FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(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, 1996
------------------
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from -------- to --------
Commission file number 0-19443
-----------------------------------------
BOSTON CAPITAL TAX CREDIT FUND II LIMITED PARTNERSHIP
- -----------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 04-3066791
- -------------------------------- -----------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Boston Place, Suite 2100, Boston, Massachusetts 02108
- -----------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 624-8900
--------------
- -----------------------------------------------------------------
(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
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2)has been subject to such filing
requirements for the past 90 days.
Yes X No
------ ------
<PAGE>
BOSTON CAPITAL TAX CREDIT FUND II LIMITED PARTNERSHIP
-----------------------------------------------------
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED DECEMBER 31, 1996
-----------------------------------------------
TABLE OF CONTENTS
-----------------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements..............................
Balance Sheets....................................
Statements of Operations..........................
Statement of Changes in Partners' Capital.........
Statements of Cash Flows..........................
Notes to Financial Statements.....................
Item 2. Management's Discussion and Analysis of
Financial Condition and Results
of Operations.....................................
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K..................
Signatures........................................
<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
BALANCE SHEETS
December 31, March 31,
1996 1996
(Unaudited) (Audited)
------------ ------------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $69,204,902 $80,065,183
OTHER ASSETS
Cash and cash equivalents 1,550,778 1,862,286
Notes Receivable 578,078 1,168,584
Deferred acquisition costs (Note B) 1,250,463 1,286,884
Organization costs, net of accumulated
amortization (Note B) - 9,828
Other assets 678,225 1,093,447
---------- ---------
$73,262,446 $85,486,212
========== ==========
LIABILITIES
Accounts payable & accrued
expenses $ 16,041 $ 14,877
Accounts Payable - affiliates (Note C) 11,026,650 9,118,716
Capital Contributions payable (Note D) 665,590 1,920,536
---------- ----------
11,708,281 11,054,129
---------- ----------
PARTNERS' CAPITAL
Limited Partners
Units of limited partnership interest,
$10 stated value per BAC; 20,000,000
authorized BACs, 18,679,738 issued and
outstanding 62,555,338 75,304,476
General Partner (1,001,173) (872,393)
---------- ----------
61,554,165 74,432,083
---------- ----------
$73,262,446 $85,486,212
========== ==========
The accompanying notes are an integral part of these statements.
1<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
BALANCE SHEETS
SERIES 7
----------------------------
December 31, March 31,
1996 1996
(Unaudited) (Audited)
----------- ---------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $2,307,581 $2,897,708
OTHER ASSETS
Cash and cash equivalents 10,744 4,874
Notes receivable - -
Deferred acquisition costs (Note B) - -
organization costs, net of
accumulated amortization (Note B) - -
Other assets 16,450 16,450
--------- ---------
$2,334,775 $2,919,032
========= =========
LIABILITIES
Accounts payable and accrued
expenses $ - $ -
Accounts payable - affiliates (Note C) 701,531 590,023
Capital contributions payable (Note D) - -
--------- ---------
701,531 590,023
--------- ---------
PARTNERS' CAPITAL
Limited Partners
Units of limited partnership interest,
$10 stated value per BAC; 20,000,000
authorized BACs 1,036,100 and issued
outstanding 1,706,838 2,395,645
General Partner (73,594) (66,636)
--------- ---------
1,633,244 2,329,009
--------- ---------
$2,334,775 $2,919,032
========= =========
The accompanying notes are an integral part of these statements.
2<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
BALANCE SHEETS
SERIES 9
----------------------------
December 31, March 31,
1996 1996
ASSETS (Unaudited) (Audited)
----------- ---------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $12,812,093 $15,204,634
OTHER ASSETS
Cash and cash equivalents 563,460 658,264
Notes receivable - -
Deferred acquisition costs (Note B) 22,400 23,052
Organization costs, net of
accumulated amortization (Note B) - -
Other assets 12,351 12,351
---------- ----------
$13,410,304 $15,898,301
========== ==========
LIABILITIES
Accounts payable & accrued
expenses $ 1,166 $ -
Accounts payable - affiliates (Note C) 2,737,430 2,306,757
Capital contributions payable (Note D) 4,590 99,610
---------- ----------
2,743,186 2,406,367
---------- ----------
PARTNERS' CAPITAL
Limited Partners
Units of limited partnership interest,
$10 stated value per BAC; 20,000,000
authorized BACs, 4,178,029 and issued
outstanding 10,920,787 13,717,355
General Partner (253,669) (225,421)
---------- ----------
10,667,118 13,491,934
---------- ----------
$13,410,304 $15,898,301
========== ==========
The accompanying notes are an integral part of these statements.
3<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
BALANCE SHEETS
SERIES 10
----------------------------
December 31, March 31,
1996 1996
ASSETS (Unaudited) (Audited)
----------- ---------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $ 9,028,941 $10,398,970
OTHER ASSETS
Cash and cash equivalents 137,259 152,625
Notes receivable - -
Deferred acquisition costs (Note B) 88,616 91,197
Organization costs, net of
accumulated amortization (Note B) - -
Other assets 38,979 38,979
---------- ----------
$ 9,293,795 $10,681,771
========== ==========
LIABILITIES
Accounts payable & accrued
expenses $ - $ -
Accounts payable - affiliates (Note C) 1,895,088 1,628,452
Capital contributions payable (Note D) - -
---------- ----------
1,895,088 1,628,452
---------- ----------
PARTNERS' CAPITAL
Limited Partners
Units of limited partnership interest,
$10 stated value per BAC; 20,000,000
authorized BACs, 2,428,925 and issued
outstanding 7,535,533 9,173,599
General Partner (136,826) (120,280)
---------- ----------
7,398,707 9,053,319
---------- ----------
$ 9,293,795 $10,681,771
========== ==========
The accompanying notes are an integral part of these statements.
4<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
BALANCE SHEETS
SERIES 11
----------------------------
December 31, March 31,
1996 1996
(Unaudited) (Audited)
------------ ----------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $ 9,456,272 $10,593,335
OTHER ASSETS
Cash and cash equivalents 178,768 233,619
Notes receivable 34,494 -
Deferred acquisition costs (Note B) 44,916 46,224
Organization costs, net of
accumulated amortization (Note B) - -
Other assets 35,844 35,844
---------- ----------
$ 9,750,294 $10,909,022
========== ==========
LIABILITIES
Accounts payable & accrued
expenses $ - $ -
Accounts payable - affiliates (Note C) 1,218,652 974,392
Capital contributions payable (Note D) 27,528 27,528
---------- ----------
1,246,180 1,001,920
---------- ----------
PARTNERS' CAPITAL
Limited Partners
Units of limited partnership interest,
$10 stated value per BAC; 20,000,000
authorized BACs, 2,489,599 issued and
outstanding 8,633,758 10,022,716
General Partner (129,644) (115,614)
---------- ----------
8,504,114 9,907,102
---------- ----------
$ 9,750,294 $10,909,022
========== ==========
The accompanying notes are an integral part of these statements.
5<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
BALANCE SHEETS
SERIES 12
----------------------------
December 31, March 31,
1996 1996
(Unaudited) (Audited)
------------ ----------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $12,085,043 $13,899,593
OTHER ASSETS
Cash and cash equivalents 7,720 167,568
Notes receivable - -
Deferred acquisition costs (Note B) 342,908 352,896
Organization costs, net of
accumulated amortization (Note B) - -
Other assets 112,477 52,141
--------- ---------
$12,548,148 $14,472,198
========== ==========
LIABILITIES
Accounts payable & accrued
expenses $ - $ -
Accounts payable - affiliates (Note C) 1,532,569 1,245,117
Capital contributions payable (Note D) 11,405 87,835
---------- ----------
1,543,974 1,332,952
---------- ----------
PARTNERS' CAPITAL
Limited Partners
Units of limited partnership interest,
$10 stated value per BAC; 20,000,000
authorized BACs, 2,972,795 issued and
outstanding 11,151,391 13,265,112
General Partner (147,217) (125,866)
---------- ----------
11,004,174 13,139,246
---------- ----------
$12,548,148 $14,472,198
========== ==========
The accompanying notes are an integral part of these statements.
6<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
BALANCE SHEETS
SERIES 14
----------------------------
December 31, March 31,
1996 1996
(Unaudited) (Audited)
------------ ----------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $23,514,972 $27,070,943
OTHER ASSETS
Cash and cash equivalents 652,827 645,336
Notes receivable 543,584 1,168,584
Deferred acquisition costs (Note B) 751,623 773,515
Organization costs, net of
accumulated amortization (Note B) - 9,828
Other assets 462,124 937,682
---------- ----------
$25,925,130 $30,605,888
========== ==========
LIABILITIES
Accounts payable & accrued
expenses (Note C) $ 14,875 $ 14,877
Accounts payable - affiliates (Note C) 2,941 380 2,373,975
Capital contributions payable (Note D) 622,067 1,705,563
---------- ----------
3,578,322 4,094,415
---------- ----------
PARTNERS' CAPITAL
Limited Partners
Units of limited partnership interest,
$10 stated value per BAC; 20,000,000
authorized BACs, 5,574,290 issued and
outstanding 22,607,031 26,730,049
General Partner (260,223) (218,576)
---------- ----------
22,346,808 26,511,473
---------- ----------
$25,925,130 $30,605,888
========== ==========
The accompanying notes are an integral part of these statements.
7<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Three Months Ended December 31,
(Unaudited)
1996 1995
---- ----
Income
Interest income $ 113,383 $ 14,740
Miscellaneous income - -
---------- ----------
113,383 14,740
---------- ----------
Share of loss from Operating
Partnerships (3,301,770) (3,840,684)
---------- ----------
Expenses
Partnership management fees 597,694 599,442
Amortization 12,139 21,967
General and administrative expenses 38,084 54,614
---------- ----------
647,917 676,023
---------- ----------
NET LOSS $(3,836,304) $(4,501,967)
========== ==========
Net loss allocated to limited
partners $(3,797,941) $(4,456,947)
========== ==========
Net loss allocated to general partner $ (38,363) $ (45,020)
========== ==========
Net loss per BAC $ (1.26) $ (1.41)
========== ==========
The accompanying notes are an integral part of these statements.
8<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Three Months Ended December 31,
(Unaudited)
SERIES 7
-----------------------
1996 1995
---- ----
Income
Interest income $ 85 $ 23
Miscellaneous income - -
-------- --------
85 23
-------- --------
Share of loss from Operating
Partnerships (260,430) (298,769)
-------- --------
Expenses
Partnership management fees 27,837 28,287
Amortization - -
General and administrative expenses 1,438 2,268
-------- --------
29,275 30,555
-------- --------
NET LOSS $(289,620) $(329,301)
======== ========
Net loss allocated to limited
partners $(286,724) $(326,008)
======== ========
Net loss allocated to general partner $ (2,896) $ (3,293)
======== ========
Net loss per BAC $ (.28) $ (.31)
======== ========
The accompanying notes are an integral part of these statements.
9<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Three Months Ended December 31,
(Unaudited)
SERIES 9
----------------------
1996 1995
---- ----
Income
Interest income $ 4,215 $ 4,952
Miscellaneous income - -
--------- --------
4,215 4,952
--------- --------
Share of loss from Operating
Partnerships (762,767) (821,807)
--------- --------
Expenses
Partnership management fees 138,796 138,957
Amortization 217 217
General and administrative expenses 7,307 10,642
--------- --------
146,320 149,816
--------- --------
NET LOSS $ (904,872) $(966,671)
========= ========
Net loss allocated to limited partners $ (895,823) $(957,004)
========= ========
Net loss allocated to general partner $ (9,049) $ (9,667)
========= ========
Net loss per BAC $ (.21) $ (.22)
========= ========
The accompanying notes are an integral part of these statements.
10<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Three Months Ended December 31,
(Unaudited)
SERIES 10
----------------------
1996 1995
---- ----
Income
Interest income $ 900 $ 1,015
Miscellaneous income - -
-------- --------
900 1,015
-------- --------
Share of loss from Operating
Partnerships (463,031) (312,905)
-------- --------
Expenses
Partnership management fees 82,914 79,571
Amortization 860 860
General and administrative expenses 5,497 8,084
-------- --------
89,271 88,515
-------- --------
NET LOSS $(551,402) $(400,405)
======== ========
Net loss allocated to limited partner $(545,888) $(396,401)
======== ========
Net loss allocated to general partner $ (5,514) $ (4,004)
======== ========
Net loss per BAC $ (.22) $ (.16)
======== ========
The accompanying notes are an integral part of these statements.
11<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Three Months Ended December 31,
(Unaudited)
SERIES 11
----------------------
1996 1995
---- ----
Income
Interest income $ 1,107 $ 1,077
Miscellaneous income - -
-------- --------
1,107 1,077
-------- --------
Share of loss from Operating
Partnerships (239,771) (357,591)
-------- --------
Expenses
Partnership management fees 76,220 80,764
Amortization 436 436
General and administrative expenses 2,557 7,037
-------- --------
79,213 88,237
-------- --------
NET LOSS $(317,877) $(444,751)
======== ========
Net loss allocated to limited partner $(314,698) $(440,303)
======== ========
Net loss allocated to general partner $ (3,179) $ (4,448)
======== ========
Net loss per BAC $ (.12) $ (.18)
======== ========
The accompanying notes are an integral part of these statements.
12<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Three Months Ended December 31,
(Unaudited)
SERIES 12
----------------------
1996 1995
---- ----
Income
Interest income $ 306 $ 1,115
Miscellaneous income - -
-------- --------
306 1,115
-------- --------
Share of loss from Operating
Partnerships (658,404) (637,563)
-------- --------
Expenses
Partnership management fee 93,507 93,501
Amortization 3,329 3,329
General and administrative expenses 9,125 9,511
-------- --------
105,961 106,341
-------- --------
NET LOSS $(764,059) $(742,789)
======== ========
Net loss allocated to limited partner $(756,418) $(735,361)
======== ========
Net loss allocated to general partner $ (7,641) $ (7,428)
======== ========
Net loss per BAC $ (.25) $ (.25)
======== ========
The accompanying notes are an integral part of these statements.
13<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Three Months Ended December 31,
(Unaudited)
SERIES 14
----------------------
1996 1995
---- ----
Income
Interest income $ 106,770 $ 6,558
Miscellaneous income - -
--------- ---------
106,770 6,558
--------- ---------
Share of loss from Operating
Partnerships (917,367) (1,412,049)
--------- ---------
Expenses
Partnership management fees 178,420 178,362
Amortization 7,297 17,125
General and administrative expenses 12,160 17,072
--------- ---------
197,877 212,559
--------- ---------
NET LOSS $(1,008,474) $(1,618,050)
========= =========
Net loss allocated to limited partner $ (998,389) $(1,601,870)
========= =========
Net loss allocated to general partner $ (10,085) $ (16,180)
========= =========
Net loss per BAC $ (.18) $ (.29)
========= =========
The accompanying notes are an integral part of these statements.
14<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Nine Months Ended December 31,
(Unaudited)
1996 1995
---- ----
Income
Interest income $ 138,010 $ 51,635
Miscellaneous income - -
---------- ----------
138,010 51,635
---------- ----------
Share of loss from Operating
Partnerships (10,825,077) (11,236,217)
---------- ----------
Expenses
Partnership management fees 1,721,249 1,778,157
Amortization 46,249 87,863
General and administrative expenses 423,353 334,593
---------- ----------
2,190,851 2,200,613
---------- ----------
NET LOSS $(12,877,918) $(13,385,195)
========== ==========
Net loss allocated to limited
partners $(12,749,138) $(13,251,344)
========== ==========
Net loss allocated to general partner $ (128,780) $ (133,851)
========== ==========
Net loss per BAC $ (4.02) $ (4.15)
========== ==========
The accompanying notes are an integral part of these statements.
15<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Nine Months Ended December 31,
(Unaudited)
SERIES 7
-----------------------
1996 1995
---- ----
Income
Interest income $ 113 $ 186
Miscellaneous income - -
-------- --------
113 186
-------- --------
Share of loss from Operating
Partnerships (590,128) (758,429)
-------- --------
Expenses
Partnership management fees 81,411 80,463
Amortization - -
General and administrative expenses 24,339 24,242
-------- --------
105,750 104,705
-------- --------
NET LOSS $(695,765) $(862,948)
======== ========
Net loss allocated to limited
partners $(688,807) $(854,319)
======== ========
Net loss allocated to general partner $ (6,958) $ (8,629)
======== ========
Net loss per BAC $ (.66) $ (.82)
======== ========
The accompanying notes are an integral part of these statements.
16<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Nine Months Ended December 31,
(Unaudited)
SERIES 9
----------------------
1996 1995
---- ----
Income
Interest income $ 13,035 $ 19,482
Miscellaneous income - -
--------- ---------
13,035 19,482
--------- ---------
Share of loss from Operating
Partnerships (2,378,992) (2,329,865)
--------- ---------
Expenses
Partnership management fees 402,644 409,417
Amortization 652 652
General and administrative expenses 55,563 59,277
--------- ---------
458,859 469,346
--------- ---------
NET LOSS $(2,824,816) $(2,779,729)
========= =========
Net loss allocated to limited partners $(2,796,568) $(2,751,932)
========= =========
Net loss allocated to general partner $ (28,248) $ (27,797)
========= =========
Net loss per BAC $ (.67) $ (.66)
========= =========
The accompanying notes are an integral part of these statements.
17<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Nine Months Ended December 31,
(Unaudited)
SERIES 10
----------------------
1996 1995
---- ----
Income
Interest income $ 2,992 $ 3,422
Miscellaneous income - -
--------- ---------
2,992 3,422
--------- ---------
Share of loss from Operating
Partnerships (1,362,731) (1,069,355)
--------- ---------
Expenses
Partnership management fees 247,396 250,479
Amortization 2,581 9,547
General and administrative expenses 44,896 47,943
--------- ---------
294,873 307,969
--------- ---------
NET LOSS $(1,654,612) $(1,373,902)
========= =========
Net loss allocated to limited partner $(1,638,066) $(1,360,163)
========= =========
Net loss allocated to general partner $ (16,546) $ (13,739)
========= =========
Net loss per BAC $ (.67) $ (.56)
========= =========
The accompanying notes are an integral part of these statements.
18<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Nine Months Ended December 31,
(Unaudited)
SERIES 11
----------------------
1996 1995
---- ----
Income
Interest income $ 4,333 $ 3,471
Miscellaneous income - -
--------- ---------
4,333 3,471
--------- ---------
Share of loss from Operating
Partnerships (1,134,431) (1,227,190)
--------- ---------
Expenses
Partnership management fees 231,964 226,400
Amortization 1,308 9,673
General and administrative expenses 39,618 44,408
--------- ---------
272,890 280,481
--------- ---------
NET LOSS $(1,402,988) $(1,504,200)
========= =========
Net loss allocated to limited partner $(1,388,958) $(1,489,158)
========= =========
Net loss allocated to general partner $ (14,030) $ (15,042)
========= =========
Net loss per BAC $ (.56) $ (.60)
========= =========
The accompanying notes are an integral part of these statements.
19<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Nine Months Ended December 31,
(Unaudited)
SERIES 12
----------------------
1996 1995
---- ----
Income
Interest income $ 2,552 $ 3,709
Miscellaneous income - -
--------- ---------
2,552 3,709
--------- ---------
Share of loss from Operating
Partnerships (1,805,569) (1,550,967)
--------- ---------
Expenses
Partnership management fee 258,788 268,522
Amortization 9,988 16,615
General and administrative expenses 63,279 57,110
--------- ---------
332,055 342,247
--------- ---------
NET LOSS $(2,135,072) $(1,889,505)
========= =========
Net loss allocated to limited partner $(2,113,721) $(1,870,610)
========= =========
Net loss allocated to general partner $ (21,351) $ (18,895)
========= =========
Net loss per BAC $ (.71) $ (.63)
========= =========
The accompanying notes are an integral part of these statements.
20<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Nine Months Ended December 31,
(Unaudited)
SERIES 14
----------------------
1996 1995
---- ----
Income
Interest income $ 114,985 $ 21,365
Miscellaneous income - -
--------- ---------
114,985 21,365
--------- ---------
Share of loss from Operating
Partnerships (3,553,226) (4,300,411)
--------- ---------
Expenses
Partnership management fees 499,046 542,876
Amortization 31,720 51,376
General and administrative expenses 195,658 101,613
--------- ---------
726,424 695,865
--------- ---------
NET LOSS $(4,164,665) $(4,974,911)
========= =========
Net loss allocated to limited partner $(4,123,018) $(4,925,162)
========= =========
Net loss allocated to general partner $ (41,647) $ (49,749)
========= =========
Net loss per BAC $ (.74) $ (.88)
========= =========
The accompanying notes are an integral part of these statements.
21<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
Nine Months Ended December 31, 1996
(Unaudited)
General
Assignees Partner Total
--------- ------- -----
Partners' capital (deficit),
April 1, 1996 $ 75,304,476 $ (872,393) $74,432,083
Net loss (12,749,138) (128,780) (12,877,918)
---------- --------- ----------
Partners' capital (deficit),
December 31, 1996 $ 62,555,338 $(1,001,173) $61,554,165
========== ========= ==========
The accompanying notes are an integral part of these statements.
22<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
Nine Months Ended December 31, 1996
(Unaudited)
Limited General
Partners Partner Total
-------- ------- -----
Series 7
- --------
Partners' capital (deficit),
April 1, 1996 $ 2,395,645 $ (66,636) $ 2,329,009
Net loss (688,807) (6,958) (695,765)
--------- -------- ---------
Partners' capital (deficit),
December 31, 1996 $ 1,706,838 $ (73,594) $ 1,633,244
========= ======== =========
Series 9
- --------
Partners' capital (deficit),
April 1, 1996 $13,717,355 $(225,421) $13,491,934
Net loss (2,796,568) (28,248) (2,824,816)
---------- ------- ----------
Partners' capital (deficit),
December 31, 1996 $10,920,787 $(253,669) $10,667,118
========== ======= ==========
Series 10
- --------
Partners' capital (deficit),
April 1, 1996 $ 9,173,599 $(120,280) $ 9,053,319
Net loss (1,638,066) (16,546) (1,654,612)
---------- -------- ----------
Partners' capital (deficit),
December 31, 1996 $ 7,535,533 $(136,826) $ 7,398,707
========== ======== ==========
The accompanying notes are an integral part of these statements.
23<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
Nine Months Ended December 31, 1996
(Unaudited)
Limited General
Partners Partner Total
-------- ------- -----
Series 11
- --------
Partners' capital (deficit),
April 1, 1996 $10,022,716 $(115,614) $ 9,907,102
Net loss (1,388,958) (14,030) (1,402,988)
---------- -------- ----------
Partners' capital (deficit),
December 31, 1996 $ 8,633,758 $(129,644) $ 8,504,114
========== ======== ==========
Series 12
- --------
Partners' capital (deficit),
April 1, 1996 $13,265,112 $(125,866) $13,139,246
Net loss (2,113,721) (21,351) (2,135,072)
---------- -------- ----------
Partners' capital (deficit),
December 31, 1996 $11,151,391 $(147,217) $11,004,174
========== ======== ==========
Series 14
- --------
Partners' capital (deficit),
April 1, 1996 $26,730,049 $(218,576) $26,511,473
Net loss (4,123,018) (41,647) (4,164,665)
---------- -------- ----------
Partners' capital (deficit),
December 31, 1996 $22,607,031 $(260,223) $22,346,808
========== ======== ==========
The accompanying notes are an integral part of these statements.
24<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF CASH FLOWS
Nine Months Ended December 31,
(Unaudited)
1996 1995
---- ----
Cash flows from operating activities:
Net loss $(12,877,918) $(13,385,195)
Adjustments
Distributions from Operating
Partnerships 27,450 87,863
Amortization 46,249 50,184
Share of loss from Operating
Partnerships 10,825,077 11,236,217
Changes in assets and liabilities
Increase in accounts payable
and accrued expenses 1,909,098 1,732,855
Decrease (Increase) in prepaid
expenses - 426,043
Decrease (Increase) in other
assets 415,222 89,389
---------- ----------
Net cash (used in) provided by
operating activity 345,178 237,356
---------- ----------
Cash flows from investing activities:
Capital contributions paid to
Operating Partnerships (1,247,192) (685,021)
Advances (made to) repaid from
Operating Partnerships 590,506 (1,000)
---------- ----------
Net cash (used in) provided by
investing activities (656,686) (686,021)
---------- ----------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (311,508) (448,665)
Cash and cash equivalents, beginning 1,862,286 2,298,689
---------- ----------
Cash and cash equivalents, ending $ 1,550,778 $ 1,850,024
========== ==========
The accompanying notes are an integral part of these statements.
25<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF CASH FLOWS
Nine Months Ended December 31,
(Unaudited)
Series 7
-------------------------
1996 1995
---- ----
Cash flows from operating activities:
Net loss $(695,765) $ (862,948)
Adjustments
Distributions from Operating
Partnerships - 2,257
Amortization - -
Share of loss from Operating
Partnerships 590,128 758,429
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 111,507 93,457
Decrease (Increase) in prepaid
expenses - -
Decrease (Increase) in other
assets - -
-------- ---------
Net cash (used in) provided by
operating activities 5,870 (8,805)
-------- ---------
Cash flows from investing activities:
Capital contributions paid to
Operating Partnerships - -
Advances (made to) repaid from Operating
Partnerships - -
-------- ---------
Net cash (used in) provided by
investing activities - -
-------- ---------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 5,870 (8,805)
Cash and cash equivalents, beginning 4,874 14,044
-------- ---------
Cash and cash equivalents, ending $ 10,744 $ 5,239
======== =========
The accompanying notes are an integral part of these statements.
26<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF CASH FLOWS
Nine Months Ended December 31,
(Unaudited)
Series 9
-------------------------
1996 1995
---- ----
Cash flows from operating activities:
Net loss $(2,824,816) $(2,779,729)
Adjustments
Distributions from Operating
Partnerships 4,978 4,554
Amortization 652 652
Share of loss from Operating
Partnerships 2,378,992 2,329,865
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 431,838 427,207
Decrease (Increase) in prepaid
expenses - -
Decrease (Increase) in other
assets - 89,389
--------- ---------
Net cash (used in) provided by
operating activities (8,356) 71,938
--------- ---------
Cash flows from investing activities:
Capital contributions paid to
Operating Partnerships (86,448) (130,424)
Advances (made to) repaid from
Operating Partnerships - -
--------- ---------
Net cash (used in) provided by
investing activities (86,448) (130,424)
--------- ---------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (94,804) (58,486)
Cash and cash equivalents, beginning 658,264 712,489
--------- ---------
Cash and cash equivalents, ending $ 563,460 $ 654,003
========= =========
The accompanying notes are an integral part of these statements.
27
<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF CASH FLOWS
Nine Months Ended December 31,
(Unaudited)
Series 10
-------------------------
1996 1995
---- ----
Cash flows from operating activities:
Net loss $(1,654,612) $(1,373,902)
Adjustments
Distributions from Operating
Partnerships 7,298 947
Amortization 2,581 9,547
Share of loss from Operating
Partnerships 1,362,731 1,069,355
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 266,636 266,633
Decrease (Increase) in prepaid
expenses - -
Decrease (Increase) in other
assets - -
--------- ---------
Net cash (used in) provided by
operating activities (15,366) (27,420)
--------- ---------
Cash flows from investing activity:
Capital contributions paid to
Operating Partnerships - -
Advances (made to) repaid from
Operating Partnerships - -
--------- ---------
Net cash (used in) provided by
investing activities - -
--------- ---------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (15,366) (27,420)
Cash and cash equivalents, beginning 152,625 183,187
--------- ---------
Cash and cash equivalents, ending $ 137,259 $ 155,767
========= =========
The accompanying notes are an integral part of these statements.
28<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF CASH FLOWS
Nine Months Ended December 31,
(Unaudited)
Series 11
-------------------------
1996 1995
---- ----
Cash flows from operating activities:
Net loss $(1,402,988) $(1,504,200)
Adjustments
Distributions from Operating
Partnerships 2,632 40,407
Amortization 1,308 9,673
Share of loss from Operating
Partnerships 1,134,431 1,227,190
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 244,260 244,260
Decrease (Increase) in prepaid
expenses - -
Decrease (Increase) in other
assets - -
--------- ---------
Net cash (used in) provided by
operating activities (20,357) 17,330
--------- ---------
Cash flows from investing activities:
Capital contributions paid to
Operating Partnerships - -
Advances (made to) repaid from
Operating Partnerships (34,494) -
--------- ---------
Net cash (used in) provided by
investing activities (34,494) -
--------- ---------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (54,851) 17,330
Cash and cash equivalents, beginning 233,619 147,072
--------- ---------
Cash and cash equivalents, ending $ 178,768 $ 164,402
========= =========
The accompanying notes are an integral part of these statements.
29
<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF CASH FLOWS
Nine Months Ended December 31,
(Unaudited)
Series 12
-------------------------
1996 1995
---- ----
Cash flows from operating activities:
Net loss $(2,135,072) $(1,889,505)
Adjustments
Distributions from Operating
Partnerships 8,981 1,051
Amortization 9,988 16,615
Share of loss from Operating
Partnerships 1,805,569 1,550,967
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 287,452 287,451
Decrease (Increase) in prepaid
expenses - -
Decrease (Increase) in other
assets (60,336) -
--------- ---------
Net cash (used in) provided by
operating activities (83,418) (33,421)
--------- ---------
Cash flows from investing activity:
Capital contributions paid to
Operating Partnerships (76,430) -
Advances (made to) repaid from Operating
Partnerships - -
--------- ---------
Net cash (used in) provided by
investing activities (76,430) -
--------- ---------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (159,848) (33,421)
Cash and cash equivalents, beginning 167,568 195,421
--------- ---------
Cash and cash equivalents, ending $ 7,720 $ 162,000
========= =========
The accompanying notes are an integral part of these statements.
30<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF CASH FLOWS
Nine Months Ended December 31,
(Unaudited)
Series 14
-------------------------
1996 1995
---- ----
Cash flows from operating activities:
Net loss $(4,164,665) $(4,974,911)
Adjustments
Distributions from Operating
Partnerships 3,561 968
Amortization 31,720 51,376
Share of loss from Operating
Partnerships 3,553,226 4,300,411
Changes in assets and liabilities
Increase in accounts
payable affiliates and accrued exp. 567,405 839,890
Decrease (Increase) in prepaid
expenses - -
Decrease (Increase) in other
assets 475,558 -
---------- ---------
Net cash (used in) provided by
operating activities 466,805 217,734
---------- ---------
Cash flows from investing activity:
Capital contributions paid to
Operating Partnerships (1,084,314) (554,597)
Advances (made to) repaid from
Operating Partnerships 625,000 (1,000)
---------- ---------
Net cash (used in) provided by
investing activities (459,314) (555,597)
---------- ---------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 7,491 (337,863)
Cash and cash equivalents, beginning 645,336 1,046,476
---------- ---------
Cash and cash equivalents, ending $ 652,827 $ 708,613
========== =========
The accompanying notes are an integral part of these statements.
31
<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
(Unaudited)
NOTE A - ORGANIZATION
Boston Capital Tax Credit Fund II Limited Partnership (the "Partnership") was
formed under the laws of the State of Delaware as of June 28, 1989, for the
purpose of acquiring, holding, and disposing of limited partnership interests
in operating partnerships which will acquire, develop, rehabilitate, operate
and own newly constructed, existing or rehabilitated low-income apartment
complexes ("Operating Limited Partnerships"). The general partner of the
Partnership is Boston Capital Associates II Limited Partnership and the
limited partner is BCTC II Assignor Corp. (the "Assignor Limited Partner").
Pursuant to the Securities Act of 1933, the Partnership filed a Form S-11
Registration Statement with the Securities and Exchange Commission, effective
October 25, 1989, which covered the offering (the "Public Offering") of the
Partnership's beneficial assignee certificates ("BACs") representing
assignments of units of the beneficial interest of the limited partnership
interest of the Assignor Limited Partner. The Partnership registered
20,000,000 BACs at $10 per BAC for sale to the public in six series. The
Partnership sold 1,036,100 of Series 7 BACs, 4,178,029 of Series 9 BACs,
2,428,925 of Series 10 BACs, 2,489,599 of Series 11 BACs, 2,972,795 of Series
12 BACs, and 5,574,290 of Series 14 BACs. In 1991, when BACs were offered
and sold to certain residents of the Commonwealth of Pennsylvania, provisions
of Section 201 of the Pennsylvania Securities Act of 1972 relating to the
registration of securities may not have been complied with, in connection
with, the offer or sale of some of the securities. Accordingly the
Partnership offered to repurchase, at the investors option, these securities.
Three investors holding 6,100 BACs representing $61,000 accepted the
Partnership's offer to repurchase. In 1993 the Partnership repurchased the
BAC's with an effective date of December 31, 1992. The Partnership issued the
last BACs in Series 14 on January 27, 1992. This concluded the Public
Offering of the Partnership.
NOTE B - ACCOUNTING AND FINANCIAL REPORTING POLICIES
The condensed financial statements included herein as of December 31, 1996
and for the nine months then ended have been prepared by the Partnership,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. No BACs with respect to Series 8 and Series 13 were
offered. The Partnership accounts for its investments in Operating
Partnerships using the equity method, whereby the partnership adjusts its
investment cost for its share of each Operating Partnership's results of
operations and for any distributions received or accrued.
32
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31,1996
(Unaudited)
NOTE B - ACCOUNTING AND FINANCIAL REPORTING POLICIES - Continued
Costs incurred by the Partnership in acquiring the investments in Operating
Partnerships are capitalized to the investment account. The Partnership's
accounting and financial reporting policies are in conformity with generally
accepted accounting principles and include adjustments in interim periods
considered necessary for a fair presentation of the results of operations.
Such adjustments are of a normal recurring nature. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed
or omitted pursuant to such rules and regulations. It is suggested that
these condensed financial statements be read in conjunction with the
financial statements and the notes thereto included in the Partnership Annual
Report on Form 10-K.
On July 1, 1995, the Partnership began amortizing unallocated acquisition
costs over 330 months from April 1, 1995. As of December 31, 1996, the
Partnership has accumulated unallocated acquisition amortization totalling
$84,982. The breakdown of accumulated unallocated acquisition amortization
within the Partnership as of December 31, 1996 for Series 9, Series 10,
Series 11, Series 12, and Series 14 is $1,522, $6,022, $3,053, $23,304, and
$51,081, respectively.
NOTE C - RELATED PARTY TRANSACTIONS
The Partnership has entered into several transactions with various affiliates
of the general partner, including Boston Capital Partners, Inc., and Boston
Capital Asset Management Limited Partnership (formerly Boston Capital
Communications Limited Partnership) as follows:
An annual partnership management fee based on .5 percent of the aggregate
cost of all apartment complexes owned by the Operating Partnerships has been
accrued to Boston Capital Asset Management Limited Partnership (formerly
Boston Capital Communications Limited Partnership). The partnership
management fee accrued for the quarters ended December 31, 1996 and 1995 are
as follows:
33<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1996
(Unaudited)
NOTE C - RELATED PARTY TRANSACTIONS - Continued
1996 1995
-------- --------
Series 7 $ 28,287 $ 28,287
Series 9 143,946 142,607
Series 10 88,878 88,878
Series 11 81,420 81,420
Series 12 95,817 95,817
Series 14 189,135 189,255
------- -------
$627,483 $626,264
======= =======
Accounts payable - affilates at December 31, 1996 and 1995 represents
accrued general and adminstrative expenses and partnership management fees,
and advances from an affiliate of the general partner, which are payable to
Boston Capital Partners, Inc., and Boston Capital Communications Limited
Partnership (formerly Boston Capital Communications Limited Partnership).
As of December 31, 1996, an affiliate of the general partner has advanced
a total of $46,900 to the Partnership to pay certain operating expenses of one
of the series (Series 7). These advances are included in Accounts Payable -
Affiliates. These advances, and any additional advances, will be paid,
without interest, from available cash flow or the proceeds of sales or
refinancing of the Partnership's interests in Operating Partnerships.
34<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1996
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING LIMITED PARTNERSHIPS
At December 31, 1996 and 1995 the Partnership had limited partnership
interests in 310 Operating Partnerships which own apartment complexes. The
number of Operating Partnerships in which the Partnership had limited
partnership interests at December 31, 1996 and 1995 by series are as follows:
1996 1995
---- ----
Series 7 15 15
Series 9 55 55
Series 10 46 46
Series 11 40 40
Series 12 53 53
Series 14 101 101
--- ---
310 310
=== ===
Under the terms of the Partnership's investment in each Operating
Partnership, the Partnership is required to make capital contributions to the
Operating Partnerships. These contributions are payable in installments over
several years upon each Operating Partnership achieving specified levels of
construction and/or operations.
The contributions payable at December 31, 1996 and 1995 by series are as
follows:
1996 1995
---------- ----------
Series 7 $ - $ -
Series 9 4,590 99,610
Series 10 - 10,014
Series 11 27,528 27,528
Series 12 11,405 87,835
Series 14 622,067 1,787,274
--------- ---------
$ 665,590 $2,012,261
========= =========
The Partnership's fiscal year ends March 31 of each year, while all the
Operating Partnerships' fiscal years are the calendar year. Pursuant to the
provisions of each Operating Partnership Agreement, financial results for each
of the Operating Partnerships are provided to the Partnership within 45 days
after the close of each Operating Partnership's quarterly period.
Accordingly, the current financial results available for the Operating
Partnerships are for the nine months ended September 30, 1996.
35
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1996
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Nine months ended September 30,
(Unaudited)
Series 7
---------------------------
1996 1995
---- ----
Revenues
Rental $ 1,589,123 $ 2,030,730
Interest and other 194,127 204,977
--------- ---------
1,783,250 2,235,707
--------- ---------
Expenses
Interest 736,939 959,710
Depreciation and amortization 759,294 924,653
Operating expenses 1,080,056 1,193,831
--------- ---------
2,576,289 3,078,194
--------- ---------
NET LOSS $ (793,039) $ (842,487)
========= =========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $ (590,128) $ (758,429)
========= =========
Net loss allocated to other partners $ (7,930) $ (8,425)
========= ========
Net loss suspended $ (194,981) $ (75,633)
========= ========
The variance in allowable loss from the Operating Partnerships for the nine
months ended September 30, 1996 and 1995 is mainly a result of the way the
Partnership accounts for its investment in Operating Partnerships. The
Partnership accounts for its investments using the equity method of
accounting. Under the equity method of accounting, the partnership adjusts
its investment cost for its share of each Operating Partnership's results of
operations and for any distributions received or accrued. However, the
Partnership recognizes individual operating losses only to the extent of
capital contributions. Excess losses are suspended for use in future years to
offset excess income.
36<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1996
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Nine months ended September 30,
(Unaudited)
Series 9
--------------------------
1996 1995
----- -----
Revenues
Rental $ 7,259,297 $ 7,175,239
Interest and other 409,417 488,547
---------- ----------
7,668,714 7,663,786
---------- ----------
Expenses
Interest 2,718,490 2,963,728
Depreciation and amortization 2,936,142 2,995,554
Operating expenses 4,819,425 4,073,894
---------- ----------
10,474,057 10,033,176
---------- ----------
NET LOSS $(2,805,343) $(2,369,390)
========== ==========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $(2,378,992) $(2,329,865)
========== ==========
Net loss allocated to other partners $ (28,053) $ (23,694)
========= ==========
Net loss suspended $ (398,298) $ (15,831)
========= ==========
The variance in allowable loss from the Operating Partnerships for the nine
months ended September 30, 1996 and 1995 is mainly a result of the way the
Partnership accounts for its investment in Operating Partnerships. The
Partnership accounts for its investments using the equity method of
accounting. Under the equity method of accounting, the partnership adjusts
its investment cost for its share of each Operating Partnership's results of
operations and for an distributions received or accrued. However, the
Partnership recognizes individual operating losses only to the extent of
capital contributions. Excess losses are suspended for use in future years to
offset excess income.
37
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1996
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Nine Months ended September 30,
(Unaudited)
Series 10
--------------------------
1996 1995
Revenues ---- ----
Rental $ 5,511,545 $ 5,557,951
Interest and other 227,750 323,186
---------- ----------
5,739,295 5,881,137
---------- ----------
Expenses
Interest 2,157,313 2,072,483
Depreciation and amortization 1,940,147 1,903,125
Operating expenses 3,272,904 3,061,962
---------- ----------
7,370,364 7,037,570
---------- ----------
NET LOSS $(1,631,069) $(1,156,433)
========== ==========
Net loss allocated to Boston
Capital Tax Credit Fund
Limited Partnership II $(1,362,731) $(1,069,355)
========== ==========
Net loss allocated to other partners $ (16,311) $ (11,564)
========== ==========
Net loss suspended $ (252,027) $ (75,514)
========== ==========
The variance in allowable loss from the Operating Partnerships for the nine
months ended September 30, 1996 and 1995 is mainly a result of the way the
Partnership accounts for its investment in Operating Partnerships. The
Partnership accounts for its investments using the equity method of
accounting. Under the equity method of accounting, the partnership adjusts
its investment cost for its share of each Operating Partnership's results of
operations and for any distributions received or accrued. However, the
Partnership recognizes individual operating losses only to the extent of
capital contributions. Excess losses are suspended for use in future years to
offset excess income.
38
<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1996
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Nine months ended September 30,
(Unaudited)
Series 11
----------------------------
1996 1995
Revenues ---- ----
Rental $ 4,724,532 $ 4,768,206
Interest and other 214,690 390,064
---------- ----------
4,939,222 5,158,270
---------- ----------
Expenses
Interest 1,571,598 1,812,328
Depreciation and amortization 1,908,600 1,973,129
Operating expenses 2,767,002 2,612,399
---------- ----------
6,247,200 6,397,856
---------- ----------
NET LOSS $(1,307,978) $(1,239,586)
========== ==========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $(1,134,431) $(1,227,190)
========== ==========
Net loss allocated to other partners $ (13,080) $ (12,396)
========== ==========
Net loss suspended $ (160,467) $ -
========== ==========
The variance in allowable loss from the Operating Partnerships for the nine
months ended September 30, 1996 is mainly a result of the way the Partnership
accounts for its investment in Operating Partnerships. The Partnership
accounts for its investments using the equity method of accounting. Under the
equity method of accounting, the partnership adjusts its investment cost for
its share of each Operating Partnership's results of operations and for any
distributions received or accrued. However, the Partnership recognizes
individual operating losses only to the extent of capital contributions.
Excess losses are suspended for use in future years to offset excess income.
39<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1996
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Nine months ended September 30,
(Unaudited)
Series 12
--------------------------
1996 1995
Revenues ---- ----
Rental $ 5,049,373 $ 5,039,012
Interest and other 191,503 271,735
--------- ---------
5,240,876 5,310,747
--------- ---------
Expenses
Interest 1,957,004 1,998,116
Depreciation and amortization 2,133,854 2,089,662
Operating expenses 3,037,220 2,789,601
--------- ---------
7,128,078 6,877,379
--------- ---------
NET LOSS $(1,887,202) $(1,566,632)
========= =========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $(1,805,569) $(1,550,967)
========= =========
Net loss allocated to other partners $ (18,872) $ (15,665)
========= =========
Net loss suspended $ (62,761) $ -
========= =========
The variance in allowable loss from the Operating Partnerships for the nine
months ended September 30, 1996 is mainly a result of the way the Partnership
accounts for its investment in Operating Partnerships. The Partnership
accounts for its investments using the equity method of accounting. Under the
equity method of accounting, the partnership adjusts its investment cost for
its share of each Operating Partnership's results of operations and for any
distributions received or accrued. However, the Partnership recognizes
individual operating losses only to the extent of capital contributions.
Excess losses are suspended for use in future years to offset excess income.
40<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1996
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Nine months ended September 30,
(Unaudited)
Series 14
--------------------------
1996 1995
Revenues ---- ----
Rental $11,404,165 $10,649,357
Interest and other 468,276 450,636
---------- ----------
11,872,441 11,099,993
---------- ----------
Expenses
Interest 4,294,166 4,493,036
Depreciation and amortization 4,364,980 4,311,411
Operating expenses 6,843,537 6,667,506
---------- ----------
15,502,683 15,471,953
---------- ----------
NET LOSS $(3,630,242) $(4,371,960)
========== ==========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $(3,553,226) $(4,300,411)
========== ==========
Net loss allocated to other partners $ (36,302) $ (43,720)
========== ==========
Net loss suspended $ (40,714) $ (27,829)
========== ==========
The variance in allowable loss from the Operating Partnerships for the nine
months ended September 30, 1996 and 1995 is mainly a result of the way the
Partnership accounts for its investment in Operating Partnerships. The
Partnership accounts for its investments using the equity method of
accounting. Under the equity method of accounting, the partnership adjusts
its investment cost for its share of each Operating Partnership's results of
operations and for any distributions received or accrued. However, the
Partnership recognizes individual operating losses only to the extent of
capital contributions. Excess losses are suspended for use in future years to
offset excess income.
41<PAGE>
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1996
(Unaudited)
NOTE E - TAXABLE LOSS
The Partnership's taxable loss for the fiscal year ended March 31, 1997 is
expected to differ from its loss for financial reporting purposes primarily
due to accounting differences in depreciation incurred by the Operating
Partnerships. No provision or benefit for income taxes has been included in
these financial statements since taxable income or loss passes through to, and
is reportable by, the partners and assignees individually.
42<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity
- ---------
The Partnership's primary source of funds was the proceeds of its Public
Offering. Other sources of liquidity include (i) interest earned on capital
contributions unpaid as of December 31, 1996 or on working capital reserves
and (ii) cash distributions from operations of the Operating Partnerships in
which the Partnership has invested in. These sources of liquidity, along with
the Partnerships working capital reserve, are available to meet the
obligations of the Partnership. The Partnership does not anticipate
significant cash distributions from operations of the Operating Partnerships.
The Partnership is currently accruing the annual partnership management fee.
Pursuant to the Partnership Agreement, such liabilities will be deferred until
the Partnership receives sales or refinancing proceeds from Operating
Partnerships, and at that time proceeds from such sales or refinancing will be
used to satisfy such liabilities. The Partnership anticipates that there
will be sufficient cash to meet future third party obligations.
An affiliate of the general partner has advanced $46,900 to the Partnership to
pay certain third party operating expenses. This amount has been advanced
solely to Series 7. These and any additional advances will be paid, without
interest, from available cash flow, reporting fees, or the proceeds of the
sales of refinancing of the Partnership's interest in Operating Partnerships.
The Partnership anticipates that as the Operating Partnerships continue to
mature, more cash flow and reporting fees will be generated. Cash flow and
reporting fees will be added to the Partnership's working capital and will be
available to meet future third party obligations of the Partnership. The
Partnership is currently pursuing, and will continue to pursue, available cash
flow and reporting fees and anticipates that the amount collected will be
sufficient to cover third party operating expenses.
For the quarter ended December 31, 1996, the Partnership earned $138,010 in
interest, the majority of which was earned as tax exempt interest in an escrow
account holding capital contributions due to the Operating Partnership
Lexington Park Associates Limited Partnership. During the quarter ended
December 31, 1996, the portion of funds in the escrow account that represented
a credit adjuster, plus accrued interest, was returned to the Partnership. As
of December 31, 1996, a portion of the capital contributions still remained in
the escrow account on behalf of the Operating Partnership. Per the Escrow
Agreement, the interest earned on the escrowed funds is due to the
Partnership.
Capital Resources
- -----------------
The Partnership offered BACs in a Public offering declared effective by the
Securities and Exchange Commission on October 25, 1989. The Partnership
43
received and accepted subscriptions for $186,337,017 representing 18,679,738
BACs from investors admitted as BAC Holders in Series 7 through Series 14
of the Partnership.
(Series 7) The Partnership commenced offering BACs in Series 7 on November
14, 1989. Offers and sales of BACs in Series 7 totaled $10,361,000 and were
completed on December 29, 1989. The Partnership had committed proceeds to pay
initial and additional installments of capital contributions to 15 Operating
Partnerships in the amount of $7,547,852.
As of December 31, 1996, Series 7 had paid all installments of capital
contributions to the Operating Partnerships.
(Series 8) No BACs with respect to Series 8 were offered.
(Series 9) The Partnership commenced offering BACs in Series 9 on February 1,
1990. Offers and sales of BACs in Series 9 totaled $41,574,018 and were
completed on May 4, 1990. The Partnership had committed proceeds to pay
initial and additional installments of capital contributions to 55 Operating
Partnerships in the amount of $30,128,943.
During the quarter ended December 31, 1996, none of Series 9 net offering
proceeds had been used to pay capital contributions. Series 9 net offering
proceeds in the amount of $4,590 remain to be used by the Partnership to pay
additional installments of capital contributions to the Operating
Partnerships.
(Series 10) The Partnership commenced offering BACs in Series 10 on May 10,
1990. Offers and sales of BACs in Series 10 totaled $24,288,997 and were
completed on August 24, 1990. The Partnership had committed proceeds to pay
initial and additional installments of capital contributions to 46 Operating
Partnerships in the amount of $17,685,147.
As of December 31,1996, Series 10 had paid all installments of capital
contributions to the Operating Partnerships.
(Series 11) The Partnership commenced offering BACs in Series 11 on September
17, 1990. Offers and sales of BACs in Series 11 totaled $24,735,002 and were
completed on December 27, 1990. The Partnership had committed proceeds to pay
initial and additional installments of capital contributions to 40 Operating
Partnerships in the amount of $17,849,548.
During the quarter ended December 31, 1996, none of Series 11 net proceeds
had been used to pay capital contributions. Series 11 net offering proceeds
in the amount of $27,528 remain to be used by the Partnership to pay remaining
capital contributions to the Operating Partnerships.
(Series 12) The Partnership commenced offering BACs in Series 12 on January
29, 1991. Offers and sales of BACs in Series 12 totaled $29,710,003 and were
completed on April 30, 1991. The Partnership had committed proceeds to pay
44
initial and additional installments of capital contributions to 53 Operating
Partnerships in the amount of $21,654,977.
During the quarter ended December 31, 1996, none of Series 12 net offering
proceeds had been used to pay capital contributions. Series 12 net offering
proceeds in the amount of $11,405 remain to be used by the Partnership to pay
remaining capital contributions to the Operating Partnerships.
(Series 13) No BACs with respect to Series 13 were offered.
(Series 14) The Partnership commenced offering BACs in Series 14 on May 20,
1991. Offers and sales of BACs in Series 14 totaled $55,728,997 and were
completed on January 27, 1992. The Partnership had committed proceeds to pay
initial and additional installments of capital contributions to 101 Operating
Partnerships in the amount of $40,673,736.
During the quarter ended December 31, 1996, none Series 14 net offering
proceeds had been used to pay capital contributions. Series 14 net offering
proceeds in the amount of $622,067 remain to be used by the Partnership to pay
remaining capital contributions to the Operating Partnerships.
Results of Operations
- ---------------------
As of December 31, 1996 and 1995 the Partnership held limited partnership
interests in 310 Operating Partnerships. In each instance the Apartment
Complex owned by the applicable Operating Partnership is eligible for the
Federal Housing Tax Credit. Occupancy of a unit in each Apartment Complex
which initially complied with the Minimum Set-Aside Test (i.e., occupancy by
tenants with incomes equal to no more than a certain percentage of area median
income) and the Rent Restriction Test (i.e., gross rent charged tenants does
not exceed 30% of the applicable income standards) is referred to hereinafter
as "Qualified Occupancy." Each of the Operating Partnerships and each of the
respective Apartment Complexes are described more fully in the Prospectus or
applicable report on Form 8-K. The General Partner believes that there is
adequate casualty insurance on the properties.
The Partnership incurs a partnership management fee to Boston Capital
Asset Management Limited Partnership (formerly Boston Capital Communications
Communications Limited Partnership) in an amount equal to 0.5% of the
aggregate cost of the apartment complexes owned by the Operating Partnerships,
less the amount of certain asset management and reporting fees paid by the
Operating Partnerships. The annual partnership management fee is currently
being accrued. It is anticipated that all outstanding fees will be repaid
from the sale or refinancing proceeds. The partnership management fee
incurred for the quarters ended December 31, 1996 and 1995 were $597,694 and
$599,442, respectively. The amount is anticipated to decrease in subsequent
future periods as the Operating Partnerships begin to pay annual asset
management and reporting fees to the partnership.
45
The Partnership's investment objectives do not include receipt of significant
cash distributions from the Operating Partnerships in which it has invested or
intends to invest. The Partnership's investments in Operating Partnerships
have been and will be made principally with a view towards realization of
Federal Housing Tax Credits for allocation to its partners and BAC holders.
The General Partner and it's affiliate, Boston Capital Asset Management
Limited Partnership, monitors the operations of all the properties in the
Partnership. The Operating Partnerships that are mentioned in the following
discussion of each series' results of operations are being closely monitored
so as to improve the overall results of each series' operations.
(Series 7) As of December 31, 1996 and 1995, the average Qualified Occupancy
for the series was 100% for both years. The series had a total of 15
properties at December 31, 1996.
For the nine months being reported the series reflects a net loss from the
Operating Partnerships of $793,039. When adjusted for depreciation, which is a
non-cash item, the Operating Partnerships reflect a net loss of $33,745. This
is an interim period estimate; it is not necessarily indicative of the final
year end results.
(Series 9) As of December 31, 1996 and 1995, the average Qualified
Occupancy for the series was 99.8 and 99.7%, respectively. The series had a
total of 55 properties at December 31, 1996. Out of the total, 52 were at
100% Qualified Occupancy.
For the nine months being reported the series reflects a net loss from the
Operating Partnerships of $2,805,343. When adjusted for depreciation, which is
a non-cash item, the Operating Partnerships reflect positive operations of
$130,799. This is an interim period estimate; it is not necessarily
indicative of the final year end results.
(Series 10) As of December 31, 1996 and 1995, the average Qualified
Occupancy for the series was 99.8% and 99.7%, respectively. The series had a
total of 46 properties at December 31, 1996, 44 of which were at 100%
Qualified Occupancy.
For the nine months being reported the series reflects a net loss from the
Operating Partnerships of $1,631,069. When adjusted for depreciation which is
a non-cash item, the Operating Partnerships reflect positive operations of
$309,078. This is an interim period estimate; it is not necessarily
indicative of the final year end results.
(Series 11) As of December 31, 1996 and 1995, the average Qualified
Occupancy for the series was 100% for both years. The series had a total of 40
properties at December 31, 1996.
46
For the nine months being reported the series reflects a net loss from the
Operating Partnerships of $1,307,978. When adjusted for depreciation, which is
a non-cash item, the Operating Partnerships reflect positive operations of
$600,622. This is an interim period estimate; it is not necessarily
indicative of the final year end results.
(Series 12) As of December 31, 1996 and 1995, the average Qualified
Occupancy for the series was 100% and 99.9%, respectively. The series had a
total of 53 properties at December 31, 1996.
For the nine months being reported the series reflects a net loss from the
Operating Partnerships of $1,887,202. When adjusted for depreciation, which is
a non-cash item, the Operating Partnerships reflect positive operations of
$246,652. This is an interim period estimate; it is not necessarily
indicative of the final year end results.
California Investors VII Limited Partnership was operating at a deficit due to
higher than projected operating expenses. Operating shortfalls caused the
accrual of accounts payable. The Operating Partnership closed on a debt
refinancing in the fourth quarter of 1996. The favorable interest rate
enabled the Operating Partnership to payoff the accrued accounts payable and
reduced the monthly debt payment. The refinancing should also create
increased operating stability for the Operating Partnership.
During 1996, the Operating General Partner of Brandywood Limited Partnership
experienced financial difficulties. Shortly thereafter, the Operating General
Partner and its affiliated management company were replaced. The new Operating
General Partner and management company, together, have improved the occupancy
of the property, which is currently at 89%. Additionally, negotiations are
underway with the permanent mortgage lender to restructure the debt service in
order to improve the financial feasibility of the property.
(Series 14) As of December 31, 1996 and 1995, the average Qualified
Occupancy for the series was 99.9% and 99.8%, respectively. The series had a
total of 101 properties at December 31, 1996, 98 of which were at 100%
Qualified Occupancy.
For the nine months being reported the series reflects a net loss from the
Operating Partnerships of $3,630,242. When adjusted for depreciation, which is
a non-cash item, the Operating Partnerships reflect positive operations of
$734,738. This is an interim period estimate; it is not necessarily
indicative of the final year end results.
During the quarter ended December 31, 1996, Series 14 earned $114,985 in
interest, the majority of which was earned as tax exempt interest in an escrow
account holding capital contributions due to the Operating Partnership
Lexington Park Associates Limited Partnership. During the quarter ended
December 31, 1996, the portion of funds in the escrow account that represented
a credit adjuster, plus accrued interest, was returned to the Partnership. As
of December 31, 1996, a portion of the capital contributions still remained in
47
the escrow account on behalf of the Operating Partnership. Per the Escrow
Agreement, the interest earned on the escrowed funds is due to the
Partnership.
California Investors VII Limited Partnership was operating at a deficit due to
higher than projected operating expenses. Operating shortgalls caused the
accrual of accounts payable. The Operating Partnership closed on a debt
refinancing in the fourth quarter of 1996. The favorable interest rate
enabled the Operating Partnership to payoff the accrued accounts payable and
reduced the monthly debt payment. The refinancing should also create
increased operating stbility for the Operating Partnership.
48<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
None
(b) Reports on Form 8-K
None
49<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 hereunto duly authorized.
BOSTON CAPITAL TAX CREDIT
FUND II LIMITED PARTNERSHIP
By: Boston Capital Associates II Limited
Partnership
By: C&M Associates d/b/a
Boston Capital Associates
Date: February 18, 1997 By: /s/ John P. Manning
-------------------
John P. Manning,
Partner & Principal Financial
Officer
50
<PAGE>
<PAGE>
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<NAME> BOSTON CAPITAL TAX CREDIT FUND II LIMITED PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> APR-01-1996
<PERIOD-END> MAR-31-1997
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