FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
--------------------
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from -------- to --------
Commission file number 0-19443
-----------------------------------------
BOSTON CAPITAL TAX CREDIT FUND II LIMITED PARTNERSHIP
-----------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 04-3066791
-------------------------------- -----------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Boston Place, Suite 2100, Boston, Massachusetts 02108
-----------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 624-8900
--------------
-----------------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2)has been subject to such filing
requirements for the past 90 days.
Yes X No
------ ------
BOSTON CAPITAL TAX CREDIT FUND II LIMITED
PARTNERSHIP
-----------------------------------------------------
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED June 30, 2000
-----------------------------------------------
TABLE OF CONTENTS
-----------------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements..............................
Balance Sheets....................................
Statements of Operations..........................
Statement of Changes in Partners' Capital.........
Statements of Cash Flows..........................
Notes to Financial Statements.....................
Item 2. Management's Discussion and Analysis of
Financial Condition and Results
of Operations.....................................
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K..................
Signatures........................................
Boston Capital Tax Credit Fund II Limited
Partnership
BALANCE SHEETS
June 30,
March 31,
2000
2000
(Unaudited)
(Audited)
------------
------------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $ 44,899,520 $
46,636,873
OTHER ASSETS
Cash and cash equivalents 1,553,191
1,512,272
Notes Receivable 543,584
543,584
Deferred acquisition costs (Note B) 1,112,344
1,092,637
Other assets 787,201
799,453
----------
----------
$ 48,895,840 $
50,584,819
==========
==========
LIABILITIES
Accounts Payable $ 1,380 $
1,380
Accounts Payable - affiliates (Note C) 20,097,942
19,467,919
Capital Contributions payable (Note D) 261,103
261,103
----------
----------
20,360,425
19,730,402
----------
----------
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 29,866,774
32,162,586
General Partner (1,331,359)
(1,308,169)
----------
----------
28,535,415
30,854,417
----------
----------
$ 48,895,840 $
50,584,819
==========
==========
The accompanying notes are an integral part of these
statements.
1
Boston Capital Tax Credit Fund II Limited Partnership
BALANCE SHEETS
SERIES 7
----------------------------
June 30,
March 31,
2000
2000
(Unaudited)
(Audited)
-----------
---------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $ 655,426 $
705,120
OTHER ASSETS
Cash and cash equivalents 1,461
4,929
Notes receivable -
-
Deferred acquisition costs (Note B) -
-
Other assets 58,503
57,517
---------
---------
$ 715,390 $
767,566
=========
=========
LIABILITIES
Accounts payable $ - $
-
Accounts payable - affiliates (Note C) 1,184,427
1,155,639
Capital contributions payable (Note D) -
-
---------
---------
1,184,427
1,155,639
---------
---------
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 (374,420)
(294,266)
General Partner (94,617)
(93,807)
---------
---------
(469,037)
(388,073)
---------
---------
$ 715,390 $
767,566
=========
=========
The accompanying notes are an integral part of these
statements.
2
Boston Capital Tax Credit Fund II Limited Partnership
BALANCE SHEETS
SERIES 9
----------------------------
June 30,
March 31,
2000
2000
ASSETS (Unaudited)
(Audited)
-----------
---------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $ 7,196,537 $
7,491,734
OTHER ASSETS
Cash and cash equivalents 358,439
335,866
Notes receivable -
-
Deferred acquisition costs (Note B) 19,355
19,572
Other assets 201,886
204,244
----------
----------
$ 7,776,217 $
8,051,416
==========
==========
LIABILITIES
Accounts payable $ - $
-
Accounts payable - affiliates (Note C) 4,752,674
4,608,729
Capital contributions payable (Note D) -
-
----------
----------
4,752,674
4,608,729
----------
----------
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 3,353,647
3,768,600
General Partner (330,104)
(325,913)
----------
----------
3,023,543
3,442,687
----------
----------
$ 7,776,217 $
8,051,416
==========
==========
The accompanying notes are an integral part of these
statements.
3
Boston Capital Tax Credit Fund II Limited Partnership
BALANCE SHEETS
SERIES 10
----------------------------
June 30,
March 31,
2000
2000
ASSETS (Unaudited)
(Audited)
-----------
---------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $ 6,681,160 $
6,885,117
OTHER ASSETS
Cash and cash equivalents 122,191
121,866
Notes receivable -
-
Deferred acquisition costs (Note B) 76,571
77,431
Other assets 43,296
42,154
----------
----------
$ 6,923,218 $
7,126,568
==========
==========
LIABILITIES
Accounts payable $ - $
-
Accounts payable - affiliates (Note C) 3,139,374
3,050,496
Capital contributions payable (Note D) -
-
----------
----------
3,139,374
3,050,496
----------
----------
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 3,956,818
4,246,124
General Partner (172,974)
(170,052)
----------
----------
3,783,844
4,076,072
----------
----------
$ 6,923,218 $
7,126,568
==========
==========
The accompanying notes are an integral part of these
statements.
4
Boston Capital Tax Credit Fund II Limited Partnership
BALANCE SHEETS
SERIES 11
----------------------------
June 30,
March 31,
2000
2000
(Unaudited)
(Audited)
------------
----------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $ 7,852,623 $
8,097,883
OTHER ASSETS
Cash and cash equivalents 386,662
389,019
Notes receivable -
-
Deferred acquisition costs (Note B) 70,658
39,247
Other assets 38,811
68,870
----------
----------
$ 8,348,754 $
8,595,019
==========
==========
LIABILITIES
Accounts payable $ - $
-
Accounts payable - affiliates (Note C) 2,358,934
2,277,513
Capital contributions payable (Note D) 22,528
22,528
----------
----------
2,381,462
2,300,041
----------
----------
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 6,122,304
6,446,713
General Partner (155,012)
(151,735)
----------
----------
5,967,292
6,294,978
----------
----------
$ 8,348,754 $
8,595,019
==========
==========
The accompanying notes are an integral part of these
statements.
5
Boston Capital Tax Credit Fund II Limited Partnership
BALANCE SHEETS
SERIES 12
----------------------------
June 30,
March 31,
2000
2000
(Unaudited)
(Audited)
------------
----------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $ 7,950,021 $
8,296,388
OTHER ASSETS
Cash and cash equivalents 73,216
68,437
Notes receivable -
-
Deferred acquisition costs (Note B) 296,299
299,628
Other assets 105,927
105,927
---------
---------
$ 8,425,463 $
8,770,380
==========
==========
LIABILITIES
Accounts payable $ - $
-
Accounts payable - affiliates (Note C) 2,965,915
2,868,059
Capital contributions payable (Note D) 11,405
11,405
----------
----------
2,977,320
2,879,464
----------
----------
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 5,650,921
6,089,266
General Partner (202,778)
(198,350)
----------
----------
5,448,143
5,890,916
----------
----------
$ 8,425,463 $
8,770,380
==========
==========
The accompanying notes are an integral part of these
statements.
6
Boston Capital Tax Credit Fund II Limited Partnership
BALANCE SHEETS
SERIES 14
----------------------------
June 30,
March 31,
2000
2000
(Unaudited)
(Audited)
------------
----------
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $14,563,753
$15,160,631
OTHER ASSETS
Cash and cash equivalents 611,222
592,155
Notes receivable 543,584
543,584
Deferred acquisition costs (Note B) 649,461
656,759
Other assets 338,778
320,741
----------
----------
$16,706,798
$17,273,870
==========
==========
LIABILITIES
Accounts payable $ 1,380 $
1,380
Accounts payable - affiliates (Note C) 5,696,618
5,507,483
Capital contributions payable (Note D) 227,170
227,170
----------
----------
5,925,168
5,736,033
----------
----------
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 11,157,504
11,906,149
General Partner (375,874)
(368,312)
----------
----------
10,781,630
11,537,837
----------
----------
$16,706,798
$17,273,870
==========
==========
The accompanying notes are an integral part of these
statements.
7
Boston Capital Tax Credit Fund II Limited
Partnership
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
2000 1999
---- ----
Income
Interest income $ 12,825 $ 15,657
Other Income 3,613 3,739
---------- ----------
16,438 19,396
Share of loss from Operating
Partnerships (Note D) (1,731,095)
(1,999,509)
---------- ----------
Expenses
Partnership management fees (Note C) 528,521 557,103
Amortization 12,139 12,139
General and administrative expenses 63,685 68,185
---------- ----------
604,345 637,427
---------- ----------
NET LOSS $(2,319,002)
$(2,617,540)
========== ==========
Net loss allocated to limited
partners $(2,295,812)
$(2,591,365)
========== ==========
Net loss allocated to general partner $ (23,190) $
(26,175)
========== ==========
Net loss per BAC $ (.71) $
(.75)
========== ==========
The accompanying notes are an integral part of these
statements.
8
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
SERIES 7
-----------------------
2000
1999
----
----
Income
Interest income $ 40 $
49
Other Income -
-
--------
--------
40
49
Share of loss from Operating
Partnerships (Note D) (49,694)
(77,331)
--------
--------
Expenses
Partnership management fees (Note C) 25,287
28,287
Amortization -
-
General and administrative expenses 6,023
2,492
--------
--------
31,310
30,779
--------
--------
NET LOSS $ (80,964)
$(108,061)
========
========
Net loss allocated to limited
partners $ (80,154)
$(106,980)
========
========
Net loss allocated to general partner $ (810) $
(1,081)
========
========
Net loss per BAC $ (.08) $
(.10)
========
========
The accompanying notes are an integral part of these
statements.
9
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
SERIES 9
----------------------
2000
1999
----
----
Income
Interest income $ 2,856 $
3,764
Other Income 2,329
2,490
--------
--------
5,185
6,254
Share of loss from Operating
Partnerships (Note D) (294,850)
(384,748)
--------
--------
Expenses
Partnership management fees (Note C) 119,560
127,830
Amortization 217
217
General and administrative expenses 9,702
11,680
--------
--------
129,479
139,727
--------
--------
NET LOSS $ (419,144) $
(518,221)
========
=========
Net loss allocated to limited partners $ (414,953) $
(513,039)
========
=========
Net loss allocated to general partner $ (4,191) $
(5,182)
========
=========
Net loss per BAC $ (.10) $
(.12)
========
=========
The accompanying notes are an integral part of these
statements.
10
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
SERIES 10
----------------------
2000
1999
----
----
Income
Interest income $ 1,270 $
1,104
Other income -
150
--------
--------
1,270
1,254
Share of loss from Operating
Partnerships (Note D) (203,606)
(91,259)
--------
--------
Expenses
Partnership management fees (Note C) 81,535
85,378
Amortization 860
860
General and administrative expenses 7,497
7,580
--------
--------
89,892
93,818
--------
--------
NET LOSS $(292,228)
$(183,823)
========
========
Net loss allocated to limited partner $(289,306)
$(181,985)
========
========
Net loss allocated to general partner $ (2,992) $
(1,838)
========
========
Net loss per BAC $ (.12) $
(.07)
========
========
The accompanying notes are an integral part of these
statements.
11
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
SERIES 11
----------------------
2000
1999
----
----
Income
Interest income $ 2,787 $
3,397
Other Income -
915
--------
--------
2,787
4,312
Share of loss from Operating
Partnerships (Note D) (245,261)
(220,740)
--------
--------
Expenses
Partnership management fees (Note C) 78,120
75,330
Amortization 436
436
General and administrative expenses 6,656
5,815
--------
--------
85,212
81,581
--------
--------
NET LOSS $(327,686)
$(298,009)
========
========
Net loss allocated to limited partner $(324,409)
$(295,029)
========
========
Net loss allocated to general partner $ (3,277) $
(2,980)
========
========
Net loss per BAC $ (.13) $
(.12)
========
=========
The accompanying notes are an integral part of these
statements.
12
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
SERIES 12
----------------------
2000
1999
----
----
Income
Interest income $ 399 $
461
Other Income -
150
--------
--------
399
611
Share of loss from Operating
Partnerships (Note D) (345,645)
(313,831)
--------
--------
Expenses
Partnership management fee (Note C) 77,092
88,202
Amortization 3,329
3,329
General and administrative expenses 17,106
7,719
--------
--------
97,527
99,250
--------
--------
NET LOSS $(442,773)
$(412,470)
========
========
Net loss allocated to limited partner $(438,345)
$(408,345)
========
========
Net loss allocated to general partner $ (4,428) $
(4,125)
========
========
Net loss per BAC $ (.15) $
(.14)
========
========
The accompanying notes are an integral part of these
statements.
13
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
SERIES 14
----------------------
2000
1999
----
----
Income
Interest income $ 5,473 $
6,882
Other Income 1,284
34
---------
---------
6,757
6,916
Share of loss from Operating
Partnerships (Note D) (592,039)
(911,600)
---------
---------
Expenses
Partnership management fees (Note C) 146,927
152,076
Amortization 7,297
7,297
General and administrative expenses 16,701
32,899
---------
---------
170,925
192,272
---------
---------
NET LOSS $ (756,207)
$(1,096,956)
========= =========
Net loss allocated to limited partner $ (748,645)
$(1,085,986)
=========
=========
Net loss allocated to general partner $ (7,562) $
(10,970)
=========
=========
Net loss per BAC $ (.14) $
(.20)
=========
=========
The accompanying notes are an integral part of these
statements.
14
Boston Capital Tax Credit Fund II Limited
Partnership
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
Three Months Ended June 30, 2000
(Unaudited)
General
Assignees Partner Total
--------- ------- -----
Partners' capital (deficit),
April 1, 2000 $ 32,162,586 $(1,308,169)
$30,854,417
Net loss (2,295,812) (23,190)
(2,319,002)
---------- ----------
----------
Partners' capital (deficit),
June 30, 2000 $ 29,866,744 $(1,331,359)
$28,535,415
========== =========
==========
The accompanying notes are an integral part of these
statements.
15
Boston Capital Tax Credit Fund II Limited
Partnership
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
Three Months Ended June 30, 2000
(Unaudited)
Limited General
Partners Partner Total
-------- ------- -----
Series 7
--------
Partners' capital (deficit),
April 1, 2000 $ (294,266) $ (93,807) $
(388,073)
Net loss (80,154) (810)
(80,964)
--------- --------
---------
Partners' capital (deficit),
June 30, 2000 $ (374,420) $ (94,617) $
(469,037)
========= ========
=========
Series 9
--------
Partners' capital (deficit),
April 1, 2000 $ 3,768,600 $(325,913) $
3,442,687
Net loss (414,953) (4,191)
(419,144)
---------- -------
----------
Partners' capital (deficit),
June 30, 2000 $ 3,353,647 $(330,104) $
3,023,543
========== ========
==========
Series 10
--------
Partners' capital (deficit),
April 1, 2000 $ 4,246,124 $(170,052) $
4,076,072
Net loss (289,306) (2,922)
(292,228)
---------- -------- ------
----
Partners' capital (deficit),
June 30, 2000 $ 3,956,818 $(172,974) $
3,783,844
========== ========
==========
The accompanying notes are an integral part of these
statements.
16
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
Three Months Ended June 30, 2000
(Unaudited)
Limited General
Partners Partner Total
-------- ------- -----
Series 11
--------
Partners' capital (deficit),
April 1, 2000 $ 6,446,713 $(151,735) $
6,294,978
Net loss (324,409) (3,277)
(327,686)
---------- -------- -
----------
Partners' capital (deficit),
June 30, 2000 $ 6,122,304 $(155,012) $
5,967,292 ==========
======== ==========
Series 12
--------
Partners' capital (deficit),
April 1, 2000 $ 6,089,266 $(198,350) $
5,890,916
Net loss (438,345) (4,428)
(442,773)
---------- -------- -
----------
Partners' capital (deficit),
June 30, 2000 $ 5,650,921 $(202,778) $
5,448,143 ==========
======== ==========
Series 14
--------
Partners' capital (deficit),
April 1, 2000 $11,906,149 $(368,312)
$11,537,837
Net loss (748,645) (7,562)
(756,207) ----------
-------- -----------
Partners' capital (deficit),
June 30, 2000 $11,157,504 $(375,874)
$10,781,630
========== ========
==========
The accompanying notes are an integral part of these
statements.
17
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
2000
1999
----
----
Cash flows from operating activities:
Net loss $ (2,319,002) $
(2,617,540)
Adjustments
Distributions from Operating
Partnerships 6,260
20,147
Amortization 12,139
12,139
Share of loss from Operating
Partnerships 1,731,095 1,999,509
Changes in assets and liabilities
Increase in accounts payable
and accrued expenses 630,022
751,124
Decrease (Increase) in other
assets (19,595)
(126,858)
Decrease (Increase) in prepaid
Expenses -
-
----------
----------
Net cash (used in) provided by
operating activities 40,919
38,521
----------
----------
Cash flows from investing activities:
Capital contributions paid to
Operating Partnerships -
-
Advances (made to) repaid from
Operating Partnerships -
-
Credit adjusters received from
(refunded to)Operating Partnerships - (6,743)
---------- ----------
Net cash (used in) provided by
investing activities -
(6,743)
---------- ------
----
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 40,919
31,778
Cash and cash equivalents, beginning 1,512,272
1,590,545
---------
----------
Cash and cash equivalents, ending $ 1,553,191 $
1,622,323
==========
==========
The accompanying notes are an integral part of these
statements.
18
Boston Capital Tax Credit Fund II Limited
Partnership
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 7
-------------------------
2000
1999
----
----
Cash flows from operating activities:
Net loss $ (80,964) $
(108,061)
Adjustments
Distributions from Operating
Partnerships -
-
Amortization -
-
Share of loss from Operating
Partnerships 49,694
77,331
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 28,788
39,533
Decrease (Increase) in other
assets (986)
(9,923)
Decrease (Increase) in prepaid -
-
expenses --------
---------
Net cash (used in) provided by
operating activities (3,468)
(1,120)
--------
---------
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 (3,468)
(1,120)
Cash and cash equivalents, beginning 4,929
8,529
--------
---------
Cash and cash equivalents, ending $ 1,461 $
7,409
========
=========
The accompanying notes are an integral part of these
statements.
19
Boston Capital Tax Credit Fund II Limited
Partnership
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 9
-------------------------
2000
1999
----
----
Cash flows from operating activities:
Net loss $ (419,144) $
(518,221)
Adjustments
Distributions from Operating
Partnerships 347
1,020
Amortization 217
217
Share of loss from Operating
Partnerships 294,850
384,748
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 143,945
143,946
Decrease (Increase) in other
assets 2,358
41
Decrease (Increase) in prepaid
expenses -
-
---------
---------
Net cash (used in) provided by
operating activities 22,573
11,751
---------
---------
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 22,573
11,751
Cash and cash equivalents, beginning 335,866
396,237
---------
---------
Cash and cash equivalents, ending $ 358,439 $
407,988
=========
=========
The accompanying notes are an integral part of these
statements.
20
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 10
-------------------------
2000
1999
----
----
Cash flows from operating activities:
Net loss $ (292,228) $
(183,823)
Adjustments
Distributions from Operating
Partnerships 351
684
Amortization 860
860
Share of loss from Operating
Partnerships 203,606
91,259
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 88,878
88,882
Decrease (Increase) in other
assets (1,142)
(939)
Decrease (Increase) in prepaid
expenses -
-
---------
---------
Net cash (used in) provided by
operating activities 325
(3,077)
---------
---------
Cash flows from investing activity:
Capital contributions paid to
Operating Partnerships -
-
Advances (made to) repaid from
Operating Partnerships -
-
Credit adjusters received from
(refunded to)Operating Partnerships - (7,350)
---------
---------
Net cash (used in) provided by
investing activities -
(7,350)
--------- ------
---
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 325
(10,427)
Cash and cash equivalents, beginning 121,866
118,099
---------
---------
Cash and cash equivalents, ending $ 122,191 $
107,672
=========
=========
The accompanying notes are an integral part of these
statements.
21
Boston Capital Tax Credit Fund II Limited
Partnership
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 11
-------------------------
2000 1999
---- ----
Cash flows from operating activities:
Net loss $ (327,686) $
(298,009)
Adjustments
Distributions from Operating
Partnerships -
35
Amortization 436
436
Share of loss from Operating
Partnerships 245,261
220,740
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 81,420
81,420
Decrease (Increase) in other
assets (1,788)
(2,895)
Decrease (Increase) in
prepaid expenses -
-
---------
---------
Net cash (used in) provided by
operating activities (2,357)
1,727
---------
---------
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 (2,357)
1,727
Cash and cash equivalents, beginning 389,019
316,711
---------
---------
Cash and cash equivalents, ending $ 386,662 $
318,438
=========
=========
The accompanying notes are an integral part of these
statements.
22
Boston Capital Tax Credit Fund II Limited
Partnership
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 12
-------------------------
2000
1999
----
----
Cash flows from operating activities:
Net loss $ (442,773) $
(412,470)
Adjustments
Distributions from Operating
Partnerships 722
(5,579)
Amortization 3,329
3,329
Share of loss from Operating
Partnerships 345,645
313,831
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 97,856
100,860
Decrease (Increase) in prepaid
Expenses -
-
Decrease (Increase) in other
assets -
-
---------
---------
Net cash (used in) provided by
operating activities 4,779
(29)
---------
---------
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 4,779
(29)
Cash and cash equivalents, beginning 68,437
82,710
---------
---------
Cash and cash equivalents, ending $ 73,216 $
82,681
=========
=========
The accompanying notes are an integral part of these
statements.
23
Boston Capital Tax Credit Fund II Limited
Partnership
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 14
-------------------------
2000
1999
----
----
Cash flows from operating activities:
Net loss $ (756,207)
$(1,096,956)
Adjustments
Distributions from Operating
Partnerships 4,840
23,987
Amortization 7,297
7,297
Share of loss from Operating
Partnerships 592,039
911,600
Changes in assets and liabilities
Increase in accounts
payable and accrued expenses 189,135
296,483
Decrease (Increase) in other
Assets (18,037)
(113,142)
Decrease (Increase) in prepaid
expenses -
-
----------
---------
Net cash (used in) provided by
operating activities 19,067
29,269
----------
---------
Cash flows from investing activity:
Capital contributions paid to
Operating Partnerships -
-
Advances (made to) repaid from
Operating Partnerships -
-
Credit adjusters received from
Operating Partnerships -
607
----------
---------
Net cash (used in) provided by
investing activities -
607
----------
---------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 19,067
29,876
Cash and cash equivalents, beginning 592,155
668,259
----------
---------
Cash and cash equivalents, ending $ 611,222 $
698,135
==========
=========
The accompanying notes are an integral part of these
statements.
24
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
(Unaudited)
NOTE A - ORGANIZATION
Boston Capital Tax Credit Fund II Limited Partnership (the
"Partnership") was
formed under the laws of the State of Delaware as of June 28,
1989, for the
purpose of acquiring, holding, and disposing of limited
partnership interests
in operating partnerships which will acquire, develop,
rehabilitate, operate
and own newly constructed, existing or rehabilitated low-income
apartment
complexes ("Operating Limited Partnerships"). The general
partner of the
Partnership is Boston Capital Associates II Limited Partnership
and the
limited partner is BCTC II Assignor Corp. (the "Assignor Limited
Partner").
Pursuant to the Securities Act of 1933, the Partnership filed a
Form S-11
Registration Statement with the Securities and Exchange
Commission, effective
October 25, 1989, which covered the offering (the "Public
Offering") of the
Partnership's beneficial assignee certificates ("BACs")
representing
assignments of units of the beneficial interest of the limited
partnership
interest of the Assignor Limited Partner. The Partnership
registered
20,000,000 BACs at $10 per BAC for sale to the public in six
series. The
Partnership sold 1,036,100 of Series 7 BACs, 4,178,029 of Series
9 BACs,
2,428,925 of Series 10 BACs, 2,489,599 of Series 11 BACs,
2,972,795 of Series
12 BACs, and 5,574,290 of Series 14 BACs. The Partnership issued
the
last BACs in Series 14 on January 27, 1992. This concluded the
Public
Offering of the Partnership.
NOTE B - ACCOUNTING AND FINANCIAL REPORTING POLICIES
The condensed financial statements included herein as of June 30,
2000
and for the three months then ended have been prepared by the
Partnership,
without audit, pursuant to the rules and regulations of the
Securities and
Exchange Commission. No BACs with respect to Series 8 and Series
13 were
offered. The Partnership accounts for its investments in
Operating
Partnerships using the equity method, whereby the partnership
adjusts its
investment cost for its share of each Operating Partnership's
results of
operations and for any distributions received or accrued.
25
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 2000
(Unaudited)
NOTE B - ACCOUNTING AND FINANCIAL REPORTING POLICIES - Continued
Costs incurred by the Partnership in acquiring the
investments in
Operating Partnerships are capitalized to the investment account.
The
Partnership's accounting and financial reporting policies are in
conformity with generally accepted accounting principles and
include adjustments in interim periods considered necessary for a
fair presentation of the results of operations. Such adjustments
are of a normal recurring nature. Certain information and
footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules
and regulations. It is suggested that these condensed financial
statements be read in conjunction with the
financial statements and the notes thereto included in the
Partnership Annual
Report on Form 10-K.
On July 1, 1995, the Partnership began amortizing
unallocated acquisition
costs over 330 months from April 1, 1995. As of June 30, 2000,
the
Partnership has accumulated unallocated acquisition amortization
totaling
$254,948. The breakdown of accumulated unallocated acquisition
amortization
within the Partnership as of June 30, 2000 for Series 9, Series
10,
Series 11, Series 12, and Series 14 is $4,567, $18,067, $9,157,
$69,913, and
$153,244, respectively.
NOTE C - RELATED PARTY TRANSACTIONS
The Partnership has entered into several transactions with
various affiliates
of the general partner, including Boston Capital Partners, Inc.,
and Boston
Capital Asset Management Limited Partnership as follows:
An annual partnership management fee based on .5 percent of
the aggregate
cost of all apartment complexes owned by the Operating
Partnerships has been
accrued to Boston Capital Asset Management Limited Partnership.
The partnership management fee accrued for the quarters ended
June 30, 2000 and 1999 are as follows:
26
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 2000
(Unaudited)
NOTE C - RELATED PARTY TRANSACTIONS - Continued
2000 1999
-------- --------
Series 7 $ 28,287 $ 28,287
Series 9 143,946 143,946
Series 10 88,878 88,878
Series 11 81,420 81,420
Series 12 95,817 95,817
Series 14 189,135 189,135
------- -------
$627,483 $627,483
======= =======
Accounts payable - affiliates at June 30, 2000 and 1999
represents
accrued general and administrative expenses, partnership
management fees,
and advances from an affiliate of the general partner, which are
payable to
Boston Capital Partners, Inc., and Boston Capital Asset
Management Limited
Partnership.
As of June 30, 2000, 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. There were no advances made during the quarter
ended June 30, 2000. Below is a table that breaks down by series
the advances as of June 30, 2000.
2000
-------
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.
27
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 2000
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING LIMITED PARTNERSHIPS
At June 30, 2000 and 1999 the Partnership had limited
partnership
interests in 309 Operating Partnerships which own apartment
complexes. The number of Operating Partnerships in which the
Partnership had limited partnership interests at June 30, 2000
and 1999 by series is as follows:
2000 1999
---- ----
Series 7 15 15
Series 9 55 55
Series 10 45 45
Series 11 40 40
Series 12 53 53
Series 14 101 101
--- ---
309 309
=== ===
Under the terms of the Partnership's investment in each
Operating
Partnership, the Partnership is required to make capital
contributions to the
Operating Partnerships. These contributions are payable in
installments over
several years upon each Operating Partnership achieving specified
levels of
construction and/or operations.
The contributions payable at June 30, 2000 and 1999 by series
are as
follows:
2000 1999
---------- ----------
Series 7 $ - $ -
Series 9 - 4,590
Series 10 - -
Series 11 22,528 22,528
Series 12 11,405 11,405
Series 14 227,170 329,894
--------- ---------
$ 261,103 $ 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
28 Boston Capital Tax Credit
Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 2000
(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 three months ended March 31, 2000.
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 7
---------------------------
2000 1999
---- ----
Revenues
Rental $ 509,945 $
512,907
Interest and other 35,181
7,979
---------
---------
545,125
502,885
---------
---------
Expenses
Interest 187,941
179,124
Depreciation and amortization 173,857
168,506
Operating expenses 339,356
329,976
---------
---------
701,154
677,605
---------
---------
NET LOSS $ (156,028) $
(156,720)
=========
=========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $ (49,694) $
(77,331)
=========
=========
Net loss allocated to other partners $ (1,560) $
(1,567)
=========
=========
Net loss suspended $ (104,774) $
(77,822)
=========
=========
The partnership accounts for its investments using the equity
method of
accounting. Under the equity method of accounting, the
partnership adjusts
its investment cost for its share of each Operating Partnership's
results of
operations and for any distributions received or accrued.
However, the
Partnership recognizes individual operating losses only to the
extent of
capital contributions. Excess losses are suspended for use in
future years to
offset excess income.
29
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 2000
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 9
--------------------------
2000 1999
----- -----
Revenues
Rental $ 2,595,081 $
2,509,020
Interest and other 108,706
103,642
----------
----------
2,703,787
2,612,663
----------
----------
Expenses
Interest 775,177
766,172
Depreciation and amortization 920,157
936,649
Operating expenses 1,640,252
1,564,240
----------
----------
3,335,587
3,267,061
----------
----------
NET LOSS $ (631,800) $
(654,399)
==========
==========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $ (294,850) $
(384,748)
==========
==========
Net loss allocated to other partners $ (6,318) $
(6,544)
==========
==========
Net loss suspended $ (330,632) $
(263,106)
==========
==========
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.
30
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 2000
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three Months ended March 31,
(Unaudited)
Series 10
--------------------------
2000 1999
Revenues ---- ----
Rental $ 1,918,789 $
1,863,758
Interest and other 106,595
62,786
----------
----------
2,025,383
1,926,544
----------
----------
Expenses
Interest 496,779
517,466
Depreciation and amortization 677,966
579,947
Operating expenses 1,209,067
1,055,109
----------
----------
2,383,812
2,152,521
----------
----------
NET LOSS $ (358,428) $
(225,977)
==========
==========
Net loss allocated to Boston
Capital Tax Credit Fund
Limited Partnership II $ (203,606) $
(91,259)
==========
==========
Net loss allocated to other partners $ (3,584) $
(2,260)
==========
==========
Net loss suspended $ (151,238) $
(132,459)
==========
==========
The Partnership accounts for its investments using the equity
method of
accounting. Under the equity method of accounting, the
partnership adjusts
its investment cost for its share of each Operating Partnership's
results of
operations and for any distributions received or accrued.
However, the
Partnership recognizes individual operating losses only to the
extent of
capital contributions. Excess losses are suspended for use in
future years to
offset excess income.
31
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 2000
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 11
----------------------------
2000 1999
Revenues ---- ----
Rental $ 1,624,835 $
1,592,046
Interest and other 127,094
99,602
----------
----------
1,751,929
1,691,648
----------
----------
Expenses
Interest 473,176
512,967
Depreciation and amortization 626,322
601,178
Operating expenses 1,104,935
954,418
----------
----------
2,204,432
2,068,563
----------
----------
NET LOSS $ (452,503) $
(376,915)
==========
==========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $ (245,261) $
(220,740)
==========
==========
Net loss allocated to other partners $ (4,525) $
(3,769)
==========
==========
Net loss suspended $ (202,717) $
(152,406)
==========
==========
The Partnership accounts for its investments using the equity
method of
accounting. Under the equity method of accounting, the
partnership adjusts
its investment cost for its share of each Operating Partnership's
results of
operations and for any distributions received or accrued.
However, the
Partnership recognizes individual operating losses only to the
extent of
capital contributions. Excess losses are suspended for use in
future years to
offset excess income.
32
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 2000
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 12
--------------------------
2000 1999
Revenues ---- ----
Rental $ 1,827,145 $
1,731,575
Interest and other 63,156
77,324
---------
---------
1,890,301
1,808,899
---------
---------
Expenses
Interest 479,192
505,779
Depreciation and amortization 710,921
651,745
Operating expenses 1,212,824
1,125,728
---------
---------
2,402,937
2,283,252
---------
---------
NET LOSS $ (512,637) $
(474,353)
==========
=========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $ (345,645) $
(313,831)
=========
=========
Net loss allocated to other partners $ (5,126) $
(4,744)
=========
=========
Net loss suspended $ (161,865) $
(155,778)
========= =========
The Partnership accounts for its investments using the equity
method of
accounting. Under the equity method of accounting, the
partnership adjusts
its investment cost for its share of each Operating Partnership's
results of
operations and for any distributions received or accrued.
However, the
Partnership recognizes individual operating losses only to the
extent of
capital contributions. Excess losses are suspended for use in
future years to
offset excess income.
33
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 2000
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 14
---
------------------------
2000 1999
Revenues ---- ----
Rental $ 3,803,775 $
3,738,205
Interest and other 143,409
163,610
---------- ----------
3,947,184
3,901,815
----------
----------
Expenses
Interest 1,089,153
1,160,087
Depreciation and amortization 1,253,747
1,591,267
Operating expenses 2,502,865
2,327,947
----------
----------
4,845,765
5,079,301
----------
----------
NET LOSS $ (898,581) $
(1,177,486)
==========
==========
Net loss allocated to Boston
Capital Tax Credit Fund II
Limited Partnership $ (592,039) $
(911,600)
==========
==========
Net loss allocated to other partners $ (8,986) $
(11,775)
==========
==========
Net loss suspended $ (297,556) $
(254,111)
==========
==========
The Partnership accounts for its investments using the equity
method of
accounting. Under the equity method of accounting, the
partnership adjusts
its investment cost for its share of each Operating Partnership's
results of
operations and for any distributions received or accrued.
However, the
Partnership recognizes individual operating losses only to the
extent of
capital contributions. Excess losses are suspended for use in
future years to
offset excess income.
34
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 2000
(Unaudited)
NOTE E - TAXABLE LOSS
The Partnership's taxable loss for the year ended December 31,
2000 is
expected to differ from its loss for financial reporting purposes
for the fiscal year ended March 31, 2001. This is primarily due
to accounting differences in depreciation incurred by the
Operating Partnerships and also differences between the equity
method of accounting and the IRS accounting methods. No
provision or benefit for income taxes has been included in these
financial statements since taxable income or loss passes through
to, and is reportable by, the partners and assignees
individually.
35
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity
---------
The Partnership's primary source of funds was the proceeds of its
Public
Offering. Other sources of liquidity include (i) interest earned
on capital
contributions unpaid as of June 30, 2000 or on working capital
reserves
and (ii) cash distributions from operations of the Operating
Partnerships in
which the Partnership has invested in. These sources of
liquidity, along with
the Partnerships working capital reserve, are available to meet
the
obligations of the Partnership. The Partnership does not
anticipate
significant cash distributions from operations of the Operating
Partnerships.
The Partnership currently is accruing the annual partnership
management fee to
enable each series to meet current and future third party
obligations.
Pursuant to the Partnership Agreement, such liabilities will be
deferred until
the Partnership receives sales or refinancing proceeds from
Operating
Partnerships, and at that time proceeds from such sales or
refinancing will be
used to satisfy such liabilities. The Partnership anticipates
that there
will be sufficient cash to meet future third party obligations.
The Partnership has recognized other income as of June 30, 2000
in the amount of $3,613. This total 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 Partnership has recorded $337,469 as payable to affiliates,
which 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: $137,809 in series 7, none in series 9 and 10, $401 in
series 11, $91,910 in series 12, $107,349 in series 14. These
and any future advances or accruals will be paid, without
interest, from available cash flow, reporting fees, or proceeds
of sales or refinancing of the Partnership's interest in
Operating Partnerships.
Capital Resources
-----------------
The Partnership offered BACs in a Public offering declared
effective by the
Securities and Exchange Commission on October 25, 1989. The
Partnership
received and accepted subscriptions for $186,337,017 representing
18,679,738
BACs from investors admitted as BAC Holders in Series 7 through
Series 14
of the Partnership.
36
Capital Resources (continued)
-----------------
As of June 30, 2000 the Partnership had $743,194 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 for these
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
$ 1,461
9 41,574,018 4,178,029 05/04/90 55
358,439
10 24,288,997 2,428,925 08/24/90 45
122,191
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
227,170
----------- ---------- ---
-------
$186,398,017 18,679,738 309
$743,194
=========== ========== ===
=======
(Series 8) No BACs with respect to Series 8 were offered.
(Series 13) No BACs with respect to Series 13 were offered.
Results of Operations
---------------------
As of June 30, 2000 and 1999 the Partnership held limited
partnership
interests in 309 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 in an amount equal to 0.5%
of the
aggregate cost of the apartment complexes owned by the Operating
Partnerships,
less the amount of certain asset management and reporting fees
paid by the
Operating Partnerships. The annual partnership management fee is
currently
being accrued. It is anticipated that all outstanding fees will
be repaid
from the sale or refinancing proceeds. The partnership
management fee
incurred for the quarters ended June 30, 2000 and 1999 were
$528,521 and
$557,103, respectively.
37
The Partnership's investment objectives do not include receipt of
significant
cash distributions from the Operating Partnerships in which it
has invested.
The Partnership's investments in Operating Partnerships have been
made principally with a view towards realization of Federal
Housing Tax
Credits for allocation to its partners and BAC holders.
The General Partner and 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 June 30, 2000 and 1999, the average Qualified
Occupancy
for the series was 93.3% and 100%, respectively. The series had
a total of 15
properties at June 30, 2000. Out of the total, 14 were at 100%
Qualified Occupancy.
For the three months being reported the series reflects a net
loss from the
Operating Partnerships of $156,028. When adjusted for
depreciation, which is
a non-cash item, the Operating Partnerships reflect positive
operations of $17,829. 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 Apartments.),suffer from cash flow deficits and the
senior mortgage is in default. In an effort to address the
delinquency, the Investment General Partner attempted to work
with the lender for more favorable terms, but to no avail. Due to
the operating deficits and the mortgagor's unwillingness to work
with the Investment General Partner or to accept a deed in lieu
of foreclosure, the bank moved to foreclose on the property. Due
to a lack of perceived value in the vacant property, the bank
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. Due to the fact that the property was
vacant for most of 1999, and there are uncured health and safety
violations, Series 7 of the Partnership faced recapture of a
portion of the credits previously taken. Unless the Investment
General Partner is able to remain in the Partnership and re-
occupy the units with tax credit qualified tenants, future
credits will also be lost.
(Series 9) As of June 30, 2000 and 1999, the average Qualified
Occupancy
for the series was 97.8% and 99.7%, respectively. The series had
a total of 55 properties at June 30, 2000. Out of the total, 50
were at 100% Qualified Occupancy.
38
For the three months being reported the series reflects a net
loss from the
Operating Partnerships of $631,800. When adjusted for
depreciation, which is
a non-cash item, the Operating Partnerships reflect positive
operations of
$288,357. 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. Evictions increased when the new property
management company took over, as the previous management company
did not pursue delinquent rent and delayed eviction actions. The
slow increase in occupancy reflects the new property management's
policy of marketing the property very aggressively, while being
very selective with prospective tenants. The property's average
occupancy was 76% for the first six months of 2000. As part of
the debt restructure negotiated in January 1999, the lender
required a capital improvement program to be completed by
December 1999. Most of the capital improvements have been
completed. The lender agreed to extend the deadline for the
remaining improvements. 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 Apartments) suffer from cash flow deficits and the
mortgage is in default. In an effort to address the delinquency,
the Investment General Partner attempted to work with the lender
for more favorable terms, but to no avail. Due to operating
deficits and the mortgagor's unwillingness to work with the
Investment General Partner or to accept a deed in lieu of
foreclosure, the bank moved to foreclose on the property. Due to
a lack of perceived value in the 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, Due to the fact that the property was
vacant for most of 1999, and there are uncured health and safety
violations, Series 9 of the Partnership faced recapture of a
portion of the credits previously taken. Unless the Investment
General Partner is able to remain in the Partnership and re-
occupy the units with tax credit qualified tenants. future
credits will also be lost.
The Operating Partnership Glennwood Hotel Investors (Glennwood
Hotel) continues to operate at an average occupancy of 63%. The
area has an oversupply of affordable rental housing and a poor
local economy, which has negatively impacted the property.
Without significant structural improvements, that are at this
time physically and financial infeasible, the property will not
be able to compete effectively in the market. At the end of the
first quarter, the property's commercial tenant vacated its
space. A new tenant has leased the space as of July 1, at an
increased rental rate which should help to offset the residential
vacancies. The Operating General Partner continues to financially
support the partnership. The Investment General Partner will
continue to monitor this situation.
39
(Series 10) As of June 30, 2000 and 1999, the average Qualified
Occupancy for the series was 99.8% and 99.7%, respectively. The
series had a total of 45 properties at June 30, 2000, Out of the
total,43 were at 100%
Qualified Occupancy.
For the three months being reported the series reflects a net
loss from the
Operating Partnerships of $358,428. When adjusted for
depreciation which is
a non-cash item, the Operating Partnerships reflect positive
operations of
$319,538. This is an interim period estimate; it is not
necessarily
indicative of the final year end results.
The audited financial statements for Chuckatuck Square were
prepared assuming the partnership will continue as a Going
Concern. Despite high occupancy, the property suffers from
excessive bad debt expenses due to the seasonal nature of
employment opportunities in the local economy. As a result, the
property has accumulating payables and is delinquent in funding
its replacement reserves. In January of 2000, the partnership
entered a two-year workout plan with Rural Development that
allows for reduced debt service payments. The reduced debt
service requirement, improved rental collection and controlled
expenses have allowed the property to reduce the accounts payable
from $12,383 as of December 31, 1999 to $7,732 as of July 15,
2000, and fund $9,000 into the replacement reserve account. The
tenant receivables have been reduced from $7,305 as of December
31, 1999 to $3,289 as of July 15, 2000. The operating general
partner continues to attempt to obtain rental assistance from
Rural Development to alleviate the collection/bad debt problem.
(Series 11) As of June 30, 2000 and 1999 the average Qualified
Occupancy for the series was 99.9% and 100%, respectively. The
series had a total of 40 properties at June 30, 2000, Out of the
total,39 were at 100%
Qualified Occupancy.
For the three months being reported the series reflects a net
loss from the Operating Partnerships of $452,503. When adjusted
for depreciation, which is a non-cash item, the Operating
Partnerships reflect positive operations of $173,819. This is an
interim period estimate; it is not necessarily indicative of the
final year end results.
Ivan Woods Limited Partnership(Ivan Woods Senior Apartments)
received a Form 8823, Low Income Housing Credit Agencies Report
of Non compliance, on September 1, 1999. Presently, the
partnership files are in good condition; however, there were five
units with non-eligibility issues that occurred during the first
eighteen months of occupancy of the building. The non-compliance
of five units are being investigated by the present management
agent. The management agent is working with the state agency in
attempt to rectify the situation.
(Series 12) As of June 30, 2000 and 1999 the average Qualified
Occupancy for the series was 99.9% and 99.2%, respectively. The
series had a total of 53 properties at June 30, 2000, 51 of which
were at 100% qualified occupancy.
For the three months being reported the series reflects a net
loss from the
Operating Partnerships of $512,637. When adjusted for
depreciation, which is
a non-cash item, the Operating Partnerships reflect positive
operations of $198,284. This is an interim period estimate; it
is not necessarily indicative of the final year end results.
40
Ivan Woods Limited Partnership(Ivan Woods Senior Apartments)
received a Form 8823, Low Income Housing Credit Agencies Report
of Non compliance, on September 1, 1999. Presently, the
partnership files are in good condition; however, there were five
units with non-eligibility issues that occurred during the first
eighteen months of occupancy of the building. The non-compliance
of five units are being investigated by the present management
agent. The management agent is working with the state agency in
attempt to rectify the situation.
(Series 14) As of June 30, 2000 and 1999 the average Qualified
Occupancy for the series was 99.8% and 99.7%, respectively. The
series had a
total of 101 properties at June 30, 2000, 97 of which were at
100%
Qualified Occupancy.
For the three months being reported the series reflects a net
loss from the
Operating Partnerships of $898,581. When adjusted for
depreciation, which is
a non-cash item, the Operating Partnerships reflect positive
operations of
$355,166. This is an interim period estimate; it is not
necessarily
indicative of the final year end results.
Lakewood Terrace Limited Partnership (Lakewood Terrace
Apartments) operated with a net loss during 1999 primarily as a
result of the extensive amount of capital improvements that were
made during the year. A portion of the expense was reimbursed
from the replacement reserve account but the property funded the
balance of the costs through operations. Capital improvements of
this magnitude are not anticipated in 2000. Despite the fact that
occupancy averaged 97.47% during 1999, the property could not
sustain the expenses it incurred and closed the year with high
payables on their balance sheet. Occupancy continues to be strong
throughout the first six months of 2000 as evidenced by an
average of 99.57%. The operating General Partner has been
successful in securing a four (4) year contract with HUD and has
also been granted a 2.2% rental increase. The increase in rents
and continued high occupancy should financially assist the
partnership.
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 effort to
operate the properties in a more cost effective manner, the
Investment General Partner has commenced discussions with a local
third party management company to assume the role of both
Operating General Partners and property manager. If an agreement
can be reached it is anticipated that they will take over
management of the properties within 30 to 45 days. As a result of
repairs to unit interiors, occupancy levels have stabilized. At
June 30, 2000 physical occupancy at Haven Park II was 93%.
Occupancy at Haven Park III and Haven Park IV as of June 30, 2000
increased to 100%. Occupancy at Glenhaven Park Partners continues
to suffer, largely as a result of turnovers associated with
evictions. Occupancy as of June 30, 2000 was 83%.
41
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 Operating General Partner and its counsel do 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 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 most recently filed 10-K dated March 31,
2000.
42
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 happy to announce that we did not
experience any computer-related problems as a result of this date
change and therefore, there was no impact on our investors.
43
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
44
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the
registrant has duly caused this report to be signed on its behalf
by the
undersigned hereunto duly authorized.
BOSTON CAPITAL TAX CREDIT
FUND II LIMITED PARTNERSHIP
By: Boston Capital Associates II
Limited
Partnership
By: C&M Associates d/b/a
Boston Capital Associates
Date: August 15, 2000 By: /S/ John P. Manning
--------------------
John P. Manning,
Partner & Principal Financial
Officer
45
