25
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE
ACT OF 1934
For The Quarterly Period Ended June 30, 1999
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: (727)573-3800
Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
YES X NO
Number of Units
Title of Each Class June 30, 1999
Beneficial Assignee Certificates:
$1,000 per certificate 37,228
DOCUMENTS INCORPORATED BY REFERENCE
Parts I and II, 1998 Form 10-K, filed with the
Securities and Exchange Commission on July 13, 1998
Parts III and IV - Form S-11 Registration Statement
and all amendments and supplements thereto
File No. 33-31821
PART I - Financial Information
Item 1. Financial Statements
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
SERIES 2 June 30, March 31,
1999 1999
--------- ----------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 391,071 $ 169,513
Receivables from Other Series 0 0
Investments in Securities 49,108 49,538
------------ ------------
Total Current Assets 440,179 219,051
Investments in Securities 259,134 302,427
Investments in Project Partnerships, Net 282,197 331,579
------------- -------------
Total Assets $ 981,510 $ 853,057
============= =============
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners 45,030 44,229
Payable to Other Series 170,818 0
------------- -------------
Total Current Liabilities 215,848 44,229
------------- -------------
Long-Term Liabilities:
Payable to General Partners 343,302 326,949
------------- -------------
Partners' Equity:
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's, of
which 37,228 at June 30, 1999 and March
31,1999 have been issued to the assignees
Assignees
Units of beneficial interest of the
limited partnership interest of the
assignor limited partner, $1,000 stated
value per BAC, 37,228 at June 30, 1999
and March 31,1999, issued and outstanding 471,936 530,860
General Partners (49,576) (48,981)
------------- -------------
Total Partners' Equity 422,360 481,879
------------- -------------
Total Liabilities and Partners' Equity $ 981,510 $ 853,057
============= =============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
SERIES 3 June 30, March 31,
1999 1999
--------- ----------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 144,383 $ 137,981
Receivables from Other Series 44,415 0
Investments in Securities 43,680 44,063
------------ ------------
Total Current Assets 232,478 182,044
Investments in Securities 230,495 269,002
Investments in Project Partnerships, Net 171,118 218,820
------------- -------------
Total Assets $ 634,091 $ 669,866
============= =============
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners 49,449 48,298
Payable to Other Series 0 0
------------- -------------
Total Current Liabilities 49,449 48,298
------------- -------------
Long-Term Liabilities:
Payable to General Partners 263,263 248,238
------------- -------------
Partners' Equity:
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's, of
which 37,228 at June 30, 1999 and March
31, 1999 have been issued to the assignees
Assignees
Units of beneficial interest of the
limited partnership interest of the
assignor limited partner, $1,000 stated
value per BAC, 37,228 at June 30, 1999 and
March 31, 1999, issued and outstanding 365,981 417,412
General Partners (44,602) (44,082)
------------- -------------
Total Partners' Equity 321,379 373,330
------------- -------------
Total Liabilities and Partners' Equity $ 634,091 $ 669,866
============= =============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
SERIES 4 June 30, March 31,
1999 1999
--------- ----------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 213,068 $ 207,632
Receivables from Other Series 56,270 0
Investments in Securities 55,338 55,823
------------ ------------
Total Current Assets 324,676 263,455
Investments in Securities 292,014 340,799
Investments in Project Partnerships, Net 588,238 676,348
------------- -------------
Total Assets $ 1,204,928 $ 1,280,602
============= =============
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners 54,491 53,248
Payable to Other Series 0 0
------------- -------------
Total Current Liabilities 54,491 53,248
------------- -------------
Long-Term Liabilities:
Payable to General Partners 331,322 312,891
------------- -------------
Partners' Equity:
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's, of
which 37,228 at June 30, 1999 and March
31, 1999 have been issued to the assignees
Assignees
Units of beneficial interest of the
limited partnership interest of the
assignor limited partner, $1,000 stated
value per BAC, 37,228 at June 30, 1999 and
March 31, 1999, issued and outstanding 871,577 965,972
General Partners (52,462) (51,509)
------------- -------------
Total Partners' Equity 819,115 914,463
------------- -------------
Total Liabilities and Partners' Equity $ 1,204,928 $ 1,280,602
============= =============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
SERIES 5 June 30, March 31,
1999 1999
--------- ----------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 299,793 $ 292,994
Receivables from Other Series 70,133 0
Investments in Securities 68,975 69,576
------------ ------------
Total Current Assets 438,901 362,570
Investments in Securities 363,955 424,763
Investments in Project Partnerships, Net 1,114,353 1,145,581
------------- -------------
Total Assets $ 1,917,209 $ 1,932,914
============= =============
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners 73,105 71,427
Payable to Other Series 0 0
------------- -------------
Total Current Liabilities 73,105 71,427
------------- -------------
Long-Term Liabilities:
Payable to General Partners 331,024 308,232
------------- -------------
Partners' Equity:
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's, of
which 37,228 at June 30, 1999 and March
31,1999 have been issued to the assignees
Assignees
Units of beneficial interest of the
limited partnership interest of the
assignor limited partner, $1,000 stated
value per BAC, 37,228 at June 30, 1999
and March 31,1999, issued and outstanding 1,573,573 1,613,346
General Partners (60,493) (60,091)
------------- -------------
Total Partners' Equity 1,513,080 1,553,255
------------- -------------
Total Liabilities and Partners' Equity $ 1,917,209 $ 1,932,914
============= =============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
SERIES 6 June 30, March 31,
1999 1999
--------- ----------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 413,595 $ 408,672
Receivables from Other Series 0 0
Investments in Securities 53,162 52,341
------------ ------------
Total Current Assets 466,757 461,013
Investments in Securities 353,818 347,635
Investments in Project Partnerships, Net 2,377,958 2,464,086
------------- -------------
Total Assets $ 3,198,533 $ 3,272,734
============= =============
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners 68,580 67,059
Payable to Other Series 0 0
------------- -------------
Total Current Liabilities 68,580 67,059
------------- -------------
Long-Term Liabilities:
Payable to General Partners 413,677 388,370
------------- -------------
Partners' Equity:
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's, of
which 37,228 at June 30, 1999 and March
31,1999 have been issued to the assignees
Assignees
Units of beneficial interest of the
limited partnership interest of the
assignor limited partner, $1,000 stated
value per BAC, 37,228 at June 30, 1999
and March 31,1999, issued and outstanding 2,777,839 2,877,858
General Partners (61,563) (60,553)
------------- -------------
Total Partners' Equity 2,716,276 2,817,305
------------- -------------
Total Liabilities and Partners' Equity $ 3,198,533 $ 3,272,734
============= =============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
TOTAL SERIES 2 - 6 June 30, March 31,
1999 1999
--------- ----------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 1,461,910 $ 1,216,792
Receivables from Other Series 170,818 0
Investments in Securities 270,263 271,341
------------ ------------
Total Current Assets 1,902,991 1,488,133
Investments in Securities 1,499,416 1,684,626
Investments in Project Partnerships, Net 4,533,864 4,836,414
------------- -------------
Total Assets $ 7,936,271 $ 8,009,173
============= =============
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners 290,655 284,261
Payable to Other Series 170,818 0
------------- -------------
Total Current Liabilities 461,473 284,261
------------- -------------
Long-Term Liabilities:
Payable to General Partners 1,682,588 1,584,680
------------- -------------
Partners' Equity:
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's, of
which 37,228 at June 30, 1999 and March
31, 1999 have been issued to the assignees
Assignees
Units of beneficial interest of the
limited partnership interest of the
assignor limited partner, $1,000 stated
value per BAC, 37,228 at June 30, 1999 and
March 31, 19990, issued and outstanding 6,060,905 6,405,448
General Partners (268,695) (265,216)
------------- -------------
Total Partners' Equity 5,792,210 6,140,232
------------- -------------
Total Liabilities and Partners' Equity $ 7,936,271 $ 8,009,173
============= =============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30,
(Unaudited)
SERIES 2 1999 1998
---- ----
Revenues:
Interest Income $ 7,982 $ 9,029
------------ ------------
Expenses:
Asset Management Fee-General Partner 17,162 17,193
General and Administrative:
General Partner 1,797 1,851
Other 1,716 1,533
Amortization 1,212 1,345
------------ ------------
Total Expenses 21,887 21,922
------------ ------------
Loss Before Equity in Losses of
Project Partnerships (13,905) (12,893)
Equity in Losses of Project Partnerships (45,614) (69,246)
------------ ------------
Net Loss $ (59,519) $ (82,139)
============ ============
Allocation of Net Loss:
Assignees (58,924) (81,318)
General Partners (595) (821)
------------ ------------
$ (59,519) $ (82,139)
============ ============
Net Loss Per Beneficial
Assignee Certificate $ (9.60) $ (13.25)
Number of Beneficial Assignee ============ ============
Certificates Outstanding 6,136 6,136
============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30,
(Unaudited)
SERIES 3 1999 1998
---- ----
Revenues:
Interest Income $ 6,994 $ 7,505
------------ ------------
Expenses:
Asset Management Fee-General Partner 15,870 15,911
General and Administrative:
General Partner 1,878 1,935
Other 1,973 1,757
Amortization 760 1,115
------------ ------------
Total Expenses 20,481 20,718
------------ ------------
Loss Before Equity in Losses of
Project Partnerships (13,487) (13,213)
Equity in Losses of Project Partnerships (38,464) (49,607)
------------ ------------
Net Loss $ (51,951) $ (62,820)
============ ============
Allocation of Net Loss:
Assignees (51,431) (62,192)
General Partners (520) (628)
------------ ------------
$ (51,951) $ (62,820)
============ ============
Net Loss Per Beneficial
Assignee Certificate $ (9.43) $ (11.40)
Number of Beneficial Assignee ============ ============
Certificates Outstanding 5,456 5,456
============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30,
(Unaudited)
SERIES 4 1999 1998
---- ----
Revenues:
Interest Income $ 9,185 $ 9,773
------------ ------------
Expenses:
Asset Management Fee-General Partner 19,497 19,533
General and Administrative:
General Partner 2,368 2,440
Other 2,180 1,981
Amortization 1,932 2,264
------------ ------------
Total Expenses 25,977 26,218
------------ ------------
Loss Before Equity in Losses of
Project Partnerships (16,792) (16,445)
Equity in Losses of Project Partnerships (78,556) (64,825)
------------ ------------
Net Loss $ (95,348) $ (81,270)
============ ============
Allocation of Net Loss:
Assignees (94,395) (80,457)
General Partners (953) (813)
------------ ------------
$ (95,348) $ (81,270)
============ ============
Net Loss Per Beneficial Assignee
Certificate $ (13.65) $ (11.64)
Number of Beneficial Assignee ============ ============
Certificates Outstanding 6,915 6,915
============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30,
(Unaudited)
SERIES 5 1999 1998
---- ----
Revenues:
Interest Income $ 11,791 $ 12,625
------------ ------------
Expenses:
Asset Management Fee-General Partner 24,115 24,166
General and Administrative:
General Partner 2,940 3,029
Other 2,838 2,547
Amortization 1,632 3,256
------------ ------------
Total Expenses 31,525 32,998
------------ ------------
Loss Before Equity in Losses of
Project Partnerships (19,734) (20,373)
Equity in Losses of Project Partnerships (20,441) (116,221)
------------ ------------
Net Loss $ (40,175) $ (136,594)
============ ============
Allocation of Net Loss:
Assignees (39,773) (135,228)
General Partners (402) (1,366)
------------ ------------
$ (40,175) $ (136,594)
============ ============
Net Loss Per Beneficial Assignee
Certificate $ (4.62) $ (15.69)
Number of Beneficial Assignee ============ ============
Certificates Outstanding 8,616 8,616
============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30,
(Unaudited)
SERIES 6 1999 1998
---- ----
Revenues:
Interest Income $ 11,275 $ 12,166
------------ ------------
Expenses:
Asset Management Fee-General Partner 26,704 26,780
General and Administrative:
General Partner 3,103 3,198
Other 2,901 3,298
Amortization 4,014 4,855
------------ ------------
Total Expenses 36,722 38,131
------------ ------------
Loss Before Equity in Losses of
Project Partnerships (25,447) (25,965)
Equity in Losses of Project Partnerships (75,582) (183,112)
------------ ------------
Net Loss $ (101,029) $ (209,077)
============ ============
Allocation of Net Loss:
Assignees (100,019) (206,986)
General Partners (1,010) (2,091)
------------ ------------
$ (101,029) $ (209,077)
============ ============
Net Loss Per Beneficial Assignee
Certificate $ (9.90) $ (20.48)
Number of Beneficial Assignee ============ ============
Certificates Outstanding 10,105 10,105
============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30,
(Unaudited)
TOTAL SERIES 2 - 6 1999 1998
---- ----
Revenues:
Interest Income $ 47,227 $ 51,098
------------ ------------
Expenses:
Asset Management Fee-General Partner 103,348 103,583
General and Administrative:
General Partner 12,086 12,453
Other 11,608 11,116
Amortization 9,550 12,835
------------ ------------
Total Expenses 136,592 139,987
------------ ------------
Loss Before Equity in Losses of
Project Partnerships (89,365) (88,889)
Equity in Losses of Project Partnerships (258,657) (483,011)
------------ ------------
Net Loss $ (348,022) $ (571,900)
============ ============
Allocation of Net Loss:
Assignees (344,543) (566,182)
General Partners (3,479) (5,718)
------------ ------------
$ (348,022) $ (571,900)
============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE THREE MONTHS ENDED JUNE 30, 1999 AND 1998
(Unaudited)
General
SERIES 2 Assignees Partners Total
--------- -------- -----
Balance at March 31, 1998 $ 749,952 $ (46,768) $ 703,184
Net Loss (81,318) (821) (82,139)
------------- ------------ -------------
Balance at June 30, 1998 $ 668,634 $ (47,589) $ 621,045
============= ============ =============
Balance at March 31, 1999 $ 530,860 $ (48,981) $ 481,879
Net Loss (58,924) (595) (59,519)
------------- ------------ -------------
Balance at June 30, 1999 $ 471,936 $ (49,576) $ 422,360
============= ============ =============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE THREE MONTHS ENDED JUNE 30, 1999 AND 1998
(Unaudited)
General
SERIES 3 Assignees Partners Total
--------- -------- -----
Balance at March 31, 1998 $ 602,863 $ (42,209) $ 560,654
Net Loss (62,192) (628) (62,820)
------------- ------------ -------------
Balance at June 30, 1998 $ 540,671 $ (42,837) $ 497,834
============= ============ =============
Balance at March 31, 1999 $ 417,412 $ (44,082) $ 373,330
Net Loss (51,431) (520) (51,951)
------------- ------------ -------------
Balance at June 30, 1999 $ 365,981 $ (44,602) $ 321,379
============= ============ =============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE THREE MONTHS ENDED JUNE 30, 1999 AND 1998
(Unaudited)
General
SERIES 4 Assignees Partners Total
--------- -------- -----
Balance at March 31, 1998 $ 1,311,156 $ (48,022) $ 1,263,134
Net Loss (80,457) (813) (81,270)
------------- ------------ -------------
Balance at June 30, 1998 $ 1,230,699 $ (48,835) $ 1,181,864
============= ============ =============
Balance at March 31, 1999 $ 965,972 $ (51,509) $ 914,463
Net Loss (94,395) (953) (95,348)
------------- ------------ -------------
Balance at June 30, 1999 $ 871,577 $ (52,462) $ 819,115
============= ============ =============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE THREE MONTHS ENDED JUNE 30, 1999 AND 1998
(Unaudited)
General
SERIES 5 Assignees Partners Total
--------- -------- -----
Balance at March 31, 1998 $ 2,012,865 $ (56,055) $ 1,956,810
Net Loss (135,228) (1,366) (136,594)
------------- ------------ -------------
Balance at June 30, 1998 $ 1,877,637 $ (57,421) $ 1,820,216
============= ============ =============
Balance at March 31, 1999 $ 1,613,346 $ (60,091) $ 1,553,255
Net Loss (39,773) (402) (40,175)
------------- ------------ -------------
Balance at June 30, 1999 $ 1,573,573 $ (60,493) $ 1,513,080
============= ============ =============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE THREE MONTHS ENDED JUNE 30, 1999 AND 1998
(Unaudited)
General
SERIES 6 Assignees Partners Total
--------- -------- -----
Balance at March 31, 1998 $ 3,572,169 $ (53,540) $ 3,518,629
Net Loss (206,986) (2,091) (209,077)
------------- ------------ -------------
Balance at June 30, 1998 $ 3,365,183 $ (55,631) $ 3,309,552
============= ============ =============
Balance at March 31, 1999 $ 2,877,858 $ (60,553) $ 2,817,305
Net Loss (100,019) (1,010) (101,029)
------------- ------------ -------------
Balance at June 30, 1999 $ 2,777,839 $ (61,563) $ 2,716,276
============= ============ =============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE THREE MONTHS ENDED JUNE 30, 1999 AND 1998
(Unaudited)
General
TOTAL SERIES 2 - 6 Assignees Partners Total
--------- -------- -----
Balance at March 31, 1998 $ 8,249,005 $ (246,594) $ 8,002,411
Net Loss (566,182) (5,718) (571,900)
------------- ------------ -------------
Balance at June 30, 1998 $ 7,682,823 $ (252,312) $ 7,430,511
============= ============ =============
Balance at March 31, 1999 $ 6,405,448 $ (265,216) $ 6,140,232
Net Loss (344,543) (3,479) (348,022)
------------- ------------ -------------
Balance at June 30, 1999 $ 6,060,905 $ (268,695) $ 5,792,210
============= ============ =============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 30, 1999 AND 1998
(Unaudited)
SERIES 2 1999 1998
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss $ (59,519) $ (82,139)
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 1,212 1,345
Accreted Interest Income on Investments
in Securities (5,815) (6,231)
Equity in Losses of Project
Partnerships 45,614 69,246
Interest Income from Redemption of
Securities 20,241 16,834
Changes in Operating Assets and
Liabilities:
Increase in Payable to Other Series 170,818 0
Increase in Payable to General Partners 17,154 14,369
------------ ------------
Net Cash Used in Operating Activities 189,705 13,424
------------ ------------
Cash Flows from Investing Activities:
Distributions Received from Project
Partnerships 2,556 2,556
Redemption of Investment in Securities 29,297 30,668
------------ ------------
Net Cash Provided by Investing
Activities 31,853 33,224
------------ ------------
Increase (Decrease) in Cash and Cash
Equivalents 221,558 46,648
Cash and Cash Equivalents at Beginning of
Year 169,513 160,851
------------ ------------
Cash and Cash Equivalents at End of Year $ 391,071 $ 207,499
============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 30, 1999 AND 1998
(Unaudited)
SERIES 3 1999 1998
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss $ (51,951) $ (62,820)
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 760 1,115
Accreted Interest Income on Investments
in Securities (5,172) (5,542)
Equity in Losses of Project
Partnerships 38,464 49,607
Interest Income from Redemption of
Securities 18,004 14,974
Changes in Operating Assets and
Liabilities:
Increase in Receivable from
Other Series (44,415) 0
Increase in Payable to General
Partners 16,175 12,787
------------ ------------
Net Cash Provided by (Used in)
Operating Activities (28,135) 10,121
------------ ------------
Cash Flows from Investing Activities:
Distributions Received from Project
Partnerships 8,478 14,536
Redemption of Investment in Securities 26,059 27,278
------------ ------------
Net Cash Provided by (Used in)
Investing Activities 34,537 41,814
------------ ------------
Increase (Decrease) in Cash and Cash
Equivalents 6,402 51,935
Cash and Cash Equivalents at Beginning of
Year 137,981 135,622
------------ ------------
Cash and Cash Equivalents at End of Year $ 144,383 $ 187,557
============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 30, 1999 AND 1998
(Unaudited)
SERIES 4 1999 1998
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss $ (95,348) $ (81,270)
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 1,932 2,264
Accreted Interest Income on Investments
in Securities (6,553) (7,021)
Equity in Losses of Project
Partnerships 78,556 64,825
Interest Income from Redemption of
Securities 22,808 18,970
Changes in Operating Assets and
Liabilities:
Increase in Receivable from
Other Series (56,270) 0
Increase in Payable to General
Partners 19,675 15,738
------------ ------------
Net Cash Provided by (Used in)
Operating Activities (35,200) 13,506
------------ ------------
Cash Flows from Investing Activities:
Distributions Received from Project
Partnerships 7,621 9,588
Redemption of Investment in Securities 33,015 34,559
------------ ------------
Net Cash Provided by (Used in)
Investing Activities 40,636 44,147
------------ ------------
Increase (Decrease) in Cash and Cash
Equivalents 5,436 57,653
Cash and Cash Equivalents at Beginning of
Year 207,632 196,876
------------ ------------
Cash and Cash Equivalents at End of Year $ 213,068 $ 254,529
============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 30, 1999 AND 1998
(Unaudited)
SERIES 5 1999 1998
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss $ (40,175) $ (136,594)
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 1,632 3,256
Accreted Interest Income on Investments
in Securities (8,167) (8,751)
Equity in Losses of Project
Partnerships 20,441 116,221
Interest Income from Redemption of
Securities 28,428 23,644
Changes in Operating Assets and
Liabilities:
Increase in Receivable from
Other Series (70,133) 0
Increase in Payable to General
Partners 24,470 19,931
------------ ------------
Net Cash Provided by (Used in)
Operating Activities (43,504) 17,707
------------ ------------
Cash Flows from Investing Activities:
Distributions Received from Project
Partnerships 9,155 8,706
Redemption of Investment in Securities 41,148 43,073
------------ ------------
Net Cash Provided by (Used in)
Investing Activities 50,303 51,779
------------ ------------
Increase (Decrease) in Cash and Cash
Equivalents 6,799 69,486
Cash and Cash Equivalents at Beginning of
Year 292,994 280,813
------------ ------------
Cash and Cash Equivalents at End of Year $ 299,793 $ 350,299
============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 30, 1999 AND 1998
(Unaudited)
SERIES 6 1999 1998
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss $ (101,029) $ (209,077)
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 4,014 4,855
Accreted Interest Income on Investments
in Securities (7,004) (7,257)
Equity in Losses of Project
Partnerships 75,582 183,112
Interest Income from Redemption of
Securities 0 0
Changes in Operating Assets and
Liabilities:
Increase in Receivable from
Other Series 0 0
Increase in Payable to General
Partners 26,828 22,527
------------ ------------
Net Cash Provided by (Used in)
Operating Activities (1,609) (5,840)
------------ ------------
Cash Flows from Investing Activities:
Distributions Received from Project
Partnerships 6,532 8,333
Redemption of Investment in Securities 0 0
------------ ------------
Net Cash Provided by (Used in)
Investing Activities 6,532 8,333
------------ ------------
Increase (Decrease) in Cash and Cash
Equivalents 4,923 2,493
Cash and Cash Equivalents at Beginning of
Year 408,672 406,255
------------ ------------
Cash and Cash Equivalents at End of Year $ 413,595 $ 408,748
============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 30, 1999 AND 1998
(Unaudited)
TOTAL SERIES 2 - 6 1999 1998
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss $ (348,022) $ (571,900)
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 9,550 12,835
Accreted Interest Income on Investments
in Securities (32,711) (34,802)
Equity in Losses of Project
Partnerships 258,657 483,011
Interest Income from Redemption of
Securities 89,481 74,422
Changes in Operating Assets and
Liabilities:
Increase in Receivable from Other
Series (170,818) 0
Increase in Payable to Other Series 170,818 0
Increase in Payable to General
Partners 104,302 85,352
------------ ------------
Net Cash Provided by (Used in)
Operating Activities 81,257 48,918
------------ ------------
Cash Flows from Investing Activities:
Distributions Received from Project
Partnerships 34,342 43,719
Redemption of Investment in Securities 129,519 135,578
------------ ------------
Net Cash Provided by (Used in)
Investing Activities 163,861 179,297
------------ ------------
Increase (Decrease) in Cash and Cash
Equivalents 245,118 228,215
Cash and Cash Equivalents at Beginning of
Year 1,216,792 1,180,417
------------ ------------
Cash and Cash Equivalents at End of Year $ 1,461,910 $ 1,408,632
============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
JUNE 30, 1999
NOTE 1 - ORGANIZATION:
Gateway Tax Credit Fund II Ltd. ("Gateway"), a Florida Limited Partnership,
was formed September 12, 1989, under the laws of Florida. Operations
commenced on September 14, 1990 for Series 2, September 28, 1990 for Series
3, February 1, 1991 for Series 4, July 1, 1991 for Series 5 and January 1,
1992 for Series 6. Gateway has invested, as a limited partner, in other
limited partnerships ("Project Partnerships") each of which owns and operates
one or more apartment complexes expected to qualify for Low-Income Housing
Tax Credits. Gateway will terminate on December 31, 2040, or sooner, in
accordance with the terms of the Limited Partnership Agreement. As of June
30, 1999, 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, because management believes that Gateway does not have a
majority control of the major operating and financial policies of the Project
Partnerships in which it invests, 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, and
3)Decreased for the amortization of the acquisition fees and expenses.
Amortization is calculated on a straight-line basis over 35 years, as this
is the average estimated useful life of the underlying assets. The
amortization is 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.
Gateway recognizes a decline in the carrying value of its investment in the
Project Partnerships when there is evidence of a non-temporary decline in the
recoverable amount of the investment. There is a possibility that the
estimates relating to reserves for non-temporary declines in carrying value
of the investments in Project Partnerships may be subject to material near
term adjustments.
Gateway, as a limited partner in the Project Partnerships, is subject to
risks inherent in the ownership of property which are beyond its control,
such as fluctuations in occupancy rates and operating expenses, variations in
rental schedules, proper maintenance and continued eligibility of tax
credits. If the cost of operating a property exceeds the rental income
earned thereon, Gateway may deem it in its best interest to voluntarily
provide funds in order to protect its investment.
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 1998 and 1997 figures have been reclassified, where
appropriate, to conform with the financial statement presentation used in
1999.
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, 1999. In the opinion of management these
financial statements include adjustments, consisting only of normal recurring
adjustments, necessary to fairly summarize the Partnership's financial
position and results of operations. The results of operations for the
periods may not be indicative of the results to be expected for the year.
NOTE 3 - INVESTMENT IN SECURITIES:
The June 30, 1999 Balance Sheet includes Investment in Securities
consisting of U.S. Government Security Strips which represents their cost,
plus accreted interest income of $134,607 for Series 2, $119,731 for Series
3, $151,688 for Series 4, $189,058 for Series 5 and $152,667 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 $ 328,413 $ 308,242 $ 20,171
Series 3 292,022 274,175 17,847
Series 4 370,108 347,352 22,756
Series 5 461,150 432,929 28,221
Series 6 430,861 406,980 23,881
As of June 30, 1999, the cost and accreted interest of debt securities by
contractual maturities is as follows:
Series 2 Series 3 Series 4
-------- -------- --------
Due with 1 year $ 49,108 $ 43,680 $ 55,338
After 1 year through 5 years 179,321 159,503 202,074
After 5 years through 10 years 79,813 70,992 89,940
---------- ---------- ----------
Total Amount Carried on
Balance Sheet $ 308,242 $ 274,175 $ 347,352
========== ========== ==========
Series 5 Series 6 Total
-------- -------- --------
Due with 1 year $ 68,975 $ 53,162 $ 269,263
After 1 year through 5 years 251,857 207,244 999,999
After 5 years through 10 years 112,097 146,574 499,416
---------- ---------- ----------
Total Amount Carried on
Balance Sheet $ 432,929 $ 406,980 $1,768,678
========== ========== ==========
NOTE 4 - RELATED PARTY TRANSACTIONS:
The Payable to General Partners primarily represents the asset management
fees owed to the General Partners at the end of the period. It is unsecured,
due on demand and, in accordance with the limited partnership agreement, non-
interest bearing. Within the next 12 months, the Managing General Partner
does not intend to demand payment on the portion of Asset Management Fees
payable classified as long-term on the Balance Sheet.
The Payable to Project Partnerships represents unpaid capital contributions
to the Project Partnerships and will be paid after certain performance
criteria are met. Such contributions are in turn payable to the general
partner of the Project Partnerships.
For the three months June 30, 1999 and 1998 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.
1999 1998
---- ------
Series 2 $ 17,162 $ 17,193
Series 3 15,870 15,911
Series 4 19,497 19,533
Series 5 24,115 24,166
Series 6 26,704 26,780
--------- ---------
Total $ 103,348 $ 103,583
========= =========
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 $ 1,797 $ 1,851
Series 3 1,878 1,935
Series 4 2,368 2,440
Series 5 2,940 3,029
Series 6 3,103 3,198
--------- --------
Total $ 12,086 $ 12,453
========= ========
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS:
As of June 30, 1999, the Partnership had acquired a 99% interest in the
profits, losses and tax credits as a limited partner in 148 Project
Partnerships for the Series which own and operate government assisted multi-
family housing complexes(Series 2 - 22, Series 3 - 23, Series 4 - 29, Series 5
- - 36 and Series 6 - 38).
Cash flows from operations are allocated according to each partnership
agreement. Upon dissolution proceeds will be distributed according to each
partnership agreement.
The following is a summary of Investments in Project Partnerships as of:
SERIES 2 JUNE 30, MARCH 31,
1999 1999
-------------- ----------
Capital Contributions to Project Partner-
ships and purchase price paid for limited
partner interests in Project Partnerships $ 4,524,678 $ 4,524,678
Cumulative equity in losses of Project
Partnerships (1) (4,483,296) (4,437,682)
Cumulative distributions received from
Project Partnerships (72,210) (69,654)
------------ -------------
Investment in Project Partnerships before
Adjustment (30,828) 17,342
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 390,838 390,838
Accumulated amortization of acquisition
fees and expenses (77,813) (76,601)
----------- ------------
Investments in Project Partnerships $ 282,197 $ 331,579
============ ============
(1) In accordance with the Partnership's accounting policy to not carry
Investments in Project Partnerships below zero, cumulative suspended losses
of $1,353,062 for the period ended June 30, 1999 and cumulative suspended
losses of $1,142,213 for the year ended March 31, 1999 are not included.
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
The following is a summary of Investments in Project Partnerships as of:
SERIES 3 JUNE 30, MARCH 31,
1999 1999
-------------- ----------
Capital Contributions to Project Partner-
ships and purchase price paid for limited
partner interests in Project Partnerships $ 3,888,713 $ 3,888,713
Cumulative equity in losses of Project
Partnerships (1) (3,966,065) (3,927,601)
Cumulative distributions received from
Project Partnerships (164,344) (155,866)
----------- -------------
Investment in Project Partnerships before
Adjustment (241,696) (194,754)
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 491,746 491,746
Accumulated amortization of acquisition
fees and expenses (78,932) (78,172)
----------- ------------
Investments in Project Partnerships $ 171,118 $ 218,820
============ ============
(1) In accordance with the Partnership's accounting policy to not carry
Investments in Project Partnerships below zero, cumulative suspended losses
of $1,713,164 for the period ended June 30, 1999 and cumulative suspended
losses of $1,581,681 for the year ended March 31, 1999 are not included.
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
The following is a summary of Investments in Project Partnerships as of:
SERIES 4 JUNE 30, MARCH 31,
1999 1999
-------------- ----------
Capital Contributions to Project Partner-
ships and purchase price paid for limited
partner interests in Project Partnerships $ 4,952,519 $ 4,952,519
Cumulative equity in losses of Project
Partnerships (1) (4,712,742) (4,634,186)
Cumulative distributions received from
Project Partnerships (108,611) (100,990)
----------- -------------
Investment in Project Partnerships before
Adjustment 131,166 217,343
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 562,966 562,967
Accumulated amortization of acquisition
fees and expenses (105,894) (103,962)
----------- ------------
Investments in Project Partnerships $ 588,238 $ 676,348
============ ============
(1) In accordance with the Partnership's accounting policy to not carry
Investments in Project Partnerships below zero, cumulative suspended losses
of $1,131,877 for the period ended June 30, 1999 and cumulative suspended
losses of $1,002,895 for the year ended March 31, 1999 are not included.
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
The following is a summary of Investments in Project Partnerships as of:
SERIES 5 JUNE 30, MARCH 31,
1999 1999
-------------- ----------
Capital Contributions to Project Partner-
ships and purchase price paid for limited
partner interests in Project Partnerships $ 6,164,472 $ 6,164,472
Cumulative equity in losses of Project
Partnerships (1) (5,427,840) (5,407,399)
Cumulative distributions received from
Project Partnerships (155,870) (146,715)
----------- -------------
Investment in Project Partnerships before
Adjustment 580,762 610,358
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 650,837 650,837
Accumulated amortization of acquisition
fees and expenses (117,246) (115,614)
------------ ------------
Investments in Project Partnerships $ 1,114,353 $ 1,145,581
============ ============
(1) In accordance with the Partnership's accounting policy to not carry
Investments in Project Partnerships below zero, cumulative suspended losses
of $1,164,175 for the period ended June 30, 1999 and cumulative suspended
losses of $929,309 for the year ended March 31, 1999 are not included.
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
The following is a summary of Investments in Project Partnerships as of:
SERIES 6 JUNE 30, MARCH 31,
1999 1999
-------------- ----------
Capital Contributions to Project Partner-
ships and purchase price paid for limited
partner interests in Project Partnerships $ 7,462,215 $ 7,462,215
Cumulative equity in losses of Project
Partnerships (1) (5,571,806) (5,496,224)
Cumulative distributions received from
Project Partnerships (152,188) (145,656)
------------ -------------
Investment in Project Partnerships before
Adjustment 1,738,221 1,820,335
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 785,179 785,179
Accumulated amortization of acquisition
fees and expenses (145,442) (141,428)
------------ ------------
Investments in Project Partnerships $ 2,377,958 $ 2,464,086
============ ============
(1) In accordance with the Partnership's accounting policy to not carry
Investments in Project Partnerships below zero, cumulative suspended losses
of $700,289 for the period ended June 30, 1999 and cumulative suspended
losses of $598,829 for the year ended March 31, 1999 are not included.
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
The following is a summary of Investments in Project Partnerships as of:
TOTAL SERIES 2 - 6 JUNE 30, MARCH 31,
1999 1999
-------------- ----------
Capital Contributions to Project Partner-
ships and purchase price paid for limited
partner interests in Project Partnerships $ 26,992,597 $ 26,992,597
Cumulative equity in losses of Project
Partnerships (1) (24,161,749) (23,903,092)
Cumulative distributions received from
Project Partnerships (653,223) (618,881)
----------- -------------
Investment in Project Partnerships before
Adjustment 2,177,625 2,470,624
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 2,881,566 2,881,567
Accumulated amortization of acquisition
fees and expenses (525,327) (515,777)
----------- ------------
Investments in Project Partnerships $ 4,533,864 $ 4,836,414
============ ============
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with the Partnership's policy of presenting the financial
information of the Project Partnerships on a three month lag, below is the
summarized financial information for the Series' Project Partnerships as of
March 31, of each year:
MARCH 31,,
1999 1998
SERIES 2 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 1,763,428 $ 1,697,340
Investment properties, net 20,551,425 21,437,691
Other assets 15,740 15,595
----------- -----------
Total assets $22,330,593 $23,150,626
=========== ===========
Liabilities and Partners' Equity:
Current liabilities 501,446 452,263
Long-term debt 23,165,507 23,216,826
----------- -----------
Total liabilities 23,666,953 23,669,089
----------- -----------
Partners' equity
Limited Partner (1,361,567) (570,269)
General Partners 25,207 51,806
----------- -----------
Total Partners' equity (1,336,360) (518,463)
----------- -----------
Total liabilities and partners'
equity $22,330,593 $23,150,626
=========== ===========
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 704,648 $ 674,916
Expenses:
Operating expenses 495,055 418,495
Interest expense 239,187 207,000
Depreciation and amortization 229,460 233,898
----------- -----------
Total expenses 963,702 859,393
Net loss (259,054) (184,477)
=========== ===========
Other partners' share of net loss (2,591) (1,845)
Partnerships' share of net loss (256,463) (182,632)
Suspended losses 210,849 113,386
----------- -----------
Equity in Losses of Project Partnerships $ (45,614) $ (69,246)
=========== ===========
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with the Partnership's policy of presenting the financial
information of the Project Partnerships on a three month lag, below is the
summarized financial information for the Series' Project Partnerships as of
March 31, of each year:
MARCH 31,,
1999 1998
SERIES 3 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 2,198,970 $ 2,126,149
Investment properties, net 17,834,880 18,667,551
Other assets 216,095 224,455
----------- -----------
Total assets $20,249,945 $21,018,155
=========== ===========
Liabilities and Partners' Equity:
Current liabilities 499,172 430,047
Long-term debt 21,712,606 21,786,186
----------- -----------
Total liabilities 22,211,778 22,216,233
----------- -----------
Partners' equity
Limited Partner (2,222,181) (1,502,919)
General Partners 260,348 304,841
----------- -----------
Total Partners' equity (1,961,833) (1,198,078)
----------- -----------
Total liabilities and partners'
equity $20,249,945 $21,018,155
=========== ===========
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 608,864 $ 634,021
Expenses:
Operating expenses 369,595 394,834
Interest expense 181,793 150,037
Depreciation and amortization 229,140 228,291
----------- -----------
Total expenses 780,528 773,162
Net loss (171,664) (139,141)
=========== ===========
Other partners' share of net loss (1,717) (1,391)
Partnerships' share of net loss (169,947) (137,750)
Suspended losses 131,483 88,143
----------- -----------
Equity in Losses of Project Partnerships $ (38,464) $ (49,607)
=========== ===========
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with the Partnership's policy of presenting the financial
information of the Project Partnerships on a three month lag, below is the
summarized financial information for the Series' Project Partnerships as of
March 31, of each year:
MARCH 31,,
1999 1998
SERIES 4 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 2,331,677 $ 2,095,030
Investment properties, net 24,043,020 25,028,888
Other assets 21,916 44,390
----------- -----------
Total assets $26,396,613 $27,168,308
=========== ===========
Liabilities and Partners' Equity:
Current liabilities 682,879 558,948
Long-term debt 26,489,140 26,565,661
----------- -----------
Total liabilities 27,172,019 27,124,609
----------- -----------
Partners' equity
Limited Partner (967,012) (179,134)
General Partners 191,606 222,833
----------- -----------
Total Partners' equity (775,406) 43,699
----------- -----------
Total liabilities and partners'
equity $26,396,613 $27,168,308
=========== ===========
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 806,616 $ 795,441
Expenses:
Operating expenses 429,834 453,909
Interest expense 332,606 230,165
Depreciation and amortization 253,810 265,155
----------- -----------
Total expenses 1,016,250 949,229
Net loss (209,634) (153,788)
=========== ===========
Other partners' share of net loss (2,096) (1,538)
Partnerships' share of net loss (207,538) (152,250)
Suspended losses 128,982 87,425
----------- -----------
Equity in Losses of Project Partnerships $ (78,556) $ (64,825)
=========== ===========
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with the Partnership's policy of presenting the financial
information of the Project Partnerships on a three month lag, below is the
summarized financial information for the Series' Project Partnerships as of
March 31, of each year:
MARCH 31,,
1999 1998
SERIES 5 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 2,846,257 $ 2,732,243
Investment properties, net 30,120,120 31,346,991
Other assets 7,499 36,275
----------- -----------
Total assets $32,973,876 $34,115,509
=========== ===========
Liabilities and Partners' Equity:
Current liabilities 818,028 756,950
Long-term debt 32,737,670 32,829,165
----------- -----------
Total liabilities 33,555,698 33,586,115
----------- -----------
Partners' equity
Limited Partner (472,278) 599,983
General Partners (109,544) (70,589)
----------- -----------
Total Partners' equity (581,822) 529,394
----------- -----------
Total liabilities and partners'
equity $32,973,876 $34,115,509
=========== ===========
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 901,356 $ 902,914
Expenses:
Operating expenses 612,614 551,516
Interest expense 218,343 208,096
Depreciation and amortization 328,285 333,352
----------- -----------
Total expenses 1,159,242 1,092,964
Net loss (257,886) (190,050)
=========== ===========
Other partners' share of net loss (2,579) (1,901)
Partnerships' share of net loss (255,307) (188,149)
Suspended losses 234,866 71,928
----------- -----------
Equity in Losses of Project Partnerships $ (20,441) $ (116,221)
=========== ===========
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with the Partnership's policy of presenting the financial
information of the Project Partnerships on a three month lag, below is the
summarized financial information for the Series' Project Partnerships as of
March 31, of each year:
MARCH 31,,
1999 1998
SERIES 6 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 3,160,853 $ 2,988,191
Investment properties, net 34,052,870 35,362,364
Other assets 31,775 37,353
----------- -----------
Total assets $37,245,498 $38,387,908
=========== ===========
Liabilities and Partners' Equity:
Current liabilities 791,217 785,945
Long-term debt 35,588,981 35,743,123
----------- -----------
Total liabilities 36,380,198 36,529,068
----------- -----------
Partners' equity
Limited Partner 1,071,248 2,024,016
General Partners (205,948) (165,176)
----------- -----------
Total Partners' equity 865,300 1,858,840
----------- -----------
Total liabilities and partners' $37,245,498 $38,387,908
equity =========== ===========
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 1,011,534 $ 966,931
Expenses:
Operating expenses 588,704 580,494
Interest expense 247,932 259,487
Depreciation and amortization 353,728 368,093
----------- -----------
Total expenses 1,190,364 1,208,074
Net loss (178,830) (241,143)
=========== ===========
Other partners' share of net loss (1,788) (2,411)
Partnerships' share of net loss (177,042) (238,732)
Suspended losses 101,460 55,620
----------- -----------
Equity in Losses of Project Partnerships $ (75,582) $ (183,112)
=========== ===========
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with the Partnership's policy of presenting the financial
information of the Project Partnerships on a three month lag, below is the
summarized financial information for the Series' Project Partnerships as of
March 31, of each year:
MARCH 31,,
1999 1998
TOTAL SERIES 2- 6 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 12,301,185 $ 11,638,953
Investment properties, net 126,602,315 131,843,485
Other assets 293,025 358,068
----------- -----------
Total assets $139,196,525 $143,840,506
=========== ===========
Liabilities and Partners' Equity:
Current liabilities 3,292,742 2,984,153
Long-term debt 139,693,904 140,140,961
----------- -----------
Total liabilities 142,986,646 143,125,114
----------- -----------
Partners' equity
Limited Partner (3,951,790) 371,677
General Partners 161,669 343,715
----------- -----------
Total Partners' equity (3,790,121) 715,392
----------- -----------
Total liabilities and partners'
equity $139,196,525 $143,840,506
=========== ===========
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 4,033,018 $ 3,974,223
Expenses:
Operating expenses 2,495,802 2,399,248
Interest expense 1,219,861 1,054,785
Depreciation and amortization 1,394,423 1,428,789
----------- -----------
Total expenses 5,110,086 4,882,822
Net loss (1,077,068) (908,599)
=========== ===========
Other partners' share of net loss (10,771) (9,086)
Partnerships' share of net loss (1,066,297) (899,513)
Suspended losses 807,640 416,502
----------- -----------
Equity in Losses of Project
Partnerships $ (258,657) $ (483,011)
=========== ===========
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations, Liquidity and Capital Resources
Operations commenced on September 14, 1990, with the first admission of
Assignees in Series 2. The proceeds from Assignees' capital contributions
available for investment were used to acquire interests in Project
Partnerships.
As disclosed on the statement of operations for each Series, except as
described below, interest income is comparable for the three months ended
June 30, 1999 and June 30, 1998. The General and Administrative expenses -
General Partner and General and Administrative expenses - Other for the three
months ended June 30, 1999 are comparable for the same period ended June 30,
1998. 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 three months ended June 30, 1999 decreased from $69,246 for the three
months ended June 30, 1998 to $45,614 as a result of not including losses of
$210,849 in 1999 as compared to $113,386 in 1998, 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 June 30, 1999, the Series had $391,071 of short-term investments (Cash
and Cash Equivalents). It also had $308,242 in Zero Coupon Treasuries with
annual maturities providing $51,800 in fiscal year 2001 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
$59,519 for the three months ended June 30, 1999. However, after adjusting
for Equity in Losses of Project Partnerships of $45,614 and the changes in
operating assets and liabilities, net cash provided by activities was
$189,705, primarily due to the maturity of the Zero Coupon Treasuries, a
portion of which is payable to the other Series. Cash provided by investing
activities totaled $31,853, consisting of $2,556 in cash distributions from
the Project Partnerships and $29,297 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 three months ended June 30, 1999 decreased from $49,607 for the three
months ended June 30, 1998 to $38,464 as a result of not including losses of
$131,483 in 1999 as compared to $88,143 in 1998, as these losses would reduce
the investment in certain Project Partnerships below zero.
At June 30, 1998, the Series had $144,383 of short-term investments (Cash and
Cash Equivalents). It also had $274,175 in Zero Coupon Treasuries with
annual maturities providing $46,075 in fiscal year 2001 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
$51,951 for the three months ended June 30, 1999. However, after adjusting
for Equity in Losses of Project Partnerships of $38,464 and the changes in
operating assets and liabilities, net cash used in operating activities was
$28,135, primarily due to the Receivable from Other Series for the maturity
of Zero Coupon Treasuries. Cash provided by investing activities totaled
$34,537, consisting of $8,478 in cash distributions from the Project
Partnerships and $26,059 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 three months ended June 30, 1999 increased from $64,825 for the three
months ended June 30, 1998 to $78,556.
At June 30, 1999, the Series had $213,068 of short-term investments (Cash
and Cash Equivalents). It also had $347,352 in Zero Coupon Treasuries with
annual maturities providing $58,372 in fiscal year 2001 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
$95,348 for the three months ended June 30, 1999. However, after adjusting
for Equity in Losses of Project Partnerships of $78,556 and the changes in
operating assets and liabilities, net cash used in operating activities was
$35,200, primarily due to the Receivable from Other Series for the maturity
of Zero Coupon Treasuries. Cash provided by investing activities totaled
$40,636, consisting of $7,621 in cash distributions from the Project
Partnerships and $33,015 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 three months ended June 30, 1999 decreased from $116,221 for the three
months ended June 30, 1998 to $20,441 as a result of not including losses of
$234,866 in 1999 as compared to $71,928 in 1998, as these losses would reduce
the investment in certain Project Partnerships below zero.
At June 30, 1999, the Series had $299,793 of short-term investments (Cash
and Cash Equivalents). It also had $432,930 in Zero Coupon Treasuries with
annual maturities providing $72,753 in fiscal year 2001 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
$40,175 for the three months ended June 30, 1999. However, after adjusting
for Equity in Losses of Project Partnerships of $20,441 and the changes in
operating assets and liabilities, net cash used in operating activities was
$43,504, primarily due to the Receivable from Other Series for the maturity
of Zero Coupon Treasuries. Cash provided by investing activities totaled
$50,303, consisting of $9,156 in cash distributions from the Project
Partnerships and $41,148 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 for
the three months ended June 30, 1999 decreased from $183,112 for the three
months ended June 30, 1998 to $75,582 as a result of not including losses of
$101,460 in 1999 as compared to $55,620 in 1998, as these losses would reduce
the investment in certain Project Partnerships below zero.
At June 30, 1999, the Series had $413,595 of short-term investments (Cash
and Cash Equivalents). It also had $406,980 in Zero Coupon Treasuries with
annual maturities providing $55,000 in fiscal year 2001 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
$101,029 for the three months ended June 30, 1999. However, after adjusting
for Equity in Losses of Project Partnerships of $75,582 and the changes in
operating assets and liabilities, net cash used in operating activities was
$1,609, primarily due to the increase in payable to the General Partners.
Cash provided by investing activities totaled $6,532, consisting of cash
distributions from the Project Partnerships. There were no unusual events or
trends to describe.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
By: Raymond James Tax Credit Funds,Inc.
Date: August 13, 1999 By:/s/ Ronald M. Diner
Ronald M. Diner
President
Date: August 13, 1999 By:/s/ Sandra L. Furey
Sandra L. Furey
Secretary and Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1999.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-END> JUN-30-1999
<CASH> 1,461,910
<SECURITIES> 1,769,679
<RECEIVABLES> 170,818
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,902,991
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 7,936,271
<CURRENT-LIABILITIES> 461,473
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,792,210
<TOTAL-LIABILITY-AND-EQUITY> 7,936,271
<SALES> 0
<TOTAL-REVENUES> 47,227
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 136,592
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (348,022)
<INCOME-TAX> 0
<INCOME-CONTINUING> (348,022)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (348,022)
<EPS-BASIC> (34.10)<F1>
<EPS-DILUTED> (34.10)<F1>
<FN>
<F1>EPS IS NET LOSS PER $1,000 LIMITED PARTNERSHIP UNIT.
</FN>
</TABLE>
