FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 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 December 31, 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
December 31,
March 31,
1998
1998
(Unaudited)
(Audited)
------------
- ------------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $ 53,341,813 $
60,839,977
OTHER ASSETS
Cash and cash equivalents 1,544,177
1,611,248
Notes Receivable 543,584
604,695
Deferred acquisition costs (Note B) 1,153,339
1,189,760
Other assets 442,122
387,808
----------
- ----------
$ 57,025,035 $
64,633,488
==========
==========
LIABILITIES
Accounts Payable $ - $
- -
Accounts Payable - affiliates (Note C) 16,151,794
14,237,489
Capital Contributions payable (Note D) 368,417
368,417
----------
- ----------
16,520,211
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 41,716,489
51,144,019
General Partner (1,211,665)
(1,116,437)
----------
- ----------
40,504,824
50,027,582
----------
- ----------
$ 57,025,035 $
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
- ----------------------------
December 31,
March 31,
1998
1998
(Unaudited)
(Audited)
-----------
- ---------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $1,165,926
$1,485,326
OTHER ASSETS
Cash and cash equivalents 2,363
7,134
Notes receivable -
- -
Deferred acquisition costs (Note B) -
- -
Other assets 25,778
16,450
---------
- ---------
$1,194,067
$1,508,910
=========
=========
LIABILITIES
Accounts payable $ - $
- -
Accounts payable - affiliates (Note C) 964,634
860,885
Capital contributions payable (Note D) -
- -
---------
- ---------
964,634
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 317,065
731,471
General Partner (87,632)
(83,446)
---------
- ---------
229,433
648,025
---------
- ---------
$1,194,067
$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
- ----------------------------
December 31,
March 31,
1998
1998
ASSETS (Unaudited)
(Audited)
-----------
- ---------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $ 9,547,848
$10,821,707
OTHER ASSETS
Cash and cash equivalents 478,680
517,412
Notes receivable -
- -
Deferred acquisition costs (Note B) 20,660
21,312
Other assets 76,256
47,650
----------
- ----------
$10,123,444
$11,408,081
==========
==========
LIABILITIES
Accounts payable $ - $
- -
Accounts payable - affiliates (Note C) 3,889,001
3,457,163
Capital contributions payable (Note D) 4,590
4,590
----------
- ----------
3,893,591
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 6,527,894
8,227,204
General Partner (298,041)
(280,876)
----------
- ----------
6,229,853
7,946,328
----------
- ----------
$10,123,444
$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
- ----------------------------
December 31,
March 31,
1998
1998
ASSETS (Unaudited)
(Audited)
-----------
- ---------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $ 7,262,177 $
8,211,459
OTHER ASSETS
Cash and cash equivalents 102,982
124,484
Notes receivable -
- -
Deferred acquisition costs (Note B) 81,733
84,314
Other assets 35,926
39,662
----------
- ----------
$ 7,482,818 $
8,459,919
==========
==========
LIABILITIES
Accounts payable $ - $
- -
Accounts payable - affiliates (Note C) 2,606,111
2,339,472
Capital contributions payable (Note D) -
- -
----------
- ----------
2,606,111
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 5,038,752
6,270,055
General Partner (162,045)
(149,608)
----------
- ----------
4,876,707
6,120,447
----------
- ----------
$ 7,482,818 $
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
- ----------------------------
December 31,
March 31,
1998
1998
(Unaudited)
(Audited)
------------
- ----------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $ 8,491,092 $
9,872,942
OTHER ASSETS
Cash and cash equivalents 263,737
287,800
Notes receivable -
- -
Deferred acquisition costs (Note B) 41,427
42,735
Other assets 50,006
47,290
----------
- ----------
$ 8,846,262
$10,250,767
==========
==========
LIABILITIES
Accounts payable $ - $
- -
Accounts payable - affiliates (Note C) 1,870,414
1,625,754
Capital contributions payable (Note D) 22,528
22,528
----------
- ----------
1,892,942
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 7,098,472
8,731,145
General Partner (145,152)
(128,660)
----------
- ----------
6,953,320
8,602,485
----------
- ----------
$ 8,846,262
$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
- ----------------------------
December 31,
March 31,
1998
1998
(Unaudited)
(Audited)
------------
- ----------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $ 9,400,789
$10,585,841
OTHER ASSETS
Cash and cash equivalents 59,976
21,827
Notes receivable -
61,111
Deferred acquisition costs (Note B) 316,274
326,262
Other assets 67,000
59,831
---------
- ---------
$ 9,844,039
$11,054,872
==========
==========
LIABILITIES
Accounts payable $ - $
- -
Accounts payable - affiliates (Note C) 2,367,174
2,067,156
Capital contributions payable (Note D) 11,405
11,405
----------
- ----------
2,378,579
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 7,648,065
9,143,807
General Partner (182,605)
(167,496)
----------
- ----------
7,465,460
8,976,311
----------
- ----------
$ 9,844,039
$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
- ----------------------------
December 31,
March 31,
1998
1998
(Unaudited)
(Audited)
------------
- ----------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $17,473,981
$19,862,702
OTHER ASSETS
Cash and cash equivalents 636,439
652,591
Notes receivable 543,584
543,584
Deferred acquisition costs (Note B) 693,245
715,137
Other assets 187,156
176,925
----------
- ----------
$19,534,405
$21,950,939
==========
==========
LIABILITIES
Accounts payable $ - $
- -
Accounts payable - affiliates (Note C) 4,454,460
3,887,059
Capital contributions payable (Note D) 329,894
329,894
----------
- ----------
4,784,354
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 15,086,241
18,040,337
General Partner (336,190)
(306,351)
----------
- ----------
14,750,051
17,733,986
----------
- ----------
$19,534,405
$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 December 31,
(Unaudited)
1998 1997
---- ----
Income
Interest income $ 18,119 $ 7,835
Other Income 8,251 -
---------- ----------
26,370 7,835
Share of loss from Operating
Partnerships (1,876,234)
(2,508,324)
---------- ----------
Expenses
Partnership management fees 597,975 583,927
Amortization 12,357 12,139
General and administrative expenses 27,270 53,884
---------- ----------
637,602 649,950
---------- ----------
NET LOSS $(2,487,466)
$(3,150,439)
========== ==========
Net loss allocated to limited
partners $(2,462,591)
$(3,118,935)
========== ==========
Net loss allocated to general partner $ (24,875) $
(31,504)
========== ==========
Net loss per BAC $ (.73) $
(.91)
========== ==========
The accompanying notes are an integral part of these
statements.
8
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Three Months Ended December 31,
(Unaudited)
SERIES 7
- -----------------------
1998
1997
----
- ----
Income
Interest income $ 21 $
49
Other Income -
- -
--------
- --------
21
49
Share of loss from Operating
Partnerships (102,594)
(25,581)
--------
- --------
Expenses
Partnership management fees 28,287
28,287
Amortization -
- -
General and administrative expenses 1,072
1,775
--------
- --------
29,359
30,062
--------
- --------
NET LOSS $(131,932) $
(55,594)
========
========
Net loss allocated to limited
partners $(130,613) $
(55,038)
========
========
Net loss allocated to general partner $ (1,319) $
(556)
========
========
Net loss per BAC $ (.13) $
(.05)
========
========
The accompanying notes are an integral part of these
statements.
9
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Three Months Ended December 31,
(Unaudited)
SERIES 9
- ----------------------
1998
1997
----
- ----
Income
Interest income $ 6,893 $
2,740
Other Income -
- -
--------
- --------
6,893
2,740
Share of loss from Operating
Partnerships (570,604)
(564,483)
--------
- --------
Expenses
Partnership management fees 136,696
136,696
Amortization 435
217
General and administrative expenses 4,959
4,387
--------
- --------
142,090
141,300
--------
- --------
NET LOSS $ (705,801) $
(703,043)
========
=========
Net loss allocated to limited partners $ (698,743) $
(696,013)
========
=========
Net loss allocated to general partner $ (7,058) $
(7,030)
========
=========
Net loss per BAC $ (.18) $
(.17)
========
=========
The accompanying notes are an integral part of these
statements.
10
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Three Months Ended December 31,
(Unaudited)
SERIES 10
- ----------------------
1998
1997
----
- ----
Income
Interest income $ 1,270 $
594
Other income -
- -
--------
- --------
1,270
594
Share of loss from Operating
Partnerships (224,643)
(288,849)
--------
- --------
Expenses
Partnership management fees 80,253
68,492
Amortization 860
860
General and administrative expenses 3,750
10,185
--------
- --------
84,863
79,537
--------
- --------
NET LOSS $(308,236)
$(367,792)
========
========
Net loss allocated to limited partner $(305,154)
$(364,114)
========
========
Net loss allocated to general partner $ (3,082) $
(3,678)
========
========
Net loss per BAC $ (.13) $
(.15)
========
========
The accompanying notes are an integral part of these
statements.
11
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Three Months Ended December 31,
(Unaudited)
SERIES 11
- ----------------------
1998
1997
----
- ----
Income
Interest income $ 3,360 $
1,185
Other Income 1,641
- -
--------
- --------
5,001
1,185
Share of gain (loss) from Operating
Partnerships * 68,097
(350,804)
--------
- --------
Expenses
Partnership management fees 79,170
79,920
Amortization 436
436
General and administrative expenses 4,123
9,105
--------
- --------
83,729
89,461
--------
- --------
NET LOSS $ (10,631)
$(439,080)
========
========
Net loss allocated to limited partner $ (10,525)
$(434,689)
========
========
Net loss allocated to general partner $ (106) $
(4,391)
========
========
Net loss per BAC $ (.01) $
(.18)
========
========
* See Results of Operations in Item 2. Management's Discussion
and Analysis of Financial Condition and Results of Operations
for an explanation of
variance.
The accompanying notes are an integral part of these
statements.
12
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Three Months Ended December 31,
(Unaudited)
SERIES 12
- ----------------------
1998
1997
----
- ----
Income
Interest income $ 161 $
39
Other Income 4,660
- -
--------
- --------
4,821
39
Share of loss from Operating
Partnerships (169,156)
(399,421)
--------
- --------
Expenses
Partnership management fee 86,538
90,847
Amortization 3,329
3,329
General and administrative expenses 3,556
6,441
--------
- --------
93,423
100,617
--------
- --------
NET LOSS $(257,758)
$(499,999)
========
========
Net loss allocated to limited partner $(255,180)
$(494,999)
========
========
Net loss allocated to general partner $ (2,578) $
(5,000)
========
========
Net loss per BAC $ (.09) $
(.17)
========
========
The accompanying notes are an integral part of these
statements.
13
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Three Months Ended December 31,
(Unaudited)
SERIES 14
- ----------------------
1998
1997
----
- ----
Income
Interest income $ 6,414 $
3,228
Other Income 1,950
- -
---------
- ---------
8,364
3,228
Share of loss from Operating
Partnerships (877,334)
(879,186)
---------
- ---------
Expenses
Partnership management fees 187,031
179,685
Amortization 7,297
7,297
General and administrative expenses 9,810
21,991
---------
- ---------
204,138
208,973
---------
- ---------
NET LOSS $(1,073,108)
$(1,084,931)
========= =========
Net loss allocated to limited partner $(1,062,377)
$(1,074,082)
=========
=========
Net loss allocated to general partner $ (10,731) $
(10,849)
=========
=========
Net loss per BAC $ (.19) $
(.19)
=========
=========
The accompanying notes are an integral part of these
statements.
14
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Nine Months Ended December 31,
(Unaudited)
1998 1997
---- ----
Income
Interest income $ 57,685 $ 32,874
Other Income 34,032 -
---------- ----------
91,717 32,874
Share of loss from Operating
Partnerships (7,508,793)
(8,408,743)
---------- ----------
Expenses
Partnership management fees 1,750,860 1,756,649
Amortization 36,421 36,421
General and administrative expenses 318,401 379,957
---------- ----------
2,105,682 2,172,527
---------- ----------
NET LOSS $(9,522,758)
$(10,548,396)
========== ===========
Net loss allocated to limited
partners $(9,427,530)
$(10,442,912)
========== ===========
Net loss allocated to general partner $ (95,228) $
(105,484)
========== ===========
Net loss per BAC $ (3.02) $
(3.27)
========== ===========
The accompanying notes are an integral part of these
statements.
15
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Nine Months Ended December 31,
(Unaudited)
SERIES 7
- -----------------------
1998
1997
----
- ----
Income
Interest income $ 137 $
224
Other Income -
- -
--------
- --------
137
224
Share of loss from Operating
Partnerships (319,400)
(256,031)
--------
- --------
Expenses
Partnership management fees 78,861
84,861
Amortization -
- -
General and administrative expenses 20,468
22,798
--------
- --------
99,329
107,659
--------
- --------
NET LOSS $(418,592)
$(363,466)
========
========
Net loss allocated to limited
partners $(414,406)
$(359,831)
========
========
Net loss allocated to general partner $ (4,186) $
(3,635)
========
========
Net loss per BAC $ (.40) $
(.35)
========
========
The accompanying notes are an integral part of these
statements.
16
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Nine Months Ended December 31,
(Unaudited)
SERIES 9
- ----------------------
1998
1997
----
- ----
Income
Interest income $ 17,897 $
11,234
Other Income 2,134
- -
--------- -
- --------
20,031
11,234
Share of loss from Operating
Partnerships (1,272,610)
(1,697,592)
--------- -
- --------
Expenses
Partnership management fees 409,429
406,037
Amortization 652
652
General and administrative expenses 53,815
59,249
--------- -
- --------
463,896
465,938
--------- -
- --------
NET LOSS $(1,716,475)
$(2,152,296)
=========
=========
Net loss allocated to limited partners $(1,699,310)
$(2,130,773)
=========
=========
Net loss allocated to general partner $ (17,165) $
(21,523)
=========
=========
Net loss per BAC $ (.41) $
(.52)
=========
=========
The accompanying notes are an integral part of these
statements.
17
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Nine Months Ended December 31,
(Unaudited)
SERIES 10
- ----------------------
1998
1997
----
- ----
Income
Interest income $ 4,354 $
2,521
Other income -
- -
--------
- --------
4,354
2,521
Share of loss from Operating
Partnerships (954,190)
(985,241)
--------
- --------
Expenses
Partnership management fees 248,264
239,330
Amortization 2,581
2,581
General and administrative expenses 43,059
55,611
--------
- --------
293,904
297,522
--------
- --------
NET LOSS $(1,243,740)
$(1,280,242)
=========
==========
Net loss allocated to limited partner $(1,231,303)
$(1,267,440)
=========
==========
Net loss allocated to general partner $ (12,437) $
(12,802)
=========
==========
Net loss per BAC $ (.51) $
(.53)
=========
==========
The accompanying notes are an integral part of these
statements.
18
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Nine Months Ended December 31,
(Unaudited)
SERIES 11
- ----------------------
1998
1997
----
- ----
Income
Interest income $ 11,770 $
4,582
Other Income 4,041
- -
--------- -
- --------
15,811
4,582
Share of loss from Operating
Partnerships (1,381,815)
(1,489,899)
--------- -
- --------
Expenses
Partnership management fees 239,756
238,374
Amortization 1,380
1,308
General and administrative expenses 42,097
51,844
--------- -
- --------
283,161
291,526
--------- -
- --------
NET LOSS $(1,649,165)
$(1,776,843)
=========
=========
Net loss allocated to limited partner $(1,632,673)
$(1,759,075)
=========
=========
Net loss allocated to general partner $ (16,492) $
(17,768)
=========
=========
Net loss per BAC $ (.66) $
(.71)
=========
=========
The accompanying notes are an integral part of these
statements.
19
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Nine Months Ended December 31,
(Unaudited)
SERIES 12
- ----------------------
1998
1997
----
- ----
Income
Interest income $ 471 $
191
Other Income 10,810
- -
--------- -
- --------
11,281
191
Share of loss from Operating
Partnerships (1,197,451)
(1,374,882)
--------- -
- --------
Expenses
Partnership management fee 257,325
270,029
Amortization 9,988
9,988
General and administrative expenses 57,368
65,488
--------- -
- --------
324,681
345,505
--------- -
- --------
NET LOSS $(1,510,851)
$(1,720,196)
=========
=========
Net loss allocated to limited partner $(1,495,742)
$(1,702,994)
=========
=========
Net loss allocated to general partner $ (15,109) $
(17,202)
=========
=========
Net loss per BAC $ (.51) $
(.58)
=========
=========
The accompanying notes are an integral part of these
statements.
20
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Nine Months Ended December 31,
(Unaudited)
SERIES 14
- ----------------------
1998
1997
----
- ----
Income
Interest income $ 23,056 $
14,122
Other Income 17,047
- -
---------
- ---------
40,103
14,122
Share of loss from Operating
Partnerships (2,383,327)
(2,605,098)
---------
- ---------
Expenses
Partnership management fees 517,225
518,018
Amortization 21,892
21,892
General and administrative expenses 101,594
124,467
---------
- ---------
640,711
664,377
---------
- ---------
NET LOSS $(2,983,935)
$(3,255,353)
========= =========
Net loss allocated to limited partner $(2,954,096)
$(3,222,799)
=========
=========
Net loss allocated to general partner $ (29,839) $
(32,554)
=========
=========
Net loss per BAC $ (.53) $
(.58)
=========
=========
The accompanying notes are an integral part of these
statements.
21
Boston Capital Tax Credit Fund II Limited
Partnership
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
Nine Months Ended December 31, 1998
(Unaudited)
General
Assignees Partner Total
--------- ------- -----
Partners' capital (deficit),
April 1, 1998 $ 51,144,019 $(1,116,437)
$50,027,582
Net loss (9,427,530) (95,228)
(9,522,758)
---------- ---------
- ----------
Partners' capital (deficit),
December 31, 1998 $41,716,489 $(1,211,665)
$40,504,824
========== =========
==========
The accompanying notes are an integral part of these
statements.
22
Boston Capital Tax Credit Fund II Limited
Partnership
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
Nine Months Ended December 31, 1998
(Unaudited)
Limited General
Partners Partner Total
-------- ------- -----
Series 7
- --------
Partners' capital (deficit),
April 1, 1998 $ 731,471 $ (83,446) $
648,025
Net loss (414,406) (4,186)
(418,592)
--------- --------
- ---------
Partners' capital (deficit),
December 31, 1998 $ 317,065 $ (87,632) $
229,433
========= ========
=========
Series 9
- --------
Partners' capital (deficit),
April 1, 1998 $ 8,227,204 $(280,876) $
7,946,328
Net loss (1,699,310) (17,165)
(1,716,475)
---------- -------
- ----------
Partners' capital (deficit),
December 31, 1998 $ 6,527,894 $(298,041) $
6,229,853
========== ========
==========
Series 10
- --------
Partners' capital (deficit),
April 1, 1998 $ 6,270,055 $(149,608) $
6,120,447
Net loss (1,231,303) (12,437)
(1,243,740)
---------- -------- ------
- ----
Partners' capital (deficit),
December 31, 1998 $ 5,038,752 $(162,045) $
4,876,707
========== ========
==========
The accompanying notes are an integral part of these
statements.
23
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
Nine Months Ended December 31, 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 (1,632,673) (16,492)
(1,649,165)
---------- --------
- ----------
Partners' capital (deficit),
December 31, 1998 $ 7,098,472 $(145,152) $
6,953,320
========== ========
==========
Series 12
- --------
Partners' capital (deficit),
April 1, 1998 $ 9,143,807 $(167,496) $
8,976,311
Net loss (1,495,742) (15,109)
(1,510,851)
---------- --------
- ----------
Partners' capital (deficit),
December 31, 1998 $ 7,648,065 $(182,605) $
7,465,460
========== ========
==========
Series 14
- --------
Partners' capital (deficit),
April 1, 1998 $18,040,337 $(306,351)
$17,733,986
Net loss (2,954,096) (29,839)
(2,983,935)
---------- --------
- ----------
Partners' capital (deficit),
December 31, 1998 $15,086,241 $(336,190)
$14,750,051
========== ========
==========
The accompanying notes are an integral part of these
statements.
24
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF CASH FLOWS
Nine Months Ended December 31,
(Unaudited)
1998
1997
----
- ----
Cash flows from operating activities:
Net loss $ (9,522,758)
$(10,548,396)
Adjustments
Distributions from Operating
Partnerships 6,215
15,923
Amortization 36,421
36,421
Share of loss from Operating
Partnerships 7,508,793 8,408,743
Changes in assets and liabilities
Increase in accounts payable
and accrued expenses 1,914,299
1,952,522
Decrease (Increase) in other
assets 7,397
- -
Decrease (Increase) in prepaid
Expenses -
- -
----------
- ----------
Net cash (used in) provided by
operating activities (49,633)
(134,787)
----------
- ----------
Cash flows from investing activities:
Capital contributions paid to
Operating Partnerships (15,374)
(12,997)
Advances (made to) repaid from
Operating Partnerships -
(4,588)
Credit adjusters received from
Operating Partnerships (2,064)
- -
----------
- ----------
Net cash (used in) provided by
investing activities (17,438)
(17,585)
---------- -------
- ---
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (67,071)
(152,372)
Cash and cash equivalents, beginning 1,611,248
1,725,325
---------
- ----------
Cash and cash equivalents, ending $ 1,544,177 $
1,572,953
==========
==========
The accompanying notes are an integral part of these
statements.
25
Boston Capital Tax Credit Fund II Limited
Partnership
STATEMENTS OF CASH FLOWS
Nine Months Ended December 31,
(Unaudited)
Series 7
- -------------------------
1998
1997
----
- ----
Cash flows from operating activities:
Net loss $ (418,592) $
(363,466)
Adjustments
Distributions from Operating
Partnerships -
- -
Amortization -
- -
Share of loss from Operating
Partnerships 319,400
256,031
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 103,749
101,707
Decrease (Increase) in other
assets (9,328)
- -
Decrease (Increase) in prepaid -
- -
expenses --------
- ---------
Net cash (used in) provided by
operating activities (4,771)
(5,728)
--------
- ---------
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 (4,771)
(5,728)
Cash and cash equivalents, beginning 7,134
12,008
--------
- ---------
Cash and cash equivalents, ending $ 2,363 $
6,280
========
=========
The accompanying notes are an integral part of these
statements.
26
Boston Capital Tax Credit Fund II Limited
Partnership
STATEMENTS OF CASH FLOWS
Nine Months Ended December 31,
(Unaudited)
Series 9
- -------------------------
1998
1997
----
- ----
Cash flows from operating activities:
Net loss $(1,716,475)
$(2,152,296)
Adjustments
Distributions from Operating
Partnerships 1,249
3,386
Amortization 652
652
Share of loss from Operating
Partnerships 1,272,610
1,697,592
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 431,838
431,840
Decrease (Increase) in other
assets (28,606)
- -
Decrease (Increase) in prepaid
expenses -
- -
---------
- ---------
Net cash (used in) provided by
operating activities (38,732)
(18,826)
---------
- ---------
Cash flows from investing activities:
Capital contributions paid to
Operating Partnerships -
- -
Advances (made to) repaid from
Operating Partnerships -
(4,588)
Credit adjusters received from
Operating Partnerships -
- -
---------
- ---------
Net cash (used in) provided by
investing activities -
(4,588)
---------
- ---------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (38,732)
(23,414)
Cash and cash equivalents, beginning 517,412
566,836
---------
- ---------
Cash and cash equivalents, ending $ 478,680 $
543,422
=========
=========
The accompanying notes are an integral part of these
statements.
27
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF CASH FLOWS
Nine Months Ended December 31,
(Unaudited)
Series 10
- -------------------------
1998
1997
----
- ----
Cash flows from operating activities:
Net loss $(1,243,740)
$(1,280,242)
Adjustments
Distributions from Operating
Partnerships 338
149
Amortization 2,581
2,581
Share of loss from Operating
Partnerships 954,190
985,241
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 266,633
266,634
Decrease (Increase) in other
assets 3,736
- -
Decrease (Increase) in prepaid
expenses -
- -
---------
- ---------
Net cash (used in) provided by
operating activities (16,262)
(25,637)
---------
- ---------
Cash flows from investing activity:
Capital contributions paid to
Operating Partnerships -
- -
Advances (made to) repaid from
Operating Partnerships -
- -
Credit adjusters received from
Operating Partnerships (5,240)
- -
---------
- ---------
Net cash (used in) provided by
investing activities (5,240)
- -
--------- ------
- ---
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (21,502)
(25,637)
Cash and cash equivalents, beginning 124,484
144,428
---------
- ---------
Cash and cash equivalents, ending $ 102,982 $
118,791
=========
=========
The accompanying notes are an integral part of these
statements.
28
Boston Capital Tax Credit Fund II Limited
Partnership
STATEMENTS OF CASH FLOWS
Nine Months Ended December 31,
(Unaudited)
Series 11
- -------------------------
1998 1997
---- ----
Cash flows from operating activities:
Net loss $(1,649,165) $
(1,776,843)
Adjustments
Distributions from Operating
Partnerships 35
- -
Amortization 1,308
1,308
Share of loss from Operating
Partnerships 1,381,815
1,489,899
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 244,660
244,261
Decrease (Increase) in other
assets (2,716)
- -
Decrease (Increase) in
prepaid expenses -
- -
---------
- ---------
Net cash (used in) provided by
operating activities (24,063)
(41,375)
---------
- ---------
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 (24,063)
(41,375)
Cash and cash equivalents, beginning 287,800
307,351
---------
- ---------
Cash and cash equivalents, ending $ 263,737 $
265,976
=========
=========
The accompanying notes are an integral part of these
statements.
29
Boston Capital Tax Credit Fund II Limited
Partnership
STATEMENTS OF CASH FLOWS
Nine Months Ended December 31,
(Unaudited)
Series 12
- -------------------------
1998
1997
----
- ----
Cash flows from operating activities:
Net loss $(1,510,851)
$(1,720,196)
Adjustments
Distributions from Operating
Partnerships 432
4,673
Amortization 9,988
9,988
Share of loss from Operating
Partnerships 1,197,451
1,374,882
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 300,018
340,675
Decrease (Increase) in prepaid
Expenses -
- -
Decrease (Increase) in other
assets 53,942
- -
---------
- ---------
Net cash (used in) provided by
operating activities 50,980
10,022
---------
- ---------
Cash flows from investing activity:
Capital contributions paid to
Operating Partnerships (12,831)
- -
Advances (made to) repaid from Operating
Partnerships -
- -
Credit adjusters received from
Operating Partnerships -
- -
---------
- ---------
Net cash (used in) provided by
investing activities (12,831)
- -
---------
- ---------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 38,149
10,022
Cash and cash equivalents, beginning 21,827
8,532
---------
- ---------
Cash and cash equivalents, ending $ 59,976 $
18,554
=========
=========
The accompanying notes are an integral part of these
statements.
30
Boston Capital Tax Credit Fund II Limited
Partnership
STATEMENTS OF CASH FLOWS
Nine Months Ended December 31,
(Unaudited)
Series 14
- -------------------------
1998
1997
----
- ----
Cash flows from operating activities:
Net loss $(2,983,935)
$(3,255,353)
Adjustments
Distributions from Operating
Partnerships 4,161
7,715
Amortization 21,892
21,892
Share of loss from Operating
Partnerships 2,383,327
2,605,098
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 567,401
567,405
Decrease (Increase) in other
Assets (9,631)
- -
Decrease (Increase) in prepaid
expenses -
- -
----------
- ---------
Net cash (used in) provided by
operating activities (16,785)
(53,243)
----------
- ---------
Cash flows from investing activity:
Capital contributions paid to
Operating Partnerships (2,543)
(12,997)
Advances (made to) repaid from
Operating Partnerships -
- -
Credit adjusters received from
Operating Partnerships 3,176
- -
----------
- ---------
Net cash (used in) provided by
investing activities 633
(12,997)
----------
- ---------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (16,152)
(66,240)
Cash and cash equivalents, beginning 652,591
686,170
----------
- ---------
Cash and cash equivalents, ending $ 636,439 $
619,930
==========
=========
The accompanying notes are an integral part of these
statements.
31
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS
December 31, 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 December
31, 1998
and for the nine months then ended have been prepared by the
Partnership,
without audit, pursuant to the rules and regulations of the
Securities and
Exchange Commission. No BACs with respect to Series 8 and Series
13 were
offered. The Partnership accounts for its investments in
Operating
Partnerships using the equity method, whereby the partnership
adjusts its
investment cost for its share of each Operating Partnership's
results of
operations and for any distributions received or accrued.
32
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 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 December 31,
1998, the
Partnership has accumulated unallocated acquisition amortization
totaling
$182,106. The breakdown of accumulated unallocated acquisition
amortization
within the Partnership as of December 31, 1998 for Series 9,
Series 10,
Series 11, Series 12, and Series 14 is $3,262, $12,905, $6,541,
$49,938, and
$109,460, respectively.
NOTE C - RELATED PARTY TRANSACTIONS
The Partnership has entered into several transactions with
various affiliates
of the general partner, including Boston Capital Partners, Inc.,
and Boston
Capital Asset Management Limited Partnership (formerly Boston
Capital
Communications Limited Partnership) as follows:
An annual partnership management fee based on .5 percent of
the aggregate
cost of all apartment complexes owned by the Operating
Partnerships has been
accrued to Boston Capital Asset Management Limited Partnership
(formerly
Boston Capital Communications Limited Partnership). The
partnership
management fee accrued for the quarters ended December 31, 1998
and 1997 are
as follows:
33
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 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 December 31, 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 December 31, 1998, an affiliate of the general partner
has
advanced a total of $131,400 to the Partnership to pay certain
operating
expenses of two of the series (Series 7 & 12). None was advance
during the quarter ended December 31, 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.
As of December 31, 1998, an affiliate of the general partner
funded $5,775, interest free, to the Partnership (Series 7) so
that it could make an advance to the Operating Partnership New
Holland. These funds were advanced during the quarter ended
December 31, 1998. This advance to the Operating Partnership was
made to fund operating expenses of the Operating Partnership, and
will be repaid to the Partnership by the Operating Partnership
with surplus cash from operations.
34
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1998
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING LIMITED PARTNERSHIPS
At December 31, 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 December 31, 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 December 31, 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 14 329,894 330,578
--------- ---------
$ 368,417 $ 374,101
========= =========
The Partnership's fiscal year ends March 31 of each year, while
all the
Operating Partnerships' fiscal years are the calendar year.
Pursuant to the
provisions of each Operating Partnership Agreement, financial
results for each
of the Operating Partnerships are provided to the Partnership
within 45 days
after the close of each Operating Partnership's quarterly period.
Accordingly, the current financial results available for the
Operating
Partnerships are for the nine months ended September 30, 1998.
35
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1998
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Nine months ended September 30,
(Unaudited)
Series 7
- ---------------------------
1998 1997
---- ----
Revenues
Rental $ 1,559,209 $
1,544,473
Interest and other 147,967
131,227
---------
- ---------
1,707,176
1,675,700
---------
- ---------
Expenses
Interest 627,397
645,825
Depreciation and amortization 752,575
798,995
Operating expenses 1,046,331
1,138,844
---------
- ---------
2,426,303
2,583,664
---------
- ---------
NET LOSS $ (719,127) $
(907,964)
=========
=========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $ (319,400) $
(256,031)
=========
=========
Net loss allocated to other partners $ (7,191) $
(9,080)
=========
=========
Net loss suspended $ (449,362) $
(642,853)
=========
=========
The partnership accounts for its investments using the equity
method of
accounting. Under the equity method of accounting, the
partnership adjusts
its investment cost for its share of each Operating Partnership's
results of
operations and for any distributions received or accrued.
However, the
Partnership recognizes individual operating losses only to the
extent of
capital contributions. Excess losses are suspended for use in
future years to
offset excess income.
36
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1998
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Nine months ended September 30,
(Unaudited)
Series 9
- --------------------------
1998 1997
----- -----
Revenues
Rental $ 7,488,962 $
7,284,542
Interest and other 553,897
370,742
----------
- ----------
8,042,859
7,655,284
----------
- ----------
Expenses
Interest 2,570,291
2,583,445
Depreciation and amortization 2,820,017
2,906,247
Operating expenses 4,790,932
4,514,783
----------
- ----------
10,181,240
10,004,475
----------
- ----------
NET LOSS $(2,138,381)
$(2,349,191)
==========
==========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $(1,272,610)
$(1,697,592)
==========
==========
Net loss allocated to other partners $ (21,384) $
(23,492)
==========
==========
Net loss suspended $ (844,387) $
(628,107)
==========
==========
The Partnership accounts for its investments using the equity
method of
accounting. Under the equity method of accounting, the
partnership adjusts
its investment cost for its share of each Operating Partnership's
results of
operations and for an distributions received or accrued.
However, the
Partnership recognizes individual operating losses only to the
extent of
capital contributions. Excess losses are suspended for use in
future years to
offset excess income.
37
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1998
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Nine Months ended September 30,
(Unaudited)
Series 10
- --------------------------
1998 1997
Revenues ---- ----
Rental $ 5,630,492 $
5,503,294
Interest and other 314,060
235,605
----------
- ----------
5,944,552
5,738,899
----------
- ----------
Expenses
Interest 1,905,610
1,803,389
Depreciation and amortization 1,989,033
1,872,498
Operating expenses 3,352,291
3,327,029
----------
- ----------
7,246,935
7,002,916
----------
- ----------
NET LOSS $(1,302,383)
$(1,264,016)
==========
==========
Net loss allocated to Boston
Capital Tax Credit Fund
Limited Partnership II $ (954,190) $
(985,241)
==========
==========
Net loss allocated to other partners $ (13,024) $
(12,640)
==========
==========
Net loss suspended $ (335,169) $
(266,135)
==========
==========
The Partnership accounts for its investments using the equity
method of
accounting. Under the equity method of accounting, the
partnership adjusts
its investment cost for its share of each Operating Partnership's
results of
operations and for any distributions received or accrued.
However, the
Partnership recognizes individual operating losses only to the
extent of
capital contributions. Excess losses are suspended for use in
future years to
offset excess income.
38
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1998
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Nine months ended September 30,
(Unaudited)
Series 11
- ----------------------------
1998 1997
Revenues ---- ----
Rental $ 4,735,155 $
4,887,707
Interest and other 257,283
235,446
----------
- ----------
4,992,438
5,123,153
----------
- ----------
Expenses
Interest 1,827,923
1,925,117
Depreciation and amortization 1,868,831
1,834,595
Operating expenses 2,934,623
3,064,184
----------
- ----------
6,631,377
6,823,896
----------
- ----------
NET LOSS $(1,638,939)
$(1,700,743)
==========
==========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $(1,381,815)
$(1,489,899)
==========
==========
Net loss allocated to other partners $ (16,389) $
(17,007)
==========
==========
Net loss suspended $ (240,735) $
(193,837)
==========
==========
The Partnership accounts for its investments using the equity
method of
accounting. Under the equity method of accounting, the
partnership adjusts
its investment cost for its share of each Operating Partnership's
results of
operations and for any distributions received or accrued.
However, the
Partnership recognizes individual operating losses only to the
extent of
capital contributions. Excess losses are suspended for use in
future years to
offset excess income.
39
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1998
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Nine months ended September 30,
(Unaudited)
Series 12
- --------------------------
1998 1997
Revenues ---- ----
Rental $ 5,191,635 $
5,387,867
Interest and other 283,928
216,386
---------
- ---------
5,475,563
5,604,253
---------
- ---------
Expenses
Interest 1,745,789
1,903,988
Depreciation and amortization 2,039,203
2,113,445
Operating expenses 3,349,228
3,130,728
---------
- ---------
7,134,220
7,148,161
---------
- ---------
NET LOSS $(1,658,657)
$(1,543,908)
=========
=========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $(1,197,451)
$(1,374,882)
=========
=========
Net loss allocated to other partners $ (16,587) $
(15,439)
=========
=========
Net loss suspended $ (444,619) $
(153,587)
=========
=========
The Partnership accounts for its investments using the equity
method of
accounting. Under the equity method of accounting, the
partnership adjusts
its investment cost for its share of each Operating Partnership's
results of
operations and for any distributions received or accrued.
However, the
Partnership recognizes individual operating losses only to the
extent of
capital contributions. Excess losses are suspended for use in
future years to
offset excess income.
40
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1998
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Nine months ended September 30,
(Unaudited)
Series 14
---
- ------------------------
1998 1997
Revenues ---- ----
Rental $11,092,830
$10,775,219
Interest and other 520,595
565,817
----------
- ----------
11,613,425
11,341,036
----------
- ----------
Expenses
Interest 3,987,271
3,611,818
Depreciation and amortization 3,626,589
4,023,026
Operating expenses 6,855,884
6,602,697
----------
- ----------
14,469,744
14,237,541
----------
- ----------
NET LOSS $(2,856,319)
$(2,896,505)
==========
==========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $(2,383,327)
$(2,605,098)
==========
==========
Net loss allocated to other partners $ (28,563) $
(28,965)
==========
==========
Net loss suspended $ (444,429) $
(262,442)
==========
==========
The Partnership accounts for its investments using the equity
method of
accounting. Under the equity method of accounting, the
partnership adjusts
its investment cost for its share of each Operating Partnership's
results of
operations and for any distributions received or accrued.
However, the
Partnership recognizes individual operating losses only to the
extent of
capital contributions. Excess losses are suspended for use in
future years to
offset excess income.
41
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1998
(Unaudited)
NOTE E - TAXABLE LOSS
The Partnership's taxable loss for the year ended December 31,
1998 is
expected to differ from its loss for financial reporting purposes
for the fiscal year ended March 31, 1999. This is primarily due
to accounting differences in depreciation incurred by the
Operating Partnerships and also differences between the equity
method of accounting and the IRS accounting methods. No
provision or benefit for income taxes has been included in these
financial statements since taxable income or loss passes through
to, and is reportable by, the partners and assignees
individually.
42
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity
- ---------
The Partnership's primary source of funds was the proceeds of its
Public
Offering. Other sources of liquidity include (i) interest earned
on capital
contributions unpaid as of December 31, 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 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 December 31,
1998 in the amount of $34,032. Of the total, $11,382 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 $22,650 represents transfer fee income.
An affiliate of the general partner has advanced $131,400 to the
Partnership
to pay certain third party operating expenses. None of these
funds were advanced during the quarter ended December 31, 1998.
The amounts advanced to two of the six series are as follows:
$73,900 to Series 7 and $57,500 to Series 12. These and any
additional advances will be paid, without interest, from
available cash flow, reporting fees, or the proceeds of the sales
or refinancing of the Partnership's interest in Operating
Partnerships. The Partnership anticipates that as the Operating
Partnerships continue to mature, more cash flow and reporting
fees will be generated. Cash flow and reporting fees will be
added to the Partnership's working capital and will be available
to meet future third party obligations of the Partnership. The
Partnership is currently pursuing, and will continue to pursue,
available cash flow and reporting fees and anticipates that the
amount collected will be sufficient to cover third party
operating expenses.
Capital Resources
- -----------------
The Partnership offered BACs in a Public offering declared
effective by the
Securities and Exchange Commission on October 25, 1989. The
Partnership
received and accepted subscriptions for $186,337,017 representing
18,679,738
BACs from investors admitted as BAC Holders in Series 7 through
Series 14
of the Partnership.
43
(Series 7) The Partnership commenced offering BACs in Series 7
on November
14, 1989. Offers and sales of BACs in Series 7 totaled
$10,361,000 and were
completed on December 29, 1989. The Partnership had committed
proceeds to pay
initial and additional installments of capital contributions to
15 Operating
Partnerships in the amount of $7,547,852.
As of December 31, 1998, Series 7 had paid all installments of
capital
contributions to the Operating Partnerships. Series 7 net
offering proceeds
in the amount of $2,363 remains in working capital.
(Series 8) No BACs with respect to Series 8 were offered.
(Series 9) The Partnership commenced offering BACs in Series 9
on February 1,
1990. Offers and sales of BACs in Series 9 totaled $41,574,018
and were
completed on May 4, 1990. The Partnership had committed proceeds
to pay
initial and additional installments of capital contributions to
55 Operating
Partnerships in the amount of $30,128,943.
During the quarter ended December 31, 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 $478,680 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 December 31, 1998, Series 10 had paid all installments of
capital
contributions to the Operating Partnerships. Series 10 net
offering proceeds
in the amount of $102,982 remains in working capital.
(Series 11) The Partnership commenced offering BACs in Series 11
on September
17, 1990. Offers and sales of BACs in Series 11 totaled
$24,735,002 and were
completed on December 27, 1990. The Partnership had committed
proceeds to pay
initial and additional installments of capital contributions to
40 Operating
Partnerships in the amount of $17,849,548.
During the quarter ended December 31, 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 $263,737 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
44
initial and additional installments of capital contributions to
53 Operating
Partnerships in the amount of $21,654,977.
During the quarter ended December 31, 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 $59,976 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 December 31, 1998, none of Series 14 net
offering
proceeds had been used to pay capital contributions. Series 14
net offering
proceeds in the amount of $636,439 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 December 31, 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 December 31, 1998 and 1997 were
$597,975 and
$583,927, respectively. The amount is anticipated to decrease in
subsequent
future periods as more Operating Partnerships begin to pay annual
asset
management and reporting fees to the Partnership.
45
The Partnership's investment objectives do not include receipt of
significant
cash distributions from the Operating Partnerships in which it
has invested. The Partnership's investments in Operating
Partnerships have been made principally with a view towards
realization of Federal Housing Tax
Credits for allocation to its partners and BAC holders.
The General Partner and it's affiliate, Boston Capital Asset
Management
Limited Partnership, monitors the operations of all the
properties in the
Partnership. The Operating Partnerships that are mentioned in
the following
discussion of each series' results of operations are being
closely monitored
so as to improve the overall results of each series' operations.
(Series 7) As of December 31, 1998 and 1997, the average
Qualified Occupancy
for the series was 100% for both years. The series had a total
of 15
properties at December 31, 1998.
For the nine months being reported the series reflects a net loss
from the
Operating Partnerships of $719,127. When adjusted for
depreciation, which is
a non-cash item, the Operating Partnerships reflect positive
operations of $33,448. 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 operating partnership incurring continued operational cash
flow deficits, this has raised substantial doubt about the
property continuing as a going concern. The cash flow deficits
have been the result of continued poor occupancy at the property.
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. As of this filing, the mortgagee has not called
the loan and regular payments have continued to be made but the
Investment General Partner believes that there is a strong
possibility that the technical default might be enforced by
senior mortgage holder. At this time all parties are still
unsure how this situation will ultimately be resolved, therefore
no adjustment has been made to the attached financial statements.
(Series 9) As of December 31, 1998 and 1997, the average
Qualified Occupancy
for the series was 99.7% and 99.8%, respectively. The series had
a total of 55 properties at December 31, 1998. Out of the total,
52 were at 100% Qualified Occupancy.
For the nine months being reported the series reflects a net loss
from the
Operating Partnerships of $2,138,381. When adjusted for
depreciation, which is
a non-cash item, the Operating Partnerships reflect positive
operations of
$681,636. This is an interim period estimate; it is not
necessarily
indicative of the final year end results.
The Operating General Partner and management agent of School
Street II Limited Partnership (School Street Apts. II) were
removed and replaced during 1997. In the transition, occupancies
suffered, and as a result, a leasing agent and new management
company were hired by the new Operating General Partner to rent
the vacant units. Due to the unresponsiveness of the new
management company,
46
another company was hired in October 1998 with the goal to
improve occupancy and operations. Occupancy was at 83% in
December 1998 as a result of the new
site manager who started in October. In addition, the Operating
General Partner initiated negotiations with the first mortgage
holder to restructure the debt. As a result of these
negotiations, a more favorable refinancing closed on January 4,
1999. The Operating General Partner anticipates that the
property will generate positive cash flow with the new debt
service once occupancy is stabilized.
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 operating partnership incurring continued operational cash
flow deficits, this has raised substantial doubt about the
property continuing as a going concern. The cash flow deficits
have been the result of continued poor occupancy at the property.
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. As of this filing the mortgagee has not called
the loan and regular payments have continued to be made but the
Investment General Partner believes that there is a strong
possibility that the technical default might be enforced by
senior mortgage holder. At this time all parties are still
unsure how this situation will ultimately be resolved, therefore
no adjustment has been made to the attached financial statements.
The Operating Partnership Glennwood Hotel Investors (Glennwood
Hotel) continues to operate at an average occupancy of 60%. 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 December 31, 1998 and 1997, the average
Qualified
Occupancy for the series was 99.7% and 99.6%, respectively. The
series had a total of 46 properties at December 31, 1998, 45 of
which were at 100%
Qualified Occupancy.
For the nine months being reported the series reflects a net loss
from the
Operating Partnerships of $1,302,382. When adjusted for
depreciation which is
a non-cash item, the Operating Partnerships reflect positive
operations of
$686,650. 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)
operated
at a deficit in 1998 due to its high operating expenses. The
Operating General Partner was unable to secure a loan
modification from the loan holder. The continued level of high
operating deficits left the Operating General Partner with little
alternative but to grant a deed-in-lieu of foreclosure to
47
the loan holder. However, since the deed-in-lieu of foreclosure
occurred during January 1999, the Partnership will still be
eligible to receive 1998 tax credits. In 1999, the Partnership
will face recapture of a portion of credits previously taken due
to the transfer of ownership of the apartment
complex from the Operating Partnership to the mortgage holder.
Further, the Investment Partnership will no longer have any
ownership interest in the apartment complex.
(Series 11) As of December 31, 1998 and 1997 the average
Qualified
Occupancy for the series was 99.38% and 100%, respectively. The
series had a total of 40 properties at December 31, 1998, 39 of
which were at 100% Qualified Occupancy.
For the three months ended December 31, 1998, the Partnership
recorded a gain of $68,067 for its share of the operations of the
operating partnerships, compared to a loss reported of $350,804
for the three months ended December 31, 1997. A gain is being
reported for the current quarter as a result of an adjustment for
overstated operating partnership interest expense in the first
two quarters of 1998.
For the nine months being reported the series reflects a net loss
from the Operating Partnerships of $1,638,939. When adjusted for
depreciation, which is
a non-cash item, the Operating Partnerships reflect positive
operations of
$229,892. This is an interim period estimate; it is not
necessarily
indicative of the final year end results.
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 currently working with the IRS to resolve the
situation. At this time no reasonable impact of any IRS decision
can be estimated.
(Series 12) As of December 31, 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 December 31, 1998, 52 of which were at 100%
qualified occupancy.
For the nine months being reported the series reflects a net loss
from the
Operating Partnerships of $1,658,657. When adjusted for
depreciation, which is
a non-cash item, the Operating Partnerships reflect positive
operations of $380,546. 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
December 31, 1998 was 95%. The property had previously suffered
operational difficulties due to more expensive debt and high
expenses. 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.
For the first three quarters of 1998, Brandywood Limited
Partnership (Brandywood Apts) has maintained a 99% average
occupancy, and was at 96% at year end. During 1997, the property
operated under a forbearance agreement with the permanent
mortgage lender, making payments on debt service based on
48
cash flow. The loan was refinanced with the lender effective
July 1998 at a lower rate. The restructuring has improved the
financial feasibility as the property now generates positive cash
flow.
(Series 14) As of December 31, 1998 and 1997, the average
Qualified
Occupancy for the series was 99.6% and 99.5%, respectively. The
series had a
total of 101 properties at December 31, 1998, 95 of which were at
100%
Qualified Occupancy.
For the nine months being reported the series reflects a net loss
from the
Operating Partnerships of $2,856,319. When adjusted for
depreciation, which is
a non-cash item, the Operating Partnerships reflect positive
operations of
$770,270. 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
December 31, 1998 was 95%. The property had previously suffered
operational difficulties due to more expensive debt and high
expenses. 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.
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 Parnters IV, A California LP
(Glenhaven Park) continue to suffer from high operating expenses
and occupancy issues. The management company has said that the
rental market is poor with an oversupply of housing. As of
December 31, 1998, physical occupancy was 83%, 78%, 80%, and 75%,
respectively. The management company will continue to actively
conduct outreach to generate new interest in the properties along
with working towards reducing the operating expenses. The
Investment General Partner is also working with the Operating
General Partner to develop a capital needs plan to assess what
can be done in hopes of improving occupancy levels.
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. 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 Operating General Partner and its counsel 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) was scheduled to mature on December 10, 1998. The
Operating General Partner obtained an extension for the maturity
date of the loan to April 1999 and is currently evaluating
multiple refinancing options.
49
Y2K Issue
- ---------
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 have contacted the vendors to
provide us with the necessary upgrades and replacements. Boston
Capital is committed to ensuring that the "Y2K' issue will have
no impact on our investors.
50
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
51
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the
registrant has duly caused this report to be signed on its behalf
by the
undersigned hereunto duly authorized.
BOSTON CAPITAL TAX CREDIT
FUND II LIMITED PARTNERSHIP
By: Boston Capital Associates II
Limited
Partnership
By: C&M Associates d/b/a
Boston Capital Associates
Date: February 18,1999 By: /s/ John P. Manning
--------------------
John P. Manning,
Partner & Principal Financial
Officer
52
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<CIK> 0000853566
<NAME> BOSTON CAPITAL TAX CREDIT FUND II LIMITED PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-START> APR-01-1998
<PERIOD-END> DEC-31-1998
<TOTAL-ASSETS> 57,025,035
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<COMMON> 0
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