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, 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 December 31, 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
December 31,
March 31,
1997
1997
(Unaudited)
(Audited)
------------
- ------------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $ 61,044,372 $
69,472,764
OTHER ASSETS
Cash and cash equivalents 1,572,953
1,725,325
Notes Receivable 543,584
603,920
Deferred acquisition costs (Note B) 1,201,900
1,238,321
Other assets 411,195
342,545
----------
- ----------
$ 64,774,004 $
73,382,875
==========
==========
LIABILITIES
Accounts Payable - affiliates (Note C) $ 13,607,156 $
11,654,634
Capital Contributions payable (Note D) 374,101
387,098
----------
- ----------
13,981,257
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 51,901,533
62,344,445
General Partner (1,108,786)
(1,003,302)
----------
- ----------
50,792,747
61,341,143
----------
- ----------
$ 64,774,004 $
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
- ----------------------------
December 31,
March 31,
1997
1997
(Unaudited)
(Audited)
-----------
- ---------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $1,515,336
$1,771,367
OTHER ASSETS
Cash and cash equivalents 6,280
12,008
Notes receivable -
- -
Deferred acquisition costs (Note B) -
- -
Other assets 16,450
16,450
---------
- ---------
$1,538,066
$1,799,825
=========
=========
LIABILITIES
Accounts payable - affiliates (Note C) $ 832,033 $
730,326
Capital contributions payable (Note D) -
- -
---------
- ---------
832,033
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 788,899
1,148,730
General Partner (82,866)
(79,231)
---------
- ---------
706,033
1,069,499
---------
- ---------
$1,538,066
$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
- ----------------------------
December 31,
March 31,
1997
1997
ASSETS (Unaudited)
(Audited)
-----------
- ---------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $10,823,905
$12,528,610
OTHER ASSETS
Cash and cash equivalents 543,422
566,836
Notes receivable -
- -
Deferred acquisition costs (Note B) 21,530
22,182
Other assets 22,324
14,009
----------
- ----------
$11,411,181
$13,131,637
==========
==========
LIABILITIES
Accounts payable - affiliates (Note C) $ 3,313,216 $
2,881,376
Capital contributions payable (Note D) 4,590
4,590
----------
- ----------
3,317,806
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 8,372,781
10,503,554
General Partner (279,406)
(257,883)
----------
- ----------
8,093,375
10,245,671
----------
- ----------
$11,411,181
$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
- ----------------------------
December 31,
March 31,
1997
1997
ASSETS (Unaudited)
(Audited)
-----------
- ---------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $ 8,239,205 $
9,224,595
OTHER ASSETS
Cash and cash equivalents 118,791
144,428
Notes receivable -
- -
Deferred acquisition costs (Note B) 85,174
87,755
Other assets 38,979
38,979
----------
- ----------
$ 8,482,149 $
9,495,757
==========
==========
LIABILITIES
Accounts payable - affiliates (Note C) $ 2,250,594 $
1,983,960
Capital contributions payable (Note D) -
- -
----------
- ----------
2,250,594
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 6,380,052
7,647,492
General Partner (148,497)
(135,695)
----------
- ----------
6,231,555
7,511,797
----------
- ----------
$ 8,482,149 $
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
- ----------------------------
December 31,
March 31,
1997
1997
(Unaudited)
(Audited)
------------
- ----------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $ 9,596,076
$11,085,975
OTHER ASSETS
Cash and cash equivalents 265,976
307,351
Notes receivable -
- -
Deferred acquisition costs (Note B) 43,171
44,479
Other assets 41,567
41,567
----------
- ----------
$ 9,946,790
$11,479,372
==========
==========
LIABILITIES
Accounts payable - affiliates (Note C) $ 1,544,334 $
1,300,073
Capital contributions payable (Note D) 27,528
27,528
----------
- ----------
1,571,862
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 8,505,863
10,264,938
General Partner (130,935)
(113,167)
----------
- ----------
8,374,928
10,151,771
----------
- ----------
$ 9,946,790
$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
- ----------------------------
December 31,
March 31,
1997
1997
(Unaudited)
(Audited)
------------
- ----------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $10,566,693
$11,946,248
OTHER ASSETS
Cash and cash equivalents 18,554
8,532
Notes receivable -
60,336
Deferred acquisition costs (Note B) 329,591
339,579
Other assets 116,322
55,986
---------
- ---------
$11,031,160
$12,410,681
==========
==========
LIABILITIES
Accounts payable - affiliates (Note C) $ 1,969,059 $
1,628,384
Capital contributions payable (Note D) 11,405
11,405
----------
- ----------
1,980,464
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 9,217,448
10,920,442
General Partner (166,752)
(149,550)
----------
- ----------
9,050,696
10,770,892
----------
- ----------
$11,031,160
$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
- ----------------------------
December 31,
March 31,
1997
1997
(Unaudited)
(Audited)
------------
- ----------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $20,303,157
$22,915,969
OTHER ASSETS
Cash and cash equivalents 619,930
686,170
Notes receivable 543,584
543,584
Deferred acquisition costs (Note B) 722,434
744,326
Other assets 175,553
175,554
----------
- ----------
$22,364,658
$25,065,603
==========
==========
LIABILITIES
Accounts payable - affiliates (Note C) $ 3,697,920 $
3,130,515
Capital contributions payable (Note D) 330,578
343,575
----------
- ----------
4,028,498
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 18,636,490
21,859,289
General Partner (300,330)
(267,776)
----------
- ----------
18,336,160
21,591,513
----------
- ----------
$22,364,658
$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 December 31,
(Unaudited)
1997 1996
---- ----
Income
Interest income $ 7,835 $ 113,383
---------- ----------
Share of loss from Operating
Partnerships (2,508,324)
(3,301,770)
---------- ----------
Expenses
Partnership management fees 583,927 597,694
Amortization 12,139 12,139
General and administrative expenses 53,884 38,084
---------- ----------
649,950 647,917
---------- ----------
NET LOSS $(3,150,439)
$(3,836,304)
========== ==========
Net loss allocated to limited
partners $(3,118,935)
$(3,797,941)
========== ==========
Net loss allocated to general partner $ (31,504) $
(38,363)
========== ==========
Net loss per BAC $ (.91) $
(1.26)
========== ==========
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 December 31,
(Unaudited)
SERIES 7
- -----------------------
1997
1996
----
- ----
Income
Interest income $ 49 $
85
--------
- --------
Share of loss from Operating
Partnerships (25,581)
(260,430)
--------
- --------
Expenses
Partnership management fees 28,287
27,837
Amortization -
- -
General and administrative expenses 1,775
1,438
--------
- --------
30,062
29,275
--------
- --------
NET LOSS $ (55,594)
$(289,620)
========
========
Net loss allocated to limited
partners $ (55,038)
$(286,724)
========
========
Net loss allocated to general partner $ (556) $
(2,896)
========
========
Net loss per BAC $ (.05) $
(.28)
========
========
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 December 31,
(Unaudited)
SERIES 9
- ----------------------
1997
1996
----
- ----
Income
Interest income $ 2,740 $
4,215
--------
- --------
Share of loss from Operating
Partnerships (564,483)
(762,767)
--------
- --------
Expenses
Partnership management fees 136,696
138,796
Amortization 217
217
General and administrative expenses 4,387
7,307
--------
- --------
141,300
146,320
--------
- --------
NET LOSS $ (703,043) $
(904,872)
========
=========
Net loss allocated to limited partners $ (696,013) $
(895,823)
========
=========
Net loss allocated to general partner $ (7,030) $
(9,049)
========
=========
Net loss per BAC $ (.17) $
(.21)
========
=========
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 December 31,
(Unaudited)
SERIES 10
- ----------------------
1997
1996
----
- ----
Income
Interest income $ 594 $
900
--------
- --------
Share of loss from Operating
Partnerships (288,849)
(463,031)
--------
- --------
Expenses
Partnership management fees 68,492
82,914
Amortization 860
860
General and administrative expenses 10,185
5,497
--------
- --------
79,537
89,271
--------
- --------
NET LOSS $(367,792)
$(551,402)
========
========
Net loss allocated to limited partner $(364,114)
$(545,888)
========
========
Net loss allocated to general partner $ (3,678) $
(5,514)
========
========
Net loss per BAC $ (.15) $
(.22)
========
========
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 December 31,
(Unaudited)
SERIES 11
- ----------------------
1997
1996
----
- ----
Income
Interest income $ 1,185 $
1,107
--------
- --------
Share of loss from Operating
Partnerships (350,804)
(239,771)
--------
- --------
Expenses
Partnership management fees 79,920
76,220
Amortization 436
436
General and administrative expenses 9,105
2,557
--------
- --------
89,461
79,213
--------
- --------
NET LOSS $(439,080)
$(317,877)
========
========
Net loss allocated to limited partner $(434,689)
$(314,698)
========
========
Net loss allocated to general partner $ (4,391) $
(3,179)
========
========
Net loss per BAC $ (.18) $
(.12)
========
========
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 December 31,
(Unaudited)
SERIES 12
- ----------------------
1997
1996
----
- ----
Income
Interest income $ 39 $
306
--------
- --------
Share of loss from Operating
Partnerships (399,421)
(658,404)
--------
- --------
Expenses
Partnership management fee 90,847
93,507
Amortization 3,329
3,329
General and administrative expenses 6,441
9,125
--------
- --------
100,617
105,961
--------
- --------
NET LOSS $(499,999)
$(764,059)
========
========
Net loss allocated to limited partner $(494,999)
$(756,148)
========
========
Net loss allocated to general partner $ (5,000) $
(7,641)
========
========
Net loss per BAC $ (.17) $
(.25)
========
========
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 December 31,
(Unaudited)
SERIES 14
- ----------------------
1997
1996
----
- ----
Income
Interest income $ 3,228 $
106,770
---------
- ---------
Share of loss from Operating
Partnerships (879,186)
(917,367)
---------
- ---------
Expenses
Partnership management fees 179,685
178,420
Amortization 7,297
7,297
General and administrative expenses 21,991
12,160
---------
- ---------
208,973
197,877
---------
- ---------
NET LOSS $(1,084,931)
$(1,008,474)
=========
=========
Net loss allocated to limited partner $(1,074,082) $
(998,389)
=========
=========
Net loss allocated to general partner $ (10,849) $
(10,085)
=========
=========
Net loss per BAC $ (.19) $
(.18)
=========
=========
The accompanying notes are an integral part of these
statements.
14
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Nine Months Ended December 31,
(Unaudited)
1997 1996
---- ----
Income
Interest income $ 32,874 $ 138,010
---------- ----------
Share of loss from Operating
Partnerships (8,408,743)
(10,825,077)
---------- ----------
Expenses
Partnership management fees 1,756,649 1,721,249
Amortization 36,421 46,249
General and administrative expenses 379,457 423,353
---------- ----------
2,172,527 2,190,851
---------- ----------
NET LOSS $(10,548,396)
$(12,877,918)
========== ==========
Net loss allocated to limited
partners $(10,442,912)
$(12,749,138)
========== ==========
Net loss allocated to general partner $ (105,484) $
(128,780)
========== ==========
Net loss per BAC $ (3.27) $
(4.02)
========== ==========
The accompanying notes are an integral part of these
statements.
15
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Nine Months Ended December 31,
(Unaudited)
SERIES 7
- -----------------------
1997
1996
----
- ----
Income
Interest income $ 224 $
113
--------
- --------
Share of loss from Operating
Partnerships (256,031)
(590,128)
--------
- --------
Expenses
Partnership management fees 84,861
81,411
Amortization -
- -
General and administrative expenses 22,798
24,339
--------
- --------
107,659
105,750
--------
- --------
NET LOSS $(363,466)
$(695,765)
========
========
Net loss allocated to limited
partners $(359,831)
$(688,807)
========
========
Net loss allocated to general partner $ (3,635) $
(6,958)
========
========
Net loss per BAC $ (.35) $
(.66)
========
========
The accompanying notes are an integral part of these
statements.
16
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Nine Months Ended December 31,
(Unaudited)
SERIES 9
- ----------------------
1997
1996
----
- ----
Income
Interest income $ 11,234 $
13,035
--------- --
- --------
Share of loss from Operating
Partnerships (1,697,592)
(2,378,992)
--------- --
- --------
Expenses
Partnership management fees 406,037
402,644
Amortization 652
652
General and administrative expenses 59,249
55,563
--------- --
- --------
465,938
458,859
--------- --
- --------
NET LOSS $(2,152,296) $
(2,824,816)
=========
==========
Net loss allocated to limited partners $(2,130,773) $
(2,796,568)
=========
==========
Net loss allocated to general partner $ (21,523) $
(28,248)
=========
==========
Net loss per BAC $ (.52) $
(.67)
=========
==========
The accompanying notes are an integral part of these
statements.
17
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Nine Months Ended December 31,
(Unaudited)
SERIES 10
- ----------------------
1997
1996
----
- ----
Income
Interest income $ 2,521 $
2,992
-------- -
- --------
Share of loss from Operating
Partnerships (985,241)
(1,362,731)
-------- -
- --------
Expenses
Partnership management fees 239,330
247,396
Amortization 2,581
2,581
General and administrative expenses 55,611
44,896
-------- -
- --------
297,522
294,873
-------- -
- --------
NET LOSS $(1,280,242)
$(1,654,612)
=========
=========
Net loss allocated to limited partner $(1,267,440)
$(1,638,066)
=========
=========
Net loss allocated to general partner $ (12,802) $
(16,546)
=========
=========
Net loss per BAC $ (.53) $
(.67)
=========
=========
The accompanying notes are an integral part of these
statements.
18
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Nine Months Ended December 31,
(Unaudited)
SERIES 11
- ----------------------
1997
1996
----
- ----
Income
Interest income $ 4,582 $
4,333
--------- --
- -------
Share of loss from Operating
Partnerships (1,489,899)
(1,134,431)
--------- -
- --------
Expenses
Partnership management fees 238,374
231,964
Amortization 1,308
1,038
General and administrative expenses 51,844
39,618
--------- -
- --------
291,526
272,890
--------- -
- --------
NET LOSS $(1,776,843)
$(1,402,988)
=========
=========
Net loss allocated to limited partner $(1,759,075)
$(1,388,958)
=========
=========
Net loss allocated to general partner $ (17,768) $
(14,030)
=========
=========
Net loss per BAC $ (.71) $
(.56)
=========
=========
The accompanying notes are an integral part of these
statements.
19
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Nine Months Ended December 31,
(Unaudited)
SERIES 12
- ----------------------
1997
1996
----
- ----
Income
Interest income $ 191 $
2,552
--------- -
- --------
Share of loss from Operating
Partnerships (1,374,882)
(1,805,569)
--------- -
- --------
Expenses
Partnership management fee 270,029
258,788
Amortization 9,988
9,988
General and administrative expenses 65,488
63,279
--------- -
- --------
345,505
332,055
--------- -
- --------
NET LOSS $(1,720,196)
$(2,135,072)
=========
=========
Net loss allocated to limited partner $(1,702,994)
$(2,113,721)
=========
=========
Net loss allocated to general partner $ (17,202) $
(21,351)
=========
=========
Net loss per BAC $ (.58) $
(.71)
=========
=========
The accompanying notes are an integral part of these
statements.
20
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Nine Months Ended December 31,
(Unaudited)
SERIES 14
- ----------------------
1997
1996
----
- ----
Income
Interest income $ 14,122 $
114,985
---------
- ---------
Share of loss from Operating
Partnerships (2,605,098)
(3,553,226)
---------
- ---------
Expenses
Partnership management fees 518,018
499,046
Amortization 21,892
31,720
General and administrative expenses 124,467
195,658
---------
- ---------
664,377
726,424
---------
- ---------
NET LOSS $(3,255,353)
$(4,164,665)
=========
=========
Net loss allocated to limited partner $(3,222,799)
$(4,123,018)
=========
=========
Net loss allocated to general partner $ (32,554) $
(41,647)
=========
=========
Net loss per BAC $ (.58) $
(.74)
=========
=========
The accompanying notes are an integral part of these
statements.
21
Boston Capital Tax Credit Fund II Limited
Partnership
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
Nine Months Ended December 31, 1997
(Unaudited)
General
Assignees Partner Total
--------- ------- -----
Partners' capital (deficit),
April 1, 1997 $ 62,344,445 $(1,003,302)
$61,341,143
Net loss (10,442,912) (105,484)
(10,548,396)
---------- ---------
- ----------
Partners' capital (deficit),
December 31, 1997 $ 51,901,533 $(1,108,786)
$50,792,747
========== =========
==========
The accompanying notes are an integral part of these
statements.
22
Boston Capital Tax Credit Fund II Limited
Partnership
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
Nine Months Ended December 31, 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 (359,831) (3,635)
(363,466)
--------- --------
- ---------
Partners' capital (deficit),
December 31, 1997 $ 788,899 $ (82,866) $
706,033
========= ========
=========
Series 9
- --------
Partners' capital (deficit),
April 1, 1997 $10,503,554 $(257,883)
$10,245,671
Net loss (2,130,773) (21,523)
(2,152,296)
---------- -------
- ----------
Partners' capital (deficit),
December 31, 1997 $ 8,372,781 $(279,406) $
8,093,375
========== ========
==========
Series 10
- --------
Partners' capital (deficit),
April 1, 1997 $ 7,647,492 $(135,695) $
7,511,797
Net loss (1,267,440) (12,802)
(1,280,242)
---------- -------- ------
- ----
Partners' capital (deficit),
December 31, 1997 $ 6,380,052 $(148,497) $
6,231,555
========== ========
==========
The accompanying notes are an integral part of these
statements.
23
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
Nine Months Ended December 31, 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 (1,759,075) (17,768)
(1,776,843)
---------- --------
- ----------
Partners' capital (deficit),
December 31, 1997 $ 8,505,863 $(130,935) $
8,374,928
========== ========
==========
Series 12
- --------
Partners' capital (deficit),
April 1, 1997 $10,920,442 $(149,550)
$10,770,892
Net loss (1,702,994) (17,202)
(1,720,196)
---------- --------
- ----------
Partners' capital (deficit),
December 31, 1997 $ 9,217,448 $(166,752) $
9,050,696
========== ========
==========
Series 14
- --------
Partners' capital (deficit),
April 1, 1997 $21,859,289 $(267,776)
$21,591,513
Net loss (3,222,799) (32,554)
(3,255,353)
---------- --------
- ----------
Partners' capital (deficit),
December 31, 1997 $18,636,490 $(300,330)
$18,336,160
========== ========
==========
The accompanying notes are an integral part of these
statements.
24
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF CASH FLOWS
Nine Months Ended December 31,
(Unaudited)
1997
1996
----
- ----
Cash flows from operating activities:
Net loss $(10,548,396)
$(12,877,918)
Adjustments
Distributions from Operating
Partnerships 15,923
27,450
Amortization 36,421
46,249
Share of loss from Operating
Partnerships 8,408,743 10,825,077
Changes in assets and liabilities
Increase in accounts payable
and accrued expenses 1,952,522
1,909,098
Decrease (Increase) in other
assets -
415,222
----------
- ----------
Net cash (used in) provided by
operating activities (134,787)
345,178
----------
- ----------
Cash flows from investing activities:
Capital contributions paid to
Operating Partnerships (12,997)
(1,247,192)
Advances (made to) repaid from
Operating Partnerships (4,588)
590,506
----------
- ----------
Net cash (used in) provided by
investing activities (17,585)
(656,686)
---------- -------
- ---
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (152,372)
(311,508)
Cash and cash equivalents, beginning 1,725,325
1,862,286
----------
- ----------
Cash and cash equivalents, ending $ 1,572,953 $
1,550,778
==========
==========
The accompanying notes are an integral part of these
statements.
25
Boston Capital Tax Credit Fund II Limited
Partnership
STATEMENTS OF CASH FLOWS
Nine Months Ended December 31,
(Unaudited)
Series 7
- -------------------------
1997
1996
----
- ----
Cash flows from operating activities:
Net loss $(363,466) $
(695,765)
Adjustments
Distributions from Operating
Partnerships -
- -
Amortization -
- -
Share of loss from Operating
Partnerships 256,031
590,128
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 101,707
111,507
Decrease (Increase) in other
assets -
- -
--------
- ---------
Net cash (used in) provided by
operating activities (5,728)
5,870
--------
- ---------
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 (5,728)
5,870
Cash and cash equivalents, beginning 12,008
4,874
--------
- ---------
Cash and cash equivalents, ending $ 6,280 $
10,744
========
=========
The accompanying notes are an integral part of these
statements.
26
Boston Capital Tax Credit Fund II Limited
Partnership
STATEMENTS OF CASH FLOWS
Nine Months Ended December 31,
(Unaudited)
Series 9
- -------------------------
1997
1996
----
- ----
Cash flows from operating activities:
Net loss $(2,152,296)
$(2,824,816)
Adjustments
Distributions from Operating
Partnerships 3,386
4,978
Amortization 652
652
Share of loss from Operating
Partnerships 1,697,592
2,378,992
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 431,840
431,838
Decrease (Increase) in other
assets -
- -
---------
- ---------
Net cash (used in) provided by
operating activities (18,826)
(8,356)
---------
- ---------
Cash flows from investing activities:
Capital contributions paid to
Operating Partnerships -
(86,448)
Advances (made to) repaid from
Operating Partnerships (4,588)
- -
---------
- ---------
Net cash (used in) provided by
investing activities (4,588)
(86,448)
---------
- ---------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (23,414)
(94,804)
Cash and cash equivalents, beginning 566,836
658,264
---------
- ---------
Cash and cash equivalents, ending $ 543,422 $
563,460
=========
=========
The accompanying notes are an integral part of these
statements.
27
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF CASH FLOWS
Nine Months Ended December 31,
(Unaudited)
Series 10
- -------------------------
1997
1996
----
- ----
Cash flows from operating activities:
Net loss $(1,280,242)
$(1,654,612)
Adjustments
Distributions from Operating
Partnerships 149
7,298
Amortization 2,581
2,581
Share of loss from Operating
Partnerships 985,241
1,362,731
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 266,634
266,636
Decrease (Increase) in other
assets -
- -
---------
- ---------
Net cash (used in) provided by
operating activities (25,637)
(15,366)
---------
- ---------
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 (25,637)
(15,366)
Cash and cash equivalents, beginning 144,428
152,625
---------
- ---------
Cash and cash equivalents, ending $ 118,791 $
137,259
=========
=========
The accompanying notes are an integral part of these
statements.
28
Boston Capital Tax Credit Fund II Limited
Partnership
STATEMENTS OF CASH FLOWS
Nine Months Ended December 31,
(Unaudited)
Series 11
- -------------------------
1997 1996
---- ----
Cash flows from operating activities:
Net loss $(1,776,843)
$(1,402,988)
Adjustments
Distributions from Operating
Partnerships -
2,632
Amortization 1,308
1,308
Share of loss from Operating
Partnerships 1,489,899
1,134,431
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 244,261
244,260
Decrease (Increase) in other
assets -
- -
---------
- ---------
Net cash (used in) provided by
operating activities (41,375)
(20,357)
---------
- ---------
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 (41,375)
(54,851)
Cash and cash equivalents, beginning 307,351
233,619
---------
- ---------
Cash and cash equivalents, ending $ 265,976 $
178,768
=========
=========
The accompanying notes are an integral part of these
statements.
29
Boston Capital Tax Credit Fund II Limited
Partnership
STATEMENTS OF CASH FLOWS
Nine Months Ended December 31,
(Unaudited)
Series 12
- -------------------------
1997
1996
----
- ----
Cash flows from operating activities:
Net loss $(1,720,196)
$(2,135,072)
Adjustments
Distributions from Operating
Partnerships 4,673
8,981
Amortization 9,988
9,988
Share of loss from Operating
Partnerships 1,374,882
1,805,569
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 340,675
287,452
Decrease (Increase) in other
assets -
(60,336)
---------
- ---------
Net cash (used in) provided by
operating activities 10,022
(83,418)
---------
- ---------
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 10,022
(159,848)
Cash and cash equivalents, beginning 8,532
167,568
---------
- ---------
Cash and cash equivalents, ending $ 18,554 $
7,720
=========
=========
The accompanying notes are an integral part of these
statements.
30
Boston Capital Tax Credit Fund II Limited
Partnership
STATEMENTS OF CASH FLOWS
Nine Months Ended December 31,
(Unaudited)
Series 14
- -------------------------
1997
1996
----
- ----
Cash flows from operating activities:
Net loss $(3,255,353)
$(4,164,665)
Adjustments
Distributions from Operating
Partnerships 7,715
3,561
Amortization 21,892
31,720
Share of loss from Operating
Partnerships 2,605,098
3,553,226
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 567,405
567,405
Decrease (Increase) in other
assets -
475,558
----------
- ---------
Net cash (used in) provided by
operating activities (53,243)
466,805
----------
- ---------
Cash flows from investing activity:
Capital contributions paid to
Operating Partnerships (12,997)
(1,084,314)
Advances (made to) repaid from
Operating Partnerships -
625,000
----------
- ---------
Net cash (used in) provided by
investing activities (12,997)
(459,134)
----------
- ---------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (66,240)
7,491
Cash and cash equivalents, beginning 686,170
645,336
----------
- ---------
Cash and cash equivalents, ending $ 619,930 $
652,827
==========
=========
The accompanying notes are an integral part of these
statements.
31
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS
December 31, 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 December
31, 1997
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, 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 December 31,
1997, the
Partnership has accumulated unallocated acquisition amortization
totaling
$133,544. The breakdown of accumulated unallocated acquisition
amortization
within the Partnership as of December 31, 1997 for Series 9,
Series 10,
Series 11, Series 12, and Series 14 is $2,392, $9,464, $4,797,
$36,621, and
$80,270, 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, 1997
and 1996 are
as follows:
33
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1997
(Unaudited)
NOTE C - RELATED PARTY TRANSACTIONS - Continued
1997 1996
-------- --------
Series 7 $ 28,287 $ 28,287
Series 9 143,946 143,946
Series 10 88,878 88,878
Series 11 81,420 81,420
Series 12 95,817 95,817
Series 14 189,135 189,135
------- -------
$627,483 $627,483
======= =======
Accounts payable - affiliates at December 31, 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 December 31, 1997, an affiliate of the general partner
has
advanced a total of $111,400 to the Partnership to pay certain
operating
expenses of two of the series (Series 7 & 12). No funds were
advanced during the during the quarter ended December 31, 1997.
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
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1997
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING LIMITED PARTNERSHIPS
At December 31, 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 December 31, 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 December 31, 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 11,405
Series 14 330,578 622,067
--------- ---------
$ 374,101 $ 665,590
========= =========
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, 1997.
35
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1997
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Nine months ended September 30,
(Unaudited)
Series 7
- ---------------------------
1997 1996
---- ----
Revenues
Rental $ 1,544,473 $
1,589,123
Interest and other 131,227
194,127
---------
- ---------
1,675,700
1,783,250
---------
- ---------
Expenses
Interest 645,825
736,939
Depreciation and amortization 798,995
759,294
Operating expenses 1,138,844
1,080,056
---------
- ---------
2,583,664
2,576,289
---------
- ---------
NET LOSS $ (907,964) $
(793,039)
=========
=========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $ (256,031) $
(590,128)
=========
=========
Net loss allocated to other partners $ (9,080) $
(7,930)
=========
=========
Net loss suspended $ (642,853) $
(194,981)
=========
=========
The variance in allowable loss from the Operating Partnerships
for the nine
months ended September 30, 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.
36
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1997
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Nine months ended September 30,
(Unaudited)
Series 9
- --------------------------
1997 1996
----- -----
Revenues
Rental $ 7,284,542 $
7,259,297
Interest and other 370,742
409,417
----------
- ----------
7,655,284
7,668,714
----------
- ----------
Expenses
Interest 2,583,445
2,718,490
Depreciation and amortization 2,906,247
2,936,142
Operating expenses 4,514,783
4,819,425
----------
- ----------
10,004,475
10,474,057
----------
- ----------
NET LOSS $(2,349,191)
$(2,805,343)
==========
==========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $(1,697,592)
$(2,378,992)
==========
==========
Net loss allocated to other partners $ (23,492) $
(28,053)
=========
==========
Net loss suspended $ (628,107) $
(398,298)
=========
==========
The variance in allowable loss from the Operating Partnerships
for the nine
months ended September 30, 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.
37
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1997
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Nine Months ended September 30,
(Unaudited)
Series 10
- --------------------------
1997 1996
Revenues ---- ----
Rental $ 5,503,294 $
5,511,545
Interest and other 235,605
227,750
----------
- ----------
5,738,899
5,739,295
----------
- ----------
Expenses
Interest 1,803,389
2,157,313
Depreciation and amortization 1,872,498
1,940,147
Operating expenses 3,327,029
3,272,904
----------
- ----------
7,002,916
7,370,364
----------
- ----------
NET LOSS $(1,264,016)
$(1,631,069)
==========
==========
Net loss allocated to Boston
Capital Tax Credit Fund
Limited Partnership II $ (985,241)
$(1,362,731)
==========
==========
Net loss allocated to other partners $ (12,640) $
(16,311)
==========
==========
Net loss suspended $ (266,135) $
(252,027)
==========
==========
The variance in allowable loss from the Operating Partnerships
for the nine
months ended September 30, 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.
38
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1997
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Nine months ended September 30,
(Unaudited)
Series 11
- ----------------------------
1997 1996
Revenues ---- ----
Rental $ 4,887,707 $
4,724,532
Interest and other 235,446
214,690
----------
- ----------
5,123,153
4,939,222
----------
- ----------
Expenses
Interest 1,925,117
1,571,598
Depreciation and amortization 1,834,595
1,908,600
Operating expenses 3,064,184
2,767,002
----------
- ----------
6,823,896
6,247,200
----------
- ----------
NET LOSS $(1,700,743)
$(1,307,978)
==========
==========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $(1,489,899)
$(1,134,431)
==========
==========
Net loss allocated to other partners $ (17,007) $
(13,080)
==========
==========
Net loss suspended $ (193,837) $
(160,467)
==========
==========
The variance in allowable loss from the Operating Partnerships
for the nine
months ended September 30, 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.
39
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1997
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Nine months ended September 30,
(Unaudited)
Series 12
- --------------------------
1997 1996
Revenues ---- ----
Rental $ 5,387,867 $
5,049,373
Interest and other 216,386
191,503
---------
- ---------
5,604,253
5,240,876
---------
- ---------
Expenses
Interest 1,903,988
1,957,004
Depreciation and amortization 2,113,445
2,133,854
Operating expenses 3,130,728
3,037,220
---------
- ---------
7,148,161
7,128,078
---------
- ---------
NET LOSS $(1,543,908)
$(1,887,202)
=========
=========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $(1,374,882)
$(1,805,569)
=========
=========
Net loss allocated to other partners $ (15,439) $
(18,872)
=========
=========
Net loss suspended $ (153,587) $
(62,761)
=========
=========
The variance in allowable loss from the Operating Partnerships
for the nine
months ended September 30, 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.
40
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1997
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Nine months ended September 30,
(Unaudited)
Series 14
---
- ------------------------
1997 1996
Revenues ---- ----
Rental $10,775,219
$11,404,165
Interest and other 565,817
468,276
----------
- ----------
11,341,036
11,872,441
----------
- ----------
Expenses
Interest 3,611,818
4,294,166
Depreciation and amortization 4,023,026
4,364,980
Operating expenses 6,602,697
6,843,537
----------
- ----------
14,237,541
15,502,683
----------
- ----------
NET LOSS $(2,896,505)
$(3,630,242)
==========
==========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $(2,605,098)
$(3,553,226)
==========
==========
Net loss allocated to other partners $ (28,965) $
(36,302)
==========
==========
Net loss suspended $ (262,442) $
(40,714)
==========
==========
The variance in allowable loss from the Operating Partnerships
for the nine
months ended September 30, 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.
41
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 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.
42
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, 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 $111,400 to the
Partnership
to pay certain third party operating expenses. This amount has
been advanced
to two series, Series 7 and 12. 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.
43
(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, 1997, Series 7 had paid all installments of
capital
contributions to the Operating Partnerships. Series 7 net
offering proceeds
in the amount of $6,280 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 December 31, 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 December 31, 1997, Series 10 had paid all installments of
capital
contributions to the Operating Partnerships. Series 10 net
offering proceeds
in the amount of $118,791 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 December 31, 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
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, 1997, 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, 1997, none of Series 14 net
offering
proceeds had been used to pay capital contributions. Series 14
net offering
proceeds in the amount of $330,578 remain to be used by the
Partnership to pay
remaining capital contributions to the Operating Partnerships.
Results of Operations
- ---------------------
As of December 31, 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 December 31, 1997 and 1996 were
$583,927 and
$597,694, 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. 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, 1997 and 1996, the average
Qualified Occupancy
for the series was 100% for both years. The series had a total
of 15
properties at December 31, 1997.
For the nine months being reported the series reflects a net loss
from the
Operating Partnerships of $907,964. When adjusted for
depreciation, which is
A non-cash item, the Operating Partnerships reflect a net loss of
$108,969.
This is an interim period estimate; it is not necessarily
indicative of
the final year end results.
(Series 9) As of December 31, 1997 and 1996, the average
Qualified Occupancy
for the series was 99.8% for both years. The series had a total
of 55
properties at December 31, 1997. Out of the total, 53 were at
100% Qualified
Occupancy.
For the nine months being reported the series reflects a net loss
from the
Operating Partnerships of $2,349,191. When adjusted for
depreciation, which is
a non-cash item, the Operating Partnerships reflect positive
operations of
$557,056. This is an interim period estimate; it is not
necessarily
indicative of the final year end results.
(Series 10) As of December 31, 1997 and 1996, the average
Qualified
Occupancy for the series was 99.6% and 99.8%, respectively. The
series had a
total of 46 properties at December 31, 1997, 43 of which were at
100%
Qualified Occupancy.
For the nine months being reported the series reflects a net loss
from the
Operating Partnerships of $1,264,016. When adjusted for
depreciation which is
a non-cash item, the Operating Partnerships reflect positive
operations of
$608,482. This is an interim period estimate; it is not
necessarily
indicative of the final year end results.
(Series 11) As of December 31, 1997 and 1996 the average
Qualified
Occupancy for the series was 100% for both years. The series had
a total of 40
properties at December 31, 1997.
46
For the nine months being reported the series reflects a net loss
from the
Operating Partnerships of $1,700,743. When adjusted for
depreciation, which is
a non-cash item, the Operating Partnerships reflect a net loss of
$133,852. This is an interim period estimate; it is not
necessarily
indicative of the final year end results.
(Series 12) As of December 31, 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 December 31, 1997, 52 of which were at
100%
qualified occupancy.
For the nine months being reported the series reflects a net loss
from the
Operating Partnerships of $1,543,908. When adjusted for
depreciation, which is
a non-cash item, the Operating Partnerships reflect positive
operations of
$569,537. 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 94%. 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, 1997 and 1996, the average
Qualified
Occupancy for the series was 99.5% and 99.9%, respectively. The
series had a
total of 101 properties at December 31, 1997, 92 of which were at
100%
Qualified Occupancy.
For the nine months being reported the series reflects a net loss
from the
Operating Partnerships of $2,896,505. When adjusted for
depreciation, which is
a non-cash item, the Operating Partnerships reflect positive
operations of
$1,126,521. This is an interim period estimate; it is not
necessarily
indicative of the final year end results.
47
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.
48
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
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 19, 1998 By: /s/ John P. Manning
-------------------
John P. Manning,
Partner & Principal Financial
Officer
50
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<ARTICLE> CT
<CIK> 0000853566
<NAME> BOSTON CAPITAL TAX CREDIT FUND II LIMITED PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> APR-01-1997
<PERIOD-END> DEC-31-1997
<TOTAL-ASSETS> 64,774,004
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 64,774,004
<TOTAL-REVENUES> 32,874
<INCOME-TAX> 0
<INCOME-CONTINUING> (10,581,270)
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