FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 1997
OR
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ________ to ___________
Commission file number: 0-20058
WNC CALIFORNIA HOUSING TAX CREDITS, L.P.
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
California 33-0316953
WNC CALIFORNIA HOUSING TAX CREDITS, L.P.
3158 Redhill Avenue, Suite 120, Costa Mesa, CA 92626
(714) 662-5565
Securities registered pursuant to Section 12(b) of the Act:
Title of Securities Exchanges on which Registered
NONE NOT APPLICABLE
Securities registered pursuant to section 12(g) of the Act:
NONE
<PAGE>
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ____
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. x
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and
the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document
is incorporated: (1) Any annual report to security holders; (2) Any proxy or
information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or
(c) under the Securities Act of 1933. The listed documents should be clearly
described for identification purposes (e.g., annual report to security holders
for fiscal year ended December 24, 1980).
NONE
2
<PAGE>
Item 1. Business
Organization
WNC California Tax Housing Credits, L.P. ("CHTC" or the "Partnership") is a
California Limited Partnership formed under the laws of the State of California
on September 15, 1988. The Partnership was formed to acquire limited partnership
interests in local limited partnerships ("Local Limited Partnerships") which own
multifamily apartment complexes that are eligible for low-income housing federal
and California income tax credits ("Low Income Housing Credits").
The general partners of the Partnership are WNC & Associates, Inc.
("Associates") and Wilfred N. Cooper, Sr. (collectively, the "General
Partners"). Wilfred N. Cooper, Sr through the Cooper Revocable Trust, owns just
less than 70% of the outstanding stock of Associates. John B. Lester, Jr. is the
original limited partner of the Partnership and owns, through the Lester Family
Trust, just less than 30% of the outstanding stock of Associates. The business
of the Partnership is conducted primarily through Associates as the Partnership
has no employees of its own.
Associates became a general partner upon its acquisition of all of the
outstanding stock of WNC Resources, Inc. in August 1991. WNC Resources, Inc. was
originally a general partner and Mr. Cooper was its principal shareholder.
On March 16, 1989, the Partnership commenced a public offering of 10,000 Units
of Limited Partnership Interests ("Units"), at a price of $1,000 per Units. As
of the close of the public offering, October 31, 1990, a total of 7,450 Units
representing $7,450,000 had been sold. Holders of Units are referred herein as
"Limited Partners".
Description of Business
The Partnership's principal business objective is to provide its Limited
Partners with Low Income Housing Credits. The Partnership's principal business
therefore consists of investing as a limited partner in Local Limited
Partnerships each of which will own and operate an apartment complex ("Apartment
Complex") which will qualify for the Low Income Housing Credit. In general,
under Section 42 of the Internal Revenue Code, an owner of low-income housing
can receive the Low Income Housing Credit to be used against Federal taxes
otherwise due in each year of a ten year period. In general, under Section 17058
of the California Revenue and Taxation Code, an owner of low-income housing can
receive the Low Income Housing Credit to be used against California taxes
otherwise due in each year of a four year period. The Apartment Complex is
subject to a fifteen-year compliance period (the "Compliance Period").
3
<PAGE>
In general, in order to avoid recapture of Low Income Housing Credits, the
Partnership does not expect that it will dispose of its interests in Local
Limited Partnerships ("Local Limited Partnership Interests") or approve the sale
by a Local Limited Partnership of any Apartment Complex prior to the end of the
applicable Compliance Period. Because of (i) the nature of the Apartment
Complexes, (ii) the difficulty of predicting the resale market for low-income
housing 15 or more year in the future, and (iii) the inability of the
Partnership to directly cause the sale of Apartment Complexes by the general
partners of the respective Local Limited Partnerships ("Local General
Partners"), but generally only to require such Local General Partners to use
their respective best efforts to find a purchaser for the Apartment Complexes
(and then subject to the ability of government lenders to disapprove of
transfers), it is not possible at this time to predict whether the liquidation
of substantially all of the Partnership's assets and the disposition of the
proceeds, if any, in accordance with the Partnership Agreement will be able to
be accomplished promptly at the end of the 15-year period. If a Local Limited
Partnership is unable to sell an Apartment Complex, it is anticipated that the
Local General Partner will either continue to operate such Apartment Complex or
take such other actions as the Local General Partner believes to be in the best
interest of the Local Limited Partnership. In addition, circumstances beyond the
control of the General Partner may occur during the Compliance Period which
would require the Partnership to approve the disposition of an Apartment Complex
prior to the end thereof.
As of December 31, 1996, CHTC has invested in 11 Local Limited Partnerships.
Each of these Local Limited Partnerships owns an Apartment Complex that is
eligible for the federal Low Income Housing Tax Credit. Eight of the Apartment
Complexes are eligible for the California Low Income Housing Credit. All of the
Local Limited Partnerships also benefit from government programs promoting low
or moderate income housing.
The Partnership's investments in Local Limited Partnerships are subject to the
risks incident to the management and ownership of multifamily residential real
estate. Some of these risks are that the Housing Tax Credit could be recaptured
and neither the Partnership's investments nor the Apartment Complexes owned by
Local Limited Partnerships will be readily marketable. Additionally there can be
no assurance that the Partnership will be able to dispose of its interest in
Local Limited Partnerships at the end of the Compliance Period. The value of the
Partnership's investments will be subject to changes in national and local
economic conditions, including unemployment conditions, which could adversely
impact vacancy levels, rental payment defaults and operating expenses. This, in
turn, could substantially increase the risk of operating losses for the
Apartment Complexes and the Partnership. The Apartment Complexes could be
subject to loss through foreclosure. In addition, each Local Limited Partnership
is subject to risks relating to environmental hazards which might be
uninsurable. Because the Partnership's ability to control its operations will
depend on these and other factors beyond the control of the General Partners and
the general partners of the Local Limited Partnerships, there can be no
assurance that Partnership operations will be profitable or that the anticipated
Low Income Housing Credits will be available to Limited Partners.
As of December 31, 1997, all of the Apartment Complexes were completed and in
operation. The Apartment Complexes owned by the Local Limited Partnerships in
which CHTC has invested were developed by the Local General Partners who
acquired the sites and applied for applicable mortgages and subsidies. CHTC
became the principal limited partner in these Local Limited Partnerships
pursuant to arm's-length negotiations with the general partners of the
respective Local Limited Partnerships ("Local General Partners"). As a limited
partner, CHTC's liability for obligations of the Local Limited Partnership is
limited to its investment. The Local General Partner of the Local Limited
Partnership retains responsibility for developing, constructing, maintaining,
operating and managing the Apartment Complex.
4
<PAGE>
The following is a schedule of the status as of December 31, 1997, of the
Apartment Complexes owned by Local Limited Partnerships in which CHTC is a
limited partner.
<TABLE>
<CAPTION>
SCHEDULE OF PROJECTS OWNED BY LOCAL PARTNERSHIPS
IN WHICH THE PARTNERSHIP HAS AN INVESTMENT
AS OF DECEMBER 31, 1997
No. of Units Units Percentage of Total
Name & Location Apts. Completed Occupied Units Occupied
- --------------- ----- --------- -------- --------------
<S> <C> <C> <C> <C>
Alta Vista Investors, Ltd. 42 42 41 98%
Orisi, California
BCA Associates, Ltd. 40 40 40 100%
Anderson, California
Cloverdale Garden Apts., Ltd. 34 34 34 100%
Cloverdale, California
Countryway Associates, Ltd. 41 41 39 95%
Mendota, California
East Garden Apartments, Ltd 51 51 49 96%
Jamestown, California
HPA Investors, Ltd. 42 42 41 98%
Shafter, California
Knights Landing, Ltd. 25 25 23 92%
Knights Landing, California
Midland Manor Associates 40 40 37 94%
Mendota, California
San Jacinto Associates 38 38 26 68%
San Jacinto, California
Woodlake Manor, Ltd. 44 44 39 89%
Woodlake, California
Yreka Investment Group, Ltd. 36 36 35 97%
Yreka, California -- -- -- --
433 433 404 93%
==== ==== === ===
</TABLE>
Item 2. Properties
Through its investment in Local Partnerships CHTC holds interests in
Apartment Complexes. See Item 1 for information pertaining to these Apartment
Complexes.
Item 3. Legal Proceedings
NONE.
Item 4. Submission of Matters to a Vote of Security Holders
NONE.
5
<PAGE>
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
Item 5a.
(a) The Units are not traded on a public exchange but were sold through a public
offering. It is not anticipated that any public market will develop for the
purchase and sale of any Unit. Units can be assigned only if certain
requirements in CHTC's Agreement of Limited Partnership ("Partnership
Agreement") are satisfied. (b) At December 31, 1997, there were 688 Limited
Partners. (c) The Partnership was not designed to provide cash distributions to
Limited Partners in circumstances other than refinancing or disposition of its
investments in Local Limited Partnerships. The Limited Partners received $99 and
$100 federal Low Income Housing Credits per Unit for the years 1996 and 1997,
respectively. State Low Income Housing Credits in the aggregate amount of $473
to $700 per Limited Partnership Interest were generated from 1989 through 1994.
Item 6. Selected Financial Data
<TABLE>
<CAPTION>
Years Ended December 31,
1997 1996 1995 1994 1993
----- ----- ----- ---- ----
<S> <C> <C> <C> <C> <C>
Revenues $2,227 $3,549 $3,911 $2,764 $2,885
Partnership
operating expenses (139,595) (138,716) (145,806) (145,636) (157,710)
Equity in loss of
Local Partnership (420,868) (476,567) (412,291) (437,264) (375,550)
-------- -------- -------- --------- --------
Net loss $(558,236) $(611,734) $(554,186) $(580,136) $(530,375)
======== ======== ======== ======== ========
Net loss per Limited
Partnership Interest $ (74) $ (81) $ (74) $ $ (70)
========== ========== ========== ======= ==========
(77)
Total assets $2,079,931 $2,526,490 $3,027,914 $3,470,515 $3,938,958
========= ========= ========= ========= =========
Net investment in
Local Partnerships $2,001,822 $2,442,547 $2,943,052 $3,376,715 $3,836,281
========= ========= ========= ========= =========
Capital contributions
payable to Local
Partnerships -0- -0- -0- -0- -0-
= = = = =
</TABLE>
6
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operation
Liquidity and Capital Resources
- -------------------------------
The Partnership raised $7,450,000 from investors by means of a public offering.
The Net Proceeds available for investment were disbursed for the payment of
Acquisition Fees and Acquisition Expenses, the establishment of Reserves, the
payment of operating expenses and the acquisition of investments in Local
Limited Partnerships which own the Apartment Complexes. The Partnership has paid
all capital contributions due for its investments in Local Limited Partnerships
and has no further obligations for its property investments.
Overall, as reflected in its Statement of Cash Flows, the Partnership had a net
decrease in cash and cash equivalents of approximately $5,800 for the period
ended December 31, 1997. This decrease was due to cash used by operating
activities for the Partnership of approximately $10,800 and cash provided by
investing activities of approximately $5,000 of distributions from Local Limited
Partnerships.
Overall, as reflected in its Statement of Cash Flows, the Partnership had a net
decrease in cash and cash equivalents of approximately $600 for the period ended
December 31, 1996. This decrease was due to cash used by operating activities
for the Partnership of approximately $9,600 and cash provided by investing
activities of approximately $9,000 of distributions from Local Limited
Partnerships. Cash provided by operating activities for the two years, consisted
of interest, and cash used consisted of payments for operating fees and
expenses.
It is not expected that any of the Local Limited Partnerships in which the
Partnership has invested will generate cash sufficient to provide distributions
to The Partnership of any material amount. Distributions to the Partnership
would first by used to meet operating expenses of the Partnership, including the
payment of the Asset Management Fee to the General Partner.
The Partnership's investments are not readily marketable and may be affected by
adverse general economic conditions which, in turn, could substantially increase
the risk of operating losses for the Apartment Complexes, the Local Limited
Partnerships and the Partnership. These problems may result from a number of
factors, many of which cannot be controlled by the General Partners.
Nevertheless, the General Partners anticipate that capital raised from the sale
of the Units is sufficient to fund the Partnership's operations.
Upon completion of its pubic offering (in 1991) the Partnership established
working capital reserves of 3.3% of capital contributions (or approximately
$247,000), an amount which is anticipated to be sufficient to satisfy general
working capital and administrative expense requirements of the Partnership
including payment of the asset management fee as well as expenses attendant to
the preparation of tax returns and reports to the limited partners and other
investor servicing obligations of the Partnership. To the extent that working
capital reserves are insufficient to satisfy the cash requirements of the
Partnership, it is anticipated that additional funds would be sought through
bank loans or other institutional financing. The General Partners may also apply
any cash distributions received from the local limited partnerships for such
purposes or to replenish or increase working capital reserves.
7
<PAGE>
Under its partnership agreement the Partnership does not have the ability to
assess its partners for additional capital contributions to provide capital if
needed by the Partnership or Local Limited Partnerships. Accordingly, if
circumstances arise that cause the Local Limited Partnerships to require capital
in addition to that contributed by the Partnership and any equity of the Local
General Partners, the only sources from which such capital needs will be able to
be satisfied (other than the limited reserves available at the Partnership
level) will be (i) third-party debt financing (which may not be available, if,
as expected, the apartment complexes owned by the local limited partnerships are
already substantially leveraged), (ii) additional equity contributions or
advances of the Local General Partners, (iii) other equity sources (which could
adversely affect the Partnership's interest in tax credits, cash flow and/or
proceeds of sale or refinancing of the apartment complexes and result in adverse
tax consequences to the Limited Partners), or (iv) the sale or disposition of
the apartment complexes (which could have the same adverse effects as discussed
in (iii) above). There can be no assurance that funds from any of such sources
would be readily available in sufficient amounts to fund the capital requirement
of the Local Limited partnerships in question. If such funds are not available,
the Local Limited Partnerships would risk foreclosure on their apartment
complexes if they were unable to renegotiate the terms of their first mortgages
and any other debt secured by the apartment complexes to the extent the capital
requirements of the local limited partnerships relate to such debt.
Reserves of the Partnership and reserves of the Local Limited Partnership may be
increased or decreased from time to time by the General Partner or the Local
General Partner, as the case may be, in order to meet anticipated costs and
expenses. The amount of cash flow available for distribution and/or Sale or
Refinancing Proceeds, if any, which is available for distribution to the Limited
Partners may be affected accordingly.
Results of Operations
- ---------------------
As reflected on its Statements of Operations, the Partnership had losses of
$558,236, $611,734 and $554,186 for the years ended December 31, 1997, 1996, and
1995, respectively. The component items of revenue and expense are discussed
below.
Revenue. Partnership revenues consisted entirely of interest earned on cash
deposits held in financial institutions as Reserves. Interest revenue in future
years will be a function of prevailing interest rates and the amount of cash
balances. It is anticipated that the Partnership will maintain cash reserves in
an amount not materially in excess of the minimum amount required by its
Partnership Agreement, which is 3% of Capital Contributions.
Expenses. The most significant component of operating expenses is expected to be
the Asset Management Fee. The Asset Management Fees is equal to 0.5% of Invested
assets of local Limited Partnerships: accordingly the amount to be incurred in
the future is a function of the level of such invested assets (i.e., the sum of
the Partnerships' capital contributions to the Local Limited Partnerships plus
the Partnership's share of the debts related to the Apartment Complexes owned by
such Local Limited Partnerships). The annual management fee incurred was
$111,691, $111,691, and $111,691, for the years ended December 31, 1997, 1996,
and 1995, respectively, of which no amounts were paid in such years.
Office expense consists of the Partnership's administrative expenses, such as
accounting and legal fees, bank charges and investor reporting expenses.
8
<PAGE>
Equity in losses from Local Limited Partnerships. The Partnership's equity in
losses from Local Limited Partnerships is equal to 99% of the aggregate net loss
of the Local Limited Partnerships. After rent-up, the Local Limited Partnerships
are expected to generate losses during each year of operations; this is so
because, although rental income is expected to exceed cash operating expenses,
depreciation and amortization deductions claimed by the Local Limited
Partnerships are expected to exceed net rental income.
The Partnership, as a Limited Partner in the Local Limited Partnerships in which
it has invested, is subject to the risks incident to the construction,
management, and ownership of improved real estate. The Partnership investments
are also subject to adverse general economic conditions, and accordingly, the
status of the national economy, including substantial unemployment and
concurrent inflation, could increase vacancy levels, rental payment defaults,
and operating expenses, which in turn, could substantially increase the risk of
operating losses for the Apartment Complexes.
9
<PAGE>
Item 8. Financial Statements and Supplementary Data
WNC CALIFORNIA HOUSING TAX CREDITS, L.P.
(A California Limited Partnership)
FINANCIAL STATEMENTS
For The Years Ended
December 31, 1997, 1996 and 1995
with
INDEPENDENT AUDITORS' REPORT THEREON
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Partners
WNC California Housing Tax Credits, L.P.
We have audited the accompanying balance sheets of WNC California Housing Tax
Credits, L.P. (a California Limited Partnership) (the "Partnership") as of
December 31, 1997 and 1996, and the related statements of operations, partners'
equity (deficit) and cash flows for the years ended December 31, 1997, 1996 and
1995. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits. We did not audit the financial statements of the
limited partnerships in which WNC California Housing Tax Credits, L.P. is a
limited partner. These investments, as discussed in Note 2 to the financial
statements, are accounted for by the equity method. The investments in these
limited partnerships represented 96% and 97% of the total assets of WNC
California Tax Credits, L.P., at December 31, 1997 and 1996, respectively. The
financial statements of the limited partnerships were audited by other auditors
whose reports have been furnished to us, and our opinion, insofar as it relates
to the amounts included for these limited partnerships, is based solely on the
reports of the other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits and the reports of the other auditors provide a
reasonable basis for our opinion.
In our opinion, based on our audits and the reports of the other auditors, the
financial statements referred to above present fairly, in all material respects,
the financial position of WNC California Housing Tax Credits, L.P. (A California
Limited Partnership) as of December 31, 1997 and 1996, and the results of its
operations and its cash flows for each of the years ended December 31, 1997,
1996 and 1995 in conformity with generally accepted accounting principles.
/s/CORBIN & WERTZ
-----------------
CORBIN & WERTZ
Irvine, California
March 18, 1998
<PAGE>
WNC CALIFORNIA HOUSING TAX CREDITS, L.P.
(A California Limited Partnership)
BALANCE SHEETS
December 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
--------------- ----------------
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 78,109 $ 83,943
Investments in limited partnerships (Note 2) 2,001,822 2,442,547
--------------- ----------------
$ 2,079,931 $ 2,526,490
=============== ================
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities -
Accrued fees and expenses due to general partner and
affiliates (Note 3) $ 705,925 $ 594,248
--------------- ----------------
Partners' equity (deficit):
General partners (51,100) (45,518)
Limited partners (10,000 units authorized; 7,450 units
issued and outstanding at December 31, 1997 and 1996) 1,425,106 1,977,760
--------------- ----------------
Total partners equity 1,374,006 1,932,242
--------------- ----------------
$ 2,079,931 $ 2,526,490
=============== ================
</TABLE>
See accompanying notes to financial statements
FS-2
<PAGE>
WNC CALIFORNIA HOUSING TAX CREDITS, L.P.
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
For The Years Ended December 31, 1997, 1996 and 1995
<TABLE>
<CAPTION>
1997 1996 1995
--------------- --------------- ---------------
<S> <C> <C>
Interest income $ 2,227 $ 3,549 $ 3,911
Operating expenses:
Amortization (Note 2) 14,904 14,904 15,970
Partnership management fees (Note 3) 111,691 111,691 111,691
Legal and accounting 5,339 5,175 7,000
Office 7,661 6,946 11,145
------------- ------------- -------------
Total operating expenses 139,595 138,716 145,806
------------- ------------- -------------
Loss from operations (137,368) (135,167) (141,895)
Equity in losses from limited partnerships (Note 2) (420,868) (476,567) (412,291)
------------- ------------- -------------
Net loss $ (558,236) $ (611,734) $ (554,186)
============= ============= =============
Net loss allocable to:
General partners $ (5,582) $ (6,117) $ (5,542)
============= ============= =============
Limited partners $ (552,654) $ (605,617) $ (548,644)
============= ============= =============
Net loss per weighted number of limited partners
units $ (74.18) $ (81.29) $ (73.64)
============= ============ =============
Outstanding weighted limited partner units 7,450 7,450 7,450
============= ============= =============
</TABLE>
See accompanying notes to financial statements
FS-3
<PAGE>
WNC CALIFORNIA HOUSING TAX CREDITS, L.P.
(A California Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
For The Years Ended December 31, 1997, 1996 and 1995
<TABLE>
<CAPTION>
General Limited
Partners Partners Total
--------------- --------------- ---------------
<S> <C> <C> <C>
Equity (deficit) - January 1, 1995 $ (33,859) $ 3,132,021 $ 3,098,162
Net loss (5,542) (548,644) (554,186)
------------- ------------- -------------
Equity (deficit) - December 31, 1995 (39,401) 2,583,377 2,543,976
Net loss (6,117) (605,617) (611,734)
------------- ------------- -------------
Equity (deficit) - December 31, 1996 (45,518) 1,977,760 1,932,242
Net loss (5,582) (552,654) (558,236)
------------- ------------- -------------
Equity (deficit) - December 31, 1997 $ (51,100) $ 1,425,106 $ 1,374,006
============= ============= =============
</TABLE>
See accompanying notes to financial statements
FS-4
<PAGE>
WNC CALIFORNIA HOUSING TAX CREDITS, L.P.
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
For The Years Ended December 31, 1997, 1996 and 1995
<TABLE>
<CAPTION>
1997 1996 1995
--------------- --------------- ---------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (558,236) $ (611,734) $ (554,186)
Adjustments to reconcile net loss to net
cash used in operating activities:
Amortization 14,904 14,904 15,970
Equity in loss of limited partnerships 420,868 476,567 412,291
Change in other assets - 358 (284)
Change in accrued fees and expenses
due to general partner and affiliates 111,677 110,310 111,585
------------- ------------- -------------
Net cash used in operating activities (10,787) (9,595) (14,624)
Cash flows provided by investing activities -
Distributions from limited partnerships 4,953 9,034 5,402
------------- ------------- -------------
Net decrease in cash and cash equivalents (5,834) (561) (9,222)
Cash and cash equivalents, beginning of year 83,943 84,504 93,726
------------- ------------- -------------
Cash and cash equivalents, end of year $ 78,109 $ 83,943 $ 84,504
============= ============= =============
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Interest paid $ - $ - $ -
============= ============= =============
Taxes paid $ 800 $ 800 $ 800
============= ============= =============
</TABLE>
See accompanying notes to financial statements
FS-5
<PAGE>
WNC CALIFORNIA HOUSING TAX CREDITS, L.P.
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For The Years Ended December 31, 1997, 1996 and 1995
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- --------------------------------------------------------------------
Organization
- ------------
WNC California Housing Tax Credits, L.P. (A California Limited Partnership) (the
"Partnership") was formed on September 15, 1988 under the laws of the State of
California. The Partnership was formed to invest as a limited partner in other
limited partnerships which own and operate multifamily housing complexes that
are eligible for low income housing tax credits.
WNC & Associates, Inc., a California corporation, and Wilfred N. Cooper, Sr.,
are general partners of the Partnership (the "General Partner"). The Cooper
Revocable Trust is the principal shareholder of WNC & Associates, Inc.
The Partnership shall continue to be in full force and effect until December 31,
2037 unless terminated prior to that date pursuant to the partnership agreement
or law.
The Partnership Agreement authorized the sale of up to 10,000 units of Limited
Partnership Interests at $1,000 per Unit ("Units"). The offering of Units
concluded in October 1990 at which time 7,450 Units representing subscriptions
in the amount of $7,450,000 had been accepted. The General Partner has a 1%
interest in operating profits and losses of the Partnership. The limited
partners will be allocated the remaining 99% interest in proportion to their
respective investments.
After the limited partners have received proceeds from a sale or refinancing
equal to their capital contributions and their return on investment (as defined
in the Partnership Agreement) and the General Partner has received a
subordinated disposition fee (as described in Note 3), any additional sale or
refinancing proceeds will be distributed 90% to the limited partners (in
proportion to their respective investments) and 10% to the General Partner.
The Partnership's investments in limited partnerships are subject to the risks
incident to the management and ownership of multifamily residential real estate,
and include the risks that neither the Partnership's investments nor the
apartment complexes owned by the limited partnerships will be readily
marketable. Additionally there can be no assurance that the Partnership will be
able to dispose of its interests in the limited partnerships. The value of the
Partnership's investments will be subject to changes in national and local
economic conditions, including unemployment conditions, which could adversely
impact vacancy levels, rental payment defaults and operating expenses. This, in
turn, could substantially increase the risk of operating losses for the
apartment complexes and the Partnership. The apartment complexes could be
subject to loss through foreclosure. In addition, each limited partnership is
subject to risks relating to environmental hazards which might be uninsurable.
Because the Partnership's ability to control its operations will depend on these
and other factors beyond the control of the General Partner and the general
partners of the limited partnerships, there can be no assurance that Partnership
operations will be profitable or that the anticipated housing tax credits will
be available to limited partners.
FS-6
<PAGE>
WNC CALIFORNIA HOUSING TAX CREDITS, L.P.
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Years Ended December 31, 1997, 1996 and 1995
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
- -------------------------------------------------------------------------------
Method of Accounting For Investment in Limited Partnerships
- -----------------------------------------------------------
The Partnership accounts for its investments in limited partnerships using the
equity method of accounting, whereby the Partnership adjusts its investment
balance for its share of each limited partnership's results of operations and
for any distributions received. The accounting policies of the limited
partnerships are consistent with those of the Partnership. Costs incurred by the
Partnership in acquiring the investments in limited partnerships are capitalized
as part of the investment and are being amortized over 30 years (Note 2).
Losses from limited partnerships allocated to the Partnership are not recognized
to the extent that the investment balance would be adjusted below zero.
Cash and Cash Equivalents
The Partnership considers all highly liquid investments with remaining
maturities of three months or less when purchased to be cash equivalents.
Organization Costs
- ------------------
Organization costs of $59,142 were being amortized on the straight-line method
over sixty months. Such costs were fully amortized at December 31, 1997 and
1996.
Offering Expenses
- -----------------
Offering expenses consist of underwriting commissions, legal fees, printing,
filing and recordation fees, and other costs incurred with selling limited
partnership interests in the Partnership. The General Partner is obligated to
pay all offering and organization costs in excess of 15% (including sales
commissions) of the total offering proceeds. Offering expenses amounted to
$946,704 at December 31, 1997 and 1996 and are reflected as a reduction of
limited partners' capital.
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 revenues and expenses during the reporting period.
Actual results could materially differ from those estimates.
FS-7
<PAGE>
WNC CALIFORNIA HOUSING TAX CREDITS, L.P.
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Years Ended December 31, 1997, 1996 and 1995
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
- -------------------------------------------------------------------------------
Net Loss Per Limited Partner Units
- ----------------------------------
Net loss per weighted number of limited partner units is computed by dividing
the limited partners' share of net loss by the weighted number of limited
partner units outstanding during the year.
Reclassifications
- -----------------
Certain prior year balances have been reclassified to conform to the 1997
presentation.
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS
- --------------------------------------------
As of December 31, 1997 and 1996, the Partnership has acquired limited
partnership interests in eleven limited partnerships which own and operate
apartment complexes consisting of 433 apartment units. The respective general
partners of the limited partnerships manage the day to day operations of the
limited partnerships. Significant limited partner business decisions, as
defined, require the approval of the Partnership. The Partnership, as a limited
partner, is generally entitled to 99% of the operating profits and losses of the
limited partnerships.
The Partnership's investment in limited partnerships as reflected in the
accompanying balance sheets at December 31, 1997 and 1996, is approximately
$208,000 and $225,000, respectively, greater than the Partnership's equity as
shown in the limited partnerships' combined financial statements. This
difference is due primarily to acquisition, selection and other costs related to
the acquisition of the limited partnerships which were capitalized in the
Partnership's investment account and to certain costs incurred by the limited
partnerships which were netted against partners' capital on the limited
partnerships' financial statements. Acquisition, selection and other costs
capitalized by the Partnership are being amortized over 30 years (see Note 3).
The following is a summary of the equity method activity of the investments in
limited partnerships for the years ended December 31:
<TABLE>
<CAPTION>
1997 1996
--------------- ----------------
<S> <C> <C>
Investments per balance sheet, beginning of year $ 2,442,547 $ 2,943,052
Equity in loss of limited partnerships (420,868) (476,567)
Distributions (4,953) (9,034)
Amortization of capitalized acquisition costs (14,904) (14,904)
--------------- ----------------
Investments per balance sheet, end of year $ 2,001,822 $ 2,442,547
=============== ================
</TABLE>
FS-8
<PAGE>
WNC CALIFORNIA HOUSING TAX CREDITS, L.P.
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Years Ended December 31, 1997, 1996 and 1995
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
- -------------------------------------------------------
Approximate combined condensed financial information from the individual
financial statements of the limited partnerships as of December 31 and for the
years then ended is as follows:
COMBINED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
1997 1996
--------------- ----------------
ASSETS
<S> <C> <C>
Buildings and improvements, net of accumulated
depreciation for 1997 and 1996 of $4,818,000 and
$4,200,000, respectively $ 16,617,000 $ 17,203,000
Land 1,484,000 1,484,000
Other assets 1,387,000 1,331,000
--------------- ----------------
Total assets $ 19,488,000 $ 20,018,000
=============== ================
LIABILITIES
Mortgage loans payable $ 16,854,000 $ 16,882,000
Other liabilities 483,000 542,000
--------------- ----------------
Total liabilities 17,337,000 17,424,000
--------------- ----------------
PARTNERS' CAPITAL
WNC California Housing Tax Credits, L.P. 1,794,000 2,218,000
Other partners 357,000 376,000
--------------- ----------------
Total partners' capital 2,151,000 2,594,000
--------------- ----------------
$ 19,488,000 $ 20,018,000
=============== ================
</TABLE>
FS-9
<PAGE>
WNC CALIFORNIA HOUSING TAX CREDITS, L.P.
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Years Ended December 31, 1997, 1996 and 1995
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
- -------------------------------------------------------
<TABLE>
<CAPTION>
COMBINED CONDENSED STATEMENTS OF OPERATIONS
1997 1996 1995
--------------- --------------- ---------------
<S> <C> <C> <C>
Total revenues, including rental and interest
subsidies $ 1,802,000 $ 1,771,000 $ 1,783,000
------------- ------------- -------------
Expenses:
Operating expenses 1,199,000 1,236,000 1,159,000
Interest expense 410,000 406,000 407,000
Depreciation and amortization 618,000 611,000 633,000
------------- ------------- -------------
Total expenses 2,227,000 2,253,000 2,199,000
------------- ------------- -------------
Net loss $ (425,000) $ (482,000) $ (416,000)
============= ============= =============
Net loss allocable to the Partnership $ (421,000) $ (477,000) $ (412,000)
============= ============= =============
</TABLE>
Certain limited partnerships have incurred operating losses and working capital
deficiencies. In the event these limited partnerships continue to incur
operating losses, additional capital contributions by the Partnership may be
required to sustain operations of such limited partnerships. If additional
capital contributions are not made when they are required, the Partnership's
investment in certain of such limited partnerships could be impaired.
NOTE 3 - RELATED PARTY TRANSACTIONS
- -----------------------------------
Under the terms of the Partnership Agreement, the Partnership has paid or is
obligated to the General Partner or its affiliates for the following items:
Acquisition fees equal to 6% of the gross proceeds from the sale of
Units as compensation to the General Partner for services rendered to
the Partnership in connection with the acquisition of limited
partnerships. As of December 31, 1997 and 1996, acquisition fees of
$447,060 have been incurred and included in the Partnership's
investment in limited partnerships. Accumulated amortization amounted
to $172,053 and $157,149 as of December 31, 1997 and 1996,
respectively.
Reimbursement of costs incurred by an affiliate of the General Partner
in connection with the acquisition of limited partnerships. These
reimbursements have not exceeded 3% of the gross proceeds. As of
December 31, 1997 and 1996, the Partnership incurred acquisition costs
of $32,018 which have been included in the limited partnership
investment. Such costs were fully amortized at December 31, 1997 and
1996.
FS-10
<PAGE>
WNC CALIFORNIA HOUSING TAX CREDITS, L.P.
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Years Ended December 31, 1997, 1996 and 1995
NOTE 3 - RELATED PARTY TRANSACTIONS, continued
- ----------------------------------------------
An annual management fee equal to 0.5% of the invested assets of the
limited partnerships, including the Partnership's allocable share of
the mortgages. Fees of $111,691 were incurred during 1997, 1996 and
1995. No amounts were paid during 1997, 1996 or 1995.
A subordinated disposition fee in an amount equal to 1% of the sales
price of any property sold. Payment of this fee to the General Partner
is subordinated to the limited partners who receive a 6% preferred
return (as defined in the partnership agreement) and is payable only
if the General Partner or its affiliates render services.
Accrued fees and expenses due to General Partner and affiliates are summarized
as follows:
<TABLE>
<CAPTION>
1997 1996
--------------- ----------------
<S> <C> <C>
Due to affiliate $ - $ 14
Annual management fees accrued net of amounts owed
by General Partner 705,925 594,234
--------------- ----------------
Total $ 705,925 $ 594,248
=============== ================
</TABLE>
NOTE 4 - INCOME TAXES
- ---------------------
No provision for income taxes has been recorded in the accompanying financial
statements as any liability for income taxes is the obligation of the partners
of the Partnership.
FS-11
<PAGE>
Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
NONE.
Item 10. Directors and Executive Officers of the Registrant
Directors of Registrant
The Partnership has no directors or executive officers of its own. The following
biographical information is presented for the directors and executive officers
of Associates which has principal responsibility for the Partnership's affairs.
Directors and Executive Officers of WNC & Associates, Inc.
The directors of Associates are Wilfred N. Cooper, Sr., who serves as Chairman
of the Board, John B. Lester, Jr., David N. Shafer, Wilfred N. Cooper, Jr. and
Kay L. Cooper. Substantially all of the shares of Associates are owned by
Wilfred N. Cooper, Sr., through the Cooper Revocable Trust, and John B. Lester,
Jr., through the Lester Family Trust.
WILFRED N. COOPER, SR., age 67, has been the principal shareholder and a
Director of WNC & ASSOCIATES, INC. since its organization in 1971, of SHELTER
RESOURCE CORPORATION since its organization in 1981 and of WNC RESOURCES, INC.
from its organization in 1988 through its acquisition by WNC & ASSOCIATES, INC.
in 1991, serving as President of those companies until 1992 and as Chief
Executive Officer since 1992, and has been a Director of WNC CAPITAL CORPORATION
since its organization. He is also a general partner with WNC & ASSOCIATES, INC.
in WNC FINANCIAL GROUP, L.P. and WNC TAX CREDIT PARTNERS, L.P. During 1970 and
1971 he was a principal of Creative Equity Development Corporation, a
predecessor of WNC & ASSOCIATES, INC., and of Creative Equity Corporation, a
real estate investment firm. For 12 years prior to that, Mr. Cooper was employed
by Rockwell International Corporation, last serving as its manager of housing
and urban developments. Previously, he had responsibility for new business
development including factory-built housing evaluation and project management in
urban planning and development. Mr. Cooper is a Director of the Executive
Committee of the National Association of Home Builders (NAHB) and a past
Chairman of the NAHB's Rural Housing Council, a Director of the National Housing
Conference, a Director of the Affordable Housing Tax Credit Coalition, a past
President of the California Council of Affordable Housing (CCAH) (formerly Rural
Builders Council of California), and a past President of Southern California
Chapter II of the Real Estate Syndication and Securities Institute (RESSI) of
the National Association of Realtors (NAR). Mr. Cooper graduated from Pomona
College in 1956 with a Bachelor of Arts degree.
JOHN B. LESTER, JR., age 64, has been a shareholder, a Director and Secretary of
WNC & ASSOCIATES, INC. since 1986, Executive Vice President from 1986 to 1992,
and President and Chief Operating Officer since 1992, and has been a Director of
WNC CAPITAL CORPORATION since its organization. He was a shareholder, Executive
Vice President, Secretary and a Director of WNC RESOURCES, INC. from 1988
through its acquisition by WNC & ASSOCIATES, INC. in 1991. From 1973 to 1986 he
was Chairman of the Board and Vice President or President of E & L Associates,
Inc., a provider of engineering and construction services to the oil refinery
and petrochemical industries which he co-founded in 1973. Mr. Lester is a former
Director of the Los Angeles Chapter of the Associated General Contractors of
California. His responsibilities at WNC & ASSOCIATES, INC. include property
acquisitions and company operations. Mr. Lester graduated from the University of
Southern California in 1956 with a Bachelor of Science degree in Mechanical
Engineering.
10
<PAGE>
DAVID N. SHAFER, age 45, has been a Director of WNC & ASSOCIATES, INC. since
1997, a Senior Vice President since 1992, and General Counsel since 1990, and
served as Asset Management Director from 1990 to 1992, and has been a Director
and Secretary of WNC Management, Inc. since its organization. Previously he was
employed as an associate attorney by the law firms of Morinello, Barone, Holden
& Nardulli from 1987 until 1990, Frye, Brandt & Lyster from 1986 to 1987 and
Simon and Sheridan from 1984 to 1986. Mr. Shafer is a Director and President of
CCAH, a member of NAHB's Rural Housing Council, a past President of Southern
California Chapter II of RESSI, a past Director of the Council of Affordable and
Rural Housing and Development and a member of the State Bar of California. Mr.
Shafer graduated from the University of California at Santa Barbara in 1978 with
a Bachelor of Arts degree, from the New England School of Law in 1983 with a
Juris Doctor degree and from the University of San Diego in 1986 with a Master
of Law degree in Taxation.
WILFRED N. COOPER, JR., age 35, has been employed by WNC & ASSOCIATES, INC.
since 1988 and has been a Director since 1997 Executive Vice President since
1998, and a Senior Vice President since 1992. Mr. Cooper heads the Acquisition
Originations department at WNC, has been President of, and a registered
principal with, WNC CAPITAL CORPORATION, a member firm of the NASD, since its
organization, and has been a Director of WNC Management Inc. since its
organization. Previously, he was employed as a government affairs assistant by
Honda North America from 1987 to 1988, and as a legal assistant with respect to
Federal legislative and regulatory matters by the law firm of Schwartz, Woods
and Miller from 1986 to 1987. Mr. Cooper is an alternate director and member of
NAHB's Rural Housing Council and serves as Chairman of its Membership Committee.
Mr. Cooper graduated from The American University in 1985 with a Bachelor of
Arts degree.
THEODORE M. PAUL, age 42, has been Vice President - Finance of WNC & ASSOCIATES,
INC. since 1992 and Chief Financial Officer since 1990, and has been a Director
and Chief Financial Officer of WNC Management Inc. since its organization.
Previously, he was a Vice President and Chief Financial Officer of National
Partnership Investments Corp., a sponsor and general partner of syndicated
partnerships investing in affordable rental housing qualified for tax credits,
from 1986 until 1990, and was employed as an associate by the accounting firms
of Laventhol & Horwath, during 1985, and Mann & Pollack Accountants, from 1979
to 1984. Mr. Paul is a member of the California Society of Certified Public
Accountants and the American Institute of Certified Public Accountants. His
responsibilities at WNC & ASSOCIATES, INC. include supervision of investor
partnership accounting and tax reporting matters and monitoring the financial
condition of the Local Limited Partnerships in which the Partnership will
invest. Mr. Paul graduated from the University of Illinois in 1978 with a
Bachelor of Science degree and is a Certified Public Accountant in the State of
California.
11
<PAGE>
THOMAS J. RIHA, age 43, has been Vice President - Asset Management of WNC &
ASSOCIATES, INC. since 1994, and has been a Director and Chief Executive Officer
of WNC Management Inc. since its organization. He has more than 17 years'
experience in commercial and multi-family real estate investment and management.
Previously, Mr. Riha was employed by Trust Realty Advisor, a real estate
acquisition and management company, from 1988 to 1994, last serving as Vice
President - Operations. His responsibilities at WNC & ASSOCIATES, INC. include
monitoring the operations and financial performance of, and regulatory
compliance by, properties in the WNC portfolio. Mr. Riha graduated from the
California State University, Fullerton in 1977 with a Bachelor of Arts degree
(cum laude) in Business Administration with a concentration in Accounting and is
a Certified Public Accountant in the State of California and a member of the
American Institute of Certified Public Accountants.
SY P. GARBAN, age 52, has 20 years' experience in the real estate securities and
syndication industry. He has been associated with WNC & ASSOCIATES, INC., since
1989, serving as National Sales Director through 1992 and as Vice President -
National Sales since 1992. Previously, he was employed as Executive Vice
President by MRW, Inc., Newport Beach, California from 1980 to 1989, a real
estate development and management firm. Mr. Garban is a member of the
International Association of Financial Planners. He graduated from Michigan
State University in 1967 with a Bachelor of Science degree in Business
Administration.
CARL FARRINGTON, age 55, has been associated with WNC & ASSOCIATES, INC. since
1993, and has served as Director - Originations since 1994. Mr. Farrington has
more than 12 years' experience in finance and real estate acquisitions.
Previously, he served as Acquisitions Director for The Arcand Company from 1991
to 1993, and as Treasurer and Director of Finance and Administrator for Polytron
Corporation from 1988 to 1991. Mr. Farrington is a member and Director of the
Council of Affordable and Rural Housing and Development. Mr. Farrington
graduated from Yale University with a Bachelor of Arts degree in 1966 and from
Dartmouth College with a Master of Business Administration in 1970.
DAVID TUREK, age 43, has been Director - Originations of WNC & ASSOCIATES, INC.
since 1996. He has 23 years' experience in real estate finance and acquisitions.
Previously, from 1995 to 1996 Mr. Turek served as a consultant for a national
Low Income Housing Credit sponsor where he was responsible for on-site
feasibility studies and due diligence analyses of Low Income Housing Credit
properties, from 1992 to 1995 he served as Executive Vice President for Levcor,
Inc., a multi-family development company, and from 1990 to 1992 he served as
Vice President for the Paragon Group where he was responsible for Low Income
Housing Credit development activities. Mr. Turek graduated from Southern
Methodist University in 1976 with a Bachelor of Business Administration degree.
N. PAUL BUCKLAND, age 36, has been employed by WNC & ASSOCIATES, INC. since 1994
and currently serves as Vice President Acquisitions. He has 11 years' experience
in analysis pertaining to the development of multi-family and commercial
properties. Previously, from 1986 to 1994 he served on the development team of
the Bixby Ranch which constructed more than 700 apartment units and more than
one million square feet of "Class A" office space in California and neighboring
states, and from 1984 to 1986 he served as a land acquisition coordinator with
Lincoln Property Company where he identified and analyzed multi-family
developments. Mr. Buckland graduated from California State University, Fullerton
in 1992 with a Bachelor of Science degree in Business Finance.
12
<PAGE>
MICHELE M. TAYLOR, age 43, has been employed by WNC & ASSOCIATES, INC. since
1986, serving as a paralegal and office manager, and currently is the Investor
Services Director. Previously she was self-employed between 1982 and 1985 in
non-financial services activities and from 1978 to 1981 she was employed as a
paralegal by a law firm which specialized in real estate limited partnership
transactions. Ms. Taylor graduated from the University of California, Irvine in
1976 with a Bachelor of Arts degree.
THERESA I. CHAMPANY, age 40, has been employed by WNC & ASSOCIATES, INC. since
1989 and currently is the Marketing Services Director and a registered principal
with WNC CAPITAL CORPORATION. Previously, she was employed as Manager of
Marketing Services by August Financial Corporation from 1986 to 1989 and as
office manager and Assistant to the Vice President of Real Estate Syndications
by McCombs Securities Co., Inc. from 1979 to 1986. Ms. Champany attended
Manchester (Conn.) Community College from 1976 to 1978.
KAY L. COOPER, age 61, has been an officer and Director of WNC & ASSOCIATES,
INC. since 1971 and of WNC RESOURCES, INC. from 1988 through its acquisition by
WNC & ASSOCIATES, INC. in 1991. Mrs. Cooper has also been the sole proprietor of
Agate 108, a manufacturer and retailer of home accessory products, since 1975.
She is the wife of Wilfred N. Cooper, Sr., the mother of Wilfred N. Cooper, Jr.
and the sister of John B. Lester, Jr. Mrs. Cooper graduated from the University
of Southern California in 1958 with a Bachelor of Science degree.
Item 11. Executive Compensation
The Partnership has no officers, employees, or directors. However, under the
terms of the Partnership Agreement the Partnership is obligated to the General
Partner or its affiliates for the following fees:
(a) Organization and Offering Expenses. The Partnership paid the General Partner
or its affiliates as of December 31, 1997 approximately $1,006,000, consisting
of offering costs, selling commissions and other fees and expenses of the
Partnership's offering of Unitsof approximately $59,000, $745,000 and $202,000,
respectively. Of the total paid to the General Partner or its affiliates, all of
the approximate total of $1,006,000 was paid (reallowed)to unaffiliated persons
participating in the Partnership's offering or rendering other services in
connection with the Partnership's offering.
(b) Acquisition fees in an amount equal to 6% of the gross proceeds of the
Partnership's offering ("Gross Proceeds"). Through December 31, 1997, the
aggregate amount of acquisition fees of $447,060 have been paid to the General
Partner or its affiliates.
(c) The Partnership reimbursed the General Partner or its affiliates as of
December 31, 1997 for acquisition expenses expended by such persons on behalf of
the Partnership in the amounts $32,018.
(d) An annual asset management fee in an amount equal to 0.5% of invested assets
(the sum of the Partnership's Investment in Local Limited Partnership Interests
and the Partnership's allocable share of the amount of the mortgage loans on and
other debts related to, the Apartment Complexes owned by such Local Limited
Partnerships.) Fees of $111,691 were incurred for 1997, 1996, and 1995. No
amounts were paid during 1997, 1996 or 1995.
(e) The General Partners were allocated federal and California Housing Tax
Credits for 1997 and 1996 as follows:
WNC & ASSOCIATES, INC.
1997 1996
Federal $6,769 $6,715
WILFRED N. COOPER
1997 1996
Federal $ 752 $ 746
13
<PAGE>
Item 12. Security Ownership of Certain Beneficial Owners and Management
Security Ownership of Certain Beneficial Owners
No person is known to the General Partner to own beneficially in excess of 5% of
the outstanding Units.
Security Ownership of Management
(a) Security Ownership of Certain Beneficial Owners
No person is known to own beneficially in excess of 5% of the outstanding
Limited Partnership Interests.
(b) Security Ownership of Management
Neither the General Partner, its affiliates nor any of the officers or
directors of the General Partner or its affiliates own directly or beneficially
any limited partnership interests in the Partnership.
(c) Changes in Control
The management and control of the General Partners may be changed at any time in
accordance with their respective organizational documents, without the consent
or approval of the Limited Partners. In addition, the Partnership Agreement
provides for the admission of one or more additional and successor General
Partners in certain circumstances.
First, with the consent of any other General Partners and a majority-in-interest
of the Limited Partners, any General Partner may designate one or more persons
to be successor or additional General Partners. In addition, any General Partner
may, without the consent of any other General Partner or the Limited Partners,
(I) substitute in its stead as General Partner any entity which has, by merger,
consolidation or otherwise, acquired substantially all of its assets, stock or
other evidence of equity interest and continued its business, or (ii) cause to
be admitted to the Partnership an additional General Partner or Partners if it
deems such admission to be necessary or desirable so that the Partnership will
be classified a partnership for Federal income tax purposes. Finally, a
majority-in-interest of the Limited Partners may at anytime remove the General
Partner of the Partnership and elect a successor General Partner
Item 13. Certain Relationships and Related Transactions
All of the Partnership's affairs are managed by the General Partner, through
Associates. The transactions with the General Partner and Associates are
primarily in the form of fees paid by the Partnership for services rendered to
the Partnership, as discussed in Item 11 and in the notes to the accompanying
financial statements.
14
<PAGE>
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K
Financial Statements:
Report of independent public accountants.
Balance sheet as of December 31, 1997 and 1996.
Statements of Operations for the years ended December 31, 1997, 1996, and 1995.
Statement of Partners' Equity for the years ended December 31, 1997, 1996, and
1995. Statements of Cash Flows for the years ended December 31, 1997, 1996, and
1995.
Notes to Financial Statements.
Financial Statement Schedules:
N/A
Exhibits
(3): Articles of incorporation and by-laws: The registrant is not incorporated.
The Partnership Agreement is included as Exhibit B to the Prospectus, filed as
Exhibit 28.1 to Form 10 K for the year ended December 31, 1994.
Material Contracts
10.1 Amended and Restated Agreement of Limited Partnership of Orland Associates
filed as exhibit 10.1 to the annual report on Form 10-K dated December 31, 1992,
is herein incorporated by reference as Exhibit 10.1.
10.2 Ukiah Terrace, a California Partnership filed as Exhibit 10.2 to the annual
report on Form 10-K dated December 31, 1992, is herein incorporated by reference
as Exhibit 10.2.
10.3 Amended and Restated Agreement of Limited Partnership of Northwest Tulare
Associates filed as exhibit 10.3 to the annual report on Form 10-K dated
December 31, 1992, is herein incorporated by reference as Exhibit 10.3.
10.4 Second Amended and Restated Agreement of Limited Partnership of Yucca
Warren Vista, Ltd. filed as exhibit 10.4 to the annual report on Form 10-K dated
December 31, 1992, is herein incorporated by reference as Exhibit 10.4.
10.5 Amended and Restated Agreement of Limited Partnership of Woodlake Garden
Apartments filed as exhibit 10.5 to the annual report on Form 10-K dated
December 31, 1992, is herein incorporated by reference as Exhibit 10.5.
10.6 Amended and Restated Agreement of Limited Partnership of 602 Main Street
Investors filed as exhibit 10.6 to the annual report on Form 10-K dated December
31, 1992, is herein incorporated by reference as Exhibit 10.6.
10.7 Amended and Restated Agreement of Limited Partnership of ADI Development
Partners filed as exhibit 10.7 to the annual report on Form 10-K dated December
31, 1992, is herein incorporated by reference as Exhibit 10.7.
10.8 Amended and Restated Agreement of Limited Partnership of Bayless Garden
Apartment Investors filed as exhibit 10.8 to the annual report on Form 10-K
dated December 31, 1992, is herein incorporated by reference as Exhibit 10.8.
10.9 Third Amended and Restated Agreement of Limited Partnership of Twin Pines
Apartments Associates filed as exhibit 10.9 to the annual report on Form 10-K
dated December 31, 1992, is herein incorporated by reference as Exhibit 10.9.
15
<PAGE>
10.10 Amended and Restated Agreement of Limited Partnership of Blackberry Oaks,
Ltd. filed as exhibit 10.10 to the annual report on Form 10-K dated December 31,
1992, is herein incorporated by reference as Exhibit 10.10.
10.11 Amended and Restated Agreement of Limited Partnership of Mecca Apartments
II filed as exhibit 10.11 to the annual report on Form 10-K dated December 31,
1992, is herein incorporated by reference as Exhibit 10.11.
10.12 Amended and Restated Agreement of Limited Partnership of Silver Birch
Limited Partnership filed as exhibit 10.12 to the annual report on Form 10-K
dated December 31, 1992, is herein incorporated by reference as Exhibit 10.12.
Reports on Form 8-K
No reports of Current Reports on Form 8-K were filed during the fourth quarter
ended December 31, 1997.
16
<PAGE>
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.
WNC CALIFORNIA HOUSING TAX CREDITS, L.P.
By: WNC California Tax Credit Partners III, L.P. General Partner of
the Registrant
By: WNC & Associates, Inc. General Partner of
WNC California Tax Credit Partners III, L.P.
By: /s/ John B. Lester, Jr.
____________________________________________________
John B. Lester, Jr. President of WNC & Associates, Inc.
Date: April 9, 1998
By: /s/ Theodore M. Paul
_____________________________________________________
Theodore M. Paul Vice-President Finance of WNC & Associates, Inc.
Date: April 9, 1998
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
By: /s/ Wilfred N. Cooper, Sr.
_____________________________________________________
Wilfred N. Cooper, Sr., Director and Chairman of the Board of
Date: April 9, 1998 WNC & Associates, Inc.
By: /s/ John B. Lester, Jr.
_____________________________________________________
John B. Lester, Jr., Director and Secretary of the Board of
Date: April 14, 1998 WNC & Associates, Inc.
By: /s/ David N. Shafer
_____________________________________________________
David N. Shafer Director of WNC & Associates, Inc.
Date: April 9, 1998
17
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000845750
<NAME> WNC CALIFORNIA HOUSING TAX CREDITS
<MULTIPLIER> 1
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<EXCHANGE-RATE> 1
<CASH> 78,109
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 78,109
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,079,931
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
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<NET-INCOME> (558,236)
<EPS-PRIMARY> (558,236)
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</TABLE>
