SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE
ACT OF 1934
For The Quarterly Period Ended September 30, 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 September 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, 1999
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 September 30, March 31,
1999 1999
--------- ----------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 184,694 $ 169,513
Investments in Securities 50,016 49,538
------------ ------------
Total Current Assets 234,710 219,051
Investments in Securities 264,153 302,427
Investments in Project Partnerships, Net 203,592 331,579
------------- -------------
Total Assets $ 702,455 $ 853,057
============= =============
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners 44,759 44,229
------------- -------------
Total Current Liabilities 44,759 44,229
------------- -------------
Long-Term Liabilities:
Payable to General Partners 329,576 326,949
------------- -------------
Partners' Equity:
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's, of
which 37,228 at September 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 September 30,
1999 and March 31,1999, issued and
outstanding 378,639 530,860
General Partners (50,519) (48,981)
------------- -------------
Total Partners' Equity 328,120 481,879
------------- -------------
Total Liabilities and Partners' Equity $ 702,455 $ 853,057
============= =============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
SERIES 3 September 30, March 31,
1999 1999
--------- ----------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 148,088 $ 137,981
Investments in Securities 44,488 44,063
------------ ------------
Total Current Assets 192,576 182,044
Investments in Securities 234,957 269,002
Investments in Project Partnerships, Net 152,793 218,820
------------- -------------
Total Assets $ 580,326 $ 669,866
============= =============
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners 48,101 48,298
------------- -------------
Total Current Liabilities 48,101 48,298
------------- -------------
Long-Term Liabilities:
Payable to General Partners 240,203 248,238
------------- -------------
Partners' Equity:
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's, of
which 37,228 at September 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 September 30,
1999 and March 31, 1999, issued and
outstanding 336,917 417,412
General Partners (44,895) (44,082)
------------- -------------
Total Partners' Equity 292,022 373,330
------------- -------------
Total Liabilities and Partners' Equity $ 580,326 $ 669,866
============= =============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
SERIES 4 September 30, March 31,
1999 1999
--------- ----------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 225,166 $ 207,632
Investments in Securities 56,362 55,823
------------ ------------
Total Current Assets 281,528 263,455
Investments in Securities 297,669 340,799
Investments in Project Partnerships, Net 534,489 676,348
------------- -------------
Total Assets $ 1,113,686 $ 1,280,602
============= =============
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners 53,019 53,248
------------- -------------
Total Current Liabilities 53,019 53,248
------------- -------------
Long-Term Liabilities:
Payable to General Partners 311,643 312,891
------------- -------------
Partners' Equity:
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's, of
which 37,228 at September 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 September 30,
1999 and March 31, 1999, issued and
outstanding 802,187 965,972
General Partners (53,163) (51,509)
------------- -------------
Total Partners' Equity 749,024 914,463
------------- -------------
Total Liabilities and Partners' Equity $ 1,113,686 $ 1,280,602
============= =============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
SERIES 5 September 30, March 31,
1999 1999
--------- ----------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 305,306 $ 292,994
Investments in Securities 70,251 69,576
------------ ------------
Total Current Assets 375,557 362,570
Investments in Securities 371,003 424,763
Investments in Project Partnerships, Net 1,021,142 1,145,581
------------- -------------
Total Assets $ 1,767,702 $ 1,932,914
============= =============
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners 71,096 71,427
------------- -------------
Total Current Liabilities 71,096 71,427
------------- -------------
Long-Term Liabilities:
Payable to General Partners 300,685 308,232
------------- -------------
Partners' Equity:
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's, of
which 37,228 at September 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 September 30,
1999 and March 31,1999, issued and
outstanding 1,457,585 1,613,346
General Partners (61,664) (60,091)
------------- -------------
Total Partners' Equity 1,395,921 1,553,255
------------- -------------
Total Liabilities and Partners' Equity $ 1,767,702 $ 1,932,914
============= =============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
SERIES 6 September 30, March 31,
1999 1999
--------- ----------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 354,627 $ 408,672
Investments in Securities 54,005 52,341
------------ ------------
Total Current Assets 408,632 461,013
Investments in Securities 360,180 347,635
Investments in Project Partnerships, Net 2,108,649 2,464,086
------------- -------------
Total Assets $ 2,877,461 $ 3,272,734
============= =============
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners 66,637 67,059
------------- -------------
Total Current Liabilities 66,637 67,059
------------- -------------
Long-Term Liabilities:
Payable to General Partners 388,847 388,370
------------- -------------
Partners' Equity:
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's, of
which 37,228 at September 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 September 30,
1999 and March 31,1999, issued and
outstanding 2,486,483 2,877,858
General Partners (64,506) (60,553)
------------- -------------
Total Partners' Equity 2,421,977 2,817,305
------------- -------------
Total Liabilities and Partners' Equity $ 2,877,461 $ 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 September 30, March 31,
1999 1999
--------- ----------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 1,217,881 $ 1,216,792
Investments in Securities 275,122 271,341
------------ ------------
Total Current Assets 1,493,003 1,488,133
Investments in Securities 1,527,962 1,684,626
Investments in Project Partnerships, Net 4,020,665 4,836,414
------------- -------------
Total Assets $ 7,041,630 $ 8,009,173
============= =============
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners 283,612 284,261
------------- -------------
Total Current Liabilities 283,612 284,261
------------- -------------
Long-Term Liabilities:
Payable to General Partners 1,570,954 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 September 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 September 30,
1999 and March 31, 19990, issued and
outstanding 5,461,811 6,405,448
General Partners (274,747) (265,216)
------------- -------------
Total Partners' Equity 5,187,064 6,140,232
------------- -------------
Total Liabilities and Partners' Equity $ 7,041,630 $ 8,009,173
============= =============
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 SEPTEMBER 30,
(Unaudited)
SERIES 2 1999 1998
---- ----
Revenues:
Interest Income $ 8,235 $ 8,841
------------ ------------
Expenses:
Asset Management Fee-General Partner 17,162 17,193
General and Administrative:
General Partner 2,681 2,671
Other 5,627 5,342
Amortization 1,212 1,345
------------ ------------
Total Expenses 26,682 26,551
------------ ------------
Loss Before Equity in Losses of
Project Partnerships (18,447) (17,710)
Equity in Losses of Project Partnerships (75,793) (25,463)
------------ ------------
Net Loss $ (94,240) $ (43,173)
============ ============
Allocation of Net Loss:
Assignees (93,297) (42,741)
General Partners (943) (432)
------------ ------------
$ (94,240) $ (43,173)
============ ============
Net Loss Per Beneficial
Assignee Certificate $ (15.21) $ (6.97)
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 SEPTEMBER 30,
(Unaudited)
SERIES 3 1999 1998
---- ----
Revenues:
Interest Income $ 7,141 $ 7,866
------------ ------------
Expenses:
Asset Management Fee-General Partner 15,870 15,911
General and Administrative:
General Partner 2,803 2,792
Other 4,966 5,646
Amortization 760 1,115
------------ ------------
Total Expenses 24,399 25,464
------------ ------------
Loss Before Equity in Losses of
Project Partnerships (17,258) (17,598)
Equity in Losses of Project Partnerships (12,099) (102,920)
------------ ------------
Net Loss $ (29,357) $ (120,518)
============ ============
Allocation of Net Loss:
Assignees (29,064) (119,313)
General Partners (293) (1,205)
------------ ------------
$ (29,357) $ (120,518)
============ ============
Net Loss Per Beneficial
Assignee Certificate $ (5.32) $ (21.87)
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 SEPTEMBER 30,
(Unaudited)
SERIES 4 1999 1998
---- ----
Revenues:
Interest Income $ 9,424 $ 10,208
------------ ------------
Expenses:
Asset Management Fee-General Partner 19,497 19,533
General and Administrative:
General Partner 3,530 3,521
Other 6,116 6,941
Amortization 1,932 1,514
------------ ------------
Total Expenses 31,075 31,509
------------ ------------
Loss Before Equity in Losses of
Project Partnerships (21,651) (21,301)
Equity in Losses of Project Partnerships (48,440) 30,088
------------ ------------
Net Loss $ (70,091) $ 8,787
============ ============
Allocation of Net Loss:
Assignees (69,390) 8,699
General Partners (701) 88
------------ ------------
$ (70,091) $ 8,787
============ ============
Net Loss Per Beneficial Assignee
Certificate $ (10.04) $ 1.26
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 SEPTEMBER 30,
(Unaudited)
SERIES 5 1999 1998
---- ----
Revenues:
Interest Income $ 12,055 $ 13,130
------------ ------------
Expenses:
Asset Management Fee-General Partner 24,115 24,166
General and Administrative:
General Partner 4,387 4,371
Other 7,501 9,717
Amortization 1,632 3,256
------------ ------------
Total Expenses 37,635 41,510
------------ ------------
Loss Before Equity in Losses of
Project Partnerships (25,580) (28,380)
Equity in Losses of Project Partnerships (91,579) (132,040)
------------ ------------
Net Loss $ (117,159) $ (160,420)
============ ============
Allocation of Net Loss:
Assignees (115,988) (158,816)
General Partners (1,171) (1,604)
------------ ------------
$ (117,159) $ (160,420)
============ ============
Net Loss Per Beneficial Assignee
Certificate $ (13.46) $ (18.44)
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 SEPTEMBER 30,
(Unaudited)
SERIES 6 1999 1998
---- ----
Revenues:
Interest Income $ 11,485 $ 12,347
------------ ------------
Expenses:
Asset Management Fee-General Partner 26,704 26,780
General and Administrative:
General Partner 4,631 4,612
Other 8,074 9,059
Amortization 4,014 4,855
------------ ------------
Total Expenses 43,423 45,306
------------ ------------
Loss Before Equity in Losses of
Project Partnerships (31,938) (32,959)
Equity in Losses of Project Partnerships (262,361) (155,286)
------------ ------------
Net Loss $ (294,299) $ (188,245)
============ ============
Allocation of Net Loss:
Assignees (291,356) (186,363)
General Partners (2,943) (1,882)
------------ ------------
$ (294,299) $ (188,245)
============ ============
Net Loss Per Beneficial Assignee
Certificate $ (28.83) $ (18.45)
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 SEPTEMBER 30,
(Unaudited)
TOTAL SERIES 2 - 6 1999 1998
---- ----
Revenues:
Interest Income $ 48,340 $ 52,392
------------ ------------
Expenses:
Asset Management Fee-General Partner 103,348 103,583
General and Administrative:
General Partner 18,032 17,967
Other 32,284 36,705
Amortization 9,550 12,085
------------ ------------
Total Expenses 163,214 170,340
------------ ------------
Loss Before Equity in Losses of
Project Partnerships (114,874) (117,948)
Equity in Losses of Project Partnerships (490,272) (385,621)
------------ ------------
Net Loss $ (605,146) $ (503,569)
============ ============
Allocation of Net Loss:
Assignees (599,094) (498,533)
General Partners (6,052) (5,036)
------------ ------------
$ (605,146) $ (503,569)
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED SEPTEMBER 30,
(Unaudited)
SERIES 2 1999 1998
---- ----
Revenues:
Interest Income $ 16,217 $ 17,870
------------ ------------
Expenses:
Asset Management Fee-General Partner 34,324 34,386
General and Administrative:
General Partner 4,478 4,522
Other 7,343 6,875
Amortization 2,424 2,690
------------ ------------
Total Expenses 48,569 48,473
------------ ------------
Loss Before Equity in Losses of
Project Partnerships (32,352) (30,603)
Equity in Losses of Project Partnerships (121,407) (94,709)
------------ ------------
Net Loss $ (153,759) $ (125,312)
============ ============
Allocation of Net Loss:
Assignees (152,221) (124,059)
General Partners (1,538) (1,253)
------------ ------------
$ (153,759) $ (125,312)
============ ============
Net Loss Per Beneficial
Assignee Certificate $ (24.81) $ (20.22)
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 SIX MONTHS ENDED SEPTEMBER 30,
(Unaudited)
SERIES 3 1999 1998
---- ----
Revenues:
Interest Income $ 14,135 $ 15,371
------------ ------------
Expenses:
Asset Management Fee-General Partner 31,740 31,822
General and Administrative:
General Partner 4,681 4,727
Other 6,939 7,403
Amortization 1,520 2,230
------------ ------------
Total Expenses 44,880 46,182
------------ ------------
Loss Before Equity in Losses of
Project Partnerships (30,745) 30,811)
Equity in Losses of Project Partnerships (50,563) (152,527)
------------ ------------
Net Loss $ (81,308) $ (183,338)
============ ============
Allocation of Net Loss:
Assignees (80,495) (181,505)
General Partners (813) (1,833)
------------ ------------
$ (81,308) $ (183,338)
============ ============
Net Loss Per Beneficial
Assignee Certificate $ (14.75) $ (33.27)
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 SIX MONTHS ENDED SEPTEMBER 30,
(Unaudited)
SERIES 4 1999 1998
---- ----
Revenues:
Interest Income $ 18,609 $ 19,981
------------ ------------
Expenses:
Asset Management Fee-General Partner 38,994 39,066
General and Administrative:
General Partner 5,898 5,961
Other 8,296 8,922
Amortization 3,864 3,778
------------ ------------
Total Expenses 57,052 57,727
------------ ------------
Loss Before Equity in Losses of
Project Partnerships (38,443) (37,746)
Equity in Losses of Project Partnerships (126,996) (34,737)
------------ ------------
Net Loss $ (165,439) $ (72,483)
============ ============
Allocation of Net Loss:
Assignees (163,785) (71,758)
General Partners (1,654) (725)
------------ ------------
$ (165,439) $ (72,483)
============ ============
Net Loss Per Beneficial Assignee
Certificate $ (23.69) $ (10.38)
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 SIX MONTHS ENDED SEPTEMBER 30,
(Unaudited)
SERIES 5 1999 1998
---- ----
Revenues:
Interest Income $ 23,846 $ 25,755
------------ ------------
Expenses:
Asset Management Fee-General Partner 48,230 48,332
General and Administrative:
General Partner 7,327 7,400
Other 10,339 12,264
Amortization 3,264 6,512
------------ ------------
Total Expenses 69,160 74,508
------------ ------------
Loss Before Equity in Losses of
Project Partnerships (45,314) (48,753)
Equity in Losses of Project Partnerships (112,020) (248,261)
------------ ------------
Net Loss $ (157,334) $ (297,014)
============ ============
Allocation of Net Loss:
Assignees (155,761) (294,044)
General Partners (1,573) (2,970)
------------ ------------
$ (157,334) $ (297,014)
============ ============
Net Loss Per Beneficial Assignee
Certificate $ (18.08) $ (34.13)
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 SIX MONTHS ENDED SEPTEMBER 30,
(Unaudited)
SERIES 6 1999 1998
---- ----
Revenues:
Interest Income $ 22,760 $ 24,513
------------ ------------
Expenses:
Asset Management Fee-General Partner 53,408 53,560
General and Administrative:
General Partner 7,734 7,810
Other 10,975 12,357
Amortization 8,028 9,710
------------ ------------
Total Expenses 80,145 83,437
------------ ------------
Loss Before Equity in Losses of
Project Partnerships (57,385) (58,924)
Equity in Losses of Project Partnerships (337,943) (338,398)
------------ ------------
Net Loss $ (395,328) $ (397,322)
============ ============
Allocation of Net Loss:
Assignees (391,375) (393,349)
General Partners (3,953) (3,973)
------------ ------------
$ (395,328) $ (397,322)
============ ============
Net Loss Per Beneficial Assignee
Certificate $ (38.73) $ (38.93)
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 SIX MONTHS ENDED SEPTEMBER 30,
(Unaudited)
TOTAL SERIES 2 - 6 1999 1998
---- ----
Revenues:
Interest Income $ 95,567 $ 103,490
------------ ------------
Expenses:
Asset Management Fee-General Partner 206,696 207,166
General and Administrative:
General Partner 30,118 30,420
Other 43,892 47,821
Amortization 19,100 24,920
------------ ------------
Total Expenses 299,806 310,327
------------ ------------
Loss Before Equity in Losses of
Project Partnerships (204,239) (206,837)
Equity in Losses of Project Partnerships (748,929) (868,632)
------------ ------------
Net Loss $ (953,168) $(1,075,469)
============ ============
Allocation of Net Loss:
Assignees (943,637) (1,064,715)
General Partners (9,531) (10,754)
------------ ------------
$ (953,168) $(1,075,469)
============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
General
SERIES 2 Assignees Partners Total
--------- -------- -----
Balance at March 31, 1998 $ 749,952 $ (46,768) $ 703,184
Net Loss (124,059) (1,253) (125,312)
------------- ------------ -------------
Balance at September 30,1998 $ 625,893 $ (48,021) $ 577,872
============= ============ =============
Balance at March 31, 1999 $ 530,860 $ (48,981) $ 481,879
Net Loss (152,221) (1,538) (153,759)
------------- ------------ -------------
Balance at September 30,1999 $ 378,639 $ (50,519) $ 328,120
============= ============ =============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
General
SERIES 3 Assignees Partners Total
--------- -------- -----
Balance at March 31, 1998 $ 602,863 $ (42,209) $ 560,654
Net Loss (181,505) (1,833) (183,338)
------------- ------------ -------------
Balance at September 30,1998 $ 421,358 $ (44,042) $ 377,316
============= ============ =============
Balance at March 31, 1999 $ 417,412 $ (44,082) $ 373,330
Net Loss (80,495) (813) (81,308)
------------- ------------ -------------
Balance at September 30,1999 $ 336,917 $ (44,895) $ 292,022
============= ============ =============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE SIX MONTHS ENDED SEPTEMBER 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 (71,758) (725) (72,483)
------------- ------------ -------------
Balance at September 30,1998 $ 1,239,398 $ (48,747) $ 1,190,651
============= ============ =============
Balance at March 31, 1999 $ 965,972 $ (51,509) $ 914,463
Net Loss (163,785) (1,654) (165,439)
------------- ------------ -------------
Balance at September 30,1999 $ 802,187 $ (53,163) $ 749,024
============= ============ =============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE SIX MONTHS ENDED SEPTEMBER 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 (294,044) (2,970) (297,014)
------------- ------------ -------------
Balance at September 30,1998 $ 1,718,821 $ (59,025) $ 1,659,796
============= ============ =============
Balance at March 31, 1999 $ 1,613,346 $ (60,091) $ 1,553,255
Net Loss (155,761) (1,573) (157,334)
------------- ------------ -------------
Balance at September 30,1999 $ 1,457,585 $ (61,664) $ 1,395,921
============= ============ =============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE SIX MONTHS ENDED SEPTEMBER 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 (393,349) (3,973) (397,322)
------------- ------------ -------------
Balance at September 30,1998 $ 3,178,820 $ (57,513) $ 3,121,307
============= ============ =============
Balance at March 31, 1999 $ 2,877,858 $ (60,553) $ 2,817,305
Net Loss (391,375) (3,953) (395,328)
------------- ------------ -------------
Balance at September 30,1999 $ 2,486,483 $ (64,506) $ 2,421,977
============= ============ =============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE SIX MONTHS ENDED SEPTEMBER 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 (1,064,715) (10,754) (1,075,469)
------------- ------------ -------------
Balance at September 30,1998 $ 7,184,290 $ (257,348) $ 6,926,942
============= ============ =============
Balance at March 31, 1999 $ 6,405,448 $ (265,216) $ 6,140,232
Net Loss (943,637) (9,531) (953,168)
------------- ------------ -------------
Balance at September 30,1999 $ 5,461,811 $ (274,747) $ 5,187,064
============= ============ =============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
SERIES 2 1999 1998
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss $ (153,759) $ (125,312)
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 2,424 2,690
Accreted Interest Income on Investments
in Securities (11,741) (12,580)
Equity in Losses of Project
Partnerships 121,407 94,709
Interest Income from Redemption of
Securities 20,241 16,834
Changes in Operating Assets and
Liabilities:
Increase in Payable to General Partners 3,156 (3,505)
------------ ------------
Net Cash Used in Operating Activities (18,272) (27,164)
------------ ------------
Cash Flows from Investing Activities:
Distributions Received from Project
Partnerships 4,156 5,393
Redemption of Investment in Securities 29,297 30,668
------------ ------------
Net Cash Provided by Investing
Activities 33,453 36,061
------------ ------------
Increase (Decrease) in Cash and Cash
Equivalents 15,181 8,897
Cash and Cash Equivalents at Beginning of
Year 169,513 160,851
------------ ------------
Cash and Cash Equivalents at End of Year $ 184,694 $ 169,748
============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
SERIES 3 1999 1998
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss $ (81,308) $ (183,338)
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 1,520 2,230
Accreted Interest Income on Investments
in Securities (10,444) (11,190)
Equity in Losses of Project
Partnerships 50,563 152,527
Interest Income from Redemption of
Securities 18,004 14,974
Changes in Operating Assets and
Liabilities:
Increase in Payable to General
Partners (8,231) (18,479)
------------ ------------
Net Cash Provided by (Used in)
Operating Activities (29,896) (43,276)
------------ ------------
Cash Flows from Investing Activities:
Distributions Received from Project
Partnerships 13,944 16,276
Redemption of Investment in Securities 26,059 27,278
------------ ------------
Net Cash Provided by (Used in)
Investing Activities 40,003 43,554
------------ ------------
Increase (Decrease) in Cash and Cash
Equivalents 10,107 278
Cash and Cash Equivalents at Beginning of
Year 137,981 135,622
------------ ------------
Cash and Cash Equivalents at End of Year $ 148,088 $ 135,900
============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
SERIES 4 1999 1998
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss $ (165,439) $ (72,483)
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 3,864 3,778
Accreted Interest Income on Investments
in Securities (13,231) (14,176)
Equity in Losses of Project
Partnerships 126,996 34,737
Interest Income from Redemption of
Securities 22,808 18,970
Changes in Operating Assets and
Liabilities:
Increase in Payable to General
Partners (1,477) (6,889)
------------ ------------
Net Cash Provided by (Used in)
Operating Activities (26,479) (36,063)
------------ ------------
Cash Flows from Investing Activities:
Distributions Received from Project
Partnerships 10,998 13,582
Redemption of Investment in Securities 33,015 34,559
------------ ------------
Net Cash Provided by (Used in)
Investing Activities 44,013 48,141
------------ ------------
Increase (Decrease) in Cash and Cash
Equivalents 17,534 12,078
Cash and Cash Equivalents at Beginning of
Year 207,632 196,876
------------ ------------
Cash and Cash Equivalents at End of Year $ 225,166 $ 208,954
============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
SERIES 5 1999 1998
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss $ (157,334) $ (297,014)
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 3,264 6,512
Accreted Interest Income on Investments
in Securities (16,491) (17,669)
Equity in Losses of Project
Partnerships 112,020 248,261
Interest Income from Redemption of
Securities 28,428 23,644
Changes in Operating Assets and
Liabilities:
Increase in Payable to General
Partners (7,878) (13,039)
------------ ------------
Net Cash Provided by (Used in)
Operating Activities (37,991) (49,305)
------------ ------------
Cash Flows from Investing Activities:
Distributions Received from Project
Partnerships 9,155 14,165
Redemption of Investment in Securities 41,148 43,073
------------ ------------
Net Cash Provided by (Used in)
Investing Activities 50,303 57,238
------------ ------------
Increase (Decrease) in Cash and Cash
Equivalents 12,312 7,933
Cash and Cash Equivalents at Beginning of
Year 292,994 280,813
------------ ------------
Cash and Cash Equivalents at End of Year $ 305,306 $ 288,746
============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
SERIES 6 1999 1998
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss $ (395,328) $ (397,322)
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 8,028 9,710
Accreted Interest Income on Investments
in Securities (14,208) (14,720)
Equity in Losses of Project
Partnerships 337,943 338,398
Interest Income from Redemption of
Securities 0 0
Changes in Operating Assets and
Liabilities:
Increase in Payable to General
Partners 54 (6,235)
------------ ------------
Net Cash Provided by (Used in)
Operating Activities (63,511) (70,169)
------------ ------------
Cash Flows from Investing Activities:
Distributions Received from Project
Partnerships 9,466 8,333
Redemption of Investment in Securities 0 0
------------ ------------
Net Cash Provided by (Used in)
Investing Activities 9,466 8,333
------------ ------------
Increase (Decrease) in Cash and Cash
Equivalents (54,045) (61,836)
Cash and Cash Equivalents at Beginning of
Year 408,672 406,255
------------ ------------
Cash and Cash Equivalents at End of Year $ 354,627 $ 344,419
============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
TOTAL SERIES 2 - 6 1999 1998
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss $ (953,168) $(1,075,469)
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 19,100 24,920
Accreted Interest Income on Investments
in Securities (66,115) (70,335)
Equity in Losses of Project
Partnerships 748,929 868,632
Interest Income from Redemption of
Securities 89,481 74,422
Changes in Operating Assets and
Liabilities:
Increase in Payable to General
Partners (14,376) (48,147)
------------ ------------
Net Cash Provided by (Used in)
Operating Activities (176,149) (225,977)
------------ ------------
Cash Flows from Investing Activities:
Distributions Received from Project
Partnerships 47,719 57,749
Redemption of Investment in Securities 129,519 135,578
------------ ------------
Net Cash Provided by (Used in)
Investing Activities 177,238 193,327
------------ ------------
Increase (Decrease) in Cash and Cash
Equivalents 1,089 (32,650)
Cash and Cash Equivalents at Beginning of
Year 1,216,792 1,180,417
------------ ------------
Cash and Cash Equivalents at End of Year $ 1,217,881 $ 1,147,767
============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
SEPTEMBER 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
September 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 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 September 30, 1999 Balance Sheet includes Investment in Securities
consisting of U.S. Government Security Strips which represents their cost,
plus accreted interest income of $140,535 for Series 2, $125,002 for Series
3, $158,366 for Series 4, $197,383 for Series 5 and $159,872 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 $ 331,570 $ 314,169 $ 17,401
Series 3 294,829 279,445 15,384
Series 4 373,663 354,031 19,632
Series 5 465,582 441,254 24,328
Series 6 430,995 414,185 16,810
As of September 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 $ 50,016 $ 44,488 $ 56,362
After 1 year through 5 years 182,769 162,571 205,960
After 5 years through 10 years 81,384 72,386 91,709
---------- ---------- ----------
Total Amount Carried on
Balance Sheet $ 314,169 $ 279,445 $ 354,031
========== ========== ==========
Series 5 Series 6 Total
-------- -------- --------
Due with 1 year $ 70,251 $ 54,005 $ 275,122
After 1 year through 5 years 256,700 210,850 1,018,850
After 5 years through 10 years 114,303 149,330 509,112
---------- ---------- ----------
Total Amount Carried on
Balance Sheet $ 441,254 $ 414,185 $1,803,084
========== ========== ==========
NOTE 4 - RELATED PARTY TRANSACTIONS:
The Payable to General Partners primarily represents the asset management
fees owed to the General Partners at the end of the period. It is unsecured,
due on demand and, in accordance with the limited partnership agreement, non-
interest bearing. Within the next 12 months, the Managing General Partner
does not intend to demand payment on the portion of Asset Management Fees
payable classified as long-term on the Balance Sheet.
The Payable to Project Partnerships represents unpaid capital contributions
to the Project Partnerships and will be paid after certain performance
criteria are met. Such contributions are in turn payable to the general
partner of the Project Partnerships.
For the six months September 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 $ 34,324 $ 34,386
Series 3 31,740 31,822
Series 4 38,994 39,066
Series 5 48,230 48,332
Series 6 53,408 53,560
--------- ---------
Total $ 206,696 $ 207,166
========= =========
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 $ 4,478 $ 4,522
Series 3 4,681 4,727
Series 4 5,898 5,961
Series 5 7,327 7,400
Series 6 7,734 7,810
--------- --------
Total $ 30,118 $ 30,420
========= ========
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS:
As of September 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 SEPTEMBER 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) (4,559,089) (4,437,682)
Cumulative distributions received from (73,810) (69,654)
Project Partnerships ------------ -------------
Investment in Project Partnerships before
Adjustment (108,221) 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 (79,025) (76,601)
----------- ------------
Investments in Project Partnerships $ 203,592 $ 331,579
============ ============
(1) In accordance with the Partnership's accounting policy to not carry
Investments in Project Partnerships below zero, cumulative suspended losses
of $1,507,781 for the period ended September 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 SEPTEMBER 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) (3,978,164) (3,927,601)
Cumulative distributions received from
Project Partnerships (169,810) (155,866)
----------- -------------
Investment in Project Partnerships before
Adjustment (259,261) (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 (79,692) (78,172)
----------- ------------
Investments in Project Partnerships $ 152,793 $ 218,820
============ ============
(1) In accordance with the Partnership's accounting policy to not carry
Investments in Project Partnerships below zero, cumulative suspended losses
of $1,902,700 for the period ended September 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 SEPTEMBER 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) (4,761,182) (4,634,186)
Cumulative distributions received from
Project Partnerships (111,988) (100,990)
----------- -------------
Investment in Project Partnerships before
Adjustment 79,349 217,343
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 562,966 562,967
Accumulated amortization of acquisition
fees and expenses (107,826) (103,962)
----------- ------------
Investments in Project Partnerships $ 534,489 $ 676,348
============ ============
(1) In accordance with the Partnership's accounting policy to not carry
Investments in Project Partnerships below zero, cumulative suspended losses
of $1,244,668 for the period ended September 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 SEPTEMBER 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) (5,519,419) (5,407,399)
Cumulative distributions received from
Project Partnerships (155,870) (146,715)
----------- -------------
Investment in Project Partnerships before
Adjustment 489,183 610,358
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 650,837 650,837
Accumulated amortization of acquisition
fees and expenses (118,878) (115,614)
------------ ------------
Investments in Project Partnerships $ 1,021,142 $ 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 $1,446,978 for the period ended September 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 SEPTEMBER 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) (5,834,167) (5,496,224)
Cumulative distributions received from
Project Partnerships (155,122) (145,656)
------------ -------------
Investment in Project Partnerships before
Adjustment 1,472,926 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 (149,456) (141,428)
------------ ------------
Investments in Project Partnerships $ 2,108,649 $ 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 $864,258 for the period ended September 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 SEPTEMBER 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) (24,652,021) (23,903,092)
Cumulative distributions received from
Project Partnerships (666,600) (618,881)
----------- -------------
Investment in Project Partnerships before
Adjustment 1,673,976 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 (534,877) (515,777)
----------- ------------
Investments in Project Partnerships $ 4,020,665 $ 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
June 30, of each year:
JUNE 30,
1999 1998
SERIES 2 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 1,816,046 $ 1,750,157
Investment properties, net 20,322,293 21,204,830
Other assets 14,201 35,271
----------- -----------
Total assets $22,152,540 $22,990,258
=========== ===========
Liabilities and Partners' Equity:
Current liabilities 568,789 437,533
Long-term debt 23,155,354 23,206,573
----------- -----------
Total liabilities 23,724,143 23,644,106
----------- -----------
Partners' equity
Limited Partner (1,592,829) (704,300)
General Partners 21,226 50,452
----------- -----------
Total Partners' equity (1,571,603) (653,848)
----------- -----------
Total liabilities and partners'
equity $22,152,540 $22,990,258
=========== ===========
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 1,240,418 $ 1,356,115
Expenses:
Operating expenses 942,468 796,685
Interest expense 330,924 411,496
Depreciation and amortization 458,920 467,796
----------- -----------
Total expenses 1,732,312 1,675,977
Net loss (491,894) (319,862)
=========== ===========
Other partners' share of net loss (4,919) (3,199)
Partnerships' share of net loss (486,975) (316,663)
Suspended losses 365,568 221,954
----------- -----------
Equity in Losses of Project Partnerships $ (121,407) $ (94,709)
=========== ===========
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with the Partnership's policy of presenting the financial
information of the Project Partnerships on a three month lag, below is the
summarized financial information for the Series' Project Partnerships as of
June 30, of each year:
JUNE 30,
1999 1998
SERIES 3 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 2,215,363 $ 2,142,090
Investment properties, net 17,622,467 18,451,962
Other assets 212,916 221,466
----------- -----------
Total assets $20,050,746 $20,815,518
=========== ===========
Liabilities and Partners' Equity:
Current liabilities 533,518 484,048
Long-term debt 21,693,402 21,758,002
----------- -----------
Total liabilities 22,226,920 22,242,050
----------- -----------
Partners' equity
Limited Partner (2,429,165) (1,729,088)
General Partners 252,991 302,556
----------- -----------
Total Partners' equity (2,176,174) (1,426,532)
----------- -----------
Total liabilities and partners'
equity $20,050,746 $20,815,518
=========== ===========
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 1,218,434 $ 1,187,591
Expenses:
Operating expenses 826,215 830,029
Interest expense 314,660 267,363
Depreciation and amortization 452,925 457,794
----------- -----------
Total expenses 1,593,800 1,555,186
Net loss (375,366) (367,595)
=========== ===========
Other partners' share of net loss (3,754) (3,676)
Partnerships' share of net loss (371,612) (363,919)
Suspended losses 321,049 211,392
----------- -----------
Equity in Losses of Project Partnerships $ (50,563) $ (152,527)
=========== ===========
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with the Partnership's policy of presenting the financial
information of the Project Partnerships on a three month lag, below is the
summarized financial information for the Series' Project Partnerships as of
June 30, of each year:
JUNE 30,
1999 1998
SERIES 4 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 2,421,613 $ 2,281,638
Investment properties, net 23,796,605 24,774,619
Other assets 25,015 46,196
----------- -----------
Total assets $26,243,233 $27,102,453
=========== ===========
Liabilities and Partners' Equity:
Current liabilities 849,130 592,640
Long-term debt 26,350,949 26,531,497
----------- -----------
Total liabilities 27,200,079 27,124,137
----------- -----------
Partners' equity
Limited Partner (1,137,532) (240,423)
General Partners 180,686 218,739
----------- -----------
Total Partners' equity (956,846) (21,684)
----------- -----------
Total liabilities and partners'
equity $26,243,233 $27,102,453
=========== ===========
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 1,500,178 $ 1,656,330
Expenses:
Operating expenses 1,030,493 981,127
Interest expense 334,559 357,041
Depreciation and amortization 507,620 530,310
----------- -----------
Total expenses 1,872,672 1,868,478
Net loss (372,494) (212,148)
=========== ===========
Other partners' share of net loss (3,725) (2,121)
Partnerships' share of net loss (368,769) (210,027)
Suspended losses 241,773 175,290
----------- -----------
Equity in Losses of Project Partnerships $ (126,996) $ (34,737)
=========== ===========
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with the Partnership's policy of presenting the financial
information of the Project Partnerships on a three month lag, below is the
summarized financial information for the Series' Project Partnerships as of
June 30, of each year:
JUNE 30,
1999 1998
SERIES 5 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 2,943,437 $ 2,759,912
Investment properties, net 29,808,118 31,015,360
Other assets 5,756 71,380
----------- -----------
Total assets $32,757,311 $33,846,652
=========== ===========
Liabilities and Partners' Equity:
Current liabilities 1,026,137 756,060
Long-term debt 32,709,285 32,813,316
----------- -----------
Total liabilities 33,735,422 33,569,376
----------- -----------
Partners' equity
Limited Partner (853,820) 350,386
General Partners (124,291) (73,110)
----------- -----------
Total Partners' equity (978,111) 277,276
----------- -----------
Total liabilities and partners'
equity $32,757,311 $33,846,652
=========== ===========
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 1,806,888 $ 1,765,354
Expenses:
Operating expenses 1,338,080 1,123,887
Interest expense 448,287 417,261
Depreciation and amortization 656,570 666,375
----------- -----------
Total expenses 2,442,937 2,207,523
Net loss (636,049) (442,169)
=========== ===========
Other partners' share of net loss (6,360) (4,422)
Partnerships' share of net loss (629,689) (437,747)
Suspended losses 517,669 189,486
----------- -----------
Equity in Losses of Project Partnerships $ (112,020) $ (248,261)
=========== ===========
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with the Partnership's policy of presenting the financial
information of the Project Partnerships on a three month lag, below is the
summarized financial information for the Series' Project Partnerships as of
June 30, of each year:
JUNE 30,
1999 1998
SERIES 6 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 3,167,201 $ 3,077,417
Investment properties, net 33,752,053 35,013,401
Other assets 15,073 24,437
----------- -----------
Total assets $36,934,327 $38,115,255
=========== ===========
Liabilities and Partners' Equity:
Current liabilities 1,026,293 788,868
Long-term debt 35,485,020 35,658,804
----------- -----------
Total liabilities 36,511,313 36,447,672
----------- -----------
Partners' equity
Limited Partner 639,094 1,834,672
General Partners (216,080) (167,089)
----------- -----------
Total Partners' equity 423,014 1,667,583
----------- -----------
Total liabilities and partners' $36,934,327 $38,115,255
equity =========== ===========
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 1,875,629 $ 1,988,399
Expenses:
Operating expenses 1,250,340 1,141,374
Interest expense 527,298 546,487
Depreciation and amortization 707,458 732,938
----------- -----------
Total expenses 2,485,096 2,420,799
Net loss (609,467) (432,400)
=========== ===========
Other partners' share of net loss (6,095) (4,324)
Partnerships' share of net loss (603,372) (428,076)
Suspended losses 265,429 89,678
----------- -----------
Equity in Losses of Project Partnerships $ (337,943) $ (338,398)
=========== ===========
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with the Partnership's policy of presenting the financial
information of the Project Partnerships on a three month lag, below is the
summarized financial information for the Series' Project Partnerships as of
June 30, of each year:
JUNE 30,
1999 1998
TOTAL SERIES 2- 6 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 12,563,660 $ 12,011,214
Investment properties, net 125,301,536 130,460,172
Other assets 272,961 398,750
----------- -----------
Total assets $138,138,157 $142,870,136
=========== ===========
Liabilities and Partners' Equity:
Current liabilities 4,003,867 3,059,149
Long-term debt 139,394,010 139,968,192
----------- -----------
Total liabilities 143,397,877 143,027,341
----------- -----------
Partners' equity
Limited Partner (5,374,252) (488,753)
General Partners 114,532 331,548
----------- -----------
Total Partners' equity (5,259,720) (157,205)
----------- -----------
Total liabilities and partners'
equity $138,138,157 $142,870,136
=========== ===========
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 7,641,547 $ 7,953,789
Expenses:
Operating expenses 5,387,596 4,873,102
Interest expense 1,955,728 1,999,648
Depreciation and amortization 2,783,493 2,855,213
----------- -----------
Total expenses 10,126,817 9,727,963
Net loss (2,485,270) (1,774,174)
=========== ===========
Other partners' share of net loss (24,853) (17,742)
Partnerships' share of net loss (2,460,417) (1,756,432)
Suspended losses 1,711,488 887,800
----------- -----------
Equity in Losses of Project
Partnerships $ (748,929) $ (868,632)
=========== ===========
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations, Liquidity and Capital Resources
Operations commenced on September 14, 1990, with the first admission of
Assignees in Series 2. The proceeds from Assignees' capital contributions
available for investment were used to acquire interests in Project
Partnerships.
As disclosed on the statement of operations for each Series, except as
described below, interest income is comparable for the six and three months
ended September 30, 1999 and September 30, 1998. The General and
Administrative expenses - General Partner and General and Administrative
expenses - Other for the six and three months ended September 30, 1999 are
comparable for the same period ended Septembr 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 six months ended September 30, 1999 increased from $94,709 for the six
months ended September 30, 1998 to $121,407. The increase in equity in
losses is the result of the lower tier Project Partnerships recording
interest subsidy income on a quarterly basis for the six months ended
September 30, 1998. The amount recorded was reversed in the following
quarter and this practice was not continued in the following periods. In
general, it is common in the real estate industry to experience losses for
financial and tax reporting purposes because of the non-cash expenses of
depreciation and amortization. As a result, management expects that this
Series, as well as those described below, will report its equity in Project
Partnerships as a loss for tax and financial reporting purposes. Overall,
management believes the Project Partnerships are operating as expected and
are generating tax credits which meet projections.
At September 30, 1999, the Series had $184,694 of short-term investments
(Cash and Cash Equivalents). It also had $314,169 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
sufficent 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
$153,759 for the six months ended September 30, 1999. However, after
adjusting for Equity in Losses of Project Partnerships of $121,407 and the
changes in operating assets and liabilities, net cash used in operating
activities was $18,272, 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 $33,453, consisting of $4,156 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 six months ended September 30, 1999 decreased from $152,527 for the six
months ended September 30, 1998 to $50,563 as a result of not including
losses of $321,049 in 1999 as compared to $211,392 in 1998, as these losses
would reduce the investment in certain Project Partnerships below zero.
At September 30, 1998, the Series had $148,088 of short-term investments
(Cash and Cash Equivalents). It also had $279,445 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
$81,308 for the six months ended September 30, 1999. However, after
adjusting for Equity in Losses of Project Partnerships of $50,563 and the
changes in operating assets and liabilities, net cash used in operating
activities was $29,896, primarily due to the Receivable from Other Series for
the maturity of Zero Coupon Treasuries. Cash provided by investing
activities totaled $40,003, consisting of $13,944 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 six months ended September 30, 1999 increased from $34,737 for the six
months ended September 30, 1998 to $126,996. The increase in equity in
losses is the result of the lower tier Project Partnerships recording
interest subsidy income on a quarterly basis for the six months ended
September 30, 1998. The amount recorded was reversed in the following
quarter and this practice was not continued in the following periods.
At September 30, 1999, the Series had $225,166 of short-term investments
(Cash and Cash Equivalents). It also had $354,031 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
$165,439 for the six months ended September 30, 1999. However, after
adjusting for Equity in Losses of Project Partnerships of $126,996 and the
changes in operating assets and liabilities, net cash used in operating
activities was $26,479, primarily due to the Receivable from Other Series for
the maturity of Zero Coupon Treasuries. Cash provided by investing
activities totaled $44,013, consisting of $10,998 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 six months ended September 30, 1999 decreased from $248,261 for the six
months ended September 30, 1998 to $112,020 as a result of not including
losses of $517,669 in 1999 as compared to $189,486 in 1998, as these losses
would reduce the investment in certain Project Partnerships below zero.
At September 30, 1999, the Series had $305,306 of short-term investments
(Cash and Cash Equivalents). It also had $441,254 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
$157,334 for the six months ended September 30, 1999. However, after
adjusting for Equity in Losses of Project Partnerships of $112,020 and the
changes in operating assets and liabilities, net cash used in operating
activities was $37,991, 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 $9,155 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 six months ended September 30, 1999 was comparable to the six months
ended September 30, 1998.
At September 30, 1999, the Series had $354,627 of short-term investments
(Cash and Cash Equivalents). It also had $414,185 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
$395,328 for the six months ended September 30, 1999. However, after
adjusting for Equity in Losses of Project Partnerships of $337,943 and the
changes in operating assets and liabilities, net cash used in operating
activities was $63,511, primarily due to the increase in payable to the
General Partners. Cash provided by investing activities totaled $9,466,
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: October 28, 1999 By:/s/ Ronald M. Diner
Ronald M. Diner
President
Date: October 28, 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 SEPTEMBER 30, 1999.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-END> SEP-30-1999
<CASH> 1,217,881
<SECURITIES> 1,803,084
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,493,003
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 7,041,630
<CURRENT-LIABILITIES> 283,612
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,187,064
<TOTAL-LIABILITY-AND-EQUITY> 7,041,630
<SALES> 0
<TOTAL-REVENUES> 95,567
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 299,806
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (953,168)
<INCOME-TAX> 0
<INCOME-CONTINUING> (953,168)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (953,168)
<EPS-BASIC> (25.35)<F1>
<EPS-DILUTED> (25.35)<F1>
<FN>
<F1>EPS IS NET LOSS PER $1,000 LIMITED PARTNERSHIP UNIT.
</FN>
</TABLE>
