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 September 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 September 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
September 30, March 31,
1999 1999
(Unaudited) (Audited)
------------ ------------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $ 49,374,450 $ 52,816,616
OTHER ASSETS
Cash and cash equivalents 1,366,676 1,590,545
Notes Receivable 543,584 543,584
Deferred acquisition costs (Note B) 1,116,919 1,141,198
Other assets 721,947 556,163
---------- ----------
$ 53,123,576 $ 56,648,106
========== ==========
LIABILITIES
Accounts Payable $ - $ -
Accounts Payable - affiliates (Note C) 18,207,929 16,817,686
Capital Contributions payable (Note D) 263,827 368,417
---------- ----------
18,471,756 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 35,922,016 40,684,097
General Partner (1,270,196) (1,222,094)
---------- ----------
34,651,820 39,462,003
---------- ----------
$ 53,123,576 $ 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
----------------------------
September 30, March 31,
1999 1999
(Unaudited) (Audited)
----------- ---------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $ 843,747 $ 974,248
OTHER ASSETS
Cash and cash equivalents 6,118 8,529
Notes receivable - -
Deferred acquisition costs (Note B) - -
Other assets 57,476 46,618
--------- ---------
$ 907,341 $1,029,395
========= =========
LIABILITIES
Accounts payable $ - $ -
Accounts payable - affiliates (Note C) 1,098,006 1,020,834
Capital contributions payable (Note D) - -
--------- ---------
1,098,006 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 (98,832) 98,402
General Partner (91,833) (89,841)
--------- ---------
(190,665) 8,561
--------- ---------
$ 907,341 $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
----------------------------
September 30, March 31,
1999 1999
ASSETS (Unaudited) (Audited)
----------- ---------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $ 8,370,674 $ 9,083,730
OTHER ASSETS
Cash and cash equivalents 351,060 396,237
Notes receivable - -
Deferred acquisition costs (Note B) 20,008 20,442
Other assets 187,929 154,191
---------- ----------
$ 8,929,671 $ 9,654,600
========== ==========
LIABILITIES
Accounts payable $ - $ -
Accounts payable - affiliates (Note C) 4,320,836 4,032,944
Capital contributions payable (Note D) - 4,590
---------- ----------
4,320,836 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 4,923,086 5,921,235
General Partner (314,251) (304,169)
---------- ----------
4,608,835 5,617,066
---------- ----------
$ 8,929,671 $ 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
----------------------------
September 30, March 31,
1999 1999
ASSETS (Unaudited) (Audited)
----------- ---------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $ 7,097,656 $ 7,305,952
OTHER ASSETS
Cash and cash equivalents 95,245 118,099
Notes receivable - -
Deferred acquisition costs (Note B) 79,152 80,872
Other assets 39,927 42,354
---------- ----------
$ 7,311,980 $ 7,547,277
========== ==========
LIABILITIES
Accounts payable $ - $ -
Accounts payable - affiliates (Note C) 2,872,740 2,694,984
Capital contributions payable (Note D) - -
---------- ----------
2,872,740 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 4,605,661 5,014,583
General Partner (166,421) (162,290)
---------- ----------
4,439,240 4,852,293
---------- ----------
$ 7,311,980 $ 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
----------------------------
September 30, March 31,
1999 1999
(Unaudited) (Audited)
------------ ----------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $ 8,309,291 $ 8,819,044
OTHER ASSETS
Cash and cash equivalents 296,131 316,711
Notes receivable - -
Deferred acquisition costs (Note B) 40,119 40,991
Other assets 58,388 54,797
---------- ----------
$ 8,703,929 $ 9,231,543
========== ==========
LIABILITIES
Accounts payable $ - $ -
Accounts payable - affiliates (Note C) 2,114,674 1,951,834
Capital contributions payable (Note D) 22,528 22,528
---------- ----------
2,137,202 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 6,715,745 7,399,294
General Partner (149,018) (142,113)
---------- ----------
6,566,727 7,257,181
---------- ----------
$ 8,703,929 $ 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
----------------------------
September 30, March 31,
1999 1999
(Unaudited) (Audited)
------------ ----------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $ 8,813,462 $ 9,338,564
OTHER ASSETS
Cash and cash equivalents 47,186 82,710
Notes receivable - -
Deferred acquisition costs (Note B) 306,287 312,945
Other assets 70,847 68,425
--------- ---------
$ 9,237,782 $ 9,802,644
========== ==========
LIABILITIES
Accounts payable $ - $ -
Accounts payable - affiliates (Note C) 2,672,461 2,473,495
Capital contributions payable (Note D) 11,405 11,405
---------- ----------
2,683,866 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 6,745,636 7,501,826
General Partner (191,720) (184,082)
---------- ----------
6,553,916 7,317,744
---------- ----------
$ 9,237,782 $ 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
----------------------------
September 30, March 31,
1999 1999
(Unaudited) (Audited)
------------ ----------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $15,939,620 $17,295,078
OTHER ASSETS
Cash and cash equivalents 570,936 668,259
Notes receivable 543,584 543,584
Deferred acquisition costs (Note B) 671,353 685,948
Other assets 307,380 189,778
---------- ----------
$18,032,873 $19,382,647
========== ==========
LIABILITIES
Accounts payable $ - $ -
Accounts payable - affiliates (Note C) 5,129,212 4,643,595
Capital contributions payable (Note D) 229,894 329,894
---------- ----------
5,359,106 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 13,030,720 14,748,757
General Partner (356,953) (339,599)
---------- ----------
12,673,767 14,409,158
---------- ----------
$18,032,873 $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 September 30,
(Unaudited)
1999 1998
---- ----
Income
Interest income $ 14,169 $ 19,463
Other Income 16,650 4,447
---------- ----------
30,819 23,910
Share of loss from Operating
Partnerships (Note D) (1,423,204) (2,662,923)
---------- ----------
Expenses
Partnership management fees (Note C) 586,884 590,952
Amortization 12,139 12,139
General and administrative expenses 201,233 244,313
---------- ----------
800,256 847,404
---------- ----------
NET LOSS $(2,192,641) $(3,486,417)
========== ==========
Net loss allocated to limited
partners $(2,170,715) $(3,451,553)
========== ==========
Net loss allocated to general partner $ (21,926) $ (34,864)
========== ==========
Net loss per BAC $ (.69) $ (1.20)
========== ==========
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 September 30,
(Unaudited)
SERIES 7
-----------------------
1999 1998
---- ----
Income
Interest income $ 47 $ 64
Other Income - -
-------- --------
47 64
Share of loss from Operating
Partnerships (Note D) (53,170) (159,981)
-------- --------
Expenses
Partnership management fees (Note C) 25,287 28,287
Amortization - -
General and administrative expenses 12,755 17,709
-------- --------
38,042 45,996
-------- --------
NET LOSS $ (91,165) $(205,913)
======== ========
Net loss allocated to limited
partners $ (90,253) $(203,854)
======== ========
Net loss allocated to general partner $ (912) $ (2,059)
======== ========
Net loss per BAC $ (.09) $ (.20)
======== ========
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 September 30,
(Unaudited)
SERIES 9
----------------------
1999 1998
---- ----
Income
Interest income $ 2,363 $ 5,950
Other Income 8,700 -
-------- --------
11,063 5,950
Share of loss from Operating
Partnerships (Note D) (327,261) (260,328)
-------- --------
Expenses
Partnership management fees (Note C) 139,170 143,946
Amortization 217 217
General and administrative expenses 34,424 38,720
-------- --------
173,811 182,883
-------- --------
NET LOSS $ (490,009) $ (437,261)
======== =========
Net loss allocated to limited partners $ (485,109) $ (432,888)
======== =========
Net loss allocated to general partner $ (4,900) $ (4,373)
======== =========
Net loss per BAC $ (.12) $ (.10)
======== =========
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 September 30,
(Unaudited)
SERIES 10
----------------------
1999 1998
---- ----
Income
Interest income $ 1,397 $ 1,625
Other income 7,800 -
-------- --------
9,197 1,625
Share of loss from Operating
Partnerships (Note D) (123,703) (333,187)
-------- --------
Expenses
Partnership management fees (Note C) 83,242 88,878
Amortization 860 860
General and administrative expenses 30,621 28,878
-------- --------
114,723 118,616
-------- --------
NET LOSS $(229,229) $(450,178)
======== ========
Net loss allocated to limited partner $(226,937) $(445,676)
======== ========
Net loss allocated to general partner $ (2,292) $ (4,502)
======== ========
Net loss per BAC $ (.09) $ (.19)
======== ========
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 September 30,
(Unaudited)
SERIES 11
----------------------
1999 1998
---- ----
Income
Interest income $ 3,396 $ 4,791
Other Income - -
-------- --------
3,396 4,791
Share of loss from Operating
Partnerships (Note D) (285,381) (709,103)
-------- --------
Expenses
Partnership management fees (Note C) 80,670 80,166
Amortization 436 436
General and administrative expenses 29,354 33,774
-------- --------
110,460 114,376
-------- --------
NET LOSS $(392,445) $(818,688)
======== ========
Net loss allocated to limited partner $(388,521) $(810,501)
======== ========
Net loss allocated to general partner $ (3,924) $ (8,187)
======== ========
Net loss per BAC $ (.16) $ (.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 September 30,
(Unaudited)
SERIES 12
----------------------
1999 1998
---- ----
Income
Interest income $ 312 $ 151
Other Income 150 -
-------- --------
462 151
Share of loss from Operating
Partnerships (Note D) (214,428) (466,620)
-------- --------
Expenses
Partnership management fee (Note C) 93,817 79,660
Amortization 3,329 3,329
General and administrative expenses 40,246 49,156
-------- --------
137,392 132,145
-------- --------
NET LOSS $(351,358) $(598,614)
======== ========
Net loss allocated to limited partner $(347,844) $(592,628)
======== ========
Net loss allocated to general partner $ (3,514) $ (5,986)
======== ========
Net loss per BAC $ (.12) $ (.20)
======== ========
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 September 30,
(Unaudited)
SERIES 14
----------------------
1999 1998
---- ----
Income
Interest income $ 6,654 $ 6,882
Other Income - 4,447
--------- ---------
6,654 11,329
Share of loss from Operating
Partnerships (Note D) (419,261) (733,704)
--------- ---------
Expenses
Partnership management fees (Note C) 164,698 170,015
Amortization 7,297 7,297
General and administrative expenses 53,833 76,076
--------- ---------
225,828 253,388
--------- ---------
NET LOSS $ (638,435) $ (975,763)
========= =========
Net loss allocated to limited partner $ (632,051) $ (966,005)
========= =========
Net loss allocated to general partner $ (6,384) $ (9,758)
========= =========
Net loss per BAC $ (.11) $ (.18)
========= =========
The accompanying notes are an integral part of these statements.
1
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Six Months Ended September 30,
(Unaudited)
1999 1998
---- ----
Income
Interest income $ 29,826 $ 39,566
Other Income 20,390 25,781
---------- ----------
50,216 65,347
Share of loss from Operating
Partnerships (Note D) (3,422,713) (5,632,559)
---------- ----------
Expenses
Partnership management fees (Note C) 1,143,986 1,183,791
Amortization 24,281 24,281
General and administrative expenses 269,419 261,694
---------- ----------
1,437,686 1,469,766
---------- ----------
NET LOSS $(4,810,183) $(7,036,978)
========== ==========
Net loss allocated to limited
partners $(4,762,081) $(6,966,607)
========== ==========
Net loss allocated to general partner $ (48,102) $ (70,371)
========== ==========
Net loss per BAC $ (1.45) $ (2.33)
========== ==========
The accompanying notes are an integral part of these statements.
1
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Six Months Ended September 30,
(Unaudited)
SERIES 7
-----------------------
1999 1998
---- ----
Income
Interest income $ 96 $ 116
Other Income - -
-------- --------
96 116
Share of loss from Operating
Partnerships (Note D) (130,501) (216,806)
-------- --------
Expenses
Partnership management fees (Note C) 53,574 56,574
Amortization - -
General and administrative expenses 15,247 13,496
-------- --------
68,821 70,070
-------- --------
NET LOSS $(199,226) $(286,760)
======== ========
Net loss allocated to limited
partners $(197,234) $(283,892)
======== ========
Net loss allocated to general partner $ (1,992) $ (2,868)
======== ========
Net loss per BAC $ (.19) $ (.28)
======== ========
The accompanying notes are an integral part of these statements.
16
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Six Months Ended September 30,
(Unaudited)
SERIES 9
----------------------
1999 1998
---- ----
Income
Interest income $ 6,127 $ 11,003
Other Income 11,190 2,134
-------- --------
17,317 13,137
Share of loss from Operating
Partnerships (Note D) (712,009) (702,006)
-------- --------
Expenses
Partnership management fees (Note C) 267,000 287,892
Amortization 435 435
General and administrative expenses 46,104 33,985
-------- --------
313,539 322,312
-------- --------
NET LOSS $(1,008,231) $(1,011,181)
========= =========
Net loss allocated to limited partners $ (998,149) $(1,001,069)
========= =========
Net loss allocated to general partner $ (10,082) $ (10,112)
========= =========
Net loss per BAC $ (.24) $ (.24)
========= =========
The accompanying notes are an integral part of these statements.
1
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Six Months Ended September 30,
(Unaudited)
SERIES 10
----------------------
1999 1998
---- ----
Income
Interest income $ 2,501 $ 3,083
Other income 7,950 -
-------- --------
10,451 3,083
Share of loss from Operating
Partnerships (Note D) (214,962) (729,547)
-------- --------
Expenses
Partnership management fees (Note C) 168,620 177,756
Amortization 1,721 1,721
General and administrative expenses 38,201 29,771
-------- --------
208,542 209,248
-------- --------
NET LOSS $(413,053) $(935,712)
======== ========
Net loss allocated to limited partner $(408,922) $(926,354)
======== ========
Net loss allocated to general partner $ (4,131) $ (9,358)
======== ========
Net loss per BAC $ (.17) $ (.39)
======== ========
The accompanying notes are an integral part of these statements.
1
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Six Months Ended September 30,
(Unaudited)
SERIES 11
----------------------
1999 1998
---- ----
Income
Interest income $ 6,793 $ 8,410
Other Income 916 2,400
-------- --------
7,709 10,810
Share of loss from Operating
Partnerships (Note D) (506,121) (1,449,912)
-------- ---------
Expenses
Partnership management fees (Note C) 156,000 160,586
Amortization 872 872
General and administrative expenses 35,170 38,148
-------- --------
192,042 199,606
-------- --------
NET LOSS $(690,454) $(1,638,708)
======== =========
Net loss allocated to limited partner $(683,549) $(1,622,321)
======== =========
Net loss allocated to general partner $ (6,905) $ (16,387)
======== =========
Net loss per BAC $ (.28) $ (.66)
======== =========
The accompanying notes are an integral part of these statements.
1
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Six Months Ended September 30,
(Unaudited)
SERIES 12
----------------------
1999 1998
---- ----
Income
Interest income $ 773 $ 311
Other Income 300 6,150
-------- ---------
1,073 6,461
Share of loss from Operating
Partnerships (Note D) (528,259) (1,028,295)
-------- ---------
Expenses
Partnership management fee (Note C) 182,019 170,788
Amortization 6,658 6,658
General and administrative expenses 47,965 54,056
-------- ---------
236,642 231,502
-------- ---------
NET LOSS $(763,828) $(1,253,336)
======== =========
Net loss allocated to limited partner $(756,190) $(1,240,803)
======== =========
Net loss allocated to general partner $ (7,638) $ (12,533)
======== =========
Net loss per BAC $ (.26) $ (.42)
======== =========
The accompanying notes are an integral part of these statements.
2
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Six Months Ended September 30,
(Unaudited)
SERIES 14
----------------------
1999 1998
---- ----
Income
Interest income $ 13,536 $ 16,643
Other Income 34 15,097
--------- ---------
13,570 31,740
Share of loss from Operating
Partnerships (Note D) (1,330,861) (1,505,993)
--------- ---------
Expenses
Partnership management fees (Note C) 316,773 330,195
Amortization 14,595 14,595
General and administrative expenses 86,732 92,238
--------- ---------
418,100 437,028
--------- ---------
NET LOSS $(1,735,391) $(1,911,281)
========= =========
Net loss allocated to limited partner $(1,718,037) $(1,892,168)
========= =========
Net loss allocated to general partner $ (17,354) $ (19,113)
========= =========
Net loss per BAC $ (.31) $ (.34)
========= =========
The accompanying notes are an integral part of these statements.
2
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
Six Months Ended September 30, 1999
(Unaudited)
General
Assignees Partner Total
--------- ------- -----
Partners' capital (deficit),
April 1, 1999 $ 40,684,097 $(1,222,094) $39,462,003
Net loss (4,762,081) (48,102) (4,810,183)
---------- ---------- ----------
Partners' capital (deficit),
September 30, 1999 $ 35,922,016 $(1,270,196) $34,651,820
========== ========= ==========
The accompanying notes are an integral part of these statements.
2
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
Six Months Ended September 30, 1999
(Unaudited)
Limited General
Partners Partner Total
-------- ------- -----
Series 7
- --------
Partners' capital (deficit),
April 1, 1999 $ 98,402 $ (89,841) $ 8,561
Net loss (197,234) (1,992) (199,226)
--------- -------- ---------
Partners' capital (deficit),
September 30, 1999 $ (98,832) $ (91,833) $ (190,665)
========= ======== =========
Series 9
- --------
Partners' capital (deficit),
April 1, 1999 $ 5,921,235 $(304,169) $ 5,617,066
Net loss (998,149) (10,082) (1,008,231)
---------- ------- ----------
Partners' capital (deficit),
September 30, 1999 $ 4,923,086 $(314,251) $ 4,608,835
========== ======== ==========
Series 10
- --------
Partners' capital (deficit),
April 1, 1999 $ 5,014,583 $(162,290) $ 4,852,293
Net loss (408,922) (4,131) (413,053)
---------- -------- ----------
Partners' capital (deficit),
September 30, 1999 $ 4,605,661 $(166,421) $ 4,439,240
========== ======== ==========
The accompanying notes are an integral part of these statements.
2
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
Six Months Ended September 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 (683,549) (6,905) (690,454)
---------- -------- -----------
Partners' capital (deficit),
September 30, 1999 $ 6,715,745 $(149,018) $ 6,566,727
========== ======== ==========
Series 12
- --------
Partners' capital (deficit),
April 1, 1999 $ 7,501,826 $(184,082) $ 7,317,744
Net loss (756,190) (7,638) (763,828)
---------- -------- -----------
Partners' capital (deficit),
September 30, 1999 $ 6,745,636 $(191,720) $ 6,553,916
========== ======== ==========
Series 14
- --------
Partners' capital (deficit),
April 1, 1999 $14,748,757 $(339,599) $14,409,158
Net loss (1,718,037) (17,354) (1,735,391)
---------- -------- -----------
Partners' capital (deficit),
September 30, 1999 $13,030,720 $(356,953) $12,673,767
========== ======== ==========
The accompanying notes are an integral part of these statements.
24
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF CASH FLOWS
Six Months Ended September 30,
(Unaudited)
1999 1998
---- ----
Cash flows from operating activities:
Net loss $ (4,810,183) $ (7,036,978)
Adjustments
Distributions from Operating
Partnerships 20,175 6,913
Amortization 24,281 24,281
Share of loss from Operating
Partnerships 3,422,713 5,632,559
Changes in assets and liabilities
Increase in accounts payable
and accrued expenses 1,390,243 1,285,930
Decrease (Increase) in other
assets (42,163) (12,741)
Decrease (Increase) in prepaid
Expenses (117,602) (17,681)
---------- ----------
Net cash (used in) provided by
operating activities (112,536) (117,717)
---------- ----------
Cash flows from investing activities:
Capital contributions paid to
Operating Partnerships (104,590) (2,543)
Advances (made to) repaid from
Operating Partnerships - -
Credit adjusters received from
Operating Partnerships (6,743) 3,176
---------- ----------
Net cash (used in) provided by
investing activities (111,333) 633
---------- ----------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (223,869) (117,084)
Cash and cash equivalents, beginning 1,590,545 1,611,248
--------- ----------
Cash and cash equivalents, ending $ 1,366,676 $ 1,494,164
========== ==========
The accompanying notes are an integral part of these statements.
25
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF CASH FLOWS
Six Months Ended September 30,
(Unaudited)
Series 7
-------------------------
1999 1998
---- ----
Cash flows from operating activities:
Net loss $ (199,226) $ (286,760)
Adjustments
Distributions from Operating
Partnerships - -
Amortization - -
Share of loss from Operating
Partnerships 130,501 216,806
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 77,172 69,324
Decrease (Increase) in other
assets (10,858) (1,353)
Decrease (Increase) in prepaid - -
expenses -------- ---------
Net cash (used in) provided by
operating activities (2,411) (1,983)
-------- ---------
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 (2,411) (1,983)
Cash and cash equivalents, beginning 8,529 7,134
-------- ---------
Cash and cash equivalents, ending $ 6,118 $ 5,151
======== =========
The accompanying notes are an integral part of these statements.
2
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF CASH FLOWS
Six Months Ended September 30,
(Unaudited)
Series 9
-------------------------
1999 1998
---- ----
Cash flows from operating activities:
Net loss $(1,008,231) $(1,011,181)
Adjustments
Distributions from Operating
Partnerships 1,046 1,249
Amortization 435 435
Share of loss from Operating
Partnerships 712,009 702,006
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 287,892 288,182
Decrease (Increase) in other
assets (33,738) (17,234)
Decrease (Increase) in prepaid
expenses - -
--------- ---------
Net cash (used in) provided by
operating activities (40,587) (36,543)
--------- ---------
Cash flows from investing activities:
Capital contributions paid to
Operating Partnerships (4,590) -
Advances (made to) repaid from
Operating Partnerships - -
Credit adjusters received from
Operating Partnerships - -
--------- ---------
Net cash (used in) provided by
investing activities (4,590) -
--------- ---------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (45,177) (36,543)
Cash and cash equivalents, beginning 396,237 517,412
--------- ---------
Cash and cash equivalents, ending $ 351,060 $ 480,869
========= =========
The accompanying notes are an integral part of these statements.
2
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF CASH FLOWS
Six Months Ended September 30,
(Unaudited)
Series 10
-------------------------
1999 1998
---- ----
Cash flows from operating activities:
Net loss $ (413,053) $ (935,712)
Adjustments
Distributions from Operating
Partnerships 683 -
Amortization 1,721 1,721
Share of loss from Operating
Partnerships 214,962 729,547
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 177,756 177,985
Decrease (Increase) in other
assets 2,427 (307)
Decrease (Increase) in prepaid
expenses - -
--------- ---------
Net cash (used in) provided by
operating activities (15,504) (26,766)
--------- ---------
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 (22,854) (26,766)
Cash and cash equivalents, beginning 118,099 124,484
--------- ---------
Cash and cash equivalents, ending $ 95,245 $ 97,718
========= =========
The accompanying notes are an integral part of these statements.
28
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF CASH FLOWS
Six Months Ended September 30,
(Unaudited)
Series 11
-------------------------
1999 1998
---- ----
Cash flows from operating activities:
Net loss $ (690,454) $ (1,638,708)
Adjustments
Distributions from Operating
Partnerships 35 1,070
Amortization 872 872
Share of loss from Operating
Partnerships 506,121 1,449,912
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 162,840 163,415
Decrease (Increase) in other
assets 6 (2,847)
Decrease (Increase) in
prepaid expenses - -
--------- ---------
Net cash (used in) provided by
operating activities (20,580) (26,286)
--------- ---------
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 (20,580) (26,286)
Cash and cash equivalents, beginning 316,711 287,800
--------- ---------
Cash and cash equivalents, ending $ 296,131 $ 261,514
========= =========
The accompanying notes are an integral part of these statements.
29
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF CASH FLOWS
Six Months Ended September 30,
(Unaudited)
Series 12
-------------------------
1999 1998
---- ----
Cash flows from operating activities:
Net loss $ (763,828) $(1,253,336)
Adjustments
Distributions from Operating
Partnerships (5,579) 436
Amortization 6,658 6,658
Share of loss from Operating
Partnerships 528,259 1,028,294
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 198,966 203,106
Decrease (Increase) in prepaid
Expenses - 4,060
Decrease (Increase) in other
assets - -
--------- ---------
Net cash (used in) provided by
operating activities (35,524) (10,781)
--------- ---------
Cash flows from investing activity:
Capital contributions paid to
Operating Partnerships - -
Advances (made to) repaid from Operating
Partnerships - -
Credit adjusters received from
Operating Partnerships - -
--------- ---------
Net cash (used in) provided by
investing activities - -
--------- ---------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (35,524) (10,781)
Cash and cash equivalents, beginning 82,710 21,827
--------- ---------
Cash and cash equivalents, ending $ 47,186 $ 11,046
========= =========
The accompanying notes are an integral part of these statements.
30
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF CASH FLOWS
Six Months Ended September 30,
(Unaudited)
Series 14
-------------------------
1999 1998
---- ----
Cash flows from operating activities:
Net loss $(1,735,391) $(1,911,281)
Adjustments
Distributions from Operating
Partnerships 23,990 4,158
Amortization 14,595 14,595
Share of loss from Operating
Partnerships 1,330,861 1,505,993
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 485,617 383,918
Decrease (Increase) in other
Assets (117,602) (12,741)
Decrease (Increase) in prepaid
expenses - -
---------- ---------
Net cash (used in) provided by
operating activities 2,070 (15,358)
---------- ---------
Cash flows from investing activity:
Capital contributions paid to
Operating Partnerships (100,000) (2,543)
Advances (made to) repaid from
Operating Partnerships - -
Credit adjusters received from
Operating Partnerships 607 3,176
---------- ---------
Net cash (used in) provided by
investing activities (99,393) (2,543)
---------- ---------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (97,323) (14,725)
Cash and cash equivalents, beginning 668,259 652,591
---------- ---------
Cash and cash equivalents, ending $ 570,936 $ 637,866
========== =========
The accompanying notes are an integral part of these statements.
3
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS
September 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 September 30, 1999
and for the six 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.
3
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 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 September 30, 1999, the
Partnership has accumulated unallocated acquisition amortization totaling
$218,527. The breakdown of accumulated unallocated acquisition amortization
within the Partnership as of September 30, 1999 for Series 9, Series 10,
Series 11, Series 12, and Series 14 is $3,914, $15,486, $7,849, $59,926, and
$131,352, 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 September 30, 1999
and 1998 are as follows:
3
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 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 September 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 September 30, 1999, an affiliate of the general partner advanced a
total of $295,245 to the Partnership to pay certain operating expenses and
make advances and/or loans to Operating Partnerships. $8,935 of the advances
was made during the quarter ended September 30, 1999. Below is a table that
breaks down by series the advances as of September 30, 1999.
1999
-------
Series 7 $125,346
Series 12 62,550
Series 14 107,349
-------
$295,245
=======
These advances are included in Accounts payable-affiliates. These advances,
and any additional advances, will be paid, without interest, from available
cash flow or the proceeds of sales or refinancing of the Partnership's
interests in Operating Partnerships.
34
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 1999
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING LIMITED PARTNERSHIPS
At September 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 September 30, 1999 and 1998
by series is 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 September 30, 1999 and 1998 by series are as
follows:
1999 1998
---------- ----------
Series 7 $ - $ -
Series 9 - 4,590
Series 10 - -
Series 11 22,528 22,528
Series 12 11,405 11,405
Series 14 229,894 329,894
--------- ---------
$ 263,827 $ 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
3
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 1999
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
after the close of each Operating Partnership's quarterly period.
Accordingly, the current financial results available for the Operating
Partnerships are for the six months ended June 30, 1999.
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Six months ended June 30,
(Unaudited)
Series 7
---------------------------
1999 1998
---- ----
Revenues
Rental $ 1,017,594 $ 1,039,250
Interest and other 31,308 97,505
--------- ---------
1,048,902 1,136,755
--------- ---------
Expenses
Interest 337,308 401,032
Depreciation and amortization 344,360 522,415
Operating expenses 659,359 694,009
--------- ---------
1,341,027 1,617,456
--------- ---------
NET LOSS $ (292,125) $ (480,701)
========= =========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $ (130,501) $ (216,806)
========= =========
Net loss allocated to other partners $ (2,921) $ (4,807)
========= =========
Net loss suspended $ (158,703) $ (259,088)
========= =========
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
September 30, 1999
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Six months ended June 30,
(Unaudited)
Series 9
--------------------------
1999 1998
----- -----
Revenues
Rental $ 5,011,136 $ 5,014,152
Interest and other 196,973 448,282
---------- ----------
5,208,109 5,462,434
---------- ----------
Expenses
Interest 1,525,381 1,709,979
Depreciation and amortization 1,883,291 1,895,143
Operating expenses 3,131,599 3,152,863
---------- ----------
6,540,271 6,757,985
---------- ----------
NET LOSS $(1,332,162) $(1,295,551)
========== ==========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $ (712,009) $ (702,006)
========== ==========
Net loss allocated to other partners $ (13,322) $ (12,956)
========== ==========
Net loss suspended $ (606,831) $ (580,589)
========== ==========
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 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.
3
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 1999
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Six Months ended June 30,
(Unaudited)
Series 10
--------------------------
1999 1998
Revenues ---- ----
Rental $ 3,762,660 $ 3,756,096
Interest and other 134,801 218,746
---------- ----------
3,897,461 3,974,842
---------- ----------
Expenses
Interest 1,039,425 1,444,139
Depreciation and amortization 1,187,052 1,326,525
Operating expenses 2,140,947 2,170,983
---------- ----------
4,367,424 4,941,647
---------- ----------
NET LOSS $ (469,963) $ (966,805)
========== ==========
Net loss allocated to Boston
Capital Tax Credit Fund
Limited Partnership II $ (214,962) $ (729,547)
========== ==========
Net loss allocated to other partners $ (4,700) $ (9,668)
========== ==========
Net loss suspended $ (250,301) $ (227,590)
========== ==========
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.
3
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 1999
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Six months ended June 30,
(Unaudited)
Series 11
----------------------------
1999 1998
Revenues ---- ----
Rental $ 3,205,233 $ 3,147,418
Interest and other 179,827 169,609
---------- ----------
3,385,060 3,317,027
---------- ----------
Expenses
Interest 1,014,757 1,679,214
Depreciation and amortization 1,187,009 1,248,828
Operating expenses 2,027,086 1,994,875
---------- ----------
4,228,852 4,922,917
---------- ----------
NET LOSS $ (843,792) $(1,065,890)
========== ==========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $ (506,121) $(1,449,912)
========== ==========
Net loss allocated to other partners $ (8,438) $ (16,059)
========== ==========
Net loss suspended $ (329,233) $ (139,919)
========== ==========
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.
3
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 1999
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Six months ended June 30,
(Unaudited)
Series 12
--------------------------
1999 1998
Revenues ---- ----
Rental $ 3,482,366 $ 3,461,126
Interest and other 151,988 182,199
--------- ---------
3,634,354 3,643,325
--------- ---------
Expenses
Interest 998,698 1,406,175
Depreciation and amortization 1,291,035 1,352,356
Operating expenses 2,180,634 2,205,247
--------- ---------
4,470,367 4,963,778
--------- ---------
NET LOSS $ (836,013) $(1,320,453)
========== =========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $ (528,259) $(1,028,295)
========= =========
Net loss allocated to other partners $ (8,360) $ (13,205)
========= =========
Net loss suspended $ (299,394) $ (278,954)
========= =========
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.
4
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 1999
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Six months ended June 30,
(Unaudited)
Series 14
---------------------------
1999 1998
Revenues ---- ----
Rental $ 7,468,987 $ 7,416,656
Interest and other 312,578 385,927
---------- ----------
7,781,565 7,802,583
---------- ----------
Expenses
Interest 2,236,187 2,680,350
Depreciation and amortization 2,863,178 2,359,114
Operating expenses 4,564,052 4,521,883
---------- ----------
9,663,417 9,561,347
---------- ----------
NET LOSS $(1,881,852) $(1,758,764)
========== ==========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $(1,330,861) $(1,505,993)
========== ==========
Net loss allocated to other partners $ (18,819) $ (17,588)
========== ==========
Net loss suspended $ (532,172) $ (235,183)
========== ==========
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.
4
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 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.
4
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 September 30, 1999 in the
amount of $20,390. Of the total, $6,290 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 $14,100 represents transfer fee income.
The Partnership has recorded $329,907 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: $136,249 in series 7, none in
series 9 and 10, $401 in series 11, $85,907 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.
4
Capital Resources (continued)
- -----------------
As of September 30, 1999 the Partnership had $729,968 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, and number of
properties invested in, and remaining proceeds. All capital contributions have
been paid by Series 7,9 and 10. Proceeds remaining listed below for those
series represent current cash balance.
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 $351,060
10 $ 24,288,997 2,428,925 08/24/90 45 $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 $229,894
----------- ---------- --- -------
$176,047,378 18,679,738 309 $729,968
=========== ========== === =======
(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 September 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 September 30, 1999 and 1998 were $586,884 and
$590,952, respectively.
44
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 its 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 September 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 September 30, 1999.
For the six months being reported the series reflects a net loss from the
Operating Partnerships of $292,125. When adjusted for depreciation, which is
a non-cash item, the Operating Partnerships reflect positive operations of
$52,235. 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
cash flow deficits. The senior mortgage is 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, and the mortgage holder's unwillingness to accept a deed in lieu of
foreclosure, the bank had moved to foreclose on the property. Due to a lack of
perceived value in the currently vacant property, the bank has decided against
continuing its foreclosure proceeding at the present time. During this
reprieve, the Investment General Partner is been working to locate a not-for-
profit entity with the hope of convincing the first mortgage holder to forgive
the debt. The first mortgage holder is examining all options available to
it,including eventual foreclosure. If a foreclosure 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 September 30, 1999 and 1998, the average Qualified Occupancy
for the series were 99.7% for both years. The series had a total of 55
properties at September 30, 1999. Out of the total, 52 were at 100% Qualified
Occupancy.
45
For the six months being reported the series reflects a net loss from the
Operating Partnerships of $1,332,162. When adjusted for depreciation, which is
a non-cash item, the Operating Partnerships reflect positive operations of
$551,129. 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 September 1999 with the
goal of improving occupancy and operations. The property's average occupancy
was 86% for the third quarter of 1999. In addition, the operating General
Partner successfully negotiated a debt restructure on January 4, 1999. As part
of the debt restructure, the lender required a capital improvement program
that is on schedule to be completed by December 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
cash flow deficits. The mortgage is 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, and the mortgage holder's unwillingness to accept a deed in lieu of
foreclosure, the bank had moved to foreclose on the property. Due to a lack of
perceived value in the currently vacant property, the bank has decided against
continuing its foreclosure proceeding at the present time. During this
reprieve, the Investment General Partner is working to locate a not-for-profit
entity with the hope of convincing the first mortgage holder to forgive the
debt. The First mortgage holder is examining all options available to it,
including foreclosure. If a foreclosure 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
plans to conduct a site inspection/property review in December 1999.
(Series 10) As of September 30, 1999 and 1998, the average Qualified
Occupancy for the series was 99.7% and 99.9%, respectively. The series had a
total of 45 properties at September 30, 1999, Out of the total,44 were at 100%
Qualified Occupancy.
46
For the six months being reported the series reflects a net loss from the
Operating Partnerships of $469,963. When adjusted for depreciation which is
a non-cash item, the Operating Partnerships reflect positive operations of
$717,089. 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). A 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, the series 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 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 September 30, 1999 and 1998 the average Qualified
Occupancy for the series was 100% and 993%, respectively. The series had a
total of 40 properties all of which were 100% at September 30, 1999.
For the six months being reported the series reflects a net loss from the
Operating Partnerships of $843,792. When adjusted for depreciation, which is a
non-cash item, the Operating Partnerships reflect positive operations of
$343,217. This is an interim period estimate; it is not necessarily
indicative of the final year end results.
(Series 12) As of September 30, 1999 and 1998, the average Qualified
Occupancy for the series was 99.9% for both years. The series had a total of
53 properties at September 30, 1999, 52 of which were at 100% qualified
occupancy.
For the six months being reported the series reflects a net loss from the
Operating Partnerships of $836,013. When adjusted for depreciation, which is
a non-cash item, the Operating Partnerships reflect positive operations of
$455,022. This is an interim period estimate; it is not necessarily
indicative of the final year end results.
(Series 14) As of September 30, 1999 and 1998, the average Qualified
Occupancy for the series was 99.7% and 99.6%, respectively. The series had a
total of 101 properties at September 30, 1999, 96 of which were at 100%
Qualified Occupancy.
For the six months being reported the series reflects a net loss from the
Operating Partnerships of $1,881,852. When adjusted for depreciation, which is
a non-cash item, the Operating Partnerships reflect positive operations of
$981,326. This is an interim period estimate; it is not necessarily
indicative of the final year end results.
47
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
excessive operating expenses compared to operating income. In an attempt to
reduce operating expenses a not-for-profit company is being sought to provide
tenant services, coordinate leasing and community outreach, and also reduce
real estate tax burden. As a result of repairs to unit interiors, occupancy
levels have improved. At September 30, 1999 physical occupancy at Haven Park
II and Haven Park III, was 93% and 100% respectively. Occupancy at Haven Park
IV as of September 30, 1999 remains at 92%, and occupancy at Glenhaven Park as
of September 30, 1999 is 83%. As a result of repairs to unit interiors, all
vacant units are prepared for occupancy, and should be rented in November
1999. Additional deferred maintenance issues are budgeted for completion in
this years business plan. The scope of work includes exterior painting,
limited siding replacement, and fence repairs. The work will not effect
occupancy, but will prevent further physical deterioration, and help preserve
the asset.
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 IRS has additionally sent two 60 day letters for the tax years ending 1996
and 1997 dated August 23 1999 and August 8, 1999, respectively. The initial
60-Day letter which was issued in relation to the tax years ended December 31,
1993, 1994, and 1995, and the subsequent 1996 and 1997 60-day letter were 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 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
as of September, 1999 had secured new financing. This new mortgage should
allow the property to complete required repairs and other maintenance items
to enhance curb appeal.
48
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.
49
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
5
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: November 19, 1999 By: /s/ John P. Manning
--------------------
John P. Manning,
Partner & Principal Financial
Officer
51
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<NAME> BOSTON CAPITAL TAX CREDIT FUND II
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<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-START> APR-01-1999
<PERIOD-END> SEP-30-1999
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