<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Fiscal Year Ended DECEMBER 31, 1996
Commission File Number 33-27658
NATIONAL TAX CREDIT PARTNERS, L.P.
A CALIFORNIA LIMITED PARTNERSHIP
I.R.S. Employer Identification No. 95-4205231
9090 WILSHIRE BOULEVARD, SUITE 201, BEVERLY HILLS, CALIFORNIA 90211
Registrant's Telephone Number, Including Area Code (310) 278-2191
Securities Registered Pursuant to Section 12(b) or 12(g) of the Act:
NONE
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed with the Commission by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding twelve months (or 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]
<PAGE> 2
PART I.
ITEM 1. BUSINESS:
National Tax Credit Partners, L.P. ("NTCP" or the "Partnership") is a limited
partnership formed under the laws of the State of California on March 7, 1989.
The Partnership was formed to acquire limited partnership interests in separate
local limited partnerships ("Local Partnerships"), which own multifamily
apartment complexes that are eligible for low-income housing federal income tax
credits ("Housing Tax Credits"). On June 6, 1989, the Partnership offered 14,000
units consisting of 28,000 limited partnership interests and warrants to
purchase 14,000 additional limited partnership interests (collectively "Limited
Partnership Interests") through a public offering managed by PaineWebber
Incorporated (the "Selling Agent").
The general partner of NTCP (the "General Partner") is National Partnership
Investments Corp. ("NAPICO"), a California corporation. PaineWebber T.C., Inc.,
a Delaware corporation and an affiliate of PaineWebber Incorporated, is the
special limited partner of the Partnership (the "Special Limited Partner").
Casden Investment Corporation ("CIC") owns 100% of NAPICO's stock. The current
members of NAPICO's Board of Directors are Charles H. Boxenbaum, Bruce E.
Nelson, Alan I. Casden, Henry C. Casden and Brian Goldberg.
In general, an owner of a low-income housing apartment complex ("Apartment
Complex") is entitled to receive Housing Tax Credits in each year of a ten-year
period (the "Credit Period"). The Apartment Complex is subject to a 15-year
compliance period (the "Compliance Period") to preserve the Housing Tax Credits.
In addition to the Housing Tax Credits, tax credits are available for certain
rehabilitation expenditures incurred in improving certified historic structures
("Historic Tax Credits," and together with Housing Tax Credits are referred to
as "Tax Credits"). Tax Credits are available to the Limited Partners to reduce
their federal income tax liability. The ability of a Limited Partner to utilize
Tax Credits or allocated losses may be restricted by the passive activity loss
limitation and the general business tax credit limitation rules. NTCP invests in
Local Partnerships that each own an Apartment Complex that is eligible for (i)
Housing Tax Credits or (ii) in certain cases, Historic Tax Credits and, in some
cases, both. Several of the Local Partnerships also benefit from government
programs promoting low or moderate income housing.
The Partnership's investments in Local Partnerships are subject to the risks
incident to the management and ownership of multifamily residential real estate.
Neither the Partnership's investments nor the Apartment Complexes owned by the
Local Partnerships will be readily marketable, and there can be no assurance
that the Partnership will be able to dispose of its Local Partnership Interests,
or that the Local Partnerships will be able to dispose of their Apartment
Complexes, 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 substantial unemployment, 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 will be subject to loss
through foreclosure. In addition, each Local 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 local general
partners, there can be no assurance that the Partnership operations will be
profitable or that the anticipated Tax Credits will be available to Limited
Partners.
The Apartment Complexes owned by the Local Partnerships in which NTCP has
invested were developed by the Local Operating General Partners (the "Local
Operating General Partners") who acquired the sites and applied for applicable
mortgages and subsidies, if any. NTCP became the principal limited partner in
these Local Partnerships pursuant to arm's-length negotiations with the Local
Operating General Partners. As a limited partner, NTCP's liability for
obligations of the Local Partnership is generally limited to its investment. The
Local Operating General Partner of the Local Partnership retains responsibility
for developing, constructing, maintaining, operating and managing the Apartment
Complex. Under certain circumstances, an affiliate of NAPICO or NTCP may act as
the Local Operating General Partner. An affiliate, National Tax Credit Inc.
("NTC") or another affiliate, is acting as a non-managing, administrative
general partner or special limited partner of each Local Partnership.
<PAGE> 3
During 1996, the Apartment Complexes in which NTCP had invested were
substantially rented.
The following is a schedule of the occupancy status as of December 31, 1996, of
the Apartment Complexes owned by Local Partnerships in which NTCP is a limited
partner.
SCHEDULE OF PROJECTS OWNED BY LOCAL PARTNERSHIPS
IN WHICH NTCP HAS AN INVESTMENT
DECEMBER 31, 1996
<TABLE>
<CAPTION>
No. of Units Percentage of
Name & Location Units Occupied Total Units
- --------------- ----- -------- -----------
<S> <C> <C> <C>
Apple Tree
Brigham City, UT 24 24 100%
Blue Lake
Miami, FL 106 77 73%
ComFed Qualified(1)
Omaha, NE 116 116 100%
Concept I & II
Cleveland, OH 40 38 95%
Countryview/Columbus
Columbus, OH 152 150 99%
Dickens
Chicago, IL 34 32 97%
Dynes
Cleveland, OH 42 41 98%
Genoa Plaza
Genoa City, WI 48 48 100%
Glenark
Woonsocket, RI 67 65 97%
Grand Meadows
Grand Blanc, MI 64 61 95%
Grinnell Park
Grinnell, IA 24 24 100%
</TABLE>
<PAGE> 4
SCHEDULE OF PROJECTS OWNED BY LOCAL PARTNERSHIPS
IN WHICH NTCP HAS AN INVESTMENT (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
No. of Units Percentage of
Name & Location Units Occupied Total Units
- --------------- ----- -------- -----------
<S> <C> <C> <C>
Hickory Green
Westland, MI 59 56 95%
Holden Village
West Seattle, WA 96 93 97%
Kimberly Court
Seward, AK 24 16 67%
Meadows Apartments
Ypsilanti, MI 114 100 88%
Mountain View - I
Sante Fe, NM 120 105 88%
Mountain View - II
Sante Fe, NM 159 145 91%
Newbury
Oak Creek, WI 164 126 77%
North Liberty
North Liberty, IA 24 24 100%
Paris Hotel
Denver, CO 17 17 100%
Rolling Hills
Pottsgrove Township, PA 232 231 99%
Rose City
Portland, OR 264 262 99%
Summit I - Wallace
Philadelphia, PA 17 15 94%
Summit II - Bergdoll
Philadelphia, PA 9 9 100%
Summit III - Chandler
Philadelphia, PA 25 22 88%
</TABLE>
<PAGE> 5
SCHEDULE OF PROJECTS OWNED BY LOCAL PARTNERSHIPS
IN WHICH NTCP HAS AN INVESTMENT (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
No. of Units Percentage of
Name & Location Units Occupied Total Units
- --------------- ----- -------- -----------
<S> <C> <C> <C>
Terrace Gardens
Lemon Grove, CA 150 141 94%
Ticino
Seattle, WA 45 43 96%
Torres de Plata I
Toa Alta, PR 72 72 100%
Tyrone Elderly
Tyrone, PA 100 97 97%
Victorian Park
Streamwood, IL 336 312 93%
Vinton/Park School
Omaha, NE 44 40 91%
----- -----
TOTAL 2,788 2,648 95%
===== =====
</TABLE>
<PAGE> 6
ITEM 2. PROPERTIES:
Through its investments in Local Partnerships, NTCP holds interests in 31
Apartment Complexes. See Item 1 and Schedule for information pertaining to these
Apartment Complexes.
ITEM 3. LEGAL PROCEEDINGS:
As of December 31, 1996, NTCP's General Partner was a plaintiff or defendant in
several lawsuits. In addition, the Partnership is involved in the following
lawsuits arising from transactions in the ordinary course of business. In the
opinion of management and the General Partner, the claims will not result in any
material liability to the Partnership.
Victorian Park Associates, which owns a 336-unit Apartment Complex located in
Illinois, defaulted on its mortgage in July 1991 principally because the
unaffiliated Local Operating General Partners failed to pay $800,000 of real
estate taxes required under their guarantees. On March 25, 1992, the Partnership
commenced litigation [National Tax Credit Partners, L.P. v. Havlick, Owings,
United Development et al., Case No. 92C2074 in the United States District Court
for the Northern District of Illinois Eastern Division] against the Local
Operating General Partners to enforce its rights. On November 13, 1992 the
Partnership was advised that a Chapter 11 petition in bankruptcy was filed by
the local operating general partners on behalf of the Local Partnership [In re:
Victorian Park Associates, Debtor, Case No. 92-B-25140, Chapter 11] and that
the lender, Patrician Mortgage ("Patrician"), had accelerated its mortgage. On
January 7, 1993, the Partnership obtained an order compelling the Local
Operating General Partners to perform under their Guarantees, which order was
reversed by the U.S. Court of Appeals for the Seventh Circuit. The Partnership
has until June 1997 to reinstate this case. The Local Operating General
Partners' Seventh Amended Plan of Reorganization (the "Plan") is now pending
approval. Pursuant to the Plan, Patrician is required to reissue and/or reduce
the principal on the first mortgage bonds and the Local Operating General
Partners are required to (i) pay $1,000,000 cash to implement the Plan and (ii)
pay an agreed upon monthly guarantee payment. No assurances can be given that
the Plan will be successfully implemented. As of December 31, 1996 and 1995, the
Partnership's carrying value of the investment in the Victorian Local
Partnership (which represents approximately 5.7% of the Partnership's total
equity initially invested in Local Partnerships) was zero.
In December 1992, Tara Construction, the general contractor for Art Museum
properties (Summit I, II and III), commenced an action in the Court of Common
Pleas, Montgomery County, Pennsylvania Tara Construction v. NTCP et al., (Case
No. 92-23505) against the three Summit Local Partnerships, the Partnership, NTC,
the General Partner, PaineWebber Incorporated, and a PaineWebber affiliate,
seeking damages of approximately $600,000 allegedly due the general contractor
for work done in connection with the completion of construction plus damages for
alleged misrepresentations and punitive damages. The Partnership believes that
the general contractor's claims are barred and/or subject to offset and it has
filed responsive pleadings. The Partnership has not accrued any liability in the
accompanying financial statements as of December 31, 1996 and 1995. Tara
Construction's lawsuit has been dormant for more than two years. Although
occupancy levels at the three related Local Partnerships, Summit I, II, and III
(Wallace, Bergdoll, and Chandler School located in Philadelphia) were stabilized
at 94%, 100%, and 88%, respectively, the properties operated at deficits during
1996. The Summit I and III properties have approximately $150,000 in outstanding
property taxes (a portion of which could result in liens on the properties),
utility bills, and other trade payables. The local general partner is currently
attempting to negotiate discounted payments and/or payment plans for these items
which, if unsuccessful, could result in foreclosure proceedings on all three
properties. NTCP has settled its litigation with the lender on Summit I and III.
As part of the settlement, the lender dismissed its foreclosure actions and
converted its mortgages to mortgages requiring debt service payments out of
available cash flow only. In return, NTCP intends to (i) admit the lender into
all three of the local partnerships if certain conditions are satisfied, and
(ii) to assign a portion of NTCP's interests in each local partnership,
including an allocation of approximately $100,000 in remaining tax credits. In
1996, the aggregate carrying value of the investments in Summit I, Summit II and
Summit III of approximately $2,290,000 was written off. Summit I, II and III
represent 3.2%, 1.4% and 4.6%, respectively, of NTCP's original portfolio
investment.
<PAGE> 7
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
Not applicable.
PART II.
ITEM 5. MARKET FOR THE REGISTRANT'S PARTNERSHIP INTERESTS AND RELATED SECURITY
HOLDER MATTERS:
The Limited Partnership Interests are not traded on a public exchange but were
sold through a public offering managed by PaineWebber Incorporated. It is not
anticipated that any active public market will develop for the purchase and sale
of any Limited Partnership Interest. Limited Partnership Interests may not be
transferred but can be assigned only if certain requirements in the Partnership
Agreement are satisfied. At December 31, 1996, there were 3,905 registered
holders of Limited Partnership Interests in NTCP. The Partnership was not
designed to provide cash distributions to Limited Partners in circumstances
other than refinancing or disposition of its investments in Local Partnerships
and then such distributions, if any, may be limited. Distributions have not been
made from the inception of the Partnership to December 31, 1996.
<PAGE> 8
ITEM 6. SELECTED FINANCIAL DATA:
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Interest and other Income $ 99,016 $ 75,125 $ 54,226 $ 38,446 $ 424,224
Operating expenses (975,642) (1,207,679) (1,337,098) (990,948) (1,144,667)
Distributions from limited
partnership recognized
as income 37,532 -- -- -- --
Equity in loss of limited
partnerships and
amortization of
acquisition costs (2,049,514) (3,828,734) (2,369,642) (3,658,302) (4,761,019)
Write-off of Local Partnership (2,289,875) (1,158,801) -- (2,258,920) --
------------ ------------ ------------ ------------ ------------
Net loss $ (5,178,483) $ (6,120,089) $ (3,652,514) $ (6,869,724) $ (5,481,462)
============ ============ ============ ============ ============
Net loss per limited
partnership interest $ (215) $ (254) $ (151) $ (285) $ (227)
============ ============ ============ ============ ============
Total assets $ 17,946,325 $ 22,499,105 $ 27,390,138 $ 30,293,611 $ 36,993,049
============ ============ ============ ============ ============
Investments in Local
Partnerships $ 17,721,398 $ 21,923,823 $ 27,142,069 $ 29,141,967 $ 35,277,267
============ ============ ============ ============ ============
Capital contributions payable $ 392,300 $ 441,300 $ -- $ -- $ 608,393
============ ============ ============ ============ ============
Accrued fees and expenses
due to partners $ 3,996,221 $ 3,266,521 $ 2,503,091 $ 1,878,419 $ 1,176,835
============ ============ ============ ============ ============
</TABLE>
<PAGE> 9
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS:
Capital Resources
The Partnership received proceeds totaling $59,749,000 from the sale of Limited
Partnership Interests, pursuant to a registration statement filed on Form S-11,
which sale commenced in June 1989 and terminated in June 1990. This amount
includes $18,907,500 from the sale of 7,563 Additional Limited Partnership
Interests. The proceeds have been used to invest in local limited partnerships
("Local Partnerships"), which own and operate multifamily housing complexes
("Apartment Complexes") that are eligible for low income housing tax credits or,
in certain cases, historic rehabilitation tax credits. As a limited partner of
the Local Partnerships, the Partnership does not have authority over day-to-day
management of the Local Partnerships or their Apartment Complexes. The general
partners responsible for management of the Local Partnerships (the "Local
Operating General Partners") are in most cases not affiliated with the General
Partner of the Partnership. See, however, the discussion below concerning the
replacement of the local operating general partners of certain Local
Partnerships and the assumption of those management responsibilities by National
Tax Credit, Inc. ("NTC"), or other affiliates of the General Partner. The
Partnership has made capital contributions to 32 Local Partnerships (one of
which was foreclosed upon by the lender in 1995) representing a total investment
of approximately $44,811,000.
It is not expected that any of the Local Partnerships in which the Partnership
invested will generate cash from operations sufficient to provide distributions
to the Limited Partners. Such cash from operations, if any, would first be used
to meet operating expenses of the Partnership. 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 Partnerships and the Partnership.
These problems may result from a number of factors, many of which cannot be
controlled by the General Partner.
The General Partner has the right to cause distributions received by the
Partnership from the Local Partnerships (that would otherwise be available for
distributions as cash flow) to be dedicated to the increase or replenishment of
reserves at the Partnership level. The reserves are available to satisfy working
capital or operating expense needs of the Partnership (including payment of
partnership management fees) and will also be available to pay any excess
third-party costs or expenses incurred by the Partnership in connection with the
administration of the Partnership, the preparation of reports to the Limited
Partners and other investor servicing obligations of the Partnership. At the
discretion of the General Partner, reserves may be available for contributions
to the Local Partnerships.
The Partnership's unrestricted cash reserves as of December 31, 1996 were
approximately $150,000. In order to replenish NTCP's reserves, NTCP sold to the
local general partner an additional portion and further diluted its limited
partner interest in the Rose City local partnership during the reporting period.
The local general partner will, accordingly, be entitled to an increased
allocation of cash flow and back-end distributions. NTCP will continue to
receive its allocable portion of housing tax credits, subject to the allocation
made to the additional limited partner identified in a prior report, through the
ten year credit period. As a result of this transaction, NTCP will receive
$240,000, of which $120,000 was paid in February 1997, and the balance of
$120,000 is payable in July, 1997. Based on immediate cash needs, NTCP is
negotiating with the local operating general partner for a discounted advance
payment of the $120,000, and the sale of an additional portion of NTCP's
economic interest in the local partnership. As a result, the local general
partner will also increase its interest in distributions of cash flow and
proceeds from the sale or refinancing of the property. The Partnership is
currently considering raising additional funds from one or more investors that
would be admitted for a minority interest as a special limited partner in
two-four Local Partnerships and entitled to receive a portion of the tax credits
otherwise allocable to the Partnership. There is no assurance that the
Partnership will be successful in these sales. If the offerings were
successfully concluded, the net proceeds would be added to the Partnership's
reserves and used to implement the provisions of restructurings with Local
Partnerships previously agreed upon. Additionally, at least two properties are
projected to operate at a cumulative annual deficit of approximately $85,000.
<PAGE> 10
The Partnership does not have the ability to assess Limited Partners for
additional capital contributions to provide capital if needed by the Partnership
or Local Partnerships. Accordingly, if circumstances arise that cause the Local
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 Partnerships are already substantially leveraged), (ii) other
equity sources (which could reduce the amount of Tax Credits being allocated to
the Partnership, adversely affect the Partnership's interest in operating cash
flow and/or proceeds of sale or refinancing of the Apartment Complexes and
possibly even result in adverse tax consequences to the Limited Partners), or
(iii) the sale or disposition of Apartment Complexes. There can be no assurance
that any of such sources would be readily available in sufficient proportions to
fund the capital requirements of the Local Partnerships. If such sources are not
available, the Local 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, which would have
significant adverse tax consequences to the Limited Partners.
Liquidity
Each Local Partnership investment has been analyzed by the General Partner with
respect to its probable impact upon the Partnership's liquidity position. In
this regard, the General Partner took into account projected cash flow generated
from each Apartment Complex, the anticipated debt service requirements of the
existing financing and any restructuring or refinancing of such Apartment
Complex, and the division of cash flow in excess of debt service between the
Partnership and the local operating general partner.
Following an acquisition, adverse business or financial developments could
negatively impact cash flow and the Partnership's liquidity position. The
General Partner has attempted to obtain operating deficit guarantees from
certain local general partners to fund operating deficits for limited periods of
time. In addition, as discussed above the Partnership maintains reserves and the
Local Partnerships are expected to maintain working capital reserves independent
of those maintained by the Partnership to the extent that (i) the terms of
mortgage debt encumbering the Apartment Complexes or the terms of any government
assistance program so require, or (ii) the local general partner determines that
such reserves are necessary or advisable. Although reserves are to be maintained
at both the Partnership and Local Partnership levels, if such reserves and other
available income, if any, are insufficient to cover the Partnership's or any
Local Partnership's operating expenses and liabilities, it may be necessary to
accumulate additional funds from distributions received from Local Partnerships
which would otherwise be available for distribution to the Limited Partners, or
to liquidate the Partnership's investment in one or more Local Partnerships.
Reserves of the Partnership and reserves of the Local Partnerships 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 distributions and/or sale as
refinancing proceeds, if any, which is available for distribution to the Limited
Partners may be affected accordingly.
Results of Operations
The Partnership was formed to provide various benefits to its Limited Partners
as discussed in Item 1. It is not expected that any of the Local Partnerships in
which the Partnership has invested will generate cash flow sufficient to provide
for distributions to Limited Partners. The Partnership accounts for its
investments in the Local Partnerships on the equity method, thereby adjusting
its investment balance by its proportionate share of the income or loss of the
Local Partnerships.
In general, in order to avoid recapture of Tax Credits, the Partnership does not
expect that it will voluntarily dispose of its Local Partnership Interests or
approve the sale by a Local Partnership of any Apartment Complex prior to the
end of the applicable 15-year Compliance Period (although earlier dispositions
of Historic Complexes may occur). Because of (i) the nature of the Apartment
Complexes, (ii) the difficulty of predicting the resale market for low-income
housing 15 or more years in the future, and (iii) the inability of the
Partnership to directly cause the sale of Apartment Complexes by local
<PAGE> 11
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, 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 Compliance Period. If a Local
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 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 of the Compliance Period.
Except for interim investments in highly liquid debt investments, the
Partnership's investments consist entirely of interests in other Local
Partnerships owning Apartment Complexes. Funds temporarily not required for such
investments in projects are invested in these highly liquid debt investments
earning interest income as reflected in the statement of operations. These
interim investments can be easily converted to cash to meet obligations as they
arise.
The Partnership, as a limited partner in the Local 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. Certain of the Local Partnerships and their respective
Apartment Complexes are subject to litigation and operating problems. See Item 3
"Legal Proceedings" above and the information which follows.
The Meadows Apartments (the "Local Partnership") is a 114-unit building located
in Ypsilanti, Michigan. The first mortgage loan matured on May 15, 1996. After
the lender refused to negotiate an extension of the loan, the Local Partnership
filed Chapter 11 bankruptcy proceedings to avert foreclosure. A plan of
reorganization for the Local Partnership (the "Plan") was approved by the
bankruptcy court on December 16, 1996. Pursuant to the Plan, NTCP paid the
following amounts out of reserves (i) 1996 delinquent property taxes of $35,317,
(ii) legal fees of $10,000, and (iii) unsecured creditors of $18,590. The Plan
also requires NTCP to make a payment of $171,093 on April 18, 1997, which will
satisfy the 1993 delinquent real estate taxes. The Plan also outlines a partial
payment schedule for the 1994 and 1995 delinquent real estate taxes which would
be paid out of the property's operations. Under the Plan, the existing loan in
the principal amount of $2,890,000, at an interest rate of 10%, was reduced to
$2,100,000 with an interest rate of 9%. In exchange, the lender received
one-third of NTCP's local partnership interest, including anticipated
allocations of housing tax credits in the amount of approximately $488,500. The
property operated at an occupancy level of 97% as of December 1996. It is
anticipated that the Local Partnership will attain break-even levels of
operations on a go forward basis once the Plan is fully implemented. The
Partnership's investment in Meadows Apartments at December 31, 1996 was zero.
A loan modification with Federal Home Loan Mortgage Corporation, the lender on
Countryview Apartments, was completed October 9, 1996 with, among other things
as part of the modification, NTCP is required to pay to the lender $15,677 on a
monthly basis (commencing November 1, 1996) for the first six months and $10,910
for an additional two months for a total of $115,882, of which only the November
1, 1996 payment in the amount of $15,677 has been paid to date. Accordingly,
while the loan under the restructured terms is being paid monthly out of the
cash flow from the property's operations, there is currently a default under the
modification. The Partnership is currently negotiating, with the lender to cure
this default. In connection with the modification, the interest rate was reduced
from 11.5% to 8%. As of December 1996 the property attained 97% occupancy. The
Partnership's investment in Countryview Apartments at December 31, 1996 was
approximately $2,230,000.
Holden Village and Ticino Apartments, located in Seattle, Washington, maintained
average occupancy levels of 95%, but experienced operating deficits of
approximately $45,000 and $23,000, respectively, during 1996. The high cost of
servicing the debt is the largest contributing factor associated with the
deficit operations. In an effort to improve the performance of the properties,
the local general partner, an affiliate of the General Partner, removed the
existing management agent in June 1996. The new management agent has attempted
to reduce operating expenses and increase occupancy levels, but has been
<PAGE> 12
generally unsuccessful. NTCP is currently negotiating an interest rate reduction
with the lender for each of the properties in an effort to improve the cash
flow. In exchange, it is expected that NTCP will be required to assign all or
part of its local partnership interests, including its allocable share of the
remaining tax credits in each of the local partnerships, which assignment could
result in recapture for NCTP's partners. However, if the loan modifications are
successful the operating performance of each property is expected to improve
substantially. The Partnership's total investment in Holden Village and Ticino
Apartments at December 31, 1996 was approximately $1,533,000.
The first mortgage loan encumbering Dynes Village is delinquent in the amount of
$21,177, which includes a shortfall in the tax escrow fund. In addition, the
property has been audited by the IRS with respect to tenant qualifications
performed by the prior local operating general partner in 1989, 1990 and 1991.
The IRS has preliminarily disqualified certain housing tax credits taken based
on what they consider non-compliance by the prior local operating general
partner. The accountants for the Dynes Village local partnership believe that a
settlement can be reached pursuant to which the entire amount of tax credits
claimed during the disputed period will not be disqualified. Finally, while the
property is budgeted to operate at a $10,000 deficit during 1997, the first
mortgage loan is currently being paid one month in arrears. The Partnership's
investment in Dynes Village is approximately $630,000 at December 31, 1996.
Pursuant to the terms of a workout, dated January 11, 1995 (the "Workout")
agreed between the parties relating to the resolution of an existing default
under the first mortgage loan encumbering Glenark Landing, an annual payment of
$30,000 is due in March 1998 to the Rhode Island Housing and Mortgage Finance
Corporation (the "Lender"). The Workout provides for additional payments of
$42,800 per year, for a five year term, totaling $214,000. The property incurred
significant accounts payable due to necessary repairs, consequently the property
has accrued payables in the amount of $70,000. The General Partner is
negotiating with the Lender for an extension of time to make the $30,000
payment. In addition, the General Partner is requesting a release of available
replacement reserves from the Lender to bring the accounts payable current. The
Partnership's investment in Glenark Landing at December 31, 1996 was zero.
Pursuant to the terms of a loan workout relating to the Blue Lake Local
Partnership, dated March 25, 1995 (the "Workout"), NTCP is required to
contribute an additional $541,300 to the local partnership over a ten year
period. In exchange, the debt service on the property is payable out of net cash
flow. During 1996 and 1995, approximately $49,000 and $100,000, respectively,
was paid by NTCP to the local partnership under the Workout. The Partnership's
investment in Blue Lake at December 31, 1996 was zero.
The Partnership accounts for its investments in the Local Partnerships on the
equity method, thereby adjusting its investment balance by its proportionate
share of the income or loss of the Local Partnerships. The equity in loss of
Local Partnerships is higher in 1995, compared to 1996 and 1994, because losses,
for certain Local Partnerships where the investment balances had previously been
reduced to zero, are not recognized. However, during 1995, the Partnership
agreed to contribute $556,300 to a Local Partnership with a zero investment
account, which resulted in additional losses of $556,300 being recognized. Other
Local Partnerships with positive investment accounts also recognized higher
losses in 1995 as compared to 1996 and 1994. In addition, the Summits and the
Meadows Apartments were written off in 1996 and 1995, respectively, as discussed
above.
Distributions received from Local Partnerships are recognized as return of
capital until the investment balance has been reduced to zero or to a negative
amount equal to future capital contributions required. Subsequent distributions
received are recognized as income.
Operating expenses consist primarily of recurring general and administrative
expenses and professional fees for services rendered to the Partnership. In
addition, an annual partnership management fee in an amount equal to 0.5% of
invested assets is payable to the General Partner and Special Limited Partner.
The management fee represents the annual recurring fee which will be paid to the
General Partner for its continuing management of Partnership affairs. The
decrease in legal fees for the year ended December 31, 1996, as compared to 1995
and 1994, is due to higher legal fees in 1995 and 1994 associated with the final
settlement of litigation involving the Blue Lake, Dynes and Glenark Local
Partnerships as well as
<PAGE> 13
legal fees being paid in connection with the Victorian Park bankruptcy, and
legal fees incurred in connection with various securities matters.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA:
The Financial Statements and Supplementary Data are listed under Item 14.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE:
Not applicable.
<PAGE> 14
NATIONAL TAX CREDIT PARTNERS, L.P.
(a California limited partnership)
FINANCIAL STATEMENTS,
FINANCIAL STATEMENT SCHEDULES
AND REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
DECEMBER 31, 1996
<PAGE> 15
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of
National Tax Credit Partners, L.P.
(A California limited partnership)
We have audited the accompanying balance sheets of National Tax Credit Partners,
L.P. (a California limited partnership) as of December 31, 1996 and 1995, and
the related statements of operations, partners' equity (deficiency) and cash
flows for each of the three years in the period ended December 31, 1996. Our
audits also included the financial statement schedules listed in the index on
item 14. These financial statements and financial statement schedules are the
responsibility of the management of the Partnership. Our responsibility is to
express an opinion on these financial statements and financial statement
schedules based on our audits. We did not audit the financial statements of
certain investee limited partnerships, the investments in which are reflected in
the accompanying financial statements using the equity method of accounting. The
investments in these investee limited partnerships represent 35 percent and 34
percent of total assets as of December 31, 1996 and 1995, respectively, and the
equity in the net loss of these partnerships represents 55 percent, 37 percent
and 13 percent of the total net loss of the Partnership for the years ended
December 31, 1996, 1995 and 1994, respectively, and represent a substantial
portion of the investee information in Note 2 and the financial statement
schedules. The financial statements of these investee limited partnerships were
audited by other auditors. Their reports have been furnished to us and our
opinion, insofar as it relates to the amounts included for those 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 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 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 other auditors, the
financial statements referred to above present fairly, in all material respects,
the financial position of National Tax Credit Partners, L.P. as of December 31,
1996 and 1995, and the results of its operations and its cash flows for each of
the three years in the period ended December 31, 1996 in conformity with
generally accepted accounting principles. Also, in our opinion, based on our
audits and the reports of other auditors, such financial statement schedules,
when considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth therein.
DELOITTE & TOUCHE LLP
Los Angeles, California
April 8, 1997
<PAGE> 16
[LOGO]
[SCHOONOVER BOYER GETTMAN & ASSOCIATES LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To The Partners
Blue Lake Pointe Apartments Associates, Ltd.
Cumming, Georgia
We have audited the accompanying balance sheet of Blue Lake Pointe Apartments
Associates, Ltd., as of December 31, 1996 and 1995 and the related statements of
income/(loss), partners' (deficit) and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Blue Lake Pointe Apartments
Associates, Ltd., as of December 31, 1996 and 1995 and the results of its
operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that Blue Lake
Pointe Apartments Associates, Ltd. will continue as a going concern. As
discussed in Note 7 to the financial statements, the Partnership's recurring
losses from operations and net capital deficiency raise substantial doubt about
the entity's ability to continue as a going concern. Management's plans in
regard to these matters are also described in Note 7. The financial statements
do not include any adjustments relating to the recoverability and classification
of reported asset amounts or the amounts and classification of liabilities that
might result from the outcome of this uncertainty.
/s/ SCHOONOVER BOYER GETTMAN & ASSOCIATES
- -----------------------------------------
January 17, 1997
<PAGE> 17
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
ACCOUNTANTS' COMPILATION REPORT
To the Partners of
Concept I Limited Partnership and
Concept II Limited Partnership
We have compiled the accompanying combined balance sheets of CONCEPT I LIMITED
PARTNERSHIP and CONCEPT II LIMITED PARTNERSHIP as of December 31, 1996 and 1995,
and the combined statement of operations, changes in partners' equity (deficit)
and cash flows for the years then ended, and the additional financial data as
shown in the Table of Contents, in accordance with Statements on Standards for
Accounting and Review Services, issued by the American Institute of Certified
Public Accountants.
A compilation is limited to presenting, in the form of financial statements,
information that is the representation of management. We have not audited or
reviewed the accompanying financial statements and the additional financial data
as shown in the Table of Contents and, accordingly, do not express an opinion or
any other form of assurance on them.
As discussed in Note 5 to the financial statements, a certain condition
indicates the partnerships may be unable to continue as going concerns. The
financial statements do not include any adjustments that might be necessary
should the partnerships be unable to continue as going concerns.
/s/ ALTSCHULER, MELVOIN AND GLASSER LLP
- -----------------------------------------
Chicago, Illinois
February 1, 1997
<PAGE> 18
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Countryview Columbus, Ltd.
We have audited the accompanying balance sheets of COUNTRYVIEW COLUMBUS, LTD. as
of December 31, 1996 and 1995, and the related statements of operations, changeS
in partners, equity and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Countryview Columbus, Ltd. as
of December 31, 1996 and 1995, and its results of operations and cash flows for
the years then ended in conformity with generally accepted accounting
principles.
As discussed in Note 2, the Partnership is in default under the terms of its
modified mortgage loan agreement.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The additional 1996 financial data shown on pages
10 and 11 is presented for the purpose of additional analysis and is not a
required part of the financial statements. Such information has been subjected
to the procedures applied in the audit of the 1996 financial statements and, in
our opinion, is fairly stated in all material respects in relation to the
financial statements taken as a whole.
/s/ ALTSCHULER, MELVOIN & GLASSER LLP
- -----------------------------------------
Chicago, Illinois
January 29, 1997
<PAGE> 19
[LOGO]
[ROCKOFF HARLAN RASOF LTD. LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
DICKENS ASSOCIATES II
We have audited the accompanying balance sheet of DICKENS ASSOCIATES II.
F.H.A. Project No. 071-35591 (the "Partnership"), as of December 31, 1996. and
the related statements of operations, changes in partners' capital and cash
flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards. issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis. evidence
supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Partnership as of December
31, 1996, and the results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in the notes to the
financial statements, the Partnership has been experiencing cash flow problems,
which raise substantial doubt about its ability to continue as a going concern.
Management's plans regarding those matters also are described in the notes to
the financial statements. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
In accordance with Government Auditing Standards. we have also issued a report
dated February 12, 1997 on our consideration of the Partnership's internal
control structure and a report dated February 12, 1997 on its compliance with
laws and regulations.
The accompanying supplementary information shown on pages 17 to 21 is presented
for purposes of additional analysis and is not a required part of the basic
financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ ROCKOFF, HARLAN, RASOF, LTD.
- -----------------------------------------
February 12, 1997
<PAGE> 20
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
ACCOUNTANTS' COMPILATION REPORT
To the Partners of
Dynes Village Associates Limited Partnership
We have compiled the accompanying balance sheets of DYNES VILLAGE ASSOCIATES
LIMITED PARTNERSHIP as of December 31, 1996 and 1995, and the related statements
of operations, changes in partners' equity and cash flows for the years then
ended, and the additional financial data as shown in the Table of Contents, in
accordance with Statements on Standards for Accounting and Review Services,
issued by the American Institute of Certified Public Accountants.
A compilation is limited to presenting, in the form of financial statements and
additional financial data, information that is the representation of management.
We have not audited or reviewed the accompanying financial statements and the
additional financial data as shown in the Table of Contents and, accordingly, do
not express an opinion or any other form of assurance on them.
/s/ ALTSCHULER, MELVOIN AND GLASSER LLP
- ----------------------------------------
Chicago, Illinois
February 1, 1997
<PAGE> 21
[LOGO]
[HUMISTON, SKOKAN, WARREN & EICHENBERGER LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Genoa Plaza, Limited Partnership
West Des Moines, Iowa
We have audited the accompanying balance sheets of GENOA PLAZA, LIMITED
PARTNERSHIP as of December 31, 1996 and 1995, and the related statements of
operations, partners' equity (deficit) and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Governmental Auditing Standards, issued by the Comptroller General
of the United States and U.S. Department of Agriculture Farmers Home
Administration, Audit Program. 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 Genoa Plaza, Limited
Partnership as of December 31, 1996 and 1995 and the results of its operations
and its cash flows for the years then ended, in conformity with generally
accepted accounting principles.
/s/ HUMISTON, SKOKAN, WARREN & EICHENBERGER
- -----------------------------------------
January 10, 1997
<PAGE> 22
[LOGO]
[PLANTE & MORAN, LLP LETTERHEAD]
Independent Auditor's Report
To the Partners
Grand Meadows II Limited
Dividend Housing Association
Limited Partnership
We have audited the accompanying balance sheet of Grand Meadows II Limited
Dividend Housing Association Limited Partnership (a Michigan limited
partnership), MSHDA Development No. 827 as of December 31, 1996, 1995, and 1994,
and the related statements of profit and loss, partners' equity, and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Grand Meadows II Limited
Dividend Housing Association Limited Partnership at December 31, 1996, 1995, and
1994, and the results of its operations and changes in partners' equity, and
cash flows for the years then ended, in conformity with generally accepted
accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated January 13, 1997, on our consideration of the Partnership's internal
control structure and a report dated January 13, 1997, on its compliance with
laws and regulations.
/s/ PLANTE & MORAN, LLP
- -----------------------------------------
January 13, 1997
<PAGE> 23
INDEPENDENT AUDITORS' REPORT
To the Partners
Grinnell Park Apartments, Limited Partnership
West Des Moines, Iowa
We have audited the accompanying balance sheets of GRINNELL PARK APARTMENTS,
LIMITED PARTNERSHIP as of December 31, 1996 and 1995, and the related statements
of operations, partners' equity (deficit) and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit 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 Grinnell Park Apartments,
Limited Partnership as of December 31, 1996 and 1995 and the results of its
operations and its cash flows for the years then ended, in conformity with
generally accepted accounting principles.
January 10, 1997
<PAGE> 24
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Hickory Green Limited Partnership
We have audited the accompanying balance sheets of HICKORY GREEN LIMITED
PARTNERSHIP as of December 31, 1996 and 1995, and the related statements of
operations, changes in partners' equity and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management as well as evaluating the overall financial statement presentation.
We believe 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 Hickory Green Limited
Partnership as of December 31, 1996 and 1995, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The additional 1996 financial data on pages 10 and
11 are presented for the purpose of additional analysis and are not a required
part of the financial statements. This information has been subjected to the
procedures applied in the audit of the 1996 financial statements and, in our
opinion, is stated fairly in all material respects in relation to the financial
statements taken as a whole.
/s/ ALTSCHULER, MELVOIN & GLASSER, LLP
- -----------------------------------------
Chicago, Illinois
January 29, 1997
<PAGE> 25
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Holden Village Associates
We have audited the accompanying balance sheets of HOLDEN VILLAGE ASSOCIATES (a
limited partnership) as of December 31, 1996 and 1995, and the related
statements of operations, changes in partners' equity and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Holden Village Associates as of
December 31, 1996 and 1995, and the results of its operations, changes in its
partners' equity, and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. Insufficient cash flows and
recurring losses from operations raise substantial doubt about the Partnership's
ability to continue as a going concern. Management's plans in regard to these
matters are described in Note 6. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
<PAGE> 26
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The additional 1996 financial data, listed in the
Table of Contents, are presented for the purpose of additional analysis and are
not a required part of the financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the 1996 financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ ALTSCHULER, MELVOIN AND GLASSER, LLP
- -----------------------------------------
Los Angeles, California
March 7, 1997
<PAGE> 27
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Mountain View Limited Partnership
We have audited the accompanying balance sheets of MOUNTAIN VIEW LIMITED
PARTNERSHIP as of December 31, 1996 and 1995, and the related statements of
operations, changes in partners' equity and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Mountain View Limited
Partnership as of December 31, 1996 and 1995, and its results of operations,
changes in partners' equity, and cash flows for the years then ended in
conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the financial
statements, taken as a whole. The additional 1996 financial data, listed in the
Table of Contents, are presented for the purpose of additional analysis and are
not a required part of the financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the 1996 financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ ALTSCHULER, MELVOIN & GLASSER LLP
- -----------------------------------------
Los Angeles, California
February 17, 1997
<PAGE> 28
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Mountain View Limited Partnership II
We have audited the accompanying balance sheets of MOUNTAIN VIEW LIMITED
PARTNERSHIP II as of December 31, 1996 and 1995, and the related statements of
operations, changes in partners' equity and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Mountain View Limited
Partnership II as of December 31, 1996 and 1995, and its results of operations,
changes in partners' equity and cash flows for the years then ended in
conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the financial
statements, taken as a whole. The additional 1996 financial data, listed in the
Table of Contents, are presented for the purpose of additional analysis and are
not a required part of the financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the 1996 financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ ALTSCHULER, MELVOIN AND GLASSER LLP
- -----------------------------------------
Los Angeles, California
February 17, 1997
<PAGE> 29
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Newbury Place Apartments Limited Partnership
We have audited the accompanying balance sheets of NEWBURY PLACE APARTMENTS
LIMITED PARTNERSHIP as of December 31, 1996 and 1995, and the related statements
of operations, changes in partners' equity and cash flows for the years then
ended. These financial statements are the responsibility of the partnerships
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 Newbury Place Apartments
Limited Partnership as of December 31, 1996 and 1995, and its results of
operations and cash flows for the years then ended in conformity with generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The additional 1996 financial data on pages 11 and
12 are presented for the purpose of additional analysis and are not a required
part of the financial statements. This information has been subjected to the
procedures applied in the audit of the 1996 financial statements and, in our
opinion, is stated fairly in all material respects in relation to the financial
statements taken as a whole.
/s/ ALTSCHULER, MELVOIN AND GLASSER LLP
- -----------------------------------------
Chicago, Illinois
March 6, 1997
<PAGE> 30
[LOGO]
[HUMISTON, SKOKAN, WARREN & EICHENBERGER LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
North Liberty Park, Limited Partnership
West Des Moines, Iowa
We have audited the accompanying balance sheets of NORTH LIBERTY PARK,
LIMITED PARTNERSHIP as of December 31, 1996 and 1995, and the related statements
of operations, partners' equity (deficit) and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit 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 North Liberty Park, Limited
Partnership as of December 31, 1996 and 1995 and the results of its operations
and its cash flows for the years then ended, in conformity with generally
accepted accounting principles.
/s/ HUMISTON, SKOKAN, WARREN & EICHENBERGER, P.C.
- -------------------------------------------------
January 9, 1997
<PAGE> 31
[LOGO]
[JOHN M. HANSON & COMPANY, P.C. LETTERHEAD]
The General Partners
Paris Hotel Limited Partnership
Independent Auditors' Report
We have audited the accompanying balance sheets of the Paris Hotel Limited
Partnership as of December 31, 1996 and 1995, and the related statements of
operations, changes in partners' equity and cash flows for the years ended
December 31, 1996, 1995 and 1994. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the Paris Hotel Limited
Partnership as of December 31, 1996 and 1995, and the results of its operations
and its cash flows for the years ended December 31, 1996, 1995 and 1994, in
conformity with generally accepted accounting principles.
/s/ JOHN H. HANSON & COMPANY, P.C.
- ----------------------------------
Denver, Colorado
January 13, 1997
<PAGE> 32
[LOGO]
[DELOITTE & TOUCHE LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
ComFed Qualified Housing Limited Partners XII, a Nebraska Limited Partnership
We have audited the accompanying statement of financial condition of ComFed
Qualified Housing Limited Partners XII, a Nebraska Limited Partnership as of
December 31, 1996 and 1995 and the related statements of operations, changes in
partners' capital accounts, and cash flows for each of the three years in the
period ended December 31, 1996. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our 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, such financial statements present fairly, in all material
respects, the financial position of the ComFed Qualified Housing Limited
Partners XII at December 31, 1996 and 1995 and the results of its operations and
its cash flows for each of the three years in the period ended December 31,
1996, in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of cash deficit
at December 31, 1996 is presented for purposes of additional analysis and is not
a required part of the basic financial statements. This supplemental schedule is
the responsibility of the Partnership's management. Such supplemental schedule
has been subjected to the auditing procedures applied in our audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects when considered in relation to the basic financial statements taken as
a whole.
/s/ DELOITTE & TOUCHE LLP
- -----------------------------------------
February 7, 1997
<PAGE> 33
[LOGO]
[BERNSTEIN, SIMPSON, GILBERT AND MOROWITZ LLC LETTERHEAD]
Independent Auditor's Report
To the Partners
Rolling Hills Apts. Ltd.
Pottsgrove Township, Pa.
We have audited the accompanying balance sheets of Rolling Hills Apts. Ltd.(a
limited partnership), HUD Project No. PHFA No. 61 as of December 31, 1996 and
1995, and the related statements of income, changes in partners' deficit and
cash flows for the years then ended. These financial statements are the
responsibility of the Rolling Hills Apts. Ltd.'s management. Our responsibility
is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and the significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
<PAGE> 34
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Rolling Hills Apts. Ltd. HUD
Project No. PHFA No. 61 as of December 31, 1996 and 1995, and the results of
its operations, changes in partners' deficit and cash flows for the years then
ended in conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report (shown
on pages 15 to 31) are presented for the purposes of additional analysis and are
not a required part of the financial statements of Rolling Hills Apts. Ltd.
Project No. PHFA No. 61. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
Respectfully submitted,
/s/ BERNSTEIN, SIMPSON, GILBERT AND MOROWITZ, LLC
- -------------------------------------------------
Atlantic City, N.J.
February 8, 1997
<PAGE> 35
[LOGO]
[MCDONALD JACOBS MARKS JOHNSON LETTERHEAD]
INDEPENDENT AUDITOR' S REPORT
To the Partners
Rose City Village
Limited Partnership
Portland, Oregon
We have audited the accompanying balance sheets of Rose City Village Limited
Partnership as of December 31, 1996, 1995 and 1994, and the related statements
of income, changes in partners' capital (deficit) and cash flows for the years
then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
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 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 Rose City Village Limited
Partnership as of December 31, 1996, 1995 and 1994, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/ MCDONALD JACOBS MARKS JOHNSON
- ---------------------------------
January 7, 1997
<PAGE> 36
[LOGO]
[HARLAN & BOETTGER LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Terrace Gardens Limited Partnership:
We have audited the accompanying balance sheets of Terrace Gardens Limited
Partnership (a California limited partnership) as of December 31, 1996 and 1995,
and the related statements of operations, changes in partners' equity (deficit)
and cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit 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 Terrace Gardens Limited
Partnership as of December 31, 1996 and 1995, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/ HARLAN & BOETTGER
- ---------------------
San Diego, California
January 22, 1997
<PAGE> 37
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners of
100 Sixth Avenue Associates, Limited Partnership
aka Ticino Apartments
We have audited the accompanying balance sheets of 100 SIXTH AVENUE ASSOCIATES,
LIMITED PARTNERSHIP aka TICINO APARTMENTS as of December 31, 1996 and 1995, and
the related statements of operations, changes in partners' equity and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnerships 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 100 Sixth Avenue Associates,
Limited Partnership aka Ticino Apartments as of December 31, 1996 and 1995, and
the results of its operations, changes in its partners' equity, and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. Insufficient cash flows and
recurring losses from operations raise substantial doubt about the Partnership's
ability to continue as a going concern. Management's plans in regard to these
matters are described in Note 6. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
<PAGE> 38
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The additional 1996 financial data, listed in the
Table of Contents, are presented for the purpose of additional analysis and are
not a required part of the financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the 1996 financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ ALTSCHULER, MELVOIN AND GLASSER LLP
- ---------------------------------------
Los Angeles, California
March 7, 1997
<PAGE> 39
[LOGO]
TORRES STOMPART SANCHEZ RUIZ & CO.
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS
Partners
Torres del Plata I Limited Partnership
San Juan, Puerto Rico
We have audited the accompanying balance sheet of Torres del Plata I Limited
Partnership as of December 31, 1996, and the related statements of operations,
partners' equity, and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit. The financial statements of Torres del Plata I Limited Partnership as
of December 31, 1995, were audited by other auditors whose report dated January
22, 1996, expressed an unqualified opinion on those statements.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statements
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Torres del Plata I Limited
Partnership as of December 31, 1996, and the results of its operations, changes
in partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated January 23, 1997, on our consideration of the Partnership's internal
control structure and a report dated January 23, 1997 on its compliance with
laws, regulations, contracts, loan covenants and agreements.
/s/ TORRES STOMPART SANCHEZ RUIZ & CO.
- --------------------------------------
January 23, 1997
License No. 169
Stamp number 1392913 was
affixed to the original of this report.
<PAGE> 40
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS
AND ADDITIONAL FINANCIAL DATA REQUIRED BY
THE PENNSYLVANIA HOUSING FINANCE AGENCY
To the Partners
Tyrone Elderly Limited Partnership
We have audited the accompanying balance sheet of TYRONE ELDERLY LIMITED
PARTNERSHIP, PHFA Project Number R-261-8E, as of December 31, 1996, and the
related statements of operations, changes in partners' equity and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits. The financial statements of Tyrone
Elderly Limited Partnership as of and for the year ended December 31, 1995, were
audited by other auditors whose report dated January 26, 1996, expressed an
unqualified opinion on those statements.
We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the 1996 financial statements referred to above present fairly,
in all material respects, the financial position of Tyrone Elderly Limited
Partnership as of December 31, 1996, and its results of operations, changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued reports
dated February 4, 1997, on our consideration of Tyrone Elderly Limited
Partnership's internal control structure and on its compliance with laws and
regulations.
<PAGE> 41
Our audit was performed for the purpose of forming an opinion on the financial
statements taken as a whole. The additional 1996 financial data shown on pages
13 through 22 is presented for purposes of additional analysis and is not a
required part of the financial statements. Such information has been subjected
to the procedures applied in the audit of the 1996 financial statements and, in
our opinion, is fairly stated in all material respects in relation to the
financial statements taken as a whole.
/s/ ALTSCHULER, MELVOIN AND GLASSER LLP
- ---------------------------------------
Chicago, Illinois
February 4, 1997
<PAGE> 42
[LOGO]
[BLACKMAN & ASSOCIATES, P.C. LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Vinton/Park School Apartments
Limited Partnership
Omaha, Nebraska
We have audited the accompanying balance sheets of Vinton/Park School Apartments
Limited Partnership (a Nebraska Limited Partnership) as of December 31, 1996 and
1995 and the related statements of operations, changes in partners' capital
accounts and cash flows for the years ended December 31, 1996, 1995 and 1994.
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 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 Vinton/Park School Apartments
Limited Partnership at December 31, 1996 and 1995 and the results of its
operations, changes in partners' capital accounts and cash flows for the years
ended December 31, 1996, 1995 and 1994, in conformity with generally accepted
accounting principles.
/s/ Blackman & Associates, P.C.
- -------------------------------
Omaha, Nebraska
January 23, 1997
<PAGE> 43
NATIONAL TAX CREDIT PARTNERS, L.P.
(A CALIFORNIA LIMITED PARTNERSHIP)
BALANCE SHEETS
DECEMBER 31, 1996 AND 1995
ASSETS
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
INVESTMENTS IN LIMITED PARTNERSHIPS
(Notes 1 and 2) $17,721,398 $21,923,823
CASH AND CASH EQUIVALENTS (Note 1) 149,927 500,282
RESTRICTED CASH 75,000 75,000
----------- -----------
TOTAL ASSETS $17,946,325 $22,499,105
=========== ===========
<CAPTION>
LIABILITIES AND PARTNERS' EQUITY
<S> <C> <C>
LIABILITIES:
Accrued fees and expenses due to partners (Notes 4 and 7) $ 3,996,221 $ 3,266,521
Capital contributions payable (Note 3) 392,300 441,300
Accounts payable and accrued expenses 270,354 325,351
----------- -----------
4,658,875 4,033,172
CONTINGENCIES (Note 6)
PARTNERS' EQUITY 13,287,450 18,465,933
----------- -----------
TOTAL LIABILITIES AND PARTNERS' EQUITY $17,946,325 $22,499,105
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 44
NATIONAL TAX CREDIT PARTNERS, L.P.
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
INTEREST AND OTHER INCOME $ 99,016 $ 75,125 $ 54,226
----------- ----------- -----------
OPERATING EXPENSES:
Management fees - partners (Note 4) 692,956 692,955 694,095
Legal and accounting 132,991 374,878 493,158
General and administrative (Note 4) 149,695 139,846 149,845
----------- ----------- -----------
Total operating expenses 975,642 1,207,679 1,337,098
----------- ----------- -----------
LOSS FROM PARTNERSHIP OPERATIONS (876,626) (1,132,554) (1,282,872)
WRITE-OFF OF INVESTMENT IN
LIMITED PARTNERSHIP (Note 2) (2,289,875) (1,158,801) --
DISTRIBUTIONS FROM LIMITED
PARTNERSHIPS RECOGNIZED
AS INCOME 37,532 -- --
EQUITY IN LOSS OF LIMITED
PARTNERSHIPS AND AMORTIZATION
OF ACQUISITION COSTS (Note 2) (2,049,514) (3,828,734) (2,369,642)
----------- ----------- -----------
NET LOSS $(5,178,483) $(6,120,089) $(3,652,514)
=========== =========== ===========
NET LOSS PER LIMITED
PARTNERSHIP INTEREST (Note 1) $ (215) $ (254) $ (151)
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 45
NATIONAL TAX CREDIT PARTNERS, L.P.
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF PARTNERS' EQUITY (DEFICIENCY)
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
Special
Limited General Limited
Partners Partners Partners Total
-------- -------- -------- -----
<S> <C> <C> <C> <C>
PARTNERS' EQUITY (DEFICIENCY),
January 1, 1994 $1,000 $(236,438) $ 28,473,974 $ 28,238,536
Net loss for 1994 -- (36,525) (3,615,989) (3,652,514)
------ --------- ------------ ------------
PARTNERS' EQUITY (DEFICIENCY),
December 31, 1994 1,000 (272,963) 24,857,985 24,586,022
Net loss for 1995 -- (61,201) (6,058,888) (6,120,089)
------ --------- ------------ ------------
PARTNERS' EQUITY (DEFICIENCY),
December 31, 1995 1,000 (334,164) 18,799,097 18,465,933
Net loss for 1996 -- (51,785) (5,126,698) (5,178,483)
------ --------- ------------ ------------
PARTNERS' EQUITY (DEFICIENCY),
December 31, 1996 $1,000 $(385,949) $ 13,672,399 $ 13,287,450
====== ========= ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 46
NATIONAL TAX CREDIT PARTNERS, L.P.
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(5,178,483) $(6,120,089) $(3,652,514)
Adjustments to reconcile net loss to net cash
used in operating activities:
Equity in losses of limited partnerships
and amortization of acquisition costs 2,049,514 3,828,734 2,369,642
Write-off of investee partnership 2,289,875 1,158,801 --
Increase in:
Accrued fees and expenses due to partners 729,700 763,430 624,672
Accounts payable and accrued expenses (54,997) 24,326 124,369
----------- ----------- -----------
Net cash used in operating activities (164,391) (344,798) (533,831)
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in investee partnerships:
Capital contributions and advances to ( recovery from)
limited partnerships (223,816) 112,749 (227,675)
Capitalized acquisition costs and fees -- (2,745) (240,958)
Distributions recognized as a return of capital 86,852 120,707 98,889
Increase (decrease) in capital contributions payable (49,000) 441,300 --
Decrease in restricted cash -- -- 118,997
Decrease in other assets -- 16,894 --
----------- ----------- -----------
Net cash provided by (used in) investing activities (185,964) 688,905 (250,747)
----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (350,355) 344,107 (784,578)
CASH AND CASH EQUIVALENTS,
beginning of year 500,282 156,175 940,753
----------- ----------- -----------
CASH AND CASH EQUIVALENTS,
end of year $ 149,927 $ 500,282 $ 156,175
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 47
NATIONAL TAX CREDIT PARTNERS, L.P.
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
National Tax Credit Partners, L.P. (the "Partnership") was formed under
the California Revised Limited Partnership Act and organized on March 7,
1989. The Partnership was formed to invest primarily in other limited
partnerships which own and operate multifamily housing complexes that are
eligible for low income housing tax credits or, in certain cases, for
historic rehabilitation tax credits. The general partner of the
Partnership (the "General Partner") is National Partnership Investments
Corp., a California corporation ("NAPICO"). Casden Investment Corporation
owns 100% of NAPICO's stock. The special limited partner of the
Partnership (the "Special Limited Partner") is PaineWebber T.C., Inc., a
Delaware corporation.
The Partnership originally registered 14,000 units, consisting of 28,000
Limited Partnership Interests ("LPI"), and warrants to purchase a maximum
of 14,000 Additional Limited Partnership Interests ("ALPI"). The term of
the offering expired in June 1990, at which date the Partnership raised
$59,749,000 from the sale of 16,336 LPI and warrants representing 7,563
ALPI.
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.
The Partnership shall continue in full force and effect until December 31,
2029, unless terminated prior to that, pursuant to the partnership
agreement or law.
Upon total or partial liquidation of the Partnership or the disposition or
partial disposition of a project or project interest and distribution of
the proceeds, the General Partner will be entitled to a property
disposition fee as mentioned in the partnership agreement. The limited
partners will have a priority item equal to their invested capital plus a
10% priority return as defined in the partnership agreement. This property
disposition fee may accrue but shall not be paid until the limited
partners have received distributions equal to 100% of their capital
contributions plus the 10% priority return.
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 reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
Method of Accounting for Investments in Limited Partnerships
The investments in limited partnerships are accounted for using the equity
method. Acquisition, selection and other costs related to the acquisition
of the projects acquired are capitalized as part of the investment
accounts and are being amortized on a straight line basis over the
estimated lives of the underlying assets, which is generally 30 years.
5
<PAGE> 48
NATIONAL TAX CREDIT PARTNERS, L.P.
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Net Loss Per Limited Partnership Interest
Net loss per limited partnership interest was computed by dividing the
limited partners' share of net loss by the number of limited partnership
interests outstanding during the year. The number of limited partnership
interests was 23,899 for all years presented.
Cash and Cash Equivalents
The Partnership considers all highly liquid debt instruments purchased
with an original maturity of three months or less to be cash equivalents.
Impairment of Long-Lived Assets
The Partnership reviews long-lived assets to determine if there has been
any permanent impairment whenever events or changes in circumstances
indicate that the carrying amount of the asset may not be recoverable. If
the sum of the expected future cash flows is less than the carrying amount
of the assets, the Partnership recognizes an impairment loss.
2. INVESTMENTS IN LIMITED PARTNERSHIPS
The Partnership holds limited partnership interests in 31 local limited
partnerships (the "Local Partnerships"). As a limited partner of the Local
Partnerships, the Partnership does not have authority over day-to-day
management of the Local Partnerships or their properties (the "Apartment
Complexes"). The general partners responsible for management of the Local
Partnerships (the "Local Operating General Partners") are not affiliated
with the General Partner of the Partnership, except as discussed below.
At December 31, 1996, the Local Partnerships own residential projects
consisting of 2,788 apartment units.
The Partnership, as a limited partner in each Local Partnership, is
generally entitled to 99 percent of the operating profits and losses of
the Local Partnerships. National Tax Credit, Inc. (NTC), an affiliate of
the General Partner, serves either as a special limited partner or
non-managing administrative general partner in which case it receives .01%
of operating profits and losses of the Local Partnership, or as the Local
Operating General Partner of the Local Partnership in which case it is
entitled to .09% of operating profits and losses of the Local Partnership.
The Partnership is also generally entitled to receive 50% of the net cash
flow generated by the Apartment Complexes, subject to repayment of any
loans made to the Local Partnerships (including loans provided by NTC or
an affiliate), repayment for funding of development deficit and operating
deficit guarantees by the Local Operating General Partners or their
affiliates (excluding NTC and its affiliates), and certain priority
payments to the Local Operating General Partners other than NTC or its
affiliates.
The Partnership's allocable share of losses from Local Partnerships are
recognized in the financial statements until the related investment
account is reduced to a zero balance. Losses incurred after the investment
account is reduced to zero are not recognized. The cumulative amount of
the unrecognized equity in losses of unconsolidated limited partnerships
was approximately $13,934,000 and $2,501,000 as of December 31, 1996 and
1995, respectively.
6
<PAGE> 49
NATIONAL TAX CREDIT PARTNERS, L.P.
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
Distributions from the Local Partnerships are accounted for as a return of
capital until the investment balance is reduced to zero or to a negative
amount equal to further capital contributions required. Subsequent
distributions received will be recognized as income.
The following is a summary of the investments in and advances to Local
Partnerships and reconciliation to the Local Partnerships accounts:
<TABLE>
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
Investment balance, beginning of year $ 21,923,823 $ 27,142,069
Capital contributions to (recovery from) limited partnerships 223,816 (112,749)
Capitalized acquisition costs and fees (Note 3) 0 2,745
Equity in loss of limited partnerships (1,893,223) (3,642,215)
Write off of investee partnership (2,289,875) (1,158,801)
Amortization of capitalized acquisition costs and fees (156,291) (186,519)
Distributions recognized as a return of capital (86,852) (120,707)
------------ ------------
Investment balance, end of year $ 17,721,398 $ 21,923,823
============ ============
</TABLE>
The difference between the investment per the accompanying balance sheets
at December 31, 1996 and 1995, and the equity per the Local Partnerships'
combined financial statements is due primarily to cumulative unrecognized
equity in losses of certain Local Partnerships the Partnership's recording
of capital contributions payable to the Local Partnerships in its
investment balance and costs capitalized to the investment account.
Victorian Park
Victorian Park Associates, which owns a 336-unit Apartment Complex located
in Illinois, defaulted on its mortgage in July 1991 principally because the
unaffiliated Local Operating General Partners failed to pay $800,000 of
real property taxes required under their guarantees. On March 25, 1992, the
Partnership commenced litigation against the Local Operating General
Partners to enforce its rights. On November 13, 1992 the Partnership was
advised that a Chapter 11 petition in bankruptcy was filed by the Local
Operating General Partners on behalf of the Local Partnership and that the
lender, Patrician Mortgage ("Patrician"), had accelerated its mortgage. On
January 7, 1993, the Partnership obtained an order compelling the Local
Operating General Partners to perform under their Guarantees, which order
was reversed by the U.S. Court of Appeals for the Seventh Circuit. The
Partnership has until June 1997 to reinstate this case. The Local Operating
General Partners' Seventh Amended Plan of Reorganization (the "Plan") is
now pending approval. Pursuant to the Plan, Patrician is required to
reissue and/or reduce the principal on the first mortgage bonds and the
Local Operating General Partners are required to (i) pay $1,000,000 cash to
implement the Plan and (ii) pay an agreed upon monthly guarantee payment.
No assurances can be given that the Plan will be successfully implemented.
As of December 31, 1996 and 1995, the Partnership's carrying value of the
investment in the Victorian Local Partnership (which represents
approximately 5.7% of the Partnership's total equity initially invested in
Local Partnerships) was zero.
7
<PAGE> 50
NATIONAL TAX CREDIT PARTNERS, L.P.
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
Summit I, II and III
The general contractor for three related Local Partnerships, Summit I,
Summit II and Summit III, initiated a lawsuit in December 1992 against the
Local Partnerships and the Partnership seeking damages in the amount of
approximately $600,000 allegedly due pursuant to the respective general
contracts plus damages for alleged misrepresentations and punitive damages.
The Partnership believes that the general contractor's claims are barred
and/or subject to offset and it has filed responsive pleadings. The
Partnership has not accrued any liability in the accompanying financial
statements as of December 31, 1996. The lawsuit has been dormant for more
than two years. Although occupancy levels at the three related Local
Partnerships, Summit I, II, and III (Wallace, Bergdoll, and Chandler School
located in Philadelphia) were stabilized at 94%, 100%, and 88%,
respectively, the properties operated at deficits during 1996. The Summit I
and III properties have approximately $150,000 in outstanding property
taxes (a portion of which could result in liens on the properties), utility
bills, and other trade payables. The local general partner is currently
attempting to negotiate discounted payments and/or payment plans for these
items which, if unsuccessful, could result in foreclosure proceedings on
all three properties. NTCP has settled its litigation with the lender on
Summit I and III. As part of the settlement, the lender dismissed its
foreclosure actions and converted its mortgages to mortgages requiring debt
service payments out of available cash flow only. In return, NTCP intends
to (i) admit the lender into all three of the local partnerships if certain
conditions are satisfied, and (ii) to assign a portion of NTCP's interests
in each local partnership, including an allocation of approximately
$100,000 in remaining tax credits. In 1996, the aggregate carrying value of
the investments in Summit I, Summit II and Summit III of approximately
$2,290,000 was written off. Summits I, II and III represent 3.2%, 1.4% and
4.6%, respectively, of NTCP's original portfolio investment.
Meadows
The Meadows Apartments (the "Local Partnership") is a 114-unit building
located in Ypsilanti, Michigan. The first mortgage loan matured on May 15,
1996. After the lender refused to negotiate an extension of the loan, the
Local Partnership filed Chapter 11 bankruptcy proceedings to avert
foreclosure. A plan of reorganization for the Local Partnership (the
"Plan") was approved by the bankruptcy court on December 16, 1996. Pursuant
to the Plan, NTCP paid the following amounts out of reserves (i) 1996
delinquent property taxes of $35,317, (ii) legal fees of $10,000, and (iii)
unsecured creditors of $18,590. The Plan also requires NTCP to make a
payment of $171,093 on April 18, 1997, which will satisfy the 1993
delinquent real estate taxes. The Plan also outlines a partial payment
schedule for the 1994 and 1995 delinquent real estate taxes which would be
paid out of the property's operations.
Under the Plan, the existing loan in the principal amount of $2,890,000, at
an interest rate of 10%, was reduced to $2,100,000 with an interest rate of
9%. In exchange, the lender received one-third of NTCP's local partnership
interest, including anticipated allocations of housing tax credits in the
amount of approximately $488,500. The property operated at an occupancy
level of 97% as of December 1996. It is anticipated that the Local
Partnership will attain break-even levels of operations on a go forward
basis once the Plan is fully implemented. As of December 31, 1996 and 1995,
the Partnership's carrying value of the investment in the Meadows
Apartments was zero.
8
<PAGE> 51
NATIONAL TAX CREDIT PARTNERS, L.P.
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
Glenark
Pursuant to the terms of a workout, dated January 11, 1995 (the "Workout")
agreed between the parties relating to the resolution of an existing
default under the first mortgage loan encumbering Glenark Landing, an
annual payment of $30,000 is due in March 1998 to the Rhode Island Housing
and Mortgage Finance Corporation (the "Lender"). The Workout provides for
additional payments of $42,800 per year, for a five year term, totaling
$214,000. The property incurred significant accounts payable due to
necessary repairs, consequently the property has accrued payables in the
amount of $70,000. The General Partner is negotiating with the Lender for
an extension of time to make the $30,000 payment. In addition, the General
Partner is requesting a release of available replacement reserves from the
Lender to bring the accounts payable current. The Partnership's investment
in Glenark at December 31, 1996 and 1995 was zero.
Countryview
A loan modification with Federal Home Loan Mortgage Corporation, the lender
on Countryview Apartments, was completed October 9, 1996 with, among other
things as part of the modification, NTCP is required to pay to the lender
$15,677, on a monthly basis (commencing November 1, 1996) for the first six
months and $10,910 for an additional two months for a total of $115,882 of
which only the November 1, 1996 payment in the amount of $15,677 has been
paid to date. Accordingly, while the loan under the restructured terms is
being paid monthly out of the cash flow from the property's operations,
there is currently a default under the modification. The Partnership is
currently negotiating with the lender to cure this default. In connection
with the modification, the interest rate was reduced from 11.515% to 8%. As
of December 1996 the property attained 97% occupancy. The Partnership's
investment in Countryview Apartments at December 31, 1996 was approximately
$2,230,000.
Holden Village & Ticino Apartments
Holden Village and Ticino Apartments, located in Seattle, Washington,
maintained average occupancy levels of 95%, but experienced operating
deficits of approximately $45,000 and $50,000, respectively, during 1996.
The high cost of servicing the debt is the largest contributing factor
associated with the deficit operations. In an effort to improve the
performance of the properties, the local general partner, an affiliate of
the General Partner, removed the existing management agent in June 1996.
The new management agent has attempted to reduce operating expenses and
increase occupancy levels, but has been generally unsuccessful. NTCP is
currently negotiating an interest rate reduction with the lender for each
of the properties in an effort to improve the cash flow. In exchange, it is
expected that NTCP will be required to assign all or part of its local
partnership interests, including its allocable share of the remaining tax
credits in each of the local partnerships, which assignment could result in
recapture for NCTP's partners. However, if the loan modifications are
successful the operating performance of each property is expected to
improve substantially. The Partnership's total investment in Holden Village
and Ticino Apartments at December 31, 1996 was approximately $1,533,000.
9
<PAGE> 52
NATIONAL TAX CREDIT PARTNERS, L.P.
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
Dynes Village
The first mortgage loan encumbering Dynes Village is delinquent in the
amount of $21,177, which includes a shortfall in the tax escrow fund. In
addition, the property has been audited by the IRS with respect to tenant
qualifications performed by the prior local operating general partner in
1989, 1990 and 1991. The IRS has preliminarily disqualified certain housing
tax credits taken based on what they consider non-compliance by the prior
local operating general partner. The accountants for the Dynes Village
local partnership believe that a settlement can be reached pursuant to
which the entire amount of tax credits claimed during the disputed period
will not be disqualified. Finally, while the property is budgeted to
operate at a $10,000 deficit during 1997, the first mortgage loan is
currently being paid one month in arrears. The Partnership's investment in
Dynes Village was approximately $630,000 at December 31, 1996.
Blue Lake
Pursuant to the terms of a loan workout, dated March 25, 1995 (the
"Workout"), NTCP is required to contribute an additional $541,300 to the
local partnership over a ten year period. In exchange, the debt service on
the property is payable out of net cash flow. During 1996 and 1995,
approximately $49,000 and $100,000, respectively, was paid by NTCP to the
local partnership under the Workout (see Note 3). The Partnership's
investment in Blue Lake at December 31, 1996 and 1995 was zero.
10
<PAGE> 53
NATIONAL TAX CREDIT PARTNERS, L.P.
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
Selected financial information from the combined financial statements of
the Local Partnerships at December 31, 1996 and 1995 and for each of the
three years in the period ended December 31, 1996 is as follows:
Balance Sheets
<TABLE>
<CAPTION>
1996 1995
----------- --------
(in thousands)
<S> <C> <C>
Land and buildings, net $ 105,915 $ 123,259
========= =========
Total assets $ 112,540 $ 129,627
========= =========
Mortgages payable secured by real property $ 88,936 $ 89,828
========= =========
Total liabilities $ 106,966 $ 109,031
========= =========
Equity of National Tax Credit Partners, L.P. $ 651 $ 15,984
========= =========
Equity of other partners $ 4,924 $ 4,611
========= =========
</TABLE>
Statements of Operations
<TABLE>
<CAPTION>
1996 1995 1994
-------- -------- --------
(in thousands)
<S> <C> <C> <C>
Total revenues $ 17,624 $ 17,015 $ 16,638
======== ======== ========
Interest expense $ 7,608 $ 8,173 $ 8,623
======== ======== ========
Depreciation $ 4,371 $ 4,546 $ 4,790
======== ======== ========
Total expenses $ 33,530 $ 21,750 $ 21,471
======== ======== ========
Net loss $(15,906) $ (4,735) $ (4,833)
======== ======== ========
Net loss allocable to the Partnership $(15,436) $ (4,584) $ (4,725)
======== ======== ========
</TABLE>
11
<PAGE> 54
NATIONAL TAX CREDIT PARTNERS, L.P.
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
An affiliate of the General Partner is the Local Operating General Partner
in sixteen of the Local Partnerships included above, and another affiliate
receives property management fees of approximately 5 percent of gross
revenues from two of these Local Partnerships. The following sets forth the
significant combined data for the Local Partnerships in which an affiliate
of the General Partner was the Local Operating General Partner, reflected
in the accompanying financial statements using the equity method of
accounting:
<TABLE>
<CAPTION>
1996 1995 1994
-------- -------- -------
(in thousands)
<S> <C> <C> <C>
Total assets $ 50,550 $ 65,142
======== =======
Total liabilities $ 47,939 $ 49,868
======== =======
Equity (Deficiency) of National Tax
Credit Partners, L.P. $ (986) $ 12,300
======== =======
Equity of other partners $ 3,597 $ 2,975
======== =======
Total revenue $ 7,475 $ 7,275 $ 7,034
======== ======== =======
Net loss $ (8,140) $ (2,932) $(2,591)
======== ======== =======
</TABLE>
3. CAPITAL CONTRIBUTIONS PAYABLE
Capital contributions payable represents $70,000 due annually, until paid
in full, for the investment in the Blue Lake Local Partnership. The capital
contributions payable are unsecured and non-interest bearing.
4. RELATED-PARTY TRANSACTIONS
Under the terms of the Restated Certificate and Agreement of the Limited
Partnership, the Partnership is obligated to the General Partner and the
Special Limited Partner for the following fees:
(a) An annual Partnership management fee in an annual amount equal to
0.5% of invested assets (as defined in the partnership agreement) is
payable to the General Partner and Special Limited Partner.
Partnership management fees expensed were $692,956, $692,955 and
$694,095 for 1996, 1995 and 1994, respectively. At December 31, 1996
and 1995, $3,996,221 and $3,266,521, respectively, was due the
General Partner and Special Limited Partner.
(b) A property disposition fee is payable to the General Partner in an
amount equal to the lesser of (i) one-half of the competitive real
estate commission that would have been charged by unaffiliated third
parties providing comparable services in the area where the apartment
complex is located, or (ii) 3% of the sales price received in
connection with the sale or disposition of the apartment complex or
local partnership interest, but in no event will the property
disposition fee and all amounts payable to unaffiliated real estate
brokers in connection with any such sale exceed in the aggregate, the
lesser of the competitive rate (as
12
<PAGE> 55
NATIONAL TAX CREDIT PARTNERS, L.P.
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
4. RELATED-PARTY TRANSACTIONS (CONTINUED)
described above) or 6% of such sale price. Receipt of the property
disposition fee will be subordinated to the distribution of sale or
refinancing proceeds by the Partnership until the limited partners
have received distributions from sale or refinancing proceeds in an
aggregate amount equal to (i) their 10% priority return for any year
not theretofore satisfied (as defined in the partnership agreement)
and (ii) an amount equal to the aggregate adjusted investment (as
defined in the partnership agreement) of the limited partners. No
disposition fees have been paid.
(c) The Partnership reimburses certain expenses to the General Partner.
The reimbursement due to the General Partner was $36,744, $35,079 and
$33,804 during 1996, 1995 and 1994, respectively, and included in
general and administrative expenses.
NTC is the Local Operating General Partner in sixteen of the Partnership's
31 Local Partnerships. In addition, NTC is either a special limited partner
or a non-managing, administrative general partner in each Local
Partnership.
An affiliate of the General Partner is responsible for the on-site property
management for two Local Partnerships (Note 2). The Local Partnerships paid
the affiliate property management fees of $65,049, $68,800 and $61,000 in
1996, 1995 and 1994, respectively.
5. INCOME TAXES
No provision has been made for income taxes in the accompanying financial
statements since such taxes, if any, are the liability of the individual
partners. The major differences in tax and financial statement losses
result from the use of different bases and depreciation methods for the
properties held by the Local Partnerships. Additional differences in tax
and financial losses arises when financial statement losses are not
recognized after the investment balance has been reduced to zero or to a
negative amount equal to further capital contributions required.
6. CONTINGENCIES
The General Partner of the Partnership is a plaintiff in various lawsuits
and has also been named as a defendant in other lawsuits arising from
transactions in the ordinary course of business. In addition, the
Partnership is involved in several suits. In the opinion of management and
the General Partner, the claims will not result in any material liability
to the Partnership (Note 2).
7. FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, "Disclosure about Fair
Value of Financial Instruments," requires disclosure of fair value
information about financial instruments, when it is practicable to estimate
that value. The operations generated by the investee limited partnerships,
which account for the Partnership's primary source of funds, are subject to
various government rules, regulations and restrictions which make it
impracticable to estimate the fair value of the accrued fees due to
partners. The carrying amount of other assets and liabilities
reported on the balance sheets that require such disclosure approximates
fair value due to their short-term maturity.
13
<PAGE> 56
NATIONAL TAX CREDIT PARTNERS, L.P.
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
8. FOURTH-QUARTER ADJUSTMENT
The Partnership's policy is to record its equity in the loss of limited
partnerships on a quarterly basis using estimated financial information
furnished by the various local operating general partners. The equity in
loss reflected in the accompanying annual financial statements is based
primarily upon audited financial statements of the investee limited
partnerships. The increase, in equity in loss of approximately $177,400,
between the estimated nine-month equity in loss and the actual 1996 year
end equity in loss has been recorded in the fourth quarter.
14
<PAGE> 57
NATIONAL TAX CREDIT PARTNERS, L.P. SCHEDULE
INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
AMORTIZATION
BALANCE CAPITALIZED EQUITY OF BALANCE CAPITAL
LIMITED JANUARY 1, CAPITAL ACQUISITION CASH INCOME CAPITALIZED DEC. 31, CONTRIBUTIONS
PARTNERSHIPS 1996 CONTRIBUTIONS COSTS DISTRIBUTIONS (LOSS) ACQ. COSTS 1996 PAYABLE
- ------------ ------------- ------------- ----------- ------------- ----------- ------------ ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Apple Tree $ 182,313 $ $ $ (1,900) $ (5,347) $ (1,418) $ 173,648 $
Blue Lake 0 0 0 0 392,300
ComFed 0 0 0 0
Concept I & II 250,778 (104,178) (6,318) 140,282
Countryview Columbus 2,215,062 104,187 (75,811) (13,007) 2,230,431
Dickens 266,437 (145,751) (3,248) 117,438
Dynes Village 756,218 (113,158) (12,632) 630,428
Genoa Plaza 173,424 (20,101) (529) 152,794
Glenark 0 34,200 (34,200) 0 0
Grand Meadows 1,085,626 (85,209) (3,812) 996,605
Grinnell Park 127,321 (7,285) (215) 119,821
Hickory Green 528,049 (369) (90,304) (5,279) 432,097
Holden Village 1,084,955 43,911 (176,434) (7,597) 944,835
Kimberly Court 219,210 (1,724) (42,484) (1,663) 173,339
The Meadows 0 (28,880) 28,880 0 0
Mountain View I 1,146,496 (80,759) (7,990) 1,057,747
Mountain View II 1,531,416 (105,715) (7,991) 1,417,710
Newbury Place 2,572,173 18,254 (144,018) (14,698) 2,431,711
North Liberty Park 56,746 (21,561) (917) 34,268
Paris Hotel 354,293 (4,000) (16,870) (2,834) 330,589
Rolling Hills 1,185,549 (49,445) (349,358) (8,800) 777,946
Rose City 585,697 (23,333) 45,655 (3,941) 604,078
Summit I 607,899 17,950 (617,772) (8,077) 0
Summit II 1,055,009 (1,047,145) (7,864) 0
Summit III 632,737 (624,958) (7,779) 0
Torres de Plata I 257,288 (6,450) (108,332) (832) 141,674
Terrace Gardens 2,117,731 (128,626) (13,253) 1,975,852
Ticino 655,731 34,563 (97,285) (5,006) 588,003
Tyrone Elderly 924,479 39,775 (5,188) 959,066
Victorian Park 0 0 0 0
Vinton Park School 1,351,186 (54,747) (5,403) 1,291,036
------------- ---------- ----------- --------- ----------- --------- ----------- ----------
$ 21,923,823 $ 223,816 $ 0 $ (86,852) $(4,183,098) $(156,291) $17,721,398 $ 392,300
============ ========== =========== ========= =========== ========= =========== ==========
</TABLE>
<PAGE> 58
NATIONAL TAX CREDIT PARTNERS SCHEDULE
INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS
YEARS ENDED DECEMBER 31, 1996,1995, AND 1994
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
AMORTIZATION
BALANCE CAPITALIZED EQUITY OF BALANCE CAPITAL
LIMITED JANUARY 1, CAPITAL ACQUISITION CASH INCOME CAPITALIZED DEC. 31, CONTRIBUTIONS
PARTNERSHIPS 1995 CONTRIBUTIONS COSTS DISTRIBUTIONS (LOSS) ACQ. COSTS 1995 PAYABLE
- ------------ ------------ ------------- ---------- -------------- ---------- ------------ -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Apple Tree $ 193,325 $ $ $ (1,900) $ (7,694) $ (1,418) $ 182,313 $
Blue Lake 0 556,300 (556,300) 0 441,300
Cigar Factory 14,781 0 (14,781) 0
ComFed 183,875 (265,000) 87,000 (5,875) 0
Concept I & II 299,542 (747) (41,699) (6,318) 250,778
Countryview Columbus 2,519,287 (113,629) (177,589) (13,007) 2,215,062
Dickens 376,032 (106,347) (3,248) 266,437
Dynes Village 759,523 10,794 (1,467) (12,632) 756,218
Genoa Plaza 206,561 (32,608) (529) 173,424
Glenark 0 140,937 (140,937) 0 0
Grand Meadows 1,200,010 (110,572) (3,812) 1,085,626
Grinnell Park 135,807 (8,271) (215) 127,321
Hickory Green 633,802 (44,130) (56,344) (5,279) 528,049
Holden Village 1,172,070 44,369 (123,887) (7,597) 1,084,955
Kimberly Court 235,814 (1,724) (13,217) (1,663) 219,210
The Meadows 1,389,894 (17,470) (1,362,806) (9,618) 0
Mountain View I 1,272,704 (110,924) (15,284) 1,146,496
Mountain View II 1,664,259 (132,146) (697) 1,531,416
Newbury Place 2,848,257 (107,172) (154,214) (14,698) 2,572,173
North Liberty Park 74,162 (16,499) (917) 56,746
Paris Hotel 377,332 (4,000) (16,205) (2,834) 354,293
Rolling Hills 1,546,696 (50,000) (302,347) (8,800) 1,185,549
Rose City 956,200 (380,000) (40,000) 53,438 (3,941) 585,697
Summit I 1,137,112 29,652 2,721 (553,555) (8,031) 607,899
Summit II 1,156,577 (93,704) (7,864) 1,055,009
Summit III 1,052,290 24 (411,798) (7,779) 632,737
Torres de Plata I 362,643 (6,550) (97,973) (832) 257,288
Terrace Gardens 2,323,555 (192,571) (13,253) 2,117,731
Ticino 709,720 33,347 (82,330) (5,006) 655,731
Tyrone Elderly 925,779 (16,533) 20,421 (5,188) 924,479
Victorian Park 0 0 0 0
Vinton Park School 1,414,460 (57,871) (5,403) 1,351,186
----------- -------------- ---------- ----------- --------------- --------- ----------- ----------
$ 27,142,069 $ (112,749) $ 2,745 $ (120,707) $ (4,801,016) $(186,519) $21,983,823 $ 441,300
=========== ============== ========== =========== =============== ========= =========== ==========
</TABLE>
<PAGE> 59
NATIONAL TAX CREDIT PARTNERS SCHEDULE
INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS
YEARS ENDED DECEMBER 31, 1996,1995, AND 1994
YEAR ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
BALANCE CAPITALIZED EQUITY AMORTIZATION BALANCE CAPITAL
LIMITED JANUARY 1, CAPITAL ACQUISITION CASH INCOME OF CAPITALIZED DECEMBER 31, CONTRIBUTIONS
PARTNERSHIPS 1994 CONTRIBUTIONS COSTS DISTRIBUTIONS (LOSS) ACQ. COSTS 1994 PAYABLE
- ------------ ------------ ------------- ----------- ------------- --------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Apple Tree $ 210,829 $ 0 $ 0 $ (1,900) $ (14,187) $ (1,417) $ 193,325 $ 0
Blue Lake 0 0
Cigar Factory 47,556 (28,348) (4,427) 14,781
ComFed 353,642 1,198 (165,111) (5,854) 183,875
Concept I & II 325,936 51,776 3,902 (75,819) (6,253) 299,542
Countryview
Columbus 2,704,983 (140,700) 15,493 (47,740) (12,749) 2,519,287
Dickens 470,459 319 (91,503) (3,243) 376,032
Dynes Village 371,224 237,696 3,411 159,766 (12,574) 759,523
Genoa Plaza 238,038 (30,949) (528) 206,561
Glenark 0 36,420 27,139 (63,559) 0
Grand Meadows 1,309,658 141 (105,979) (3,810) 1,200,010
Grinnell Park 153,132 (17,110) (215) 135,807
Hickory Green 722,347 (63,250) 15,605 (3,445) (32,436) (5,019) 633,802
Holden Village 1,279,397 24,735 (124,465) (7,597) 1,172,070
Kimberly Court 254,238 (1,483) (15,277) (1,664) 235,814
The Meadows 1,495,535 89,896 20,494 (206,755) (9,276) 1,389,894
Mountain
View I 1,370,945 3,360 17 (93,628) (7,990) 1,272,704
Mountain
View II 1,772,789 2,640 16 (103,197) (7,989) 1,664,259
Newbury Place 2,892,554 (83,848) 15,961 38,022 (14,432) 2,848,257
North Liberty
Park 89,565 254 (14,744) (913) 74,162
Paris Hotel 405,858 (25,691) (2,835) 377,332
Rolling Hills 1,856,425 320 (49,445) (251,810) (8,794) 1,546,696
Rose City 971,468 (17,068) (13,333) 19,358 (4,225) 956,200
Summit I 1,262,584 (1,470) 46,683 (163,528) (7,157) 1,137,112
Summit II 1,164,008 44,240 (44,544) (7,127) 1,156,577
Summit III 1,179,258 43,612 (163,528) (7,052) 1,052,290
Torres de
Plata I 476,478 (12,800) (100,202) (833) 362,643
Terrace Gardens 2,396,613 5,329 (65,223) (13,164) 2,323,555
Ticino 757,021 70,420 (112,715) (5,006) 709,720
Tyrone Elderly 903,182 6,641 (16,483) 37,517 (5,078) 925,779
Victorian Park (2) 1,934 (1,932) 0 0
Vinton Park
School 1,706,247 5,317 (291,790) (5,314) 1,414,460
----------- --------- --------- --------- ----------- ---------- ----------- ---
$29,141,967 $ 227,675 $ 240,958 $ (98,889) $(2,197,107) $ (172,535) $27,142,069 $ 0
=========== ========= ========= ========= =========== ========== =========== ===
</TABLE>
<PAGE> 60
SCHEDULE
(Continued)
NATIONAL TAX CREDIT PARTNERS, L.P.
INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
NOTES: 1. Equity in losses represents the Partnership's allocable
share of the net loss from the Local Partnerships for
the year. Equity in losses of the Local Partnerships
will be recognized until the investment balance is
reduced to zero or a negative balance equal to further
commitments by the Partnership.
2. Cash distributions from the Local Partnerships are
treated as a return of the investment and reduce the
investment balance until such time as the investment is
reduced to zero or a negative balance equal to further
commitments by the Partnership. Distributions
subsequently received will be recognized as income.
<PAGE> 61
NATIONAL TAX CREDIT PARTNERS, L.P.
REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY HELD BY LOCAL LIMITED PARTNERSHIPS SCHEDULE III
IN WHICH NTCP HAS INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
BUILDINGS,
FURNISHINGS
& EQUIPMENT TOTAL LAND
NUMBER OUTSTANDING AMOUNT CARRIED AND BUILDINGS
OF MORTGAGE AT CLOSE OF FURNISHINGS & ACCUMULATED
PARTNERSHIP/LOCATION UNITS LOAN LAND PERIOD EQUIPMENT DEPRECIATION
- -------------------- ------ ----------- ----------- -------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Apple Tree Associates 24 $ 894,771 $ 74,000 $ 1,168,270 $ 1,242,270 $ 216,881
Brigham City, UT
Art Museum - Summit I (Wallace) 17 1,595,160 0 0 0 0
Philadelphia, PA
Art Museum - Summit II (Bergdoll) 9 66,824 0 0 0 0
Philadelphia, PA
Art Museum - Summit III (Chandler) 25 2,391,333 0 0 0 0
Philadelphia, PA
Blue Lake 106 4,750,000 335,000 1,865,000 2,200,000 1,167,471
Miami, FL
ComFed Qualified Housing Limited 116 2,223,257 385,467 4,160,750 4,546,217 1,259,002
Partnership III
Omaha, NE
Concept I & II Limited Partnerships 40 1,570,373 131,600 2,440,871 2,572,471 560,175
Cleveland, OH
Countryview Columbus Limited 152 4,169,113 320,000 7,238,493 7,558,493 1,221,065
Columbus, OH
Dickens Associates II 34 1,279,178 105,000 2,294,724 2,399,724 409,785
Chicago, IL
Dynes Village Associates Limited 42 770,026 65,000 2,576,987 2,641,987 555,200
Cleveland, OH
Genoa Plaza Limited Partnership 48 1,334,020 98,024 1,653,915 1,751,939 319,595
Genoa City, WI
Glenark Associates Limited 67 3,911,140 45,525 7,047,086 7,092,611 1,233,315
Woonsocket, RI
Grand Meadows II Limited 64 1,932,850 112,000 3,447,520 3,559,520 602,231
Grand Blanc, MI
Grinnell Park Limited 24 610,567 48,400 777,175 825,575 149,685
Grinnell, PA
Hickory Green Limited Partnership 59 1,484,174 215,000 2,688,685 2,903,685 644,232
Westland, MI
Holden Village Limited Partnership 96 2,475,867 280,000 4,179,848 4,459,848 1,143,920
West Seattle, WA
Kimberly Court 24 1,486,909 233,900 1,709,801 1,943,701 329,760
Seward, AK
The Meadows Limited Partnership 114 2,100,000 356,300 2,554,226 2,910,526 845,611
Ypsilanti, MI
Mountain View Limited I 120 2,773,270 685,819 4,181,840 4,867,659 798,095
Lawrence, MA
Mountain View Limited II 159 3,969,874 866,212 5,191,215 6,057,427 968,843
Lawrence, MA
Newbury Limited Partnership 164 3,807,214 739,882 8,019,349 8,759,231 1,380,235
Oak Creek, WI
North Liberty Park Limited 24 605,430 47,811 725,512 773,323 161,400
North Liberty, IA
Paris Hotel Limited Partnership 17 886,732 179,160 1,673,902 1,853,062 296,566
Denver, CO
Rolling Hills Apts. Limited 232 5,234,609 800,000 11,401,837 12,201,837 2,160,020
Pottsgrove Township, PA
Rose City 264 6,325,000 463,955 9,303,473 9,767,428 2,103,445
Portland, OR
Terrace Gardens Limited Partnership 150 5,274,480 1,522,369 8,058,237 9,580,606 2,308,907
Lemon Grove, CA
Ticino Apts. Limited Partnership 45 1,373,849 101,066 2,231,036 2,332,102 399,368
Seattle, WA
Torres de Plata I 72 3,030,794 161,280 3,720,726 3,882,006 771,140
Toa Alta, PR
Tyrone Elderly Limited Partnership 100 3,345,714 100,000 4,584,811 4,684,811 852,895
Tyrone, PA
Victorian Park 336 16,537,820 1,737,727 17,517,369 19,255,096 6,229,049
Streamwood, IL
Vinton/Park School Apts. Limited 44 725,956 145,500 2,612,865 2,758,365 379,009
Omaha, NE
----- ----------- ----------- ------------ ------------ -----------
TOTAL 2,788 $88,936,305 $10,355,997 $125,025,523 $135,381,520 $29,466,900
===== =========== =========== ============ ============ ===========
</TABLE>
<PAGE> 62
SCHEDULE III
(Continued)
NATIONAL TAX CREDIT PARTNERS, L.P.
REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY
HELD BY LOCAL PARTNERSHIPS
IN WHICH NTCP HAS INVESTMENTS
DECEMBER 31, 1996
NOTES: 1. Each Local Partnership has developed and now owns and
operates an Apartment Complex. Substantially all
project costs, including construction period interest
expense, were capitalized by the Local Partnerships.
2. Depreciation is provided for by various methods over
the estimated useful lives of the Apartment Complexes.
The estimated composite useful lives of the buildings
are generally from 25 to 40 years.
3. Investments in property and equipment:
<TABLE>
<CAPTION>
Buildings,
Furnishings,
Land Equipment Total
------------- ------------- -------------
<S> <C> <C> <C>
Balance, January 1, 1994 $ 10,504,308 $ 141,051,827 $ 151,556,135
Net additions during the year 7,000 279,647 286,647
------------- ------------- -------------
Balance, December 31, 1994 10,511,308 141,331,474 151,842,782
Net dispositions during the year (106,961) (2,579,242) (2,686,203)
------------- ------------- -------------
Balance, December 31, 1995 10,404,347 138,752,232 149,156,579
Net additions during the year (48,350) (13,726,709) (13,775,059)
------------- ------------- -------------
Balance, December 31, 1996 $10,355,997 $ 125,025,523 $ 135,381,520
============= ============= =============
</TABLE>
<PAGE> 63
SCHEDULE III
Continued
NATIONAL TAX CREDIT PARTNERS, L.P.
REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY
HELD BY LOCAL PARTNERSHIPS
IN WHICH NTCP HAS INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
Buildings, Furnishings
Accumulated Depreciation: And Equipment
- ------------------------ -----------
<S> <C>
Balance, January 1, 1994 $17,698,778
Net additions during the year 4,660,315
-----------
Balance, December 31, 1994 22,359,093
Net additions during the year 3,538,116
-----------
Balance, December 31, 1995 25,897,209
Net additions during the year 3,569,691
-----------
Balance, December 31, 1996 $29,466,900
===========
</TABLE>
<PAGE> 64
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT:
NATIONAL TAX CREDIT PARTNERS, L.P. (the "Partnership") has no directors or
executive officers of its own.
National Partnership Investments Corp. ("NAPICO" or the "Managing General
Partner") is a wholly-owned subsidiary of Casden Investment Corporation, an
affiliate of The Casden Company. The following biographical information is
presented for the directors and executive officers of NAPICO with principal
responsibility for the Partnership's affairs.
CHARLES H. BOXENBAUM, 67, Chairman of the Board of Directors and Chief Executive
Officer of NAPICO.
Mr. Boxenbaum has been associated with NAPICO since its inception. He has been
active in the real estate industry since 1960, and prior to joining NAPICO was a
real estate broker with the Beverly Hills firm of Carl Rhodes Company.
Mr. Boxenbaum has been a guest lecturer at national and state realty
conventions, certified properties exchanger's seminars, Los Angeles Town Hall,
National Association of Home Builders, International Council of Shopping
Centers, Society of Conventional Appraisers, California Real Estate Association,
National Institute of Real Estate Brokers, Appraisal Institute, various mortgage
banking seminars, and the North American Property Forum held in London, England.
In 1963, he was the winner of the Snyder Award, the highest annual award offered
by the National Association of Real Estate Boards for Best Exchange. He is one
of the founders and a past director of the First Los Angeles Bank, organized in
November 1974. Mr. Boxenbaum was a member of the Board of Directors of the
National Housing Council. Mr. Boxenbaum received his Bachelor of Arts degree
from the University of Chicago.
BRUCE E. NELSON, 45, President and a director of NAPICO.
Mr. Nelson joined NAPICO in 1980 and became President in February 1989. He is
responsible for the operations of all NAPICO sponsored limited partnerships.
Prior to that he was primarily responsible for the securities aspects of the
publicly offered real estate investment programs. Mr. Nelson is also involved in
the identification, analysis, and negotiation of real estate investments.
From February 1979 to October 1980, Mr. Nelson held the position of Associate
General Counsel at Western Consulting Group, Inc., private residential and
commercial real estate syndicators. Prior to that time, Mr. Nelson was engaged
in the private practice of law in Los Angeles. Mr. Nelson received his Bachelor
of Arts degree from the University of Wisconsin and is a graduate of the
University of Colorado School of Law. He is a member of the State Bar of
California and is a licensed real estate broker in California and Texas.
ALAN I. CASDEN, 51, Chairman of The Casden Company, an affiliate of Casden
Properties (formerly CoastFed Properties), a director and member of the audit
committee of NAPICO, and chairman of the Executive Committee of NAPICO.
Mr. Casden is Chairman of the Board, Chief Executive Officer and sole
shareholder of The Casden Company and Casden Investment Company. Prior to that,
he was the President and chairman of Mayer Group, Inc., which he joined in 1975.
He is also chairman of Mayer Management, Inc., a real estate management firm.
Mr. Casden has been involved in approximately $3 billion of real estate
financings and sales and has been responsible for the development and
construction of more than 12,000 apartment units and 5,000 single-family homes
and condominiums.
<PAGE> 65
Mr. Casden is a member of the American Institute of Certified Public Accountants
and of the California Society of Certified Public Accountants. Mr. Casden is a
member of the advisory board of the National Multi-Family Housing Conference,
the Multi-Family Housing Council, and the President's Council of the California
Building Industry Association. He also serves on the advisory board to the
School of Accounting of the University of Southern California. He holds a
Bachelor of Science degree and a Masters in Business Administration degree from
the University of Southern California.
HENRY C. CASDEN, 53, President, Chief Operating Officer and Secretary of The
Casden Company and a director and secretary of NAPICO.
Mr. Casden has been President and Chief Operating Officer of The Casden Company,
as well as a director of NAPICO since February 1988. He became secretary of both
companies in late 1994. From 1982 to 1988, Mr. Casden was of counsel and a
partner in the Los Angeles law firm of Troy, Casden & Gould. From 1978 to 1981,
he was of counsel and a partner in the Los Angeles law firm of Loeb & Loeb. From
1972 to 1978, Mr. Casden was a member of the Beverly Hills law firm of Fink &
Casden, Professional Corporation.
Mr. Casden received his Bachelor of Arts degree from the University of
California at Los Angeles, and is a graduate of the University of San Diego Law
School. Mr. Casden is a member of the State Bar of California and has numerous
professional affiliations.
BRIAN D. GOLDBERG, 33, Chief Financial Officer of The Casden Company and a
director of NAPICO.
Mr. Goldberg joined The Casden Company in 1990 as Vice President of Finance and
became Chief Financial Officer in March 1991. Prior to joining The Casden
Company, Mr. Goldberg was with Arthur Andersen & Co., an international public
accounting firm, from August 1985 until July 1990 in their Los Angeles office.
He received his bachelor of science degree in Accounting from the University of
Denver. Mr. Goldberg is a member of the American Institute of Certified Public
Accountants and the California Society of Certified Public Accountants.
SHAWN HORWITZ, 37, Executive Vice President and Chief Financial Officer.
Mr. Horwitz joined NAPICO in 1990 and is responsible for the financial affairs
of NAPICO and the limited partnerships sponsored by NAPICO. Prior to joining
NAPICO, Mr. Horwitz was President for approximately one year of Star Sub Shops,
Inc. a corporation engaged in the business of selling fast food franchises, was
an audit manager in the real estate industry group for Altschuler, Melvoin &
Glasser for six years, and was an auditor with Arthur Young & Co. for three
years.
Mr. Horwitz received his Bachelor of Commerce degree in accounting from Rhodes
University in South Africa and is a member of the Illinois Society of Certified
Public Accountants, the American Institute of Certified Public Accountants and
the South African Institute of Chartered Accountants.
BOB SCHAFER, 55, Vice President and Corporate Controller.
Mr. Schafer joined NAPICO in 1984 and is the Corporate Controller responsible
for the financial reporting function of the Company. Prior to this, he was a
Group and Division Controller at Bergen Brunswig for over eight years,
Controller at a Flintkote subsidiary for over four years, and Assistant
Controller at an electronics subsidiary of General Electric for two years.
Mr. Schafer is a member of the California Society of Certified Public
Accountants. He holds a Bachelor of Science degree in accounting from Woodbury
University, Los Angeles.
<PAGE> 66
PATRICIA W. TOY, 67, Senior Vice President - Communications and Assistant
Secretary.
Mrs. Toy joined NAPICO in 1977, following her receipt of an MBA from the
Graduate School of Management, UCLA. From 1952 to 1956, Mrs. Toy served as a
U.S. Naval Officer in communications and personnel assignments. She holds a
Bachelor of Arts Degree from the University of Nebraska.
MARK L. WALTHER, 36, Executive Vice President, General Counsel and Assistant
Secretary.
Mr. Walther joined NAPICO in 1987 and is responsible for the legal affairs of
the NAPICO sponsored limited partnerships. Prior to joining NAPICO, Mr. Walther
worked in the San Francisco law firm of Browne and Kahn which specialized in
construction litigation. Mr. Walther received his Bachelor of Arts Degree in
Political Science from the University of California, Santa Barbara and is a
graduate of the University of California, Davis, School of Law. He is a member
of the State Bar of Hawaii.
<PAGE> 67
ITEM 11. MANAGEMENT REMUNERATION AND TRANSACTIONS:
National Tax Credit Partners, L.P. has no officers, employees, or directors.
However, under the terms of the Restated Certificate and Agreement of Limited
Partnership, the Partnership is obligated to the General Partner and Special
Limited Partner for the following fees:
(a) An annual partnership management fee in an amount equal to 0.5% of invested
assets (as defined) is payable to the General Partner and Special Limited
Partner. For the years ended December 31, 1996, 1995 and 1994, $692,956,
$692,955 and 694,095, respectively, has been incurred.
(b) A property disposition fee is payable to the General Partner in an amount
equal to the lesser of (i) one- half of the competitive real estate
commission that would have been charged by unaffiliated third parties
providing comparable services in the area where the Apartment Complex is
located, or (ii) 3% of the sale price received in connection with the sale
or disposition of the Apartment Complex or Local Partnership Interest, but
in no event will the Property Disposition Fee and all amounts payable to
unaffiliated real estate brokers in connection with any such sale exceed in
the aggregate the lesser of the competitive rate (as described above) or 6%
of such sale price. Receipt of the Property Disposition Fee will be
subordinated to the distribution of Sale or Refinancing Proceeds by the
Partnership until the Limited Partners have received distributions of Sale
or Refinancing Proceeds in an aggregate amount equal to (i) their 10%
Priority Return for any year not theretofore satisfied and (ii) an amount
equal to the aggregate adjusted investment (as defined) of the limited
partners. No disposition fees have been paid.
(c) The Partnership reimburses certain expenses to the General Partner. For the
years ended December 31, 1996, 1995 and 1994, $36,744, $35,079 and $33,804,
respectively, has been paid.
(d) An affiliate of the General Partner is responsible for the on-site property
management for two Local Partnerships. The Local Partnerships paid the
affiliate property management fees of $65,049, $68,800, $61,000 in 1996,
1995 and 1994, respectively.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT:
(a) Security Ownership of Certain Beneficial Owners
The General Partner owns all of the outstanding general partnership interests of
NTCP; no person is known to own beneficially in excess of 5% of the outstanding
Limited Partnership Interests.
(b) None of the officers or directors of the General Partner own directly or
beneficially any Limited Partnership Interests in NTCP.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS:
The Partnership has no officers, directors, or employees of its own. All of its
affairs are managed by the General Partner, National Partnership Investments
Corp. , and the Special Limited Partner, PaineWebber T.C., Inc. The transactions
with the Special Limited Partner are primarily in the form of fees paid by the
Partnership to the General Partner for services rendered to the Partnership, as
discussed in Item 11 and in the notes to the accompanying financial statements.
<PAGE> 68
ITEM 14. FINANCIAL STATEMENTS, SCHEDULES, EXHIBITS AND REPORTS ON FORM 8-K:
REPORTS OF INDEPENDENT PUBLIC ACCOUNTANTS.
FINANCIAL STATEMENTS
Report of Independent Public Accountants.
Balance Sheets as of December 31, 1996 and 1995.
Statements of Operations for the years ended December 31, 1996, 1995 and 1994.
Statements of Partners' Equity (Deficiency) for the years ended December 31,
1996, 1995 and 1994.
Statements of Cash Flows for the years ended December 31, 1996, 1995 and 1994.
Notes to Financial Statements.
FINANCIAL STATEMENT SCHEDULES APPLICABLE TO NATIONAL TAX CREDIT PARTNERS, L.P.
AND THE LIMITED PARTNERSHIPS IN WHICH NATIONAL TAX CREDIT PARTNERS, L.P. HAS
INVESTMENTS
Schedule - Investments in Local Limited Partnerships, December 31, 1996, 1995
and 1994.
Schedule III - Real Estate and Accumulated Depreciation, December 31, 1996.
The remaining schedules are omitted because any required information is included
in the financial statements and notes thereto, or they are not applicable, or
not required.
EXHIBITS
(3) Articles of incorporation and bylaws: The registrant is not incorporated.
The Partnership Agreement was filed with Form S-11 Registration #33-27658
incorporated herein by reference.
(10) Material contracts: The registrant is not party to any material contracts,
other than the Restated Certificate and Agreement of Limited Partnership
dated March 7, 1989 previously filed and which is hereby incorporated by
reference.
(13) Annual report to security holders: Pages ___ to ___.
REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the year ended December 31, 1996.
<PAGE> 69
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 in the City of Los Angeles,
State of California.
NATIONAL TAX CREDIT PARTNERS, L.P.
By: NATIONAL PARTNERSHIP INVESTMENTS CORP.
The General Partner
_____________________________________
Charles H. Boxenbaum
Chairman of the Board of Directors
and Chief Executive Officer
_____________________________________
Bruce E. Nelson
Director and President
_____________________________________
Alan I. Casden
Director
_____________________________________
Henry C. Casden
Director
_____________________________________
Brian D. Goldberg
Director
_____________________________________
Shawn D. Horwitz
Executive Vice President and
Chief Financial Officer
_____________________________________
Bob E. Schafer
Senior Vice President and Corporate Controller
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
PARTNERSHIP'S STATEMENTS OF EARNINGS AND BALANCE SHEETS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 224,927
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 224,927
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 17,946,325
<CURRENT-LIABILITIES> 270,354
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 4,658,875
<TOTAL-LIABILITY-AND-EQUITY> 17,946,325
<SALES> 0
<TOTAL-REVENUES> (1,912,966)
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,265,517
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 5,178,483
<INCOME-TAX> 0
<INCOME-CONTINUING> 5,178,483
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,178,483
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
