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, 1998
--------------------
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, 1998
-----------------------------------------------
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,
1998
1998
(Unaudited)
(Audited)
------------
- ------------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $ 57,857,916 $
60,839,977
OTHER ASSETS
Cash and cash equivalents 1,722,596
1,611,248
Notes Receivable 543,584
604,695
Deferred acquisition costs (Note B) 1,177,837
1,189,760
Other assets 465,347
387,808
----------
- ----------
$ 61,767,280 $
64,633,488
==========
==========
LIABILITIES
Accounts Payable $ 55,459
$ -
Accounts Payable - affiliates (Note C) 14,866,163
14,237,489
Capital Contributions payable (Note D) 368,417
368,417
----------
- ----------
15,290,039
14,605,906
----------
- ----------
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 47,629,180
51,144,019
General Partner (1,151,939)
(1,116,437)
----------
- ----------
46,477,241
50,027,582
----------
- ----------
$ 61,767,280 $
64,633,488
==========
==========
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,
1998
1998
(Unaudited)
(Audited)
-----------
- ---------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $1,428,501
$1,485,326
OTHER ASSETS
Cash and cash equivalents 11,751
7,134
Notes receivable -
- -
Deferred acquisition costs (Note B) -
- -
Other assets 16,450
16,450
---------
- ---------
$1,456,702
$1,508,910
=========
=========
LIABILITIES
Accounts payable $ 119 $
- -
Accounts payable - affiliates (Note C) 889,405
860,885
Capital contributions payable (Note D) -
- -
---------
- ---------
889,524
860,885
---------
- ---------
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 651,432
731,471
General Partner (84,254)
(83,446)
---------
- ---------
567,178
648,025
---------
- ---------
$1,456,702
$1,508,910
=========
=========
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,
1998
1998
ASSETS (Unaudited)
(Audited)
-----------
- ---------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $10,379,834
$10,821,707
OTHER ASSETS
Cash and cash equivalents 527,428
517,412
Notes receivable -
- -
Deferred acquisition costs (Note B) 21,312
21,312
Other assets 51,744
47,650
----------
- ----------
$10,980,318
$11,408,081
==========
==========
LIABILITIES
Accounts payable $ 1,995 $
- -
Accounts payable - affiliates (Note C) 3,601,106
3,457,163
Capital contributions payable (Note D) 4,590
4,590
----------
- ----------
3,607,691
3,461,753
----------
- ----------
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 7,659,240
8,227,204
General Partner (286,613)
(280,876)
----------
- ----------
7,372,627
7,946,328
----------
- ----------
$10,980,318
$11,408,081
==========
==========
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,
1998
1998
ASSETS (Unaudited)
(Audited)
-----------
- ---------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $ 7,815,104 $
8,211,459
OTHER ASSETS
Cash and cash equivalents 169,379
124,484
Notes receivable -
- -
Deferred acquisition costs (Note B) 83,453
84,314
Other assets 40,783
39,662
----------
- ----------
$ 8,108,719 $
8,459,919
==========
==========
LIABILITIES
Accounts payable $ 45,455 $
- -
Accounts payable - affiliates (Note C) 2,428,350
2,339,472
Capital contributions payable (Note D) -
- -
----------
- ----------
2,473,805
2,339,472
----------
- ----------
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 5,789,377
6,270,055
General Partner (154,463)
(149,608)
----------
- ----------
5,634,914
6,120,447
----------
- ----------
$ 8,108,719 $
8,459,919
==========
==========
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,
1998
1998
(Unaudited)
(Audited)
------------
- ----------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $ 9,132,098 $
9,872,942
OTHER ASSETS
Cash and cash equivalents 287,661
287,800
Notes receivable -
- -
Deferred acquisition costs (Note B) 42,299
42,735
Other assets 50,717
47,290
----------
- ----------
$ 9,512,775
$10,250,767
==========
==========
LIABILITIES
Accounts payable $ 208 $
- -
Accounts payable - affiliates (Note C) 1,707,574
1,625,754
Capital contributions payable (Note D) 22,528
22,528
----------
- ----------
1,730,310
1,648,282
----------
- ----------
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 7,919,325
8,731,145
General Partner (136,860)
(128,660)
----------
- ----------
7,782,465
8,602,485
----------
- ----------
$ 9,512,775
$10,250,767
==========
==========
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,
1998
1998
(Unaudited)
(Audited)
------------
- ----------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $10,020,104
$10,585,841
OTHER ASSETS
Cash and cash equivalents 32,840
21,827
Notes receivable -
61,111
Deferred acquisition costs (Note B) 323,933
326,262
Other assets 120,942
59,831
---------
- ---------
$10,496,819
$11,054,872
==========
==========
LIABILITIES
Accounts payable $ 287 $
- -
Accounts payable - affiliates (Note C) 2,163,538
2,067,156
Capital contributions payable (Note D) 11,405
11,405
----------
- ----------
2,175,230
2,078,561
----------
- ----------
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 8,495,632
9,143,807
General Partner (174,043)
(167,496)
----------
- ----------
8,321,589
8,976,311
----------
- ----------
$10,496,819
$11,054,872
==========
==========
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,
1998
1998
(Unaudited)
(Audited)
------------
- ----------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $19,082,275
$19,862,702
OTHER ASSETS
Cash and cash equivalents 693,537
652,591
Notes receivable 543,584
543,584
Deferred acquisition costs (Note B) 707,840
715,137
Other assets 184,711
176,925
----------
- ----------
$21,211,947
$21,950,939
==========
==========
LIABILITIES
Accounts payable $ 7,395 $
- -
Accounts payable - affiliates (Note C) 4,076,190
3,887,059
Capital contributions payable (Note D) 329,894
329,894
----------
- ----------
4,413,479
4,216,953
----------
- ----------
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 17,114,174
18,040,337
General Partner (315,706)
(306,351)
----------
- ----------
16,798,468
17,733,986
----------
- ----------
$21,211,947
$21,950,939
==========
==========
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)
1998 1997
---- ----
Income
Interest income $ 20,101 $ 11,969
Other Income 21,334 -
---------- ----------
41,435 11,969
Share of loss from Operating
Partnerships (2,969,636)
(3,408,453)
---------- ----------
Expenses
Partnership management fees 567,185 587,499
Amortization 11,922 12,139
General and administrative expenses 43,033 46,683
---------- ----------
622,140 646,321
---------- ----------
NET LOSS $(3,550,341)
$(4,042,805)
========== ==========
Net loss allocated to limited
partners $(3,514,839)
$(4,002,377)
========== ==========
Net loss allocated to general partner $ (35,502) $
(40,428)
========== ==========
Net loss per BAC $ (1.14) $
(1.29)
========== ==========
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
- -----------------------
1998
1997
----
- ----
Income
Interest income $ 52 $
88
Other Income -
- -
--------
- --------
52
88
Share of loss from Operating
Partnerships (56,825)
(154,942)
--------
- --------
Expenses
Partnership management fees 22,287
28,287
Amortization -
- -
General and administrative expenses 1,787
2,885
--------
- --------
24,074
31,172
--------
- --------
NET LOSS $ (80,847)
$(186,026)
========
========
Net loss allocated to limited
partners $ (80,039)
$(184,166)
========
========
Net loss allocated to general partner $ (808) $
(1,860)
========
========
Net loss per BAC $ (.08) $
(.18)
========
========
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
- ----------------------
1998
1997
----
- ----
Income
Interest income $ 5,053 $
4,348
Other Income 2,134
- -
--------
- --------
7,187
4,348
Share of loss from Operating
Partnerships (441,678)
(753,828)
--------
- --------
Expenses
Partnership management fees 129,037
135,983
Amortization -
217
General and administrative expenses 10,173
8,715
--------
- --------
139,210
144,915
--------
- --------
NET LOSS $ (573,701) $
(894,395)
========
=========
Net loss allocated to limited partners $ (567,964) $
(885,451)
========
=========
Net loss allocated to general partner $ (5,737) $
(8,944)
========
=========
Net loss per BAC $ (.14) $
(.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 June 30,
(Unaudited)
SERIES 10
- ----------------------
1998
1997
----
- ----
Income
Interest income $ 1,458 $
978
Other income -
- -
--------
- --------
1,458
978
Share of loss from Operating
Partnerships (396,360)
(456,597)
--------
- --------
Expenses
Partnership management fees 84,133
84,528
Amortization 860
860
General and administrative expenses 5,683
6,577
--------
- --------
90,631
91,965
--------
- --------
NET LOSS $(485,533)
$(547,584)
========
========
Net loss allocated to limited partner $(480,678)
$(542,108)
========
========
Net loss allocated to general partner $ (4,855) $
(5,476)
========
========
Net loss per BAC $ (.20) $
(.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 June 30,
(Unaudited)
SERIES 11
- ----------------------
1998
1997
----
- ----
Income
Interest income $ 3,618 $
1,673
Other Income 2,400
- -
--------
- --------
6,018
1,673
Share of loss from Operating
Partnerships (740,809)
(623,000)
--------
- --------
Expenses
Partnership management fees 80,420
78,834
Amortization 436
436
General and administrative expenses 4,373
5,763
--------
- --------
85,229
85,033
--------
- --------
NET LOSS $(820,020)
$(706,360)
========
========
Net loss allocated to limited partner $(811,820)
$(699,296)
========
========
Net loss allocated to general partner $ (8,200) $
(7,064)
========
========
Net loss per BAC $ (.33) $
(.28)
========
========
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
- ----------------------
1998
1997
----
- ----
Income
Interest income $ 160 $
85
Other Income 6,150
- -
--------
- --------
6,310
85
Share of loss from Operating
Partnerships (561,675)
(572,212)
--------
- --------
Expenses
Partnership management fee 91,128
91,518
Amortization 3,329
3,329
General and administrative expenses 4,900
7,760
--------
- --------
99,357
102,607
--------
- --------
NET LOSS $(654,722)
$(674,734)
========
========
Net loss allocated to limited partner $(648,175)
$(667,987)
========
========
Net loss allocated to general partner $ (6,547) $
(6,747)
========
========
Net loss per BAC $ (.22) $
(.22)
========
========
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
- ----------------------
1998
1997
----
- ----
Income
Interest income $ 9,760 $
4,797
Other Income 10,650
- -
---------
- ---------
20,410
4,797
Share of loss from Operating
Partnerships (772,289)
(847,874)
---------
- ---------
Expenses
Partnership management fees 160,180
168,349
Amortization 7,297
7,297
General and administrative expenses 16,162
14,983
---------
- ---------
183,640
190,629
---------
- ---------
NET LOSS $ (935,518)
$(1,033,706)
========= =========
Net loss allocated to limited partner $ (926,163)
$(1,023,369)
=========
=========
Net loss allocated to general partner $ (9,355) $
(10,337)
=========
=========
Net loss per BAC $ (.17) $
(.18)
=========
=========
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, 1998
(Unaudited)
General
Assignees Partner Total
--------- ------- -----
Partners' capital (deficit),
April 1, 1998 $ 51,144,019 $(1,116,437)
$50,027,582
Net loss (3,514,839) (35,502)
(3,550,341)
---------- ---------
- ----------
Partners' capital (deficit),
June 30, 1998 $ 47,629,180 $(1,151,939)
$46,477,241
========== =========
==========
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, 1998
(Unaudited)
Limited General
Partners Partner Total
-------- ------- -----
Series 7
- --------
Partners' capital (deficit),
April 1, 1998 $ 731,471 $ (83,446) $
648,025
Net loss (80,039) (808)
(80,847)
--------- --------
- ---------
Partners' capital (deficit),
June 30, 1998 $ 651,432 $ (84,254) $
567,178
========= ========
=========
Series 9
- --------
Partners' capital (deficit),
April 1, 1998 $ 8,227,204 $(280,876) $
7,946,328
Net loss (567,964) (5,737)
(573,701)
---------- -------
- ----------
Partners' capital (deficit),
June 30, 1998 $ 7,659,240 $(286,613) $
7,372,627
========== ========
==========
Series 10
- --------
Partners' capital (deficit),
April 1, 1998 $ 6,270,055 $(149,608) $
6,120,447
Net loss (480,678) (4,855)
(485,533)
---------- -------- ------
- ----
Partners' capital (deficit),
June 30, 1998 $ 5,789,377 $(154,463) $
5,634,914
========== ========
==========
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, 1998
(Unaudited)
Limited General
Partners Partner Total
-------- ------- -----
Series 11
- --------
Partners' capital (deficit),
April 1, 1998 $ 8,731,145 $(128,660) $
8,602,485
Net loss (811,820) (8,200)
(820,020)
---------- --------
- ----------
Partners' capital (deficit),
June 30, 1998 $ 7,919,325 $(136,860) $
7,782,465
========== ========
==========
Series 12
- --------
Partners' capital (deficit),
April 1, 1998 $ 9,143,807 $(167,496) $
8,976,311
Net loss (648,175) (6,547)
(654,722)
---------- --------
- ----------
Partners' capital (deficit),
June 30, 1998 $ 8,495,632 $(174,043) $
8,321,589
========== ========
==========
Series 14
- --------
Partners' capital (deficit),
April 1, 1998 $18,040,337 $(306,351)
$17,733,986
Net loss (926,163) (9,355)
(935,518)
---------- --------
- ----------
Partners' capital (deficit),
June 30, 1998 $17,114,174 $(315,706)
$16,798,468
========== ========
==========
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)
1998
1997
----
- ----
Cash flows from operating activities:
Net loss $ (3,550,341) $
(4,042,806)
Adjustments
Distributions from Operating
Partnerships 7,650
3,050
Amortization 11,922
12,139
Share of loss from Operating
Partnerships 2,969,636 3,408,453
Changes in assets and liabilities
Increase in accounts payable
and accrued expenses 676,736
627,983
Decrease (Increase) in other
assets (62,360)
- -
Decrease (Increase) in prepaid
Expenses (7,786)
- -
----------
- ----------
Net cash (used in) provided by
operating activities 45,457
8,819
----------
- ----------
Cash flows from investing activities:
Capital contributions paid to
Operating Partnerships (2,543)
(13,000)
Advances (made to) repaid from
Operating Partnerships 61,111
- -
Credit adjusters received from
Operating Partnerships 7,323
- -
----------
- ----------
Net cash (used in) provided by
investing activities 65,891
(13,000)
---------- ------
- ----
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 111,348
(4,181)
Cash and cash equivalents, beginning 1,611,248
1,725,325
----------
- ----------
Cash and cash equivalents, ending $ 1,722,596 $
1,721,144
==========
==========
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
- -------------------------
1998
1997
----
- ----
Cash flows from operating activities:
Net loss $ (80,847) $
(186,026)
Adjustments
Distributions from Operating
Partnerships -
- -
Amortization -
- -
Share of loss from Operating
Partnerships 56,825
154,942
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 28,639
28,787
Decrease (Increase) in other
assets -
- -
Decrease (Increase) in prepaid -
- -
expenses --------
- ---------
Net cash (used in) provided by
operating activities 4,617
(2,297)
--------
- ---------
Cash flows from investing activities:
Capital contributions paid to
Operating Partnerships -
- -
Advances (made to) repaid from Operating
Partnerships -
- -
Credit adjusters received from Operating
Partnerships -
- -
--------
- ---------
Net cash (used in) provided by
investing activities -
- -
-------- ------
- ---
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 4,617
(2,297)
Cash and cash equivalents, beginning 7,134
12,008
--------
- ---------
Cash and cash equivalents, ending $ 11,751 $
9,711
========
=========
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
- -------------------------
1998
1997
----
- ----
Cash flows from operating activities:
Net loss $ (573,701) $
(894,396)
Adjustments
Distributions from Operating
Partnerships 195
5
Amortization -
217
Share of loss from Operating
Partnerships 441,678
753,828
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 145,938
143,946
Decrease (Increase) in other
assets (4,094)
- -
Decrease (Increase) in prepaid
expenses -
- -
---------
- ---------
Net cash (used in) provided by
operating activities 10,016
3,600
---------
- ---------
Cash flows from investing activities:
Capital contributions paid to
Operating Partnerships -
- -
Advances (made to) repaid from
Operating Partnerships -
- -
Credit adjusters received from
Operating Partnerships -
- -
---------
- ---------
Net cash (used in) provided by
investing activities -
- -
---------
- ---------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 10,016
3,600
Cash and cash equivalents, beginning 517,412
566,836
---------
- ---------
Cash and cash equivalents, ending $ 527,428 $
570,436
=========
=========
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
- -------------------------
1998
1997
----
- ----
Cash flows from operating activities:
Net loss $ (485,533) $
(547,584)
Adjustments
Distributions from Operating
Partnerships -
- -
Amortization 860
860
Share of loss from Operating
Partnerships 396,360
456,597
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 134,333
88,878
Decrease (Increase) in other
assets (1,125)
- -
Decrease (Increase) in prepaid
expenses -
- -
---------
- ---------
Net cash (used in) provided by
operating activities 44,895
(1,249)
---------
- ---------
Cash flows from investing activity:
Capital contributions paid to
Operating Partnerships -
- -
Advances (made to) repaid from
Operating Partnerships -
- -
Credit adjusters received from
Operating Partnerships -
- -
---------
- ---------
Net cash (used in) provided by
investing activities -
- -
--------- ------
- ---
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 44,895
(1,249)
Cash and cash equivalents, beginning 124,484
144,428
---------
- ---------
Cash and cash equivalents, ending $ 169,379 $
143,179
=========
=========
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
- -------------------------
1998 1997
---- ----
Cash flows from operating activities:
Net loss $ (820,020) $
(706,360)
Adjustments
Distributions from Operating
Partnerships 37
- -
Amortization 436
436
Share of loss from Operating
Partnerships 740,809
623,000
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 82,026
81,420
Decrease (Increase) in other
assets (3,427)
- -
Decrease (Increase) in
prepaid expenses -
- -
---------
- ---------
Net cash (used in) provided by
operating activities (139)
(1,504)
---------
- ---------
Cash flows from investing activities:
Capital contributions paid to
Operating Partnerships -
- -
Advances (made to) repaid from
Operating Partnerships -
- -
Credit adjusters received from
Operating Partnerships -
- -
---------
- ---------
Net cash (used in) provided by
investing activities -
- -
--------- ------
- ---
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (139)
(1,504)
Cash and cash equivalents, beginning 287,800
307,351
---------
- ---------
Cash and cash equivalents, ending $ 287,661 $
307,847
=========
=========
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
- -------------------------
1998
1997
----
- ----
Cash flows from operating activities:
Net loss $ (654,722) $
(674,734)
Adjustments
Distributions from Operating
Partnerships 4,062
- -
Amortization 3,329
3,329
Share of loss from Operating
Partnerships 561,675
572,212
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 96,669
95,817
Decrease (Increase) in prepaid
Expenses (61,111)
- -
Decrease (Increase) in other
assets -
- -
---------
- ---------
Net cash (used in) provided by
operating activities (50,098)
(3,376)
---------
- ---------
Cash flows from investing activity:
Capital contributions paid to
Operating Partnerships -
- -
Advances (made to) repaid from Operating
Partnerships 61,111
- -
Credit adjusters received from
Operating Partnerships -
- -
---------
- ---------
Net cash (used in) provided by
investing activities 61,111
- -
---------
- ---------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 11,013
(3,376)
Cash and cash equivalents, beginning 21,827
8,532
---------
- ---------
Cash and cash equivalents, ending $ 32,840 $
5,156
=========
=========
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
- -------------------------
1998
1997
----
- ----
Cash flows from operating activities:
Net loss $ (935,518)
$(1,033,706)
Adjustments
Distributions from Operating
Partnerships 3,356
3,045
Amortization 7,297
7,297
Share of loss from Operating
Partnerships 772,289
847,874
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 189,131
189,135
Decrease (Increase) in other
Assets 7,397
- -
Decrease (Increase) in prepaid
expenses (7,786)
- -
----------
- ---------
Net cash (used in) provided by
operating activities 36,166
13,645
----------
- ---------
Cash flows from investing activity:
Capital contributions paid to
Operating Partnerships (2,543)
(13,000)
Advances (made to) repaid from
Operating Partnerships -
- -
Credit adjusters received from
Operating Partnerships 7,323
- -
----------
- ---------
Net cash (used in) provided by
investing activities 4,780
(13,000)
----------
- ---------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 40,946
645
Cash and cash equivalents, beginning 652,591
686,170
----------
- ---------
Cash and cash equivalents, ending $ 693,537 $
686,815
==========
=========
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, 1998
(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,
1998
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, 1998
(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, 1998,
the
Partnership has accumulated unallocated acquisition amortization
totaling
$157,608. The breakdown of accumulated unallocated acquisition
amortization
within the Partnership as of June 30, 1998 for Series 9, Series
10,
Series 11, Series 12, and Series 14 is $2,610, $11,185, $5,669,
$43,279, and
$94,865, 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 June 30, 1998 and
1997 are
as follows:
26
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1998
(Unaudited)
NOTE C - RELATED PARTY TRANSACTIONS - Continued
1998 1997
-------- --------
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 June 30, 1998 and 1997
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, 1998, 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 quarter ended June 30, 1998. 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, 1998
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING LIMITED PARTNERSHIPS
At June 30, 1998 and 1997 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, 1998 and 1997 by series are as
follows:
Series 7 15
Series 9 55
Series 10 46
Series 11 40
Series 12 53
Series 14 101
---
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, 1998 and 1997 by series
are as
follows:
1998 1997
---------- ----------
Series 7 $ - $ -
Series 9 4,590 4,590
Series 10 - -
Series 11 22,528 27,528
Series 12 11,405 11,405
Series 14 329,894 330,575
--------- ---------
$ 368,417 $ 374,098
========= =========
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, 1998.
28
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1998
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 7
- ---------------------------
1998 1997
---- ----
Revenues
Rental $ 526,245 $
532,590
Interest and other 59,457
47,244
---------
- ---------
585,702
579,834
---------
- ---------
Expenses
Interest 204,502
240,882
Depreciation and amortization 230,097
248,577
Operating expenses 339,489
447,561
---------
- ---------
774,088
937,020
---------
- ---------
NET LOSS $ (188,386) $
(357,186)
=========
=========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $ (56,825) $
(154,942)
=========
=========
Net loss allocated to other partners $ (1,884) $
(3,572)
=========
=========
Net loss suspended $ (129,677) $
(198,672)
=========
=========
The variance in allowable loss from the Operating Partnerships
for the three
months ended June 30, 1998 and 1997 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, 1998
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 9
- --------------------------
1998 1997
----- -----
Revenues
Rental $ 2,509,740 $
2,394,795
Interest and other 194,042
153,558
----------
- ----------
2,703,782
2,548,353
----------
- ----------
Expenses
Interest 862,626
887,058
Depreciation and amortization 944,385
967,950
Operating expenses 1,662,903
1,556,261
----------
- ----------
3,469,914
3,411,269
----------
- ----------
NET LOSS $ (766,132) $
(862,916)
==========
==========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $ (441,678) $
(753,828)
==========
==========
Net loss allocated to other partners $ (7,661) $
(8,629)
=========
==========
Net loss suspended $ (316,793) $
(100,459)
=========
==========
The variance in allowable loss from the Operating Partnerships
for the three
months ended June 30, 1998 and 1997 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, 1998
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three Months ended March 31,
(Unaudited)
Series 10
- --------------------------
1998 1997
Revenues ---- ----
Rental $ 1,878,955 $
1,839,292
Interest and other 106,071
96,997
----------
- ----------
1,985,026
1,936,289
----------
- ----------
Expenses
Interest 725,549
648,229
Depreciation and amortization 674,131
632,318
Operating expenses 1,106,932
1,186,240
----------
- ----------
2,506,612
2,466,787
----------
- ----------
NET LOSS $ (521,586) $
(530,498)
==========
==========
Net loss allocated to Boston
Capital Tax Credit Fund
Limited Partnership II $ (396,360) $
(456,597)
==========
==========
Net loss allocated to other partners $ (5,216) $
(5,305)
==========
==========
Net loss suspended $ (120,010) $
(68,596)
==========
==========
The variance in allowable loss from the Operating Partnerships
for the three
months ended June 30, 1998 and 1997 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, 1998
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 11
- ----------------------------
1998 1997
Revenues ---- ----
Rental $ 1,576,003 $
1,792,926
Interest and other 86,741
91,081
----------
- ----------
1,662,744
1,884,007
----------
- ----------
Expenses
Interest 840,898
785,878
Depreciation and amortization 623,377
592,009
Operating expenses 1,033,867
1,165,760
----------
- ----------
2,498,142
2,543,647
----------
- ----------
NET LOSS $ (835,398) $
(659,640)
==========
==========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $ (740,809) $
(623,000)
==========
==========
Net loss allocated to other partners $ (8,354) $
(6,596)
==========
==========
Net loss suspended $ (86,235) $
(30,044)
==========
==========
The variance in allowable loss from the Operating Partnerships
for the three
months ended June 30, 1998 and 1997 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, 1998
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 12
- --------------------------
1998 1997
Revenues ---- ----
Rental $ 1,743,104 $
1,932,724
Interest and other 86,655
59,344
---------
- ---------
1,829,759
1,992,068
---------
- ---------
Expenses
Interest 716,222
855,014
Depreciation and amortization 679,492
707,481
Operating expenses 1,115,823
1,024,261
---------
- ---------
2,511,537
2,586,756
---------
- ---------
NET LOSS $ (681,778) $
(594,688)
=========
=========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $ (561,675) $
(572,212)
=========
=========
Net loss allocated to other partners $ (6,818) $
(5,947)
=========
=========
Net loss suspended $ (113,285) $
(16,529)
=========
=========
The variance in allowable loss from the Operating Partnerships
for the three
months ended June 30, 1998 and 1997 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, 1998
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 14
---
- ------------------------
1998 1997
Revenues ---- ----
Rental $ 3,754,239 $
3,723,187
Interest and other 197,927
196,064
----------
- ----------
3,952,166
3,919,251
----------
- ----------
Expenses
Interest 1,380,776
1,293,461
Depreciation and amortization 1,092,409
1,275,282
Operating expenses 2,344,264
2,302,809
----------
- ----------
4,817,449
4,871,552
----------
- ----------
NET LOSS $ (865,283) $
(952,301)
==========
==========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $ (772,289) $
(847,874)
==========
==========
Net loss allocated to other partners $ (8,653) $
(9,523)
==========
==========
Net loss suspended $ (84,341) $
(94,904)
==========
==========
The variance in allowable loss from the Operating Partnerships
for the three
months ended June 30, 1998 and 1997 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, 1998
(Unaudited)
NOTE E - TAXABLE LOSS
The Partnership's taxable loss for the fiscal year ended March
31, 1999 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, 1998 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.
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, 1998, Series 7 had paid all installments of
capital
contributions to the Operating Partnerships. Series 7 net
offering proceeds
in the amount of $11,751 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, 1998 the Partnership did not
use any of Series 9's net offering proceeds to pay installments
of its capital contributions to the Operating Partnerships.
Series 9 net offering proceeds
in the amount of $527,428 remain to be used by the Partnership to
pay
additional installments of capital contributions to the Operating
Partnerships and in working capital.
(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, 1998, Series 10 had paid all installments of
capital
contributions to the Operating Partnerships. Series 10 net
offering proceeds
in the amount of $169,379 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, 1998 the Partnership did not
use any of Series 11's net offering proceeds to pay installments
of its capital contributions to the Operating Partnerships.
Series 11 net offering proceeds
in the amount of $287,661 remain to be used by the Partnership to
pay remaining capital contributions to the Operating Partnerships
and in working
capital.
(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, 1998, the Partnership did not
use any of Series 12's net offering proceeds to pay installments
of its capital contributions to the Operating Partnerships.
Series 12 net offering
proceeds in the amount of $32,480 remain to be used by the
Partnership to pay
remaining capital contributions to the Operating Partnerships and
in working
capital.
(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, 1998, $2,543 of Series 14 net
offering
proceeds had been used to pay capital contributions. Series 14
net offering
proceeds in the amount of $693,537 remain to be used by the
Partnership to pay
remaining capital contributions to the Operating Partnerships and
in working
capital.
Results of Operations
- ---------------------
As of June 30, 1998 and 1997 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, 1998 and 1997 were
$567,185 and
$587,499, 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. 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, 1998 and 1997, the average Qualified
Occupancy
for the series was 100% for both years. The series had a total
of 15
properties at June 30, 1998.
For the three months being reported the series reflects a net
loss from the
Operating Partnerships of $188,386. When adjusted for
depreciation, which is
a non-cash item, the Operating Partnerships reflect positive
operations of $41,711. This is an interim period estimate; it is
not necessarily indicative
of the final year end results.
The Operating Partnership New Holland Apartments Limited
Partnership (New
Holland Apts) received a going concern opinion on the 1997 audit.
As a result
of the partnership incurring continued operational cash flow
losses, this has raised substantial doubt about the property
continuing as a going concern. The cash flow losses have been
the result of continued poor occupancy on the property, which as
of June 30, 1998 averaged 61% for the year. As of the 1997 year-
end, the senior mortgage was in technical default as it matured
and the Operating General Partner failed to payoff the loan. The
mortgagee has yet to call the loan. The Operating General
Partner has funded operating deficits in the past, but has failed
to do so in 1998 and the Investment General Partner has had
active conversations with the Operating General Partner about
their intent.
(Series 9) As of June 30, 1998 and 1997, the average Qualified
Occupancy
for the series was 99.8% for both years. The series had a total
of 55
properties at June 30, 1998. 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 $766,132. When adjusted for
depreciation, which is
a non-cash item, the Operating Partnerships reflect positive
operations of
$178,253. This is an interim period estimate; it is not
necessarily
indicative of the final year end results.
The Operating General Partner of School Street II Limited
Partnership (School Street Apts. II) pledged his general
partnership interest in the
Operating Partnership as collateral for another loan. Since this
was a violation of the terms of the partnership agreement, the
Operating General Partner was removed and replaced during 1997.
In the transition, occupancies suffered and as a result, a
leasing agent was hired by the new Operating General Partner to
rent the vacant units. Occupancy was at approximately 87% in
August 1998. It is anticipated that all units will be fully
leased by the end of the third quarter. In addition, the
Operating General Partner hired a new managing agent effective
June 1998, and a refinancing application has
39
been filed with the state housing agency, in hopes to further
improve
operations. Any capital needs are anticipated to be addressed as
part of the refinancing package.
The Operating Partnership New Holland Apartments Limited
Partnership (New
Holland Apts) received a going concern opinion on the 1997 audit.
As a result
of the partnership incurring continued operational cash flow
losses, this has raised substantial doubt about the property
continuing as a going concern. The cash flow losses have been
the result of continued poor occupancy on the property, which as
of June 30, 1998 averaged 61% for the year. As of the 1997 year-
end, the senior mortgage was in technical default as it matured
and the Operating General Partner failed to payoff the loan. The
mortgagee has yet to call the loan. The Operating General
Partner has funded operating deficits in the past, but has failed
to do so in 1998 and the Investment General Partner has had
active conversations with the Operating General Partner about
their
intent.
The occupancy of the Operating Partnership Glennwood Hotel
Investors (Glennwood Hotel) was at an average of 69% at the end
of the first quarter of 1998. The area has an oversupply of
affordable rental housing and a poor local enconomy which has
negatively impacted the property. The management company, an
affiliate of the Operating General Partner, has increased its
marketing and outreach efforts and continues to offer assistance
to the Operating Partnership.
(Series 10) As of June 30, 1998 and 1997, the average Qualified
Occupancy for the series was 99.96% and 99.6%, respectively. The
series had a total of 46 properties at June 30, 1998, 45 of which
were at 100%
Qualified Occupancy.
For the three months being reported the series reflects a net
loss from the
Operating Partnerships of $521,586. When adjusted for
depreciation which is
a non-cash item, the Operating Partnerships reflect positive
operations of
$152,545. This is an interim period estimate; it is not
necessarily
indicative of the final year end results.
North Connecticut Avenue L.P. (46 North Connecticut Avenue) is
operating
at a deficit due to high operating expenses. The Operating
General Partner was seeking a loan modification from the loan
holder, however the holder was reluctant to grant the request.
The loan holder is in discussions with the Operating General
Partner on a deed-in-lieu of foreclosure. The process of deed-in-
lieu of foreclosure is continuing, but as of March 31, 1998 has
not been completed. The Investment General Partner continues to
monitor the situation.
(Series 11) As of June 30, 1998 and 1997 the average Qualified
Occupancy for the series was 100% for both years. The series had
a total of 40
properties at June 30, 1998.
For the three months being reported the series reflects a net
loss from the
Operating Partnerships of $835,398. When adjusted for
depreciation, which is
a non-cash item, the Operating Partnerships reflect a net loss of
$212,021. This is an interim period estimate; it is not
necessarily
indicative of the final year end results.
40
The Investment General Partner has received notification from the
Internal Revenue Service that an administrative proceeding has
begun on the Operating Partnership Crestwood RRH, Limited
(Crestwood Apartments). Accountants for the Operating
Partnership are working with the IRS to resolve the situation.
(Series 12) As of June 30, 1998 and 1997, the average Qualified
Occupancy for the series was 99.9% for both years. The series had
a total of
53 properties at June 30, 1998, 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 $681,778. When adjusted for
depreciation, which is
a non-cash item, the Operating Partnerships reflect a net loss of
$2,286. This is an interim period estimate; it is not
necessarily indicative of the
final year end results.
The physical occupancy of California Investors VII Limited
Partnership (Summit Ridge Apartments/Longhorn Pavillion) as of
June 30, 1998 was 92%. The property had previously suffered
operational difficulties due to more expensive debt and high
expenses. All indications are that, despite a difficult
marketplace, the property is competing effectively. As a result
of a diligent effort to control costs, the property has generated
a positive operational cash flow year-to-date. The Operating
General Partner is optimistic about the continued positive
prospects for this property.
During 1997, the Operating General Partner of Brandywood Limited
Partnership Brandywood Apts) and the affiliated management
company improved
the average occupancy of the property to 89.66%, up from 84%
during 1996. In the first half of 1998, the operating
partnership has maintained a 99.7% average occupancy. During
1997, the property operated under a forbearance agreement with
the permanent mortgage lender, making payments on debt service
based on cash flow. The loan was refinanced with the lender
effective July 1998 at a lower rate. The restructuring of the
loan will improve the financial feasibility of the property. In
addition, a capital needs assessment was recently completed and
identified items that will be addressed
going forward.
(Series 14) As of June 30, 1998 and 1997, the average Qualified
Occupancy for the series was 99.7% and 99.5%, respectively. The
series had a
total of 101 properties at June 30, 1998, 95 of which were at
100%
Qualified Occupancy.
For the three months being reported the series reflects a net
loss from the
Operating Partnerships of $865,283. When adjusted for
depreciation, which is
a non-cash item, the Operating Partnerships reflect positive
operations of
$227,126. This is an interim period estimate; it is not
necessarily
indicative of the final year end results.
The physical occupancy of California Investors VII Limited
Partnership (Summit Ridge Apartments/Longhorn Pavillion) as of
June 30, 1998 was 92%. The property had previously suffered
operational difficulties due to more expensive debt and high
expenses. All indications are that, despite a difficult
marketplace, the property is competing effectively. As a result
of a diligent effort to control costs, the property has generated
a positive operational cash flow year-to-date. The Operating
General Partner is optimistic about the continued positive
prospects for this property.
41
Glenhaven Park Partners, A California L.P. (Glenhaven Estates)
continues to
suffer from high operating expenses and occupancy issues.
Management has said that the rental market is soft with an
oversupply of housing. As of June 30, 1998, physical occupancy
was 82%. Management will continue to actively
conduct outreach to generate new interest in the property along
with working
towards reducing the operating expenses.
Woodfield Commons Limited Partnership (Rainbow Commons
Apartments) is in
receipt of a 60-Day letter issued by the IRS stating that the
Operating Partnership has not met certain IRC Section 42
requirements. The finding was the result of an IRS audit of the
Operating Partnership's tenant files. The IRS has proposed an
adjustment that would disallow the Partnership from utilizing
certain past or future credits. The Operating General Partner
and its counsel are in the process of filing an appeal to the
finding of the IRS, and do not anticipate an outcome that will
have a material effect on the financial statements and
accordingly, no adjustment has been made in the accompanying
financial statements.
The first permanent loan of One Northridge, Limited (Northridge
Apts) will mature on December 10, 1998. The Investment General
Partner is working with the Operating General Partner to
refinance the loan.
42
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
43
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 19, 1998 By: /s/ John P. Manning
-------------------
John P. Manning,
Partner & Principal Financial
Officer
44
<TABLE> <S> <C>
<ARTICLE> CT
<CIK> 0000853566
<NAME> BOSTON CAPITAL TAX CREDIT FUND II, LIMITED PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-START> APR-01-1998
<PERIOD-END> JUN-30-1998
<TOTAL-ASSETS> 61,767,280
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 61,767,280
<TOTAL-REVENUES> 41,435
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,591,776)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,550,341)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
