<PAGE>
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 December 31, 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 December 31, 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
SERIES 2 December 31, March 31,
1997 1997
--------- ----------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 153,454 $ 138,561
Investments in Securities 46,817 45,757
------------ ------------
Total Current Assets 200,271 184,318
Investments in Securities 320,654 346,730
Investments in Project Partnerships, Net 519,859 814,883
------------- -------------
Total Assets $ 1,040,784 $ 1,345,931
============= =============
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners 43,137 43,644
------------- -------------
Total Current Liabilities 43,137 43,644
------------- -------------
Long-Term Liabilities:
Payable to General Partners 279,607 261,410
------------- -------------
Partners' Equity:
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's, of
which 37,228 at December, 31, 1997 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 December 31, 1997
and March 31, 1997, issued and
outstanding 764,659 1,084,268
General Partners (46,619) (43,391)
------------- -------------
Total Partners' Equity 718,040 1,040,877
------------- -------------
Total Liabilities and Partners' Equity $ 1,040,784 $ 1,345,931
============= =============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
SERIES 3 December 31, March 31,
1997 1997
--------- ----------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 122,681 $ 109,925
Investments in Securities 41,643 40,699
------------ ------------
Total Current Assets 164,324 150,624
Investments in Securities 285,214 308,410
Investments in Project Partnerships, Net 393,346 584,189
------------- -------------
Total Assets $ 842,884 $ 1,043,223
============= =============
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners 48,050 48,117
------------- -------------
Total Current Liabilities 48,050 48,117
------------- -------------
Long-Term Liabilities:
Payable to General Partners 219,521 212,944
------------- -------------
Partners' Equity:
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's, of
which 37,228 at December, 31, 1997 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 December 31, 1997
and March 31, 1997, issued and outstanding
General Partners 617,375 822,156
(42,062) (39,994)
Total Partners' Equity ------------- -------------
575,313 782,162
Total Liabilities and Partners' Equity ------------- -------------
$ 842,884 $ 1,043,223
============= =============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
SERIES 4 December 31, March 31,
1997 1997
--------- ----------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 192,330 $ 182,773
Investments in Securities 52,758 51,562
------------ ------------
Total Current Assets 245,088 234,335
Investments in Securities 361,337 390,723
Investments in Project Partnerships, Net 1,129,479 1,423,319
------------- -------------
Total Assets $ 1,735,904 $ 2,048,377
============= =============
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners 52,997 52,967
------------- -------------
Total Current Liabilities 52,997 52,967
------------- -------------
Long-Term Liabilities:
Payable to General Partners 261,969 246,861
------------- -------------
Partners' Equity:
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's, of
which 37,228 at December, 31, 1997 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 December 31, 1997
and March 31, 1997, issued and outstanding
General Partners 1,467,382 1,791,717
(46,444) (43,168)
Total Partners' Equity ------------- -------------
1,420,938 1,748,549
Total Liabilities and Partners' Equity ------------- -------------
$ 1,735,904 $ 2,048,377
============= =============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
SERIES 5 December 31, March 31,
1997 1997
--------- ----------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 265,740 $ 259,006
Investments in Securities 65,755 64,266
------------ ------------
Total Current Assets 331,495 323,272
Investments in Securities 450,361 486,986
Investments in Project Partnerships, Net 1,614,004 2,268,632
------------- -------------
Total Assets $ 2,395,860 $ 3,078,890
============= =============
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners 71,075 70,909
------------- -------------
Total Current Liabilities 71,075 70,909
------------- -------------
Long-Term Liabilities:
Payable to General Partners 251,323 237,669
------------- -------------
Partners' Equity:
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's, of
which 37,228 at December, 31, 1997 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 December 31, 1997
and March 31, 1997, issued and
outstanding 2,128,350 2,818,232
General Partners (54,888) (47,920)
------------- -------------
Total Partners' Equity 2,073,462 2,770,312
------------- -------------
Total Liabilities and Partners' Equity $ 2,395,860 $ 3,078,890
============= =============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
SERIES 6 December 31, March 31,
1997 1997
--------- ----------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 341,744 $ 396,736
Investments in Securities 47,825 45,870
------------ ------------
Total Current Assets 389,569 442,606
Investments in Securities 414,485 393,657
Investments in Project Partnerships, Net 3,276,077 3,912,526
------------- -------------
Total Assets $ 4,080,131 $ 4,748,789
============= =============
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners 66,593 66,605
------------- -------------
Total Current Liabilities 66,593 66,605
------------- -------------
Long-Term Liabilities:
Payable to General Partners 315,881 293,418
------------- -------------
Partners' Equity:
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's, of
which 37,228 at December, 31, 1997 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 December 31, 1997
and March 31, 1997, issued and
outstanding 3,749,407 4,433,605
General Partners (51,750) (44,839)
------------- -------------
Total Partners' Equity 3,697,657 4,388,766
------------- -------------
Total Liabilities and Partners' Equity $ 4,080,131 $ 4,748,789
============= =============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
TOTAL SERIES 2 - 6 December 31, March 31,
1997 1997
--------- ----------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 1,075,949 $ 1,087,001
Investments in Securities 254,798 248,154
------------ ------------
Total Current Assets 1,330,747 1,335,155
Investments in Securities 1,832,051 1,926,506
Investments in Project Partnerships, Net 6,932,765 9,003,549
------------- -------------
Total Assets $10,095,563 $12,265,210
============= =============
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners 281,852 282,242
------------- -------------
Total Current Liabilities 281,852 282,242
------------- -------------
Long-Term Liabilities:
Payable to General Partners 1,328,301 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 December, 31, 1997 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 December 31, 1997
and March 31, 1997, issued and outstanding
General Partners 8,727,173 10,949,978
(241,763) (219,312)
Total Partners' Equity ------------- -------------
8,485,410 10,730,666
Total Liabilities and Partners' Equity ------------- -------------
$10,095,563 $12,265,210
============= =============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED DECEMBER 31,
(Unaudited)
SERIES 2 1997 1996
---- ----
Revenues:
Interest Income $ 29,196 $ 27,471
------------ ------------
Expenses:
Asset Management Fee-General Partner 51,666 51,750
General and Administrative:
General Partner 6,238 5,006
Other 8,113 10,787
Amortization 1,776 3,609
------------ ------------
Total Expenses 67,793 71,152
------------ ------------
Loss Before Equity in Losses of Project
Partnerships (38,597) (43,681)
Equity in Losses of Project Partnerships (284,240) (405,978)
------------ ------------
Net Loss $ (322,837) $ (449,659)
============ ============
Allocation of Net Loss:
Assignees (319,609) (445,162)
General Partners (3,228) (4,497)
------------ ------------
$ (322,837) $ (449,659)
============ ============
Net Loss Per Beneficial Assignee
Certificate $ (52.09) $ (72.55)
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
FOR THE NINE MONTHS ENDED DECEMBER 31,
(Unaudited)
SERIES 3 1997 1996
---- ----
Revenues:
Interest Income $ 22,953 $ 23,502
------------ ------------
Expenses:
Asset Management Fee-General Partner 47,844 47,946
General and Administrative:
General Partner 6,522 5,235
Other 7,943 14,294
Amortization (1,212) 957
------------ ------------
Total Expenses 61,097 68,432
------------ ------------
Loss Before Equity in Losses of Project
Partnerships (38,144) (44,930)
Equity in Losses of Project Partnerships (168,705) (222,177)
------------ ------------
Net Loss $ (206,849) $ (267,107)
============ ============
Allocation of Net Loss:
Assignees (204,781) (264,436)
General Partners (2,068) (2,671)
------------ ------------
$ (206,849) $ (267,107)
============ ============
Net Loss Per Beneficial Assignee
Certificate $ (37.53) $ (48.47)
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
FOR THE NINE MONTHS ENDED DECEMBER 31,
(Unaudited)
SERIES 4 1997 1996
---- ----
Revenues:
Interest Income $ 30,440 $ 31,324
------------ ------------
Expenses:
Asset Management Fee-General Partner 58,704 58,788
General and Administrative:
General Partner 8,223 6,599
Other 9,996 11,814
Amortization (1,467) 2,541
------------ ------------
Total Expenses 75,456 79,742
------------ ------------
Loss Before Equity in Losses of Project
Partnerships (45,016) (48,418)
Equity in Losses of Project Partnerships (282,595) (425,830)
------------ ------------
Net Loss $ (327,611) $ (474,248)
============ ============
Allocation of Net Loss:
Assignees (324,335) (469,506)
General Partners (3,276) (4,742)
------------ ------------
$ (327,611) $ (474,248)
============ ============
Net Loss Per Beneficial Assignee
Certificate $ (46.90) $ (67.90)
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
FOR THE NINE MONTHS ENDED DECEMBER 31,
(Unaudited)
SERIES 5 1997 1996
---- ----
Revenues:
Interest Income $ 39,094 $ 40,044
------------ ------------
Expenses:
Asset Management Fee-General Partner 72,633 72,759
General and Administrative:
General Partner 10,208 8,192
Other 12,645 14,659
Amortization 8,253 9,348
------------ ------------
Total Expenses 103,739 104,958
------------ ------------
Loss Before Equity in Losses of Project
Partnerships (64,645) (64,914)
Equity in Losses of Project Partnerships (632,205) (581,763)
------------ ------------
Net Loss $ (696,850) $ (646,677)
============ ============
Allocation of Net Loss:
Assignees (689,882) (640,210)
General Partners (6,968) (6,467)
------------ ------------
$ (696,850) $ (646,677)
============ ============
Net Loss Per Beneficial Assignee
Certificate $ (80.07) $ (74.30)
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
FOR THE NINE MONTHS ENDED DECEMBER 31,
(Unaudited)
SERIES 6 1997 1996
---- ----
Revenues:
Interest Income $ 36,848 $ 35,879
------------ ------------
Expenses:
Asset Management Fee-General Partner 80,553 80,748
General and Administrative:
General Partner 10,775 8,647
Other 13,307 11,947
Amortization 16,536 16,992
------------ ------------
Total Expenses 121,171 118,334
------------ ------------
Loss Before Equity in Losses of Project (84,323)
Partnerships (82,455)
Equity in Losses of Project Partnerships (606,786) (562,683)
------------ ------------
Net Loss $ (691,109) $ (645,138)
============ ============
Allocation of Net Loss:
Assignees (684,198) (638,687)
General Partners (6,911) (6,451)
------------ ------------
$ (691,109) $ (645,138)
============ ============
Net Loss Per Beneficial Assignee
Certificate $ (67.71) $ (63.21)
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
FOR THE NINE MONTHS ENDED DECEMBER 31,
(Unaudited)
TOTAL SERIES 2 - 6 1997 1996
---- ----
Revenues:
Interest Income $ 158,531 $ 158,220
------------ ------------
Expenses:
Asset Management Fee-General Partner 311,400 311,991
General and Administrative:
General Partner 41,966 33,679
Other 52,004 63,501
Amortization 23,886 33,447
------------ ------------
Total Expenses 429,256 442,618
------------ ------------
Loss Before Equity in Losses of Project
Partnerships (270,725) (284,398)
Equity in Losses of Project Partnerships (1,974,531) (2,198,431)
------------ ------------
Net Loss $(2,245,256) $(2,482,829)
============ ============
Allocation of Net Loss:
Assignees (2,222,805) (2,458,001)
General Partners (22,451) (24,828)
------------ ------------
$(2,245,256) $(2,482,829)
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 31,
(Unaudited)
SERIES 2 1997 1996
---- ----
Revenues:
Interest Income $ 9,003 $ 9,035
------------ ------------
Expenses:
Asset Management Fee-General Partner 17,222 17,250
General and Administrative:
General Partner 2,022 1,666
Other 1,309 1,582
Amortization 592 1,203
------------ ------------
Total Expenses 21,145 21,701
------------ ------------
Loss Before Equity in Losses of Project
Partnerships (12,142) (12,666)
Equity in Losses of Project Partnerships (113,426) (169,248)
------------ ------------
Net Loss $ (125,568) $ (181,914)
============ ============
Allocation of Net Loss:
Assignees (124,312) (180,094)
General Partners (1,256) (1,820)
------------ ------------
$ (125,568) $ (181,914)
============ ============
Net Loss Per Beneficial Assignee
Certificate $ (20.26) $ (29.35)
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
FOR THE THREE MONTHS ENDED DECEMBER 31,
(Unaudited)
SERIES 3 1997 1996
---- ----
Revenues:
Interest Income $ 7,866 $ 7,823
------------ ------------
Expenses:
Asset Management Fee-General Partner 15,948 15,982
General and Administrative:
General Partner 2,114 1,742
Other 1,551 2,136
Amortization (404) 319
------------ ------------
Total Expenses 19,209 20,179
------------ ------------
Loss Before Equity in Losses of Project
Partnerships (11,343) (12,356)
Equity in Losses of Project Partnerships (50,409) (31,875)
------------ ------------
Net Loss $ (61,752) $ (44,231)
============ ============
Allocation of Net Loss:
Assignees (61,134) (43,789)
General Partners (618) (442)
------------ ------------
$ (61,752) $ (44,231)
============ ============
Net Loss Per Beneficial Assignee
Certificate $ (11.21) $ (8.03)
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
FOR THE THREE MONTHS ENDED DECEMBER 31,
(Unaudited)
SERIES 4 1997 1996
---- ----
Revenues:
Interest Income $ 10,426 $ 10,465
------------ ------------
Expenses:
Asset Management Fee-General Partner 19,568 19,596
General and Administrative:
General Partner 2,666 2,196
Other 1,763 1,851
Amortization (489) 847
------------ ------------
Total Expenses 23,508 24,490
------------ ------------
Loss Before Equity in Losses of Project
Partnerships (13,082) (14,025)
Equity in Losses of Project Partnerships (124,875) (119,869)
------------ ------------
Net Loss $ (137,957) $ (133,894)
============ ============
Allocation of Net Loss:
Assignees (136,577) (132,556)
General Partners (1,380) (1,338)
------------ ------------
$ (137,957) $ (133,894)
============ ============
Net Loss Per Beneficial Assignee
Certificate $ (19.75) $ (19.17)
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
FOR THE THREE MONTHS ENDED DECEMBER 31,
(Unaudited)
SERIES 5 1997 1996
---- ----
Revenues:
Interest Income $ 13,349 $ 13,331
------------ ------------
Expenses:
Asset Management Fee-General Partner 24,211 24,253
General and Administrative:
General Partner 3,310 2,726
Other 2,049 2,260
Amortization 2,751 3,116
------------ ------------
Total Expenses 32,321 32,355
------------ ------------
Loss Before Equity in Losses of Project
Partnerships (18,972) (19,024)
Equity in Losses of Project Partnerships (256,936) (171,692)
------------ ------------
Net Loss $ (275,908) $ (190,716)
============ ============
Allocation of Net Loss:
Assignees (273,149) (188,809)
General Partners (2,759) (1,907)
------------ ------------
$ (275,908) $ (190,716)
============ ============
Net Loss Per Beneficial Assignee
Certificate $ (31.70) $ (21.91)
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
FOR THE THREE MONTHS ENDED DECEMBER 31,
(Unaudited)
SERIES 6 1997 1996
---- ----
Revenues:
Interest Income $ 12,125 $ 11,892
------------ ------------
Expenses:
Asset Management Fee-General Partner 26,851 26,916
General and Administrative:
General Partner 3,494 2,877
Other 2,427 2,119
Amortization 5,512 5,664
------------ ------------
Total Expenses 38,284 37,576
------------ ------------
Loss Before Equity in Losses of Project
Partnerships (26,159) (25,684)
Equity in Losses of Project Partnerships (208,584) (190,004)
------------ ------------
Net Loss $ (234,743) $ (215,688)
============ ============
Allocation of Net Loss:
Assignees (232,396) (213,532)
General Partners (2,347) (2,156)
------------ ------------
$ (234,743) $ (215,688)
============ ============
Net Loss Per Beneficial Assignee
Certificate $ (23.00) $ (21.13)
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
FOR THE THREE MONTHS ENDED DECEMBER 31,
(Unaudited)
TOTAL SERIES 2 - 6 1997 1996
---- ----
Revenues:
Interest Income $ 52,769 $ 52,546
------------ ------------
Expenses:
Asset Management Fee-General Partner 103,800 103,997
General and Administrative:
General Partner 13,606 11,207
Other 9,099 9,948
Amortization 7,962 11,149
------------ ------------
Total Expenses 134,467 136,301
------------ ------------
Loss Before Equity in Losses of Project
Partnerships (81,698) (83,755)
Equity in Losses of Project Partnerships (754,230) (682,688)
------------ ------------
Net Loss $ (835,928) $ (766,443)
============ ============
Allocation of Net Loss:
Assignees (827,569) (758,780)
General Partners (8,359) (7,663)
------------ ------------
$ (835,928) $ (766,443)
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996
(Unaudited)
General
SERIES 2 Assignees Partners Total
--------- -------- -----
Balance at March 31, 1996 $ 1,661,075 $ (37,565) $ 1,623,510
Net Loss (455,162) (4,497) (449,659)
------------- ------------ -------------
Balance at December 31, 1996 $ 1,215,913 $ (42,062) $ 1,173,851
============= ============ =============
Balance at March 31, 1997 $ 1,084,268 $ (43,391) $ 1,040,877
Net Loss (319,609) (3,228) (322,837)
------------- ------------ -------------
Balance at December 31, 1997 $ 764,659 $ (46,619) $ 718,040
============= ============ =============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996
(Unaudited)
General
SERIES 3 Assignees Partners Total
--------- -------- -----
Balance at March 31, 1996 $ 1,160,025 $ (36,581) $ 1,123,444
Net Loss (264,436) (2,671) (267,107)
------------- ------------ -------------
Balance at December 31, 1996 $ 895,589 $ (39,252) $ 856,337
============= ============ =============
Balance at March 31, 1997 $ 822,156 $ (39,994) $ 782,162
Net Loss (204,781) (2,068) (206,849)
------------- ------------ -------------
Balance at December 31, 1997 $ 617,375 $ (42,062) $ 575,313
============= ============ =============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996
(Unaudited)
General
SERIES 4 Assignees Partners Total
--------- -------- -----
Balance at March 31, 1996 $ 2,480,767 $ (36,208) $ 2,444,559
Net Loss (469,506) (4,742) (474,248)
------------- ------------ -------------
Balance at December 31, 1996 $ 2,011,261 $ (40,950) $ 1,970,311
============= ============ =============
Balance at March 31, 1997 $ 1,791,717 $ (43,168) $ 1,748,549
Net Loss (324,335) (3,276) (327,611)
------------- ------------ -------------
Balance at December 31, 1997 $ 1,467,382 $ (46,444) $ 1,420,938
============= ============ =============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996
(Unaudited)
General
SERIES 5 Assignees Partners Total
--------- -------- -----
Balance at March 31, 1996 $ 3,805,620 $ (37,946) $ 3,767,674
Net Loss (640,210) (6,467) (646,677)
------------- ------------ -------------
Balance at December 31, 1996 $ 3,165,410 $ (44,413) $ 3,120,997
============= ============ =============
Balance at March 31, 1997 $ 2,818,232 $ (47,920) $ 2,770,312
Net Loss (689,882) (6,969) (696,850)
------------- ------------ -------------
Balance at December 31, 1997 $ 2,128,350 $ (54,888) $ 2,073,462
============= ============ =============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996
(Unaudited)
General
SERIES 6 Assignees Partners Total
--------- -------- -----
Balance at March 31, 1996 $ 5,340,274 $ (35,681) $ 5,304,593
Net Loss (638,687) (6,451) (645,138)
------------- ------------ -------------
Balance at December 31, 1996 $ 4,701,587 $ (42,132) $ 4,659,455
============= ============ =============
Balance at March 31, 1997 $ 4,433,605 $ (44,839) $ 4,388,766
Net Loss (684,198) (6,911) (691,109)
------------- ------------ -------------
Balance at December 31, 1997 $ 3,749,407 $ (51,750) $ 3,697,657
============= ============ =============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996
(Unaudited)
General
TOTAL SERIES 2 - 6 Assignees Partners Total
--------- -------- -----
Balance at March 31, 1996 $ 14,447,761 $ (183,981) $ 14,263,780
Net Loss (2,458,001) (24,828) (2,482,829)
------------- ------------ -------------
Balance at December 31, 1996 $ 11,989,760 $ (208,809) $ 11,780,951
============= ============ =============
Balance at March 31, 1997 $ 10,949,978 $ (219,312) $ 10,730,666
Net Loss (2,222,805) (22,451) (2,245,256)
------------- ------------ -------------
Balance at December 31, 1997 $ 8,727,173 $ (241,763) $ 8,485,410
============= ============ =============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996:
(Unaudited)
SERIES 2 1997 1996
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss
Adjustments to Reconcile Net Loss to Net $ (322,837) $ (449,659)
Cash Provided by (Used in) Operating
Activities:
Amortization 1,776 3,609
Accreted Interest Income on Investments
in Securities (20,676) (21,518)
Equity in Losses of Project
Partnerships 284,240 405,978
Interest Income from Redemption of
Securities 13,628 10,359
Payment of Asset Management Fee (33,471) (32,438)
Changes in Operating Assets and
Liabilities:
Increase in Payable to General
Partners 51,160 49,701
------------ ------------
Net Cash Used in Operating
Activities (26,180) (33,968)
------------ ------------
Cash Flows from Investing Activities:
Distributions Received from Project
Partnerships 9,008 4,176
Redemption of Investment in Securities 32,065 33,294
------------ ------------
Net Cash Provided by (Used in)
Investing Activities 41,073 37,470
------------ ------------
Increase (Decrease) in Cash and Cash
Equivalents 14,893 3,502
Cash and Cash Equivalents at Beginning of
Year 138,561 135,519
------------ ------------
Cash and Cash Equivalents at End of Year $ 153,454 $ 139,021
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996:
(Unaudited)
SERIES 3 1997 1996
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss
Adjustments to Reconcile Net Loss to Net $ (206,849) $ (267,107)
Cash Provided by (Used in) Operating
Activities:
Amortization (1,212) 957
Accreted Interest Income on Investments
in Securities (18,391) (19,140)
Equity in Losses of Project
Partnerships 168,705 222,177
Interest Income from Redemption of
Securities 12,121 9,214
Payment of Asset Management Fee (41,266) (39,504)
Changes in Operating Assets and
Liabilities:
Increase in Payable to General
Partners 47,777 45,778
------------ ------------
Net Cash Used in Operating
Activities (39,115) (47,625)
------------ ------------
Cash Flows from Investing Activities:
Distributions Received from Project
Partnerships 23,350 26,557
Redemption of Investment in Securities 28,521 29,617
------------ ------------
Net Cash Provided by (Used in)
Investing Activities 51,871 56,174
------------ ------------
Increase (Decrease) in Cash and Cash
Equivalents 12,756 8,549
Cash and Cash Equivalents at Beginning of
Year 109,925 97,988
------------ ------------
Cash and Cash Equivalents at End of Year $ 122,681 $ 106,537
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996:
(Unaudited)
SERIES 4 1997 1996
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss
Adjustments to Reconcile Net Loss to Net $ (327,611) $ (474,248)
Cash Provided by (Used in) Operating
Activities:
Amortization (1,467) 2,541
Accreted Interest Income on Investments
in Securities (23,299) (24,248)
Equity in Losses of Project
Partnerships 282,595 425,830
Interest Income from Redemption of
Securities 15,358 11,674
Payment of Asset Management Fee (43,594) (42,702)
Changes in Operating Assets and
Liabilities:
Increase in Payable to General
Partners 58,730 56,193
------------ ------------
Net Cash Used in Operating
Activities (39,288) (44,960)
------------ ------------
Cash Flows from Investing Activities:
Distributions Received from Project
Partnerships 12,712 10,900
Redemption of Investment in Securities 36,133 37,522
------------ ------------
Net Cash Provided by (Used in)
Investing Activities 48,845 48,422
------------ ------------
Increase (Decrease) in Cash and Cash
Equivalents 9,557 3,462
Cash and Cash Equivalents at Beginning of
Year 182,773 178,506
------------ ------------
Cash and Cash Equivalents at End of Year $ 192,330 $ 181,968
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996:
(Unaudited)
SERIES 5 1997 1996
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss
Adjustments to Reconcile Net Loss to Net $ (696,850) $ (646,677)
Cash Provided by (Used in) Operating
Activities:
Amortization 8,253 9,348
Accreted Interest Income on Investments
in Securities (29,040) (30,222)
Equity in Losses of Project
Partnerships 632,205 581,763
Interest Income from Redemption of
Securities 19,140 14,550
Payment of Asset Management Fee (58,980) (59,353)
Changes in Operating Assets and
Liabilities:
Increase in Payable to General
Partners 72,801 69,696
------------ ------------
Net Cash Used in Operating
Activities (52,471) (60,895)
------------ ------------
Cash Flows from Investing Activities:
Distributions Received from Project
Partnerships 14,170 7,878
Redemption of Investment in Securities 45,035 46,767
------------ ------------
Net Cash Provided by (Used in)
Investing Activities 59,205 54,645
------------ ------------
Increase (Decrease) in Cash and Cash
Equivalents 6,734 (6,250)
Cash and Cash Equivalents at Beginning of
Year 259,006 257,549
------------ ------------
Cash and Cash Equivalents at End of Year $ 265,740 $ 251,299
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996:
(Unaudited)
SERIES 6 1997 1996
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss
Adjustments to Reconcile Net Loss to Net $ (691,109) $ (645,138)
Cash Provided by (Used in) Operating
Activities:
Amortization 16,536 16,992
Accreted Interest Income on Investments
in Securities (22,783) (22,991)
Equity in Losses of Project
Partnerships 606,786 562,683
Interest Income from Redemption of
Securities 0 0
Payment of Asset Management Fee (58,089) (52,484)
Changes in Operating Assets and
Liabilities:
Increase in Payable to General
Partners 80,540 77,289
------------ ------------
Net Cash Used in Operating
Activities (68,119) (63,649)
------------ ------------
Cash Flows from Investing Activities:
Distributions Received from Project
Partnerships 13,127 14,560
Redemption of Investment in Securities 0 0
------------ ------------
Net Cash Provided by (Used in)
Investing Activities 13,127 14,560
------------ ------------
Increase (Decrease) in Cash and Cash
Equivalents (54,992) (49,089)
Cash and Cash Equivalents at Beginning of
Year 396,736 388,991
------------ ------------
Cash and Cash Equivalents at End of Year $ 341,744 $ 339,902
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996:
(Unaudited)
TOTAL SERIES 2 - 6 1997 1996
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss
Adjustments to Reconcile Net Loss to Net $(2,245,256) $(2,482,829)
Cash Provided by (Used in) Operating
Activities:
Amortization 23,886 33,447
Accreted Interest Income on Investments
in Securities (114,189) (118,119)
Equity in Losses of Project
Partnerships 1,974,531 2,198,431
Interest Income from Redemption of
Securities 60,247 45,797
Payment of Asset Management Fee (235,400) (226,481)
Changes in Operating Assets and
Liabilities:
Increase in Payable to General
Partners 311,008 298,657
------------ ------------
Net Cash Used in Operating
Activities (225,173) (251,097)
------------ ------------
Cash Flows from Investing Activities:
Distributions Received from Project
Partnerships 72,367 64,071
Redemption of Investment in Securities 141,754 147,200
------------ ------------
Net Cash Provided by (Used in)
Investing Activities 214,121 211,271
------------ ------------
Increase (Decrease) in Cash and Cash
Equivalents (11,052) (39,826)
Cash and Cash Equivalents at Beginning of
Year 1,087,001 1,058,553
------------ ------------
Cash and Cash Equivalents at End of Year $ 1,075,949 $ 1,018,727
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
DECEMBER 31, 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 partner, in other
limited partnerships ("Project Partnerships") each of which owns and operates
one or more apartment complexes expected to qualify for Low-Income Housing
Tax Credits. Gateway will terminate on December 31, 2040, or sooner, in
accordance with the terms of the Limited Partnership Agreement. As of
December 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 December 31, 1997 Balance Sheet includes Investment in Securities
consisting of U.S. Government Security Strips which represents their cost,
plus accreted interest income of $133,872 for Series 2, $119,076 for Series
3, $150,857 for Series 4, $188,024 for Series 5 and $137,242 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 Unrealized
Estimated Market Cost Plus Gains and
Value Accreted Interest (Losses)
----------------- ----------------- ----------------
Series 2 $ 395,031 $ 367,471 $ 27,560
Series 3 351,257 326,857 24,400
Series 4 445,182 414,095 31,087
Series 5 554,693 516,116 38,577
Series 6 488,887 462,310 26,577
As of December 31, 1997, the cost and accreted interest of debt securities
by contractual maturities is as follows:
Series 2 Series 3 Series 4
-------- -------- --------
Due with 1 year $ 46,817 $ 41,643 $ 52,758
After 1 year through 5 years 172,457 153,397 194,339
After 5 years through 10 years 148,197 131,817 166,998
---------- ---------- ----------
Total Amount Carried on
Balance Sheet $ 367,471 $ 326,857 $ 414,095
========== ========== ==========
Series 5 Series 6 Total
-------- -------- --------
Due with 1 year $ 65,755 $ 47,825 $ 254,798
After 1 year through 5 years 242,218 191,056 953,467
After 5 years through 10 years 208,143 223,429 878,584
---------- ---------- ----------
Total Amount Carried on
Balance Sheet $ 516,116 $ 462,310 $2,086,849
========== ========== ==========
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 nine months ended December 31, 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 $ 51,666 $ 51,750
Series 3 47,844 47,946
Series 4 58,704 58,788
Series 5 72,633 72,759
Series 6 80,553 80,748
--------- ---------
Total $ 311,400 $ 311,991
========= =========
General and Administrative Expenses - The Managing General Partner is reim
bursed for general and administrative expenses of Gateway on an accountable
basis. This expense is included in the Statements of Operations.
Series 2 $ 6,238 $ 5,006
Series 3 6,522 5,235
Series 4 8,223 6,599
Series 5 10,208 8,192
Series 6 10,775 8,647
--------- --------
Total $ 41,966 $ 33,679
========= ========
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS:
As of December 31, 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:
SERIES 2 DECEMBER 31, MARCH 31,
1997 1997
-------------- ----------
Capital Contributions to Project Partner-
ships and purchase price paid for limited
partner interests in Project Partnerships $ 4,524,678 $ 4,524,678
Accumulated accretion/(amortization) of the
excess of the book value of the underlying
assets of Project Partnerships over the
purchase price (1) 44,174 39,734
Cumulative equity in losses of Project
Partnerships (2) (4,306,611) (4,022,371)
Cumulative distributions received from
Project Partnerships (60,629) (51,621)
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 390,838 390,838
Accumulated amortization of acquisition
fees and expenses (72,591) (66,375)
------------ ------------
Investments in Project Partnerships $ 519,859 $ 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 December 31, 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 $289,555 for the period ended December 31, 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):
The following is a summary of Investments in Project Partnerships as of:
SERIES 3 DECEMBER 31, MARCH 31,
1997 1997
-------------- ---------
Capital Contributions to Project Partner-
ships and purchase price paid for limited
partner interests in Project Partnerships $ 3,888,713 $ 3,888,713
Accumulated accretion/(amortization) of the
excess of the book value of the underlying
assets of Project Partnerships over the
purchase price (1) 48,029 41,993
Cumulative equity in losses of Project
Partnerships (2) (3,792,318) (3,623,613)
Cumulative distributions received from
Project Partnerships (167,327) (143,977)
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 491,746 491,746
Accumulated amortization of acquisition
fees and expenses (75,497) (70,673)
------------ ------------
Investments in Project Partnerships $ 393,346 $ 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 December 31, 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 $891,324 for the period ended December 31, 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):
The following is a summary of Investments in Project Partnerships as of:
SERIES 4 DECEMBER 31, MARCH 31,
1997 1997
-------------- ----------
Capital Contributions to Project Partner-
ships and purchase price paid for limited
partner interests in Project Partnerships $ 4,952,519 $ 4,952,519
Accumulated accretion/(amortization) of the
excess of the book value of the underlying
assets of Project Partnerships over the
purchase price (1) 85,306 74,647
Cumulative equity in losses of Project
Partnerships (2) (4,285,976) (4,003,381)
Cumulative distributions received from
Project Partnerships (88,963) (76,251)
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 562,967 562,967
Accumulated amortization of acquisition
fees and expenses (96,374) (87,182)
------------ ------------
Investments in Project Partnerships $ 1,129,479 $ 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 December 31, 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 $281,053 for the period ended December 31, 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):
The following is a summary of Investments in Project Partnerships as of:
SERIES 5 DECEMBER 31, MARCH 31,
1997 1997
-------------- ---------
Capital Contributions to Project Partner-
ships and purchase price paid for limited
partner interests in Project Partnerships $ 6,164,472 $ 6,164,472
Accumulated accretion/(amortization) of the
excess of the book value of the underlying
assets of Project Partnerships over the
purchase price (1) 37,751 33,149
Cumulative equity in losses of Project
Partnerships (2) (5,010,833) (4,378,628)
Cumulative distributions received from
Project Partnerships (119,305) (105,135)
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 650,837 650,837
Accumulated amortization of acquisition
fees and expenses (108,918) (96,063)
------------ ------------
Investments in Project Partnerships $ 1,614,004 $ 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 December 31, 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 $145,653 for the period ended December 31, 1997 and cumulative suspended
losses of $254010 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 as of:
SERIES 6 DECEMBER 31, MARCH 31,
1997 1997
-------------- ----------
Capital Contributions to Project Partner-
ships and purchase price paid for limited
partner interests in Project Partnerships $ 7,462,215 $ 7,462,215
Accumulated accretion/(amortization) of the
excess of the book value of the underlying
assets of Project Partnerships over the
purchase price (1) (3,296) (2,849)
Cumulative equity in losses of Project
Partnerships (2) (4,739,682) (4,132,896)
Cumulative distributions received from
Project Partnerships (106,299) (93,172)
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 785,179 785,179
Accumulated amortization of acquisition
fees and expenses (122,040) (105,951)
------------ ------------
Investments in Project Partnerships $ 3,276,077 $ 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 December 31, 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 $138,446 for the period ended December 31, 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 as of:
TOTAL SERIES 2 - 6 DECEMBER 31, MARCH 31,
1997 1997
-------------- ----------
Capital Contributions to Project Partner-
ships and purchase price paid for limited
partner interests in Project Partnerships $ 26,992,597 $ 26,992,597
Accumulated accretion/(amortization) of the
excess of the book value of the underlying
assets of Project Partnerships over the
purchase price (1) 211,964 186,674
Cumulative equity in losses of Project
Partnerships (2) (22,135,420) (20,160,889)
Cumulative distributions received from
Project Partnerships (542,523) (470,156)
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 2,881,567 2,881,567
Accumulated amortization of acquisition
fees and expenses (475,420) (426,244)
------------ ------------
Investments in Project Partnerships $ 6,932,765 $ 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
September 30 of each year:
SEPTEMBER 30,
1997 1996
SERIES 2 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 1,752,764 $ 1,660,264
Investment properties, net 21,936,092 22,743,234
Other assets 8,642 1,693
----------- -----------
Total assets $23,697,498 $24,405,191
=========== ===========
Liabilities and Partners' Equity:
Current liabilities 458,696 470,102
Long-term debt 23,253,785 23,298,841
----------- -----------
Total liabilities 23,712,481 23,768,943
----------- -----------
Partners' equity
Limited Partner (87,345) 554,832
General Partners 72,362 81,416
----------- -----------
Total Partners' equity (14,983) 636,248
----------- -----------
Total liabilities and partners'
equity $23,697,498 $24,405,191
=========== ===========
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 1,995,370 $ 1,968,616
Expenses:
Operating expenses 1,117,137 1,031,540
Interest expense 605,728 661,270
Depreciation and amortization 704,687 718,588
----------- -----------
Total expenses 2,427,552 2,411,398
Net loss (432,182) (442,782)
=========== ===========
Other partners' share of net loss (4,322) (4,428)
Partnerships' share of net loss (427,860) (438,354)
Suspended losses 143,620 32,376
----------- -----------
Equity in Losses of Project Partnerships $ (284,240) $ (405,978)
=========== ===========
<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
September 30 of each year:
SEPTEMBER 30,
1997 1996
SERIES 3 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 2,116,428 $ 2,049,208
Investment properties, net 19,160,883 20,004,029
Other assets 232,910 233,196
----------- -----------
Total assets $21,510,221 $22,286,433
=========== ===========
Liabilities and Partners' Equity:
Current liabilities 541,980 523,579
Long-term debt 21,822,011 21,840,016
----------- -----------
Total liabilities 22,363,991 22,363,595
----------- -----------
Partners' equity
Limited Partner (1,178,658) (425,639)
General Partners 324,888 348,477
----------- -----------
Total Partners' equity (853,770) (77,162)
----------- -----------
Total liabilities and partners'
equity $21,510,221 $22,286,433
=========== ===========
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 1,853,684 $ 1,871,589
Expenses:
Operating expenses 1,199,461 1,145,127
Interest expense 458,779 446,640
Depreciation and amortization 691,039 683,936
----------- -----------
Total expenses 2,349,279 2,275,703
Net loss (495,595) (404,114)
=========== ===========
Other partners' share of net loss (4,956) (4,041)
Partnerships' share of net loss (490,639) (400,073)
Suspended losses 321,934 177,896
----------- -----------
Equity in Losses of Project Partnerships $ (168,705) $ (222,177)
=========== ===========
<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
September 30 of each year:
SEPTEMBER 30,
1997 1996
SERIES 4 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 2,154,311 $ 2,010,040
Investment properties, net 25,633,123 26,528,213
Other assets 20,577 21,726
----------- -----------
Total assets $27,808,011 $28,559,979
=========== ===========
Liabilities and Partners' Equity:
Current liabilities 608,600 575,577
Long-term debt 26,606,712 26,618,948
----------- -----------
Total liabilities 27,215,312 27,194,525
----------- -----------
Partners' equity
Limited Partner 344,261 1,095,809
General Partners 248,438 269,645
----------- -----------
Total Partners' equity 592,699 1,365,454
----------- -----------
Total liabilities and partners'
equity $27,808,011 $28,559,979
=========== ===========
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 2,365,056 $ 2,372,440
Expenses:
Operating expenses 1,340,745 1,341,690
Interest expense 703,241 693,611
Depreciation and amortization 782,972 792,581
----------- -----------
Total expenses 2,826,958 2,827,882
Net loss (461,902) (455,442)
=========== ===========
Other partners' share of net loss (4,619) (4,554)
Partnerships' share of net loss (457,283) (450,888)
Suspended losses 174,688 25,058
----------- -----------
Equity in Losses of Project Partnerships $ (282,595) $ (425,830)
=========== ===========
<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
September 30 of each year:
SEPTEMBER 30,
1997 1996
SERIES 5 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 2,844,732 $ 2,595,853
Investment properties, net 31,976,080 33,271,847
Other assets 4,454 1,148
----------- -----------
Total assets $34,825,266 $35,868,848
=========== ===========
Liabilities and Partners' Equity:
Current liabilities 892,807 799,455
Long-term debt 32,895,228 32,935,732
----------- -----------
Total liabilities 33,788,035 33,735,187
----------- -----------
Partners' equity
Limited Partner 1,065,779 2,149,527
General Partners (28,548) (15,866)
----------- -----------
Total Partners' equity 1,037,231 2,133,661
----------- -----------
Total liabilities and partners'
equity $34,825,266 $35,868,848
=========== ===========
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 2,690,933 $ 2,648,282
Expenses:
Operating expenses 1,715,822 1,534,029
Interest expense 655,325 663,006
Depreciation and amortization 1,031,401 1,038,886
----------- -----------
Total expenses 3,402,548 3,235,921
Net loss (711,615) (587,639)
=========== ===========
Other partners' share of net loss (7,116) (5,876)
Partnerships' share of net loss (704,499) (581,763)
Suspended losses 72,294 0
----------- -----------
Equity in Losses of Project Partnerships $ (632,205) $ (581,763)
=========== ===========
<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
September 30 of each year:
SEPTEMBER 30,
1997 1996
SERIES 6 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 3,052,657 $ 2,777,491
Investment properties, net 36,071,857 37,340,541
Other assets 14,004 21,153
----------- -----------
Total assets $39,138,518 $40,139,185
=========== ===========
Liabilities and Partners' Equity:
Current liabilities 925,682 912,481
Long-term debt 35,817,153 35,835,035
----------- -----------
Total liabilities 36,742,835 36,747,516
----------- -----------
Partners' equity
Limited Partner 2,527,314 3,508,456
General Partners (131,631) (116,787)
----------- -----------
Total Partners' equity 2,395,683 3,391,669
----------- -----------
Total liabilities and partners' $39,138,518 $40,139,185
equity =========== ===========
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 2,978,066 $ 3,087,264
Expenses:
Operating expenses 1,662,399 1,619,403
Interest expense 875,240 907,245
Depreciation and amortization 1,102,889 1,154,954
----------- -----------
Total expenses 3,640,528 3,681,602
Net loss (662,462) (594,338)
=========== ===========
Other partners' share of net loss (6,625) (5,943)
Partnerships' share of net loss (655,837) (588,395)
Suspended losses 49,051 25,712
----------- -----------
Equity in Losses of Project Partnerships $ (606,786) $ (562,683)
=========== ===========
<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
September 30 of each year:
SEPTEMBER 30,
1997 1996
TOTAL SERIES 2- 6 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 11,920,892 $ 11,092,856
Investment properties, net 134,778,035 139,887,864
Other assets 280,587 278,916
----------- -----------
Total assets $146,979,514 $151,259,636
=========== ===========
Liabilities and Partners' Equity:
Current liabilities 3,427,765 3,281,194
Long-term debt 140,394,889 140,528,572
----------- -----------
Total liabilities 143,822,654 143,809,766
----------- -----------
Partners' equity
Limited Partner 2,671,350 6,882,985
General Partners 485,510 566,885
----------- -----------
Total Partners' equity 3,156,860 7,449,870
----------- -----------
Total liabilities and partners'
equity $146,979,514 $151,259,636
=========== ===========
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $11,883,109 $11,948,191
Expenses:
Operating expenses 7,035,564 6,671,789
Interest expense 3,298,313 3,371,772
Depreciation and amortization 4,312,988 4,388,945
----------- -----------
Total expenses 14,646,865 14,432,506
Net loss (2,763,756) (2,484,315)
=========== ===========
Other partners' share of net loss (27,638) (24,842)
Partnerships' share of net loss (2,736,118) (2,459,473)
Suspended losses 761,587 261,042
----------- -----------
Equity in Losses of Project
Partnerships $(1,974,531) $(2,198,431)
=========== ===========
<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 nine and three months
ended December 31, 1997 and December 31, 1996. The General and
Administrative expenses - General Partner and General and Administrative
expenses - Other for the nine and three months ended December 31, 1997 are
comparable for the same periods ended December 31, 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 nine months ended December 31, 1997 decreased from $405,978 for the nine
months ended December 31, 1996 to $284,240 as a result of not including
losses of $143,620 in 1997 as compared to $32,376 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 December 31, 1997, the Series had $153,454 of short-term investments
(Cash and Cash Equivalents). It also had $367,471 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
$322,837 for the nine months ended December 31, 1997. However, after
adjusting for Equity in Losses of Project Partnerships of $284,240 and the
changes in operating assets and liabilities, net cash used in operating
activities was $26,180, primarily due to the payment of the Asset Management
Fee of $33,471. Cash provided by investing activities totaled $41,073,
consisting of $9,008 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 nine months ended December 31, 1997 decreased from $222,177 for the nine
months ended December 31, 1996 to $168,705 as a result of not including
losses of $321,934 in 1997 as compared to $177,896 in 1996, as these losses
would reduce the investment in certain Project Partnerships below zero.
At December 31, 1997, the Series had $122,681 of short-term investments (Cash
and Cash Equivalents). It also had $326,857 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
$206,849 for the nine months ended December 31, 1997. However, after
adjusting for Equity in Losses of Project Partnerships of $168,705 and the
changes in operating assets and liabilities, net cash used in operating
activities was $39,115, primarily due to the Payment of the Asset Management
Fee of $41,266. Cash provided by investing activities totaled $51,871,
consisting of $23,350 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 nine months ended December 31, 1997 decreased from $425,830 for the nine
months ended December 31, 1996 to $282,595 as a result of not including
losses of $174,688 in 1997 as compared to $25,058 in 1996, as these losses
would reduce the investment in certain Project Partnerships below zero.
At December 31, 1997, the Series had $192,330 of short-term investments
(Cash and Cash Equivalents). It also had $414,095 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
$327,611 for the nine months ended December 31, 1997. However, after
adjusting for Equity in Losses of Project Partnerships of $282,595 and the
changes in operating assets and liabilities, net cash used in operating
activities was $39,288, primarily due to the payment of the Asset Management
Fee of $43,594. Cash provided by investing activities totaled $48,845,
consisting of $12,712 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 nine months ended December 31, 1997 increased from $581,763 for the nine
months ended December 31, 1996 to $632,205.
At December 31, 1997, the Series had $265,740 of short-term investments
(Cash and Cash Equivalents). It also had $516,116 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
$696,850 for the nine months ended December 31, 1997. However, after
adjusting for Equity in Losses of Project Partnerships of $632,205 and the
changes in operating assets and liabilities, net cash used in operating
activities was $52,471, primarily due to the payment of the Asset Management
Fee of $58,980. Cash provided by investing activities totaled $59,205,
consisting of $14,170 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 nine months ended December 31, 1997 and December 31,
1996.
At December 31, 1997, the Series had $341,744 of short-term investments
(Cash and Cash Equivalents). It also had $462,310 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
$691,109 for the nine months ended December 31, 1997. However, after
adjusting for Equity in Losses of Project Partnerships of $606,786 and the
changes in operating assets and liabilities, net cash used in operating
activities was $68,119, primarily due to the payment of the Asset Management
Fee of $58,089. Cash provided by investing activities totaled $13,127,
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: February 11, 1998 By:/s/ Ronald M. Diner
Ronald M. Diner
President
Date: February 11, 1998 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 DECEMBER 31, 1997.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> DEC-31-1997
<CASH> 1,075,949
<SECURITIES> 2,086,849
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,330,747
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 10,095,563
<CURRENT-LIABILITIES> 281,852
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 8,485,410
<TOTAL-LIABILITY-AND-EQUITY> 10,095,563
<SALES> 0
<TOTAL-REVENUES> 158,531
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 429,256
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,245,256)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,245,256)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,245,256)
<EPS-PRIMARY> (59.71)<F1>
<EPS-DILUTED> (59.71)<F1>
<FN>
<F1>EPS IS NET LOSS PER $1,000 LIMITED PARTNERSHIP UNIT
</FN>
</TABLE>
