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 June 30, 1997
------------------
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
------ ------
BOSTON CAPITAL TAX CREDIT FUND II LIMITED PARTNERSHIP
-----------------------------------------------------
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1997
-----------------------------------------------
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........................................
Boston Capital Tax Credit Fund II Limited Partnership
BALANCE SHEETS
June 30, March 31,
1997 1997
(Unaudited) (Audited)
------------ ------------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $ 66,061,262 $ 69,472,764
OTHER ASSETS
Cash and cash equivalents 1,721,144 1,725,325
Notes Receivable 556,415 603,920
Deferred acquisition costs (Note B) 1,226,182 1,238,321
Organization costs, net of accumulated
amortization (Note B) - -
Other assets 390,050 342,545
---------- ----------
$ 69,955,053 $ 73,382,875
========== ==========
LIABILITIES
Accounts payable & accrued
expenses $ - $ -
Accounts Payable - affiliates (Note C) 12,282,617 11,654,634
Capital Contributions payable (Note D) 374,098 387,098
---------- ----------
12,656,715 12,041,732
---------- ----------
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 58,342,068 62,344,445
General Partner (1,043,730) (1,003,302)
---------- ----------
57,298,338 61,341,143
---------- ----------
$ 69,955,053 $ 73,382,875
========== ==========
The accompanying notes are an integral part of these statements.
1
Boston Capital Tax Credit Fund II Limited Partnership
BALANCE SHEETS
SERIES 7
----------------------------
June 30, March 31,
1997 1997
(Unaudited) (Audited)
----------- ---------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $1,616,425 $1,771,367
OTHER ASSETS
Cash and cash equivalents 9,711 12,008
Notes receivable - -
Deferred acquisition costs (Note B) - -
Organization costs, net of
accumulated amortization (Note B) - -
Other assets 16,450 16,450
--------- ---------
$1,642,586 $1,799,825
========= =========
LIABILITIES
Accounts payable and accrued
expenses $ - $ -
Accounts payable - affiliates (Note C) 759,113 730,326
Capital contributions payable (Note D) - -
--------- ---------
759,113 730,326
--------- ---------
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 964,564 1,148,730
General Partner (81,091) (79,231)
--------- ---------
883,473 1,069,499
--------- ---------
$1,642,586 $1,799,825
========= =========
The accompanying notes are an integral part of these statements.
2
Boston Capital Tax Credit Fund II Limited Partnership
BALANCE SHEETS
SERIES 9
----------------------------
June 30, March 31,
1997 1997
ASSETS (Unaudited) (Audited)
----------- ---------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $11,774,778 $12,528,610
OTHER ASSETS
Cash and cash equivalents 570,436 566,836
Notes receivable - -
Deferred acquisition costs (Note B) 21,965 22,182
Organization costs, net of
accumulated amortization (Note B) - -
Other assets 14,009 14,009
---------- ----------
$12,381,188 $13,131,637
========== ==========
LIABILITIES
Accounts payable & accrued
expenses $ - $ -
Accounts payable - affiliates (Note C) 3,025,322 2,881,376
Capital contributions payable (Note D) 4,590 4,590
---------- ----------
3,029,912 2,885,966
---------- ----------
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 9,618,103 10,503,554
General Partner (266,827) (257,883)
---------- ----------
9,351,276 10,245,671
---------- ----------
$12,381,188 $13,131,637
========== ==========
The accompanying notes are an integral part of these statements.
3
Boston Capital Tax Credit Fund II Limited Partnership
BALANCE SHEETS
SERIES 10
----------------------------
June 30, March 31,
1997 1997
ASSETS (Unaudited) (Audited)
----------- ---------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $ 8,767,998 $ 9,224,595
OTHER ASSETS
Cash and cash equivalents 143,179 144,428
Notes receivable - -
Deferred acquisition costs (Note B) 86,895 87,755
Organization costs, net of
accumulated amortization (Note B) - -
Other assets 38,979 38,979
---------- ----------
$ 9,037,051 $ 9,495,757
========== ==========
LIABILITIES
Accounts payable & accrued
expenses $ - $ -
Accounts payable - affiliates (Note C) 2,072,838 1,983,960
Capital contributions payable (Note D) - -
---------- ----------
2,072,838 1,983,960
---------- ----------
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 7,105,384 7,647,492
General Partner (141,171) (135,695)
---------- ----------
6,964,213 7,511,797
---------- ----------
$ 9,037,051 $ 9,495,757
========== ==========
The accompanying notes are an integral part of these statements.
4
Boston Capital Tax Credit Fund II Limited Partnership
BALANCE SHEETS
SERIES 11
----------------------------
June 30, March 31,
1997 1997
(Unaudited) (Audited)
------------ ----------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $10,462,975 $11,085,975
OTHER ASSETS
Cash and cash equivalents 305,847 307,351
Notes receivable - -
Deferred acquisition costs (Note B) 44,043 44,479
Organization costs, net of
accumulated amortization (Note B) - -
Other assets 41,567 41,567
---------- ----------
$10,854,432 $11,479,372
========== ==========
LIABILITIES
Accounts payable & accrued
expenses $ - $ -
Accounts payable - affiliates (Note C) 1,381,493 1,300,073
Capital contributions payable (Note D) 27,528 27,528
---------- ----------
1,409,021 1,327,601
---------- ----------
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 9,565,642 10,264,938
General Partner (120,231) (113,167)
---------- ----------
9,445,411 10,151,771
---------- ----------
$10,854,432 $11,479,372
========== ==========
The accompanying notes are an integral part of these statements.
5
Boston Capital Tax Credit Fund II Limited Partnership
BALANCE SHEETS
SERIES 12
----------------------------
June 30, March 31,
1997 1997
(Unaudited) (Audited)
------------ ----------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $11,374,036 $11,946,248
OTHER ASSETS
Cash and cash equivalents 5,156 8,532
Notes receivable 12,831 60,336
Deferred acquisition costs (Note B) 336,250 339,579
Organization costs, net of
accumulated amortization (Note B) - -
Other assets 103,491 55,986
--------- ---------
$11,831,764 $12,410,681
========== ==========
LIABILITIES
Accounts payable & accrued
expenses $ - $ -
Accounts payable - affiliates (Note C) 1,724,201 1,628,384
Capital contributions payable (Note D) 11,405 11,405
---------- ----------
1,735,606 1,639,789
---------- ----------
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 10,252,455 10,920,442
General Partner (156,297) (149,550)
---------- ----------
10,096,158 10,770,892
---------- ----------
$11,831,764 $12,410,681
========== ==========
The accompanying notes are an integral part of these statements.
6
Boston Capital Tax Credit Fund II Limited Partnership
BALANCE SHEETS
SERIES 14
----------------------------
June 30, March 31,
1997 1997
(Unaudited) (Audited)
------------ ----------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $22,065,050 $22,915,969
OTHER ASSETS
Cash and cash equivalents 686,815 686,170
Notes receivable 543,584 543,584
Deferred acquisition costs (Note B) 737,029 744,326
Organization costs, net of
accumulated amortization (Note B) - -
Other assets 175,554 175,554
---------- ----------
$24,208,032 $25,065,603
========== ==========
LIABILITIES
Accounts payable & accrued
expenses (Note C) $ - $ -
Accounts payable - affiliates (Note C) 3,319,650 3,130,515
Capital contributions payable (Note D) 330,575 343,575
---------- ----------
3,650,225 3,474,090
---------- ----------
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 20,835,920 21,859,289
General Partner (278,113) (267,776)
---------- ----------
20,557,807 21,591,513
---------- ----------
$24,208,032 $25,065,603
========== ==========
The accompanying notes are an integral part of these statements.
7
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
1997 1996
---- ----
Income
Interest income $ 11,969 $ 13,920
Miscellaneous income - -
---------- ----------
11,969 13,920
---------- ----------
Share of loss from Operating
Partnerships (3,408,453) (3,931,170)
---------- ----------
Expenses
Partnership management fees 587,499 526,756
Amortization 12,139 21,967
General and administrative expenses 46,683 124,318
---------- ----------
646,321 673,041
---------- ----------
NET LOSS $(4,042,805) $(4,590,291)
========== ==========
Net loss allocated to limited
partners $(4,002,377) $(4,544,388)
========== ==========
Net loss allocated to general partner $ (40,428) $ (45,903)
========== ==========
Net loss per BAC $ (1.29) $ (1.38)
========== ==========
The accompanying notes are an integral part of these statements.
8
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
SERIES 7
-----------------------
1997 1996
---- ----
Income
Interest income $ 88 $ 20
Miscellaneous income - -
-------- --------
88 20
-------- --------
Share of loss from Operating
Partnerships (154,942) (128,101)
-------- --------
Expenses
Partnership management fees 28,287 28,287
Amortization - -
General and administrative expenses 2,885 5,343
-------- --------
31,172 33,630
-------- --------
NET LOSS $(186,026) $(161,711)
======== ========
Net loss allocated to limited
partners $(184,166) $(160,094)
======== ========
Net loss allocated to general partner $ (1,860) $ (1,617)
======== ========
Net loss per BAC $ (.18) $ (.15)
======== ========
The accompanying notes are an integral part of these statements.
9
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
SERIES 9
----------------------
1997 1996
---- ----
Income
Interest income $ 4,348 $ 4,761
Miscellaneous income - -
--------- --------
4,348 4,761
--------- --------
Share of loss from Operating
Partnerships (753,828) (763,578)
--------- --------
Expenses
Partnership management fees 135,983 123,042
Amortization 217 217
General and administrative expenses 8,715 17,101
--------- --------
144,915 140,360
--------- --------
NET LOSS $ (894,395) $(899,177)
========= ========
Net loss allocated to limited partners $ (885,451) $(890,185)
========= ========
Net loss allocated to general partner $ (8,944) $ (8,992)
========= ========
Net loss per BAC $ (.21) $ (.22)
========= ========
The accompanying notes are an integral part of these statements.
10
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
SERIES 10
----------------------
1997 1996
---- ----
Income
Interest income $ 978 $ 1,092
Miscellaneous income - -
-------- --------
978 1,092
-------- --------
Share of loss from Operating
Partnerships (456,597) (540,138)
-------- --------
Expenses
Partnership management fees 84,528 78,309
Amortization 860 860
General and administrative expenses 6,577 14,187
-------- --------
91,965 93,356
-------- --------
NET LOSS $(547,584) $(632,402)
======== ========
Net loss allocated to limited partner $(542,108) $(626,078)
======== ========
Net loss allocated to general partner $ (5,476) $ (6,324)
======== ========
Net loss per BAC $ (.22) $ (.26)
======== ========
The accompanying notes are an integral part of these statements.
11
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
SERIES 11
----------------------
1997 1996
---- ----
Income
Interest income $ 1,673 $ 1,685
Miscellaneous income - -
-------- --------
1,672 1,685
-------- --------
Share of loss from Operating
Partnerships (623,000) (579,456)
-------- --------
Expenses
Partnership management fees 78,834 77,294
Amortization 436 436
General and administrative expenses 5,763 12,814
-------- --------
85,033 90,544
-------- --------
NET LOSS $(706,360) $(668,315)
======== ========
Net loss allocated to limited partner $(699,296) $(661,632)
======== ========
Net loss allocated to general partner $ (7,064) $ (6,683)
======== ========
Net loss per BAC $ (.28) $ (.26)
======== ========
The accompanying notes are an integral part of these statements.
12
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
SERIES 12
----------------------
1997 1996
---- ----
Income
Interest income $ 85 $ 1,242
Miscellaneous income - -
-------- --------
85 1,242
-------- --------
Share of loss from Operating
Partnerships (572,212) (604,800)
-------- --------
Expenses
Partnership management fee 91,518 80,502
Amortization 3,329 3,329
General and administrative expenses 7,760 21,001
-------- --------
102,607 104,832
-------- --------
NET LOSS $(674,734) $(708,390)
======== ========
Net loss allocated to limited partner $(667,987) $(701,306)
======== ========
Net loss allocated to general partner $ (6,747) $ (7,084)
======== ========
Net loss per BAC $ (.22) $ (.23)
======== ========
The accompanying notes are an integral part of these statements.
13
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
SERIES 14
----------------------
1997 1996
---- ----
Income
Interest income $ 4,797 $ 5,120
Miscellaneous income - -
--------- ---------
4,797 5,120
--------- ---------
Share of loss from Operating
Partnerships (847,874) (1,315,097)
--------- ---------
Expenses
Partnership management fees 168,349 139,322
Amortization 7,297 17,125
General and administrative expenses 14,983 53,872
--------- ---------
190,629 210,319
--------- ---------
NET LOSS $(1,033,706) $(1,520,296)
========= =========
Net loss allocated to limited partner $(1,023,369) $(1,505,093)
========= =========
Net loss allocated to general partner $ (10,337) $ (15,203)
========= =========
Net loss per BAC $ (.18) $ (.27)
========= =========
The accompanying notes are an integral part of these statements.
14
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
Three Months Ended June 30, 1997
(Unaudited)
General
Assignees Partner Total
--------- ------- -----
Partners' capital (deficit),
April 1, 1997 $ 62,344,445 $(1,003,302) $61,341,143
Net loss (4,002,377) (40,428) (4,042,805)
---------- --------- ----------
Partners' capital (deficit),
June 30, 1997 $ 58,342,068 $(1,043,730) $57,298,338
========== ========= ==========
The accompanying notes are an integral part of these statements.
15
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
Three Months Ended June 30, 1997
(Unaudited)
Limited General
Partners Partner Total
-------- ------- -----
Series 7
- --------
Partners' capital (deficit),
April 1, 1997 $ 1,148,730 $ (79,231) $1,069,499
Net loss (184,166) (1,860) (186,026)
--------- -------- ---------
Partners' capital (deficit),
June 30, 1997 $ 964,564 $ (81,091) $ 883,473
========= ======== =========
Series 9
- --------
Partners' capital (deficit),
April 1, 1997 $10,503,554 $(257,883) $10,245,671
Net loss (885,451) (8,944) (894,395)
---------- ------- ----------
Partners' capital (deficit),
June 30, 1997 $ 9,618,103 $(266,827) $9,351,276
========== ======== ==========
Series 10
- --------
Partners' capital (deficit),
April 1, 1997 $ 7,647,492 $(135,695) $ 7,511,797
Net loss (542,108) (5,476) (547,584)
---------- -------- ----------
Partners' capital (deficit),
June 30, 1997 $ 7,105,384 $(141,171) $ 6,964,213
========== ======== ==========
The accompanying notes are an integral part of these statements.
16
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
Three Months Ended June 30, 1997
(Unaudited)
Limited General
Partners Partner Total
-------- ------- -----
Series 11
- --------
Partners' capital (deficit),
April 1, 1997 $10,264,938 $(113,167) $10,151,771
Net loss (699,296) (7,064) (706,360)
---------- -------- ----------
Partners' capital (deficit),
June 30, 1997 $ 9,565,642 $(120,231) $ 9,445,411
========== ======== ==========
Series 12
- --------
Partners' capital (deficit),
April 1, 1997 $10,920,442 $(149,550) $10,770,892
Net loss (667,987) (6,747) (674,734)
---------- -------- ----------
Partners' capital (deficit),
June 30, 1997 $10,252,455 $(156,297) $10,096,158
========== ======== ==========
Series 14
- --------
Partners' capital (deficit),
April 1, 1997 $21,859,289 $(267,776) $21,591,513
Net loss (1,023,369) (10,337) (1,033,706)
---------- -------- ----------
Partners' capital (deficit),
June 30, 1997 $20,835,920 $(278,113) $20,557,807
========== ======== ==========
The accompanying notes are an integral part of these statements.
17
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
1997 1996
---- ----
Cash flows from operating activities:
Net loss $ (4,042,806) $ (4,590,291)
Adjustments
Distributions from Operating
Partnerships 3,050 15,513
Amortization 12,139 21,967
Share of loss from Operating
Partnerships 3,408,453 3,931,170
Changes in assets and liabilities
Increase in accounts payable
and accrued expenses 627,983 628,861
Decrease (Increase) in prepaid
expenses - -
Decrease (Increase) in other
assets - -
---------- ----------
Net cash (used in) provided by
operating activity 8,819 7,220
---------- ----------
Cash flows from investing activities:
Capital contributions paid to
Operating Partnerships (13,000) (86,448)
Advances (made to) repaid from
Operating Partnerships - -
---------- ----------
Net cash (used in) provided by
investing activities (13,000) (86,448)
---------- ----------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (4,181) (79,228)
Cash and cash equivalents, beginning 1,725,325 1,862,286
---------- ----------
Cash and cash equivalents, ending $ 1,721,144 $ 1,783,058
========== ==========
The accompanying notes are an integral part of these statements.
18
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 7
-------------------------
1997 1996
---- ----
Cash flows from operating activities:
Net loss $(186,026) $ (161,711)
Adjustments
Distributions from Operating
Partnerships - -
Amortization - -
Share of loss from Operating
Partnerships 154,942 128,101
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 28,787 29,669
Decrease (Increase) in prepaid
expenses - -
Decrease (Increase) in other
assets - -
-------- ---------
Net cash (used in) provided by
operating activities (2,297) (3,941)
-------- ---------
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 (2,297) (3,941)
Cash and cash equivalents, beginning 12,008 4,874
-------- ---------
Cash and cash equivalents, ending $ 9,711 $ 933
======== =========
The accompanying notes are an integral part of these statements.
19
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 9
-------------------------
1997 1996
---- ----
Cash flows from operating activities:
Net loss $ (894,396) $ (899,177)
Adjustments
Distributions from Operating
Partnerships 5 2,474
Amortization 217 217
Share of loss from Operating
Partnerships 753,828 763,578
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 143,946 143,946
Decrease (Increase) in prepaid
expenses - -
Decrease (Increase) in other
assets - -
--------- ---------
Net cash (used in) provided by
operating activities 3,600 11,038
--------- ---------
Cash flows from investing activities:
Capital contributions paid to
Operating Partnerships - (86,448)
Advances (made to) repaid from
Operating Partnerships - -
--------- ---------
Net cash (used in) provided by
investing activities - (86,448)
--------- ---------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 3,600 (75,410)
Cash and cash equivalents, beginning 566,836 658,264
--------- ---------
Cash and cash equivalents, ending $ 570,436 $ 582,854
========= =========
The accompanying notes are an integral part of these statements.
20
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 10
-------------------------
1997 1996
---- ----
Cash flows from operating activities:
Net loss $ (547,584) $ (632,402)
Adjustments
Distributions from Operating
Partnerships - 235
Amortization 860 860
Share of loss from Operating
Partnerships 456,597 540,138
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 88,878 88,874
Decrease (Increase) in prepaid
expenses - -
Decrease (Increase) in other
assets - -
--------- ---------
Net cash (used in) provided by
operating activities (1,249) (2,295)
--------- ---------
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 (1,249) (2,295)
Cash and cash equivalents, beginning 144,428 152,625
--------- ---------
Cash and cash equivalents, ending $ 143,179 $ 150,330
========= =========
The accompanying notes are an integral part of these statements.
21
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 11
-------------------------
1997 1996
---- ----
Cash flows from operating activities:
Net loss $ (706,360) $ (668,315)
Adjustments
Distributions from Operating
Partnerships - 749
Amortization 436 436
Share of loss from Operating
Partnerships 623,000 579,456
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 81,420 81,421
Decrease (Increase) in prepaid
expenses - -
Decrease (Increase) in other
assets - -
--------- ---------
Net cash (used in) provided by
operating activities (1,504) (6,253)
--------- ---------
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 (1,504) (6,253)
Cash and cash equivalents, beginning 307,351 233,619
--------- ---------
Cash and cash equivalents, ending $ 305,847 $ 227,366
========= =========
The accompanying notes are an integral part of these statements.
22
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 12
-------------------------
1997 1996
---- ----
Cash flows from operating activities:
Net loss $ (674,734) $ (708,390)
Adjustments
Distributions from Operating
Partnerships - 8,571
Amortization 3,329 3,329
Share of loss from Operating
Partnerships 572,212 604,800
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 95,817 95,816
Decrease (Increase) in prepaid
expenses - -
Decrease (Increase) in other
assets - -
--------- ---------
Net cash (used in) provided by
operating activities (3,376) 4,126
--------- ---------
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 (3,376) 4,126
Cash and cash equivalents, beginning 8,532 167,568
--------- ---------
Cash and cash equivalents, ending $ 5,156 $ 171,694
========= =========
The accompanying notes are an integral part of these statements.
23
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 14
-------------------------
1997 1996
---- ----
Cash flows from operating activities:
Net loss $(1,033,706) $(1,520,296)
Adjustments
Distributions from Operating
Partnerships 3,045 3,484
Amortization 7,297 17,125
Share of loss from Operating
Partnerships 847,874 1,315,097
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 189,135 189,135
Decrease (Increase) in prepaid
expenses - -
Decrease (Increase) in other
assets - -
---------- ---------
Net cash (used in) provided by
operating activities 13,645 4,545
---------- ---------
Cash flows from investing activity:
Capital contributions paid to
Operating Partnerships (13,000) -
Advances (made to) repaid from
Operating Partnerships - -
---------- ---------
Net cash (used in) provided by
investing activities (13,000) -
---------- ---------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 645 4,545
Cash and cash equivalents, beginning 686,170 645,336
---------- ---------
Cash and cash equivalents, ending $ 686,815 $ 649,881
========== =========
The accompanying notes are an integral part of these statements.
24
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS
June 30, 1997
(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 June 30, 1997
and for the three 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.
25
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1997
(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 June 30, 1997, the
Partnership has accumulated unallocated acquisition amortization totaling
$109,263. The breakdown of accumulated unallocated acquisition amortization
within the Partnership as of June 30, 1997 for Series 9, Series 10,
Series 11, Series 12, and Series 14 is $1,957, $7,743, $3,924, $29,963, and
$65,676, 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 charged to operations, less the amount of certain partnership
management and reporting fees paid by the Operating Partnerships, for the
quarters ended June 30, 1997 and 1996 are as follows:
26
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1997
(Unaudited)
NOTE C - RELATED PARTY TRANSACTIONS - Continued
1997 1996
-------- --------
Series 7 $ 28,287 $ 28,287
Series 9 135,983 123,042
Series 10 84,528 78,309
Series 11 78,834 77,294
Series 12 91,518 80,502
Series 14 168,349 139,322
------- -------
$587,499 $526,756
======= =======
Accounts payable - affiliates at June 30, 1997 and 1996 represents
accrued general and administrative expenses, partnership management fees,
and advances from an affiliate of the general partner, which are payable to
Boston Capital Partners, Inc., and Boston Capital Asset Management Limited
Partnership (formerly Boston Capital Communications Limited Partnership).
As of June 30, 1997, 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.
27
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1997
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING LIMITED PARTNERSHIPS
At June 30, 1997 and 1996 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 June 30, 1997 and 1996 by series are as follows:
1997 1996
---- ----
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 June 30, 1997 and 1996 by series are as
follows:
1997 1996
---------- ----------
Series 7 $ - $ -
Series 9 4,590 4,590
Series 10 - -
Series 11 27,528 27,528
Series 12 11,405 87,835
Series 14 330,575 1,705,563
--------- ---------
$ 374,098 $1,825,516
========= =========
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 three months ended March 31, 1997.
28
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1997
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 7
---------------------------
1997 1996
---- ----
Revenues
Rental $ 532,590 $ 564,863
Interest and other 47,244 96,341
--------- ---------
579,834 661,204
--------- ---------
Expenses
Interest 240,882 280,921
Depreciation and amortization 248,577 254,461
Operating expenses 447,561 348,305
--------- ---------
937,020 883,687
--------- ---------
NET LOSS $ (357,186) $ (222,483)
========= =========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $ (154,942) $ (128,101)
========= =========
Net loss allocated to other partners $ (3,572) $ (2,225)
========= =========
Net loss suspended $ (198,672) $ (92,158)
========= =========
The variance in allowable loss from the Operating Partnerships for the three
months ended March 31, 1997 and 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.
29
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1997
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 9
--------------------------
1997 1996
----- -----
Revenues
Rental $ 2,394,795 $ 2,391,790
Interest and other 153,558 94,703
---------- ----------
2,548,353 2,486,493
---------- ----------
Expenses
Interest 887,058 905,651
Depreciation and amortization 967,950 996,087
Operating expenses 1,556,261 1,406,131
---------- ----------
3,411,269 3,307,869
---------- ----------
NET LOSS $ (862,916) $ (821,376)
========== ==========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $ (753,828) $ (763,578)
========== ==========
Net loss allocated to other partners $ (8,629) $ (8,214)
========= ==========
Net loss suspended $ (100,459) $ (49,584)
========= ==========
The variance in allowable loss from the Operating Partnerships for the three
months ended March 31, 1997 and 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 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.
30
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1997
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three Months ended March 31,
(Unaudited)
Series 10
--------------------------
1997 1996
Revenues ---- ----
Rental $ 1,839,292 $ 1,813,800
Interest and other 96,997 62,645
---------- ----------
1,936,289 1,876,445
---------- ----------
Expenses
Interest 648,229 746,662
Depreciation and amortization 632,318 631,226
Operating expenses 1,186,240 1,106,743
---------- ----------
2,466,787 2,484,631
---------- ----------
NET LOSS $ (530,498) $ (608,186)
========== ==========
Net loss allocated to Boston
Capital Tax Credit Fund
Limited Partnership II $ (456,597) $ (540,138)
========== ==========
Net loss allocated to other partners $ (5,305) $ (6,082)
========== ==========
Net loss suspended $ (68,596) $ (61,966)
========== ==========
The variance in allowable loss from the Operating Partnerships for the three
months ended March 31, 1997 and 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.
31
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1997
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 11
----------------------------
1997 1996
Revenues ---- ----
Rental $ 1,792,926 $ 1,543,015
Interest and other 91,081 58,967
---------- ----------
1,884,007 1,601,982
---------- ----------
Expenses
Interest 785,878 578,998
Depreciation and amortization 592,009 643,868
Operating expenses 1,165,760 1,017,107
---------- ----------
2,543,647 2,239,973
---------- ----------
NET LOSS $ (659,640) $ (637,991)
========== ==========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $ (623,000) $ (579,456)
========== ==========
Net loss allocated to other partners $ (6,596) $ (6,380)
========== ==========
Net loss suspended $ (30,044) $ (52,155)
========== ==========
The variance in allowable loss from the Operating Partnerships for the three
months ended March 31, 1997 and 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.
32
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1997
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 12
--------------------------
1997 1996
Revenues ---- ----
Rental $ 1,932,724 $ 1,694,420
Interest and other 59,344 52,493
--------- ---------
1,992,068 1,746,913
--------- ---------
Expenses
Interest 855,014 706,054
Depreciation and amortization 707,481 725,522
Operating expenses 1,024,261 943,607
--------- ---------
2,586,756 2,375,183
--------- ---------
NET LOSS $ (594,688) $ (628,270)
========= =========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $ (572,212) $ (604,800)
========= =========
Net loss allocated to other partners $ (5,947) $ (6,283)
========= =========
Net loss suspended $ (16,529) $ (17,187)
========= =========
The variance in allowable loss from the Operating Partnerships for the three
months ended March 31, 1997 and 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.
33
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1997
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 14
--------------------------
1997 1996
Revenues ---- ----
Rental $ 3,723,187 $ 3,896,070
Interest and other 196,064 131,229
---------- ----------
3,919,251 4,027,299
---------- ----------
Expenses
Interest 1,293,461 1,579,649
Depreciation and amortization 1,275,282 1,406,901
Operating expenses 2,302,809 2,402,620
---------- ----------
4,871,552 5,389,170
---------- ----------
NET LOSS $ (952,301) $(1,361,871)
========== ==========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $ (847,874) $(1,315,097)
========== ==========
Net loss allocated to other partners $ (9,523) $ (13,619)
========== ==========
Net loss suspended $ (94,904) $ (33,155)
========== ==========
The variance in allowable loss from the Operating Partnerships for the three
months ended March 31, 1997 and 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.
34
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1997
(Unaudited)
NOTE E - TAXABLE LOSS
The Partnership's taxable loss for the fiscal year ended March 31, 1998 is
expected to differ from its loss for financial reporting purposes. This is
primarily due to accounting differences in depreciation incurred by the
Operating Partnerships and also differences between the equity method of
accounting and the IRS accounting methods. 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.
35
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 June 30, 1997 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 to
enable each series to meet current and future third party obligations.
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 or 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.
Capital Resources
- -----------------
The Partnership offered BACs in a Public offering declared effective by the
Securities and Exchange Commission on October 25, 1989. The Partnership
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.
36
(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 June 30, 1997 Series 7 had paid all installments of capital contributions
to the Operating Partnerships. Series 7 net offering proceeds in the amount of
$9,711 remains in working capital.
(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 June 30, 1997 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 June 30, 1997, Series 10 had paid all installments of capital
contributions to the Operating Partnerships. Series 10 net offering proceeds in
the amount of $143,179 remains in working capital.
(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 June 30, 1997 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
37
initial and additional installments of capital contributions to 53 Operating
Partnerships in the amount of $21,654,977.
During the quarter ended June 30, 1997, none of Series 12 net offering
proceeds had been used to pay capital contributions. Series 12 net offering
proceeds in the amount of $5,156 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 June 30, 1997, 13,000 Series 14 net offering
proceeds had been used to pay capital contributions. Series 14 net offering
proceeds in the amount of $330,575 remain to be used by the Partnership to pay
remaining capital contributions to the Operating Partnerships.
Results of Operations
- ---------------------
As of June 30, 1997 and 1996 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 June 30, 1997 and 1996 were $587,499 and
$526,756, 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.
38
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 June 30, 1997 and 1996, the average Qualified Occupancy
for the series was 100% for both years. The series had a total of 15
properties at June 30, 1997.
For the three months being reported the series reflects a net loss from the
Operating Partnerships of $357,186. When adjusted for depreciation, which is a
non-cash item, the Operating Partnerships reflect a net loss of $108,609. This
is an interim period estimate; it is not necessarily indicative of the final
year end results.
(Series 9) As of June 30, 1997 and 1996, the average Qualified Occupancy for
the series was 99.8% and 99.7%, respectively. The series had a total of 55
properties at June 30, 1997. Out of the total, 53 were at 100% Qualified
Occupancy.
For the three months being reported the series reflects a net loss from the
Operating Partnerships of $862,916. When adjusted for depreciation, which is
a non-cash item, the Operating Partnerships reflect positive operations of
$105,034. This is an interim period estimate; it is not necessarily
indicative of the final year end results.
(Series 10) As of June 30, 1997 and 1996, the average Qualified
Occupancy for the series was 99.57% and 99.7%, respectively. The series had a
total of 46 properties at June 30, 1997, 43 of which were at 100%
Qualified Occupancy.
For the three months being reported the series reflects a net loss from the
Operating Partnerships of $530,498. When adjusted for depreciation which is
a non-cash item, the Operating Partnerships reflect positive operations of
$101,821. This is an interim period estimate; it is not necessarily
indicative of the final year end results.
(Series 11) As of June 30, 1997 and 1996 the average Qualified
Occupancy for the series was 100% for both years. The series had a total of 40
properties at June 30, 1997.
39
For the three months being reported the series reflects a net loss from the
Operating Partnerships of 659,640. When adjusted for depreciation, which is
a non-cash item, the Operating Partnerships reflect a net loss of
$67,631. This is an interim period estimate; it is not necessarily
indicative of the final year end results.
(Series 12) As of June 30, 1997 and 1996, the average Qualified
Occupancy for the series was 99.9% and 100%, respectively. The series had a
total of 53 properties at June 30, 1997, 52 of which were at 100% qualified
occupancy.
For the three months being reported the series reflects a net loss from the
Operating Partnerships of $594,688. When adjusted for depreciation, which is
a non-cash item, the Operating Partnerships reflect positive operations of
$112,793. 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 June 30, 1997 and 1996, the average Qualified
Occupancy for the series was 99.5% and 99.8%, respectively. The series had a
total of 101 properties at June 30, 1997, 92 of which were at 100%
Qualified Occupancy.
For the three months being reported the series reflects a net loss from the
Operating Partnerships of $952,301. When adjusted for depreciation, which is
a non-cash item, the Operating Partnerships reflect positive operations of
$322,981. This is an interim period estimate; it is not necessarily
indicative of the final year end results.
40
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 stability for the Operating Partnership.
41
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
42
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: August 20, 1997 By: /s/ John P. Manning
-------------------
John P. Manning,
Partner & Principal Financial
Officer
43
<TABLE> <S> <C>
<ARTICLE> CT
<CIK> 0000853566
<NAME> BOSTON CAPITAL TAX CREDIT FUND II LTD PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> APR-01-1997
<PERIOD-END> JUN-30-1997
<TOTAL-ASSETS> 69,955,053
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 69,955,053
<TOTAL-REVENUES> 11,969
<INCOME-TAX> 0
<INCOME-CONTINUING> (4,054,774)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,042,805)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
