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, 1999
--------------------
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, 1999
-----------------------------------------------
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,
1999
1999
(Unaudited)
(Audited)
------------
- ------------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $ 50,797,685 $
52,816,616
OTHER ASSETS
Cash and cash equivalents 1,622,323
1,590,545
Notes Receivable 543,584
543,584
Deferred acquisition costs (Note B) 1,149,792
1,141,198
Other assets 668,306
556,163
----------
- ----------
$ 54,781,690 $
56,648,106
==========
==========
LIABILITIES
Accounts Payable $ - $
- -
Accounts Payable - affiliates (Note C) 17,568,810
16,817,686
Capital Contributions payable (Note D) 368,417
368,417
----------
- ----------
17,937,227
17,186,103
----------
- ----------
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 38,092,732
40,684,097
General Partner (1,248,269)
(1,222,094)
----------
- ----------
36,844,463
39,462,003
----------
- ----------
$ 54,781,690 $
56,648,106
==========
==========
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,
1999
1999
(Unaudited)
(Audited)
-----------
- ---------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $ 896,917 $
974,248
OTHER ASSETS
Cash and cash equivalents 7,409
8,529
Notes receivable -
- -
Deferred acquisition costs (Note B) -
- -
Other assets 56,541
46,618
---------
- ---------
$ 960,867
$1,029,395
=========
=========
LIABILITIES
Accounts payable $ - $
- -
Accounts payable - affiliates (Note C) 1,060,367
1,020,834
Capital contributions payable (Note D) -
- -
---------
- ---------
1,060,367
1,020,834
---------
- ---------
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 (8,578)
98,402
General Partner (90,922)
(89,841)
---------
- ---------
(99,500)
8,561
---------
- ---------
$ 960,867
$1,029,395
=========
=========
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,
1999
1999
ASSETS (Unaudited)
(Audited)
-----------
- ---------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $ 8,697,962 $
9,083,730
OTHER ASSETS
Cash and cash equivalents 407,988
396,237
Notes receivable -
- -
Deferred acquisition costs (Note B) 20,225
20,442
Other assets 154,150
154,191
----------
- ----------
$ 9,280,325 $
9,654,600
==========
==========
LIABILITIES
Accounts payable $ - $
- -
Accounts payable - affiliates (Note C) 4,176,890
4,032,944
Capital contributions payable (Note D) 4,590
4,590
----------
- ----------
4,181,480
4,037,534
----------
- ----------
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 5,408,196
5,921,235
General Partner (309,351)
(304,169)
----------
- ----------
5,098,845
5,617,066
----------
- ----------
$ 9,280,325 $
9,654,600
==========
==========
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,
1999
1999
ASSETS (Unaudited)
(Audited)
-----------
- ---------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $ 7,221,359 $
7,305,952
OTHER ASSETS
Cash and cash equivalents 107,672
118,099
Notes receivable -
- -
Deferred acquisition costs (Note B) 80,012
80,872
Other assets 43,293
42,354
----------
- ----------
$ 7,452,336 $
7,547,277
==========
==========
LIABILITIES
Accounts payable $ - $
- -
Accounts payable - affiliates (Note C) 2,783,866
2,694,984
Capital contributions payable (Note D) -
- -
----------
- ----------
2,783,866
2,694,984
----------
- ----------
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 4,832,598
5,014,583
General Partner (164,128)
(162,290)
----------
- ----------
4,668,470
4,852,293
----------
- ----------
$ 7,452,336 $
7,547,277
==========
==========
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,
1999
1999
(Unaudited)
(Audited)
------------
- ----------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $ 8,594,672 $
8,819,044
OTHER ASSETS
Cash and cash equivalents 318,438
316,711
Notes receivable -
- -
Deferred acquisition costs (Note B) 61,289
40,991
Other assets 40,555
54,797
----------
- ----------
$ 9,014,954 $
9,231,543
==========
==========
LIABILITIES
Accounts payable $ - $
- -
Accounts payable - affiliates (Note C) 2,033,254
1,951,834
Capital contributions payable (Note D) 22,528
22,528
----------
- ----------
2,055,782
1,974,362
----------
- ----------
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 7,104,265
7,399,294
General Partner (145,093)
(142,113)
----------
- ----------
6,959,172
7,257,181
----------
- ----------
$ 9,014,954 $
9,231,543
==========
==========
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,
1999
1999
(Unaudited)
(Audited)
------------
- ----------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $ 9,027,890 $
9,338,564
OTHER ASSETS
Cash and cash equivalents 82,681
82,710
Notes receivable -
- -
Deferred acquisition costs (Note B) 309,616
312,945
Other assets 70,847
68,425
---------
- ---------
$ 9,491,034 $
9,802,644
==========
==========
LIABILITIES
Accounts payable $ - $
- -
Accounts payable - affiliates (Note C) 2,574,355
2,473,495
Capital contributions payable (Note D) 11,405
11,405
----------
- ----------
2,585,760
2,484,900
----------
- ----------
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 7,093,481
7,501,826
General Partner (188,207)
(184,082)
----------
- ----------
6,905,274
7,317,744
----------
- ----------
$ 9,491,034 $
9,802,644
==========
==========
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,
1999
1999
(Unaudited)
(Audited)
------------
- ----------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $16,358,885
$17,295,078
OTHER ASSETS
Cash and cash equivalents 698,135
668,259
Notes receivable 543,584
543,584
Deferred acquisition costs (Note B) 678,650
685,948
Other assets 302,920
189,778
----------
- ----------
$18,582,174
$19,382,647
==========
==========
LIABILITIES
Accounts payable $ - $
- -
Accounts payable - affiliates (Note C) 4,940,078
4,643,595
Capital contributions payable (Note D) 329,894
329,894
----------
- ----------
5,269,972
4,973,489
----------
- ----------
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 13,662,771
14,748,757
General Partner (350,569)
(339,599)
----------
- ----------
13,312,202
14,409,158
----------
- ----------
$18,582,174
$19,382,647
==========
==========
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)
1999 1998
---- ----
Income
Interest income $ 15,657 $ 20,101
Other Income 3,739 21,334
---------- ----------
19,396 41,435
Share of loss from Operating
Partnerships (1,999,509)
(2,969,636)
---------- ----------
Expenses
Partnership management fees 557,103 567,185
Amortization 12,139 11,922
General and administrative expenses 68,185 43,033
---------- ----------
637,427 622,140
---------- ----------
NET LOSS $(2,617,540)
$(3,550,341)
========== ==========
Net loss allocated to limited
partners $(2,591,365)
$(3,514,839)
========== ==========
Net loss allocated to general partner $ (26,175) $
(35,502)
========== ==========
Net loss per BAC $ (.75) $
(1.14)
========== ==========
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
- -----------------------
1999
1998
----
- ----
Income
Interest income $ 49 $
52
Other Income -
- -
--------
- --------
49
52
Share of loss from Operating
Partnerships (77,331)
(56,825)
--------
- --------
Expenses
Partnership management fees 28,287
22,287
Amortization -
- -
General and administrative expenses 2,492
1,787
--------
- --------
30,779
24,074
--------
- --------
NET LOSS $(108,061) $
(80,847)
========
========
Net loss allocated to limited
partners $(106,980) $
(80,039)
========
========
Net loss allocated to general partner $ (1,081) $
(808)
========
========
Net loss per BAC $ (.10) $
(.08)
========
========
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
- ----------------------
1999
1998
----
- ----
Income
Interest income $ 3,764 $
5,053
Other Income 2,490
2,134
--------
- --------
6,254
7,187
Share of loss from Operating
Partnerships (384,748)
(441,678)
--------
- --------
Expenses
Partnership management fees 127,830
129,037
Amortization 217
- -
General and administrative expenses 11,680
10,173
--------
- --------
139,727
139,210
--------
- --------
NET LOSS $ (518,221) $
(573,701)
========
=========
Net loss allocated to limited partners $ (513,039) $
(567,964)
========
=========
Net loss allocated to general partner $ (5,182) $
(5,737)
========
=========
Net loss per BAC $ (.12) $
(.14)
========
=========
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
- ----------------------
1999
1998
----
- ----
Income
Interest income $ 1,104 $
1,458
Other income 150
- -
--------
- --------
1,254
1,458
Share of loss from Operating
Partnerships (91,259)
(396,360)
--------
- --------
Expenses
Partnership management fees 85,378
84,133
Amortization 860
860
General and administrative expenses 7,580
5,683
--------
- --------
93,818
90,631
--------
- --------
NET LOSS $(183,823)
$(485,533)
========
========
Net loss allocated to limited partner $(181,985)
$(480,678)
========
========
Net loss allocated to general partner $ (1,838) $
(4,855)
========
========
Net loss per BAC $ (.07) $
(.20)
========
========
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
- ----------------------
1999
1998
----
- ----
Income
Interest income $ 3,397 $
3,618
Other Income 915
2,400
--------
- --------
4,312
6,018
Share of loss from Operating
Partnerships (220,740)
(740,809)
--------
- --------
Expenses
Partnership management fees 75,330
80,420
Amortization 436
436
General and administrative expenses 5,815
4,373
--------
- --------
81,581
85,229
--------
- --------
NET LOSS $(298,009)
$(820,020)
========
========
Net loss allocated to limited partner $(295,029)
$(811,820)
========
========
Net loss allocated to general partner $ (2,980) $
(8,200)
========
========
Net loss per BAC $ (.12) $
(.33)
========
========
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
- ----------------------
1999
1998
----
- ----
Income
Interest income $ 461 $
160
Other Income 150
6,150
--------
- --------
611
6,310
Share of loss from Operating
Partnerships (313,831)
(561,675)
--------
- --------
Expenses
Partnership management fee 88,202
91,128
Amortization 3,329
3,329
General and administrative expenses 7,719
4,900
--------
- --------
99,250
99,357
--------
- --------
NET LOSS $(412,470)
$(654,722)
========
========
Net loss allocated to limited partner $(408,345)
$(648,175)
========
========
Net loss allocated to general partner $ (4,125) $
(6,547)
========
========
Net loss per BAC $ (.14) $
(.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
- ----------------------
1999
1998
----
- ----
Income
Interest income $ 6,882 $
9,760
Other Income 34
10,650
---------
- ---------
6,916
20,410
Share of loss from Operating
Partnerships (911,600)
(772,289)
---------
- ---------
Expenses
Partnership management fees 152,076
160,180
Amortization 7,297
7,297
General and administrative expenses 32,899
16,162
---------
- ---------
192,272
183,639
---------
- ---------
NET LOSS $(1,096,956) $
(935,518)
========= =========
Net loss allocated to limited partner $(1,085,986) $
(926,163)
=========
=========
Net loss allocated to general partner $ (10,970) $
(9,355)
=========
=========
Net loss per BAC $ (.20) $
(.17)
=========
=========
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, 1999
(Unaudited)
General
Assignees Partner Total
--------- ------- -----
Partners' capital (deficit),
April 1, 1999 $ 40,684,097 $(1,222,094)
$39,462,003
Net loss (2,591,365) (26,175)
(2,617,540)
---------- ---------
- ----------
Partners' capital (deficit),
June 30, 1999 $38,092,732 $(1,248,269)
$36,844,463
========== =========
==========
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, 1999
(Unaudited)
Limited General
Partners Partner Total
-------- ------- -----
Series 7
- --------
Partners' capital (deficit),
April 1, 1999 $ 98,402 $ (89,841) $
8,561
Net loss (106,980) (1,081)
(108,061)
--------- --------
- ---------
Partners' capital (deficit),
June 30, 1999 $ (8,578) $ (90,922) $
(99,500)
========= ========
=========
Series 9
- --------
Partners' capital (deficit),
April 1, 1999 $ 5,921,235 $(304,169) $
5,617,066
Net loss (513,039) (5,182)
(518,221)
---------- -------
- ----------
Partners' capital (deficit),
June 30, 1999 $ 5,408,196 $(309,351) $
5,098,845
========== ========
==========
Series 10
- --------
Partners' capital (deficit),
April 1, 1999 $ 5,014,583 $(162,290) $
4,852,293
Net loss (181,985) (1,838)
(183,823)
---------- -------- ------
- ----
Partners' capital (deficit),
June 30, 1999 $ 4,832,598 $(164,128) $
4,668,470
========== ========
==========
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, 1999
(Unaudited)
Limited General
Partners Partner Total
-------- ------- -----
Series 11
- --------
Partners' capital (deficit),
April 1, 1999 $ 7,399,294 $(142,113) $
7,257,181
Net loss (295,029) (2,980)
(298,009)
---------- --------
- ----------
Partners' capital (deficit),
June 30, 1999 $ 7,104,265 $(145,093) $
6,959,172
========== ========
==========
Series 12
- --------
Partners' capital (deficit),
April 1, 1999 $ 7,501,826 $(184,082) $
7,317,744
Net loss (408,345) (4,125)
(412,470)
---------- --------
- ----------
Partners' capital (deficit),
June 30, 1999 $ 7,093,481 $(188,207) $
6,905,274
========== ========
==========
Series 14
- --------
Partners' capital (deficit),
April 1, 1999 $14,748,757 $(339,599)
$14,409,158
Net loss (1,085,986) (10,970)
(1,096,956)
---------- --------
- ----------
Partners' capital (deficit),
June 30, 1999 $13,662,771 $(350,569)
$13,312,202
========== ========
==========
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)
1999
1998
----
- ----
Cash flows from operating activities:
Net loss $ (2,617,540) $
(3,550,341)
Adjustments
Distributions from Operating
Partnerships 20,147
7,650
Amortization 12,139
11,922
Share of loss from Operating
Partnerships 1,999,509 2,969,636
Changes in assets and liabilities
Increase in accounts payable
and accrued expenses 751,124
676,736
Decrease (Increase) in other
assets (126,858)
(62,360)
Decrease (Increase) in prepaid
Expenses -
(7,786)
----------
- ----------
Net cash (used in) provided by
operating activities 38,521
45,457
----------
- ----------
Cash flows from investing activities:
Capital contributions paid to
Operating Partnerships -
(2,543)
Advances (made to) repaid from
Operating Partnerships -
61,111
Credit adjusters received from
Operating Partnerships (6,743)
7,323
----------
- ----------
Net cash (used in) provided by
investing activities (6,743)
65,891
---------- -------
- ---
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 31,778
111,348
Cash and cash equivalents, beginning 1,590,545
1,611,248
---------
- ----------
Cash and cash equivalents, ending $ 1,622,323 $
1,722,596
==========
==========
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
- -------------------------
1999
1998
----
- ----
Cash flows from operating activities:
Net loss $ (108,061) $
(80,847)
Adjustments
Distributions from Operating
Partnerships -
- -
Amortization -
- -
Share of loss from Operating
Partnerships 77,331
56,825
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 39,533
28,639
Decrease (Increase) in other
assets (9,923)
- -
Decrease (Increase) in prepaid -
- -
expenses --------
- ---------
Net cash (used in) provided by
operating activities (1,120)
4,617
--------
- ---------
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 (1,120)
4,617
Cash and cash equivalents, beginning 8,529
7,134
--------
- ---------
Cash and cash equivalents, ending $ 7,409 $
11,751
========
=========
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
- -------------------------
1999
1998
----
- ----
Cash flows from operating activities:
Net loss $ (518,221) $
(573,701)
Adjustments
Distributions from Operating
Partnerships 1,020
195
Amortization 217
- -
Share of loss from Operating
Partnerships 384,748
441,678
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 143,946
145,938
Decrease (Increase) in other
assets 41
(4,094)
Decrease (Increase) in prepaid
expenses -
- -
---------
- ---------
Net cash (used in) provided by
operating activities 11,751
10,016
---------
- ---------
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 11,751
10,016
Cash and cash equivalents, beginning 396,237
517,412
---------
- ---------
Cash and cash equivalents, ending $ 407,988 $
527,428
=========
=========
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
- -------------------------
1999
1998
----
- ----
Cash flows from operating activities:
Net loss $ (183,823) $
(485,533)
Adjustments
Distributions from Operating
Partnerships 684
- -
Amortization 860
860
Share of loss from Operating
Partnerships 91,259
396,360
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 88,882
134,333
Decrease (Increase) in other
assets (939)
(1,125)
Decrease (Increase) in prepaid
expenses -
- -
---------
- ---------
Net cash (used in) provided by
operating activities (3,077)
44,895
---------
- ---------
Cash flows from investing activity:
Capital contributions paid to
Operating Partnerships -
- -
Advances (made to) repaid from
Operating Partnerships -
- -
Credit adjusters received from
Operating Partnerships (7,350)
- -
---------
- ---------
Net cash (used in) provided by
investing activities (7,350)
- -
--------- ------
- ---
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (10,427)
44,895
Cash and cash equivalents, beginning 118,099
124,484
---------
- ---------
Cash and cash equivalents, ending $ 107,672 $
169,379
=========
=========
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
- -------------------------
1999 1998
---- ----
Cash flows from operating activities:
Net loss $ (298,009) $
(820,020)
Adjustments
Distributions from Operating
Partnerships 35
37
Amortization 436
436
Share of loss from Operating
Partnerships 220,740
740,809
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 81,420
82,026
Decrease (Increase) in other
assets (2,895)
(3,427)
Decrease (Increase) in
prepaid expenses -
- -
---------
- ---------
Net cash (used in) provided by
operating activities 1,727
(139)
---------
- ---------
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 (1,727)
(139)
Cash and cash equivalents, beginning 316,711
287,800
---------
- ---------
Cash and cash equivalents, ending $ 318,438 $
287,661
=========
=========
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
- -------------------------
1999
1998
----
- ----
Cash flows from operating activities:
Net loss $ (412,470) $
(654,722)
Adjustments
Distributions from Operating
Partnerships (5,579)
4,062
Amortization 3,329
3,329
Share of loss from Operating
Partnerships 313,831
561,675
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 100,860
96,669
Decrease (Increase) in prepaid
Expenses -
(61,111)
Decrease (Increase) in other
assets -
- -
---------
- ---------
Net cash (used in) provided by
operating activities (29)
(50,098)
---------
- ---------
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 (29)
11,013
Cash and cash equivalents, beginning 82,710
21,827
---------
- ---------
Cash and cash equivalents, ending $ 82,681 $
32,840
=========
=========
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
- -------------------------
1999
1998
----
- ----
Cash flows from operating activities:
Net loss $(1,096,956) $
(935,518)
Adjustments
Distributions from Operating
Partnerships 23,987
3,356
Amortization 7,297
7,297
Share of loss from Operating
Partnerships 911,600
772,289
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 296,483
189,131
Decrease (Increase) in other
Assets (113,142)
7,397
Decrease (Increase) in prepaid
expenses -
(7,786)
----------
- ---------
Net cash (used in) provided by
operating activities 29,269
36,166
----------
- ---------
Cash flows from investing activity:
Capital contributions paid to
Operating Partnerships -
(2,543)
Advances (made to) repaid from
Operating Partnerships -
- -
Credit adjusters received from
Operating Partnerships 607
7,323
----------
- ---------
Net cash (used in) provided by
investing activities 607
4,780
----------
- ---------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 29,867
40,946
Cash and cash equivalents, beginning 668,259
652,591
----------
- ---------
Cash and cash equivalents, ending $ 698,135 $
693,537
==========
=========
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, 1999
(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. 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,
1999
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, 1999
(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, 1999,
the
Partnership has accumulated unallocated acquisition amortization
totaling
$211,383. The breakdown of accumulated unallocated acquisition
amortization
within the Partnership as of June 30, 1999 for Series 9, Series
10,
Series 11, Series 12, and Series 14 is $3,697, $14,626, $7,413,
$56,596, and
$129,054, 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 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.
The partnership management fee accrued for the quarters ended
June 30, 1999 and 1998 are as follows:
26
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1999
(Unaudited)
NOTE C - RELATED PARTY TRANSACTIONS - Continued
1999 1998
-------- --------
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, 1999 and 1998
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.
As of June 30, 1999, an affiliate of the general partner
advanced a
total of $286,310 to the Partnership to pay certain operating
expenses and make advances and/or loans to Operating
Partnerships. $117,272 of the funds were advanced during the
quarter ended June 30, 1999. Below is a table that breaks down
by series the advances as of June 30, 1999.
1999
-------
Series 7 $116,411
Series 12 62,550
Series 14 107,349
-------
$286,310
=======
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, 1999
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING LIMITED PARTNERSHIPS
At June 30, 1999 and 1998 the Partnership had limited
partnership
interests in 309 and 310 Operating Partnerships, respectively
which own apartment complexes. The number of Operating
Partnerships in which the Partnership had limited partnership
interests at June 30, 1999 and 1998 by series are as follows:
1999 1998
---- ----
Series 7 15 15
Series 9 55 55
Series 10 45 46
Series 11 40 40
Series 12 53 53
Series 14 101 101
--- ---
309 310
=== ===
During the first quarter of 1999, the Partnership disposed of
the Operating Partnership North Connecticut Avenue LP. Please
refer to the Results of Operations for further explanation.
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, 1999 and 1998 by series
are as
follows:
1999 1998
---------- ----------
Series 7 $ - $ -
Series 9 4,590 4,590
Series 10 - -
Series 11 22,528 22,528
Series 12 11,405 11,405
Series 14 329,894 329,894
--------- ---------
$ 368,417 $ 368,417
========= =========
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, 1999.
28
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1999
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 7
- ---------------------------
1999 1998
---- ----
Revenues
Rental $ 512,907 $
526,245
Interest and other 7,979
59,457
---------
- ---------
520,885
585,702
---------
- ---------
Expenses
Interest 179,124
204,502
Depreciation and amortization 168,506
230,097
Operating expenses 329,976
339,489
---------
- ---------
677,605
774,088
---------
- ---------
NET LOSS $ (156,720) $
(188,386)
=========
=========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $ (77,331) $
(56,825)
=========
=========
Net loss allocated to other partners $ (1,567) $
(1,884)
=========
=========
Net loss suspended $ (77,822) $
(129,677)
=========
=========
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, 1999
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 9
- --------------------------
1999 1998
----- -----
Revenues
Rental $ 2,509,020 $
2,509,740
Interest and other 103,642
194,042
----------
- ----------
2,612,663
2,703,782
----------
- ----------
Expenses
Interest 766,172
862,626
Depreciation and amortization 936,649
944,385
Operating expenses 1,564,240
1,622,903
----------
- ----------
3,267,061
3,469,914
----------
- ----------
NET LOSS $ (654,399) $
(766,132)
==========
==========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $ (384,748) $
(441,678)
==========
==========
Net loss allocated to other partners $ (6,544) $
(7,661)
==========
==========
Net loss suspended $ (263,106) $
(316,793)
==========
==========
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, 1999
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three Months ended March 31,
(Unaudited)
Series 10
- --------------------------
1999 1998
Revenues ---- ----
Rental $ 1,863,758 $
1,878,955
Interest and other 62,786
106,071
----------
- ----------
1,926,544
1,985,026
----------
- ----------
Expenses
Interest 517,466
725,549
Depreciation and amortization 579,947
674,131
Operating expenses 1,055,109
1,106,932
----------
- ----------
2,152,521
2,506,612
----------
- ----------
NET LOSS $ (225,977) $
(521,586)
==========
==========
Net loss allocated to Boston
Capital Tax Credit Fund
Limited Partnership II $ (91,259) $
(396,360)
==========
==========
Net loss allocated to other partners $ (2,260) $
(5,216)
==========
==========
Net loss suspended $ (132,459) $
(120,010)
==========
==========
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, 1999
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 11
- ----------------------------
1999 1998
Revenues ---- ----
Rental $ 1,592,046 $
1,576,003
Interest and other 99,602
86,741
----------
- ----------
1,691,648
1,662,744
----------
- ----------
Expenses
Interest 512,967
840,898
Depreciation and amortization 601,178
623,377
Operating expenses 954,418
1,033,867
----------
- ----------
2,068,563
2,498,142
----------
- ----------
NET LOSS $ (376,915) $
(835,398)
==========
==========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $ (220,740) $
(740,809)
==========
==========
Net loss allocated to other partners $ (3,769) $
(8,354)
==========
==========
Net loss suspended $ (152,406) $
(86,235)
==========
==========
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, 1999
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 12
- --------------------------
1999 1998
Revenues ---- ----
Rental $ 1,731,575 $
1,743,104
Interest and other 77,324
86,655
---------
- ---------
1,808,899
1,829,759
---------
- ---------
Expenses
Interest 505,779
716,222
Depreciation and amortization 651,745
679,492
Operating expenses 1,125,728
1,115,823
---------
- ---------
2,283,252
2,511,537
---------
- ---------
NET LOSS $ (474,353) $
(681,778)
==========
=========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $ (313,831) $
(561,675)
=========
=========
Net loss allocated to other partners $ (4,744) $
(6,818)
=========
=========
Net loss suspended $ (155,778) $
(113,285)
=========
=========
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, 1999
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 14
---
- ------------------------
1999 1998
Revenues ---- ----
Rental $ 3,738,205 $
3,754,239
Interest and other 163,610
197,927
- ---------- ----------
3,901,815
3,952,166
----------
- ----------
Expenses
Interest 1,160,087
1,380,776
Depreciation and amortization 1,591,267
1,092,409
Operating expenses 2,327,947
2,344,264
----------
- ----------
5,079,301
4,817,449
----------
- ----------
NET LOSS $(1,177,486) $
(865,283)
==========
==========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $ (911,600) $
(772,289)
==========
==========
Net loss allocated to other partners $ (11,775) $
(8,653)
==========
==========
Net loss suspended $ (254,111) $
(84,341)
==========
==========
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, 1999
(Unaudited)
NOTE E - TAXABLE LOSS
The Partnership's taxable loss for the year ended December 31,
1999 is
expected to differ from its loss for financial reporting purposes
for the fiscal year ended March 31, 2000. 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, 1999 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 currently is 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.
The Partnership has recognized other income as of June 30, 1999
in the amount of $3,739. Of the total, $3,289 represents
distributions received from Operating Partnership for which the
Partnership normally records as a decrease in the Investment in
Operating Partnerships. Due to the equity method of accounting,
the Partnership has recorded these distributions as other income.
The remaining $450 represents transfer fee income.
The Partnership has recorded $318,266 as payable to affiliates.
This represents advances to pay certain third party operating
expenses, make advances and/or loans to Operating Partnerships,
and accrued overhead allocations. The breakout between series
are: $126,897 in series 7, none in series 9 and 10, $401 in
series 11, $83,618 in series 12, $107,349 in series 14. These
and any future advances or accruals will be paid, without
interest, from available cash flow, reporting fees, or proceeds
of sales or refinancing of the Partnership's interest in
Operating Partnerships.
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
Capital Resources (continued)
- -----------------
As of June 30, 1999 the Partnership had $483,498 in
remaining net offering proceeds. Below is a table, which
provides, by series, the equity raised, number of BAC's sold,
final date BAC's were offered, number of properties invested in,
and remaining proceeds.
Final Number of
Proceeds Series Equity BAC's Close Date
Properties Remaining
- ------ ----------- --------- ---------- ----------
- ---------
7 $ 10,361,000 1,036,100 12/29/89 15
$ 7,409
9 $ 41,574,018 4,178,029 05/04/90 55
$ 4,590
10 $ 24,288,997 2,428,925 08/24/90 46
$107,672
11 $ 24,735,002 2,489,599 12/27/90 40
$ 22,528
12 $ 29,710,003 2,972,795 04/30/91 53
$ 11,405
14 $ 55,728,997 5,574,290 01/27/92 101
$329,894
----------- ---------- ---
- -------
$176,047,378 18,679,738 310
$483,498
=========== ========== ===
=======
(Series 8) No BACs with respect to Series 8 were offered.
(Series 13) No BACs with respect to Series 13 were offered.
Results of Operations
- ---------------------
As of June 30, 1999 and 1998 the Partnership held limited
partnership
interests in 309 and 310 Operating Partnerships, respectively.
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 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, 1999 and 1998 were
$557,103 and
$567,185, respectively.
37
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 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, monitor 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, 1999 and 1998, the average Qualified
Occupancy
for the series was 100% for both years. The series had a total
of 15
properties at June 30, 1999.
For the three months being reported the series reflects a net
loss from the
Operating Partnerships of $156,720. When adjusted for
depreciation, which is
a non-cash item, the Operating Partnerships reflect positive
operations of $11,786. This is an interim period estimate; it is
not necessarily indicative
of the final year end results.
As a result of poor occupancy at the property, the Operating
Partnership, New Holland Apartments Limited Partnership (New
Holland Apts), continues to incur operational cash flow deficits.
As of 1998 year end, the senior mortgage was in default due to
the nonpayment of interest and principal. In an effort to
address the deficits, the Investment General Partner has
attempted to work with the senior mortgage holder to get more
favorable terms, but to no avail. As a result of the ongoing
deficits and the mortgage holder's unwillingness to work with the
Investment General Partner, the Investment General Partner has
determined that a deed in lieu of foreclosure transfer is the
most likely resolution. Assuming the bank does not change its
position, a transfer of ownership of the apartment complex from
the Operating Partnership to the mortgage holder is likely to
occur during the third quarter of 1999. If this should occur, in
1999, Series 7 of the Partnership will face recapture of a
portion of the credits previously taken as well as a loss of
future years credits. The Investment General Partner estimates
that for the tax year 1999 there will be a recapture of credits
previously taken and a loss of 1999 credits resulting in a
decrease in overall credit yield in 1999 of between
4-5%. A decrease in overall credit yield of .9%-1.5% is
estimated for the tax year 2000. Actual results will not be
determined until the 1999 tax return is completed.
(Series 9) As of June 30, 1999 and 1998, the average Qualified
Occupancy
for the series was 99.7% and 99.8%, respectively. The series had
a total of 55 properties at June 30, 1999. Out of the total, 52
were at 100% Qualified Occupancy.
For the three months being reported the series reflects a net
loss from the
Operating Partnerships of $654,399. When adjusted for
depreciation, which is
a non-cash item, the Operating Partnerships reflect positive
operations of
$282,250. 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) hired a new management
company in October 1998 with the goal to improve occupancy and
operations. The partnership's average occupancy
38
reached 86% for the second quarter of 1999. In addition, the
operating General Partner successfully negotiated a debt
restructure on January 4, 1999. The Operating General Partner
continues to actively participate in the partnership's operations
in order to attain positive cash flow at the property.
As a result of poor occupancy at the property, the Operating
Partnership, New Holland Apartments Limited Partnership (New
Holland Apts), continues to incur operational cash flow deficits.
As of 1998 year end, the senior mortgage was in default due to
the nonpayment of interest and principal. In an effort to
address the deficits, the Investment General Partner has
attempted to work with the senior mortgage holder to get more
favorable terms, but to no avail. As a result of the ongoing
deficits and the mortgage holder's unwillingness to work with the
Investment General Partner, the Investment General Partner has
determined that a deed in lieu of foreclosure transfer is the
most likely resolution. Assuming the bank does not change its
position, a transfer of ownership of the apartment complex from
the Operating Partnership to the mortgage holder is likely to
occur during the third quarter of 1999. If this should occur, in
1999, Series 9 of the Partnership will face recapture of a
portion of the credits previously taken, as well as a loss of
future years credits. The Investment General Partner estimates
that for the tax year 1999 there will be a recapture of credits
previously taken and a loss of 1999 credits resulting in a
decrease in overall credit yield in 1999 of between
.8% - 1.5%. A decrease in overall credit yield of .1%-.5% is
estimated for the tax year 2000. Actual results will not be
determined until the 1999 tax return is completed.
The Operating Partnership Glennwood Hotel Investors (Glennwood
Hotel) continues to operate at an average occupancy of 66%. The
area has an oversupply of affordable rental housing and a poor
local economy, which has negatively impacted the property. The
property's competition includes a number of newer complexes with
more space and amenities and, in some cases, lower rents. 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. The
Investment General Partner is working with the Operating General
Partner to monitor marketing efforts.
(Series 10) As of June 30, 1999 and 1998, the average Qualified
Occupancy for the series was 99.7% and 99.6%, respectively. The
series had a total of 45 properties at June 30, 1999, 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 $225,977. When adjusted for
depreciation which is
a non-cash item, the Operating Partnerships reflect positive
operations of
$353,970. This is an interim period estimate; it is not
necessarily
indicative of the final year end results.
The Investment Partnership no longer has an ownership interest in
North Connecticut L.P. (46 North Connecticut Avenue). The
continued level of high operating deficits during 1998 left the
Operating General Partner with little alternative but to grant a
deed-in-lieu of foreclosure to the loan holder after attempts to
secure a loan modification did not succeed. The deed-in-lieu of
foreclosure occurred during January 1999, so the Partnership was
still eligible to receive 1998 tax credits. In 1999, Series 10 of
the Partnership will face recapture of a portion of credits
previously taken, as well as loss of future years credits, due to
the transfer of ownership of the apartment
39
complex from the Operating Partnership to the mortgage holder.
The Investment General Partner estimates that for the tax year
1999 there will be a recapture of credits previously taken and a
loss of 1999 credits resulting in a decrease in overall credit
yield for 1999 of between 1-2%. A decrease in overall credit
yield of between .5% - 1% is estimated for the tax year 2000.
Actual results will not be determined until the 1999 tax return
is completed.
(Series 11) As of June 30, 1999 and 1998 the average Qualified
Occupancy for the series was 100% for both years. The series had
a total of 40 properties at June 30, 1999.
For the three months being reported the series reflects a net
loss from the Operating Partnerships of $376,915. When adjusted
for depreciation, which is a non-cash item, the Operating
Partnerships reflect positive operations of $224,263. This is an
interim period estimate; it is not necessarily indicative of the
final year end results.
(Series 12) As of June 30, 1999 and 1998, the average Qualified
Occupancy for the series was 99.2% for both years. The series had
a total of
53 properties at June 30, 1999, 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 $474,353. When adjusted for
depreciation, which is
a non-cash item, the Operating Partnerships reflect positive
operations of $177,392. This is an interim period estimate; it
is not necessarily indicative of the final year end results.
(Series 14) As of June 30, 1999 and 1998, the average Qualified
Occupancy for the series was 99.7% for both years. The series
had a
total of 101 properties at June 30, 1999, 96 of which were at
100%
Qualified Occupancy.
For the three months being reported the series reflects a net
loss from the
Operating Partnerships of $1,177,486. When adjusted for
depreciation, which is
a non-cash item, the Operating Partnerships reflect positive
operations of
$413,781. This is an interim period estimate; it is not
necessarily
indicative of the final year end results.
The properties owned by Glenhaven Park Partners, A California LP
(Glenhaven Estates), Haven Park Partners II, A California LP
(Glenhaven Park II), Haven Park Partners III, A California LP
(Glenhaven Park III), and Haven Park Partners IV, A California LP
(Glenhaven Park) continue to suffer from high operating expenses
and occupancy issues. As of May 31, 1999, physical occupancy was
92%, 87%, 87%, and 92%, respectively. The properties suffer from
excessive expenses compared to operating income. There are few
ways of further reducing expenses. A not-for-profit company is
being sought to serve as General Partner to reduce the real
estate expense. The Operating General Partner has developed a
capital needs plan to address what can be done in hopes of
improving occupancy levels. Deferred maintenance issues are
budgeted for completion in this year's business plan and the
manager is currently bidding the work. Deferred maintenance
issues related to two vacant units have been completed and the
units are being prepared for occupancy and should be occupied in
September or October 1999.
On April 27, 1998 Woodfield Commons Limited Partnership (Rainbow
Commons Apartments) received a 60-Day letter issued by the IRS
stating that the
Operating Partnership had not met certain IRC Section 42
requirements. The
40
IRS has additionally sent two Notices of Beginning of
Administrative Proceedings for the tax years ending 1996 and 1997
dated May 24, 1999 and June 1, 1999, respectively.
The initial 60-Day letter which was issued in relation to the tax
years ended December 31, 1993, 1994, and 1995, 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. On
June 23, 1998, the Operating General Partner and its counsel
filed a written protest with the IRS and requested additional
information from the IRS
with regards to the legal and factual basis upon which it has
proposed its assessment. As of this date, the IRS has not
responded to this request nor has a conference with the Appeals
Office been scheduled.
The IRS has not proposed any adjustments for disallowing credits
with respect to the tax years 1996 and 1997. Therefore the
Operating General Partner has not yet responded to the additional
notices, nor have they been able to review the information
related to the notices to render an opinion on the ultimate
outcome.
The Partnership previously reported that the Operating General
Partner and its counsel did not anticipate an outcome that would
have a material effect on the financial statements and
accordingly, no adjustment has been made in the accompanying
financial statements. While the Operating General Partner and
its counsel are still of this opinion, it is the opinion of the
Investment General Partner that the outcome of the original
proceedings coupled with new notices could, in total, be
material. While no adjustments have been made to the
accompanying financial statements, the auditor's have included a
contingency footnote in the annual financial statement (Note H)
which is a part of the Partnership's most recently filed 10-K
dated March 31, 1999.
The first permanent loan of One Northridge, Limited (Northridge
Apts) was scheduled to mature on December 10, 1998. The
Operating General Partner obtained an extension for the maturity
date of the loan to August 31, 1999 and
is currently evaluating multiple refinancing options.
Year 2000 Compliance
- --------------------
As previously stated in the Partnership's 10-K, Boston Capital
and its management have reviewed the potential computer problems
that may arise from the century date change known as the "Year
2000" or "Y2K" problem. We are currently in the process of
taking the necessary precautions to minimize any disruptions.
The majority of Boston Capital's systems are "Y2K" complaint.
For all remaining systems we are working with the vendors to make
the necessary upgrades and replacements. Boston Capital believes
that all of its systems will be fully compliant before the year
2000 and is committed to ensuring that the "Y2K" issue will have
no impact on our investors.
41
PART II - OTHER INFORMATION
---------------------------
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
42
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the
registrant has duly caused this report to be signed on its behalf
by the
undersigned hereunto duly authorized.
BOSTON CAPITAL TAX CREDIT
FUND II LIMITED PARTNERSHIP
By: Boston Capital Associates II
Limited
Partnership
By: C&M Associates d/b/a
Boston Capital Associates
Date: August 19, 1999 By: /s/ John P. Manning
--------------------
John P. Manning,
Partner & Principal Financial
Officer
43
<TABLE> <S> <C>
<ARTICLE> CT
<CIK> 0000853566
<NAME> BOSTON CAPITAL TAX CREDIT FUND II LIMITED PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-START> APR-01-1999
<PERIOD-END> JUN-30-1999
<TOTAL-ASSETS> 54,781,690
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 54,781,690
<TOTAL-REVENUES> 19,396
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,636,936)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,617,540)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
