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 September 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 September 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
SEPTEMBER 30, MARCH 31,
1997 1997
----------- -----------
SERIES 2 (Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 147,709 $ 138,561
Investments in Securities 45,976 45,757
---------- ----------
Total Current Assets 193,685 184,318
Investments in Securities 314,424 346,730
Investments in Project
Partnerships, Net 637,689 814,883
---------- ----------
Total Assets $1,145,798 $1,345,931
========== ==========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 39,195 $ 43,644
Long-Term Liabilities:
Payable to General Partners 262,995 261,410
Partners' Equity:
Assignor Limited Partner
Units of limited Partnership
interest consisting of 40,000
authorized BAC's, of which 37,228
at September 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
September 30 and March 31, 1997
issued and outstanding 888,972 1,084,268
General Partners (45,364) (43,391)
---------- ----------
Total Partners' Equity 843,608 1,040,877
---------- ----------
Total Liabilities and
Partners Equity $1,145,798 $1,345,931
========== ==========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
SEPTEMBER 30, MARCH 31,
1997 1997
----------- ----------
SERIES 3 (Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 119,991 $ 109,925
Investments in Securities 40,895 40,699
---------- ----------
Total Current Assets 160,886 150,624
Investments in Securities 279,673 308,410
Investments in Project
Partnerships, Net 447,024 584,189
---------- ----------
Total Assets $ 887,583 $1,043,223
========== ==========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 46,304 $ 48,117
Long-Term Liabilities:
Payable to General Partners 204,214 212,944
Partners' Equity:
Assignor Limited Partner
Units of limited Partnership
interest consisting of 40,000
authorized BAC's, of which 37,228
at September 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
September 30 and March 31, 1997
issued and outstanding 678,510 822,156
General Partners (41,445) (39,994)
---------- ----------
Total Partners' Equity 637,065 782,162
---------- ----------
Total Liabilities and
Partners Equity $ 887,583 $1,043,223
========== ==========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
SEPTEMBER 30, MARCH 31,
1997 1997
----------- ----------
SERIES 4 (Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 188,876 $ 182,773
Investments in Securities 51,810 51,562
---------- ----------
Total Current Assets 240,686 234,335
Investments in Securities 354,317 390,723
Investments in Project
Partnerships, Net 1,258,446 1,423,319
---------- ----------
Total Assets $1,853,449 $2,048,377
========== ==========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 51,347 $ 52,967
Long-Term Liabilities:
Payable to General Partners 243,207 246,861
Partners' Equity:
Assignor Limited Partner
Units of limited Partnership
interest consisting of 40,000
authorized BAC's, of which 37,228
at September 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
September 30 and March 31, 1997
issued and outstanding 1,603,960 1,791,717
General Partners (45,065) (43,168)
---------- ----------
Total Partners' Equity 1,558,895 1,748,549
---------- ----------
Total Liabilities and
Partners Equity $1,853,449 $2,048,377
========== ==========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
SEPTEMBER 30, MARCH 31,
1997 1997
----------- ----------
SERIES 5 (Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 265,157 $ 259,006
Investments in Securities 64,574 64,266
---------- ----------
Total Current Assets 329,731 323,272
Investments in Securities 441,611 486,986
Investments in Project
Partnerships, Net 1,875,106 2,268,632
---------- ----------
Total Assets $2,646,448 $3,078,890
========== ==========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 68,966 $ 70,909
Long-Term Liabilities:
Payable to General Partners 228,112 237,669
Partners' Equity:
Assignor Limited Partner
Units of limited Partnership
interest consisting of 40,000
authorized BAC's, of which 37,228
at September 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
September 30 and March 31, 1997
issued and outstanding 2,401,499 2,818,232
General Partners (52,129) (47,920)
---------- ----------
Total Partners' Equity 2,349,370 2,770,312
---------- ----------
Total Liabilities and
Partners Equity $2,646,448 $3,078,890
========== ==========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
SEPTEMBER 30, MARCH 31,
1997 1997
----------- ----------
SERIES 6 (Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 337,620 $ 396,736
Investments in Securities 47,162 45,870
---------- ----------
Total Current Assets 384,782 442,606
Investments in Securities 407,396 393,657
Investments in Project
Partnerships, Net 3,494,396 3,912,526
---------- ----------
Total Assets $4,286,574 $4,748,789
========== ==========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 64,088 $ 66,605
Long-Term Liabilities:
Payable to General Partners 290,086 293,418
Partners' Equity:
Assignor Limited Partner
Units of limited Partnership
interest consisting of 40,000
authorized BAC's, of which 37,228
at September 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
September 30 and March 31, 1997
issued and outstanding 3,981,803 4,433,605
General Partners (49,403) (44,839)
---------- ----------
Total Partners' Equity 3,932,400 4,388,766
---------- ----------
Total Liabilities and
Partners Equity $4,286,574 $4,748,789
========== ==========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
SEPTEMBER 30, MARCH 31,
1997 1997
----------- ----------
TOTAL SERIES 2 - 6 (Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 1,059,353 $ 1,087,001
Investments in Securities 250,417 248,154
----------- -----------
Total Current Assets 1,309,770 1,335,155
Investments in Securities 1,797,421 1,926,506
Investments in Project
Partnerships, Net 7,712,661 9,003,549
----------- -----------
Total Assets $10,819,852 $12,265,210
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 269,900 $ 282,242
Long-Term Liabilities:
Payable to General Partners 1,228,614 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 September 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
September 30 and March 31, 1997
issued and outstanding 9,554,744 10,949,978
General Partners (233,406) (219,312)
----------- -----------
Total Partners' Equity 9,321,338 10,730,666
----------- -----------
Total Liabilities and
Partners Equity $10,819,852 $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 SEPTEMBER 30,
1997 1996
SERIES 2 ----------- ----------
Revenues:
Interest Income $ 10,457 $ 9,144
----------- ----------
Expenses:
Asset Management Fee-
General Partner 17,222 17,250
General and Administrative-
General Partner 2,344 1,676
General and Administrative-
Other 5,577 7,158
Amortization 592 1,203
----------- ----------
Total Expenses 25,735 27,287
----------- ----------
Loss Before Equity in Losses of
Project Partnerships (15,278) (18,143)
Equity in Losses of Project
Partnerships (45,452) (116,078)
----------- -----------
Net Loss $ (60,730) $ (134,221)
=========== ===========
Allocation of Net Loss:
Assignees $ (60,123) $ (132,879)
General Partners (607) (1,342)
----------- -----------
$ (60,730) $ (134,221)
=========== ===========
Net Loss Per Beneficial
Assignee Certificate $ (9.80) $ (21.66)
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 SEPTEMBER 30,
1997 1996
SERIES 3 ----------- ----------
Revenues:
Interest Income $ 7,787 $ 8,024
----------- ----------
Expenses:
Asset Management Fee-
General Partner 15,948 15,982
General and Administrative-
General Partner 2,451 1,751
General and Administrative-
Other 5,011 10,281
Amortization (404) 319
----------- ----------
Total Expenses 23,006 28,333
----------- ----------
Loss Before Equity in Losses of
Project Partnerships (15,219) (20,309)
Equity in Losses of Project
Partnerships (56,357) (120,574)
----------- -----------
Net Loss $ (71,576) $ (140,883)
=========== ===========
Allocation of Net Loss:
Assignees $ (70,860) $ (139,474)
General Partners (716) (1,409)
----------- -----------
$ (71,576) $ (140,883)
=========== ===========
Net Loss Per Beneficial
Assignee Certificate $ (12.99) $ (25.56)
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 SEPTEMBER 30,
1997 1996
SERIES 4 ----------- ----------
Revenues:
Interest Income $ 10,277 $ 10,625
----------- ----------
Expenses:
Asset Management Fee-
General Partner 19,568 19,596
General and Administrative-
General Partner 3,089 2,209
General and Administrative-
Other 6,656 7,384
Amortization (489) 847
----------- ----------
Total Expenses 28,824 30,036
----------- ----------
Loss Before Equity in Losses of
Project Partnerships (18,547) (19,411)
Equity in Losses of Project
Partnerships (27,064) (155,597)
----------- -----------
Net Loss $ (45,611) $ (175,008)
=========== ===========
Allocation of Net Loss:
Assignees $ (45,155) $ (173,258)
General Partners (456) (1,750)
----------- -----------
$ (45,611) $ (175,008)
=========== ===========
Net Loss Per Beneficial
Assignee Certificate $ (6.53) $ (25.06)
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 SEPTEMBER 30,
1997 1996
SERIES 5 ----------- ----------
Revenues:
Interest Income $ 13,213 $ 13,576
----------- ----------
Expenses:
Asset Management Fee-
General Partner 24,211 24,253
General and Administrative-
General Partner 3,835 2,742
General and Administrative-
Other 8,695 9,406
Amortization 2,751 3,116
----------- ----------
Total Expenses 39,492 39,517
----------- ----------
Loss Before Equity in Losses of
Project Partnerships (26,279) (25,941)
Equity in Losses of Project
Partnerships (218,011) (250,900)
----------- -----------
Net Loss $ (244,290) $ (276,841)
=========== ===========
Allocation of Net Loss:
Assignees $ (241,847) $ (274,073)
General Partners (2,443) (2,768)
----------- -----------
$ (244,290) $ (276,841)
=========== ===========
Net Loss Per Beneficial
Assignee Certificate $ (28.07) $ (31.81)
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 SEPTEMBER 30,
1997 1996
SERIES 6 ----------- ----------
Revenues:
Interest Income $ 12,484 $ 12,071
----------- ----------
Expenses:
Asset Management Fee-
General Partner 26,851 26,916
General and Administrative-
General Partner 4,047 2,895
General and Administrative-
Other 8,622 6,909
Amortization 5,512 5,664
----------- ----------
Total Expenses 45,032 42,384
----------- ----------
Loss Before Equity in Losses of
Project Partnerships (32,548) (30,313)
Equity in Losses of Project
Partnerships (171,286) (174,399)
----------- -----------
Net Loss $ (203,834) $ (204,712)
=========== ===========
Allocation of Net Loss:
Assignees $ (201,796) $ (202,665)
General Partners (2,038) (2,047)
----------- -----------
$ (203,834) $ (204,712)
=========== ===========
Net Loss Per Beneficial
Assignee Certificate $ (19.97) $ (20.06)
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 SEPTEMBER 30,
1997 1996
TOTAL SERIES 2-6 ------------ -----------
Revenues:
Interest Income $ 54,218 $ 53,440
------------ -----------
Expenses:
Asset Management Fee-
General Partner 103,800 103,997
General and Administrative-
General Partner 15,766 11,273
General and Administrative-
Other 34,561 41,138
Amortization 7,962 11,149
------------ -----------
Total Expenses 162,089 167,557
------------ -----------
Loss Before Equity in Losses of
Project Partnerships (107,871) (114,177)
Equity in Losses of Project
Partnerships (518,170) (817,548)
------------ ------------
Net Loss $ (626,041) $ (931,665)
============ ============
Allocation of Net Loss:
Assignees $ (619,781) $ (922,348)
General Partners (6,260) (9,317)
------------ ------------
$ (626,041) $ (931,665)
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
FOR THE SIX MONTHS ENDED SEPTEMBER 30,
1997 1996
SERIES 2 ----------- ----------
Revenues:
Interest Income $ 20,193 $ 18,436
----------- ----------
Expenses:
Asset Management Fee-
General Partner 34,444 34,500
General and Administrative-
General Partner 4,216 3,340
General and Administrative-
Other 6,804 9,205
Amortization 1,184 2,406
----------- ----------
Total Expenses 46,648 49,451
----------- ----------
Loss Before Equity in Losses of
Project Partnerships (26,455) (31,015)
Equity in Losses of Project
Partnerships (170,814) (236,730)
----------- -----------
Net Loss $ (197,269) $ (267,745)
=========== ===========
Allocation of Net Loss:
Assignees $ (195,296) $ (265,068)
General Partners (1,973) (2,677)
----------- -----------
$ (197,269) $ (267,745)
=========== ===========
Net Loss Per Beneficial
Assignee Certificate $ (31.83) $ (43.20)
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 SIX MONTHS ENDED SEPTEMBER 30,
1997 1996
SERIES 3 ----------- ----------
Revenues:
Interest Income $ 15,087 $ 15,679
----------- ----------
Expenses:
Asset Management Fee-
General Partner 31,896 31,964
General and Administrative-
General Partner 4,408 3,493
General and Administrative-
Other 6,392 12,158
Amortization (808) 638
----------- ----------
Total Expenses 41,888 48,253
----------- ----------
Loss Before Equity in Losses of
Project Partnerships (26,801) (32,574)
Equity in Losses of Project
Partnerships (118,296) (190,302)
----------- -----------
Net Loss $ (145,097) $ (222,876)
=========== ===========
Allocation of Net Loss:
Assignees $ (143,646) $ (220,647)
General Partners (1,451) (2,229)
----------- -----------
$ (145,097) $ (222,876)
=========== ===========
Net Loss Per Beneficial
Assignee Certificate $ (26.33) $ (40.44)
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 SIX MONTHS ENDED SEPTEMBER 30,
1997 1996
SERIES 4 ----------- ----------
Revenues:
Interest Income $ 20,014 $ 20,859
----------- ----------
Expenses:
Asset Management Fee-
General Partner 39,136 39,192
General and Administrative-
General Partner 5,557 4,403
General and Administrative-
Other 8,233 9,963
Amortization (978) 1,694
----------- ----------
Total Expenses 51,948 55,252
----------- ----------
Loss Before Equity in Losses of
Project Partnerships (31,934) (34,393)
Equity in Losses of Project
Partnerships (157,720) (305,961)
----------- -----------
Net Loss $ (189,654) $ (340,354)
=========== ===========
Allocation of Net Loss:
Assignees $ (187,757) $ (336,950)
General Partners (1,897) (3,404)
----------- -----------
$ (189,654) $ (340,354)
=========== ===========
Net Loss Per Beneficial
Assignee Certificate $ (27.15) $ (48.73)
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 SIX MONTHS ENDED SEPTEMBER 30,
1997 1996
SERIES 5 ----------- ----------
Revenues:
Interest Income $ 25,745 $ 26,713
----------- ----------
Expenses:
Asset Management Fee-
General Partner 48,422 48,506
General and Administrative-
General Partner 6,898 5,466
General and Administrative-
Other 10,596 12,399
Amortization 5,502 6,232
----------- ----------
Total Expenses 71,418 72,603
----------- ----------
Loss Before Equity in Losses of
Project Partnerships (45,673) (45,890)
Equity in Losses of Project
Partnerships (375,269) (410,071)
----------- -----------
Net Loss $ (420,942) $ (455,961)
=========== ===========
Allocation of Net Loss:
Assignees $ (416,733) $ (451,401)
General Partners (4,209) (4,560)
----------- -----------
$ (420,942) $ (455,961)
=========== ===========
Net Loss Per Beneficial
Assignee Certificate $ (48.37) $ (52.39)
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 SIX MONTHS ENDED SEPTEMBER 30,
1997 1996
SERIES 6 ----------- ----------
Revenues:
Interest Income $ 24,723 $ 23,987
----------- ----------
Expenses:
Asset Management Fee-
General Partner 53,702 53,832
General and Administrative-
General Partner 7,281 5,770
General and Administrative-
Other 10,880 9,828
Amortization 11,024 11,328
----------- ----------
Total Expenses 82,887 80,758
----------- ----------
Loss Before Equity in Losses of
Project Partnerships (58,164) (56,771)
Equity in Losses of Project
Partnerships (398,202) (372,679)
----------- -----------
Net Loss $ (456,366) $ (429,450)
=========== ===========
Allocation of Net Loss:
Assignees $ (451,802) $ (425,155)
General Partners (4,564) (4,295)
----------- -----------
$ (456,366) $ (429,450)
=========== ===========
Net Loss Per Beneficial
Assignee Certificate $ (44.71) $ (42.07)
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 SIX MONTHS ENDED SEPTEMBER 30,
1997 1996
TOTAL SERIES 2-6 ------------ -----------
Revenues:
Interest Income $ 105,762 $ 105,674
------------ -----------
Expenses:
Asset Management Fee-
General Partner 207,600 207,994
General and Administrative-
General Partner 28,360 22,472
General and Administrative-
Other 42,905 53,553
Amortization 15,924 22,298
------------ -----------
Total Expenses 294,789 306,317
------------ -----------
Loss Before Equity in Losses of
Project Partnerships (189,027) (200,643)
Equity in Losses of Project
Partnerships (1,220,301) (1,515,743)
------------ ------------
Net Loss $(1,409,328) $(1,716,386)
============ ============
Allocation of Net Loss:
Assignees $(1,395,234) $(1,699,221)
General Partners (14,094) (17,165)
------------ ------------
$(1,409,328) $(1,716,386)
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
(Unaudited)
FOR THE SIX MONTHS ENDED SEPTEMBER 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 (265,068) (2,677) (267,745)
------------ ---------- ------------
Balance at
September 30, 1996 $ 1,396,007 $ (40,242) $ 1,355,765
============ ========== ============
Balance at
March 31, 1997 $ 1,084,268 $ (43,391) $ 1,040,877
Net Loss (195,296) (1,973) (197,269)
------------ ---------- ------------
Balance at
September 30, 1997 $ 888,972 $ (45,364) $ 843,608
============ ========== ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
(Unaudited)
FOR THE SIX MONTHS ENDED SEPTEMBER 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 (220,647) (2,229) (222,876)
------------ ---------- ------------
Balance at
September 30, 1996 $ 939,378 $ (38,810) $ 900,568
============ ========== ============
Balance at
March 31, 1997 $ 822,156 $ (39,994) $ 782,162
Net Loss (143,646) (1,451) (145,097)
------------ ---------- ------------
Balance at
September 30, 1997 $ 678,510 $ (41,445) $ 637,065
============ ========== ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
(Unaudited)
FOR THE SIX MONTHS ENDED SEPTEMBER 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 (336,950) (3,404) (340,354)
------------ ---------- ------------
Balance at
September 30, 1996 2,143,817 (39,612) 2,104,205
============ ========== ============
Balance at
March 31, 1997 $ 1,791,717 $ (43,168) $ 1,748,549
Net Loss (187,757) (1,897) (189,654)
------------ ---------- ------------
Balance at
September 30, 1997 $ 1,603,960 $ (45,065) $ 1,558,895
============ ========== ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
(Unaudited)
FOR THE SIX MONTHS ENDED SEPTEMBER 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 (451,401) (4,560) (455,961)
------------ ---------- ------------
Balance at
September 30, 1996 $ 3,354,219 $ (42,506) $ 3,311,713
============ ========== ============
Balance at
March 31, 1997 $ 2,818,232 $ (47,920) $ 2,770,312
Net Loss (416,733) (4,209) (420,942)
------------ ---------- ------------
Balance at
September 30, 1997 $ 2,401,499 $ (52,129) $ 2,349,370
============ ========== ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
(Unaudited)
FOR THE SIX MONTHS ENDED SEPTEMBER 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 (425,155) (4,295) (429,450)
------------ ---------- ------------
Balance at
September 30, 1996 $ 4,915,120 $ (39,976) $ 4,875,143
============ ========== ============
Balance at
March 31, 1997 $ 4,433,605 $ (44,839) 4,388,766
Net Loss (451,802) (4,564) (456,366)
------------ ---------- ------------
Balance at
September 30, 1997 $ 3,981,803 $ (49,403) $ 3,932,400
============ ========== ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
(Unaudited)
FOR THE SIX MONTHS ENDED SEPTEMBER 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 (1,699,221) (17,165) (1,716,386)
------------ ---------- ------------
Balance at
September 30, 1996 $12,748,540 $(201,146) $12,547,394
============ ========== ============
Balance at
March 31, 1997 $10,949,978 $(219,312) $10,730,666
Net Loss (1,395,234) (14,094) (1,409,328)
------------ ---------- ------------
Balance at
September 30, 1997 $ 9,554,744 $(233,406) $ 9,321,338
============ ========== ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1997 AND 1996:
1997 1996
SERIES 2 --------- ---------
Cash Flows from Operating Activities:
Net Loss $ (197,269) $ (267,745)
Adjustments to Reconcile
Net Loss to Net Cash
Provided by (Used in)
Operating Activities:
Amortization 1,184 2,406
Accreted Interest Income
on Investments in
Securities (13,605) (14,183)
Equity in Losses of
Project Partnerships 170,814 236,730
Interest Income from Redemption
of Securities 13,628 10,359
Payment of Asset Management Fee (32,000) (31,000)
Changes in Operating Assets
and Liabilities:
Increase in Payable to
General Partners 29,135 31,950
------------ ------------
Net Cash Provided by
(Used in) Operating
Activities (28,113) (31,483)
------------ ------------
Cash Flows from Investing Activities:
Distributions Received from
Project Partnerships 5,196 5,709
Redemption of Investment
in Securities 32,065 33,294
------------ ------------
Net Cash Provided by
(Used in) Investing
Activities 37,261 39,003
------------ ------------
Increase (Decrease) in Cash and
Cash Equivalents 9,148 7,520
Cash and Cash Equivalents at
Beginning of Year 138,561 135,519
------------ ------------
Cash and Cash Equivalents at
End of Year $ 147,709 $ 143,039
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1997 AND 1996:
1997 1996
SERIES 3 --------- ---------
Cash Flows from Operating Activities:
Net Loss $ (145,097) $ (222,876)
Adjustments to Reconcile
Net Loss to Net Cash
Provided by (Used in)
Operating Activities:
Amortization (808) 638
Accreted Interest Income
on Investments in
Securities (12,101) (12,616)
Equity in Losses of
Project Partnerships 118,296 190,302
Interest Income from Redemption
of Securities 12,121 9,214
Payment of Asset Management Fee (40,000) (38,000)
Changes in Operating Assets
and Liabilities:
Increase in Payable to
General Partners 29,457 29,274
------------ ------------
Net Cash Used in
Operating
Activities (38,132) (44,064)
------------ ------------
Cash Flows from Investing Activities:
Distributions Received from
Project Partnerships 19,677 23,757
Redemption of Investment
in Securities 28,521 29,617
------------ ------------
Net Cash Provided by
(Used in) Investing
Activities 48,198 53,374
------------ ------------
Increase (Decrease) in Cash and
Cash Equivalents 10,066 9,310
Cash and Cash Equivalents at
Beginning of Year 109,925 97,988
------------ ------------
Cash and Cash Equivalents at
End of Year $ 119,991 $ 107,298
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1997 AND 1996:
1997 1996
SERIES 4 --------- ---------
Cash Flows from Operating Activities:
Net Loss $ (189,654) $ (340,354)
Adjustments to Reconcile
Net Loss to Net Cash
Provided by (Used in)
Operating Activities:
Amortization (978) 1,694
Accreted Interest Income
on Investments in
Securities (15,331) (15,983)
Equity in Losses of
Project Partnerships 157,720 305,961
Interest Income from Redemption
of Securities 15,358 11,674
Payment of Asset Management Fee (42,000) (41,000)
Changes in Operating Assets
and Liabilities:
Increase in Payable to
General Partners 36,724 36,115
------------ ------------
Net Cash Used in
Operating
Activities (38,161) (41,893)
------------ ------------
Cash Flows from Investing Activities:
Distributions Received from
Project Partnerships 8,131 10,900
Redemption of Investment
in Securities 36,133 37,522
------------ ------------
Net Cash Provided by
(Used in) Investing
Activities 44,264 48,422
------------ ------------
Increase (Decrease) in Cash and
Cash Equivalents 6,103 6,529
Cash and Cash Equivalents at
Beginning of Year 182,773 178,506
------------ ------------
Cash and Cash Equivalents at
End of Year $ 188,876 $ 185,035
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1997 AND 1996:
1997 1996
SERIES 5 --------- ---------
Cash Flows from Operating Activities:
Net Loss $ (420,942) $ (455,961)
Adjustments to Reconcile
Net Loss to Net Cash
Provided by (Used in)
Operating Activities:
Amortization 5,502 6,232
Accreted Interest Income
on Investments in
Securities (19,108) (19,921)
Equity in Losses of
Project Partnerships 375,269 410,071
Interest Income from Redemption
of Securities 19,140 14,550
Payment of Asset Management Fee (57,000) (57,000)
Changes in Operating Assets
and Liabilities:
Increase in Payable to
General Partners 45,500 44,584
------------ ------------
Net Cash Used in
Operating
Activities (51,639) (57,445)
------------ ------------
Cash Flows from Investing Activities:
Distributions Received from
Project Partnerships 12,755 6,462
Redemption of Investment
in Securities 45,035 46,767
------------ ------------
Net Cash Provided by
(Used in) Investing
Activities 57,790 53,229
------------ ------------
Increase (Decrease) in Cash and
Cash Equivalents 6,151 (4,216)
Cash and Cash Equivalents at
Beginning of Year 259,006 257,549
------------ ------------
Cash and Cash Equivalents at
End of Year $ 265,157 $ 253,333
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1997 AND 1996:
1997 1996
SERIES 6 --------- ---------
Cash Flows from Operating Activities:
Net Loss $ (456,366) $ (429,450)
Adjustments to Reconcile
Net Loss to Net Cash
Provided by (Used in)
Operating Activities:
Amortization 11,024 11,328
Accreted Interest Income
on Investments in
Securities (15,031) (15,171)
Equity in Losses of
Project Partnerships 398,202 372,679
Interest Income from Redemption
of Securities 0 0
Payment of Asset Management Fee (56,000) (50,000)
Changes in Operating Assets
and Liabilities:
Increase in Payable to
General Partners 50,151 49,496
----------- ------------
Net Cash Used in
Operating
Activities (68,020) (61,118)
---------- ------------
Cash Flows from Investing Activities:
Distributions Received from
Project Partnerships 8,904 12,984
Redemption of Investment
in Securities 0 0
----------- ------------
Net Cash Provided by
(Used in) Investing
Activities 8,904 12,984
----------- ------------
Increase (Decrease) in Cash and
Cash Equivalents (59,116) (48,134)
Cash and Cash Equivalents at
Beginning of Year 396,736 388,991
----------- ------------
Cash and Cash Equivalents at
End of Year $ 337,620 $ 340,857
=========== ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1997 AND 1996:
1997 1996
TOTAL SERIES 2-6 --------- ---------
Cash Flows from Operating Activities:
Net Loss $(1,409,328) $(1,716,386)
Adjustments to Reconcile
Net Loss to Net Cash
Provided by (Used in)
Operating Activities:
Amortization 15,924 22,298
Accreted Interest Income
on Investments in
Securities (75,176) (77,874)
Equity in Losses of
Project Partnerships 1,220,301 1,515,743
Interest Income from Redemption
of Securities 60,247 45,797
Payment of Asset Management Fee (227,000) (217,000)
Changes in Operating Assets
and Liabilities:
Increase in Payable to
General Partners 190,967 191,419
------------ ------------
Net Cash Used in
Operating
Activities (224,065) (236,003)
------------ ------------
Cash Flows from Investing Activities:
Distributions Received from
Project Partnerships 54,663 59,812
Redemption of Investment
in Securities 141,754 147,200
------------ ------------
Net Cash Provided by
(Used in) Investing
Activities 196,417 207,012
------------ ------------
Increase (Decrease) in Cash and
Cash Equivalents (27,648) (28,991)
Cash and Cash Equivalents at
Beginning of Year 1,087,001 1,058,553
------------ ------------
Cash and Cash Equivalents at
End of Year $ 1,059,353 $ 1,029,562
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
SEPTEMBER 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 September 30, 1997 Balance Sheet includes Investment in
Securities consisting of U.S. Government Security Strips which
represents their cost, plus accreted interest income of
$129,801 for Series 2, $112,787 for Series 3, $142,889 for
Series 4, $178,093 for Series 5 and $129,490 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 $ 384,219 $360,400 $ 23,819
Series 3 341,645 320,568 21,077
Series 4 432,997 406,126 26,871
Series 5 539,507 506,185 33,322
Series 6 474,552 454,558 19,994
As of September 30, 1997, the cost and accreted interest of
debt securities by contractual maturities is as follows:
Series 2 Series 3
Due within 1 year $ 45,976 $ 40,895
After 1 year through 5 years 169,176 150,479
After 5 years through 10 years 145,248 129,194
--------- ---------
Total Amount Carried on
Balance Sheet $ 360,400 $ 320,568
========= =========
Series 4 Series 5
Due within 1 year $ 51,810 $ 64,574
After 1 year through 5 years 190,642 237,610
After 5 years through 10 years 163,674 204,001
--------- ---------
Total Amount Carried on
Balance Sheet $ 406,126 $ 506,185
========= =========
Series 6 Total
Due within 1 year $ 47,162 $ 250,417
After 1 year through 5 years 188,009 935,916
After 5 years through 10 years 219,387 861,504
--------- ---------
Total Amount Carried on
Balance Sheet $ 454,558 $2,047,837
========= =========
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 six months ended September 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 $ 34,444 $ 34,500
Series 3 31,896 31,964
Series 4 39,136 39,192
Series 5 48,422 48,506
Series 6 53,702 53,832
--------- ---------
Total $ 207,600 $ 207,994
========= =========
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 $ 4,216 $ 3,340
Series 3 4,408 3,493
Series 4 5,557 4,403
Series 5 6,898 5,466
Series 6 7,281 5,770
--------- --------
Total $ 28,360 $ 22,472
========= ========
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS:
As of September 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:
September 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) 42,694 39,734
Cumulative equity in losses of
Project Partnerships (2) (4,193,185) (4,022,371)
Cumulative distributions received
from Project Partnerships (56,817) (51,621)
Acquisition fees and expenses 390,838 390,838
Accumulated amortization of
acquisition fees and expenses (70,519) (66,375)
------------ ------------
Investments in
Project Partnerships $ 637,689 $ 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 September 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 $251,655 for the period ended September 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 September 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:
September 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) 46,017 41,993
Cumulative equity in losses of
Project Partnerships (2) (3,741,909) (3,623,613)
Cumulative distributions received
from Project Partnerships (163,654) (143,977)
Acquisition fees and expenses 491,746 491,746
Accumulated amortization of
acquisition fees and expenses (73,889) (70,673)
------------ ------------
Investments in
Project Partnerships $ 447,024 $ 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 September 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 $749,079 for the period ended September 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 September 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:
September 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) 81,753 74,647
Cumulative equity in losses of
Project Partnerships (2) (4,161,101) (4,003,381)
Cumulative distributions received
from Project Partnerships (84,382) (76,251)
Acquisition fees and expenses 562,967 562,967
Accumulated amortization of
acquisition fees and expenses (93,310) (87,182)
------------ ------------
Investments in
Project Partnerships $ 1,258,446 $ 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 September 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 $220,442 for the period ended September 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 September 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:
September 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) 36,217 33,149
Cumulative equity in losses of
Project Partnerships (2) (4,753,897) (4,378,628)
Cumulative distributions received
from Project Partnerships (117,890) (105,135)
Acquisition fees and expenses 650,837 650,837
Accumulated amortization of
acquisition fees and expenses (104,633) (96,063)
------------ ------------
Investments in
Project Partnerships $ 1,875,106 $ 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 September 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 $73,359 for the period ended September 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 September 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:
September 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) (3,147) (2,849)
Cumulative equity in losses of
Project Partnerships (2) (4,531,098) (4,132,896)
Cumulative distributions received
from Project Partnerships (102,076) (93,172)
Acquisition fees and expenses 785,179 785,179
Accumulated amortization of
acquisition fees and expenses (116,677) (105,951)
------------ ------------
Investments in
Project Partnerships $ 3,494,396 $ 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 September 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 $126,174 for the period ended September 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:
September 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) 203,534 186,674
Cumulative equity in losses of
Project Partnerships (21,381,190) (20,160,889)
Cumulative distributions received
from Project Partnerships (524,819) (470,156)
Acquisition fees and expenses 2,881,567 2,881,567
Accumulated amortization of
acquisition fees and expenses (459,028) (426,244)
------------- -------------
Investments in
Project Partnerships $ 7,712,661 $ 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 June 30 of each year:
1997 1996
SERIES 2 ------------- --------------
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 1,645,940 $ 1,583,447
Investment properties, net 22,168,236 22,950,706
Other assets 10,058 2,377
------------- -------------
Total assets $ 23,824,234 $ 24,536,530
============= =============
Liabilities and Partners' Equity
Current liabilities $ 428,623 $ 423,058
Long-term debt 23,257,739 23,290,759
------------- -------------
Total liabilities 23,686,362 23,713,817
Partners' Equity
Limited Partner 63,980 733,799
General Partners 73,892 88,914
------------- ------------
137,872 822,713
Total liabilities and
partners' equity $ 23,824,234 $ 24,536,530
============= =============
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income $ 1,342,960 $ 1,287,603
Expenses:
Operating expenses 734,845 656,094
Interest expense 417,630 414,340
Depreciation and amortization 469,812 479,176
------------- -------------
Total expenses 1,622,287 1,549,610
Net loss $ (279,327) $ (262,007)
============= =============
Other partners' share
of net loss $ (2,793) $ (2,620)
Partnership's share
of net loss $ (276,534) $ (259,387)
Suspended loss 105,720 22,657
------------- -------------
Equity in Loss of
Project Partnerships $ (170,814) $ (236,730)
============= =============
<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 June 30 of each year:
1997 1996
SERIES 3 ------------- --------------
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 2,094,496 $ 1,966,829
Investment properties, net 19,383,407 20,223,468
Other assets 236,415 233,517
------------- -------------
Total assets $ 21,714,318 $ 22,423,814
============= =============
Liabilities and Partners' Equity
Current liabilities $ 543,028 $ 492,234
Long-term debt 21,830,460 21,871,583
------------- -------------
Total liabilities 22,373,488 22,363,817
Partners' Equity
Limited Partner (986,004) (304,933)
General Partners 326,834 364,930
------------- ------------
(659,170) 59,997
Total liabilities and
partners' equity $ 21,714,318 $ 22,423,814
============= =============
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income $ 1,210,651 $ 1,217,433
Expenses:
Operating expenses 742,330 744,049
Interest expense 308,623 292,418
Depreciation and amortization 460,693 463,155
------------- -------------
Total expenses 1,511,646 1,499,622
Net loss $ (300,995) $ (282,189)
============= =============
Other partners' share
of net loss $ (3,010) $ (2,822)
Partnership's share
of net loss $ (297,985) $ (279,367)
Suspended loss 179,689 89,065
------------- -------------
Equity in Loss of
Project Partnerships $ (118,296) $ (190,302)
============= =============
<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 June 30 of each year:
1997 1996
SERIES 4 ------------- --------------
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 2,100,912 $ 1,936,500
Investment properties, net 25,828,907 26,784,353
Other assets 24,858 22,385
------------- -------------
Total assets $ 27,954,677 $ 28,743,238
============= =============
Liabilities and Partners' Equity
Current liabilities $ 562,752 $ 589,582
Long-term debt 26,611,866 26,641,940
------------- -------------
Total liabilities 27,174,618 27,231,522
Partners' Equity
Limited Partner 529,747 1,227,606
General Partners 250,312 284,110
------------- ------------
780,059 1,511,716
Total liabilities and
partners' equity $ 27,954,677 $ 28,743,238
============= =============
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income $ 1,592,236 $ 1,568,591
Expenses:
Operating expenses 882,888 903,525
Interest expense 462,018 459,990
Depreciation and amortization 521,872 528,400
------------- -------------
Total expenses 1,866,778 1,891,915
Net loss $ (274,542) $ (323,324)
============= =============
Other partners' share
of net loss $ (2,745) $ (3,233)
Partnership's share
of net loss $ (271,797) $ (320,091)
Suspended loss 114,077 14,130
------------- -------------
Equity in Loss of
Project Partnerships $ (157,720) $ (305,961)
============= =============
<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 June 30 of each year:
1997 1996
SERIES 5 ------------- --------------
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 2,731,776 $ 2,463,229
Investment properties, net 32,306,100 33,612,772
Other assets 4,958 2,123
------------- -------------
Total assets $ 35,042,834 $ 36,078,124
============= =============
Liabilities and Partners' Equity
Current liabilities $ 824,094 $ 807,295
Long-term debt 32,897,396 32,945,488
------------- -------------
Total liabilities 33,721,490 33,752,783
Partners' Equity
Limited Partner 1,347,051 2,321,219
General Partners (25,707) 4,122
------------- ------------
1,321,344 2,325,341
Total liabilities and
partners' equity $ 35,042,834 $ 36,078,124
============= =============
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income $ 1,778,167 $ 1,761,025
Expenses:
Operating expenses 1,064,849 1,074,848
Interest expense 453,197 403,404
Depreciation and amortization 687,623 696,986
------------- -------------
Total expenses 2,205,669 2,175,238
Net loss $ (427,502) $ (414,213)
============= =============
Other partners' share
of net loss $ (4,275) $ (4,142)
Partnership's share
of net loss $ (423,227) $ (410,071)
Suspended loss 47,958 0
------------- -------------
Equity in Loss of
Project Partnerships $ (375,269) $ (410,071)
============= ==============
<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 June 30 of each year:
1997 1996
SERIES 6 ------------- --------------
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 2,904,433 $ 2,611,371
Investment properties, net 36,416,742 37,716,660
Other assets 15,352 23,382
------------- -------------
Total assets $ 39,336,527 $ 40,351,413
============= =============
Liabilities and Partners' Equity
Current liabilities $ 880,880 $ 928,080
Long-term debt 35,836,877 35,827,365
------------- -------------
Total liabilities 36,717,757 36,755,445
Partners' Equity
Limited Partner 2,748,170 3,708,349
General Partners (129,400) (112,381)
------------- ------------
2,618,770 3,595,968
Total liabilities and
partners' equity $ 39,336,527 $ 40,351,413
============= =============
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income $ 2,044,084 $ 1,973,212
Expenses:
Operating expenses 1,094,214 1,093,105
Interest expense 652,781 499,641
Depreciation and amortization 736,464 772,892
------------- -------------
Total expenses 2,483,459 2,365,638
Net loss $ (439,375) $ (392,426)
============= =============
Other partners' share
of net loss $ (4,394) $ (3,924)
Partnership's share
of net loss $ (434,981) $ (388,502)
Suspended loss 36,779 15,823
------------- -------------
Equity in Loss of
Project Partnerships $ (398,202) $ (372,679)
============= ==============
<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 June 30 of each year:
1997 1996
TOTAL SERIES 2 - 6 ------------- --------------
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 11,477,557 $ 10,561,376
Investment properties, net 136,103,392 141,287,959
Other assets 291,641 283,784
------------- -------------
Total assets $147,872,590 $152,133,119
============= =============
Liabilities and Partners' Equity
Current liabilities $ 3,239,377 $ 3,240,249
Long-term debt 140,434,338 140,577,135
------------- -------------
Total liabilities 143,673,715 143,817,384
Partners' Equity
Limited Partner 3,702,944 7,686,040
General Partners 495,931 629,695
------------- ------------
4,198,875 8,315,735
Total liabilities and
partners' equity $147,872,590 $152,133,119
============= =============
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income $ 7,968,098 $ 7,807,864
Expenses:
Operating expenses 4,519,126 4,471,621
Interest expense 2,294,249 2,069,793
Depreciation and amortization 2,876,464 2,940,609
------------- -------------
Total expenses 9,689,839 9,482,023
Net loss $ (1,721,741) $ (1,674,159)
============= =============
Other partners' share
of net loss $ (17,217) $ (16,741)
Partnership's share
of net loss $ (1,704,524) $ (1,657,418)
Suspended loss 484,223 141,675
------------- -------------
Equity in Loss of
Project Partnerships $ (1,220,301) $ (1,515,743)
============= ==============
<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
six and three months ended September 30, 1997 and September 30,
1996. The General and Administrative expenses - General Partner
and General and Administrative expenses - Other for the six and
three months ended September 30, 1997 are comparable for the same
periods ended September 30, 1996. 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. (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 for the six months ended September 30, 1997
decreased from $236,730 for the six months ended September 30, 1996
to $170,814 as a result of not including losses of $105,720 in 1997
as compared to $22,657 in 1996, as these losses would reduce the
investment in certain Project Partnerships below zero. 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 September 30, 1997, the Series had $147,709 of short-term
investments (Cash and Cash Equivalents). It also had $360,400 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 $197,269 for the six months ended September 30, 1997.
However, after adjusting for Equity in Losses of Project
Partnerships of $170,814 and the changes in operating assets and
liabilities, net cash used in operating activities was $28,113,
primarily due to the payment of the Asset Management Fee of
$32,000. Cash provided by investing activities totaled $37,261,
consisting of $5,196 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 for the six months ended September 30, 1997
decreased from $190,302 for the six months ended September 30, 1996
to $118,296 as a result of not including losses of $179,689 in 1997
as compared to $89,065 in 1996, as these losses would reduce the
investment in certain Project Partnerships below zero.
At September 30, 1997, the Series had $119,991 of short-term
investments (Cash and Cash Equivalents). It also had $320,568 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 $145,097 for the six months ended September 30, 1997.
However, after adjusting for Equity in Losses of Project
Partnerships of $118,296 and the changes in operating assets and
liabilities, net cash used in operating activities was $38,132,
primarily due to the Payment of the Asset Management Fee of
$40,000. Cash provided by investing activities totaled $48,198,
consisting of $19,677 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 for the six months ended September 30, 1997
decreased from $305,961 for the six months ended September 30, 1996
to $157,720 as a result of not including losses of $114,077 in 1997
as compared to $14,130 in 1996, as these losses would reduce the
investment in certain Project Partnerships below zero.
At September 30, 1997, the Series had $188,876 of short-term
investments (Cash and Cash Equivalents). It also had $406,126 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 $189,654 for the six months ended September 30, 1997.
However, after adjusting for Equity in Losses of Project
Partnerships of $157,750 and the changes in operating assets and
liabilities, net cash used in operating activities was $38,161,
primarily due to the payment of the Asset Management Fee of
$42,000. Cash provided by investing activities totaled $44,264,
consisting of $8,131 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 for the six months ended September 30, 1997
decreased from $410,071 for the six months ended September 30, 1996
to $375,269 as a result of not including losses of $47,958 in 1997
as compared to $0 in 1996, as these losses would reduce the
investment in certain Project Partnerships below zero.
At September 30, 1997, the Series had $265,157 of short-term
investments (Cash and Cash Equivalents). It also had $506,185 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 $420,942 for the six months ended September 30, 1997.
However, after adjusting for Equity in Losses of Project
Partnerships of $375,269 and the changes in operating assets and
liabilities, net cash used in operating activities was $51,639,
primarily due to the payment of the Asset Management Fee of
$57,000. Cash provided by investing activities totaled $57,790,
consisting of $12,755 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 six months ended
September 30, 1997 and September 30, 1996.
At September 30, 1997, the Series had $337,620 of short-term
investments (Cash and Cash Equivalents). It also had $454,558 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 $456,366 for the six months ended September 30, 1997.
However, after adjusting for Equity in Losses of Project
Partnerships of $398,202 and the changes in operating assets and
liabilities, net cash used in operating activities was $68,020,
primarily due to the payment of the Asset Management Fee of
$56,000. Cash provided by investing activities totaled $8,904,
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: November 3, 1997 By:/s/ Ronald M. Diner
Ronald M. Diner
President
Date: November 3, 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 SEPTEMBER 30, 1997.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> SEP-30-1997
<CASH> 1,059,353
<SECURITIES> 2,047,838
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,309,770
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 10,819,852
<CURRENT-LIABILITIES> 269,900
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 9,321,338
<TOTAL-LIABILITY-AND-EQUITY> 10,819,852
<SALES> 0
<TOTAL-REVENUES> 105,762
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 294,789
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,409,328)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,409,328)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,409,328)
<EPS-PRIMARY> (37.48)<F1>
<EPS-DILUTED> (37.48)<F1>
<FN>
<F1>EPS IS NET LOSS PER $1,000 LIMITED PARTNERSHIP UNIT.
</FN>
</TABLE>
