UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE
SECURITIES EXCHANGE ACT OF 1934
For The Quarterly Period Ended June 30, 1996
Commission File Number 0-19022
Gateway Tax Credit Fund II Ltd.
(Exact name of Registrant as specified in its charter)
Florida 65-0142704
(State or other jurisdiction of ( I.R.S. Employer No.)
incorporation or organization)
880 Carillon Parkway, St. Petersburg, Florida 33716
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code:
(813)573-3800
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
Number of Units
Title of Each Class June 30, 1996
Beneficial Assignee Certificates:
$1,000 per certificate 37,228
DOCUMENTS INCORPORATED BY REFERENCE
Parts I and II, 1995 Form 10-K, filed with the
Securities and Exchange Commission on June 27, 1996
Parts III and IV - Form S-11 Registration Statement
and all amendments and supplements thereto
File No. 33-31821
<PAGE>
PART I - Financial Information
Item 1. Financial Statements
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
JUNE 30, MARCH 31,
1996 1996
----------- -----------
SERIES 2 (Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 177,077 $ 135,519
Investments in Securities 43,443 43,655
----------- ----------
Total Current Assets 220,520 179,174
Investments in Securities 327,284 363,740
Investments in Project
Partnerships, Net 1,226,513 1,350,923
----------- ----------
Total Assets $1,774,317 $1,893,837
=========== ==========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 41,916 $ 44,607
Long-Term Liabilities:
Payable to General Partners 242,415 225,720
Partners' Equity:
Assignor Limited Partner
Units of limited Partnership
interest consisting of 40,000
authorized BAC's, of which 37,228
at June 30, 1996 and March 31, 1996
have been issued to the assignees
Assignees
Units of beneficial interest of
the limited partnership interest of
the assignor limited partner, $1,000
stated value per BAC, 37,228 at
June 30, 1996 and March 31, 1996,
issued and outstanding 1,528,886 1,661,075
General Partners (38,900) (37,565)
----------- ----------
Total Partners' Equity 1,489,986 1,623,510
----------- ----------
Total Liabilities and
Partners Equity $1,774,317 $1,893,837
=========== ==========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
JUNE 30, MARCH 31,
1996 1996
----------- ----------
SERIES 3 (Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 152,396 $ 97,988
Investments in Securities 38,642 38,831
----------- ----------
Total Current Assets 191,038 136,819
Investments in Securities 291,111 323,539
Investments in Project
Partnerships, Net 810,438 901,663
----------- ----------
Total Assets $1,292,587 $1,362,021
=========== ==========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 46,012 $ 48,855
Long-Term Liabilities:
Payable to General Partners 205,124 189,722
Partners' Equity:
Assignor Limited Partner
Units of limited Partnership
interest consisting of 40,000
authorized BAC's, of which 37,228
at June 30, 1996 and March 31, 1996
have been issued to the assignees
Assignees
Units of beneficial interest of
the limited partnership interest of
the assignor limited partner, $1,000
stated value per BAC, 37,228 at
June 30, 1996 and March 31, 1996,
issued and outstanding 1,078,852 1,160,025
General Partners (37,401) (36,581)
---------- ----------
Total Partners' Equity 1,041,451 1,123,444
----------- ----------
Total Liabilities and
Partners Equity $1,292,587 $1,362,021
=========== ==========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
JUNE 30, MARCH 31,
1996 1996
----------- ----------
SERIES 4 (Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 227,186 $ 178,506
Investments in Securities 48,955 49,195
----------- ----------
Total Current Assets 276,141 227,701
Investments in Securities 368,809 409,891
Investments in Project
Partnerships, Net 1,916,447 2,073,510
----------- ----------
Total Assets $2,561,397 $2,711,102
=========== ==========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 50,489 $ 53,905
Long-Term Liabilities:
Payable to General Partners 231,695 212,638
Partners' Equity:
Assignor Limited Partner
Units of limited Partnership
interest consisting of 40,000
authorized BAC's, of which 37,228
at June 30, 1996 and March 31, 1996
have been issued to the assignees
Assignees
Units of beneficial interest of
the limited partnership interest of
the assignor limited partner, $1,000
stated value per BAC, 37,228 at
June 30, 1996 and March 31, 1996,
issued and outstanding 2,317,074 2,480,767
General Partners (37,861) (36,208)
----------- ----------
Total Partners' Equity 2,279,213 2,444,559
----------- ----------
Total Liabilities and
Partners Equity $2,561,397 $2,711,102
=========== ==========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
JUNE 30, MARCH 31,
1996 1996
----------- ----------
SERIES 5 (Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 317,975 $ 257,549
Investments in Securities 61,016 61,314
----------- ----------
Total Current Assets 378,991 318,863
Investments in Securities 459,673 510,876
Investments in Project
Partnerships, Net 3,043,118 3,211,868
----------- ----------
Total Assets $3,881,782 $4,041,607
=========== ==========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 68,036 $ 72,085
Long-Term Liabilities:
Payable to General Partners 225,192 201,848
Partners' Equity:
Assignor Limited Partner
Units of limited Partnership
interest consisting of 40,000
authorized BAC's, of which 37,228
at June 30, 1996 and March 31, 1996
have been issued to the assignees
Assignees
Units of beneficial interest of
the limited partnership interest of
the assignor limited partner, $1,000
stated value per BAC, 37,228 at
June 30, 1996 and March 31, 1996,
issued and outstanding 3,628,291 3,805,620
General Partners (39,737) (37,946)
----------- ----------
Total Partners' Equity 3,588,554 3,767,674
----------- ----------
Total Liabilities and
Partners Equity $3,881,782 $4,041,607
=========== ==========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
JUNE 30, MARCH 31,
1996 1996
----------- ----------
SERIES 6 (Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 387,804 $ 388,991
Investments in Securities 43,676 43,120
----------- ----------
Total Current Assets 431,480 432,111
Investments in Securities 417,875 410,950
Investments in Project
Partnerships, Net 4,559,999 4,769,625
----------- ----------
Total Assets $5,409,354 $5,612,686
=========== ==========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 63,281 $ 67,831
Long-Term Liabilities:
Payable to General Partners 266,218 240,262
Partners' Equity:
Assignor Limited Partner
Units of limited Partnership
interest consisting of 40,000
authorized BAC's, of which 37,228
at June 30, 1996 and March 31, 1996
have been issued to the assignees
Assignees
Units of beneficial interest of
the limited partnership interest of
the assignor limited partner, $1,000
stated value per BAC, 37,228 at
June 30, 1996 and March 31, 1996,
issued and outstanding 5,117,783 5,340,274
General Partners (37,928) (35,681)
----------- ----------
Total Partners' Equity 5,079,855 5,304,593
----------- ----------
Total Liabilities and
Partners Equity $5,409,354 $5,612,686
=========== ==========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
JUNE 30, MARCH 31,
1996 1996
----------- ----------
TOTAL SERIES 2 - 6 (Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $1,262,438 $1,058,553
Investments in Securities 235,732 236,115
----------- ----------
Total Current Assets 1,498,170 1,294,668
Investments in Securities 1,864,752 2,018,996
Investments in Project
Partnerships, Net 11,556,515 12,307,589
----------- ----------
Total Assets $14,919,437 $15,621,253
=========== ==========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 269,734 $ 287,283
Long-Term Liabilities:
Payable to General Partners 1,170,644 1,070,190
Partners' Equity:
Assignor Limited Partner
Units of limited Partnership
interest consisting of 40,000
authorized BAC's, of which 37,228
at June 30, 1996 and March 31, 1996
have been issued to the assignees
Assignees
Units of beneficial interest of
the limited partnership interest of
the assignor limited partner, $1,000
stated value per BAC, 37,228 at
June 30, 1996 and March 31, 1996,
issued and outstanding 13,670,886 14,447,761
General Partners (191,827) (183,981)
----------- -----------
Total Partners' Equity 13,479,059 14,263,780
----------- ----------
Total Liabilities and
Partners Equity $14,919,437 $15,621,253
=========== ==========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
1996 1995
SERIES 2 ----------- ----------
Revenues:
Interest Income $ 9,292 $ 9,398
----------- ----------
Expenses:
Asset Management Fee-
General Partner 17,250 17,256
General and Administrative-
General Partner 1,664 2,242
General and Administrative-
Other 2,047 3,632
Amortization 1,203 1,321
----------- ----------
Total Expenses 22,164 24,451
Loss Before Equity in Losses of
Project Partnerships (12,872) (15,053)
Equity in Losses of Project
Partnerships (120,652) (162,091)
----------- ----------
Net Loss $ (133,524) $ (177,144)
=========== ==========
Allocation of Net Loss:
Assignees $ (132,189) $ (175,373)
General Partners (1,335) (1,771)
----------- ----------
$ (133,524) $ (177,144)
=========== ==========
Net Loss Per Beneficial
Assignee Certificate $ (21.54) $ (28.58)
Number of Beneficial Assignee
Certificates Outstanding 6,136 6,136
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
1996 1995
SERIES 3 ----------- ----------
Revenues:
Interest Income $ 7,655 $ 7,972
----------- ----------
Expenses:
Asset Management Fee-
General Partner 15,982 16,010
General and Administrative-
General Partner 1,742 2,338
General and Administrative-
Other 1,877 4,260
Amortization 319 1,991
----------- ----------
Total Expenses 19,920 24,599
----------- ----------
Loss Before Equity in Losses of
Project Partnerships (12,265) (16,627)
Equity in Losses of Project
Partnerships (69,728) (127,033)
----------- ----------
Net Loss $ (81,993) $ (143,660)
=========== ==========
Allocation of Net Loss:
Assignees $ (81,173) $ (142,223)
General Partners (820) (1,437)
----------- ----------
$ (81,993) $ (143,660)
=========== ==========
Net Loss Per Beneficial
Assignee Certificate $ (14.88) $ (26.07)
Number of Beneficial Assignee
Certificates Outstanding 5,456 5,456
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
1996 1995
SERIES 4 ----------- ----------
Revenues:
Interest Income $ 10,234 $ 10,894
----------- ----------
Expenses:
Asset Management Fee-
General Partner 19,596 19,642
General and Administrative-
General Partner 2,194 2,955
General and Administrative-
Other 2,579 4,446
Amortization 847 1,197
----------- ----------
Total Expenses 25,216 28,240
----------- ----------
Loss Before Equity in Losses of
Project Partnerships (14,982) (17,346)
Equity in Losses of Project
Partnerships (150,364) (150,620)
----------- ----------
Net Loss $ (165,346) $ (167,966)
=========== ==========
Allocation of Net Loss:
Assignees $ (163,693) $ (166,286)
General Partners (1,653) (1,680)
----------- ----------
$ (165,346) $ (167,966)
=========== ==========
Net Loss Per Beneficial
Assignee Certificate $ (23.67) $ (24.05)
Number of Beneficial Assignee
Certificates Outstanding 6,915 6,915
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
1996 1995
SERIES 5 ----------- ----------
Revenues:
Interest Income $ 13,137 $ 14,097
----------- ----------
Expenses:
Asset Management Fee-
General Partner 24,253 24,290
General and Administrative-
General Partner 2,724 3,669
General and Administrative-
Other 2,993 5,271
Amortization 3,116 3,082
----------- ----------
Total Expenses 33,086 36,312
----------- ----------
Loss Before Equity in Losses of
Project Partnerships (19,949) (22,215)
Equity in Losses of Project
Partnerships (159,171) (141,998)
----------- ----------
Net Loss $ (179,120) $ (164,213)
=========== ==========
Allocation of Net Loss:
Assignees $ (177,329) $ (162,571)
General Partners (1,791) (1,642)
----------- ----------
$ (179,120) $ (164,213)
=========== ==========
Net Loss Per Beneficial
Assignee Certificate $ (20.58) $ (18.87)
Number of Beneficial Assignee
Certificates Outstanding 8,616 8,616
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
1996 1995
SERIES 6 ----------- ----------
Revenues:
Interest Income $ 11,916 $ 12,548
----------- ----------
Expenses:
Asset Management Fee-
General Partner 26,916 26,977
General and Administrative-
General Partner 2,875 3,873
General and Administrative-
Other 2,919 5,668
Amortization 5,664 5,757
----------- ----------
Total Expenses 38,374 42,275
----------- ----------
Loss Before Equity in Losses of
Project Partnerships (26,458) (29,727)
Equity in Losses of Project
Partnerships (198,280) (160,748)
----------- ----------
Net Loss $ (224,738) $ (190,475)
=========== ==========
Allocation of Net Loss:
Assignees $ (222,491) $ (188,570)
General Partners (2,247) (1,905)
----------- ----------
$ (224,738) $ (190,475)
=========== ==========
Net Loss Per Beneficial
Assignee Certificate $ (22.02) $ (18.66)
Number of Beneficial Assignee
Certificates Outstanding 10,105 10,105
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
1996 1995
TOTAL SERIES 2 - 6 ----------- ----------
Revenues:
Interest Income $ 52,234 $ 54,909
----------- ----------
Expenses:
Asset Management Fee-
General Partner 103,997 104,175
General and Administrative-
General Partner 11,199 15,077
General and Administrative-
Other 12,415 23,277
Amortization 11,149 13,348
----------- ----------
Total Expenses 138,760 155,877
----------- ----------
Loss Before Equity in Losses of
Project Partnerships (86,526) (100,968)
Equity in Losses of Project
Partnerships (698,195) (742,490)
----------- ----------
Net Loss $ (784,721) $ (843,458)
=========== ==========
Allocation of Net Loss:
Assignees $ (776,875) $ (835,023)
General Partners (7,846) (8,435)
----------- ----------
$ (784,721) $ (843,458)
=========== ==========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
General
Assignees Partners Total
SERIES 2 ----------- ----------- -----------
Balance at
March 31, 1995 $ 2,246,516 $ (31,651) $ 2,214,865
Net Loss (175,373) (1,771) (177,144)
----------- ---------- -----------
Balance at
June 30, 1995 $ 2,071,143 $ (33,422) $ 2,037,721
=========== ========== ===========
Balance at
March 31, 1996 $ 1,661,075 $ (37,565) $ 1,623,510
Net Loss (132,189) (1,335) (133,524)
----------- ---------- -----------
Balance at
June 30, 1996 $ 1,528,886 $ (38,900) $ 1,489,986
=========== ========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
General
Assignees Partners Total
SERIES 3 ----------- ---------- -----------
Balance at
March 31, 1995 $ 1,626,196 $ (31,872) $ 1,594,324
Net Loss (142,223) (1,437) (143,660)
----------- ---------- -----------
Balance at
June 30, 1995 $ 1,483,973 $ (33,309) $ 1,450,664
=========== ========== ===========
Balance at
March 31, 1996 $ 1,160,025 $ (36,581) $ 1,123,444
Net Loss (81,173) (820) (81,993)
----------- ---------- -----------
Balance at
June 30, 1996 $ 1,078,852 $ (37,401) $ 1,041,451
=========== ========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
General
Assignees Partners Total
SERIES 4 ----------- ---------- -----------
Balance at
March 31, 1995 $ 3,179,350 $ (29,152) $ 3,150,198
Net Loss (166,286) (1,680) (167,966)
----------- ---------- -----------
Balance at
June 30, 1995 $ 3,013,064 $ (30,832) $ 2,982,232
=========== ========== ===========
Balance at
March 31, 1996 $ 2,480,767 $ (36,208) $ 2,444,559
Net Loss (163,693) (1,653) (165,346)
----------- ---------- -----------
Balance at
June 30, 1996 $ 2,317,074 $ (37,861) $ 2,279,213
=========== ========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
General
Assignees Partners Total
SERIES 5 ----------- ---------- -----------
Balance at
March 31, 1995 $ 4,579,242 $ (30,132) $ 4,549,110
Net Loss (162,571) (1,642) (164,213)
----------- ---------- -----------
Balance at
June 30, 1995 $ 4,416,671 $ (31,774) $ 4,384,897
=========== ========== ===========
Balance at
March 31, 1996 $ 3,805,620 $ (37,946) $ 3,767,674
Net Loss (177,329) (1,791) (179,120)
----------- ---------- -----------
Balance at
June 30, 1996 $ 3,628,291 $ (39,737) $ 3,588,554
=========== ========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
General
Assignees Partners Total
SERIES 6 ----------- ---------- -----------
Balance at
March 31, 1995 $ 6,153,088 $ (27,471) $ 6,125,617
Net Loss (188,570) (1,905) (190,475)
----------- ---------- -----------
Balance at
June 30, 1995 $ 5,964,518 $ (29,376) $ 5,935,142
=========== ========== ===========
Balance at
March 31, 1996 $ 5,340,274 $ (35,681) $ 5,304,593
Net Loss (222,491) (2,247) (224,738)
----------- ---------- -----------
Balance at
June 30, 1996 $ 5,117,783 $ (37,928) $ 5,079,855
=========== ========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
General
Assignees Partners Total
TOTAL SERIES 2 - 6 ----------- ---------- -----------
Balance at
March 31, 1995 $17,784,392 $ (150,278) $17,634,114
Net Loss (835,023) (8,435) (843,458)
----------- ---------- -----------
Balance at
June 30, 1995 $16,949,369 $ (158,713) $16,790,656
=========== ========== ===========
Balance at
March 31, 1996 $14,447,761 $ (183,981) $14,263,780
Net Loss (776,875) (7,846) (784,721)
----------- ---------- -----------
Balance at
June 30, 1996 $13,670,886 $ (191,827) $13,479,059
=========== ========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
1996 1995
SERIES 2 ----------- ---------
Cash Flows from Operating Activities:
Net Loss $ (133,524) $ (177,144)
Adjustments to Reconcile Net Loss to
Net Cash Provided by (Used in)
Operating Activities:
Amortization 1,203 1,321
Accreted Interest Income
on Investments in Securities (6,987) (7,062)
Equity in Losses of
Project Partnerships 120,652 162,091
Interest Income from
Redemption of Securities 10,359 7,238
Changes in Operating Assets
and Liabilities:
Increase in Payable to
General Partners 14,005 14,662
----------- ---------
Net Cash Provided by (Used in)
Operating Activities 5,708 1,106
---------- ---------
Cash Flows from Investing Activities:
Distributions Received from
Project Partnerships 2,556 (733)
Redemption of Investment
in Securities 33,294 34,609
----------- ---------
Net Cash Provided by
Investing Activities 35,850 33,876
----------- ---------
Increase (Decrease) in Cash and
Cash Equivalents 41,558 34,982
Cash and Cash Equivalents at
Beginning of Year 135,519 127,890
----------- ---------
Cash and Cash Equivalents at
End of Year $ 177,077 $ 162,872
=========== =========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
1996 1995
SERIES 3 ----------- ---------
Cash Flows from Operating Activities:
Net Loss $ (81,993) $ (143,660)
Adjustments to Reconcile Net Loss to
Net Cash Provided by (Used in)
Operating Activities:
Amortization 319 1,991
Accreted Interest Income
on Investments in Securities (6,216) (6,282)
Equity in Losses of
Project Partnerships 69,728 127,033
Interest Income from
Redemption of Securities 9,214 6,437
Changes in Operating Assets
and Liabilities:
Increase in Payable to
General Partners 12,560 13,279
---------- ---------
Net Cash Provided by (Used in)
Operating Activities 3,612 (1,202)
---------- ---------
Cash Flows from Investing Activities:
Distributions Received from
Project Partnerships 21,179 8,140
Redemption of Investment
in Securities 29,617 30,785
---------- ---------
Net Cash Provided by
Investing Activities 50,796 38,925
---------- ---------
Increase (Decrease) in Cash and
Cash Equivalents 54,408 37,723
Cash and Cash Equivalents at
Beginning of Year 97,988 83,648
---------- ---------
Cash and Cash Equivalents at
End of Year $ 152,396 $ 121,371
========== =========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
1996 1995
SERIES 4 ---------- ---------
Cash Flows from Operating Activities:
Net Loss $ (165,346) $ (167,966)
Adjustments to Reconcile Net Loss to
Net Cash Provided by (Used in)
Operating Activities:
Amortization 847 1,197
Accreted Interest Income
on Investments in Securities (7,874) (7,959)
Equity in Losses of
Project Partnerships 150,364 150,620
Interest Income from
Redemption of Securities 11,674 8,156
Changes in Operating Assets
and Liabilities:
Increase in Payable to
General Partners 15,641 16,316
---------- ---------
Net Cash Provided by (Used in)
Operating Activities 5,306 364
---------- ---------
Cash Flows from Investing Activities:
Distributions Received from
Project Partnerships 5,852 0
Redemption of Investment
in Securities 37,522 39,001
---------- ---------
Net Cash Provided by
Investing Activities 43,374 39,001
---------- ---------
Increase (Decrease) in Cash and
Cash Equivalents 48,680 39,365
Cash and Cash Equivalents at
Beginning of Year 178,506 168,651
---------- ---------
Cash and Cash Equivalents at
End of Year $ 227,186 $ 208,016
========== =========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
1996 1995
SERIES 5 ---------- ---------
Cash Flows from Operating Activities:
Net Loss $ (179,120) $ (164,213)
Adjustments to Reconcile Net Loss to
Net Cash Provided by (Used in)
Operating Activities:
Amortization 3,116 3,082
Accreted Interest Income
on Investments in Securities (9,814) (9,920)
Equity in Losses of
Project Partnerships 159,171 141,998
Interest Income from
Redemption of Securities 14,550 10,166
Changes in Operating Assets
and Liabilities:
Increase in Payable to
General Partners 19,294 20,294
---------- ---------
Net Cash Provided by (Used in)
Operating Activities 7,197 1,407
========== =========
Cash Flows from Investing Activities:
Distributions Received from
Project Partnerships 6,462 0
Redemption of Investment
in Securities 46,767 48,609
---------- ---------
Net Cash Provided by
Investing Activities 53,229 48,609
---------- ---------
Increase (Decrease) in Cash and
Cash Equivalents 60,426 50,016
Cash and Cash Equivalents at
Beginning of Year 257,549 249,065
---------- ---------
Cash and Cash Equivalents at
End of Year $ 317,975 $ 299,081
---------- ---------
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
1996 1995
SERIES 6 ---------- ---------
Cash Flows from Operating Activities:
Net Loss $ (224,738) $ (190,475)
Adjustments to Reconcile Net Loss to
Net Cash Provided by (Used in)
Operating Activities:
Amortization 5,664 5,757
Accreted Interest Income
on Investments in Securities (7,480) (7,464)
Equity in Losses of
Project Partnerships 198,280 160,748
Interest Income from
Redemption of Securities 0 0
Changes in Operating Assets
and Liabilities:
Increase in Payable to
General Partners 21,406 22,568
---------- ---------
Net Cash Provided by (Used in)
Operating Activities (6,868) (8,866)
---------- ---------
Cash Flows from Investing Activities:
Distributions Received from
Project Partnerships 5,681 1,571
Redemption of Investment
in Securities 0 0
---------- ---------
Net Cash Provided by
Investing Activities 5,681 1,571
---------- ---------
Increase (Decrease) in Cash and
Cash Equivalents (1,187) (7,295)
Cash and Cash Equivalents at
Beginning of Year 388,991 384,578
---------- ---------
Cash and Cash Equivalents at
End of Year $ 387,804 $ 377,283
========== =========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
1996 1995
TOTAL SERIES 2 - 6 ---------- ---------
Cash Flows from Operating Activities:
Net Loss $ (784,721) $ (843,458)
Adjustments to Reconcile Net Loss to
Net Cash Provided by (Used in)
Operating Activities:
Amortization 11,149 13,348
Accreted Interest Income
on Investments in Securities (38,371) (38,687)
Equity in Losses of
Project Partnerships 698,195 742,490
Interest Income from
Redemption of Securities 45,797 31,997
Changes in Operating Assets
and Liabilities:
Increase in Payable to
General Partners 82,906 87,119
---------- ---------
Net Cash Provided by (Used in)
Operating Activities 14,955 (7,191)
---------- ---------
Cash Flows from Investing Activities:
Distributions Received from
Project Partnerships 41,730 8,978
Redemption of Investment
in Securities 147,200 153,004
---------- ---------
Net Cash Provided by
Investing Activities 188,930 161,982
---------- ---------
Increase (Decrease) in Cash and
Cash Equivalents 203,885 154,791
Cash and Cash Equivalents at
Beginning of Year 1,058,553 1,013,832
---------- ---------
Cash and Cash Equivalents at
End of Year $ 1,262,438 $1,168,623
========== =========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
June 30, 1996
NOTE 1 - ORGANIZATION:
Gateway Tax Credit Fund II Ltd. ("Gateway"), a Florida Limited
Partnership, was formed September 12, 1989, under the laws of
Florida. Operations commenced on September 14, 1990 for Series 2,
September 28, 1990 for Series 3, February 1, 1991 for Series 4,
July 1, 1991 for Series 5 and January 1, 1992 for Series 6.
Gateway has invested, as a limited partner, in other limited
partnerships ("Project Partnerships") each of which owns and
operates one or more apartment complexes expected to qualify for
Low-Income Housing Tax Credits. Gateway will terminate on December
31, 2040, or sooner, in accordance with the terms of the Limited
Partnership Agreement. As of June 30, 1996, Gateway had received
capital contributions of $1,000 from the General Partners and
$37,228,000 from Beneficial Assignee Certificate investors (the
"Assignees"). The fiscal year of Gateway for reporting purposes
ends on March 31.
Pursuant to the Securities Act of 1933, Gateway filed a Form S-11
Registration Statement with the Securities and Exchange Commission,
effective September 12, 1989, which covered the offering (the
"Public Offering") of Gateway's Beneficial Assignee Certificates
("BACs") representing assignments of units for the beneficial
interest of the limited partnership interest of the Assignor
Limited Partner. The Assignor Limited Partner was formed for the
purpose of serving in that capacity for the Fund and will not
engage in any other business.
Raymond James Partners, Inc. and RJ Credit Partners, Inc.,
wholly-owned subsidiaries of Raymond James Financial, Inc., are the
General Partner and the Managing General Partner, respectively.
The Managing General Partner manages and controls the business of
Gateway.
Gateway offered BACs in five series. BACs in the amounts of
$6,136,000, $5,456,000, $6,915,000, $8,616,000 and $10,105,000 for
Series 2, 3, 4, 5 and 6, respectively had been issued as of June
30, 1996. Each Series is treated as a separate partnership,
investing in a separate and distinct pool of Project Partnerships.
Net proceeds from each Series are used to acquire Project
Partnerships which are specifically allocated to such Series.
Income or loss and all tax items from the Project Partnerships
acquired by each Series are specifically allocated among the
Assignees of such Series.
Operating profits and losses, cash distributions from operations
and tax credits are allocated 99% to the Assignees and 1% to the
General Partners. Profit or loss and cash distributions from sales
of properties will be allocated as formulated in the Limited
Partnership Agreement.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES:
Basis of Accounting
Gateway utilizes the accrual basis of accounting whereby revenues
are recognized when earned and expenses are recognized when
obligations are incurred.
Gateway accounts for its investments as the sole limited partner
in Project Partnerships ("Investments in Project Partnerships")
using the equity method of accounting and reports the equity in
losses of the Project Partnerships on a 3-month lag in the
Statements of Operations. Under the equity method, the Investments
in Project Partnerships initially include:
1) Gateway's capital contribution,
2) Acquisition fees paid to the General Partner for services
rendered in selecting properties for acquisition, and
3) Acquisition expenses including legal fees, travel and other
miscellaneous costs relating to acquiring properties.
Quarterly the Investments in Project Partnerships are increased or
decreased as follows:
1) Increased for equity in income or decreased for equity in
losses of the Project Partnerships,
2) Decreased for cash distributions received from the Project
Partnerships,
3) Decreased for the amortization of the acquisition fees and
expenses,
4) In certain Project Partnerships, where Gateway's investment
was greater than Gateway's pro-rata share of the book value of
the underlying assets, decreased for the amortization of the
difference; and
5) In certain Project Partnerships, where Gateway's investment
was less than Gateway's pro-rata share of the book value of the
underlying assets, increased for the accretion of the difference.
Amortization and accretion are calculated on a straight-line
basis over 35 years, as this is the average estimated useful life
of the underlying assets. The net amortization and accretion are
shown as amortization expense on the Statements of Operations.
Pursuant to the limited partnership agreements for the Project
Partnerships, cash losses generated by the Project Partnerships are
allocated to the general partners of those partnerships. In
subsequent years, cash profits, if any, are first allocated to the
general partners to the extent of the allocation of prior years'
cash losses.
Since Gateway invests as a limited partner, and therefore is not
obligated to fund losses or make additional capital contributions,
it does not recognize losses from individual Project Partnerships
to the extent that these losses would reduce the investment in
those Project Partnerships below zero. The suspended losses will
be used to offset future income from the individual Project
Partnerships.
Cash and Cash Equivalents
It is Gateway's policy to include short-term investments with an
original maturity of three months or less in Cash and Cash
Equivalents. Short-term investments are comprised of money market
mutual funds.
Concentration of Credit Risk
Financial instruments which potentially subject Gateway to
concentrations of credit risk consist of cash investments in a
money market mutual fund that is a wholly-owned subsidiary of
Raymond James Financial, Inc.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with
generally accepted accounting principles requires the use of
estimates that affect certain reported amounts and disclosures.
These estimates are based on management's knowledge and experience.
Accordingly, actual results could differ from these estimates.
Investment in Securities
Effective April 1, 1994, Gateway adopted Statement of Financial
Accounting Standards No. 115, Accounting for Certain Investments in
Debt and Equity Securities ("FAS 115"). Under FAS 115, Gateway is
required to categorize its debt securities as held-to-maturity,
available-for-sale or trading securities, dependent upon Gateway's
intent in holding the securities. Gateway's intent is to hold all
of its debt securities (U. S. Government Security Strips) until
maturity and to use these reserves to fund Gateway's ongoing
operations. Interest income is recognized ratably on the U. S.
Government Strips using the effective yield to maturity.
Offering and Commission Costs
Offering and commission costs were charged against Assignees'
Equity upon the admission of Limited Partners.
Income Taxes
No provision for income taxes has been made in these financial
statements, as income taxes are a liability of the partners rather
than of Gateway.
Reclassifications
For comparability, the 1995 figures have been reclassified, where
appropriate, to conform with the financial statement presentation
used in 1996.
Fair Value of Financial Instruments
The fair value of investment securities is discussed in Note 3.
The fair value of current assets and current liabilities is assumed
to be equal to their reported carrying amounts due to their short
term nature. It is not practicable to estimate the fair value of
the long term payable to the general partner because it is
attributable to a related party transaction for which there would
be no fair market equivalent.
Basis of Preparation
The unaudited financial statements presented herein have been
prepared in accordance with the instructions to Form 10-Q and do
not include all of the information and note disclosures required by
generally accepted accounting principles. These statements should
be read in conjunction with the financial statements and notes
thereto included with the Partnership's Form 10-K for the year
ended March 31, 1996. In the opinion of management these financial
statements include adjustments, consisting only of normal recurring
adjustments, necessary to fairly summarize the Partnership's
financial position and results of operations. The results of
operations for the periods may not be indicative of the results to
be expected for the year.
NOTE 3 - INVESTMENT IN SECURITIES:
The June 30, 1996 Balance Sheet includes Investment in Securities
consisting of U.S. Government Security Strips which represents
their cost, plus accreted interest income of $105,062 for Series 2,
$93,451 for Series 3, $118,394 for Series 4, $147,562 for Series 5
and $100,461 for Series 6. For convenience, the Investment in
Securities are commonly held in a brokerage account with Raymond
James and Associates, Inc. A separate accounting is maintained
for each series' share of the investments.
<PAGE>
Estimated Cost Plus Gross Unrealized
Market Accreted Gains and
Value Interest (Losses)
--------- --------- ---------
Series 2 $ 388,955 $370,727 $ 18,228
Series 3 345,855 329,753 16,102
Series 4 438,336 417,764 20,572
Series 5 546,159 520,689 25,470
Series 6 468,943 461,551 7,392
As of June 30, 1996, the cost and accreted interest of debt
securities by contractual maturities is as follows:
Series 2 Series 3 Series 4
--------- --------- ---------
Due within 1 year $ 43,443 $ 38,642 $ 48,955
After 1 year
through 5 years 159,637 141,992 179,889
After 5 years
through 10 years 167,647 149,119 188,920
After 10 years 0 0 0
--------- --------- ---------
Total Amount Carried on
Balance Sheet $ 370,727 $ 329,753 $ 417,764
========= ========= =========
Series 5 Series 6 Total
--------- --------- ---------
Due within 1 year $ 61,016 $ 43,676 $ 235,732
After 1 year
through 5 years 224,210 174,926 880,654
After 5 years
through 10 years 235,463 205,157 946,305
After 10 years 0 37,792 37,792
--------- --------- ---------
Total Amount Carried on
Balance Sheet $ 520,689 $ 461,551 $2,100,484
========= ========= =========
NOTE 4 - RELATED PARTY TRANSACTIONS:
The Payable to General Partners primarily represents the asset
management fees owed to the General Partners at the end of the
period. It is unsecured, due on demand and, in accordance with the
limited partnership agreement, non-interest bearing. Within the
next twelve months, the Managing General Partner does not intend to
demand payment on the portion of Asset Management fees payable
classified as long-term on the balance sheet.
For the three months ended June 30, 1996 and 1995 the General
Partners and affiliates are entitled to compensation and
reimbursement for costs and expenses incurred by Gateway as
follows:
Asset Management Fee - The Managing General Partner is entitled
to be paid an annual asset management fee equal to 0.25% of the
aggregate cost of Gateway's interest in the projects owned by the
Project Partnerships. The asset management fee will be paid only
after all other expenses of Gateway have been paid. These fees are
included in the Statements of Operations.
1996 1995
--------- ---------
Series 2 $ 17,250 $ 17,256
Series 3 15,982 16,010
Series 4 19,596 19,642
Series 5 24,253 24,290
Series 6 26,916 26,977
--------- ---------
Total $103,997 $ 104,175
========= =========
General and Administrative Expenses - The Managing General
Partner is reimbursed for general and administrative expenses of
Gateway on an accountable basis. This expense is included in the
Statements of Operations.
1996 1995
--------- ---------
Series 2 $ 1,664 $ 2,242
Series 3 1,742 2,338
Series 4 2,194 2,955
Series 5 2,724 3,669
Series 6 2,875 3,873
--------- ---------
Total $ 11,199 $ 15,077
========= =========
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS:
As of June 30, 1996, the Partnership had acquired an interest in
22 Project Partnerships for the Series which own and operate
government assisted multi-family housing complexes. The
Partnership, as the Investor Limited Partner pursuant to the
Project Partnership Agreements has generally acquired an ownership
interest of 99% in these Project Partnerships.
The following is a summary of Investments in Project Partnerships
as of:
JUNE 30, MARCH 31,
1996 1996
SERIES 2 ---------- ----------
Capital Contributions to Project
Partnerships (purchase price paid
for limited partner interests in
Project Partnerships) $ 4,542,678 $ 4,524,678
Accumulated amortization of excess
of purchase price of Project
Partnerships over book value
of underlying assets (1) 35,296 33,815
Cumulative equity in losses of
Project Partnerships (2) (3,615,848) (3,495,196)
Cumulative distributions received
from Project Partnerships (47,680) (45,124)
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 390,838 390,838
Accumulated amortization of
acquisition fees and expenses (60,771) (58,088)
---------- ----------
Investments in
Project Partnerships $1,226,513 $1,350,923
========== ==========
(1) Includes amounts representing accumulated accretion or
(amortization of the difference between the book value of the
underlying assets of the Project Partnerships over or under the
purchase price. At June 30, 1996 and March 31, 1996 these excess
costs were $205,718.
(2) In accordance with the Partnership's accounting policy to not
carry Investments in Project Partnerships below zero, cumulative
suspended losses of $25,114 for the period ended June 30, 1996 and
cumulative suspended losses of $0 for the year ended March 31, 1996
are not included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
As of June 30, 1996, the Partnership had acquired an interest in
23 Project Partnerships for the Series which own and operate
government assisted multi-family housing complexes. The
Partnership, as the Investor Limited Partner pursuant to the
Project Partnership Agreements has generally acquired an ownership
interest of 99% in these Project Partnerships.
The following is a summary of Investments in Project Partnerships
as of:
JUNE 30, MARCH 31,
1996 1996
SERIES 3 ---------- ----------
Capital Contributions to Project
Partnerships (purchase price paid
for limited partner interests in
Project Partnerships) $ 3,888,713 $ 3,888,713
Accumulated amortization of excess
of purchase price of Project
Partnerships over book value
of underlying assets (1) 35,804 33,947
Cumulative equity in losses of
Project Partnerships (2) (3,407,488) (3,337,760)
Cumulative distributions received
from Project Partnerships (131,919) (110,740)
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 491,746 491,746
Accumulated amortization of
acquisition fees and expenses (66,418) (64,243)
---------- ----------
Investments in
Project Partnerships $ 810,438 $ 901,663
========== ==========
(1) Includes amounts representing accumulated accretion or
(amortization of the difference between the book value of the
underlying assets of the Project Partnerships over or under the
purchase price. At June 30, 1996 and March 31, 1996 these excess
costs were $213,147.
(2) In accordance with the Partnership's accounting policy to not
carry Investments in Project Partnerships below zero, cumulative
suspended losses of $226,112 for the period ended June 30, 1996 and
cumulative suspended losses of $35,248 for the year ended March 31,
1996 are not included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
As of June 30, 1996, the Partnership had acquired an interest in
29 Project Partnerships for the Series which own and operate
government assisted multi-family housing complexes. The
Partnership, as the Investor Limited Partner pursuant to the
Project Partnership Agreements has generally acquired an ownership
interest of 99% in these Project Partnerships.
The following is a summary of Investments in Project Partnerships
as of:
JUNE 30, MARCH 31,
1996 1996
SERIES 4 ---------- ----------
Capital Contributions to Project
Partnerships (purchase price paid
for limited partner interests in
Project Partnerships) $ 4,952,519 $ 4,952,519
Accumulated amortization of excess
of purchase price of Project
Partnerships over book value
of underlying assets (1) 63,515 60,437
Cumulative equity in losses of
Project Partnerships (2) (3,518,567) (3,368,203)
Cumulative distributions received
from Project Partnerships (65,135) (59,283)
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 562,967 562,967
Accumulated amortization of
acquisition fees and expenses (78,852) (74,927)
---------- ----------
Investments in
Project Partnerships $1,916,447 $2,073,510
========== ==========
(1) Includes amounts representing accumulated accretion or
(amortization of the difference between the book value of the
underlying assets of the Project Partnerships over or under the
purchase price. At June 30, 1996 and March 31, 1996 these excess
costs were $430,637.
(2) In accordance with the Partnership's accounting policy to not
carry Investments in Project Partnerships below zero, cumulative
suspended losses of $11,440 for the period ended June 30, 1996 and
cumulative suspended losses of $0 for the year ended March 31, 1996
are not included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
As of June 30, 1996, the Partnership had acquired an interest in
36 Project Partnerships for the Series which own and operate
government assisted multi-family housing complexes. The
Partnership, as the Investor Limited Partner pursuant to the
Project Partnership Agreements has generally acquired an ownership
interest of 99% in these Project Partnerships.
The following is a summary of Investments in Project Partnerships
as of:
JUNE 30, MARCH 31,
1996 1996
SERIES 5 ---------- ----------
Capital Contributions to Project
Partnerships (purchase price paid
for limited partner interests in
Project Partnerships) $ 6,164,472 $ 6,164,472
Accumulated amortization of excess
of purchase price of Project
Partnerships over book value
of underlying assets (1) 28,550 27,015
Cumulative equity in losses of
Project Partnerships (2) (3,625,834) (3,466,663)
Cumulative distributions received
from Project Partnerships (91,333) (84,871)
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 650,837 650,837
Accumulated amortization of
acquisition fees and expenses (83,574) (78,922)
---------- ----------
Investments in
Project Partnerships $3,043,118 $3,211,868
========== ==========
(1) Includes amounts representing accumulated accretion or
(amortization of the difference between the book value of the
underlying assets of the Project Partnerships over or under the
purchase price. At June 30, 1996 and March 31, 1996 these excess
costs were $214,636.
(2) In accordance with the Partnership's accounting policy to not
carry Investments in Project Partnerships below zero, cumulative
suspended losses of $0 for the period ended June 30, 1996 and
cumulative suspended losses of $0 for the year ended March 31, 1996
are not included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
As of June 30, 1996, the Partnership had acquired an interest in
38 Project Partnerships for the Series which own and operate
government assisted multi-family housing complexes. The
Partnership, as the Investor Limited Partner pursuant to the
Project Partnership Agreements has generally acquired an ownership
interest of 99% in these Project Partnerships.
The following is a summary of Investments in Project Partnerships
as of:
JUNE 30, MARCH 31,
1996 1996
SERIES 6 ---------- ----------
Capital Contributions to Project
Partnerships (purchase price paid
for limited partner interests in
Project Partnerships) $ 7,462,215 $ 7,462,215
Accumulated amortization of excess
of purchase price of Project
Partnerships over book value
of underlying assets (1) (2,402) (2,253)
Cumulative equity in losses of
Project Partnerships (2) (3,525,866) (3,327,586)
Cumulative distributions received
from Project Partnerships (69,113) (63,432)
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 785,179 785,179
Accumulated amortization of
acquisition fees and expenses (90,014) (84,498)
---------- ----------
Investments in
Project Partnerships $4,559,999 $4,769,625
========== ==========
(1) Includes amounts representing accumulated accretion or
(amortization of the difference between the book value of the
underlying assets of the Project Partnerships over or under the
purchase price. At June 30, 1996 and March 31, 1996 these excess
costs were ($20,841).
(2) In accordance with the Partnership's accounting policy to not
carry Investments in Project Partnerships below zero, cumulative
suspended losses of $11,517 for the period ended June 30, 1996 and
cumulative suspended losses of $0 for the year ended March 31, 1996
are not included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
The following is a summary of Investments in Project
Partnerships:
JUNE 30, MARCH 31,
1996 1996
TOTAL SERIES 2 - 6 ---------- ----------
Capital Contributions to Project
Partnerships (purchase price paid
for limited partner interests in
Project Partnerships) $ 26,992,597 $ 26,992,597
Accumulated amortization of excess
of purchase price of Project
Partnerships over book value
of underlying assets 160,763 152,961
Cumulative equity in losses of
Project Partnerships (17,693,603) (16,995,408)
Cumulative distributions received
from Project Partnerships (405,180) (363,450)
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 2,881,567 2,881,567
Accumulated amortization of
acquisition fees and expenses (379,629) (360,678)
---------- ----------
Investments in
Project Partnerships $11,556,515 $12,307,589
========== ==========
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with the Partnership's policy of presenting the
financial information of the Project Partnerships on a three month
lag, below is the summarized financial information for the Series'
Project Partnerships as of March 31 of each year:
1996 1995
SERIES 2 ----------- ----------
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 1,479,746 $ 1,251,560
Investment properties, net 23,181,244 24,111,784
Other assets 3,061 4,901
----------- ----------
Total assets $ 24,664,051 $ 25,368,245
=========== ==========
Liabilities and Partners' Equity
Current liabilities $ 407,458 $ 507,186
Long-term debt 23,305,419 23,309,322
----------- ----------
Total liabilities 23,712,877 23,816,508
Partners' Equity
Limited Partner 860,975 1,363,358
General Partners 90,199 188,379
----------- ----------
951,174 1,551,737
Total liabilities and
partners' equity $ 24,664,051 $ 25,368,245
=========== ==========
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income $ 634,071 $ 646,275
Expenses:
Operating expenses 322,660 310,353
Interest expense 205,367 256,568
Depreciation and amortization 239,590 243,082
----------- ----------
Total expenses 767,617 810,003
Net loss $ (133,546) $ (163,728)
=========== ==========
Other partners' share
of net loss $ (1,335) $ (1,637)
Partnership's share of net loss $ (132,211) $ (162,091)
Suspended loss 11,559 0
----------- ----------
Equity in Loss of
Project Partnerships $ (120,652) $ (162,091)
=========== ==========
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with the Partnership's policy of presenting the
financial information of the Project Partnerships on a three month
lag, below is the summarized financial information for the Series'
Project Partnerships as of March 31 of each year:
1996 1995
SERIES 3 ----------- ----------
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 1,888,543 $ 1,740,119
Investment properties, net 20,584,176 21,334,387
Other assets 234,599 247,877
----------- ----------
Total assets $ 22,707,318 $ 23,322,383
=========== ==========
Liabilities and Partners' Equity
Current liabilities $ 612,858 $ 561,192
Long-term debt 21,896,992 21,924,055
----------- ----------
Total liabilities 22,509,850 22,485,247
Partners' Equity
Limited Partner (168,837) 481,509
General Partners 366,305 355,627
----------- ----------
197,468 837,136
Total liabilities and
partners' equity $ 22,707,318 $ 23,322,383
=========== ==========
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income $ 608,589 $ 697,530
Expenses:
Operating expenses 373,163 349,355
Interest expense 147,290 261,221
Depreciation and amortization 232,854 228,106
----------- ----------
Total expenses 753,307 838,682
Net loss $ (144,718) $ (141,152)
=========== ==========
Other partners' share
of net loss $ (1,447) $ (1,412)
Partnership's share of net loss $ (143,271) $ (139,740)
Suspended loss 73,543 12,707
----------- ----------
Equity in Loss of
Project Partnerships $ (69,728) $ (127,033)
=========== ==========
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with the Partnership's policy of presenting the
financial information of the Project Partnerships on a three month
lag, below is the summarized financial information for the Series'
Project Partnerships as of March 31 of each year:
1996 1995
SERIES 4 ----------- ----------
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 1,896,011 $ 1,735,568
Investment properties, net 27,026,624 28,033,566
Other assets 51,407 12,502
----------- ----------
Total assets $ 28,974,042 $ 29,781,636
=========== ==========
Liabilities and Partners' Equity
Current liabilities $ 632,921 $ 690,922
Long-term debt 26,662,834 26,655,060
----------- ----------
Total liabilities 27,295,755 27,345,982
Partners' Equity
Limited Partner 1,392,512 2,075,124
General Partners 285,775 360,530
----------- ----------
1,678,287 2,435,654
Total liabilities and
partners' equity $ 28,974,042 $ 29,781,636
=========== ==========
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income $ 778,553 $ 837,328
Expenses:
Operating expenses 441,472 436,123
Interest expense 229,364 283,720
Depreciation and amortization 264,470 269,626
----------- ----------
Total expenses 935,306 989,469
Net loss $ (156,753) $ (152,141)
=========== ==========
Other partners' share
of net loss $ (1,568) $ (1,521)
Partnership's share of net loss $ (155,185) $ (150,620)
Suspended loss 4,821 0
----------- ----------
Equity in Loss of
Project Partnerships $ (150,364) $ (150,620)
=========== ==========
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with the Partnership's policy of presenting the
financial information of the Project Partnerships on a three month
lag, below is the summarized financial information for the Series'
Project Partnerships as of March 31 of each year:
1996 1995
SERIES 5 ----------- ----------
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 2,341,205 $ 2,031,404
Investment properties, net 33,956,699 35,143,429
Other assets 2,924 15,099
------------ ----------
Total assets $ 36,300,828 $ 37,189,932
=========== ==========
Liabilities and Partners' Equity
Current liabilities $ 751,322 $ 936,146
Long-term debt 32,970,731 32,952,287
----------- ----------
Total liabilities 33,722,053 33,888,433
Partners' Equity
Limited Partner 2,572,119 3,266,269
General Partners 6,656 35,230
----------- ----------
2,578,775 3,301,499
Total liabilities and
partners' equity $ 36,300,828 $ 37,189,932
=========== ==========
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income $ 869,596 $ 913,727
Expenses:
Operating expenses 471,489 434,922
Interest expense 206,653 260,340
Depreciation and amortization 352,233 361,897
----------- ----------
Total expenses 1,030,375 1,057,159
Net loss $ (160,779) $ (143,432)
=========== ==========
Other partners' share
of net loss $ (1,608) $ (1,434)
Partnership's share of net loss $ (159,171) $ (141,998)
Suspended loss 0 0
----------- -----------
Equity in Loss of
Project Partnerships $ (159,171) $ (141,998)
=========== ==========
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with the Partnership's policy of presenting the
financial information of the Project Partnerships on a three month
lag, below is the summarized financial information for the Series'
Project Partnerships as of March 31 of each year:
1996 1995
SERIES 6 ----------- ----------
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 2,508,965 $ 2,139,454
Investment properties, net 38,090,663 39,494,668
Other assets 26,274 40,653
----------- ----------
Total assets $ 40,625,902 $ 41,674,775
=========== ==========
Liabilities and Partners' Equity
Current liabilities $ 916,324 $ 1,064,908
Long-term debt 35,930,403 35,975,613
----------- ----------
Total liabilities 36,846,727 37,040,521
Partners' Equity
Limited Partner 3,891,357 4,686,669
General Partners (112,182) (52,415)
----------- ----------
3,779,175 4,634,254
Total liabilities and
partners' equity $ 40,625,902 $ 41,674,775
=========== ==========
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income $ 1,025,539 $ 1,039,741
Expenses:
Operating expenses 595,647 516,805
Interest expense 246,615 289,778
Depreciation and amortization 390,847 395,530
----------- ----------
Total expenses 1,233,109 1,202,113
Net loss $ (207,570) $ (162,372)
=========== ==========
Other partners' share
of net loss $ (2,076) $ (1,624)
Partnership's share of net loss $ (205,494) $ (160,748)
Suspended loss 7,214 0
----------- ----------
Equity in Loss of
Project Partnerships $ (198,280) $ (160,748)
=========== ==========
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with the Partnership's policy of presenting the
financial information of the Project Partnerships on a three month
lag, below is the summarized financial information for the Project
Partnerships as of March 31 of each year:
1996 1995
TOTAL SERIES 2 - 6 ----------- ----------
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 10,114,470 $ 8,898,105
Investment properties, net 142,839,406 148,117,834
Other assets 318,265 321,032
----------- ----------
Total assets $ 153,272,141 $157,336,971
=========== ==========
Liabilities and Partners' Equity
Current liabilities $ 3,320,883 $ 3,730,354
Long-term debt 140,766,379 140,816,337
----------- ----------
Total liabilities 144,087,262 144,576,691
Partners' Equity
Limited Partner 8,548,126 11,872,929
General Partners 636,753 887,351
----------- -----------
9,184,879 12,760,280
Total liabilities and
partners' equity $ 153,272,141 $157,336,971
=========== ==========
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income $ 3,916,348 $ 4,134,601
Expenses:
Operating expenses 2,204,431 2,047,558
Interest expense 1,035,289 1,351,627
Depreciation and amortization 1,479,994 1,498,241
----------- ----------
Total expenses 4,719,714 4,897,426
Net loss $ (803,366) $ (762,825)
=========== ==========
Other partners' share
of net loss $ (8,034) $ (7,628)
Partnership's share of net loss $ (795,332) $ (755,197)
Suspended loss 97,137 12,707
----------- ----------
Equity in Loss of
Project Partnerships $ (698,195) $ (742,490)
=========== ==========
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
June 30, 1996
Results of Operations, Liquidity and Capital Resources
Operations commenced on September 14, 1990, with the first
admission of Assignees in Series 2. The proceeds from Assignees'
capital contributions available for investment were used to acquire
interests in Project Partnerships.
As disclosed on the statement of operations for each Series,
interest income and total expenses are comparable for the three
months ended June 30, 1996 and 1995. There were no unusual
variations in the operating results between these two periods.
The capital resources of each Series are used to pay General and
Administrative operating costs including personnel, supplies, data
processing, travel and legal and accounting associated with the
administration and monitoring of Gateway and the Project
Partnerships. The capital resources are also used to pay the Asset
Management Fee due the Managing General Partner, but only to the
extent that Gateway's remaining resources are sufficient to fund
Gateway's ongoing needs.
The sources of funds to pay the operating costs of each Series
are short term investments and interest earned thereon, the
maturity of U.S. Treasury Security Strips ("Zero Coupon
Treasuries") which were purchased with funds set aside for this
purpose, and cash distributed to the Series from the operations of
the Project Partnerships.
From inception, no Series has paid distributions and management
does not anticipate distributions in the future.
Series 2 - Gateway closed this series on September 14, 1990 after
receiving $6,136,000 from 375 Assignees. Equity in Losses of
Project Partnerships decreased from $162,091 for the three months
ended June 30, 1995 to $120,652 for the three months ended June 30,
1996. This decrease was partially caused by $11,559 of losses that
were suspended to prevent reducing the investment in certain
Project Partnerships below zero, in accordance with the equity
method of accounting. In general, it is common in the real estate
industry to experience losses for financial and tax reporting
purposes because of the non-cash expenses of depreciation and
amortization. As a result, management expects that this Series, as
well as those described below, will report its equity in Project
Partnerships as a loss for tax and financial reporting purposes.
Overall, management believes the Project Partnerships are operating
as expected and are generating tax credits which meet projections.
At June 30, 1996, the Series had $177,077 of short-term
investments (Cash and Cash Equivalents). It also had $370,727 in
Zero Coupon Treasuries. Management believes the sources of funds
are sufficient to meet current and ongoing operating costs for the
foreseeable future, and to pay part of the Asset Management Fee.
As disclosed on the statement of cash flows, the Series had a net
loss of $133,524 for the three months June 30, 1996. However,
after adjusting for Equity in Losses of Project Partnerships of
$120,652 and the changes in operating assets and liabilities, net
cash provided by operating activities was $5,708. Cash provided by
investing activities totaled $35,850, consisting of $33,294 from
matured Zero Coupon Treasuries and $2,556 in cash distributions
received from the Project Partnerships. There were no unusual
events or trends to describe.
Series 3 - Gateway closed this series on December 13, 1990 after
receiving $5,456,000 from 398 Assignees. Equity in Losses of
Project Partnerships decreased from $127,033 for the three months
ended June 30, 1995 to $69,728 for the three months ended June 30,
1996. This decrease was partially caused by $73,543 of losses that
were suspended to prevent reducing the investment in a certain
Project Partnership below zero, in accordance with the equity
method of accounting in comparison to $12,707 for the period ended
June 30, 1995. Overall, management believes these Project
Partnerships are operating as expected and are generating tax
credits which meet projections.
At June 30, 1996, the Series had $152,396 of short-term
investments (Cash and Cash Equivalents). It also had $329,753 in
Zero Coupon Treasuries. Management believes these sources of funds
are sufficient to meet the Series' current and ongoing operating
costs for the foreseeable future, and to pay part of the Asset
Management Fee.
As disclosed on the statement of cash flows, the Series had a net
loss of $81,993 for the three months ended June 30, 1996. However,
after adjusting for Equity in Losses of Project Partnerships of
$69,728 and the changes in operating assets and liabilities net
cash provided by operating activities was $3,612. Cash provided by
investing activities totaled $50,796, consisting of $21,179 in cash
distributions received from the Project Partnerships and $29,617
from matured Zero Coupon Treasuries. There were no unusual events
or trends to describe.
Series 4 - Gateway closed this series on May 31, 1991 after
receiving $6,915,000 from 465 Assignees. Equity in Losses of
Project Partnerships were comparable for the three months ended
June 30, 1995 and June 30, 1996. Overall, management believes
these Project Partnerships are operating as expected and are
generating tax credits which meet projections.
At June 30, 1996, the Series had $227,186 of short-term
investments (Cash and Cash Equivalents). It also had $417,764 in
Zero Coupon Treasuries. Management believes these sources of funds
are sufficient to meet the Series' current and ongoing operating
costs for the foreseeable future, and to pay part of the Asset
Management Fee.
As disclosed on the statement of cash flows, the Series had a net
loss of $165,346 for the three months ended June 30, 1996.
However, after adjusting for Equity in Losses of Project
Partnerships of $150,364 and the changes in operating assets and
liabilities net cash provided by operating activities was $5,306
Cash provided by investing activities totaled $43,374 consisting of
$37,522 from matured Zero Coupon Treasuries and $5,852 in cash
distributions received from the Project Partnerships. There were
no unusual events or trends to describe.
Series 5 - Gateway closed this series on October 11, 1991 after
receiving $8,616,000 from 535 Assignees. Equity in Losses of
Project Partnerships increased from $141,998 for the three months
ended June 30, 1995 to $159,171 for the three months ended June 30,
1996. Overall, management believes these Project Partnerships are
operating as expected and are generating tax credits which meet
projections.
At June 30, 1996, the Series had $317,975 of short-term
investments (Cash and Cash Equivalents). It also had $520,689 in
Zero Coupon Treasuries. Management believes these sources of funds
are sufficient to meet the Series' current and ongoing operating
costs for the foreseeable future, and to pay part of the Asset
Management Fee.
As disclosed on the statement of cash flows, the Series had a net
loss of $179,120 for the three months ended June 30, 1996.
However, after adjusting for Equity in Losses of Project
Partnerships of $159,171 and the changes in operating assets and
liabilities net cash provided operating activities was $7,197.
Cash provided by investing activities totaled $53,229 consisting of
$46,767 from matured Zero Coupon Treasuries and $6,462 in cash
distributions received from the Project Partnerships. There were
no unusual events or trends to describe.
Series 6 - Gateway closed this series on March 11, 1992 after
receiving $10,105,000 from 625 Assignees. Equity in Losses of
Project Partnerships increased from $160,748 for the three months
ended June 30, 1995 to $198,280 for the three months ended June 30,
1996. Overall, management believes these Project Partnerships are
operating as expected and are generating tax credits which meet
projections.
At June 30, 1996, the Series had $387,802 of short-term
investments (Cash and Cash Equivalents). It also had $461,551 in
Zero Coupon Treasuries. Management believes these sources of funds
are sufficient to meet the Series' current and ongoing operating
costs for the foreseeable future, and to pay part of the Asset
Management Fee.
As disclosed on the statement of cash flows, the Series had a net
loss of $224,738 for the three months ended June 30, 1996.
However, after adjusting for Equity in Losses of Project
Partnerships of $198,280 and the changes in operating assets and
liabilities net cash used in operating activities was $6,868. Cash
provided by investing activities totaled $5,681 consisting of cash
distributions received from the Project Partnerships. There were
no unusual events or trends to describe.
<PAGE>
PART II. OTHER INFORMATION
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits - NONE
b. Reports on Form 8-K - NONE
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed by the following persons on
behalf of the Registrant and in the capacities and on the dates
indicated.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
By: RJ Credit Partners, Inc.
Managing General Partner
Date: August 15, 1996 By:/s/ Ronald M. Diner
Ronald M. Diner
President
Date: August 15, 1996 By:/s/ Sandra L. Furey
Sandra L. Furey
Secretary and Treasurer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> JUN-30-1996
<CASH> 1,262,438
<SECURITIES> 2,100,484
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,498,170
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 14,919,437
<CURRENT-LIABILITIES> 269,734
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 13,479,059
<TOTAL-LIABILITY-AND-EQUITY> 14,919,437
<SALES> 0
<TOTAL-REVENUES> 52,234
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 138,760
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (784,721)
<INCOME-TAX> 0
<INCOME-CONTINUING> (784,721)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (784,721)
<EPS-PRIMARY> (20.87)<F1>
<EPS-DILUTED> (20.87)<F1>
<FN>
<F1>EPS IS NET LOSS PER $1,000 LIMITED PARTNERSHIP UNIT.
</FN>
</TABLE>
