SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1999
OR
____ TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-20638
PATRIOT TAX CREDIT PROPERTIES L.P.,
(Exact name of registrant as specified in its charter)
Delaware 13-3519080
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
625 Madison Avenue, New York, New York 10022
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212)421-5333
N/A
Former name, former address and
former fiscal year, if changed since last report
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the Securi-
ties Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes X No ____
<PAGE>
<TABLE>
PART I - Financial Information
Item 1. Financial Statements
PATRIOT TAX CREDIT PROPERTIES L.P.
(a limited partnership)
AND SUBSIDIARIES
Consolidated Statements of Financial Condition
(Unaudited)
<CAPTION>
December 31, March 31,
1999 1999
<S> <C> <C>
ASSETS
Investment in property:
Land $ 4,005,633 $ 4,005,633
Buildings and improvements 75,575,140 75,355,591
Accumulated depreciation (19,216,026) (17,604,303)
Net investment in property 60,364,747 61,756,921
Cash and cash equivalents 996,431 254,539
Cash and cash equivalents
held in escrow 1,344,650 1,007,919
Deferred financing costs, net 2,383,228 2,587,637
Other assets 241,927 278,693
Total assets $65,330,983 $65,885,709
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgage notes payable $44,719,366 $45,127,197
Accrued interest payable 1,711,605 1,590,244
Other accrued expenses
and liabilities 2,100,021 1,760,924
Due to general partners and
affiliates of local partnerships 5,712,951 3,091,695
Development fees payable 1,450,709 1,450,709
Construction costs payable 0 605,358
Real estate taxes payable 268,762 105,318
Due to general partner and
its affiliates 948,384 619,537
Total liabilities 56,911,798 54,350,982
Minority interest in local
partnerships 1,475,278 2,375,091
PARTNERS' CAPITAL
Limited partners (38,125 BUC$
issued and outstanding) 6,160,466 8,365,116
General partner (1 BUC
issued and outstanding) 783,441 794,520
Total Partners' Capital 6,943,907 9,159,636
Total Liabilities and Partners' Capital $65,330,983 $65,885,709
See Accompanying Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
PATRIOT TAX CREDIT PROPERTIES L.P.
(a limited partnership)
AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
December 31, December 31,
1999 1998* 1999 1998*
<S> <C> <C> <C> <C>
Revenues
Rental income $1,736,172 $2,153,234 $5,561,441 $ 6,247,127
Other income 145,989 189,613 357,930 486,054
Interest income 4,457 2,786 10,326 11,509
1,886,618 2,345,633 5,929,697 6,744,690
Expenses
Interest 1,045,535 989,868 3,143,338 3,165,510
Depreciation and
amortization 605,376 618,779 1,816,132 1,836,342
Operating and other 191,581 199,662 597,176 578,723
Taxes and
insurance 260,750 275,192 796,655 846,231
Repairs and
maintenance 585,731 464,116 1,551,015 1,395,162
General and
administrative 486,374 559,614 1,321,945 1,510,930
Partnership
management fees 59,718 59,718 178,450 178,450
Property
management fees 78,818 91,660 245,296 265,438
3,313,883 3,258,609 9,650,007 9,776,786
Loss before minority
interest and
extraordinary
item (1,427,265) (912,976) (3,720,310) (3,032,096)
Minority interest
in loss of
local
partnerships 359,384 151,956 899,223 547,918
Loss before
extraordinary
item (1,067,881) (761,020) (2,821,087) (2,484,178)
Extraordinary item -
forgiveness of
indebtedness
income (Note 3) 0 0 605,358 0
Net loss $(1,067,881) $ (761,020) $(2,215,729) $ (2,484,178)
Loss before
extraordinary
item -
limited
partners $(1,062,541) $ (757,215) $(2,806,981) $ (2,471,757)
Extraordinary
item -
limited
partners 0 0 602,331 0
Net loss -
limited
partners $(1,062,541) $ (757,215) $(2,204,650) $(2,471,757)
Number of
limited
partnership
units
outstanding 38,125 38,125 38,125 38,125
Loss before
extraordinary
item
per limited
partnership
unit $ (27.87) $ (19.86) $ (73.63) $ (64.83)
Extraordinary
item
per limited
partnership
unit 0 0 15.80 0
Net loss
per limited
partnership
unit $ (27.87) $ (19.86) $ (57.83) $ (64.83)
*Reclassified for comparative purposes.
See Accompanying Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
PATRIOT TAX CREDIT PROPERTIES L.P.
(a limited partnership)
AND SUBSIDIARIES
Consolidated Statement of Changes in Partners' Capital
(Unaudited)
<CAPTION>
Limited General
Total Partners Partner BUC$
<S> <C> <C> <C> <C>
Partners' capital
March 31, 1999 $ 9,159,636 $ 8,365,116 $794,520 38,126
Net loss - Nine
Months ended
December 31, 1999 (2,215,729) (2,204,650) (11,079) 0
Partners' capital-
December 31, 1999 $ 6,943,907 $ 6,160,466 $783,441 38,126
See Accompanying Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
PATRIOT TAX CREDIT PROPERTIES L.P.
(a limited partnership)
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
<CAPTION>
Nine Months Ended
December 31,
1999 1998
<S> <C> <C>
Cash flows from operating activities:
Net loss $(2,215,729) $(2,484,178)
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Extraordinary item - forgiveness
of indebtedness income (Note 3) (605,358) 0
Depreciation and amortization 1,816,132 1,836,342
Minority interest in loss of
local partnerships (899,223) (547,918)
Increase in cash held
in escrow (336,731) (433,060)
Increase in real estate
taxes payable 163,444 109,660
Increase (decrease) in accrued
interest payable 121,361 (32,369)
Decrease in other assets 36,766 52,856
Increase in other liabilities 339,097 1,192,860
Increase in due to General Partner
and its affiliates 328,847 479,770
Increase in due to general
partners and affiliates
of local partnerships 2,621,256 20,316
Total adjustments 3,585,591 2,678,457
Net cash provided by operating
activities 1,369,862 194,279
Cash flows from investing activities:
Investment in property (219,549) (1,073)
Cash flows from financing activities:
Payments of mortgage notes (407,831) (367,965)
Distribution to minority interest (590) (358)
Net cash used in financing activities (408,421) (368,323)
Net increase (decrease) in cash and
cash equivalents 741,892 (175,117)
Cash and cash equivalents at
beginning of period 254,539 573,775
Cash and cash equivalents at
end of period $ 996,431 $ 398,658
Supplemental disclosure of
cash flow information:
Non-cash Financing activity:
Forgiveness of indebtedness
income (Note 3)
Decrease in construction
costs payable $ 605,358 $ 0
Interest paid $ 3,021,977 $ 3,197,879
See Accompanying Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
PATRIOT TAX CREDIT PROPERTIES L.P.
(a limited partnership)
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1999
(Unaudited)
Note 1 - General
These consolidated financial statements have not been audited. In
the opinion of management, the consolidated financial statements
contain all adjustments (consisting of only normal recurring ad-
justments) necessary to present fairly the financial position of Pa-
triot Tax Credit Properties L.P. (the "Partnership") as of December
31, 1999, the results of operations for the three and nine months
ended December 31, 1999 and 1998 and cash flows for the nine
months ended December 31, 1999 and 1998. However, the oper-
ating results for the interim periods may not be indicative of the
results expected for a full year.
Certain information and footnote disclosures normally included in
consolidated financial statements prepared in accordance with
generally accepted accounting principles have been omitted. It is
suggested that these consolidated financial statements be read in
conjunction with the consolidated financial statements and notes
thereto included in the Partnership's Annual Report on Form 10-K
filed with the Securities and Exchange Commission for the year
ended March 31, 1999.
The Partnership invests in partnerships (the "Local Partnerships")
which own the properties. The financial statements of the Local
Partnerships consolidated herein are for the nine month period
ended September 30, and occupancy rates are as of September 30.
Prior to October 1, 1997, the general partner of the Partnership
was Prudential Bache Properties, Inc. ("PBP") and since October 1,
1997, the general partner has been RCC Partners 96, L.L.C. (the
"New GP"). PBP and the New GP are sometimes referred to as the
"General Partner" or "General Partners" as the context requires.
Note 2 - Related Parties
The General Partner and its affiliates have performed and will
continue to perform services for the Partnership which include,
but are not limited to: accounting and financial management,
registrar, transfer and assignment functions, asset management,
investor communications, printing and other administrative serv-
ices. The General Partner and its affiliates receive management
fees and reimbursements for general and administrative costs
incurred in connection with these services, the amount of which is
limited by the provisions of the Partnership Agreement. The costs
and expenses incurred to the General Partner were:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
December 31, December 31,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Management fees (a) $59,718 $59,718 $178,450 $178,450
Local administra-
tive fees 5,062 5,062 15,186 15,186
General and
administrative 33,263 31,837 64,172 80,120
$98,043 $96,617 $257,808 $273,756
</TABLE>
(a) A management fee for managing the affairs of the Partnership
equal to 0.375% of invested assets is payable from operations and
reserves to the General Partner and its affiliates. Partnership man-
agement fees owed to the General Partner amounting to approxi-
mately $445,000 and $266,000 were accrued and unpaid as of De-
cember 31, 1999 and March 31, 1999, respectively. Without the
General Partner's continued accrual without payment of certain
fees and expense reimbursements, the Partnership will not be in a
position to meet its financial obligations. The General Partner has
continued allowing the accrual without payment of these amounts
but is under no obligation to continue do so.
At December 31, 1999, the properties owned by three of the Local
Partnerships are managed by a Local General Partner or its affili-
ates. Five of the Local Partnerships' general partners are owned
by affiliates of the New GP.
Note 3 - Extraordinary Item-Forgiveness of Indebtedness Income
RMB Limited Partnership ("Hubbards Ridge")
During the nine months ended December 31, 1999 it was deter-
mined that construction costs payable in the amount of $605,358
would not be paid and such amounts were subsequently written
off and recorded as forgiveness of indebtedness income on the
consolidated statements of operations of the Partnership.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Con-
dition and Results of Operations
Liquidity and Capital Resources
The Partnership invested in eight Local Partnerships which are
owners of affordable multi-family residential complexes. The
Local Partnerships are operated in accordance with the rules and
regulations under Section 42 of the Internal Revenue Code in or-
der to protect the related tax credits. The Partnership's primary
source of funds is rental revenues which are fully utilized at the
property level. The Partnership is dependent upon the support of
the General Partner and certain of its affiliates in order to meet its
obligations at the Partnership level. The General Partner and these
affiliates have agreed to continue such support for the foreseeable
future. Without the General Partner's continued accrual without
payment of certain fees and expense reimbursements, the Partner-
ship will not be in a position to meet its obligations. The General
Partner has continued allowing the accrual without payment of
these amounts but is under no obligation to continue do so.
At the Local Partnership level, the Local General Partner at Papil-
lion Heights has made a guarantee with respect to the Local Part-
nership which, under certain circumstances, requires the Local
General Partner to fund cash flow deficits pursuant to the deficit
guaranty agreement. These operating deficit advances do not bear
interest and are repayable by the Local Partnership in accordance
with the respective Local Partnership agreement. The Papillion
Heights operating deficit guaranty agreement is in effect until such
date of the net operating income is sufficient to cover 115% of the
debt service for twelve consecutive months, as defined in the part-
nership agreement. Of the $170,000 maximum funding obligation,
$66,000 has been funded to date.
The Summer Creek Villas Local Partnership continues to experi-
ence severe cash flow deficits. The Local General Partner has met
its funding obligation having advanced $3,042,000 through De-
cember 31, 1999. The Local General Partner has elected to treat
approximately $2,742,000 as non-repayable advances. The class C
limited partner has funded $700,000 in 1999 and has committed to
fund another $1,300,000 over 2 years, subject to annual review and
evaluation. The Partnership has an obligation to fund $2 for every
$1 funded by the class C limited partner and to fund any amounts
in excess of the amounts which get funded under this sharing
arrangement. The Partnership has advanced approximately
$2,170,000 through December 31, 1999. The partners will deter-
mine whether these funds are repayable at December 31, 1999.
The partners are not required to forgive such advances and if they
are not forgiven the repayment will be from cash flow.
The Local General Partner is currently reviewing different alterna-
tives to improve property cash flow and reduce operating deficits.
Also, the management agent was replaced in the summer of 1997
so as to implement a new strategy for increasing property per-
formance.
The Local Partnerships have generated net operating income be-
fore debt service and depreciation of $1,588,000 and $2,476,000 for
the nine months ended December 31, 1999 and 1998, respectively.
Debt service payments (principal and interest) made during the
same periods were $3,430,000 and $3,566,000, respectively.
Results of Operations
The operating results of the Local Partnerships consolidated
herein are for the three and nine month periods ended September
30. Information disclosed below with respect to each Local Part-
nership is consistent with this method of presentation.
Rental income decreased approximately $417,000 and $686,000 for
the three and nine months ended December 31, 1999 as compared
to the corresponding periods in 1998, primarily due to a decrease
in occupancy at Summer Creek Villas due to an increase in evic-
tions necessary to stabilize the tenant profile.
Other income decreased approximately $44,000 and $128,000 for
the three and nine months ended December 31, 1999 as compared
to the corresponding periods in 1998 due to a decrease in applica-
tion fees, termination fees and tenant damage fees received at
Summer Creek Villas.
Repairs and maintenance increased approximately $122,000 and
$156,000 for the three and nine months ended December 31, 1999
as compared to the corresponding periods in 1998 primarily due
to the rehabilitation of apartments at Summer Creek Villas and
Hubbard's Ridge.
General and administrative decreased approximately $73,000 and
$189,00 for the three and nine months ended December 31, 1999 as
compared to the corresponding periods in 1998 primarily due to
decreases in administrative salaries, advertising, legal fees and
management fees incurred in 1999 at Summer Creek Villas and
decrease in legal fees at the Partnership level.
Property management fees decreased approximately $13,000 and
$20,000 for the three and nine months ended December 31, 1999 as
compared to the corresponding periods in 1998 primarily due to
the change in the management agent at Summer Creek Villas.
<TABLE>
Property Information
Occupancies at the Local Partnerships were as follows:
<CAPTION>
September 30,
1999 1998
<S> <C> <C>
Property
Hubbard's Ridge 94% 92%
Cutler Canal II 99 95
Diamond Street 92 98
Papillion Heights 90 94
Hill Top Homes 92 92
Summer Creek Villas 58 91
Brookland Park Plaza 100 96
Compton Townhouses 100 97
</TABLE>
(Occupancies are calculated by dividing occupied units by total
available units.)
The Partnership holds a 66.5% interest in Summer Creek Villas, a
98% interest in Hubbard's Ridge, Hill Top Homes and Compton
Townhouses and a 98.99% interest in Cutler Canal II, Diamond
Street, Papillion Heights and Brookland Park Plaza. Summer
Creek Villas experienced a 33% decrease in occupancy rate for the
nine month period ended September 30, 1999 as compared with
the corresponding period in 1998. This decrease was primarily
due to an increase in evictions necessary to stabilize the tenant
profile of the property. Other than Summer Creek Villas, none of
the above properties experienced significant decreases in occu-
pancy rates.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
None
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings - None
Item 2. Changes in Securities - None
Item 3. Defaults Upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders - None
Item 5. Other Information - None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Description:
Agreement of Limited Partnership as adopted on
May 3, 1989 and Amendments thereto dated May 25, 1989 and
June 21, 1989 (1)
Form of Amended and Restated Agreement of Lim-
ited Partnership (included in Prospectus as Exhibit A)(2)
Form of Purchase and Sale Agreement pertaining to
the Partnership's Acquisition of Local Partnership Interests (2)
Form of Amended and Restated Agreement of Local
Limited Partnership of Local Partnerships (2)
Amendment to Certificate of Limited Partnership
dated October 1, 1997 (3)
Amendment Number 1 to Prudential-Bache Tax
Credit Properties L.P. Amended and Restated Agreement of Lim-
ited Partnership, dated October 1, 1997 (3)
Financial Data Schedule (filed herewith).
(1) Filed as a exhibit to Pre-Effective Amendment
No. 1 to Form S-11 Registration Statement (No. 33-28571) (the
"Registration Statement") and incorporated herein by reference.
(2) Filed as an exhibit to Pre-Effective Amendment
No. 2 to Form S-11 Registration Statement and incorporated
herein by reference.
(3) Filed as an exhibit to Registrant's Current Report
on Form 8-K dated October 1, 1997 and incorporated herein by
reference.
(b) Reports on Form 8-K - No reports on form 8-K were
filed during the quarter.
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
PATRIOT TAX CREDIT PROPERTIES L.P.
(Registrant)
By: RCC PARTNERS 96, L.L.C.,
General Partner
Date: February 7, 2000
By: /s/ Alan P. Hirmes
Alan P. Hirmes
Senior Vice President and
Chief Financial Officer
Date: February 7, 2000
By: /s/ Glenn F. Hopps
Glenn F. Hopps
Treasurer and
Chief Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The Schedule contains summary financial information extracted
from the financial statements for Patriot Tax Credit Properties L.P.
and is qualified in its entirety by reference to such financial state-
ments
</LEGEND>
<CIK> 0000850184
<NAME> Patriot Tax Credit Properties L.P.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-START> APR-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 2,341,081
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 241,927
<PP&E> 79,580,773
<DEPRECIATION> (19,216,026)
<TOTAL-ASSETS> 65,330,983
<CURRENT-LIABILITIES> 12,192,432
<BONDS> 44,719,366
0
0
<COMMON> 0
<OTHER-SE> 8,419,185
<TOTAL-LIABILITY-AND-EQUITY> 65,330,983
<SALES> 0
<TOTAL-REVENUES> 5,929,697
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 6,506,669
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,143,338
<INCOME-PRETAX> (2,821,087)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 605,358
<CHANGES> 0
<NET-INCOME> (2,215,729)
<EPS-BASIC> (57.83)
<EPS-DILUTED> 0
</TABLE>
