UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 30, 1999
OR
[]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ____________
0-17619
(Commission File Number)
American Tax Credit Properties L.P.
-----------------------------------
(Exact name of registrant as specified in its governing instruments)
Delaware 13-3458875
- ---------------------------- -----------------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of organization)
Richman Tax Credit Properties L.P.
599 West Putnam Avenue, 3rd floor
Greenwich, Connecticut 06830
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 869-0900
--------------
Securities registered pursuant to Section 12(b) of the Act:
None None
- -------------------- -----------------------------------------
(Title of each Class) (Name of each exchange on which registered)
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
- -------------------------------------------------------------------------------
(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
requirement for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in a definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. X
Registrant has no voting stock.
Documents incorporated by reference:
Part I - pages 21 through 35 and 51 through 75 of the prospectus dated May 6,
1988, as supplemented by Supplement No. 1 and Supplement No. 2 dated August 11,
1988 and September 20, 1988, respectively, filed pursuant to Rule 424(b)(3)
under the Securities Act of 1933.
<PAGE>
PART I
Item 1. Business
Formation
American Tax Credit Properties L.P. ("Registrant"), a Delaware limited
partnership, was formed on February 12, 1988 to invest primarily in leveraged
low-income multifamily residential complexes (the "Property" or "Properties")
which qualify for the low-income tax credit in accordance with Section 42 of the
Internal Revenue Code (the "Low-income Tax Credit"), through the acquisition of
limited partnership equity interests in partnerships (the "Local Partnership" or
"Local Partnerships") that are the owners of the Properties. Registrant invested
in nineteen such Properties including one Property which also qualifies for the
historic rehabilitation tax credit in accordance with Section 48(g) of the
Internal Revenue Code of 1986 (the "Historic Rehabilitation Tax Credit").
Registrant considers its activity to constitute a single industry segment.
Richman Tax Credit Properties L.P. (the "General Partner"), a Delaware limited
partnership, was formed on February 10, 1988 to act as the general partner of
Registrant. The general partners of the General Partner are Richard Paul
Richman and Richman Tax Credit Properties Inc. ("Richman Tax"), a Delaware
corporation which is wholly-owned by Richard Paul Richman. Richman Tax is
an affiliate of The Richman Group, Inc. ("Richman Group"), a Delaware
corporation founded by Richard Paul Richman in 1988.
The Amendment No. 2 to the Registration Statement on Form S-11 was filed with
the Securities and Exchange Commission (the "Commission") on April 29, 1988
pursuant to the Securities Act of 1933 under Registration Statement File No.
33-20391, and was declared effective on May 4, 1988. Reference is made to the
prospectus dated May 6, 1988, as supplemented by Supplement No. 1 and Supplement
No. 2 dated August 11, 1988 and September 20, 1988, respectively, filed with the
Commission pursuant to Rule 424(b)(3) under the Securities Act of 1933 (the
"Prospectus"). Pursuant to Rule 12b-23 of the Commission's General Rules and
Regulations promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), the description of Registrant's business set forth under
the heading "Investment Objectives and Policies" at pages 51 through 75 of the
Prospectus is incorporated herein by reference.
On May 11, 1988, Registrant commenced, through Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch"), the offering of up to 50,000 units of
limited partnership interest ("Unit") at $1,000 per Unit to investors. On August
19, 1988 and November 15, 1988, the closings for 23,603 and 17,683 Units,
respectively, took place, amounting to aggregate limited partners' capital
contributions of $41,286,000.
Competition
Pursuant to Rule 12b-23 of the Commission's General Rules and Regulations
promulgated under the Exchange Act, the description of Registrant's competition,
general risks, tax risks and partnership risks set forth under the heading "Risk
Factors" at pages 21 through 35 of the Prospectus is incorporated herein by
reference.
Employees
Registrant employs no personnel and incurs no payroll costs. All management
activities of Registrant are conducted by the General Partner. An affiliate of
the General Partner employs individuals who perform the management activities of
Registrant. This entity also performs similar services for other affiliates of
the General Partner.
Tax Reform Act of 1986, Revenue Act of 1987, Technical and Miscellaneous Revenue
Act of 1988, Omnibus Budget Reconciliation Act of 1989, Omnibus Budget
Reconciliation Act of 1990, Tax Extension Act of 1991, Omnibus Budget
Reconciliation Act of 1993, Uruguay Round Agreements Act and Taxpayer Relief Act
of 1997 (collectively the "Tax Acts")
Registrant is organized as a limited partnership and is a "pass through" tax
entity which does not, itself, pay federal income tax. However, the partners of
Registrant who are subject to federal income tax may be affected by the Tax
Acts. Registrant will consider the effect of certain aspects of the Tax Acts on
the partners when making decisions regarding its investments. Registrant does
not anticipate that the Tax Acts will currently have a material adverse impact
on Registrant's business operations, capital resources and plans or liquidity.
<PAGE>
Item 2. Properties
The executive offices of Registrant and the General Partner are located at 599
West Putnam Avenue, 3rd floor, Greenwich, Connecticut 06830. Registrant does not
own or lease any properties. Registrant pays no rent; all charges for leased
space are borne by an affiliate of the General Partner.
Registrant's primary objective is to provide Low-income Tax Credits to limited
partners generally over a ten year period. The relevant state tax credit agency
has allocated each of Registrant's Local Partnerships an amount of Low-income
Tax Credits, which are generally available for a ten year period from the year
the Property is placed in service. The required holding period of each Property,
in order to avoid Low-income Tax Credit recapture, is fifteen years from the
year in which the Low-income Tax Credits commence on the last building of the
Property (the "Compliance Period"). The Properties must satisfy various
requirements including rent restrictions and tenant income limitations (the
"Low-income Tax Credit Requirements") in order to maintain eligibility for the
recognition of the Low-income Tax Credit at all times during the Compliance
Period. Once a Local Partnership has become eligible for the Low-income Tax
Credit, it may lose such eligibility and suffer an event of recapture if its
Property fails to remain in compliance with the Low-income Tax Credit
Requirements. In April 1997, B & V, Ltd. ("B & V") suffered its final event of
recapture of Low-income Tax Credits due to a hurricane which substantially
damaged the property owned by such Local Partnership and the failure of the
property to be fully-rebuilt, primarily due to the non-performance of the
insurance company and the resulting foreclosure action taken by the lender. In
May 1998, B & V Phase I, Ltd. ("B & V Phase I") suffered an event of recapture
of Low-income Tax Credits resulting from the same hurricane and a resulting
foreclosure. Due to delays in the reconstruction of the complex, B & V Phase I
was unable to comply with the terms of its agreement with the lender. In April
1998, Erie Associates Limited Partnership ("Erie") suffered an event of
recapture as a result of a foreclosure sale directed by the lender, due to
accumulated arrearages under the terms of the mortgage (see Part II, Item 7 -
Management's Discussion and Analysis of Financial Condition and Results of
Operations herein).
Although Registrant generally owns a 98.9%-99% limited partnership interest
("Local Partnership Interest") in the Local Partnerships, Registrant and
American Tax Credit Properties II L.P. ("ATCP II"), a Delaware limited
partnership and an affiliate of Registrant, together, in the aggregate, own a
99% Local Partnership Interest in Santa Juanita Limited Dividend Partnership
L.P. ("Santa Juanita"); the ownership percentages of Registrant and ATCP II of
Santa Juanita are 34.64% and 64.36%, respectively.
Many of the Local Partnerships receive rental subsidy payments, including
payments under Section 8 of Title II of the Housing and Community Development
Act of 1974 ("Section 8") (see descriptions of subsidies on page 5). The subsidy
agreements expire at various times during and after the Compliance Periods of
the Local Partnerships. In October 1997, Congress passed the Multifamily
Assisted Housing and Reform and Affordability Act, whereby the United States
Department of Housing and Urban Development ("HUD") was given the authority to
renew certain project based Section 8 contracts expiring during HUD's fiscal
year 1998, where requested by an owner, for an additional one year term
generally at or below current rent levels, subject to certain guidelines. In
October 1998, HUD issued a directive related to project based Section 8
contracts expiring during HUD's fiscal year 1999 which defines owners'
notification responsibilities, advises owners of project based Section 8
properties of what their options are regarding the renewal of Section 8
contracts, provides guidance and procedures to owners, management agents,
contract administrators and HUD staff on renewing Section 8 contracts, provides
guidance on setting renewal rents and handling renewal rent increases and
provides the requirements and procedures for opting-out of a Section 8 project
based contract. Registrant cannot reasonably predict legislative initiatives and
governmental budget negotiations, the outcome of which could result in a
reduction in funds available for the various federal and state administered
housing programs including the Section 8 program. Such changes could adversely
affect the future net operating income and debt structure of any or all Local
Partnerships currently receiving such subsidy or similar subsidies. Four Local
Partnerships' Section 8 contracts are scheduled to expire in 1999.
<PAGE>
<TABLE>
<CAPTION>
Item 2. Properties (continued)
<S> <C> <C> <C> <C>
Mortgage loans
Name of Local Partnership Number payable as of Subsidy
Name of apartment complex of rental Capital December 31, (see
Apartment complex location units contribution 1998 footnotes)
- -------------------------------- --------- ------------ --------------- ----------
4611 South Drexel Limited Partnership
South Drexel Apartments
Chicago, Illinois 44 $ 362,966 $ 1,348,852 (1c)
B & V, Ltd.
Homestead Apartments
Homestead, Florida 158 2,050,795 (3) -- (3)
B & V Phase I, Ltd.
Gardens of Homestead
Homestead, Florida 97 140,000 (3) -- (3)
Blue Hill Housing Limited Partnership
Blue Hill Housing
Grove Hall, Massachusetts 144 4,506,082 6,498,779 (1a)
Cityside Apartments, L.P.
Cityside Apartments
Trenton, New Jersey 126 6,098,990 7,732,846 (1a)
Cobbet Hill Associates Limited Partnership
Cobbet Hill Apartments
Lynn, Massachusetts 117 4,910,942 13,652,326 (1a&b)
Dunbar Limited Partnership
Spring Grove Apartments
Chicago, Illinois 100 1,518,229 3,987,468 (1a&d)
Dunbar Limited Partnership No. 2
Park View Apartments
Chicago, Illinois 102 1,701,849 4,566,461 (1a&d)
Erie Associates Limited Partnership
Erie Apartments
Springfield, Massachusetts 18 755,736 (3) -- (3)
Federal Apartments Limited Partnership
Federal Apartments
Fort Lauderdale, Florida 164 2,832,224 5,184,018 (1a)
Golden Gates Associates
Golden Gates
Brooklyn, New York 85 879,478 4,622,936 (1b)
Grove Park Housing, A California Limited Partnership
Grove Park Apartments
Garden Grove, California 104 1,634,396 6,872,589 (1a)
Gulf Shores Apartments Ltd.
Morgan Trace Apartments
Gulf Shores, Alabama 50 352,693 1,486,787 (1b)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Item 2. Properties (continued)
<S> <C> <C> <C> <C>
Mortgage loans
Name of Local Partnership Number payable as of Subsidy
Name of apartment complex of rental Capital December 31, (see
Apartment complex location units contribution 1998 footnotes)
- -------------------------------- ---------- ------------ -------------- -----------
Hilltop North Associates, A Virginia Limited Partnership
Hilltop North Apartments
Richmond, Virginia 160 $ 1,414,524 $ 3,281,463 (1a)
Madison-Bellefield Associates
Bellefield Dwellings
Pittsburgh, Pennsylvania 158 1,047,744 3,499,704 (1a)
Pine Hill Estates Limited Partnership
Pine Hill Estates
Shreveport, Louisiana 110 613,499 2,375,040 (1a&d)
Santa Juanita Limited Dividend Partnership L.P.
Santa Juanita Apartments
Bayamon, Puerto Rico 45 313,887 (2) 1,494,484 (1a&b)
Vista del Mar Limited Dividend Partnership L.P.
Vista del Mar Apartments
Fajardo, Puerto Rico 152 3,097,059 5,290,711 (1a&b)
Winnsboro Homes Limited Partnership
Winnsboro Homes
Winnsboro, Louisiana 50 289,730 1,187,688 (1a&d)
------------ -------------
$ 34,520,823 $ 73,082,152
============ ============
</TABLE>
(1) Description of subsidies:
(a) Section 8 of Title II of the Housing and Community
Development Act of 1974 allows qualified low-income tenants
to pay thirty percent of their monthly income as rent with
the balance paid by the federal government.
(b) The Local Partnership's debt structure includes a principal
or interest payment subsidy.
(c) The City of Chicago Housing Authority allows qualified
low-income tenants to receive rental certificates.
(d) The Local Partnership's Section 8 contracts are scheduled to
expire in 1999.
(2) Reflects amount attributable to Registrant only.
(3) The property was lost through lender's foreclosure. As of March
30, 1999, the Local Partnership has no underlying assets and
liabilities and is not included in the combined balance sheet of
the Local Partnerships as of December 31, 1998 in Note 5 to the
financial statements.
<PAGE>
Item 3. Legal Proceedings
On March 5, 1990, Stonebridge Associates ("Stonebridge") filed a lawsuit against
Federal Apartments Limited Partnership ("Federal") for repayment of an
unsecured, non-interest bearing note in the amount of $96,000. The suit was
filed in the First Judicial District Court in Caddo Parish, Louisiana. The suit
alleged that the defendant was required to pay down such note upon the receipt
of the second installment of the capital contribution obligation from
Registrant. Such capital contribution payment was made by Registrant to Federal
on December 27, 1989. Federal contended that Stonebridge is not entitled to such
payment. After the Court ruled in favor of Federal and Stonebridge appealed the
ruling, the appellate Court ruled in favor of Federal.
Registrant is not aware of any other material legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of the limited partners of Registrant
during the fourth quarter of the fiscal year covered by this report.
<PAGE>
PART II
Item 5. Market for Registrant's Common Equity
and Related Security Holder Matters
Market Information and Holders
There is no established public trading market for Registrant's Units.
Accordingly, accurate information as to the market value of a Unit at any given
date is not available. The number of owners of Units as of June 15, 1999 was
2,603, holding 41,286 Units.
Merrill Lynch follows internal guidelines for providing estimated values of
limited partnerships and other direct investments reported on client account
statements. Pursuant to such guidelines, estimated values for limited
partnership interests reported on Merrill Lynch client account statements (such
as Registrant's Units) are provided to Merrill Lynch by independent valuation
services. These estimated values are based on financial and other information
available to the independent services (1) on the prior August 15th for reporting
on December year-end and subsequent client account statements through the
following May's month-end client account statements and (2) on March 31st for
reporting on June month-end and subsequent client account statements through the
November month-end client account statements of the same year. In addition,
Registrant may provide an estimate of value to Unit holders from time to time in
Registrant's reports to limited partners. The estimated values provided by the
independent services and Registrant, which may differ, are not market values and
Unit holders may not be able to sell their Units or realize either amount upon a
sale of their Units. In addition, Unit holders may not realize such estimated
values upon the liquidation of Registrant.
Distributions
Registrant owns a limited partnership interest in Local Partnerships that are
the owners of Properties which are leveraged and receive government assistance
in various forms of rental and debt service subsidies. The distribution of cash
flow generated by the Local Partnerships may be restricted, as determined by
each Local Partnership's financing and subsidy agreements. Accordingly,
Registrant does not anticipate that it will provide significant cash
distributions to its partners. There were no cash distributions to the partners
during the years ended March 30, 1999 and 1998.
Low-income Tax Credits and Historic Rehabilitation Tax Credits (together, the
"Tax Credits"), which are subject to various limitations, may be used by
partners to offset federal income tax liabilities. The Tax Credits per Unit
generated by Registrant and allocated to the limited partners for the tax years
ended December 31, 1998 and 1997 and the cumulative Tax Credits, net of
recaptured Low-income Tax Credits, allocated from inception through December 31,
1998 are as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Historic Net
Rehabilitation Low-income
Tax Credits Tax Credits
-------------- -----------
Tax year ended December 31, 1998 $ -- $ 106.36
Tax year ended December 31, 1997 -- 98.94
Cumulative totals $ 71.88 $ 1,404.58
</TABLE>
Registrant expects to generate total Tax Credits from investments in Local
Partnerships of approximately $1,545 per Unit through December 31, 1999, net of
circumstances which have given rise to, not withstanding future circumstances
which may give rise to, recapture and loss of future benefits (see Part I,
Item 2 - Properties and Part II, Item 7 - Management's Discussion and Analysis
of Financial Condition and Results of Operations, herein).
<PAGE>
Item 6. Selected Financial Data
The information set forth below presents selected financial data of Registrant.
Additional detailed financial information is set forth in the audited financial
statements included under Part II, Item 8 herein.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Years Ended March 30,
----------------------------------------------------------------------------------
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
Interest and other revenue $ 249,174 $ 261,201 $ 259,193 $ 274,591 $ 289,248
=========== =========== =========== =========== ===========
Equity in loss of investment
in local partnerships $(2,262,176) $(1,484,136) $(2,049,756) $(2,240,958) $(2,319,646)
=========== =========== =========== =========== ===========
Net loss $(2,543,362) $(1,684,224) $(2,384,219) $(2,425,508) $(2,498,880)
=========== =========== =========== =========== ===========
Net loss per unit of limited
partnership interest $ (60.99) $ (40.39) $ (57.17) $ (58.16) $ (59.92)
=========== =========== =========== =========== ===========
As of March 30,
----------------------------------------------------------------------------------
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
Total assets $ 6,478,405 $ 9,011,845 $10,611,961 $13,040,183 $15,370,194
=========== =========== =========== =========== ===========
</TABLE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Capital Resources and Liquidity
Registrant admitted limited partners in two closings with aggregate limited
partners' capital contributions of $41,286,000. In connection with the offering
of the sale of Units, Registrant incurred organization and offering costs of
approximately $4,781,000 and established a working capital reserve of
approximately $2,271,000. The remaining net proceeds of approximately
$34,234,000 (the "Net Proceeds") were available to be applied to the acquisition
of limited partnership interests in local partnerships (the "Local
Partnerships") which own low-income multifamily residential complexes (the
"Property" or "Properties") which qualify for the low-income tax credit in
accordance with Section 42 of the Internal Revenue Code (the "Low-income Tax
Credit"); one Local Partnership owns a Property which also qualifies for the
historic rehabilitation tax credit in accordance with Section 48 (g) of the
Internal Revenue Code of 1986. Registrant has utilized the Net Proceeds in
acquiring an interest in nineteen Local Partnerships.
As of March 30, 1999, Registrant has cash and cash equivalents and investments
in bonds totaling $2,792,501, which is available for operating expenses of
Registrant and circumstances which may arise in connection with the Local
Partnerships. As of March 30, 1999, Registrant's investments in bonds represent
corporate bonds of $1,042,623, U.S. Treasury bonds of $1,434,591 and U.S.
government agency bonds of $229,055 with various maturity dates ranging from
1999 to 2023. Registrant acquired such investments in bonds with the intention
of utilizing proceeds generated by such investments to meet its annual
obligations. Future sources of Registrant funds are expected primarily from
interest earned on working capital and limited cash distributions from Local
Partnerships.
During the year ended March 30, 1999, Registrant received cash from interest
revenue, redemptions and sale of bonds and other income from Local Partnerships
and utilized cash for operating expenses and investments in bonds. Cash and cash
equivalents and investments in bonds available-for-sale decreased, in the
aggregate, by approximately $275,000 during the year ended March 30, 1999 (which
includes a net unrealized loss on investments in bonds of approximately $26,000,
the amortization of net premium on investments in bonds of approximately $38,000
and the accretion of zero coupon bonds of approximately $16,000).
Notwithstanding circumstances that may arise in connection with the Properties,
Registrant does not expect to realize significant gains or losses on its
investments in bonds, if any.
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
During the year ended March 30, 1999, the investment in Local Partnerships
decreased as a result of Registrant's equity in the Local Partnerships' net loss
for the year ended December 31, 1998 of $1,241,671 and an adjustment to
Registrant's carrying value of its investment in certain Local Partnerships in
accordance with applicable accounting guidelines of $1,020,505 (see discussion
below under Results of Operations). Payable to general partner in the
accompanying balance sheet as of March 30, 1999 represents accrued management
fees.
Results of Operations
Registrant's operating results are dependent upon the operating results of the
Local Partnerships and are significantly impacted by the Local Partnerships'
policies. In addition, the operating results herein are not necessarily the same
for tax reporting. Registrant accounts for its investment in Local Partnerships
in accordance with the equity method of accounting. Accordingly, the investment
is carried at cost and is adjusted for Registrant's share of each Local
Partnership's results of operations and by cash distributions received. Equity
in loss of each investment in Local Partnership allocated to Registrant is
recognized to the extent of Registrant's investment balance in each Local
Partnership. Equity in loss in excess of Registrant's investment balance in a
Local Partnership is allocated to other partners' capital in any such Local
Partnership. As a result, the reported equity in loss of investment in Local
Partnerships is expected to decrease as Registrant's investment balances in the
respective Local Partnerships become zero. The combined statements of operations
of the Local Partnerships reflected in Note 5 to Registrant's financial
statements include the operating results of those Local Partnerships still
operating as of the dates indicated, irrespective of Registrant's investment
balances.
Cumulative losses and cash distributions in excess of investment in Local
Partnerships may result from a variety of circumstances, including a Local
Partnership's accounting policies, subsidy structure, debt structure and
operating deficits, among other things. In addition, the carrying value of
Registrant's investment in Local Partnerships may be reduced if the carrying
value is considered to exceed the estimated value derived by management (which
contemplates remaining Low-income Tax Credits and potential residual value,
among other things). Accordingly, cumulative losses and cash distributions in
excess of the investment or an adjustment to an investment's carrying value are
not necessarily indicative of adverse operating results of a Local Partnership.
See discussion below under Local Partnership Matters regarding certain Local
Partnerships currently operating below economic break even levels.
Registrant's operations for the years ended March 30, 1999, 1998 and 1997
resulted in net losses of $2,543,362, 1,684,224 and $2,384,219, respectively.
The increase in net loss from 1998 to 1999 is primarily attributable to an
increase in equity in loss of investment in Local Partnerships of approximately
$778,000 and an increase in professional fees of approximately $58,000. The
decrease in net loss from 1997 to 1998 is primarily attributable to a decrease
in equity in loss of investment in Local Partnerships of approximately $566,000
and a decrease in professional fees of approximately $128,000. Equity in loss of
investment in Local Partnerships has fluctuated over the last three years as a
result of (i) Registrant adjusting the carrying value of its investment in
Cityside Apartments, L.P. and Hilltop North Associates, A Virginia Limited
Partnership ("Hilltop")during the year ended March 30, 1999 by $596,586 and
$423,919, respectively, (ii) losses from impairment of long-lived assets and
eminent domain proceeding in connection with B & V, Ltd. ("B & V"), B & V Phase
I, Ltd. ("B & V Phase I") and Erie Associates Limited Partnership ("Erie")and
(iii) changes in the net operating losses of those Local Partnerships in which
Registrant continues to have an investment balance.
The Local Partnerships' loss from operations of approximately $3,608,000 for the
year ended December 31, 1998 includes depreciation and amortization expense of
approximately $3,891,000 and interest on non-mandatory debt of approximately
$610,000, and does not include principal payments on permanent mortgages of
approximately $621,000. The Local Partnerships' loss from operations for the
year ended December 31, 1998 does not include the gain from the extinguishment
of debt of $3,171,629 in connection with B & V Phase I and Erie, which is
reflected as an extraordinary item. The Local Partnership's net loss from
operations of approximately $5,434,000 for the year ended December 31, 1997
includes depreciation and amortization expense of approximately $4,109,000,
interest on non-mandatory debt of approximately $690,000 and a loss from
impairment of long-lived assets of approximately $744,000, and does not include
principal payments on permanent mortgages of approximately $479,000. The Local
Partnerships' loss from operations for the year ended December 31, 1997 does not
include the gain from the extinguishment of debt of $6,441,935 in connection
with B & V, which is reflected as an extraordinary item. The Local Partnerships'
net loss of approximately $9,901,000 for the year ended December 31, 1996
includes depreciation and amortization expense of approximately $4,122,000, a
loss from impairment of long-lived assets and eminent domain proceeding of
approximately $4,808,000 in connection with B & V and interest on non-mandatory
debt of approximately $647,000, and does not include principal payments on
permanent mortgages of approximately $577,000.
The results of operations of the Local Partnerships for the year ended December
31, 1998 are not necessarily indicative of the results that may be expected in
future periods.
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
Local Partnership Matters
Registrant's primary objective is to provide Low-income Tax Credits to limited
partners generally over a ten year period. The required holding period of each
Property, in order to avoid Low-income Tax Credit recapture, is fifteen years
from the year in which the Low-income Tax Credits commence on the last building
of the Property (the "Compliance Period"). The Properties must satisfy various
requirements including rent restrictions and tenant income limitations (the
"Low-income Tax Credit Requirements") in order to maintain eligibility for the
recognition of the Low-income Tax Credit at all times during the Compliance
Period. Once a Local Partnership has become eligible for the Low-income Tax
Credit, it may lose such eligibility and suffer an event of recapture if its
Property fails to remain in compliance with the Low-income Tax Credit
Requirements. The Local Partnerships will have generated substantially all of
the Low-income Tax Credits allocated to limited partners by December 31, 1999.
The Properties are principally comprised of subsidized and leveraged low-income
multifamily residential complexes located throughout the United States and
Puerto Rico. Many of the Local Partnerships receive rental subsidy payments,
including payments under Section 8 of Title II of the Housing and Community
Development Act of 1974 ("Section 8"). The subsidy agreements expire at various
times during and after the Compliance Periods of the Local Partnerships. In
October 1997, Congress passed the Multifamily Assisted Housing and Reform and
Affordability Act, whereby the United States Department of Housing and Urban
Development ("HUD") was given the authority to renew certain project based
Section 8 contracts expiring during HUD's fiscal year 1998, where requested by
an owner, for an additional one year term generally at or below current rent
levels, subject to certain guidelines. In October 1998, HUD issued a directive
related to project based Section 8 contracts expiring during HUD's fiscal year
1999 which defines owners' notification responsibilities, advises owners of
project based Section 8 properties of what their options are regarding the
renewal of Section 8 contracts, provides guidance and procedures to owners,
management agents, contract administrators and HUD staff on renewing Section 8
contracts, provides guidance on setting renewal rents and handling renewal rent
increases and provides the requirements and procedures for opting-out of a
Section 8 project based contract. Registrant cannot reasonably predict
legislative initiatives and governmental budget negotiations, the outcome of
which could result in a reduction in funds available for the various federal and
state administered housing programs including the Section 8 program. Such
changes could adversely affect the future net operating income and debt
structure of any or all Local Partnerships currently receiving such subsidy or
similar subsidies. Four Local Partnerships' Section 8 contracts are scheduled to
expire in 1999.
The Local Partnerships have various financing structures which include (i)
required debt service payments ("Mandatory Debt Service") and (ii) debt service
payments which are payable only from available cash flow subject to the terms
and conditions of the notes, which may be subject to specific laws, regulations
and agreements with appropriate federal and state agencies ("Non-Mandatory Debt
Service or Interest"). During the year ended December 31, 1998, revenue from
operations of the Local Partnerships have generally been sufficient to cover
operating expenses and Mandatory Debt Service. Most of the Local Partnerships
are effectively operating at or near break even levels, although certain Local
Partnerships' operating information reflects operating deficits that do not
represent cash deficits due to their mortgage and financing structure and the
required deferral of property management fees. However, as discussed below,
certain Local Partnerships' operating information indicates below break even
operations after taking into account their mortgage and financing structure and
any required deferral of property management fees.
B & V Phase I owned a 97-unit, Section 8 assisted apartment complex located in
Homestead, Florida. Prior to Registrant's investment during the year ended March
30, 1995, B & V Phase I was damaged by Hurricane Andrew in August 1992. Since
May 1, 1996, all 97 of the rental units were complete and occupied. Pursuant to
an agreement with the lender, B & V Phase I was to commence paying debt service
in January 1995, which was to coincide with the completion of construction.
However, due to construction delays, B & V Phase I had not commenced making such
payments. The lender declared a default under the terms of the mortgage and, on
December 9, 1996 the lender commenced a foreclosure action. After pursuing
various legal efforts which were ultimately unsuccessful because alternative
sources of financing could not be secured, the property was transferred to the
lender in May 1998. As a result of the lender's foreclosure, Registrant had to
reflect recapture of Low-income Tax Credits taken through December 1997,
including interest, of approximately $3 per Unit for Unit holders of record as
of May 1998 and lost the ability to utilize remaining Low-income Tax Credits of
approximately $2 per Unit for 1998. Registrant's investment balance in B & V
Phase I, after cumulative equity losses, became zero during the year ended March
30, 1995.
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
Erie, which was in the tenth year of the Low-income Tax Credit period, was
subject to an amended and restated note (the "Amended Note") dated December 1,
1994 (which matured on December 1, 1997) and was entitled to a project-based
rental subsidy under Chapter 707 of the Acts of 1966 of the Commonwealth of
Massachusetts. The original financing called for Mandatory Debt Service of
$7,647 per month, while the Amended Note required monthly Mandatory Debt Service
of $5,883. The Local General Partners had reported that Erie was several months
in arrears under the terms of the Amended Note, that a default was declared by
the lender and that discussions were being held with the lender. While
negotiations were ongoing, the lender conducted a foreclosure sale of the
property in April 1998. Registrant made an offer to repurchase the property and
acquire the Amended Note in order to avoid adverse tax consequences but was
ultimately unsuccessful. Registrant had to reflect recapture of Low-income Tax
Credits taken through December 1997, including interest, of approximately $19
per Unit for Unit holders of record as of April 1998 and lost the ability to
utilize remaining Low-income Tax Credits of approximately $4 per Unit for 1998.
Registrant's investment balance in Erie, after cumulative equity losses, became
zero during the year ended March 30, 1998.
In connection with certain repairs required by the lender (the Massachusetts
Housing Finance Agency) ("MHFA") of Cobbet Hill Associates Limited Partnership
("Cobbet"), MHFA drew on a then existing letter of credit in the amount of
$242,529, which had been established for the purpose of covering future
operating deficits, if any. In June 1997, Registrant provided funds to establish
collateral to secure a replacement letter of credit. Although the repairs have
been completed and Cobbet has notified MHFA of such completion, Cobbet has not
received the anticipated notice from MHFA that the default has been cured.
Cobbet was originally financed with a first mortgage with mandatory monthly
payment terms with MHFA and a second mortgage with MHFA under the State Housing
Assistance for Rental Production Program (the "SHARP Operating Loan") whereby
proceeds would be advanced monthly as an operating subsidy (the "Operating
Subsidy Payments"). The terms of the SHARP Operating Loan called for declining
Operating Subsidy Payments over its term (not more than 15 years). However, due
to the economic condition of the Northeast region in the early 1990's, MHFA
instituted an operating deficit loan (the "ODL") program which supplemented the
scheduled reduction in the Operating Subsidy Payments. Effective October 1,
1997, MHFA announced its intention to eliminate the ODL program, such that
Cobbet no longer receives the ODL, without which Cobbet is unable to make the
full Mandatory Debt Service payments on its first mortgage. MHFA has notified
Cobbet and, to the Local General Partners' knowledge, other ODL recipients as
well, that MHFA considers such mortgages to be in default. The Local General
Partners have agreed to a plan, with modifications proposed by MHFA, to
recapitalize Cobbet from capital to be received from the admission of a new
limited partner. As of the date of this report, MHFA has not executed the plan.
If the plan were to be implemented, such new limited partner would receive a
substantial portion of the annual allocation of Cobbet's tax losses upon such
partner's admission, plus cash flows and residuals, if any. Registrant and the
Local General Partners would retain a sufficient interest in Cobbet to avoid
recapture of Low-income Tax Credits. There can be no assurance the plan will be
implemented, and if not, MHFA would be expected to retain its rights under the
loan documents. The future financial viability of Cobbet is highly uncertain.
The Property's historic tax credit was earned in 1988 and all of the Low-income
Tax Credits have been allocated since 1989 and are scheduled to expire in 1999.
Registrant's investment balance in Cobbet, after cumulative equity losses,
became zero during the year ended March 30, 1994.
The terms of the partnership agreement of Hilltop require the management agent
to defer property management fees in order to avoid a default under the
mortgage. Hilltop incurred an operating deficit resulting primarily from costs
associated with tenant turnover and a dispute regarding the administration of
the Section 8 contract by the local housing authority of approximately $198,000
for the year ended December 31, 1998, which included property management fees of
approximately $59,000. Hilltop received permission and withdrew approximately
$140,000 from the replacement reserve account to cover a portion of the deficit.
The Local General Partner has been conducting discussions with the local housing
authority in an effort to resolve what the Local General Partner considers to be
excessive requirements placed on the Property by the local housing authority.
Payments on the mortgage and real estate taxes are current. Registrant's
investment balance in Hilltop, after cumulative equity losses and an adjustment
to the investment's carrying value, became zero during the year ended March 30,
1999. All of the Low-income Tax Credits have been allocated since 1989 and are
scheduled to expire in 1999. Of Registrant's total annual Low-income Tax
Credits, approximately 6% is allocated from Hilltop.
Inflation
Inflation is not expected to have a material adverse impact on Registrant's
operations during its period of ownership of the Local Partnership Interests.
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
Adoption of Accounting Standards
Registrant has adopted Statement of Financial Accounting Standard ("SFAS") No.
130, "Reporting Comprehensive Income." SFAS No. 130 establishes standards for
reporting and display of comprehensive income and its components (revenues,
expenses, gains and losses) in a full set of general-purpose financial
statements. Other comprehensive income (loss) in the accompanying statements of
operations resulted from net unrealized gains (losses) on investments in bonds
available-for-sale. Accumulated other comprehensive income in the accompanying
balance sheets reflects the net unrealized gain on investments in bonds
available-for-sale. The statements of operations for the years ended March 30,
1998 and 1997 include certain reclassifications to reflect the adoption of SFAS
No. 130.
Registrant has adopted SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information," which establishes standards for reporting
information about operating segments and related disclosures about products and
services, geographic areas and major customers. Registrant is in one business
segment and follows the requirements of SFAS No. 131.
Year 2000 Compliance
The inability of computers, software and other equipment utilizing
microprocessors to recognize and properly process data fields containing a two
digit year is commonly referred to as the year 2000 compliance ("Y2K") issue. As
the year 2000 approaches, such systems may be unable to accurately process
certain data-based information. Many businesses may need to upgrade existing
systems or purchase new ones to correct the Y2K issue. Registrant has performed
an assessment of its computer software and hardware and believes it has made the
necessary upgrades in an effort to ensure compliance. However, there can be no
assurance that the systems of other entities on which Registrant relies,
including the Local Partnerships which report to Registrant on a periodic basis
for the purpose of Registrant's reporting to its investors, will be timely
converted. Registrant has corresponded with the Local Partnerships to ensure
their awareness of the Y2K issue and has requested details regarding their
efforts to ensure compliance. The total cost associated with Y2K implementation
is not expected to materially impact Registrant's financial position or results
of operations in any given year. However, there can be no assurance that a
failure to convert by Registrant or another entity would not have a material
adverse impact on Registrant.
Item 7A. Quantitative and Qualitative Disclosure Above Market Risk
Registrant has invested a significant portion of its working capital reserves in
corporate bonds and U.S. treasury instruments. The market value of such
investments is subject to fluctuation based upon changes in interest rates
relative to each investment's maturity date. Since Registrant's investments in
bonds have various maturity dates through 2023, the value of such investments
may be adversely impacted in an environment of rising interest rates in the
event Registrant decides to liquidate any such investment prior to its maturity.
Although Registrant may utilize reserves to assist an underperforming Property,
it otherwise intends to hold such investments to their respective maturities.
Therfore, Registrant does not anticipate any material adverse impact in
connection with such investments.
The Properties are generally located where there is a demand for low-income
housing. Accordingly, there is a significant likelihood that new low-income
housing properties could be built in the general vicinity of the respective
Properties. As a result, the respective Properties' ability to operate at high
occupancy levels is subject to competition from newly built low-income housing.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES L.P.
Item 8. Financial Statements and Supplementary Data
Table of Contents
Page
Independent Auditors' Report..................................................14
Balance Sheets................................................................15
Statements of Operations......................................................16
Statements of Changes in Partners' Equity (Deficit)...........................17
Statements of Cash Flows......................................................18
Notes to Financial Statements.................................................20
No financial statement schedules are included 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>
Independent Auditors' Report
To the Partners
American Tax Credit Properties L.P.
We have audited the accompanying balance sheets of American Tax Credit
Properties L.P. as of March 30, 1999 and 1998, and the related statements of
operations, changes in partners' equity (deficit) and cash flows for each of the
three years in the period ended March 30, 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 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 American Tax Credit
Properties L.P. as of March 30, 1999 and 1998, and the results of its operations
and its cash flows for each of the three years in the period ended March 30,
1999, in conformity with generally accepted accounting principles.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland
May 13, 1999
<PAGE>
AMERICAN TAX CREDIT PROPERTIES L.P.
BALANCE SHEETS
MARCH 30, 1999 AND 1998
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Notes 1999 1998
----- ----------- -----------
ASSETS
Cash and cash equivalents 3,9 $ 86,232 $ 388,431
Investments in bonds available-for-sale 4,5,9 2,706,269 2,678,595
Investment in local partnerships 5,8 3,628,899 5,891,075
Interest receivable 9 57,005 53,744
----------- -----------
$ 6,478,405 $ 9,011,845
=========== ===========
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities
Accounts payable and accrued expenses 8 $ 91,698 $ 55,400
Payable to general partner 6,8 43,861 43,861
----------- -----------
135,559 99,261
----------- -----------
Commitments and contingencies 5,8
Partners' equity (deficit) 2,4
General partner (304,341) (278,907)
Limited partners (41,286 units of limited partnership interest
outstanding) 6,440,125 8,958,053
Accumulated other comprehensive income, net 207,062 233,438
----------- -----------
6,342,846 8,912,584
----------- -----------
$ 6,478,405 $ 9,011,845
=========== ===========
See Notes to Financial Statements.
</TABLE>
<PAGE>
AMERICAN TAX CREDIT PROPERTIES L.P.
STATEMENTS OF OPERATIONS
YEARS ENDED MARCH 30, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Notes 1999 1998 1997
----- ----------- ----------- -----------
REVENUE
Interest $ 225,936 $ 241,201 $ 255,496
Other income from local partnerships 23,238 20,000 3,697
----------- ----------- -----------
TOTAL REVENUE 249,174 261,201 259,193
----------- ----------- -----------
EXPENSES
Administration fees 8 183,723 183,723 183,723
Management fee 6,8 175,466 175,466 175,466
Professional fees 133,265 75,063 202,897
Printing, postage and other 37,906 27,037 31,570
----------- ----------- -----------
TOTAL EXPENSES 530,360 461,289 593,656
----------- ----------- -----------
Loss from operations (281,186) (200,088) (334,463)
Equity in loss of investment in local partnerships 5 (2,262,176) (1,484,136) (2,049,756)
----------- ----------- -----------
NET LOSS (2,543,362) (1,684,224) (2,384,219)
Other comprehensive income (loss) 4 (26,376) 119,945 (77,279)
----------- ----------- -----------
COMPREHENSIVE LOSS $(2,569,738) $(1,564,279) $(2,461,498)
=========== =========== ===========
NET LOSS ATTRIBUTABLE TO 2
General partner $ (25,434) $ (16,842) $ (23,842)
Limited partners (2,517,928) (1,667,382) (2,360,377)
----------- ----------- -----------
$(2,543,362) $(1,684,224) $(2,384,219)
=========== =========== ===========
NET LOSS per unit of limited partnership
interest (41,286 units of limited partnership
interest) $ (60.99) $ (40.39) $ (57.17)
=========== =========== ===========
See Notes to Financial Statements.
</TABLE>
<PAGE>
AMERICAN TAX CREDIT PROPERTIES L.P.
STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIT)
YEARS ENDED MARCH 30, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Accumulated
Other
Comprehensive
General Limited Income (Loss),
Partner Partners Net Total
----------- ------------- -------------- --------------
Partners' equity (deficit), March 30, 1996 $ (238,223) $ 12,985,812 $ 190,772 $ 12,938,361
Net loss (23,842) (2,360,377) (2,384,219)
Other comprehensive loss, net (77,279) (77,279)
----------- ------------- -------------- --------------
Partners' equity (deficit), March 30, 1997 (262,065) 10,625,435 113,493 10,476,863
Net loss (16,842) (1,667,382) (1,684,224)
Other comprehensive income, net 119,945 119,945
----------- ------------- -------------- --------------
Partners' equity (deficit), March 30, 1998 (278,907) 8,958,053 233,438 8,912,584
Net loss (25,434) (2,517,928) (2,543,362)
Other comprehensive loss, net (26,376) (26,376)
----------- ------------- -------------- --------------
Partners' equity (deficit), March 30, 1999 $ (304,341) $ 6,440,125 $ 207,062 $ 6,342,846
=========== ============= ============== ==============
See Notes to Financial Statements.
</TABLE>
<PAGE>
AMERICAN TAX CREDIT PROPERTIES L.P.
STATEMENTS OF CASH FLOWS
YEARS ENDED MARCH 30, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1999 1998 1997
------------ ------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received $ 244,449 $ 263,267 $ 276,171
Cash paid for
administration fees (183,723) (183,723) (183,723)
management fee (175,466) (175,466) (175,466)
professional fees (96,965) (99,428) (184,832)
printing, postage and other expenses (37,908) (38,509) (16,359)
------------ ------------ ------------
Net cash used in operating activities (249,613) (233,859) (284,209)
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash distributions and other income from local partnerships 23,238 37,500 36,197
Investment in local partnership (10,533)
Investments in bonds (includes accrued interest of $386 and $1,301) (260,814) (257,217)
Maturity/redemption and sale of bonds 184,990 568,432 135,000
------------ ------------ ------------
Net cash provided by (used in) investing activities (52,586) 338,182 171,197
------------ ------------ ------------
Net increase (decrease) in cash and cash equivalents (302,199) 104,323 (113,012)
Cash and cash equivalents at beginning of year 388,431 284,108 397,120
------------ ------------ ------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 86,232 $ 388,431 $ 284,108
============ ============ ============
SIGNIFICANT NON-CASH INVESTING ACTIVITIES
Unrealized gain (loss) on investments in bonds available-for-sale, net $ (26,376) $ 119,945 $ (77,279)
============ ============ ============
See reconciliation of net loss to net cash used in operating activities on page
19.
See Notes to Financial Statements.
</TABLE>
<PAGE>
AMERICAN TAX CREDIT PROPERTIES L.P.
STATEMENTS OF CASH FLOWS - (Continued)
YEARS ENDED MARCH 30, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1999 1998 1997
-------------- ------------- -------------
RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING
ACTIVITIES
Net loss $ (2,543,362) $ (1,684,224) $ (2,384,219)
Adjustments to reconcile net loss to net cash used in operating
activities
Equity in loss of investment in local partnerships 2,262,176 1,484,136 2,049,756
Distributions from local partnerships classified as other (23,238) (20,000) (3,697)
income
Amortization of net premium on investments in bonds 37,667 28,576 32,114
Accretion of zero coupon bonds (16,279) (15,783) (16,303)
Decrease (increase) in interest receivable (2,875) 9,273 4,864
Increase (decrease) in accounts payable and accrued expenses 36,298 (35,837) 33,276
-------------- ------------- -------------
NET CASH USED IN OPERATING ACTIVITIES $ (249,613) $ (233,859) $ (284,209)
============== ============= =============
See Notes to Financial Statements.
</TABLE>
<PAGE>
AMERICAN TAX CREDIT PROPERTIES L.P.
NOTES TO FINANCIAL STATEMENTS
MARCH 30, 1999, 1998 AND 1997
1. Organization, Purpose and Summary of Significant Accounting Policies
American Tax Credit Properties L.P. (the "Partnership") was formed on February
12, 1988 and the Certificate of Limited Partnership of the Partnership was filed
under the Delaware Revised Uniform Limited Partnership Act. There was no
operating activity until admission of the limited partners on August 19, 1988.
The Partnership was formed to invest primarily in leveraged low-income
multifamily residential complexes (the "Property" or "Properties") which qualify
for the low-income tax credit in accordance with Section 42 of the Internal
Revenue Code (the "Low-income Tax Credit"), through the acquisition of limited
partnership equity interests (the "Local Partnership Interests") in partnerships
(the "Local Partnership" or "Local Partnerships") that are the owners of the
Properties. The Partnership has invested in one Property which also qualifies
for the historic rehabilitation tax credit in accordance with Section 48(g) of
the Internal Revenue Code of 1986. Richman Tax Credit Properties L.P. (the
"General Partner") was formed on February 10, 1988 to act as a general partner
of the Partnership.
Basis of Accounting and Fiscal Year
The Partnership's records are maintained on the accrual basis of accounting for
both financial reporting and tax purposes. For financial reporting purposes, the
Partnership's fiscal year ends March 30 and its quarterly periods end June 29,
September 29 and December 30. The Local Partnerships have a calendar year for
financial reporting purposes. The Partnership and the Local Partnerships each
have a calendar year for income tax purposes.
Investment in Local Partnerships
The Partnership accounts for its investment in Local Partnerships in accordance
with the equity method of accounting, under which the investment is carried at
cost and is adjusted for the Partnership's share of each Local Partnership's
results of operations and by cash distributions received. Equity in loss of each
investment in Local Partnership allocated to the Partnership is recognized to
the extent of the Partnership's investment balance in each Local Partnership.
Equity in loss in excess of the Partnership's investment balance in a Local
Partnership is allocated to other partners' capital in any such Local
Partnership. Previously unrecognized equity in loss of any Local Partnership is
recognized in the fiscal year in which equity in income is earned by such Local
Partnership. Distributions received subsequent to the elimination of an
investment balance for any such investment in a Local Partnership are recorded
as other income from local partnerships.
The Partnership regularly assesses the carrying value of its investment in Local
Partnerships. If the carrying value is considered to exceed the estimated value
derived by management (which contemplates remaining Low-income Tax Credits and
potential residual value, among other things), the Partnership reduces its
investment in any such Local Partnership and includes such reduction in equity
in loss of investment in local partnerships.
Advances made to Local Partnerships are recorded as investments in Local
Partnerships. Such advances are considered by the Partnership to be voluntary
loans to the respective Local Partnerships and the Partnership may be reimbursed
at a future date to the extent such Local Partnerships generate distributable
cash flow or receive proceeds from sale or refinancing.
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 as of 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
The Partnership has adopted Statement of Financial Accounting Standard ("SFAS")
No. 130, "Reporting Comprehensive Income." SFAS No. 130 establishes standards
for reporting and display of comprehensive income and its components (revenues,
expenses, gains and losses) in a full set of general-purpose financial
statements. Other comprehensive income (loss) in the accompanying statements of
operations resulted from net unrealized gains (losses) on investments in bonds
available-for-sale. Accumulated other comprehensive income in the accompanying
balance sheets reflects the net
<PAGE>
AMERICAN TAX CREDIT PROPERTIES L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
1. Organization, Purpose and Summary of Significant Accounting Policies
(continued)
unrealized gain on investments in bonds available-for-sale. The statements of
operations for the years ended March 30, 1998 and 1997 include certain
reclassifications to reflect the adoption of SFAS No. 130.
The Partnership has adopted SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information," which establishes standards for reporting
information about operating segments and related disclosures about products and
services, geographic areas and major customers. The Partnership is in one
business segment and follows the requirements of SFAS No. 131.
Cash and Cash Equivalents
The Partnership considers all highly liquid investments purchased with an
original maturity of three months or less at the date of acquisition to be cash
equivalents. Cash and cash equivalents are stated at cost which approximates
market value.
Investments in Bonds Available-For-Sale
Investments in bonds classified as available-for-sale represent investments that
the Partnership intends to hold for an indefinite period of time but not
necessarily to maturity. Any decision to sell an investment classified as
available-for-sale would be based on various factors, including significant
movements in interest rates and liquidity needs. Investments in bonds
available-for-sale are carried at estimated fair value and unrealized gains or
losses are included as items of comprehensive income (loss) and are reported as
a separate component of partners' equity (deficit).
Premiums and discounts on investments in bonds available-for-sale are amortized
(accreted) using the straight-line method over the life of the investment.
Amortized premiums offset interest revenue, while the accretion of discounts and
zero coupon bonds are included in interest revenue. Realized gain (loss) on
redemption or sale of investments in bonds available-for-sale are included in,
or offset against, interest revenue on the basis of the adjusted cost of each
specific investment redeemed or sold.
Income Taxes
No provision for income taxes has been made because all income, losses and tax
credits are allocated to the partners for inclusion in their respective tax
returns. In accordance with SFAS No. 109, "Accounting for Income Taxes," the
Partnership has included in Note 7 disclosures related to differences in the
book and tax bases of accounting.
2. Capital Contributions
On May 11, 1988, the Partnership commenced the offering of units (the "Units")
through Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Selling
Agent"). On August 19, 1988 and November 15, 1988, under the terms of the
Amended and Restated Agreement of Limited Partnership of the Partnership (the
"Partnership Agreement"), the General Partner admitted limited partners to the
Partnership in two closings. At these closings, subscriptions for a total of
41,286 Units representing $41,286,000 in limited partners' capital contributions
were accepted. In connection with the offering of Units, the Partnership
incurred organization and offering costs of $4,781,252, of which $75,000 was
capitalized as organization costs and $4,706,252 was charged to the limited
partners' equity as syndication costs. The Partnership received a capital
contribution of $100 from the General Partner.
Net loss is allocated 99% to the limited partners and 1% to the General Partner
in accordance with the Partnership
Agreement.
3. Cash and Cash Equivalents
As of March 30, 1999, the Partnership has $86,232 in cash and cash equivalents
which are deposited in interest-bearing accounts with an institution which is
not insured by the Federal Deposit Insurance Corporation.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
4. Investments in Bonds Available-For-Sale
The Partnership carries its investments in bonds as available-for-sale because
such investments are used to facilitate and provide flexibility for the
Partnership's obligations, including resolving circumstances which may arise in
connection with the Local Partnerships. Such bonds available-for-sale includes
$242,529 considered restricted in connection with a Local Partnership's
outstanding letter of credit (see Note 8). Investments in bonds
available-for-sale are reflected in the accompanying balance sheets at estimated
fair value.
As of March 30, 1999, certain information concerning investments in bonds
available-for-sale is as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Gross Gross
Amortized unrealized unrealized Estimated
Description and maturity cost gains losses fair value
------------------------ ----------- ---------- ------------ -----------
Corporate debt securities
Within one year $ 15,000 $ 66 $ -- $ 15,066
After one year through five years 262,268 15,986 -- 278,254
After five years through ten years 652,680 23,812 -- 676,492
After ten years 74,212 -- (1,401) 72,811
----------- ---------- ------------ -----------
1,004,160 39,864 (1,401) 1,042,623
----------- ---------- ------------ -----------
U.S. Treasury debt securities
Within one year 257,000 801 -- 257,801
After one year through five years 824,368 129,483 -- 953,851
After five years through ten years 183,729 39,210 -- 222,939
----------- ---------- ------------ -----------
1,265,097 169,494 -- 1,434,591
----------- ---------- ------------ -----------
U.S. government and agency securities
After five years through ten years 229,950 -- (895) 229,055
----------- ---------- ------------ -----------
$ 2,499,207 $ 209,358 $ (2,296) $ 2,706,269
=========== ========== ============ ===========
</TABLE>
<PAGE>
AMERICAN TAX CREDIT PROPERTIES L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
4. Investments in Bonds Available-For-Sale (continued)
As of March 30, 1998, certain information concerning investments in bonds
available-for-sale is as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Gross Gross
Amortized unrealized unrealized Estimated
Description and maturity cost gains losses fair value
- ------------------------ ----------- ---------- ---------- -----------
Corporate debt securities
After one year through five years $ 331,817 $ 9,134 $ (169) $ 340,782
After five years through ten years 773,429 39,963 -- 813,392
After ten years 101,334 -- (1,677) 99,657
----------- ---------- ---------- -----------
1,206,580 49,097 (1,846) 1,253,831
----------- ---------- ---------- -----------
U.S. Treasury debt securities
After one year through five years 514,237 83,844 -- 598,081
After five years through ten years 510,669 103,734 -- 614,403
----------- ---------- ---------- -----------
1,024,906 187,578 -- 1,212,484
----------- ---------- ---------- -----------
U.S. government and agency securities
After five years through ten years 213,671 -- (1,391) 212,280
----------- ---------- ---------- -----------
$ 2,445,157 $ 236,675 $ (3,237) $ 2,678,595
=========== ========== ========== ===========
</TABLE>
<PAGE>
AMERICAN TAX CREDIT PROPERTIES L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
5. Investment in Local Partnerships
As of March 30, 1999, the Partnership owns a limited partnership interest in the
following Local Partnerships:
1. 4611 South Drexel Limited Partnership;
2. Blue Hill Housing Limited Partnership;
3. Cityside Apartments, L.P. ("Cityside")*;
4. Cobbet Hill Associates Limited Partnership ("Cobbet")*;
5. Dunbar Limited Partnership;
6. Dunbar Limited Partnership No. 2;
7. Federal Apartments Limited Partnership;
8. Golden Gates Associates;
9. Grove Park Housing, A California Limited Partnership;
10. Gulf Shores Apartments Ltd.;
11. Hilltop North Associates, A Virginia Limited Partnership ("Hilltop");
12. Madison-Bellefield Associates;
13. Pine Hill Estates Limited Partnership;
14. Santa Juanita Limited Dividend Partnership L.P. ("Santa Juanita");
15. Vista del Mar Limited Dividend Partnership L.P.; and
16. Winnsboro Homes Limited Partnership.
* An affiliate of the General Partner is a general partner of and/or provides
services to the Local Partnership.
Although the Partnership generally owns a 98.9%-99% limited partnership interest
in the Local Partnerships, the Partnership and American Tax Credit Properties II
L.P. ("ATCP II"), a Delaware limited partnership and an affiliate of the
Partnership, together, in the aggregate, own a 99% Local Partnership Interest in
Santa Juanita; the ownership percentages of the Partnership and ATCP II of Santa
Juanita are 34.64% and 64.36%, respectively.
The Properties are principally comprised of subsidized and leveraged low-income
multifamily residential complexes located throughout the United States and
Puerto Rico. The required holding period of each Property, in order to avoid
Low-income Tax Credit recapture, is fifteen years from the year in which the
Low-income Tax Credits commence on the last building of the Property (the
"Compliance Period"). The rents of the Properties are controlled by federal and
state agencies pursuant to applicable laws and regulations. Under the terms of
each of the Local Partnership's partnership agreements, the Partnership made
capital contributions in the aggregate amount of $34,520,823. As of December 31,
1998, the Local Partnerships have outstanding mortgage loans payable totaling
approximately $73,082,000 and accrued interest payable on such loans totaling
approximately $3,397,000, which are secured by security interests and liens
common to mortgage loans on the Local Partnerships' real property and other
assets.
Equity in loss of investment in Local Partnerships is limited to the
Partnership's investment balance in each Local Partnership; any excess is
applied to other partners' capital in any such Local Partnership (see Note 1).
The amount of such excess losses applied to other partners' capital was
$2,305,457, $3,864,303 and $7,714,573 for the years ended December 31, 1998,
1997 and 1996, respectively, as reflected in the combined statements of
operations of the Local Partnerships reflected herein Note 5.
As a result of management's assessment of the carrying value of the investment
in Local Partnerships under applicable accounting guidelines (see Note 1), the
Partnership has reduced its investment in Cityside and Hilltop during the year
ended March 30, 1999 by $596,586 and $423,919, respectively. Such losses are
included in equity in loss of investment in local partnerships in the
accompanying statement of operations of the Partnership for the year ended March
30, 1999.
The combined balance sheets of the Local Partnerships as of December 31, 1998
and 1997 and the combined statements of operations of the Local Partnerships for
the years ended December 31, 1998, 1997 and 1996 are reflected on pages 25 and
26, respectively.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
5. Investment in Local Partnerships (continued)
The combined balance sheets of the Local Partnerships as of December 31, 1998
and 1997 are as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
1998 1997
----------- -----------
ASSETS
Cash and cash equivalents $ 950,402 $ 1,219,986
Rents receivable 158,840 243,316
Escrow deposits and reserves 2,902,738 3,044,733
Land 3,850,061 4,075,735
Buildings and improvements (net of accumulated
depreciation of $36,919,031 and $34,628,370) 68,839,045 74,439,165
Intangible assets (net of accumulated amortization
of $581,155 and $640,058) 1,752,259 1,827,938
Other 717,846 803,251
----------- -----------
$79,171,191 $85,654,124
=========== ===========
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities
Accounts payable and accrued expenses $ 1,012,318 $ 1,065,374
Due to related parties 5,102,192 5,376,344
Mortgage loans 73,082,152 77,119,187
Notes payable 1,103,781 1,000,841
Accrued interest 3,396,688 4,959,061
Other 311,163 353,188
----------- -----------
84,008,294 89,873,995
----------- -----------
Partners' equity (deficit)
American Tax Credit Properties L.P.
Capital contributions, net of distributions 33,929,447 33,941,389
Cumulative loss (29,301,268) (28,059,597)
----------- -----------
4,628,179 5,881,792
----------- -----------
General partners and other limited partners, including ATCP II
Capital contributions, net of distributions 509,267 677,937
Cumulative loss (9,974,549) (10,779,600)
----------- -----------
(9,465,282) (10,101,663)
----------- -----------
(4,837,103) (4,219,871)
----------- -----------
$79,171,191 $85,654,124
=========== ===========
</TABLE>
<PAGE>
AMERICAN TAX CREDIT PROPERTIES L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
5. Investment in Local Partnerships (continued)
The combined statements of operations of the Local Partnerships for the years
ended December 31, 1998, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1998 1997 1996
REVENUE
Rental $ 15,316,870 $ 16,012,453 $ 16,043,472
Interest and other 288,163 288,937 313,515
-------------- -------------- --------------
TOTAL REVENUE 15,605,033 16,301,390 16,356,987
-------------- -------------- --------------
EXPENSES
Administrative 2,344,916 2,425,249 2,471,642
Utilities 1,289,871 1,343,714 1,318,995
Operating, maintenance and other 3,428,628 3,672,948 3,596,884
Taxes and insurance 1,815,618 1,937,491 2,231,678
Financial (including amortization of $75,679
$76,677, and $99,791) 6,519,143 7,579,627 7,807,923
Depreciation 3,815,106 4,032,607 4,022,559
Loss from eminent domain proceeding 897,770
Loss from impairment of long-lived assets 744,126 3,910,599
-------------- -------------- --------------
TOTAL EXPENSES 19,213,282 21,735,762 26,258,050
-------------- -------------- --------------
NET LOSS FROM OPERATIONS BEFORE EXTRAORDINARY
ITEM (3,608,249) (5,434,372) (9,901,063)
Extraordinary gain on extinguishment of debt 3,171,629 6,441,935
-------------- -------------- --------------
NET INCOME (LOSS) $ (436,620) $ 1,007,563 $ (9,901,063)
============== ============== ==============
NET INCOME (LOSS) ATTRIBUTABLE TO
American Tax Credit Properties L.P. $ (1,241,671) $ (1,484,136) $ (2,049,756)
General partners and other limited
partners, including ATCP II, which
includes specially allocated items
of net revenue to certain general
partners of $2,905,824, $6,763,705,
and $10,487, and $2,305,457, $3,864,303,
and $7,714,573 of Partnership loss in
excessof investment 805,051 2,491,699 (7,851,307)
-------------- -------------- --------------
$ (436,620) $ 1,007,563 $ (9,901,063)
============== ============== ==============
</TABLE>
<PAGE>
AMERICAN TAX CREDIT PROPERTIES L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
5. Investment in Local Partnerships (continued)
Investment activity with respect to each Local Partnership for the year ended
March 30, 1999 is as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Cash
distributions
Cash classified
Investment Partnership's Adjustment distributions as other Investment
in Local equity in to carrying received income in Local
Partnership loss for the value during during the during the Partnership
balance as year ended the year ended year ended year ended balance as
Name of Local of March 30, December 31, March 30, March 30, March 30, of March 30,
Partnership 1998 1998 1999 1999 1999 1999
- ------------------------- ------------ ----------- ------------- ------------- ------------ ------------
4611 South Drexel Limited
Partnership $ -- $ --(1) $ -- $ -- $ -- $ --
Blue Hill Housing Limited
Partnership 1,808,884 (106,122) -- -- -- 1,702,762
Cityside Apartments, L.P. 1,977,733 (575,453) (596,586)(2) -- -- 805,694
Cobbet Hill Associates
Limited Partnership -- --(1) -- -- -- --
Dunbar Limited Partnership -- --(1) -- -- -- --
Dunbar Limited
Partnership No. 2 -- --(1) -- -- -- --
Erie Associates Limited
Partnership -- --(1) -- (8,263) 8,263 --
Federal Apartments
Limited Partnership -- --(1) -- -- -- --
Golden Gates Associates -- --(1) -- -- -- --
Grove Park Housing, A
California Limited
Partnership -- --(1) -- -- -- --
Gulf Shores Apartments -- --(1) -- (2,475) 2,475 --
Ltd.
Hilltop North Associates,
A Virginia Limited 600,108 (176,189) (423,919)(2) -- -- --
Partnership
Madison-Bellefield
Associates 704,748 (36,254) -- -- -- 668,494
Pine Hill Estates Limited
Partnership -- --(1) -- (10,000) 10,000 --
Santa Juanita Limited
Dividend Partnership L.P. 112,378 (15,065) -- -- -- 97,313
Vista del Mar Limited
Dividend Partnership L.P. 687,224 (332,588) -- -- -- 354,636
Winnsboro Homes Limited
Partnership -- --(1) -- (2,500) 2,500 --
------------ ----------- ----------- ----------- ----------- -----------
$ 5,891,075 $(1,241,671) $(1,020,505) $ (23,238) $ 23,238 $ 3,628,899
============ =========== =========== =========== =========== ===========
</TABLE>
(1) Additional equity in loss of investment is not allocated to the Partnership
until equity in income is earned.
(2) The Partnership has adjusted the investment's carrying value in accordance
with applicable accounting guidelines.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
5. Investment in Local Partnerships (continued)
Investment activity with respect to each Local Partnership for the year ended
March 30, 1998 is as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Cash
Cash distributions
Investment in Partnership's distributions classified as Investment in
Local Investment equity in loss received other income Local
Partnership during the for the year during the during the Partnership
Balance as of year ended ended year ended year ended balance as of
March 30, March 30, December 31, March 30, March 30, March 30,
Partnership 1997 1998 1997 1998 1998 1998
- ------------------------- ------------ ----------- ------------- ------------- ------------ ------------
4611 South Drexel Limited
Partnership $ -- $ 10,533 $ (10,533)(1) $ -- $ -- $ --
B & V Phase I, Ltd. -- -- -- (2) -- -- --
Blue Hill Housing Limited
Partnership 1,998,263 -- (189,379) -- -- 1,808,884
Cityside Apartments, L.P. 2,512,654 -- (532,421) (2,500) -- 1,977,733
Cobbet Hill Associates
Limited Partnership -- -- --(2) -- -- --
Dunbar Limited Partnership 29,617 -- (27,117)(1) (2,500) -- --
Dunbar Limited
Partnership No. 2 -- -- --(2) (2,500) 2,500 --
Erie Associates Limited
Partnership 217,968 -- (217,968)(1) -- -- --
Federal Apartments
Limited Partnership -- -- --(2) (5,000) 5,000 --
Golden Gates Associates -- -- --(2) (2,500) 2,500 --
Grove Park Housing, A
California Limited
Partnership -- -- --(2) -- -- --
Gulf Shores Apartments
Ltd. -- -- --(2) -- -- --
Hilltop North Associates,
A Virginia Limited
Partnership 756,064 -- (155,956) -- -- 600,108
Madison-Bellefield
Associates 782,220 -- (67,472) (10,000) -- 704,748
Pine Hill Estates Limited
Partnership -- -- --(2) (10,000) 10,000 --
Santa Juanita Limited
Dividend Partnership L.P. 126,730 -- (14,352) -- -- 112,378
Vista del Mar Limited
Dividend Partnership L.P. 932,195 -- (244,971) -- -- 687,224
Winnsboro Homes Limited
Partnership 26,467 -- (23,967)(1) (2,500) -- --
------------ ------------ ----------- ----------- ------------ ------------
$ 7,382,178 $ 10,533 $(1,484,136) $ (37,500) $ 20,000 $ 5,891,075
============ ============ =========== =========== ============ ============
</TABLE>
(1) The Partnership's equity in loss of an investment in a Local Partnership is
limited to the remaining investment balance.
(2) Additional equity in loss of investment is not allocated to the Partnership
until equity in income is earned.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
5. Investment in Local Partnerships (continued)
Property information for each Local Partnership as of December 31, 1998 is as
follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Mortgage Buildings and Accumulated
Name of Local Partnership loans payable Land improvements depreciation
- ---------------------------------------------------- ------------- ---------- ------------- ------------
4611 South Drexel Limited Partnership $ 1,348,852 $ 64,408 $ 1,756,833 $ (552,068)
Blue Hill Housing Limited Partnership 6,498,779 111,325 10,930,375 (3,687,040)
Cityside Apartments, L.P. 7,732,846 131,591 13,785,799 (4,681,381)
Cobbet Hill Associates Limited Partnership 13,652,326 504,683 16,089,978 (5,947,859)
Dunbar Limited Partnership 3,987,468 117,126 5,738,685 (2,016,632)
Dunbar Limited Partnership No. 2 4,566,461 131,920 6,480,819 (2,326,149)
Federal Apartments Limited Partnership 5,184,018 279,750 8,459,690 (3,010,387)
Golden Gates Associates 4,622,936 29,585 5,821,145 (2,210,618)
Grove Park Housing, A California Limited Partnership 6,872,589 956,952 7,676,667 (2,544,448)
Gulf Shores Apartments Ltd. 1,486,787 172,800 1,750,427 (665,975)
Hilltop North Associates, A Virginia Limited Partnership
3,281,463 240,514 4,923,732 (1,419,973)
Madison-Bellefield Associates 3,499,704 245,000 5,610,744 (2,048,792)
Pine Hill Estates Limited Partnership 2,375,040 40,000 3,892,369 (1,332,579)
Santa Juanita Limited Dividend Partnership L.P. 1,494,484 228,718 2,329,619 (770,901)
Vista del Mar Limited Dividend Partnership L.P. 5,290,711 565,689 8,700,543 (3,104,217)
Winnsboro Homes Limited Partnership 1,187,688 30,000 1,810,651 (600,012)
------------ ---------- ------------ ------------
$ 73,082,152 $3,850,061 $105,758,076 $(36,919,031)
============ ========== ============ ============
Property information for each Local Partnership as of December 31, 1997 is as
follows:
Mortgage Buildings and Accumulated
Name of Local Partnership loans payable Land improvements depreciation
- ----------------------------------------------- ------------- ---------- ------------- ------------
4611 South Drexel Limited Partnership $ 1,362,810 $ 64,408 $ 1,756,833 $ (488,253)
B & V Phase I, Ltd. 2,638,947 190,830 2,758,628 (845,068)
Blue Hill Housing Limited Partnership 6,527,094 111,325 10,901,190 (3,416,271)
Cityside Apartments, L.P. 7,802,632 131,591 13,785,799 (4,178,545)
Cobbet Hill Associates Limited Partnership 13,638,653 504,683 16,089,978 (5,342,860)
Dunbar Limited Partnership 3,998,205 117,126 5,661,631 (1,806,293)
Dunbar Limited Partnership No. 2 4,578,433 131,920 6,349,410 (2,091,678)
Erie Associates Limited Partnership 914,034 34,844 1,050,946 (625,762)
Federal Apartments Limited Partnership 5,255,821 279,750 8,397,981 (2,680,492)
Golden Gates Associates 4,640,520 29,585 5,818,392 (2,002,181)
Grove Park Housing, A California Limited Partnership 6,902,010 956,952 7,676,667 (2,265,325)
Gulf Shores Apartments Ltd. 1,489,807 172,800 1,750,427 (604,448)
Hilltop North Associates, A Virginia Limited Partnership
3,309,917 240,514 4,803,496 (1,280,404)
Madison-Bellefield Associates 3,579,463 245,000 5,580,759 (1,807,672)
Pine Hill Estates Limited Partnership 2,425,687 40,000 3,867,047 (1,182,796)
Santa Juanita Limited Dividend Partnership L.P. 1,508,243 228,718 2,321,226 (688,156)
Vista del Mar Limited Dividend Partnership L.P. 5,335,087 565,689 8,693,087 (2,788,983)
Winnsboro Homes Limited Partnership 1,211,824 30,000 1,804,038 (533,183)
----------- ---------- ------------ ------------
$77,119,187 $4,075,735 $109,067,535 $(34,628,370)
=========== ========== ============ ============
</TABLE>
<PAGE>
AMERICAN TAX CREDIT PROPERTIES L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
5. Investment in Local Partnerships (continued)
The summary of property activity during the year ended December 31, 1998 is as
follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Net change
Balance as of during the year ended Balance as of
December 31, 1997 December 31, 1998 December 31, 1998
----------------- --------------------- -----------------
Land $ 4,075,735 $ (225,674) $ 3,850,061
Buildings and improvements 109,067,535 (3,309,459) 105,758,076
----------------- --------------------- -----------------
113,143,270 (3,535,133) 109,608,137
Accumulated depreciation (34,628,370) (2,290,661) (36,919,031)
----------------- --------------------- -----------------
$ 78,514,900 $ (5,825,794) $ 72,689,106
================= ==================== =================
</TABLE>
In December 1988, the Partnership acquired a 99% limited partnership interest in
B & V, Ltd. ("B & V"), which owned a 190-unit complex located in Homestead,
Florida. In August 1992, much of Homestead, Florida was devastated by Hurricane
Andrew and the Property owned by B & V sustained substantial damage. The damage
to the complex was covered by property insurance and B & V was covered by rental
interruption insurance. It was the intention of the Local General Partner to
reconstruct the complex, and thus preserve the Low-income Tax Credits. However,
delays in the rebuilding of the complex occurred due to significant
disagreements with the insurance company concerning selection of the contractor
and the costs to rebuild the complex. In addition, the insurance carrier ceased
making rental interruption insurance payments and subsequently the lender
declared a default. While conducting repairs, which included completing 52
rental units which were placed in service, B & V was unable to make required
mortgage payments, but undertook significant litigious efforts to effect a
workout with the lender and cause the insurance company and contractor to
perform under their obligations to rebuild the complex, which included
reorganization plans, bankruptcy proceedings, binding arbitration and voluntary
nonbinding mediation. Despite such efforts, the complex lost 32 rental units
pursuant to a quick-take eminent domain proceeding in April 1996, resulting in
the recognition by B & V of a loss from impairment of long-lived assets and
eminent domain proceeding of approximately $4,808,000. The remainder of the
complex was ultimately lost in April 1997 when the Bankruptcy Court ordered
title transfer of the Property, resulting in the recognition by B & V of a gain
on the extinguishment of debt of $6,441,935. The Partnership's investment
balance in B & V, after cumulative equity losses, became zero during the year
ended March 30, 1995, therefore, the aforementioned gain and losses had no
impact on the financial position, results of operations or cash flows of the
Partnership.
B & V Phase I, Ltd. ("B & V Phase I"), owned a 97-unit, Section 8 assisted
apartment complex located in Homestead, Florida. Prior to the Partnership's
investment during the year ended March 30, 1995, B & V Phase I was damaged by
Hurricane Andrew in August 1992. Since May 1, 1996, all 97 of the rental units
were complete and occupied. Pursuant to an agreement with the lender, B & V
Phase I was to commence paying debt service in January 1995 which was to
coincide with the completion of construction. However, due to construction
delays, B & V Phase I had not commenced making such payments. The lender
declared a default under the terms of the mortgage and, on December 9, 1996 the
lender commenced a foreclosure action. After pursuing various legal efforts
which were ultimately unsuccessful because alternative sources of financing
could not be secured, the property was transferred to the lender in May 1998. As
a result, the combined balance sheet of the Local Partnerships as of December
31, 1998 and the combined statement of operations of the Local Partnerships for
the year then ended presented herein Note 5 do not include the assets and
liabilities and results of operations of B & V Phase I with the exception of an
extraordinary gain recognized on the extinguishment of debt in the amount of
$2,467,526. The Partnership's investment balance in B & V Phase I, after
cumulative equity losses, became zero during the year ended March 30, 1995. The
aforementioned transfer had no effect on the financial position, results of
operations or cash flows of the Partnership.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
5. Investment in Local Partnerships (continued)
Erie Associates Limited Partnership ("Erie"), which was in the tenth year of the
Low-income Tax Credit period, was subject to an amended and restated note (the
"Amended Note") dated December 1, 1994 (which matured on December 1, 1997) and
was entitled to a project-based rental subsidy under Chapter 707 of the Acts of
1966 of the Commonwealth of Massachusetts. The original financing called for
mandatory debt service of $7,647 per month, while the Amended Note required
monthly mandatory debt service of $5,883. The Local General Partners had
reported that Erie was several months in arrears under the terms of the Amended
Note, that a default was declared by the lender and that discussions were being
held with the lender. While negotiations were ongoing, the lender conducted a
foreclosure sale of the property in April 1998. The Partnership made an offer to
repurchase the property and acquire the Amended Note in order to avoid adverse
tax consequences but was ultimately unsuccessful. As a result, the combined
balance sheet of the Local Partnerships as of December 31, 1998 and the combined
statement of operations of the Local Partnerships for the year then ended
presented herein Note 5 do not include the assets and liabilities and results of
operations of Erie with the exception of an extraordinary gain recognized on the
extinguishment of debt in the amount of $704,103. The combined financial
statements of the Local Partnerships for the year ended December 31, 1997
include a loss from impairment of long-lived assets of $744,126, which
represents an adjustment of the real property of Erie. The Partnership's
investment balance in Erie, after cumulative equity losses, became zero during
the year ended March 30, 1998. The aforementioned transfer had no effect on the
financial position, results of operations or cash flows of the Partnership.
Cobbet was originally financed with a first mortgage with mandatory monthly
payment terms with the Massachusetts Housing Finance Agency ("MHFA") and a
second mortgage with MHFA under the State Housing Assistance for Rental
Production Program (the "SHARP Operating Loan") whereby proceeds would be
advanced monthly as an operating subsidy (the "Operating Subsidy Payments"). The
terms of the SHARP Operating Loan called for declining Operating Subsidy
Payments over its term (not more than 15 years). However, due to the economic
condition of the Northeast region in the early 1990's, MHFA instituted an
operating deficit loan (the "ODL") program which supplemented the scheduled
reduction in the Operating Subsidy Payments. Effective October 1, 1997, MHFA
announced its intention to eliminate the ODL program, such that Cobbet no longer
receives the ODL, without which Cobbet is unable to make the full mandatory debt
service payments on its first mortgage. MHFA has notified Cobbet and, to the
Local General Partners' knowledge, other ODL recipients as well, that MHFA
considers such mortgages to be in default. The Local General Partners have
agreed to a plan, with modifications proposed by MHFA, to recapitalize Cobbet
from capital to be received from the admission of a new limited partner. As of
the date of this report, MHFA has not executed the plan. If the plan were to be
implemented, such new limited partner would receive a substantial portion of the
annual allocation of Cobbet's tax losses upon such partner's admission, plus
cash flows and residuals, if any. The Partnership and the Local General Partners
would retain a sufficient interest in Cobbet to avoid recapture of Low-income
Tax Credits. There can be no assurance the plan will be implemented, and if not,
MHFA would be expected to retain its rights under the loan documents. The
Partnership's investment balance in Cobbet, after cumulative equity losses,
became zero during the year ended March 30, 1994.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
6. Transactions with General Partner and Affiliates
For the years ended March 30, 1999, 1998 and 1997, the Partnership paid and/or
incurred the following amounts to the General Partner and/or affiliates in
connection with services provided to the Partnership:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1999 1998 1997
----------------------- ----------------------- ----------------------
Paid Incurred Paid Incurred Paid Incurred
---------- --------- ---------- --------- ----------- ---------
Management fee (see Note 8) $175,466 $175,466 $175,466 $175,466 $175,466 $175,466
For the years ended December 31, 1998, 1997 and 1996, the Local Partnerships
paid and/or incurred the following amounts to the General Partner and/or
affiliates in connection with services provided to the Local Partnerships:
1998 1997 1996
----------------------- ----------------------- -----------------------
Paid Incurred Paid Incurred Paid Incurred
--------- --------- --------- ---------- --------- ----------
Property management fees $ 118,604 $ 163,029 $ 84,628 $ 167,376 $ 151,033 $ 157,983
Insurance and other services 68,422 84,189 98,453 101,245 195,321 202,343
Advance -- -- 74,525 -- -- --
</TABLE>
<PAGE>
AMERICAN TAX CREDIT PROPERTIES L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
7. Taxable Loss
A reconciliation of the financial statement net loss of the Partnership for the
years ended March 30, 1999, 1998 and 1997 to the tax return net loss for the
years ended December 31, 1998, 1997 and 1996 is as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1999 1998 1997
------------- -------------- --------------
Financial statement net loss for the years ended
March 30, 1999, 1998 and 1997 $ (2,543,362) $ (1,684,224) $ (2,384,219)
Add (less) net transactions occurring between
January 1, 1996 to March 30, 1996 -- -- (40,146)
January 1, 1997 to March 30, 1997 -- (112,344) 112,344
January 1, 1998 to March 30, 1998 (40,964) 40,964 --
January 1, 1999 to March 30, 1999 56,816 -- --
------------- -------------- --------------
Adjusted financial statement net loss for the years
ended December 31, 1998, 1997 and 1996 (2,527,510) (1,755,604) (2,312,021)
Differences arising from equity in loss of
investment in local partnerships (399,244) (36,449) (3,435,403)
Other income from local partnerships (18,725) (9,975) --
Other differences 377 2,085 (7,010)
------------- -------------- --------------
Tax return net loss for the years ended
December 31, 1998, 1997 and 1996 $ (2,146,614) $ (1,799,943) $ (5,754,434)
============= ============== ==============
The differences between the investment in Local Partnerships for tax return and
financial reporting purposes as of December 31, 1998 and 1997 are as follows:
1998 1997
--------------- -------------
Investment in Local Partnerships - financial reporting $ 4,628,179 $ 5,886,792
Investment in Local Partnerships - tax (4,138,809) (2,203,935)
--------------- -------------
$ 8,766,988 $ 8,090,727
=============== =============
</TABLE>
Payable to general partner in the accompanying balance sheets represents accrued
management fees not deductible for tax purposes pursuant to Internal Revenue
Code Section 267.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
8. Commitments and Contingencies
Pursuant to the Partnership Agreement, the Partnership is required to pay the
General Partner an annual management fee ("Management Fee") in the amount of
$175,466 for its services in connection with the management of the affairs of
the Partnership, subject to certain provisions of the Partnership Agreement. The
Partnership incurred a Management Fee of $175,466 for each of the three years
ended March 30, 1999. An unpaid Management Fee in the amount of $43,861 is
recorded as payable to general partner in the accompanying balance sheets as of
March 30, 1999 and 1998.
In addition, pursuant to the Partnership Agreement, the Partnership is required
to pay ML Fund Administrators Inc., an affiliate of the Selling Agent, an annual
administration fee ("Administration Fee") in the amount of $152,758 and an
annual additional administration fee ("Additional Administration Fee") in the
amount of $30,965 for its administrative services provided to the Partnership,
subject to certain provisions of the Partnership Agreement. The Partnership
incurred an Administration Fee and an Additional Administration Fee in the
amounts of $152,758 and $30,965, respectively, for each of the three years ended
March 30, 1999. Such amounts are aggregated and reflected under the caption
administration fees in the accompanying statements of operations. Unpaid
Additional Administration Fees in the amount of $7,740 are included in accounts
payable and accrued expenses in the accompanying balance sheets as of March 30,
1999 and 1998.
The rents of the Properties, many of which receive rental subsidy payments,
including payments under Section 8 of Title II of the Housing and Community
Development Act of 1974 ("Section 8"), are subject to specific laws, regulations
and agreements with federal and state agencies. The subsidy agreements expire at
various times during and after the Compliance Periods of the Local Partnerships.
In October 1997, Congress passed the Multifamily Assisted Housing and Reform and
Affordability Act, whereby the United States Department of Housing and Urban
Development ("HUD") was given the authority to renew certain project based
Section 8 contracts expiring during HUD's fiscal year 1998, where requested by
an owner, for an additional one year term generally at or below current rent
levels, subject to certain guidelines. In October 1998, HUD issued a directive
related to project based Section 8 contracts expiring during HUD's fiscal year
1999 which defines owners' notification responsibilities, advises owners of
project based Section 8 properties of what their options are regarding the
renewal of Section 8 contracts, provides guidance and procedures to owners,
management agents, contract administrators and HUD staff on renewing Section 8
contracts, provides guidance on setting renewal rents and handling renewal rent
increases and provides the requirements and procedures for opting-out of a
Section 8 project based contract. The Partnership cannot reasonably predict
legislative initiatives and governmental budget negotiations, the outcome of
which could result in a reduction in funds available for the various federal and
state administered housing programs including the Section 8 program. Such
changes could adversely affect the future net operating income and debt
structure of any or all Local Partnerships currently receiving such subsidy or
similar subsidies. Four Local Partnerships' Section 8 contracts are scheduled to
expire in 1999.
In connection with Cobbet's financing, the Partnership has provided collateral
to secure a letter of credit in the amount of $242,529, which had been
established for the purpose of covering future operating deficits, if any, of
Cobbet. The lender may draw directly from the letter of credit to fund any
operating deficits that exist and upon any default by Cobbet with respect to any
of the obligations under the loan agreement. At the end of a 12-month period in
which the property achieves positive cash flow, the undrawn balance in the
letter of credit and any amounts advanced under a separate operating guaranty
(not an obligation of the Partnership) shall be released or reduced at the
written request of Cobbet by $114,315. Thereafter, in any subsequent 12-month
period in which there is positive cash flow, the same amount may be released.
These releases will only be made so long as Cobbet has complied with the
conditions set forth by the lender as provided in the loan agreement.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
9. Fair Value of Financial Instruments
The following disclosure of the estimated fair value of financial instruments is
made in accordance with the requirements of SFAS No. 107, "Disclosures about
Fair Value of Financial Instruments." The estimated fair value amounts have been
determined using available market information, assumptions, estimates and
valuation methodologies.
Cash and Cash Equivalents
The carrying amount approximates fair value.
Investments in Bonds Available-For-Sale
Fair value is estimated based on market quotes provided by an independent
service as of the balance sheet dates.
Interest Receivable
The carrying amount approximates fair value due to the terms of the underlying
investments.
The estimated fair value of the Partnership's financial instruments as of March
30, 1999 and 1998 are disclosed elsewhere in the financial statements.
<PAGE>
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None
PART III
Item 10. Directors and Executive Officers of the Registrant
Registrant has no officers or directors. The General Partner manages
Registrant's affairs and has general responsibility and authority in all matters
affecting its business. The responsibilities of the General Partner are
currently carried out by Richman Tax. The executive officers and directors of
Richman Tax are:
<TABLE>
<CAPTION>
<S> <C> <C>
Served in present
Name capacity since 1 Position held
- -------------------- ----------------- ----------------------------
Richard Paul Richman February 10, 1988 President and Director
David A. Salzman April 29, 1994 Vice President
Neal Ludeke February 10, 1988 Vice President and Treasurer
Gina S. Scotti February 10, 1988 Secretary
</TABLE>
1 Director holds office until his successor is elected and qualified. All
officers serve at the pleasure of the Director.
Richard Paul Richman, age 51, is the sole Director and President of Richman Tax.
Mr. Richman is the President and principal stockholder of Richman Group. Mr.
Richman is involved in the syndication and management of residential property.
Mr. Richman is also a director of Wilder Richman Resources Corp., an affiliate
of Richman Tax and the general partner of Secured Income L.P., a director of
Wilder Richman Historic Corporation, an affiliate of Richman Tax and the general
partner of Wilder Richman Historic Properties II, L.P., a director of Richman
Tax Credits Inc., an affiliate of Richman Tax and the general partner of the
general partner of American Tax Credit Properties II L.P., a director of Richman
Housing Credits Inc., an affiliate of Richman Tax and the general partner of the
general partner of American Tax Credit Properties III L.P. and a director of
Richman American Credit Corp., an affiliate of Richman Tax and the manager of
American Tax Credit Trust, a Delaware statutory business trust.
David A. Salzman, age 38, is a Vice President of Richman Tax and minority
stockholder of Richman Group. Mr. Salzman is responsible for the acquisition and
development of residential real estate for syndication as a Vice President of
acquisitions of Richman Group.
Neal Ludeke, age 41, is a Vice President and Treasurer of Richman Tax. Mr.
Ludeke, a Vice President and the Treasurer of Richman Group, is engaged
primarily in the syndication, asset management and finance operations of Richman
Group. In addition, Mr. Ludeke is a Vice President and the Treasurer of Richman
Asset Management, Inc. ("RAM"), an affiliate of Richman Tax. Mr. Ludeke's
responsibilities in connection with RAM include advisory services provided to a
small business investment company and various partnership management functions.
Gina S. Scotti, age 43, is the Secretary of Richman Tax. Ms. Scotti is a Vice
President and the Secretary of Richman Group. As the Director of Investor
Services, Ms. Scotti is responsible for communications with investors.
Item 11. Executive Compensation
Registrant has no officers or directors. Registrant does not pay the officers or
director of Richman Tax any remuneration. During the year ended March 30, 1999,
Richman Tax did not pay any remuneration to any of its officers or its director.
<PAGE>
Item 12. Security Ownership of Certain Beneficial Owners and Management
Dominion Capital Inc., having the mailing address P.O. Box 26532, Richmond,
Virginia 23261, is the owner of 2,800 Units, representing approximately 6.8% of
all such Units. As of June 25, 1999, no person or entity, other than Dominion
Capital Inc., was known by Registrant to be the beneficial owner of more than
five percent of the Units.
Richman Tax is wholly-owned by Richard Paul Richman.
Item 13. Certain Relationships and Related Transactions
The General Partner and certain of its affiliates are entitled to receive
certain fees and reimbursement of expenses and have received/earned fees for
services provided to Registrant as described in Notes 6 and 8 to the audited
financial statements included in Item 8 - "Financial Statements and
Supplementary Data" herein.
Transactions with General Partner and Affiliates
The net tax losses and net Low-income Tax Credits generated by Registrant during
the year ended December 31, 1998 allocated to the General Partner were $21,466
and $44,356, respectively. The net tax losses and net Low-income Tax Credits
generated by the General Partner during the year ended December 31, 1998 (from
the allocation of Registrant discussed above) and allocated to Richman Tax were
$14,597 and $30,162, respectively.
Indebtedness of Management
No officer or director of the General Partner or any affiliate of the foregoing
was indebted to Registrant at any time during the year ended March 30, 1999.
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) Financial Statements, Financial Statement Schedules and Exhibits
(1) Financial Statements
See Item 8 - "Financial Statements and Supplementary Data."
(2) Financial Statement Schedules
No financial statement schedules are included 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.
(3) Exhibits
<TABLE>
<CAPTION>
<S> <C>
Incorporated by
Exhibit Reference to
3.1 Certificate of Limited Partnership of Registrant Exhibit 3.2 to Amendment No. 2 to
the Registration Statement on Form
S-11 dated April 29, 1988
(File No. 33-20391)
10.1 4611 South Drexel Limited Partnership Agreement Exhibit 10.3 to Form 10-Q Report
of Limited Partnership dated December 30, 1989
(File No. 0-17619)
10.2 B & V, Ltd. Fourth Amended and Restated Agreement Exhibit 10.3 to Form 8-K Report
and Certificate of Limited Partnership dated January 17, 1989
(File No. 33-20391)
10.3 B & V Phase I, Ltd. Amended and Restated Exhibit 10.1 to Form 10-Q Report
Agreement of Limited Partnership dated September 29, 1994
(File No. 0-17619)
10.4 B & V Phase I, Ltd. Assignment of Partnership Exhibit 10.4 to Form 10-K Report
Interests, Assumption of Responsibilities, and dated March 30, 1997
Waiver of Conditions (File No. 0-17619)
10.5 Blue Hill Housing Limited Partnership Amended and Exhibit 10.7 to Form 8-K Report
Restated Agreement and Certificate of Limited dated January 17, 1989
Partnership (File No. 33-20391)
10.6 Cityside Apartments, L.P. Amended and Restated Exhibit 10.3 to Form 10-K Report
Agreement of Limited Partnership dated March 30, 1990
(File No. 0-17619)
10.7 Amendment No. 1 to Cityside Apartments, L.P. Exhibit 10.4 to Form 10-K Report
Amended and Restated Agreement of Limited dated March 30, 1992
Partnership (File No. 0-17619)
10.8 Amendment No. 2 to Cityside Apartments, L.P. Exhibit 10.5 to Form 10-K Report
Amended and Restated Agreement of Limited dated March 30, 1992
Partnership (File No. 0-17619)
10.9 Amendment No. 3 to Cityside Apartments, L.P. Exhibit 10.6 to Form 10-K Report
Amended and Restated Agreement of Limited dated March 30, 1992
Partnership (File No. 0-17619)
10.10 Cobbet Hill Associates Limited Partnership Exhibit 10.4 to Form 10-K Report
Amended and Restated Agreement and Certificate of dated March 30, 1990
Limited Partnership (File No. 0-17619)
10.11 Cobbet Hill Associates Limited Partnership First Exhibit 10.8 to Form 10-K Report
Amendment to Amended and Restated Agreement and dated March 30, 1993
Certificate of Limited Partnership (File No. 0-17619)
10.12 Cobbet Hill Associates Limited Partnership Second Exhibit 10.9 to Form 10-K Report
Amendment to the Amended and Restated Agreement dated March 30, 1993
and Certificate of Limited Partnership (File No. 0-17619)
10.13 Dunbar Limited Partnership Second Amended and Exhibit 10.5 to Form 10-K Report
Restated Agreement of Limited Partnership dated March 30, 1990
(File No. 0-17619)
10.14 Dunbar Limited Partnership No. 2 Second Amended Exhibit 10.6 to Form 10-K Report
and Restated Agreement of Limited Partnership dated March 30, 1990
(File No. 0-17619)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Incorporated by
Exhibit Reference to
10.15 Erie Associates Limited Partnership Amended and Exhibit 10.2 to Form 10-K Report
Restated Agreement and Certificate of Limited dated March 30, 1989
Partnership (File No. 33-20391)
10.16 Federal Apartments Limited Partnership Amended Exhibit 10.8 to Form 10-K Report
and Restated Agreement of Limited Partnership dated March 30, 1990
(File No. 0-17619)
10.17 First Amendment to Federal Apartments Limited Exhibit 10.14 to Form 10-K Report
Partnership Amended and Restated Agreement of dated March 30, 1993
Limited Partnership (File No. 0-17619)
10.18 Second Amendment to Federal Apartments Limited Exhibit 10.15 to Form 10-K Report
Partnership Amended and Restated Agreement of dated March 30, 1993
Limited Partnership (File No. 0-17619)
10.19 Golden Gates Associates Amended and Restated Exhibit 10.1 to Form 8-K Report
Agreement of Limited Partnership dated January 17, 1989
(File No. 33-20391)
10.20 Grove Park Housing, A California Limited Exhibit 10.10 to Form 10-K Report
Partnership Amended and Restated Agreement of dated March 30, 1990
Limited Partnership (File No. 0-17619)
10.21 Gulf Shores Apartments Ltd. Amended and Restated Exhibit 10.3 to Form 10-K Report
Agreement and Certificate of Limited Partnership dated March 30, 1989
(File No. 33-20391)
10.22 Hilltop North Associates, A Virginia Limited Exhibit 10.12 to Form 10-K Report
Partnership Amended and Restated Agreement of dated March 30, 1990
Limited Partnership (File No. 0-17619)
10.23 Madison-Bellefield Associates Amended and Exhibit 10.2 to Form 8-K Report
Restated Agreement and Certificate of Limited dated January 17, 1989
Partnership (File No. 33-20391)
10.24 Amended and Restated Articles of Partnership in Exhibit 10.2 to Form 10-Q Report
Commendam of Pine Hill Estates Limited dated December 30, 1989
Partnership (File No. 0-17619)
10.25 Santa Juanita Limited Dividend Partnership Exhibit 10.4 to Form 10-Q Report
Amended and Restated Agreement of Limited dated December 30, 1989
Partnership (File No. 0-17619)
10.26 Second Amendment of Limited Partnership of Santa Exhibit 10.23 to Form 10-K Report
Juanita Limited Dividend Partnership and dated March 30, 1994
Amendment No. 2 to the Amended and Restated (File No. 0-17619)
Agreement of Limited Partnership
10.27 Amendment No. 1 to Santa Juanita Limited Exhibit 10.1 to Form 10-Q Report
Dividend Partnership L.P. Amended and Restated dated September 29, 1995
Agreement of Limited Partnership (File No. 0-17619)
(Replaces in its entirety Exhibit 10.24 hereof.)
10.28 Amendment No. 2 to Santa Juanita Limited Exhibit 10.2 to Form 10-Q Report
Dividend Partnership L.P. Amended and Restated dated September 29, 1995
Agreement of Limited Partnership (File No. 0-17619)
10.29 Vista Del Mar Limited Dividend Partnership Exhibit 10.1 to Form 10-K Report
Amended and Restated Agreement and Certificate dated March 30, 1989
of Limited Partnership (File No. 33-20391)
10.30 Certificate of Amendment of Limited Partnership Exhibit 10.25 to Form 10-K Report
of Vista Del Mar Limited Dividend Partnership dated March 30, 1994
and Amendment No. 1 to the Amended and Restated (File No. 0-17619)
Agreement and Certificate of Limited Partnership
10.31 Amendment No. 1 to Vista del Mar Limited Exhibit 10.3 to Form 10-Q Report
Dividend Partnership L.P. Amended and Restated dated September 29, 1995
Agreement of Limited Partnership (File No. 0-17619)
(Replaces in its entirety Exhibit 10.28 hereof.)
10.32 Amendment No. 2 to Vista del Mar Limited Exhibit 10.4 to Form 10-Q Report
Dividend Partnership L.P. Amended and Restated dated September 29, 1995
Agreement of Limited Partnership (File No. 0-17619)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Incorporated by
Exhibit Reference to
10.33 Amended and Restated Articles of Partnership in Exhibit 10.1 to Form 10-Q Report
Commendam of Winnsboro Homes Limited Partnership dated December 30, 1989
(File No. 0-17619)
10.34 The B & V, Ltd. Exhibit 10.2 to Form 10-Q Report
Investment Agreement dated September 29, 1994
(File No. 0-17619)
10.35 The B & V Phase I, Ltd. Exhibit 10.3 to Form 10-Q Report
Investment Agreement dated September 29, 1994
(File No. 0-17619)
27 Financial Data Schedule
99.22 Pages 21 through 35, 51 through 75 and 89 Exhibit 28 to Form 10-K Report
through 91 of Prospectus dated May 6, 1989 dated March 30, 1989
filed pursuant to Rule 424(b)(3) under the (File No. 33-20391)
Securities Act of 1933
99.23 Pages 16 through 19 of Prospectus dated May Exhibit 28.2 to Form 10-K Report
6, 1989 filed pursuant to Rule 424(b)(3) under dated March 30, 1989
the Securities Act of 1933 (File No. 33-20391)
99.24 Supplement No. 1 dated August 11, 1988 to Exhibit 28.3 to Form 10-K Report
Prospectus dated March 30, 1991
(File No. 0-17619)
99.25 Supplement No. 2 dated September 20, 1988 to Exhibit 28.4 to Form 10-K Report
Prospectus dated March 30, 1991
(File No. 0-17619)
99.26 December 31, 1992 financial statements of Exhibit 28.26 to Form 10-K Report
Cityside Apartments, L.P. pursuant to Title 17, dated March 30, 1993
Code of Federal Regulations, Section 210.3-09 (File No. 0-17619)
99.27 December 31, 1993 financial statements of Exhibit 99.27 to Form 10-K Report dated
Cityside Apartments, L.P. pursuant to Title 17, March 30, 1994
Code of Federal Regulations, Section 210.3-09 (File No. 0-17619)
99.28 December 31, 1994 financial statements of Exhibit 99.28 to Form 10-K Report dated
Cityside Apartments, L.P. pursuant to Title 17, March 30, 1995
Code of Federal Regulations, Section 210.3-09 (File No. 0-17619)
99.29 December 31, 1995 financial statements of Exhibit 99.29 to Form 10-K Report dated
Cityside Apartments, L.P. pursuant to Title 17, March 30, 1996
Code of Federal Regulations, Section 210.3-09 (File No. 0-17619)
99.30 December 31, 1996 financial statements of Exhibit 99.30 to Form 10-K Report dated
Cityside Apartments, L.P. pursuant to Title 17, March 30, 1997
Code of Federal Regulations, Section 210.3-09 (File No. 0-17619)
99.31 December 31, 1997 financial statements of Exhibit 99.31 to Form 10-K Report dated
Cityside Apartments, L.P. pursuant to Title 17, March 30, 1998
Code of Federal Regulations, Section 210.3-09 (File No. 0-17619)
99.32 December 31, 1997 financial statements of Blue Exhibit 99.32 to Form 10-K Report dated
Hill Housing Limited Partnership pursuant to March 30, 1998
Title17, Code of Federal Regulations, Section (File No. 0-17619)
210.3-09
99.33 December 31, 1998 financial statements of
Blue Hill HousingLimited Partnership pursuant
to Title 17, Code of Federal Regulations,
Section 210.3-09
</TABLE>
(b) Reports on Form 8-K
No reports on Form 8-K were filed by Registrant during the last quarter
of the period covered by this report.
(c) Exhibits
See (a)(3) above.
(d) Financial Statement Schedules
See (a)(2) above.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
AMERICAN TAX CREDIT PROPERTIES L.P.
(a Delaware limited partnership)
By: Richman Tax Credit Properties L.P.,
General Partner
by: Richman Tax Credit Properties Inc.,
general partner
Dated: June 28, 1999 /s/ Richard Paul Richman
------------- ------------------------
by: Richard Paul Richman
President
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 in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
Signature Title Date
--------- ----- ----
/s/ Richard Paul Richman President, Chief Executive Officer June 28, 1999
------------------------- and Director of the general partner
(Richard Paul Richman) of the General Partner
/s/ Neal Ludeke Vice President and Treasurer of the June 28, 1999
---------------------------------- general partner of the General -------------
(Neal Ludeke) Partner (Principal Financial and
Accounting Officer of Registrant)
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
AMERICAN TAX CREDIT PROPERTIES L.P.
(a Delaware limited partnership)
By: Richman Tax Credit Properties L.P.,
General Partner
by: Richman Tax Credit Properties Inc.,
general partner
Dated: June 28, 1999 /s/ Richard Paul Richman
------------- ------------------------
by: Richard Paul Richman
President
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 in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
Signature Title Date
--------- ----- ----
/s/ Richard Paul Richman President, Chief Executive Officer
-------------------------- and Director of the general partner
(Richard Paul Richman) of the General Partner June 28, 1999
-------------
/s/ Neal Ludeke Vice President and Treasurer of the
-------------------------- general partner of the General
(Neal Ludeke) Partner (Principal Financial and June 28, 1999
Accounting Officer of Registrant) -------------
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted from
the year ended March 30, 1999 Form 10-K Balance Sheets
and Statements of Operations and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<CIK> 0000830159
<NAME> American Tax Credit Properties, L.P.
<MULTIPLIER> 1000
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-30-1999
<PERIOD-START> MAR-31-1998
<PERIOD-END> MAR-30-1999
<EXCHANGE-RATE> 1.00
<CASH> 86
<SECURITIES> 2,706
<RECEIVABLES> 57
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 6,478
<CURRENT-LIABILITIES> 136
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 6,478
<SALES> 0
<TOTAL-REVENUES> 249
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 530
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,543)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,543)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,543)
<EPS-BASIC> (60.99)
<EPS-DILUTED> 0
</TABLE>
