------------------------------------------
- ------------
Southview Place Lovington,
Apts NM 48 $1,092,506 2/89 100%
$245,602
Spring Hollow Springfield,
Apartments GA 52 1,436,215 3/88 100%
321,860
Stokes Rowe Philadelphia,
PA 16 1,054,279 6/88 100%
673,000
Story Hill Washburn,
Estates ME 24 1,209,588 1/89 100%
322,425
Suncrest Newport,
Apartments TN 32 969,007 5/88 100%
210,960
Lodging House at Boston,
300 Shamut Ave., MA 15 636,373 12/88 100%
508,000
The
Village Chase Zephyrhills,
Apts FL 48 1,485,505 4/89 100%
386,368
Village Walk Zephyrhills,
Apartments FL 43 1,390,565 3/89 100%
362,500
Washington Mews Dorchester,
MA 20 849,188 12/88 100%
510,000
Wildwood Statesboro,
Villas II GA 58 1,473,287 9/88 100%
369,260
Willowbrook Immokalee,
Place FL 41 1,316,810 3/88 100%
328,711
6
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, 1999, the Partnership had 2,364 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, 1999. 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
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,
1999. 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,
1999 1998 1997 1996
1995
-------- -------- -------- --------
- --------
Operations
- ----------
Interest Income $ 203 $ 331 $ 743 $ 783
$ 520
Other Income 7,894 6,355 1,470 -
1,650 Share of Losses
from Operating
Partnerships (418,312) (383,653) (795,677)
(1,047,309) (1,392,030)
Operating Expenses (483,891) (478,740) (477,380)
(516,882) (503,107) --------- --------- -
- --------- ---------- ----------
Net Loss (894,106)$ (855,707)$(1,270,844)
$(1,563,408)$(1,892,967)
========= ========= ========== ==========
==========
Net Loss per Unit of
Limited Partnership
Interest $ (33.40)$ (31.97) $ (47.48) $
(58.40)$ (70.72) ========= =========
=========== ========== ==========
March 31, March 31, March 31, March
31, March 31,
Balance Sheet 1999 1998 1997 1996
1995 ------------- -------- -------- --------
- -------- --------
Total Assets $ 2,602,756 $3,022,949 $ 3,409,282 $ 4,274,839
$ 5,344,896
========= ========== ========== ==========
==========
Total Liabilities $ 4,485,968 $4,012,055 $ 3,542,681 $ 3,137,394
$ 2,644,043
========= ========== ========== ==========
==========
Partners' Equity $(1,883,212)$ (989,106)$ (133,399) $ 1,137,445
$ 2,700,853
(Deficit) ========= ========== ========== ==========
==========
Other Data
- ----------
Credit Per BAC* $ 103.96**$ 129.93 $ 130.05 $ 114.28
$ 131.60
======== ========= ========== ==========
==========
* The credit per BAC data is reported for the calendar year
which ends in the
third quarter of the related fiscal year.
** See Results of operations.
9
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity
- ---------
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, 1999 were
$436,961
and total asset management fees accrued as of March 31, 1999 were
$4,274,689.
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 $131,369 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. 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. 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, 1999 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, 1999.
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, 1999, the
Partnership had committed to investments requiring cash payments
of
$18,613,793, all of which has been paid. At March 31, 1999, the
Partnership
held working capital of $9,857. 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, 1999 and 1998 was
$420,831 and
$427,161, 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,
1999 and 1998, the Partnership received $282 and $846 in
distributions
of cash flow and $16,130 and $9,800 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 $203
and $331 in
the fiscal years ended March 31, 1999 and 1998, respectively. No
other
significant source of income is anticipated.
As of December 31, 1998 and 1997 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.
As of March 31, 1999 and 1998 the Qualified Occupancy for the
Partnership was 99.8% and 99.5%, respectively.
For the years ended December 31, 1998 and 1997 the Operating
Partnerships
reflected a net income (loss) of $765,577 and $590,279,
respectively, when adjusted for depreciation which is a non-cash
item.
11
For the tax year ended December 31, 1998 and 1997 the
Partnership generated $2,954,474 and $2,373,534, respectively, in
passive income tax losses that were passed through to the
investors. The Partnership also provided $104 and $130 in tax
credits per BAC to the investors for each of the tax years ended
December 31, 1998 and 1997, respectively. Many of the Operating
Limited Partnerships are in the process of completing their 10-
year tax allocations; therefore, the partnership will be
generating annual tax credit results accordingly. 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.
During the quarter ended March 31, 1999 the Partnership
incurred the cost of the 1998 audit and tax return for Rouse
Stokes Rowe Housing Associates, L.P. (Stokes Rowe), and is
reflected in General and administrative expenses. Historically,
the financial statements of Stokes Rowe have been prepared
assuming that the Operating Partnership will continue as a going
concern. Both of the Operating Partnership's mortgages are in
technical default for non-payment and
as such the entire balance has been classified as a current
liability. (The first permanent loan is payable to the
stockholder of Southwark Realty, an affiliate of one of the
Operating General Partner). Despite high occupancy, the property
suffers from cash flow deficits related to excessive operating
expenses. The Investment General Partner continues to explore
different options to cure the cash flow deficits. A site visit
to the property completed in October, 1998 confirmed that the
property was in good physical condition and that the
leasing/management staff was performing well. During that
inspection, concerns about the property's Section 42
documentation were noted. These concerns will be addressed with
the Operating General Partner.
Lovington Housing Associates, L.P. (Southview Place
Apartments) was suffering operational difficulties. A review by
the Investment General Partner revealed that the Operating
General Partner was not properly managing the property. As a
result the Operating General Partner was replaced by Western
States Housing. Operations at the property have improved
significantly since Western States Housing, an affiliate of the
property's management company, became the general partner of the
property. The property experienced a downturn in occupancy during
the past two quarters as the local economy and tenant population
were adversely impacted by the decline of local oil production.
The management company has indicated that these economic
conditions have improved and that the occupancy rate is expected
to rebound during the second quarter. Although the replacement
reserve account is under funded, the property remains in
compliance with a workout plan to cure the deficit.
The Operating Partnership, Fairbanks Flats Limited
Partnership
(Fairbanks Flats Apts), received a going concern opinion on their
1997 audit.
As a result of the property incurring continued operational cash
flow deficits a substantial doubt about the property continuing
as a going concern has been raised. The cash flow deficits have
been the result of poor occupancy at the property. The Operating
General Partner has funded deficits in the past, but
12
has failed to do so in 1998. Due to the Operating General
Partner's inability to continue funding operating deficits, the
Investment General Partner has initiated conversations with the
first mortgage holder to get more favorable
terms potentially generating positive cash flow. As a result of
ongoing operating deficits and the first mortgage holder's
unwillingness to work with the Investment General Partner, the
Investment General Partner has determined that a foreclosure or a
deed in lieu of foreclosure transfer is the most likely
resolution. Assuming the bank does not change its position, a
transfer of ownership of the apartment complex from the Operating
Partnership to the first mortgage holder is likely to occur
during the third quarter of 1999. As a result, in 1999 the
partnership will face recapture of a portion of the credits
previously taken.
13
Recent Accounting Statements Not Yet Adopted
- --------------------------------------------
On March 31, 1997, the Partnership adopted 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 form within the financial
statements of pertinent fights and privileges of the various
securities outstanding. On March 31, 1998, the Partnership
adopted SFAS No. 130, "Reporting Comprehensive Income," and SFAS
No. 131, "Disclosures about Segments of an Enterprise and Related
Information." SFAS No. 132, "Employees' Disclosures about
Pensions and Other Post-retirement Benefits." SFAS No. 130
establishes standards for reporting and display of comprehensive
income and its components, SFAS No. 131 establishes standards for
how public business enterprises report information about
operating segments and SFAS No. 132 revises employers'
disclosures about pension and other post-retirement benefit
plans. The implementation of these standards has not materially
affected the partnership's financial statements.
In June 1998, the FASB issued SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities." In October 1998,
the FASB issued SFAS No. 134, "Accounting for Mortgage-backed
Securities Retained after the Securitization of Mortgage Loans
Held for Sale by a Mortgage Banking Enterprise." In February
1999, the FASB issued SFAS No. 135, "Rescission of FASB Statement
75 and Technical Corrections." SFAS No. 133 is effective for all
the fiscal quarters of years beginning after June 15, 1999; SFAS
No. 134 is effective for the first fiscal quarter beginning after
December 31, 1998; and SFAS No. 135 is effective for years ending
after February 15, 1999. Early adoption is encouraged for SFAS
No. 133, 134 and 135.
The fund does not have any derivative or hedging activities
and does not have any mortgage-backed securities. FASB Statement
75, "Deferral of the Effective Date of Certain Accounting
Requirements for Pension Plans of State and Local Governmental
Units," does not apply to the fund. Consequently, these
pronouncements are expected to have no effect on the fund's
financial statements.
Year 2000 Compliance
- --------------------
Boston Capital and its management have reviewed the
potential computer problems that may arise from the century date
change known as the "Year 2000"or "Y2K" problem. We are
currently in the process of taking the necessary precautions to
minimize any disruptions. The majority of Boston Capital's
systems are "Y2K" compliant. For all remaining systems we have
contacted the vendors to provide us with the necessary upgrades
and replacements. Boston Capital is committed to ensuring that
the "Y2K" issue will have no impact on our investors.
14
Item 7A. Quantitative and Qualitative Disclosure About Market
Risk - Not Applicable
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.
15
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 68, is co-founder and Chairman of the
Board of Boston Capital Corporation. Nominated by President
Clinton and confirmed by the United States Senate, Mr. Collins
served as the Republican private sector member of the Thrift
Depositor Protection Oversight Board. During 1990 and 1991 he
served as Chairman of the Board of Directors for the Federal Home
Loan Bank of Boston, a 314-member, $12 billion central bank in
New England. Mr. Collins is the co-founder and past President of
the Coalition for Rural Housing and Development. In the 1980s he
served as Chairman of the Massachusetts Housing Policy Commission
to evaluate current programs and recommend future housing policy.
Additionally, he served as a member of the Board of Directors of
the Metropolitan Boston Housing Partnership and on the Mitchell-
Danforth Task Force, which helped structure the 1990 federal Tax
Credit legislation. Mr. Collins also is a past Member of the
Board of Directors of the National Leased Housing Association and
has served as a member of the U. S. Conference of Mayors Task
Force on "HUD and the cities: 1995 and Beyond" Mr. Collins also
was a member of the Fannie Mae Housing Impact Advisory Council
and the Republican Housing Opportunity Caucus. He is Chairman of
the Business Advisory Council and a member of the National
Council of State Housing Agencies Tax Credit Commission. Mr.
Collins graduated from Harvard College. President Bush appointed
him to the President's Advisory Committee on the Arts at the John
F. Kennedy Center for the Performing Arts. He is a leader in the
civic community, serving on the Boards of Youthbuild Boston, the
Pine Inn and I Have a Dream Foundation.
John P. Manning, age 51, is co-founder, President and Chief
Executive Officer of Boston Capital Corporation where he is
responsible for strategic planning and business development. In
addition to his responsibilities at Boston Capital, Mr. Manning
is a proactive leader in the industry. He served in 1990 as a
member of the Mitchell-Danforth Task Force, 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 publication Housing and Development
Reporter. During the 1980s he served as a member of the
Massachusetts Housing Policy Committee, as an appointee of the
Governor of Massachusetts. In addition, Mr. Manning has
testified before the U.S. House Ways and Means Committee and the
U.S. Senate Finance Committee, on the critical role of the
private sector in the success of the Low Income Housing Tax
Credit Program. 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. In 1998, President Clinton also
appointed Mr. Manning to the President's Export Council, which is
the premier
16
committee comprised of major corporate CEOs to advise the
President in matters of foreign trade. Mr. Manning is also a
member of the Board of Directors of the John F. Kennedy
Presidential Library in Boston. In the civic community, Mr.
Manning is a leader, serving on the Board of Youthbuild Boston.
Mr. Manning is a graduate of Boston College.
Richard J. DeAgazio, age 54, 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 formerly 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 presently serves as a member of the National
Adjudicatory Council on NASD. 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 is a leader in the community and serves on the
Business Leaders Council of the Boston Symphony, Board of
Directors for Junior Achievement of Massachusetts, the Board of
Advisors for the Ron Burton Training Village and is on the Board
of Corporators of Northeastern University. He graduated from
Northeastern University.
Christopher W. Collins, age 43, 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 38, is Chief Financial Officer of
Boston Capital Partners, Inc., and serves as Chairman of the
firm's Operating Committee. He has fifteen years of experience
in the accounting and finance field and has supervised the
financial aspects of Boston Capital's 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.
17
(f) Involvement in certain legal proceedings.
None.
(g) Promoters and control persons.
None.
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 1999
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, 1999 was
$436,961. The fee is payable without interest as sufficient
funds become available.
2. The Partnership has accrued as payable to affiliates of
the General Partners a total of $1,973 for amounts charged to
operations during the year ended March 31, 1999. The charges
include, 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, 1999.
18
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, 1999 and 1998
Statements of Operations, Years ended March 31, 1999, 1998
and 1997
Statements of Changes in Partners' Capital, Years ended
March 31,
1999, 1998, and 1997
Statements of Cash Flows, Years ended March 31, 1999, 1998
and 1997
Notes to Financial Statements, Years ended March 31, 1999,
1998
and 1997
Liberty Center, Ltd.
Independent Auditors' Report
Balance Sheets, December 31, 1998 and 1997
Statements of Operations, Years ended December 31, 1998 and
1997
Statements of Cash Flow, Years ended December 31, 1998 and
1997
Statements of Changes in Partners' Capital, Years ended
December 31,
1998 and 1997
Notes to Financial Statements, Years ended December 31,
1998 and
1997
19
Riverplace Apartments
Independent Auditors' Report
Balance Sheets, December 31, 1998 and 1997
Statements of Operations, Years ended December 31, 1998 and
1997
Statements of Changes in Partners' Capital, Years ended
December 31,
1998 and 1997
Statements of Cash Flow, Years ended December 31, 1998 and
1997
Notes to Financial Statements, Years ended December 31,
1998 and
1997
(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.
20
(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, 1999.
(b) Exhibits
Same as Item 14(a)3. above.
(c) Financial Statement Schedules
See Items (a)1. and (a)2. above.
21
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 29,
1999
Limited Partnership
By: Boston Capital Associates,
General Partner
By: /s/ John P. Manning
----------------------------
John P. Manning, Partner
22
SIGNATURE TITLE DATE
- --------- ----- ----
Boston Capital Associates General Partner
By: /s/ John P. Manning
------------------------ June 29,
1999
John P. Manning, Partner
- -------------
/s/ Herbert F. Collins
------------------------ June 29,
1999
Herbert F. Collins General Partner
- -------------
of Boston Capital
Associates, Principal
Executive Officer,
Principal Financial
Officer and Principal
Accounting Officer
/s/ John P. Manning
------------------------ June 29,
1999
John P. Manning General Partner
- -------------
of Boston Capital
23
INDEX TO EXHIBITS
-----------------
Exhibit Description of Exhibit
- ------- ----------------------
Page
- ----
(22) Subsidiary of the registrant
24
Exhibit (22)
25
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.
26
<PAGE>
FINANCIAL STATEMENTS AND
INDEPENDENT AUDITORS' REPORT
AMERICAN AFFORDABLE HOUSING II
LIMITED PARTNERSHIP
MARCH 31, 1999 AND 1998
<PAGE>
American Affordable Housing II Limited Partnership
TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITORS' REPORT F - 3
FINANCIAL STATEMENTS
BALANCE SHEETS F - 5
STATEMENTS OF OPERATIONS F - 6
STATEMENTS OF CHANGES IN PARTNERS'
CAPITAL (DEFICIT) F - 7
STATEMENTS OF CASH FLOWS F - 8
NOTES TO FINANCIAL STATEMENTS F - 9
SCHEDULE III - REAL ESTATE AND ACCUMULATED
DEPRECIATION F - 19
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>
Reznick Fedder & Silverman
Certified Public Accountants * 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, 1999 and 1998, and the related statements of operations,
changes in partners' capital (deficit) and cash flows for each
of the three years in the period ended March 31, 1999. These
financial statements are the responsibility of the
partnership's management. Our responsibility is to express an
opinion on these financial statements based on our audits. We
did not audit the financial statements of certain operating
limited partnerships in which American Affordable Housing II
Limited Partnership owns a limited partnership interest.
Investments in such partnerships comprise 43% and 37% of the
assets as of March 31, 1999 and 1998, and 14%, 6% and 9% of the
partnership loss for each of the three years in the period
ended March 31, 1999, 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.
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, 1999 and 1998, and the results of
its operations and its cash flows for each of the three years
in the period ended March 31, 1999, in conformity with
generally accepted accounting principles.
F-3
<PAGE>
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, 1999. 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 24, 1999
F-4
Dauby O'Connor & Zaleski
Limited Liability Company
Certified Public Accountants
Independent Auditors' Report
To the Partners of
Bowdoinham Associates
(A Maine Limited Partnership)
We have audited the accompanying balance sheet of Bowdoinham
Associates (a Maine Limited Partnership) as of December 31, 1998,
and the related statements of operations, changes in partners'
equity (deficit), and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these
financial statements based on our audit. The 1997 financial
statements were audited by other auditors whose report dated
January 19, 1998, 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
Bowdoinham Associates as of December 31, 1998, and the results of
its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also
issued a report dated March 5, 1999, on our consideration of the
Partnership's internal controls and a report dated March 5, 1999,
on its compliance with laws and regulations.
698 Pro Med Lane Carmel, Indiana 46032
317-848-5700 Fax: 317-815-6140
Bowdoinham Associates
Page Two
The accompanying supplementary information 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 financial statements taken as
a whole.
March 5, 1999 Dauby O'Connor &
Zaleski, LLC
Carmel, Indiana Certified Public
Accountants
2
Marshall, Shafer & Spalffing, P.C.
Certified Public Accountants
10497 Town & Country Way, Suite 420
Houston' Tex s 77024
713 / 973-8378
FAX 713 / 973-8377
INDEPENDENT AUDITOR'S REPORT
March 12, 1999
To the Partners
Brookhollow Manor, Ltd.
We have audited the accompanying balance sheet of Brookhollow
Manor, Ltd. as of December 31, 1998 and 1997, 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, 1998 and
1997, 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 12, 1999, on our consideration of
Brookhollow Manor, Ltd.'s internal control and on its compliance
with laws and regulations.
Marshall, Shafer & Spalding, P.C,
Houston, Texas
-3-
INDEPENDENT AUDITORS' REPORT
To the Partners
Carthage Court Housing Company
We have audited the accompanying balance sheets of Carthage Court
Housing Company as of December 31, 1998 and 1997, and the related
statements of operations, partners' deficit, and cash flows for
the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility
is to express an opinion on these financial statements based on
our 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
Carthage Court Housing Company as of December 31, 1998 and 1997,
and the results of its operations and its cash flows for the years
then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have also
issued reports dated February 4, 1999, on our consideration of the
Carthage Court Housing Company's internal control structure and
its compliance with laws and regulations.
February 4, 1999 Fecteau & Co.
Albany, New York
Dauby O'Connor & Zaleski
A Limited Liability Company
Certified Public Accountants
Independent Auditors' Report
To the Partners of
Deer Crossing Associates
(A Maine Limited Partnership)
We have audited the accompanying balance sheet of Deer Crossing
Associates (a Maine Limited Partnership) as of December 31, 1998,
and the related statements of operations, changes in partners'
equity (deficit), and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these
financial statements based on our audit. The 1997 financial
statements were audited by other auditors whose report dated
January 23, 1998, 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 Deer
Crossing Associates as of December 31, 1998, and the results of
its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also
issued a report dated March 5, 1999, on our consideration of the
Partnership's internal controls and a report dated March 5, 1999,
on its compliance with laws and regulations.
698 Pro Med LaneCarmel, Indiana 46032
317-848-5700 Fax: 317-815-6140
Deer Crossing Associates
Page Two
The accompanying supplementary information 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 financia.1 statements taken
as a whole.
March 5, 1999
Dauby O'Connor & Zaleski, LLC
Carmel, Indiana
Certified Public AccountantsMUELLER, WALLA & ALBERTSON, PC.
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 11, L.P. (a limited partnership) as of December 31,
1998 and 1997, 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, 1998 and
1997, 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 13 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 t6-the basic financial statements taken as a
whole.
Mueller, Walla & Albertson, P.C.
Certified Public Accountants
January 22, 1999
MEMBERS AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
MISSOURI SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
Dauby O'Connor & Zaleski
A Limited Liability Company
Certified Public Accountants
Independent Auditors' Report
To the Partners of
Harbor Hill Associates
(A Maine Limited Partnership)
We have audited the accompanying balance sheet of Harbor Hill
Associates (a Maine Limited Partnership) as of December 31, 1998,
and the related statements of operations, changes in partners'
equity (deficit), and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these
financial statements based on our audit. The 1997 financial
statements were audited by other auditors whose report dated
January 24, 1998, 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 Harbor
Hill Associates as of December 31, 1998, and the results of its
operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also
issued a report dated March 5, 1999, on our consideration of the
Partnership's internal controls and a report dated March 5, 1999,
on its compliance with laws and regulations.
698 Pro Med Lane
Harbor Hill Associates
Page Two
The accompanying supplementary information 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 financial statements taken as
a whole.
March 5, 1999
Dauby O'Connor & Zaleski, LLC
Carmel, Indiana
Certified Public Accountants
2
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, 1998 and 1997, 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.
4209 BAYMEADOWS ROAD
SUITE 2
JACKSONVILLE, FL 32217
904.731.9222
FAX 904.731.0352
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, 1998 and 1997, and the
results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting principles.
March 1, 1999
4209 BAYMEADOWS ROAD
SUITE 2
JACKSONVILLE, FL 32217
904.731.9222
FAX 904.731.0352
Kenneth C. Boothe & Company, P.C.
Certified Public Accountant
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 Limited Partnership
d.b.a. Southview Place Apartments
We have audited the accompanying balance sheets of Lovington
Housing Associates Limited Partnership as of December 31, 1998 and
1997, 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 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 Limited Partnership as of December
31, 1998 and 1997, 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 issued by the
Comptroller General of the United States, we have also issued a
report dated February 6, 1999, on our consideration of Lovington
Housing Associates Limited Partnership's internal control
structure and a report dated February 6, 1999, 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 19 through 20 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.
KENNETH C. BOOTHE AND COMPANY, P.C.
February 6, 1999
Big Spring, Texas
FECTEAU & COMPANY, P.C.
Certified Public Accountants
Advisors of Taxation
INDEPENDENT AUDITORS' REPORT
To the Partners
Malone Housing Redevelopment Company
We have audited the accompanying balance sheet of Malone Housing
Redevelopment Company as of December 31, 1998 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 the financial statements based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards and Government Auditing Standards issued by the
Comptroller General of the United States. Those standards require
that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by Management, as
well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Malone
Housing Redevelopment Company as of December 31, 1998 and the
results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also
issued reports dated February 4, 1999, on our consideration of
Malone Housing Redevelopment Company's internal control structure
and its compliance with laws and regulations.
The financial statements of Malone Housing Redevelopment Company
as of December 31, 1997 were audited by other accountants whose
report dated January 19, 1998 expressed an unqualified opinion on
those statements.
FECTEAU & COMPANY, P.C.
February 4, 1999
Albany, New York
Executive Woods, 4 Atrium Drive, Albany, NY 12205(518) 438-7400 0
FAX (518) 438-7444
Member
American Institute of Certified Public Accountants
(Private Companies Practice Section & Tax Division)
New York State Society of CPA's
Dauby O'Connor & Zaleski
A Limited Liability Company
Certified Public Accountants
Independent Auditors' Report
To the Partners of
Maple Tree Associates
(A Maine Limited Partnership)
We have audited the accompanying balance sheet of Maple Tree
Associates
(a Maine Limited Partnership) as of December 31, 1998, and the
related statements of operations, changes in partners' equity
(deficit), and cash flows f or 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 1997 financial
statements were audited by other auditors whose report dated
January 21,1998, 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 Maple
Tree Associates as of December 31, 1998, and the results of its
operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also
issued a report dated March 5, 1999, on our consideration of the
Partnership's internal controls and a report dated March 5, 1999,
on its compliance with laws and regulations.
698 Pro Med Lane
Carmel, Indiana 46032
317-848-5700
Fax: 317-815-6140
Maple Tree Associates
Page Two
The accompanying supplementary information 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 financial statements taken as
a whole.
March 5, 1999
Dauby O'Connor & Zaleski, LLC
Certified Public Accountants
Carmel, Indiana
2
MAHONEY
ULBRICH
CHRISTIANSEN
The Partners
Nicollet Island Historic Homes
Saint Paul, Minnesota
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying balance sheet of Nicollet Island
Historic Homes (A Limited Partnership) as of December 31, 1998,
and the related statements of operations, partners' capital 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 financial statement and
supplemental information of Nicollet Island Historic Homes as of
December 31, 1997, were audited by other auditors whose report
dated January 20, 1998, expressed an unqualified opinion on those
financial statements and supplemental information.
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
Nicollet Island Historic Homes as of December 31, 1998, and the
results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the
basic 1998 financial statements taken as a whole. The supplemental
information on page 10 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 1998 financial statements taken as a whole.
Saint Paul, Minnesota
January 19, 1999
I
Certified Public Accountants
MAHONEY
ULBRICH
CHRISTIANSEN
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, 1998 and 1997 and the
related statements of operations, partners' capital and cash 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 Paige
Hall Limited Partnership as of December 31, 1998 and 1997, 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 22, 1999
I
Dauby O'Connor & Zaleski
A Limited Liability Company
Certified Public Accountants
Independent Auditors' Report
To the Partners of
Perramond Associates
(A Maine Limited Partnership)
We have audited the accompanying balance sheet of Perramond
Associates (a Maine Limited Partnership) as of December 31, 1998,
and the related statements of operations, changes in partners'
equity (deficit), and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these
financial statements based on our audit. The 1997 financial
statements were audited by other auditors whose report dated
January 21, 1998, 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
Perramond Associates as of December 31, 1998, and the results of
its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also
issued a report dated March 5, 1999, on our consideration of the
Partnership's internal controls and a report dated March 5, 1999,
on its compliance with laws and regulations.
698 Pro Med Lane
Carmel, Indiana 46032
317-848-5700
Fax: 317-815-6140
Perramond Associates
Page Two
The accompanying supplementary information 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 financial statements taken as
a whole.
March 5, 1999
Dauby O'Connor & Zaleski, LLC
Carmey, Indiana
Certified Public Accountants
2
Bernard Robinson & Company, LLP
Certified Public Accountants since 1947
MAILING ADDRESS
OFFICES
P.O. B6x 19608
109 MUIRS CHAPEL ROAD
GREENSBORO, NC 27419-9608
GREENSBORO, NC 274 10
FAX 336-547-0840
TELEPHONE 336-294-4494
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, 1998 and 1997, and the related statements of
operations, partners' equity, and cash flows for the years then
ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audit in accordance with generally accepted
auditing standards and the standards applicable to financial
audits contained in 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, 1998 and 1997, 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 our report dated January 15, 1999, on our consideration of
the Partnership's internal control over financial reporting and
our tests of its compliance with certain provisions of laws,
regulations, contracts, and grants.
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.
CERTIFIED PUBLIC ACCOUNTIANTS
Greensboro, North Carolina January 15, 1999
Page 1
Dauby O'Connor & Zaleski
A Limited Liability Company
Certified Public Accountants
Independent Auditors' Report
To the Partners of
Sara Pepper Associates
(A Maine Limited Partnership)
We have audited the accompanying balance sheet of Sara Pepper
Associates (a Maine Limited Partnership) as of December 31, 1998,
and the related statements of operations, changes in partners'
equity (deficit), and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these
financial statements based on our audit. The 1997 financial
statements were audited by other auditors whose report dated
January 18, 1998, 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 Sara
Pepper Associates as of December 31, 1998, and the results of its
operations and cash flows for the year then ended in conformity
with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also
issued a report dated March 5, 1999, on our consideration of the
Partnership's internal controls and a report dated March 5, 1999,
on its compliance with laws and regulations.
698 Pro Med Lane
Carmel, Indiana 46032
317-848-5700
Fax: 317-815-6140
Sara Pepper Associates
Page Two
The accompanying supplementary information 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 financial statements taken as a whole.
March 5, 1999
Dauby O'Connor & Zaleski, LLC
Carmel, Indiana
Certified Public Accountants
2
GLOVER & GLOVER
206 WILSON PIKE CIRCLE BRENTWOOD,
TENNESSEE 37027
(615) 370-0341
FAX 370-0342
MEMBERS
M. Lawrence Glover, CPA
Bryon L.Glvoer, CPA
AMMUCAN INSTITUTE OF CMTWW KMUC ACCOUNTANTTS
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, 1998 and 1997, and the related
statements of operations, partners' equity (deficit) and cash
flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility
is to express an opinion on these financial statements based on
our 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, 1998 and 1997, and the
results of Its operations, the changes In partners' equity
(deficit) 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.
In accordance with Government Auditing Standards, we have also
issued a report on our consideration of the entity's internal
control and a report on compliance with laws and regulations
applicable to the financial statements.
March 15, 1999
4
Dauby O'Connor & Zaleski
A Limited Liability Company
Certified Public Accountants
Independent Auditors' Report
To the Partners of
Silver Pines Associates
(A Maine Limited Partnership)
We have audited the accompanying balance sheet of Silver Pines
Associates (a Maine Limited Partnership) as of December 31, 1998,
and the related statements of operations, changes in partners'
equity (deficit), and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these
financial statements based on our audit. The 1997 financial
statements were audited by other auditors whose report dated
January 22, 1998, 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 Silver Pines Associates as of December 31, 1998, and the
results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also
issued a report dated March 5, 1999, on our consideration of the
Partnership's internal controls and a report dated March 5, 1999,
on its compliance with laws and regulations.
698 Pro Med Lane
Carmel, Indiana 46032
317-848-5700
Fax: 317-815-6140
Silver Pines Associates
Page Two
The accompanying supplementary information 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 financial statements taken as
a whole.
March 5, 1999
Dauby O'Connor & Zaleski, LLC
Carmel, Indiana
Certified Public Accountants
2
GLOVER & GLOVER
CERTIFIED PUBLIC ACCOUNTANTS
206 WILSON P11M CIRCLE BRENTWOOD, TENNESSEE 37027
(615) 370-0341
FAX 370-0342
M. Lawrence Glover, CPA
Bryon L. Glover, CPA
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT
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, 1998 and 1997, and the related statements of operations,
partners' equity (deficit) and cash flows for the years then ended. These
financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our 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, 1998 and 1997, and the results of its operations, the changes
In partners' equity (deficit) 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.
In accordance with Government Auditing Standards, we have also issued a
report on our consideration of the entity's internal control and a report
on compliance with laws and regulations applicable to the financial
statements.
March 15, 1999
4
GLOVER & GLOVER
CERTIFIED PUBLIC ACCOUNTANTS
206 WILSON P11M CIRCLE BRENTWOOD, TENNESSEE 37027
(615) 370-0341
FAX 370-0342
M. Lawrence Glover, CPA
Bryon L. Glover, CPA
INDEPENDENT AUDITORS' REPORT
To the Partners
Warren Properties, Ltd.
We have audited the accompanying balance sheets of Warren Properties, Ltd.
(a Tennessee limited partnership), RHS Project No.: 48 089 621237357, as of
December 31, 1998 and 1997, and the related statements of operations,
partners' equity (deficit) and cash flows for the years then ended. These
financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our 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, 1998 and 1997, and the results of its operations, the
changes in partners' equity (deficit) 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.
In accordance with Government Auditing Standards, we have also issued a
report on our consideration of the entity's internal control and a report
on compliance with laws and regulations applicable to the financial
statements.
March 15, 1999
4
Bernard, Johnson & Company, RC.
Certified Public Accountants and Business Advisors
INDEPENDENT AUDITORS'REPORT
To the Partners of
Washington Mews Limited Partnership
We have audited the accompanying balance sheets of Washington Mews
Limited Partnership as of December 31, 1998 and 1997, and the
related statements of income (loss) and partners' equity and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
Washington Mews Limited Partnership as of December 31, 1998 and
1997, 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 conducted for the purpose of forming an opinion on
the basic financial statements taken as a whole. The supporting
schedules included in the Supplemental Information are presented
for the purpose of additional analysis and is not a required part
of the basic financial statements of Washington Mews Limited
Partnership. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements
and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
Topsfield, Massachusetts
February 26, 1999
-1-
15 Main Street, Topsfield, MA 01983-1842 , Tel. (978) 887-2220 -
Fax (978) 887-5443
30 Maplewood Avenue, Suite 213, Portsmouth, NH 03801-3732 - Tel.
(603) 436-8110 - Fax (603) 427-0888
Dauby O'Connor & Zaleski
A Limited Liability Company
Certified Public Accountants
Independent Auditors' Report
To the Partners of
Wilder Associates
(A Main Limited Partnership)
We have audited the accompanying balance sheet of Wilder
Associates (a Maine Limited Partnership) as of December 31, 1998,
and the related statements of operations, changes in partners'
equity (deficit), and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these
financial statements based on our audit. The 1997 financial
statements were audited by other auditors whose report dated
January 24, 1998, 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 included 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
represent fairly, in all material respects, the financial position
of Wilder Associates as of December 31, 1998, and the results of
its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also
issued a report dated March 5, 1999, on our consideration of the
partnership's internal controls and a report dated March 5, 1999,
on its compliance with laws and regulations.
Wilder Associates
Page Two
The accompanying supplementary information 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 financial statements taken as
a whole.
March 5, 1999
Dauby O'Connor & Zaleski, LLC
Carmel, Indiana
Certified Public Accountants
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
February 23, 1998
To the Partners
Brookhollow Manor, Ltd.
We have audited the accompanying balance sheet of Brookhollow
Manor, Ltd. as of December 31, 1997 and 1996, 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, 1997 and
1996, 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 February 23, 1998, on our consideration
of Brookhollow Manor, Ltd.'s internal control and on its
compliance with laws and regulations.
Marshall & Shafer, P.C.
Houston, Texas
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,
1997 and 1996, 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, 1997 and
1996, 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 13, 1998
Members American Institute Of Certified Public Accountants
Missouri Society Of Certified Public Accountants
Hunter & Associates, P.A.
4209 Baymeadows Road, Suite 2
Jacksonville, Florida 32217
Phone: (904) 731-9222
Fax: (904) 731-0352
May 19, 1998
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, 1997 and 1996, 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, 1997 and 1996, and the results of
its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
Certified Public Accountants
Kenneth C. Boothe & Company, P.C.
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 Limited Partnership
dba Southview Place Apts.
We have audited the accompanying balance sheets of Lovington
Housing Associates Limited Partnership as of December 31, 1997 and
1996, 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 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 Limited Partnership as of December
31, 1997 and 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 20, 1998, on our consideration of Lovington
Housing Associates Limited Partnership's internal control
structure and a report dated January 20, 1998, 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 19 through 20 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.
KENNETH C. BOOTHE AND COMPANY, P.C.
January 20, 1998
Big Spring, Texas
Coopers & Lybrand L.L.P.
a professional services firm
Report of Independent Accountants
To the Partners
Malone Housing Redevelopment Company
We have audited the accompanying statements of financial position
of Malone Housing Redevelopment Company (A Limited Partnership),
as of December 31, 1997 and 1996, 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 Malone
Housing Redevelopment Company as of December 31, 1997 and 1996,
and the results of its operations and its cash flows for the years
then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have also
issued our report dated January 19, 1998 on its compliance with
laws and regulations.
Rochester, New York
January 19, 1998
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, 1997 and 1996, 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,
1997 and 1996, and the results of its operations and its cash
flows for the years then ended in conformity with generally
accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The 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 20, 1998
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, 1997 and 1996, 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, 1997 and 1996, and the
results of its operations and its cash flows for the years then
ended in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The 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 15, 1998
Bernard Robinson & Company, L.L.P.
Certified Public Accountants since 1947
Mailing Address:
P.O. Box 19608
Greensboro, NC 27419-9608
Fax 336-547-0840
Offices:
109 Muirs Chapel Road
Greensboro, NC 24710
Telephone 336-294-4494
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, 1997 and 1996, 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, 1997 and 1996, and
the results of its operations and its cash flows for the years
then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have also
issued a report dated January 22, 1998 on our consideration of the
Partnership's internal control over financial reporting and our
tests of its compliance with certain provisions of laws,
regulations, contracts, and grants.
"Celebrating 50 Years of Excellence"
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.
Bernard Roninson & Company, LLP
Certified Public Accountants
Greensboro, North Carolina
January 22, 1998
Page 2
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, 1997 and 1996, 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, 1997 and 1996, and the
results of its operations, the changes in partners' capital, and
cash flows for the years then ended in conformity with generally
accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental
information on pages 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 25, 1998
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, 1997 and 1996, 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, 1997 and 1996, and the results
of its operations, the changes in partners' capital, and cash
flows for the years then ended in conformity with generally
accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental
information on pages 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 25, 1998
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, 1997 and 1996, 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, 1997 and 1996, and the results
of its operations, the changes in partners' capital, and cash
flows for the years then ended in conformity with generally
accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental
information on pages 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 25, 1998
<PAGE>
American Affordable Housing II Limited Partnership
BALANCE SHEETS
March 31,
<TABLE>
1999 1998
------------- ----------------
<S> <C> <C>
ASSETS
INVESTMENTS IN OPERATING
LIMITED PARTNERSHIPS
(notes A and D) $ 2,544,050 $ 2,962,644
OTHER ASSETS
Cash 9,857 12,456
Note receivable (note
C) 40,000 40,000
Other assets 8,849 7,849
------------- ---------------
$ 2,602,756 $ 3,022,949
============= ===============
LIABILITIES AND PARTNERS'
DEFICIT
LIABILITIES
Due to affiliates
(note B) $ 4,482,468 $ 4,008,555
Accounts payable 3,500 3,500
------------- ---------------
4,485,968 4,012,055
------------- ---------------
PARTNERS' DEFICIT
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 (1,634,474) (749,309)
General partners (248,738) (239,797)
------------- ---------------
(1,883,212) (989,106)
------------- ---------------
$ 2,602,756 $ 3,022,949
============= ===============
</TABLE>
See notes to financial statements
F-5
<PAGE>
American Affordable Housing II Limited Partnership
STATEMENTS OF OPERATIONS
Year ended March 31,
<TABLE>
1999
1998 1997
--------------- ------
- --------- ---------------
<S> <C> <C>
<C>
Income
Interest income $ 203 $
331 $ 743
Miscellaneous income 7,894
6,355 1,470
--------------- ------
- --------- ---------------
8,097
6,686 2,213
--------------- ------
- --------- ---------------
Share of losses from operating limited
partnerships (note A) (418,312)
(383,653) (795,677)
--------------- ------
- --------- ---------------
Expenses
Professional fees 47,488
31,208 36,450
General and administrative expense
(note B) 15,572
20,371 14,182
Asset management fee (note B) 420,831
427,161 426,748
--------------- ------
- --------- ---------------
483,891
478,740 477,380
--------------- ------
- --------- ---------------
NET LOSS $ (894,106) $
(855,707) $ (1,270,844)
===============
=============== ===============
Net loss allocated to general partners $ (8,941) $
(8,557) $ (12,708)
===============
=============== ===============
Net loss allocated to limited partners $ (885,165) $
(847,150) $ (1,258,136)
===============
=============== ===============
Net loss per unit of limited
partnership interest $ (33.40) $
(31.97) $ (47.48)
===============
=============== ===============
</TABLE>
See notes to financial statements
F-6
<PAGE>
American Affordable Housing II Limited Partnership
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
Years ended March 31, 1999, 1998 and 1997
<TABLE>
General
Limited partners
partners Total
--------------- ------
- --------- ---------------
<S> <C> <C>
<C>
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)
Net loss (847,150)
(8,557) (855,707)
--------------- ------
- --------- ---------------
Partners' deficit, March 31, 1998 (749,309)
(239,797) (989,106)
Net loss (885,165)
(8,941) (894,106)
--------------- ------
- --------- ---------------
Partners' deficit, March 31, 1999 $ (1,634,474) $
(248,738) $ (1,883,212)
===============
=============== ===============
</TABLE>
See notes to financial statements
F-7
<PAGE>
American Affordable Housing II Limited Partnership
STATEMENTS OF CASH FLOWS
Year ended March 31,
<TABLE>
1999
1998 1997
--------------- ------
- --------- ---------------
<S> <C> <C>
<C>
Cash flows from operating activities
Net loss $ (894,106) $
(855,707) $ (1,270,844)
Adjustments to reconcile net loss
to net cash used in operating
activities
Cash flows from operating limited
partnerships 282
846 10,351
Share of losses from operating
limited partnerships 418,312
383,653 795,677
Increase in other assets (1,000)
- - -
Increase in due to affiliates 473,913
469,374 405,287
--------------- ------
- --------- ---------------
Net cash used in operating
activities (2,599)
(1,834) (59,529)
--------------- ------
- --------- ---------------
Cash flows from investing activities
Repayment by an operating limited
partnership -
- - 38,875
--------------- ------
- --------- ---------------
Net cash provided by investing
activities -
- - 38,875
--------------- ------
- --------- ---------------
NET DECREASE IN CASH (2,599)
(1,834) (20,654)
Cash, beginning 12,456
14,290 34,944
--------------- ------
- --------- ---------------
Cash, end $ 9,857 $
12,456 $ 14,290
--------------- ------
- --------- ---------------
</TABLE>
See notes to financial statements
F-8
<PAGE>
American Affordable Housing II Limited Partnership
NOTES TO FINANCIAL STATEMENTS
March 31, 1999, 1998 and 1997
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 distributions) 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.
F-9
<PAGE>
American Affordable Housing II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
March 31, 1999, 1998 and 1997
NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
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
limited partnership's results of operations and for any
distributions received or accrued. However, the partnership
recognizes an individual operating limited partnership's
losses only to the extent that the partnership's share of
losses of the operating limited partnership does not exceed
the carrying amount of its investment. Unrecognized losses
will be suspended and offset against the future individual
operating limited partnership's income.
A loss in value of an investment in an operating limited
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
partnership and the estimated residual value of the
investment.
Capital contributions to operating limited partnerships are
adjusted by tax credit adjusters. Tax credit adjusters are
defined as adjustments to operating limited partnership
capital contributions due to reductions in actual tax
credits from those originally projected. The partnership
records tax credit adjusters as a reduction in investment in
operating limited partnerships and capital contributions
payable.
The operating limited partnerships maintain their financial
statements based on a calendar year and the partnership
utilizes a March 31 year-end. The partnership records
losses and income from the operating limited partnerships on
a calendar year basis which is not materially different from
losses and income generated if the operating limited
partnerships utilized a March 31 year-end.
The partnership records capital contributions payable to the
operating limited partnerships once there is a binding
obligation to fund a specified amount. The operating
limited partnerships record capital contributions from the
partnership when received.
The partnership records acquisition costs as an increase in
its investment in operating limited partnerships. Certain
operating limited partnerships have not recorded the
acquisition costs as a capital contribution from the
partnership. These differences are shown as reconciling
items in note D.
F-10
<PAGE>
American Affordable Housing II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
March 31, 1999, 1998 and 1997
NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
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, 1999,
26,501 units were outstanding.
Use of Estimates
----------------
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could
differ from those estimates.
Adoption of Accounting Standards
--------------------------------
On March 31, 1997, the partnership adopted 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 form
within the financial statements of pertinent rights and
privileges of the various securities outstanding. The
implementation of these standards has not materially
affected the partnership's financial statements.
In June 1997, the Financial Accounting Standards Board
issued SFAS No. 130, "Reporting Comprehensive Income," and
SFAS No. 131, "Disclosures about Segments of an Enterprise
and Related Information." In February 1998, the Financial
Accounting Standards Board issued SFAS No. 132, "Employees'
Disclosures about Pensions and Other Postretirement
Benefits." SFAS No. 130 is effective for years beginning
after December 15, 1997. SFAS No. 131 and No. 132 are
effective for years beginning after December 31, 1997, and
early adoption is encouraged.
F-11
<PAGE>
American Affordable Housing II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
March 31, 1999, 1998 and 1997
NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
Adoption of Accounting Standards (Continued)
--------------------------------
The partnership does not have any items of other
comprehensive income, does not have other segments of its
business on which to report, and does not have any pensions
or other postretirement benefits. Consequently, these
pronouncements are expected to have no effect on the
partnership's financial statements.
In June 1998, the FASB issued SFAS No. 133, *Accounting for
Derivative Instruments and Hedging Activities.* In October
1998, the FASB issued SFAS No. 134, *Accounting for
Mortgage-backed Securities Retained after the Securitization
of Mortgage Loans Held for Sale by a Mortgage Banking
Enterprise.* In February 1999, the FASB issued SFAS No.
135, *Rescission of FASB Statement 75 and Technical
Corrections.* SFAS No. 133 is effective for all fiscal
quarters of years beginning after June 15, 1999; SFAS No.
134 is effective for the first fiscal quarter beginning
after December 31, 1998; and SFAS No. 135 is effective for
years ending after February 15, 1999. Early adoption is
encouraged for SFAS Nos. 133, 134 and 135.
The partnership does not have any derivative or hedging
activities and does not have any mortgage-backed securities.
FASB Statement 75, *Deferral of the Effective Date of
Certain Accounting Requirements for Pension Plans of State
and Local Governmental Units,* does not apply to the
partnership. Consequently, these pronouncements are
expected to have no effect on the partnership*s financial
statements.
NOTE B - RELATED PARTY TRANSACTIONS
During the years ended March 31, 1999, 1998 and 1997, the
partnership entered into several transactions with various
affiliates of the general partners, including Boston Capital
Partners, Inc., Boston Capital Holdings Limited Partnership,
and Boston Capital Asset Management Limited Partnership, as
follows:
General and administrative expenses of $1,973, $2,441 and
$2,303, incurred by Boston Capital Asset Management Limited
Partnership, Boston Capital Holdings Limited Partnership,
and Boston Capital Partners, Inc. were charged to operations
during the years ended March 31, 1999, 1998 and 1997,
respectively. At March 31, 1999 and 1998, the unpaid
general and administrative expenses totaled $167,779 and
$130,827, 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 upon
demand. The amount still outstanding at the end of fiscal
years 1999 and 1998 was $40,000.
An annual asset management fee based on 0.5% 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 partnerships
and 99% of the permanent financing at the operating limited
partnership level. At March 31, 1999 and 1998, the unpaid
asset management fees totaled $4,274,689 and $3,837,728,
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,
1999, 1998 and 1997 were $436,961, $436,961 and $441,858,
respectively, which are netted with reporting fees paid by
the operating limited partnerships. During the years ended
March 31, 1999, 1998 and 1997, the amount of reporting fees
paid by the operating limited partnerships was $16,130,
$9,800 and $15,110, respectively.
F-12
<PAGE>
American Affordable Housing II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
March 31, 1999, 1998 and 1997
NOTE C - NOTE RECEIVABLE
Note receivable is an advance made to an operating limited
partnership during the fiscal year ended March 31, 1995.
The note, secured by a second mortgage on the property owned
by the operating limited partnership, bears interest at 6%
per annum and was due December 31, 1997. The carrying
amount of the note receivable approximates fair value as of
March 31, 1999 and 1998.
NOTE D - INVESTMENTS IN OPERATING LIMITED PARTNERSHIPS
At March 31, 1999 and 1998, the partnership has limited
partnership equity interests in 50 operating limited
partnerships which own apartment complexes.
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, 1999 and
1998. The partnership has no further obligation to make any
additional contributions.
F-13
<PAGE>
American Affordable Housing II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
March 31, 1999, 1998 and 1997
NOTE D - INVESTMENTS IN OPERATING LIMITED PARTNERSHIPS
(Continued)
The partnership's investments in operating limited
partnerships at March 31, 1999 and 1998 are summarized as
follows:
<TABLE>
1999
1998
--------------- --
- -------------
<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 (19,353,187)
(18,934,875)
Cumulative distributions from
operating limited partnerships (69,133)
(68,851)
--------------- --
- -------------
Investment in Operating Limited
Partnerships per balance sheet 2,544,050
2,962,644
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) (8,808,750)
(7,141,631)
Other adjustments 61,361
(623,057)
--------------- --
- -------------
Equity per operating limited
partnerships' combined financial
statements $ (4,830,467) $
(3,429,172)
===============
===============
</TABLE>
F-14
<PAGE>
American Affordable Housing II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
March 31, 1999, 1998 and 1997
NOTE D - INVESTMENTS IN OPERATING LIMITED PARTNERSHIPS
(Continued)
The combined summarized balance sheets of the operating
limited partnerships at December 31, 1998 and 1997 are as
follows:
COMBINED SUMMARIZED BALANCE SHEETS
<TABLE>
1998
1997
--------------- --
- -------------
<S> <C>
<C>
ASSETS
Buildings and improvements, net of
accumulated depreciation of
$30,999,473 and $28,427,132 $ 59,634,159 $
62,399,625
Land 4,288,727
4,407,517
Other assets 6,127,631
5,761,425
--------------- --
- -------------
$ 70,050,517 $
72,568,567
===============
===============
LIABILITIES AND PARTNERS' DEFICIT
Mortgages payable $ 67,945,260 $
69,854,741
Accounts payable and accrued expenses 3,373,939
2,828,164
Other liabilities 2,640,381
2,406,012
--------------- --
- -------------
73,959,580
75,088,917
--------------- --
- -------------
PARTNERS' DEFICIT
American Affordable Housing II
Limited Partnership (4,830,467)
(3,429,172)
Other partners 921,404
908,822
--------------- --
- -------------
(3,909,063)
(2,520,350)
--------------- --
- -------------
$ 70,050,517 $
72,568,567
===============
===============
</TABLE>
F-15
<PAGE>
American Affordable Housing II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
March 31, 1999, 1998 and 1997
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, 1998, 1997 and 1996 are as follows:
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
<TABLE>
1998
1997 1996
--------------- ----
- ----------- ---------------
<S> <C> <C>
<C>
Revenue
Rental $ 10,590,206 $
10,648,605 $ 10,513,559
Interest and other 439,999
430,683 356,532
--------------- ----
- ----------- ---------------
11,030,205
11,079,288 10,870,091
--------------- ----
- ----------- ---------------
Expenses
Interest 3,779,559
3,924,370 3,937,805
Depreciation and amortization 2,892,193
2,886,227 2,998,290
Taxes and insurance 1,313,538
1,387,190 1,420,744
Repairs and maintenance 1,628,137
1,754,632 1,595,969
Operating expenses 3,543,394
3,422,817 3,929,125
--------------- ----
- ----------- ---------------
13,156,821
13,375,236 13,881,933
--------------- ----
- ----------- ---------------
NET LOSS $ (2,126,616) $
(2,295,948) $ (3,011,842)
===============
=============== ===============
Net loss allocated to American
Affordable Housing II Limited
Partnership * $ (2,085,431) $
(2,158,133) $ (2,929,058)
===============
=============== ===============
Net loss allocated to other
partners $ (41,185) $
(137,815) $ (82,784)
===============
=============== ===============
</TABLE>
* Amount includes $1,667,119, $1,774,480 and $2,133,381
for the years ended December 31, 1998, 1997 and 1996,
respectively, of loss not recognized under the equity
method of accounting as described in note A.
F-16
<PAGE>
American Affordable Housing II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
March 31, 1999, 1998 and 1997
NOTE E - RECONCILIATION OF FINANCIAL STATEMENT NET LOSS TO TAX
RETURN
The partnership's net loss for financial reporting and tax
return purposes is reconciled as follows:
<TABLE>
Year
ended March 31,
-----------------------
- ------------------------------
1999
1998 1997
--------------- ----
- ----------- ---------------
<S> <C> <C>
<C>
Net loss for financial reporting
purposes $ (894,106) $
(855,707) $ (1,270,844)
Operating limited partnership rents
received in advance (2,572)
4,359 1,993
Related party expenditures 58,054
72,243 19,424
Asset management fee not deductible
for tax purposes until paid 436,961
436,961 441,858
Excess of tax depreciation over book
depreciation on operating limited
partnership assets (406,024)
(423,900) (394,135)
Difference due to fiscal year for book
purposes and calendar year for tax
purposes 3,150
149,012 142
Operating limited partnership net loss
not allowed for financial
reporting under equity method (1,667,119)
(1,774,480) (2,133,381)
Other (512,660)
(5,996) 716,565
--------------- ----
- ----------- ---------------
Net loss for income tax purposes $ (2,984,316) $
(2,397,508) $ (2,618,378)
===============
=============== ===============
</TABLE>
F-17
<PAGE>
American Affordable Housing II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
March 31, 1999, 1998 and 1997
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 is 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, 1999 and 1998, the differences are as follows:
<TABLE>
1999
1998
---------------
- ---------------
<S> <C>
<C>
Investment in operating limited
partnerships - tax basis $ (7,432,058)
$ (4,488,085)
Add back losses not recognized under
the equity method 8,808,750
7,141,631
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 1,645,117
786,857
---------------
- ---------------
Investment in operating limited
partnerships - as reported $ 2,544,050
$ 2,962,644
===============
===============
</TABLE>
F-18
LIBERTY CENTER, LTD.
Financial Statements
December 31, 1998 and 1997
Hunter & Associates, P.A.
4209 Baymeadows Road, Suite 2
Jacksonville, Florida 32217
Phone: (904) 731-9222
Fax: (904) 731-0352
June 25, 1999
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, 1998 and 1997, 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 1998 and 1997, and the
results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting
principles.
Certified Public Accountants
Liberty Center, Ltd.
Balance Sheets
December 31, 1998 and 1997
Assets
1998 1997
Current assets: ---- ----
Cash and cash equivalents $118,339
$106,173
Accounts Receivable 10,253 16,680
--------- ---------
Total Current Assets 128,592 122,853
--------- ---------
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 (641,850) (579,418)
--------- ---------
2,049,329 2,111,761
--------- ---------
Other Assets 0 522
--------- ---------
Total Assets: 2,177,921 $2,235,136
========= =========
See Independent Auditors' Report and Notes to Financial
Statements.
Liberty Center, Ltd.
Balance Sheets
December 31, 1998 and 1997
Liabilities and Partners' Equity
1998 1997
------- -------
Current Liabilities
Current portion of notes payable $ 396,574 $ 204,246
Accrued interest, due within one year 2,903 3,948
Accounts payable and accrued expenses 53,915 43,493
--------- ---------
Total current liabilities 453,392 251,687
--------- ---------
Long-Term Liabilities
Notes payable - net of current portion 719,899 972,227
Accrued interest, due after one year 553,538 488,747
Advances from affiliates 32,716 92,491
Tenant security deposits 3,966 4,999
--------- ---------
Total long-term liabilities 1,310,119 1,558,464
--------- ---------
Total Liabilities 1,763,511 1,810,151
--------- ---------
Partners' Equity
General partner (13,161) (13,056)
Limited partner 427,572 438,041
--------- ---------
Total partners' equity 414,410 424,985
--------- ---------
Total liabilities and partners'
equity $2,177,921 $2,235,136
========= =========
See Independent Auditors' Report and Notes to Financial
Statements.
Liberty Center, Ltd.
Statements of Operation
For the Years ended December 31, 1998 and 1997
1998 1997
Rental revenues $473,447 $466,947
Interest and dividends 1,647 1,902
------- -------
475,094 468,849
------- -------
Expenses
Depreciation and amortization 62,432 62,459
General and administrative 37,253 35,937
Insurance 45,558 45,375
Interest 98,923 118,760
Legal and professional services 16,533 10,956
Maintenance and repairs 26,999 24,354
Management fees 21,600 20,020
Salaries - operations 44,017 69,372
Security - outside services 49,886 33,237
Taxes 39,322 22,985
Utilities 43,146 37,671
------- -------
Total expenses 485,669 481,126
------- -------
Net income (loss) from operations $ (10,575) $ (12,277)
======= =======
See Independent Auditors' Report and Notes to Financial
Statements.
Liberty Center, Ltd.
Statement of Partners' Equity
For the Years ended December 31, 1998 and 1997
Investor
General Limited
Partner Partner
Total
------- --------
- -----
Partners' equity December 31, 1996 ($12,933) $450,195
$437,262
Loss (loss) ($123) $(12,154)
$(12,277)
Distributions $0 $0
$0
Partners' equity December 31, 1997 ($13,056) $438,041
$424,985
Loss (loss) (106) (10,469)
($10,575)
Distributions 0 0
$0
- ---------------------------------
Partners' equity December 31, 1998 ($13,161) $427,572
$414,410
=================================
See Independent Auditors' Report and Notes to Financial
Statements.
Liberty Center, Ltd.
Statements of Cash Flows
For the Years ended December 31, 1998 and 1997
1998
1997
Cash flow from operating activities ----
- ----
Net income (loss) $ (10,575) $
(12,277)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation 62,432
62,459
Changes in asset and liabilities:
Decrease (increase) in tenant receivables 6,427
(2,164)
Decrease (increase) in prepaid expenses
and other assets 522
5,878
Increase (decrease) in accounts payable
and accrued expenses 9,377
(11,032)
Increase (decrease) in net security
deposits (1,033)
3,627
Net cash (used for) provided -------
- -------
by operations 67,150
46,491
-------
- -------
Cash flows from investing activities
Increase in accrued interest 64,791
64,791
Net cash provided by investing -------
- -------
activities 64,791
64,791
-------
- -------
Cash flows from financing activities
Repayment of long-term debt (60,000)
(100,906)
Increase in advances from affiliates (59,775)
(3,787)
Net cash used for financing -------
- -------
activities (119,775)
(104,693)
-------
- -------
Net decrease in cash and cash equivalents 12,166
6,589
Cash and cash equivalents at beginning of year 106,173
99,584
-------
- -------
Cash and cash equivalents at end of year $ 118,339 $
106,173
=======
=======
Liberty Center, Ltd.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
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.
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 $101,225 and $99,605 in money market deposits (Note C) at
December 31, 1998 and 1997, 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.
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 $101,225 and $99,605 at
December 31, 1998 and December 31, 1997.
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, 1998,
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, 1998.
The following is a schedule of accrued interest payable:
December 31
1998
1997
----
- ----
First mortgage payable (Note F) 2,903 $
3,948
Second mortgage payable (Note F) 553,538
488,747
-------
- -------
556,441
492,695
Less amount due within one year (2,903)
(3,948)
-------
- -------
$553,538
$488,747
=======
=======
NOTE F - NOTES PAYABLE
------------- December
31
The following is a schedule of notes payable:
- -----------
1998
1997
Mortgage note payable to a bank monthly at ----
- ----
$18,710 including interest at 8.5% until
August, 1999, secured by first mortgage on
apartment project. $ 396,574 $
456,574
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
---------
- ---------
$1,116,473
$1,176,473
Less amount due in one year 396,574
(204,246)
---------
- ---------
$ 719,899 $
972,227
=========
=========
Aggregate maturities of long-term debt for the next five year are
estimated as
follows:
1999 $ 396,574
Later years 719,899
---------
$1,116,473
=========
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, 1998 and 1997, $21,600 and $20,200 respectively.
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 1, 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 - REIMBURSEMENT FOR OPERATING PERSONNEL
---------------------------------
In 1998 the partnership was reimbursed for services provided to
an affiliate. The services provided were mainly leasing, tenant
assistance, record keeping, and security services. The
reimbursement was recorded as a reduction in the salary expenses
($57,898).
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
REPORT ON AUDITS OF FINANCIAL STATEMENTS
AND ADDITIONAL INFORMATION
DECEMBER 31, 1998 AND 1997
C O N T E N T S
PAGE
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS
BALANCE SHEETS 2-3
STATEMENT OF OPERATIONS 4
STATEMENT OF PARTNERS' EQUITY (DEFICIT) 5
STATEMENT OF CASH FLOWS 6
NOTES TO FINANCIAL STATEMENTS 7-16
SUPPLEMENTAL INFORMATION
SCHEDULES OF RENTING, ADMINISTRATIVE,
OPERATING, MAINTENANCE, TAXES AND
INSURANCE, AND INTEREST EXPENSE 17-18
Robert Ercolini & Company LLP
Certified Public Accountants Business ConsultantsINDEPENDENT
AUIDITOR'S REPORTTo the Partners ofRiverplace Apartments Limited
PartnershipHolyoke, Massachusetts
We have audited the accompanying balance sheet of Riverplace
Apartments Limited Partnership as of December 31, 1998 and 1997,
and the related statements of operations, partners' capital, and
cash flows for the year then ended. These financial statements are
the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial
statements based on our audit
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assess' 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, 1998
and 1997, and the results of its operations, changes in partners'
capital, and its cash flows for the year then ended in conformity
with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole, The additional information
related to the 1997 financial statements included in this report
(shown 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 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 25, 1999
Fifty Five Summer Street - BOSTON, MA 021 10-100-1 - TELEPHONE 617-482-
5511 - FAX 617.426-5252
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
BALANCE SHEETS
DECEMBER 31, 1998 AND 1997
ASSETS
1997 1996
CURRENT ASSET ---- ----
Cash 46,385 $ 1,471
Accounts Receivable - Tenants 10,481 9,438
Accounts Receivable Subsidy 36,720 30,848
Receivables - Affiliate 4,188 -
Grants receiveable 39,860 -
Prepaid Expenses 6,838 5,183
--------- ---------
Total Current Assets 144,472 46,940
--------- ---------
Tenants' Security Deposits 13,850 13,461
RESTRICTED DEPOSITS AND FUNDED RESERVES
Reserve for Replacements 24,307 2,802
--------- ---------
RENTAL PROPERTY - AT COST
Land 175,260 175,260
Buildings and Improvements 6,604,141 6,604,141
Personal Property 190,497 161,963
--------- ---------
6,969,898 6,941,364
Less Accumulated Depreciation (1,860,055) (1,663,878)
--------- ---------
5,109,843 5,277,486
--------- ---------
Deferred financing costs, net of accumulated
amortization of $30,296 and $27,147 40,282 43,431
--------- ---------
$5,332,754 $5,384,120
========= =========
See notes to financial statements.
2
LIABILITIES AND PARTNERS' EQUITY
1998 1997
CURRENT LIABILITIES -------- -------
Current Portion of Mortgage Note Payable $ 63,355 $ 57,350
Accounts Payable 60,044 12,064
Payables Affiliates 7,005 18,048
Accrued Mortgage Interest Payable 34,108 34,603
Accrued Expenses Other 67,312 66,753
Prepaid Rents 1,281 5,222
--------- ---------
Total Current Liabilities 233,105 194,040
--------- ---------
DEPOSIT LIABILITY
Tenants' Security Deposits 13,756 12,881
--------- ---------
LONG-TERM LIABILITIES
Mortgage Note Payable, 4,029,564 4,093,924
less current portion
Accrued fees payable - affiliate 49,500 44,000
--------- ---------
4,079,064 4,137,924
--------- ---------
Total Liabilities 4,325,925 4,344,845
PARTNERS' CAPITAL 1,006,829 1,039,275
--------- ---------
$ 5,332,754 $5,384,120
========= =========
See notes to financial statements. 3
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
STATEMENT OF OPERATIONS
DECEMBER 31, 1998 AND 1997
1998 1997
Revenue ---- ----
Rents $ 1,112,011 $ 1,209,638
Less Vacancy Losses 20,037 26,660
--------- ---------
1,091,974 1,182,978
Interest Income 923 306
Other Income 6,633 4,405
--------- ---------
1,099,530 1,187,689
--------- ---------
Expenses
Administrative 82,986 89,041
Utilities 167,079 161,180
Management Fee 65,805 71,119
Operating and Maintenance 120,961 127,046
Taxes 24,364 26,644
Insurance 53,543 99,950
Interest on Mortgage 412,412 419,648
Depreciation and Amortization 199,326 196,035
--------- ---------
1,126,476 1,190,663
--------- ---------
LOSS BEFORE MORTGAGE ENTITY EXPENSE (26,946) (2,974)
MORTGAGE ENTITY EXPENSE:
Partnership Reporting Fee Affiliate (5,500) (5,500)
NET LOSS $ (32,446) $ (8,474)
========= =========
See notes to financial statements
4
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
STATEMENT OF PARTNERS' EQUITY
DECEMBER 31, 1998 AND 1997
General Limited
Partner Partner Total
------- -------- -------
Balance (deficiency)
January 1, 1997 $ (123,211)$ 1,170,960 $ 1,047,749
Net Loss for Year (85) (8,389) (8,474)
Balance (deficiency)
December 31, 1997 ( 123,296) 1,162,571 1,039,275
Net Loss for Year ( 324) ( 32,122) ( 32,446)
--------- ------- ---------
Balance (deficiency)
December 31, 1998 $ (123,620)$ 1,130,449 $ 1,006,829
========== ========= =========
Percentage Interest at
December 31, 1998 and 1997 1% 99% 100%
==== ==== ====
See notes to financial statements
5
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1998 AND 1997
1998 1997
Cash Flow From Operating Activities ---- ----
Net Loss $ (32,446) $ (8,474)
Adjustments to Reconcile Net Loss
to Net Cash Provided (Used) By
Operating Activities
Depreciation 196,177 192,886
Amortization 3,149 3,149
Mortgage Entity Expense 5,500 5,500
Changes in Assets and Liabilities:
(Increase) Decrease in Tenants' Rents
Receivables (1,043) ( 2,287)
(Increase) Decrease in Tenants' Rent
Subsidies Receivable (5,872) ( 7,223)
Increase in Receivabes-Affiliates (4,188) -
Increase in Grants Receivable (39,860) -
Decrease in Prepaid Expenses (1,655) 15,530
Decrease in Accounts Payable 47,980 (21,204)
Increase (Decrease) in Payables/Affiliates (11,043) (89,632)
Decrease in Accrued Mortgage Interest Payable (495) (440)
Decrease in Accrued Expenses Other 559 (7,981)
Increase in Prepaid Rents (3,941) 5,222
Increase (Decrease) in Tenants' Security (389) (776)
Deposits
Increase in Tenants' Security Deposit
Liabilities 875 133
Net Cash Provided (Used) by ------- -------
Operating Activities 153,308 84,403
------- -------
Cash Flows From Investing Activities
Purchase of Rental Property (28,534) ( 28,386)
Reserve for Replacements Funded,
Including Interest Earned (21,505) ( 21,158)
Reserve for Replacement Releases - 18,551
------- -------
Net Cash Used In
Investing Activities (50,039) (30,993)
------- -------
Cash Flows From Financing Activities
Payment on Mortgage Note Payable (58,355) (52,699)
------- -------
Net Increase (Decrease) in Cash 44,914 711
Cash, Beginning of Year 1,471 760
------- -------
Cash, End of Year 46,385 $ 1,471
Supplemental Disclosure of Cash Flow ======= =======
Information:
Cash Paid During the Year for Interest 412,907 $ 420,088
======= =======
See notes to financial statements 6
RIVERPLACE APARTMENTS LIMITED PARTNERSIHP
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,1998 AND 1997
1.
Organization and summary of significant accounting policies:
Organization:
Riverplace Apartments Limited Partnership ("the Partnership"),
organized as a Massachusetts Limited Partnership on February 29, 1988,
was formed to acquire and operate an affordable residential apartment
complex consisting of 100 units located at various scattered locations
in Holyoke, Massachusetts ("the Property") as follows: 298, 300, 302,
304 Chestnut Street; 294, 298 Elm Street; 82, 82@ R. Clemente Street;
44 Lyman S@; 22, 24 Northeast Street; 532 South Bridge Street; 527
South Summer Street; and 177, 183, 185 West Street. The project is
currently operating under the name Riverplace Apartments. The
Partnership Agreement was last amended and restated on September 1,
1988.
Summary of significant accounting policies:
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
income and expenses during the reporting period. Actual results could
differ from those estimates.
Method of accounting:
The financial statements of the Partnership have been prepared on the
accrual basis of accounting, consistent with generally accepted
accounting principles.
Rental income:
Rental income is recognized under the operating method as the rentals
become due. Rental payments received in advance are deferred until
earned. Residential units are principally on short-term leases.
Rental property:Rental property 's recorded at cost. Depreciation is
provided for in amounts sufficient to relate the cost of depreciable
assets to operations over their estimated useful lives of 40 years for
buildings, 12 years for certain improvements and 3 to 15 years for
personal property using both straight-line and accelerated methods.
For federal 'income tax purposes, depreciation is being calculated
using the Modified Accelerated Cost Recovery System (MACRS).
Improvements to rental property are capitalized, while expenditures
for maintenance and repairs are charged to expense as incurred. Upon
disposal of depreciable property, the appropriate property accounts
are reduced by
the related costs and accumulated depreciation. The resulting gains
and losses are reflected in the statement of operations.
7
RIVERPLACE APARTMENTS LIMTED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - CONTINUED YEARS
ENDED DECEMBER 31,1998 AND 1997
1. Organization and summary of significant accounting policies -
continued:
Deferred financing costs:
Deferred financing costs consist of costs associated with obtaining
the mortgage on the Property. These costs are being amortized on a
straight-line basis over the life of the related debt.
Income taxes:
Federal and state income taxes are not included in the accompanying
financial statements because these taxes, if any, are the
responsibility of the individual Partners.
The Project is eligible for low-income housing tax credits for a ten-
year
period, beginning in 1988, which are calculated at between 9.12% -
9.22% of
qualified rehabilitation costs - The um annual credit is $364,094 and
it is a
pass-through credit to the partners. The actual credit amount may
vary
annually based on the low income occupancy of the buildings. The
credits for
1998 and 1997 were $350,362 and $364,094, respectively. The year
ended December 31
1999 will be the final year in which low income housing tax credits
may be claimed for the project. The credits for 1999 are expected to
be $32,909.
Provisions of the enabling legislation regarding the tax credit
restrict occupancy of all 100 apartments to qualified low-income
tenants for a fifteen-year period. Recapture provisions of the
legislation could result in a required repayment by the partners of a
portion of the tax credits if relevant provisions are not adhered to.
2. Partners' capital contributions:
The general partners of the Partnership are Mark A. Berezin, Herbert
G. Berezin, and Stephen L. Berezin. As of December 31, 1998 and 1997,
the general partners have made aggregate capital contributions of $3.
The investment limited partner of the Partnership is American
Affordable Housing II Limited Partnership. As of December 31, 1998
and 1997, the investment limited partner has made capital
contributions of $2,186,118.
3. Allocation of benefits:
In accordance with the Partnership Agreement, as last amended, all
profits and losses from operations and tax credits are allocated as
follows:
Investment Limited Partner 99%
General Partners 1
100%
8
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31,1998 AND 1997
3. Allocation of benefits - continued:Distributable cash flow
is defined in the Partnership Agreement, as last amended, to
include all profits and losses of the Partnership from operating
activities subject to the following adjustments:
(a) Depreciation of rental property and amortization of deferred
costs shall not be deducted;
(b) Mortgage principal payment shall be deducted-,
(c) Payments to reserves for working capital needs,
improvements, replacements and any other contingencies shall
be deducted;
(d) Amounts paid for capital expenditures shall be deducted,
unless paid from a replacement reserve or funded through
insurance.
(e) Proceeds from a capital transaction shall not be included;
(f) Any rent or interest subsidies received shall be included;
(g) Certain fees to the General Partners and others, as defined
in the Partnership Agreement, shall not be deducted;
(h) The reporting fee shall be deducted only when and to the
extent paid-, and
(i) Deposits to or releases of funds, letters of credit or other
security (and the interest, if any, thereon) provided in
connection with any mortgage by the General Partners and their
affiliates shall not be included.
Distributable cash flow from operations shall be applied, subject
to governmental agency and lender approvals (if required), as
follows (all terms are as defined in the Partnership Agreement,
as last amended) -.
(a) First, to the repayment of Subordinated Loans and interest
thereon-,
(b) Second the balance there of shall be distributed 5O% to the
Investment Limited Partner and 5O% to the General Partners.
Distributable cash flow from operations in respect to any fiscal
year may not exceed such amounts as governmental agency
regulations and lender regulations permit to be distributed.
Further, the Partnership Agreement provides that until September
1, 2003 all distributable cash flow from operations be paid into
a reserve account to fund the costs of paying increased debt
service on the Partnership's mortgage note due to interest rate
'increases and the costs of refinancing the mortgage as may be
applicable. On September 1, 2003 or such earlier time as
approved by the General Partners and the designated affiliate of
the Investment Limited Partner, any funds remaining in the
reserve account shall be disbursed to the partners.
9
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 1998 AND 1997
3. Allocation of benefits - continued:
Profits from a capital transaction, as defined in the Partnership
Agreement, as last amended, are allocated to the partners as
follows:
(a) First, to restore the negative capital accounts of all
partners to zero in proportion to each partner's negative
capital account balance;
(b) Second to the partners to the extent of their invested
amounts not previously distributed and
(c) Third the balance, if any, of such profits shall be
allocated, 50% to the investment Limited Partner and 50% to
the General Partners.
Losses from a capital transaction are allocated to the partners
as follows:
(a) First, losses shall be allocated to all partners having
positive capital accounts until their capital accounts have
been reduced to zero; and
(b) Second, the balance of such losses shall be allocated to the
General
Partners.4.Cash, restricted deposits and funded reserves:
The Partnership maintains certain operating, security deposit and
replacement
reserve cash balances in two financial institutions located in
Massachusetts.
The balances are measured by the Federal Deposit Insurance
Corporation
("FDIC") up to $100,000. At December 31, 1998 and 1997, the
Partnership's
cash balances were fully insured.
5.Mortgage note payable:
The mortgage note payable consists of a note in the original
amount of
$4,500,000, dated March 11, 1988 and last amended on May 23,
1989, with Fleet National Bank as successor in interest to Bank
of New England-West, N.A. The note is secured by the real estate
and related personal property of the Partnership and an
assignment of rents and leases. Interest is currently payable on
the note at a rate of 10% per annum. This rate was fixed at the
conversion date (August 1, 1989), as defined in the loan
agreement. The lender has the right to adjust the interest, rate
every three years subsequent to the conversion date to a rate
that is equal to 2 1/2% per annum above the three year Treasury
note rate in effect on the interest rate adjustment dates. The
next scheduled interest rate adjustment date is August 1, 1998.
Based upon the current interest rate, the note requires monthly
'installments of principal and interest of $39,240. The note
matures on July 1, 2019. However, the lender has the right to
demand repayment of the loan in full on September 19, 2003 which
is the date fifteen years following the execution of the first
Housing Assistance Payments contract for the Property. The
mortgage note may be prepaid by the Partnership without premium
or penalty.
10
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31,1998 AND 1997
5. Mortgage note payable - continued:
In connection the execution of the note agreement, the General
Partners entered into a Negative Cash Flow Commitment agreement
with the lender. Pursuant to the agreement, the General Partners
were required to fund any operating deficits, as defined, until
the later to occur of August 1, 1992 or when net income, as
defined, from the Property at least equaled 120% of debt service
on the mortgage note. The Negative Cash Flow Commitment was
limited to a maximum amount of $250,000. For the year ended
December 31, 1998, the Partnership met the requirement that net
'income equal at least 120% of debt service on the mortgage note.
Accordingly, pursuant to its provisions, the Negative Cash Flow
Commitment terminated as of December 31, 1998.
Aggregate principal maturities on the mortgage loan for each of
the next five years, based on the current effective interest
rate, are as follows:
Year Amount
1999 63,355
2000 69,990
2001 77,318
2002 85,415
2003 94,359
The liability of the Partnership under the mortgage note is
limited to the underling value of the real estate collateral plus
any amounts that may be deposited with the lender.
6. Rental housing assistance agreement:
The Partnership has a contract with the Housing Authority of the
City of Holyoke, Massachusetts to receive HUD Section 8 rental
assistance funds for the benefit of qualified tenants. The
program restricts assistance to those who meet certain HUD
established criteria including maximum income limitations. The
Housing Authority is responsible for determining tenant
eligibility for participation 'm the program. This Housing
Assistance Payments ("HAP") contract was awarded in stages
covering all 100 apartment units and it expires m corresponding
stages from September 19, 2003 through March 20, 2004. During
the years ended December 31, 1998 and 1997, rental assistance
income organized under the contract amounted to $924,969 and
$904,401, respectively.
7. Rental income:
During 1997, the Partnership received $96,262 from the Holyoke
Housing Authority for retroactive rent adjustments
and special clams payments related to years prior to 1997. This
amount has been included in rental income for the year ended
December 31, 1997. The Partnership still has a request pending
with the Holyoke Housing Authority for additional adjustments
related to a prior year. The Housing Authority has not yet acted
upon this request as of December 31, 1998. At this time, no
estimate can be made of the amount, if any, of additional
adjustments that will actually be received by the Partnership.
11
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 1998 AND 1997
8. Transactions with related parties:
Marken Properties, Inc. ("Marken"), an affiliate of the General
Partners, is the project management agent. Marken receives a
base management fee calculated at 6% of gross revenues from the
Property. Management fees expensed in 1998 and 1997 amounted to
$65,805 and $71,119, respectively. At December 31, 1998, the
Partnership has a receivable of $5,295 from Marken. At December
31, 1997, management fees of $8,120 remained unpaid.
Personnel working at the project site are employees of Marken and
therefore the Project reimbursed Marken for the actual salaries
and related benefits, as reflected in the accompanying financial
statements. Such salaries and related benefit costs expensed
during 1998 and 1997 amounted to $96,520 and $99,465
respectively. Of these amounts, $1,107 and $5,448 remained
unpaid at December 31, 1998 and 1997 respectively. The payable
of $1,107 at December 31, 1998 has been netted against a
receivable from Marken in the accompanying 1998 balance sheet.
The Partnership incurred accounting and data processing fees of
$7,200 to Marken in each of the years ended December 3 1, 1998
and 1998.
Marken allocates certain office and administrative expenses among
multiple properties under its management. For the year ended
December 31, 1998 and 1997, the Partnership's allocable share of
these costs amounted to $11,914 and $10,982, respectively. In
addition, the Partnership purchases various operating and
maintenance supplies and services as well as its fuel oil and
heating service contract from companies (Interstate Plumbing &
Heating Supply Corp., Key Contractors, Inc., and Hampden
Contractors, Inc.) affiliated with the General Partners. For the
year ended December 3 1, 1998 and 1997, the Partnership incurred
costs to Interstate Plumb' & Heating Supply Corp. and Key
Contractors, Inc. for capital equipment and operating and
maintenance supplies and services in the amounts of $31,045 and
$34,490, respectively. For the year ended December 3 1, 1998 and
1997, the Partnership incurred costs to Key Contractors, Inc. for
operating and maintenance supplies and services in the amounts of
$4,883 and $2,525, respectively. Additionally, the Partnership
incurred costs to Key contractors, Inc. for operating and
maintenance supplies and serices associated with grants in the
amount of $9,000 in 1998. Costs incurred to Hampden Contractors,
Inc. for fuel Oil and heating seances and to maintain the laundry
concession aggregated $54,735 in 1998 and $71,949 in 1997. As of
December 31, 1998, the Partnership had payables to these
affiliates totaling $7,005 and $4,480.
Pursuant to the Partnership Agreement, as last amended, a
reporting fee is payable to an affiliate of the Investment
Limited Partner for its services in assisting with the
preparation of tax returns and other reports to the partners as
required by the Partners Agreement. The fee is in an annual
amount of $5,500 and is payable from available cash flow from
operations. Any unpaid fees shall accrue and be payable on a
cumulative basis in the first year in which there is sufficient
cash flow from operations or from the proceeds of a capital
transaction. A reporting fee in the amount of $5,5 00 was
expensed in
12
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 1998 AND 1997
the years ended December 3 1, 1998 and 1997. No fees were paid
in 1998 or
1997. The Partnership's cumulative liability to the affiliate
for these fees at December 31, 1998 and 1997 amounted to $49,500
and $38,500, respectively.
In accordance with the provisions of the Partnership Agreement,
as last amended if the Partnership is required to obtain loans to
fund increased debt service under its mortgage note on account
of interest rate increases during the fifteen year period ending
on September 1, 2003, the General Partners are required to either
guarantee such loans or to make such loans to the Partnership.
Any such loans made to the Partnership by the General Partners
will be Subordinated Loans. These loans will bear interest at
the prime rate of Fleet National Bank. The loans and related
interest thereon may only be repaid from available cash flow from
operations or from the proceeds of a capital transaction.
Pursuant to the Partnership Agreement, as last amended, the
General Partners are entitled to receive a sales preparation fee
in the amount of 3 % of the gross sales price upon any sale of
the Property.
9. Grants:
In 1998, the Partnership received grant proceeds of $95,416 under
the Federally Asisted Low Income Housing Drug Elimination Grant
Program and $0 under the Safe Neighborhood Grant Program ("the
Programs") from the U.S. Department of Housing and Urban
Development (HUD). The Partnership is obligated to expend these
funds as authorized under the Programs and in accordance with the
approved budgets.
The total grant award for under the Drug Elimination Grant
Program is $124,960. Funds are received by the Partnership based
upon expenditures incurred (cost reimbursement method). The term
of the grant is twelve months beginning January 1,1998. An
extension of up to six months can be obtained with the approval
of HUD. The Partnership has applied for a six month extension
for this grant and has received a verbal approval as of January
25, 1999.
13
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31,1998 AND 1997
The total grant award under the Safe Neighborhhod Grant Program
is $119,600. Funds are recived by the Partnership based upon the
expenditures incurred (cost reimbursement method). The term of
the grant is twenty four months beginning on May 1, 1998. An
extension of up to six months can be obtained with the approval
of HUD.
A summary of grant activity for 1998 is as follows:
Drug Safe
Elimination Neighborhood
Program Program Total
------- -------- -------
Proceeds:
Grant Proceeds: $ 95,416 $ - $ -
Expenditures:
Salaries and Related
Benefits 33,142 - 33,142
Administration Fees - - -
Other Administrative Costs 10,592 - 10,592
Operating and Maintenance 55,024 36,518 91,542
--------- --------- ----------
98,758 36,518 135,276
--------- --------- ----------
Expenditure in
Excess of Proceeds $ ( 3,342) $ ( 36,518) $ ( 39,860)
========== ========= ==========
Grant Expenditures in excess of grant proceeds are reflected as a
recievable in the accompanying balance sheet since these amounts
are expected to be reimbursed to the Partnership under the terms
of the grant agreements.
In January, 1999, the Partnership was awarded an additional grant
of $125,000 under the Federally assisted Low-Income Housing Drug
Elimination Grant Program.
10. Contingencies:
The Partnership is required to maintain compliance with the Low-
Income Housing Tax Credit Program as a condition to receiving low-
income housing tax credits. Failure to comply with the
requirements of the Low-income Housing Tax Credit Program can
result in a recapture of a portion of the tax credits previously
taken and can jeopardize the ability of the Partnership to claim
any future low-income tax credits.
The Partnership is involved in a dispute with the City of
Holyoke, Massachusetts related to water meter readings and sewer
use charges at the
14
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 1998 AND 1997
Property's 304 Chestnut Street location. In March 1994, the
Holyoke Water Department determined that its meter reader had
been incorrectly reading the water meter at this location since
December 1989. As a result, the City has
alleged that the Partnership had only been billed for a small
portion of the total water consumption and sewer use charges at
this location for the period from December, 1989 to March, 1994.
The City billed the Partnership an amount of approximately
$83,000 for the previously unbilled water and sewer use charges
allegedly incurred for this period of time. The Partnership has
contested the City's actions in this matter. As a consequence,
on June 6, 1995, the City placed a lien on the Property for the
unpaid water bill, sewer
charges and accumulated interest thereon totaling $94,503.
Management is
currently attempting to settle this matter with the City. A
liability in the amount of approximately $43,000 has been accrued
in the accompanying financial statements for 1998 and 1997 and it
has been included with accrued expenses other. Management
believes, based in part upon the opinion of legal counsel, that
the Partnership may be able to settle this matter with the City
for an amount approximating the liability recorded in the
accompanying financial statements. The ultimate resolution of
this matter cannot be determined at the present time.
Nevertheless, due to uncertainties in the settlement process, it
is at least reasonably possible that management's view of the
outcome will change in the near term.
11. Concentrations:
The Partnership's operations are concentrated in the multifamily
real estate market. In addition, the Partnership operates in a
heavily regulated environment. The operations of the Partnership
are subject to the administrative directives, rules and
regulations of federal, state and local regulatory agencies,
including, but not limited to, HUD. Such administrative
directives, rules and regulations are subject to change by an act
of Congress or an administrative change mandated by HUD. Such
changes may occur with little notice or inadequate funding to pay
for the related costs, including the additional administrative
burden, to comply with a change.
15
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 1998 AND 1997
11. Reconciliation to taxable loss:
Reconciliation's of financial statement net loss to taxable loss
of the Partnership for the years ended December 31, 1998 and 1997
are as follows:
1998 1997
Net loss per financial statement ( $32,446) ( $8,474)
Adjustments:
Excess of tax depreciation ( 62,553) ( 64,713)
over book depreciation ( 3,941) 5,222
Rents collected in advance ( 39,860) -
Miscellaneous other 4,756 -
-------- --------
Taxable loss per tax return ($134,044) ( $67,965)
======== ========
16
ADDITIONAL INFORMATION
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
SCHEDULES OF RENTING, ADMINISTRATIVE, OPERATING,
MAINTENANCE,
TAXES AND INSURANCE, AND INTEREST EXPENSES
YEARS ENDED DECEMBER 31, 1998 AND 1997
1998 1997
---- ----
Administrative Expenses
Advertising and Promotion $ 1,839 $
752
Office Salaries 28,143 24,687
Employee Benefits 10,406 14,860
Legal 676 5,721
Auditing 8,500 7,500
Telephone 3,698 3,410
Office Expense 10,363 11,725
Data Processing Fees/ Bank Charges 9,530 8,582
Licenses and Permits 240 413
Miscellaneous 9,591 11,391
-------- --------
Total Administrative Expenses $ 82,986 $ 89,041
======== ========
Utilities
Fuel oil 46,274 $ 61,087
Electricity 13,531 12,414
Water and Sewer 93,553 75,037
Gas 13,721 12,642
-------- --------
Total Utilities $167,079 $ 161,180
======= ========
Operating Expenses
Maintenance Salaries $ 25,336 $ 29,788
Cleaning Salaries 14,888 11,000
Decorating Salaries - 117
Trash Removal 9,785 8,885
Exterminating 5,403 10,195
Cleaning Supplies 2,003 2,522
Snow Removal 387 1,673
HVAC Repairs and Maintenance 12,367 15,275
Repairs Material 34,789 38,730
Decorating Supplies and Contract 16,003 8,861
-------- --------
Total Operating and Maintenance Expenses $120,961 $ 127,046
======== ========
See independent auditor's report on additional information on
page 1. 17
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
SCHEDULES OF RENTING, ADMINISTRATIVE, OPERATING, MAINTENANCE,
TAXES AND INSURANCE, AND INTEREST EXPENSES - CONTINUED
YEARS ENDED DECEMBER 31, 1998 AND 1997
1997 1996
---- ----
Taxes
Real Estate Taxes $ 15,782 $ 18,870
Payroll Taxes 8,496 7,649
Other Taxes 86 125
------- --------
$ 24,364 $ 26,644
======== ========
Insurance Expense
Property and Liability $ 44,292 $ 88,064
Workers' Compensation 3,105 2,944
Employee Health 6,146 8,942
-------- --------
Total Insurance Expenses $ 53,543 $ 99,950
======== ========
Interest Expense
Interest on Mortgage $412,030 $ 417,740
Other Interest 382 1,908
-------- --------
Total Interest Expense $412,412 $ 419,648
======== ========
See independent auditor's report on additional information on page 1. 18
<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, 1999
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 3,864,835 501,332 2,632,779 1,727,786 501,322 4,360,565
4,861,887 1,163,273 3/89 10/88 5-50
Belen Apts. 1,480,955 54,000 1,468,653 570,832 87,960 2,039,485
2,127,445 767,542 12/88 12/88 5-27.5
Blairview
Associates 1,428,626 80,814 1,705,626 6,399 80,814 1,712,025
1,792,839 780,901 12/88 3/89 5-27.5
Bloomfield
Associates 367,900 11,500 466,419 6,986 11,500 473,405
484,905 192,128 6/88 6/88 5-27.5
Boardman Lake
Apartments 976,308 60,200 590,096 672,641 60,200 1,262,737
1,322,937 521,997 5/89 10/88 5-27.5
Bowdoinham
Associates 1,275,576 95,132 966,112 719,894 65,132 1,686,006
1,751,138 556,448 5/89 11/88 5-27.5
Brewton Ltd. 951,156 72,500 1,211,379 4,023 72,500 1,215,402
1,287,902 494,884 6/88 8/88 5-27.5
- 19 -
American Affordable Housing II
Limited Partnership
Schedule III - Real Estate and
Accumulated Depreciation
March 31, 1999
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 770,228 12,000 1,012,110 15,535 12,000 1,027,645
1,039,645 456,901 5/88 8/88 5-27.5
Brookhollow
Manor, Ltd. 893,009 25,080 1,003,839 189,137 25,080 1,192,976
1,218,056 458,340 8/88 10/88 5-27.5
Carthage Court
Housing 1,274,664 18,000 1,568,266 61,725 18,000 1,629,991
1,647,991 636,565 10/88 12/88 5-27.5
Deer Crossing
Associates 1,179,722 73,102 1,565,336 32,574 73,102 1,597,910
1,671,012 434,922 4/89 4/89 5-27.5
East China
Township 896,023 52,039 1,140,464 18,404 52,039 1,158,868
1,210,907 500,958 11/88 8/88 5-27.5
East Ridge
Associates 1,249,521 70,000 1,602,988 7,638 70,000 1,610,626
1,680,626 583,696 9/88 8/88 5-27.5
Fairbanks Flats* -0- 40,000 883,522 (883,522)b -0- -0-
- -0- -0- 12/88 7/88 5-27.5
Fredericktown
Associates 370,063 20,000 456,784 25,486 20,000 482,270
502,270 186,983 5/88 6/88 5-27.5
* No Financial Statement
- 20 -
American Affordable Housing II
Limited Partnership
Schedule III - Real Estate and
Accumulated Depreciation
March 31, 1999
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. 382,840 14,775 483,300 4,000 14,775 487,300
502,075 163,263 6/88 6/88 5-35
Harbor Hill
Associates 1,217,492 65,132 1,443,798 158,119 65,132 1,601,917
1,667,049 555,036 2/89 11/88 5-27.5
Immokalee
RRH, Ltd. 1,316,810 107,000 1,573,636 17,690 107,000 1,591,326
1,698,326 490,538 3/88 5/88 5-27.5
Kersey Apts. 1,181,296 90,000 1,270,768 239,502 92,040 1,510,270
1,602,310 550,114 10/88 10/88 5-27.5
Kingsley Park
Associates 9,881,279 521,725 12,281,821 145,089 521,725 12,426,910
12,948,635 4,794,703 10/88 3/88 5-27.5
Lake Havasu
Invsmt. Grp. 1,424,641 176,845 1,595,306 0 176,845 1,595,306
1,772,151 485,002 4/88 3/88 5-50
Liberty Center,
Ltd. 1,116,473 198,000 2,480,840 12,339 198,000 2,493,179
2,691,179 641,850 10/88 12/88 5-27.5
Lovington
Housing Assoc. 1,092,506 30,000 1,464,954 74,578 30,000 1,539,532
1,569,532 384,835 2/89 2/89 5-27.5
- 21 -
American Affordable Housing II
Limited Partnership
Schedule III - Real Estate and
Accumulated Depreciation
March 31, 1999
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 1,479,298 64,900 1,788,215 100,096 64,900 1,888,311
1,953,211 705,444 11/88 12/88 5-27.5
Maple Tree
Associates 1,234,411 65,132 1,464,954 155,138 65,132 1,620,092
1,685,224 547,761 4/89 5/89 5-27.5
Marionville
Family Hsg. 193,582 19,825 230,104 0 19,825 230,104
249,929 69,578 5/88 6/88 5-35
Michelle Manor
Apartments 905,633 131,945 1,009,687 (14,586)a 131,945 995,101
1,127,046 267,444 9/88 10/88 5-50
Middleburg
Assoc. Ltd. 1,410,283 104,000 1,155,947 261,514 104,000 1,417,461
1,521,461 554,951 3/89 10/88 5-27.5
Nebraska City
Senior Hsg. 417,939 27,119 516,617 0 27,119 516,617
543,736 175,665 7/88 6/88 5-35
Nicollet Island
Historic Homes 1,097,120 0 1,875,059 81,255 0 1,956,314
1,956,314 607,628 12/88 11/88 7-27.5
Paige Hall Ltd. 2,253,150 633,666 2,544,140 706,485 0 3,250,625
3,250,625 970,911 4/89 3/89 7-27.5
- 22 -
American Affordable Housing II
Limited Partnership
Schedule III - Real Estate and
Accumulated Depreciation
March 31, 1999
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 1,179,613 88,813 1,487,597 91,391 28,000 1,578,988
1,606,988 430,871 4/89 4/89 7-27.5
Pine Knoll
Devpmt. Co. 1,357,555 45,000 803,220 770,338 199,301 1,573,558
1,772,859 583,595 5/89 10/88 5-27.5
Pine Ridge Ltd. 1,477,962 110,000 1,899,826 11,601 110,000 1,911,427
2,021,427 772,865 6/88 7/88 5-27.5
Pine Terrace
Ltd. 1,189,642 61,500 1,188,396 326,353 61,500 1,514,749
1,576,249 586,139 1/89 12/88 5/27.5
Plattevill
Apartments 544,014 45,000 659,035 62,144 46,301 721,179
767,480 273,556 10/88 10/88 5-27.5
Riverplace
Apts. 4,092,919 175,260 6,463,578 331,060 175,260 6,794,638
6,969,898 1,860,055 3/89 9/88 5-27.5
Sara Pepper
Associates 633,048 67,200 740,378 60,912 22,000 801,290
823,290 239,503 3/88 5/88 5-27.5
Shawmut Ave 636,373 69,325 1,145,503 60,576 69,325 1,206,079
1,275,404 383,545 12/88 11/88 5-34
- 23 -
American Affordable Housing II
Limited Partnership
Schedule III - Real Estate and
Accumulated Depreciation
March 31, 1999
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. 609,780 13,000 736,830 0 13,000 736,830
749,830 218,805 7/88 10/88 5-27.5
Silver Pines
Associates 1,377,034 170,050 1,684,846 95,990 98,500 1,780,836
1,879,336 506,851 8/88 8/88 5-27.5
Springfield Ltd.1,436,215 66,000 1,864,463 30,670 66,000 1,895,133
1,961,133 775,710 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
1,926,727 511,085 6/88 6/88 5-27.5
Suncrest, Ltd. 969,007 50,000 1,141,518 4,176 50,000 1,145,694
1,195,694 333,292 5/88 10/88 5-27.5
Village Chase of
Zephyrhills,
Ltd. 1,485,505 151,350 490,589 1,332,111 151,350 1,822,700
1,974,050 700,625 4/89 12/88 7-27.5
Village Walk of
Zephyrhills,
Ltd. 1,390,565 133,650 619,248 1,077,169 133,650 1,696,417
1,830,067 644,433 3/89 12/88 7-27.5
- 24 -
American Affordable Housing II
Limited Partnership
Schedule III - Real Estate and
Accumulated Depreciation
March 31, 1999
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. 1,396,347 70,000 1,648,427 9,720 70,000
1,658,147 1,728,147 503,396 10/88 10/88 5-27
Washington
Mews LP. 849,188 55,225 1,921,104 (91,279) 55,225
1,829,825 1,885,050 684,209 12/88 8/88 5-27.5
Wilder
Associates 1,209,588 62,947 1,519,472 77,237 62,947
1,596,709 1,659,656 545,653 1/89 11/88 5-27.5
Wildwood Villas 1,473,287 100,960 1,872,065 7,686 100,960
1,879,751 1,980,711 745,024 9/88 9/88 5-27.5
---------- --------- ---------- --------- --------- ---------
- - ---------- ----------
67,945,260 4,978,364 81,253,852 9,379,780 4,288,727
90,633,632 94,922,359 30,999,473
========== ========= ========== ========= =========
========== ========== ==========
Since the Operating Partnerships maintain a calendar year end the information
reported on this schedule is as of December 31, 1997.
a Decrease due to reallocation of acquistion costs.
b Decrease due to impairment.
**There were no carrying costs as of December 31, 1998. The column has been
ommitted for presentation purposes
- 25 -
</TABLE>
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
- 26 -
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................................ 246,897
Other............................................ 0
-----------
$ 246,897
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
Additions during period:
Acquisitions through foreclosure.................$ 0
Other acquisitions............................... 0
Improvements, etc................................
Other............................................ 821,235
-----------
$ 821,235
Deductions during period:
Cost of real estate sold.........................$ 0
Other............................................ 0
----------
$ 0
-----------
Balance at close of period - 03/31/98............................$ 95,234,274
===========
- 27 -
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 - 03/31/98............................$ 95,234,274
Additions during period:
Acquisitions through foreclosure.................$ 0
Other acquisitions............................... 0
Improvements, etc................................
Other............................................ (883,522)
-----------
$ (883,522)
Deductions during period:
Cost of real estate sold.........................$ 0
Other............................................ 0
-----------
$ 0
-----------
Balance at close of period - 03/31/99............................$ 94,922,359
===========
- 28 -
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
Current year
expense.....................................$2,826,160
- ---------
Balance at close of period -
3/31/98.................................$28,427,132
Current year
expense.....................................$2,572,341
- ---------
Balance at close of period -
3/31/99.................................$30,999,473
==========
- 29 -
<TABLE> <S> <C>
<ARTICLE> CT
<CIK> 0000815024
<NAME> AMERICAN AFFORDABLE HOUSING II LIMITED PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-START> APR-01-1998
<PERIOD-END> MAR-31-1999
<TOTAL-ASSETS> 2,602,756
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 2,602,756
<TOTAL-REVENUES> 8,097
<INCOME-TAX> 0
<INCOME-CONTINUING> (902,203)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (894,106)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
