<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, 1997
Commission File Number
0-18541
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").
NAPICO is a wholly owned subsidiary of Casden Investment Corporation ("CIC"),
which is wholly owned by Alan I. Casden. The current members of NAPICO's Board
of Directors are Charles H. Boxenbaum, Bruce E. Nelson, Alan I. Casden and
Henry C. Casden.
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 1997, the Apartment Complexes in which NTCP had invested were
substanially rented.
The following is a schedule of the occupancy status as of December 31, 1997, 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, 1997
<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 74 70%
ComFed Qualified(1)
Omaha, NE 116 115 99%
Concept I & II
Cleveland, OH 40 37 93%
Countryview/Columbus
Columbus, OH 152 144 95%
Dickens
Chicago, IL 34 34 100%
Dynes
Cleveland, OH 42 39 93%
Genoa Plaza
Genoa City, WI 48 46 96%
Glenark
Woonsocket, RI 67 67 100%
Grand Meadows
Grand Blanc, MI 64 59 92%
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, 1997
<TABLE>
<CAPTION>
No. of Units Percentage of
Name & Location Units Occupied Total Units
- --------------- ----- -------- -----------
<S> <C> <C> <C>
Hickory Green
Westland, MI 59 57 97%
Holden Village
West Seattle, WA 96 92 96%
Kimberly Court
Seward, AK 24 19 79%
Meadows Apartments
Ypsilanti, MI 114 109 96%
Mountain View - I
Sante Fe, NM 120 113 94%
Mountain View - II
Sante Fe, NM 159 146 92%
Newbury
Oak Creek, WI 164 146 89%
North Liberty
North Liberty, IA 24 20 83%
Paris Hotel
Denver, CO 17 17 100%
Rolling Hills
Pottsgrove Township, PA 232 232 100%
Rose City
Portland, OR 264 264 100%
Summit I - Wallace
Philadelphia, PA 17 15 94%
Summit II - Bergdoll
Philadelphia, PA 9 8 89%
Summit III - Chandler
Philadelphia, PA 25 20 80%
</TABLE>
<PAGE> 5
SCHEDULE OF PROJECTS OWNED BY LOCAL PARTNERSHIPS
IN WHICH NTCP HAS AN INVESTMENT (CONTINUED)
DECEMBER 31, 1997
<TABLE>
<CAPTION>
No. of Units Percentage of
Name & Location Units Occupied Total Units
- --------------- ----- -------- -----------
<S> <C> <C> <C>
Terrace Gardens
Lemon Grove, CA 150 149 99%
Ticino
Seattle, WA 45 40 89%
Torres de Plata I
Toa Alta, PR 72 72 100%
Tyrone Elderly
Tyrone, PA 100 99 99%
Victorian Park
Streamwood, IL 336 309 92%
Vinton/Park School
Omaha, NE 44 42 95%
----- -----
TOTAL 2,788 2,632 94%
===== =====
</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, 1997, 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 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 successfuly implemented. As of December 31, 1997 and
1996, 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, 1997 and 1996. Tara
Construction's lawsuit has been dormant for more than three years. Occupancy
levels at the three related Local Partnerships, Summit I, II, and III (Wallace,
Bergdoll, and Chandler School located in Philadelphia) were 94%, 89%, and 80%,
respectively, at December 31, 1997, and the properties have been operating at a
deficit. The Summit I and III properties have approximately $187,000 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. 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, 1997, there were 3,937 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, 1997.
<PAGE> 8
ITEM 6. SELECTED FINANCIAL DATA:
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------------------------------------------------
1997 1996 1995 1994 1993
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Interest and other Income $ 51,975 $ 99,016 $ 75,125 $ 54,226 $ 38,446
Operating expenses (903,971) (975,642) (1,207,679) (1,337,098) (990,948)
Distributions from limited
partnership recognized
as income 18,381 37,532 -- -- --
Equity in loss of limited
partnerships and
amortization of
acquisition costs (2,188,630) (2,049,514) (3,828,734) (2,369,642) (3,658,302)
Write-off of Local Partnership (560,766) (2,289,875) (1,158,801) -- (2,258,920)
------------ ------------ ------------ ------------ ------------
Net loss $ (3,583,011) $ (5,178,483) $ (6,120,089) $ (3,652,514) $ (6,869,724)
============ ============ ============ ============ ============
Net loss per limited
partnership interest $ (148) $ (215) $ (254) $ (151) $ (285)
============ ============ ============ ============ ============
Total assets $ 14,985,893 $ 17,946,325 $ 22,499,105 $ 27,390,138 $ 30,293,611
============ ============ ============ ============ ============
Investments in Local
Partnerships $ 14,370,207 $ 17,721,398 $ 21,923,823 $ 27,142,069 $ 29,141,967
============ ============ ============ ============ ============
Capital contributions payable $ 329,030 $ 392,300 $ 441,300 $ -- $ --
============ ============ ============ ============ ============
Accrued fees and expenses
due to partners $ 4,727,721 $ 3,996,221 $ 3,266,521 $ 2,503,091 $ 1,878,419
============ ============ ============ ============ ============
</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, 1997 were
approximately $541,000. 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 1997. The local
general partner will, accordingly, be entitled to an increased allocation of
cash flow and proceeds from the sale or refinancing of the property. 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
received $260,000 during 1997. In addition, NTCP sold to an unrelated party a
portion of its limited partner interest in the Countryview local partnership and
received $625,582 during 1997. The amounts received from these sales are traded
as reductions to the Partnership's investment balance in the local partnerships.
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
<PAGE> 10
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 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.
<PAGE> 11
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. 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 96% as of December 1997 and attained
break-even levels of operations during 1997. The Partnership's investment in
Meadows Apartments was zero at December 31, 1997 and 1996, as the investment was
written off in 1995.
Holden Village and Ticino Apartments, located in Seattle, Washington, maintained
average occupancy levels of 96% and 89%, respectively, and experienced operating
deficits of approximately $149,000 and $94,000, respectively, during 1997. The
high cost of servicing the debt is the largest contributing factor associated
with the deficit operations. In January 1998, NTCP was successful in negotiating
an interest rate reduction with the lender for each of the properties. Based on
the loan modifications, the operating performance of each property is expected
to improve substantially. The Partnership's total investment in Holden Village
and Ticino Apartments was approximately $1,306,000 and $1,533,000 at December
31, 1997 and 1996, respectively.
The Dynes Village Apartments complex is operating at a deficit and the first
mortgage loan encumbering the property was delinquent until it was brought
current by NTCP in November 1997. In addition, the property has been audited by
the IRS with respect to tenant qualifications performed by the prior local
operating general partner. The IRS has disqualified all future housing tax
credits based on what they consider non-compliance by the prior local operating
general partner. Finally, the property is budgeted to operate at a deficit
during 1998. As a result, the Partnership's investment in Dynes Village of
$560,766 at December 31, 1997 was written off during the year.
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 was zero at December 31, 1997 and
1996.
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 1997 and 1996, approximately $63,000 and $49,000,
<PAGE> 12
respectively, was paid by NTCP to the local partnership under the Workout. The
Partnership's investment in Blue Lake was zero at December 31, 1997 and 1996.
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 1997 and 1996, 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 1997 and 1996. In addition, Dynes Village, the
Summits and the Meadows Apartments were written off in 1997, 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, 1997, as compared to 1996
and 1995, is due to higher legal fees in 1996 and 1995 associated with the final
settlement of litigation involving the Blue Lake, Dynes and Glenark Local
Partnerships as well as legal fees being paid in connection with the Victorian
Park bankruptcy, and legal fees incurred in connection with various securities
matters.
The Partnership has assessed the potential impact of the Year 2000 computer
systems issue on its operations. The Partnership believes that no significant
actions are required to be taken by the Partnership to address the issue and
that the impact of the Year 2000 computer systems issue will not materially
affect the Partnership's future operating results or financial condition.
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> 13
NATIONAL TAX CREDIT PARTNERS, L.P.
(a California limited partnership)
FINANCIAL STATEMENTS,
FINANCIAL STATEMENT SCHEDULES
AND REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
DECEMBER 31, 1997
<PAGE> 14
[DELOITTE & TOUCHE LLP LETTERHEAD]
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, 1997 and 1996, and
the related statements of operations, partners' equity (deficiency) and cash
flows for each of the three years in the period ended December 31, 1997. 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 40 percent and 35
percent of total assets as of December 31, 1997 and 1996, respectively, and the
equity in the net loss of these partnerships represents 44 percent, 55 percent
and 37 percent of the total net loss of the Partnership for the years ended
December 31, 1997, 1996 and 1995, 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,
1997 and 1996, and the results of its operations and its cash flows for each of
the three years in the period ended December 31, 1997 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, 1998
<PAGE> 15
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Countryview Columbus, Ltd.
We have audited the balance sheets of COUNTRYVIEW COLUMBUS, LTD. as of December
31, 1997 and 1996 and the related statements of operations, changes in
partners' equity and cash flows for each of the three years in the period
ended December 31, 1997. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our 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, 1997 and 1996 and the results of its operations, changes in
partners' equity and cash flows for each of the three years in the period ended
December 31, 1997 in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the
financial statements taken as a whole. The additional financial data 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 audits of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ ALTSCHULER, MELVOIN AND GLASSER LLP
- ---------------------------------------
Chicago, Illinois
March 11, 1998
<PAGE> 16
[HSW&E 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, 1997 and 1996, 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, 1997 and 1996 and the results of its operations
and its cash flows for the years then ended, in conformity with generally
accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued our
reports dated January 13, 1998 on our consideration of Genoa Plaza, Limited
Partnership' internal control and on its compliance with laws and regulations.
/s/ HUMISTON, SKOKAN, WARREN & EICHENBERGER, P.C.
-------------------------------------------------
January 13, 1998
West Des Moines, Iowa
1
<PAGE> 17
[HUMISTON, SKOKAN, WARREN & EICHENGERGER 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 of 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 & EICHENGERGER, P.C.
- -------------------------------------------------
January 10, 1997
West Des Moines, Iowa
1
<PAGE> 18
[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, 1997, 1996, and 1995,
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 as of December 31, 1997, 1996,
and 1995, and its profit and loss, partners' equity, and its cash flows for the
years then ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated January 9, 1998, on our consideration of the Partnership's internal
controls and a report dated January 9, 1998, on its compliance with laws and
regulations.
/s/ PLANTE & MORAN, LLP
-----------------------
January 9, 1998
East Lansing, Michigan 48826-2500
<PAGE> 19
[HSW&E LETTERHEAD]
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, 1997 and 1996, 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, 1997 and 1996 and the results of its
operations and its cash flows for the years then ended, in conformity with
generally accepted accounting principles.
/s/ HUMISTON, SKOKAN, WARREN & EICHENBERGER, P.C.
-------------------------------------------------
January 14, 1998
West Des Moines, Iowa
<PAGE> 20
[HUMISTON, SKOKAN, WARREN & EICHENBERGER, LETTERHEAD]
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.
/s/ HUMISTON, SKOKAN, WARREN & EICHENBERGER, P.C.
-------------------------------------------------
January 10, 1997
West Des Moines, Iowa
<PAGE> 21
[LOGO]
ALTSCHULER, MELVOIN AND GLASSER LLP Chicago
Certified Public Accountants and Consultants Los Angeles
New York
Tampa
Washington, D.C.
INDEPENDENT AUDITORS' REPORT
To the Partners
Hickory Green Limited Partnership
We have audited the balance sheets of HICKORY GREEN LIMITED PARTNERSHIP as of
December 31, 1997 and 1996 and the related statements of operations, changes in
partners' equity and cash flows for each of the three years in the period ended
December 31, 1997. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our 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 Hickory Green Limited
Partnership as of December 31, 1997 and 1996 and the results of its operations,
changes in partners' equity and cash flows for each of the three years in the
period ended December 31, 1997 in conformity with generally accepted accounting
principles.
Our audits were conducted for the purpose of forming an opinion on the
financial statements taken as a whole. The additional financial data 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 audits of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
Altschuler, Melvoin and Glasser LLP
Chicago, Illinois
February 21, 1998
35 South Wacker Drive, Suite 2600, Chicago, Illinois 60606-7494
312-207-2809 Fax 312-207-2954 http://www.amgnet.com
Associated Worldwide With Summit International Associates, Inc.
<PAGE> 22
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Holden Village Associates
We have audited the balance sheets of HOLDEN VILLAGE ASSOCIATES as of December
31, 1997 and 1996 and the related statements of operations, changes in partners'
equity and cash flows for each of the three years in the period ended December
31, 1997. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our 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, 1997 and 1996 and the results of its operations, changes in
partners' equity and cash flows for each of the three years in the period ended
December 31, 1997 in conformity with generally accepted accounting principles.
The financial statements have been prepared assuming the Partnership will
continue as a going concern. As described in Note 6, insufficient cash flows and
recurring losses from operations raise substantial doubt about the Project's
ability to continue as a going concern. Management's plans regarding these
matters are described in Note 6. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Our audits were conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The additional financial data 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 audits of the financial statements and, in our opinion, is fairly
stated in all material respects in relation to the financial statements taken as
a whole.
/s/ ALTSCHULER, MELVOIN AND GLASSER LLP
---------------------------------------
Los Angeles, California
March 5, 1998
<PAGE> 23
[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.
2.
<PAGE> 24
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
3.
<PAGE> 25
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Mountain View Limited Partnership
We have audited the balance sheets of MOUNTAIN VIEW LIMITED PARTNERSHIP as of
December 3 1, 1997 and 1996 and the related statements of operations, changes in
partners' equity and cash flows for each of the three years in the period ended
December 31, 1997. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our 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, 1997 and 1996 and the results of its operations,
changes in partners' equity and cash flows for each of the three years in the
period ended December 31, 1997 in conformity with generally accepted accounting
principles.
Our audits were conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The additional financial data 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 audits of the financial statements arid, 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 5, 1998
<PAGE> 26
[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 AND GLASSER LLP
- ---------------------------------------
Los Angeles, California
February 17, 1997
<PAGE> 27
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Mountain View Limited Partnership II
We have audited the balance sheets of MOUNTAIN VIEW LIMITED PARTNERSHIP II as of
December 31, 1997 and 1996 and the related statements of operations, changes in
partners' equity and cash flows for each of the three years in the period ended
December 31, 1997. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our 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, 1997 and 1996 and the results of its
operations, changes in partners' equity and cash flows for each of the three
years in the period ended December 31, 1997 in conformity with generally
accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The additional financial data 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 audits of the financial statements and, in our opinion, is fairly
stated in all material respects in relation to the financial statements taken as
a whole.
/s/ ALTSCHULER, MELVOIN AND GLASSER LLP
- ---------------------------------------
Los Angeles, California
February 10, 1998
<PAGE> 28
[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
[HSW&E LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
North Liberty Park, Limited Partnership
Nest Des Moines, Iowa
We have audited the accompanying balance sheets of NORTH LIBERTY PARK,
LIMITED PARTNERSHIP as of December 31, 1997 and 1996, 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, 1997 and 1996 and the results of its operations
and its cash flows for the years then ended, in conformity with generally
accepted accounting principles.
/s/ HUMISTON, SKOKAN, WARREN & EICHENBERGER P.C.
- ------------------------------------------------
January 9, 1998
West Des Moines, Iowa
1
<PAGE> 30
[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
West Des Moines, Iowa
1
<PAGE> 31
[BERNSTEIN SIMPSON GILBERT & 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), Pa. Project No. PHFA No. 61 as of December 31, 1997 and
1996, and the related statements of income, changes in partners' equity 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> 32
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Rolling Hills Apts. Ltd. Pa.
Project No. PHFA No. 61 as of December 31, 1997 and 1996, 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. Pa.
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 & MOROWITZ LLC
- --------------------------------------------
BERNSTEIN, SIMPSON, GILBERT AND MOROWITZ, LLC
Atlantic City, N.J.
February 9, 1998
<PAGE> 33
[BERNSTEIN SIMPSON GILBERT & MOROWITZ LLC LETTERHEAD]
Indenendent 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 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 f1ows 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 & MOROWITZ LLC
- --------------------------------------------
BERNSTEIN, SIMPSON, GILBERT AND MOROWITZ, LLC
Atlantic City, N.J.
February 8, 1997
<PAGE> 35
[TORRES LLOMPART, SANCHEZ RUIZ & CO LETTERHEAD]
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS
PARTNERS
TORRES DEL PLATA I LIMITED PARTNERSHIP
SAN JUAN, PUERTO RICO
We have audited the accompanying balance sheets of Torres del Plata I Limited
Partnership as of December 31, 1997 and 1996, and the related statements of
operations, partners' equity, and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States and the US Department of Agriculture, Farmers Home Administration
Audit Program Handbook, issued in December 1989. 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 statements 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 Torres del Plata I Limited
Partnership as of December 31, 1997 and 1996, and the results of its operations,
changes in partners' equity and its cash flows for the years then ended in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated January 28, 1998, on our consideration of the Partnership's internal
control structure and a report dated January 28, 1998 on its compliance with
laws, regulations, contracts, loan covenants and agreements.
/s/ TORRES LLOMPART, SANCHEZ RUIZ & CO
--------------------------------------
January 28, 1998
License No. 169
San Juan, Puerto Rico
Stamp number 1462219 was affixed
to the original of this report.
<PAGE> 36
[TORRES LLOMPART, SANCHEZ RUIZ & CO LETTERHEAD]
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 LLOMPART, SANCHEZ RUIZ & CO
--------------------------------------
January 23, 1997
License No. 169
San Juan, Puerto Rico
Stamp number 1392913 was
affixed to the original of this report.
<PAGE> 37
INDEPENDENT AUDITORS' REPORT
TO THE PARTNERS OF
TERRACE GARDENS LIMITED PARTNERSHIP,
A CALIFORNIA LIMITED PARTNERSHIP:
We have audited the accompanying balance sheets of Terrace Gardens Limited
Partnership, a California Limited Partnership, as of December 31, 1997 and 1996,
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, a California Limited Partnership, as of December 31, 1997 and 1996,
and the results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.
San Diego, California
January 23, 1998
<PAGE> 38
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
100 Sixth Avenue Associates, Limited Partnership
aka Ticino Apartments
We have audited the balance sheets of 100 SIXTH AVENUE ASSOCIATES, LIMITED
PARTNERSHIP AKA TICINO APARTMENTS as of December 31, 1997 and 1996 and the
related statements of operations, changes in partners' equity and cash flows for
each of the three years in the period ended December 31, 1997. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our 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 as of December 31, 1997 and 1996 and the results of its
operations, changes in partners' equity and cash flows for each of the three
years in the period ended December 31, 1997 in conformity with generally
accepted accounting principles.
The financial statements have been prepared assuming the Partnership will
continue as a going concern. As described in Note 6, insufficient cash flows and
recurring losses from operations raise substantial doubt about the Project's
ability to continue as a going concern. Management's plans regarding these
matters are described in Note 6. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Our audits were conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The additional financial data 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 audits of the financial statements and, in our opinion, is fairly
stated in all material respects in relation to the financial statements taken as
a whole.
/s/ ALTSCHULER, MELVOIN AND GLASSER LLP
---------------------------------------
Los Angeles, California
March 5, 1998
<PAGE> 39
[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, 1997 and
1996 and the related statements of operations, changes in partners' capital
accounts and cash flows for the years ended December 31, 1997, 1996 and 1995.
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, 1997 and 1996 and the results of its
operations, changes in partners' capital accounts and cash flows for the years
ended December 31, 1997, 1996 and 1995, in conformity with generally accepted
accounting principles.
/s/ BLACKMAN & ASSOCIATES, P.C.
-------------------------------
Omaha, Nebraska
January 23, 1998
<PAGE> 40
NATIONAL TAX CREDIT PARTNERS, L.P.
(A CALIFORNIA LIMITED PARTNERSHIP)
BALANCE SHEETS
DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
ASSETS
INVESTMENTS IN LIMITED PARTNERSHIPS
(Notes 1 and 2) $14,370,207 $17,721,398
CASH AND CASH EQUIVALENTS (Note 1) 540,686 149,927
RESTRICTED CASH 75,000 75,000
----------- -----------
TOTAL ASSETS $14,985,893 $17,946,325
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES:
Accrued fees and expenses due to partners (Notes 4 and 7) $ 4,727,721 $ 3,996,221
Capital contributions payable (Note 3) 329,030 392,300
Accounts payable and accrued expenses 224,703 270,354
----------- -----------
5,281,454 4,658,875
CONTINGENCIES (Note 6)
PARTNERS' EQUITY 9,704,439 13,287,450
----------- -----------
TOTAL LIABILITIES AND PARTNERS' EQUITY $14,985,893 $17,946,325
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 41
NATIONAL TAX CREDIT PARTNERS, L.P.
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
1997 1996 1995
----------- ----------- -----------
<S> <C> <C> <C>
INTEREST AND OTHER INCOME $ 51,975 $ 99,016 $ 75,125
----------- ----------- -----------
OPERATING EXPENSES:
Management fees - partners (Note 4) 692,956 692,956 692,955
Legal and accounting 66,790 132,991 374,878
General and administrative (Note 4) 144,225 149,695 139,846
----------- ----------- -----------
Total operating expenses 903,971 975,642 1,207,679
----------- ----------- -----------
LOSS FROM PARTNERSHIP OPERATIONS (851,996) (876,626) (1,132,554)
WRITE-OFF OF INVESTMENT IN
LIMITED PARTNERSHIP (Note 2) (560,766) (2,289,875) (1,158,801)
DISTRIBUTIONS FROM LIMITED
PARTNERSHIPS RECOGNIZED
AS INCOME 18,381 37,532 --
EQUITY IN LOSS OF LIMITED
PARTNERSHIPS AND AMORTIZATION
OF ACQUISITION COSTS (Note 2) (2,188,630) (2,049,514) (3,828,734)
----------- ----------- -----------
NET LOSS $(3,583,011) $(5,178,483) $(6,120,089)
=========== =========== ===========
NET LOSS PER LIMITED
PARTNERSHIP INTEREST (Note 1) $ (148) $ (215) $ (254)
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 42
NATIONAL TAX CREDIT PARTNERS, L.P.
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF PARTNERS' EQUITY (DEFICIENCY)
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
Special
Limited General Limited
Partners Partners Partners Total
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
PARTNERS' EQUITY (DEFICIENCY),
January 1, 1995 $ 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
Net loss for 1997 -- (35,830) (3,547,181) (3,583,011)
------------ ------------ ------------ ------------
PARTNERS' EQUITY (DEFICIENCY),
December 31, 1997 $ 1,000 $ (421,779) $ 10,125,218 $ 9,704,439
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 43
NATIONAL TAX CREDIT PARTNERS, L.P.
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
1997 1996 1995
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(3,583,011) $(5,178,483) $(6,120,089)
Adjustments to reconcile net loss to net cash
used in operating activities:
Equity in losses of limited partnerships
and amortization of acquisition costs 2,188,630 2,049,514 3,828,734
Write-off of investee partnership 560,766 2,289,875 1,158,801
Increase in:
Accrued fees and expenses due to partners 731,500 729,700 763,430
Accounts payable and accrued expenses (45,651) (54,997) 24,326
----------- ----------- -----------
Net cash used in operating activities (147,766) (164,391) (344,798)
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in investee partnerships:
Capital contributions and advances to ( recovery from)
limited partnerships 494,576 (223,816) 112,749
Capitalized acquisition costs and fees 305 -- (2,745)
Distributions recognized as a return of capital 106,914 86,852 120,707
Increase (decrease) in capital contributions payable (63,270) (49,000) 441,300
Decrease in other assets -- -- 16,894
----------- ----------- -----------
Net cash provided by (used in) investing activities 538,525 (185,964) 688,905
----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 390,759 (350,355) 344,107
CASH AND CASH EQUIVALENTS,
beginning of year 149,927 500,282 156,175
----------- ----------- -----------
CASH AND CASH EQUIVALENTS,
end of year $ 540,686 $ 149,927 $ 500,282
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 44
NATIONAL TAX CREDIT PARTNERS, L.P.
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
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> 45
NATIONAL TAX CREDIT PARTNERS, L.P.
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
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, 1997, 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 percent 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 percent of operating profits and losses of the Local
Partnership. The Partnership is also generally entitled to receive 50 percent
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
$14,981,471 and $13,934,000 as of December 31, 1997 and 1996, respectively.
6
<PAGE> 46
NATIONAL TAX CREDIT PARTNERS, L.P.
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
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>
1997 1996
------------ ------------
<S> <C> <C>
Investment balance, beginning of year $ 17,721,398 $ 21,923,823
Capital contributions to (recovery from) limited partnerships (494,576) 223,816
Capitalized acquisition costs and fees (Note 3) (305) --
Equity in loss of limited partnerships (2,059,308) (1,893,223)
Write off of investee partnership (560,766) (2,289,875)
Amortization of capitalized acquisition costs and fees (129,322) (156,291)
Distributions recognized as a return of capital (106,914) (86,852)
------------ ------------
Investment balance, end of year $ 14,370,207 $ 17,721,398
============ ============
</TABLE>
In 1997, the Partnership received approximately $886,000 from the sale of a
portion of its limited partner interest in two Local Partnerships.
The difference between the investment per the accompanying balance sheets at
December 31, 1997 and 1996, 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 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
7
<PAGE> 47
NATIONAL TAX CREDIT PARTNERS, L.P.
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
31, 1997 and 1996, the Partnership's carrying value of the investment in the
Victorian Local Partnership (which represents approximately 5.7 percent of the
Partnership's total equity initially invested in Local Partnerships) was zero.
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, 1997
and 1996. The lawsuit has been dormant for more than three years. Occupancy
levels at the three related Local Partnerships, Summit I, II, and III (Wallace,
Bergdoll, and Chandler School located in Philadelphia) were 94%, 89%, and 80%,
respectively, at December 31, 1997, and the properties have been operating at a
deficit. The Summit I and III properties have approximately $187,000 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. 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. 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 96% as of December 1997, and
attained break-even levels of operations during 1997. As of December 31, 1997
and 1996, the Partnership's carrying value of the investment in the Meadows
Apartments was zero, as the investment was written off in 1995.
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
8
<PAGE> 48
NATIONAL TAX CREDIT PARTNERS, L.P.
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
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 was zero at December 31, 1997 and 1996.
Holden Village & Ticino Apartments
Holden Village and Ticino Apartments, located in Seattle, Washington,
maintained average occupancy levels of 96% and 89%, respectively, and
experienced operating deficits of approximately $151,000 and $95,000,
respectively, during 1997. The high cost of servicing the debt is the largest
contributing factor associated with the deficit operations. In January 1998,
NTCP was successful in negotiating an interest rate reduction with the lender
for each of the properties. Based on the loan modifications, the operating
performance of each property is expected to improve substantially. The
Partnership's total investment in Holden Village and Ticino Apartments was
approximately $1,306,000 and $1,533,000 at December 31, 1997 and 1996,
respectively.
Dynes Village
The Dynes Village Apartments complex is operating at a deficit and the first
mortgage loan encumbering the property was delinquent until it was brought
current by NTCP in November 1997. In addition, the property has been audited by
the IRS with respect to tenant qualifications performed by the prior local
operating general partner. The IRS has disqualified all future housing tax
credits based on what they consider non-compliance by the prior local operating
general partner. Finally, the property is budgeted to operate at a deficit
during 1998. As a result, the Partnership's investment in Dynes Village of
$560,766 at December 31, 1997 was written off during the year.
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 1997 and 1996, approximately $63,000 and
$49,000, 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,
1997 and 1996 was zero.
Rose City
During 1997, the Oregon Housing and Community Services Department
("Department") inspected Rose City Village Limited Partnership's compliance
with the low-income housing credit provisions of the Internal Revenue Code, and
determined that the Partnership was not in compliance. The Department filed
Form 8823, Low-Income Housing Credit Agencies Report of Noncompliance, with the
Internal Revenue Service. Management believes the instances of noncompliance
are now corrected; however, as of the date of this report, resolution of this
matter by the Department and the Internal Revenue Service is still outstanding.
The effect, if any, of the noncompliance on the financial statements of the
Partnership cannot be determined at this date. The Partnership's investment in
Rose City at December 31, 1997 was $685,558.
9
<PAGE> 49
NATIONAL TAX CREDIT PARTNERS, L.P.
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
Selected financial information from the combined financial statements of the
Local Partnerships at December 31, 1997 and 1996 and for each of the three
years in the period ended December 31, 1997 is as follows:
Balance Sheets
<TABLE>
<CAPTION>
1997 1996
--------- ---------
(in thousands)
<S> <C> <C>
Land and buildings, net $ 102,994 $ 105,915
========= =========
Total assets $ 109,481 $ 112,540
========= =========
Mortgages payable secured by real property $ 87,811 $ 88,936
========= =========
Total liabilities $ 107,169 $ 106,966
========= =========
Equity of National Tax Credit Partners, L.P. $ (3,216) $ 651
========= =========
Equity of other partners $ 5,529 $ 4,924
========= =========
</TABLE>
Statements of Operations
<TABLE>
<CAPTION>
1997 1996 1995
-------- -------- --------
(in thousands)
<S> <C> <C> <C>
Total revenues $ 18,087 $ 17,624 $ 17,015
======== ======== ========
Interest expense $ 7,687 $ 7,608 $ 8,173
======== ======== ========
Depreciation $ 4,269 $ 4,371 $ 4,546
======== ======== ========
Total expenses $ 21,546 $ 33,530 $ 21,750
======== ======== ========
Net loss $ (3,459) $(15,906) $ (4,735)
======== ======== ========
Net loss allocable to the Partnership $ (3,466) $(15,436) $ (4,584)
======== ======== ========
</TABLE>
10
<PAGE> 50
NATIONAL TAX CREDIT PARTNERS, L.P.
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
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>
1997 1996 1995
-------- -------- --------
(in thousands)
<S> <C> <C> <C>
Total assets $ 48,987 $ 50,550
======== ========
Total liabilities $ 48,133 $ 47,939
======== ========
Equity (Deficiency) of National Tax
Credit Partners, L.P. $ (3,177) $ (986)
======== ========
Equity of other partners $ 4,030 $ 3,597
======== ========
Total revenue $ 7,503 $ 7,475 $ 7,275
======== ======== ========
Net loss $ (1,971) $ (8,140) $ (2,932)
======== ======== ========
</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
percent 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, $692,956 and $692,955 for 1997,
1996 and 1995, respectively. At December 31, 1997 and 1996, $4,727,721
and $3,996,221, 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 percent 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
11
<PAGE> 51
NATIONAL TAX CREDIT PARTNERS, L.P.
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
4. RELATED-PARTY TRANSACTIONS (CONTINUED)
described above) or 6 percent 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 percent 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 $38,544, $36,744 and
$35,079 during 1997, 1996 and 1995, 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 $67,157, $65,049 and $68,800 in 1997,
1996 and 1995, 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).
The Partnership has assessed the potential impact of the Year 2000 computer
systems issue on its operations. The Partnership believes that no significant
actions are required to be taken by the Partnership to address the issue and
that the impact of the Year 2000 computer systems issue will not materially
affect the Partnership's future operating results or financial condition.
12
<PAGE> 52
NATIONAL TAX CREDIT PARTNERS, L.P.
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
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.
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 $536,269, between the estimated
nine-month equity in loss and the actual 1997 year end equity in loss has been
recorded in the fourth quarter.
13
<PAGE> 53
NATIONAL TAX CREDIT PARTNERS, L.P. SCHEDULE
INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
BALANCE CAPITALIZED EQUITY AMORTIZATION BALANCE CAPITAL
LIMITED JANUARY 1, CAPITAL ACQUISITION CASH INCOME OF CAPITALIZED DECEMBER 31, CONTRIBUTIONS
PARTNERSHIPS 1997 CONTRIBUTIONS COSTS DISTRIBUTIONS (LOSS) ACQ. COSTS 1997 PAYABLE
- ------------ ----------- ------------- ----------- ------------- ----------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Apple Tree $ 173,648 $ $ $ (1,900) $ (13,161) $ (1,418) $ 157,169 $
Blue Lake 0 0 0 0
ComFed 0 0 0 0
Concept I & II 140,282 (2,035) (6,318) 131,929
Countryview Columbus 2,230,431 (625,582) (125,113) (13,007) 1,466,729
Dickens 117,438 (117,438) 0 0
Dynes Village 630,428 53,900 (671,696) (12,632) 0
Genoa Plaza 152,794 (3,779) (17,122) (529) 131,364
Glenark 0 36,400 (36,400) 0 0
Grand Meadows 996,605 (93,388) (3,812) 899,405
Grinnell Park 119,821 (7,823) (215) 111,783
Hickory Green 432,097 (32,574) (5,279) 394,244
Holden Village 944,835 22,000 (149,437) (7,597) 809,801
Kimberly Court 173,339 (1,724) (43,541) (1,663) 126,411
The Meadows 0 262,492 (262,492) 0 0
Mountain View I 1,057,747 (6,000) (77,667) (7,990) 966,090
Mountain View II 1,417,710 (3,000) (98,004) (7,990) 1,308,716
Newbury Place 2,431,711 (10,000) (287,676) (14,698) 2,119,337
North Liberty Park 34,268 (23,246) (917) 10,105
Paris Hotel 330,589 (24,603) (2,834) 303,152
Rolling Hills 777,946 (49,445) (602,763) (8,800) 116,938
Rose City 604,078 (260,000) (1,750) 347,171 (3,941) 685,558
Summit I 0 2,354 (2,354)
Summit II 0 10,023 (10,023)
Summit III 0 5,837 (5,837)
Torres de Plata I 141,674 (6,450) (89,064) (832) 45,328
Terrace Gardens 1,975,852 (107,346) (13,253) 1,855,253
Ticino 588,003 8,000 (305) (94,176) (5,006) 496,516
Tyrone Elderly 959,066 (32,866) 48,100 (5,188) 969,112
Victorian Park 0 0
Vinton Park School 1,291,036 (20,366) (5,403) 1,265,267
------------ --------- ----- --------- ----------- ---------- ----------- -----
$ 17,721,398 $(494,576) $(305) $(106,914) $(2,620,074) (129,322) $14,370,207 $ 0
============ ========= ===== ========= =========== ========== =========== =====
</TABLE>
<PAGE> 54
NATIONAL TAX CREDIT PARTNERS, L.P. SCHEDULE
INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS (CONTINUED)
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
- ---------------------------------------------------------------------------------------------------------------------------------
AMORTIZATION CAPITAL
BALANCE CAPITAL CAPITALIZED CASH EQUITY OF BALANCE CONTRI-
LIMITED JANUARY 1, CONTRIBU- ACQUISITION DISTRIBU- INCOME CAPITALIZED DECEMBER 31, BUTIONS
PARTNERSHIPS 1996 TIONS COSTS TIONS (LOSS) ACQ. COSTS 1996 PAYABLE
- ------------ ------------- --------- ----------- --------- ----------- ------------ ------------ --------
<S> <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> 55
NATIONAL TAX CREDIT PARTNERS SCHEDULE
7 INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS SCHEDULE
YEARS ENDED DECEMBER 31, 1997,1996, AND 1995
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
- ------------------------------------------------------------------------------------------------------------------------------------
BALANCE CAPITALIZED EQUITY AMORTIZATION BALANCE CAPITAL
LIMITED JANUARY 1, CAPITAL ACQUISITION CASH INCOME OF CAPITALIZED DECEMBER 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) $21,923,823 $441,300
============ ========== ====== ========= =========== ========== =========== ========
</TABLE>
<PAGE> 56
SCHEDULE
(Continued)
NATIONAL TAX CREDIT PARTNERS, L.P.
INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
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> 57
SCHEDULE III
NATIONAL TAX CREDIT PARTNERS, L.P.
REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY HELD BY LOCAL LIMITED PARTNERSHIPS
IN WHICH NTCP HAS INVESTMENTS
DECEMBER 31, 1997
<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 $ 892,872 $ 74,000 $ 1,173,575 $ 1,247,575 $ 247,069
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 1,654,521 1,989,521 210,479
Miami, FL
ComFed Qualified Housing Limited 116 2,176,892 385,467 4,160,750 4,546,217 1,407,810
Partnership III
Concept I & II Limited Partnership 40 1,556,304 131,600 2,440,871 2,572,471 617,894
Cleveland, OH
Countryview Columbus Limited 152 3,976,538 320,000 7,290,177 7,610,177 1,403,156
Columbus, OH
Dickens Associates II 34 1,272,916 105,000 2,299,724 2,404,724 474,180
Chicago, IL
Dynes Village Associates Limited 42 766,438 65,000 2,576,987 2,641,987 627,721
Cleveland, OH
Genoa Plaza Limited Partnership 48 1,331,347 98,024 1,673,067 1,771,091 368,292
Genoa City, WI
Glenark Associates Limited 67 3,911,140 45,525 7,047,086 7,092,611 1,710,171
Woonsocket, RI
Grand Meadows II Limited 64 1,921,225 112,000 3,447,520 3,559,520 707,216
Grand Blanc, MI
Grinnel Park Limited 24 607,788 48,400 778,972 827,372 172,848
Grinnel, PA
Hickory Green Limited Partnership 59 1,454,832 215,000 2,688,685 2,903,685 733,922
Westland, MI
Holden Village Limited Partnership 96 2,490,117 280,000 4,179,848 4,459,848 1,242,341
West Seattle, WA
Kimberly Court 24 1,483,643 233,900 1,750,750 1,984,650 377,579
Seward, AK
The Meadows Limited Partnership 114 2,085,173 123,900 1,943,184 2,067,084 99,684
Ypsilanti, MI
Mountain View Limited I 120 2,743,150 685,819 4,181,840 4,867,659 911,311
Lawrence, MA
Mountain View Limited II 159 3,946,434 866,212 5,191,215 6,057,427 1,114,070
Lawrence, MA
Newbury Limited Partnership 164 3,723,721 739,882 8,025,649 8,765,531 1,609,788
Oak Creek, WI
North Liberty Park Limited 24 603,657 47,811 729,137 776,948 185,346
North Liberty, IA
Paris Hotel Limited Partnership 17 876,254 179,160 1,673,902 1,853,062 338,419
Denver, CO
Rolling Hills Apts. Limited 232 5,126,420 800,000 11,453,473 12,253,473 2,493,828
Pottsgrove Township, PA
Rose City 264 5,985,000 463,955 9,415,289 9,879,244 2,454,241
Portland, OR
Terrace Gardens Limited Partnership 150 5,175,499 1,522,369 8,061,143 9,583,512 2,602,926
Lemon Grove, CA
Ticino Apts. Limited Partnership 45 1,370,546 101,066 2,129,970 2,231,036 452,617
Seattle, WA
Torres de Plata I 72 3,024,427 161,280 3,720,726 3,882,006 927,677
Toa Alta, PR
Tyrone Elderly Limited Partnership 100 3,252,536 100,000 4,740,670 4,840,670 984,747
Tyrone, PA
Victorian Park 336 16,537,820 1,737,727 17,517,369 19,255,096 6,828,994
Streamwood, IL
Vinton/Park School Apts. Limited 44 715,450 145,500 2,663,751 2,809,251 435,178
Omaha, NE
--------------------------------------------------------------------------------------------
TOTAL 2,788 $87,811,456 $10,123,597 $124,609,851 $134,733,448 $31,739,504
============================================================================================
</TABLE>
<PAGE> 58
SCHEDULE III
(Continued)
REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY
HELD BY LOCAL PARTNERSHIPS
IN WHICH NTCP HAS INVESTMENTS
DECEMBER 31, 1997
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, 1995 $ 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 dispositions during the year (48,350) (13,726,709) (13,775,059)
------------- ------------- -------------
Balance, December 31, 1996 10,355,997 125,025,523 135,381,520
Net disposition during the year (232,400) (415,672) (648,072)
------------- ------------- -------------
Balance, December 31, 1997 $ 10,123,597 $ 124,609,851 $ 134,733,448
============= ============= =============
</TABLE>
<PAGE> 59
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, 1997
<TABLE>
<CAPTION>
Buildings,
Furnishings
ACCUMULATED DEPRECIATION: And Equipment
-------------
<S> <C>
Balance, January 1, 1995 $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
Net additions during the year 2,272,604
-----------
Balance, December 31, 1997 $31,739,504
===========
</TABLE>
<PAGE> 60
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, 68, 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, 46, 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, 52, 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> 61
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, 54, 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.
BOB SCHAFER, 56, Senior 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.
PATRICIA W. TOY, 68, 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, 37, 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.
NAPICO and several of its officers, directors and affiliates, including Charles
H. Boxenbaum, Bruce E. Nelson and Alan I. Casden, consented to the entry, on
June 25, 1997, of an administrative cease and desist order by the U.S.
Securities and Exchange Commission (the "Commission"), without admitting or
denying any of the findings made by the Commission. The Commission found that
NAPICO and others had violated certain federal securities laws in connection
with transactions unrelated to the Partnership. The Commission's order did not
impose any cost, burden or penalty on any partnership managed by NAPICO and does
not impact NAPICO's ability to serve as the Partnership's Managing General
Partner.
<PAGE> 62
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 percent of
invested assets (as defined) is payable to the General Partner and Special
Limited Partner. For the years ended December 31, 1997, 1996 and 1995,
$692,956, $692,956 and $692,955, 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 percent 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 percent 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 percent 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, 1997, 1996 and 1995, $38,544, $36,744 and $35,079,
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 $67,157, $65,049, $68,800 in 1997,
1996 and 1995, 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 percent 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> 63
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K:
REPORTS OF INDEPENDENT PUBLIC ACCOUNTANTS.
FINANCIAL STATEMENTS
Report of Independent Public Accountants.
Balance Sheets as of December 31, 1997 and 1996.
Statements of Operations for the years ended December 31, 1997, 1996 and 1995.
Statements of Partners' Equity (Deficiency) for the years ended December 31,
1997, 1996 and 1995.
Statements of Cash Flows for the years ended December 31, 1997, 1996 and 1995.
Notes to Financial Statements.
FINANCIAL STATEMENT SCHEDULES 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, 1997, 1996
and 1995.
Schedule III - Real Estate and Accumulated Depreciation, December 31, 1997.
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.
REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the year ended December 31, 1997.
<PAGE> 64
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.
General Partner
/s/ CHARLES H. BOXENBAUM
- ----------------------------------
Charles H. Boxenbaum
Chairman of the Board of Directors
and Chief Executive Officer
/s/ BRUCE E. NELSON
- ----------------------------------
Bruce E. Nelson
Director and President
/s/ ALAN I. CASDEN
- ----------------------------------
Alan I. Casden
Director
/s/ HENRY C. CASDEN
- ----------------------------------
Henry C. Casden
Director
/s/ BOB E. SCHAFER
- ----------------------------------
Bob E. Schafer
Senior Vice President of Finance
<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-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 615,686
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 615,686
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 14,985,893
<CURRENT-LIABILITIES> 224,703
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,281,454
<TOTAL-LIABILITY-AND-EQUITY> 14,985,893
<SALES> 0
<TOTAL-REVENUES> 51,975
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,634,986
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,583,011)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,583,001)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,583,011)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
