UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR
--- 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1997
OR
--- TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-24660
LIBERTY TAX CREDIT PLUS II L.P.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3458180
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
625 Madison Avenue, New York, New York 10022
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212)421-5333
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
<PAGE>
PART I - Financial Information
Item 1. Financial Statements
LIBERTY TAX CREDIT PLUS II L.P.
AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
------------ -------------
December 31, March 31,
1997 1997
------------ -------------
ASSETS
Property and equipment, net of
accumulated depreciation
of $62,249,817 and $56,299,580,
respectively $174,920,619 $180,610,721
Cash and cash equivalents 4,115,880 4,956,628
Cash held in escrow 7,398,821 6,304,514
Deferred costs, net of accumulated
amortization of $3,147,998
and $2,966,900, respectively 4,259,017 4,273,139
Other assets 4,370,687 4,124,261
------------ ------------
Total assets $195,065,024 $200,269,263
============ ============
LIABILITIES AND PARTNERS' CAPITAL
Mortgage notes payable $117,564,426 $118,783,431
Accounts payable and other
liabilities 9,469,672 9,331,939
Due to local general partners and
affiliates 11,255,465 10,926,397
Due to general partners and
affiliates 3,976,400 2,785,541
Due to selling partners 3,435,488 3,429,863
------------ ------------
Total liabilities 145,701,451 145,257,171
------------ ------------
Minority interest 4,312,084 3,297,946
------------ ------------
Commitments and contingencies
(Note 5)
Partners' capital
Limited partners (115,917.5 BACs
issued and outstanding) 45,631,658 52,227,688
General partners (580,169) (513,542)
------------ ------------
Total partners' capital 45,051,489 51,714,146
------------ ------------
Total liabilities and partners'
capital $195,065,024 $200,269,263
============ ============
See Accompanying Notes to Consolidated Financial Statements
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<PAGE>
LIBERTY TAX CREDIT PLUS II L.P.
AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
------------------------ ---------------------------
Three Months Ended Nine Months Ended
December 31, December 31,
------------------------ ---------------------------
1997 1996* 1997 1996*
------------------------ ---------------------------
REVENUES
Rentals, net $6,302,862 $6,522,495 $18,876,737 $18,626,485
Other 172,124 209,630 434,841 520,802
Gain on partial 0 0 154,577 0
sale of ---------- ---------- ----------- -----------
investment in
subsidiary
partnerships
(Note 3)
6,474,986 6,732,125 19,466,155 19,147,287
---------- ---------- ----------- -----------
EXPENSES
General and 1,539,305 1,516,144 4,857,026 4,633,115
administrative
General and 637,437 252,985 1,960,593 735,294
administrative-
related parties
(Note 2)
Repairs and 938,337 983,695 2,891,427 2,799,098
maintenance
Operating 521,215 545,686 2,173,233 2,084,921
Taxes 248,381 266,425 800,816 800,935
Insurance 403,367 344,482 995,751 915,552
Interest 2,268,146 2,159,823 6,418,022 6,369,805
Depreciation 2,043,017 2,043,372 6,131,335 6,064,538
and ---------- ---------- ----------- -----------
amortization
Total expenses 8,599,205 8,112,612 26,228,203 24,403,258
---------- ---------- ----------- -----------
Minority 22,186 53,841 99,391 140,591
interest in ---------- ---------- ----------- -----------
loss of
subsidiaries
Net loss $(2,102,033) $(1,326,646) $(6,662,657) $(5,115,380)
=========== =========== =========== ===========
Net loss- $(2,081,013) $(1,313,379) $(6,596,030) $(5,064,226)
limited =========== =========== =========== ===========
partners
Number of 115,917.5 115,917.5 115,917.5 115,917.5
BACs =========== =========== =========== ===========
outstanding
Net loss per $ (17.95) $ (11.33) $ (56.90) $ (43.69)
BAC =========== =========== =========== ===========
* Reclassified for comparative purposes
See Accompanying Notes to Consolidated Financial Statements
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<PAGE>
LIBERTY TAX CREDIT PLUS II L.P.
AND SUBSIDIARIES
Consolidated Statement of Changes in Partners' Capital
(Unaudited)
--------------------------------------------
Limited General
Total Partners Partners
--------------------------------------------
Partners' capital -
April 1, 1997 $51,714,146 $52,227,688 $(513,542)
Net loss (6,662,657) (6,596,030) (66,627)
----------- ----------- ---------
Partners' capital -
December 31, 1997 $45,051,489 $45,631,658 $(580,169)
=========== =========== =========
See Accompanying Notes to Consolidated Financial Statements
-4-
<PAGE>
LIBERTY TAX CREDIT PLUS II L.P.
AND SUBSIDIARIES
Statements of Cash Flows
Increase (Decrease) in Cash and Cash Equivalents
(Unaudited)
---------------------------
Nine Months Ended
December 31,
---------------------------
1997 1996
---------------------------
Cash flows from operating activities:
Net loss $(6,662,657) $(5,115,380)
----------- -----------
Adjustments to reconcile net loss
to net cash (used in) provided
by operating activities:
Gain on partial sale of investment in
subsidiary partnerships (Note 3) (154,577) 0
Depreciation and amortization 6,131,335 6,064,538
Minority interest in loss of
subsidiaries (99,391) (140,591)
(Increase) decrease in other assets (246,426) 418,528
(Increase) decrease in cash held
in escrow (1,171,454) 211,509
Increase in accounts
payable and other liabilities 137,733 1,163,744
Increase in due to general partners
and affiliates 1,190,859 179,338
Increase in due to local general
partners and affiliates 498,591 478,489
Decrease in due to local general
partners and affiliates (169,523) (240,248)
----------- -----------
Total adjustments 6,117,147 8,135,307
----------- -----------
Net cash (used in) provided by
operating activities (545,510) 3,019,927
----------- -----------
Cash flows from investing activities:
Proceeds from partial sale of
investment in subsidiary
partnerships 1,400,000 0
Improvements to property and
equipment (260,135) (1,480,928)
Decrease in cash held
in escrow 77,147 80,512
----------- -----------
Net cash provided by (used in)
investing activities 1,217,012 (1,400,416)
----------- -----------
See Accompanying Notes to Consolidated Financial Statements
-5-
<PAGE>
LIBERTY TAX CREDIT PLUS II L.P.
AND SUBSIDIARIES
Statements of Cash Flows
Increase (Decrease) in Cash and Cash Equivalents
(continued)
(Unaudited)
---------------------------
Nine Months Ended
December 31,
---------------------------
1997 1996
---------------------------
Cash flows from financing activities:
Increase in deferred costs (166,976) (38,465)
Repayments of mortgage notes (5,219,005) (1,010,143)
Proceeds from mortgage notes 4,000,000 0
Increase in due to selling partners 5,625 5,625
Decrease in capitalization
of consolidated subsidiaries
attributable to minority
interest (131,894) (110,434)
----------- ----------
Net cash used in decrease
financing activities (1,512,250) (1,153,417)
---------- ----------
Net (decrease) increase in cash and
cash equivalents (840,748) 466,094
Cash and cash equivalents at
beginning of period 4,956,628 4,498,565
---------- ---------
Cash and cash equivalents at
end of period $4,115,880 $4,964,659
========= =========
Components of partial sale of
investment in subsidiary
partnerships:
Increase in capitalization of
consolidated subsidiaries
attributable to minority
interest $1,245,423 $ 0
See Accompanying Notes to Consolidated Financial Statements
-6-
<PAGE>
LIBERTY TAX CREDIT PLUS II L.P.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1997
(Unaudited)
Note 1 - General
The consolidated financial statements include the accounts of Liberty Tax Credit
Plus II L.P. (the "Partnership") and 27 subsidiary partnerships ("subsidiary
partnerships" or "Local Partnerships") in which the Partnership is the limited
partner. Through the rights of the Partnership and/or a General Partner, which
General Partner has a contractual obligation to act on behalf of the
Partnership, to remove the general partner of the subsidiary partnerships and to
approve certain major operating and financial decisions, the Partnership has a
controlling financial interest in the subsidiary partnerships.
The Partnership's fiscal quarter ends December 31. All subsidiary partnerships
have fiscal quarters ending September 30. Accounts of the subsidiary
partnerships have been adjusted for intercompany transactions from October 1
through December 31.
All intercompany accounts and transactions have been eliminated in
consolidation.
Increases (decreases) in the capitalization of consolidated subsidiary
partnerships attributable to minority interest arise from cash contributions
from and cash distributions to the minority interest partners.
Losses attributable to minority interests which exceed the minority interests'
investment in a subsidiary partnership have been charged to the Partnership.
Such losses aggregated $81,000 and $83,000 and $328,000 and $323,000 for the
three and nine months ended December 31, 1997 and 1996, respectively. The
Partnership's investment in each subsidiary partnership is equal to the
respective subsidiary partnership's partners' equity less minority interest
capital, if any. In consolidation, all subsidiary partnership losses are
included in the Partnership's capital account except for losses allocated to
minority interest capital.
The books and records of the Partnership are maintained on the accrual basis in
accordance with generally accepted accounting principles. In the opinion of the
general partners of the Partnership (the "General Partners"), the accompanying
unaudited finan-
-7-
<PAGE>
LIBERTY TAX CREDIT PLUS II L.P.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1997
(Unaudited)
cial statements contain all adjustments (consisting only of normal recurring
adjustments) necessary to present fairly the financial position of the
Partnership as of December 31, 1997, the results of operations for the three and
nine months ended December 31, 1997 and 1996 and cash flows for the nine months
ended December 31, 1997 and 1996. However, the operating results for the nine
months ended December 31, 1997 may not be indicative of the results for the
year.
Certain information and note disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been omitted or condensed. These consolidated financial statements should
be read in conjunction with the financial statements and notes thereto included
in the Partnership's Annual Report on Form 10-K for the year ended March 31,
1997.
Note 2 - Related Party Transactions
One of the General Partners has a 1% interest as a special limited partner in
each of the subsidiary partnerships. An affiliate of the General Partners also
has a minority interest in certain subsidiary partnerships.
-8-
<PAGE>
LIBERTY TAX CREDIT PLUS II L.P.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1997
(Unaudited)
The costs incurred to related parties for the three and nine months ended
December 31, 1997 and 1996 were as follows:
Three Months Ended Nine Months Ended
December 31, December 31,
-------------------- -----------------------
1997 1996 1997 1996
-------------------- -----------------------
Partnership $374,000 $ 50,000 $1,122,000 $150,000
management
fees (a)
Expense reim- 27,500 36,860 109,049 90,675
bursement (b)
Property man- 222,937 153,625 690,544 457,619
agement fees (c)
Local adminis- 13,000 12,500 39,000 37,000
trative fee (d) -------- -------- ---------- --------
$637,437 $252,985 $1,960,593 $735,294
======== ======== ========== ========
(a) The General Partners are entitled to receive a partnership management fee,
after payment of all Partnership expenses, which together with the annual local
administrative fees will not exceed a maximum of 0.5% per annum of invested
assets (as defined in the Partnership Agreement), for administering the affairs
of the Partnership. The partnership management fee, subject to the foregoing
limitation, will be determined by the General Partners in their sole discretion
based upon their review of the Partnership's investments. Partnership management
fees owed to the General Partners amounting to approximately $3,500,000 and
$2,378,000 were accrued and unpaid as of December 31, 1997 and March 31, 1997,
respectively.
(b) The Partnership reimburses the General Partners and their affiliates for
actual Partnership operating expenses incurred by the General Partners and their
affiliates on the Partnership's behalf. The amount of reimbursement from the
Partnership is limited by the provisions of the Partnership Agreement. Another
affiliate of the Related General Partner performs asset monitoring for the
Partnership. These services include site visits and evaluations of the
subsidiary partnerships' performance.
-9-
<PAGE>
LIBERTY TAX CREDIT PLUS II L.P.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1997
(Unaudited)
(c) Property management fees incurred by subsidiary partnerships amounted to
$370,190 and $357,788 and $1,126,199 and $1,119,240 for the three and nine
months ended December 31, 1997 and 1996, respectively. Of these fees $222,937
and $153,625 and $690,544 and $457,619 were incurred to affiliates of the
subsidiary partnerships' general partners. Included in amounts incurred to
affiliates of the subsidiary partnerships' general partners are $88,487 and
$19,097 and $291,817 and $56,275 for the three and nine months ended December
31, 1997 and 1996, respectively, which were also incurred to affiliates of the
Partnership.
(d) Liberty Associates II L.P., a special limited partner of the subsidiary
partnerships, is entitled to receive a local administrative fee of up to $2,500
per year from each subsidiary partnership.
Note 3 - Partial sale of Investment in Subsidiary Partnerships
Campeche Isle Apartments, L.P. ("Campeche") filed a voluntary petition under
Chapter 11 during March 1996. Although current on its debt service up to and
including the January 1, 1996 payment, the property was unable to fully fund all
operating expenses plus debt service following a 1% increase in the interest
rate on the property's mortgage in June of 1994. Debt service had been kept
current through advances by the subsidiary partnership's general partner, RCC
Pineview, Inc., and the Partnership totaling $302,222 as of December 31, 1996.
In addition, Campeche has not paid its managing agent in excess of $100,000 of
management fees.
In an effort to reduce the property's debt service burden, negotiations with the
holder of the property's first mortgage, Sun America Life Insurance Company (the
"Mortgagee") had been ongoing during January and February of 1996. The Mortgagee
rejected Campeche's proposals and commenced a foreclosure action during the
latter part of February. In order to preserve Campeche's ownership of the
property, a Chapter 11 filing was made during March 1996 and the Mortgagee was
stayed from proceeding with its foreclosure. Campeche had presented a Plan of
Reorganization to the Bankruptcy Court and the property was being operated under
a Cash Collateral order issued by the Court. On June 19, 1997, Campeche
completed a restructuring of its mortgage debt wherein the mortgage debt was
settled for $4,200,000, through the following transactions: Bank of Boston made
a $4,000,000 loan to
-10-
<PAGE>
LIBERTY TAX CREDIT PLUS II L.P.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1997
(Unaudited)
Campeche and the Partnership as co-borrowers. Such loan is secured by a first
mortgage on Campeche Isle Apartments, a pledge of the Partnership's interest in
Spring Creek and recourse guarantees of the Partnership, Campeche, Campeche's
general partner and one of the General Partners. In addition to paying off the
mortgage, the restructuring agreement requires Campeche to make approximately
$800,000 of required repairs to the project. The Partnership raised
approximately $1,400,000 by selling a portion of it's limited partnership
interest in two subsidiary partnerships to Related Glenport Associates, an
affiliate of the General Partner. The Partnership sold 24.99% of its limited
partnership interest in United-Glenarden I Limited Partnership for $600,000
resulting in a gain of $224,482 and sold 32.32% of its limited partnership
interest in Property Development Associates, L.P. for $800,000 resulting in a
loss of $69,905. A portion of the proceeds were used to repay the Mortgagee, pay
closing costs on the new loan and to fund debt service and an escrow account for
repairs. Monthly debt service on the new loan will be paid by the net income of
Campeche and the balance by the Partnership. In addition, any distributions
received by the Partnership from Spring Creek must be placed in escrow at Bank
of Boston. The new loan matures on December 31, 1998. On or prior to the
maturity of the new loan it is expected that a refinancing will be completed
which will have a term at least equal to the remaining compliance period of the
project which ends 2004. On July 24, 1997 the Chapter 11 filing was dismissed.
As of December 31, 1997, total advances to Campeche from the Partnership totaled
approximately $1,516,000.
Note 4 - Mortgage Notes Payable
The status of the loan modification with respect to Williamsburg Residential,
L.P. has remained the same since the events reported in Form 10-Q dated
September 30, 1997.
-11-
<PAGE>
LIBERTY TAX CREDIT PLUS II L.P.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1997
(Unaudited)
Note 5 - Commitments and Contingencies
The following disclosures include changes and/or additions to disclosures
regarding the subsidiary partnerships which were included in the Partnership's
Annual Report on Form 10-K for the period ended March 31, 1997 (see Notes 3 and
4 for discussions of the resolution of the contingencies regarding Campeche Isle
Apartments, L.P. and Williamsburg Residential, L.P., respectively.)
Santa Juanita II Limited Partnership
A bank filed a suit against Santa Juanita II Limited Partnership ("Santa
Juanita") for non-payment of the monthly installments required by a second
mortgage loan agreement. During February 1994, the court issued a judgment
against Santa Juanita demanding immediate payment of the second mortgage note
with an outstanding principal balance of $474,656, plus accrued interest and
legal expenses. A significant portion of Santa Juanita's operating assets is
pledged as collateral for this note and foreclosure by the bank would seriously
impair Santa Juanita's continued existence. In May 1996, the special limited
partner of Santa Juanita instituted proceedings to formally remove the general
partner of Santa Juanita and in June 1996, the general partner of Santa Juanita
filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code
("Chapter 11") and in June 1997 the court ordered that Santa Juanita's Amended
and Restated Agreement of Limited Partnership and Management Agreement should
not be part of the general partner's bankruptcy. As such, the court ordered the
general partner to surrender the books and records of Santa Juanita to Liberty
Associates II L.P., the special limited partner and in July, the case was
dismissed in the Bankruptcy Court. Liberty Associates II L.P. amended Santa
Juanita's Amended and Restated Agreement of Limited Partnership which removed
the former general partner as general partner and management agent and admitted
a new general partner and management agent. Management of Santa Juanita is
currently pursuing a workout agreement with the lenders with respect to Santa
Juanita's mortgage debt. The Partnership's investment in Santa Juanita at
December 31, 1997 and March 31, 1997 was approximately $428,000 and $478,000,
respectively, and the minority interest balance was zero at each date. Santa
Juanita's net loss after minority interest amounted to approximately $44,000 and
$46,000 and $89,000 and
-12-
<PAGE>
LIBERTY TAX CREDIT PLUS II L.P.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1997
(Unaudited)
$68,000 for the three and nine months ended December 31, 1997 and 1996,
respectively.
Rolling Green Limited Partnership
Rolling Green Limited Partnership ("Rolling Green") operates and is regulated by
U.S. Department of Housing and Urban Development ("HUD") under Section 221(d)(3)
of the National Housing Act. Rents received by Rolling Green are subsidized by
Section 8 Housing Assistance Payments. Rental income from such Assistance
Payments totaled $1,198,880 and $1,143,607 in the 1996 and 1995 Fiscal Years,
respectively. In September 1997 two of the three Section 8 contracts expired and
were renewed for 1 year. However, uncertainties regarding the future of HUD
Programs exist.
-13-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Liquidity and Capital Resources
The Partnership's primary sources of funds are the cash distributions from the
operations of the Local Partnerships in which the Partnership has invested.
These sources of funds are available to meet obligations of the Partnership.
During the nine months ended December 31, 1997 and 1996 respectively, amounts
received from operations of the Local Partnerships were approximately $264,000
and $621,000, respectively.
As of December 31, 1997 the Partnership has invested all of the net proceeds in
twenty-seven Local Partnerships. Approximately $400,000 of the purchase price
remains to be paid (none of which is being held in escrow). During the nine
months ended December 31, 1997, approximately $39,000 was paid.
During the nine months ended December 31, 1997, cash and cash equivalents of the
Partnership and its 27 consolidated Local Partnerships decreased approximately
$841,000. This decrease was primarily due to cash used in operating activities
($546,000), improvements to property and equipment ($260,000), net repayments of
mortgage notes ($1,219,000), a decrease in capitalization of consolidated
subsidiaries attributable to minority interest ($132,000), an increase in
deferred costs ($167,000) which exceeded proceeds from partial sale of
investment in subsidiary partnerships (1,400,000) and a decrease in cash held in
escrow relating to investing activities ($77,000). Included in the adjustments
to reconcile the net loss to cash used in operating activities is gain on
partial sale of investment in subsidiary partnerships ($155,000) and
depreciation and amortization ($6,131,000).
Partnership management fees owed to the General Partners amounting to
approximately $3,500,000 and $2,378,000 were accrued and unpaid as of December
31, 1997 and March 31, 1997, respectively.
For discussion of contingencies affecting certain Local Partnerships, see Note 5
to the financial statements. Since the maximum loss the Partnership would be
liable for is its net investment in the respective Local Partnerships, the
resolution of the existing contingencies is not anticipated to impact future
results of operations, liquidity or financial condition in a material way.
However, the Partnership's loss of its investment in a Local Partnership will
eliminate the ability to generate future tax credits from such Local Partnership
and may also result in recapture of tax credits if the investment is lost before
the expiration of the compliance period.
-14-
<PAGE>
Management is not aware of any trends or events, commitments or uncertainties
which have not otherwise been disclosed, that will or are likely to impact
liquidity in a material way. Management believes the only impact would be from
laws that have not yet been adopted. The portfolio is diversified by the
location of the properties around the United States so that if one area of the
country is experiencing downturns in the economy, the remaining properties in
the portfolio may be experiencing upswings. However, the geographic
diversifications of the portfolio may not protect against a general downturn in
the national economy. The Partnership has fully invested the proceeds of its
offerings in 27 Local Partnerships, all of which fully have their tax credits in
place. The tax credits are attached to the project for a period of ten years and
are transferable with the property during the remainder of such ten year period.
If the General Partners determined that a sale of a property is warranted, the
remaining tax credits would transfer to the new owner, thereby adding value to
the property on the market, which are not included in the financial statement
carrying amount.
Results of Operations
Results of operations for the three and nine months ended December 31, 1997
consisted primarily of the results of the Partnership's investment in
twenty-seven Local Partnerships.
Rental income decreased approximately 3% and increased approximately 1% for the
three and nine months ended December 31, 1997 as compared to the corresponding
periods in 1996 primarily due to the merger of Spring Creek Retail Associates,
L.P. ("Retail") with Spring Creek Associates, L.P. ("Spring Creek") effective
August 16, 1996. Before such merger the commercial rent was accrued by Spring
Creek on the basis of cash flow from Retail's operations, pursuant to the terms
of a net lease agreement. Excluding Spring Creek, rental income increased
approximately 4% for both the three and nine months ended December 31, 1997 as
compared to the corresponding periods in 1996 primarily due to rental rate
increases and increases in occupancy at two Local Partnerships.
Other income decreased approximately $38,000 and $86,000 for the three and nine
months ended December 31, 1997 as compared to the corresponding periods in 1996
primarily due to the receipt of a real estate tax refund at one Local
Partnership in the first quarter of 1996 and a refund of mortgage premiums paid
at another Local Partnership in the third quarter of 1996.
-15-
<PAGE>
Total expenses excluding general and administrative-related parties and
insurance remained fairly consistent with increases of approximately 1% and 2%
for the three and nine months ended December 31, 1997 as compared to the
corresponding periods in 1996.
General and administrative-related parties increased approximately $384,000 and
$1,225,000 for the three and nine months ended December 31, 1997 as compared to
the corresponding periods in 1996 primarily due to an increase in partnership
management fees payable to the General Partners and an increase in property
management fees resulting from the change at two Local Partnerships from an
unaffiliated property manager to one which is an affiliate.
Insurance expense increased approximately $59,000 for the three months ended
December 31, 1997 as compared to the corresponding period in 1996 primarily due
to an underaccrual of such expense at one Local Partnership in the third quarter
of 1996.
A gain on partial sale of investment in subsidiary partnerships in the amount of
approximately $155,000 was recorded for the nine months ended December 31, 1997
(see Note 3 to the financial statements).
-16-
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceeding
The litigation described in Note 5 to the financial statements contained
in Part I, Item 1 of this quarterly report on Form 10-Q is incorporated herein
by reference.
Item 2. Changes in Securities - None
Item 3. Defaults Upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders - None
Item 5. Other information
On November 25, 1997, an affiliate of Related Credit Properties II, L.P.
("RCP") the general partner of the Partnership, purchased 100% of the stock of
Liberty GP II, Inc. ("LGP") the other general partner of the Partnership (the
"Transfer"). In addition to the Transfer, by acquiring the stock of LGP, an
affiliate of RCP also acquired LGP's general partner interest in Liberty
Associates II L.P., the special limited partner of the Partnership. Pursuant to
the Partnership's Amended and Restated Partnership Agreement, the consent of the
limited partners was not required to approve the Transfer.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule (filed herewith)
(b) Reports on Form 8-K - A report on Form 8-K dated November 25, 1997
was filed by the Partnership on December 8, 1997 which reported in Item 1. the
Transfer referred to in Item 5. Other Information of this Form 10-Q.
-17-
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
LIBERTY TAX CREDIT PLUS II L.P.
-------------------------------
(Registrant)
By: RELATED CREDIT PROPERTIES II L.P.,
General Partner
By: RELATED CREDIT PROPERTIES II INC.,
General Partner
Date: February 3, 1998
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes,
Vice President
(principal financial officer)
Date: February 3, 1998
By: /s/ Glenn F. Hopps
------------------
Glenn F. Hopps,
Treasurer
(principal accounting officer)
By: LIBERTY GP II INC.,
General Partner
Date: February 3, 1998
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes,
Vice President
(principal financial officer)
Date: February 3, 1998
By: /s/ Glenn F. Hopps
------------------
Glenn F. Hopps,
Treasurer
(principal accounting officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The Schedule contains summary financial information extracted from the financial
statements for Liberty Tax Credit Plus II L. P. and is qualified in its entirety
by reference to such financial statements
</LEGEND>
<CIK> 0000832141
<NAME> Liberty Tax Credit Plus II L.P.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> APR-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 11,514,701
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,370,687
<PP&E> 237,170,436
<DEPRECIATION> 62,249,817
<TOTAL-ASSETS> 195,065,024
<CURRENT-LIABILITIES> 24,701,537
<BONDS> 120,999,914
0
0
<COMMON> 0
<OTHER-SE> 49,363,573
<TOTAL-LIABILITY-AND-EQUITY> 195,065,025
<SALES> 0
<TOTAL-REVENUES> 19,466,155
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 19,810,181
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,418,022
<INCOME-PRETAX> (6,762,048)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,762,048)
<EPS-PRIMARY> (56.90)
<EPS-DILUTED> 0
</TABLE>
