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, 1997
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, 1997
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 July 11, 1997
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,
1997 1997
----------- -----------
SERIES 2 (Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 342,705 $ 138,561
Receivable from Other Series 0 0
Investments in Securities 45,150 45,757
---------- ----------
Total Current Assets 387,855 184,318
Investments in Securities 308,313 346,730
Investments in Project
Partnerships, Net 686,289 814,883
---------- ----------
Total Assets $1,382,457 $1,345,931
========== ==========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 43,200 $ 43,644
Payable to Other Series 156,308 0
Long-Term Liabilities:
Payable to General Partners 278,611 261,410
Partners' Equity:
Assignor Limited Partner
Units of limited Partnership
interest consisting of 40,000
authorized BAC's, of which 37,228
at June 30, and March 31, 1997
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 and March 31, 1997
issued and outstanding 949,094 1,084,268
General Partners (44,756) (43,391)
---------- ----------
Total Partners' Equity 904,338 1,040,877
---------- ----------
Total Liabilities and
Partners Equity $1,382,457 $1,345,931
========== ==========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
JUNE 30, MARCH 31,
1997 1997
----------- ----------
SERIES 3 (Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 116,222 $ 109,925
Receivable from Other Series 40,642 0
Investments in Securities 40,160 40,699
---------- ----------
Total Current Assets 197,024 150,624
Investments in Securities 274,238 308,410
Investments in Project
Partnerships, Net 513,873 584,189
---------- ----------
Total Assets $ 985,135 $1,043,223
========== ==========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 47,354 $ 48,117
Payable to Other Series 0 0
Long-Term Liabilities:
Payable to General Partners 229,140 212,944
Partners' Equity:
Assignor Limited Partner
Units of limited Partnership
interest consisting of 40,000
authorized BAC's, of which 37,228
at June 30 and March 31, 1997
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 and March 31, 1997
issued and outstanding 749,370 822,156
General Partners (40,729) (39,994)
---------- ----------
Total Partners' Equity 708,641 782,162
---------- ----------
Total Liabilities and
Partners Equity $ 985,135 $1,043,223
========== ==========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
JUNE 30, MARCH 31,
1997 1997
----------- ----------
SERIES 4 (Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 187,312 $ 182,773
Receivable from Other Series 51,491 0
Investments in Securities 50,879 51,562
---------- ----------
Total Current Assets 289,682 234,335
Investments in Securities 347,431 390,723
Investments in Project
Partnerships, Net 1,286,317 1,423,319
---------- ----------
Total Assets $1,923,430 $2,048,377
========== ==========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 52,180 $ 52,967
Payable to Other Series 0 0
Long-Term Liabilities:
Payable to General Partners 266,744 246,861
Partners' Equity:
Assignor Limited Partner
Units of limited Partnership
interest consisting of 40,000
authorized BAC's, of which 37,228
at June 30 and March 31, 1997
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 and March 31, 1997
issued and outstanding 1,649,114 1,791,717
General Partners (44,608) (43,168)
---------- ----------
Total Partners' Equity 1,604,506 1,748,549
---------- ----------
Total Liabilities and
Partners Equity $1,923,430 $2,048,377
========== ==========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
JUNE 30, MARCH 31,
1997 1997
----------- ----------
SERIES 5 (Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 265,178 $ 259,006
Receivable from Other Series 64,175 0
Investments in Securities 63,414 64,266
---------- ----------
Total Current Assets 392,767 323,272
Investments in Securities 433,028 486,986
Investments in Project
Partnerships, Net 2,100,267 2,268,632
---------- ----------
Total Assets $2,926,062 $3,078,890
========== ==========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 70,131 $ 70,909
Payable to Other Series 0 0
Long-Term Liabilities:
Payable to General Partners 262,271 237,669
Partners' Equity:
Assignor Limited Partner
Units of limited Partnership
interest consisting of 40,000
authorized BAC's, of which 37,228
at June 30 and March 31, 1997
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 and March 31, 1997
issued and outstanding 2,643,347 2,818,232
General Partners (49,687) (47,920)
---------- ----------
Total Partners' Equity 2,593,660 2,770,312
---------- ----------
Total Liabilities and
Partners Equity $2,926,062 $3,078,890
========== ==========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
JUNE 30, MARCH 31,
1997 1997
----------- ----------
SERIES 6 (Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 401,938 $ 396,736
Receivable from Other Series 0 0
Investments in Securities 46,508 45,870
---------- ----------
Total Current Assets 448,446 442,606
Investments in Securities 400,430 393,657
Investments in Project
Partnerships, Net 3,673,707 3,912,526
---------- ----------
Total Assets $4,522,583 $4,748,789
========== ==========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 65,668 $ 66,605
Payable to Other Series 0 0
Long-Term Liabilities:
Payable to General Partners 320,681 293,418
Partners' Equity:
Assignor Limited Partner
Units of limited Partnership
interest consisting of 40,000
authorized BAC's, of which 37,228
at June 30 and March 31, 1997
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 and March 31, 1997
issued and outstanding 4,183,598 4,433,605
General Partners (47,364) (44,839)
---------- ----------
Total Partners' Equity 4,136,234 4,388,766
---------- ----------
Total Liabilities and
Partners Equity $4,522,583 $4,748,789
========== ==========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
JUNE 30, MARCH 31,
1997 1997
----------- ----------
TOTAL SERIES 2 - 6 (Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 1,313,355 $ 1,087,001
Receivable from Other Series 156,308 0
Investments in Securities 246,111 248,154
----------- -----------
Total Current Assets 1,715,774 1,335,155
Investments in Securities 1,763,440 1,926,506
Investments in Project
Partnerships, Net 8,260,453 9,003,549
----------- -----------
Total Assets $11,739,667 $12,265,210
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 278,533 $ 282,242
Payable from Other Series 156,308 0
Long-Term Liabilities:
Payable to General Partners 1,357,447 1,252,302
Partners' Equity:
Assignor Limited Partner
Units of limited Partnership
interest consisting of 40,000
authorized BAC's, of which 37,228
at June 30 and March 31, 1997
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 and March 31, 1997
issued and outstanding 10,174,523 10,949,978
General Partners (227,144) (219,312)
----------- -----------
Total Partners' Equity 9,947,379 10,730,666
----------- -----------
Total Liabilities and
Partners Equity $11,739,667 $12,265,210
=========== ===========
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,
1997 1996
SERIES 2 ----------- ----------
Revenues:
Interest Income $ 9,736 $ 9,292
----------- ----------
Expenses:
Asset Management Fee-
General Partner 17,222 17,250
General and Administrative-
General Partner 1,872 1,664
General and Administrative-
Other 1,227 2,047
Amortization 592 1,203
----------- ----------
Total Expenses 20,913 22,164
----------- ----------
Loss Before Equity in Losses of
Project Partnerships (11,177) (12,872)
Equity in Losses of Project
Partnerships (125,362) (120,652)
----------- -----------
Net Loss $ (136,539) $ (133,524)
=========== ===========
Allocation of Net Loss:
Assignees $ (135,174) $ (132,189)
General Partners (1,365) (1,335)
----------- -----------
$ (136,539) $ (133,524)
=========== ===========
Net Loss Per Beneficial
Assignee Certificate $ (22.03) $ (21.54)
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,
1997 1996
SERIES 3 ----------- ----------
Revenues:
Interest Income $ 7,300 $ 7,655
----------- ----------
Expenses:
Asset Management Fee-
General Partner 15,948 15,982
General and Administrative-
General Partner 1,957 1,742
General and Administrative-
Other 1,381 1,877
Amortization (404) 319
----------- ----------
Total Expenses 18,882 19,920
----------- ----------
Loss Before Equity in Losses of
Project Partnerships (11,582) (12,265)
Equity in Losses of Project
Partnerships (61,939) (69,728)
----------- -----------
Net Loss $ (73,521) $ (81,993)
=========== ===========
Allocation of Net Loss:
Assignees $ (72,786) $ (81,173)
General Partners (735) (820)
----------- -----------
$ (73,521) $ (81,993)
=========== ===========
Net Loss Per Beneficial
Assignee Certificate $ (13.34) $ (14.88)
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,
1997 1996
SERIES 4 ----------- ----------
Revenues:
Interest Income $ 9,737 $ 10,234
----------- ----------
Expenses:
Asset Management Fee-
General Partner 19,568 19,596
General and Administrative-
General Partner 2,468 2,194
General and Administrative-
Other 1,577 2,579
Amortization (489) 847
----------- ----------
Total Expenses 23,124 25,216
----------- ----------
Loss Before Equity in Losses of
Project Partnerships (13,387) (14,982)
Equity in Losses of Project
Partnerships (130,656) (150,364)
----------- -----------
Net Loss $ (144,043) $ (165,346)
=========== ===========
Allocation of Net Loss:
Assignees $ (142,603) $ (163,693)
General Partners (1,440) (1,653)
----------- -----------
$ (144,043) $ (165,346)
=========== ===========
Net Loss Per Beneficial
Assignee Certificate $ (20.62) $ (23.67)
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,
1997 1996
SERIES 5 ----------- ----------
Revenues:
Interest Income $ 12,532 $ 13,137
----------- ----------
Expenses:
Asset Management Fee-
General Partner 24,211 24,253
General and Administrative-
General Partner 3,063 2,724
General and Administrative-
Other 1,901 2,993
Amortization 2,751 3,116
----------- ----------
Total Expenses 31,926 33,086
----------- ----------
Loss Before Equity in Losses of
Project Partnerships (19,394) (19,949)
Equity in Losses of Project
Partnerships (157,258) (159,171)
----------- -----------
Net Loss $ (176,652) $ (179,120)
=========== ===========
Allocation of Net Loss:
Assignees $ (174,885) $ (177,329)
General Partners (1,767) (1,791)
----------- -----------
$ (176,652) $ (179,120)
=========== ===========
Net Loss Per Beneficial
Assignee Certificate $ (20.30) $ (20.58)
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,
1997 1996
SERIES 6 ----------- ----------
Revenues:
Interest Income $ 12,239 $ 11,916
----------- ----------
Expenses:
Asset Management Fee-
General Partner 26,851 26,916
General and Administrative-
General Partner 3,234 2,875
General and Administrative-
Other 2,258 2,919
Amortization 5,512 5,664
----------- ----------
Total Expenses 37,855 38,374
----------- ----------
Loss Before Equity in Losses of
Project Partnerships (25,616) (26,458)
Equity in Losses of Project
Partnerships (226,916) (198,280)
----------- -----------
Net Loss $ (252,532) $ (224,738)
=========== ===========
Allocation of Net Loss:
Assignees $ (250,007) $ (222,491)
General Partners (2,525) (2,247)
----------- -----------
$ (252,532) $ (224,738)
=========== ===========
Net Loss Per Beneficial
Assignee Certificate $ (24.74) $ (22.02)
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,
1997 1996
TOTAL SERIES 2-6 ------------ -----------
Revenues:
Interest Income $ 51,544 $ 52,234
------------ -----------
Expenses:
Asset Management Fee-
General Partner 103,800 103,997
General and Administrative-
General Partner 12,594 11,199
General and Administrative-
Other 8,344 12,415
Amortization 7,962 11,149
------------ -----------
Total Expenses 132,700 138,760
------------ -----------
Loss Before Equity in Losses of
Project Partnerships (81,156) (86,526)
Equity in Losses of Project
Partnerships (702,131) (698,195)
------------ ------------
Net Loss $ (783,287) $ (784,721)
============ ============
Allocation of Net Loss:
Assignees $ (775,455) $ (776,875)
General Partners (7,832) (7,846)
------------ ------------
$ (783,287) $ (784,721)
============ ============
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, 1997 AND 1996:
General
Assignees Partners Total
SERIES 2 ----------- ----------- -----------
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
============ ========== ============
Balance at
March 31, 1997 $ 1,084,268 $ (43,391) $ 1,040,877
Net Loss (135,174) (1,365) (136,539)
------------ ---------- ------------
Balance at
June 30, 1997 $ 949,094 $ (44,756) $ 904,338
============ ========== ============
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, 1997 AND 1996:
General
Assignees Partners Total
SERIES 3 ----------- ----------- -----------
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
============ ========== ============
Balance at
March 31, 1997 $ 822,156 $ (39,994) $ 782,162
Net Loss (72,786) (735) (73,521)
------------ ---------- ------------
Balance at
June 30, 1997 $ 749,370 $ (40,729) $ 708,641
============ ========== ============
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, 1997 AND 1996:
General
Assignees Partners Total
SERIES 4 ----------- ----------- -----------
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
============ ========== ============
Balance at
March 31, 1997 $ 1,791,717 $ (43,168) $ 1,748,549
Net Loss (142,603) (1,440) (144,043)
------------ ---------- ------------
Balance at
June 30, 1997 $ 1,649,114 $ (44,608) $ 1,604,506
============ ========== ============
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, 1997 AND 1996:
General
Assignees Partners Total
SERIES 5 ----------- ----------- -----------
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
============ ========== ============
Balance at
March 31, 1997 $ 2,818,232 $ (47,920) $ 2,770,312
Net Loss (174,885) (1,767) (176,652)
------------ ---------- ------------
Balance at
June 30, 1997 $ 2,643,347 $ (49,687) $ 2,593,660
============ ========== ============
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, 1997 AND 1996:
General
Assignees Partners Total
SERIES 6 ----------- ----------- -----------
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
============ ========== ============
Balance at
March 31, 1997 $ 4,433,605 $ (44,839) 4,388,766
Net Loss (250,007) (2,525) (252,532)
------------ ---------- ------------
Balance at
June 30, 1997 $ 4,183,598 $ (47,364) $ 4,136,234
============ ========== ============
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, 1997 AND 1996:
General
Assignees Partners Total
TOTAL SERIES 2-6 ----------- ----------- -----------
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
============ ========== ============
Balance at
March 31, 1997 $10,949,978 $(219,312) $10,730,666
Net Loss (775,455) (7,832) (783,287)
------------ ---------- ------------
Balance at
March 31, 1997 $10,174,523 $(227,144) $ 9,947,379
============ ========== ============
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, 1997 AND 1996:
1997 1996
SERIES 2 --------- ---------
Cash Flows from Operating Activities:
Net Loss $ (136,539) $ (133,524)
Adjustments to Reconcile
Net Loss to Net Cash
Provided by (Used in)
Operating Activities:
Amortization 592 1,203
Accreted Interest Income
on Investments in
Securities (6,669) (6,987)
Equity in Losses of
Project Partnerships 125,362 120,652
Interest Income from Redemption
of Securities 13,628 10,359
Changes in Operating Assets
and Liabilities:
Increase in Receivable
From Other Series 0 0
Increase in Payable
To Other Series 156,308 0
Increase in Payable to
General Partners 16,757 14,005
------------ ------------
Net Cash Provided by
(Used in) Operating
Activities 169,439 5,708
------------ ------------
Cash Flows from Investing Activities:
Distributions Received from
Project Partnerships 2,640 2,556
Redemption of Investment
in Securities 32,065 33,294
------------ ------------
Net Cash Provided by
(Used in) Investing
Activities 34,705 35,850
------------ ------------
Increase (Decrease) in Cash and
Cash Equivalents 204,144 41,558
Cash and Cash Equivalents at
Beginning of Year 138,561 135,519
------------ ------------
Cash and Cash Equivalents at
End of Year $ 342,705 $ 177,077
============ ============
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, 1997 AND 1996:
1997 1996
SERIES 3 --------- ---------
Cash Flows from Operating Activities:
Net Loss $ (73,521) $ (81,993)
Adjustments to Reconcile
Net Loss to Net Cash
Provided by (Used in)
Operating Activities:
Amortization (404) 319
Accreted Interest Income
on Investments in
Securities (5,931) (6,216)
Equity in Losses of
Project Partnerships 61,939 69,728
Interest Income from Redemption
of Securities 12,121 9,214
Changes in Operating Assets
and Liabilities:
Increase in Receivable
From Other Series (40,642) 0
Increase in Payable
From Other Series 0 0
Increase in Payable to
General Partners 15,433 12,560
------------ ------------
Net Cash Used in
Operating
Activities (31,005) 3,612
------------ ------------
Cash Flows from Investing Activities:
Distributions Received from
Project Partnerships 8,781 21,179
Redemption of Investment
in Securities 28,521 29,617
------------ ------------
Net Cash Provided by
(Used in) Investing
Activities 37,302 50,796
------------ ------------
Increase (Decrease) in Cash and
Cash Equivalents 6,297 54,408
Cash and Cash Equivalents at
Beginning of Year 109,925 97,988
------------ ------------
Cash and Cash Equivalents at
End of Year $ 116,222 $ 152,396
============ ============
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, 1997 AND 1996:
1997 1996
SERIES 4 --------- ---------
Cash Flows from Operating Activities:
Net Loss $ (144,043) $ (165,346)
Adjustments to Reconcile
Net Loss to Net Cash
Provided by (Used in)
Operating Activities:
Amortization (489) 847
Accreted Interest Income
on Investments in
Securities (7,514) (7,874)
Equity in Losses of
Project Partnerships 130,656 150,364
Interest Income from Redemption
of Securities 15,358 11,674
Changes in Operating Assets
and Liabilities:
Increase in Receivable
From Other Series (51,491) 0
Increase in Payable
To Other Series 0 0
Increase in Payable to
General Partners 19,094 15,641
------------ ------------
Net Cash Used in
Operating
Activities (38,429) 5,306
------------ ------------
Cash Flows from Investing Activities:
Distributions Received from
Project Partnerships 6,835 5,852
Redemption of Investment
in Securities 36,133 37,522
------------ ------------
Net Cash Provided by
(Used in) Investing
Activities 42,968 43,374
------------ ------------
Increase (Decrease) in Cash and
Cash Equivalents 4,539 48,680
Cash and Cash Equivalents at
Beginning of Year 182,773 178,506
------------ ------------
Cash and Cash Equivalents at
End of Year $ 187,312 $ 227,186
============ ============
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, 1997 AND 1996:
1997 1996
SERIES 5 --------- ---------
Cash Flows from Operating Activities:
Net Loss $ (176,652) $ (179,120)
Adjustments to Reconcile
Net Loss to Net Cash
Provided by (Used in)
Operating Activities:
Amortization 2,751 3,116
Accreted Interest Income
on Investments in
Securities (9,366) (9,814)
Equity in Losses of
Project Partnerships 157,258 159,171
Interest Income from Redemption
of Securities 19,140 14,550
Changes in Operating Assets
and Liabilities:
Increase in Receivable
From Other Series (64,175) 0
Increase in Payable
To Other Series 0 0
Increase in Payable to
General Partners 23,825 19,294
------------ ------------
Net Cash Used in
Operating
Activities (47,219) 7,197
------------ ------------
Cash Flows from Investing Activities:
Distributions Received from
Project Partnerships 8,356 6,462
Redemption of Investment
in Securities 45,035 46,767
------------ ------------
Net Cash Provided by
(Used in) Investing
Activities 53,391 53,229
------------ ------------
Increase (Decrease) in Cash and
Cash Equivalents 6,172 60,426
Cash and Cash Equivalents at
Beginning of Year 259,006 257,549
------------ ------------
Cash and Cash Equivalents at
End of Year $ 265,178 $ 317,975
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE YEARS THREE MONTHS ENDED JUNE 30, 1997 AND 1996:
1997 1996
SERIES 6 --------- ---------
Cash Flows from Operating Activities:
Net Loss $ (252,532) $ (224,738)
Adjustments to Reconcile
Net Loss to Net Cash
Provided by (Used in)
Operating Activities:
Amortization 5,512 5,664
Accreted Interest Income
on Investments in
Securities (7,411) (7,480)
Equity in Losses of
Project Partnerships 226,916 198,280
Interest Income from Redemption
of Securities 0 0
Changes in Operating Assets
and Liabilities:
Increase in Receivable
From Other Series 0 0
Increase in Payable
To Other Series 0 0
Increase in Payable to
General Partners 26,326 21,406
----------- ------------
Net Cash Used in
Operating
Activities (1,189) (6,868)
---------- ------------
Cash Flows from Investing Activities:
Distributions Received from
Project Partnerships 6,391 5,681
Redemption of Investment
in Securities 0 0
----------- ------------
Net Cash Provided by
(Used in) Investing
Activities 6,391 5,681
----------- ------------
Increase (Decrease) in Cash and
Cash Equivalents 5,202 (1,187)
Cash and Cash Equivalents at
Beginning of Year 396,736 388,991
----------- ------------
Cash and Cash Equivalents at
End of Year $ 401,938 $ 387,804
=========== ============
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, 1997 AND 1996:
1997 1996
TOTAL SERIES 2-6 --------- ---------
Cash Flows from Operating Activities:
Net Loss $ (783,287) $ (784,721)
Adjustments to Reconcile
Net Loss to Net Cash
Provided by (Used in)
Operating Activities:
Amortization 7,962 11,149
Accreted Interest Income
on Investments in
Securities (36,891) (38,371)
Equity in Losses of
Project Partnerships 702,131 698,195
Interest Income from Redemption
of Securities 60,247 45,797
Changes in Operating Assets
and Liabilities:
Increase in Receivable
From Other Series (156,308) 0
Increase in Payable
To Other Series 156,308 0
Increase in Payable to
General Partners 101,435 82,906
------------ ------------
Net Cash Used in
Operating
Activities 51,597 14,955
------------ ------------
Cash Flows from Investing Activities:
Distributions Received from
Project Partnerships 33,003 41,730
Redemption of Investment
in Securities 141,754 147,200
------------ ------------
Net Cash Provided by
(Used in) Investing
Activities 174,757 188,930
------------ ------------
Increase (Decrease) in Cash and
Cash Equivalents 226,354 203,885
Cash and Cash Equivalents at
Beginning of Year 1,087,001 1,058,553
------------ ------------
Cash and Cash Equivalents at
End of Year $ 1,313,355 $ 1,262,438
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
JUNE 30, 1997
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 partn-
er, 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 March 31, 1997, 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 Raymond James Tax Credit
Funds, 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 March 31, 1997. 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, 1995, 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 1996 and 1995 figures have been
reclassified, where appropriate, to conform with the financial
statement presentation used in 1997.
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, 1997. 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, 1997 Balance Sheet includes Investment in
Securities consisting of U.S. Government Security Strips which
represents their cost, plus accreted interest income of
$119,864 for Series 2, $106,617 for Series 3, $135,073 for
Series 4, $168,350 for Series 5 and $121,870 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.
Gross
Cost Plus Unrealized
Estimated Accreted Gains and
Market Value Interest (Losses)
Series 2 $ 372,058 $353,463 $ 18,595
Series 3 330,831 314,398 16,433
Series 4 419,291 398,310 20,981
Series 5 522,432 496,442 25,990
Series 6 458,657 446,938 11,719
As of June 30, 1997, the cost and accreted interest of debt
securities by contractual maturities is as follows:
<PAGE>
Series 2 Series 3
Due within 1 year $ 45,150 $ 40,160
After 1 year through 5 years 165,957 147,616
After 5 years through 10 years 142,356 126,622
--------- ---------
Total Amount Carried on
Balance Sheet $ 353,463 $ 314,398
========= =========
Series 4 Series 5
Due within 1 year $ 50,879 $ 63,414
After 1 year through 5 years 187,015 233,089
After 5 years through 10 years 160,416 199,939
--------- ---------
Total Amount Carried on
Balance Sheet $ 398,310 $ 496,442
========= =========
Series 6 Total
Due within 1 year $ 46,508 $ 246,111
After 1 year through 5 years 185,011 918,688
After 5 years through 10 years 215,419 844,752
--------- ---------
Total Amount Carried on
Balance Sheet $ 446,938 $2,009,551
========= =========
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 12 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.
The Payable to Project Partnerships represents unpaid
capital contributions to the Project Partnerships and will be
paid after certain performance criteria are met. Such
contributions are in turn payable to the general partner of
the Project Partnerships.
For the three months ended June 30, 1997 and 1996 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.
1997 1996
---- ------
Series 2 $ 17,222 $ 17,250
Series 3 15,948 15,982
Series 4 19,568 19,596
Series 5 24,211 24,253
Series 6 26,851 26,916
--------- ---------
Total $ 103,800 $ 103,997
========= =========
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.
Series 2 $ 1,872 $ 1,664
Series 3 1,957 1,742
Series 4 2,468 2,194
Series 5 3,063 2,724
Series 6 3,234 2,875
--------- --------
Total $ 12,594 $ 11,199
========= ========
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS:
As of June 30, 1997, 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,
1997 1997
SERIES 2 ---------- ----------
Capital Contributions to Project
Partnerships (purchase price paid
for limited partner interests in
Project Partnerships) $ 4,524,678 $ 4,524,678
Accumulated accretion/(amortization) of
the difference in the book value of
underlying assets of the Project
Partnerships over/under purchase
price (1) 41,214 39,734
Cumulative equity in losses of
Project Partnerships (2) (4,147,733) (4,022,371)
Cumulative distributions received
from Project Partnerships (54,261) (51,621)
Acquisition fees and expenses 390,838 390,838
Accumulated amortization of
acquisition fees and expenses (68,447) (66,375)
------------ ------------
Investments in
Project Partnerships $ 686,289 $ 814,883
============ ============
(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, 1997 and March 31, 1997 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 $192,090 for the period ended June 30, 1997 and
cumulative suspended losses of $145,935 for the year ended March
31, 1997 are not included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
As of June 30, 1997, 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,
1997 1997
SERIES 3 ---------- ----------
Capital Contributions to Project
Partnerships (purchase price paid
for limited partner interests in
Project Partnerships) $ 3,888,713 $ 3,888,713
Accumulated accretion/(amortization) of
the difference in the book value of
underlying assets of the Project
Partnerships over/under purchase
price (1) 44,005 41,993
Cumulative equity in losses of
Project Partnerships (2) (3,685,552) (3,623,613)
Cumulative distributions received
from Project Partnerships (152,758) (143,977)
Acquisition fees and expenses 491,746 491,746
Accumulated amortization of
acquisition fees and expenses (72,281) (70,673)
------------ ------------
Investments in
Project Partnerships $ 513,873 $ 584,189
============ ============
(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, 1997 and March 31, 1997 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 $671,919 for the period ended June 30, 1997 and
cumulative suspended losses of $569,390 for the year ended March
31, 1997 are not included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
As of June 30, 1997, 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,
1997 1997
SERIES 4 ---------- ----------
Capital Contributions to Project
Partnerships (purchase price paid
for limited partner interests in
Project Partnerships) $ 4,952,519 $ 4,952,519
Accumulated accretion/(amortization) of
the difference in the book value of
underlying assets of the Project
Partnerships over/under purchase
price (1) 78,200 74,647
Cumulative equity in losses of
Project Partnerships (2) (4,134,037) (4,003,381)
Cumulative distributions received
from Project Partnerships (83,086) (76,251)
Acquisition fees and expenses 562,967 562,967
Accumulated amortization of
acquisition fees and expenses (90,246) (87,182)
------------ ------------
Investments in
Project Partnerships $ 1,286,317 $ 1,423,319
============ ============
(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, 1997 and March 31, 1997 these excess
costs were $411,863.
(2) In accordance with the Partnership's accounting policy to not
carry Investments in Project Partnerships below zero, cumulative
suspended losses of $179,729 for the period ended June 30, 1997 and
cumulative suspended losses of $106,365 for the year ended March
31, 1997 are not included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
As of June 30, 1997, 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,
1997 1997
SERIES 5 ---------- ----------
Capital Contributions to Project
Partnerships (purchase price paid
for limited partner interests in
Project Partnerships) $ 6,164,472 $ 6,164,472
Accumulated accretion/(amortization) of
the difference in the book value of
underlying assets of the Project
Partnerships over/under purchase
price (1) 34,683 33,149
Cumulative equity in losses of
Project Partnerships (2) (4,535,868) (4,378,628)
Cumulative distributions received
from Project Partnerships (113,491) (105,135)
Acquisition fees and expenses 650,837 650,837
Accumulated amortization of
acquisition fees and expenses (100,348) (96,063)
------------ ------------
Investments in
Project Partnerships $ 2,100,267 $ 2,268,632
============ ============
(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, 1997 and March 31, 1997 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 $39,357 for the period ended June 30, 1997 and
cumulative suspended losses of $25,401 for the year ended March 31,
1997 are not included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
As of June 30, 1997, 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,
1997 1997
SERIES 6 ---------- ----------
Capital Contributions to Project
Partnerships (purchase price paid
for limited partner interests in
Project Partnerships) $ 7,462,215 $ 7,462,215
Accumulated accretion/(amortization) of
the difference in the book value of
underlying assets of the Project
Partnerships over/under purchase
price (1) (2,998) (2,849)
Cumulative equity in losses of
Project Partnerships (2) (4,359,812) (4,132,896)
Cumulative distributions received
from Project Partnerships (99,563) (93,172)
Acquisition fees and expenses 785,179 785,179
Accumulated amortization of
acquisition fees and expenses (111,314) (105,951)
------------ ------------
Investments in
Project Partnerships $ 3,673,707 $ 3,912,526
============ ============
(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, 1997 and March 31, 1997 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 $104,699 for the period ended June 30, 1997 and
cumulative suspended losses of $89,395 for the year ended March 31,
1997 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,
1997 1997
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 accretion/(amortization) of
the difference in the book value of
underlying assets of the Project
Partnerships over/under purchase
price (1) 195,104 186,674
Cumulative equity in losses of
Project Partnerships (20,863,020) (20,160,889)
Cumulative distributions received
from Project Partnerships (503,159) (470,156)
Acquisition fees and expenses 2,881,567 2,881,567
Accumulated amortization of
acquisition fees and expenses (442,636) (426,244)
------------- -------------
Investments in
Project Partnerships $ 8,260,453 $ 9,003,549
============= =============
<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:
1997 1996
SERIES 2 ------------- --------------
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 1,634,549 $ 1,479,746
Investment properties, net 22,326,462 23,181,244
Other assets 11,036 3,061
------------- -------------
Total assets $ 23,972,047 $ 24,664,051
============= =============
Liabilities and Partners' Equity
Current liabilities $ 467,917 $ 407,458
Long-term debt 23,260,181 23,305,419
------------- -------------
Total liabilities 23,728,098 23,712,877
Partners' Equity
Limited Partner 168,997 860,975
General Partners 74,952 90,199
------------- ------------
243,949 951,174
Total liabilities and
partners' equity $ 23,972,047 $ 24,664,051
============= =============
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income $ 663,171 $ 634,071
Expenses:
Operating expenses 389,835 322,660
Interest expense 206,339 205,367
Depreciation and amortization 240,247 239,590
------------- -------------
Total expenses 836,421 767,617
Net loss $ (173,250) $ (133,546)
============= =============
Other partners' share
of net loss $ (1,733) $ (1,335)
Partnership's share
of net loss $ (171,517) $ (132,211)
Suspended loss 46,155 11,559
------------- -------------
Equity in Loss of
Project Partnerships $ (125,362) $ (120,652)
============= =============
<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:
1997 1996
SERIES 3 ------------- --------------
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 2,051,340 $ 1,888,543
Investment properties, net 19,561,292 20,584,176
Other assets 243,192 234,599
------------- -------------
Total assets $ 21,855,824 $ 22,707,318
============= =============
Liabilities and Partners' Equity
Current liabilities $ 538,944 $ 612,858
Long-term debt 21,839,234 21,896,992
------------- -------------
Total liabilities 22,378,178 22,509,850
Partners' Equity
Limited Partner (851,512) (168,837)
General Partners 329,158 366,305
------------- ------------
(522,354) 197,468
Total liabilities and
partners' equity $ 21,855,824 $ 22,707,318
============= =============
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income $ 613,571 $ 608,589
Expenses:
Operating expenses 394,769 373,163
Interest expense 154,508 147,290
Depreciation and amortization 230,423 232,854
------------- -------------
Total expenses 779,700 753,307
Net loss $ (166,129) $ (144,718)
============= =============
Other partners' share
of net loss $ (1,661) $ (1,447)
Partnership's share
of net loss $ (164,468) $ (143,271)
Suspended loss 102,529 73,543
------------- -------------
Equity in Loss of
Project Partnerships $ (61,939) $ (69,728)
============= =============
<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:
1997 1996
SERIES 4 ------------- --------------
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 2,016,453 $ 1,896,011
Investment properties, net 26,071,590 27,026,624
Other assets 24,404 51,407
------------- -------------
Total assets $ 28,112,447 $ 28,974,042
============= =============
Liabilities and Partners' Equity
Current liabilities $ 647,739 $ 632,921
Long-term debt 26,615,588 26,662,834
------------- -------------
Total liabilities 27,263,327 27,295,755
Partners' Equity
Limited Partner 597,524 1,392,512
General Partners 251,596 285,775
------------- ------------
849,120 1,678,287
Total liabilities and
partners' equity $ 28,112,447 $ 28,974,042
============= =============
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income $ 782,939 $ 778,553
Expenses:
Operating expenses 478,798 441,472
Interest expense 249,829 229,364
Depreciation and amortization 260,393 264,470
------------- -------------
Total expenses 989,020 935,306
Net loss $ (206,081) $ (156,753)
============= =============
Other partners' share
of net loss $ (2,061) $ (1,568)
Partnership's share
of net loss $ (204,020) $ (155,185)
Suspended loss 73,364 4,821
------------- -------------
Equity in Loss of
Project Partnerships $ (130,656) $ (150,364)
============= =============
<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:
1997 1996
SERIES 5 ------------- --------------
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 2,629,405 $ 2,341,205
Investment properties, net 32,629,849 33,956,699
Other assets 5,057 2,924
------------- -------------
Total assets $ 35,264,311 $ 36,300,828
============= =============
Liabilities and Partners' Equity
Current liabilities $ 788,633 $ 751,322
Long-term debt 32,899,775 32,970,731
------------- -------------
Total liabilities 33,688,408 33,722,053
Partners' Equity
Limited Partner 1,599,064 2,572,119
General Partners (23,161) 6,656
------------- ------------
1,575,903 2,578,775
Total liabilities and
partners' equity $ 35,264,311 $ 36,300,828
============= =============
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income $ 880,340 $ 869,596
Expenses:
Operating expenses 490,050 471,489
Interest expense 219,451 206,653
Depreciation and amortization 343,782 352,233
------------- -------------
Total expenses 1,053,283 1,030,375
Net loss $ (172,943) $ (160,779)
============= =============
Other partners' share
of net loss $ (1,729) $ (1,608)
Partnership's share
of net loss $ (171,214) $ (159,171)
Suspended loss 13,956 0
------------- -------------
Equity in Loss of
Project Partnerships $ (157,258) $ (159,171)
============= ==============
<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:
1997 1996
SERIES 6 ------------- --------------
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 2,784,026 $ 2,508,965
Investment properties, net 36,759,850 38,090,663
Other assets 15,234 26,274
------------- -------------
Total assets $ 39,559,110 $ 40,625,902
============= =============
Liabilities and Partners' Equity
Current liabilities $ 898,230 $ 916,324
Long-term debt 35,847,402 35,930,403
------------- -------------
Total liabilities 36,745,632 36,846,727
Partners' Equity
Limited Partner 2,940,931 3,891,357
General Partners (127,453) (112,182)
------------- ------------
2,813,478 3,779,175
Total liabilities and
partners' equity $ 39,559,110 $ 40,625,902
============= =============
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income $ 959,693 $ 1,025,539
Expenses:
Operating expenses 562,341 595,647
Interest expense 274,912 246,615
Depreciation and amortization 367,107 390,847
------------- -------------
Total expenses 1,204,360 1,233,109
Net loss $ (244,667) $ (207,570)
============= =============
Other partners' share
of net loss $ (2,447) $ (2,076)
Partnership's share
of net loss $ (242,220) $ (206,494)
Suspended loss 15,304 7,214
------------- -------------
Equity in Loss of
Project Partnerships $ (226,916) $ (198,280)
============= ==============
<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:
1997 1996
TOTAL SERIES 2 - 6 ------------- --------------
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 11,115,773 $ 10,114,470
Investment properties, net 137,349,043 142,839,406
Other assets 298,923 318,265
------------- -------------
Total assets $148,763,739 $153,272,141
============= =============
Liabilities and Partners' Equity
Current liabilities $ 3,341,463 $ 3,320,883
Long-term debt 140,462,180 140,766,379
------------- -------------
Total liabilities 143,803,643 144,087,262
Partners' Equity
Limited Partner 4,455,004 8,548,126
General Partners 505,092 636,753
------------- ------------
4,960,096 9,184,879
Total liabilities and
partners' equity $148,763,739 $153,272,141
============= =============
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income $ 3,899,714 $ 3,916,348
Expenses:
Operating expenses 2,315,793 2,204,431
Interest expense 1,105,039 1,035,289
Depreciation and amortization 1,441,952 1,479,994
------------- -------------
Total expenses 4,862,784 4,719,714
Net loss $ (963,070) $ (806,366)
============= =============
Other partners' share
of net loss $ (9,631) $ (8,034)
Partnership's share
of net loss $ (953,439) $ (795,332)
Suspended loss 251,308 97,137
------------- -------------
Equity in Loss of
Project Partnerships $ (702,131) $ (698,195)
============= ==============
<PAGE>
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
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,
except as described below, interest income is comparable for the
three months ended June 30 1997 and June 30, 1996. The General and
Administrative expenses - General Partner and General and
Administrative expenses - Other for the three months ended June 30,
1997 are comparable to June 30, 1996. There were no unusual
variations in the operating results between these two period.
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. (Payment of any Asset Management Fee
unpaid at the time Gateway sells its interests in the Project
Partnerships is subordinated to the return of the investors'
original capital contributions).
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 were comparable for the three months ended
June 30, 1997 and June 30, 1996. 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, 1997, the Series had $342,705 of short-term
investments (Cash and Cash Equivalents). It also had $353,463 in
Zero Coupon Treasuries with annual maturities providing $47,508 in
fiscal year 1999 increasing to $66,285 in fiscal year 2007.
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 $136,539 for the three months ended June 30, 1997.
However, after adjusting for Equity in Losses of Project
Partnerships of $125,362 and the changes in operating assets and
liabilities, net cash provided by operating activities was
$169,439. This was due to a payable to other series which
consisted of cash to be transferred from the maturity of the Zero
Coupon Treasuries. Cash provided by investing activities totaled
$34,705, consisting of $2,640 in cash distributions from the
Project Partnerships and $32,065 from matured Zero Coupon
Treasuries. 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 were comparable for the three months ended
June 30, 1997 and June 30, 1996. At June 30, 1997, the Series had
$116,222 of short-term investments (Cash and Cash Equivalents).
It also had $314,398 in Zero Coupon Treasuries with annual
maturities providing $42,244 in fiscal year 1999 increasing to
$58,940 in fiscal year 2007. 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 $73,521 for the three months ended June 30, 1997. However,
after adjusting for Equity in Losses of Project Partnerships of
$61,939 and the changes in operating assets and liabilities, net
cash used in operating activities was $31,005. This was due to a
receivable from other series which consisted of cash to be
transferred from the maturity of the Zero Coupon Treasuries. Cash
provided by investing activities totaled $37,302, consisting of
$8,781 in cash distributions from the Project Partnerships and
$28,521 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, 1997 and June 30, 1996. 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, 1997, the Series had $187,312 of short-term
investments (Cash and Cash Equivalents). It also had $398,310 in
Zero Coupon Treasuries with annual maturities providing $53,539 in
fiscal year 1999 increasing to $74,700 in fiscal year 2007.
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 $144,043 for the three months ended June 30, 1997.
However, after adjusting for Equity in Losses of Project
Partnerships of $130,656 and the changes in operating assets and
liabilities, net cash used in operating activities was $38,429.
This was due to a receivable from other series which consisted of
cash to be transferred from the maturity of the Zero Coupon
Treasuries. Cash provided by investing activities totaled $42,968,
consisting of $6,835 in cash distributions from the Project
Partnerships and $36,133 from matured Zero Coupon Treasuries. 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 were comparable for the three months ended
June 30, 1997 and June 30, 1996. 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, 1997, the Series had $265,178 of short-term
investments (Cash and Cash Equivalents). It also had $496,442 in
Zero Coupon Treasuries with annual maturities providing $66,709 in
fiscal year 1999 increasing to $93,075 in fiscal year 2007.
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 $176,652 for the three months ended June 30, 1997.
However, after adjusting for Equity in Losses of Project
Partnerships of $157,258 and the changes in operating assets and
liabilities, net cash used in operating activities was $47,219.
This was due to a receivable from other series which consisted of
cash to be transferred from the maturity of the Zero Coupon
Treasuries. Cash provided by investing activities totaled $53,391,
consisting of $8,356 in cash distributions from the Project
Partnerships and $45,035 from matured Zero Coupon Treasuries. 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 were comparable for the three months ended
June 30, 1997 and June 30, 1996. 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, 1997, the Series had $401,938 of short-term
investments (Cash and Cash Equivalents). It also had $446,938 in
Zero Coupon Treasuries with annual maturities providing $48,000 in
fiscal year 1999 increasing to $83,000 in fiscal year 2007.
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 $252,532 for the three months ended June 30, 1997.
However, after adjusting for Equity in Losses of Project
Partnerships of $226,916 and the changes in operating assets and
liabilities, net cash used in operating activities was $1,189. Cash
provided by investing activities totaled $6,391, consisting of cash
distributions from the Project Partnerships. There were no unusual
events or trends to describe.
<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: Raymond James Tax Credit Funds,Inc.
Date: August 29, 1997 By:/s/ Ronald M. Diner
Ronald M. Diner
President
Date: August 29, 1997 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, 1997.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 1,313,355
<SECURITIES> 2,009,551
<RECEIVABLES> 156,308
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,715,774
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 11,739,667
<CURRENT-LIABILITIES> 434,841
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 9,947,379
<TOTAL-LIABILITY-AND-EQUITY> 11,739,667
<SALES> 0
<TOTAL-REVENUES> 51,544
<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> (20.83)<F1>
<EPS-DILUTED> (20.83)<F1>
<FN>
<F1>EPS IS NET LOSS PER $1,000 LIMITED PARTNERSHIP UNIT.
</FN>
</TABLE>
