June 28, 1999
Securities and Exchange Commission
Filer Support, Edgar
Operation Center, Stop 0-7
6432 General Green Way
Alexandria, VA 22312
Boston Financial Qualified Housing Tax Credits L.P. III
Form 10-K Annual Report for Year Ended March 31, 1999
File Number 01-18462
Dear Sir/Madam:
Pursuant to the requirements of Section 15(d) of the Securities Exchange Act of
1934, there is filed herewith one copy of subject report.
Very truly yours,
/s/Stephen Guilmette
Stephen Guilmette
Assistant Controller
QH310K-K
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended Commission file number
March 31, 1999 01-18462
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
(Exact name of registrant as specified in its charter)
Delaware 04-3032106
(State of organization) (I.R.S. Employer
Identification No.)
101 Arch Street, 16th Floor
Boston, Massachusetts 02110-1106
(Address of Principal executive office) (Zip Code)
Registrant's telephone number, including area code 617/439-3911
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
UNITS OF LIMITED PARTNERSHIP INTEREST
(Title of Class)
100,000
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Subsection 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ X ]
State the aggregate sales price of partnership units held by nonaffiliates of
the registrant.
$99,610,000 as of March 31, 1999
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE: LIST THE FOLLOWING DOCUMENTS IF
INCORPORATED BY REFERENCE AND THE PART OF THE FORM 10-K INTO WHICH THE
DOCUMENT IS INCORPORATED: (1) ANY ANNUAL REPORT TO SECURITY HOLDERS; (2) ANY
PROXY OR INFORMATION STATEMENT; AND (3) ANY PROSPECTUS FILED PURSUANT TO
RULE 424(b) OR (c) UNDER THE SECURITIES ACT OF 1933.
Part of Report on
Form 10-K into
Which the Document
Documents incorporated by reference is Incorporated
Post-effective Amendment No. 1 to the Form S-11
Registration Statement, File # 33-24175 Part I, Item 1
Supplement No. 4 to the Prospectus, dated May 9, 1989 Part I, Item 1
Report on Form 8-K dated November 21, 1989 Part I, Item 1
Acquisition Reports Part I, Item 1
Prospectus - Sections Entitled:
"Investment Objectives and Policies -
Principal Investment Policies Part I, Item 1
"Estimated Use of Proceeds" Part III, Item 13
"Management Compensation and Fees" Part III, Item 13
"Profits and Losses for Tax Purposes, Tax
Credits and Cash Distributions" Part III, Item 13
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
(a Limited Partnership)
ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED MARCH 31, 1999
TABLE OF CONTENTS
PART I Page No.
Item 1 Business K-3
Item 2 Properties K-7
Item 3 Legal Proceedings K-19
Item 4 Submission of Matters to a
Vote of Security Holders K-19
PART II
Item 5 Market for the Registrant's Units
and Related Security Holder Matters K-19
Item 6 Selected Financial Data K-20
Item 7 Management's Discussion and Analysis of
Financial Condition and Results of Operations K-21
Item 7A. Quantitative and Qualitative Disclosures about
Market Risk K-26
Item 8 Financial Statements and Supplementary Data K-26
Item 9 Changes in and Disagreements with
accountants on Accounting and Financial
Disclosure K-26
PART III
Item 10 Directors and Executive Officers
of the Registrant K-26
Item 11 Management Remuneration K-28
Item 12 Security Ownership of Certain Beneficial
Owners and Management K-28
Item 13 Certain Relationships and Related
Transactions K-28
PART IV
Item 14 Exhibits, Financial Statement Schedule
and Reports on Form 8-K K-31
SIGNATURES K-32
<PAGE>
PART I
Item 1. Business
Boston Financial Qualified Housing Tax Credits L.P. III (the "Partnership") is a
limited partnership formed on August 9, 1988 under the Uniform Limited
Partnership Act of the State of Delaware. The Certificate and Agreement of
Limited Partnership ("Partnership Agreement") authorized the sale of up to
100,000 units of Limited Partnership Interest ("Units") at $1,000 per Unit,
adjusted for certain discounts. The Partnership raised $99,610,000 ("Gross
Proceeds"), net of discounts of $390,000, through the sale of 100,000 Units.
Such amounts exclude five unregistered Units previously acquired for $5,000 by
the Initial Limited Partner, which is also one of the General Partners. The
offering of Units terminated on May 30, 1989. No further sale of Units is
expected.
As described more fully under Item 7 - Management's Discussion and Analysis of
Financial Condition and Results of Operations, affiliates of the Managing
General Partner assumed the Local General Partner interest in several Local
Limited Partnerships in which the Partnership has invested: 1) BF Harbour View,
Inc. assumed the Local General Partner interest in 241 Pine Street Associates
L.P. ("241 Pine Street"); 2) BF Willow Lake, Inc. assumed the Local General
Partner interest in Willow Lake Partners II, L.P. ("Willow Lake"); 3) BF Texas
Limited Partnership was admitted as an additional Local General Partner to
thirteen Local Limited Partnerships ("Texas Partnerships") and assumed the Local
General Partner interest in the Temple Kyle, L.P., Ltd. (the "Kyle"); and 4)
Boston Financial GP-I, LLC. assumed the Local General Partner interest in
Breckenridge Creste Apartments, L.P. ("Breckenridge"). As a result, the
Partnership is deemed to have control over 241 Pine Street, Willow Lake, the
Texas Partnerships, the Kyle and Breckenridge (the "Combined Entities"), and the
accompanying financial statements are presented in combined form to conform with
the required accounting treatment under generally accepted accounting
principles. However, these changes only affect the presentation of the
Partnership's operating results, not the business of the Partnership.
Accordingly, a presentation of information about industry segments is not
applicable and would not be material to an understanding of the Partnership's
business taken as a whole. As described more fully in Item 7 - Management's
Discussion and Analysis of Financial Condition and Results of Operations, the
Managing General Partner has transferred all of the assets of The Texas
Partnerships subject to their liabilities to unaffiliated entities.
The Partnership has invested as a limited partner in fifty-four other limited
partnerships ("Local Limited Partnerships") which own and operate residential
apartment complexes ("Properties"), some of which benefit from some form of
federal, state or local assistance programs and all of which qualify for the
low-income housing tax credits ("Tax Credits") that were added to the Internal
Revenue Code by the Tax Reform Act of 1986 (the "Code"). The investment
objectives of the Partnership include the following: (i) to provide current tax
benefits in the form of Tax Credits which qualified limited partners may use to
offset their federal income tax liability; (ii) to preserve and protect the
Partnership's capital; (iii) to provide limited cash distributions from property
operations which are not expected to constitute taxable income during the
expected duration of the Partnership's operations; and (iv) to provide cash
distributions from sale or refinancing transactions. There cannot be any
assurance that the Partnership will attain any or all of these investment
objectives.
A more detailed discussion of these investment objectives, along with the risks
in achieving them, is contained in the section of the prospectus entitled
"Investment Objectives and Policies - Principal Investment Policies" which is
herein incorporated by this reference.
Table A on the following pages lists the Properties owned by Local Limited
Partnerships in which the Partnership has invested. Item 7 of this Report
contains other significant information with respect to such Local Limited
Partnerships. As required by applicable rules, the terms of the acquisition of
Local Limited Partnership interests have been described in supplements to the
Prospectus and collected in one post-effective amendment to the Registration
Statement, in another supplement to the Prospectus and in a report on Form 8-K
listed in Part IV of this Report (collectively, the "Acquisition Reports"); such
descriptions are incorporated herein by this reference.
<PAGE>
TABLE A
SELECTED LOCAL LIMITED
PARTNERSHIP DATA
(Unaudited)
<TABLE>
Properties Owned by Date
Local Limited Interest
Partnerships Location Acquired
<S> <C> <C>
West Dade Miami, FL 12/31/88
West Dade II Miami, FL 12/31/88
Regency Square *** Dayton, OH 03/13/89
Westwood Manor Flint, MI 02/21/89
Rolling Hills *** Dayton, OH 03/13/89
Boulevard Commons II Chicago, IL 04/04/89
Boulevard Commons IIA Chicago, IL 04/04/89
Fox Run Housing Victoria, TX 04/07/89
Waterfront Buffalo, NY 04/28/89
Shoreline Buffalo, NY 04/28/89
Colony Apartments* Columbia, SC 05/19/89
Admiral Court Philadelphia, PA 06/07/89
Crestwood** Bridgeport, TX 06/05/89
Elmwood Aurora, CO 05/16/89
El Jardin Davie, FL 06/14/89
Ashley Place Orlando, FL 06/23/89
Willowick** Gainesville, TX 06/30/89
Kirkendall Heights Ellsworth, KS 07/19/89
Bentley Hill Syracuse, KS 06/30/89
Columbia Townhouses Burlington, IA 07/28/89
Quartermill Richmond, VA 08/02/89
Ponca Manor Satanta, KS 07/28/89
Pearl Place Rossville, KS 07/28/89
Crown Point** Venus, TX 08/22/89
Godley Arms** Godley, TX 08/25/89
Pilot Point** Pilot Point, TX 08/22/89
Sherwood Arms** Keene, TX 08/22/89
South Holyoke Holyoke, MA 08/29/89
Walker Woods Dover, DE 08/30/89
Lakeway Colony** Lake Dallas, TX 08/30/89
One Main Place** Little Elm, TX 08/22/89
Eaglewood Covington, TN 09/06/89
Harbour View* Staten Island, NY 09/29/89
Georgetown II Georgetown, DE 09/28/89
Granite* Boston, MA 09/29/89
Garden Plain Garden Plain, KS 08/09/89
Fulton Fulton, KY 10/05/89
Lone Oak** Graham, TX 10/06/89
Hallet West** Hallettsville, TX 11/20/89
</TABLE>
<PAGE>
<TABLE>
Properties Owned by Date
Local Limited Interest
Partnerships Location Acquired
<S> <C> <C>
Glenbrook** St. Jo, TX 10/06/89
Eagles Nest** Decatur, TN 10/06/89
Billings Family Billings, MO 08/09/89
Brownsville Brownsville, TN 08/09/89
Sunnyhill Villa Wayne, NE 08/09/89
Longview Humboldt, KS 10/13/89
Horseshoe Bend Horseshoe Bend, AR 08/09/89
Briarwood II Lake Havasua, AZ 10/04/89
Quail Run** Iowa Park, TX 10/06/89
Smithville Smithville, MO 08/09/89
Aurora East Denver, CO 11/06/89
Elver Park II Madison, WI 11/09/89
Elver Park III Madison, WI 11/09/89
Tucson Trails I Madison, WI 11/22/89
Tucson Trails II Madison, WI 11/23/89
Pleasant Plaza Malden, MA 12/01/89
241 Pine Street Manchester, NH 12/04/89
Heather Oaks Oak Grove, MO 11/24/89
Riverfront Sunbury, PA 12/26/89
Susquehanna View Camp Hill, PA 12/26/89
Breckenridge* Duluth, GA 12/19/89
Wood Creek Calcium, NY 12/15/89
Willow Lake* Kansas City, MO 12/20/89
Ashton Heights Bolivar, MO 12/15/89
Fouche Valley Perryville, AR 05/01/90
Altheimer Altheimer, AR 04/18/90
Kyle Hotel Temple, TX 06/12/90
Diversey Square Chicago, IL 12/01/90
Poplar Village Cumberland, KY 12/30/90
Lexington Lexington, TN 12/29/90
</TABLE>
* The Partnership's interest in profits and losses of each Local Limited
Partnership arising from normal operations is 99% with the exception of
five Local Limited Partnerships in which the Partnership acquired a 98%
interest (Willow Lake), 98% interest (Breckenridge), 97% interest
(Granite), 49% interest (Colony Apartments) and a 48.96% interest (Harbour
View). Profits and losses arising from sale or refinancing transactions
are allocated in accordance with the respective Local Limited Partnership
Agreements.
** As of March 31, 1999, the Managing General Partner has transferred all of
the assets of the thirteen Texas Partnerships subject to their liabilities
to unaffiliated entities. The transfer of Crown Point, Godley Arms,
Glenbrook Apartments, Quail Run Apartments, Sherwood Arms Housing, Lone
Oak Apartments, Hallet West Apartments, Crestwood Place, Eagle Nest
Apartments, One Main Place, Pilot Point Apartments, Lakeway Colony and
Willowick were effective February 21, 1996, February 21, 1996, June 7,
1996, July 3, 1996, November 26, 1996, August 6, 1997, September 23, 1997,
October 28, 1997, October 28, 1997, October 28, 1997, October 28, 1997,
October 30, 1997 and August 4, 1998, respectively.
*** As of March 31, 1999, the titles of Rolling Hills and Regency Square were
transferred to the lender. The transfers were effective May 2, 1997.
<PAGE>
Although the Partnership's investments in Local Limited Partnerships are not
subject to seasonal fluctuations, the Partnership's equity in losses of Local
Limited Partnerships and rental operating revenues and expenses, to the extent
they reflect the operations of individual Properties, may vary from quarter to
quarter based upon changes in occupancy and operating expenses as a result of
seasonal factors.
With the exception of the Combined Entities, each Local Limited Partnership has,
as its general partners ("Local General Partners"), one or more individuals or
entities not affiliated with the Partnership or its General Partners. In
accordance with the partnership agreements under which such entities are
organized ("Local Limited Partnership Agreements"), the Partnership depends on
the Local General Partners for the management of each Local Limited Partnership.
As of March 31, 1999, the following Local Limited Partnerships have a common
Local General Partner or affiliated group of Local General Partners accounting
for the specified percentage of the total capital contributions in Local Limited
Partnerships: (i) Boulevard Commons II and Boulevard Commons IIA, representing
2.48%, have Carroll Properties, Inc. and Robert King as Local General Partners;
(ii) Ellsworth, Syracuse, Satanta, Rossville, Humbolt, Smithville, Brownsville,
Briarwood, Billings, Garden Plain, Wayne, Horseshoe Bend, Bolivar, Oak Grove,
Westgate and Altheimer, representing 2.40%, have The Lockwood Group as Local
General Partner; (iii) Elver Park II, Elver Park III, Tucson Trails I and Tucson
Trails II, representing 6.41%, have Gorman Associates as Local General Partner;
(iv) Riverfront Apartments and Susquehanna View, representing 6.10%, have NCHP
as Local General Partner; (v) West Dade and West Dade II, representing 6.65%,
have Romat, Inc. and Arbor, Inc., respectively, both of which have Aristedes
Martinez as principal, as Local General Partner; (vi) Elmwood and Fox Run,
representing 3.95%, have Delwood Ventures, Inc. and R.S.F. Ventures, Inc. as
Local General Partners, respectively, both of which have Raymond Baker as
principal; (vii) Eaglewood, Lexington and Fulton, representing 0.77%, have Tommy
Harper, Jerry Blurt and Chris Turskey as Local General Partners; and (viii)
Waterfront and Shoreline, representing 6.83%, have M.B. Associates as Local
General Partner. The Local General Partners of the remaining Local Limited
Partnerships are identified in the Acquisition Reports, which are incorporated
herein by reference.
The Properties owned by Local Limited Partnerships in which the Partnership has
invested are and will continue to be subject to competition from existing and
future properties in the same areas. The continued success of the Partnership
will depend on many factors, most of which are beyond the control of the
Partnership and which cannot be predicted at this time. Such factors include
general economic and real estate market conditions, both on a national basis and
in those areas where the Properties are located, the availability and cost of
borrowed funds, real estate tax rates, operating expenses, energy costs and
government regulations. In addition, other risks inherent in real estate
investment may influence the ultimate success of the Partnership, including: (i)
possible reduction in rental income due to an inability to maintain high
occupancy levels or adequate rental levels; (ii) possible adverse changes in
general economic conditions and adverse local conditions, such as competitive
overbuilding, a decrease in employment rates or adverse changes in real estate
laws, including building codes; and (iii) the possible future adoption of rent
control legislation which would not permit increased costs to be passed on to
the tenants in the form of rent increases or which would suppress the ability of
the Local Limited Partnership to generate operating cash flow. Since most of the
Properties benefit from some form of government assistance, the Partnership is
subject to the risks inherent in that area including decreased subsidies,
difficulties in finding suitable tenants and obtaining permission for rent
increases. In addition, any Tax Credits allocated to investors with respect to a
Property are subject to recapture to the extent that the Property or any portion
thereof ceases to qualify for the Tax Credits. Other future changes in Federal
and state income tax laws affecting real estate ownership or limited
partnerships could have a material and adverse affect on the business of the
Partnership.
The Partnership is managed by Arch Street III, Inc., the Managing General
Partner of the Partnership. The other General Partner of the Partnership is Arch
Street III Limited Partnership. The Partnership, which does not have any
employees, reimburses The Boston Financial Group Limited Partnership ("Boston
Financial"), an affiliate of the General Partners, for certain expenses and
overhead costs. A complete discussion of the management of the Partnership is
set forth in Item 10 of this Report.
<PAGE>
Item 2. Properties
The Partnership owns limited partnership interests in fifty-four Local Limited
Partnerships which own and operate Properties, some of which benefit from some
form of federal, state or local assistance programs and all of which qualify for
the Tax Credits added to the Code by the Tax Reform Act of 1986. The
Partnership's ownership interest in each Local Limited Partnership is 99%,
except for Willow Lake, Breckenridge, Granite, Colony Apartments and Harbour
View, where the Partnership's ownership interest is 98%, 98%, 97%, 49% and
48.96%, respectively.
Each of the Local Limited Partnerships has received an allocation of Tax Credits
from its relevant state tax credit agency. In general, the Tax Credit runs for
ten years from the date the Property is placed in service. The required holding
period (the "Compliance Period") of the Properties is fifteen years. During
these fifteen years, the Properties must satisfy rent restrictions, tenant
income limitations and other requirements, as promulgated by the Internal
Revenue Code, in order to maintain eligibility for the Tax Credit at all times
during the Compliance Period. Once a Local Limited Partnership has become
eligible for the Tax Credits, it may lose such eligibility and suffer an event
of recapture if its Property fails to remain in compliance with the
requirements.
In addition, some of the Local Limited Partnerships have obtained one or a
combination of different types of loans such as: i) below market rate interest
loans; ii) loans provided by a redevelopment agency of the town or city in which
the property is located at favorable terms; and iii) loans which have repayment
terms that are based on a percentage of cash flow.
The schedules on the following pages provide certain key information on the
Local Limited Partnership interests acquired by the Partnership.
<PAGE>
<TABLE>
Capital Contributions
Local Limited Partnership Total Total Mtge. Loans
Property Name Number of Committed at March Paid through March payable Type of Occupancy at March
Property Location Apt. Units 31, 1999 31, 1999 at December 31, 1998 Subsidy* 31, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
West Dade LTD, A Limited Partnership
West Dade
Miami, FL 122 $1,513,936 $1,513,936 $4,049,203 Section 8 92%
West Dade LTD II, A Limited Partnership
West Dade II
Miami, FL 209 3,039,442 3,039,442 8,273,811 Section 8 98%
Westwood Manor Limited Dividend
Housing Association L.P.
Westwood Manor
Flint, MI 144 1,165,925 1,165,925 3,231,079 Section 8 95%
Rolling Hills Associates L.P. (B)
Rolling Hills
Dayton, OH
Regency Square Limited Partnership (B)
Regency Square
Dayton, OH
Shoreline Limited Partnership
Shoreline
Buffalo, NY 142 1,079,318 1,079,318 7,087,704 None 72%
Waterfront Limited Partnership
Waterfront
Buffalo, NY 472 3,597,307 3,597,307 25,342,127 None 72%
<PAGE>
Capital Contributions
Local Limited Partnership Total Total Mtge. Loans
Property Name Number of Committed at March Paid through March payable Type of Occupancy at March
Property Location Apt. Units 31, 1999 31, 1999 at December 31, 1998 Subsidy* 31, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
Fox Run Housing
Fox Run
Victoria, TX 150 1,605,775 1,605,775 4,104,694 Section 8 93%
Boulevard Commons Limited
Partnership II
Boulevard Commons II
Chicago, IL 61 517,175 517,175 691,775 Section 8 100%
The Colony Apartments, L.P.
A Limited Partnership
Colony Apartments
Columbia, SC 300 1,762,500 1,762,500 8,596,401 Section 8 93%
Boulevard Commons Limited
Partnership IIA
Boulevard Commons IIA
Chicago, IL 42 1,179,812 1,179,812 1,511,625 Section 8 38%
Ashley Place, LTD
A Florida Limited Partnership
Ashley Place
Orlando, FL 96 2,002,560 2,002,560 2,791,025 None 96%
Admiral Housing Limited Partnership
Admiral Court
Philadelphia, PA 46 1,900,000 1,900,000 2,619,347 Section 8 87%
<PAGE>
Capital Contributions
Local Limited Partnership Total Total Mtge. Loans
Property Name Number of Committed at March Paid through March payable Type Occupancy at March
Property Location Apt. Units 31, 1999 31, 1999 at December 31, 1998 of 31, 1999
Subsidy*
- ------------------------------------------------------------------------------------------------------------------------------------
Prarieland Property of Syracuse, L.P.
Bentley Hill
Syracuse, KS 8 52,150 52,150 240,431 FmHA 100%
El Jardin of Davie, Ltd.
El Jardin
Davie, FL 236 2,022,100 2,022,100 6,863,716 Section 8 98%
EDM Housing Associates LTD
A Limited Partnership
Elmwood Delmar
Aurora, CO 95 1,102,025 1,102,025 3,230,700 Section 8 90%
Bridgeport Housing Associates, LTD(A)
Crestwood
Bridgeport, TX
Willowick Housing Associates, LTD(A)
Willowick
Gainesville, FL
Ellsworth Senior Housing, L.P.
Kirkendall Heights
Ellsworth, KS 12 69,658 69,658 327,767 FmHA 83%
Prairieland Properties of Satanta, L.P.
Ponca Manor
Satanta, KS 8 49,915 49,915 223,361 FmHA 100%
<PAGE>
Capital Contributions
Local Limited Partnership Total Total Mtge. Loans
Property Name Number of Committed at March Paid through March payable Type Occupancy at March
Property Location Apt. Units 31, 1999 31, 1999 at December 31, 1998 of 31, 1999
Subsidy*
- ------------------------------------------------------------------------------------------------------------------------------------
Rossville Senior Housing L.P.
Pearl Place
Rossville, KS 10 58,855 58,855 278,728 FmHA 90%
Columbia Townhouse Associates, L.P.
Columbia Townhouses
Burlington, IA 56 752,450 752,450 1,787,964 Section 8 89%
Quartermill Associates, L.P.
A Virginia Limited Partnership
Quartermill
Richmond, VA 266 7,705,500 7,705,500 7,116,270 None 100%
One Main Place Housing
Associates, LTD(A)
One Main Place
Little Elm, TX
Pilot Point Housing Associates, LTD(A)
Pilot Point
Pilot Point, TX
Sherwood Arms Housing
Associates, LTD (A)
Sherwood Arms
Keene, TX
<PAGE>
Capital Contributions
Local Limited Partnership Total Total Mtge. Loans payable
Property Name Number of Committed at March Paid through March at December 31, Type of Occupancy at March
Property Location Apt. Units 31, 1999 31, 1999 1998 Subsidy* 31, 1999
- -----------------------------------------------------------------------------------------------------------------------------------
Crown Point Housing
Associates, LTD (A)
A Texas Limited Partnership
Crown Point
Venus, TX
Godley Arms Housing
Associates, LTD (A)
Godley Arms
Godley, TX
South Holyoke Limited Partnership
South Holyoke
Holyoke, MA 48 1,119,330 1,119,330 2,701,132 None 100%
Harbour View
A Limited Partnership
Harbour View
Staten Island, NY 122 1,350,000 1,350,000 10,681,534 None 96%
Walker Woods Partners, L.P.
Walker Woods
Dover, DE 51 1,452,380 1,452,380 2,331,283 None 84%
Boston Financial Texas Properties
Limited Partnership III(A)
Lakeway Colony
Lake Dallas, TX
<PAGE>
Capital Contributions
Local Limited Partnership Total Total Mtge. Loans
Property Name Number of Committed at March Paid through March payable Type of Occupancy at March
Property Location Apt. Units 31, 1999 31, 1999 at December 31, 1998 Subsidy* 31, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
Eaglewood VIII, L.P.
A Limited Partnership
Eaglewood
Covington, TN 40 255,000 255,000 1,113,413 FmHA 100%
Georgetown Associates II, L.P.
Georgetown II
Georgetown, DE 50 1,200,000 1,200,000 1,724,359 None 98%
Blue Mountain Associates, L.P.
A Massachusetts Limited Partnership
Granite V
Boston, MA 217 5,774,113 5,774,113 9,718,207 Section 8 99%
Garden Plain Senior Apts., LTD
Garden Plain
Garden Plain, KS 12 70,030 70,030 302,841 FmHA 100%
Fulton Associates I, L.P.
A Limited Partnership
Fulton, KY 24 180,000 180,000 798,123 FmHA 100%
Lone Oak Housing Associates, LTD (A)
Lone Oak
Graham, TX
<PAGE>
Capital Contributions
Local Limited Partnership Total Total Mtge. Loans payable
Property Name Number of Committed at March Paid through March at December 31, Type of Occupancy at March
Property Location Apt. Units 31, 1999 31, 1999 1998 Subsidy* 31, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
West Hallettsville Housing
Associates, LTD(A)
Hallet-West
Hallettsville, TX
Glenbrook Housing Associates, LTD (A)
Glenbrook
St. Jo, TX
Eagles Nest Housing
Associates, LTD(A)
Eagles Nest
Decatur, TX
Billings Family Housing, L.P.
Cedar Tree
Billings, MO 12 58,855 58,855 282,556 FmHA 83%
Brownsville Associates, L.P.
Brownsville
Brownsville, TN 28 161,665 161,665 784,201 FmHA 96%
Wayne Senior Housing, L.P.
Sunnyhill Villa
Wayne, NE 15 81,205 81,205 427,912 FmHA 93%
Longview Apartments, L.P.
Longview
Humbolt, KS 14 91,635 91,635 398,009 FmHA 100%
<PAGE>
Capital Contributions
Local Limited Partnership Total Total Mtge. Loans payable
Property Name Number of Committed at March Paid through March payable Type of Occupancy at March
Property Location Apt. Units 31, 1999 31, 1999 at December 31, 1998 Subsidy* 31, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
Horseshoe Bend Associates I, L.P.
Horseshoe Bend
Horseshoe Bend, AR 24 143,785 143,785 647,909 FmHA 100%
Briarwood Associates II, L.P.
Briarwood II
Lake Havasua, AZ 32 219,030 219,030 1,108,853 FmHA 100%
North Quail Run Housing
Associates, LTD (A)
Quail Run
Iowa Park, TX
Smithville Rural Housing
A Limited Partnership
Smithville
Smithville, MO 24 108,025 108,025 543,708 FmHA 100%
Aurora Properties, LTD.
A Limited Partnership
Aurora East Apartments
Denver, CO 125 765,000 765,000 4,098,800 Section 8 92%
Elver Park Limited Partnership II
Elver Park II
Madison, WI 56 1,246,385 1,246,385 1,680,740 None 95%
<PAGE>
Capital Contributions
Local Limited Partnership Total Total Mtge. Loans
Property Name Number of Committed at March Paid through March payable Type of Occupancy at
Property Location Apt. Units 31, 1999 31, 1999 at December 31, 1998 Subsidy* March 31, 1999
- -----------------------------------------------------------------------------------------------------------------------------------
Elver Park Limited Partnership III
Elver Park III
Madison, WI 48 1,047,470 1,047,470 1,439,145 None 93%
Tuscon Trails Limited Partnership I
Tuscon Trails I
Madison, WI 48 1,047,470 1,047,470 1,407,408 None 90%
Tuscon Trails Limited Partnership II
Tuscon Trails II
Madison, WI 48 1,047,470 1,047,470 1,414,049 None 100%
Pleasant Plaza Housing L.P.
Pleasant Plaza
Malden, MA 125 3,340,138 3,340,138 17,298,253 Section 8 99%
241 Pine Street Associates, L.P.**
241 Pine Street
Manchester, NH 50 1,374,298 1,374,298 418,430 None 99%
Missouri Rural Housing of
Oak Grove, L.P.
Heather Oaks
Oak Grove, MO 24 118,828 118,828 561,717 FmHA 92%
Wood Creek Associates
A New York Limited Partnership
Wood Creek
Calcium, NY 104 1,850,000 1,850,000 3,186,957 None 94%
<PAGE>
Capital Contributions
Local Limited Partnership Total Total Mtge. Loans
Property Name Number of Committed at March Paid through March payable at Type of Occupancy at March
Property Location Apt. Units 31, 1999 31, 1999 December 31, 1998 Subsidy* 31, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
Breckenridge Creste Apartments, L.P.**
Breckenridge
Duluth, GA 164 3,520,000 3,520,000 4,708,469 None 97%
Willow Lake Partners II, L.P.**
A Limited Partnership
Willow Lake
Kansas City, MO 132 2,130,700 2,130,700 2,699,871 None 91%
Bolivar Senior Housing, L.P.
Ashton Heights
Bolivar, MO 20 95,360 95,360 466,514 FmHA 100%
Lexington Associates I L.P.
A Limited Partnership
Lexington Civic
Lexington, TN 24 95,000 95,000 815,747 FmHA 96%
Riverfront Apartments, L.P.
Riverfront
Sunbury, PA 200 1,984,908 1,984,908 7,264,214 Section 8 99%
Susquehanna View L.P.
Susquehanna View
Camp Hill, PA 201 2,194,314 2,194,314 8,955,465 Section 8 100%
Westgate Associates I, L.P.
Fouche Valley
Perryville, AR 20 131,865 131,865 638,634 FmHA 90%
<PAGE>
Capital Contributions
Local Limited Partnership Total Total Mtge. Loans
Property Name Number of Committed at March Paid through March payable Type of Occupancy at March
Property Location Apt. Units 31, 1999 31, 1999 at December 31, 1998 Subsidy* 31, 1999
- --------------------------------------------------------- ------------------------------------------------------------------------
Altheimer Associates I, L.P.
Altheimer
Altheimer, AR 20 130,375 130,375 597,205 FmHA 90%
The Temple-Kyle L.P.**
Kyle Hotel
Temple, TX 64 1,624,100 1,624,100 0 Section 8 86%
Diversey Square Associates II
Diversey Square II
Chicago, IL 48 1,031,825 1,031,825 2,567,130 Section 8 100%
Poplar Village, LTD
Poplar Village
Cumberland, KY 36 283,945 283,945 1,200,333 None 97%
------ ------------- ------------ ---------------
4,745 68,500,907 68,500,907 183,350,849
======
Less: **Combined Entities 8,649,098 8,649,098 7,826,770
------------- ------------ ---------------
$59,851,809 $59,851,809 $ 175,524,079
=========== =========== ===============
</TABLE>
*FmHA This subsidy, which is authorized under Section 515 of the Housing
Act of 1949, can be one or a combination of different types
of GP financing. For instance, FmHA may provide: 1) direct below-
market-rate mortgage loans for rural rental housing; 2) mortgage
interest subsidies which effectively lower the interest rate of the
loan to 1%; 3) a rental assistance subsidy to tenants which allows
them to pay no more than 30% of their monthly income as rent with the
balance paid by the federal government; or 4) a combination of any of
the above.
Section 8 This subsidy, which is authorized under Section 8 of Title II of
the Housing and Community Development Act of 1974, allows qualified
low- income tenants to pay 30% of their monthly income as rent with
the balance paid by the federal government.
(A) As of March 31, 1999, the Managing General Partner has transferred
all of the assets of the Thirteen Texas Partnerships subject to
their liabilities. The Texas Partnerships had total capital
contributions and mortgage payable amounts of $1,580,498 and
$6,516,496, respectively, as of the transfer dates.
(B) As of March 31, 1998, the Managing General Partner transferred the
title of Rolling Hills Associates, L.P. and Regency Square Limited
Partnership to the lender. These two Partnerships had total capital
contributions and mortgage payable amounts of $5,655,000 and
$6,409,457, respectively, as of the transfer dates.
<PAGE>
One Local Limited Partnership, Quarter Mill Associates L.P., invested in by the
Partnership represents more than 10% of the total capital contributions to be
made to Local Limited Partnerships by the Partnership. Quarter Mill is a
266-unit construction apartment complex located in Richmond, Virginia.
Quarter Mill is financed by a combination of private and public sources. The
first mortgage is at 8.75% interest, has a 40-year term and is insured by HUD.
The apartment project is pledged as collateral for the note. In addition to the
first mortgage, there is a subordinated nonrecourse note that is payable each
year only to the extent of 15% of the property's net cash flow, as defined by
the note agreement.
Additional information required under this item, as it pertains to the
Partnership, is contained in Items 1, 7 and 8 of this report.
Item 3. Legal Proceedings
Lone Oak Housing Associates, Ltd., as was previously reported, was the defendant
in a lawsuit in which the plaintiff had alleged negligence and deceptive Trade
Act violations. This litigation was settled by the insurance carrier and the
case dismissed.
Willow Lake Partners II, L.P. ("Willow Lake") was the defendant in a lawsuit
relating to an earlier lawsuit involving Willow Lake. As part of the
Partnership's settlement with the former management agent, Willow Lake gave the
management agent two cash flow notes. The former management agent is now
claiming that Willow Lake has cash flow (so payments should have been made on
the notes) and it is the Partnership's position that the property is running a
deficit. On June 25, 1998, the court found for Willow Lake on summary judgement
and ruled that there was no default on the note. This litigation is no longer
outstanding unless the former management agent decides to appeal.
Item 4. Submission of Matters to a Vote of Security Holders
None.
PART II
Item 5. Market for the Registrant's Units and Related Security Holder Matters
There is no public market for the Units, and it is not expected that a public
market will develop. If a Limited Partner desires to sell Units, the buyer of
those Units will be required to comply with the minimum purchase and retention
requirements and investor suitability standards imposed by applicable federal or
state securities laws and the minimum purchase and retention requirements
imposed by the Partnership. The price to be paid for the Units, as well as the
commissions to be received by any participating broker-dealers, will be subject
to negotiation by the Limited Partner seeking to sell his Units. Units will not
be redeemed or repurchased by the Partnership.
The Partnership Agreement does not impose on the Partnership or its General
Partners any obligation to obtain periodic appraisals of assets or to provide
Limited Partners with any estimates of the current value of Units.
As of June 15, 1999, there were 5,880 record holders of Units of the
Partnership.
Cash distributions, when made, are paid annually. No cash distribution was paid
in the years ended March 31, 1999, 1998 and 1997.
<PAGE>
Item 6. Selected Financial Data
The following table sets forth selected financial information regarding the
Partnership's financial position and operating results. This information should
be read in conjunction with Management's Discussion and Analysis of Financial
Condition and Results of Operations and the Financial Statements and Notes
thereto, which are included in Items 7 and 8 of this Report.
<TABLE>
March 31, March 31, March 31, March 31, March 31,
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Revenue (C) $ 2,977,888 $ 2,733,282 $ 2,119,597 $ 2,219,261 $ 1,926,504
Equity in losses of Local
Limited Partnerships (C) (3,090,983) (3,287,444) (3,624,984) (4,670,063) (5,818,976)
Gain (loss) on asset transfers 645,018 1,868,051 (51,595) 1,279,618 -
Per Limited Partnership Unit 6.38 18.49 (0.51) 12.67 -
Net loss (5,109,931) (3,597,835) (7,208,441) (5,440,551) (9,002,539)
Per Limited Partnership
Unit (50.59) (35.62) (71.36) (53.86) (89.13)
Partner distributions - - - - -
Cash and cash equivalents (C) 440,365 311,867 379,614 268,040 155,456
Marketable securities 721,788 275,387 331,319 158,967 2,200,946
Investment in Local Limited
Partnerships 15,789,285 19,319,502 23,647,348 30,174,708 36,622,429
Total Assets (A) 31,239,750 37,131,787 43,791,590 44,371,622 52,653,124
Long-term debt (C) 7,832,127 8,641,832 11,754,415 7,006,101 9,581,097
Total Liabilities (C) 11,714,112 12,474,903 15,393,975 9,474,777 12,090,444
Other Data:
Passive loss (B) (9,547,678) (7,960,758) (10,918,014) (11,654,006) (12,660,771)
Per Limited Partnership
Unit (B) (94.52) (78.82) (108.09) (115.37) (125.34)
Portfolio Income (B) 399,857 415,665 412,136 529,521 470,018
Per Limited Partnership
Unit (B) 3.96 4.12 4.08 5.24 4.65
Low-Income Housing
Tax Credits (B) 12,743,635 12,585,747 13,857,452 14,056,981 14,088,559
Per Limited Partnership
Unit (B) 125.55 123.94 136.50 138.47 138.78
Recapture of Low-Income
Housing Tax Credits (B) (244,408) (3,582,142) (995,750) - -
Per Limited Partnership
Unit (B) (2.42) (35.46) (9.86) - -
Local Limited Partnership interests
owned at end of period (D) 54 55 64 69 69
</TABLE>
(A) Total assets include the net investment in Local Limited Partnerships.
(B) Income tax information is as of December 31, the year end of the
Partnership for income tax purposes. The Low-Income Housing Tax Credit per
Limited Partnership Unit for 1998, 1997, 1996, 1995 and 1994 represents the
amount allocated to individual investors. Corporate investors were
allocated $131.03, $129.80, $142.65, $144.62 and $144.95 per Unit in 1998,
1997, 1996, 1995 and 1994, respectively.
<PAGE>
Item 6. Selected Financial Data (continued)
(C) Revenue for the years ended March 31, 1999, 1998, 1997, 1996 and 1995
includes $2,484,545, $2,563,928, $1,909,683, $2,224,273 and $1,792,997,
respectively, of rental and other revenues from the Combined Entities that
is included in the combined revenue on the Combined Statement of
Operations. Equity in losses of Local Limited Partnerships in the years
ended March 31, 1999, 1998, 1997, 1996 and 1995 does not include
$1,663,198, $(931,727),$(2,633,475), $608,681 and ($857,248), respectively,
of income (losses) from the Combined Entities that have been combined with
the Partnership's loss on the Combined Statement of Operations. Cash and
cash equivalents for the years ended March 31, 1999, 1998, 1997, 1996 and
1995 includes $101,372, $99,298, $166,606, $173,408 and $80,091,
respectively, from the Combined Entities that is included on the Combined
Balance sheets. The total amount of long-term debt is related to the
Combined Entities. Total liabilities for the years ended March 31, 1999,
1998, 1997, 1996 and 1995 includes $10,990,506, $12,068,486, $15,409,538,
$10,065,592 and $11,499,446, respectively, from the Combined Entities that
is included on the Combined Balance Sheets.
(D) As of March 31, 1998, the Managing General Partner transferred the title to
the lender of Rolling Hills Associates, L.P. and Regency Square Limited
Partnership with an original cost amount of $5,655,000. As of March 31,
1999, the Managing General Partner also transferred all of the assets of
Willowick subject to its liabilities.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Certain matters discussed herein constitute forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. The
Partnership intends such forward-looking statements to be covered by the safe
harbor provisions for forward-looking statements, and are including this
statement for purposes of complying with these safe harbor provisions. Although
the Partnership believes the forward-looking statements are based on reasonable
assumptions, the Partnership can give no assurance that their expectations will
be attained. Actual results and timing of certain events could differ materially
from those projected in or contemplated by the forward-looking statements due to
a number of factors, including, without limitation, general economic and real
estate conditions, interest rates, and unanticipated delays or expenses on the
part of the Partnership and their suppliers in achieving year 2000 compliance.
As previously reported, the Managing General Partner transferred all of the
assets of the thirteen Texas Partnerships subject to their liabilities to
unaffiliated entities. Crown Point, Godley Arms, Glenbrook Apartments, Quail Run
Apartments, Sherwood Arms Housing, Lone Oak Apartments, Hallet West Apartments,
Lakeway Colony, Crestwood Place, Eagle Nest Apartments, One Main Place and Pilot
Point Apartments were transferred prior to March 31, 1998. Willowick was
transferred on August 4, 1998. For tax purposes, these events resulted in both
Section 1231 gain and cancellation of indebtedness income. In addition, the
transfer of ownership resulted in a nominal amount of recapture of tax credits
because the Texas Partnerships represented only 2% of the Partnership's tax
credits.
The Local General Partner and Managing General Partner were involved in lengthy
workout negotiations with HUD, but ultimately the mortgages for these properties
were sold to a lender in HUD's August 1996 non-performing loan auction. Although
negotiations continued with the lender in an attempt to prevent foreclosure, a
workout was not achieved, and the foreclosures occurred. This transfer of title
resulted in a recapture tax in 1997 and the allocation of taxable income, which
was reported on the investors' 1997 tax return (filed in 1998).
Liquidity and Capital Resources
The Partnership (including the Combined Entities) had an increase in cash and
cash equivalents of $128,498 for the year ended March 31, 1999. This increase is
attributable to sales of marketable securities, cash distributions received from
Local Limited Partnership and cash provided by operations and proceeds from
mortgage note. These increases are partially offset by purchases of marketable
securities and reimbursement to developer.
The Managing General Partner initially designated 3% of the Gross Proceeds as
Reserves. The Reserves were established to be used for working capital of the
Partnership and contingencies related to the ownership of Local Limited
Partnership interests. The Managing General Partner may increase or decrease
such Reserves from time to time, as it deems appropriate. During the year ended
March 31, 1993, the Managing General Partner decided to increase the Reserve
level to 3.75%. Funds approximating $196,000 have been withdrawn from the
Reserves to pay legal and other costs. Additionally, professional fees relating
to various property issues totaling approximately $1,728,000 have been paid from
Reserves. This amount includes approximately $1,313,000 for the Texas
Partnerships. To date, Reserve funds in the amount of approximately $349,000
have also been used to make additional capital contributions to two Local
Limited Partnerships, and the Partnership has paid approximately $1,070,000 (net
of paydowns) to purchase the mortgage of a Local Limited Partnership. To date,
the Partnership has used approximately $2,038,000 of operating funds to
replenish Reserves. At March 31, 1999, approximately $983,000 of cash, cash
equivalents and marketable securities have been designated as Reserves. Reserves
may be used to fund Partnership operating deficits, if the Managing General
Partner deems funding appropriate. If Reserves are not adequate to cover the
Partnership's operations, the Partnership will seek other financing sources
including, but not limited to, the deferral of Asset Management Fees paid to an
affiliate of the Managing General Partner or working with Local Limited
Partnerships to increase cash distributions.
In the event a Local Limited Partnership encounters operating difficulties
requiring additional funds, the Partnership might deem it in its best interests
to provide such funds, voluntarily, in order to protect its investment. To date,
in addition to the $1,313,000 noted above, the Partnership has also advanced
approximately $622,000 to the Texas Partnerships and $841,000 to four other
Local Limited Partnerships to fund operating deficits.
Since the Partnership invests as a limited partner, the Partnership has no
contractual duty to provide additional funds to Local Limited Partnerships
beyond its specified investment. Thus, at March 31, 1999, the Partnership had no
contractual or other obligation to any Local Limited Partnership which had not
been paid or provided for.
Cash Distributions
No cash distributions were made in the three years ended March 31, 1999. As of
March 31, 1999, all required capital contributions have been made to Local
Limited Partnerships. Based on the results of 1998 operations, the Local Limited
Partnerships are not expected to distribute significant amounts of cash to the
Partnership because such amounts will be needed to fund Property operating
costs. In addition, many of the Properties benefit from some type of federal or
state subsidy and, as a consequence, are subject to restrictions on cash
distributions. Therefore, it is expected that only a limited amount of cash will
be distributed to investors from this source in the future.
Results of Operations
1999 versus 1998
For the year ended March 31, 1999, Partnership operations resulted in a net loss
of $5,109,931 as compared to a net loss of $3,597,835 for the same period in
1998. The increase in net loss is primarily attributable to an increase in
provision for valuation of real estate related to one of the combined entities.
These increases in net loss are partially offset by a decrease in bad debt
expenses.
1998 versus 1997
For the year ended March 31, 1998, Partnership operations resulted in a net loss
of $3,597,835 as compared to a net loss of $7,208,441 for the same period in
1997. The decrease in net loss is primarily attributable to a increase in gains
on transfer of assets, an increase in rental revenue, a decrease in provision
for valuation of real estate and a decrease in equity in losses. These decreases
in net loss are partially offset by an increase in bad debt expense, rental
operations and interest expense.
Low-Income Housing Tax Credits
The 1998, 1997 and 1996 Tax Credits per Unit for individuals were $125.55,
$123.94 and $136.50, respectively. The 1998, 1997 and 1996 Tax Credits per Unit
for corporations were $131.03, $129.80 and $142.65, respectively. The credits,
which have stabilized, are expected to remain stable for the next two years, and
then they are expected to decrease as certain properties reach the end of the
ten-year credit period. However, because the compliance periods extend
significantly beyond the tax credit periods, the Partnership is expected to
retain most of its interest in the Local Limited Partnerships for the
foreseeable future. The transfer of ownership of the remaining Texas Partnership
will result in nominal recapture of tax credits since the Texas Partnerships
represent less than 2% of the Partnership's tax credits.
The Tax Credits per Unit for corporate investors will be slightly higher for the
remaining years of the credit period than that for individual investors because
certain of the Properties took advantage of 1990 federal legislation that
allowed the acceleration of future tax credits to individuals in the tax year
ended December 31, 1990. For those Properties that elected to accelerate the
individual credit, the accelerated portion is being amortized over the remainder
of the credit period, thereby causing a reduction of this and future year's tax
credits passed through by those Properties. In total, both individual and
corporate investors will be allocated equal amounts of Tax Credits.
Property Discussions
Prior to the transfer of the Texas Partnerships, Limited Partnership interests
had been acquired in sixty-nine Local Limited Partnerships, which own and
operate rental properties in twenty-four states. Forty-two of the properties,
totaling 3,935 units, were rehabilitated, and twenty-seven properties,
consisting of 1,614 units, were newly constructed.
Many of the remaining fifty-four Local Limited Partnerships in which the
Partnership has invested have stable operations and are operating
satisfactorily. Several properties are experiencing operating difficulties and
generating cash flow deficits due to a variety of reasons. In most cases, the
Local General Partners of these properties are funding the deficits through
project expense loans and subordinated loans or payments from escrows. In
instances where the Local General Partners' obligations to fund deficits have
expired or otherwise, the Managing General Partner is working with the Local
General Partner to increase operating income, reduce expenses or refinance the
debt at lower interest rates.
Boulevard Commons II and IIA, located in Chicago, Illinois, and both having the
same Local General Partner have been experiencing operating deficits. Expenses
have increased due to increasing maintenance, capital needs, security issues and
high turnover at the property. The Managing General Partner has been in
negotiations with the Local General Partner to develop a plan that will
ultimately transfer ownership of the property to the Local General Partner. The
plan includes provisions to minimize the risk of recapture. Effective January 1,
1999, the Partnership redeemed its interest in Boulevard Commons II to the Local
Limited Partnership. The redemption of the Partnership's interest avoids a
possible recapture event. However, the redemption will cause investors to have
minimal taxable gain or loss for the 1999 tax year, depending upon the tax basis
of the property.
The Managing General Partner is still negotiating with the Local General Partner
regarding Boulevard Commons IIA to develop a plan that will ultimately transfer
ownership of the property to the Local General Partner and minimize the risk of
recapture, However, given the severity of the operating deficits, it is possible
that the Partnership will not be able to retain its interest in the property
through 1999. A foreclosure would result in recapture of credits for investors,
the allocation of taxable income to the Fund and loss of future benefits
associated with this property.
Breckenridge Creste, located in Duluth, Georgia, is experiencing operating
deficits as a result of higher vacancies during the summer of 1998. However
occupancy for the last two quarters has increased from 90% in September 30, 1998
to 96% in December 31, 1998. The Managing General Partner is working with
property management to review completion of needed capital improvements and to
review the revised marketing strategy.
Columbia Townhouses, located in Burlington, Iowa, has been experiencing
operating deficits due to consistent increases in vacancy. As of December 31,
1998, occupancy was 89%. The Local General Partner, Managing General Partner and
Management Agent are working together to review the marketing, security and
long-term strategy for this property. In addition, the Local General Partner has
approached the lender about the possibility of refinancing the mortgage. The
Managing General Partner is closely monitoring this property.
As previously reported, Harbour View, located in Staten Island, New York, had
defaulted on its HUD-insured loan. Subsequently, the lender assigned the loan to
HUD. In December 1996, the mortgage was sold at auction to an unaffiliated
institutional buyer. The Managing General Partner and Local General Partner
continue to participate in workout discussions with the new lender. The
Partnership's ability to retain its interest in the property will depend on the
ability of the Local General Partner and Partnership affiliates to negotiate a
satisfactory workout agreement with the new lender. However, if the negotiations
are not successful, it is possible that the Partnership will not be able to
retain its interest in the property through 1999. A foreclosure would result in
recapture of credits for investors, the allocation of taxable income to the
Partnership and loss of future benefits associated with this property. The
Partnership's carrying value of this investment for financial reporting purposes
is zero. Occupancy for this property as of December 31, 1998 was 98%.
As previously reported, a refinancing application was submitted for Kyle Hotel,
located in Temple, Texas, in December 1997. The potential lender needs to
approve several issues before the application will be approved. The Managing
General Partner is still monitoring the progress of the application approval
process.
Pleasant Plaza located in Malden, Massachusetts, as well as South Holyoke,
located in Holyoke, Massachusetts, receive a subsidy under the State Housing
Assistance Rental Program (SHARP), which is an important part of their annual
income. As originally conceived, the SHARP subsidy was scheduled to decline over
time to match increases in net operating income. However, increases in net
operating income failed to keep pace with the decline in the SHARP subsidy. Many
of the SHARP properties (including Pleasant Plaza and South Holyoke) structured
workouts that included additional subsidies in the form of Operating Deficit
Loans (ODL's). Effective October 1, 1997, the Massachusetts Housing Finance
Agency (MHFA), which provided the SHARP subsidies, withdrew funding of the
Operating Deficit Loans. Properties unable to make full debt service payments
were declared in default by MHFA. The Managing General Partner joined a group of
SHARP property owners called the responsible SHARP Owners, Inc. (RSO) and is
negotiating with MHFA and the Local General Partners of Pleasant Plaza and South
Holyoke to find a solution to the problems that will result from the withdrawn
subsidies. Given existing operating deficits and the dependence on these
subsidies by Pleasant Plaza and South Holyoke House, it is likely that both
properties will default on their mortgage obligations in the near future. On
September 16, 1998, the Partnership joined with the RSO and about 20 other SHARP
property owners and filed suit against the MHFA (Mass. Sup. Court Civil Action
#98-4720). Among other things, the suit seeks to enforce the MHFA's previous
financial commitments to the SHARP properties. The lawsuit is complex and in its
early stages, so no predications can be made at this time as to the ultimate
outcome. In the meantime, the Managing General Partner intends to continue to
participate in the RSO's efforts to negotiate a resolution of this matter with
MHFA.
Waterfront and Shoreline, both located in Buffalo, New York, continue to have
operating deficits as a result of a soft rental market, deferred maintenance and
security issues. Shoreline was approved for the 1998 New Approach Anti-Drug
Grant. The Grant was issued in February, 1999 and will be used to support drug
prevention, educational programs and increased security on the property. For
both Waterfront and Shoreline, the Management Agent has applied for
consideration for a Project Improvement Program (PIP) and applied for a Safe
Neighborhood Grant. At this point, deficits continue to be funded by the
Management Agent. As noted previously, the viability of the properties depends
upon funding deficits until receipt of the grants. Both properties currently
carry cash flow mortgages with New York State. The Managing General Partner is
working closely with the Local General Partner to develop a plan that will
address these concerns.
Willow Lake, located in Kansas, is experiencing operating difficulties due to
soft rental market conditions. As previously reported, the Managing General
Partner negotiated a nine year extension to the original workout agreement. The
nine year extension will expire on May 31, 2001. In addition, the Managing
General Partner is working with the Local General Partner to negotiate permanent
debt service relief, increase rents and monitor property expenses.
As previously reported, the Managing General Partner completed the transfer of
the remaining Texas Partnership, Willowick, effective August 4, 1998. This
transfer resulted in tax credit recapture of $2.44 per unit that was reported on
your 1998 K-1. In addition, the event also resulted in both Section 1231 gain
and cancellation of indebtedness income for the tax year 1998.
In accordance with Financial Accounting Standard No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of",
the Partnership has implemented policies and practices for assessing impairment
of its real estate assets and investments in Local Limited Partnerships. Each
asset is analyzed by real estate experts to determine if an impairment indicator
exists. If so, the carrying value is compared to the undiscounted future cash
flows expected to be derived from the asset and, if there is a significant
impairment in value, a provision to write down the asset to fair value will be
charged against income.
Inflation and Other Economic Factors
Inflation had no material impact on the Partnerships operations or financial
condition for the years ended March 31, 1999, 1998 and 1997.
As some Properties benefit from some form of government assistance, the
Partnership is subject to the risks inherent in that area including decreased
subsidies, difficulties in finding suitable tenants and obtaining permission for
rent increases. In addition, the Tax Credits allocated to investors with respect
to a Property are subject to recapture to the extent that a Property or any
portion thereof ceases to qualify for Tax Credits.
Some of the properties listed in this report are located in areas suffering from
poor economic conditions. Such conditions could have an adverse effect on the
rent or occupancy levels at such Properties. Nevertheless, the Managing General
Partner believes that the generally high demand for below market rate housing
will tend to negate such factors. However, no assurance can be given in this
regard.
Impact of Year 2000
The Managing General Partner's plan to resolve year 2000 issues involves the
following four phases: assessment, remediation, testing and implementation. To
date, the Managing General Partner has fully completed an assessment of all
information systems that may not be operative subsequent to 1999 and has begun
the remediation, testing and implementation phase on both hardware and software
systems. Because the hardware and software systems of both the Partnership and
Local Limited Partnerships are generally the responsibility of obligated third
parties, the plan primarily involves ongoing discussions with and obtaining
written assurances from these third parties that pertinent systems will be 2000
compliant. In addition, neither the Partnership nor the Local Limited
Partnerships are incurring significant additional costs since such expenses are
principally covered under the service contracts with vendors. As of June 1999,
the General Partner is in the final stages of its Year 2000 remediation plan and
believes all major systems are compliant; any systems still being updated are
not considered significant to the Partnership's operations. However, despite the
likelihood that all significant year 2000 issues are expected to be resolved in
a timely manner, the Managing General Partner has no means of ensuring that all
systems of outside vendors or other entities that impact operations will be 2000
compliant. The Managing General Partner does not believe that the inability of
third parties to address their year 2000 issues in a timely manner will have a
material impact on the Partnership. However, the effect of non-compliance by
third parties is not readily determinable.
Management has also evaluated a worst case scenario projection with respect to
the year 2000 and expects any resulting disruption of either the Managing
General Partner's activities or any Local Limited Partnership's operations to be
short-term inconveniences. Such problems, however, are not likely to fully
impede the ability to carry out necessary duties of the Partnership. Moreover,
because expected problems under a worst case scenario are not extensively
detrimental, and because the likelihood that all systems affecting the
Partnership will be compliant before 2000, the Managing General Partner has
determined that a formal contingency plan that responds to material system
failures is not necessary.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
The table below provides information about the Partnership's market risk
sensitive instruments.
<TABLE>
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<S> <C> <C> <C> <C> <C> <C> <C>
1998 1999 2000 2001 2002 2003 Thereafter Face Value
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Debt Obligations
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Long Term Debt:
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Fixed Rate 92,398 101,326 111,103 121,609 133,661 7,272,030 7,832,127
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Average Interest
Rate 9.31% 9.31% 9.31% 9.31% 9.31% 9.31%
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Variable Rate 1,389,038 1,389,038
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Average Interest Rate 8.75%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
Due to difficulties in obtaining market values of obligations with similar
characteristics for certain debt in this table, it is not practicable to
determine a fair value materially different from face value.
In addition to the debt obligations included in this table, the Partnership has
invested in marketable securities with aggregate fair values of $721,788 at
March 31, 1999; these securities, with rates ranging from 4.87% to 6.49%, do not
subject the Partnership to significant market risk because of their short term
maturities and high liquidity.
The Partnership has no other exposure to market risk associated with activities
in derivative financial instruments, derivative commodity instruments, or other
financial instruments.
Item 8. Financial Statements and Supplementary Data
Information required under this Item is submitted as a separate section of this
Report. See Index on page F-1 hereof.
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
The Managing General Partner of the Partnership is Arch Street III, Inc., a
Massachusetts corporation (the "Managing General Partner" or "Arch Street III,
Inc."), an affiliate of The Boston Financial Group Limited Partnership ("Boston
Financial"), a Massachusetts limited partnership. George Fantini, Jr., a Vice
President of the Managing General Partner, resigned his position effective June
30, 1995. Donna Gibson, a Vice President of the Managing General Partner,
resigned from her position on September 13, 1996. Georgia Murray resigned as
Managing Director, Treasurer and Chief Financial Officer of the General Partner
on May 25, 1997. Fred N. Pratt, Jr. resigned as Managing Director of the General
Partner on May 28, 1997. William E. Haynsworth resigned as a Managing Director
and Chief Operating Officer of the General Partner on March 23, 1998. Peter G.
Fallon resigned as a Vice President of the General Partner on June 1, 1999.
The Managing General Partner was incorporated in August 1988. Randolph G.
Hawthorne is the Chief Operating Officer of the Managing General Partner and had
the primary responsibility for evaluating, selecting and negotiating investments
for the Partnership. The Investment Committee of the Managing General Partner
approved all investments. The names and positions of the principal officers and
the directors of the Managing General Partner are set forth below.
Name Position
Jenny Netzer Managing Director and President
Michael H. Gladstone Managing Director, Vice President and Clerk
Randolph G. Hawthorne Managing Director, Vice President and
Chief Operating Officer
James D. Hart Chief Financial Officer and Treasurer
Paul F. Coughlan Vice President
William E. Haynsworth Vice President
The other General Partner of the Partnership is Arch Street III Limited
Partnership, a Massachusetts limited partnership ("Arch Street III L.P.") that
was organized in August 1988. The General Partner of Arch Street III L.P. is
Arch Street III, Inc.
The Managing General Partner provides day-to-day management of the Partnership.
Compensation is discussed in Item 11 of this report. Such day-to-day management
does not include the management of the Properties.
The business experience of each of the persons listed above is described below.
There is no family relationship between any of the persons listed in this
section.
Jenny Netzer, age 43, graduated from Harvard University (B.A., 1976) and
received a Master's in Public Policy from Harvard's Kennedy School of Government
in 1982. Ms. Netzer joined Boston Financial in 1987 and is a Senior Vice
President leading the Institutional Tax Credit Team. She is also a member of the
Senior Leadership Team, the firm's Executive Committee. Previously, Ms. Netzer
led Boston Financial's new business initiatives and managed the firm's Asset
Management division, which is responsible for the performance of 750 properties
and providing service to 35,000 investors. Before joining Boston Financial, she
was Deputy Budget Director for the Commonwealth of Massachusetts, where she was
responsible for the Commonwealth's health care and public pension programs'
budgets. Ms. Netzer was also Assistant Controller at Yale University and has
been a member of the Watertown Zoning Board of Appeals.
Michael H. Gladstone, age 42, graduated from Emory University (B.A., 1978) and
Cornell University (J.D.; M.B.A., 1982). Mr. Gladstone joined Boston
Financial in 1985, and is Vice President and General Counsel. He is also a
member of the Senior Leadership Team, the firm's Executive Committee. Prior to
joining Boston Financial, Mr. Gladstone was associated with the Boston law firm
of Herrick & Smith. Mr. Gladstone is on the Advisory Board of the Housing and
Development Reporter. He is also a member of the Investment Program Association,
The National Realty Committee, Cornell Real Estate Council, National Housing
Conference, and the Massachusetts Bar.
Randolph G. Hawthorne, age 49, is a graduate of Massachusetts Institute of
Technology (S.B., 1971) and Harvard Graduate School of Business (M.B.A., 1973).
Mr. Hawthorne joined Boston Financial in 1973 and is currently a Vice President
responsible for structuring and acquiring real estate investments. Previously,
Mr. Hawthorne served as Treasurer of Boston Financial. Mr. Hawthorne is Past
Chairman of the Board of the National Multi Housing Council, having served on
the board since 1989. He is a past president of the National Housing and
Rehabilitation Association is a member of the Residential Development Council of
the Urban Land Institute, as well as a member of the Advisory Board of the
Berkeley Real Estate Center at the University of California. In addition to
speaking at industry conferences, he is on the Editorial Advisory Boards of the
Tax Credit Advisor and Multi-Housing News.
James D. Hart, age 41, graduated from Trinity College (B.A.) and Amos Tuck
School at Dartmouth College (M.B.A.). Mr. Hart joined Boston Financial in 1997
and serves as Chief Financial Officer and is a member of the Senior Leadership
Team. Prior to joining Boston Financial, Mr. Hart was engaged in venture capital
management on behalf of institutional investors, including the negotiation and
structuring of private equity and mezzanine transactions as a Vice President of
Interfid Ltd., and later in the operational management of a venture-backed
software company, as Managing Director and Chief Financial Officer of Bitstream
Inc. Mr. Hart has also served on the Board of Directors of several companies,
including those that went on to complete initial public offerings.
Paul F. Coughlan, age 55, is a graduate of Brown University (A.B., 1965). Mr.
Coughlan joined Boston Financial in 1975 and is currently a Senior Vice
President and a member of the Investment Management division with responsibility
for marketing institutional investments. Previously, he was national sales
manager for Boston Financial's retail tax credit funds. Prior to joining Boston
Financial, Mr. Coughlan was an investment broker with Bache & Company and
Reynolds Securities, Inc.
William E. Haynsworth, age 59, is a graduate of Dartmouth College (A.B., 1961)
and Harvard Law School (L.L.B., 1964; L.L.M., 1969). Mr. Haynsworth joined
Boston Financial in 1977 and is a Senior Vice President responsible for the
structuring of real estate investments and the acquisition of property interests
interests. Prior to joining Boston Financial, Mr. Haynsworth was Acting
Executive Director and General Counsel of the Massachusetts Housing Finance
Agency. He was also the Director of Non-Residential Development of the Boston
Redevelopment Authority and an associate of the law firm of Goodwin, Procter &
Hoar. Mr. Haynsworth is a member of the Executive Committee and the Board of
Directors of the Affordable Housing Tax Credit Coalition. He is a member of the
Senior Leadership Team and the Board of Directors of Boston Financial.
Mr. Haynsworth has over 25 years of real estate experience.
Item 11. Management Remuneration
Neither the directors or officers of Arch Street III, Inc., the partners of Arch
Street III L.P. nor any other individual with significant involvement in the
business of the Partnership receives any current or proposed remuneration from
the Partnership.
Item 12. Security Ownership of Certain Beneficial Owners and Management
As of March 31, 1999, the following is the only entity known to the Partnership
to be the beneficial owner of more than 5% of the total number of Units
outstanding:
Amount
Title of Name and Address of Beneficially Percent
Class Beneficial Owner Owned of Class
Limited AMP, Incorporated 10,000 Units 10%
Partner P.O. Box 3608
Harrisburg, PA
The equity securities registered by the Partnership under Section 12(g) of the
Act consist of 100,000 Units, all of which have been sold to the public as of
March 31, 1999. Holders of Units are permitted to vote on matters affecting the
Partnership only in certain unusual circumstances and do not generally have the
right to vote on the operation or management of the Partnership.
As of March 31, 1999, Arch Street III L.P. owns five (unregistered) Units not
included in the 100,000 units sold to the public.
Except as described in the preceding paragraph, neither Arch Street III, Inc.,
Arch Street III L.P., Boston Financial nor any of their executive officers,
directors, partners or affiliates is the beneficial owner of any Units. None of
the foregoing persons possesses a right to acquire beneficial ownership of
Units.
The Partnership does not know of any existing arrangement that might at a later
date result in a change in control of the Partnership.
Item 13. Certain Relationships and Related Transactions
Information required under this Item is contained in Note 5 to the Combined
Financial Statements presented in Item 14.
The Partnership was required to pay certain fees to and reimburse certain
expenses of the Managing General Partner or its affiliates (including Boston
Financial) in connection with the organization of the Partnership and the
offering of Units. The Partnership was also required to pay certain fees to and
reimburse certain expenses of the Managing General Partner or its affiliates
(including Boston Financial) in connection with the administration of the
Partnership and its acquisition and disposition of investments in Local Limited
Partnerships. In addition, the General Partners are entitled to certain
Partnership distributions under the terms of the Partnership Agreement. Also, an
affiliate of the General Partners will receive up to $10,000 from the sale or
refinancing proceeds of each Local Limited Partnership, if it is still a limited
partner at the time of such transaction. All such fees and distributions are
more fully described in the sections entitled "Estimated Use of Proceeds",
"Management Compensation and Fees" and "Profits and Losses for Tax Purposes, Tax
Credits and Cash Distributions" of the Prospectus. Such sections are
incorporated herein by reference. In addition, Boston Financial Property
Management ("BFPM"), an affiliate of the Managing General Partner, serves as
property management agent for Harbour View, Willow Lake, Willowick, The Kyle and
Breckenridge.
The Partnership is permitted to enter into transactions involving affiliates of
the Managing General Partner, subject to certain limitations established in the
Partnership Agreement.
Information regarding the fees paid and expense reimbursements made in the three
years ending March 31, 1999 is presented below.
Organizational fees and expenses
In accordance with the Partnership Agreement, Boston Financial is to be
reimbursed by the Partnership for organizational, offering and selling expenses
advanced on behalf of the Partnership by Boston Financial or its affiliates and
for salaries and direct expenses of certain employees of the Managing General
Partner and its affiliates in connection with the registration and organization
of the Partnership. Such expenses include printing expenses and legal,
accounting, escrow agent and depository fees and expenses. Such expenses also
include a non-accountable expense allowance for marketing expenses equal to 1%
of gross offering proceeds. $11,832,395 of organization fees and expenses and
selling expenses incurred on behalf of the Partnership were paid and reimbursed
to an affiliate of the Managing General Partner. Total organization and offering
expenses did not exceed 5.5% of the gross offering proceeds.
There were no organization fees and offering expenses paid in the three years
ended March 31, 1999.
Acquisition fees and expenses
In accordance with the Partnership Agreement, the Partnership is required to pay
acquisition fees to and reimburse acquisition expenses of the Managing General
Partner or its affiliates for selecting, evaluating, structuring, negotiating
and closing the Partnership's investments in Local Limited Partnerships.
Acquisition fees totaled 7.5% of the gross offering proceeds. Acquisition
expenses, which include such expenses as legal fees and expenses, travel and
communications expenses, costs of appraisals, accounting fees and expenses did
not exceed 2% of the gross offering proceeds. Acquisition fees totaling
$7,500,000 for the closing of the Partnership's Local Limited Partnership
Investments have been paid to an affiliate of the Managing General Partner.
Acquisition expenses totaling $1,587,834 were incurred and have been reimbursed
to an affiliate of the Managing General Partner. In accordance with the
Partnership Agreement, 15% of the acquisition fees payable to an affiliate of
the Managing General Partner is the "Deferred Acquisition Fees". The Deferred
Acquisition Fees have been deposited in an interest bearing account and are paid
annually, with interest, at the rate of 10% per year over 10 years. Installments
began on the second anniversary of the Prospectus, November 23, 1990. As of
March 31, 1999 and 1998, deferred acquisition fees payable amounted to $112,500
and $225,000, respectively.
Payments made and expenses reimbursed in each of the three years ended March 31,
1999 are as follows:
1999 1998 1997
----------------------------------------------
Acquisition fees and expenses $ - $ - $ -
Deferred acquisition fees $ 112,500 $ 112,500 $ 112,500
Asset Management Fees
In accordance with the Partnership Agreement, an affiliate of the Managing
General Partner is paid an annual fee for services in connection with the
administration of the affairs of the Partnership. The affiliate currently
receives $7,086 (as adjusted by the CPI factor) per Local Limited Partnership
annually as the Asset Management Fee.
Asset Management Fees incurred in each of the three years ended March 31, 1999
are as follows:
1999 1998 1997
-----------------------------------------------
Asset management fees $ 385,702 $ 423,223 $ 450,678
Salaries and benefits expense reimbursements
An affiliate of the Managing General Partner is reimbursed for the cost of the
Partnership's salaries and benefits expenses. The reimbursements are based upon
the size and complexity of the Partnership's operations. Reimbursements made in
each of the three years ended March 31, 1999 are as follows:
1999 1998 1997
----------------------------------------------
Salaries and benefits expense
reimbursements $ 140,069 $ 180,970 $ 170,961
Property Management Fees
Boston Financial Property Management ("BFPM"), an affiliate of the Managing
General Partner, currently manages Harbour View, a property in which the
Partnership has invested. Included in operating expenses in the summarized
income statements in Note 4 to the Combined Financial Statements is $35,917,
$52,220 and $51,956 of fees earned by BFPM during 1998, 1997 and 1996,
respectively.
On April 2, 1993, BFPM became the management agent of Willow Lake. In August of
1993, BFPM became the management agent for the Texas Partnerships. On September
29, 1995, BFPM became the management agent of The Kyle. On August 20, 1997, BFPM
became the management agent of Breckenridge. Fees charged in each of the three
years ended December 31, 1998 are as follows:
1998 1997 1996
--------------------------------------------
Property management fees $ 102,599 $ 104,878 $ 135,472
Cash distributions paid to the General Partners
In accordance with the Partnership Agreement, the General Partners of the
Partnership, Arch Street III, Inc. and Arch Street III Limited Partnership,
receive 1% of cash distributions made to partners. No cash distributions were
made to the General Partners in any of the three years ended March 31, 1999.
Additional information concerning cash distributions and other fees paid or
payable to the Managing General Partner and its affiliates and the reimbursement
of expenses paid or payable to Boston Financial and its affiliates during each
of the three years ended March 31, 1999 is presented in Note 5 to the Financial
Statements.
<PAGE>
F-4
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) (1) and (a) (2) Documents filed as a part of this Report.
In response to this portion of Item 14, the combined financial statements,
financial statement schedule and the auditors' report relating thereto are
submitted as a separate section of this Report. See Index to the Combined
Financial Statements and Schedules on page F-1 hereof.
The reports of auditors of the Local Limited Partnership relating to the audits
of the financial statements of such Local Limited Partnerships appear in Exhibit
(28)(1) of this report.
Other schedules have been omitted as they are either not required or the
information required to be presented therein is available elsewhere in the
combined financial statements or the accompanying notes and schedules.
(a)(3) See Exhibit Index contained herein.
(a)(3)(b) Reports on Form 8-K
No reports on form 8-K were filed during the year ended March 31,
1999.
(a)(3)(c) Exhibits
Number and Description in Accordance with
Item 601 of Regulation S-K
27. Financial Data Schedule
28. Additional Exhibits
(a) Reports of Other Independent Auditors
(b) Audited financial statements of Local Limited Partnerships
Kyle Hotel
(a)(3)(d) None
<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.
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
By: Arch Street III, Inc.
its Managing General Partner
By: /s/Randolph G. Hawthorne Date: June 28, 1999
------------------------------ -------------
Randolph G. Hawthorne,
Managing Director, Vice President and
Chief Operating Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the Managing General
Partner of the Partnership and in the capacities and on the dates indicated:
By: /s/Randolph G. Hawthorne Date: June 28, 1999
------------------------------ -------------
Randolph G. Hawthorne,
Managing Director, Vice President and
Chief Operating Officer
By: /s/Michael H. Gladstone Date: June 28, 1999
--------------------------------- ----------------
Michael H. Gladstone
A Managing Director
<PAGE>
Item 8. Financial Statements and Supplementary Data
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
(A Limited Partnership)
Annual Report on Form 10-K for the Year Ended March 31, 1999
Index
Page No.
------------
Report of Independent Accountants F-2
Financial Statements
Combined Balance Sheets - March 31, 1999 and 1998 F-3
Combined Statements of Operations - For the Years Ended
March 31, 1999, 1998 and 1997 F-4
Statements of Changes in Partners' Equity
(Deficiency) - For the Years Ended March 31, 1999,
1998 and 1997 F-5
Combined Statements of Cash Flows - For the Years Ended
March 31, 1999, 1998 and 1997 F-6
Notes to the Combined Financial Statements F-8
Financial Statement Schedule:
Schedule III - Real Estate and Accumulated Depreciation F-25
See also Index to Exhibits on Page K-30 for the financial statements of the
Local Limited Partnerships included as a separate exhibit in this Annual Report
on Form 10-K.
Other schedules have been omitted as they are either not required or the
information required to be presented therein is available elsewhere in the
financial statements and the accompanying notes and schedules.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
Boston Financial Qualified Housing Tax Credits L.P. III
(A Limited Partnership):
In our opinion, based on our audits and the reports of other auditors, the
combined financial statements listed in the accompanying index present fairly,
in all material respects, the financial position of Boston Financial Qualified
Housing Tax Credits L.P. III (the "Partnership") at March 31, 1999 and 1998, and
the results of its operations and its cash flows for each of the three years in
the period ended March 31, 1999, in conformity with generally accepted
accounting principles. In addition, in our opinion, the financial statement
schedule listed in the accompanying index presents fairly, in all material
respects, the information set forth therein when read in conjunction with the
related combined financial statements. These financial statements and financial
statement schedule are the responsibility of the Partnership's management; our
responsibility is to express an opinion on these financial statements and
financial statement schedule based on our audits. We did not audit the financial
statements of certain local limited partnerships for which total assets of
$26,031,703 and $31,420,550, are included in these financial statements as of
March 31, 1999 and 1998, respectively, and for which net losses of $4,736,414,
$2,382,481, and $2,458,710 are included in the accompanying financial statements
for the period ended March 31, 1999, 1998, 1997, respectively. Those statements
were audited by other auditors whose reports thereon have been furnished to us,
and our opinion expressed herein, insofar as it relates to the amounts
included for the Local Limited Partnerships, is based solely on the reports of
the other auditors. We conducted our audits of these statements in accordance
with generally accepted auditing standard, which 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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits and the reports of other auditors provide a
reasonable basis for the opinions expressed above.
/s/PricewaterhouseCoopers LLP
June 18, 1999
Boston, Massachusetts
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
(A Limited Partnership)
COMBINED BALANCE SHEETS - MARCH 31, 1999 AND 1998
<TABLE>
1999 1998
------------- ---------
Assets
<S> <C> <C>
Cash and cash equivalents $ 440,365 $ 311,867
Marketable securities, at fair value (Note 3) 721,788 275,387
Investments in Local Limited Partnerships, net (Note 4) 15,789,285 19,319,502
Accounts receivable, net 102,755 90,467
Interest receivable 8,624 13,298
Prepaid expenses 21,095 25,247
Tenant security deposits 95,105 68,292
Replacement reserves 261,127 194,671
Operating reserves 41,285 -
Rental property at cost, net of accumulated
depreciation and reserve for valuation (Note 6) 13,216,007 16,267,802
Deferred acquisition fees escrow (Note 5) 112,500 225,000
Deferred expenses, net of $134,196 and $104,360
accumulated amortization in 1999 and 1998 219,416 209,127
Other assets 210,398 131,127
------------- -------------
Total Assets $ 31,239,750 $ 37,131,787
============= =============
Liabilities and Partners' Equity
Accounts payable to affiliates (Note 5) $ 2,079,127 $ 1,702,519
Accounts payable and accrued expenses 574,773 484,817
Interest payable 312,719 312,091
Note payable, affiliate (Note 5) 514,968 514,968
Security deposits payable 87,898 70,630
Due to affiliate (Note 8) - 323,046
Deferred acquisition fees payable (Note 5) 112,500 225,000
Advances from affiliates (Note 9) 200,000 200,000
Mortgage notes payable (Note 7) 7,832,127 8,641,832
------------- -------------
Total Liabilities 11,714,112 12,474,903
------------- -------------
Minority interest in Local Limited Partnerships 886,727 907,515
------------- -------------
General, Initial and Investor Limited Partners' Equity 18,638,674 23,748,605
Net unrealized gains on marketable securities 237 764
------------- -------------
Total Partners' Equity 18,638,911 23,749,369
------------- -------------
Total Liabilities and Partners' Equity $ 31,239,750 $ 37,131,787
============= =============
The accompanying notes are an integral part of these combined financial
statements.
</TABLE>
<PAGE>
<TABLE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
(A Limited Partnership)
COMBINED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MARCH 31, 1999, 1998 AND 1997
1999 1998 1997
------------ ------------ -------
<S> <C> <C> <C>
Revenue:
Rental $ 2,435,094 $ 2,470,887 $ 1,764,258
Investment 49,563 40,340 82,660
Recovery of bad debt 30,148 - -
Other 463,083 222,055 272,679
------------ ------------ -----------
Total Revenue 2,977,888 2,733,282 2,119,597
------------ ------------ -----------
Expenses:
Asset management fees, related party (Note 5) 385,702 423,223 450,678
General and administrative (includes reimbursements
to affiliates of $140,069, $180,970 and $170,961 in
1999, 1998 and 1997, respectively) (Note 5) 361,002 493,519 611,810
Bad debt expense 12,933 394,319 8,665
Property management fees (Note 5) 138,452 179,980 150,304
Rental operations, exclusive of depreciation 1,478,455 1,725,621 1,387,909
Interest (Notes 7 and 9) 760,130 884,758 532,518
Provision for valuation of real estate (Note 11) 1,693,514 - 1,748,708
Depreciation 653,671 767,716 605,671
Amortization 178,783 177,617 182,875
------------ ------------ -----------
Total Expenses 5,662,642 5,046,753 5,679,138
------------ ------------ -----------
Loss before equity in losses of Local Limited Partnerships, minority interest,
gain (loss) on liquidation of interests in Local Limited
Partnerships and gain on transfer (2,684,754) (2,313,471) (3,559,541)
Equity in losses of Local Limited
Partnerships (Note 4) (3,090,983) (3,287,444) (3,624,984)
Minority interest in losses of
Local Limited Partnerships 20,788 153,280 27,679
Gain (loss) on liquidation of interests
in Local Limited Partnerships (Note 10) - (18,251) -
------------ ------------ -----------
Net Loss before gain (loss) on transfer (5,754,949) (5,465,886) (7,156,846)
Gain (loss) on transfer of assets 645,018 1,868,051 (51,595)
------------ ------------ ------------
Net Loss $ (5,109,931) $ (3,597,835) $ (7,208,441)
============ ============ ============
Net Loss Allocated:
General Partners $ (51,099) $ (35,978) $ (72,084)
Limited Partners (5,058,832) (3,561,857) (7,136,357)
------------- ------------ ------------
$ (5,109,931) $ (3,597,835) $ (7,208,441)
============ ============ ============
Net Loss before gain (loss) on transfer
per Limited Partnership Unit (100,000 Units) $ (56.97) $ (54.11) $ (70.85)
============ ============ ============
Gain (loss) on transfer per Limited
Partnership Unit (100,000 Units) $ 6.38 $ 18.49 $ (0.51)
============ ============ ============
Net Loss per Limited Partnership Unit (100,000 Units) $ (50.59) $ (35.62) $ (71.36)
============ ============ =========
The accompanying notes are an integral part of these combined financial
statements.
</TABLE>
<PAGE>
<TABLE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
(A Limited Partnership)
STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY)
FOR THE YEARS ENDED MARCH 31, 1999, 1998 AND 1997
Net
Initial Investor Unrealized
General Limited Limited Gains
Partners Partners Partners (Losses) Total
<S> <C> <C> <C> <C> <C>
Balance at March 31, 1996 $ (530,297) $ 5,000 $ 35,080,178 $ 12 $ 34,554,893
---------- ------- ------------ -------- ------------
Comprehensive Loss:
Net change in unrealized gains
on marketable securities
available for sale - - - (1,959) (1,959)
Net Loss (72,084) - (7,136,357) - (7,208,441)
---------- ------- ------------ -------- ------------
Comprehensive Loss (72,084) - (7,136,357) (1,959) (7,210,400)
---------- ------- ------------ -------- ------------
Balance at March 31, 1997 (602,381) 5,000 27,943,821 (1,947) 27,344,493
---------- ------- ------------ -------- ------------
Comprehensive Income (Loss):
Net change in unrealized losses
on marketable securities
available for sale - - - 2,711 2,711
Net Loss (35,978) - (3,561,857) - (3,597,835)
---------- ---------- ---------- ---------- ----------
Comprehensive Income (Loss) (35,978) - (3,561,857) 2,711 (3,595,124)
---------- ------- ------------ -------- ------------
Balance at March 31, 1998 (638,359) 5,000 24,381,964 764 23,749,369
--------- ------- ---------- -------- ----------
Comprehensive Loss:
Net change in unrealized gains
on marketable securities
available for sale - - - (527) (527)
Net Loss (51,099) - (5,058,832) - (5,109,931)
---------- ------- ------------ -------- ------------
Comprehensive Loss (51,099) - (5,058,832) (527) (5,110,458)
---------- ------- ------------ -------- ------------
Balance at March 31, 1999 $ (689,458) $ 5,000 $ 19,323,132 $ 237 $ 18,638,911
========== ======= ============ ======== ============
The accompanying notes are an integral part of these combined financial
statements.
</TABLE>
<PAGE>
<TABLE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
(A Limited Partnership)
COMBINED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 1999, 1998 AND 1997
1999 1998 1997
------------ ------------ --------
<S> <C> <C> <C>
Net Loss $ (5,109,931) $ (3,597,835) $(7,208,441)
Adjustments to reconcile net loss to net
cash used for operating activities:
Equity in losses of Local Limited Partnerships 3,090,983 3,287,444 3,624,984
Bad debt expense (recoveries) (17,215) 394,319 8,665
Gain (loss) on liquidation of interests in Local
Limited Partnerships - 18,251 -
Provision for valuation of real estate 1,693,514 - 1,748,708
Gain (loss) on transfer of assets (645,018) (1,868,051) 51,595
Cash distribution included in net loss (68,949) (26,674) (32,610)
Amortization and depreciation 832,454 945,333 788,546
(Gain) loss on sales and maturities of
marketable securities (386) (1,292) 1,291
Minority interest in losses of Local
Limited Partnerships (20,788) (153,280) (27,679)
Increase in operating reserves (41,285) - -
Increase (decrease) in cash arising from changes
in operating assets and
liabilities:
Accounts receivable (1,052) 703 19,834
Interest receivable 4,674 50,381 (62,939)
Prepaid expenses 3,930 2,575 5,227
Tenant security deposits (30,910) (14,607) 4,099
Other assets (108,760) (39,409) (30,404)
Accounts payable to affiliates 359,696 513,799 428,633
Accounts payable and accrued expenses 208,300 144,878 43,002
Interest payable 35,320 43,460 198,324
Tenant security deposits payable 21,365 1,353 28
------------ ------------ ------------
Net cash provided by (used for) operating activities 205,942 (298,652) (439,137)
------------ ------------ ------------
Cash flows from investing activities:
(Advances to) reimbursements from affiliates (146,898) 76,318 (124,294)
Purchases of marketable securities (1,094,449) (448,522) (273,754)
Proceeds from sales and maturities of
marketable securities 647,907 508,457 98,152
Cash distributions received from Local
Limited Partnerships 576,309 424,737 503,503
Cash received upon assumption of General Partner
interest in a Combined Entity - - 18,364
Adjustment to cash received
upon assumption of General
Partner interest in a Combined Entity - - (51,595)
Adjustment to cash upon
liquidation of General Partner
interest in a Combined Entity (1,817) (11,821) -
Decrease in deferred acquisition fee escrow 112,500 112,500 112,500
Payment of deferred acquisition fees (112,500) (112,500) (112,500)
Releases from (deposits to) replacement reserves (66,875) 6,916 10,637
Additions to rental property (91,668) (335,745) (70,940)
------------ ------------ ------------
Net cash provided by (used for) investing activities (177,491) 220,340 110,073
------------ ------------ ------------
The accompanying notes are an integral part of these combined financial
statements.
</TABLE>
<PAGE>
<TABLE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
(A Limited Partnership)
COMBINED STATEMENTS OF CASH FLOWS (continued)
FOR THE YEARS ENDED MARCH 31, 1999, 1998 AND 1997
1999 1998 1997
------------- ------------- --------
<S> <C> <C> <C>
Cash flows from financing activities
Proceeds from mortgage note 418,430 - -
Repayment of mortgage notes payable (77,446) (104,845) (87,574)
Additions to deferred expenses (40,124) - -
Cash distributions (30,000) - -
Advances from affiliate 152,233 115,410 35,523
Advances on notes payable, affiliate - - 492,689
Reimbursement to developer (323,046) - -
------------- ------------- -------------
Net cash provided by financing activities 100,047 10,565 440,638
------------- ------------- -------------
Net increase (decrease) in cash and
cash equivalents 128,498 (67,747) 111,574
Cash and cash equivalents, beginning of year 311,867 379,614 268,040
------------- ------------- -------------
Cash and cash equivalents, end of year $ 440,365 $ 311,867 $ 379,614
============= ============= =============
Supplemental Disclosure:
Cash paid for interest $ 790,301 $ 910,543 $ 360,491
============= ============= =============
The accompanying notes are an integral part of these combined financial
statements.
</TABLE>
Non-cash disclosure:
See Note 10 for discussion of the transfers of certain Local Limited
Partnerships.
See Note 12 for discussion of cancellation of indebtedness income.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS
1. Organization
Boston Financial Qualified Housing Tax Credits L.P. III (the "Partnership") was
formed on August 9, 1988 under the laws of the State of Delaware for the primary
purpose of investing, as a limited partner, in other limited partnerships
("Local Limited Partnerships"), most of which own and operate apartment
complexes, most of which benefit from some form of federal, state or local
assistance program and each of which qualify for low-income housing tax credits.
The Partnership's objectives are to: (i) provide current tax benefits in the
form of tax credits which qualified investors may use to offset their federal
income tax liability; ii) preserve and protect the Partnership's capital; iii)
provide limited cash distributions which are not expected to constitute taxable
income during Partnership operations; and iv) provide cash distributions from
sale or refinancing transactions. The General Partners of the Partnership are
Arch Street III, Inc., which serves as the Managing General Partner, and Arch
Street III L.P., which also serves as the Initial Limited Partner. Both of the
General Partners are affiliates of Boston Financial Group Limited Partnership
("Boston Financial"). The fiscal year of the Partnership ends on March 31.
The Certificate and Agreement of Limited Partnership ("Partnership Agreement")
authorized the sale of up to 100,000 units of Limited Partnership Interest
("Units") at $1,000 per Unit, adjusted for certain discounts. The Partnership
raised $99,610,000 ("Gross Proceeds"), net of discounts of $390,000, through the
sale of 100,000 Units. Such amounts exclude five unregistered Units previously
acquired for $5,000 by the Initial Limited Partner, which is also one of the
General Partners. The offering of Units terminated on May 30, 1989. No further
sale of Units is expected.
Generally, profits, losses, tax credits and cash flow from operations are
allocated 99% to the Limited Partners and 1% to the General Partners. Net
proceeds from a sale or refinancing will be allocated 95% to the Limited
Partners and 5% to the General Partners, after certain priority payments.
Under the terms of the Partnership Agreement, the Partnership initially
designated 3% of the Gross Proceeds from the sale of Units as a Reserve for
working capital of the Partnership and contingencies related to ownership of
Local Limited Partnership interests. During the year ended March 31, 1993, the
Managing General Partner decided to increase the reserve level to 3.75%. At
March 31, 1999, the Managing General Partner has designated approximately
$983,000 of cash, cash equivalents and marketable securities as such Reserve.
2. Significant Accounting Policies
Basis of Presentation and Combination
The Partnership accounts for its investments in Local Limited Partnerships, with
the exception of the Combined Entities (defined below), using the equity method
of accounting, because the Partnership does not have a majority control over the
major operating and financial policies of the Local Limited Partnerships in
which it invests. Under the equity method, the investment is carried at cost,
adjusted for the Partnership's share of income or loss of the Local Limited
Partnerships, additional investments in and cash distributions from the Local
Limited Partnerships. Equity in income or loss of the Local Limited Partnerships
is included currently in the Partnership's operations. The Partnership has no
obligation to fund liabilities of the Local Limited Partnerships beyond its
investment and therefore a Local Limited Partnership's investment will not be
carried below zero. To the extent that equity losses are incurred when a Local
Limited Partnership's respective investment balance has been reduced to zero,
the losses will be suspended to be used against future income. Distributions
received from Local Limited Partnerships whose respective investment value has
been reduced to zero are included in income. For the years ended March 31, 1999,
1998 and 1997, the Partnership did not recognize $20,883,730, $4,878,906 and
$5,206,584, respectively, of equity losses relating to Local Limited
Partnerships whose cumulative equity in losses and distributions exceeded their
total investments.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
2. Significant Accounting Policies (continued)
Basis of Presentation and Combination (continued)
Excess investment costs over the underlying net assets acquired have arisen from
acquisition fees paid and expenses reimbursed to an affiliate of the
Partnership. These fees and expenses are included in the Partnership's
Investment in Local Limited Partnerships and are being amortized on a
straight-line basis over 35 years.
The Partnership recognizes a decline in the carrying value of its investments in
Local Limited Partnerships when there is evidence of a non-temporary decline in
the recoverable amount of the investment. There is the possibility that the
estimates relating to reserves for non-temporary declines in the carrying value
of investments in Local Limited Partnerships may be subject to material near
term adjustments.
The Partnership, as a limited partner in the Local Limited Partnerships, is
subject to risks inherent in the ownership of property which are beyond its
control, such as fluctuations in occupancy rates and operating expenses,
variations in rental schedules, proper maintenance of facilities and continued
eligibility of tax credits. If the cost of operating a property exceeds the
rental income earned thereon, the Partnership may deem it in its best interest
to voluntarily provide funds in order to protect its investment.
The Managing General Partner has elected to report results of the Local Limited
Partnerships on a 90-day lag basis because the Local Limited Partnerships report
their results on a calendar year basis. Accordingly, the financial information
of the Local Limited Partnerships that is included in the accompanying combined
financial statements is as of December 31, 1998, 1997 and 1996.
On August 26, 1992, an affiliate of the Partnership's Managing General Partner,
BF Harbour View, Inc., became the Local General Partner of 241 Pine Street
Associates, L.P. ("241 Pine Street"), a Local Limited Partnership in which the
Partnership has invested. Since the Local General Partner of 241 Pine Street has
a controlling financial interest in the Partnership, these combined financial
statements include the detailed financial activity of 241 Pine Street for the
years ended December 31, 1996, 1997 and 1998. All significant intercompany
balances and transactions have been eliminated.
On April 2, 1993, an affiliate of the Managing General Partner, BF Willow Lake,
Inc., became the Local General Partner of Willow Lake Partners II, L.P. ("Willow
Lake"). BF Willow Lake, Inc. replaced the previous management agent with Boston
Financial Property Management, an affiliate of the Managing General Partner.
Since the Local General Partner of Willow Lake has a controlling financial
interest in the Partnership, these combined financial statements include the
financial activity of Willow Lake for the years ended December 31, 1996, 1997
and 1998. All significant intercompany balances and transactions have been
eliminated.
On October 6, 1993, an affiliate of the Partnership's Managing General Partner,
BF Texas Limited Partnership, became an additional Local General Partner
responsible for all management decisions in thirteen Local Limited Partnerships
(the "Texas Partnerships") in which the Partnership has invested. Since the
Local General Partner of the Texas Partnerships had a controlling financial
interest in the Partnership, these combined financial statements included the
financial activity of thirteen Texas Partnerships for the years ended March 31,
1994 and 1995. During the year ended March 31, 1996, control of six of these
Texas Partnerships was transferred to unrelated parties, and as such, as of that
date, these partnerships were accounted for on the equity method (see Note 10).
During the year ended March 31, 1997, the Managing General Partner transferred
all of the assets of five out of these six Texas Partnerships subject to their
liabilities to unaffiliated entities. Therefore, as of March 31, 1997, one Texas
Partnership was accounted for on the equity method and the combined financial
statements included detailed financial activity of seven Texas Partnerships for
the year ended December 31, 1996. During the year ended March 31, 1998, the
Managing General Partner transferred all of the assets of seven of the remaining
Texas Partnerships subject to their liabilities to unaffiliated entities, six of
which were combined in prior years, one of which had been
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
2. Significant Accounting Policies (continued)
Basis of Presentation and Combination (continued)
previously accounted for under the equity method. During the year ended March
31, 1999, the Managing General Partner transferred all of the assets of the
remaining Texas Partnership subject to its liabilities to unaffiliated entities.
All significant intercompany balances and transactions have been eliminated.
On September 29, 1995, an affiliate of the Managing General Partner, BF Texas
Limited Partnership, became the Local General Partner responsible for all
management decisions in The Temple-Kyle L.P. ("The Kyle"). Since the Local
General Partner of The Kyle has a controlling financial interest in the
Partnership, these combined financial statements include the detailed financial
activity of The Kyle for the years ended December 31, 1996, 1997 and 1998.
All significant intercompany balances and transactions have been eliminated.
On August 20, 1997, an affiliate of the Managing General Partner, Boston
Financial GP-1, L.L.C., became the Local General Partner responsible for all
management decisions in Breckenridge Creste Apartments, L.P. ("Breckenridge
Creste"). Since the Local General Partner of Breckenridge Creste has a
controlling financial interest in the Partnership, these combined financial
statements include the detailed financial activity of Breckenridge Creste for
the period from September 1, 1996 through December 31, 1996, and for the years
ended December 31, 1997 and 1998. All significant intercompany balances and
transactions have been eliminated.
The Partnership has elected to report the results of 241 Pine Street, Willow
Lake, The Kyle and Breckenridge Creste on a 90-day lag basis, consistent with
the presentation of the financial information of all Local Limited Partnerships.
As used herein, the "Combined Entities" refers to 241 Pine Street, Willow Lake,
The Kyle and Breckenridge Creste.
Cash Equivalents
Cash equivalents consist of short-term money market instruments with maturities
when purchased of ninety days or less.
Marketable Securities
Marketable securities consist primarily of U.S. Treasury instruments and various
asset-backed investment vehicles. The Partnership's marketable securities are
classified as "Available for Sale" securities and reported at fair value as
reported by the brokerage firm at which the securities are held. All marketable
securities have fixed maturities. Realized gains and losses from the sales of
securities are based on the specific identification method. Unrealized gains and
losses are excluded from earnings and reported as a separate component of
partners' equity.
Effect of recently issued Accounting Standard
The Financial Accounting Standards Board recently issued Statement of Financial
Accounting Standards No. 130, Reporting Comprehensive Income. The standard
requires that changes in comprehensive income be shown in a financial statement
that is displayed with the same prominence as other financial statements. The
standard is effective for fiscal years beginning after December 15, 1997. The
Partnership adopted the new standard effective April 1, 1998 and its adoption
did not have a significant effect on the Partnership's financial position or
results of operations. The only component of the Partnership's other accumulated
comprehensive income is net unrealized gains and losses on marketable
securities.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
2. Significant Accounting Policies (continued)
Rental Property
Real estate and personal property of the Combined Entities are recorded at cost.
The Combined Entities provide for depreciation using primarily the straight-line
method over their estimated useful lives.
In accordance with Financial Accounting Standard No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of",
the Partnership has implemented policies and practices for assessing impairment
of its real estate assets and investments in Local Limited Partnerships. Each
asset is analyzed by real estate experts to determine if an impairment indicator
exists. If so, the carrying value is compared to the undiscounted future cash
flows expected to be derived from the asset and, if there is a significant
impairment in value, a provision to write down the asset to fair value will be
charged against income.
Deferred Expenses
Willow Lake's deferred financing fees are amortized over 180 months, the term of
the related debt, using the straight-line method.
Breckenridge's permanent loan costs are amortized over 10 years, the term of the
related debt, using the straight-line method.
Breckenridge's compliance monitoring fees are amortized over the remaining
12-year term of the tax credit compliance period.
Rental Income
Rental income, principally from short-term leases on the Combined Entities'
apartment units, is recognized as income as the rents become due.
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 disclosures of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Fair Value of Financial Instruments
Statements of Financial Accounting Standards No. 107 ("SFAS No. 107"),
Disclosures About Fair Value of Financial Instruments, requires disclosure for
the fair value of most on- and off-balance sheet financial instruments for which
it is practicable to estimate that value. The scope of SFAS No. 107 excludes
certain financial instruments, such as trade receivables and payables when the
carrying value approximates the fair value and investments accounted for under
the equity method, and all nonfinancial assets, such as real property. Unless
otherwise described, the fair values of the Partnership's assets and liabilities
which qualify as financial instruments under SFAS No. 107 approximate their
carrying amounts in the accompanying balance sheets.
Income Taxes
No provision for income taxes has been made as the liability for such taxes is
the obligation of the partners of the Partnership.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
2. Significant Accounting Policies (continued)
Reclassifications
Certain reclassifications have been made to prior year financial statements to
conform to the current year presentation.
3. Marketable Securities
A summary of marketable securities is as follows:
<TABLE>
Gross Gross
Unrealized Unrealized Fair
Cost Gains Losses Value
<S> <C> <C> <C> <C>
Debt securities issued by
the US Treasury and other
US government corporations
and agencies $ 721,551 $ 633 $ (396) $ 721,788
----------- ----------- -------- -----------
Marketable Securities
at March 31, 1999 $ 721,551 $ 633 $ (396) $ 721,788
=========== =========== ======== ===========
Debt securities issued by
the US Treasury and other
US government corporations
and agencies $ 274,623 $ 820 $ (56) $ 275,387
----------- ----------- -------- -----------
Marketable Securities
at March 31, 1998 $ 274,623 $ 820 $ (56) $ 275,387
=========== =========== ======== ===========
</TABLE>
The contractual maturities at March 31, 1999 are as follows:
Fair
Cost Value
Due in less than one year $ 597,065 $ 597,265
Due in one to five years 124,486 124,523
----------- -----------
$ 721,551 $ 721,788
=========== ===========
Actual maturities for asset backed securities may differ from contractual
maturities because some borrowers have the right to call or prepay obligations.
Proceeds from the sales of marketable securities were approximately $327,000
during the fiscal year ended March 31, 1998; during the years ended March 31,
1999 and 1997 there were no proceeds from sales of marketable securities.
Proceeds from the maturities of marketable securities were approximately
$648,000, $181,000 and $98,000 during the years ended March 31, 1999, 1998 and
1997, respectively. Included in investment income are gross gains of $421,
$1,845 and $64, and gross losses of $35, $553 and $1,355 that were realized on
the sales during the fiscal years ended March 31, 1999, 1998 and 1997,
respectively.
4. Investments in Local Limited Partnerships
The Partnership uses the equity method to account for its limited partnership
interests in fifty-four Local Limited Partnerships (excluding the Combined
Entities) which own and operate multi-family housing complexes, most of which
are government-assisted. The Partnership, as Investor Limited Partner pursuant
to the various Local Limited Partnership Agreements which contain certain
operating and distribution restrictions, has acquired a 99% interest in the
profits, losses, tax credits and cash flows from operations of each of the Local
Limited Partnerships, except for Granite, Colony Apartments and Harbour View,
where the Partnership's ownership interest is 97%, 49% and 48.96%, respectively.
Upon dissolution, proceeds will be distributed according to each respective
partnership agreement.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
4. Investments in Local Limited Partnerships (continued)
<TABLE>
The following is a summary of Investments in Local Limited Partnerships,
excluding the Combined Entities, for the years ended March 31:
1999 1998 1997
<S> <C> <C> <C>
Capital contributions to Local Limited Partnerships
and purchase price paid to withdrawing partners
of Local Limited Partnerships $ 59,851,809 $ 59,851,809 $ 65,667,604
Cumulative equity in losses of Local Limited Partnerships
(excluding cumulative unrecognized losses of $46,802,890
$25,919,160, and $22,111,810 at March 31,
1999, 1998 and 1997, respectively) (43,864,908) (40,842,874) (43,991,055)
Cumulative cash distributions received from
Local Limited Partnerships (2,645,308) (2,256,711) (1,831,974)
------------- ------------- -------------
Investments in Local Limited Partnerships before adjustment 13,341,593 16,752,224 19,844,575
Excess of investment cost over the underlying net assets acquired:
Acquisition fees and expenses 5,398,026 5,398,026 6,730,055
Accumulated amortization of acquisition fees and expenses (1,315,334) (1,195,748) (1,292,282)
------------- ------------- -------------
Investments in Local Limited Partnerships 17,424,285 20,954,502 25,282,348
Reserve for valuation of investments in
Local Limited Partnerships (1,635,000) (1,635,000) (1,635,000)
------------- ------------- -------------
$ 15,789,285 $ 19,319,502 $ 23,647,348
============= ============= =============
</TABLE>
Summarized financial information as of December 31, 1998, 1997 and 1996 (due to
the Partnership's policy of reporting the financial information of its Local
Limited Partnership interests on a 90 day lag basis) of all Local Limited
Partnerships accounted for on the equity method (excluding the Combined Entity
beginning on the date of combination) in which the Partnership has invested is
as follows:
Summarized Balance Sheets - as of December 31,
<TABLE>
1998 1997 1996
-------------- -------------- ---------
Assets:
<S> <C> <C> <C>
Investment property, net $ 141,245,214 $ 163,031,238 $ 179,058,410
Other assets, net 13,136,870 12,596,647 13,158,108
Current assets 5,683,117 6,395,184 5,977,538
-------------- -------------- ---------------
Total assets $ 160,065,201 $ 182,023,069 $ 198,194,056
============== ============== ===============
Liabilities and Partners' Equity:
Mortgages payable, net of current portion $ 156,511,842 $ 161,870,394 $ 172,051,946
Other liabilities 16,165,309 12,209,220 13,276,728
Current liabilities (includes current
portion of mortgages payable) 23,138,258 18,470,513 17,958,778
-------------- -------------- ---------------
Total liabilities 195,815,409 192,550,127 203,287,452
-------------- -------------- ---------------
Partners' Equity:
Partnership's deficiency (35,369,523) (10,944,390) (4,360,195)
Other partners' equity (deficiency) (380,685) 417,332 (733,201)
-------------- -------------- ---------------
Total partners' deficiency (35,750,208) (10,527,058) (5,093,396)
-------------- -------------- ---------------
Total liabilities and partners' deficiency $160,065,201 $ 182,023,069 $ 198,194,056
============ ================= ===============
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
4. Investments in Local Limited Partnerships (continued)
Summarized Income Statements - For
the year ended December 31,
1998 1997 1996
------------- ------------- ---------
Rental and other income $ 29,341,366 $ 28,897,583 $ 29,724,298
------------- ------------- --------------
Expenses:
Operating expenses 16,687,176 16,391,351 17,315,396
Interest expense 13,646,680 13,691,558 14,652,969
Depreciation and amortization 7,157,754 7,440,803 8,365,838
Provision for valuation of real estate 16,439,515 - -
------------- ------------- --------------
Total expenses 53,931,125 37,523,712 40,334,203
------------- ------------- --------------
Net Loss $ (24,589,759) $ (8,626,129) $ (10,609,905)
============= ============= ==============
Partnership's share of Net Loss $ (23,905,766) $ (8,139,677) $ (8,798,958)
============= ============= ==============
Other partners' share of Net Loss $ (683,993) $ (486,452) $ (1,810,947)
============= ============= ==============
</TABLE>
For the years ended March 31, 1999, 1998 and 1997, the Partnership has not
recognized $20,883,730, $4,878,906 and $5,206,584, respectively, of equity in
losses relating to certain Local Limited Partnerships in which cumulative equity
in losses and distributions exceeded its total investments in these Local
Limited Partnerships.
The Partnership's deficiency as reflected by the Local Limited Partnerships of
$35,369,523 differs from the Partnership's Investments in Local Limited
Partnerships before adjustment of $13,341,593 primarily because the Partnership
has not recognized $46,802,890 of equity losses relating to Local Limited
Partnerships whose cumulative equity in losses exceeded their total investments.
5. Transactions with Affiliates
In accordance with the Partnership Agreement, 15% of the acquisition fees
payable to an affiliate of the Managing General Partner is the Deferred
Acquisition Fees which have been deposited in an interest bearing account and
are paid annually, with interest, at the rate of 10% per year over 10 years.
Installments began on the second anniversary of the Prospectus, November 23,
1990. As of March 31, 1999 and 1998, deferred acquisition fees payable amounted
to $112,500 and $225,000, respectively.
An affiliate of the Managing General Partner currently receives $7,086 (as
adjusted by the CPI factor) per Local Limited Partnership annually as the Asset
Management Fee for administering the affairs of the Partnership. Included in the
Combined Statements of Operations are Asset Management Fees of $385,702,
$423,223 and $450,678 for the years ended March 31, 1999, 1998 and 1997,
respectively. Payables to affiliates of the Managing General Partner relating to
the aforementioned fees and expenses equaled $1,950,448 and $1,564,746 at March
31, 1999 and 1998, respectively.
An affiliate of the Managing General Partner is reimbursed for the actual cost
of the Partnership's operating expenses. Included in general and administrative
expenses for the years ended March 31, 1999, 1998 and 1997 is $140,069, $180,970
and $170,961, respectively, that the Partnership has paid or will pay as
reimbursement for salaries and benefits.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
5. Transactions with Affiliates (continued)
Boston Financial Property Management ("BFPM"), an affiliate of the Managing
General Partner, currently manages Harbour View, a property in which the
Partnership has invested. Included in operating expenses in the summarized
income statements in Note 4 to the Combined Financial Statements is $35,917,
$52,220 and $51,956 of fees earned by BFPM during 1998, 1997 and 1996,
respectively. As of August 1998, Boston Financial was no longer the management
agent for Harbor View.
On April 2, 1993, BFPM became the management agent of Willow Lake. In August of
1993, BFPM became the management agent for the Texas Partnerships. On September
29, 1995, BFPM became the management agent of The Kyle. On August 20, 1997, BFPM
became the management agent of Breckenridge. Included in the Combined Statements
of Operations is $102,599, $104,878 and $135,472 of property management fees
charged by BFPM during 1998, 1997 and 1996, respectively. Payables to affiliates
include $82,026 and $114,045 of property management fees at December 31, 1998
and 1997, respectively.
An affiliate of the Managing General Partner advanced the Partnership amounts to
cover operating deficits and, in return, a non-interest bearing note was
executed. As of March 31, 1999 and 1998, $514,968 is due to an affiliate of the
Managing General Partner for this note.
This affiliate of the Managing General Partner has made a commitment to defer
collection of past or future asset management fees, reimbursement of operating
expenses and property management fees, and to defer collection of the $514,968
note described above, to the extent necessary to cover operating deficits of the
Partnership.
6. Rental Property
Real estate and personal property belonging to the Combined Entities are
recorded at cost, the components of which, excluding certain acquisition costs
of $782,487 and $816,683 as of December 31, 1998 and 1997, respectively paid by
the Partnership and included in bases, are as follows at December 31:
<TABLE>
1998 1997
------------- --------
<S> <C> <C>
Land and improvements $ 1,195,873 $ 1,245,805
Building and improvements 16,377,742 19,018,025
Equipment 428,888 490,526
------------- ------------
18,002,503 20,754,356
Less: accumulated depreciation (5,568,983) (5,303,237)
------------- ------------
Total $ 12,433,520 $ 15,451,119
============= ============
</TABLE>
During the year ended December 31, 1998, operating deficiencies at Temple Kyle
indicated potential impairment. Based upon analysis of future cash flows, an
impairment loss of $1,693,514 was recognized on the real estate owned by The
Kyle, which decreased the aggregate carrying value to $2,034,321, the fair value
of the asset, as determined by an independent third party appraisal. During the
year ended December 31, 1996, an impairment loss of $1,748,708 was recognized on
real estate owned by the Texas Partnerships, which decreased the aggregate
carrying value to $2,920,411. For the years ended December 31, 1997 and 1996,
the net operating results of the Texas Partnerships increased the loss of the
Partnership (prior to the impairment loss) by $127,794 and $410,866,
respectively. See Note 10 for further details on the liquidation of the
interests in the Texas Partnerships
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
7. Mortgage Notes Payable
Willow Lake
The original mortgage note payable consists of a 9.25% per annum note due in
monthly principal and interest installments of $22,878, maturing on February 1,
2005. The original loan is collateralized by a first deed of trust covering all
real and personal property. The loan is also collateralized by an operating
deficit escrow of $58,387 provided by the Local General Partners.
As of December 31, 1993, Willow Lake was in default of its principal and
interest payments due under the mortgage agreement; however, the lender and
Willow Lake executed a workout commitment letter in June 1993 designed to
address the default. On May 31, 1998, the original workout agreement was amended
and extended for a period of thirty-six months. Commencing June 1, 1998 the
terms of the workout agreement include a reduction in the interest rate to 8.25%
for the period form June 1, 1998 through May 31, 1999, 8.75% for the period from
June 1, 1999 through May 31, 2000 and 9.00% for the period from June 1, 2000
through May 31, 2001. Thereafter Willow Lake will resume payments at the
original contract rate of 9.25%. Under the terms of the workout agreement, the
difference in the interest payments at the original contract rate of 9.25% and
the reduced rates required over the term of the workout period shall be payable
upon expiration of the workout period over the remaining term of the note.
Under the terms of the agreement, Willow Lake is required to maintain a minimum
balance of $5,000 in an operating deficit escrow account for the purpose of
funding any shortfall to the extent that cash flow is insufficient to cover the
full amount of the modified principal and interest payment.
The liability of Willow Lake under the mortgage is limited to the underlying
value of the real estate collateral plus other amounts deposited with the
lender.
Principal payments required under the above mortgage note which had a balance
at December 31, 1998 and 1997 of $2,699,871 and $2,723,285, respectively, for
each of the next five years are as follows:
December 31, 1999 $ 25,899
2000 28,399
2001 31,119
2002 34,146
2003 37,442
Thereafter 2,542,866
The terms of the mortgage note and other contract documents require the
establishment of restricted deposits and funded reserves to be held and invested
by the mortgagee. These financial instruments potentially subject Willow Lake to
a concentration of credit risk. Due to the unavailability of similar loans and
unique terms of the workout agreement, it is not practicable to determine the
fair value of this note at March 31, 1999.
Texas Partnerships
The Texas Partnerships and RECD entered into Interest Credit and Rental
Assistance Agreements that had stated interest rates ranging from 9.5% to 7.25%
and provided for an effective interest rate on the notes payable to FmHA of 1
percent, plus all rental income over basic rents as determined by the government
(overages), and maturities ranging from 2016 to 2030. All notes were
collateralized by the respective properties. The principal balance of the
remaining Texas Partnership's mortgage at December 31, 1997 was $1,150,688.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
7. Mortgage Notes Payable (continued)
The Kyle
The Kyle has a note payable to the Partnership which is eliminated in the
accompanying combined financial statements. The note is due in monthly
installments of $13,800, including interest at 7.82%, through June 1, 1998 and
$17,600, including interest at prime plus 1% (an effective interest rate of
8.75% at December 31, 1998), from July 1, 1998 through its maturity date on June
1, 2005. The note is collateralized by the respective property. $1,389,038 and
$1,406,251 was outstanding as of December 31, 1998 and 1997, respectively. The
current value of this note approximates its fair value.
Breckenridge Creste
Breckenridge Creste's mortgage note payable consists of a 9.60% per annum note
due in monthly principal and interest installments of $42,408, maturing on
November 1, 2006. The liability of Breckenridge Creste under the mortgage note
is limited to the underlying value of the real estate collateral plus other
amounts deposited with the lender. Principal payments required under the above
note, which had a balance at December 31, 1998 and 1997 of $4,708,469 and
$4,762,502, respectively, for each of the next five years are as follows:
December 31, 1999 $ 59,454
2000 65,419
2001 71,983
2002 79,206
2003 87,152
Thereafter 4,350,612
Breckenridge Creste's second note payable bears no interest and is payable in
annual installments of $2,679 until April 15, 1999. The outstanding balance at
December 31, 1998 and 1997 is $5,357.
Under current market conditions, the fair value of this mortgage as of March 31,
1999 is estimated to be approximately $5,400,000. The Partnership's ability
to refinance is impaired due to a substantial prepayment penalty.
241 Pine Street
241 Pine Street's mortgage payable consists of a 6.38% per annum note due in
monthly principal and interest installments of $2,798, maturing on December 1,
2023. The loan is collateralized by the project. Principal payments required
under the above note, which has a balance at December 31, 1998 of $418,430, for
each of the next five years are as follows:
December 31, 1999 $ 7,045
2000 7,508
2001 8,001
2002 8,257
2003 9,087
Thereafter 378,532
As the terms of the mortgage were modified under current market conditions,
management believes carrying value of the note approximates fair value as of
March 31, 1999.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
8. Due to affiliate
Under the terms of 241 Pine Street's development agreement, the Developer agreed
to advance to the property such funds as may be required to pay certain
operating expenses. Any funds so advanced were to be repaid by 241 Pine Street
upon sale or refinancing of the property. The amount due to affiliate at
December 31, 1997 represents the net amount advanced to 241 Pine Street under
this agreement. In connection with these events the Original General Partner,
who was also the Developer, was replaced by an affiliated entity of the
Partnership. Therefore, the amount previously reported as due to developer was
reclassified as a due to affiliate. 241 Pine Street obtained financing during
the year ended December 31, 1998, and used part of the proceeds to satisfy this
obligation.
9. Advances from affiliates
Prior to 1995, Willow Lake incurred debt of $662,306 payable to the former
general partners and their affiliates for development fees, Partnership advances
and management fees. As a result of the settlement of litigation in 1995, Willow
Lake agreed to pay $173,500 and issued two promissory notes in the amount of
$100,000 each. Both notes have an annual interest rate of 6% and are payable in
full, both as to accrued interest and principal on January 1, 2005. Beginning in
June 1997, principal and interest on these notes are due and payable out of cash
flow. In the event Willow Lake is unable to make a cash flow payment, the
Partnership has guaranteed one note to the extent of an interest payment equal
to $500 per month. The Partnership paid $6,000 for interest during the years
ended March 31, 1999, 1998 and 1997, respectively. The remaining debt ,$288,806,
was forgiven.
10. Liquidation of Interests in Local Limited Partnerships
For financial reporting purposes, a gain on transfer of assets of $645,018 was
recognized in the year ended March 31, 1999 as a result of the transfer of
Willowick. Loss on liquidation of interests in Local Limited Partnerships of
$18,251 and gain on transfer of assets of $1,868,051 were recognized in the year
ended March 31, 1997 as a result of the transfer of Lone Oak Apartments, Hallet
West Apartments, Lakeway Colony, Crestwood Place, Eagle Nest Apartments, One
Main Place and Pilot Point Apartments.
As previously discussed, the titles to both Regency and Rolling Hills in Dayton,
Ohio were transferred to the lender on May 2, 1997 after prolonged operating
difficulties resulting from low occupancy, capital rehabilitation needs and a
depressed local economy. The Partnership's carrying value of these investments
for financial reporting purposes was zero; therefore, the transfer had no impact
on the Partnership's operating results. For the year ended March 31, 1997, the
Partnership recognized $51,595 of loss, which was an adjustment to the
cancellation of indebtedness income in the previous year.
11. Provision for valuation of real estate
During the year ended December 31, 1998, The Kyle was deemed to be impaired and
written down to its fair value. The fair value, determined by an independent
appraisal, was determined using the fair value of comparable apartment complexes
in the area and the estimated discounted future cash flows. The determination of
fair value did not take into account the value of tax credits allocated to The
Kyle. The asset impairment loss of $1,693,514 is the difference between the
carrying value and the estimated fair value of The Kyle and was charged to
operations during the year ended December 31, 1998.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
12. Litigation
Lone Oak Housing Associates, Ltd., as was previously reported, was the defendant
in a lawsuit in which the plaintiff had alleged negligence and deceptive Trade
Act violations. This litigation has been settled by the insurance carrier and
the case dismissed.
Willow Lake Partners II, L.P. ("Willow Lake") is the defendant in a lawsuit
relating to an earlier lawsuit involving Willow Lake. As part of the
Partnership's settlement with the former management agent, Willow Lake gave the
management agent two cash flow notes. The former management agent is now
claiming that Willow Lake has cash flow (so payments should have been made on
the notes) and it is the Partnership's position that the property is running a
deficit. On June 25, 1998, the court found for Willow Lake on summary judgement
and ruled that there has been no default on the note. This litigation is no
longer outstanding unless the former management agent decides to appeal.
13. Federal Income Taxes
A reconciliation of the loss reported in the Combined Statements of Operations
for the fiscal years ended March 31, 1999, 1998 and 1997 to the loss reported
for federal income tax purposes for the year ended December 31, 1998, 1997 and
1996 is as follows:
<TABLE>
1999 1998 1997
-------------- ------------- --------
<S> <C> <C> <C>
Net Loss per Combined Statement of Operations $ (5,109,931) $ (3,597,835) $ (7,208,441)
Operating expenses not deductible in
current year for tax purposes - - 483,083
Other loss recognized for book purposes but not
recognized for tax purposes 379,660 693,904 -
Amortization of acquisition fees and expenses
not deductible for tax purposes 148,947 151,405 167,201
Adjustment to reflect March 31 fiscal year-
end to December 31 tax year-end 330,738 (532,450) (120,542)
Adjustment for equity in loss of Local Limited
Partnerships for financial reporting purposes
over (under) equity in loss for tax purposes 16,228,266 660,767 1,423,554
Adjustment for equity in loss of Local
Limited Partnerships not recognized for
financial reporting purposes (20,883,730) (4,878,906) (5,206,584)
Cash distribution included in loss for financial
reporting purposes (82,101) (60,229) (13,687)
Other (157,712) 18,251 (30,462)
-------------- ------------- -------------
Net Loss for federal income tax purposes $ (9,145,863) $ (7,545,093) $ (10,505,878)
============== ============= =============
</TABLE>
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
13. Federal Income Taxes (continued)
The differences in the assets and liabilities of the Partnership for financial
reporting purposes and tax reporting purposes for the year ended March 31, 1999
are as follows:
<TABLE>
Financial Tax
Reporting Reporting
Purposes Purposes Differences
<S> <C> <C> <C>
Investments in Local Limited Partnerships $ 15,789,285 $ (10,538,296) $ 26,327,581
============ ============= ============
Other assets $ 15,450,465 $ 15,049,069 $ 401,396
============ ============= ============
Liabilities $ 11,714,112 $ 878,380 $ 10,835,732
============ ============= ============
</TABLE>
The differences in the assets and liabilities of the Partnership for financial
reporting purposes are primarily attributable to: i) for financial reporting
purposes, the Partnership combines the financial statements of four Local
Limited Partnerships with its financial statements; for tax purposes, these
entities are carried on the equity method; ii) the cumulative equity in losses
from Local Limited Partnerships, including the Combined Entities, for tax
reporting purposes is approximately $32,139,000 greater than for financial
reporting purposes, including approximately $46,803,000 of losses the
Partnership has not recognized relating to twenty-seven Local Limited
Partnerships whose cumulative equity in losses exceeded their total investments;
iii) the Partnership has provided a provision for valuation of $1,635,000
against three of its investments in Local Limited Partnerships for financial
reporting purposes; and iv) organizational and offering costs of approximately
$11,832,000 that have been capitalized for tax reporting purposes are charged to
Limited Partners' equity for financial reporting purposes.
The differences in the assets and liabilities of the Partnership for financial
reporting purposes and tax reporting purposes for the year ended March 31, 1998
are as follows:
<TABLE>
Financial Tax
Reporting Reporting
Purposes Purposes Differences
<S> <C> <C> <C>
Investments in Local Limited Partnerships $ 19,319,502 $ (838,860) $ 20,158,362
============ ============ ============
Other assets $ 17,812,285 $ 14,555,390 $ 3,256,895
============ ============ ============
Liabilities $ 12,474,903 $ 938,274 $ 11,536,629
============ ============ ============
</TABLE>
The differences in the assets and liabilities of the Partnership for financial
reporting purposes are primarily attributable to: i) for financial reporting
purposes, the Partnership combines the financial statements of eleven Local
Limited Partnerships with its financial statements; for tax purposes, these
entities are carried on the equity method; ii) the cumulative equity in losses
from Local Limited Partnerships, including the Combined Entities, for tax
reporting purposes is approximately $27,716,000 greater than for financial
reporting purposes, including approximately $25,919,000 of losses the
Partnership has not recognized relating to twenty-four Local Limited
Partnerships whose cumulative equity in losses exceeded their total investments;
iii) the Partnership has provided a provision for valuation of $1,635,000
against three of its investments in Local Limited Partnerships for financial
reporting purposes; and iv) organizational and offering costs of approximately
$11,832,000 that have been capitalized for tax reporting purposes are charged to
Limited Partners' equity for financial reporting purposes.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
14. Supplemental Combining Schedules
<TABLE>
Balance Sheets
Boston Financial
Qualified Housing
Tax Credits Combined Eliminations Combined
L.P. III (A) Entities (B) (A) (A)
Assets
<S> <C> <C> <C> <C>
Cash and cash equivalents $ 338,993 $ 101,372 $ - $ 440,365
Marketable securities, at fair value 721,788 - - 721,788
Investments in Local Limited
Partnerships, net of reserve
for valuation 18,167,136 - (2,377,851) 15,789,285
Accounts receivable, net 758,604 91,519 (747,368) 102,755
Interest receivable 8,624 - - 8,624
Notes receivable 1,389,038 - (1,389,038) -
Prepaid expenses 2,240 18,855 - 21,095
Tenant security deposits - 95,105 - 95,105
Replacement reserves - 261,127 - 261,127
Operating reserves - 41,285 - 41,285
Rental property at cost, net of
accumulated depreciation - 12,433,520 782,487 13,216,007
Deferred acquisition fees escrow 112,500 - - 112,500
Deferred expenses, net - 219,416 - 219,416
Other assets - 210,398 - 210,398
------------ ------------- ------------ ------------
Total assets $ 21,498,923 $ 13,472,597 $ (3,731,770) $ 31,239,750
============ ============= ============ ============
Liabilities and Partners' Equity
Accounts payable to affiliates $ 1,977,756 $ 848,739 $ (747,368) $ 2,079,127
Accounts payable and accrued
expenses 254,788 319,985 - 574,773
Interest payable - 312,719 - 312,719
Notes payable, affiliate 514,968 - - 514,968
Security deposits payable - 87,898 - 87,898
Due to affiliate - - - -
Deferred acquisition fees payable 112,500 - - 112,500
Advances from affiliates - 200,000 - 200,000
Mortgage notes payable - 9,221,165 (1,389,038) 7,832,127
------------ ------------- ------------ ------------
Total liabilities 2,860,012 10,990,506 (2,136,406) 11,714,112
------------ ------------- ------------ ------------
Minority interest in Local
Limited Partnerships - - 886,727 886,727
------------ ------------- ------------ ------------
General, Initial and Investor Limited
Partners' Equity 18,638,674 2,482,091 (2,482,091) 18,638,674
Net unrealized gains on marketable
securities 237 - - 237
------------ ------------- ------------ ------------
Total Partners' Equity 18,638,911 2,482,091 (2,482,091) 18,638,911
------------ ------------- ------------ ------------
Total Liabilities and
Partners' Equity $ 21,498,923 $ 13,472,597 $ (3,731,770) $ 31,239,750
============ ============= ============= ============
</TABLE>
(A) As of March 31, 1999. (B) As of December 31, 1998 - see Note 2.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
14. Supplemental Combining Schedules (continued)
<TABLE>
Statements of Operations
Boston Financial
Qualified Housing
Tax Credits Combined Eliminations Combined
L.P. III (A) Entities (B) (A) (A)
Revenue:
<S> <C> <C> <C> <C>
Rental $ - $ 2,435,094 $ - $ 2,435,094
Investment 35,638 13,925 - 49,563
Recovery of bad debt 30,148 - - 30,148
Other 493,048 35,526 (65,491) 463,083
----------------- ----------- ------------- -------------
Total Revenue 558,834 2,484,545 (65,491) 2,977,888
----------------- ----------- ------------- -------------
Expenses:
Asset management fees,
related party 385,702 - - 385,702
General and administrative 361,002 - - 361,002
Bad debt expense 165,810 - (152,877) 12,933
Property management fees - 138,452 - 138,452
Rental operations, exclusive
of depreciation - 1,478,455 - 1,478,455
Interest 6,000 819,621 (65,491) 760,130
Provision for valuation of
real estate - 1,693,514 - 1,693,514
Depreciation - 653,671 - 653,671
Amortization 148,947 29,836 - 178,783
----------------- ----------- ------------- -------------
Total Expenses 1,067,461 4,813,549 (218,368) 5,662,642
----------------- ------------- ------------- -------------
Loss before equity in losses of Local
Limited Partnerships, minority interest,
gain on liquidation of interests in Local
Limited Partnerships and
gain on transfer (508,627) (2,329,004) 152,877 (2,684,754)
Equity in losses of Local
Limited Partnerships (4,754,181) - 1,663,198 (3,090,983)
Minority interest in losses of Local
Limited Partnerships - - 20,788 20,788
Gain on liquidation of interests
in Local Limited Partnerships 152,877 - (152,877) -
----------------- ------------- ------------- -------------
Net Loss before gain on transfer (5,109,931) (2,329,004) 1,683,986 (5,754,949)
Gain on transfer of assets - 645,018 - 645,018
----------------- ------------- ------------- -------------
Net Loss $ (5,109,931) $ (1,683,986) $ 1,683,986 $ (5,109,931)
================= ============ ============= =============
</TABLE>
(A) For the year ended March 31, 1999. (B) For the year ended December 31, 1998
- - see Note 2.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
14. Supplemental Combining Schedules (continued)
<TABLE>
Statements of Cash Flows
Boston Financial
Qualified Housing
Tax Credits Combined Eliminations Combined
L.P. III (A) Entities (B) (A) (A)
<S> <C> <C> <C> <C>
Net Loss $ (5,109,931) $ (1,683,986) $ 1,683,986 $ (5,109,931)
Adjustments to reconcile net
loss to net cash provided by
(used for) operating activities:
Equity in losses of Local
Limited Partnerships 4,754,181 - (1,663,198) 3,090,983
Bad debt expense (recoveries) 135,662 - (152,877) (17,215)
Gain on liquidation of interests
in Local Limited Partnerships (152,877) - 152,877 -
Provision for valuation of real
estate - 1,693,514 - 1,693,514
Gain on transfer of assets - (645,018) - (645,018)
Cash distribution income included in cash
distributions from Local Limited
Partnerships (68,949) - - (68,949)
Amortization and depreciation 148,947 683,507 - 832,454
Gain on sale of marketable
securities (386) - - (386)
Minority interest in losses
of Local Limited Partnerships - - (20,788) (20,788)
Increase in operating reserves - (41,285) - (41,285)
Increase (decrease) in cash
arising from changes in operating
assets and liabilities:
Accounts receivable - (1,052) - (1,052)
Interest receivable 4,674 - - 4,674
Prepaid expenses 591 3,339 - 3,930
Tenant security deposits - (30,910) - (30,910)
Other assets - (108,760) - (108,760)
Accounts payable to affiliates 389,282 (29,586) - 359,696
Accounts payable and accrued
expenses 32,778 175,522 - 208,300
Interest payable - 35,320 - 35,320
Tenant security deposits payable - 21,365 - 21,365
-------------- ------------- ------------ -------------
Net cash provided by
operating activities 133,972 71,970 - 205,942
-------------- ------------- ------------ -------------
Cash flows from investing activities:
Advances to affiliates (156,482) - 9,584 (146,898)
Purchases of marketable securities (1,094,449) - - (1,094,449)
Proceeds from sales and maturities
of marketable securities 647,907 - - 647,907
Cash distributions received from
Local Limited Partnerships 578,263 - (1,954) 576,309
Adjustment to cash upon
liquidation of General Partner
interest in a Combined Entity - (1,817) - (1,817)
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
14. Supplemental Combining Schedules (continued)
Statements of Cash Flows (continued)
Boston Financial
Qualified Housing
Tax Credits Combined Eliminations Combined
L.P. III (A) Entities (B) (A) (A)
Decrease in deferred acquisition fee
escrow 112,500 - - 112,500
Payment of deferred acquisition fee (112,500) - - (112,500)
Deposits to replacement reserves - (66,875) - (66,875)
Additions to rental property - (91,668) - (91,668)
-------------- ------------- ------------ -------------
Net cash used for investing activities (24,761) (160,360) 7,630 (177,491)
-------------- -------------- ------------ -------------
Cash flows from financing activities:
Proceeds from mortgage note - 418,430 - 418,430
Repayment of mortgage notes
payable - (94,659) 17,213 (77,446)
Additions to deferred expenses - (40,124) - (40,124)
Cash distribution - (31,954) 1,954 (30,000)
Advances from affiliate - 161,817 (9,584) 152,233
Reimbursement to affiliate - (323,046) - (323,046)
Repayment of notes
receivable, affiliate 17,213 - (17,213) -
-------------- ------------- ------------ -------------
Net cash provided by
financing activities 17,213 90,464 (7,630) 100,047
-------------- ------------- ------------ -------------
Net increase in
cash and cash equivalents 126,424 2,074 - 128,498
Cash and cash equivalents,
beginning 212,569 99,298 - 311,867
-------------- ------------- ------------ --------------
Cash and cash equivalents,
ending $ 338,993 $ 101,372 $ - $ 440,365
============== ============= ============ ==============
</TABLE>
(A) For the year ended March 31, 1999.
(B) For the year ended December 31, 1998 - see Note 2.
<PAGE>
Boston Financial Qualified Housing Tax Credits L.P. III Schedule III - Real
Estate and Accumulated Depreciation of Property owned by Local Limited
Partnerships in which Registrant has invested at March 31, 1999
<TABLE>
<CAPTION>
GROSS AMOUNT AT
WHICH CARRIED AT
NET IMPROVMENTS DECEMBER 31, 1998
COST OF INTEREST AT ACQUISTION CAPTIALIZED
NUMBER TOTAL DATE
-------------------------------- -------------------
OF ENCUM- BUILDINGS AND SUBSEQUENT TO LAND AND
DESCRIPTION UNITS BRANCES * LAND IMPROVEMENTS ACQUISITON IMPROVEMENTS
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Multi-family residential property:
Harbour View 122 10,681,534 $406,704 $11,193,508 $554,055 $
413,139
Staten Island, NY
Willow Lake Apts** 132 2,699,871 100,000 5,143,801 (27,594) 140,968
Kansas City, MO
West Dade I 122 4,049,203 626,698 4,572,095 597,462 626,698
Miami, FL
West Dade II 209 8,273,811 1,213,707 8,416,939 2,527,205 1,118,822
Miami, FL
Westwood Manor 144 3,231,079 191,987 4,091,974 114,283 191,987
Flint, MI
Rolling Hills (C) 0 0 10,000 6,791,690 (6,801,690) 0
Dayton, OH
Regency Square (C) 0 0 150,000 6,777,207 (6,927,207) 0
Dayton, OH
Buffalo Shoreline 142 7,087,704 153,588 5,106,986 (2,828,280) 153,588
Buffalo, NY
Buffalo Waterfront 472 25,342,127 202,452 17,775,357 (9,904,825) 202,452
Buffalo, NY
Fox Run 150 4,104,694 452,610 5,039,028 116,283 498,304
Victoria, TX
Boulevard II 19 691,775 0 965,670 401,256 32,174
Chicago, IL
The Colony 300 8,549,239 1,298,638 8,814,688 303,259 1,323,009
Columbia, SC
Boulevard IIA 42 1,511,625 11,786 2,467,433 621,660 34,400
Chicago, IL
Ashley Place 96 2,791,025 10 3,951,009 862,321 10
Orlando, FL
Admiral Court 46 2,619,347 60,637 4,751,321 404,624 60,637
Philadelphia, PA
Syracuse Apartments 8 240,431 17,669 289,821 3,301 17,669
Syracuse, KS
El Jardin 236 6,863,716 742,000 8,480,839 241,584 742,000
Davie, FL
Elmwood Delmar 95 3,230,700 67,097 4,111,291 50,856 74,221
Aurora, CO
Crestwood Place (B) 0 0 5,000 458,287 (463,287) 0
Bridgeport, TX
Willowick Apts** (D) 60 0 10,956 1,455,934 (1,466,890) 0
Gainesville, TX
Ellsworth Apartments 12 327,767 18,000 390,835 1,647 18,000
Ellsworth, KS
Satanta Apartments 8 223,361 23,593 264,336 3,880 7,500
Satanta, KS
Rossville Apartments 10 278,728 23,950 259,486 73,440 23,950
Rossville, KS
</TABLE>
<PAGE>
Boston Financial Qualified Housing Tax Credits L.P. III Schedule III - Real
Estate and Accumulated Depreciation of Property owned by Local Limited
Partnerships in which Registrant has invested at March 31, 1999
<TABLE>
<CAPTION>
GROSS AMOUNT AT
WHICH CARRIED AT
NET IMPROVEMENTS DECEMBER 31, 1998
COST OF INTEREST AT ACQUISTION CAPTIALIZED
NUMBER TOTAL DATE
-------------------------------- -------------------
OF ENCUM- BUILDINGS AND SUBSEQUENT TO LAND AND
DESCRIPTION UNITS BRANCES * LAND IMPROVEMENTS ACQUISITON IMPROVEMENTS
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Multi-family residential property:
Columbia Town House 56 1,787,964 167,000 885,042 1,078,618 168,303
Burlington, IA
Quarter Mill 266 7,116,270 1,139,508 2,530,458 12,816,569 5,571,829
Richmond, VA
One Main Place (B) 0 0 19,458 414,803 (434,261) 0
Little Elm, TX
Pilot Point (B) 0 0 24,805 575,107 (599,912) 0
Pilot Point, TX
Sherwood Arms (A) 0 0 32,439 658,300 (690,739) 0
Keene, TX
Crown Point (A) 0 0 13,642 371,717 (385,359) 0
Venus, TX
Godley Arms (A) 0 0 26,156 250,345 (276,501) 0
Godley, TX
South Holyoke 48 2,701,132 105,250 4,095,471 (97,559) 105,250
South Holyoke, MA
Walker Woods 51 2,331,283 159,104 2,954,196 1,016,891 159,104
Dover, DE
Shady Shores (B) 0 0 30,778 723,316 (754,094) 0
Lake Dallas, TX
Eagle Wood Apts. 40 1,113,413 0 1,382,855 52,491 45,510
Covington, TN
Georgetown II 50 1,724,359 0 1,079,160 1,726,090 0
Georgetown, DE
Blue Mountain Apts. 217 9,718,207 618,994 14,308,698 459,534 618,994
Boston, MA
Garden Plain 12 302,841 15,849 362,584 54 15,932
Garden Plain, KS
Fulton Apartments 24 798,123 0 985,000 37,657 28,000
Fulton, KY
Lone Oak (B) 0 0 34,437 803,419 (837,856) 0
Graham, TX
Hallett-West Apts (B) 0 0 18,500 322,596 (341,096) 0
Hallettsville, TX
Glenbrook (A) 0 0 13,636 310,294 (323,930) 0
St. Jo, TX
Eagles Nest (B) 0 0 49,340 1,153,573 (1,202,913) 0
Decatur, TX
Billings Family 12 282,556 14,032 327,478 2,855 14,070
Billings, MO
Brownsville 28 784,201 31,000 980,353 9,630 31,000
Brownsville, TN
Wayne Senior 15 427,912 30,949 494,381 2,889 30,949
Wayne, NE
</TABLE>
<PAGE>
Boston Financial Qualified Housing Tax Credits L.P. III Schedule III - Real
Estate and Accumulated Depreciation of Property owned by Local Limited
Partnerships in which Registrant has invested at March 31, 1999
<TABLE>
<CAPTION>
GROSS AMOUNT AT
WHICH CARRIED AT
NET IMPROVMENTS DECEMBER 31, 1998
COST OF INTEREST AT ACQUISTION CAPTIALIZED
NUMBER TOTAL DATE
-------------------------------- -------------------
OF ENCUM- BUILDINGS AND SUBSEQUENT TO LAND AND
DESCRIPTION UNITS BRANCES * LAND IMPROVEMENTS ACQUISITON IMPROVEMENTS
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Multi-family residential property:
Longview 14 398,009 29,710 461,233 2,634 29,796
Humboldt, KS
Horseshoe Bend 24 647,909 21,780 816,289 1,668 21,780
Horseshoe Bend, AR
Briarwood II 32 1,108,853 105,000 1,331,661 8,587 105,000
Lake Havasua, AZ
Quail Run (A) 0 0 8,158 458,464 (466,622) 0
Iowa Park, TX
Smithville 24 543,708 28,840 585,285 2,427 29,253
Smithville, MO
Aurora East 125 4,098,800 308,324 4,402,417 204,985 308,324
Denver, CO
Elver Park II 56 1,680,740 348,138 2,509,630 35,605 348,138
Madison, WI
Elver Park III 48 1,439,145 135,465 582,652 1,829,636 217,507
Madison, WI
Tucson Trails 48 1,407,408 138,240 588,915 1,818,501 193,866
Madison, WI
Tucson Trails II 48 1,414,049 138,240 281,704 2,131,272 194,388
Madison, WI
Pleasant Plaza 125 17,298,253 303,775 15,691,150 174,944 303,775
Malden, MA
241 Pine Street** 50 418,430 130,900 2,564,381 (1,439,141) 130,900
Manchester, NH
Oak Grove 24 561,717 35,000 169,708 521,155 35,000
Oak Grove, MO
Wood Creek 104 3,186,957 475,000 4,203,585 1,398,056 842,496
Calcium, NY
Breckenridge Creste** 164 4,708,469 845,000 811,111 7,839,724 826,686
Duluth, GA
Bolivar Apartments 20 466,514 30,000 190,970 364,091 30,000
Boliver, MO
Lexington Civic 24 815,747 15,000 650,260 310,779 15,000
Lexington, TN
Riverfront Apartments 200 7,264,214 140,333 9,845,838 735,040 140,333
Sunbury, PA
Susquehanna View 201 8,955,465 373,702 10,743,951 743,191 385,602
Camp Hill, PA
Westgate Associated 20 638,634 45,500 750,700 4,471 20,000
Perryville, AR
Altheimer Associates 20 597,205 10,000 725,429 6,028 10,000
Altheirmer, AR
The Temple-Kyle ** 64 0 93,564 931,860 1,008,897 97,319
Temple, TX
</TABLE>
<PAGE>
Boston Financial Qualified Housing Tax Credits L.P. III Schedule III - Real
Estate and Accumulated Depreciation of Property owned by Local Limited
Partnerships in which Registrant has invested at March 31, 1999
<TABLE>
<CAPTION>
GROSS AMOUNT AT
WHICH CARRIED AT
NET IMPROVEMENTS DECEMBER 31, 1998
COST OF INTEREST AT ACQUISTION CAPTIALIZED
NUMBER TOTAL DATE
-------------------------------- -------------------
OF ENCUM- BUILDINGS AND SUBSEQUENT TO LAND AND
DESCRIPTION UNITS BRANCES * LAND IMPROVEMENTS ACQUISITON IMPROVEMENTS
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Multi-family residential property:
Diversey Square 48 2,567,130 50,000 3,253,496 120,835 50,000
Chicago, IL
Poplar Village 36 1,200,333 60,000 1,427,725 0 60,000
Cumberland, KY
------------------------------------------------------------------------------------
183,303,687 12,201,628 211,517,095 7,073,164 16,863,632
Less: Combined Entities ** (7,826,770) (1,180,420) (10,907,087) (5,914,996) (1,195,873)
====================================================================================
175,476,917 $11,021,208 $200,610,008 $1,158,168 $15,667,759
====================================================================================
</TABLE>
The aggregate cost for Federal Income Tax purposes is approximately
$248,509,000.
* Mortgage notes payable generally represent
non-recourse financing of low-income housing
projects payable with terms of up to 40 years
with interest payable at rates ranging from
10.84% to 6.38%. The Partnership has not
guaranteed any of these mortgage notes payable.
(A) During the year ended March 31, 1997, the Partnership has transferred all of
the assets of five of the Texas Partnerships
subject to their liabilities to unaffiliated entities.
(B) During the year ended March 31, 1998, the Partnership has transferred all of
the assets of seven of the Texas Partnerships
subject to their liabilities to unaffiliated entities.
(C) During the year ended March 31, 1998, the Partnership has transferred the
titles of Regency and Rolling Hills
to the lender.
(D) During the year ended March 31, 1999, the Partnership has transferred all of
the assets of Willowick subject to the liabilities to unaffiliated entities.
<PAGE>
Boston Financial Qualified Housing Tax Credits L.P. III Schedule III - Real
Estate and Accumulated Depreciation of Property owned by Local Limited
Partnerships in which Registrant has invested at March 31, 1999
<TABLE>
LIFE ON WHICH
GROSS AMOUNT AT WHICH CARRIED AT DECEMBER 31, 1998 DEPRECTIATION
---------------------------------------------------------
BUILDING AND ACCUMULATED DATE IS COMPUTED DATE
DESCRIPTION IMPROVEMENTS TOTAL DEPRECIATON BUILT (YEARS) ACQUIRED
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Multi-family residential property:
Harbour View $ $ $ 1990 5-40 09/29/89
11,741,128 12,154,267 3,021,519
Staten Island, NY
Willow Lake Apts** 5,075,239 5,216,207 1,830,409 1989 5-40 12/20/89
Kansas City, MO
West Dade I 5,169,557 5,796,255 1,924,528 Various 5-40 12/31/88
Miami, FL
West Dade II 11,039,029 12,157,851 3,939,161 Various 5-40 12/31/88
Miami, FL
Westwood Manor 4,206,257 4,398,244 1,741,609 Various 5-40 02/21/89
Flint, MI
Rolling Hills (C) 0 0 0 1969 5-40 03/13/89
Dayton, OH
Regency Square (C) 0 0 0 1963 5-40 03/13/89
Dayton, OH
Buffalo Shoreline 2,278,706 2,432,294 2,099,414 Various 5-40 04/28/89
Buffalo, NY
Buffalo Waterfront 7,870,532 8,072,984 7,196,649 Various 5-40 04/28/89
Buffalo, NY
Fox Run 5,109,617 5,607,921 1,756,446 1975 5-40 04/07/89
Victoria, TX
Boulevard II 1,334,752 1,366,926 432,627 1920 5-40 04/04/89
Chicago, IL
The Colony 9,093,576 10,416,585 4,369,648 1950 5-40 05/19/89
Columbia, SC
Boulevard IIA 3,066,479 3,100,879 945,885 Various 5-40 04/04/89
Chicago, IL
Ashley Place 4,813,330 4,813,340 1,643,665 1989 5-40 06/23/89
Orlando, FL
Admiral Court 5,155,945 5,216,582 1,131,320 1920 5-40 06/07/89
Philadelphia, PA
Syracuse Apartments 293,122 310,791 113,404 1989 5-40 06/30/89
Syracuse, KS
El Jardin 8,722,423 9,464,423 2,961,213 1973 5-40 06/14/89
Davie, FL
Elmwood Delmar 4,155,023 4,229,244 1,407,907 1957 5-40 05/16/89
Aurora, CO
Crestwood Place (B) 0 0 0 1975 5-40 06/05/89
Bridgeport, TX
Willowick Apts** (D) 0 0 0 1975 5-40 06/30/89
Gainesville, TX
Ellsworth Apartments 392,482 410,482 138,010 1975 5-40 07/19/89
Ellsworth, KS
Satanta Apartments 284,309 291,809 101,748 1989 5-40 07/28/89
Satanta, KS
Rossville Apartments 332,926 356,876 112,700 1990 5-40 07/28/89
Rossville, KS
</TABLE>
<PAGE>
Boston Financial Qualified Housing Tax Credits L.P. III Schedule III - Real
Estate and Accumulated Depreciation of Property owned by Local Limited
Partnerships in which Registrant has invested at March 31, 1999
<TABLE>
LIFE ON WHICH
GROSS AMOUNT AT WHICH CARRIED AT DECEMBER 31, 1998 DEPRECTIATION
---------------------------------------------------------
BUILDING AND ACCUMULATED DATE IS COMPUTED DATE
DESCRIPTION IMPROVEMENTS TOTAL DEPRECIATON BUILT (YEARS) ACQUIRED
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Multi-family residential property:
Columbia Town House 1,962,357 2,130,660 697,608 1990 5-40 07/28/89
Burlington, IA
Quarter Mill 10,914,706 16,486,535 4,728,136 1990 5-40 08/02/89
Richmond, VA
One Main Place (B) 0 0 0 1989 5-40 08/22/89
Little Elm, TX
Pilot Point (B) 0 0 0 1989 5-40 08/22/89
Pilot Point, TX
Sherwood Arms (A) 0 0 0 1989 N/A 08/22/89
Keene, TX
Crown Point (A) 0 0 0 1989 N/A 08/22/89
Venus, TX
Godley Arms (A) 0 0 0 1989 N/A 08/25/89
Godley, TX
South Holyoke 3,997,912 4,103,162 1,040,076 1988 5-40 08/29/89
South Holyoke, MA
Walker Woods 3,971,087 4,130,191 883,133 1990 5-40 08/30/89
Dover, DE
Shady Shores (B) 0 0 0 1989 5-40 08/30/89
Lake Dallas, TX
Eagle Wood Apts. 1,389,836 1,435,346 452,164 1990 5-40 09/06/89
Covington, TN
Georgetown II 2,805,250 2,805,250 662,293 1990 5-40 09/28/89
Georgetown, DE
Blue Mountain Apts. 14,768,232 15,387,226 5,081,981 Various 5-40 09/29/89
Boston, MA
Garden Plain 362,555 378,487 135,476 1990 5-40 08/09/89
Garden Plain, KS
Fulton Apartments 994,657 1,022,657 318,506 1990 5-40 10/05/89
Fulton, KY
Lone Oak (B) 0 0 0 1990 5-40 10/06/89
Graham, TX
Hallett-West Apts (B) 0 0 0 1989 5-40 11/20/89
Hallettsville, TX
Glenbrook (A) 0 0 0 1989 N/A 10/06/89
St. Jo, TX
Eagles Nest (B) 0 0 0 1989 5-40 10/06/89
Decatur, TX
Billings Family 330,295 344,365 120,890 1989 5-40 08/09/89
Billings, MO
Brownsville 989,983 1,020,983 418,659 1989 5-40 08/09/89
Brownsville, TN
Wayne Senior 497,270 528,219 139,117 1988 5-40 08/09/89
Wayne, NE
</TABLE>
<PAGE>
Boston Financial Qualified Housing Tax Credits L.P. III Schedule III - Real
Estate and Accumulated Depreciation of Property owned by Local Limited
Partnerships in which Registrant has invested at March 31, 1999
<TABLE>
LIFE ON WHICH
GROSS AMOUNT AT WHICH CARRIED AT DECEMBER 31, 1998 DEPRECTIATION
---------------------------------------------------------
BUILDING AND ACCUMULATED DATE IS COMPUTED DATE
DESCRIPTION IMPROVEMENTS TOTAL DEPRECIATON BUILT (YEARS) ACQUIRED
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Multi-family residential property:
Longview 463,781 493,577 170,646 1988 5-40 10/13/89
Humboldt, KS
Horseshoe Bend 817,957 839,737 350,972 1988 5-40 08/09/89
Horseshoe Bend, AR
Briarwood II 1,340,248 1,445,248 544,927 1989 5-40 10/04/89
Lake Havasua, AZ
Quail Run (A) 0 0 0 1989 N/A 10/06/89
Iowa Park, TX
Smithville 587,299 616,552 208,352 1987 5-40 08/09/89
Smithville, MO
Aurora East 4,607,402 4,915,726 2,325,532 1972 5-40 11/06/89
Denver, CO
Elver Park II 2,545,235 2,893,373 786,093 1989 5-40 11/09/89
Madison, WI
Elver Park III 2,330,246 2,547,753 629,848 1990 5-40 11/09/89
Madison, WI
Tucson Trails 2,351,790 2,545,656 631,412 1990 5-40 11/22/89
Madison, WI
Tucson Trails II 2,356,828 2,551,216 619,161 1990 5-40 11/23/89
Madison, WI
Pleasant Plaza 15,866,094 16,169,869 5,592,463 1989 5-40 12/01/89
Malden, MA
241 Pine Street** 1,125,240 1,256,140 549,797 1988 5-40 12/04/89
Manchester, NH
Oak Grove 690,863 725,863 211,481 1991 5-40 11/24/89
Oak Grove, MO
Wood Creek 5,234,145 6,076,641 1,993,044 1990 5-40 12/15/89
Calcium, NY
Breckenridge Creste** 8,669,149 9,495,835 2,524,456 1990 5-40 12/19/89
Duluth, GA
Bolivar Apartments 555,061 585,061 180,425 1990 5-40 12/15/90
Boliver, MO
Lexington Civic 961,039 976,039 252,398 1990 5-40 12/29/90
Lexington, TN
Riverfront Apartments 10,580,878 10,721,211 2,602,247 1990 5-40 12/26/89
Sunbury, PA
Susquehanna View 11,475,242 11,860,844 2,811,575 1988 5-40 12/26/89
Camp Hill, PA
Westgate Associated 780,671 800,671 252,575 1990 5-40 05/01/90
Perryville, AR
Altheimer Associates 731,457 741,457 235,453 1990 5-40 04/18/90
Altheirmer, AR
</TABLE>
<PAGE>
Boston Financial Qualified Housing Tax Credits L.P. III Schedule III - Real
Estate and Accumulated Depreciation of Property owned by Local Limited
Partnerships in which Registrant has invested at March 31, 1999
<TABLE>
LIFE ON WHICH
GROSS AMOUNT AT WHICH CARRIED AT DECEMBER 31, 1998 DEPRECTIATION
---------------------------------------------------------
BUILDING AND ACCUMULATED DATE IS COMPUTED DATE
DESCRIPTION IMPROVEMENTS TOTAL DEPRECIATON BUILT (YEARS) ACQUIRED
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Multi-family residential property:
The Temple-Kyle ** 1,937,002 2,034,321 664,321 1991 5-40 06/12/90
Temple, TX
Diversey Square 3,374,331 3,424,331 1,096,328 1990 5-40 12/01/90
Chicago, IL
Poplar Village 1,427,725 1,487,725 333,746 1991 5-40 12/30/90
Cumberland, KY
---------------------------------------------------------
213,928,255 230,791,887 77,113,153
Less: Combined Entities ** (16,806,630) (18,002,503) (5,568,983)
=========================================================
$197,121,625 $212,789,384 $71,544,170
=========================================================
</TABLE>
<PAGE>
<TABLE>
Summary of property owned and accumulated depreciation:
<S> <C> <C> <C> <C>
Property Owned December 31, 1998 Accumulated Depreciation December 31, 1998
- ------------------------------------------------------------------------- -----------------------------------------------
Balance at beginning of period $228,065,336 Balance at beginning of period $65,034,098
Additions during period: Additions during period:
Acquisitions through foreclosure $0 Eliminations - 1997 5,303,237
Other acquisitions 500,450 Eliminations -1998 (5,568,983)
Improvements etc. 993,990 Properties disposed of (D) (375,954)
--------------
1,494,440 Depreciation 7,151,772
Deductions during Balance at close of period $71,544,170
period:
===============
===============
Cost of real estate and fixed assets (239,209)
sold
Eliminations - 1997 Combined Entities 20,754,356
Eliminations - 1998 Combined Entities (18,002,503)
Provision for valuation of real (18,133,029)
estate
Properties disposed (1,150,007)
of (D)
(16,770,392)
----------------
Balance at close of period $212,789,384
================
Property Owned December 31, 1997 Accumulated Depreciation December 31, 1997
- ------------------------------------------------------------------------- -----------------------------------------------
Balance at beginning of period $241,747,268 Balance at beginning of period $61,965,823
Additions during period: Additions during period:
Acquisitions through foreclosure $0 Eliminations - 1996 5,426,434
Other acquisitions 27,189 Eliminations - 1997 (5,303,237)
Improvements etc. 1,267,479 Properties disposed of (B) (931,508)
--------------
1,294,668 Properties disposed of (C) (4,045,351)
Deductions during Depreciation 7,921,937
period:
---------------
Cost of real estate and fixed assets (174) Balance at close of period $65,034,098
sold
===============
Eliminations - 1996 Combined entities 23,310,668
Eliminations - 1997 Combined Entities (20,754,356)
Properties disposed of (B) (3,746,454)
Properties disposed of (C) (13,786,284)
(14,976,600)
----------------
Balance at close of period $228,065,336
================
Property Owned December 31, 1996 Accumulated Depreciation December 31, 1996
- ------------------------------------------------------------------------- -----------------------------------------------
Balance at beginning of period $252,533,482 Balance at beginning of period $55,943,640
Additions during period: Additions during period:
Acquisitions through foreclosure $0 Eliminations - 1995 3,034,245
Other acquisitions 226,465 Eliminations - 1996 (5,426,434)
Improvements etc. 623,525 Properties disposed of (A) (421,819)
--------------
849,990 Depreciation 8,836,191
---------------
Deductions during Balance at close of period $61,965,823
period:
===============
Cost of real estate and fixed assets (33,471)
sold
Eliminations - 1995 Combined entities 15,852,398
Eliminations - 1996 Combined Entities (23,310,668)
Provision for valuation of real (1,748,708)
estate
Properties disposed of (A) (2,395,755)
--------------
(11,636,204)
----------------
Balance at close of period $241,747,268
================
</TABLE>
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
(A Limited Partnership)
Annual Report on form 10-K
For The Year Ended March 31, 1999
Reports of Independent Auditors
<PAGE>
Diversey
[Letterhead]
FRIDUSS, LUKEE, SCHIFF & CO., P.C.
CERTIFIED PUBLIC ACCOUNTANTS
4747 WEST PETERSON AVENUE
CHICAGO, ILLINOIS 60646
(773) 777-4445
FAX (773) 777-6557
INDEPENDENT AUDITOR'S REPORT
To the Partners of HUD Field Office Director
DIVERSEY SQUARE ASSOCIATES II Chicago, Illinois
Chicago, Illinois
We have audited the accompanying balance sheets of DIVERSEY SQUARE ASSOCIATES II
(An Illinois Limited Partnership), Project No. 071-35573, as of December 31,
1998 and 1997, and the related statements of profit and loss, partners' equity
and cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
and generally accepted Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and perform
the audits to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position of DIVERSEY SQUARE ASSOCIATES II as of
December 31, 1998 and 1997, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.
In accordance with the Government Auditing Standards, we have also issuedreports
dated January 27, 1999 on compliance with specific requirements applicable to
major HUD programs, compliance with specific requirements applicable to
Affirmative Fair Housing, our consideration of the internal control structure
and on compliance with laws and regulations.
The supporting data included in this report shown on pages 19 through 21 is
presented for purposes of additional analysis and is not a required part of the
basic financial statements. Such information has been subjected to the same
auditing procedures applied in the audit of the basic financial statements, and
in our opinion, are presented fairly in all material respects in relation to the
basic financial statements taken as a whole.
/s/FRIDUSS, LUKEE, SCHIFF & CO., P.C.
FRIDUSS, LUKEE, SCHIFF & CO., P.C. 36-3087225
Certified Public Accountants Mr. Bruce C. Schiff
(773) 777-4445
Chicago, Illinois
January 27, 1999
<PAGE>
[Letterhead]
FRIDUSS, LUKEE, SCHIFF & CO., P.C.
CERTIFIED PUBLIC ACCOUNTANTS
4747 WEST PETERSON AVENUE
CHICAGO, ILLINOIS 60646
(773) 777-4445
FAX (773) 777-6557
INDEPENDENT AUDITOR'S REPORT
To the Partners of HUD Field Office Director
DIVERSEY SQUARE ASSOCIATES II Chicago, Illinois
Chicago, Illinois
We have audited the accompanying balance sheets of DIVERSEY SQUARE ASSOCIATES II
(An Illinois Limited Partnership), Project No. 071-35573, as of December 31,
1997 and 1996, and the related statements of profit and loss, partners' equity
and cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
and generally accepted Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and perform
the audits to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position of DIVERSEY SQUARE ASSOCIATES II as of
December 31, 1997 and 1996, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.
In accordance with the Government Auditing Standards, we have also issued
reports dated January 30, 1998 on compliance with specific requirements
applicable to major HUD programs, compliance with specific requirements
applicable to Affirmative Fair Housing, our consideration of the internal
control structure and on compliance with laws and regulations.
The supporting data included in this report shown on pages 19 through 25 is
presented for purposes of additional analysis and is not a required part of the
basic financial statements. Such information has been subjected to the same
auditing procedures applied in the audit of the basic financial statements, and
in our opinion, are presented fairly in all material respects in relation to the
basic financial statements taken as a whole.
/s/FRIDUSS, LUKEE, SCHIFF & CO., P.C.
FRIDUSS, LUKEE, SCHIFF & CO., P.C. 36-3087225
Certified Public Accountants Mr. Bruce C. Schiff
(773) 777-4445
Chicago, Illinois
January 30, 1998
<PAGE>
Breckenridge
[Letterhead]
[LOGO]
Habif, Arogeti & Wynne, P.C.
Certified Public Accountants
INDEPENDENT AUDITORS' REPORT
To the Partners
Breckenridge Creste Apartments, L.P.
We have audited the accompanying balance sheet of Breckenridge Creste
Apartments, L.P., (a Georgia Limited Partnership), as of December 31, 1998, and
the related statements of changes in partners' equity [deficit], operations, and
cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Breckenridge Creste Apartments,
L.P. as of December 31, 1998, and the results of its operations chanfes in
partners' equity [deficit], and cash flows for the years then ended in
conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The accompanying supplemental information is
presented for the purpose of additional analysis and is not a required part of
the basic financial statements. Such information has not been subjected to the
auditing procedures applied in the audit of the basic financial statements.
/s/Habif, Arogeti & Wynne, P.C.
Atlanta, Georgia
January 29, 1999
<PAGE>
[Letterhead]
[LOGO]
Habif, Arogeti & Wynne, P.C.
Certified Public Accountants
INDEPENDENT AUDITORS' REPORT
To the Partners
Breckenridge Creste Apartments, L.P.
We have audited the accompanying balance sheet of Breckenridge Creste
Apartments, L.P., (a Georgia Limited Partnership), as of December 31, 1997, and
the related statements of changes in partners' equity, operations, and cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Breckenridge Creste Apartments,
L.P. as of December 31, 1997, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The accompanying supplemental information is
presented for the purpose of additional analysis and is not a required part of
the basic financial statements. Such information has not been subjected to the
auditing procedures applied in the audit of the basic financial statements.
/s/Habif, Arogeti & Wynne, P.C.
Atlanta, Georgia
January 30, 1998
<PAGE>
[Letterhead]
[LOGO]
Habif, Arogeti & Wynne, P.C.
Certified Public Accountants
INDEPENDENT AUDITORS' REPORT
To the Partners
Breckenridge Creste Apartments, L.P.
We have audited the accompanying balance sheet of Breckenridge Creste
Apartments, L.P., (a Georgia Limited Partnership), as of December 31, 1996, and
the related statements of changes in partners' equity, operations, and cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Breckenridge Creste Apartments,
L.P. as of December 31, 1996, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The accompanying supplemental information is
presented for the purpose of additional analysis and is not a required part of
the basic financial statements. Such information has not been subjected to the
auditing procedures applied in the audit of the basic financial statements.
/s/Habif, Arogeti & Wynne, P.C.
Atlanta, Georgia
January 24, 1997
<PAGE>
EDM HOUSING
[Letterhead]
[LOGO]
STARK TINTER & ASSOCIATES, LLC
Englewood, CO
INDEPENDENT AUDITOR'S REPORT
To the Partners of
EDM Housing Associates, Ltd.
Englewood, CO
We have audited the accompanying balance sheet of EDM Housing Associates, Ltd.
(a limited partnership), HUD Project No. 101-35513 - PM - EX, as of December 31,
1998 and the related statement of profit and loss, changes in partners' equity
(deficiency) and cash flows for the year then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position of EDM Housing Associates, Ltd., HUD
Project No. 101-35513 - PM - EX, as of December 31, 1998, and the results of its
operations and the changes in its partners' equity (deficiency) and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have also issued a report
dated January 29, 1999 on our consideration of EDM Housing Associates, Ltd.'s
internal controls and reports dated January 29, 1999 on its compliance with
specific requirements applicable to major HUD programs and specific requirements
applicable to Fair Housing and Non-Discrimination.
/s/STARK TINTER & ASSOCIATES
Certified Public Accountants
Financial Consultants
January 29, 1999
<PAGE>
[Letterhead]
[LOGO]
STARK TINTER & ASSOCIATES, LLC
Englewood, CO
INDEPENDENT AUDITOR'S REPORT
To the Partners of
EDM Housing Associates, Ltd.
Englewood, CO
We have audited the accompanying balance sheet of EDM Housing Associates, Ltd.
(a limited partnership), HUD Project No. 101-94007, as of December 31, 1997 and
the related statements of profit and loss, changes in partners' equity
(deficiency) and cash flows for the year then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position of EDM Housing Associates, Ltd., HUD
Project No. 101-94007, as of December 31, 1997, and the results of its
operations and the changes in its partners' equity (deficiency) and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
/s/STARK TINTER & ASSOCIATES
Certified Public Accountants
Financial Consultants
January 30, 1998
<PAGE>
[Letterhead]
[LOGO]
STARK TINTER & ASSOCIATES, LLC
Englewood, CO
INDEPENDENT AUDITOR'S REPORT
To the Partners of
EDM Housing Associates, Ltd.
Englewood, Colorado
We have audited the accompanying balance sheet of EDM Housing Associates, Ltd.
(a limited partnership), HUD Project No. 101-94007, as of December 31, 1996 and
the related statements of profit and loss, changes in partners' equity
(deficiency) and cash flows for the year then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position of EDM Housing Associates, Ltd., HUD
Project No. 101-94007, as of December 31, 1996, and the results of its
operations and the changes in its partners' equity (deficiency) and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
/s/STARK TINTER & ASSOCIATES
Certified Public Accountants
Financial Consultants
January 30, 1997
<PAGE>
FOX RUN
[Letterhead]
[LOGO]
STARK TINTER & ASSOCIATES, LLC
Englewood, CO
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Fox Run Housing Associates, Ltd.
Englewood, Colorado
We have audited the accompanying balance sheet of Fox Run Housing Associates,
Ltd. (a limited partnership), HUD Project No. 115-94018, as of December 31,
1998, and the related statements of profit and loss, changes in partners' equity
(deficiency) and cash flows for the year then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position of Fox Run Housing Associates, Ltd.,
HUD Project No. 115-94018, as of December 31, 1998, and the results of its
operations and the changes in its partners' equity (deficiency) and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have also issued a report
dated January 30, 1999 on our consideration of Fox Run Housing Associates,
Ltd.'s internal controls and reports dated January 30, 1999 on its compliance
with specific requirements applicable to Fair Housing and Non-Discrimination..
/s/STARK TINTER & ASSOCIATES
Certified Public Accountants
Financial Consultants
January 30, 1999
<PAGE>
[Letterhead]
[LOGO]
STARK TINTER & ASSOCIATES, LLC
Englewood, CO
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Fox Run Housing Associates, Ltd.
Englewood, Colorado
We have audited the accompanying balance sheet of Fox Run Housing Associates,
Ltd. (a limited partnership), HUD Project No. 115-94018, as of December 31,
1997, and the related statements of profit and loss, changes in partners' equity
(deficiency) and cash flows for the year then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position of Fox Run Housing Associates, Ltd.,
HUD Project No. 115-94018, as of December 31, 1997, and the results of its
operations and the changes in its partners' equity (deficiency) and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
/s/STARK TINTER & ASSOCIATES
Certified Public Accountants
Financial Consultants
February 2, 1998
<PAGE>
[Letterhead]
[LOGO]
STARK TINTER & ASSOCIATES, LLC
Englewood, CO
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Fox Run Housing Associates, Ltd.
Englewood, Colorado
We have audited the accompanying balance sheet of Fox Run Housing Associates,
Ltd. (a limited partnership), HUD Project No. 115-94018, as of December 31,
1996, and the related statements of profit and loss, changes in partners' equity
(deficiency) and cash flows for the year then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position of Fox Run Housing Associates, Ltd.,
HUD Project No. 115-94018, as of December 31, 1996, and the results of its
operations and the changes in its partners' equity (deficiency) and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
/s/STARK TINTER & ASSOCIATES
Certified Public Accountants
Financial Consultants
January 30, 1997
<PAGE>
PINE ST
[Letterhead]
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Dauby O'Conner & Zaleski
A Limited Liability Company
Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT
To the Partners
241 Pine Street Associates, L.P.
Manchester, New Hampshire
We have audited the accompanying balance sheet of 241 Pine Street Associates,
L.P., (a New Hampshire Limited Partnership), as of December 31, 1998 and the
related statement of income (loss), partners' capital and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provided 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 241 Pine Street Associates, L.P. as
of December 31, 1998, and the results of its' operations for the year then ended
in conformity with generally accepted accounting principles.
/s/Dauby O'Conner & Zaleski
February 23, 1999 Dauby O'Conner & Zaleski
Carmel, Indiana Certified Public Accountants
<PAGE>
Letterhead]
[LOGO]
Dauby O'Conner & Zaleski
A Limited Liability Company
Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT
To the Partners
241 Pine Street Associates, L.P.
Manchester, New Hampshire
We have audited the accompanying balance sheet of 241 Pine Street Associates,
L.P., (a New Hampshire Limited Partnership), as of December 31, 1997 and the
related statement of income (loss), partners' capital and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provided 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 241 Pine Street Associates, L.P. as
of December 31, 1997, and the results of its' operations for the year then ended
in conformity with generally accepted accounting principles.
/s/Dauby O'Conner & Zaleski
February 1, 1998 Dauby O'Conner & Zaleski
Carmel, Indiana Certified Public Accountants
<PAGE>
[Letterhead]
[LOGO]
Dauby O'Conner & Zaleski
A Limited Liability Company
Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT
To the Partners
241 Pine Street Associates, L.P.
Manchester, New Hampshire
We have audited the accompanying balance sheet of 241 Pine Street Associates,
L.P., (a New Hampshire Limited Partnership), as of December 31, 1996 and the
related statement of income (loss), partners' capital and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provided 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 241 Pine Street Associates, L.P. as
of December 31, 1996, and the results of its' operations for the year then ended
in conformity with generally accepted accounting principles.
/s/Dauby O'Conner & Zaleski
January 4, 1996 Dauby O'Conner & Zaleski
Carmel, Indiana Certified Public Accountants
<PAGE>
BROWNSVILLE
[Letterhead]
[LOGO]
BCC
Braunsdorf, Carlson and Clinkinbeard
CERTIFIED PUBLIC ACCOUNTANTS
A PROFESSIONAL ASSOCIATION
INDEPENDENT AUDITORS'REPORT
To the Partners
Brownsville Associates, L.P.
Brownsville, Tennessee
We have audited the accompanying balance sheets of Brownsville Associates, L.P.
(a Missouri limited partnership), Rural Development Case No.: 48-038-431399553
as of December 31, 1998 and 1997, and the related statements of operations,
partners' deficit and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing standards
and with Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Brownsville Associates, L.P. as
of December 31, 1998 and 1997 and the results of its operations, changes in
partners' deficit and cash flows for the years then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated January 20, 1999 on our consideration of Brownsville Associates, L.P.'s
internal control structure and a report dated January 21, 1999 on its compliance
with laws and regulations.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying required supplementary
information shown on pages 9-11 is presented for purposes of additional analysis
and is not a required part of the basic financial statements of the Partnership.
Such information has been subjected to the auditing procedures applied in the
audits of the basic financial statements, and in our opinion, is fairly stated
in all material respects in relation to the basic financial statements taken as
a whole.
/s/Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Braunsdorf, Carlson and Clinkinbeard
TOPEKA, KANSAS
JANUARY 20, 1999
<PAGE>
[Letterhead]
[LOGO]
BCC
Braunsdorf, Carlson and Clinkinbeard
CERTIFIED PUBLIC ACCOUNTANTS
A PROFESSIONAL ASSOCIATION
INDEPENDENT AUDITORS'REPORT
To the Partners
Brownsville Associates, L.P.
Brownsville, Tennessee
We have audited the accompanying balance sheets of Brownsville Associates, L.P.
(a Missouri limited partnership), Rural Development Case No.: 48-038-431399553
as of December 31, 1997 and 1996, and the related statements of loss, partners'
equity and cash flows for the years then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
and with Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Brownsville Associates, L.P. as
of December 31, 1997 and 1996 and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have also issued a report
dated January 21, 1998 on our consideration of Brownsville Associates, L.P.'s
internal control structure and a report dated January 21, 1998 on its compliance
with laws and regulations.
/s/Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Braunsdorf, Carlson and Clinkinbeard
TOPEKA, KANSAS
JANUARY 21, 1998
<PAGE>
BRIARWOOD
[Letterhead]
[LOGO]
BCC
Braunsdorf, Carlson and Clinkinbeard
CERTIFIED PUBLIC ACCOUNTANTS
A PROFESSIONAL ASSOCIATION
INDEPENDENT AUDITORS' REPORT
To the Partners
Briarwood Associates II, L.P.
We have audited the accompanying balance sheets of Briarwood Associates II, L.P.
(a Missouri limited Partnership), Rural Development Case No.: 02-008-431303694
as of December 31, 1998 and 1997, and the related statements of operations,
partners' deficit and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing standards
and with Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Briarwood Associates II, L.P.
as of December 31, 1998 and 1997, and the results of its operations, changes in
partners' deficit and cash flows for the years then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated January 20, 1999 on our consideration of Briarwood Associates II, L.P.'s
internal control and on its compliance with laws and regulations.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying required supplementary
information shown on pages 9-11 is presented for purposes of additional analysis
and is not a required
part of the basic financial statements of the Partnership. Such information has
been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/Braunsdorf, Carlson and Clinkinbeard, C.P.A.'s, P.A.
Braunsdorf, Carlson and Clinkinbeard, C.P.A.'s,P.A.
TOPEKA, KANSAS
January 20, 1999
<PAGE>
[Letterhead]
[LOGO]
BCC
Braunsdorf, Carlson and Clinkinbeard
CERTIFIED PUBLIC ACCOUNTANTS
A PROFESSIONAL ASSOCIATION
INDEPENDENT AUDITORS' REPORT
To the Partners
Briarwood Associates II, L.P.
We have audited the accompanying balance sheets of Briarwood Associates II, L.P.
(a Missouri limited Partnership), Rural Development Case No.: 02-027-431303694
as of December 31, 1997 and 1996, and the related statements of loss, partners'
equity and cash flows for the years then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
and with Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Briarwood Associates II, L.P.
as of December 31, 1997 and 1996, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have also issued a report
dated February 2, 1998 on our consideration of Briarwood Associates II, L.P.'s
internal control structure and a report dated February 10, 1998 on its
compliance with laws and regulations.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages
9-11 is presented for purposes of additional analysis and is not a required part
of the basic financial statements. Such information has been subjected to the
audit procedures applied in the audit of the basic financial statements and, in
our opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/Braunsdorf, Carlson and Clinkinbeard, C.P.A.'s, P.A.
Braunsdorf, Carlson and Clinkinbeard, C.P.A.'s,P.A.
TOPEKA, KANSAS
February 2, 1998
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners
Altheimer Associates I, L.P.
Altheimer, Arkansas
We have audited the accompanying balance sheets of Altheimer Associates I, L.P.,
(a Missouri limited Partnership), FmHA Case No.: 03-035-431479737, as of
December 31, 1997 and the related statements of loss, partners' equity and cash
flows for the year ended December 31, 1997. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provided 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 Altheimer Associates I, L.P. as of
December 31, 1997, and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.
/s/Braunsdorf, Carlson and Clinkinbeard
Braunsdorf, Carlson and Clinkinbeard
TOPEKA, KANSAS
February 3, 1998
<PAGE>
[Letterhead]
[LOGO]
BCC
Braunsdorf, Carlson and Clinkinbeard
CERTIFIED PUBLIC ACCOUNTANTS
A PROFESSIONAL ASSOCIATION
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners
Altheimer Associates I, L.P.
Altheimer, Arkansas
We have audited the accompanying balance sheets of Altheimer Associates I, L.P.,
(a Missouri limited Partnership), FmHA Case No.: 03-035-431479737, as of
December 31, 1996 and the related statements of loss, partners' equity and cash
flows for the year ended December 31, 1996. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provided 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 Altheimer Associates I, L.P. as of
December 31, 1996, and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.
/s/Braunsdorf, Carlson and Clinkinbeard
Braunsdorf, Carlson and Clinkinbeard
TOPEKA, KANSAS
February 3, 1997
<PAGE>
[Letterhead]
[LOGO]
BCC
Braunsdorf, Carlson and Clinkinbeard
CERTIFIED PUBLIC ACCOUNTANTS
A PROFESSIONAL ASSOCIATION
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners
Bolivar Senior Housing, L.P.
Wayne, Nebraska
We have audited the accompanying balance sheet of Bolivar Senior Housing, L.P.,
(a Missouri limited Partnership), RECD Case No.: 29-084-481063570, as of
December 31, 1997 and the related statements of loss, partners' equity and cash
flows for the year ended December 31, 1997. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provided 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 Bolivar Senior Housing, L.P. as of
December 31, 1997, and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.
/s/Braunsdorf, Carlson and Clinkinbeard
Braunsdorf, Carlson and Clinkinbeard
TOPEKA, KANSAS
January 31, 1998
<PAGE>
[Letterhead]
[LOGO]
BCC
Braunsdorf, Carlson and Clinkinbeard
CERTIFIED PUBLIC ACCOUNTANTS
A PROFESSIONAL ASSOCIATION
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners
Bolivar Senior Housing, L.P.
Wayne, Nebraska
We have audited the accompanying balance sheet of Bolivar Senior Housing, L.P.,
(a Missouri limited Partnership), RECD Case No.: 29-084-481063570, as of
December 31, 1996 and the related statements of loss, partners' equity and cash
flows for the year ended December 31, 1996. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provided 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 Bolivar Senior Housing, L.P. as of
December 31, 1996, and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.
/s/Braunsdorf, Carlson and Clinkinbeard
Braunsdorf, Carlson and Clinkinbeard
TOPEKA, KANSAS
January 31, 1997
<PAGE>
FULTON
[Letterhead]
[LOGO]
CRAIN
& COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT
To the Partners
Fulton Associates I LP
(A Limited Partnership)
We have audited the accompanying balance sheets of Fulton Associates I LP (A
Limited Partnership), a FmHA Project, as of December 31, 1998 and 1997, and the
related statements of operations, changes in partners' capital and cash flows
for the years then ended. These financial statements are the responsibility of
the partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Fulton Associates I LP (A
Limited Partnership) as of December 31, 1998 and 1997, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
Our audits were for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplementary information as listed in the
table of contents is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the same auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/Crain & Company
CRAIN & COMPANY
Certified Public Accountants
Jackson, Tennessee
January 13, 1999
<PAGE>
[Letterhead]
[LOGO]
CRAIN
& COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT
To the Partners
Fulton Associates I LP
(A Limited Partnership)
We have audited the accompanying balance sheets of Fulton Associates I LP (A
Limited Partnership), a FmHA Project, as of December 31, 1997 and 1996, and the
related statements of operations, changes in partners' capital and cash flows
for the years then ended. These financial statements are the responsibility of
the partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Fulton Associates I LP (A
Limited Partnership) as of December 31, 1997 and 1996, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
Our audits were for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplementary information as listed in the
table of contents is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the same auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/Crain & Company
CRAIN & COMPANY
Certified Public Accountants
Jackson, Tennessee
January 25, 1998
<PAGE>
EAGLEWOOD
[Letterhead]
[LOGO]
CRAIN
& COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT
To the Partners
Eaglewood VIII LP
(A Limited Partnership)
We have audited the accompanying balance sheets of Eaglewood VIII LP (A Limited
Partnership), a FmHA Project, as of December 31, 1998 and 1997, and the related
statements of operations, changes in partners' capital and cash flows for the
years then ended. These financial statements are the responsibility of the
partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position of Eaglewood VIII LP (A Limited
Partnership) as of December 31, 1998 and 1997, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
Our audits were for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplementary information, as listed in the
table of contents, is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the same auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report
dated January 27, 1999 on our consideration of the limited partnership's
internal control over financial reporting and on its compliance with laws and
regulations
/s/Crain & Company
CRAIN & COMPANY
Certified Public Accountants
Jackson, Tennessee
January 27, 1999
<PAGE>
[Letterhead]
[LOGO]
CRAIN
& COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT
To the Partners
Eaglewood VIII LP
(A Limited Partnership)
We have audited the accompanying balance sheets of Eaglewood VIII LP (A Limited
Partnership), a FmHA Project, as of December 31, 1997 and 1996, and the related
statements of operations, changes in partners' capital and cash flows for the
years then ended. These financial statements are the responsibility of the
partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position of Eaglewood VIII LP (A Limited
Partnership) as of December 31, 1997 and 1996, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
Our audits were for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplementary information, as listed in the
table of contents, is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the same auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report
dated January 26, 1998 on our consideration of the limited partnership's
internal control structure and a report dated February 9, 1998 on its compliance
with laws and regulations
/s/Crain & Company
CRAIN & COMPANY
Certified Public Accountants
Jackson, Tennessee
January 26, 1998
<PAGE>
ELVER PARK III
[Letterhead]
[LOGO]
Suby, Von Haden
& Associates, S.C.
CERTIFIED PUBLIC ACCOUNTANTS
Business and Management Consultants
Madision, WI
INDEPENDENT AUDITOR'S REPORT
To the Partners
Elver Park Limited Partnership III
Madison, Wisconsin
We have audited the balance sheet of Elver Park Limited Partnership III as of
December 31, 1998, and the related statements of loss, partners' equity and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit. The financial
statements of Elver Park Limited Partnership III as of December 31, 1997 were
audited by other auditors whose report dated January 15, 1998 expressed an
unqualified opinion on those statements.
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 above present fairly, in all
material respects, the financial position of Elver Park Limited Partnership III
as of December 31, 1998 and the results of its operations, changes in partners'
equity and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/Suby, Von Haden & Associates, S.C.
January 22, 1999
<PAGE>
[Letterhead]
[LOGO]
Suby, Von Haden
& Associates, S.C.
CERTIFIED PUBLIC ACCOUNTANTS
Business and Management Consultants
Madision, WI
INDEPENDENT AUDITOR'S REPORT
To the Partners
Elver Park Limited Partnership III
Madison, Wisconsin
We have audited the balance sheet of Elver Park Limited Partnership III as of
December 31, 1997 and the related statements of loss, partners' equity and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our 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 above present fairly, in all
material respects, the financial position of Elver Park Limited Partnership II
as of December 31, 1998, and the results of its operations, changes in partners'
equity and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/Suby, Von Haden & Associates, S.C.
January 12, 1998
<PAGE>
ELVER PAK II
[Letterhead]
[LOGO]
Suby, Von Haden
& Associates, S.C.
CERTIFIED PUBLIC ACCOUNTANTS
Business and Management Consultants
Madision, WI
INDEPENDENT AUDITOR'S REPORT
To the Partners
Elver Park Limited Partnership II
Madison, Wisconsin
We have audited the accompanying balance sheet of Elver Park Limited Partnership
II as of December 31, 1998 and the related statements of loss, partners' equity
and cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit. The financial
statements of Elver Park Limited Partnership II as of December 31, 1997 were
audited by other auditors whose report dated January 14, 1998 expressed an
unqualified opinion on those statements.
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 above present fairly, in all
material respects, the financial position of Elver Park Limited Partnership II
as of December 31, 1998, and the results of its operations, changes in partners'
equity and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/Suby, Von Haden & Associates, S.C.
January 22, 1999
<PAGE>
[Letterhead]
[LOGO]
Suby, Von Haden
& Associates, S.C.
CERTIFIED PUBLIC ACCOUNTANTS
Business and Management Consultants
Madision, WI
INDEPENDENT AUDITOR'S REPORT
To the Partners
Elver Park Limited Partnership II
Madison, Wisconsin
We have audited the accompanying balance sheets of Elver Park Limited
Partnership II as of December 31, 1997 and 1996, and the related statements of
loss, partners' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred above present fairly, in all
material respects, the financial position of Elver Park Limited Partnership II
as of December 31, 1997 and 1996, and the results of its operations, changes in
partners' equity and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/Suby, Von Haden & Associates, S.C.
January 13, 1998
<PAGE>
BLUEMOUNTAIN
[Letterhead]
[LOGO]
Robert Ercolini & Company L.L.P.
Certified Public Accountants
Fifty-Five Summer Street
Boston, Massachusetts 02110-1007
Telephone (617) 482-5511
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Blue Mountain Associates Limited Partnership HUD Area Office
Boston, Massachusetts Boston, Massachusetts
We have audited the accompanying balance sheet of Blue Mountain Associates
Limited Partnership (a Massachusetts Limited Partnership), HUD Project No.
023-36609 as of December 31, 1998, and the related statements of income and
loss, partners' capital, and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by
the Comptroller General of the United States.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Blue Mountain Associates
Limited Partnership as of December 31, 1998, and the results of its operations,
changes in partners' capital, and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated January 30, 1999 on our consideration of Blue Mountain Associates Limited
Partnership's internal control, a report dated January 30, 1999 on its
compliance with laws and regulations, and reports dated January 30, 1999 on its
compliance with specific requirements applicable to HUD Programs.
/s/Robert Ercolini & Company L.L.P.
January 30, 1999
<PAGE>
[Letterhead]
[LOGO]
Robert Ercolini & Company L.L.P.
Certified Public Accountants
Fifty-Five Summer Street
Boston, Massachusetts 02110-1007
Telephone (617) 482-5511
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Blue Mountain Associates Limited Partnership HUD Area Office
Boston, Massachusetts Boston, Massachusetts
We have audited the accompanying balance sheet of Blue Mountain Associates
Limited Partnership (a Massachusetts Limited Partnership), HUD Project No.
023-36609 as of December 31, 1997, and the related statements of profit and
loss (on HUD Form No. 92410), partners' capital, and cash flows for the years
then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Blue Mountain Associates
Limited Partnership as of December 31, 1997, and the results of its operations,
changes in partners' capital, and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated January 23, 1998 on our consideration of Blue Mountain Associates Limited
Partnership's internal control structure, a report dated January 23, 1998 on its
compliance with laws and regulations, and reports dated January 23, 1998 on its
compliance with specific requirements applicable to HUD Programs.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 16 through 21 and pages 29 through 42) is presented for the
purpose of additional analysis and is not a required part of the basic financial
statements. Such information has been subjected to the same auditing procedures
applied in the audit of the basic financial statements and, in our opinion, its
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/Robert Ercolini & Company L.L.P.
January 24, 1998
<PAGE>
[Letterhead]
[LOGO]
Robert Ercolini & Company L.L.P.
Certified Public Accountants
Fifty-Five Summer Street
Boston, Massachusetts 02110-1007
Telephone (617) 482-5511
Fax (617) 426-5252
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Blue Mountain Associates Limited Partnership HUD Area Office
Boston, Massachusetts Boston, Massachusetts
We have audited the accompanying balance sheet of Blue Mountain Associates
Limited Partnership (a Massachusetts Limited Partnership), HUD Project No.
023-36609 as of December 31, 1996, and the related statements of profit and
loss (on HUD Form No. 92410), partners' capital, and cash flows for the years
then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Blue Mountain Associates
Limited Partnership as of December 31, 1996, and the results of its operations,
changes in partners' capital, and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated January 23, 1997 on our consideration of Blue Mountain Associates Limited
Partnership's internal control structure, a report dated January 23, 1997 on its
compliance with laws and regulations, and reports dated January 23, 1997 on its
compliance with specific requirements applicable to HUD Programs.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 14 through 19) is presented for the purpose of additional
analysis and is not a required part of the basic financial statements. Such
information has been subjected to the same auditing procedures applied in the
audit of the basic financial statements and, in our opinion, its fairly stated
in all material respects in relation to the basic financial statements taken as
a whole.
/s/Robert Ercolini & Company L.L.P.
January 23, 1997
<PAGE>
BOULEVARD
Letterhead]
[LOGO]
Haran & Associates Ltd
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITOR'S REPORT
To the Partners HUD Field Office Director
Boulevard Commons Limited Partnership Chicago, Illinois
Chicago, Illinois
We have audited the accompanying balance sheet of Boulevard Commons Limited
Partnership II ( a Limited Partnership), as of December 31, 1998, and the
related statements of profit and loss (HUD - 92410), changes in partners' equity
and statement of cash flows for the year then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
These standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position of BOULEVARD COMMONS LIMITED
PARTNERSHIP II at December 31, 1998, and its operations, changes in partners'
equity, and its cash flows for the year then ended in conformity with generally
accepted accounting principles.
/s/Haran & Associates LTD
HARAN & ASSOCIATES LTD.
Certified Public Accountants
Wimette, Illinois
Illinois Certificate No. 060-002892
January 22, 1999
<PAGE>
Letterhead]
[LOGO]
Haran & Associates Ltd
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITOR'S REPORT
To the Partners HUD Field Office Director
Boulevard Commons Limited Partnership Chicago, Illinois
Chicago, Illinois
We have audited the accompanying balance sheet of Boulevard Commons Limited
Partnership II ( a Limited Partnership), as of December 31, 1997, and the
related statements of profit and loss, changes in partners' equity and statement
of cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
These standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position of BOULEVARD COMMONS LIMITED
PARTNERSHIP II as of December 31, 1997, and its operations, changes in partners'
equity, and its cash flows for the year then ended in conformity with generally
accepted accounting principles.
The accompanying supplementary information (shown on pages 15 to 19) is
presented for purposes of additional analysis and is not a required part of the
basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statement and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as whole.
/s/Haran & Associates LTD
HARAN & ASSOCIATES LTD.
Certified Public Accountants
Wimette, Illinois
Illinois Certificate No. 060-002892
January 23, 1998
<PAGE>
[Letterhead]
[LOGO]
Haran & Associates Ltd
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITOR'S REPORT
To the Partners HUD Field Office Director
Boulevard Commons Limited Partnership Chicago, Illinois
Chicago, Illinois
We have audited the accompanying balance sheet of Boulevard Commons Limited
Partnership II, Project No. 071-35592, as of December 31, 1996, and the related
statements of profit and loss, changes in partners' equity and statement of cash
flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards,
issued by the Comptroller General of the United States. These standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatements. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position of BOULEVARD COMMONS LIMITED
PARTNERSHIP II as of December 31, 1996, and its profit or loss, changes in
partners' equity, and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated January 17, 1997 on our consideration of Boulevard Commons Limited
Partnership's internal control structure and reports dated January 17, 1997 on
its compliance with specific requirements applicable to Major HUD Programs and
specific requirements applicable to Affirmative Fair Housing.
The accompanying supplementary information (shown on pages 15 to 19) is
presented for purposes of additional analysis and is not a required part of the
basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statement and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as whole.
/s/Haran & Associates LTD
HARAN & ASSOCIATES LTD.
Certified Public Accountants
Wimette, Illinois
Illinois Certificate No. 060-002892
January 17, 1997
<PAGE>
BOULIVARD II
[Letterhead]
[LOGO]
Haran & Associates Ltd
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITOR'S REPORT
To the Partners
Boulevard Commons Limited Partnership IIA
Chicago, Illinois
We have audited the accompanying balance sheet of Boulevard Commons Limited
Partnership IIA., (a Limited Partnership) as of December 31, 1998 and the
related statements of profit and loss (HUD-92419), changes in partners' equity
and statement of cash flows for the year then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and generally accepted Government Auditing Standards for financial and
compliance audits issued by the Comptroller General of the United States. These
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provided 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 BOULEVARD COMMONS LIMITED
Partnership IIA at December 31, 1998, and its operations,
changes in partners' equity, and its cash flows for the year then ended , in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in the notes to
financial statements, the Partnership is several months delinquent on both its
first and junior mortgages which raises substantial doubt about its ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/Haran & Associates LTD
HARAN & ASSOCIATES LTD.
Certified Public Accountants
Wimette, Illinois
Illinois Certificate No. 060-002892
January 26, 1999
<PAGE>
[Letterhead]
[LOGO]
Haran & Associates Ltd
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITOR'S REPORT
To the Partners
Boulevard Commons Limited Partnership IIA
Chicago, Illinois
We have audited the accompanying balance sheet of Boulevard Commons Limited
Partnership IIA., (a Limited Partnership) as of December 31, 1997 and the
related statements of profit and loss (HUD-92419), changes in partners' equity
and statement of cash flows for the year then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and generally accepted Government Auditing Standards for financial and
compliance audits issued by the Comptroller General of the United States. These
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provided a reasonable basis for our opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the assets, liabilities and partners' equity of BOULEVARD
COMMONS LIMITED Partnership IIA at December 31, 1997, and its operations,
changes in partners' equity, and its cash flows for the year then ended , in
conformity with generally accepted accounting principles.
/s/Haran & Associates LTD
HARAN & ASSOCIATES LTD.
Certified Public Accountants
Wimette, Illinois
Illinois Certificate No. 060-002892
January 17, 1998
<PAGE>
[Letterhead]
[LOGO]
Haran & Associates Ltd
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITOR'S REPORT
To the Partners
Boulevard Commons Limited Partnership IIA
Chicago, Illinois
We have audited the accompanying balance sheet of Boulevard Commons Limited
Partnership IIA., (a Limited Partnership) as of December 31, 1996 and the
related statements of profit and loss (HUD-92410), changes in partners' equity
and statement of cash flows for the year then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and generally accepted Government Auditing Standards for financial and
compliance audits issued by the Comptroller General of the United States. These
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provided a reasonable basis for our opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the assets, liabilities and partners' equity of BOULEVARD
COMMONS LIMITED Partnership IIA at December 31, 1996, and its operations,
changes in partners' equity, and its cash flows for the year then ended, in
conformity with generally accepted accounting principles.
/s/Haran & Associates LTD
HARAN & ASSOCIATES LTD.
Certified Public Accountants
Wimette, Illinois
Illinois Certificate No. 060-002892
January 17, 1997
<PAGE>
EL JARDIN
Letterhead]
[LOGO]
Reznick, Fedder & Silverman
Certified Public Accountants
Charlotte, North Carolina
INDEPENDENT AUDITORS' REPORT
To the Partners of
El Jardin of Davie, Ltd.
(A Limited Partnership)
Miami, Florida
We have audited the accompanying balance sheet of El Jardin of Davie, Ltd.
as of December 31, 1998, and the related statements of profit and loss
(on HUD Form 92410), partners' equity, and cash flows for the year then ended.
These financial statements are the responsibility of the management of the
partnership.Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position of El Jardin of Davie, Ltd. as of
December 31, 1998, and the results of its operations and its cash flows for the
year then ended, in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is presented fairly in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Reznick, Fedder & Silverman
Certified Public Accountants
Charlotte, North Carolina
January 16, 1999
<PAGE>
[Letterhead]
[LOGO]
Reznick, Fedder & Silverman
Certified Public Accountants
Charlotte, North Carolina
INDEPENDENT AUDITORS' REPORT
To the Partners of
El Jardin of Davie, Ltd.
(A Limited Partnership)
Miami, Florida
We have audited the accompanying balance sheet of El Jardin of Davie, Ltd. (FHA
Project No. 066-10539-REF) as of December 31, 1997, and the related statements
of profit and loss (HUD Form 92410), changes in partners' capital accounts, and
cash flows for the year then ended. These financial statements are the
responsibility of the management of the partnership. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion the financial statements referred above present fairly, in all
material respects, the financial position of El Jardin of Davie, Ltd.
(FHA Project No. 066-10539-REF) at December 31, 1997, and the results of its
operations and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the US Department of Housing and
Urban Development ("HUD"), we have also issued a report dated February 24, 1998,
on our consideration of El Jardin of Davie, Ltd.'s internal control structure,
and reports dated February 24, 1998, on its compliance with specific
requirements applicable to major HUD programs and specific requirements
applicable to Affirmative Fair Housing.
Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplementary information shown on
pages 16 to 21 are presented for the purpose of additional analysis and are not
a required part of the basic financial statements of El Jardin of Davie, Ltd.
(FHA Project No. 066-10539-REF). Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is presented fairly in all material respects in relation to the
basic financial statements taken as a whole.
/s/ Reznick, Fedder & Silverman
Certified Public Accountants
Charlotte, North Carolina
January 16, 1998
<PAGE>
[Letterhead]
[LOGO]
BDO Seidman, LLP
Accountants and Consultants
INDEPENDENT AUDITORS' REPORT
To the Partners of
El Jardin of Davie, Ltd.
(A Limited Partnership)
Miami, Florida
We have audited the accompanying balance sheet of El Jardin of Davie, Ltd. (FHA
Project No. 066-10539-REF) as of December 31, 1996, and the related statements
of profit and loss (HUD Form 92410), changes in partners' capital accounts, and
cash flows for the year then ended. These financial statements are the
responsibility of the management of the partnership. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion the financial statements referred above present fairly, in all
material respects, the financial position of El Jardin of Davie, Ltd. (FHA
Project No. 066-10539-REF) at December 31, 1996, and the results of its
operations and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the US Department of Housing and
Urban Development ("HUD"), we have also issued a report dated February 24, 1997,
on our consideration of El Jardin of Davie, Ltd.'s internal control structure,
and reports dated February 24, 1997, on its compliance with specific
requirements applicable to major HUD programs and specific requirements
applicable to Affirmative Fair Housing.
Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplementary information shown on
pages 16 to 21 are presented for the purpose of additional analysis and are not
a required part of the basic financial statements of El Jardin of Davie, Ltd.
(FHA Project No. 066-10539-REF). Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is presented fairly in all material respects in relation to the
basic financial statements taken as a whole.
/s/BDO Seidman, LLP
Certified Public Accountants
Miami, Florida
February 24, 1997
<PAGE>
ASHLEY
[Letterhead]
[LOGO]
Deloitte & Touche
Orlando, Florida
INDEPENDENT AUDITOR'S REPORT
To the General Partner and Limited Partners of
Ashley Place, Ltd.:
We have audited the accompanying balance sheet of Ashley Place, Ltd. (a Florida
Limited Partnership), as of December 31, 1998 and the related statements of
operations, partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing . Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion the financial statements referred above present fairly, in all
material respects, the financial position of Ashley Place, Ltd. (a Florida
Limited Partnership) as of December 31, 1998, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/Deloite & Touche LLP
February 2, 1999
<PAGE>
[Letterhead]
[LOGO]
Deloitte & Touche
Orlando, Florida
INDEPENDENT AUDITOR'S REPORT
To the General Partner and Limited Partners of
Ashley Place, Ltd.:
We have audited the accompanying balance sheet of Ashley Place, Ltd. (a Florida
Limited Partnership), as of December 31, 1997 and the related statements
operations, partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing . Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion the financial statements referred above present fairly, in all
material respects, the financial position of Ashley Place, Ltd. (a Florida
Limited Partnership) as of December 31, 1997, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/Deloite & Touche LLP
February 2, 1998
<PAGE>
[Letterhead]
[LOGO]
Deloitte & Touche
Orlando, Florida
INDEPENDENT AUDITOR'S REPORT
To the General Partner and Limited Partners of
Ashley Place, Ltd.:
We have audited the accompanying balance sheet of Ashley Place, Ltd. (a Florida
Limited Partnership), as of December 31, 1996 and the related statements
operations, partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing . Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion the financial statements referred above present fairly, in all
material respects, the financial position of Ashley Place, Ltd. (a Florida
Limited Partnership) as of December 31, 1996, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/Deloite & Touche LLP
February 2, 1997
<PAGE>
COLONY APT
[Letterhead]
[LOGO]
Purkey, Carter, Compton, Swann & Carter, P.L.L.C.
Certified Public Accountants
Morriston, Tennessee 37815
INDEPENDENT AUDITOR'S REPORT
General Partners Mr. Angelo Schioscia, State Coordinator
Partners U.S. Department of Housing and
The Colony Apartments, L.P. Urban Development
1504 Riverview Tower Strom Thurmond Federal Building
900 S. Gay Street 1835-45 Assembly Street. 11th Floor
Knoxville, Tennessee Columbia, South Carolina 29201
We have audited the accompanying balance sheet of The Colony Apartments, L.P.,
FHA Project No. 054-94002-OMC (a limited partnership) as of December 31, 1998,
and the related statements of income, changes in partners' equity and cash flows
for the year then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards,
Government Auditing Standards, issued by the Comptroller General of the United
States and the Consolidated Audit Guide for audits of HUD Programs (the
"Guide"), issued by the U.S. Department of Housing and Urban Development, Office
of the Inspector General. Those standards and the Guide require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The Colony Apartments, L.P as
of December 31, 1998, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated February 3, 1999, on our
consideration of The Colony Apartments, L.P.'s internal control structure and
reports dated February 3, 1999, on its compliance with specific requirements
applicable to major HUD Programs and specific requirements applicable to Fair
Housing and Non-Discrimination.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information shown on pages 27 to 31
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of The Colony Apartments, L.P. Such
information has been subjected to the same auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated in
all material respects in relation to the basic financial statements taken as a
whole.
We attest that our firm, Purkey, Carter, Compton, Swann & Carter, P.L.L.C. meets
any legal requirements concerning registration by the State of South Carolina.
/s/Purkey, Carter, Compton, Swann & Carter, P.L.L.C.
Purkey, Carter, Compton, Swann & Carter, P.L.L.C.
February 3, 1999
<PAGE>
[Letterhead]
[LOGO]
Purkey, Carter, Compton, Swann & Carter, P.L.L.C.
Certified Public Accountants
Morriston, Tennessee 37815
INDEPENDENT AUDITOR'S REPORT
General Partners Mr. Angelo Schioscia, State Coordinator
Partners U.S. Department of Housing and
The Colony Apartments, L.P. Urban Development
1504 Riverview Tower Strom Thurmond Federal Building
900 S. Gay Street 1835-45 Assembly Street. 11th Floor
Knoxville, Tennessee Columbia, South Carolina 29201
We have audited the accompanying balance sheet of The Colony Apartments, L.P.,
FHA Project No. 054-94002-OMC (a limited partnership) as of December 31, 1997,
and the related statements income, changes in partners' equity and cash flows
for the year then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards,
Government Auditing Standards, issued by the Comptroller General of the United
States and the July 1993 Consolidated Audit Guide for Audits of HUD Programs
(the "Guide"), issued by the U.S. Department of Housing and Urban Development,
Office of the Inspector General. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The Colony Apartments, L.P as
of December 31, 1997, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 21, 1998, on our
consideration of The Colony Apartments, L.P.'s internal control structure and
reports dated January 21, 1998, on its compliance with specific requirements
applicable to major HUD Programs and specific requirements applicable to
Affirmative Fair Housing.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplementary information included in this
report (shown on pages 26 to 35) is presented for the purpose of additional
analysis and is not a required part of the financial statements of The Colony
Apartments, L.P. Such information has been subjected to the same auditing
procedures applied in the audit of the financial statements and, in our opinion,
is fairly stated in all material respects in relation to the financial
statements taken as a whole.
We attest that our firm, Purkey, Carter, Compton, Swann & Carter, P.L.L.C. meets
any legal requirements concerning registration by the State of South Carolina.
/s/Purkey, Carter, Compton, Swann & Carter, P.L.L.C.
Purkey, Carter, Compton, Swann & Carter, P.L.L.C.
January 24, 1998
<PAGE>
[Letterhead]
[LOGO]
Purkey, Carter, Compton, Swann & Carter, P.L.L.C.
Certified Public Accountants
Morriston, Tennessee 37815
INDEPENDENT AUDITOR'S REPORT
General Partners Mr. Choice Edward, State Coordinator
Partners U.S. Department of Housing and
The Colony Apartments, L.P. Urban Development
1504 Riverview Tower Strom Thurmond Federal Building
900 S. Gay Street 1835-45 Assembly Street. 11th Floor
Knoxville, Tennessee Columbia, South Carolina 29201
We have audited the accompanying balance sheet of The Colony Apartments, L.P.,
FHA Project No. 054-94002-OMC (a limited partnership) as of December 31, 1996,
and the related statements income, changes in partners' equity and cash flows
for the year then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards,
Government Auditing Standards, issued by the Comptroller General of the United
States and the July 1993 Consolidated Audit Guide for Audits of HUD Programs
(the "Guide"), issued by the U.S. Department of Housing and Urban Development,
Office of the Inspector General. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The Colony Apartments, L.P as
of December 31, 1996, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 21, 1997, on our
consideration of The Colony Apartments, L.P.'s internal control structure and
reports dated January 21, 1997, on its compliance with specific requirements
applicable to major HUD Programs and specific requirements applicable to
Affirmative Fair Housing.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplementary information included in this
report (shown on pages 26 to 35) is presented for the purpose of additional
analysis and is not a required part of the financial statements of The Colony
Apartments, L.P. Such information has been subjected to the same auditing
procedures applied in the audit of the financial statements and, in our opinion,
is fairly stated in all material respects in relation to the financial
statements taken as a whole.
We attest that our firm, Purkey, Carter, Compton, Swann & Carter, P.L.L.C. meets
any legal requirements concerning registration by the State of South Carolina.
/s/Purkey, Carter, Compton, Swann & Carter, P.L.L.C.
Purkey, Carter, Compton, Swann & Carter, P.L.L.C.
January 21, 1997
<PAGE>
AURORA
[Letterhead]
[LOGO]
LARRY O'DONNELL, CPA, P.C.
Aurora, CO
Partners
Aurora Properties, Ltd.
d/b/a Aurora East Apartments
Aurora, Colorado
INDEPENDENT AUDITOR'S REPORT
I have audited the accompanying balance sheets of Aurora Properties Ltd. d/b/a
Aurora East Apartments, Project No. 101-10522 (a Limited Partnership) as of
December 31, 1998 and 1997, and the related statements of profit and loss,
partners' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. My responsibility
is to express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that I plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. I believe that my audit provides a reasonable basis for opinion.
In my opinion, the financial statements referred to above present fairly in all
material respects, the financial position of Aurora Properties Ltd., d/b/a
Aurora East Apartments as of December 31, 1998 and 1997, and the results of its
operations changes in partners' capital and its cash flows for the years then
ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, I have also issued a report
dated February 10, 1999 on my consideration of Aurora Properties Ltd., d/b/a
Aurora East Apartments, internal control and reports dated February 10, 1999 on
its compliance with specific requirements applicable to the basic financial
statements and major HUD programs and specific requirements applicable to
Affirmative Fair Housing.
/s/Larry O'Donnell, CPA, PC
February 10, 1999
Federal Identification Number 84-1075467
<PAGE>
[Letterhead]
[LOGO]
LARRY O'DONNELL, CPA, P.C.
Aurora, CO
Partners
Aurora Properties, Ltd.
d/b/a Aurora East Apartments
Aurora, Colorado
INDEPENDENT AUDITOR'S REPORT
I have audited the accompanying balance sheets of Aurora Properties Ltd. d/b/a
Aurora East Apartments, Project No. 101-10522 (a Limited Partnership) as of
December 31, 1997 and 1996, and the related statements of profit and loss,
partners' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. My responsibility
is to express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States and the Consolidated Audit Guide for Audits of HUD Programs,
issued by the U.S. Department of Housing and Urban Development, Office of
Inspector General in July, 1993. Those standards require that I plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. I believe that my audit provides a reasonable basis for
opinion.
In my opinion, the financial statements referred to above present fairly in all
material respects, the financial position of Aurora Properties Ltd., d/b/a
Aurora East Apartments as of December 31, 1997 and 1996, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards, I have also issued a report
dated February 10, 1998 on my consideration of Aurora Properties Ltd., d/b/a
Aurora East Apartments, internal control structure and reports dated February 3,
1998 on its compliance with laws and regulations applicable to the basic
financial statements and the major HUD program.
/s/Larry O'Donnell, CPA, PC
February 10, 1998
Federal Identification Number 84-1075467
<PAGE>
COLUMBIA
[Letterhead]
[LOGO]
VMCHC&S Vroman, McGowen, Hurst, Clark & Smith, P.C.
Certified Public Accountants and Business Advisors
INDEPENDENT AUDITOR'S REPORT
To the Partners
Columbia Townhouse Associates Limited Partnership
Des Moines, Iowa
We have audited the accompanying balance sheets of Columbia Townhouse Associates
Limited Partnership,as of December 31, 1998 and 1997, and the related statements
of operations, partners' capital (deficit) and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our 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 Columbia Townhouse Associates
Limited Partnership as of December 31, 1998 and
1997, and the results of its operations, changes in partners' capital (deficit)
and cash flows for the years then ended in conformity with generally accepted
accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 30, 1999, on our
consideration of the Partnership's internal control structure and reports, dated
January 30, 1999, on its compliance with specific requirements applicable to
major HUD Programs and specific requirements applicable to Fair Housing and
Non-Discrimination.
As discussed in Note A, the accompanying financial statements have been prepared
assuming that the Partnership will continue as a going concern. The Partnership
has incurred substantial losses before depreciation and is in default on its
first mortgage loan. The financial statements do not include any adjustments
relating to the recoverability and classification of recorded assets, or the
amounts of classifications of liabilities that might be necessary in the event
the Partnership cannot continue in existence.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental information
(shown in Section II) is presented for the purpose of additional analysis and is
not a required part of the basic financial statements of Columbia Townhouse
Associates Limited Partnership. Such information has been subjected to the same
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, are presented fairly in all material respects in relation to the
basic financial statements taken as a whole.
/s/Vroman, McGowen, Hurst, Clark & Smith, P.C.
Des Moines, Iowa
January 30, 1999
<PAGE>
[Letterhead]
[LOGO]
VMCHC&S Vroman, McGowen, Hurst, Clark & Smith, P.C.
Certified Public Accountants and Business Advisors
INDEPENDENT AUDITOR'S REPORT
To the Partners
Columbia Townhouse Associates Limited Partnership
Des Moines, Iowa
We have audited the accompanying balance sheets of Columbia Townhouse Associates
Limited Partnership, HUD Project No. 074-35189, as of December 31, 1997 and
1996, and the related statements of profit and loss, partners' capital (deficit)
and cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our 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 Columbia Townhouse Associates
Limited Partnership as of December 31, 1997 and
1996, and the results of its operations, changes in partners' capital (deficit)
and cash flows for the years then ended in conformity with generally accepted
accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 31, 1998, on our
consideration of the Partnership's internal control structure and reports, dated
January 31, 1998, on its compliance with specific requirements applicable to
major HUD Programs and specific requirements applicable to Affirmative Fair
Housing.
As discussed in Note A, the accompanying financial statements have been prepared
assuming that the Partnership will continue as a going concern. As shown in the
financial statements, the Partnership has incurred substantial losses before
depreciation for each of the passed two years. The financial statements do not
include any adjustments relating to the recoverability and classification of
recorded assets, or the amounts of classifications of liabilities that might be
necessary in the event the Partnership cannot continue in existence.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental information
(shown in Section II) is presented for the purpose of additional analysis and is
not a required part of the basic financial statements of Columbia Townhouse
Associates Limited Partnership. Such information has been subjected to the same
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, are presented fairly in all material respects in relation to the
basic financial statements taken as a whole.
/s/Vroman, McGowen, Hurst, Clark & Smith, P.C.
Des Moines, Iowa
January 31, 1998
<PAGE>
ADMIRAL
[Letterhead]
[LOGO]
Fishbein & Company
Certified Public Accountants February 4, 1999
Elkins Park, PA
INDEPENDENT AUDITOR'S REPORT
Partners
Admiral Housing Limited Partnership
We have audited the accompanying balance sheets of ADMIRAL HOUSING LIMITED
PARTNERSHIP, as of December 31, 1998 and 1997 and the related statements of
operations, partners' equity and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provides a reasonable basis for our opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position of Admiral Housing Limited Partnership
as of December 31, 1998 and 1997, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information included in
this report (shown on pages 10 and 11) is presented for purposes of additional
analysis and is not a required part of the basic financial statements of the
Partnership. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the financial statements
taken as a whole.
/s/Fishbein & Company P.C.
<PAGE>
[Letterhead]
[LOGO]
Fishbein & Company
Certified Public Accountants February 5, 1998
Elkins Park, PA
INDEPENDENT AUDITOR'S REPORT
Partners
Admiral Housing Limited Partnership
We have audited the accompanying balance sheets of ADMIRAL HOUSING LIMITED
PARTNERSHIP, as of December 31, 1997 and 1996 and the related statements
operations, partners' equity and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provides a reasonable basis for our opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position of Admiral Housing Limited Partnership
as of December 31, 1997 and 1996, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information included in
this report (shown on pages 10 and 11) is presented for purposes of additional
analysis and is not a required part of the basic financial statements of the
Partnership. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the financial statements
taken as a whole.
/s/Fishbein & Company P.C.
<PAGE>
GEORGETOWN
[Letterhead]
[LOGO]
HALBERT, KATZ & CO., P.C.
CERTIFIED PUBLIC ACCOUNTANTS
Philadelphia, PA
INDEPENDENT AUDITOR'S REPORT
To the Partners
Georgetown Associates II, L.P.
Wilmington, Delaware
We have audited the accompanying balance sheets of Georgetown Associates II,
L.P., as of December 31, 1998 and December 31, 1997, and the related statements
of loss, partners' capital (capital deficiency) and cash flows for the years
then ended. These financial statements are the responsibility of the project's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Georgetown Associates II, L.P.,
as of December 31, 1998 and December 31, 1997, and the results of its operations
and its cash flows for the years then ended, in conformity with generally
accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
the report (shown on pages 13 to 15) is presented for the purpose of additional
analysis and is not a required part of the basic financial
statements of Georgetown Associates II, L.P. Such information has been subjected
to the same auditing procedures applied in the audits of the basic financial
statements and in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/Halbert, Katz & Co., P.C.
January 30, 1999
<PAGE>
[Letterhead]
[LOGO]
HALBERT, KATZ & CO., P.C.
CERTIFIED PUBLIC ACCOUNTANTS
Philadelphia, PA
INDEPENDENT AUDITOR'S REPORT
To the Partners
Georgetown Associates II, L.P.
Wilmington, Delaware
We have audited the accompanying balance sheets of Georgetown Associates II,
L.P., as of December 31, 1997 and December 31, 1996, and the related statements
of loss, partners' capital (capital deficiency) and cash flows for the years
then ended. These financial statements are the responsibility of the project's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Georgetown Associates II, L.P.,
as of December 31, 1997 and December 31, 1996, and the results of its operations
and its cash flows for the years then ended, in conformity with generally
accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
the report (shown on pages 13 through 15) is presented for the purpose of
additional analysis and is not a required part of the basic financial
statements of Georgetown Associates II, L.P. Such information has been subjected
to the same auditing procedures applied in the audits of the basic financial
statements and in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/Halbert, Katz & Co., P.C.
January 30, 1998
<PAGE>
LEXINGTON I
[Letterhead]
[LOGO]
CRAIN
& COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT
To the Partners
Lexington Associates, I LP
(A Limited Partnership)
We have audited the accompanying balance sheets of Lexington Associates, I LP (A
Limited Partnership), a FmHA Project, as of December 31, 1998 and 1997, and the
related statements of operations, changes in partners' capital and cash flows
for the years then ended. These financial statements are the responsibility of
the partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position of Lexington Associates I LP (A
Limited Partnership) as of December 31, 1998 and 1997, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
Our audits were for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplementary information as listed in the
table of contents is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the same auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report
dated January 26, 1999 on our consideration of the limited partnership's
internal control structure and a report dated January 26, 1999 on its compliance
with laws and regulations
/s/Crain & Company
CRAIN & COMPANY
Certified Public Accountants
Jackson, Tennessee
January 26, 1999
<PAGE>
[Letterhead]
[LOGO]
CRAIN
& COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT
To the Partners
Lexington Associates, I LP
(A Limited Partnership)
We have audited the accompanying balance sheets of Lexington Associates, I LP (A
Limited Partnership), a FmHA Project, as of December 31, 1997 and 1996, and the
related statements of operations, changes in partners' capital and cash flows
for the years then ended. These financial statements are the responsibility of
the partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position of Lexington Associates I LP (A
Limited Partnership) as of December 31, 1997 and 1996, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
Our audits were for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplementary information as listed in the
table of contents is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the same auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report
dated January 26, 1998 on our consideration of the limited partnership's
internal control structure and a report dated January 26, 1998 on its compliance
with laws and regulations
/s/Crain & Company
CRAIN & COMPANY
Certified Public Accountants
Jackson, Tennessee
January 26, 1998
<PAGE>
LONGVIEW
[Letterhead]
[LOGO]
BCC
Braunsdorf, Carlson, and Clinkinbeard
CERTIFIED PUBLIC ACCOUNTANTS
A Professional Association
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners
Longview Apartments, L.P.
Humboldt, Kansas
We have audited the accompanying balance sheet of Longview Apartments, L.P. ( a
Kansas limited partnership), RECD Case No.: 18-001-431454412 as of December 31,
1997, and the related statements of loss, partners' equity and cash flows for
the year then ended. These financial statements are the responsibility of the
partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Longview Apartments, L.P. as of
December 31, 1997, and the results of its operations, and its cash flows for the
years then ended in conformity with generally accepted accounting principles.
/s/ Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Topeka, Kansas
January 31, 1998
<PAGE>
LONGVIEW
[Letterhead]
[LOGO]
BCC
Braunsdorf, Carlson, and Clinkinbeard
CERTIFIED PUBLIC ACCOUNTANTS
A Professional Association
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners
Longview Apartments, L.P.
Humboldt, Kansas
We have audited the accompanying balance sheet of Longview Apartments, L.P. ( a
Kansas limited partnership), RECD Case No.: 18-001-431454412 as of December 31,
1996, and the related statements of loss, partners' equity and cash flows for
the year then ended. These financial statements are the responsibility of the
partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Longview Apartments, L.P. as of
December 31, 1996, and the results of its operations, and its cash flows for the
years then ended in conformity with generally accepted accounting principles.
/s/ Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Topeka, Kansas
January 31, 1997
<PAGE>
Missouri Rural Housing of Oak Grove, L.P.
[Letterhead]
[LOGO]
BCC
Braunsdorf, Carlson, and Clinkinbeard
CERTIFIED PUBLIC ACCOUNTANTS
A Professional Association
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners
Missouri Rural Housing of Oak Grove, L.P.
Oak Grove , Missouri
We have audited the accompanying balance sheet of Missouri Rural Housing of Oak
Grove, L.P. ( a Missouri limited partnership), as of December 31,
1997, and the related statements of loss, partners' equity and cash flows for
the year then ended. These financial statements are the responsibility of the
partnership's management. Our responsibility is to express an opinion on these
financial statements
based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Missouri Rural
Housing of Oak Grove, L.P. as of December 31, 1997, and the results
of its operations, and its cash flows for the year then ended in conformity
with generally accepted accounting principles.
/s/ Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Topeka, Kansas
February 9, 1998
<PAGE>
Missouri Rural Housing of Oak Grove, L.P.
[Letterhead]
[LOGO]
BCC
Braunsdorf, Carlson, and Clinkinbeard
CERTIFIED PUBLIC ACCOUNTANTS
A Professional Association
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners
Missouri Rural Housing of Oak Grove, L.P.
Oak Grove , Missouri
We have audited the accompanying balance sheet of Missouri Rural Housing of Oak
Grove, L.P. ( a Missouri limited partnership), as of December 31,
1996, and the related statements of loss, partners' equity and cash flows for
the year then ended. These financial statements are the responsibility of the
partnership's management. Our responsibility is to express an opinion on these
financial statements
based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Missouri Rural Housing of Oak
Grove, L.P. as of December 31, 1996, and the results of its operations, and its
cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/ Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Topeka, Kansas
February 9, 1997
<PAGE>
Smithville Rural Housing, a Limited Partnership
[Letterhead]
[LOGO]
BCC
Braunsdorf, Carlson, and Clinkinbeard
CERTIFIED PUBLIC ACCOUNTANTS
A Professional Association
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners
Smithville Rural Housing, A Limited Partnership
Wayne, Nebraska
We have audited the accompanying balance sheet of Smithville Rural Housing, A
Limited Partnership ( a Missouri limited partnership), RECD Case No:
29-024-480975973 as of December 31, 1997, and the related statements of loss,
partners' equity and cash flows for the year then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements
based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Smithville Rural Housing, A
Limited Partnership as of December 31, 1997, and the results of its operations,
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/ Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Topeka, Kansas
February 7, 1998
<PAGE>
Smithville Rural Housing, a Limited Partnership
[Letterhead]
[LOGO]
BCC
Braunsdorf, Carlson, and Clinkinbeard
CERTIFIED PUBLIC ACCOUNTANTS
A Professional Association
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners
Smithville Rural Housing, A Limited Partnership
Wayne, Nebraska
We have audited the accompanying balance sheet of Smithville Rural Housing, A
Limited Partnership ( a Missouri limited partnership), RECD Case No:
29-024-480975973 as of December 31, 1996, and the related statements of loss,
partners' equity and cash flows for the year then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements
based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Smithville Rural Housing, A
Limited Partnership as of December 31, 1996, and the results of its operations,
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/ Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Topeka, Kansas
February 7, 1997
<PAGE>
WESTGATE
[Letterhead]
[LOGO]
BCC
Braunsdorf, Carlson, and Clinkinbeard
CERTIFIED PUBLIC ACCOUNTANTS
A Professional Association
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners
Westgate Associates I, L.P.
Perryville, Arkansas
We have audited the accompanying balance sheet of Westagte Associates I, L.P.
( a Missouri limited partnership), FmHA Case No: 03-053-431477863
as of December 31, 1997, and the related statements of loss, partners' equity
and cash flows for the year then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements
based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Westgate Associates I, L.P. as
of December 31, 1997, and the results of its operations, and its cash flows for
the
year then ended in conformity with generally accepted accounting principles.
/s/ Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Topeka, Kansas
February 6, 1998
<PAGE>
WESTGATE
[Letterhead]
[LOGO]
BCC
Braunsdorf, Carlson, and Clinkinbeard
CERTIFIED PUBLIC ACCOUNTANTS
A Professional Association
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners
Westgate Associates I, L.P.
Perryville, Arkansas
We have audited the accompanying balance sheet of Westagte Associates I, L.P.
( a Missouri limited partnership), FmHA Case No: 03-053-431477863
as of December 31, 1996, and the related statements of loss, partners' equity
and cash flows for the year then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements
based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Westgate Associates I, L.P. as
of December 31, 1996, and the results of its operations, and its cash flows for
the
year then ended in conformity with generally accepted accounting principles.
/s/ Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Topeka, Kansas
February 6, 1997
<PAGE>
TUCSON
[Letterhead]
[LOGO]
Suby, Von Haden
& Associates, S.C.
CERTIFIED PUBLIC ACCOUNTANTS
Business and Management Consultants
Madision, WI
INDEPENDENT AUDITOR'S REPORT
To the Partners
Tucson Trails Limited Partnership I
Madison, Wisconsin
We have audited the accompanying balance sheets of Tucson Trails Limited
Partnership I as of December 31, 1998, and the related statements of loss,
partners' equity and cash flows for the year then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits. The financial statements of Tucson Trails Limited Partnership I as
of December 31, 1997 were audited by other auditors whose report dated January
14, 1998 expressed an unqualified opinion on those statements.
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 above present fairly, in all
material respects, the financial position of Tucson Trails Limited Partnership I
as of December 31, 1998, and the results of its operations, changes in partners'
equity and its cash flows for the year then ended in conformity with generally
accepted accounting principles.
/s/Suby, Von Haden & Associates, S.C.
January 22, 1999
<PAGE>
[Letterhead]
[LOGO]
Suby, Von Haden
& Associates, S.C.
CERTIFIED PUBLIC ACCOUNTANTS
Business and Management Consultants
Madision, WI
INDEPENDENT AUDITOR'S REPORT
To the Partners
Tucson Trails Limited Partnership I
Madison, Wisconsin
We have audited the accompanying balance sheets of Tucson Trails Limited
Partnership I as of December 31, 1997 and 1996, and the related statements of
loss, partners' equity and cash flows for the years then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred above present fairly, in all
material respects, the financial position of Tucson Trails Limited Partnership I
as of December 31, 1997 and 1996, and the results of its operations, changes in
partners' equity and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/Suby, Von Haden & Associates, S.C.
January 12, 1998
<PAGE>
TUSCAN II
[Letterhead]
[LOGO]
Suby, Von Haden
& Associates, S.C.
CERTIFIED PUBLIC ACCOUNTANTS
Business and Management Consultants
Madision, WI
INDEPENDENT AUDITOR'S REPORT
To the Partners
Tucson Trails Limited Partnership II
Madison, Wisconsin
We have audited the accompanying balance sheets of Tucson Trails Limited
Partnership II as of December 31, 1998, and the related statements of loss,
partners' equity and cash flows for the year then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit. The financial statements of Tucson Trails Limited Partnership II as
of December 31, 1997 were audited by other auditors whose report dated January
14, 1998 expressed an unqualified opinion on those statements.
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 above present fairly, in all
material respects, the financial position of Tucson Trails Limited Partnership
II as of December 31, 1998, and the results of its operations, changes in
partners' equity and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/Suby, Von Haden & Associates, S.C.
January 22, 1999
<PAGE>
[Letterhead]
[LOGO]
Suby, Von Haden
& Associates, S.C.
CERTIFIED PUBLIC ACCOUNTANTS
Business and Management Consultants
Madision, WI
INDEPENDENT AUDITOR'S REPORT
To the Partners
Tucson Trails Limited Partnership II
Madison, Wisconsin
We have audited the accompanying balance sheets of Tucson Trails Limited
Partnership II as of December 31, 1997 and 1996, and the related statements of
loss, partners' equity and cash flows for the years then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred above present fairly, in all
material respects, the financial position of Tucson Trails Limited Partnership
II as of December 31, 1997 and 1996, and the results of its operations, changes
in partners' equity and its cash flows for the years then ended in conformity
with generally accepted accounting principles.
/s/Suby, Von Haden & Associates, S.C.
January 17, 1997
<PAGE>
WALKER WOODS
[Letterhead]
[LOGO]
PATTERSON & KELLY
PROFESSIONAL ASSOCIATION
CERTIFIED PUBLIC ACCOUNTANTS
To the Partners of
Walker Woods Partners, L.P.
Dover, Delaware 19901
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying balance sheets of Walker Woods Partners, L.P.
as of December 31, 1998 and 1997, and the statements of income, cash flows and
owners' equity and for the years then ended. These financial statements are the
responsibility of the company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred above present fairly, in all
material respects, the financial position of Walker Woods Partners, L.P. as of
December 31, 1998 and 1997, and the results of its operations and its cash flows
and owners' equity for the years then ended in conformity with generally
accepted accounting principles.
/s/Patterson & Kelly, P.A.
Patterson & Kelly, P.A.
Dover, Delaware
February 25, 1999
<PAGE>
[Letterhead]
[LOGO]
PATTERSON & KELLY
PROFESSIONAL ASSOCIATION
CERTIFIED PUBLIC ACCOUNTANTS
To the Partners of
Walker Woods Partners, L.P.
Dover, Delaware 19901
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying balance sheets of Walker Woods Partners, L.P.
as of December 31, 1997 and 1996, and the statements of income, cash flows and
owners' equity and for the years then ended. These financial statements are the
responsibility of the company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred above present fairly, in all
material respects, the financial position of Walker Woods Partners, L.P. as of
December 31, 1997 and 1996, and the results of its operations and its cash flows
and owners' equity for the years then ended in conformity with generally
accepted accounting principles.
/s/Patterson & Kelly, P.A.
Patterson & Kelly, P.A.
Dover, Delaware
February 12, 1998
<PAGE>
WATERFRONT
[Letterhead]
[LOGO]
Reznick, Fedder & Silverman
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
Waterfront Limited Partnership:
We have audited the accompanying balance sheets of
Waterfront Limited Partnership, as of December 31, 1998 and 1997 and the
related statements of income and expenses, partners' deficit and cash flows for
the years then ended These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatements. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Waterfront Limited Partnership,
as of December 31, 1998, and 1997, and the results of its operations, the
changes in partners' deficit and its cash flows for the years then ended, in
conformity with generally accepted accounting principles.
statements taken as a whole.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note H to the
financial statements, the Partnership has experienced recurring operating losses
and working capital deficiencies that raise substantial doubt about its ability
to continue as a going concern. Management's plan in regard to these matters are
also described in Note H. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Our 1998 audit was made for the purpose of forming an opinion on the basic
financial Statements taken as a whole. The supplementary information shown on
pages 18 through 48 is presented purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the financial statements taken as a whole.
In accordance with Government Auditing Standards, and the "Consolidated Audit
Guide for Audits of HUD Programs", we have also issued a report dated February
5, 1999 on our consideration of Waterfront Limited Partnership's internal
control and on its compliance with specific requirements applicable to major HUD
programs, fair housing and non-discrimination, and laws and regulation
applicable to the financial statements.
/s/Reznick, Fedder & Silverman
Boston, Massachusetts
February 5, 1999
<PAGE>
WATERFRONT
[Letterhead]
[LOGO]
Reznick, Fedder & Silverman
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
Waterfront Limited Partnership:
We have audited the accompanying balance sheet (on DHCR Form No.: HAA-77.2) of
Waterfront Limited Partnership, DHCR No.: UDC-13 as of December 31, 1997 and the
related statements of income and expenses (on DHCR Form No. HAA-77-3a),
partners' (deficiency) and cash flows as of December 31, 1997. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatements. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the 1998 financial statements referred to above present fairly,
in all material respects, the financial position of Waterfront Limited
Partnership, DHCR No.: UDC-13, as of December 31, 1998, and the results of its
operations, the changes in partners' (deficiency) and cash flows for the year
then ended, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 6 to the
financial statements, the Partnership has experienced recurring operating losses
and working capital deficiencies that raise substantial doubt about its ability
to continue as a going concern. Management's plan in regard to these matters are
also described in Note 8. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
In accordance with Government Auditing Standards, we have also issued a report
dated January 30, 1999 on our consideration of Waterfront Limited Partnership's
internal control structure and a report dated January 30, 1999 on its compliance
with laws and regulations.
/s/Reznick, Fedder & Silverman
Boston, Massachusetts
January 30, 1999
<PAGE>
[Letterhead]
[LOGO]
Coopers & Lybrand
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
Waterfront Limited Partnership:
We have audited the accompanying balance sheet (on DHCR Form No.: HAA-77.2) of
Waterfront Limited Partnership, DHCR No.: UDC-13 as of December 31, 1996 and the
related statements of income and expenses (on DHCR Form No. HAA-77-3a),
partners' (deficiency) and cash flows as of December 31, 1996. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatements. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the 1996 financial statements referred to above present fairly,
in all material respects, the financial position of Waterfront Limited
Partnership, DHCR No.: UDC-13, as of December 31, 1996, and the results of its
operations, the changes in partners' (deficiency) and cash flows for the year
then ended, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 8 to the
financial statements, the Partnership has experienced recurring operating losses
and working capital deficiencies that raise substantial doubt about its ability
to continue as a going concern. Management's plan in regard to these matters are
also described in Note 8. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
In accordance with Government Auditing Standards, we have also issued a report
dated February 10, 1997 on our consideration of Waterfront Limited Partnership's
internal control structure and a report dated February 10, 1997 on its
compliance with laws and regulations.
/s/Coopers & Lybrand L.L.P
Boston, Massachusetts
February 10, 1997
<PAGE>
WEST DADE
[Letterhead]
[LOGO]
BDO Seidman, LLP
Accountants and Consultants
Independent Auditors' Report
To the Partners of
West Dade, Ltd.
(A Limited Partnership)
Miami, Florida
We have audited the accompanying balance sheet of West Dade, Ltd.
(FHA Project No. 066-94021) as of December 31, 1998, and the
related statements of profit and loss, changes in partners' capital accounts,
and cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's Management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards. Those standards require
that we plan and perform the audits to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position West Dade, Ltd. (FHA Project No.
066-94021) at December 31, 1998, and the results of its operations and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
/s/BDO Seidman, LLP
Certified Public Accountants
Miami, Florida
February 9, 1999
<PAGE>
[Letterhead]
[LOGO]
BDO Seidman, LLP
Accountants and Consultants
Independent Auditors' Report
To the Partners of
West Dade, Ltd.
(A Limited Partnership)
Miami, Florida
We have audited the accompanying balance sheet of West Dade, Ltd. (FHA
Project No. 066-94021) as of December 31, 1997, and the related
statements of profit and loss (HUD Form 92410), changes in partners' capital
accounts, and cash flows for the year then ended. These financial
statements are the responsibility of the management of the partnership. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position West Dade, Ltd. (FHA Project No.
066-94021) at December 31, 1997, and the results of its operations and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development ("HUD"), we have also issued a report dated February 5, 1998,
on our consideration of West Dade, Ltd.'s internal control structure, and
reports dated February 5, 1998, on its compliance with specific requirements
applicable to major HUD programs and specific requirements applicable to
Affirmative Fair Housing.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The accompanying supplemental information shown on
pages 17 to 22 are presented for the purpose of additional analysis and are not
a required part of the basic financial statements of West Dade, Ltd. (FHA
Project No. 066-94021). Such information has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/BDO Seidman, LLP
Certified Public Accountants
Miami, Florida
February 5, 1998
<PAGE>
[Letterhead]
[LOGO]
BDO Seidman, LLP
Accountants and Consultants
Independent Auditors' Report
To the Partners of
West Dade, Ltd.
(A Limited Partnership)
Miami, Florida
We have audited the accompanying balance sheet of West Dade, Ltd. (FHA
Project No. 066-94021) as of December 31, 1996, and the related statements
of profit and loss (HUD Form 92410), changes in partners' capital accounts,
and cash flows for the year then ended. These financial statements are the
responsibility of the management of the partnership. Our responsibility is
to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position West Dade, Ltd. (FHA Project No.
066-94021) at December 31, 1996, and the results of its operations and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development ("HUD"), we have also issued a report dated January 31, 1997,
on our consideration of West Dade, Ltd.'s internal control structure, and
reports dated January 31, 1997, on its compliance with specific requirements
applicable to major HUD programs and specific requirements applicable to
Affirmative Fair Housing. Our audit was made for the purpose of forming
an opinion on the basic financial statements taken as a whole. The accompanying
supplemental information shown on pages 17 to 22 are presented for the purpose
of additional analysis and are not a required part of the basic financial
statements of West Dade, Ltd. (FHA Project No. 066-94021). Such information has
been subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the financial statements taken as a whole.
/s/BDO Seidman, LLP
Certified Public Accountants
Miami, Florida
January 31, 1997
<PAGE>
WEST DADE II
[Letterhead]
[LOGO]
BDO Seidman, LLP
Accountants and Consultants
Independent Auditors' Report
To the Partners of
West Dade, Ltd. II
(A Limited Partnership)
Miami, Florida
We have audited the accompanying balance sheet of West Dade, Ltd. (FHA Project
No. 066-11048) as of December 31, 1998, and the related statements of profit and
loss, changes in partners' capital accounts, and cash flows for the year then
ended. These financial statements are the responsibility of the Partnership's
Management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing Standards.
Those standards require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position West Dade, Ltd. II (FHA Project No.
066-11048) at December 31, 1998, and the results of its operations and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
/s/BDO Seidman, LLP
Certified Public Accountants
Miami, Florida
February 9, 1999
<PAGE>
[Letterhead]
[LOGO]
BDO Seidman, LLP
Accountants and Consultants
Independent Auditors' Report
To the Partners of
West Dade, Ltd. II
(A Limited Partnership)
Miami, Florida
We have audited the accompanying balance sheet of West Dade, Ltd. II (FHA
Project No. 066-94022) as of December 31, 1997, and the related statements
of profit and loss (HUD Form 92410), changes in partners'capital accounts, and
cash flows for the year then ended. These financial statements are the
responsibility of the management of the partnership. Our responsibility is
to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position West Dade, Ltd. II (FHA Project No.
066-94022) at December 31, 1997, and the results of its operations and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development ("HUD") we have also issued a report dated February 6, 1998 on
our consideration of West Dade, Ltd. II's internal control structure, and
reports dated February 6, 1998, on its compliance with specific requirements
applicable to major HUD programs and specific requirements applicable to
Affirmative Fair Housing.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The accompanying supplementary information shown on
pages 17 to 22 are presented for the purpose of additional analysis and are not
a required part of the basic financial statements of West Dade, Ltd. II (FHA
Project No. 066-94022). Such information has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/BDO Seidman, LLP
Certified Public Accountants
Miami, Florida
February 6, 1998
<PAGE>
[Letterhead]
[LOGO]
BDO Seidman, LLP
Accountants and Consultants
Independent Auditors' Report
To the Partners of
West Dade, Ltd. II
(A Limited Partnership)
Miami, Florida
We have audited the accompanying balance sheet of West Dade, Ltd. II (FHA
Project No. 066-94022) as of December 31, 1996, and the related statements of
profit and loss (HUD Form 92410), changes in partners'
capital accounts, and cash flows for the year then ended. These financial
statements are the responsibility of the management of the partnership. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position West Dade, Ltd. II (FHA Project No.
066-94022) at December 31, 1996, and the results of its operations and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development ("HUD") we have also issued a report dated January 31, 1997 on
our consideration of West Dade, Ltd. II's internal control structure, and
reports dated January 31, 1997, on its compliance with specific requirements
applicable to major HUD programs and specific requirements applicable to
Affirmative Fair Housing. Our audit was made for the purpose of forming
an opinion on the basic financial statements taken as a whole. The accompanying
supplementary information shown on pages 17 to 22 are presented for the purpose
of additional analysis and are not a required part of the basic financial
statements of West Dade, Ltd. II (FHA Project No. 066-94022). Such information
has been subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the financial statements taken as a whole.
/s/BDO Seidman, LLP
Certified Public Accountants
Miami, Florida
January 31, 1997
<PAGE>
WOOD CREEK
[Letterhead]
[LOGO]
CHAPMAN, COLLINS, AGOSTINELLI & SHAW, P.C. A Professional Corporation
CERTIFIED PUBLIC ACCOUNTANTS
Rochester, NY
INDEPENDENT AUDITORS' REPORT
To the Partners of
Wood Creek Associates
We have audited the balance sheets of Wood Creek Associates (A New York Limited
Partnership) as of December 31, 1998 and 1997, and the related statements of
operations, changes in partners' capital, and cash flows for the years then
ended. These financial statements are the responsibility of Wood Creek
Associates' 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 Wood Creek Associates as of December
31, 1998 and 1997, and the results of its operations and its cash flows for the
year then ended, in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information is presented
for purposes of additional analysis and is not a required part of the basic
financial statements. Such information has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/CHAPMAN, COLLINS, AGOSTINELLI & SHAW, P.C.
February 5, 1999
<PAGE>
[Letterhead]
[LOGO]
CHAPMAN, COLLINS, AGOSTINELLI & SHAW, P.C. A Professional Corporation
CERTIFIED PUBLIC ACCOUNTANTS
Rochester, NY
INDEPENDENT AUDITORS' REPORT
To the Partners of
Wood Creek Associates
We have audited the balance sheets of Wood Creek Associates (A New York Limited
Partnership) as of December 31, 1997 and 1996, and the related statements of
operations, changes in partners' capital, and cash flows for the years then
ended. These financial statements are the responsibility of Wood Creek
Associates' 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 Wood Creek Associates as of December
31, 1997 and 1996, and the results of its operations and its cash flows for the
year then ended, in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information is presented
for purposes of additional analysis and is not a required part of the basic
financial statements. Such information has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/CHAPMAN, COLLINS, AGOSTINELLI & SHAW, P.C.
February 4, 1998
<PAGE>
WESTWOOD
[Letterhead]
[LOGO]
Reznick Fedder & Silverman
Certified Public Accountants, Business Consultants
A Professional Corporation
INDEPENDENT AUDITORS' REPORT
To the Partners
Westwood Manor Limited Dividend Housing
Association Limited Partnership
We have audited the accompanying balance sheet of Westwood Manor Limited
Dividend Housing Association Limited Partnership, PROJECT NO. 048-10515-REF
as of December 31, 1998, andthe related statements of profit and loss, changes
in partners' equity and cash flows for the year then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion the financial statements referred to in the first paragraph
present fairly, in all material respects, the financial position of Westwood
Manor Limited Dividend
Housing Association Limited Partnership as of December 31, 1998, and its profit
or loss, changes in partners' equity and cash flows for the year then ended, in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated February 3 , 1999 on our consideration of Westwood Manor Limited Dividend
Housing Association Limited Partnership internal control structure and reports
dated February 3, 1999 on its compliance with specific requirements applicable
to Major HUD
Programs and specific requirements applicable to Affirmative Fair Housing.
The accompanying supplementary information (shown on pages 14 to 18) is
presented for purposes of additional analysis and is not a required part of the
basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/Reznick Fedder & Silverman
Bethesda, Maryland Federal Employer
February 3, 1999 Identification Number:
52-1088612
Audit Principal: Renee G. Scruggs
<PAGE>
[Letterhead]
[LOGO]
Reznick Fedder & Silverman
Certified Public Accountants, Business Consultants
A Professional Corporation
INDEPENDENT AUDITORS' REPORT
To the Partners
Westwood Manor Limited Dividend Housing
Association Limited Partnership
We have audited the accompanying balance sheet of Westwood Manor Limited
Dividend Housing Association Limited Partnership as of December 31, 1997, and
the related statements of profit and loss (on HUD Form No. 92410), partners'
equity and cash flows for the year then ended. These financial statements are
the responsibility of the partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position of Westwood Manor Limited Dividend
Housing Association Limited Partnership as of December 31, 1997, and the results
of its operations, the changes in partners' equity and cash flows for the year
then ended, in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 20 though 25
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
financial statements taken as a whole.
In accordance with Government Auditing Standards and the " Consolidated Audit
Guide for Audits of HUD Programs, we have also issued reports dated February 5,
1998 on our consideration of Westwood Manor Limited Dividend Housing
Association Limited Partnership's internal control structure and on its
compliance with specific requirements applicable to major HUD Programs,
affirmative fair housing, and laws and regulations applicable to the financial
statements.
/s/Reznick Fedder & Silverman
Bethesda, Maryland Federal Employer
February 5, 1998 Identification Number:
52-1088612
Audit Principal: Renee G. Scruggs
<PAGE>
[Letterhead]
[LOGO]
Reznick Fedder & Silverman
Certified Public Accountants, Business Consultants
A Professional Corporation
INDEPENDENT AUDITORS' REPORT
To the Partners
Westwood Manor Limited Dividend Housing
Association Limited Partnership
We have audited the accompanying balance sheet of Westwood Manor Limited
Dividend Housing Association Limited Partnership as of December 31, 1996, and
the related statements of profit and loss (on HUD Form No. 92410), partners'
equity and cash flows for the year then ended. These financial statements are
the responsibility of the partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position of Westwood Manor Limited Dividend
Housing Association Limited Partnership as of December 31, 1996, and the results
of its operations, the changes in partners' equity and cash flows for the year
then ended, in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 20 though 25
is presented for purposes of additional analysis and is not a required part
of the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
financial statements taken as a whole.
In accordance with Government Auditing Standards and the " Consolidated Audit
Guide for Audits of HUD Programs, we have also issued reports dated February
14, 1997 on our consideration of Westwood Manor Limited Dividend Housing
Association Limited Partnership's internal control structure and on its
compliance with specific requirements applicable to major HUD Programs,
affirmative fair housing, and laws and regulations applicable to the financial
statements.
/s/Reznick Fedder & Silverman
Bethesda, Maryland Federal Employer
February 14, 1997 Identification Number:
52-1088612
Audit Principal: Renee G. Scruggs
<PAGE>
PLEASANT PLAZA
[Letterhead]
[LOGO]
Pannell Kerr Forster PC
Certified Public Accountants
Boston, MA
Independent Auditors' Report
To the Partners
Pleasant Plaza Housing Limited Partnership
We have audited the accompanying balance sheet of Pleasant Plaza Housing Limited
Partnership, MHFA Project No: 85-004, as of December 31, 1998 and the related
statements of loss, changes in partners' equity (deficiency) and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. These standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Pleasant Plaza Housing Limited
Partnership at December 31, 1998 and the results of its operations and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have also issued a report
dated February 7, 1999, on our consideration of Pleasant Plaza Housing Limited
Partnership's internal control structure, and a report dated February 7, 1999 on
its compliance with laws and regulations.
/s/Pannell Kerr Forster PC
February 7, 1999
<PAGE>
[Letterhead]
[LOGO]
Pannell Kerr Forster PC
Certified Public Accountants
Boston, MA
Independent Auditors' Report
To the Partners
Pleasant Plaza Housing Limited Partnership
We have audited the accompanying balance sheet of Pleasant Plaza Housing Limited
Partnership, MHFA Project No: 85-004, as of December 31, 1997 and the related
statements of loss, changes in partners' equity (deficiency) and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. These standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Pleasant Plaza Housing Limited
Partnership at December 31, 1997 and the results of its operations and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have also issued a report
dated February 8, 1998, on our consideration of Pleasant Plaza Housing Limited
Partnership's internal control structure, and a report dated February 9, 1998 on
its compliance with laws and regulations.
/s/Pannell Kerr Forster PC
February 8, 1998
<PAGE>
[Letterhead]
[LOGO]
Pannell Kerr Forster PC
Certified Public Accountants
Boston, MA
Independent Auditors' Report
To the Partners
Pleasant Plaza Housing Limited Partnership
We have audited the accompanying balance sheet of Pleasant Plaza Housing Limited
Partnership, MHFA Project No: 85-004, as of December 31, 1996 and the related
statements of loss, changes in partners' equity (deficiency) and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. These standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Pleasant Plaza Housing Limited
Partnership at December 31, 1996 and the results of its operations and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have also issued a report
dated February 9, 1997, on our consideration of Pleasant Plaza Housing Limited
Partnership's internal control structure, and a report dated February 9, 1997 on
its compliance with laws and regulations.
/s/Pannell Kerr Forster PC
February 9, 1997
<PAGE>
SHORELINE
[Letterhead]
[LOGO]
Reznick, Fedder & Silverman
INDEPENDENT AUDITORS' REPORT
To the Partners
Shoreline Limited Partnership:
We have audited the accompanying balance sheets of Shoreline Limited
Partnership, as of December 31, 1998, and 1997, and the statements of
operations, partners' deficit
and cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's Management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Shoreline Limited Partnership,
as of December 31, 1998, and 1997 and the results of its operations, changes in
partners' deficit, and its cash flows for the years then ended in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note H to the
financial statements, the Partnership has experienced recurring operating losses
and working capital deficiencies that raise substantial doubt about its ability
to continue as a going concern. Management's plan in regard to these matters are
also described in Note H. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/Reznick, Fedder & Silverman
Boston, Massachusetts
February 5, 1999
<PAGE>
[Letterhead]
[LOGO]
Coopers & Lybrand
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of Shoreline Limited Partnership:
We have audited the accompanying balance sheet (on DHCR Form No.: HAA-77.2) of
Shoreline Limited Partnership, DHCR No.: UDC-03, as of December 31, 1996, and
the related statements of income and expenses (on DHCR Form No. HAA-77-3a),
partners' capital deficit and cash flows for the year then ended December 31,
1996. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the 1996 financial statements referred to above present fairly,
in all material respects, the financial position of Shoreline Limited
Partnership, DHCR No.: UDC-03 as of December 31, 1996, and the results of its
operations, changes in partners' capital deficit, and its cash flows for the
year then ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 8 to the
financial statements, the Partnership has experienced recurring operating losses
and working capital deficiencies that raise substantial doubt about its ability
to continue as a going concern. Management's plan in regard to these matters are
also described in Note 8. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
In accordance with Government Auditing Standards, we have also issued a report
dated February 10, 1997 on our consideration of Shoreline Limited Partnership's
internal control structure and a report dated February 10, 1997 on its
compliance with laws and regulations.
/s/Coopers & Lybrand L.L.P
Boston, Massachusetts
February 10, 1997
<PAGE>
POPLAR VILLAGE
[Letterhead]
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MILLER, MAYER, SULLIVAN & STEVENS LLP
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT
To the Partners Rural Development
Poplar Village, Ltd. London, Kentucky
We have audited the accompanying balance sheets of Poplar Village, Ltd., (a
limited partnership) Case No. 20-048-611170806, as of December 31, 1998 and 1997
and the related statements of operations, changes in partners' equity (deficit),
and cash flows for the year then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audit in accordance with generally accepted auditing standards
and the standards for financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States. Those
standards require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Poplar Village, Ltd. as of
December 31, 1998 and 1997, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have also issued reports
dated February 4, 1999 on our consideration of Poplar Village, Ltd. 's internal
control over financial reporting and our tests of its compliance with certain
provisions of laws, regulations, contracts, and grants.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental data included in this
report is presented for purposes of additional analysis and is not a required
part of the basic financial statements. Such information has been subjected to
the auditing procedures applied in the audits of the basic financial statements,
and in our opinion, is presented fairly, in all material respects, in relation
to the financial statements taken as a whole.
/s/Miller, Mayer, Sullivan, & Stevens
Lexington, Kentucky
February 4, 1999
<PAGE>
[Letterhead]
[LOGO]
MILLER, MAYER, SULLIVAN & STEVENS LLP
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT
To the Partners Rural Development
Poplar Village, Ltd. London, Kentucky
We have audited the accompanying balance sheets of Poplar Village, Ltd., (a
limited partnership) Case No. 20-048-611170806, as of December 31, 1997 and 1996
and the related statements of operations, changes in partners' equity (deficit),
and cash flows for the year then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audit in accordance with generally accepted auditing standards
and the standards for financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States. Those
standards require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Poplar Village, Ltd. as of
December 31, 1997 and 1996, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have also issued reports
dated January 29, 1998 on our consideration of Poplar Village, Ltd. 's internal
control structure and compliance with laws and regulations.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental data included in this
report is presented for purposes of additional analysis and is not a required
part of the basic financial statements. Such information has been subjected to
the auditing procedures applied in the audits of the basic financial statements,
and in our opinion, is presented fairly, in all material respects, in relation
to the financial statements taken as a whole.
/s/Miller, Mayer, Sullivan, & Stevens
Lexington, Kentucky
January 29, 1998
<PAGE>
SOUTH HOLYOKE
[Letterhead]
[LOGO]
JOSEPH B. COHAN
& ASSOCIATES, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT
To the Partners of
South Holyoke Housing Limited Partnership
We have audited the accompanying balance sheet of South Holyoke Housing Limited
Partnership as of December 31, 1998 and the related statements of operations,
changes in partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
Except as discussed in the following paragraph, we conducted our audit in
accordance With generally accepted auditing standards and Government Auditing
standards, issued by the Comptroller General of the United States. Those
standards require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
We were unable to obtain a current appraisal of the property for the purpose of
determining whether an impairment loss should be recognized, and we were unable
to satisfy ourselves about the fair value of the property.
In our opinion, except for the effects of such adjustments, if any , as might
have been Determined to be necessary had we been able to determine the fair
value of the property, the financial statements referred to above present
fairly, in all material respects, the financial position of South Holyoke
Housing Limited Partnership as of December 31, 1998, and the results of its
operations, changes in partners equity and its cash flows for the years then
ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continued as a going concern. As discussed in Note 8 to the
financial statements, the Partnership currently has insufficient resources and
cash flows to meet its obligations. There is substantial doubt about the
Partnership's ability to continue as a going concern. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs, issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 26, 1999 on our
consideration of South Holyoke Housing Limited Partnership's internal control,
and reports dated January 26, 1999 on its compliance with laws and regulations
and specific requirements applicable to nonmajor HUD program transactions.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information shown on pages 13 to 23 is presented for purposes of additional
analysis and is not a required part of the basic financial statements. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.
/s/Joseph B. Cohan & Assoc PC
Worcester, Massachusetts
January 26, 1999
<PAGE>
[Letterhead]
[LOGO]
JOSEPH B. COHAN
& ASSOCIATES, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT
To the Partners of
South Holyoke Housing Limited Partnership
We have audited the accompanying balance sheet of South Holyoke Housing Limited
Partnership as of December 31, 1997 and the related statements of income,
changes in partners' equity (deficiency), and cash flows for the year then
ended. These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of South Holyoke Housing Limited
Partnership as of December 31, 1997, and the results of its operations, changes
in partners equity and its cash flows for the years then ended in conformity
with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs, issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated February 7, 1996 on our
consideration of South Holyoke Housing Limited Partnership's internal control,
and reports dated February 7, 1998 on its compliance with laws and regulations
and specific requirements applicable to nonmajor HUD program transactions.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information shown on pages 11 to 21 is presented for purposes of additional
analysis and is not a required part of the basic financial statements. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.
/s/Joseph B. Cohan & Assoc PC
Worcester, Massachusetts
February 7, 1998
<PAGE>
[Letterhead]
[LOGO]
JOSEPH B. COHAN
& ASSOCIATES, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT
To the Partners of
South Holyoke Housing Limited Partnership
We have audited the accompanying balance sheet of South Holyoke Housing Limited
Partnership as of December 31, 1996 and the related statements of income,
changes in partners' equity (deficiency), and cash flows for the year then
ended. These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of South Holyoke Housing Limited
Partnership as of December 31, 1996, and the results of its operations, changes
in partners equity and its cash flows for the years then ended in conformity
with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs, issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated February 7, 1997 on our
consideration of South Holyoke Housing Limited Partnership's internal control,
and reports dated February 7, 1997 on its compliance with laws and regulations
and specific requirements applicable to nonmajor HUD program transactions.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information shown on pages 11 to 21 is presented for purposes of additional
analysis and is not a required part of the basic financial statements. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.
/s/Joseph B. Cohan & Assoc PC
Worcester, Massachusetts
February 7, 1997
<PAGE>
QUARTER MILL
[Letterhead]
[LOGO]
Coopers & Lybrand
Report of Independent Accountants
To the Partners of Quarter Mill Associates L.P.:
We have audited the accompanying balance sheet of Quarter Mill Associates, L.P.,
a Virginia Limited Partnership (the "Partnership"), FHA Project No. 051-35404,
as of December 31, 1998, and the related statements of changes in partners'
capital, profit and loss, and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Quarter Mill Associates, L.P.
as of December 31, 1998, and the results of its operations and its cash flows
for the year then ended, in conformity with generally accepted accounting
principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental data included in the
report is presented for purposes of additional analysis and is not a required
part of the basic financial statements of the Partnership. Such information has
been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report
dated January 25, 1999 on our consideration of the Partnership's
internal controls on compliance with specific requirements applicable to its
major Housing and Urban Development ("HUD") program and on compliance with
specific requirements applicable to fair housing and non-discrimination.
This report is intended solely for the information and use of the partners and
HUD and is not intended to be and should not be used by anyone other than these
specified individuals. However, this report is a matter of public record and its
distribution is not limited.
/s/Coopers & Lybrand L.L.P
Richmond, Virginia
January 25, 1999
<PAGE>
[Letterhead]
[LOGO]
Coopers & Lybrand
Report of Independent Accountants
To the Partners of Quarter Mill Associates L.P.:
We have audited the accompanying balance sheet of Quarter Mill Associates, L.P.,
a Virginia Limited Partnership (the "Partnership"), FHA Project No. 051-35404,
as of December 31, 1997, and the related statements of changes in partners'
capital accounts, profit and loss, and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Quarter Mill Associates, L.P.
as of December 31, 1997, and the results of its operations and its cash flows
for the year then ended, in conformity with generally accepted accounting
principles.
/s/Coopers & Lybrand L.L.P
Richmond, Virginia
January 20, 1998
<PAGE>
[Letterhead]
[LOGO]
Coopers
& Lybrand
Report of Independent Accountants
To the Partners of Quarter Mill Associates L.P.:
We have audited the accompanying balance sheet of Quarter Mill Associates, L.P.,
a Virginia Limited Partnership (the "Partnership"), FHA Project No. 051-35404,
as of December 31, 1996, and the related statements of changes in partners'
capital accounts, profit and loss, and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Quarter Mill Associates, L.P.
as of December 31, 1996, and the results of its operations and its cash flows
for the year then ended, in conformity with generally accepted accounting
principles.
/s/Coopers & Lybrand L.L.P
Richmond, Virginia
January 27, 1997
<PAGE>
[Letterhead]
[LOGO]
MUELLER & WALLA, P.C.
Certified Public Accountants
Kirkwood, MI
INDEPENDENTS AUDITORS' REPORT
The Partners
Horseshoe Bend Associates I, L.P.
St. Louis, Missouri
We have audited the accompanying balance sheet of Horseshoe Bend Associates I,
L.P. (a limited partnership) as of December 31, 1997 and 1996, and the related
statements of operations, partners' capital, and cash flows for the years then
ended. These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provides a reasonable basis for our
opinion.
In our opinion, financial statements referred to above present fairly, in
all material respects, the financial position of Horseshoe Bend Associates I,
L.P. as of December 31, 1997 and 1996 and the results of its operations,
changes in partners' capital and cash flows for the years then ended in
conformity with generally accepted accounting principles.
/s/Mueller, Walla & Albertson, P.C.
Mueller, Walla & Albertson, P.C.
Certified Public Accountants
February 11, 1998
Audit Principal: Phillip A. Weitzel
<PAGE>
[Letterhead]
[LOGO]
Reznick Fedder & Silverman
Certified Public Accountants, Business Consultants
A Professional Corporation
INDEPENDENT AUDITORS' REPORT
To the Partners
Harbour View Associates
We have audited the accompanying balance sheets of Harbour View Associates as of
December 31, 1997 and 1996, and the related statements of operations, partners'
deficit and cash flows for the years then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
As more fully described in Note C to the financial statements, the Partnership
has not recorded certain accrued interest on the mortgage payable in the
accompanying financial statements which, in our opinion, should be accrued in
order to conform with generally accepted accounting principles. If this interest
were recorded, accrued interest payable would be increase by $122,803 and
partners' deficit would be increased by $122,803 as of December 31, 1997 and
1996.
In our opinion, except for the effects of not accruing
certain interest on the mortgage as discussed in the preceding paragraph, the
financial statements referred to above present fairly, in all material respects,
the financial position Harbour View Associates as of December 31, 1997 and 1996,
and the results of its operations, the changes in partners' deficit and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming the
Partnership will continue as a going concern. As discussed in Note B to the
financial statements, the Partnership is in default of its mortgage due to
substantial losses from operations and the unauthorized withdrawal of funds by
the former managing general partner and the former managing agent of the
Partnership's property. These events raise substantial doubt about the
Partnership's ability to continue as a going concern. The Management' plan
regarding this matter is also described in Note B. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
/s/Reznick Fedder & Silverman
Boston, Massachusetts Federal Employer
February 2, 1998 Identification Number:
52-1088612
Audit Principal: Phillip A. Weitzel
<PAGE>
WILLOW LAKE
[Letterhead]
[LOGO]
Reznick Fedder & Silverman
Certified Public Accountants Business Consultants
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners
Willow Lake Partners II, L.P.
We have audited the accompanying balance sheet of Willow Lake Partners II, L.P.,
as of December 31, 1998, and the related statements of
operations, partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position Willow Lake Partners II, L.P. as
of December 31, 1998, and the results of its operations, the changes in
partners' equity and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.
/s/Reznick Fedder & Silverman
Boston, Massachusetts
January 30, 1999
<PAGE>
[Letterhead]
[LOGO]
Reznick Fedder & Silverman
Certified Public Accountants Business Consultants
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners
Willow Lake Partners II, L.P.
We have audited the accompanying balance sheet of Willow Lake Partners II, L.P.,
as of December 31, 1997, and the related statements of
operations, partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position Willow Lake Partners II, L.P. as
of December 31, 1997, and the results of its operations, the changes in
partners' equity and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.
/s/Reznick Fedder & Silverman
Boston, Massachusetts
January 30, 1998
<PAGE>
[Letterhead]
[LOGO]
Reznick Fedder & Silverman
Certified Public Accountants Business Consultants
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners
Willow Lake Partners II, L.P.
We have audited the accompanying balance sheet of Willow Lake Partners II, L.P.,
as of December 31, 1996, and the related statements of
operations, partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position Willow Lake Partners II, L.P.
as of December 31, 1996, and the results of its operations, the changes in
partners' equity and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.
/s/Reznick Fedder & Silverman
Boston, Massachusetts
January 16, 1997
<PAGE>
RIVER FRONT
[Letterhead]
[LOGO]
Deloitte & Touche LLP
McLean, VA
INDEPENDENT AUDITORS' REPORT
To the Partners of
River Front Apartments Limited
Partnership
Washington, D.C.
We have audited the accompanying balance sheet of River Front Apartments Limited
Partnership, A Limited Partnership, Project Number. R458-8E as of December 31,
1998, and the related statements of profit and partners' equity (deficit), and
cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit. The financial
statements of River Front Apartments Limited Partnership for the year ended
December 31, 1997 were audited by other auditors whose report dated January 28,
1998, expressed an unqualified opinion on those statements.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States.. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit also 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 1998 financial statements referred to above present fairly
in all material respects, the financial position of River Front Apartments
Limited Partnership at December 31, 1998, and the results of its operations and
its cash flows for the year then ended in conformity with generally accepted
accounting principles.
In accordance with Government Auditing Standards we have also issued a report
entitled "Independent Auditor's Report on Compliance and on Internal Control
Over Financial Reporting Based on an Audit of the Financial Statements in
accordance with Government Auditing Standards" dated February 22, 1999 on our
consideration of the Partnership's internal control, over financial reporting
and our tests of its compliance with certain provisions of laws regulations and
contracts.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data listed on the
contents page
is presented for purposes of additional analysis and is not a required part of
the financial statements of the Partnership. Such data has been subjected to the
auditing procedures applied in our audit of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/Deloitte & Touche LLP
February 22, 1999
<PAGE>
[Letterhead]
[LOGO]
Deloitte & Touche LLP
McLean, VA
INDEPENDENT AUDITORS' REPORT
To the Partners of
River Front Apartments Limited
Partnership
Washington, D.C.
We have audited the accompanying statements of financial position of River Front
Apartments Limited Partnership, A Limited Partnership, PHFA Project No. R458-8E
as of December 31, 1997 and 1996, and the related statements of profit and loss
(on HUD Form No. 92410), partners' equity (deficit), and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States.. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit also includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of River Front Apartments Limited Partnership
at December 31, 1997 and 1996, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
/s/Deloitte & Touche LLP
January 8, 1998
<PAGE>
SUSQUEHANNA
[Letterhead]
[LOGO]
Deloitte & Touche LLP
McLean, VA
INDEPENDENT AUDITORS' REPORT
To the Partners of
Susquehanna View Limited
Partnership
Washington, D.C.
We have audited the accompanying balance sheet of Susquehanna
View Limited Partnership, A Limited Partnership --- Project Number R- 451-8E as
of December 31, 1998, and the related statements of profit and loss, partners'
equity (deficit),
and cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit. The financial
statements of Susquehana View Limited Partnership for the year ended December
31, 1997 were audited by other auditors whose report dated January 30, 1998
expressed an unqualified opinion on those statements.
We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit also 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 1998 financial statements referred to above present fairly,
in all material respects, the financial position of Susquehanna View Limited
Partnership, as of December 31, 1998, and the results of its operations and its
cash flows for the year then ended in conformity with generally accepted
accounting principles.
In accordance with Government Auditing Standards we have also issued a report
entitled "Independent Auditor's Report on Compliance and on Internal Control
Over Financial Reporting Based on an Audit of the Financial Statements in
accordance with Government Auditing Standards" dated February 22, 1999 on our
consideration of the Partnership's internal control, over financial reporting
and our tests of its compliance with certain provisions of laws regulations and
contracts.
Our audit was conducted for the purpose of forming an opinion on the
financial statements taken as a whole. The supporting data listed on the
contents page is presented for purposes of additional analysis and is not a
required part of the financial statements of the Partnership. Such data has
been subjected to the auditing procedures applied in our audit of the
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the financial statements taken as a whole.
/s/Deloitte & Touche LLP
February 22, 1999
<PAGE>
[Letterhead]
[LOGO]
Deloitte & Touche LLP
McLean, VA
INDEPENDENT AUDITORS' REPORT
To the Partners of
Susquehanna View Limited
Partnership
Washington, D.C.
We have audited the accompanying statements of financial position of Susquehanna
View Limited Partnership, A Limited Partnership, PHFA Project No. R451-8E as of
December 31, 1997 and 1996, and the related statements of profit and loss (on
HUD Form No. 92410), partners' equity (deficit), and cash flows for the years
then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements present fairly in all material
respects, the financial position of Susquehanna View Limited Partnership, as of
December 31, 1997 and 1996, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.
/s/Deloitte & Touche LLP
January 30, 1998
<PAGE>
[[Letterhead]
[LOGO]
Plante & Morgan, LLP
East Lansing, Michigan
INDEPENDENT AUDITORS' REPORT
To the Partners of
The Temple Kyle Limited Partnership, LTD
We have audited the accompanying balance sheet of The Temple Kyle Limited
Partnership, Ltd (a Texas limited partnership), as of December 31, 1998 and
1997, and the related statements of operations, partners' equity, and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our 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 also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The Temple Kyle Limited
Partnership, Ltd. at December 31, 1998 and 1997, and the results of its
operations, changes in partners' equity, and its cash flows for the years then
ended in conformity with generally accepted accounting principles.
/s/Plante & Moran LLP
February 16, 1999
<PAGE>
Letterhead]
[LOGO]
Plante & Morgan, LLP
East Lansing, Michigan
INDEPENDENT AUDITORS' REPORT
To the Partners of
The Temple Kyle Limited Partnership, LTD
We have audited the accompanying balance sheet of The Temple Kyle Limited
Partnership, Ltd (a Texas limited partnership), as of December 31, 1997 and
1996, and the related statements of operations, partners' equity, and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our 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 also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The Temple Kyle Limited
Partnership, Ltd. at December 31, 1997 and 1996, and the results of its
operations, changes in partners' equity, and its cash flows for the years then
ended in conformity with generally accepted accounting principles.
/s/Plante & Moran LLP
February 16, 1998
<PAGE>
THE TEMPLE KYLE LIMITED PARTNERSHIP, LTD.
(a Texas limited partnership)
FINANCIAL REPORT
DECEMBER 31, 1996
<PAGE>
THE TEMPLE KYLE LIMITED PARTNERSHIP, LTD.
(a Texas limited partnership)
CONTENTS
INDEPENDENT AUDITOR'S REPORT 1
FINANCIAL STATEMENTS
Balance Sheet 2
Statement of Operations 3
Statement of Partners' Equity 4
Statement of Cash Flows 5
Notes to Financial Statements 6-7
<PAGE>
[letterhead]
Independent Auditor's Report
To the Partners
The Temple Kyle Limited Partnership, LTD.
We have audited the accompanying balance sheet of The Temple Kyle Limited
Partnership, LTD. (a Texas limited partnership), as of December 31, 1996 and
1995, and the related statements of operations, partners' equity, and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The Temple Kyle Limited
Partnership, LTD. as of December 31, 1996 and 1995, and the results of its
operations, changes in partners' equity, and cash flows for the years then
ended, in conformity with generally accepted accounting principles.
/s/ Plante & Moran, LLP
February 12, 1997
<PAGE>
<TABLE>
<CAPTION>
THE TEMPLE KYLE LIMITED PARTNERSHIP, LTD.
(a Texas limited partnership)
BALANCE SHEET
ASSETS
- ------------------------------------------------------------------------------------------------------------------------
DECEMBER 31
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
- --------------------------------------------------------------------------------------------------- -------------------
- --------------------------------------------------------------------------------------------------- -------------------
1996 1995
- --------------------------------------------------------------------------------------------------- -------------------
- --------------------------------------------------------------------------------------------------- -------------------
- --------------------------------------------------------------------------------------------------- -------------------
- --------------------------------------------------------------------------------------------------- -------------------
Operating cash $ 5,912 $ 60,752
- --------------------------------------------------------------------------------------------------- -------------------
- --------------------------------------------------------------------------------------------------- -------------------
Accounts receivable:
- --------------------------------------------------------------------------------------------------- -------------------
- --------------------------------------------------------------------------------------------------- -------------------
Tenants 902 5,176
- --------------------------------------------------------------------------------------------------- -------------------
- --------------------------------------------------------------------------------------------------- -------------------
Other - 481
- --------------------------------------------------------------------------------------------------- -------------------
- --------------------------------------------------------------------------------------------------- -------------------
Prepaid insurance 2,916 5,025
- --------------------------------------------------------------------------------------------------- -------------------
- --------------------------------------------------------------------------------------------------- -------------------
Security deposits account - Savings 9,026 8,747
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Tax and insurance escrow account - Savings 9,966 7,312
- --------------------------------------------------------------------------------------------------- -------------------
- --------------------------------------------------------------------------------------------------- -------------------
Reserve for replacements - Savings 86,683 75,163
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Property and equipment:
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Land 88,000 88,000
- --------------------------------------------------------------------------------------------------- -------------------
- --------------------------------------------------------------------------------------------------- -------------------
Buildings and land improvement 3,605,668 3,604,618
- --------------------------------------------------------------------------------------------------- -------------------
- --------------------------------------------------------------------------------------------------- -------------------
Equipment and fixtures 7,408 3,100
- --------------------------------------------------------------------------------------------------- -------------------
- --------------------------------------------------------------------------------------------------- -------------------
- --------------------------------------------------------------------------------------------------- -------------------
- --------------------------------------------------------------------------------------------------- -------------------
Total cost 3,701,076 3,695,718
- --------------------------------------------------------------------------------------------------- -------------------
- --------------------------------------------------------------------------------------------------- -------------------
- --------------------------------------------------------------------------------------------------- -------------------
- --------------------------------------------------------------------------------------------------- -------------------
Less accumulated depreciation (474,948) 383,932
- --------------------------------------------------------------------------------------------------- -------------------
- --------------------------------------------------------------------------------------------------- -------------------
- --------------------------------------------------------------------------------------------------- -------------------
- --------------------------------------------------------------------------------------------------- -------------------
Net carrying value 3,226,128 3,311,786
- --------------------------------------------------------------------------------------------------- -------------------
- --------------------------------------------------------------------------------------------------- -------------------
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Total assets $ 3,341,533 $ 3,474,442
- ------------------------------------------------------------------------------------=============== -------------------
- --------------------------------------------------------------------------------------------------- -------------------
- ----------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND PARTNERS' EQUITY
- ------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
LIABILITIES
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Note payable (Note 2) $ 1,423,253 $ 1,454,127
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Accounts payable and accrued expenses:
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Trade 2,373 14,892
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Interest 46,370 -
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Property taxes - 42,978
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Prepaid rent 358 137
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Tenants' security deposit 9,051 8,704
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Due to affiliate (Note 3) 5,165 -
- --------------------------------------------------------------------------------------------------- -------------------
- --------------------------------------------------------------------------------------------------- -------------------
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Total liabilities 1,486,570 1,520,838
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
PARTNERS' EQUITY 1,854,963 1,953,604
- --------------------------------------------------------------------------------------------------- -------------------
- --------------------------------------------------------------------------------------------------- -------------------
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Total liabilities and partners' equity $ 3,341,533 $ 3,474,442
- ------------------------------------------------------------------------------------=============== -------------------
</TABLE>
see notes to Financial Statements.
<PAGE>
THE TEMPLE KYLE LIMITED PARTNERSHIP, LTD.
(a Texas limited partnership)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
1996 1995
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
INCOME
- ----------------------------------------------------------------------------------------------------- -----------------
- ----------------------------------------------------------------------------------------------------- -----------------
Rentals $ 330,563 $ 337,526
- ----------------------------------------------------------------------------------------------------- -----------------
- ----------------------------------------------------------------------------------------------------- -----------------
Interest 3,595 1,925
- ----------------------------------------------------------------------------------------------------- -----------------
- ----------------------------------------------------------------------------------------------------- -----------------
Other 2,858 1,820
- ----------------------------------------------------------------------------------------------------- -----------------
- ----------------------------------------------------------------------------------------------------- -----------------
- ----------------------------------------------------------------------------------------------------- -----------------
- ----------------------------------------------------------------------------------------------------- -----------------
Total income 337,016 341,271
- ----------------------------------------------------------------------------------------------------- -----------------
- ----------------------------------------------------------------------------------------------------- -----------------
- ----------------------------------------------------------------------------------------------------- -----------------
- ----------------------------------------------------------------------------------------------------- -----------------
OPERATING EXPENSES
- ----------------------------------------------------------------------------------------------------- -----------------
- ----------------------------------------------------------------------------------------------------- -----------------
Operation and maintenance 75,616 53,736
- ----------------------------------------------------------------------------------------------------- -----------------
- ----------------------------------------------------------------------------------------------------- -----------------
Utilities 66,234 70,355
- ----------------------------------------------------------------------------------------------------- -----------------
- ----------------------------------------------------------------------------------------------------- -----------------
Administrative 40,664 110,116
- ----------------------------------------------------------------------------------------------------- -----------------
- ----------------------------------------------------------------------------------------------------- -----------------
Taxes and insurance 49,431 45,499
- ----------------------------------------------------------------------------------------------------- -----------------
- ----------------------------------------------------------------------------------------------------- -----------------
- ----------------------------------------------------------------------------------------------------- -----------------
- ----------------------------------------------------------------------------------------------------- -----------------
Total operating expenses 231,945 279,706
- ----------------------------------------------------------------------------------------------------- -----------------
- ----------------------------------------------------------------------------------------------------- -----------------
- ----------------------------------------------------------------------------------------------------- -----------------
- ----------------------------------------------------------------------------------------------------- -----------------
OPERATING INCOME 105,071 61,565
- ----------------------------------------------------------------------------------------------------- -----------------
- ----------------------------------------------------------------------------------------------------- -----------------
- ----------------------------------------------------------------------------------------------------- -----------------
- ----------------------------------------------------------------------------------------------------- -----------------
OTHER PROJECT EXPENSES
- ----------------------------------------------------------------------------------------------------- -----------------
- ----------------------------------------------------------------------------------------------------- -----------------
Depreciation 91,016 90,329
- ----------------------------------------------------------------------------------------------------- -----------------
- ----------------------------------------------------------------------------------------------------- -----------------
Interest 112,696 122,071
- ----------------------------------------------------------------------------------------------------- -----------------
- ----------------------------------------------------------------------------------------------------- -----------------
- ----------------------------------------------------------------------------------------------------- -----------------
- ----------------------------------------------------------------------------------------------------- -----------------
Other project expenses 203,712 212,400
- ----------------------------------------------------------------------------------------------------- -----------------
- ----------------------------------------------------------------------------------------------------- -----------------
- ----------------------------------------------------------------------------------------------------- -----------------
- ----------------------------------------------------------------------------------------------------- -----------------
LOSS BEFORE EXTRAORDINARY ITEM (98,641) (150,835)
- ----------------------------------------------------------------------------------------------------- -----------------
- ----------------------------------------------------------------------------------------------------- -----------------
- ----------------------------------------------------------------------------------------------------- -----------------
- ----------------------------------------------------------------------------------------------------- -----------------
EXTRAORDINARY ITEM (Note 4) - 794,492
- ----------------------------------------------------------------------------------------------------- -----------------
- ----------------------------------------------------------------------------------------------------- -----------------
- ----------------------------------------------------------------------------------------------------- -----------------
- -------------------------------------------------------------------------------------================ -----------------
NET INCOME $ (98,641) $ 643,657
- -------------------------------------------------------------------------------------================ -----------------
See notes to Financial Statements.
</TABLE>
<PAGE>
THE TEMPLE KYLE LIMITED PARTNERSHIP, LTD.
(a Texas limited partnership)
STATEMENT OF PARTNERS' EQUITY
<TABLE>
<CAPTION>
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
LIMITED PARTNERS GENERAL PARTNER TOTAL
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
BALANCE - January 1, 1995 $ 1,312,991 $ (3,044) $ 1,309,947
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
Net income 637,220 6,437 643,657
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
BALANCE - December 31, 1995 1,950,211 3,393 1,953,604
- -------------------------------------------------------
- -------------------------------------------------------
- -------------------------------------------------------
- -------------------------------------------------------
Net income (loss) (97,655) (986) (98,641)
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------
- -------------------------------------------------------
BALANCE - December 31, 1996 $ 1,852,556 $ 2,407 $ 1,854,963
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
THE TEMPLE KYLE LIMITED PARTNERSHIP, LTD.
(a Texas limited partnership)
STATEMENT OF CASH FLOWS
- ------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
1996 1995
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Net income (loss) $ (98,641) $ 643,657
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Adjustments to reconcile net income (loss) to net cash from operating
activities:
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Depreciation 91,016 90,329
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Gain on forgiveness of indebtedness - (794,492)
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
(Increase) decrease in assets:
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Accounts receivable 4,755 (5,657)
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Prepaid insurance 2,109 (5,025)
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Security deposit account - Savings (279) (8,747)
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Tax and insurance escrow account - Savings (2,654) (7,312)
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in liabilities:
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Accounts payable and accrued expenses (9,127) 26,758
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Tenant's security deposits 347 6,224
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Prepaid rent 221 137
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Net cash used in operating activities (12,253) (54,128)
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Purchase of property and equipment (5,358) (75,163)
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Deposits into reserve for replacements (11,520) (1,360)
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (16,878) (76,523)
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Advance received from affiliate 5,165 -
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Principal payments on note payable (30,874) (8,566)
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (25,709) (8,566)
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN CASH (54,840) (139,217)
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
CASH - Beginning of year 60,752 199,969
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
CASH - End of year $ 5,912 $ 60,752
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
Cash paid for interest was $66,326 in 1996 and $51,609 in 1995.
Significant noncash investing and financing activities are as follows:
During 1995, in conjunction with the Partnership's plan of reorganization as
described in Note 4, the Partnership recognized a gain on forgiveness of
indebtedness totaling $794,492.
<PAGE>
THE TEMPLE KYLE LIMITED PARTNERSHIP, LTD.
(a Texas limited partnership)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Partnership was organized in 1989 as a Texas limited
partnership for the purpose of acquiring, owning, constructing, and
operating a designated historic structure that contains an
apartment complex of 64 units for low to moderate income senior
citizens and includes rental space for office and retail
facilities. The facility is located in Temple, Texas.
Operations of the Partnership are limited to the rental of
apartment units, office, and retail space owned by the Partnership.
Significant accounting policies are as follows:
Classification of Assets and Liabilities - The financial affairs of
the Partnership do not generally involve a business cycle.
Accordingly, the classification of assets and liabilities between
current and long-term is not used.
Land, Buildings, and Equipment - Land, buildings, and equipment are
recorded at cost. Depreciation is calculated using either the
straight-line method or an accelerated method over the estimated
useful lives of 7 to 40 years. Maintenance and repairs are charged
to expense when incurred.
Income Taxes - No provision has been made in the financial
statements for income taxes because, as a partnership, all income
and expenses are allocated to the partners for inclusion on their
respective income tax returns.
Allocation of Profits and Losses - Losses from operations are
allocated to the general partners and limited partners in the ratio
of 1 and 99 percent, respectively.
Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that effect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during
the reporting period.
Actual results could differ from those estimates.
NOTE 2 - NOTE PAYABLE
The Partnership has a note payable to the investor limited partner.
The note is due in monthly installments of $13,800, including
interest at 7.82 percent through June 1, 1997; $17,600, including
interest at prime plus 1.00 percent from July 1, 1997 through its
maturity date on June 1, 2005. The note is collateralized by all
properties of the Partnership.
<PAGE>
NOTE 2 - NOTE PAYABLE (Continued)
Minimum principal payments to maturity as of December 31, 1996, are as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
1997 $ 56,306
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
1998 119,293
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
1999 127,918
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
2000 137,163
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
2001 147,080
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
2002 and after 835,493
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
Total $ 1,423,253
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE 3 - RELATED PARTY TRANSACTIONS
The Partnership incurred management fees of $17,397 and $4,237
during the years ended December 31, 1996 and 1995, respectively, to
a management company affiliated with the investor limited partner.
The amount payable to the management company for management fees
totaled $1,669 and $4,237 at December 31,1996 and 1995,
respectively, and is included in accounts payable - trade in the
balance sheet.
Amounts due to affiliate represent advances from the Investor
Limited Partner made to the Partnership in excess of the amount
required to be deposited into the replacement reserve account. The
advance is unsecured and noninterest bearing and may be returned to
the Investor Limited Partner upon approval of the Temple Housing
Authority.
NOTE 4 - REORGANIZATION
On May 28, 1993, certain creditors of the Partnership filed an
involuntary petition for reorganization under Chapter 11 of the
United States Bankruptcy Code in the United States Bankruptcy Court
for the Western District of Texas, Waco Division. The Partnership
emerged from Chapter 11 effective with the beginning of business on
September 29, 1995. In general, the Plan for Reorganization
provided for resolution of all previous claims against the
Partnership as of May 28, 1993, the Chapter 11 filing date. As part
of the Plan for Reorganization, the investor limited partner paid
$850,000 in cash and entered into a new loan agreement for $612,693
with the mortgagor for payment of all claims due from the
Partnership to the mortgagor (Note 2). This transaction resulted in
a gain on forgiveness of indebtedness of $794,492 for the year
ended December 31, 1995.
<PAGE>
THE TEMPLE KYLE LIMITED PARTNERSHIP, LTD.
(a Texas limited partnership)
FINANCIAL REPORT
DECEMBER 31, 1997
<PAGE>
Contents
Independent Auditor's Report 1
Financial Statements
Balance Sheet 2
Statement of Operations 3
Statement of Partners' Equity 4
Statement of Cash Flows 5
Notes to Financial Statements 6-7
<PAGE>
[letterhead]
Independent Auditor's Report
To the Partners
The Temple Kyle Limited Partnership
We have audited the accompanying balance sheet of The Temple Kyle Limited
Partnership, LTD. (a Texas limited partnership), as of December 31, 1998 and
1997, and the related statements of operations, partners' equity, and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The Temple Kyle Limited
Partnership, LTD as of December 31, 1998 and 1997, and the results of its
operations, changes in partners' equity, and cash flows for the years then
ended, in conformity with generally accepted accounting principles.
/s/ Plante & Moran, LLP
<PAGE>
The Temple Klye Limited Partnership, LTD.
<TABLE>
<CAPTION>
Balance Sheet
ASSETS
December 31,
1997 1996
<S> <C> <C>
Cash $ 3,374 $ 5,912
Tenant accounts receivable 542 902
Prepaid insurance 4,442 2,916
Security deposits account - Savings 9,504 9,026
Tax and insurance escrow account - Savings 52,340 9,966
Reserve for replacements - Savings 67,941 86,683
Property and equipment:
Land 97,319 88,000
Buildings and land improvement 3,605,668 3,605,668
Equipment and fixtures 24,848 7,408
--------------- ----------------
Total cost 3,727,835 3,701,076
Accumulated depreciation (568,896) (474,948)
--------------- ----------------
Net carrying value 3,158,939 3,226,128
--------------- ----------------
Total assets $ 3,297,082 $ 3,341,533
=============== ================
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES
Note payable (Note 2) $ 1,406,251 $ 1,423,253
Accounts payable and accrued expenses:
Trade (Note 3) 60,311 2,373
Property taxes - 46,370
Security deposits payable 9,480 9,051
Prepaid rent 60 358
Due to affiliate (Note 3) 5,165 5,165
--------------- ----------------
Total liabilities 1,481,267 1,486,570
PARTNERS' EQUITY
General and limited partners 1,815,815 1,854,963
--------------- ----------------
Total liabilities and partners' equity $ 3,297,082 $ 3,341,533
=============== ================
</TABLE>
See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
THE TEMPLE KYLE LIMITED PARTNERSHIP, LTD.
(a Texas limited partnership)
Statement of Operations
December 31,
1997 1996
Revenue
<S> <C> <C>
Rentals $ 372,271 $ 330,563
Interest 3,525 3,595
Other 45,606 2,858
--------------- ----------------
Total revenue 421,402 337,016
Operating Expenses
Operation and maintenance 105,785 75,616
Utilities 68,497 66,234
Administrative 42,560 40,664
Taxes and insurance 47,533 49,431
--------------- ----------------
Total operating expenses 264,375 231,945
--------------- ----------------
Operating Income 157,027 105,071
Other Project Expenses
Depreciation 93,947 91,016
Interest 102,228 112,696
--------------- ----------------
Total other project expenses 196,175 203,712
--------------- ----------------
Net Loss $ (39,148) $ (98,641)
=============== ================
</TABLE>
See Notes to Fimnancial Statements
<PAGE>
<TABLE>
<CAPTION>
THE TEMPLE KYLE LIMITED PARTNERSHIP, LTD.
(a Texas limited partnership)
Statement of Partners' Equity
Limited General
Partners Partners Total
<S> <C> <C> <C> <C>
Balance - January 1, 1996 $ 1,950,211 $ 3,393 $ 1,953,604
Net loss (97,655) (986) (98,641)
------------------- ------------------- -------------------
Balance - December 31 1996 1,852,556 2,407 1,854,963
Net loss (38,757) (391) (39,148)
------------------- ------------------- -------------------
Balance - December 31, 1997 $ 1,813,799 $ 2,016 $ 1,815,815
=================== =================== ====================
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
THE TEMPLE KYLE LIMITED PARTNERSHIP, LTD.
(a Texas limited partnership)
Statement of Cash Flows
December 31,
1997 1996
<S> <C> <C>
Cash flows from Operating Activities $ (39,148) $ (98,641)
Net operating loss
Adjustment to reconcile net operating
loss to net cash From operating
activities:
Depreciation 93,947 91,016
(Increase) decrease in assets:
Tenant accounts receivable 360 4,755
Prepaid insurance (1,526) 2,109
Security deposits account - Savings (478) (279)
Tax and insurance escrow account - Savings (42,374) (2,654)
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities 11,569 (9,127)
Security deposits payable 429 347
Prepaid rent (298) 221
--------------- ----------------
Net cash provided by (used in) operating activities 22,481 (12,253)
Cash Flows for Investing Activities
Purchase of property and equipment (26,759) (5,358)
Change in reserve for replacement 18,742 (11,520)
--------------- ----------------
Net cash used in investing activities (8,017) (16,878)
Cash Flows from Financing Activities
Principal payments on note payable (17,002) (30,974)
Advance received from affiliate - 5,165
--------------- ----------------
Net cash used in financing activities (17,002) (25,709)
--------------- ----------------
Net Decrease in Cash (2,538) (54,840)
Cash - Beginning of Year 5,912 60,752
--------------- ----------------
Cash - End of Year $ 3,374 $ 5,912
=============== ================
Supplemental Information - Cash paid for interest $ 148,598 $ 66,326
=============== ================
</TABLE>
See Notes to Financial Statements.
<PAGE>
The Temple Klye Limited Partnership, LTD.
Notes to Financial Statements
December 31, 1997 and 1996
Note 1 - Nature of Business and Significant Accounting Policies
The Partnership was organized in 1989 as a Texas limited
partnership for the purpose of acquiring, owning, constructing,
and operating a designated historic structure that contains an
apartment complex of 64 units for low to moderate income senior
citizens and includes rental space for office and retail
facilities. The facility is located in Temple, Texas.
Operations of the Partnership are limited to the rental of
apartment units, office, and retail space owned by the
Partnership. Significant accounting policies are as follows:
Classification of Assets and Liabilities - The financial affairs
of Partnership do not generally involve a business cycle.
Accordingly, the classification of assets and liabilities between
current and long-term is not used.
Land, Buildings, and Equipment - Land, buildings, and equipment
are recorded at cost. Depreciation is calculated using the
straight-line and accelerated methods over the estimated useful
lives of the assets of 7 to 40 years. Maintenance and repairs are
charged to expense as incurred.
Allocation of Profits and Losses - Losses from operations are
allocated to the general and limited partners in the ratio of 1
and 99 percent, respectively.
Income Taxes - No provision has been made in the financial
statements for income taxes because, as a partnership, all income
and expenses are allocated to the partners for inclusion on their
respective income tax returns.
Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses
during the reporting period. Actual results could differ from
those estimates.
Note 2 - Note Payable
The Partnership has a note payable to the Investor Limited
Partner. The note is due in monthly installments of $13,800,
including interest at 7.82 percent through June 30, 1997.
Effective July 1, 1997 the note is due in monthly installments of
$17,600, including interest at prime plus 1.00 percent, through
its maturity date on June 1, 2005. At December 31, 1997, the
prime interest rate was 8.50 percent. The note is collateralized
by all properties of the Partnership.
Minimum principal payments on the note payable to maturity as of
December 31, 1997, are as follows:
1998 $ 119,293
1999 127,918
2000 137,163
2001 147,080
2002 157,724
2003 and after 717,073
------------
Total $1,406,251
Note 3 - Related Party Transactions
The Partnership incurred management fees of $20,844 and $17,397
during the years ended December 31 1997 and 1996, respectively,
to a management company affiliated with the Investor Limited
Partner. The amount payable to the management company for
management fees totaled $31 and $1,669 at December 31, 1997 and
1996, respectively, and is included in accounts payable - trade
in the balance sheet.
Due to affiliate represent advances from the Investor Limited
Partner made to the Partnership in excess of the amount required
to be deposited into the replacement reserve account. The advance
is unsecured and noninterest bearing and may be returned to the
Investor Limited Partner upon approval of the Temple Housing
Authority.
<PAGE>
The Temple Kyle Limited Partnership, LTD
- -
(a Texas partnership)
Financial Report
December 31, 1998
<PAGE>
THE TEMPLE KYLE LIMITED PARTNERSHIP, LTD.
- -
Contents
Independent Auditor's Report 1
Financial Statements
Balance Sheet 2
Statement of Operations 3
Statement of Partners' Equity 4
Statement of Cash Flows 5
Notes to Financial Statements 6-8
<PAGE>
[letterhead]
Independent Auditor's Report
To the Partners
The Temple Kyle Limited Partnership, LTD.
We have audited the accompanying balance sheet of The Temple Kyle Limited
Partnership, LTD. (a Texas limited partnership), as of December 31, 1998 and
1997 and the related statements of operations, partners' equity, and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The Temple Kyle Limited
Partnership, LTD. at December 31, 1998 and 1997, and the results of its
operations, changes in partners' equity, and cash flows for the years then
ended, in conformity with generally accepted accounting principles.
/s/ Plante & Moran, LLP
February 15, 1999
<PAGE>
The Temple Kyle Limited Partnership, Ltd.
<TABLE>
<CAPTION>
Balance Sheet
ASSETS
December 31,
1998 1997
<S> <C> <C>
Cash $ 8,593 $ 3,374
Tenant accounts receivable 605 542
Prepaid insurance 2,884 4,442
Security deposits account - Savings 9,893 9,504
Tax and insurance escrow account - Savings 51,950 52,340
Reserve for replacements - Savings 86,041 67,941
Property and equipment:
Land 97,319 97,319
Buildings and land improvement 1,912,154 3,605,668
Equipment and fixtures 24,848 24,848
--------------- ----------------
Total cost 2,034,321 3,727,835
Accumulated depreciation (664,321) (568,896)
--------------- ----------------
Net carrying value 1,370,000 3,158,939
--------------- ----------------
Total assets $ 1,529,966 $ 3,297,082
=============== ================
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES
Note payable (Note 2) $ 1,389,038 $ 1,406,251
Accounts payable and accrued expenses:
Trade (Note 3) 28,647 25,914
Property taxes 35,348 34,397
Security deposits payable 9,768 9,480
Prepaid rent 240 60
Due to affiliate (Note 3) 5,165 5,165
--------------- ----------------
Total liabilities 1,468,806 1,481,267
PARTNERS' EQUITY
General and limited partners 61,760 1,815,815
--------------- ----------------
Total liabilities and partners' equity $ 1,529,966 $ 3,297,082
=============== ================
</TABLE>
See Notes to Financial Statements.
<PAGE>
THE TEMPLE KYLE LIMITED PARTNERSHIP, LTD.
(a Texas limited partnership)
<TABLE>
<CAPTION>
Statement of Operations
December 31,
1998 1997
Revenue
<S> <C> <C>
Rentals $ 399,154 $ 372,271
Interest 3,366 3,525
Other 2,426 45,606
--------------- ----------------
Total revenue 404,946 421,402
Operating Expenses
Operation and maintenance 103,844 105,785
Utilities 67,632 68,497
Administrative 42,974 42,560
Taxes and insurance 44,653 47,533
--------------- ----------------
Total operating expenses 259,103 264,375
--------------- ----------------
Operating Income 145,843 157,027
Other Project Expenses
Appraisal 22,572 -
Depreciation 95,425 93,947
Interest 88,387 102,228
--------------- ----------------
Total other project expenses 206,384 196,175
Loss on Impairment of Long-Lived Assets (Note4) 1,693,514 -
--------------- ----------------
Net Operating Loss $ (1,754,055) $ (39,148)
=============== ================
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE TEMPLE KYLE LIMITED PARTNERSHIP, LTD.
(a Texas limited partnership)
Statement of Partners' Equity
Limited General
Partners Partners Total
<S> <C> <C> <C> <C>
Balance - January 1, 1997 $ 1,852,556 $ 2,407 $ 1,854,963
Net operating loss (38,757) (391) (39,148)
------------------- ------------------- -------------------
Balance - December 31 1996 ,813,799 2,016 1,815,815
Net operating loss (1,736,514) (17,541) (1,754,055)
------------------- ------------------- -------------------
Balance - December 31, 1997 77,285 $ (15,525) $ 61,760
=================== =================== ====================
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE TEMPLE KYLE LIMITED PARTNERSHIP, LTD.
(a Texas limited partnership)
Statement of Cash Flows
December 31,
1998 1997
<S> <C> <C>
Cash flows from Operating Activities $ (1,754,055) $ (39,148)
Net operating loss
Adjustment to reconcile net operating loss to net cash From operating
activities:
Depreciation 95,425 93,947
Loss on impairment of long-lived assets 1,693,514 -
(Increase) decrease in assets:
Tenant accounts receivable (63) 360
Prepaid insurance 1,558 (1,526)
Security deposits account - Savings (389) (478)
Tax and insurance escrow account - Savings 390 (42,374)
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities 3,684 11,569
Security deposits payable 288 429
Prepaid rent 180 (298)
--------------- ----------------
Net cash provided by (used in) operating activities 40,532 22,481
Cash Flows for Investing Activities
Purchase of property and equipment - (26,759)
Change in reserve for replacement (18,100) 18,742
--------------- ----------------
Net cash used in investing activities (18,100) (8,017)
Cash Flows from Financing Activities
Principal payments on note payable (17,213) (17,002)
--------------- ----------------
Net cash used in financing activities (17,213) (17,002)
--------------- ----------------
Net Decrease in Cash 5,219 (2,538)
Cash - Beginning of Year 3,374 5,912
--------------- ----------------
Cash - End of Year $ 8,593 $ 3,374
=============== ================
Supplemental Information - Cash paid for interest $ 88,387 $ 148,598
=============== ================
See Notes to Financial Statements.
</TABLE>
<PAGE>
The Temple Kyle Limited Partnership, Ltd.
Notes to Financial Statements
December 31, 1998 and 1997
Note 1 - Nature of Business and Significant Accounting Policies
The Partnership was organized in 1989 as a Texas limited
partnership for the purpose of acquiring, owning, constructing,
and operating a designated historic structure that contains an
apartment complex of 64 units for low to moderate income senior
citizens and includes rental space for office and retail
facilities. The facility is located in Temple, Texas.
Operations of the Partnership are limited to the rental of
apartment units, office, and retail space owned by the
Partnership. Significant accounting policies are as follows:
Classification of Assets and Liabilities - The financial affairs
of the Partnership do not generally involve a business cycle.
Accordingly, the classification of assets and liabilities between
current and long-term is not used.
Land, Buildings, and Equipment - Land, buildings, and equipment
are recorded at cost. Depreciation is calculated using the
straight-line and accelerated methods over the estimated useful
lives of the assets of 7 to 40 years. Maintenance and repairs are
charged to expense as incurred.
Allocation of Profits and Losses - Losses from operations are
allocated to the general and limited partners in the ratio of 1
and 99 percent, respectively.
Income Taxes - No provision has been made in the financial
statements for income taxes because, as a partnership, all income
and expenses are allocated to the partners for inclusion on their
respective income tax returns.
Restricted Deposits - The reserve for replacement and tax and
insurance escrow accounts are maintained for the benefit of the
project and are restricted as to use based on applicable loan
documents.
Year 2000 - The management company has assessed the Partnership's
exposure to date sensitive computer software programs that may
not be operative subsequent to 1999 and has implemented a course
of action to minimize Year 2000 risk and ensure that neither
significant costs or disruption of normal business operations are
encountered. However, because there is no guarantee that all
systems of the Partnership and of outside vendors or other
entities affecting Partnership's operations will be Year 2000
compliant, the Partnership remains susceptible to consequences of
the Year 2000 issue.
<PAGE>
Note 1 - Nature of Business and Significant Accounting Policies (Continued)
Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses
during the reporting period. Actual results could differ from
those estimates.
Note 2 - Note Payable
The Partnership has a note payable to the Investor Limited
Partner. The note is due in monthly installments of $17,600,
including interest at prime plus 1.00 percent (an effective rate
of 8.75 and 9.50 percent in 1998 and 1997, respectively), through
its maturity date on June 1, 2005. At December 31, 1998, the
prime interest rate was 7.75 percent. The note is collateralized
by all properties of the Partnership.
Minimum principal payments on the note payable to maturity as of
December 31, 1998, are as follows:
1999 $ 131,693
2000 141,210
2001 151,420
2002 162,363
2003 174,103
2004 and after 628,249
------------
Total $ 1,389,038
============
<PAGE>
Note 3 - Related Party Transactions
The Partnership incurred management fees of $19,850 and $20,844
during the years ended December 31, 1998 and 1997, respectively,
to a management company affiliated with the Investor Limited
Partner. The amount payable to the management company for
management fees and reimbursed expenses totaled $1,898 and $31 at
December 31, 1998 and 1997, respectively, and is included in
accounts payable trade in the balance sheet. In addition, certain
expenses totaling $22,572 were paid on behalf of the Partnership
by the Investor Limited Partner and are included in accounts
payable - trade in the balance sheet.
Due to affiliate represents advances from the Investor Limited
Partner made to Partnership in excess of the amount required to
be deposited into the replacement reserve account. The advance is
unsecured and noninterest bearing and may be returned to the
Investor Limited Partner upon approval of the General Partner.
Note 4 - Impairment of Long-Lived Assets
During the year ended December 31, 1998, the apartment complex
was deemed to be impaired and written down to its fair value. The
fair value, determined by an independent appraisal, was
determined using the fair value of comparable apartment complexes
in the area and the estimated discounted future cash flows. The
determination of fair value did not take into account the value
of tax credits allocated to the Partnership. The asset impairment
loss of $1,693,514 is the difference between the carrying value
and the estimated fair value of the apartment complex and was
charged to operations during the year ended December 31, 1998.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 440,365
<SECURITIES> 721,788
<RECEIVABLES> 111,379<F1>
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 000
<PP&E> 13,216,007
<DEPRECIATION> 000
<TOTAL-ASSETS> 31,239,750<F2>
<CURRENT-LIABILITIES> 000
<BONDS> 000
<COMMON> 000
000
000
<OTHER-SE> 18,638,911
<TOTAL-LIABILITY-AND-EQUITY> 31,239,750<F4>
<SALES> 000
<TOTAL-REVENUES> 2,977,888<F5>
<CGS> 000
<TOTAL-COSTS> 000
<OTHER-EXPENSES> 4,902,512<F6>
<LOSS-PROVISION> 000
<INTEREST-EXPENSE> 760,130
<INCOME-PRETAX> 000
<INCOME-TAX> 000
<INCOME-CONTINUING> 000
<DISCONTINUED> 000
<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> (5,109,931)<F7>
<EPS-BASIC> (50.59)
<EPS-DILUTED> 000
<FN>
<F1>Included in Receivables: Accounts receivable of $102,755 and Interest
receivable of $8,624.
<F2>Included in Total Assets: Prepaid expenses of $21,095, Tenant security
deposits of $95,105, Other assets of $210,395, Investments in Local Limited
Partnerships of $15,789,285, Replacement reserves of $261,127, Operating reserve
of $41,285, Deferred escrow of $112,500 and Deferred expenses, net of $219,416.
<F4>Included in Total Liabilities and Equity: Accounts payable to affiliates of
$2,079,127, Accounts payable and accrued expenses of $574,773, Interest payable
of $312,719, Note payable, affiliate of $514,968, Security deposits payable of
$87,898, Deferred acquisition fees payable of $112,500, General Partner advances
of $200,000, Mortgage notes payable of $7,832,127 and Minority interest in Local
Limited Partnerships of $886,727. <F5>Included in Total Revenue: Rental of
$2,435,094, Investment of $49,563, Recovery of bad debt of $30,148 and Other of
$463,083. <F6>Included in Other Expenses: Asset management fees of $385,702,
General and Administrative of $361,002, Bad debt expense of $12,933, Property
management fees of $138,452, Rental operations, exclusive of depreciation of
$1,478,455, Provision for valuation of real estate of $1,693,514, Depreciation
of $653,671 and Amortization of $178,783. <F7>Included in Net Loss: Equity in
losses of Local Limited Partnerships of $3,090,983, Minority interest in losses
of Local Limited Partnerships of $20,788, and Gain on transfer of assets of
$645,018.
</FN>
</TABLE>
