UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the fiscal year
ended March 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 For the
transition period from ______ to ____________
0-18405
(Commission File Number)
American Tax Credit Properties II L.P.
(Exact name of registrant as specified in its governing instruments)
Delaware 13-3495678
(State or other jurisdiction of organization)
(I.R.S. Employer Identification No.)
Richman Tax Credit Properties II L.P.
599 West Putnam Avenue, 3rd floor
Greenwich, Connecticut 06830
- - --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 869-0900
--------------
Securities registered pursuant to Section 12(b) of the Act:
None None
(Title of each Class) (Name of each exchange on which registered)
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
- - --------------------------------------------------------------------------------
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirement for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in a definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. X
Registrant has no voting stock.
Documents incorporated by reference:
Part I - pages 20 through 33 and 47 through 70 of the prospectus dated May 10,
1989, as supplemented by Supplement No. 1 and Supplement No. 2 dated July 25,
1989 and September 18, 1989, respectively, filed pursuant to Rule 424(b)(3)
under the Securities Act of 1933.
<PAGE>
- - --------------------------------------------------------------------------------
PART I
- - --------------------------------------------------------------------------------
Item 1. Business
Formation
American Tax Credit Properties II L.P. ("Registrant"), a Delaware limited
partnership, was formed on October 26, 1988 to invest primarily in leveraged
low-income multifamily residential complexes (the "Property" or "Properties")
which qualify for the low-income tax credit established by Section 42 of the
Internal Revenue Code (the "Low-income Tax Credit"), through the acquisition of
limited partnership equity interests in partnerships (the "Local Partnership" or
"Local Partnerships") that are the owners of the Properties. Registrant invested
in fifty such Properties including one Property which also qualifies for the
historic rehabilitation tax credit in accordance with Section 48(g) of the
Internal Revenue Code of 1986 (the "Historic Rehabilitation Tax Credit").
Registrant considers its activity to constitute a single industry segment.
Richman Tax Credit Properties II L.P. (the "General Partner"), a Delaware
limited partnership, was formed on October 26, 1988 to act as the general
partner of Registrant. The general partner of the General Partner is
Richman TaxCredits Inc. ("Richman Tax Credits"), a Delaware corporation
which is wholly-owned by Richard Paul Richman. Richman Tax Credits is an
affiliate of The Richman Group, Inc. ("Richman Group"), a Delaware
corporation founded by Richard Paul Richman in 1988.
The Amendment No. 2 to the Registration Statement on Form S-11 was filed with
the Securities and Exchange Commission (the "Commission") on April 21, 1989
pursuant to the Securities Act of 1933 under Registration Statement No.
33-25337, and was declared effective on May 9, 1989. Reference is made to the
prospectus dated May 10, 1989, as supplemented by Supplement No. 1 and
Supplement No. 2 dated July 25, 1989 and September 18, 1989, respectively, filed
with the Commission pursuant to Rule 424(b)(3) under the Securities Act of 1933
(the "Prospectus"). Pursuant to Rule 12b-23 of the Commission's General Rules
and Regulations promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), the description of Registrant's business set forth
under the heading "Investment Objectives and Policies" at pages 47 through 70 of
the Prospectus is incorporated herein by reference.
On June 14, 1989, Registrant commenced, through Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch"), the offering of up to 100,000 units of
limited partnership interest ("Unit") at $1,000 per Unit. On June 28, 1989, July
31, 1989 and September 22, 1989, the closings for 13,533, 20,560 and 21,653
Units, respectively, took place, amounting to aggregate limited partners'
capital contributions of $55,746,000.
Competition
Pursuant to Rule 12b-23 of the Commission's General Rules and Regulations
promulgated under the Exchange Act, the description of Registrant's competition,
general risks, tax risks and partnership risks set forth under the heading "Risk
Factors" at pages 20 through 33 of the Prospectus is incorporated herein by
reference.
Employees
Registrant employs no personnel and incurs no payroll costs. All management
activities of Registrant are conducted by the General Partner. An affiliate of
the General Partner employs individuals who perform the management activities of
Registrant. This entity also performs similar services for other affiliates of
the General Partner.
Tax Reform Act of 1986, Revenue Act of 1987, Technical and Miscellaneous Revenue
Act of 1988, Omnibus Budget Reconciliation Act of 1989, Omnibus Budget
Reconciliation Act of 1990, Tax Extension Act of 1991, Omnibus Budget
Reconciliation Act of 1993, Uruguay Round Agreements Act and Taxpayer Relief Act
of 1997 (collectively the "Tax Acts")
Registrant is organized as a limited partnership and is a "pass through" tax
entity which does not, itself, pay Federal income tax. However, the partners of
Registrant who are subject to Federal income tax may be affected by the Tax
Acts. Registrant will consider the effect of certain aspects of the Tax Acts on
the partners when making decisions regarding its investments. Registrant does
not anticipate that the Tax Acts will currently have a material adverse impact
on Registrant's business operations, capital resources and plans or liquidity.
<PAGE>
- - --------------------------------------------------------------------------------
Item 2. Properties
- - --------------------------------------------------------------------------------
The executive offices of Registrant and the General Partner are located at 599
West Putnam Avenue, 3rd floor, Greenwich, Connecticut 06830. Registrant does not
own or lease any properties. Registrant pays no rent; all charges for leased
space are borne by an affiliate of the General Partner.
Registrant's primary objective is to provide Low-income Tax Credits to limited
partners generally over a ten year period. The relevant state tax credit agency
has allocated each of Registrant's Local Partnerships an amount of Low-income
Tax Credits, which are generally available for a ten year period from the year
the Property is placed in service. The required holding period of each Property,
in order to avoid Low-income Tax Credit recapture, is fifteen years from the
year in which the Low-income Tax Credits commence on the last building of the
Property (the "Compliance Period"). In addition, certain of the Local
Partnerships have entered into agreements with the relevant state tax credit
agencies whereby the Local Partnerships must maintain the low-income nature of
the Properties for a period which exceeds the Compliance Period, regardless of
any sale of the Properties by the Local Partnerships after the Compliance
Period. The Properties must satisfy various requirements including rent
restrictions and tenant income limitations (the "Low-income Tax Credit
Requirements") in order to maintain eligibility for the recognition of the
Low-income Tax Credit at all times during the Compliance Period. Once a Local
Partnership has become eligible for the Low-income Tax Credit, it may lose such
eligibility and suffer an event of recapture if its Property fails to remain in
compliance with the Low-income Tax Credit Requirements. Through December 31,
1997, none of the Local Partnerships have suffered an event of recapture of
Low-income Tax Credits.
Although Registrant generally owns a 98.9%-99% limited partnership interest
("Local Partnership Interest") in the Local Partnerships, Registrant and
American Tax Credit Properties L.P. ("ATCP"), a Delaware limited partnership and
an affiliate of Registrant, together, in the aggregate, acquired a 99% Local
Partnership Interest in Santa Juanita Limited Dividend Partnership L.P. (the
"Santa Juanita Local Partnership"); the ownership percentages of Registrant and
ATCP of the Santa Juanita Local Partnership are 64.36% and 34.64%, respectively.
In addition, Registrant and American Tax Credit Properties III L.P. ("ATCP
III"), a Delaware limited partnership and an affiliate of Registrant, together,
in the aggregate, acquired a 99% Local Partnership Interest in certain Local
Partnerships as follows:
<TABLE>
<CAPTION>
Registrant ATCP III
<S> <C> <C>
Batesville Family, L.P. .......................... 37.25% 61.75%
Bruce Housing Associates, L.P. ................... 37.25 61.75
Carrington Limited Dividend Housing
Association Limited Partnership ................ 33.05 65.95
Ivy Family, L.P. ................................. 37.25 61.75
Lawrence Road Properties, Ltd. ................... 37.25 61.75
Mirador del Toa Limited Partnership .............. 39.94 59.06
Purvis Heights Properties, L.P. .................. 37.25 61.75
Queen Lane Investors ............................. 50.50 48.50
</TABLE>
Many of the Local Partnerships receive rental subsidy payments, including
payments under Section 8 of Title II of the Housing and Community Development
Act of 1974 ("Section 8") (see descriptions of subsidies on pages 7 and 8). The
subsidy agreements expire at various times during and after the Compliance
Periods of the Local Partnerships. In October 1997, Congress passed the
Multifamily Assisted Housing and Reform and Affordability Act whereby the United
States Department of Housing and Urban Development ("HUD") has been given
authority to renew certain project based Section 8 contracts expiring during
HUD's fiscal year 1998 where requested by an owner, for an additional one year
term generally at or below current rent levels, subject to certain guidelines.
HUD has additional programs which, in general, provide for restructuring rents
and/or mortgages where rents may be adjusted to market levels and mortgage terms
may be adjusted based on the reduction in rents, although there may be instances
in which only rents, but not mortgages, are restructured. Registrant cannot
reasonably predict legislative initiatives and governmental budget negotiations,
the outcome of which could result in a reduction in funds available for the
various federal and state administered housing programs including the Section 8
program. Such changes could adversely affect the future net operating income and
debt structure of any or all Local Partnerships currently receiving such subsidy
or similar subsidies. Six Local Partnerships have one or more Section 8
contracts, certain of which cover only certain rental units, which are scheduled
to expire in 1998.
<PAGE>
- - --------------------------------------------------------------------------------
Item 2. Properties (continued)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Mortgage
Name of Local Partnership ........ loans payable
Number as of Subsidy,
Name of apartment complex ........ of rental Capital December 31, (see
Apartment complex location ....... units contribution 1997 footnotes)
- - ---------------------------------- ------ ---------- ---------- --------
<S> <C> <C> <C> <C>
1989 Westview Arms Limited Partnership
Westview Arms
Dumas, Arkansas .................. 60 $ 130,796 $ 528,748 (1a)
2000-2100 Christian Street Associates
Christian Street Apartments II
Philadelphia, Pennsylvania ....... 57 1,390,449 2,822,479 (1a&f)
Ann Ell Apartments Associates, Ltd.
Ann Ell Apartments
Miami Beach, Florida ............. 54 790,162 2,350,410 (1a&c)
Auburn Hills Apartments Limited
Partnership
Auburn Hills Apartments
Cabot, Arkansas .................. 24 201,649 800,535 (1c)
Auburn Hills Townhouses Limited
Partnership
Auburn Hills Townhouse Apartments
Pontiac, Michigan ................ 250 3,206,110 6,517,826 (1a&g)
Batesville Family, L.P.
Westridge Apartments 2
Batesville, Mississippi .......... 48 160,741 1,443,783 (1c)
Browning Road Phase I, L.P.
Browning Road Apartments, Phase I
Greenwood, Mississippi ........... 60 197,808 860,934 (1c)
Bruce Housing Associates, L.P. ...
Bruce Family Apartments 2
Bruce, Mississippi ............... 40 122,814 1,112,700 (1c&d)
Canton Partners, L.P. ............
Pecan Village
Canton, Mississippi .............. 48 380,199 1,449,534 (1c)
Carrington Limited Dividend Housing
Association Limited Partnership
Carrington Place 2
Farmington Hills, Michigan ....... 100 1,058,976 3,464,852 (1e)
Christian Street Associates Limited
Partnership
Christian Street Apartments
Philadelphia, Pennsylvania ....... 72 2,334,353 2,815,516 (1a,c&f)
Cityside Apartments, Phase II, L.P.
Cityside Apartments Phase II
Trenton, New Jersey .............. 107 6,592,092 7,625,959 (1a)
Cleveland Square, Ltd. ...........
Cleveland Square Apartments
Cleveland, Texas ................. 48 223,327 848,367 (1c)
</TABLE>
<PAGE>
- - --------------------------------------------------------------------------------
15
- - --------------------------------------------------------------------------------
Item 2. Properties (continued)
<TABLE>
<CAPTION>
Mortgage
Name of Local Partnership loans payable
Number as of Subsidy
Name of apartment complex of rental Capital December 31, (see
Apartment complex location units contribution 1997 footnotes)
- - -------------------------- ------ ---------- ---------- ----------
<S> <C> <C> <C> <C>
College Avenue Apartments Limited
Partnership
College Avenue Apartments
Natchitoches, Louisiana .............. 41 $ 324,847 $ 606,954 (1a)
Corrigan Square, Ltd. ................
Corrigan Square Apartments
Corrigan, Texas ...................... 96 372,833 1,459,790 (1c)
De Queen Villas Limited Partnership
De Queen Villas Apartments
De Queen, Arkansas ................... 37 296,051 1,171,606 (1c)
Dermott Villas Limited Partnership
Dermott Villas
Dermott, Arkansas .................... 32 272,802 1,068,171 (1c)
Eagle View, Ltd. .....................
Eagle View Apartments
Clearfield, Kentucky ................. 24 102,850 415,863 (1c)
Elm Hill Housing Limited Partnership
Elm Hill Housing
Boston, Massachusetts ................ 142 5,712,391 6,945,821 (1a)
Eudora Manor Limited Partnership
Eudora Manor Apartments
Eudora, Arkansas ..................... 24 188,838 753,953 (1c)
Forest Village Housing Partnership
Forest Village Apartments
Auburn, Washington ................... 89 465,588 1,550,458 (1b)
Harborside Housing Limited Partnership
Cal-View Apartments
East Chicago, Indiana ................ 255 1,789,434 3,625,485 (1a,c&g)
Hill Com I Associates Limited
Partnership
Hill Com I Apartments
Pittsburgh, Pennsylvania ............. 67 887,635 1,349,104 (1a&g)
Hill Com II Associates Limited
Partnership
Hill Com II Apartments
Pittsburgh, Pennsylvania ............. 48 683,172 1,061,757 (1a&g)
Hughes Manor Limited Partnership
Hughes Manor
Hughes, Arkansas ..................... 32 287,261 1,118,194 (1c)
Ivy Family, L.P. .....................
Ivy Apartments 2
Louisville, Mississippi .............. 32 90,878 801,919 (1c&d)
Lakeside Housing Limited Partnership
Lakeside Garden Apartments
East Chicago, Indiana 312 3,147,863 7,985,174 (1a,c&g)
</TABLE>
<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
Item 2. Properties (continued)
<TABLE>
<CAPTION>
Mortgage
Name of Local Partnership .. loans payable
Number as of Subsidy
Name of apartment complex .. of rental Capital December 31, (see
Apartment complex location ... units contribution 1997 footnotes)
--------- --------- ---------- -------------
<S> <C> <C> <C> <C>
Lawrence Road Properties, Ltd. .........
Hillcrest Apartments 2
Newton, Mississippi .................... 24 $ 83,013 $ 762,171 (1c&d)
Lexington Estates Ltd.,
A Mississippi Limited Partnership
Lexington Estates
Lexington, Mississippi ................. 24 176,225 711,055 (1c)
Littleton Avenue Community Village, L.P.
Littleton Avenue Community Village
Newark, New Jersey ..................... 102 3,087,138 4,303,080 (1a&c)
Lula Courts Ltd., L.P.
Lula Courts
Lula, Mississippi ...................... 24 176,645 703,005 (1c)
Magee Elderly, L.P. ....................
Eastgate Manor
Magee, Mississippi ..................... 24 150,952 592,809 (1c&d)
Mirador del Toa Limited Partnership
Mirador del Toa Apartments 2
Toa Alta, Puerto Rico .................. 48 186,717 1,891,902 (1c&d)
Nixa Heights Apartments, L.P.
Nixa Heights Apartments
Nixa, Missouri ......................... 40 250,030 1,009,653 (1c)
North Hills Farms Limited Partnership
North Hills Farms Apartments
Pontiac, Michigan ...................... 525 3,443,762 2,994,864 (1a&g)
Patton Place Limited Partnership
Patton Street Apartments
Springfield, Massachusetts ............. 24 794,044 985,550 (1a)
Plantersville Family, L.P.
Regal Ridge Apartments
Plantersville, Mississippi ............. 24 152,268 601,762 (1c)
Powelton Gardens Associates
Powelton Gardens Apartments
West Philadelphia, Pennsylvania ........ 25 782,958 1,025,667 (1a&f)
Purvis Heights Properties, L.P.
Pineview Apartments 2
Purvis, Mississippi .................... 40 128,419 1,153,999 (1c)
Queen Lane Investors
Queen's Row 2
Philadelphia, Pennsylvania ............. 29 603,552 1,580,073 (1c&f)
</TABLE>
<PAGE>
- - --------------------------------------------------------------------------------
Item 2. Properties (continued)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Mortgage
Name of Local Partnership .... Number loans payable
as of Subsidy,
Name of apartment complex .... of rental Capital December 31, (see
Apartment complex location ... units Contribution 1997 footnotes)
- - ------------------------------ ---------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
Renova Properties, L.P.
Hymon Lucas Manor
Renova, Mississippi .......... 24 $ 165,582 $ 640,657 (1c&d)
Santa Juanita Limited Dividend
Partnership L.P.
Santa Juanita Apartments 2
Bayamon, Puerto Rico ......... 45 584,117 1,508,243 (1a)
Simpson County Family, L.P.
Azalea Apartments
Magee, Mississippi ........... 24 211,823 816,364 (1d)
Summers Village Limited Partnership
Summers Village Apartments
Summersville, West Virginia .. 24 194,674 812,180 (1c)
Tchula Courts Apartments, L.P.
Tchula Courts Apartments
Tchula, Mississippi .......... 24 150,984 739,611 (1c)
The Pendleton (A Louisiana
Partnership in Commendam)
The Pendleton
Shreveport, Louisiana ........ 36 444,321 651,771 (1a&c)
Trenton Heights Apartments, L P.
Trenton Heights Apartments
Trenton, Mississippi ......... 40 100,434 441,960 (1c)
Twin Pine Family, L.P.
Twin Pine Apartments
Louisville, Mississippi ...... 24 163,172 618,833 (1c)
Village Creek Limited Partnership
Village Creek Apartments
Arkadelphia, Arkansas ........ 40 288,216 1,218,140 (1c)
York Park Associates Limited Partnership
York Park Apartments
Dundalk, Maryland ............ 80 2,146,200 3,971,885 (1a)
---------- ------------
$45,877,165 $92,291,126
========== ===========
</TABLE>
(1) Description of Subsidies:
(a) Section 8 of Title II of the Housing and Community Development
Act of 1974 allows qualified low-income tenants to pay thirty
percent of their monthly income as rent with the balance paid
by the federal government.
(b) King County Housing Authority provided an interest subsidy
through issuance of tax exempt bonds which provided first and
second mortgage loans for the acquisition and rehabilitation
of the complex.
(c) The Local Partnership's debt structure includes a principal or
interest payment subsidy.
<PAGE>
- - --------------------------------------------------------------------------------
Item 2. Properties (continued)
- - --------------------------------------------------------------------------------
(d) The Rural Housing Service (formerly the Farmers Home
Administration) of the United States Department of Agriculture
Rental Assistance Program allows qualified low-income tenants
to receive rental subsidies.
(e) The Michigan State Housing Development Authority allows
tenants, who would otherwise pay more than 40% of their income
for rent and utilities, to receive rental subsidies.
(f) The City of Philadelphia Housing Authority allows qualified
low-income tenants to receive rental certificates.
(g) At least one of the Local Partnership's Section 8 contracts,
which cover certain rental units, is scheduled to expire in
1998.
(2) The capital contribution reflects Registrant's obligation only.
Item 3. Legal Proceedings
Littleton Avenue Community Village, L.P. (the "Littleton Local Partnership") is
a defendant in a lawsuit resulting from an accident in 1989 during the
construction of the complex owned by the Littleton Local Partnership. In
November 1995 the Littleton Local Partnership and one co-defendant were found
liable in the lawsuit, of which the Littleton Local Partnership's potential
liability is approximately $300,000. The Littleton Local Partnership has
appealed the result of the trial and has filed a lawsuit against the
construction period insurance companies, which were not co-defendants in the
lawsuit. Although the local general partner of the Littleton Local Partnership
expects the incident to be covered by insurance, it has agreed to indemnify the
Littleton Local Partnership and has established an escrow of approximately
$325,000 from development proceeds in the event the Littleton Local Partnership
is unsuccessful in its appeal and its action against the construction period
insurance companies.
On July 16, 1997, Everest Properties, Inc. ("Everest") demanded certain
information with respect to the holders of Units. Everest stated that the
purpose of the demand was to assist Everest in making an offer to Unit holders
to purchase their Units and otherwise to communicate with them concerning such
an offer. On July 25, 1997, Registrant requested certain information from
Everest in order to assess the appropriateness of the demand. On July 28, 1997,
Everest filed a complaint in the Court of Chancery of the State of Delaware in
and for New Castle County against the Registrant, the General Partner and its
general partner seeking, among other things, an order directing the defendants
to immediately furnish the requested information and awarding the plaintiff any
resulting damages. A one day trial was held on September 29, 1997. On December
5, 1997, the Court of Chancery issued a memorandum opinion and order, holding
that the plaintiff is entitled to the requested information regarding Unit
holders. On December 15, 1997, defendants filed a Notice of Appeal to the
Supreme Court of Delaware, which appeal was heard and denied. Registrant has
complied with the Court of Chancery's order.
The first mortgage of Ann Ell Apartments Associates, Ltd. (the "Ann Ell Local
Partnership") had been in default due to insufficient deposits to the
replacement reserve and the lender had alleged certain other incidents of
default including, among other things, inadequate funding of real estate tax and
insurance escrows and failure to procure certain minimum insurance coverage,
resulting in the lender filing a Complaint to Foreclose Mortgage And For Other
Relief and filing an Entry Of A Final Judgement Of Foreclosure in Circuit Court
for Dade County, Florida on January 31, 1997. Registrant replaced the local
general partner and the management agent of the Ann Ell Local Partnership
effective July 10, 1997 and advanced approximately $185,000 to cure defaults and
sufficiently fund the replacement reserve and escrows. The foreclosure action
has been voluntarily dismissed.
Registrant is not aware of any other material legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of the limited partners of Registrant
during the fourth quarter of the fiscal year covered by this report.
<PAGE>
- - --------------------------------------------------------------------------------
PART II
- - --------------------------------------------------------------------------------
Item 5. Market for Registrant's Common Equity
and Related Security Holder Matters
Market Information and Holders
There is no established public trading market for Registrant's Units.
Accordingly, accurate information as to the market value of a Unit at any given
date is not available. The number of owners of Units as of May 20, 1998 was
3,440, holding 55,746 Units.
Merrill Lynch follows internal guidelines for providing estimated values of
limited partnerships and other direct investments reported on client account
statements. Pursuant to such guidelines, estimated values for limited
partnership interests reported on Merrill Lynch client account statements (such
as Registrant's Units) are provided to Merrill Lynch by independent valuation
services. These estimated values are based on financial and other information
available to the independent services (1) on the prior August 15th for reporting
on December year-end and subsequent client account statements through the
following May month-end client account statements and (2) on the prior March
31st for reporting on June through November month-end client account statements
of the same year. Merrill Lynch clients may contact their Merrill Lynch
Financial Consultants or telephone the number provided to them on their account
statements to obtain a general description of the methodology used by the
independent valuation services to determine their estimates of value. In
addition, Registrant may provide an estimate of value to Unit holders from time
to time in Registrant's reports to limited partners. The estimated values
provided by the independent services and Registrant, which may differ, are not
market values and Unit holders may not be able to sell their Units or realize
either amount upon a sale of their Units. In addition, Unit holders may not
realize such estimated values upon the liquidation of Registrant's assets over
its remaining life.
Distributions
Registrant owns a limited partnership interest in Local Partnerships that are
the owners of Properties which are leveraged and receive government assistance
in various forms of rental and debt service subsidies. The distribution of cash
flow generated by the Local Partnerships may be restricted, as determined by
each Local Partnership's financing and subsidy agreements. Accordingly,
Registrant does not anticipate that it will provide significant annual cash
distributions to its partners. There were no cash distributions to the partners
during the years ended March 30, 1998 and 1997.
Low-income Tax Credits and Historic Rehabilitation Tax Credits (together, the
"Tax Credits"), which are subject to various limitations, may be used by
partners to offset Federal income tax liabilities. The Tax Credits per Unit
generated by Registrant and allocated to the limited partners for the tax years
ended December 31, 1997 and 1996 and the cumulative Tax Credits allocated from
inception through December 31, 1997 are as follows:
<TABLE>
<CAPTION>
Historic
Rehabilitation Low-income
Tax Credits Tax Credits
<S> <C> <C>
Tax year ended December 31, 1997 $ -- $ 144.49
Tax year ended December 31, 1996 -- 144.49
</TABLE>
Cumulative totals $ 6.56 $ 1,158.33
Notwithstanding future circumstances which may give rise to recapture or loss
of future benefits (see Part I, Item 2 Properties, herein), Registrant
expects to generate total Tax Credits from investments in Local Partnerships of
approximately $1,500 per Unit through December 31, 2001.
<PAGE>
- - --------------------------------------------------------------------------------
Item 6. Selected Financial Data
- - --------------------------------------------------------------------------------
The information set forth below presents selected financial data of Registrant.
Additional detailed financial information is set forth in the audited financial
statements included under Part II, Item 8 herein.
<TABLE>
<CAPTION>
Years Ended March 30,
1998 1997 1996 1995 1994
------------- --------------- -------------- -------------- ----------
<S> <C> <C> <C> <C> <C>
Interest and other revenue $ 352,811 $ 359,806 $ 360,324 $ 335,780 $ 446,683
============= ============== ============== ============== ==============
Equity in loss of investment
in local partnerships $ (2,806,299) $ (5,180,297) $ (3,514,333) $ (3,914,008) $ (4,323,884)
============= ============ ============ ============ ============
Net loss $ (3,189,990) $ (5,506,972) $ (3,837,432) $ (4,266,419) $ (4,620,850)
============= ============ ============ ============ ============
Net loss per unit of limited
partnership interest $ (56.65) $ (97.80) $ (68.15) $ (75.77) $ (82.06)
============ ============== ============= =============== ============
As of March 30,
1998 1997 1996 1995 1994
------------ ------------ ------------ ------------ ------------
Total assets $ 20,162,596 $ 23,022,129 $ 28,509,605 $ 32,573,919 $ 36,497,595
============ ============ ============ ============ ============
</TABLE>
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Capital Resources and Liquidity
Registrant admitted limited partners in three closings with aggregate limited
partners' capital contributions of $55,746,000. In connection with the offering
of the sale of Units, Registrant incurred organization and offering costs of
approximately $6,534,000 and established a working capital reserve of
approximately $3,345,000. The remaining net proceeds of approximately
$45,867,000 (the "Net Proceeds") were available to be applied to the acquisition
of limited partnership interests in local partnerships (the "Local
Partnerships") which own low-income multifamily residential complexes (the
"Property" or "Properties") which qualify for the low-income tax credit under
Section 42 of the Internal Revenue Code (the "Low-income Tax Credit"); one Local
Partnership owns a Property which also qualifies for the historic rehabilitation
tax credit in accordance with Section 48(g) of the Internal Revenue Code of
1986. Any adjustments to the capital contributions made by Registrant to the
Local Partnerships under the terms of the Local Partnerships' partnership
agreements have resulted in an adjustment to Registrant's working capital
reserve. Registrant has utilized Net Proceeds, after making any necessary
adjustments, in acquiring an interest in fifty Local Partnerships.
As of March 30, 1998, Registrant has cash and cash equivalents and investments
in bonds totaling $4,783,802 which is available for operating expenses of
Registrant and circumstances which may arise in connection with the Local
Partnerships. As of March 30, 1998, Registrant's investments in bonds represent
corporate bonds of $3,186,166, U.S. Treasury bonds of $488,688 and U.S.
government agency bonds of $595,412 with various maturity dates ranging from
1999 to 2023. Registrant acquired such investments in bonds with the intention
of utilizing proceeds generated by such investments to meet its annual
obligations. Future sources of Registrant funds are expected primarily from
interest earned on working capital and limited cash distributions from Local
Partnerships.
During the year ended March 30, 1998, Registrant received cash from interest
revenue, maturity of a bond and distributions from Local Partnerships and
utilized cash for operating expenses, investments in bonds and providing capital
to a Local Partnership. Cash and cash equivalents and investments in bonds
available-for-sale decreased, in the aggregate, by approximately $42,000 during
the year ended March 30, 1998 (which included a net unrealized gain on
investments in bonds of approximately $200,000, the amortization of net premium
on investments in bonds of approximately $42,000 and the accretion of zero
coupon bonds of approximately $41,000). Notwithstanding circumstances that may
arise in connection with the Properties, Registrant does not expect to realize
significant gains or losses on its investments in bonds, if any.
<PAGE>
- - --------------------------------------------------------------------------------
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
- - --------------------------------------------------------------------------------
During the year ended March 30, 1998, the investment in Local Partnerships
decreased as a result of Registrant's equity in the Local Partnerships' net loss
for the year ended December 31, 1997 of $2,806,299 and cash distributions
received from Local Partnerships of $192,939 (exclusive of distributions from
Local Partnerships of $1,348 classified as other income), partially offset by an
investment paid to a Local Partnership of $184,503. Payable to general partner
in the accompanying balance sheet as of March 30, 1998 represents accrued
management fees.
Results of Operations
Registrant's operating results are dependent upon the operating results of the
Local Partnerships and are significantly impacted by the Local Partnerships'
policies. In addition, the operating results herein are not necessarily the same
for tax reporting. Registrant accounts for its investment in Local Partnerships
in accordance with the equity method of accounting, under which the investment
is carried at cost and is adjusted for Registrant's share of each Local
Partnership's results of operations and by cash distributions received. Equity
in loss of each investment in Local Partnership allocated to Registrant is
recognized to the extent of Registrant's investment balance in each Local
Partnership. Equity in loss in excess of Registrant's investment balance in a
Local Partnership is allocated to other partners' capital in any such Local
Partnership. As a result, the reported equity in loss of investment in Local
Partnerships is expected to decrease as Registrant's investment balances in the
respective Local Partnerships become zero. However, the combined statements of
operations of the Local Partnerships reflected in Note 5 to Registrant's
financial statements include the operating results of all Local Partnerships,
irrespective of Registrant's investment balances.
Cumulative losses and cash distributions in excess of investment in Local
Partnerships may result from a variety of circumstances, including a Local
Partnership's accounting policies, subsidy structure, debt structure and
operating deficits, among other things. Accordingly, cumulative losses and cash
distributions in excess of the investment are not necessarily indicative of
adverse operating results of a Local Partnership. See discussion below under
Local Partnership Matters regarding certain Local Partnerships currently
operating below economic break even levels.
Registrant's operations for the years ended March 30, 1998, 1997 and 1996
resulted in net losses of $3,189,990, $5,506,972 and $3,837,432, respectively.
The decrease in net loss from 1997 to 1998 is primarily attributable to a
decrease in equity in loss of investment in Local Partnerships of approximately
$2,374,000, partially offset by an increase in professional fees of
approximately $46,000. The decrease in equity in loss of investment in Local
Partnerships is primarily the result of (i) a decrease in net loss of the Local
Partnerships of approximately $8,373,000 resulting primarily from the recorded
impairment for the year ended December 31, 1996 in connection with Christian
Street Associates Limited Partnership (the "Christian Street Local Partnership")
and 2000-2100 Christian Street Associates (the "2000 Christian Street Local
Partnership") of $7,314,852, partially offset by (ii) a decrease in the
nonrecognition of losses in excess of Registrant's investment in Local
Partnerships of approximately $5,871,000 in accordance with the equity method of
accounting. The increase in professional fees is primarily the result of costs
incurred in connection with an outside party's desire to purchase Units. The
increase in net loss from 1996 to 1997 is primarily attributable to an increase
in equity in loss of investment in Local Partnerships of approximately
$1,666,000, which is primarily the result of the adjustment to reduce the
Christian Street Local Partnership and the 2000 Christian Street Local
Partnership properties to their estimated fair value in accordance with
applicable accounting practices and an increase in depreciation expense of two
Local Partnerships associated with payments in connection with acquisition notes
which were originally not recorded due to the uncertainty of ultimate repayment
at the time the respective Properties were placed in service, partially offset
by an increase in the nonrecognition of losses in excess of Registrant's
investment in Local Partnerships of approximately $5,960,000 in accordance with
the equity method of accounting.
The Local Partnerships' net loss of approximately $3,570,000 for the year ended
December 31, 1997 includes depreciation and amortization expense of
approximately $5,272,000 and interest on non-mandatory debt of approximately
$698,000, and does not include principal payments on permanent mortgages of
approximately $1,031,000. The Local Partnerships' net loss of approximately
$11,942,000 for the year ended December 31, 1996 includes depreciation and
amortization expense of approximately $6,115,000, interest on non-mandatory debt
of approximately $695,000 and a loss from impairment of long-lived assets of
approximately $7,315,000, and does not include principal payments on permanent
mortgages of approximately $1,045,000. The Local Partnerships' net loss of
approximately $4,159,000 for the year ended December 31, 1995 includes
depreciation and amortization expense of approximately $5,734,000 and interest
on non-mandatory debt of approximately $690,000, and does not include principal
payments on permanent mortgages of approximately $942,000. The results of
operations of the Local Partnerships for the year ended December 31, 1997 are
not necessarily indicative of results that may be expected in the future
periods.
<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
Local Partnership Matters
The Properties are principally comprised of subsidized and leveraged low-income
multifamily residential complexes located throughout the United States and
Puerto Rico. The rents of the Properties, many of which receive rental subsidy
payments pursuant to subsidy agreements ("HAP Contracts") are subject to
specific laws, regulations and agreements with federal and state agencies. Six
Local Partnerships have one or more HAP Contracts, certain of which cover only
certain rental units, which are scheduled to expire in 1998. In addition, the
Local Partnerships have various financing structures which include (i) required
debt service payments ("Mandatory Debt Service") and (ii) debt service payments
which are payable only from available cash flow subject to the terms and
conditions of the notes, which may be subject to specific laws, regulations and
agreements with appropriate federal and state agencies ("Non-Mandatory Debt
Service or Interest"). During the year ended December 31, 1997, revenue from
operations, Local General Partner advances and reserves of the Local
Partnerships have generally been sufficient to cover the operating expenses and
Mandatory Debt Service. Substantially all of the Local Partnerships are
effectively operating at or near break even levels, although certain Local
Partnerships' operating information reflects operating deficits that do not
represent cash deficits due to their mortgage and financing structure and the
required deferral of property management fees. However, as discussed below,
certain Local Partnerships' operating information indicates below break even
operations after taking into account their mortgage and financing structure and
any required deferral of property management fees.
The terms of the partnership agreements of Christian Street Associates Limited
Partnership (the "Christian Street Local Partnership") and 2000-2100 Christian
Street Associates (the "2000 Christian Street Local Partnership") (collectively,
the "Christian Street Local Partnerships"), which Local Partnerships have
certain common general partner interests and a common first mortgage lender,
require the Local General Partners to advance funds to cover operating deficits
up to $182,500 (through March 1996) and $130,000 (through December 1996),
respectively, and to cause the management agent to defer property management
fees in order to avoid a default under the respective mortgages. The properties
have experienced ongoing operating deficits and as of December 31, 1997, the
Local General Partners have advanced approximately $404,000 to the Christian
Street Local Partnership and approximately $330,000 to the 2000 Christian Street
Local Partnership. However, the Local General Partners, which have fulfilled
their respective deficit guarantees, have informed Registrant that they do not
intend to continue to voluntarily fund the operating deficits of the properties.
The Local General Partners have also informed Registrant that the Christian
Street Local Partnerships are current under their respective first mortgage
obligations as a result of the Local General Partners' funding of operating
deficits. The Local General Partners have approached the lender and are
attempting to restructure the loans; however the lender has indicated that in
connection with any such restructuring, the respective Local Partnerships would
be responsible for certain costs, which may be significant. There can be no
assurance that any such restructuring will be achieved. The Christian Street
Local Partnership and the 2000 Christian Street Local Partnership incurred
operating deficits for the year ended December 31, 1997 of approximately
$140,000 and $99,000, respectively (exclusive of property management fees of
approximately $19,000 and $16,000, respectively). The Christian Street Local
Partnerships have allocated approximately 7.5 years of Low-income Tax Credits to
Registrant through December 31, 1997. Accordingly, if the Local General Partners
cease to fund the operating deficits, Registrant may incur substantial recapture
of Low-income Tax Credits. Of Registrant's total annual Low-income Tax Credits,
approximately 6% and 3% are allocated from the Christian Street Local
Partnership and the 2000 Christian Street Local Partnership, respectively, and
are scheduled to expire in 2000.
Due to the continuing operating deficits and the uncertainty of future operating
income of the Christian Street Local Partnership and the 2000 Christian Street
Local Partnership, the combined financial statements of the Local Partnerships
as of and for the year ended December 31, 1996 include a loss from impairment of
long-lived assets totaling $7,314,852, which represents an adjustment of the
real property of the Christian Street Local Partnership and the 2000 Christian
Street Local Partnership of $3,986,977 and $3,327,875, respectively, based on
estimates of expected future cash flows. Registrant recorded additional equity
in loss of investment in Local Partnerships during the year ended March 30, 1997
of $1,371,790 as a result of such impairment.
During the year ended December 31, 1997, Forest Village Housing Partnership (the
"Forest Village Local Partnership") incurred an operating deficit of
approximately $13,000, resulting primarily from costs associated with tenant
turnover and unscheduled maintenance. Payments on the mortgages and real estate
taxes are current. Of Registrant's total annual Low-income Tax Credits,
approximately 1% is allocated from the Forest Village Local Partnership.
<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
The first mortgage of Ann Ell Apartments Associates, Ltd. (the "Ann Ell Local
Partnership") had been in default due to insufficient deposits to the
replacement reserve and the lender had alleged certain other incidents of
default including, among other things, inadequate funding of real estate tax and
insurance escrows and failure to procure certain minimum insurance coverage,
resulting in the lender filing a foreclosure action and a motion for summary
judgment. Registrant replaced the Local General Partner and the management agent
of the Ann Ell Local Partnership effective July 10, 1997 and advanced
approximately $185,000 to cure defaults and sufficiently fund the replacement
reserve and escrows. The foreclosure action has been voluntarily dismissed.
Littleton Avenue Community Village, L.P. (the "Littleton Local Partnership") is
a defendant in a lawsuit resulting from an accident in 1989 during the
construction of the complex owned by the Littleton Local Partnership. In
November 1995 the Littleton Local Partnership and one co-defendant were found
liable in the lawsuit, of which the Littleton Local Partnership's potential
liability is approximately $300,000. The Littleton Local Partnership has
appealed the result of the trial and has filed a lawsuit against the
construction period insurance companies, which were not co-defendants in the
lawsuit. Although the Local General Partner expects the incident to be covered
by insurance, it has agreed to indemnify the Littleton Local Partnership and has
established an escrow of approximately $325,000 from development proceeds in the
event the Littleton Local Partnership is unsuccessful in its appeal and its
action against the construction period insurance companies.
Inflation
Inflation is not expected to have a material adverse impact on Registrant's
operations during its period of ownership of the Local Partnership Interests.
Adoption of Accounting Standard
Registrant has adopted Statement of Financial Accounting Standard ("SFAS")
No. 128, "Earnings Per Share" and SFAS No.129, "Disclosure of Information
about Capital Structure." SFAS No. 128 establishes standards for computing
and presenting earnings per share. SFAS No. 129 requires the disclosure in
summary form within the financial statements of the pertinent rights and
privileges of the various securities outstanding. The adoption of SFAS
Nos. 128 and 129 has not materially impacted the Registrant's reported earnings,
financial condition, cash flows or presentation of the financial statements.
Accounting Standard not yet Adopted
On March 31, 1998, Registrant adopted SFAS No. 130, "Reporting Comprehensive
Income." SFAS No. 130 establishes standards for reporting and display of
comprehensive income and its components (revenues, expenses, gains and losses)
in a full set of general-purpose financial statements. The adoption of SFAS No.
130 is not expected to have a material impact on Registrant's financial position
and results of operations.
<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
AMERICAN TAX CREDIT PROPERTIES II L.P.
Item 8. Financial Statements and Supplementary Data
Table of Contents
Page
Independent Auditors' Report................................................15
Balance Sheets as of March 30, 1998 and 1997................................16
Statements of Operations for the years ended March 30, 1998, 1997 and 1996..17
Statements of Changes in Partners' Equity (Deficit) for the years ended
March 30, 1998, 1997 and 1996..........................................18
Statements of Cash Flows for the years ended March 30, 1998, 1997 and 1996..19
Notes to Financial Statements as of March 30, 1998, 1997 and 1996...........21
No financial statement schedules are included because of the absence of the
conditions under which they are required or because the information is included
in the financial statements or the notes thereto.
<PAGE>
Independent Auditors' Report
To the Partners
American Tax Credit Properties II L.P.
We have audited the accompanying balance sheets of American Tax Credit
Properties II L.P. as of March 30, 1998 and 1997, and the related statements of
operations, changes in partners' equity (deficit) and cash flows for each of the
three years in the period ended March 30, 1998. These financial statements are
the responsibility of the partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of American Tax Credit
Properties II L.P. as of March 30, 1998 and 1997, and the results of its
operations and its cash flows for each of the three years in the period ended
March 30, 1998, in conformity with generally accepted accounting principles.
/s/ Reznick Fedder and Silverman
Bethesda, Maryland
May 11, 1998
<PAGE>
- - --------------------------------------------------------------------------------
AMERICAN TAX CREDIT PROPERTIES II L.P.
- - --------------------------------------------------------------------------------
BALANCE SHEETS
MARCH 30, 1998 AND 1997
<TABLE>
<CAPTION>
Notes 1998 1997
----- ---------------- --------------
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents 3,9 $ 513,536 $ 674,160
Investments in bonds available-for-sale 4,9 4,270,266 4,151,478
Investment in local partnerships 5,8 15,304,416 18,119,151
Interest receivable 9 74,378 77,340
---------------- --------------
$ 20,162,596 $ 23,022,129
============ ============
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities
Accounts payable and accrued expenses 8 $ 639,905 $ 561,847
Payable to general partner 6,8 546,015 486,224
Other 55,600 62,600
---------------- ----------------
1,241,520 1,110,671
-------------- --------------
Commitments and contingencies 8
Partners' equity (deficit) 2,4
General partner (304,342) (272,442)
Limited partners (55,746 units of limited partnership interest
outstanding) 19,147,253 22,305,343
Unrealized gain (loss) on investments in bonds available-for-sale, 78,165 (121,443)
---------------- --------------
net
18,921,076 21,911,458
------------- -------------
$ 20,162,596 $ 23,022,129
============ ============
</TABLE>
See Notes to Financial Statements.
<PAGE>
- - --------------------------------------------------------------------------------
AMERICAN TAX CREDIT PROPERTIES II L.P.
- - --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
YEARS ENDED MARCH 30, 1998, 1997 AND 1996
<TABLE>
<CAPTION>
Notes 1998 1997 1996
----- ------------------ ------------------ ---------------
<S> <C> <C> <C>
REVENUE
Interest $ 351,463 $ 359,806 $ 360,143
Other income from local partnerships 1,348 181
------------------- ----------------- ---------------
TOTAL REVENUE 352,811 359,806 360,324
----------------- ----------------- ---------------
EXPENSES
Administration fees 8 299,307 299,307 299,307
Management fees 6,8 299,307 299,307 299,307
Professional fees 102,651 57,140 56,071
Printing, postage and other 35,237 30,727 28,738
------------------- ----------------- ----------------
TOTAL EXPENSES 736,502 686,481 683,423
------------------ ---------------- -----------------
Loss from operations (383,691) (326,675) (323,099)
Equity in loss of investment in local
partnerships 5 (2,806,299) (5,180,297) (3,514,333)
---------------- ---------------- ----------------
NET LOSS $ (3,189,990) $ (5,506,972) $ (3,837,432)
=============== =============== ===============
NET LOSS ATTRIBUTABLE TO 2
General partner $ (31,900) $ (55,070) $ (38,374)
Limited partners (3,158,090) (5,451,902) (3,799,058)
---------------- ---------------- ---------------
$ (3,189,990) $ (5,506,972) $ (3,837,432)
=============== =============== ===============
NET LOSS per unit of limited partnership
interest (55,746 units of limited
partnership interest) $ (56.65) $ (97.80) $ (68.15)
================ ================ ================
</TABLE>
See Notes to Financial Statements.
<PAGE>
- - --------------------------------------------------------------------------------
AMERICAN TAX CREDIT PROPERTIES II L.P.
- - --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIT)
YEARS ENDED MARCH 30, 1998, 1997 AND 1996
<TABLE>
<CAPTION>
Unrealized Gain
(Loss) on
Investments in
Bonds
General Partner Limited Partners Available-
For-Sale Total
Net
<S> <C> <C> <C> <C>
Partners' equity (deficit), March 30, 1995 $ (178,998) $ 31,556,303 $ (92,946) $ 31,284,359
Net loss (38,374) (3,799,058) (3,837,432)
Unrealized gain on investments in bonds
available-for-sale, net 85,694 85,694
------------------------------------------- ---------------- ---------------
Partners' equity (deficit), March 30, 1996 (217,372) 27,757,245 (7,252) 27,532,621
Net loss (55,070) (5,451,902) (5,506,972)
Unrealized loss on investments in bonds
available-for-sale, net (114,191) (114,191)
------------------------------------------- --------------- --------------
Partners' equity (deficit), March 30, 1997 (272,442) 22,305,343 (121,443) 21,911,458
Net loss (31,900) (3,158,090) (3,189,990)
Unrealized gain on investments in bonds
available-for-sale, net 199,608 199,608
------------------------------------------- --------------- --------------
Partners' equity (deficit), March 30, 1998 $ (304,342) $ 19,147,253 $ 78,165 $ 18,921,076
================= ============= =============== ============
</TABLE>
See Notes to Financial Statements.
<PAGE>
- - --------------------------------------------------------------------------------
AMERICAN TAX CREDIT PROPERTIES II L.P.
- - --------------------------------------------------------------------------------
STATEMENTS OF CASH FLOWS
YEARS ENDED MARCH 30, 1998, 1997 AND 1996
<TABLE>
<CAPTION>
1998 1997 1996
---------------- ---------------- ----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received $ 356,833 $ 370,043 $ 395,194
Cash used for local partnerships for deferred expenses (7,000) (7,000) (7,000)
Cash paid for
administration fees (239,513) (239,513) (239,508)
management fees (239,516) (239,523) (241,894)
professional fees (76,622) (51,890) (53,571)
printing, postage and other expenses (43,001) (14,868) (25,467)
interest on an outstanding capital contribution (83,100)
-------------------------------------- -------------
Net cash used in operating activities (248,819) (182,751) (255,346)
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash distributions and other income from local partnerships 194,287 117,999 187,014
Maturity/redemption of bonds 130,000 200,000
Investment in local partnerships (184,503) (360,000)
Transfer from restricted cash 428,559
Investments in bonds (includes $1,089 of accrued interest in 1998) (51,589) (1.002,661)
------------ ------------------- ------------
Net cash provided by (used in) investing activities 88,195 317,999 (747,088)
--------------- ------------- ------------
Net increase (decrease) in cash and cash equivalents (160,624) 135,248 (1,002,434)
Cash and cash equivalents at beginning of year 674,160 538,912 1,541,346
-------------- ------------- ------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 513,536 $ 674,160 $ 538,912
============= ============= =============
SIGNIFICANT NON-CASH INVESTING ACTIVITIES
Unrealized gain (loss) on investments in bonds available-for-sale, net $ 199,608 $ (114,191) $ 85,694
============= ============ ==============
- - ------------------------------------------------------------------------ ------------------ ------------------- ------------------
See reconciliation of net loss to net cash used in operating activities on page 20.
</TABLE>
See Notes to Financial Statements.
<PAGE>
- - --------------------------------------------------------------------------------
AMERICAN TAX CREDIT PROPERTIES II L.P.
- - --------------------------------------------------------------------------------
STATEMENTS OF CASH FLOWS - (Continued)
YEARS ENDED MARCH 30, 1998, 1997 AND 1996
<TABLE>
<CAPTION>
1998 1997 1996
------------------ ------------------ -----------
<S> <C> <C> <C>
RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING
ACTIVITIES
Net loss $ (3,189,990) $ (5,506,972) $ (3,837,432)
Adjustments to reconcile net loss to net cash used in
operating activities
Equity in loss of investment in local partnerships 2,806,299 5,180,297 3,514,333
Distributions from local partnerships classified as other
income (1,348) (181)
Amortization of net premium on investments in bonds 41,917 50,524 69,667
Accretion of zero coupon bonds (40,597) (39,095) (39,095)
Decrease (increase) in interest receivable 4,051 (1,192) (10,062)
Increase in payable to general partner 59,791 59,784 57,413
Increase in accounts payable and accrued expenses 78,058 80,903 65,570
Decrease in other liabilities (7,000) (7,000) (7,000)
Decrease in interest payable (68,559)
-------------------------------------- --------------
NET CASH USED IN OPERATING ACTIVITIES $ (248,819) $ (182,751) $ (255,346)
============ ============ ============
</TABLE>
See Notes to Financial Statements.
<PAGE>
- - --------------------------------------------------------------------------------
AMERICAN TAX CREDIT PROPERTIES II L.P.
- - --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
MARCH 30, 1998, 1997 AND 1996
1. Organization, Purpose and Summary of Significant Accounting Policies
American Tax Credit Properties II L.P. (the "Partnership") was formed on
October 26, 1988 and the Certificate of Limited Partnership of the
Partnership was filed under the Delaware Revised Uniform Limited
Partnership Act. There was no operating activity until admission of the
limited partners on June 28, 1989. The Partnership was formed to invest
primarily in leveraged low-income multifamily residential complexes (the
"Property" or "Properties") which qualify for the low-income tax credit
established by Section 42 of the Internal Revenue Code (the "Low-income
Tax Credit"), through the acquisition of limited partnership equity
interests (the "Local Partnership Interests") in partnerships (the "Local
Partnership" or "Local Partnerships") that are the owners of the
Properties. The Partnership has invested in one Property which also
qualifies for the historic rehabilitation tax credit in accordance with
Section 48(g) of the Internal Revenue Code of 1986. Richman Tax Credit
Properties II L.P. (the "General Partner") was formed on October 26, 1988
to act as the general partner of the Partnership.
Basis of Accounting and Fiscal Year
The Partnership's records are maintained on the accrual basis of
accounting for both financial reporting and tax purposes. For financial
reporting purposes, the Partnership's fiscal year ends March 30 and its
quarterly periods end June 29, September 29 and December 30. The Local
Partnerships have a calendar year for financial reporting purposes. The
Partnership and the Local Partnerships each have a calendar year for
income tax purposes.
The Partnership accounts for its investment in Local Partnerships in
accordance with the equity method of accounting, under which the
investment is carried at cost and is adjusted for the Partnership's share
of each Local Partnership's results of operations and by cash
distributions received. Equity in loss of each investment in Local
Partnership allocated to the Partnership is recognized to the extent of
the Partnership's investment balance in each Local Partnership. Equity in
loss in excess of the Partnership's investment balance in a Local
Partnership is allocated to other partners' capital in any such Local
Partnership. Previously unrecognized equity in loss of any Local
Partnership is recognized in the fiscal year in which equity in income is
earned by such Local Partnership. Distributions received subsequent to
the elimination of an investment balance for any such investment in a
Local Partnership are recorded as other income from Local Partnerships.
The Partnership regularly assesses its investments in Local Partnerships
for the existence of impairment. If an investment in a Local Partnership
is considered to be permanently impaired, the Partnership reduces its
investment in any such Local Partnership and includes such reduction in
equity in loss of investment in Local Partnerships.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and expenses
during the reporting period. Actual results could differ from those
estimates.
Adoption of Accounting Standard
The Partnership has adopted Statement of Financial Accounting Standard
("SFAS") No. 128, "Earnings Per Share" and SFAS No. 129, "Disclosure of
Information about Capital Structure." SFAS No. 128 establishes
standards for computing and presenting earnings per share. SFAS
No. 129 requires the disclosure in summary form within the financial
statements of the pertinent rights and privileges of the various
securities outstanding. The adoption of SFAS Nos. 128 and 129 has not
materially impacted the Partnership's reported earnings, financial
condition, cash flows or presentation of the financial statements.
Accounting Standard not yet Adopted
On March 31, 1998, the Partnership adopted SFAS No. 130, "Reporting
Comprehensive Income." SFAS No. 130 establishes standards for
reporting and display of comprehensive income and its components
(revenues, expenses,
<PAGE>
- - --------------------------------------------------------------------------------
AMERICAN TAX CREDIT PROPERTIES II L.P.
- - --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1998, 1997 AND 1996
1. Organization, Purpose and Summary of Significant Accounting Policies
(continued)
gains and losses) in a full set of general-purpose financial
statements. The adoption of SFAS No. 130 is not expected to have a
material impact on the Partnership's financial position and results of
operations.
Cash and Cash Equivalents
For purposes of the statements of cash flows, the Partnership considers
all highly liquid investments purchased with an original maturity of
three months or less at the date of acquisition to be cash equivalents.
Cash and cash equivalents are stated at cost which approximates market
value.
Investments in Bonds Available-For-Sale
Investments in bonds classified as available-for-sale represent
investments that the Partnership intends to hold for an indefinite period
of time but not necessarily to maturity. Any decision to sell an
investment classified as available-for-sale would be based on various
factors, including significant movements in interest rates and liquidity
needs. Investments in bonds available-for-sale are carried at estimated
fair value and unrealized gains or losses are reported as a separate
component of partners' equity (deficit).
Premiums and discounts on investments in bonds available-for-sale are
amortized (accreted) using the straight-line method over the life of the
investment. Amortized premiums offset interest revenue, while the
accretion of discounts and zero coupon bonds are included in interest
revenue.
Realized gain (loss) on redemption or sale of investments in bonds
available-for-sale are included in, or offset against, interest revenue
on the basis of the adjusted cost of each specific investment redeemed or
sold.
Interest on Capital Contributions Payable to Local Partnerships
Pursuant to agreements with certain Local Partnerships, interest was
accrued on certain installments of capital contributions. Such amounts
were recorded as a liability and an offset to interest revenue.
Income Taxes
No provision for income taxes has been made because all income, losses
and tax credits are allocated to the partners for inclusion in their
respective tax returns. In accordance with SFAS No. 109, "Accounting for
Income Taxes," the Partnership has included in Note 7 certain disclosures
related to differences in the book and tax bases of accounting.
Reclassifications
Certain reclassifications of amounts have been made to conform to the
current year presentation.
2. Capital Contributions
On June 14, 1989, the Partnership commenced the offering of units (the
"Units") through Merrill Lynch, Pierce, Fenner & Smith Incorporated (the
"Selling Agent"). On June 28, 1989, July 31, 1989 and September 22, 1989,
under the terms of the Amended and Restated Agreement of Limited
Partnership of the Partnership (the "Partnership Agreement"), the General
Partner admitted limited partners to the Partnership in three closings.
At these closings, subscriptions for a total of 55,746 Units representing
$55,746,000 in limited partners' capital contributions were accepted. In
connection with the offering of Units, the Partnership incurred
organization and offering costs of $6,534,064, of which $75,000 was
capitalized as organization costs and $6,459,064 was charged to the
limited partners' equity as syndication costs. The Partnership received a
capital contribution of $100 from the General Partner.
Net loss is allocated 99% to the limited partners and 1% to the
General Partner in accordance with the Partnership Agreement.
<PAGE>
- - --------------------------------------------------------------------------------
AMERICAN TAX CREDIT PROPERTIES II L.P.
- - --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1998, 1997 AND 1996
3. Cash and Cash Equivalents
As of March 30, 1998, the Partnership has $513,536 in cash and cash
equivalents which are deposited in interest-bearing accounts with an
institution which is not insured by the Federal Deposit Insurance
Corporation.
4. Investments in Bonds Available-For-Sale
The Partnership carries its investments in bonds as available-for-sale
because such investments are used to facilitate and provide flexibility
for the Partnership's obligations, including resolving circumstances
which may arise in connection with the Local Partnerships. Investments in
bonds available-for-sale are reflected in the accompanying balance sheets
at estimated fair value.
As of March 30, 1998, certain information concerning investments in bonds
available-for-sale is as follows:
<TABLE>
<CAPTION>
Gross Gross Estimated
Amortized unrealized unrealized fair
cost gains losses value
<S> <C> <C> <C> <C>
Description and maturity
Corporate debt securities
Within one year $ 202,580 $ 4,534 $ -- $ 207,114
After one year through five years 999,290 32,660 -- 1,031,950
After five years through ten years 1,719,550 38,362 (10,124) 1,747,788
After ten years 202,667 -- (3,353) 199,314
------------ ----------------- ------------- -------------
3,124,087 75,556 (13,477) 3,186,166
----------- -------------- ------------ ------------
U.S. Treasury debt securities
After ten years 483,036 5,652 -- 488,688
------------ ---------------- ----------------- -------------
U.S. government and agency securities
After five years through ten years 584,978 10,434 -- 595,412
------------ -------------- ----------------- -------------
$ 4,192,101 $ 91,642 $ (13,477) $ 4,270,266
=========== ============- =========== ===========
</TABLE>
As of March 30, 1997, certain information concerning investments in bonds
available-for-sale is as follows:
<TABLE>
<CAPTION>
Gross Gross Estimated
Amortized unrealized unrealized fair
cost gains losses value
<S> <C> <C> <C> <C>
Description and maturity
Corporate debt securities
Within one year $ 130,001 $ 915 $ -- $ 130,916
After one year through five years 748,260 15,402 (6,457) 757,205
After five years through ten years 2,079,161 10,635 (98,034) 1,991,762
After ten years 253,300 -- (20,571) 232,729
------------ ------------- ------------ -------------
3,210,722 26,952 (125,062) 3,112,612
----------- ------------- ----------- ------------
U.S. Treasury debt securities
After ten years 442,441 -- (39,596) 402,845
------------- ------------- ------------ -------------
U.S. government and agency securities
After five years through ten years 619,758 16,263 -- 636,021
------------- -------------- ------------ -------------
$ 4,272,921 $ 43,215 $ (164,658) $ 4,151,478
=========== ============= ============ ===========
</TABLE>
<PAGE>
- - --------------------------------------------------------------------------------
AMERICAN TAX CREDIT PROPERTIES II L.P.
- - --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1998, 1997 AND 1996
5. Investment in Local Partnerships
As of March 30, 1998, the Partnership owns a limited partnership interest
in the following Local Partnerships:
1 1989 Westview Arms Limited Partnership;
2 2000-2100 Christian Street Associates (the "2000 Christian Street
Local Partnership");
3 Ann Ell Apartments Associates, Ltd.*;
4 Auburn Hills Apartments Limited Partnership;
5 Auburn Hills Townhouses Limited Partnership;
6 Batesville Family, L.P.;
7 Browning Road Phase I, L.P.;
8 Bruce Housing Associates, L.P.;
9 Canton Partners, L.P.;
10 Carrington Limited Dividend Housing Association Limited Partnership;
11 Christian Street Associates Limited Partnership (the "Christian
Street Local Partnership");
12 Cityside Apartments, Phase II, L.P.*;
13 Cleveland Square, Ltd.;
14 College Avenue Apartments Limited Partnership;
15 Corrigan Square, Ltd.;
16 De Queen Villas Limited Partnership;
17 Dermott Villas Limited Partnership;
18 Eagle View, Ltd.;
19 Elm Hill Housing Limited Partnership;
20 Eudora Manor Limited Partnership;
21 Forest Village Housing Partnership (the "Forest Village Local
Partnership")*;
22 Harborside Housing Limited Partnership;
23 Hill Com I Associates Limited Partnership;
24 Hill Com II Associates Limited Partnership;
25 Hughes Manor Limited Partnership;
26 Ivy Family, L.P.;
27 Lakeside Housing Limited Partnership;
28 Lawrence Road Properties, Ltd.;
29 Lexington Estates Ltd., A Mississippi Limited Partnership;
30 Littleton Avenue Community Village, L.P.;
31 Lula Courts Ltd., L.P.;
32 Magee Elderly, L.P.;
33 Mirador del Toa Limited Partnership;
34 Nixa Heights Apartments, L.P.;
35 North Hills Farms Limited Partnership;
36 Patton Place Limited Partnership;
37 Plantersville Family, L.P.;
38 Powelton Gardens Associates;
39 Purvis Heights Properties, L.P.;
40 Queen Lane Investors;
41 Renova Properties, L.P.;
42 Santa Juanita Limited Dividend Partnership L.P. (the "Santa Juanita
Local Partnership");
43 Simpson County Family, L.P.;
44 Summers Village Limited Partnership;
45 Tchula Courts Apartments, L.P.;
46 The Pendleton (A Louisiana Partnership in Commendam);
47 Trenton Heights Apartments, L.P.;
48 Twin Pine Family, L.P.;
49 Village Creek Limited Partnership; and
50 York Park Associates Limited Partnership*.
* An affiliate of the General Partner is a general partner of and/or
provides services to the Local Partnership.
<PAGE>
- - --------------------------------------------------------------------------------
AMERICAN TAX CREDIT PROPERTIES II L.P.
- - --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1998, 1997 AND 1996
5. Investment in Local Partnerships (continued)
Although the Partnership generally owns a 98.9%-99% limited partnership
interest in the Local Partnerships, the Partnership and American Tax
Credit Properties L.P. ("ATCP"), a Delaware limited partnership and an
affiliate of the Partnership, together, in the aggregate, acquired a 99%
Local Partnership Interest in the Santa Juanita Local Partnership; the
ownership percentages of the Partnership and ATCP of the Santa Juanita
Local Partnership are 64.36% and 34.64%, respectively. In addition, the
Partnership and American Tax Credit Properties III L.P. ("ATCP III"), a
Delaware limited partnership and an affiliate of the Partnership,
together, in the aggregate, acquired a 99% Local Partnership Interest in
certain Local Partnerships as follows:
<TABLE>
<CAPTION>
The
Partnership ATCP III
<S> <C> <C>
Batesville Family, L.P. ........................ 37.25% 61.75%
Bruce Housing Associates, L.P. ................. 37.25 61.75
Carrington Limited Dividend Housing
Association Limited Partnership ............. 33.05 65.95
Ivy Family, L.P. ............................... 37.25 61.75
Lawrence Road Properties, Ltd. ................. 37.25 61.75
Mirador del Toa Limited Partnership ............ 39.94 59.06
Purvis Heights Properties, L.P. ................ 37.25 61.75
Queen Lane Investors ........................... 50.50 48.50
</TABLE>
The Properties are principally comprised of subsidized and leveraged
low-income multifamily residential complexes located throughout the
United States and Puerto Rico. The required holding period of each
Property, in order to avoid Low-income Tax Credit recapture, is fifteen
years from the year in which the Low-income Tax Credits commence on the
last building of the Property (the "Compliance Period"). The rents of the
Properties are controlled by federal and state agencies pursuant to
applicable laws and regulations. Under the terms of each of the Local
Partnership's partnership agreements, the Partnership made capital
contributions in the aggregate amount of $45,877,165. As of December 31,
1997, the Local Partnerships have outstanding mortgage loans payable
totaling approximately $92,291,000 and accrued interest payable on such
loans totaling approximately $4,604,000, which are secured by security
interests and liens common to mortgage loans on the Local Partnerships'
real property and other assets.
Equity in loss of investment in Local Partnerships is limited to the
Partnership's investment balance in each Local Partnership; any excess is
applied to other partners' capital in any such Local Partnership (see
Note 1). The amount of such excess losses applied to other partners'
capital was $430,912, $6,301,666 and $341,567 for the years ended
December 31, 1997, 1996 and 1995, respectively, as reflected in the
combined statements of operations of the Local Partnerships reflected
herein Note 5.
The combined balance sheets of the Local Partnerships as of December 31,
1997 and 1996 and the combined statements of operations of the Local
Partnerships for the years ended December 31, 1997, 1996 and 1995 are
reflected on pages 26 and 27, respectively.
<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1998, 1997 AND 1996
5. Investment in Local Partnerships (continued)
The combined balance sheets of the Local Partnerships as of
December 31, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
1997 1996
--------------- -------------
<S> <C> <C>
ASSETS
Cash and other investments ....................... $ 4,208,629 $ 4,338,030
Rents receivable ................................. 334,976 331,265
Escrow deposits and reserves ..................... 5,438,953 5,141,484
Land ............................................. 4,180,673 4,180,673
Buildings and improvements (net of accumulated
depreciation of $42,156,402 and $37,016,338) . 97,712,120 102,236,052
Intangible assets (net of accumulated amortization
of $962,322 and $992,006) .................... 1,718,369 1,848,817
Other ............................................ 1,082,118 993,891
---------------- ------------
$114,675,838 $119,070,212
================ ============
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities
Accounts payable and accrued expenses ........ $ 1,386,630 $ 1,520,643
Due to related parties ....................... 4,763,846 4,650,126
Mortgage loans ............................... 92,291,126 93,336,971
Notes payable ................................ 2,599,572 2,804,927
Accrued interest ............................. 4,603,549 3,948,452
Other ........................................ 630,192 628,190
--------------- ------------
106,274,915 106,889,309
--------------- ------------
Partners' equity (deficit)
American Tax Credit Properties II L.P. .......
Capital contributions, net of distributions 45,045,349 45,115,322
Cumulative loss ........................... (29,711,073) (26,904,774)
--------------- -------------
15,334,276 18,210,548
--------------- -------------
General partners and other limited partners, including
ATCP and ATCP III
Capital contributions, net of distributions 3,363,369 3,503,853
Cumulative loss ......................... (10,296,722) (9,533,498)
--------------- -------------
(6,933,353) (6,029,645)
--------------- -------------
8,400,923 12,180,903
--------------- ------------
$114,675,838 $119,070,212
=============== ============
</TABLE>
<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1998, 1997 AND 1996
5. Investment in Local Partnerships (continued)
The combined statements of operations of the Local Partnerships for the
years ended December 31, 1997, 1996 and 1995 are as follows:
<TABLE>
<CAPTION>
1997 1996 1995
------------------- ------------------- ------------
<S> <C> <C> <C>
REVENUE
Rental $ 20,068,350 $ 19,816,507 $ 19,516,587
Interest and other 647,155 774,491 646,027
------------------- ------------------- -------------
TOTAL REVENUE 20,715,505 20,590,998 20,162,614
------------------- ------------------- -------------
EXPENSES
Administrative 3,326,215 3,061,254 3,098,156
Utilities 2,601,460 2,572,103 2,413,637
Operating, maintenance and other 4,180,233 4,511,247 4,026,163
Taxes and insurance 2,354,860 2,335,380 2,272,595
Interest (including amortization of
$130,448, $93,966 and $165,690) 6,680,294 6,717,508 6,943,019
Depreciation 5,141,966 6,020,910 5,568,319
Loss from impairment of long-lived assets 7,314,852
------------------ ---------------- --------------
TOTAL EXPENSES 24,285,028 32,533,254 24,321,889
------------------ ---------------- --------------
NET LOSS $ (3,569,523) $ (11,942,256) $ (4,159,275)
================== ================ ============
NET LOSS ATTRIBUTABLE TO
American Tax Credit Properties II L.P. $ (2,806,299) $ (5,180,297) $ (3,514,333)
General partners and other limited partners,
including ATCP & ATCP III, which includes
specially allocated items of revenue to
certain general partners of $22,425, $38,171
and $139,376, and $430,912, $6,301,666
and $341,567 of American Tax Credit Properties
II L.P. loss in excess of investment
(763,224) (6,761,959) (644,942)
--------------- ----------------- -----------
$ (3,569,523) $ (11,942,256) $ (4,159,275)
=============== ============== ===========
</TABLE>
<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1998, 1997 AND 1996
5. Investment in Local Partnerships (continued)
Investment activity with respect to each Local Partnership for the year ended
March 30, 1998 is as follows:
<TABLE>
<CAPTION>
Cash
Cash distributions
Investment Partnership's distributions classified Investment
in Local Investment equity in received as other in Local
Partnership during the income (loss) during the income Partnership
balance as year ended for the year year ended during the balance as
of March March 30, ended March 30, year ended of March
Name of Local Partnership 30, 1997 1998 December 31, 1998 March 30, 30, 1998
1997 1998
- - ------------------------------------------- ------------- -------------- ----------------- ---------------- -------------- --------
<S> <C> <C> <C> <C> <C> <C>
1989 Westview Arms Limited Partnership $ 54,461 $ -- $ 9,591 $ -- $ -- $ 64,052
2000-2100 Christian Street Associates -- -- -- (2) -- -- --
Ann Ell Apartments Associates, Ltd. -- 184,503 (184,503) (1) -- -- --
Auburn Hills Apartments Limited 52,531 -- (32,082) -- -- 20,449
Partnership
Auburn Hills Townhouses Limited 1,068,341 -- (207,929) (5,000) -- 855,412
Partnership
Batesville Family, L.P. 8,218 -- (8,218) (1) -- -- --
Browning Road Phase I, L.P. 34,129 -- (24,728) (1,200) -- 8,201
Bruce Housing Associates, L.P. 59,372 -- (9,669) -- -- 49,703
Canton Partners, L.P. 57,096 -- (42,052) (3,580) -- 11,464
Carrington Limited Dividend Housing
Association Limited Partnership 533,540 -- (57,720) -- -- 475,820
Christian Street Associates Limited -- -- -- (2) -- -- --
Partnership
Cityside Apartments, Phase II, L.P. 2,962,238 -- (543,744) (2,500) -- 2,415,994
Cleveland Square, Ltd. 38,183 -- (34,978) (600) -- 2,605
College Avenue Apartments Limited 69,196 -- (35,336) (820) -- 33,040
Partnership
Corrigan Square, Ltd. 101,955 -- (61,179) (1,200) -- 39,576
De Queen Villas Limited Partnership -- -- -- (2) -- -- --
Dermott Villas Limited Partnership 104,833 -- (28,996) -- -- 75,837
Eagle View, Ltd. 27,807 -- (9,818) -- -- 17,989
Elm Hill Housing Limited Partnership 3,066,618 -- (420,028) -- -- 2,646,590
Eudora Manor Limited Partnership 48,431 -- (17,849) -- -- 30,582
Forest Village Housing Partnership -- -- -- (2) -- -- --
Harborside Housing Limited Partnership 1,481,827 -- 100,823 (13,527) -- 1,569,123
Hill Com I Associates Limited Partnership 813,579 -- (8,372) (12,072) -- 793,135
Hill Com II Associates Limited Partnership 562,428 -- (25,201) (2,500) -- 534,727
Hughes Manor Limited Partnership 109,065 -- (32,733) -- -- 76,332
Ivy Family, L.P. 42,428 -- (10,317) -- -- 32,111
Lakeside Housing Limited Partnership 1,229,071 -- (262,690) (133,441) -- 832,940
Lawrence Road Properties, Ltd. 7,732 -- (7,732) (1) -- -- --
Lexington Estates Ltd. -- -- -- (2) (480) 480 --
Littleton Avenue Community Village, L.P. 684,961 -- (390,581) (2,500) -- 291,880
Lula Courts Ltd., L.P. 5,947 -- (5,467) (1) (480) -- --
Magee Elderly, L.P. 35,993 -- (7,153) -- -- 28,840
Mirador del Toa Limited Partnership -- -- -- (2) (388) 388 --
Nixa Heights Apartments, L.P. 36,326 -- (7,360) -- -- 28,966
North Hills Farms Limited Partnership 2,482,774 -- 138,659 (5,000) -- 2,616,433
Patton Place Limited Partnership 465,226 -- (26,999) -- -- 438,227
Plantersville Family, L.P. 42,356 -- (16,625) -- -- 25,731
Powelton Gardens Associates 383,695 -- (49,750) -- -- 333,945
Purvis Heights Properties, L.P. 50,520 -- (13,834) -- -- 36,686
Queen Lane Investors 262,002 -- (61,032) (3,781) -- 197,189
Renova Properties, L.P. 20,606 -- (17,763) -- -- 2,843
Santa Juanita Limited Dividend 241,870 -- (26,665) -- -- 215,205
Partnership L.P.
Simpson County Family, L.P. -- -- -- (2) -- -- --
Summers Village Limited Partnership 52,538 -- (19,182) -- -- 33,356
Tchula Courts Apartments, L.P. -- -- -- (2) (480) 480 --
The Pendleton 183,135 -- (27,501) (720) -- 154,914
Trenton Heights Apartments, L.P. 14,824 -- (9,734) -- -- 5,090
Twin Pine Family, L.P. 57,622 -- (16,442) -- -- 41,180
Village Creek Limited Partnership 139,379 -- (45,764) (1,518) -- 92,097
York Park Associates Limited Partnership 426,298 -- (247,646) (2,500) -- 176,152
------------- ----------- ----------- ----------- ------------ ------------
$18,119,151 $ 184,503 $(2,806,299) $ (194,287) $ 1,348 $ 15,304,416
=========== =========== =========== ========== ============ ============
(1) The Partnership's equity in loss of an investment in a Local
Partnership is limited to the remaining investment balance.
(2) Additional equity in loss of investment is not allocated to the
Partnership until equity in income is earned.
</TABLE>
<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1998, 1997 AND 1996
5. Investment in Local Partnerships (continued)
Investment activity with respect to each Local Partnership for the year
ended March 30, 1997 is as follows:
<TABLE>
<CAPTION>
Investment in Cash
Local Partnership's distributions Investment in
Partnership equity in income received Local
balance as of (loss) for the year during the year Partnership
March 30, ended ended balance as of
Name of Local Partnership 1996 December 31, March 30, March 30,
1996 1997 1997
----------------------------------------- ------------------ --------------------- ----------------- ------------------
<S> <C> <C> <C> <C>
1989 Westview Arms Limited Partnership $ 61,055 $ (6,594) $ -- $ 54,461
2000-2100 Christian Street Associates 423,066 (423,066) (1) -- --
Ann Ell Apartments Associates, Ltd. -- -- (2) -- --
Auburn Hills Apartments Limited 75,563 (23,032) -- 52,531
Partnership
Auburn Hills Townhouses Limited 1,424,845 (354,004) (2,500) 1,068,341
Partnership
Batesville Family, L.P. 28,529 (20,311) -- 8,218
Browning Road Phase I, L.P. 57,453 (23,324) -- 34,129
Bruce Housing Associates, L.P. 73,339 (13,967) -- 59,372
Canton Partners, L.P. 90,063 (31,177) (1,790) 57,096
Carrington Limited Dividend Housing
Association Limited Partnership 616,836 (83,296) -- 533,540
Christian Street Associates Limited 1,301,190 (1,301,190) (1) -- --
Partnership
Cityside Apartments, Phase II, L.P. 3,445,971 (478,733) (5,000) 2,962,238
Cleveland Square, Ltd. 63,799 (25,616) -- 38,183
College Avenue Apartments Limited 111,975 (41,959) (820) 69,196
Partnership
Corrigan Square, Ltd. 139,780 (37,825) -- 101,955
De Queen Villas Limited Partnership 30,661 (30,661) (1) -- --
Dermott Villas Limited Partnership 138,098 (33,265) -- 104,833
Eagle View, Ltd. 32,801 (4,994) -- 27,807
Elm Hill Housing Limited Partnership 3,438,461 (366,843) (5,000) 3,066,618
Eudora Manor Limited Partnership 69,579 (21,148) -- 48,431
Forest Village Housing Partnership -- -- (2) -- --
Harborside Housing Limited Partnership 1,450,111 34,096 (2,380) 1,481,827
Hill Com I Associates Limited 867,814 1,351 (55,586) 813,579
Partnership
Hill Com II Associates Limited 604,883 (13,147) (29,308) 562,428
Partnership
Hughes Manor Limited Partnership 138,546 (29,481) -- 109,065
Ivy Family, L.P. 52,330 (9,902) -- 42,428
Lakeside Housing Limited Partnership 1,560,517 (331,446) -- 1,229,071
Lawrence Road Properties, Ltd. 12,734 (5,002) -- 7,732
Lexington Estates Ltd. 12,536 (12,536) (1) -- --
Littleton Avenue Community Village, L.P. 1,088,264 (403,303) -- 684,961
Lula Courts Ltd., L.P. 27,975 (22,028) -- 5,947
Magee Elderly, L.P. 55,544 (18,820) (731) 35,993
Mirador del Toa Limited Partnership -- -- (2) -- --
Nixa Heights Apartments, L.P. 79,198 (42,872) -- 36,326
North Hills Farms Limited Partnership 2,936,302 (451,028) (2,500) 2,482,774
Patton Place Limited Partnership 515,576 (50,350) -- 465,226
Plantersville Family, L.P. 56,290 (13,934) -- 42,356
Powelton Gardens Associates 426,749 (43,054) -- 383,695
Purvis Heights Properties, L.P. 54,023 (3,503) -- 50,520
Queen Lane Investors 323,757 (55,874) (5,881) 262,002
Renova Properties, L.P. 38,278 (17,672) -- 20,606
Santa Juanita Limited Dividend 286,739 (44,869) -- 241,870
Partnership L.P.
Simpson County Family, L.P. 1,848 (1,848) (1) -- --
Summers Village Limited Partnership 76,280 (23,742) -- 52,538
Tchula Courts Apartments, L.P. -- -- (2) -- --
The Pendleton 217,353 (34,218) -- 183,135
Trenton Heights Apartments, L.P. 29,275 (14,451) -- 14,824
Twin Pine Family, L.P. 77,279 (19,657) -- 57,622
Village Creek Limited Partnership 159,435 (18,553) (1,503) 139,379
York Park Associates Limited Partnership 644,747 (213,449) (5,000) 426,298
--------------- -------------- ------------- ---------------
$ 23,417,447 $(5,180,297) $ (117,999) $ 18,119,151
============ ============ =========== ============
(1) The Partnership's equity in loss of an investment in a Local
Partnership is limited to the remaining investment balance. (2)
Additional equity in loss of investment is not allocated to the
Partnership until equity in income is earned.
</TABLE>
<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1998, 1997 AND 1996
5. Investment in Local Partnerships (continued)
Property information for each Local Partnership as of December 31, 1997 is
as follows:
<TABLE>
<CAPTION>
Mortgage Buildings and Accumulated
Name of Local Partnership loans payable Land improvements depreciation
--------------------------------------------------------- --------------- ---------------- ----------------- ----------------
<S> <C> <C> <C> <C>
1989 Westview Arms Limited Partnership $ 528,748 $ 20,275 $ 736,245 $ (173,819)
2000-2100 Christian Street Associates 2,822,479 -- -- --
Ann Ell Apartments Associates, Ltd. 2,350,410 199,645 2,838,576 (759,764)
Auburn Hills Apartments Limited Partnership 800,535 48,245 1,009,662 (220,118)
Auburn Hills Townhouses Limited Partnership 6,517,826 225,000 10,246,589 (3,809,452)
Batesville Family, L.P. 1,443,783 52,000 1,806,202 (474,324)
Browning Road Phase I, L.P. 860,934 43,000 999,617 (313,209)
Bruce Housing Associates, L.P. 1,112,700 16,000 1,418,598 (408,466)
Canton Partners, L.P. 1,449,534 35,000 1,812,723 (517,312)
Carrington Limited Dividend Housing
Association Limited Partnership 3,464,852 200,000 6,364,620 (1,803,962)
Christian Street Associates Limited Partnership 2,815,516 -- 721 --
Cityside Apartments, Phase II, L.P. 7,625,959 87,997 14,242,965 (4,032,450)
Cleveland Square, Ltd. 848,367 20,000 1,133,387 (334,100)
College Avenue Apartments Limited Partnership 606,954 24,600 997,538 (272,099)
Corrigan Square, Ltd. 1,459,790 63,358 1,862,552 (539,523)
De Queen Villas Limited Partnership 1,171,606 37,000 1,453,688 (343,283)
Dermott Villas Limited Partnership 1,068,171 15,000 1,348,882 (285,762)
Eagle View, Ltd. 415,863 35,000 496,686 (111,042)
Elm Hill Housing Limited Partnership 6,945,821 119,200 12,345,131 (3,746,810)
Eudora Manor Limited Partnership 753,953 16,000 936,661 (202,179)
Forest Village Housing Partnership 1,550,458 250,000 2,273,454 (652,784)
Harborside Housing Limited Partnership 3,625,485 39,400 6,583,302 (1,760,511)
Hill Com I Associates Limited Partnership 1,349,104 143,404 2,745,006 (762,289)
Hill Com II Associates Limited Partnership 1,061,757 112,110 2,105,354 (594,312)
Hughes Manor Limited Partnership 1,118,194 16,007 1,422,747 (302,779)
Ivy Family, L.P. 801,919 11,000 1,035,459 (304,284)
Lakeside Housing Limited Partnership 7,985,174 50,000 11,882,506 (3,420,710)
Lawrence Road Properties, Ltd. 762,171 50,000 928,273 (238,923)
Lexington Estates Ltd. 711,055 30,750 867,869 (289,959)
Littleton Avenue Community Village, L.P. 4,303,080 512,331 6,944,418 (1,858,439)
Lula Courts Ltd., L.P. 703,005 19,600 878,231 (282,252)
Magee Elderly, L.P. 592,809 30,000 714,094 (196,603)
Mirador del Toa Limited Partnership 1,891,902 105,000 2,327,341 (682,219)
Nixa Heights Apartments, L.P. 1,009,653 31,500 1,278,193 (350,728)
North Hills Farms Limited Partnership 2,994,864 525,000 11,487,928 (5,272,264)
Patton Place Limited Partnership 985,550 56,015 1,764,078 (352,694)
Plantersville Family, L.P. 601,762 12,000 751,194 (231,181)
Powelton Gardens Associates 1,025,667 29,207 1,934,005 (534,459)
Purvis Heights Properties, L.P. 1,153,999 47,000 1,443,465 (367,819)
Queen Lane Investors 1,580,073 60,301 2,735,277 (670,274)
Renova Properties, L.P. 640,657 22,700 791,905 (246,924)
Santa Juanita Limited Dividend Partnership L.P. 1,508,243 228,718 2,321,226 (688,156)
Simpson County Family, L.P. 816,364 24,700 1,010,582 (289,077)
Summers Village Limited Partnership 812,180 71,000 942,632 (208,116)
Tchula Courts Apartments, L.P. 739,611 10,000 911,318 (408,110)
The Pendleton 651,771 40,000 1,269,163 (397,398)
Trenton Heights Apartments, L.P. 441,960 29,200 563,381 (176,251)
Twin Pine Family, L.P. 618,833 7,000 782,816 (231,553)
Village Creek Limited Partnership 1,218,140 37,950 1,465,634 (342,411)
York Park Associates Limited Partnership 3,971,885 321,460 5,656,628 (1,695,249)
--------------- -------------- ----------------- ---------------
$ 92,291,126 $ 4,180,673 $ 139,868,522 $ (42,156,402)
=============== ============= =============== ==============
</TABLE>
<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1998, 1997 AND 1996
5. Investment in Local Partnerships (continued)
<TABLE>
<CAPTION>
Property information for each Local Partnership as of December 31, 1996 is
as follows:
Mortgage Buildings and Accumulated
Name of Local Partnership loans payable Land improvements depreciation
--------------------------------------------------------- --------------- ---------------- ----------------- ----------------
<S> <C> <C> <C> <C>
1989 Westview Arms Limited Partnership $ 546,363 $ 20,275 $ 736,245 $ (153,879)
2000-2100 Christian Street Associates 2,837,145 -- -- --
Ann Ell Apartments Associates, Ltd. 2,378,972 199,645 2,837,476 (655,470)
Auburn Hills Apartments Limited Partnership 802,220 48,245 1,009,662 (192,880)
Auburn Hills Townhouses Limited Partnership 6,574,035 225,000 10,030,745 (3,373,834)
Batesville Family, L.P. 1,446,124 52,000 1,792,092 (430,084)
Browning Road Phase I, L.P. 866,374 43,000 998,604 (274,290)
Bruce Housing Associates, L.P. 1,115,155 16,000 1,418,598 (354,315)
Canton Partners, L.P. 1,455,722 35,000 1,801,673 (449,526)
Carrington Limited Dividend Housing Association Limited
Partnership 3,487,158 200,000 6,359,188 (1,571,765)
Christian Street Associates Limited Partnership 2,830,407 -- -- --
Cityside Apartments, Phase II, L.P. 7,702,485 87,997 14,242,965 (3,514,576)
Cleveland Square, Ltd. 852,988 20,000 1,129,215 (288,929)
College Avenue Apartments Limited Partnership 609,266 24,600 997,538 (235,559)
Corrigan Square, Ltd. 1,467,570 63,358 1,849,084 (468,023)
De Queen Villas Limited Partnership 1,174,439 37,000 1,453,688 (301,846)
Dermott Villas Limited Partnership 1,070,453 15,000 1,348,314 (248,645)
Eagle View, Ltd. 418,251 35,000 496,686 (99,206)
Elm Hill Housing Limited Partnership 6,973,034 119,200 12,345,131 (3,297,957)
Eudora Manor Limited Partnership 755,311 16,000 936,661 (177,428)
Forest Village Housing Partnership 1,639,925 250,000 2,273,454 (565,842)
Harborside Housing Limited Partnership 3,782,222 39,400 6,583,302 (1,514,628)
Hill Com I Associates Limited Partnership 1,398,864 143,404 2,739,801 (659,012)
Hill Com II Associates Limited Partnership 1,094,108 112,110 2,092,549 (513,513)
Hughes Manor Limited Partnership 1,120,365 16,007 1,407,231 (264,616)
Ivy Family, L.P. 805,507 11,000 1,034,698 (264,504)
Lakeside Housing Limited Partnership 8,098,721 50,000 11,882,506 (2,986,046)
Lawrence Road Properties, Ltd. 763,628 50,000 928,273 (214,369)
Lexington Estates Ltd. 712,592 30,750 867,869 (258,803)
Littleton Avenue Community Village, L.P. 4,303,080 512,331 6,906,845 (1,602,998)
Lula Courts Ltd., L.P. 704,276 19,600 877,442 (250,277)
Magee Elderly, L.P. 593,802 30,000 714,094 (178,147)
Mirador del Toa Limited Partnership 1,896,098 105,000 2,327,341 (586,192)
Nixa Heights Apartments, L.P. 1,011,892 31,500 1,276,419 (326,744)
North Hills Farms Limited Partnership 3,170,532 525,000 11,262,375 (4,720,513)
Patton Place Limited Partnership 989,870 56,015 1,764,078 (308,592)
Plantersville Family, L.P. 603,300 12,000 751,194 (202,965)
Powelton Gardens Associates 1,053,208 29,207 1,919,136 (464,360)
Purvis Heights Properties, L.P. 1,156,152 47,000 1,439,927 (329,168)
Queen Lane Investors 1,587,345 60,301 2,731,943 (570,265)
Renova Properties, L.P. 641,829 22,700 787,908 (217,789)
Santa Juanita Limited Dividend Partnership L.P. 1,521,268 228,718 2,320,159 (603,379)
Simpson County Family, L.P. 817,698 24,700 1,009,620 (251,746)
Summers Village Limited Partnership 813,721 71,000 942,038 (179,754)
Tchula Courts Apartments, L.P. 741,111 10,000 910,747 (380,781)
The Pendleton 685,914 40,000 1,269,163 (349,345)
Trenton Heights Apartments, L.P. 442,886 29,200 561,080 (166,056)
Twin Pine Family, L.P. 621,916 7,000 782,816 (201,726)
Village Creek Limited Partnership 1,220,350 37,950 1,465,634 (305,606)
York Park Associates Limited Partnership 3,981,319 321,460 5,639,183 (1,490,390)
-------------------------------- ----------------- ---------------
$ 93,336,971 $ 4,180,673 $ 139,252,390 $ (37,016,338)
=============== ================ ================ =============
</TABLE>
<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1998, 1997 AND 1996
5. Investment in Local Partnerships (continued)
The summary of property activity during the year ended December 31, 1997
is as follows:
<TABLE>
<CAPTION>
Net change during
Balance as of the year ended Balance as of
December 31, 1996 December 31, 1997 December 31, 1997
----------------- ----------------- -----------------
<S> <C> <C> <C>
Land $ 4,180,673 $ $ 4,180,673
Buildings and improvements 139,252,390 616,132 139,868,522
------------- -------------- -------------
143,433,063 616,132 144,049,195
Accumulated depreciation (37,016,338) (5,140,064) (42,156,402)
-------------- -------------- --------------
$ 106,416,725 $ (4,523,932) $ 101,892,793
============= ============= =============
</TABLE>
An affiliate of the General Partner is the temporary local general partner
of the Forest Village Local Partnership. Since March 30, 1995, the
Partnership has had a zero investment balance in the Forest Village Local
Partnership and continues to account for such investment under the equity
method of accounting. The mortgage loans of the Forest Village Local
Partnership are nonrecourse to the Partnership. Selected balance sheet
data of the Forest Village Local Partnership as of December 31, 1997
includes land and building of $1,870,670 net of accumulated depreciation
of $652,784, total assets of $1,916,450, mortgage loans and accrued
interest of $1,610,286, total liabilities of $2,082,568 (of which $387,624
represents advances due to the Partnership) and partners' deficit of
$166,118. Selected balance sheet data of the Forest Village Local
Partnership as of December 31, 1996 includes land and building of
$1,957,612 net of accumulated depreciation of $565,842, total assets of
$2,022,455, mortgage loans and accrued interest of $1,691,511, total
liabilities of $2,166,132 (of which $387,624 represents advances due to
the Partnership) and partners' deficit of $143,677. Selected statement of
operations data for the year ended December 31, 1997 includes rental
income of $402,404, interest and other revenue of $49,573, interest
expense of $146,814, depreciation and amortization expenses of $89,928,
operating and maintenance expenses of $44,803, administrative expenses of
$91,868, utilities expenses of $51,598 and taxes and insurance expenses of
$49,407. Selected statement of operations data for the year ended December
31, 1996 includes rental income of $395,538, interest and other revenue of
$37,390, interest expense of $154,745, depreciation and amortization
expenses of $91,569, operating and maintenance expenses of $63,959,
administrative expenses of $73,725, utilities expenses of $42,291 and
taxes and insurance expenses of $48,183. Selected statement of operations
data for the year ended December 31, 1995 includes rental income of
$400,151, interest and other revenue of $37,390, interest expense of
$161,913, depreciation and amortization expenses of $92,452, operating and
maintenance expenses of $66,838, administrative expenses of $88,935,
utilities expenses of $27,595 and taxes and insurance expenses of $47,939.
Due to the continuing operating deficits and the uncertainty of future
operating income of the Christian Street Local Partnership and the 2000
Christian Street Local Partnership, the combined financial statements of
the Local Partnerships for the year ended December 31, 1996 included a
loss from impairment of long-lived assets totaling $7,314,852, which
represented an adjustment of the real property of the Christian Street
Local Partnership and the 2000 Christian Street Local Partnerships of
$3,986,977 and $3,327,875, respectively, based on estimates of expected
future cash flows.
6. Transactions with General Partner and Affiliates
For the years ended March 30, 1998, 1997 and 1996, the Partnership paid
and/or incurred the following amounts to the General Partner and/or
affiliates in connection with services provided to the Partnership:
<TABLE>
<CAPTION>
1998 1997 1996
--------------------------------------------------------------------------------
Paid Incurred Paid Incurred Paid Incurred
<S> <C> <C> <C> <C> <C> <C>
Management fees (see Note 8) $239,516 $299,307 $239,523 $299,307 $241,894 $299,307
</TABLE>
<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1998, 1997 AND 1996
6. Transactions with General Partner and Affiliates (continued)
For the years ended December 31, 1997, 1996 and 1995, the Local
Partnerships paid and/or incurred the following amounts to the General
Partner and/or affiliates in connection with services provided to the
Local Partnerships:
<TABLE>
<CAPTION>
1997 1996 1995
---------------------------------------------------------------------------
Paid Incurred Incurred Paid Incurred
Paid
<S> <C> <C> <C> <C> <C> <C>
Property management fees $117,817 $117,694 $121,649 $124,326 $120,350 $120,298
Insurance 69,999 70,078 62,504 64,315 102,147 104,595
Property development fees -- -- -- -- 102,807 --
</TABLE>
The property development fees were capitalized by the Local Partnerships.
7. Taxable Loss
A reconciliation of the financial statement net loss of the Partnership
for the years ended March 30, 1998, 1997 and 1996 to the tax return net
loss for the years ended December 31, 1997, 1996 and 1995 is as follows:
<TABLE>
<CAPTION>
1997
1998 1996
------------------ ---------------- -----------
<S> <C> <C> <C>
Financial statement net loss for the years ended
March 30, 1998, 1997 and 1996 $ (3,189,990) $ (5,506,972) $ (3,837,432)
Add (less) net transactions occurring between:
January 1, 1995 to March 30, 1995 -- -- (86,678)
January 1, 1996 to March 30, 1996 -- (76,176) 76,176
January 1, 1997 to March 30, 1997 (92,433) 92,433 --
January 1, 1998 to March 30, 1998 117,828 --
----------------- ------------------- --------------
Adjusted financial statement net loss for the years
ended December 31, 1997, 1996 and 1995 (3,164,595) (5,490,715) (3,847,934)
Adjustment to management fees pursuant to Internal
Revenue Code Section 267 57,344 59,791 59,792
Differences arising from equity in loss of investment
in Local Partnerships 204,609 673,859 (162,376)
Other differences 2,986 2,180 (9,196)
----------------- --------------- --------------
Tax return net loss for the years ended December 31,
1997, 1996 and 1995 $ (2,899,656) $ (4,754,885) $ (3,959,714)
============= ============ ============
</TABLE>
<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1998, 1997 AND 1996
7. Taxable Loss (continued)
The differences between the equity in the investment in Local Partnerships
for tax return and financial reporting purposes as of December 31, 1997
and 1996 are as follows:
<TABLE>
<CAPTION>
1997 1996
-----------------------------
<S> <C> <C>
Investment in Local Partnerships - financial reporting $ 15,334,276 $ 18,210,548
Investment in Local Partnerships - tax 16,338,795 19,008,326
-------------- -------------
$ (1,004,519) $ (797,778)
=============== ==============
</TABLE>
Payable to the general partner in the accompanying balance sheets
represents accrued management fees not deductible for tax purposes
pursuant to Internal Revenue Code Section 267.
8. Commitments and Contingencies
Pursuant to the Partnership Agreement, the Partnership is required to pay
the General Partner an annual management fee ("Management Fee") and an
annual additional management fee ("Additional Management Fee") for its
services in connection with the management of the affairs of the
Partnership, subject to certain provisions of the Partnership Agreement.
The annual Management Fee is equal to .14% of all proceeds as of December
31 of any year, invested or committed for investment in Local
Partnerships plus all debts of the Local Partnerships related to the
Properties ("Invested Assets"). The Partnership incurred a Management Fee
of $209,514 for each of the three years ended March 30, 1998. The annual
Additional Management Fee is equal to .06% of Invested Assets. The
Partnership incurred an Additional Management Fee of $89,793 for each of
the three years ended March 30, 1998. Such amounts are aggregated and
reflected under the caption management fees in the accompanying financial
statements. Unpaid Management Fees in the amount of $546,015 and $486,224
are recorded as payable to general partner in the accompanying balance
sheets as of March 30, 1998 and 1997, respectively.
In addition, pursuant to the Partnership Agreement, the Partnership is
required to pay ML Fund Administrators Inc., an affiliate of the Selling
Agent, an annual administration fee ("Administration Fee") and an annual
additional administration fee ("Additional Administration Fee") for its
administrative services provided to the Partnership. The annual
Administration Fee is equal to .14% of Invested Assets. The Partnership
incurred an Administration Fee of $209,514 for each of the three years
ended March 30, 1998. The annual Additional Administration Fee is subject
to certain provisions of the Partnership Agreement and is equal to .06%
of Invested Assets. The Partnership incurred an Additional Administration
Fee of $89,793 for each of the three years ended March 30, 1998. Such
amounts are aggregated and reflected under the caption administration
fees in the accompanying financial statements. Unpaid Administration Fees
in the amount of $546,025 and $486,231 are included in accounts payable
and accrued expenses in the accompanying balance sheets as of March 30,
1998 and 1997, respectively.
In connection with the Forest Village Local Partnership, the Partnership
facilitated the purchase of the first mortgage bonds (the "Series A
Bonds") at par by a group of investors (the "Group"). Though no member of
the Partnership is a participant of the Group, the individuals are
closely associated with the General Partner. Notwithstanding the close
association between the General Partner and the Group, the Group has all
the rights and remedies of the former first mortgagee. In connection with
this transaction, on November 12, 1993, the Partnership entered into a
Promissory Note and Loan Agreement (the "Note") with the Group for the
purpose of assisting the Partnership by providing advances to it so it
may help fund part of future operating deficits of the Forest Village
Local Partnership. The rate of interest is 10.5% per annum on the
principal balance from time to time outstanding. In the event that no
balance is outstanding under this Note, it shall continue as an effective
instrument at the option of the Group, to evidence future advances or
re-advances made by the Group. The entire outstanding principal balance
and all accrued and unpaid interest thereon shall be due and payable in
full on the earliest of (i) the final maturity of the Series A Bonds,
(ii) the prepayment in full or default under the terms of the loan or the
Series A bonds or (iii) the sale or other disposition of the Forest
Village Local Partnership. The Note is nonrecourse except to the extent
that the sum of the amounts advanced under the Note and amounts received
by the Partnership from the Forest Village Local Partnership exceeds
amounts paid by the Partnership in connection with the Forest Village
Local Partnership. As of March 30, 1998 and 1997, the Partnership has no
outstanding advance due under the Note and has incurred no interest
charges for the years ended March 30,
<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1998, 1997 AND 1996
8. Commitments and Contingencies (continued)
1998, 1997 and 1996. The rents of the Properties, many of which receive
rental subsidy payments, including payments under Section 8 of Title II
of the Housing and Community Development Act of 1974 ("Section 8"), are
subject to specific laws, regulations and agreements with federal and
state agencies. The subsidy agreements expire at various times during and
after the Compliance Periods of the Local Partnerships. In October 1997,
Congress passed the Multifamily Assisted Housing and Reform and
Affordability Act whereby the United States Department of Housing and
Urban Development ("HUD") has been given authority to renew certain
project based Section 8 contracts expiring during HUD's fiscal year 1998,
where requested by an owner, for an additional one year term generally at
or below current rent levels, subject to certain guidelines. HUD has
additional programs which, in general, provide for restructuring rents
and/or mortgages where rents may be adjusted to market levels and
mortgage terms may be adjusted based on the reduction in rents, although
there may be instances in which only rents, but not mortgages, are
restructured. The Partnership cannot reasonably predict legislative
initiatives and governmental budget negotiations, the outcome of which
could result in a reduction in funds available for the various federal
and state administered housing programs including the Section 8 program.
Such changes could adversely affect the future net operating income and
debt structure of any or all Local Partnerships currently receiving such
subsidy or similar subsidies. Six Local Partnerships have one or more
Section 8 contracts, certain of which cover only certain rental units,
which are scheduled to expire in 1998.
On July 16, 1997, the Partnership received a demand for certain
information with respect to the holders of Units, the stated purpose of
which was to assist such party in making an offer to Unit holders to
purchase their Units and otherwise to communicate with them concerning
such an offer. Subsequently, the Partnership requested certain
information from such party in order to assess the appropriateness of the
demand. On July 28, 1997, a complaint was filed in the Court of Chancery
of the State of Delaware in and for New Castle County against the
Partnership, the General Partner and its general partner seeking, among
other things, an order directing the defendants to immediately furnish
the requested information and awarding the plaintiff any resulting
damages. A one day trial was held on September 29, 1997. On December 5,
1997, the Court of Chancery issued a memorandum opinion and order,
holding that the plaintiff is entitled to the requested information
regarding Unit holders. On December 15, 1997, defendants filed a Notice
of Appeal to the Supreme Court of Delaware, which appeal was heard and
denied. The Partnership has complied with the Court of Chancery's order.
9. Fair Value of Financial Instruments
The following disclosure of the estimated fair value of financial
instruments is made in accordance with the requirements of SFAS No. 107,
"Disclosures about Fair Value of Financial Instruments." The estimated
fair value amounts have been determined using available market
information, assumptions, estimates and valuation methodologies.
Cash and Cash Equivalents
The carrying amount approximates fair value.
Investments in Bonds Available-For-Sale
Fair value is estimated based on market quotes provided by an independent
service as of the balance sheet dates.
Interest Receivable
The carrying amount approximates fair value due to the terms of the
underlying investments.
The estimated fair value of the Partnership's financial instruments as
of March 30, 1998 and 1997 are disclosed elsewhere in the financial
statements.
<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None
PART III
Item 10. Directors and Executive Officers of the Registrant
Registrant has no officers or directors. The General Partner manages
Registrant's affairs and has general responsibility and authority in all matters
affecting its business. The responsibilities of the General Partner are
currently carried out by Richman Tax Credits. The executive officers and
directors of Richman Tax Credits are:
<TABLE>
<CAPTION>
Served in present
Name capacity since (1) Position held
-------------------------------------------- ------------------------------- ---------------------------------
<S> <C> <C>
Richard Paul Richman October 26, 1988 President and Director
Eric P. Richelson October 26, 1988 Vice President
Neal Ludeke October 26, 1988 Vice President and Treasurer
David A. Salzman October 26, 1988 Vice President
Gina S. Scotti October 26, 1988 Secretary
----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Director holds office until his successor is elected and qualified.
All officers serve at the pleasure of the Director.
Richard Paul Richman, age 50, is the sole Director and President of Richman Tax
Credits. Mr. Richman is the President and sole stockholder of Richman Group. Mr.
Richman is involved in the syndication and management of residential property.
Mr. Richman is also a director of Wilder Richman Resources Corp., an affiliate
of Richman Tax Credits and the general partner of Secured Income L.P., a
director of Wilder Richman Historic Corporation, an affiliate of Richman Tax
Credits and the general partner of Wilder Richman Historic Properties II, L.P.,
a director of Richman Tax Credit Properties Inc., an affiliate of Richman Tax
Credits and the general partner of the general partner of American Tax Credit
Properties L.P., a director of Richman Housing Credits Inc., an affiliate of
Richman Tax Credits and the general partner of the general partner of American
Tax Credit Properties III L.P. and a director of Richman American Credit Corp.,
an affiliate of Richman Tax Credits and the manager of American Tax Credit
Trust, a Delaware statutory business trust.
Eric P. Richelson, age 46, is a Vice President of Richman Tax Credits. Mr.
Richelson is President of Wilder Richman Management Corporation, a property
management company affiliated with Richman Tax Credits. In addition, Mr.
Richelson is a Vice President of Richman Asset Management, LLC ("RAM"), an
affiliate of Richman Tax Credits. Mr. Richelson's responsibilities in connection
with RAM include advisory services provided to a small business investment
company.
Neal Ludeke, age 40, is a Vice President and the Treasurer of Richman Tax
Credits. Mr. Ludeke, a Vice President and the Treasurer of Richman Group, is
engaged primarily in the syndication, asset management and finance operations of
Richman Group. In addition, Mr. Ludeke is a Vice President and the Treasurer of
RAM. Mr. Ludeke's responsibilities in connection with RAM include advisory
services provided to a small business investment company and various partnership
management functions.
David A. Salzman, age 37, is a Vice President of Richman Tax Credits. Mr.
Salzman is responsible for the acquisition and development of residential real
estate for syndication as a Vice President of acquisitions of Richman Group.
Gina S. Scotti, age 42, is the Secretary of Richman Tax Credits. Ms. Scotti is a
Vice President and the Secretary of Richman Group. As the Director of Investor
Services, Ms. Scotti is responsible for communications with investors.
<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
Item 11. Executive Compensation
Registrant has no officers or directors. Registrant does not pay the officers or
director of Richman Tax Credits any remuneration. During the year ended March
30, 1998, Richman Tax Credits did not pay any remuneration to any of its
officers or its director.
Item 12. Security Ownership of Certain Beneficial Owners and Management
As of May 20, 1998, no person or entity was known by Registrant to be the
beneficial owner of more than five percent of the Units. Richman Tax Credits is
wholly-owned by Richard Paul Richman.
Item 13. Certain Relationships and Related Transactions
The General Partner and certain of its affiliates are entitled to receive
certain compensation, fees and reimbursement of expenses and have
received/earned fees for services provided to Registrant as described in Notes 6
and 8 to the audited financial statements included in Item 8 - "Financial
Statements and Supplementary Data" herein.
Transactions with General Partner and Affiliates
The tax losses and Low-income Tax Credits generated by Registrant during the
year ended December 31, 1997 allocated to the General Partner were $28,997 and
$81,360, respectively. The tax losses and Low-income Tax Credits generated by
the General Partner during the year ended December 31, 1997 (from the allocation
of Registrant discussed above) and allocated to Richman Tax Credits were $18,384
and $51,577, respectively.
Indebtedness of Management
No officer or director of the General Partner or any affiliate of the foregoing
was indebted to Registrant at any time during the year ended March 30, 1998.
<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) Financial Statements, Financial Statement Schedules and Exhibits
(1) Financial Statements
See Item 8 - "Financial Statements and Supplementary Data."
(2) Financial Statement Schedules
No financial statement schedules are included because of the
absence of the conditions under which they are required or because
the information is included in the financial statements or the
notes thereto.
(3) Exhibits
<TABLE>
<CAPTION>
Incorporated by
Exhibit Reference to
------- ------------
<S> <C> <C>
10.01 1989 Westview Arms Limited Partnership Exhibit 10.8 to Form 10-Q
Amended and Restated Certificate and Report dated September 29, 1990
Articles of Limited Partnership (File No. 0-18405)
10.02 2000-2100 Christian Street Associates Exhibit 10.8 to Form 10-Q
Amended and Restated Agreement of Report dated December 30, 1989
Limited Partnership (File No. 33-25337)
10.03 Ann Ell Apartments Associates, Ltd. Exhibit 10.1 to Form 10-Q
Second Amended and Restated Agreement of Report dated June 29, 1990
Limited Partnership (File No. 0-18405)
10.04 Auburn Hills Apartments Limited Exhibit 10.2 to Form 10-Q
Partnership Amended and Report dated June 29, 1990
Restated Certificate and Articles (File No. 0-18405)
of Limited Partnership
10.05 Auburn Hills Townhouses Limited Exhibit 10.01 to Form 10-K
Partnership Amended and Restated Report dated March 30, 1990
Agreement of Limited Partnership (File No. 0-18405)
10.06 Batesville Family, L.P. Amended and Exhibit 10.02 to Form 10-K
Restated Agreement of Limited Report dated March 30, 1990
Partnership (File No. 0-18405)
10.07 Batesville Family, L.P. First Exhibit 10.05 to Form 10-K
Amendment to the Amended and Report dated March 30, 1992
Restated Agreement of Limited Partnership (File No 0-18405)
10.08 Amendment No. 1 to the Batesville Family, L.P. Exhibit 10.06 to Form 10-K
Amended and Restated Report dated March 30, 1992
Agreement of Limited Partnership (File No. 0-18405)
10.09 Amendment No. 2 to the Batesville Exhibit 10.1 to Form 10-Q
Family, L.P. Amended and Restated Report dated December 30, 1990
Agreement of Limited Partnership (File No. 0-18405)
</TABLE>
<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Incorporated by
Exhibit Reference to
------- ------------
<S> <C> <C>
10.10 Batesville Family, L.P. Amendment Exhibit 10.1 to Form 10-Q
No. 3 to Amended and Restated Report dated December 30, 1991
Agreement of Limited Partnership (File No. 0-18405)
10.11 Browning Road Phase I, L.P. Exhibit 10.1 to Form 10-Q
Amended and Restated Agreement Report dated September 29, 1990
of Limited Partnership (File No. 0-18405)
10.12 Browning Road Phase I, L.P. Exhibit 10.2 to Form 10-Q
First Agreement to Amended and Report dated September 29, 1990
Restated Agreement of Limited Partnership (File No. 0-18405)
10.13 Bruce Housing Associates, L.P. Exhibit 10.03 to Form 10-K
Amended and Restated Agreement of Report dated March 30, 1990
Limited Partnership (File No. 0-18405)
10.14 Amendment No. 1 to the Exhibit 10.12 to Form 10-K
Bruce Housing Associates, L.P. Report dated March 30, 1992
Amended and Restated Agreement (File No. 0-18405)
of Limited Partnership
10.15 Bruce Housing Associates, L.P. Exhibit 10.13 to Form 10-K
First Amendment to Amended and Restated Report dated March 30, 1992
Agreement of Limited Partnership (File No. 0-18405)
10.16 Amendment No. 2 to the Bruce Housing Exhibit 10.2 to Form 10-Q
Associates, L.P. Amended and Report dated December 30, 1990
Restated Agreement of Limited Partnership (File No. 0-18405)
10.17 Bruce Housing Associates, L.P. Exhibit 10.2 to Form 10-Q
Amendment No. 3 to the Amended Report dated December 30, 1991
and Restated Agreement of (File No. 0-18405)
Limited Partnership
10.18 Canton Partners, L.P. Exhibit 10.2 to Form 10-Q
Amended and Restated Agreement of Report dated December 30, 1989
Limited Partnership (File No. 33-25337)
10.19 Carrington Limited Dividend Housing Exhibit 10.3 to Form 10-Q
Association Limited Partnership Report dated September 29, 1990
Amended and Restated Agreement (File No. 0-18405)
of Limited Partnership
10.20 Carrington Limited Dividend Exhibit 10.4 to Form 10-Q
Housing Association Limited Partnership Report dated September 29, 1990
Second Amended and Restated (File No. 0-18405)
Agreement of Limited Partnership
10.21 Carrington Limited Dividend Housing Association Exhibit 10.3 to Form 10-Q
Limited Partnership Amendment No. 1 to the Report dated December 30, 1990
Second Amended and Restated Agreement (File No. 0-18405)
of Limited Partnership
10.22 Christian Street Associates Exhibit 10.2 to Form 10-Q
Limited Partnership Second Amended and Report dated September 29, 1989
Restated Agreement and Certificate (File No. 33-25337)
of Limited Partnership
</TABLE>
<PAGE>
- - --------------------------------------------------------------------------------
<TABLE>
- - --------------------------------------------------------------------------------
<CAPTION>
Incorporated by
Exhibit Reference to
------- ------------
<S> <C> <C>
10.23 Cityside Apartments, Phase II, L.P. Exhibit 10.1 to Form 10-Q
Amended and Restated Agreement of Report dated September 29, 1989
Limited Partnership (File No. 33-25337)
10.24 Amendment No. 1 to Cityside Exhibit 10.22 to Form 10-K
Apartments, Phase II, L.P. Report dated March 30, 1992
Amended and Restated Agreement of (File No. 0-18405)
Limited Partnership
10.25 Cleveland Square, Ltd. Exhibit 10.07 to Form 10-K
Amended and Restated Agreement of Report dated March 30, 1990
Limited Partnership (File No. 0-18405)
10.26 College Avenue Apartments Exhibit 10.7 to Form 10-Q
Limited Partnership Amended Report dated December 30, 1989
and Restated and Articles of (File No. 33-25337)
Partnership in Commendam
10.27 Corrigan Square, Ltd. Exhibit 10.09 to Form 10-K
Amended and Restated Agreement of Report dated March 30, 1990
Limited Partnership (File No. 0-18405)
10.28 Critical Ventures Housing Exhibit 10.3 to Form 10-Q
Partnership III, A Washington Limited Report dated June 29, 1990
Partnership Amended and Restated (File No. 0-18405)
Agreement of Limited Partnership
10.29 De Queen Villas Limited Partnership Exhibit 10.11 to Form 10-K
Amended and Restated Certificate and Report dated March 30, 1990
Agreement of Limited Partnership (File No. 0-18405)
10.30 Dermott Villas Limited Partnership Exhibit 10.12 to Form 10-K
Amended and Restated Certificate and Report dated March 30, 1990
Agreement of Limited Partnership (File No. 0-18405)
10.31 Eagle View, Ltd. Second Amended and Exhibit 10.4 to Form 10-K
Restated Certificate of Limited Report dated June 29, 1990
Partnership and Limited Partnership Agreement (File No. 0-18405)
10.32 Elm Hill Housing Limited Partnership Exhibit 10.13 to Form 10-K
Second Amended and Restated Report dated March 30, 1990
Agreement and Certificate of Limited Partnership (File No. 0-18405)
10.33 Eudora Manor Limited Partnership Exhibit 10.14 to Form 10-K
Amended and Restated Agreement Report dated March 30, 1990
and Certificate of Limited Partnership (File No. 0-18405)
10.34 Forest Village Housing Partnership Exhibit 10.2 to Form 10-Q
Amendment No. 1 to Amended and Restated Report dated December 30, 1993
Agreement of Limited Partnership (File No. 0-18405)
10.35 Amended and Restated Agreement Exhibit 10.5 to Form 10-Q
of Limited Partnership Report dated September 29, 1990
Harborside Housing Limited Partnership (File No. 0-18405)
</TABLE>
<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Incorporated by
Exhibit Reference to
------- ------------
<S> <C> <C>
10.36 Hill Com I Associates Limited Exhibit 10.9 to Form 10-Q
Partnership Amended and Restated Report dated December 30, 1989
Agreement and Certificate of Limited Partnership (File No. 33-25337)
10.37 Hill Com I Associates Exhibit 10.35 to Form 10-K
Limited Partnership First Amendment Report dated March 30, 1992
to Amended and Restated Agreement and (File No. 0-18405)
Certificate of Limited Partnership
10.38 Hill Com II Associates Limited Exhibit 10.10 to Form 10-Q
Partnership Amended and Restated Report dated December 30, 1989
Agreement and Certificate of Limited Partnership (File No. 33-25337)
10.39 Hill Com II Associates Limited Exhibit 10.37 to Form 10-K
Partnership First Amendment to Report dated March 30, 1992
Amended and Restated Agreement and (File No. 0-18405)
Certificate of Limited Partnership
10.40 Hughes Manor Limited Partnership Exhibit 10.17 to Form 10-K
Amended and Restated Certificate Report dated March 30, 1990
and Articles of Limited Partnership (File No. 0-18405)
10.41 Ivy Family, L.P. Amended and Exhibit 10.18 to Form 10-K
Restated Agreement of Limited Report dated March 30, 1990
Partnership (File No. 0-18405)
10.42 Amendment No. 1 to the Ivy Family, Exhibit 10.4 to Form 10-Q
L.P. Amended and Restated Agreement Report dated December 31, 1990
of Limited Partnership (File No. 0-18405)
10.43 Ivy Family, L.P. Amendment No. 3 to the Exhibit 10.3 to Form 10-Q
Amended and Restated Agreement Report dated December 30, 1991
of Limited Partnership (File No. 0-18405)
10.44 Second Amended and Restated Agreement Exhibit 10.6 to Form 10-Q
of Limited Partnership Lakeside Housing Report dated September 29, 1990
Limited Partnership (File No. 0-18405)
10.45 Lawrence Road Properties, Ltd. Exhibit 10.11 to Form 10-Q
Amended and Restated Agreement of Report dated December 30, 1989
Limited Partnership (File No. 33-25337)
10.46 Amendment No. 2 to the Lawrence Road Exhibit 10.5 to Form 10-Q
Properties, Ltd. Amended and Report dated December 31, 1990
Restated Agreement of Limited (File No. 0-18405)
Partnership
10.47 Lawrence Road Properties, Ltd. Exhibit 10.4 to Form 10-Q
Amendment No. 3 to the Amended and Restated Report dated December 30, 1991
Agreement of Limited Partnership (File No. 0-18405)
10.48 Lexington Estates Ltd., A Mississippi Exhibit 10.20 to Form 10-K
Limited Partnership Amended and Restated Report dated March 30, 1990
Agreement of Limited Partnership (File No. 0-18405)
</TABLE>
<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Incorporated by
Exhibit Reference to
------- ------------
<S> <C> <C>
10.49 Littleton Avenue Community Exhibit 10.3 to Form 10-Q
Village, L.P. Amended and Report dated September 29, 1989
Restated Agreement of Limited Partnership (File No. 33-25337)
10.50 Lula Courts Ltd., L.P. Exhibit 10.22 to Form 10-K
Amended and Restated Agreement of Report dated March 30, 1990
Limited Partnership (File No. 0-18405)
10.51 Magee Elderly, L.P. Amended Exhibit 10.1 to Form 10-Q
and Restated Agreement of Report dated December 30, 1989
Limited Partnership (File No. 33-25337)
10.52 Mirador del Toa Limited Partnership Exhibit 10.5 to Form 10-Q
(A Delaware Limited Partnership) Report dated June 29, 1990
Amended and Restated Agreement (File No. 0-18405)
of Limited Partnership
10.53 Amendment No. 1 to the Mirador Exhibit 10.40 to Form 10-K
del Toa Limited Partnership Report dated March 30, 1991
(A Delaware Limited Partnership) (File No. 0-18405)
Amended and Restated Agreement
of Limited Partnership
10.54 Nixa Heights Apartments, L.P. Exhibit 10.24 to Form 10-K
Amended and Restated Agreement and Report dated March 30, 1990
Certificate of Limited Partnership (File No. 0-18405)
10.55 North Hills Farms Limited Exhibit 10.6 to Form 10-Q
Partnership Second Amended and Restated Report dated June 29, 1990
Agreement of Limited Partnership (File No. 0-18405)
10.56 First Amendment to the Exhibit 10.54 to Form 10-K
North Hills Farms Limited Partnership Report dated March 30, 1992
Second Amended and Restated Agreement (File No. 0-18405)
of Limited Partnership
10.57 Patton Place Limited Partnership Exhibit 10.25 to Form 10-K
Second Amended and Restated Agreement Report dated March 30, 1990
of Limited Partnership (File No. 0-18405)
10.58 Plantersville Family, L.P. Exhibit 10.26 to Form 10-K
Amended and Restated Agreement of Report dated March 30, 1990
Limited Partnership (File No. 0-18405)
10.59 Powelton Gardens Associates Exhibit 10.6 to Form 10-Q
Amended and Restated Agreement of Report dated December 30, 1989
Limited Partnership (File No. 33-25337)
10.60 Purvis Heights Properties, L.P. Exhibit 10.28 to Form 10-K
Amended and Restated Agreement of Report dated March 30, 1990
Limited Partnership (File No. 0-18405)
10.61 Purvis Heights Properties, L.P. Exhibit 10.60 to Form 10-K
First Amendment to Amended and Report dated March 30, 1992
Restated Agreement of Limited Partnership (File No. 0-18405)
</TABLE>
<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Incorporated by
Exhibit Reference to
------- ------------
<S> <C> <C>
10.62 Amendment No. 1 to the Purvis Heights Exhibit 10.61 to Form 10-K
Properties, L.P. Amended and Restated Report dated March 30, 1992
Agreement of Limited Partnership (File No. 0-18405)
10.63 Amendment No. 2 to the Purvis Heights Exhibit 10.6 to Form 10-Q
Properties, L.P. Amended and Report dated December 31, 1990
Restated Agreement of Limited (File No. 0-18405)
Partnership
10.64 Purvis Heights Properties, L.P. Exhibit 10.5 to Form 10-K
Amendment No. 3 to the Report dated December 30, 1991
Amended and Restated (File No. 0-18405)
Agreement of Limited Partnership
10.65 Queen Lane Investors Amended and Exhibit 10.29 to Form 10-K
Restated Agreement and Certificate Report dated March 30, 1990
of Limited Partnership (File No. 0-18405)
10.66 Queen Lane Investors Amendment No. 1 Exhibit 10.7 to Form 10-Q
to Amended and Restated Agreement Report dated December 31, 1990
and Certificate of Limited Partnership (File No. 0-18405)
10.67 Renova Properties, L.P. Amended Exhibit 10.3 to Form 10-Q
and Restated Agreement of Report dated December 30, 1989
Limited Partnership (File No. 33-25337)
10.68 Santa Juanita Limited Dividend Exhibit 10.5 to Form 10-Q
Partnership Amended and Restated Report dated December 30, 1989
Agreement of Limited Partnership (File No. 33-25337)
10.69 Second Amendment of Limited Partnership Exhibit 10.68 to Form 10-K
of Santa Juanita Limited Dividend Partnership Report dated March 30, 1994
and Amendment No. 2 to the Amended and (File No. 0-18405)
Restated Agreement of Limited Partnership
10.70 Amendment No. 1 to Santa Juanita Limited Exhibit 10.1 to Form 10-Q
Dividend Partnership L.P. Amended and Report dated September 29, 1995
Restated Agreement of Limited Partnership (File No. 0-18405)
(Replaces in its entirety Exhibit 10.69 hereof.)
10.71 Amendment No. 2 to Santa Juanita Limited Exhibit 10.2 to Form 10-Q
Dividend Partnership L.P. Amended and Report dated September 29, 1995
Restated Agreement of Limited Partnership (File No. 0-18405)
10.72 Simpson County Family, L.P. Exhibit 10.4 to Form 10-Q
Amended and Restated Agreement of Report dated December 30, 1989
Limited Partnership (File No. 33-25337)
10.73 Summers Village Limited Partnership Exhibit 10.7 to Form 10-Q
Amended and Restated Certificate Report dated June 29, 1990
of Limited Partnership and (File No. 0-18405)
Limited Partnership Agreement
10.74 Tchula Courts Apartments, L.P. Exhibit 10.33 to Form 10-K
Amended and Restated Agreement and Report dated March 30, 1990
Certificate of Limited Partnership (File No. 0-18405)
</TABLE>
<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Incorporated by
Exhibit Reference to
------- ------------
<S> <C> <C>
10.75 The Pendleton (A Louisiana Partnership Exhibit 10.7 to Form 10-Q
in Commendam) Third Amended and Report dated September 29, 1990
Restated Articles of Partnership (File No. 0-18405)
10.76 Trenton Heights Apartments, L.P. Exhibit 10.34 to Form 10-K
Amended and Restated Agreement and Report dated March 30, 1990
Certificate of Limited Partnership (File No. 0-18405)
10.77 Twin Pine Family, L.P. Amended and Exhibit 10.35 to Form 10-K
Restated Agreement of Limited Report dated March 30, 1990
Partnership (File No. 0-18405)
10.78 Village Creek Limited Partnership Exhibit 10.8 to Form 10-Q
Amended and Restated Certificate and Report dated June 29, 1990
Articles of Limited Partnership (File No. 0-18405)
10.79 York Park Associates Limited Partnership Exhibit 10.1 to Form 10-Q
Amended and Restated Agreement of Report dated June 29, 1989
Limited Partnership (File No. 33-25337)
10.80 Non-Negotiable Purchase Money Exhibit 10.8 to Form 10-Q
Promissory Notes dated as of Report dated December 30, 1990
January 19, 1990 (File No. 0-18405)
10.81 Non-Negotiable Purchase Money Exhibit 10.9 to Form 10-Q
Promissory Notes dated as of May 1, 1990 Report dated December 30, 1990
(File No. 0-18405)
10.82 Assignment and Assumption Agreements Exhibit 10.63 to Form 10-K
dated as of June 28, 1991 on the Report dated March 30, 1991
Non-Negotiable Purchase Money (File No. 0-18405)
Promissory Notes dated as of January 19, 1990
10.83 Assignment and Assumption Agreements Exhibit 10.64 to Form 10-K
dated as of June 28, 1991 on the Report dated March 30, 1991
Non-Negotiable Purchase Money (File No. 0-18405)
Promissory Notes dated as of May 1, 1990
10.84 Promissory Note and Loan Agreement Exhibit 10.1 to Form 10-Q
dated November 12, 1993 Report dated December 30, 1993
(File No. 0-18405)
27 Financial Data Schedule
28.1 Pages 14 through 33, 47 through 70 and 86 through 88
Exhibit 28.1 to Form 10-K of prospectus dated May 10, 1989
filed pursuant to Report dated March 30, 1990 Rule
424(b)(3) under the Securities Act of 1933 (File No.
0-18405)
28.2 Supplement No. 1 dated Exhibit 28.2 to Form 10-K
July 25, 1989 of Prospectus Report dated March 30, 1991
(File No. 0-18405)
28.3 Supplement No. 2 dated Exhibit 28.3 to Form 10-K
September 18, 1989 of Prospectus Report dated March 30, 1991
(File No. 0-18405)
</TABLE>
<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
(b) Reports on Form 8-K
No reports on Form 8-K were filed by Registrant during the last
quarter of the period covered by this report.
(c) Exhibits
See (a)(3) above.
(d) Financial Statement Schedules
See (a)(2) above.
<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
AMERICAN TAX CREDIT PROPERTIES II L.P.
(a Delaware limited partnership)
By: Richman Tax Credit Properties II L.P.,
General Partner
by: Richman Tax Credits Inc.,
general partner
Dated: June 29, 1998 /s/ Richard Paul Richman
------------------------- ------------------------
by: Richard Paul Richman
President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Richard Paul Richman President, Chief Executive Officer June 29, 1998
- - ------------------------- and Director of the general partner
of the General Partner ----------------------
/s/ Neal Ludeke Vice President and Treasurer of the June 29, 1998
- - --------------------------- general partner of the General Partner
(Principal Financial and Accounting
Officer of Registrant) ----------------------
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted
from the year ended March 30, 1998 Form 10-K Consolidated Balance
Sheets and Consolidated Statements of Operations as of March 30,
1998, and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000842314
<NAME> American Tax Credit Properties, II L.P.
<MULTIPLIER> 1000
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-30-1998
<PERIOD-START> MAR-31-1997
<PERIOD-END> MAR-30-1998
<EXCHANGE-RATE> 1.00
<CASH> 514
<SECURITIES> 4,270
<RECEIVABLES> 74
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 20,163
<CURRENT-LIABILITIES> 1,241
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 18,921
<TOTAL-LIABILITY-AND-EQUITY> 20,163
<SALES> 0
<TOTAL-REVENUES> 353
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 737
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,190)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,190)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,190)
<EPS-PRIMARY> (56.65)
<EPS-DILUTED> 0
</TABLE>
