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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE
ACT OF 1934
For The Quarterly Period Ended December 31, 1998
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 December 31, 1998
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
<PAGE>
PART I - Financial Information
Item 1. Financial Statements
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
SERIES 2 December 31, March 31,
1998 1998
--------- ----------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 169,081 $ 160,851
Investments in Securities 48,741 47,501
------------ ------------
Total Current Assets 217,822 208,352
Investments in Securities 296,721 326,412
Investments in Project Partnerships, Net 180,244 510,805
------------- -------------
Total Assets $ 694,787 $ 1,045,569
============= =============
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners 46,556 46,190
------------- -------------
Total Current Liabilities 46,556 46,190
------------- -------------
Long-Term Liabilities:
Payable to General Partners 310,635 296,195
------------- -------------
Partners' Equity:
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's, of
which 37,228 at December 31, 1998 and
March 31, 1998 have been issued to the
assignees
Assignees
Units of beneficial interest of the
limited partnership interest of the
assignor limited partner, $1,000 stated
value per BAC, 37,228 at December 31,1998
and March 31, 1998, issued and outstanding 388,020 749,952
General Partners (50,424) (46,768)
------------- -------------
Total Partners' Equity 337,596 703,184
------------- -------------
Total Liabilities and Partners' Equity $ 694,787 $ 1,045,569
============= =============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
SERIES 3 December 31, March 31,
1998 1998
--------- ----------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 133,162 $ 135,622
Investments in Securities 43,353 42,252
------------ ------------
Total Current Assets 176,515 177,874
Investments in Securities 263,929 290,336
Investments in Project Partnerships, Net 130,696 378,000
------------- -------------
Total Assets $ 571,140 $ 846,210
============= =============
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners 48,173 50,773
------------- -------------
Total Current Liabilities 48,173 50,773
------------- -------------
Long-Term Liabilities:
Payable to General Partners 233,133 234,783
------------- -------------
Partners' Equity:
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's, of
which 37,228 at December 31, 1998 and March
31, 1998 have been issued to the assignees
Assignees
Units of beneficial interest of the
limited partnership interest of the
assignor limited partner, $1,000 stated
value per BAC, 37,228 at December 31, 1998
and March 31, 1998, issued and outstanding 334,751 602,863
General Partners (44,917) (42,209)
Total Partners' Equity ------------- -------------
289,834 560,654
Total Liabilities and Partners' Equity ------------- -------------
$ 571,140 $ 846,210
============= =============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
SERIES 4 December 31, March 31,
1998 1998
--------- ----------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 206,323 $ 196,876
Investments in Securities 54,924 53,529
------------ ------------
Total Current Assets 261,247 250,405
Investments in Securities 334,370 367,826
Investments in Project Partnerships, Net 748,207 981,823
------------- -------------
Total Assets $ 1,343,824 $ 1,600,054
============= =============
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners 53,084 56,202
------------- -------------
Total Current Liabilities 53,084 56,202
------------- -------------
Long-Term Liabilities:
Payable to General Partners 294,496 280,718
------------- -------------
Partners' Equity:
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's, of
which 37,228 at December 31, 1998 and March
31, 1998 have been issued to the assignees
Assignees
Units of beneficial interest of the
limited partnership interest of the
assignor limited partner, $1,000 stated
value per BAC, 37,228 at December 31, 1998
and March 31, 1998, issued and outstanding 1,046,935 1,311,156
General Partners (50,691) (48,022)
Total Partners' Equity ------------- -------------
996,244 1,263,134
Total Liabilities and Partners' Equity ------------- -------------
$ 1,343,824 $ 1,600,054
============= =============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
SERIES 5 December 31, March 31,
1998 1998
--------- ----------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 286,594 $ 280,813
Investments in Securities 68,457 66,717
------------ ------------
Total Current Assets 355,051 347,530
Investments in Securities 416,749 458,448
Investments in Project Partnerships, Net 868,598 1,500,087
------------- -------------
Total Assets $ 1,640,398 $ 2,306,065
============= =============
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners 73,825 74,748
------------- -------------
Total Current Liabilities 73,825 74,748
------------- -------------
Long-Term Liabilities:
Payable to General Partners 285,506 274,507
------------- -------------
Partners' Equity:
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's, of
which 37,228 at December 31, 1998 and
March 31, 1998 have been issued to the
assignees
Assignees
Units of beneficial interest of the
limited partnership interest of the
assignor limited partner, $1,000 stated
value per BAC, 37,228 at December 31,1998
and March 31, 1998, issued and outstanding 1,343,879 2,012,865
General Partners (62,812) (56,055)
------------- -------------
Total Partners' Equity 1,281,067 1,956,810
------------- -------------
Total Liabilities and Partners' Equity $ 1,640,398 $ 2,306,065
============= =============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
SERIES 6 December 31, March 31,
1998 1998
--------- ----------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 345,554 $ 406,255
Investments in Securities 50,839 48,608
------------ ------------
Total Current Assets 396,393 454,863
Investments in Securities 393,093 373,009
Investments in Project Partnerships, Net 2,452,455 3,102,793
------------- -------------
Total Assets $ 3,241,941 $ 3,930,665
============= =============
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners 66,746 70,482
------------- -------------
Total Current Liabilities 66,746 70,482
------------- -------------
Long-Term Liabilities:
Payable to General Partners 363,200 341,554
------------- -------------
Partners' Equity:
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's, of
which 37,228 at December 31, 1998 and
March 31, 1998 have been issued to the
assignees
Assignees
Units of beneficial interest of the
limited partnership interest of the
assignor limited partner, $1,000 stated
value per BAC, 37,228 at December 31,1998
and March 31, 1998, issued and outstanding 2,872,601 3,572,169
General Partners (60,606) (53,540)
------------- -------------
Total Partners' Equity 2,811,995 3,518,629
------------- -------------
Total Liabilities and Partners' Equity $ 3,241,941 $ 3,930,665
============= =============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
TOTAL SERIES 2 - 6 December 31, March 31,
1998 1998
--------- ----------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 1,140,714 $ 1,180,417
Investments in Securities 266,314 258,607
------------ ------------
Total Current Assets 1,407,028 1,439,024
Investments in Securities 1,704,862 1,816,031
Investments in Project Partnerships, Net 4,380,200 6,473,508
------------- -------------
Total Assets $ 7,492,090 $ 9,728,563
============= =============
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners 288,384 298,395
------------- -------------
Total Current Liabilities 288,384 298,395
------------- -------------
Long-Term Liabilities:
Payable to General Partners 1,486,970 1,427,757
------------- -------------
Partners' Equity:
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's, of
which 37,228 at December 31, 1998 and March
31, 1998 have been issued to the assignees
Assignees
Units of beneficial interest of the
limited partnership interest of the
assignor limited partner, $1,000 stated
value per BAC, 37,228 at December 31, 1998
and March 31, 1998, issued and outstanding 5,986,186 8,249,005
General Partners (269,450) (246,594)
Total Partners' Equity ------------- -------------
5,716,736 8,002,411
Total Liabilities and Partners' Equity ------------- -------------
$ 7,492,090 $ 9,728,563
============= =============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 31,
(Unaudited)
SERIES 2 1998 1997
---- ----
Revenues:
Interest Income $ 8,489 $ 9,003
------------ ------------
Expenses:
Asset Management Fee-General Partner 17,193 17,222
General and Administrative:
General Partner 1,313 2,022
Other 3,947 1,309
Amortization 1,345 592
------------ ------------
Total Expenses 23,798 21,145
------------ ------------
Loss Before Equity in Losses of Project
Partnerships (15,309) (12,142)
Equity in Losses of Project Partnerships (224,967) (113,426)
------------ ------------
Net Loss $ (240,276) $ (125,568)
============ ============
Allocation of Net Loss:
Assignees (237,873) (124,312)
General Partners (2,403) (1,256)
------------ ------------
$ (240,276) $ (125,568)
============ ============
Net Loss Per Beneficial Assignee
Certificate $ (38.77) $ (20.26)
Number of Beneficial Assignee ============ ============
Certificates Outstanding 6,136 6,136
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 31,
(Unaudited)
SERIES 3 1998 1997
---- ----
Revenues:
Interest Income $ 7,360 $ 7,866
------------ ------------
Expenses:
Asset Management Fee-General Partner 15,911 15,948
General and Administrative:
General Partner 1,402 2,114
Other 1,258 1,1551
Amortization 1,115 (404)
------------ ------------
Total Expenses 19,686 19,209
------------ ------------
Loss Before Equity in Losses of Project
Partnerships (12,326) (11,343)
Equity in Losses of Project Partnerships (75,156) (50,409)
------------ ------------
Net Loss $ (87,482) $ (61,752)
============ ============
Allocation of Net Loss:
Assignees (86,607) (61,134)
General Partners (875) (618)
------------ ------------
$ (87,482) $ (61,752)
============ ============
Net Loss Per Beneficial Assignee
Certificate $ (15.87) $ (11.21)
Number of Beneficial Assignee ============ ============
Certificates Outstanding 5,456 5,456
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 31,
(Unaudited)
SERIES 4 1998 1997
---- ----
Revenues:
Interest Income $ 9,766 $ 10,426
------------ ------------
Expenses:
Asset Management Fee-General Partner 19,533 19,568
General and Administrative:
General Partner 1,731 2,666
Other 1,690 1,763
Amortization 2,264 (489)
------------ ------------
Total Expenses 25,218 23,508
------------ ------------
Loss Before Equity in Losses of Project
Partnerships (15,452) (13,082)
Equity in Losses of Project Partnerships (178,955) (124,875)
------------ ------------
Net Loss $ (194,407) $ (137,957)
============ ============
Allocation of Net Loss:
Assignees (192,463) (136,577)
General Partners (1,944) (1,380)
------------ ------------
$ (194,407) $ (137,957)
============ ============
Net Loss Per Beneficial Assignee
Certificate $ (27.83) $ (19.75)
Number of Beneficial Assignee ============ ============
Certificates Outstanding 6,915 6,915
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 31,
(Unaudited)
SERIES 5 1998 1997
---- ----
Revenues:
Interest Income $ 12,507 $ 13,349
------------ ------------
Expenses:
Asset Management Fee-General Partner 24,166 24,211
General and Administrative:
General Partner 2,148 3,310
Other 4,680 2,049
Amortization 3,256 2,751
------------ ------------
Total Expenses 34,250 32,321
------------ ------------
Loss Before Equity in Losses of Project
Partnerships (21,743) (18,972)
Equity in Losses of Project Partnerships (356,986) (256,936)
------------ ------------
Net Loss $ (378,729) $ (275,908)
============ ============
Allocation of Net Loss:
Assignees (374,942) (273,149)
General Partners (3,787) (2,759)
------------ ------------
$ (378,729) $ (275,908)
============ ============
Net Loss Per Beneficial Assignee
Certificate $ (43.52) $ (31.70)
Number of Beneficial Assignee ============ ============
Certificates Outstanding 8,616 8,616
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 31,
(Unaudited)
SERIES 6 1998 1997
---- ----
Revenues:
Interest Income $ 11,705 $ 12,125
------------ ------------
Expenses:
Asset Management Fee-General Partner 26,780 26,851
General and Administrative:
General Partner 2,283 3,494
Other 2,259 2,427
Amortization 4,855 5,512
------------ ------------
Total Expenses 36,177 38,284
------------ ------------
Loss Before Equity in Losses of Project
Partnerships (24,472) (26,159)
Equity in Losses of Project Partnerships (284,840) (208,584)
------------ ------------
Net Loss $ (309,312) $ (234,743)
============ ============
Allocation of Net Loss:
Assignees (306,219) (232,396)
General Partners (3,093) (2,347)
------------ ------------
$ (309,312) $ (234,743)
============ ============
Net Loss Per Beneficial Assignee
Certificate $ (30.30) $ (23.00)
Number of Beneficial Assignee ============ ============
Certificates Outstanding 10,105 10,105
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 31,
(Unaudited)
TOTAL SERIES 2 - 6 1998 1997
---- ----
Revenues:
Interest Income $ 49,827 $ 52,769
------------ ------------
Expenses:
Asset Management Fee-General Partner 103,583 103,800
General and Administrative:
General Partner 8,877 13,606
Other 13,834 9,099
Amortization 12,835 7,962
------------ ------------
Total Expenses 139,129 134,467
------------ ------------
Loss Before Equity in Losses of Project
Partnerships (89,302) (81,698)
Equity in Losses of Project Partnerships (1,120,904) (754,230)
------------ ------------
Net Loss $(1,210,206) $ (835,928)
============ ============
Allocation of Net Loss:
Assignees (1,198,104) (827,569)
General Partners (12,102) (8,359)
------------ ------------
$(1,210,206) $ (835,928)
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED DECEMBER 31,
(Unaudited)
SERIES 2 1998 1997
---- ----
Revenues:
Interest Income $ 26,359 $ 29,196
------------ ------------
Expenses:
Asset Management Fee-General Partner 51,579 51,666
General and Administrative:
General Partner 5,835 6,238
Other 10,822 8,113
Amortization 4,035 1,776
------------ ------------
Total Expenses 72,271 67,793
------------ ------------
Loss Before Equity in Losses of Project
Partnerships (45,912) (38,597)
Equity in Losses of Project Partnerships (319,676) (284,240)
------------ ------------
Net Loss $ (365,588) $ (322,837)
============ ============
Allocation of Net Loss:
Assignees (361,932) (319,609)
General Partners (3,656) (3,228)
------------ ------------
$ (365,588) $ (322,837)
============ ============
Net Loss Per Beneficial Assignee
Certificate $ (58.99) $ (52.09)
Number of Beneficial Assignee ============ ============
Certificates Outstanding 6,136 6,136
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED DECEMBER 31,
(Unaudited)
SERIES 3 1998 1997
---- ----
Revenues:
Interest Income $ 22,731 $ 22,953
------------ ------------
Expenses:
Asset Management Fee-General Partner 47,733 47,844
General and Administrative:
General Partner 6,129 6,522
Other 8,661 7,943
Amortization 3,345 (1,212)
------------ ------------
Total Expenses 65,868 61,097
------------ ------------
Loss Before Equity in Losses of Project
Partnerships (43,137) (38,144)
Equity in Losses of Project Partnerships (227,683) (168,705)
------------ ------------
Net Loss $ (270,820) $ (206,849)
============ ============
Allocation of Net Loss:
Assignees (268,112) (204,781)
General Partners (2,708) (2,068)
------------ ------------
$ (270,820) $ (206,849)
============ ============
Net Loss Per Beneficial Assignee
Certificate $ (49.14) $ (37.53)
Number of Beneficial Assignee ============ ============
Certificates Outstanding 5,456 5,456
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED DECEMBER 31,
(Unaudited)
SERIES 4 1998 1997
---- ----
Revenues:
Interest Income $ 29,747 $ 30,440
------------ ------------
Expenses:
Asset Management Fee-General Partner 58,599 58,704
General and Administrative:
General Partner 7,692 8,223
Other 10,612 9,996
Amortization 6,042 (1,467)
------------ ------------
Total Expenses 82,945 75,456
------------ ------------
Loss Before Equity in Losses of Project
Partnerships (53,198) (45,016)
Equity in Losses of Project Partnerships (213,692) (282,595)
------------ ------------
Net Loss $ (266,890) $ (327,611)
============ ============
Allocation of Net Loss:
Assignees (264,221) (324,335)
General Partners (2,669) (3,276)
------------ ------------
$ (266,890) $ (327,611)
============ ============
Net Loss Per Beneficial Assignee
Certificate $ (38.21) $ (46.90)
Number of Beneficial Assignee ============ ============
Certificates Outstanding 6,915 6,915
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED DECEMBER 31,
(Unaudited)
SERIES 5 1998 1997
---- ----
Revenues:
Interest Income $ 38,262 $ 39,094
------------ ------------
Expenses:
Asset Management Fee-General Partner 72,498 72,633
General and Administrative:
General Partner 9,548 10,208
Other 16,944 12,645
Amortization 9,768 8,253
------------ ------------
Total Expenses 108,758 103,739
------------ ------------
Loss Before Equity in Losses of Project
Partnerships (70,496) (64,645)
Equity in Losses of Project Partnerships (605,247) (632,205)
------------ ------------
Net Loss $ (675,743) $ (696,850)
============ ============
Allocation of Net Loss:
Assignees (668,986) (689,882)
General Partners (6,757) (6,968)
------------ ------------
$ (675,743) $ (696,850)
============ ============
Net Loss Per Beneficial Assignee
Certificate $ (77.64) $ (80.07)
Number of Beneficial Assignee ============ ============
Certificates Outstanding 8,616 8,616
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED DECEMBER 31,
(Unaudited)
SERIES 6 1998 1997
---- ----
Revenues:
Interest Income $ 36,218 $ 36,848
------------ ------------
Expenses:
Asset Management Fee-General Partner 80,340 80,553
General and Administrative:
General Partner 10,093 10,775
Other 14,616 13,307
Amortization 14,565 16,536
------------ ------------
Total Expenses 119,614 121,171
------------ ------------
Loss Before Equity in Losses of Project
Partnerships (83,396) (84,323)
Equity in Losses of Project Partnerships (623,238) (606,786)
------------ ------------
Net Loss $ (706,634) $ (691,109)
============ ============
Allocation of Net Loss:
Assignees (699,568) (684,198)
General Partners (7,066) (6,911)
------------ ------------
$ (706,634) $ (691,109)
============ ============
Net Loss Per Beneficial Assignee
Certificate $ (69.23) $ (67.71)
Number of Beneficial Assignee ============ ============
Certificates Outstanding 10,105 10,105
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED DECEMBER 31,
(Unaudited)
TOTAL SERIES 2 - 6 1998 1997
---- ----
Revenues:
Interest Income $ 153,317 $ 158,531
------------ ------------
Expenses:
Asset Management Fee-General Partner 310,749 311,400
General and Administrative:
General Partner 39,297 41,966
Other 61,655 52,004
Amortization 37,755 23,886
------------ ------------
Total Expenses 449,456 429,256
------------ ------------
Loss Before Equity in Losses of Project
Partnerships (296,139) (270,725)
Equity in Losses of Project Partnerships (1,989,536) (1,974,531)
------------ ------------
Net Loss $(2,285,675) $(2,245,256)
============ ============
Allocation of Net Loss:
Assignees (2,262,819) (2,222,805)
General Partners (22,856) (22,451)
------------ ------------
$(2,285,675) $(2,245,256)
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE NINE MONTHS ENDED DECEMBER 31, 1998 AND 1997
(Unaudited)
General
SERIES 2 Assignees Partners Total
--------- -------- -----
Balance at March 31, 1997 $ 1,084,268 $ (43,391) $ 1,040,877
Net Loss (319,609) (3,228) (322,837)
------------- ------------ -------------
Balance at December 31,1997 $ 764,659 $ (46,619) $ 718,040
============= ============ =============
Balance at March 31, 1998 $ 749,952 $ (46,768) $ 703,184
Net Loss (361,932) (3,656) (365,588)
------------- ------------ -------------
Balance at December 31,1998 $ 388,020 $ (50,424) $ 337,596
============= ============ =============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE NINE MONTHS ENDED DECEMBER 31, 1998 AND 1997
(Unaudited)
General
SERIES 3 Assignees Partners Total
--------- -------- -----
Balance at March 31, 1997 $ 822,156 $ (39,994) $ 782,162
Net Loss (204,781) (2,068) (206,849)
------------- ------------ -------------
Balance at December 31,1997 $ 617,375 $ (42,062) $ 575,313
============= ============ =============
Balance at March 31, 1998 $ 602,863 $ (42,209) $ 560,654
Net Loss (268,112) (2,708) (270,820)
------------- ------------ -------------
Balance at December 31,1998 $ 334,751 $ (44,917) $ 289,834
============= ============ =============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE NINE MONTHS ENDED DECEMBER 31, 1998 AND 1997
(Unaudited)
General
SERIES 4 Assignees Partners Total
--------- -------- -----
Balance at March 31, 1997 $ 1,791,717 $ (43,168) $ 1,748,549
Net Loss (324,335) (3,276) (327,611)
------------- ------------ -------------
Balance at December 31,1997 $ 1,467,382 $ (46,444) $ 1,420,938
============= ============ =============
Balance at March 31, 1998 $ 1,311,156 $ (48,022) $ 1,263,134
Net Loss (264,221) (2,669) (266,890)
------------- ------------ -------------
Balance at December 31,1998 $ 1,046,935 $ (50,691) $ 996,244
============= ============ =============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE NINE MONTHS ENDED DECEMBER 31, 1998 AND 1997
(Unaudited)
General
SERIES 5 Assignees Partners Total
--------- -------- -----
Balance at March 31, 1997 $ 2,818,232 $ (47,920) $ 2,770,312
Net Loss (689,882) (6,969) (696,850)
------------- ------------ -------------
Balance at December 31,1997 $ 2,128,350 $ (54,888) $ 2,073,462
============= ============ =============
Balance at March 31, 1998 $ 2,012,865 $ (56,055) $ 1,956,810
Net Loss (668,986) (6,757) (675,743)
------------- ------------ -------------
Balance at December 31,1998 $ 1,343,879 $ (62,812) $ 1,281,067
============= ============ =============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE NINE MONTHS ENDED DECEMBER 31, 1998 AND 1997
(Unaudited)
General
SERIES 6 Assignees Partners Total
--------- -------- -----
Balance at March 31, 1997 $ 4,433,605 $ (44,839) $ 4,388,766
Net Loss (684,198) (6,911) (691,109)
------------- ------------ -------------
Balance at December 31,1997 $ 3,749,407 $ (51,750) $ 3,697,657
============= ============ =============
Balance at March 31, 1998 $ 3,572,169 $ (53,540) $ 3,518,629
Net Loss (699,568) (7,066) (706,634)
------------- ------------ -------------
Balance at December 31,1998 $ 2,872,601 $ (60,606) $ 2,811,995
============= ============ =============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE NINE MONTHS ENDED DECEMBER 31, 1998 AND 1997
(Unaudited)
General
TOTAL SERIES 2 - 6 Assignees Partners Total
--------- -------- -----
Balance at March 31, 1997 $ 10,949,978 $ (219,312) $ 10,730,666
Net Loss (2,222,805) (22,451) (2,245,256)
------------- ------------ -------------
Balance at December 31,1997 $ 8,727,173 $ (241,763) $ 8,485,410
============= ============ =============
Balance at March 31, 1998 $ 8,249,005 $ (246,594) $ 8,002,411
Net Loss (2,262,819) (22,856) (2,285,675)
------------- ------------ -------------
Balance at December 31,1998 $ 5,986,186 $ (269,450) $ 5,716,736
============= ============ =============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1998 AND 1997
(Unaudited)
SERIES 2 1998 1997
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss $ (365,588) $ (322,837)
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 4,035 1,776
Accreted Interest Income on Investments
in Securities (19,051) (20,676)
Equity in Losses of Project
Partnerships 319,676 284,240
Interest Income from Redemption of
Securities 16,834 13,628
Changes in Operating Assets and
Liabilities:
Increase in Payable to General Partners 14,806 17,689
------------ ------------
Net Cash Used in Operating
Activities (29,288) (26,180)
------------ ------------
Cash Flows from Investing Activities:
Distributions Received from Project
Partnerships 6,850 9,008
Redemption of Investment in Securities 30,668 32,065
------------ ------------
Net Cash Provided by (Used in)
Investing Activities 37,518 41,073
------------ ------------
Increase (Decrease) in Cash and Cash
Equivalents 8,230 14,893
Cash and Cash Equivalents at Beginning of
Year 160,851 138,561
------------ ------------
Cash and Cash Equivalents at End of Year $ 169,081 $ 153,454
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1998 AND 1997
(Unaudited)
SERIES 3 1998 1997
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss $ (270,820) $ (206,849)
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 3,345 (1,212)
Accreted Interest Income on Investments
in Securities (16,946) (18,391)
Equity in Losses of Project
Partnerships 227,683 168,705
Interest Income from Redemption of
Securities 14,974 12,121
Changes in Operating Assets and
Liabilities:
Increase in Payable to General
Partners (4,250) 6,511
------------ ------------
Net Cash Used in Operating
Activities (46,014) (39,115)
------------ ------------
Cash Flows from Investing Activities:
Distributions Received from Project
Partnerships 16,276 23,350
Redemption of Investment in Securities 27,278 28,521
------------ ------------
Net Cash Provided by (Used in)
Investing Activities 43,554 51,871
------------ ------------
Increase (Decrease) in Cash and Cash
Equivalents (2,460) 12,756
Cash and Cash Equivalents at Beginning of
Year 135,622 109,925
------------ ------------
Cash and Cash Equivalents at End of Year $ 133,162 $ 122,681
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1998 AND 1997
(Unaudited)
SERIES 4 1998 1997
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss $ (266,890) $ (327,611)
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 6,042 (1,467)
Accreted Interest Income on Investments
in Securities (21,468) (23,299)
Equity in Losses of Project
Partnerships 213,692 282,595
Interest Income from Redemption of
Securities 18,970 15,358
Changes in Operating Assets and
Liabilities:
Increase in Payable to General
Partners 10,660 15,136
------------ ------------
Net Cash Used in Operating
Activities (38,994) (39,288)
------------ ------------
Cash Flows from Investing Activities:
Distributions Received from Project
Partnerships 13,882 12,712
Redemption of Investment in Securities 34,559 36,133
------------ ------------
Net Cash Provided by (Used in)
Investing Activities 48,441 48,845
------------ ------------
Increase (Decrease) in Cash and Cash
Equivalents 9,447 9,557
Cash and Cash Equivalents at Beginning of
Year 196,876 182,773
------------ ------------
Cash and Cash Equivalents at End of Year $ 206,323 $ 192,330
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1998 AND 1997
(Unaudited)
SERIES 5 1998 1997
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss $ (675,743) $ (696,850)
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 9,768 8,253
Accreted Interest Income on Investments
in Securities (26,758) (29,040)
Equity in Losses of Project
Partnerships 605,247 632,205
Interest Income from Redemption of
Securities 23,644 19,140
Changes in Operating Assets and
Liabilities:
Increase in Payable to General
Partners 10,076 13,821
------------ ------------
Net Cash Used in Operating
Activities (53,766) (52,471)
------------ ------------
Cash Flows from Investing Activities:
Distributions Received from Project
Partnerships 16,474 14,170
Redemption of Investment in Securities 43,073 45,035
------------ ------------
Net Cash Provided by (Used in)
Investing Activities 59,547 59,205
------------ ------------
Increase (Decrease) in Cash and Cash
Equivalents 5,781 6,734
Cash and Cash Equivalents at Beginning of
Year 280,813 259,006
------------ ------------
Cash and Cash Equivalents at End of Year $ 286,594 $ 265,740
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1998 AND 1997
(Unaudited)
SERIES 6 1998 1997
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss $ (706,634) $ (691,109)
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 14,565 16,536
Accreted Interest Income on Investments
in Securities (22,315) (22,783)
Equity in Losses of Project
Partnerships 623,238 606,786
Interest Income from Redemption of
Securities 0 0
Changes in Operating Assets and
Liabilities:
Increase in Payable to General
Partners 17,910 22,451
------------ ------------
Net Cash Used in Operating
Activities (73,236) (68,119)
------------ ------------
Cash Flows from Investing Activities:
Distributions Received from Project
Partnerships 12,535 13,127
Redemption of Investment in Securities 0 0
------------ ------------
Net Cash Provided by (Used in)
Investing Activities 12,535 13,127
------------ ------------
Increase (Decrease) in Cash and Cash
Equivalents (60,701) (54,992)
Cash and Cash Equivalents at Beginning of
Year 406,255 396,736
------------ ------------
Cash and Cash Equivalents at End of Year $ 345,554 $ 341,744
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1998 AND 1997
(Unaudited)
TOTAL SERIES 2 - 6 1998 1997
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss $(2,285,675) $(2,245,256)
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 37,755 23,886
Accreted Interest Income on Investments
in Securities (106,538) (114,189)
Equity in Losses of Project
Partnerships 1,989,536 1,974,531
Interest Income from Redemption of
Securities 74,422 60,247
Changes in Operating Assets and
Liabilities:
Increase in Payable to General
Partners 49,202 75,608
------------ ------------
Net Cash Used in Operating
Activities (241,298) (225,173)
------------ ------------
Cash Flows from Investing Activities:
Distributions Received from Project
Partnerships 66,017 72,367
Redemption of Investment in Securities 135,578 141,754
------------ ------------
Net Cash Provided by (Used in)
Investing Activities 201,595 214,121
------------ ------------
Increase (Decrease) in Cash and Cash
Equivalents (39,703) (11,052)
Cash and Cash Equivalents at Beginning of
Year 1,180,417 1,087,001
------------ ------------
Cash and Cash Equivalents at End of Year $ 1,140,714 $ 1,075,949
============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
DECEMBER 31, 1998
NOTE 1 - ORGANIZATION:
Gateway Tax Credit Fund II Ltd. ("Gateway"), a Florida Limited Partnership,
was formed September 12, 1989, under the laws of Florida. Operations
commenced on September 14, 1990 for Series 2, September 28, 1990 for Series
3, February 1, 1991 for Series 4, July 1, 1991 for Series 5 and January 1,
1992 for Series 6. Gateway has invested, as a limited partner, in other
limited partnerships ("Project Partnerships") each of which owns and operates
one or more apartment complexes expected to qualify for Low-Income Housing
Tax Credits. Gateway will terminate on December 31, 2040, or sooner, in
accordance with the terms of the Limited Partnership Agreement. As of
December 31, 1998, Gateway had received capital contributions of $1,000 from
the General Partners and $37,228,000 from Beneficial Assignee Certificate
investors (the "Assignees"). The fiscal year of Gateway for reporting
purposes ends on March 31.
Pursuant to the Securities Act of 1933, Gateway filed a Form S-11
Registration Statement with the Securities and Exchange Commission, effective
September 12, 1989, which covered the offering (the "Public Offering") of
Gateway's Beneficial Assignee Certificates ("BACs") representing assignments
of units for the beneficial interest of the limited partnership interest of
the Assignor Limited Partner. The Assignor Limited Partner was formed for
the purpose of serving in that capacity for the Fund and will not engage in
any other business.
Raymond James Partners, Inc. and Raymond James Tax Credit Funds, Inc.,
wholly-owned subsidiaries of Raymond James Financial, Inc., are the General
Partner and the Managing General Partner, respectively. The Managing General
Partner manages and controls the business of Gateway.
Gateway offered BACs in five series. BACs in the amounts of $6,136,000,
$5,456,000, $6,915,000, $8,616,000 and $10,105,000 for Series 2, 3, 4, 5 and
6, respectively had been issued as of March 31, 1997. Each Series is treated
as a separate partnership, investing in a separate and distinct pool of
Project Partnerships. Net proceeds from each Series are used to acquire
Project Partnerships which are specifically allocated to such Series. Income
or loss and all tax items from the Project Partnerships acquired by each
Series are specifically allocated among the Assignees of such Series.
Operating profits and losses, cash distributions from operations and tax
credits are allocated 99% to the Assignees and 1% to the General Partners.
Profit or loss and cash distributions from sales of properties will be
allocated as formulated in the Limited Partnership Agreement.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES:
Basis of Accounting
Gateway utilizes the accrual basis of accounting whereby revenues are
recognized when earned and expenses are recognized when obligations are
incurred.
Gateway accounts for its investments as the sole limited partner in Project
Partnerships ("Investments in Project Partnerships") using the equity method
of accounting and reports the equity in losses of the Project Partnerships on
a 3-month lag in the Statements of Operations. Under the equity method, the
Investments in Project Partnerships initially include:
1)Gateway's capital contribution,
2)Acquisition fees paid to the General Partner for services rendered
in selecting properties for acquisition, and
3)Acquisition expenses including legal fees, travel and other
miscellaneous costs relating to acquiring properties.
Quarterly the Investments in Project Partnerships are increased or decreased
as follows:
1)Increased for equity in income or decreased for equity in losses of
the Project Partnerships,
2)Decreased for cash distributions received from the Project
Partnerships, 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 1997 figures have been reclassified, where
appropriate, to conform with the financial statement presentation used in
1998.
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, 1998. In the opinion of management, these
financial statements include adjustments, consisting only of normal recurring
adjustments, necessary to fairly summarize the Partnership's financial
position and results of operations. The results of operations for the
periods may not be indicative of the results to be expected for the year.
NOTE 3 - INVESTMENT IN SECURITIES:
The December 31, 1998 Balance Sheet includes Investment in Securities
consisting of U.S. Government Security Strips which represents their cost,
plus accreted interest income of $142,530 for Series 2, $126,779 for Series
3, $160,615 for Series 4, $200,187 for Series 5 and $154,602 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 $ 382,847 $ 345,462 $ 37,385
Series 3 340,424 307,282 33,142
Series 4 431,453 389,294 42,159
Series 5 537,583 485,206 52,377
Series 6 487,593 443,932 43,661
As of December 31, 1998, the cost and accreted interest of debt securities
by contractual maturities is as follows:
Series 2 Series 3 Series 4
-------- -------- --------
Due with 1 year $ 48,741 $ 43,353 $ 54,924
After 1 year through 5 years 179,090 159,297 201,812
After 5 years through 10 years 117,631 104,632 132,558
---------- ---------- ----------
Total Amount Carried on
Balance Sheet $ 345,462 $ 307,282 $ 389,294
========== ========== ==========
Series 5 Series 6 Total
-------- -------- --------
Due with 1 year $ 68,457 $ 50,839 $ 266,314
After 1 year through 5 years 251,532 202,738 994,469
After 5 years through 10 years 165,217 190,355 710,393
---------- ---------- ----------
Total Amount Carried on
Balance Sheet $ 485,206 $ 443,932 $1,971,176
========== ========== ==========
NOTE 4 - RELATED PARTY TRANSACTIONS:
The Payable to General Partners primarily represents the asset management
fees owed to the General Partners at the end of the period. It is unsecured,
due on demand and, in accordance with the limited partnership agreement, non-
interest bearing. Within the next 12 months, the Managing General Partner
does not intend to demand payment on the portion of Asset Management Fees
payable classified as long-term on the Balance Sheet.
The Payable to Project Partnerships represents unpaid capital contributions
to the Project Partnerships and will be paid after certain performance
criteria are met. Such contributions are in turn payable to the general
partner of the Project Partnerships.
For the nine months ended December 31, 1998 and 1997 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.
1998 1997
---- ------
Series 2 $ 51,579 $ 51,666
Series 3 47,733 47,844
Series 4 58,599 58,704
Series 5 72,498 72,633
Series 6 80,340 80,553
--------- ---------
Total $ 310,749 $ 311,400
========= =========
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 $ 5,835 $ 6,238
Series 3 6,129 6,522
Series 4 7,692 8,223
Series 5 9,548 10,208
Series 6 10,093 10,775
--------- --------
Total $ 39,297 $ 41,966
========= ========
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS:
As of December 31, 1998, the Partnership had acquired an interest in 148
Project Partnerships for the Series which own and operate government assisted
multi-family housing complexes(Series 2-22, Series 3-23, Series 5-36 and
Series 6-38). The Partnership, as the Investor Limited Partner pursuant to
the Project Partnership Agreements has generally acquired an ownership
interest of 99% in these Project Partnerships.
The following is a summary of Investments in Project Partnerships as of:
SERIES 2 DECEMBER 31, MARCH 31,
1998 1998
-------------- ----------
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) (4,630,459) (4,310,783)
Cumulative distributions received from
Project Partnerships (71,126) (64,276)
------------ -------------
Investment in Project Partnerships before
Adjustment (176,907) 149,619
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 390,838 390,838
Accumulated amortization of acquisition
fees and expenses (33,687) (29,652)
----------- ------------
Investments in Project Partnerships $ 180,244 $ 510,805
============ ============
(1) In accordance with the Partnership's accounting policy to not carry
Investments in Project Partnerships below zero, cumulative suspended losses
of $758,370 for the period ended September 30 1998 and cumulative suspended
losses of $556,351 for the year ended March 31, 1998 are not included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
The following is a summary of Investments in Project Partnerships as of:
SERIES 3 DECEMBER 31, MARCH 31,
1998 1998
-------------- ----------
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) (4,049,464) (3,821,781)
Cumulative distributions received from
Project Partnerships (162,852) (146,576)
----------- -------------
Investment in Project Partnerships before
Adjustment (323,603) (79,644)
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 491,746 491,746
Accumulated amortization of acquisition
fees and expenses (37,447) (34,102)
----------- ------------
Investments in Project Partnerships $ 130,696 $ 378,000
============ ============
(1) In accordance with the Partnership's accounting policy to not carry
Investments in Project Partnerships below zero, cumulative suspended losses
of $1,371,959 for the period ended September 30, 1998 and cumulative
suspended losses of $1,033,078 for the year ended March 31, 1998 are not
included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
The following is a summary of Investments in Project Partnerships as of:
SERIES 4 DECEMBER 31, MARCH 31,
1998 1998
-------------- ----------
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) (4,638,959) (4,425,267)
Cumulative distributions received from
Project Partnerships (104,148) (90,266)
----------- -------------
Investment in Project Partnerships before
Adjustment 209,412 436,986
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 562,967 562,967
Accumulated amortization of acquisition
fees and expenses (24,172) (18,130)
----------- ------------
Investments in Project Partnerships $ 748,207 $ 981,823
============ ============
(1) In accordance with the Partnership's accounting policy to not carry
Investments in Project Partnerships below zero, cumulative suspended losses
of $655,286 for the period ended September 30, 1998 and cumulative suspended
losses of $496,384 for the year ended March 31, 1998 are not included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
The following is a summary of Investments in Project Partnerships as of:
SERIES 5 DECEMBER 31, MARCH 31,
1998 1998
-------------- ----------
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) (5,712,604) (5,107,357)
Cumulative distributions received from
Project Partnerships (148,664) (132,190)
----------- -------------
Investment in Project Partnerships before
Adjustment 303,204 924,925
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 650,837 650,837
Accumulated amortization of acquisition
fees and expenses (85,443) (75,675)
------------ ------------
Investments in Project Partnerships $ 868,598 $ 1,500,087
============ ============
(1) In accordance with the Partnership's accounting policy to not carry
Investments in Project Partnerships below zero, cumulative suspended losses
of $321,428 for the period ended September 30, 1998 and cumulative suspended
losses of $248,554 for the year ended March 31, 1998 are not included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
The following is a summary of Investments in Project Partnerships as of:
SERIES 6 DECEMBER 31, MARCH 31,
1998 1998
-------------- ----------
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) (5,518,057) (4,894,819)
Cumulative distributions received from
Project Partnerships (134,241) (121,706)
------------ -------------
Investment in Project Partnerships before
Adjustment 1,809,917 2,445,690
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 785,179 785,179
Accumulated amortization of acquisition
fees and expenses (142,641) (128,076)
------------ ------------
Investments in Project Partnerships $ 2,452,455 $ 3,102,793
============ ============
(1) In accordance with the Partnership's accounting policy to not carry
Investments in Project Partnerships below zero, cumulative suspended losses
of $265,292 for the period ended September 30, 1998 and cumulative suspended
losses of $218,323 for the year ended March 31, 1998 are not included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
The following is a summary of Investments in Project Partnerships as of:
TOTAL SERIES 2 - 6 DECEMBER 31, MARCH 31,
1998 1998
-------------- ----------
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) (24,549,544) (22,560,007)
Cumulative distributions received from
Project Partnerships (621,031) (555,014)
----------- -------------
Investment in Project Partnerships before
Adjustment 1,822,022 3,877,576
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 2,881,567 2,881,567
Accumulated amortization of acquisition
fees and expenses (323,390) (285,635)
----------- ------------
Investments in Project Partnerships $ 4,380,199 $ 6,473,508
============ ============
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with the Partnership's policy of presenting the financial
information of the Project Partnerships on a three month lag, below is the
summarized financial information for the Series' Project Partnerships as of
September 30, of each year:
1998 1997
SERIES 2 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 1,851,356 $ 1,752,764
Investment properties, net 20,976,868 21,936,092
Other assets 11,140 8,642
----------- -----------
Total assets $22,839,364 $23,697,498
=========== ===========
Liabilities and Partners' Equity:
Current liabilities 501,706 458,696
Long-term debt 23,203,641 23,253,785
----------- -----------
Total liabilities 23,705,347 23,712,481
----------- -----------
Partners' equity
Limited Partner (911,848) (87,346)
General Partners 45,865 72,363
----------- -----------
Total Partners' equity (865,983) (14,983)
----------- -----------
Total liabilities and partners'
equity $22,839,364 $23,697,498
=========== ===========
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 1,865,707 $ 1,995,370
----------- -----------
Expenses:
Operating expenses 1,251,202 1,117,137
Interest expense 439,776 605,728
Depreciation and amortization 701,694 704,687
----------- -----------
Total expenses 2,392,672 2,427,552
Net loss (526,965) (432,182)
=========== ===========
Other partners' share of net loss (5,270) (4,322)
=========== ===========
Partnerships' share of net loss (521,695) (427,860)
Suspended loss 202,019 143,620
----------- -----------
Equity in Losses of Project Partnerships $ (319,676) $ (284,240)
=========== ===========
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with the Partnership's policy of presenting the financial
information of the Project Partnerships on a three month lag, below is the
summarized financial information for the Series' Project Partnerships as of
September 30, of each year:
1998 1997
SERIES 3 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 2,194,850 $ 2,116,428
Investment properties, net 18,234,573 19,160,883
Other assets 218,802 232,910
----------- -----------
Total assets $20,648,225 $21,510,221
=========== ===========
Liabilities and Partners' Equity:
Current liabilities 565,803 541,980
Long-term debt 21,748,548 21,822,011
----------- -----------
Total liabilities 22,314,351 22,363,991
----------- -----------
Partners' equity
Limited Partner (1,948,665) (1,178,658)
General Partners 282,539 324,888
----------- -----------
Total Partners' equity (1,666,126) (853,770)
----------- -----------
Total liabilities and partners'
equity $20,648,225 $21,510,221
=========== ===========
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 1,791,299 $ 1,853,684
Expenses: ----------- -----------
Operating expenses 1,277,548 1,199,461
Interest expense 399,383 458,779
Depreciation and amortization 686,655 691,039
----------- -----------
Total expenses 2,363,586 2,349,279
Net loss (572,287) (495,595)
=========== ===========
Other partners' share of net loss (5,723) (4,956)
=========== ===========
Partnerships' share of net loss (566,564) (490,639)
Suspended loss 338,881 321,934
----------- -----------
Equity in Losses of Project Partnerships $ (227,683) $ (168,705)
=========== ===========
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with the Partnership's policy of presenting the financial
information of the Project Partnerships on a three month lag, below is the
summarized financial information for the Series' Project Partnerships as of
September 30, of each year:
1998 1997
SERIES 4 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 2,326,789 $ 2,154,311
Investment properties, net 24,514,486 25,633,123
Other assets 49,341 20,577
----------- -----------
Total assets $26,890,616 $27,808,011
=========== ===========
Liabilities and Partners' Equity:
Current liabilities 534,451 608,600
Long-term debt 26,551,287 26,606,712
----------- -----------
Total liabilities 27,085,738 27,215,312
----------- -----------
Partners' equity
Limited Partner (407,604) 344,261
General Partners 212,482 248,438
----------- -----------
Total Partners' equity (195,122) 592,699
----------- -----------
Total liabilities and partners'
equity $26,890,616 $27,808,011
=========== ===========
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 2,426,495 $ 2,365,056
Expenses: ----------- -----------
Operating expenses 1,502,100 1,340,745
Interest expense 505,288 703,241
Depreciation and amortization 795,465 782,972
----------- -----------
Total expenses 2,802,853 2,826,958
Net loss (376,358) (461,902)
=========== ===========
Other partners' share of net loss (3,764) (4,619)
=========== ===========
Partnerships' share of net loss (372,594) (457,283)
Suspended loss 158,902 174,688
----------- -----------
Equity in Losses of Project Partnerships $ (213,692) $ (282,595)
=========== ===========
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with the Partnership's policy of presenting the financial
information of the Project Partnerships on a three month lag, below is the
summarized financial information for the Series' Project Partnerships as of
September 30, of each year:
1998 1997
SERIES 5 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 2,941,760 $ 2,844,732
Investment properties, net 30,706,370 31,976,080
Other assets 19,759 4,454
----------- -----------
Total assets $33,667,889 $34,825,266
=========== ===========
Liabilities and Partners' Equity:
Current liabilities 823,788 892,807
Long-term debt 32,811,485 32,895,228
----------- -----------
Total liabilities 33,635,273 33,788,035
----------- -----------
Partners' equity
Limited Partner 109,337 1,065,779
General Partners (76,721) (28,548)
----------- -----------
Total Partners' equity 32,616 1,037,231
----------- -----------
Total liabilities and partners'
equity $33,667,889 $34,825,266
=========== ===========
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 2,699,019 $ 2,690,933
Expenses: ----------- -----------
Operating expenses 1,753,713 1,715,822
Interest expense 630,629 655,325
Depreciation and amortization 999,648 1,031,401
----------- -----------
Total expenses 3,383,990 3,402,548
Net loss (684,971) (711,615)
=========== ===========
Other partners' share of net loss (6,850) (7,116)
=========== ===========
Partnerships' share of net loss (678,121) (704,499)
Suspended loss 72,874 72,294
----------- -----------
Equity in Losses of Project Partnerships $ (605,247) $ (632,205)
=========== ===========
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with the Partnership's policy of presenting the financial
information of the Project Partnerships on a three month lag, below is the
summarized financial information for the Series' Project Partnerships as of
September 30, of each year:
1998 1997
SERIES 6 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 3,294,860 $ 3,052,657
Investment properties, net 34,691,072 36,071,857
Other assets 38,679 14,004
----------- -----------
Total assets $38,024,611 $39,138,518
=========== ===========
Liabilities and Partners' Equity:
Current liabilities 959,629 925,682
Long-term debt 35,655,864 35,817,153
----------- -----------
Total liabilities 36,615,493 36,742,835
----------- -----------
Partners' equity
Limited Partner 1,585,598 2,527,314
General Partners (176,480) (131,631)
----------- -----------
Total Partners' equity 1,409,118 2,395,683
----------- -----------
Total liabilities and partners' $38,024,611 $39,138,518
equity =========== ===========
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 2,821,903 $ 2,978,066
Expenses: ----------- -----------
Operating expenses 1,741,846 1,662,399
Interest expense 687,698 875,240
Depreciation and amortization 1,069,336 1,102,889
----------- -----------
Total expenses 3,498,880 3,640,528
Net loss (676,977) (662,462)
=========== ===========
Other partners' share of net loss (6,770) (6,625)
=========== ===========
Partnerships' share of net loss (670,207) (655,837)
Suspended losses 46,969 49,051
----------- -----------
Equity in Losses of Project Partnerships $ (623,238) $ (606,786)
=========== ===========
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with the Partnership's policy of presenting the financial
information of the Project Partnerships on a three month lag, below is the
summarized financial information for the Series' Project Partnerships as of
September 30, of each year:
1998 1997
TOTAL SERIES 2- 6 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 12,609,615 $ 11,920,892
Investment properties, net 129,123,369 134,778,035
Other assets 337,721 280,587
----------- -----------
Total assets $142,070,705 $146,979,514
=========== ===========
Liabilities and Partners' Equity:
Current liabilities 3,385,377 3,427,765
Long-term debt 139,970,825 140,394,889
----------- -----------
Total liabilities 143,356,202 143,822,654
----------- -----------
Partners' equity
Limited Partner (1,573,182) 2,671,350
General Partners 287,685 485,510
----------- -----------
Total Partners' equity (1,285,497) 3,156,860
----------- -----------
Total liabilities and partners'
equity $142,070,705 $146,979,514
============= =============
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 11,604,423 $ 11,883,109
Expenses: ------------- -------------
Operating expenses 7,526,409 7,035,564
Interest expense 2,662,774 3,298,313
Depreciation and amortization 4,252,798 4,312,988
----------- -----------
Total expenses 14,441,981 14,646,865
Net loss (2,837,558) (2,763,756)
=========== ===========
Other partners' share of net loss (28,376) (27,638)
=========== ===========
Partnerships' share of net loss (2,809,182) (2,736,118)
Suspended losses 819,645 761,587
----------- -----------
Equity in Losses of Project
Partnerships $(1,989,537) $(1,974,531)
============ ============
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations, Liquidity and Capital Resources
Operations commenced on September 14, 1990, with the first admission of
Assignees in Series 2. The proceeds from Assignees' capital contributions
available for investment were used to acquire interests in Project
Partnerships.
As disclosed on the statement of operations for each Series, except as
described below, interest income is comparable for the nine and three months
ended December 31, 1998 and December 31, 1997. The General and
Administrative expenses - General Partner and General and Administrative
expenses - Other for the nine and three months ended December 31, 1998 are
comparable for the same period ended December 31, 1997. There were no
unusual variations in the operating results between these two periods.
The capital resources of each Series are used to pay General and
Administrative operating costs including personnel, supplies, data
processing, travel and legal and accounting associated with the
administration and monitoring of Gateway and the Project Partnerships. The
capital resources are also used to pay the Asset Management Fee due the
Managing General Partner, but only to the extent that Gateway's remaining
resources are sufficient to fund Gateway's ongoing needs. (Payment of any
Asset Management Fee unpaid at the time Gateway sells its interests in the
Project Partnerships is subordinated to the return of the investors' original
capital contributions).
The sources of funds to pay the operating costs of each Series are short
term investments and interest earned thereon, the maturity of U.S. Treasury
Security Strips ("Zero Coupon Treasuries") which were purchased with funds
set aside for this purpose, and cash distributed to the Series from the
operations of the Project Partnerships.
From inception, no Series has paid distributions and management does not
anticipate distributions in the future.
Series 2 - Gateway closed this series on September 14, 1990 after receiving
$6,136,000 from 375 Assignees. Equity in Losses of Project Partnerships for
the nine months ended December 31, 1998 increased from $284,240 for the nine
months ended December 31, 1997 to $319,676. In general, it is common in the
real estate industry to experience losses for financial and tax reporting
purposes because of the non-cash expenses of depreciation and amortization.
As a result, management expects that this Series, as well as those described
below, will report its equity in Project Partnerships as a loss for tax and
financial reporting purposes. Overall, management believes the Project
Partnerships are operating as expected and are generating tax credits which
meet projections.
At December 31, 1998, the Series had $169,081 of short-term investments
(Cash and Cash Equivalents). It also had $345,462 in Zero Coupon Treasuries
with annual maturities providing $49,544 in fiscal year 2000 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
$365,588 for the nine months ended December 31, 1998. However, after
adjusting for Equity in Losses of Project Partnerships of $319,676 and the
changes in operating assets and liabilities, net cash used in operating
activities was $29,288 as a result of paying Asset Management Fees of
$35,000. Cash provided by investing activities totaled $37,518, consisting of
$6,850 in cash distributions from the Project Partnerships and $30,668 from
matured Zero Coupon Treasuries. There were no unusual events or trends to
describe.
Series 3 - Gateway closed this series on December 13, 1990 after receiving
$5,456,000 from 398 Assignees. Equity in Losses of Project Partnerships for
the nine months ended December 31, 1998 increased from $168,705 for the nine
months ended December 31, 1997 to $227,683.
At December 31, 1998, the Series had $133,162 of short-term investments
(Cash and Cash Equivalents). It also had $307,282 in Zero Coupon Treasuries
with annual maturities providing $44,054 in fiscal year 2000 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
$270,820 for the nine months ended December 31, 1998. However, after
adjusting for Equity in Losses of Project Partnerships of $227,683 and the
changes in operating assets and liabilities, net cash used in operating
activities was $46,014 as a result of paying Asset Management Fees of
$47,000. Cash provided by investing activities totaled $43,554, consisting of
$16,276 in cash distributions from the Project Partnerships and $27,278 from
matured Zero Coupon Treasuries. There were no unusual events or trends to
describe.
Series 4 - Gateway closed this series on May 31, 1991 after receiving
$6,915,000 from 465 Assignees. Equity in Losses of Project Partnerships for
the nine months ended December 31, 1998 decreased from $282,595 for the nine
months ended December 31, 1997 to $213,692.
At December 31, 1998, the Series had $206,323 of short-term investments
(Cash and Cash Equivalents). It also had $389,294 in Zero Coupon Treasuries
with annual maturities providing $55,834 in fiscal year 2000 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
$266,890 for the nine months ended December 31, 1998. However, after
adjusting for Equity in Losses of Project Partnerships of $213,692 and the
changes in operating assets and liabilities, net cash used in operating
activities was $38,994 as a result of paying Asset Management Fees of
$42,000. Cash provided by investing activities totaled $48,441, consisting of
$13,882 in cash distributions from the Project Partnerships and $34,559 from
matured Zero Coupon Treasuries. There were no unusual events or trends to
describe.
Series 5 - Gateway closed this series on October 11, 1991 after receiving
$8,616,000 from 535 Assignees. Equity in Losses of Project Partnerships for
the nine months ended December 31, 1998 decreased from $632,205 for the nine
months ended December 31, 1997 to $605,247.
At December 31, 1998, the Series had $286,594 of short-term investments
(Cash and Cash Equivalents). It also had $485,206 in Zero Coupon Treasuries
with annual maturities providing $69,568 in fiscal year 2000 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
$675,743 for the nine months ended December 31, 1998. However, after
adjusting for Equity in Losses of Project Partnerships of $605,247 and the
changes in operating assets and liabilities, net cash used in operating
activities was $53,766 as a result of paying Asset Management Fees of
$58,000. Cash provided by investing activities totaled $59,547, consisting of
$16,474 in cash distributions from the Project Partnerships and $43,073 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 nine months ended December 31, 1998 increased from $606,786 for the nine
months ended December 31, 1997 to $623,238.
At December 31, 1998, the Series had $345,554 of short-term investments
(Cash and Cash Equivalents). It also had $443,932 in Zero Coupon Treasuries
with annual maturities providing $51,000 in fiscal year 2000 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
$706,634 for the nine months ended December 31, 1998. However, after
adjusting for Equity in Losses of Project Partnerships of $623,238 and the
changes in operating assets and liabilities, net cash used in operating
activities was $73,236 as a result of paying Asset Management Fees of
$55,000. Cash provided by investing activities totaled $12,535, consisting of
cash distributions from the Project Partnerships. There were no unusual
events or trends to describe.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
By: Raymond James Tax Credit Funds,Inc.
Date: February 9, 1999 By:/s/ Ronald M. Diner
Ronald M. Diner
President
Date: February 9, 1999 By:/s/ Sandra L. Furey
Sandra L. Furey
Secretary and Treasurer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1998.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-END> DEC-31-1998
<CASH> 1,140,714
<SECURITIES> 1,971,176
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,407,028
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 7,492,090
<CURRENT-LIABILITIES> 288,384
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,716,736
<TOTAL-LIABILITY-AND-EQUITY> 7,492,090
<SALES> 0
<TOTAL-REVENUES> 153,317
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 449,456
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,285,675)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,285,675)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,285,675)
<EPS-PRIMARY> (60.78)<F1>
<EPS-DILUTED> (60.78)<F1>
<FN>
<F1>EPS IS NET LOSS PER $1,000 LIMITED PARTNERSHIP UNIT.
</FN>
</TABLE>
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