June 30, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Boston Financial Tax Credit Fund Plus, A Limited Partnership
Annual Report on Form 10-K for the Year Ended March 31, 1998
Commission File Number 0-22104
Gentlemen:
Pursuant to the requirements of Section 15(d) of the Securities Exchange Act of
1934, there is filed herewith one copy of the subject report.
Very truly yours,
\s\ Dianne Groark
Dianne Groark
Assistant Controller
TCP10K-K
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended Commission file number
March 31, 1998 0-22104
BOSTON FINANCIAL TAX CREDIT FUND PLUS, A LIMITED
PARTNERSHIP (Exact name of registrant as specified
in its charter)
Massachusetts 04-3105699
- ----------------------- ------------------
(State of organization) (I.R.S. Employer
Identification No.)
101 Arch Street, 16th Floor
Boston, Massachusetts 02110-1106
- -------------------------------------- ----------
(Address of Principal executive office) (Zip Code)
Registrant's telephone number, including area code 617/439-3911
------------
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
------------------- ------------------------
None None
Securities registered pursuant to Section 12(g) of the Act:
CLASS A AND CLASS B UNITS OF LIMITED PARTNERSHIP INTEREST
(Title of Class)
100,000
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
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Subsection 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ X ]
State the aggregate sales price of partnership units held by nonaffiliates of
the registrant.
$37,933,000 as of March 31, 1998
--------------------------------
<PAGE>
K-12
DOCUMENTS INCORPORATED BY REFERENCE: LIST THE FOLLOWING DOCUMENTS IF
INCORPORATED BY REFERENCE AND THE PART OF THE FORM 10-K INTO WHICH THE DOCUMENT
IS INCORPORATED: (1) ANY ANNUAL REPORT TO SECURITY HOLDERS; (2) ANY PROXY OR
INFORMATION STATEMENT; AND (3) ANY PROSPECTUS FILED PURSUANT TO RULE 424(b) OR
(c) UNDER THE SECURITIES ACT OF 1933.
Part of Report on
Form 10-K into
Which the Document
Documents incorporated by reference is Incorporated
Post-effective amendment No. 5 to the Form S-11
Registration Statement, File # 33-38408 Part I, Item 1
Post-effective amendment No. 6 to the Form S-11
Registration Statement File # 33-38408 Part III, Item 12
Acquisition Reports Part I, Item 1
Prospectus - Sections Entitled:
"Investment Objectives and Policies -
Principal Investment Objectives" Part I, Item 1
"Investment Risks" Part I, Item 1
"Estimated Use of Proceeds" Part III, Item 13
"Management Compensation and Fees" Part III, Item 13
"Profits and Losses for Tax Purposes, Tax
Credits and Cash Distributions" Part III, Item 13
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND PLUS, A LIMITED PARTNERSHIP
ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED MARCH 31, 1998
TABLE OF CONTENTS
Page No.
PART I
Item 1 Business K-3
Item 2 Properties K-6
Item 3 Legal Proceedings K-13
Item 4 Submission of Matters to a Vote of
Security Holders K-13
PART II
Item 5 Market for the Registrant's Units and
Related Security Holder Matters K-13
Item 6 Selected Financial Data K-14
Item 7 Management's Discussion and Analysis of
Financial Condition and Results of Operations K-16
Item 8 Financial Statements and Supplementary Data K-19
Item 9 Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure K-19
PART III
Item 10 Directors and Executive Officers
of the Registrant K-20
Item 11 Management Remuneration K-21
Item 12 Security Ownership of Certain Beneficial
Owners and Management K-21
Item 13 Certain Relationships and Related Transactions K-22
PART IV
Item 14 Exhibits, Financial Statement Schedule and
Reports on Form 8-K K-25
SIGNATURES K-26
<PAGE>
PART I
Item 1. Business
Boston Financial Tax Credit Fund Plus, A Limited Partnership (the "Fund") is a
Massachusetts limited partnership formed on December 10, 1990 under the laws of
the Commonwealth of Massachusetts. The Fund's partnership agreement
("Partnership Agreement") authorized the sale of up to 100,000 Class A and Class
B units of Limited Partnership Interest ("Class A Units" and "Class B Units";
Class A Units and Class B Units are collectively called "Units") at $1,000 per
Unit, adjusted for certain discounts. The Fund raised $37,932,300 ("Gross
Proceeds"), net of discounts of $700, through the sale of 34,643 Class A Units
and 3,290 Class B Units. Such amounts exclude five unregistered Units previously
acquired for $5,000 by the Initial Limited Partner, which is also one of the
General Partners. The offering of Units terminated on January 11, 1993.
An affiliate of the Managing General Partner, BF Texas Limited Partnership, was
admitted as an additional Local General Partner with responsibility for all
management decisions in three Local Limited Partnerships in which the Fund has
invested (the "Texas Partnerships"). As a result, the Fund was deemed to have
control over the Texas Partnerships and the accompanying financial statements
are presented in combined form ("Combined Financial Statements") to conform with
the required accounting treatment under generally accepted accounting
principles. However, this change only affects the presentation of the Fund's
operating results, not the business of the Fund. Accordingly, presentation of
information about industry segments is not applicable and would not be material
to an understanding of the Fund's business taken as a whole. As described more
fully under Item 7 Management's Discussion and Analysis of Financial Condition
and Results of Operations, the Managing General Partner transferred all of the
assets of two of the Texas Partnerships on May 31, 1996, subject to their
liabilities to unaffiliated entities. On September 27, 1997, the Managing
General Partner transferred all of the assets of the remaining Texas Partnership
(Leatherwood), subject to its liabilities, to an unaffiliated entity. Therefore,
as of March 31, 1998, Leatherwood's net loss through the date of transfer is
presented in combined form.
The Fund has invested as a limited partner in other limited partnerships ("Local
Limited Partnerships") which own and operate residential apartment complexes
("Properties"), some of which benefit from some form of federal, state or local
assistance programs, and all of which qualify for low-income housing tax credits
("Tax Credits") added to the Internal Revenue Code (the "Code") by the Tax
Reform Act of 1986. The Fund also invested in, for the benefit of the Class B
Limited Partners, United States Treasury obligations from which the interest
coupons have been stripped or in such coupons themselves (collectively "Treasury
STRIPS"). The Fund used approximately 28% of the Class B Limited Partners'
capital contributions to purchase Treasury STRIPS with maturities of 13 to 18
years, with a total redemption amount equal to the Class B Limited Partners'
capital contributions. The investment objectives of the Fund include the
following: (i) to provide investors with annual tax credits which they may use
to reduce their federal income taxes; (ii) to provide limited cash distributions
from the operations of apartment complexes; (iii) to preserve and protect the
Fund's capital with the possibility of realizing a profit through the sale or
refinancing of apartment complexes; and (iv) to provide payments to Class B
Limited Partners from Treasury STRIPS. There cannot be any assurance that the
Fund will attain any or all of these investment objectives. A more detailed
discussion of these investments objectives, along with the risk in achieving
them, is contained in the sections of the Prospectus entitled "Investment
Objectives and Policies Principal Investment Objectives" and "Investment Risks",
which are herein incorporated by this reference.
Table A on the following page lists the Properties owned by the Local Limited
Partnerships in which the Fund has invested. Item 7 of this Report on Form 10-K
contains other significant information with respect to such Local Limited
Partnerships. The terms of the acquisition of each Local Limited Partnership
interest have been described in six supplements to the Prospectus and five Form
8-K filings which were collected in Post-effective Amendment No. 5 to the
Registration Statement (collectively, the "Acquisition Reports"); such
descriptions are incorporated herein by this reference.
<PAGE>
<TABLE>
<CAPTION>
TABLE A
SELECTED LOCAL LIMITED
PARTNERSHIP DATA
(Unaudited)
Properties owned by Date Interest
Local Limited Partnerships* Location Acquired
<S> <C> <C>
Leatherwood (formerly Village Oaks)** Yoakum, TX 12/23/91
Tamaric** Cedar Park, TX 12/23/91
Northwest** Georgetown, TX 12/23/91
Pilot House Newport News, VA 02/25/92
Jardines de Juncos Juncos, PR 04/14/92
Livingston Arms Poughkeepsie, NY 05/01/92
Broadway Tower Revere, MA 06/02/92
45th & Vincennes Chicago, IL 06/26/92
Phoenix Housing Moorhead, MN 07/06/92
Cottages of Aspen Oakdale, MN 07/02/92
Long Creek Court Kittrell, NC 07/01/92
Atkins Glen Stoneville, NC 07/01/92
Tree Trail Gainesville, FL 10/30/92
Meadow Wood Smyrna, TN 10/30/92
Primrose Grand Forks, ND 12/09/92
Sycamore Sioux Falls, ND 12/17/92
Preston Place Winchester, VA 12/21/92
Kings Grant Court Statesville, NC 12/23/92
Chestnut Plains Winston-Salem, NC 12/24/92
Bancroft Court Toledo, OH 12/31/92
Capitol Park*** Oklahoma City, OK 02/10/93
Hudson Square Baton Rouge, LA 03/08/93
Walker Woods II Dover, DE 06/11/93
Vista Villa Saginaw County, MI 08/04/93
Metropolitan Chicago, IL 08/19/93
Carolina Woods II Greensboro, NC 10/11/93
Linden Square Genesee County, MI 10/29/93
New Garden Place Gilmer, NC 06/24/94
Findley Place Minneapolis, MN 07/15/94
</TABLE>
* The Fund's interest in profits and losses of each Local Limited
Partnership arising from normal operations is 99%, except for an 82%
interest in Livingston Arms, a 98.75% interest in Metropolitan and a
97.9% interest in New Garden Place. Profits and losses arising from
sale or refinancing transactions will be allocated in accordance with
the respective Local Limited Partnership Agreements.
** As of March 31, 1998, the Managing General Partner transferred all of
the assets of three of the Texas Partnerships, subject to their
liabilities, to unaffiliated entities.
*** As of March 31, 1998, the title of Capitol Park was transferred to an
affiliated entity. The transfer was effective October 7, 1997.
As previously reported, due to construction and other problems at Villas de
Montellano in Morovis, Puerto Rico, the Managing General Partner has abandoned
its interest in this Local Limited Partnership to the Local General Partner.
Also, as previously reported, the Managing General Partner elected to exercise
its rights under the Repurchase Agreement and requested from the Local General
Partner and the Guarantor the repayment of the capital contributions advanced by
the Fund and of certain expenses associated with this investment. However, the
Local General Partner and the Guarantor filed for bankruptcy in May and August
1994, respectively, and it is unlikely that they will meet all of their
obligations under the Repurchase Agreement. The Fund has engaged counsel to
vigorously pursue the Fund's claim in the Bankruptcy Court. The Fund wrote off
this investment in Fiscal 1996.
Although the Fund's investments in Local Limited Partnerships are not subject to
seasonal fluctuations, the Fund's equity in losses of Local Limited
Partnerships, to the extent it reflects the operations of individual Properties,
may vary from quarter to quarter based upon changes in occupancy and operating
expenses as a result of seasonal factors.
Each Local Limited Partnership (except the Texas Partnerships) has, as its
general partners ("Local General Partners"), one or more individuals or entities
not affiliated with the Fund or its General Partners. In accordance with the
partnership agreements under which such entities are organized ("Local Limited
Partnership Agreements"), the Fund depends on the Local General Partners for the
management of each Local Limited Partnership. As of March 31, 1998, the
following Local Limited Partnerships have a common Local General Partner or
affiliated group of Local General Partners accounting for the specified
percentage of the capital contributions to Local Limited Partnerships: (i) Tree
Trail and Meadow Wood, representing 14.14%, have Flournoy Development Company
and John Flournoy as Local General Partners; (ii) Long Creek Court, Atkins Glen,
Kings Grant Court and Chestnut Plains, representing 5.04%, have Gordon Blackwell
and MBG Investment Inc. as Local General Partners; (iii) Phoenix Housing,
Primrose and Sycamore, representing 3.33%, have Jerry Meide (see discussion
below) and/or certain affiliates as Local General Partners (Phoenix Housing has
Phoenix Housing, Inc. and RRABB, Inc., Primrose has RRABB, Inc., and Sycamore
has Jerry Meide and RRABB, Inc.); and (iv) Pilot House and Preston Place,
representing 17.77%, have Castle Development Corporation as Local General
Partners. The Local General Partners of the remaining Local Limited Partnerships
are identified in the Acquisition Reports, which are herein incorporated by
reference.
On November 10, 1997, the Fund transferred 50% of its interest in capital and
profits of Phoenix Housing, Primrose and Sycamore to the local general
partner, Jerry Meide. Included in these transfers is a put option granting the
Managing General Partner the right to put the Fund's remaining interest to the
local general partner any time after one year has elapsed. The Meide portfolio
represents 3.33% of capital contributions.
The properties owned by Local Limited Partnerships in which the Fund has
invested are, and will continue to be, subject to competition from existing and
future apartment complexes in the same areas. The continued success of the Fund
will depend on many outside factors, most of which are beyond the control of the
Fund and which cannot be predicted at this time. Such factors include general
economic and real estate market conditions, both on a national basis and in
those areas where the properties are located, the availability and cost of
borrowed funds, real estate tax rates, operating expenses, energy costs and
government regulations. In addition, other risks inherent in real estate
investment may influence the ultimate success of the Fund, including: (i)
possible reduction in rental income due to an inability to maintain high
occupancy levels or adequate rental levels; (ii) possible adverse changes in
general economic conditions and adverse local conditions, such as competitive
overbuilding, a decrease in employment or adverse changes in real estate laws,
including building codes; and (iii) possible future adoption of rent control
legislation which would not permit increased costs to be passed on to the
tenants in the form of rent increases, or which suppress the ability of the
Local Limited Partnerships to generate operating cash flow. Since most of the
properties benefit from some form of government assistance, the Fund is subject
to the risks inherent in that area including decreased subsidies, difficulties
in finding suitable tenants and obtaining permission for rent increases. In
addition, any Tax Credits allocated to investors with respect to a property are
subject to recapture to the extent that the property or any portion thereof
ceases to qualify for the Tax Credits.
The Fund is managed by Arch Street VI, Inc., the Managing General Partner of the
Fund. The other General Partner of the Fund is Arch Street VI Limited
Partnership. To economize on direct and indirect payroll costs, the Fund, which
does not have any employees, reimburses The Boston Financial Group Limited
Partnership, an affiliate of the General Partners, for certain expenses and
overhead costs. A complete discussion of the management of the Fund is set forth
in Item 10 of this Report.
<PAGE>
Item 2. Properties
Following the transfer of the three Texas Partnerships, Capitol Park and the
disposition of Villas de Montellano, the Fund owns limited partnership interests
in twenty-five Local Limited Partnerships, which own and operate Properties,
some of which benefit from some form of federal, state or local assistance
programs and all of which qualify for the Tax Credits added to the Code by the
Tax Reform Act of 1986. The Fund's ownership interest in each Local Limited
Partnership is generally 99%, except for Livingston Arms, Metropolitan and New
Garden Place, where the Fund's ownership interest is 82%, 98.75% and 97.9%,
respectively, and Phoenix Housing, Primrose and Sycamore, where the Fund's
ownership is 49.5%.
Each of the Local Limited Partnerships has received an allocation of Tax Credits
from its relevant state tax credit agency. In general, the Tax Credit runs for
ten years from the date the Property is placed in service. The required holding
period (the "Compliance Period") of the Properties is fifteen years. During
these fifteen years, the Properties must satisfy rent restrictions, tenant
income limitations and other requirements, as promulgated by the Internal
Revenue Service, in order to maintain eligibility for the Tax Credit at all
times during the Compliance Period. Once a Local Limited Partnership has become
eligible for the Tax Credits, it may lose such eligibility and suffer an event
of recapture if its Property fails to remain in compliance with the
requirements.
In addition, some of the Local Limited Partnerships have obtained one or a
combination of different types of loans such as: i) below market rate interest
loans; ii) loans provided by a redevelopment agency of the town or city in which
the property is located at favorable terms; and iii) loans with repayment terms
that are based on a percentage of cash flow.
The schedules on the following pages provide certain key information on the
Local Limited Partnership interests acquired by the Fund.
<PAGE>
<TABLE>
<CAPTION>
Capital Contributions
Local Limited Partnership Number Total committed Paid through Mtge. loans payable Occupancy
Property Name of at March 31, March 31, at December 31, Type of at March 31,
Property Location Apt. Units 1998 1998 1997 Subsidy* 1998
- -------------------------------- ------------ ----------------- ------------- -------------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Division of Boston Financial
Texas Properties Limited
Partnership VI (formerly,
Yoakum-Village Oaks
Housing Associates, LTD)(A)
Leatherwood Terrace
Yoakum, TX
Tamaric Housing Associates, LTD. (A)
Tamaric
Cedar Park, TX
Georgetown - Northwest Housing Associates,
LTD. (A)
Northwest
Georgetown, TX
Pilot House Associates, L.P.
Pilot House
Newport News, VA 132 $2,479,708 $2,479,708 $3,294,678 None 99%
Jardines Limited Dividend
Partnership, S.E., L.P.
Jardines de Juncos
Juncos, PR 60 604,781 604,781 2,621,337 FmHA 100%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Capital Contributions
Local Limited Partnership Number Total committed Paid through Mtge. loans payable Occupancy
Property Name of at March 31, March 31, at December 31, Type of at March 31,
Property Location Apt. Units 1998 1998 1997 Subsidy* 1998
- -------------------------------- ------------ ----------------- ------------- -------------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
99 Livingston Associates, L.P.
Livingston Arms
Poughkeepsie, NY 25 1,114,686 1,114,686 526,806 None 92%
Broadway Tower Limited
Partnership
Broadway Tower
Revere, MA 92 2,350,000 2,350,000 5,986,333 Section 8 100%
Phoenix Housing, L.P.
Phoenix Housing
Moorhead, MN 40 457,810 457,810 1,935,000 Section 8 85%
Cottage Homesteads of Aspen
Limited Partnership
Cottages of Aspen
Oakdale, MN 114 1,027,333 1,027,333 4,755,000 None 100%
45th & Vincennes Limited
Partnership
45th & Vincennes
Chicago, IL 19 689,080 689,080 669,209 Section 8 100%
Long Creek Court Limited
Partnership
Long Creek Court
Kittrell, NC 14 120,476 120,476 554,529 FmHA 93%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Capital Contributions
Local Limited Partnership Number Total committed Paid through Mtge. loans payable Occupancy
Property Name of at March 31, March 31, at December 31, Type of at March 31,
Property Location Apt. Units 1998 1998 1997 Subsidy* 1998
- -------------------------------- ------------ ----------------- ------------- -------------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Atkins Glen Limited Partnership
Atkins Glen
Stoneville, NC 24 205,574 205,574 956,977 FmHA 100%
Tree Trail Apartments,
A Limited Partnership
Tree Trail
Gainesville, FL 108 2,060,143 2,060,143 2,679,116 None 97%
Meadow Wood Townhomes,
A Limited Partnership
Meadow Wood
Smyrna, TN 88 1,742,671 1,742,671 2,666,882 None 97%
Dakota Square Manor
Limited Partnership
Primrose
Grand Forks, ND 48 674,557 674,557 1,097,042 None 98%
Duluth Limited Partnership II
Sycamore
Sioux Falls, ND 48 657,000 657,000 1,268,927 None 83%
Preston Place Associates, L.P.
Preston Place
Winchester, VA 120 2,300,000 2,300,000 3,217,300 None 100%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Capital Contributions
Local Limited Partnership Number Total committed Paid through Mtge. loans payable Occupancy
Property Name of at March 31, March 31, at December 31, Type of at March 31,
Property Location Apt. Units 1998 1998 1997 Subsidy* 1998
- -------------------------------- ------------ ----------------- ------------- -------------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Kings Grant Court
Limited Partnership
Kings Grant Court
Statesville, NC 36 708,530 708,530 905,964 None 100%
Chestnut Plains Limited
Partnership
Chestnut Plains
Winston-Salem, NC 24 319,810 319,810 604,861 None 100%
Prince Hall Housing Associates, (B)
Limited Partnership
Capitol Park
Oklahoma City, OK
Bancroft Street Limited
Partnership
Bancroft Court
Toledo, OH 97 902,340 902,340 1,335,373 Section 8 77%
Hudson Square Apartments
Company (A Limited
Partnership)
Hudson Square
Baton Rouge, LA 82 554,670 554,670 879,276 Section 8 100%
Walker Woods Partners, II, L.P.
Walker Woods II
Dover, DE 19 591,429 591,429 827,775 None 84%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Capital Contributions
Local Limited Partnership Number Total committed Paid through Mtge. loans payable Occupancy
Property Name of at March 31, March 31, at December 31, Type of at March 31,
Property Location Apt. Units 1998 1998 1997 Subsidy* 1998
- -------------------------------- ------------ ----------------- ------------- -------------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Vista Villa Limited Dividend
Housing Association
Limited Partnership
Vista Villa
Saginaw County, MI 100 1,204,762 1,204,762 4,469,939 None 100%
Metropolitan Apartments
Limited Partnership
Metropolitan
Chicago, IL 69 2,296,714 1,956,354 2,105,452 Section 8 85%
Carolina Woods Associates II,
Limited Partnership
Carolina Woods II
Greensboro, NC 40 750,238 750,238 910,594 None 100%
Linden Square Limited Dividend
Housing Association
Limited Partnership
Linden Square
Genesee County, MI 120 1,299,774 1,299,774 5,284,991 None 99%
New Garden Associates,
Limited Partnership
New Garden Place
Gilmer, NC 76 1,269,794 1,269,794 2,280,549 None 99%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Capital Contributions
Local Limited Partnership Number Total committed Paid through Mtge. loans payable Occupancy
Property Name of at March 31, March 31, at December 31, Type of at March 31,
Property Location Apt. Units 1998 1998 1997 Subsidy* 1998
- -------------------------------- ------------ ----------------- ------------- -------------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Exodus/Lyndon/Windsor,
Limited Partnership
Findley Place Apartments
Minneapolis, MN 89 716,000 716,000 2,805,000 None 100%
------ ------------ ------------ ------------
1,684 $ 27,097,880 $ 26,757,520 $ 54,638,910
====== ============ ============ ============
</TABLE>
* FmHA This subsidy, which is authorized under Section 515 of the
Housing Act of 1949, can be one or a combination of many
different types. For instance, FmHA may provide: 1) direct
below-market-rate mortgage loans for rural rental housing;
2) mortgage interest subsidies which effectively lower the
interest rate of the loan to 1%; 3) a rental assistance
subsidy to tenants which allows them to pay no more than 30% of
their monthly income as rent with the balance paid by the
federal government; or 4) a combination of any of the above.
Section 8 This subsidy, which is authorized under Section 8 of Title II
of the Housing and Community Development Act of 1974, allows
qualified low-income tenants to pay 30% of their monthly income
as rent with the balance paid by the federal government.
(A) As of March 31, 1998, the Managing General Partner has
transferred all of the assets of the three Texas Partnerships
(Tamaric, Northwest and Leatherwood) subject to their
liabilities to unaffiliated entities. The three Texas
Partnerships had total capital contributions and mortgage
payable amounts of $328,434 and $1,467,017, respectively, at
the date of transfer.
(B) As of March 31, 1998, the Managing General Partner has
transferred the title of Prince Hall Housing Associates, Limited
Partnership to an affiliated entity. The Partnership had total
capital contributions and mortgagee payable amounts of
$1,495,000 and $1,570,000, respectively, as of December 31,
1996.
<PAGE>
K-15
Item 3. Legal Proceedings
Except for certain claims made by the Fund against the Local General Partner and
the Guarantor of Villas De Montellano and the Texas Partnerships in connection
with their bankruptcy proceedings, the Fund is not a party to any pending legal
or administrative proceeding, and to the best of its knowledge, no legal or
administrative proceeding is threatened or contemplated against it.
Item 4. Submission of Matters to a Vote of Security Holders
None.
PART II
Item 5. Market for the Registrant's Units and Related Security Holder Matters
There is no public market for the Units, and it is not expected that a public
market will develop. If a Limited Partner desires to sell Units, the buyer of
those Units will be required to comply with the minimum purchase and retention
requirements and investor suitability standards imposed by applicable federal or
state securities laws and the minimum purchase and retention requirements
imposed by the Fund. The price to be paid for the Units, as well as the
commissions to be received by any participating broker-dealers, will be subject
to negotiation by the Limited Partner seeking to sell his Units. Units will not
be redeemed or repurchased by the Fund.
The Partnership Agreement does not impose on the Fund or its General Partners
any obligation to obtain periodic appraisals of assets or to provide Limited
Partners with any estimates of the current value of Units.
As of June 15, 1998, there were 2,048 record holders of Units of the Fund.
To date, the Fund has made no cash distributions.
<PAGE>
Item 6. Selected Financial Data
The following table sets forth selected financial information regarding the
Fund's financial position and operating results. This information should be read
in conjunction with Management's Discussion and Analysis of Financial Condition
and Results of Operations and the Financial Statements and Notes thereto, which
are included in Items 7 and 8 of this Report. As of November 1, 1993, all
intercompany balances and transactions that relate to the Texas Partnerships
have been eliminated.
<TABLE>
<CAPTION>
March 31, March 31, March 31, March 31, March 31,
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Revenue (E) $ 302,486 $ 355,858 $ 406,038 $ 374,860 $ 504,683
Equity in losses of Local Limited
Partnerships (E) (1,546,727) (2,546,404) (2,034,515) (2,048,621) (2,102,783)
Extraordinary gain on forgiveness
of indebtedness 73,252 - 643,509 - -
Per Limited Partnership Unit (A):
Class A Unit 1.96 - 17.21 - -
Class B Unit 1.41 - 12.39 - -
Accretion of original issue discount 106,661 98,713 91,595 84,533 78,234
Net Loss (3,302,890) (2,822,852) (2,427,884) (2,957,453) (2,419,200)
Per Limited Partnership Unit (A):
Class A Unit (91.20) (78.15 ) (67.39) (81.37)
(66.80)
Class B Unit (33.24) (26.26) (20.68) (32.89) (24.32)
Cash and cash equivalents (E) 216,829 381,519 489,191 373,535 676,655
Marketable securities 1,401,639 998,695 795,099 1,235,123 5,913,600
Other investments 1,432,375 1,325,714 1,227,001 1,135,406 1,050,873
Investments in Local Limited
Partnerships 16,342,634 19,511,417 22,289,712 24,261,436 22,148,406
Total assets (B) 19,415,336 22,989,174 25,382,895 28,836,803 31,738,376
Long-term debt - 739,994 509,980 - -
Total liabilities (E) 1,399,718 1,678,819 1,245,356 2,312,235 2,349,018
Other Data:
Passive loss (C) (3,357,694) (2,879,273) (3,272,132) (3,208,044) (2,760,037)
Per Limited Partnership Unit (A):
Class A Unit 89.81) (77.02) (87.52) (85.81) (73.83)
Class B Unit (64.66) (55.45) (63.02) (61.78) (53.15)
Portfolio income (C) 274,919 268,300 211,584 396,729 694,665
Per Limited Partnership Unit (A):
Class A Unit 7.35 7.19 5.66 10.61 16.55
Class B Unit (D) 37.11 34.69 31.31 32.85 34.93
Net short-term capital losses (C) - - - (45,877) -
Per Limited Partnership Unit (A):
Class A Unit - - - (1.23) -
Class B Unit - - - (0.88) -
Net long-term capital losses (C) - - (538,686) (173,620) -
Per Limited Partnership Unit (A):
Class A Unit - - (14.41) (4.64) -
Class B Unit - - (10.37) (3.34) -
</TABLE>
<PAGE>
Item 6. Selected Financial Data (continued)
<TABLE>
<CAPTION>
March 31, March 31, March 31, March 31, March 31,
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Low-Income Housing Tax Credit (C) 5,407,118 5,769,841 5,790,896 4,886,427 3,696,088
Per Limited Partnership Unit (A):
Class A Unit 144.63 154.33 154.90 130.70 98.86
Class B Unit 104.13 111.12 111.52 94.10 71.18
Recapture of Low-Income
Housing Tax Credits (C) 616,112 43,133 - - -
Per Limited Partnership Unit (A):
Class A Unit 16.48 1.15 - - -
Class B Unit 11.87 .83 - - -
Local Limited Partnership interests
owned at end of period (F,G) 25 27 29 30 28
</TABLE>
(A) Per Limited Partnership Unit data is based upon the units outstanding of
34,643 and 3,290 for Class A Units and Class B Units, respectively.
(B) Total assets include the net investment in Local Limited Partnerships.
(C) Income tax information is as of December 31, the year end of the Fund for
income tax purposes.
(D) Includes $104,663, $97,097, $89,592, $82,949 and $75,692 of accretion of
the Original Issue Discount for the calendar years ended December 31, 1997,
1996, 1995, 1994 and 1993, respectively, which is allocable only to holders
of Class B Units.
(E) Revenue for the years ended March 31, 1998, 1997, 1996, 1995 and 1994
includes $93,404, $123,962, $252,861, $246,926 and $70,456, respectively,
of total revenue from the Texas Partnerships. Equity in losses of Local
Limited Partnerships for the years ended March 31, 1998, 1997, 1996, 1995
and 1994 does not include $23,003, $69,939, $25,589, $93,745 and $22,845,
respectively, from the Texas Partnerships that have been combined with the
Fund's loss. Cash and cash equivalents at March 31, 1997, 1996, 1995 and
1994 includes $332, $23,002, $31,258 and $15,266, respectively, of cash
and cash equivalents from the Texas Partnerships that is included in the
combined cash and cash equivalents of the Fund. Total liabilities at
March 31, 1997, 1996, 1995 and 1994 includes $769,008, $527,203, $1,743,177
and $1,661,812, respectively, from the Texas Partnerships.
(F) As of March 31, 1998, the Managing General Partner has transferred all of
the assets of three of the Texas Partnerships (Tamaric, Northwest and
Leatherwood) subject to their liabilities to an unaffiliated entity. In
1996, the Fund wrote off its investment in Villas de Montellano against the
established reserve.
(G) As of March 31, 1998, the Managing General Partner has transferred the title
of Capitol Park to an affiliate.
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Liquidity and Capital Resources
At March 31, 1998, the Fund had cash and cash equivalents of $216,829 as
compared with $381,519 at March 31, 1997. The decrease is primarily attributable
to purchases of marketable securities in excess of proceeds from sales and
maturities of marketable securities. These decreases are partially offset by
cash provided by operations and cash distributions received from Local Limited
Partnerships.
Under the terms of the Partnership Agreement, the Fund initially designated 4%
of the Adjusted Gross Proceeds (which generally means Gross Proceeds minus the
amounts committed to the acquisition of Treasury STRIPS) from the sale of Units
as a reserve for working capital of the Fund and contingencies related to the
ownership of Local Limited Partnership interests. The Managing General Partner
may increase or decrease such Reserves from time to time, as it deems
appropriate. Funds totaling approximately $312,000 have been withdrawn from the
Reserve account to pay legal and other fees relating to various property issues.
This amount includes approximately $304,000 relating to the Texas Partnerships.
At March 31, 1998, approximately $907,000 of cash, cash equivalents and
marketable securities have been designated as Reserves. Management believes that
the investment income earned on the Reserves, along with cash distributions
received from Local Limited Partnerships, to the extent available, will be
sufficient to fund the Fund's ongoing operations. Reserves may be used to fund
operating deficits, if the Managing General Partner deems funding appropriate.
If Reserves are not adequate to cover Fund operations, the Fund will seek other
funding sources including, but not limited to, the deferral of Asset Management
Fees to an affiliate of the General Partner or working with Local Limited
Partnerships to increase cash distributions.
At March 31, 1998, the Fund has committed to make future capital contributions
and pay future purchase price installments on its investments in Local Limited
Partnerships. These future payments are contingent upon the achievement of
certain criteria as set forth in the Local Limited Partnership Agreements and
total $340,000.
Since the Fund invests as a limited partner, the Fund has no contractual duty to
provide additional funds to Local Limited Partnerships beyond its specified
investment. Thus, at March 31, 1998, the Fund had no contractual or other
obligation to any Local Limited Partnership which had not been paid or provided
for, except as noted above. In the event a Local Limited Partnership encounters
operating difficulties requiring additional funds, the Fund might deem it in its
best interests to provide such funds, voluntarily, in order to protect its
investment. In addition to the $304,000 noted above, the Fund has also advanced
approximately $62,000 to the Texas Partnerships to fund operating deficits.
Cash Distributions
No cash distributions were made during the years ended March 31, 1998, 1997 or
1996. It is not expected that cash available for distribution, if any, will be
significant during the 1998 calendar year. As funds from temporary investments
are paid to Local Limited Partnerships, interest earned on those funds
decreases. Additionally, it is not expected that the Local Limited Partnerships
will distribute significant amounts of cash to the Fund in 1998 because such
amounts will be needed to fund property operating costs. In addition, many of
the properties benefit from some type of federal or state subsidy and, as a
consequence, are subject to restrictions on cash distributions.
<PAGE>
Results of Operations
1998 versus 1997
The Fund's result of operations for the year ended March 31, 1998 resulted in a
net loss of $ 3,302,890 as compared to a net loss of $2,822,852 for the same
period in 1997. The increase in net loss is primarily attributable to a
provision for valuation of Investments in Local Limited Partnerships because
there was evidence of non-temporary declines in the recoverable amount of four
investments. This increase to net loss is partially offset by decrease in equity
in losses of Local Limited Partnership. The decrease in equity in losses of
Local Limited Partnerships is primarily due to the transfer of Capitol Park to
an affiliated entity.
1997 versus 1996
The Fund's results of operations for the year ended March 31, 1997 resulted in a
net loss of $2,822,852 as compared to a net loss of $2,427,884 for the same
period in 1996. The increase in net loss is primarily attributable to an
increase in equity in losses of Local Limited Partnerships, the non-existence of
a gain on cancellation of indebtedness and a decrease in rental revenue. These
increases to net loss are partially offset by decreases in general and
administrative, rental operations and interest expense items, an increase in
investment revenue and the non-existence of a reserve for valuation of
investments in Local Limited Partnerships and a provision for valuation of
rental property. The increase in equity in losses of Local Limited Partnerships
is primarily due to one of the Local Limited Partnerships incurring an
impairment loss during the year ended December 31, 1996. In fiscal 1996, there
was a provision for valuation of rental property for one of the Texas
Partnerships which was offset by a gain on cancellation of indebtedness. In
addition, fiscal 1996 experienced a provision for valuation of investments in
Local Limited Partnerships for the two disposed Texas Partnerships. No
provisions for valuation of investments in Local Limited Partnerships were
necessary in fiscal 1997. The decrease in general and administrative expenses
was due to a decrease in expenses paid on behalf of the Texas Partnerships. The
decreases in rental revenue and rental operations and interest expenses were due
to the exclusion of two of the Texas Partnership's operations which were
previously combined. Please refer to the section entitled "Property Discussions"
included in this Item. The increase in investment revenue is attributable to
favorable market conditions for the sale of marketable securities.
Low Income Housing Tax Credits
The 1997 Tax Credits per Unit were $144.63 and $104.13 for Class A Unit and
Class B Unit investors, respectively.
The 1996 Tax Credits per Unit were $154.33 and $111.12 for Class A Unit and
Class B Unit investors, respectively. The 1995 Tax Credits per Unit were $154.90
and $111.52 for Class A Unit and Class B Unit investors, respectively. The 1994
Tax Credits per Unit were $130.70 and $94.10 for Class A Unit and Class B Unit
investors, respectively. The 1993 Tax Credits per Unit were $98.86 and $71.18
for Class A Unit and Class B Unit investors, respectively. Tax Credits are not
available for a Property until the property is placed in service and its
apartment units are occupied by qualified tenants. In the first year the Tax
Credit is claimed, the allowable credit amount is determined using an averaging
convention to reflect the number of months that apartment units comprising the
qualified basis were occupied by qualified tenants during the year. To the
extent that the full amount of the annual credit is not allocated in the first
year, an additional credit equal to the difference is available in the 11th
taxable year. The transfer of ownership of the Texas Partnerships resulted in
nominal recapture of tax credits, since the Texas Partnerships represented only
2% of the Partnership's tax credits.
The Managing General Partner estimates that the 1998 Tax Credits allocated to
investors will be approximately $153 per Unit for Class A Unit investors and
$112 per Unit for Class B Unit investors. However, no assurance can be given in
this matter. Once the Tax Credits are stabilized, the annual amount allocated to
investors is expected to remain the same for about seven years. In years eight
through ten, the credits are expected to decrease as Properties reach the end of
the ten year credit period.
On November 10, 1997, the Fund transferred 50% of its interest in Phoenix
Housing, Primrose and Sycamore to the Local General Partner in order to protect
the Fund in the event of foreclosure - induced recapture of these tax credits.
Property Discussions
All of the properties owned by the Local Limited Partnerships in which the Fund
has invested have been completed and achieved initial lease-up. Operations at
most properties are stable and a majority of the properties are operating at
break-even or generating operating cash flow. However, a few properties are
experiencing significant issues. In most cases, the Local General Partners are
funding operating deficits through project expense loans, subordinated loans or
payments from operating escrows. In instances where the Local General Partners
have stopped funding deficits because their obligation to do so has expired or
otherwise, the Managing General Partner is working with the Local General
Partner to increase operating income, reduce expenses or refinance the debt in
order to improve property cash flow.
As previously reported, despite the 1994 debt restructure, Bancroft Street
Apartments, located in Toledo, Ohio, continues to experience operating deficits
primarily due to occupancy issues and deteriorating market conditions. The
management agent is currently trying to address these problems by enhancing
tenant screening and marketing efforts, as well as implementing on-site tenant
social programs. The Managing General Partner will be working closely with the
management agent and Local General Partner to discuss capital improvements, debt
restructuring and enhance marketing efforts. For financial reporting purposes,
the carrying value of the Fund's investment in this Local Limited Partnership
has been reserved by $292,093.
Occupancy for Broadway Tower, located in Revere, Massachusetts, has improved and
is currently at 100%. However, the property is still experiencing operating
deficits. In 1997, the Local General Partner successfully negotiated with the
local housing authority for Section 8 rent increases and has begun implementing
plans to decrease expenses associated with tenant turnover and maintenance
contracts. The property is currently covering its operating expenses and debt
service with funds from operations and from funding by the Local General
Partner.
Despite initial construction issues in 1994, all apartments units of
Metropolitan Apartments in Chicago, Illinois were brought to code and habitable
by the fall of 1996. Strict leasing policies have been implemented and occupancy
as of December 31, 1997 has improved to 88%. Successful occupancy levels at the
property depend upon locating tenants which meet these strict leasing policies.
The Local General Partner contributed in excess of $750,000 for the construction
rehabilitation and operating deficits, which exceeded its obligations. It is
possible that Fund Reserves may be required to fund operating deficits if the
Local General Partner is unwilling to fund future deficits. To help mitigate
some of these deficits, the Local and Managing General Partners are working with
the lender to substitute fixed rate debt for the variable rate mortgage
currently on the property.
Primrose, located in Grand Forks, North Dakota, Phoenix Housing, located in
Moorhead, Minnesota, and Sycamore, located in Sioux Falls, South Dakota, which
have the same Local General Partner, have been performing satisfactorily.
However, affiliates of the Managing General Partner have been working with the
local general partner whom has raised some concerns over the long-term financial
health of the properties. In an effort to reduce possible future risk, in
November 1997, the Managing General Partner consummated the transfer of 50% of
the Fund's interest in capital and profits in Primrose, Phoenix Housing and
Sycamore to the Local General Partner. The Managing General Partner has the
right to transfer the Fund's remaining interest to the Local General Partner any
time after one year has elapsed. The Fund will retain its full share of tax
credits until such time as the remaining interest is put to the local general
partner. For financial reporting purposes, the carrying value of the Fund's
investment in these Local Limited Partnerships, have been fully reserved.
As previously reported, the Managing General Partner transferred all of the
assets of two of the Texas Partnerships, subject to their liabilities, to
unaffiliated entities in 1996. In the fourth quarter of 1997, the Managing
General Partner transferred the remaining Texas Partnership, Leatherwood,
subject to liabilities, to an unaffiliated entity. For tax purposes, this event
resulted in both Section 1231 Gain and cancellation of indebtedness income which
was reflected on the 1997 tax return. For financial reporting purposes, loss on
liquidation of interest in Local Limited Partnership of $4,182 and extraordinary
gain on cancellation of indebtedness of $73,252 were recognized in the year
ended March 31, 1998 as a result of this transfer.
As previously reported, the Local General Partner of Capitol Park in Oklahoma
City, Oklahoma filed a Chapter 7 liquidation plan for the property during the
second quarter of 1997. The Chapter 7 filing was dismissed by the Bankruptcy
Court after its review. The fund transferred its interest in Capital Park to an
affiliated entity on October 7, 1997. Therefore, the Fund recognized tax
credit recapture, plus interest, and the allocation of taxable income to the
Fund, which was reflected on the 1997 tax return. For financial reporting
purposes the carrying value of the Fund's investment in this Local Limited
Partnership has been written-off.
In accordance with Financial Accounting Standard No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of",
which is effective for fiscal years beginning after December 15, 1995, the Fund
has implemented policies and practices for assessing impairment of its real
estate assets and investments in Local Limited Partnerships. Each asset is
analyzed by real estate experts to determine if an impairment indicator exists.
If so, the current value is compared to the fair value and if there is a
significant impairment in value, a provision to write down the asset to fair
value will be charged against income.
Inflation and Other Economic Factors
Inflation had no material impact on the operations or financial condition of the
Fund for the years ended March 31, 1998, 1997 and 1996.
Since most of the Properties benefit from some form of government assistance,
the Fund is subject to the risks inherent in that area including decreased
subsidies, difficulties in finding suitable tenants and obtaining permission for
rent increases. In addition, any Tax Credits allocated to investors with respect
to a Property are subject to recapture to the extent that a Property or any
portion thereof ceases to qualify for the Tax Credits.
Certain of the Properties in which the Fund has invested are located in areas
suffering from poor economic conditions. Such conditions could have an adverse
effect on the rent or occupancy levels at such Properties. Nevertheless,
management believes that the generally high demand for below market rate housing
will tend to negate such factors. However, no assurance can be given in this
regard.
Effect of Recently Issued Accounting Standard
The Financial Accounting Standards Board recently issued Statement of Financial
Accounting Standards No. 130, Reporting Comprehensive Income. The standard
requires that changes in comprehensive income be shown in a financial statement
that is displayed with the same prominence as other financial statements. The
standard is effective for fiscal years beginning after December 15, 1997. The
Fund will adopt the new standard beginning in the first quarter of the fiscal
year ending March 31, 1999, but is not expected to have a significant effect on
the Fund's financial position or results of operations.
Item 8. Financial Statements and Supplementary Data
Information required under this Item is submitted as a separate section of this
Report. See Index on page F-1 hereof.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant
The Managing General Partner of the Fund is Arch Street VI, Inc., a
Massachusetts corporation (the "Managing General Partner" or "Arch Street VI,
Inc."), an affiliate of The Boston Financial Group Limited Partnership ("Boston
Financial"), a Massachusetts limited partnership. George Fantini, Jr., a Vice
President of the Managing General Partner, resigned his position effective June
30, 1995. Donna Gibson, a Vice President of the Managing General Partner,
resigned from her position on September 13, 1996. Georgia Murray resigned as
Managing Director, Treasurer and Chief Financial Officer of the Managing General
Partner on May 25, 1997. Fred N. Pratt, Jr. resigned as Managing Director of the
Managing General Partner on May 28, 1997. William E. Haynsworth resigned as a
Managing Director and Chief Operating Officer of the Managing General Partner on
March 23, 1998.
The Managing General Partner was incorporated in December, 1990. Randolph G.
Hawthorne is the Chief Operating Officer of the Managing General Partner and had
the primary responsibility for evaluating, selecting and negotiating investments
for the Fund. The Investment Committee of the Managing General Partner approved
all investments. The names and positions of the principal officers and the
directors of the Managing General Partner are set forth below.
Name Position
Jenny Netzer Managing Director and President
Michael H. Gladstone Managing Director, Vice President and Clerk
Randolph G. Hawthorne Managing Director, Vice President and
Chief Operating Officer
James D. Hart Chief Financial Officer and Treasurer
Paul F. Coughlan Vice President
Peter G. Fallon, Jr. Vice President
William E. Haynsworth Vice President
The other General Partner of the Partnership is Arch Street VI Limited
Partnership, a Massachusetts limited partnership ("Arch Street VI L.P.") that
was organized in December 1990. The General Partner of Arch Street L.P. is Arch
Street VI, Inc.
The Managing General Partner provides day-to-day management of the Fund.
Compensation is discussed in Item 11 of this report. Such day-to-day management
does not include the management of the Properties.
The business experience of each of the persons listed above is described below.
There is no family relationship between any of the persons listed in this
section.
Jenny Netzer, age 42, graduated from Harvard University (B.A., 1976) and
received a Master's in Public Policy from Harvard's Kennedy School of Government
in 1982. She joined Boston Financial in 1987 and is a Senior Vice President
leading the Institutional Tax Credit Team. She is also a member of the Senior
Leadership Team. Previously, Ms. Netzer led Boston Financial's new business
initiatives and managed the firm's Asset Management division, which is
responsible for the performance of 750 properties and providing service to
35,000 investors. Before joining Boston Financial, she was Deputy Budget
Director for the Commonwealth of Massachusetts, where she was responsible for
the Commonwealth's health care and public pension programs' budgets. Ms. Netzer
was also Assistant Controller at Yale University and has been a member of the
Watertown Zoning Board of Appeals.
Michael H. Gladstone, age 41, graduated from Emory University (B.A. 1978) and
Cornell University (J.D., MBA 1982). He joined Boston Financial in 1985, and
currently serves as Vice President and as the company's General Counsel. Prior
to joining Boston Financial, Mr. Gladstone was associated with the law firm of
Herrick & Smith. Mr. Gladstone is a member of the National Realty Committee and
has served on the advisory board to the Housing and Development Reporter, a
national publication on housing issues.
Randolph G. Hawthorne, age 48, is a graduate of Massachusetts Institute of
Technology (B.S., 1971) and Harvard Graduate School of Business (M.B.A., 1973).
He has been associated with Boston Financial since 1973 and has served as the
Treasurer of Boston Financial. Currently a Senior Vice President of the firm,
Mr. Hawthorne's primary responsibility is structuring and acquiring real estate
investments. Mr. Hawthorne is Past Chairman of the Board of the National Multi
Housing Council, having served on the board since 1989. He is a past president
of the National Housing and Rehabilitation Association, is a member of the
Residential Development Council of the Urban Land Institute, as well as a member
of the Advisory Board of the Berkeley Real Estate Center at the University of
California. In addition to speaking at industry conferences, he is on the
Editorial Advisory Boards of the Tax Credit Advisor and Multi-Housing News.
James D. Hart, age 40, earned his Bachelor of Arts degree from Trinity College
and his Masters of Business Administration from the Amos Tuck School at
Dartmouth College. Mr. Hart serves as Chief Financial Officer and is a member of
the Senior Leadership Team. Prior to joining Boston Financial, Mr. Hart was
engaged in venture capital management on behalf of institutional investors,
including the negotiation and structuring of private equity and mezzanine
transactions as a Vice President of Interfid Ltd., and later in the operational
management of a venture-backed software company, as Managing Director and Chief
Financial Officer of Bitstream Inc. Mr. Hart has also served on the Board of
Directors of several investee companies, including those that went on to
complete initial public offerings.
Paul F. Coughlan, age 54, is a graduate of Brown University (B.A., 1965) and
served in the United States Navy before entering the securities business in
1969. He was employed as an Account Executive by Bache & Company until 1972, and
then by Reynolds Securities Inc. He joined Boston Financial in 1975 and is
currently a Senior Vice President on the Institutional Tax Credit Team.
Peter G. Fallon, Jr., age 59, graduated from the College of the Holy Cross
(B.S., 1960) and Babson College (M.B.A., 1965). He joined Boston Financial in
1970, shortly after its formation, to raise capital for the firm's investments.
He is currently a Senior Vice President and a member of the Institutional Tax
Credits Team with responsibility for marketing institutional investments.
Previously, he has served as president of BFG Securities, as a director of
Boston Financial, and as marketing director for public and corporate funds. Mr.
Fallon has also served as Chairman of the Board of Directors for Boston College
High School as well as a director of a local bank.
William E. Haynsworth, age 58, is a graduate of Dartmouth College (B.A., 1961)
and Harvard Law School (L.L.B., 1964; L.L.M., 1969). Prior to joining Boston
Financial in 1977, Mr. Haynsworth was Acting Executive Director and General
Counsel of the Massachusetts Housing Finance Agency. He was also the Director of
Non-Residential Development of the Boston Redevelopment Authority and an
associate of the law firm of Goodwin, Procter & Hoar. Appointed Senior Vice
President in 1986, Mr. Haynsworth brings over 25 years of experience structuring
real estate investments. Mr. Haynsworth is a member of the Executive Committee
and the Board of Directors of the Affordable Housing Tax Credit Coalition. He is
a member of the Senior Leadership Team, the firm's Executive Committee and the
Board of Directors of Boston Financial.
Item 11. Management Remuneration
Neither the directors or officers of Arch Street VI, Inc., the partners of Arch
Street VI L.P. nor any other individual with significant involvement in the
business of the Fund receives any current or proposed remuneration from the
Fund.
Item 12. Security Ownership of Certain Beneficial Owners and Management
No person is known to the Fund to be the beneficial owner of more than 5% of the
outstanding Units.
The equity securities registered by the Fund under Section 12(g) of the Act
consist of 100,000 Units, 37,933 (34,643 Class A Units and 3,290 Class B Units)
of which have been sold to the public. The remaining Units were deregistered in
Post-Effective Amendment No. 6, dated June 15, 1993, which is herein
incorporated by reference. Holders of Units are permitted to vote on matters
affecting the Fund only in certain unusual circumstances and do not generally
have the right to vote on the operation or management of the Fund.
Arch Street VI L.P. owns five (unregistered) Units not included in the 37,933
Units sold to the public. Additionally, ten registered Units were sold to an
employee of an affiliate of the Managing General Partner of the Registrant. Such
Units were sold at a discount of 7% of the Unit price for a total discount of
$700 and a total purchase price of $9,300.
Except as described in the preceding paragraph, neither Arch Street VI, Inc.,
Arch Street VI Limited Partnership, Boston Financial, nor any of their executive
officers, directors, partners or affiliates is the beneficial owner of any
Units. None of the foregoing persons possesses a right to acquire beneficial
ownership of Units.
The Fund does not know of any existing arrangement that might at a later date
result in a change in control of the Fund.
Item 13. Certain Relationships and Related Transactions
The Fund was required to pay certain fees to and reimburse certain expenses of
the Managing General Partner or its affiliates (including Boston Financial) in
connection with the organization of the Fund and the offering of Units. The Fund
is also required to pay certain fees to and reimburse certain expenses of the
Managing General Partner or its affiliates (including Boston Financial) in
connection with the administration of the Fund and its acquisition and
disposition of investments in Local Limited Partnerships. In addition, the
General Partners are entitled to certain Fund distributions under the terms of
the Partnership Agreement. Also, an affiliate of the General Partners will
receive up to $10,000 from the sale or refinancing proceeds of each Local
Limited Partnership, if it is still a limited partner at the time of such
transaction. All such fees, expenses and distributions paid in the three years
ending March 31, 1998 are described below and in the sections of the Prospectus
entitled "Estimated Use of Proceeds", "Management Compensation and Fees" and
"Profits and Losses for Tax Purposes, Tax Credits and Cash Distributions". Such
sections are incorporated herein by reference.
The Fund is permitted to enter into transactions involving affiliates of the
Managing General Partner, subject to certain limitations established in the
Partnership Agreement.
Information required under this Item is contained in Note 7 to the Financial
Statements presented as a separate section of this Report. The affiliates of the
Managing General Partner which have received fee payments and expense
reimbursements from the Fund are as follows:
Organizational fees and expenses
In accordance with the Partnership Agreement, Boston Financial is to be
reimbursed by the Fund for organizational, offering and selling expenses
advanced on behalf of the Fund by Boston Financial or its affiliates and for
salaries and direct expenses of certain employees of the Managing General
Partner and its affiliates in connection with the registration and organization
of the Fund. Such expenses include printing expenses and legal, accounting,
escrow agent and depository fees and expenses. Such expenses also include a
non-accountable expense allowance for marketing expenses equal to 1% of gross
offering proceeds. $2,035,611 of organization fees and expenses incurred on
behalf of the Fund were paid and reimbursed to an affiliate of the Managing
General Partner. Total organization and offering expenses reimbursed by the Fund
did not exceed 5.5% of the gross offering proceeds.
Acquisition fees and expenses
In accordance with the Partnership Agreement, the Fund is required to pay
acquisition fees to and reimburse acquisition expenses of the Managing General
Partner or its affiliates for selecting, evaluating, structuring, negotiating
and closing the Fund's investments in Local Limited Partnerships. Acquisition
fees totaled 7% of the Gross Proceeds. Acquisition expenses, which include such
expenses as legal fees and expenses, travel and communications expenses, costs
of appraisals, accounting fees and expenses did not exceed 1.5% of Gross
Proceeds. Acquisition fees totaling $2,590,827 (prior to the write-off of Villas
de Montellano, the Texas Partnerships and Capitol Park) for the closing of the
Fund's Local Limited Partnership Investments have been paid to an affiliate of
the Managing General Partner. Acquisition expenses totaling $825,516 were
incurred and have been reimbursed to an affiliate of the Managing General
Partner. Payments made and expenses reimbursed in each of the three years ended
March 31, 1998 are as follows:
1998 1997 1996
---------- ---------- ---------
Acquisition fees and expenses $ - $ 15,990 $ 1,805
Asset Management Fees
In accordance with the Partnership Agreement, an affiliate of the Managing
General Partner is paid an annual fee for services in connection with the
administration of the affairs of the Fund. The affiliate currently receives the
base amount of $6,468 per Local Limited Partnership (as adjusted by the CPI
factor) annually as the Asset Management Fee. Amounts earned by the affiliate
and payable in each of the three years ended March 31, 1998 are as follows:
1998 1997 1996
---------- ---------- ---------
Asset management fees $ 170,028 $ 179,719 $ 174,687
Salaries and benefits expense reimbursements
An affiliate of the Managing General Partner is reimbursed for the cost of the
Fund's salaries and benefits expenses. The reimbursements are based upon the
size and complexity of the Fund's operations. Reimbursements paid or payable in
each of the three years ended March 31, 1998 are as follows:
1998 1997 1996
---------- ---------- ----------
Salaries and benefits
expense reimbursements $ 95,037 $ 92,130 $ 99,377
Property Management Fees
Boston Financial Property Management ("BFPM"), an affiliate of the Managing
General Partner, currently manages Pilot House and Preston Place, properties in
which the Fund has invested. Fees charged for the three years ended December 31,
1997 are as follows:
1997 1996 1995
----------- ---------- ---------
Property Management fees $ 78,722 $ 56,739 $ 58,363
Lansing Management Company ("LMC"), an affiliate of the Managing General
Partner, currently manages Linden Square, a property in which the Fund has
invested. Fees charged for the three years ended December 31, 1997 are as
follows:
1997 1996 1995
----------- ---------- -----------
Property Management fees $ 33,120 $ 33,120 $ 32,442
LMC is also the management agent for the Texas Partnerships. Fees charged for
the three years ended December 31, 1997 are as follows:
1997 1996 1995
----------- ---------- -------
Property Management fees $ 8,268 $ 8,845 $ 4,260
During 1995, a provision in the Combined Entities' workout agreement came into
effect which prohibited property management fees from being charged. During
1996, this provision ended, and fees were again charged.
Cash distributions paid to the General Partners
In accordance with the Partnership Agreement, the General Partners of the Fund,
Arch Street VI, Inc. and Arch Street VI Limited Partnership, receive 1% of cash
distributions made to partners. No cash distributions have been paid to the
General Partners as of March 31, 1998.
Additional information concerning cash distributions and other fees paid or
payable to the Managing General Partner and its affiliates and the reimbursement
of expenses paid or payable to Boston Financial and its affiliates during each
of the three years ended March 31, 1998 is presented in Note 7 to the Financial
Statements.
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedule and Reports on Form 8-K
(a)(1) and (a)(2) Documents filed as a part of this Report
In response to this portion of Item 14, the financial statements, financial
statement schedule and the auditors' report relating thereto are submitted as a
separate section of this Report. See Index on page F-1 hereof.
The reports of auditors of the Local Limited Partnerships relating to the audits
of the financial statements of such Local Limited Partnerships appear in Exhibit
(28)(1) of this Report.
All other financial statement schedules and exhibits for which provision is made
in the applicable accounting regulations of the Securities and Exchange
Commission are not required under related instructions or are inapplicable and
therefore have been omitted.
(a)(3)(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the quarter ended March 31,
1998.
(a)(3)(c) Exhibits
Number and Description in Accordance with
Item 601 of Regulation S-K
27. Financial Data Schedule
28. Additional Exhibits
(a) 28.1 Reports of Other Independent Auditors
(a)(3)(d) None.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Report to be signed
on its behalf by the undersigned, thereunto duly authorized.
BOSTON FINANCIAL TAX CREDIT FUND PLUS, A LIMITED PARTNERSHIP
By: Arch Street VI, Inc.
its Managing General Partner
By: /s/Randolph G. Hawthorne Date: 6/30/98
Randolph G. Hawthorne,
Managing Director, Vice President and
Chief Operating Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the Managing General
Partner of the Fund and in the capacities and on the dates indicated:
By: /s/ Randolph G. Hawthorne Date: 6/30/98
Randolph G. Hawthorne,
Managing Director, Vice President and
Chief Operating Officer
By: /s/Michael H. Gladstone Date: 6/30/98
Michael H. Gladstone,
A Managing Director
F-1
Item 8. Financial Statements and Supplementary Data
BOSTON FINANCIAL TAX CREDIT FUND PLUS, A LIMITED PARTNERSHIP
ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED MARCH 31, 1998
INDEX
Page No.
Report of Independent Accountants
For the years ended March 31, 1998, 1997 and 1996 F-2
Combined Financial Statements:
Combined Balance Sheets - March 31, 1998 and 1997 F-3
Combined Statements of Operations - For the Years
ended March 31, 1998, 1997 and 1996 F-4
Statements of Changes in Partners' Equity (Deficiency) -
For the Years ended March 31, 1998, 1997 and 1996 F-6
Combined Statements of Cash Flows - For the Years
ended March 31, 1998, 1997 and 1996 F-7
Notes to Combined Financial Statements F-9
Financial Statement Schedule:
Schedule III - Real Estate and Accumulated
Depreciation F-26
Other schedules have been omitted as they are either not required or the
information required to be presented therein is available elsewhere in the
financial statements and the accompanying notes and schedules.
<PAGE>
F-2
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners
Boston Financial Tax Credit Fund Plus, A Limited Partnership:
We have audited the accompanying combined balance sheets of Boston Financial Tax
Credit Fund Plus, A Limited Partnership (the "Fund") as of March 31, 1998 and
1997 and the related combined statements of operations, changes in partners'
equity (deficiency) and cash flows and the financial statement schedule listed
in Item 14(a) of this Report on Form 10-K for each of three years in the period
ended March 31, 1998. These financial statements and financial statement
schedule are the responsibility of the Fund's management. Our responsibility is
to express an opinion on these financial statements and financial statement
schedule based on our audits. As of March 31, 1998 and 1997, 76% and 76%,
respectively, of total assets, and for the year ended March 31, 1998, 1997 and
1996, 82%, 88% and 83%, respectively, of equity in losses of Local Limited
Partnerships, reflected in the financial statements of the Fund, relate to Local
Limited Partnerships for which we did not audit the financial statements. The
financial statements of these Local Limited Partnerships were audited by other
auditors whose reports have been furnished to us, and our opinion, insofar as it
relates to those investments in Local Limited Partnerships, is based solely on
the reports of other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits and the reports of other auditors provide a
reasonable basis for our opinion.
In our opinion, based on our audits and the reports of other auditors, the
financial statements referred to above present fairly, in all material respects,
the combined financial position of Boston Financial Tax Credit Fund Plus, A
Limited Partnership, as of March 31, 1998 and 1997, and the results of its
combined operations and its combined cash flows for each of three years in the
period ended March 31, 1998, in conformity with generally accepted accounting
principles. In addition, in our opinion, the financial statement schedule
referred to above, when considered in relation to the basic financial statements
taken as a whole, presents fairly, in all material respects, the information
required to be included therein.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
June 22, 1998
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND PLUS
(A Limited Partnership)
The accompanying notes are an integral part of these combined financial
statements.
F-8
COMBINED BALANCE SHEETS
March 31, 1998 and 1997
<TABLE>
<CAPTION>
1998 1997
-------------- --------------
<S> <C> <C>
Assets
Cash and cash equivalents $ 216,829 $ 381,519
Marketable securities, at fair value (Note 3) 1,401,639 998,695
Other investments (Note 5) 1,432,375 1,325,714
Accounts receivable - 7,943
Mortgagee escrow deposits - 13,345
Tenant security deposits - 3,639
Investments in Local Limited Partnerships, net of
reserve for valuation of $1,554,780 in 1998 (Note 4) 16,342,634 19,511,417
Rental property, at cost, net of accumulated depreciation (Note 6) - 727,397
Other assets 21,859 19,505
-------------- --------------
Total Assets $ 19,415,336 $ 22,989,174
============== ==============
Liabilities and Partners' Equity
Accounts payable to affiliates (Note 7) $ 1,042,390 $ 881,741
Accounts payable and accrued expenses 357,328 51,702
Accrued interest - 1,743
Mortgage notes payable (Note 8) - 739,994
Security deposits payable - 3,639
-------------- --------------
Total Liabilities 1,399,718 1,678,819
-------------- --------------
Minority interest in Local Limited Partnership - (685)
-------------- --------------
Commitments (Note 10)
General, Initial and Investor Limited Partners' Equity 18,009,741 21,312,631
Net unrealized gain (loss) on marketable securities 5,877 (1,591)
-------------- --------------
Total Partners' Equity 18,015,618 21,311,040
-------------- --------------
Total Liabilities and Partners' Equity $ 19,415,336 $ 22,989,174
============== ==============
The accompanying notes are an integral part of these combined financial statements.
</TABLE>
<PAGE>
COMBINED STATEMENTS OF OPERATIONS
For the Years Ended March 31, 1998, 1997 and 1996
<TABLE>
<CAPTION>
1998 1997 1996
--------------- ------------ ------------
<S> <C> <C> <C>
Revenue:
Rental $ 85,552 $ 120,829 $ 242,199
Investment 91,226 81,379 41,442
Accretion of Original Issue Discount (Note 5) 106,661 98,713 91,595
Other 19,047 54,937 30,802
------------- ------------ ------------
Total Revenue 302,486 355,858 406,038
------------- ------------ ------------
Expenses:
Asset management fees, related party (Note 7) 170,028 179,719 174,687
General and administrative (includes
reimbursements to an affiliate in the amount
of $95,037, $92,130 and $99,377) (Note 7) 194,458 217,169 248,974
Rental operations, exclusive of depreciation 61,983 80,307 183,920
Property management fees, related party (Note 7) 8,268 8,845 4,260
Interest (Note 8) 20,532 34,791 69,628
Bad debt expense 32,665 - 12,722
Provision for valuation of Investments
in Local Limited Partnerships 1,554,780 - 41,381
Provision for valuation of rental property - - 600,000
Depreciation 52,185 70,664 64,413
Amortization 32,135 41,517 43,193
------------- ------------ ------------
Total Expenses 2,127,034 633,012 1,443,178
------------- ------------ ------------
Loss before equity in losses of Local Limited
Partnerships, minority interest, loss on liquidation
of interest in Local Limited Partnership
and extraordinary item (1,824,548) (277,154) (1,037,140)
Equity in losses of Local Limited
Partnerships (Note 4) (1,546,727) (2,546,404) (2,034,515)
Minority interest in (income) loss of
Local Limited Partnerships (685) 706 262
Loss on liquidation of interest
in Local Limited Partnership (Note 11) (4,182) - -
------------- ------------ ------------
Net loss before extraordinary item (3,376,142) (2,822,852) (3,071,393)
Extraordinary gain on cancellation
of indebtedness (Notes 8, 9 and 11) 73,252 - 643,509
------------- ------------ ------------
Net Loss $ (3,302,890) $ (2,822,852) $ (2,427,884)
============= ============ ============
The accompanying notes are an integral part of these combined financial statements.
</TABLE>
<PAGE>
COMBINED STATEMENTS OF OPERATIONS (continued)
For the Years Ended March 31, 1998, 1997 and 1996
<TABLE>
<CAPTION>
1998 1997 1996
--------------- ------------ -----------
<S> <C> <C> <C>
Net loss before extraordinary item
allocated to the Limited Partners
per Limited Partnership Unit:
Class A Unit (34,643 Units) $ (93.16) $ (78.15) $ (84.60)
============= =========== ===========
Class B Unit (3,290 Units) $ (34.65) $ (26.26) $ (33.07)
============= =========== ===========
Extraordinary gain on cancellation of
indebtedness allocated to the Limited
Partners per Limited Partnership Unit:
Class A Unit (34,643 Units) $ 1.96 $ - $ 17.21
============== ============ ============
Class B Unit (3,290 Units) $ 1.41 $ - $ 12.39
============== ============ ============
Net Loss per Limited Partnership Unit:
Class A Unit (34,643 Units) $ (91.20) $ (78.15) $ (67.39)
============= ============ ===========
Class B Unit (3,290 Units) $ (33.24) $ (26.26) $ (20.68)
============= ============ ===========
The accompanying notes are an integral part of these combined financial statements.
</TABLE>
<PAGE>
STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY)
For the Years Ended March 31, 1998, 1997 and 1996
<TABLE>
<CAPTION>
Investor Investor Net
Initial Limited Limited Unrealized
General Limited Partners, Partners, Gains
Partners Partner Class A Class B (Losses) Totals
<S> <C> <C> <C> <C> <C> <C>
Balance at March 31, 1995 $ (62,615) $ 5,000 $ 23,855,538 $ 2,765,444 $ (45,877) $ 26,517,490
Net loss (25,195) - (2,334,650) (68,039) - (2,427,884)
Net change in net unrealized
losses on marketable
securities available
for sale - - - - 47,912 47,912
---------- ------- ------------ ----------- --------- ------------
Balance at March 31, 1996 (87,810) 5,000 21,520,888 2,697,405 2,035 24,137,518
Net loss (29,216) - (2,707,239) (86,397) - (2,822,852)
Net change in net unrealized
gains on marketable
securities available
for sale - - - - (3,626) (3,626)
---------- ------- ------------ ----------- --------- ------------
Balance at March 31, 1997 (117,026) 5,000 18,813,649 2,611,008 (1,591) 21,311,040
Net loss (34,096) - (3,159,426) (109,368) - (3,302,890)
Net change in net unrealized
losses on marketable
securities available
for sale - - - - 7,468 7,468
---------- ------- ------------ ----------- --------- ------------
Balance at March 31, 1998 $(151,122) $ 5,000 $ 15,654,223 $ 2,501,640 $ 5,877 $ 18,015,618
========= ======= ============ =========== ========= ============
The accompanying notes are an integral part of these combined financial statements.
</TABLE>
<PAGE>
COMBINED STATEMENTS OF CASH FLOWS
For the Years Ended March 31, 1998, 1997 and 1996
<TABLE>
<CAPTION>
1998 1997 1996
------------- ------------ -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net Loss $ (3,302,890) $ (2,822,852) $ (2,427,884)
Adjustments to reconcile net loss to net cash
provided by (used for) operating activities:
Accretion of Original Issue Discount (106,661) (98,713) (91,595)
Equity in losses of Local Limited Partnerships 1,546,727 2,546,404 2,034,515
Bad debt expense 32,665 - 12,722
Extraordinary gain on cancellation of indebtedness (73,252) - (643,509)
Loss on transfer and liquidation of interest
in Local Limited Partnerships 4,182 - -
Provision for valuation of Investments
in Local Limited Partnerships 1,554,780 - 41,381
Other - - (39,896)
Provision for valuation of rental property - - 600,000
(Gain) loss on sales and maturities of
marketable securities (3,130) (396) 18,861
Minority interest in losses of
Local Limited Partnerships 685 (706) (262)
Depreciation and amortization 84,320 112,181 107,606
Increase (decrease) in cash arising from
changes in operating assets and liabilities:
Accounts receivable 7,943 14,245 (39,569)
Mortgagee escrow deposits 13,345 (13,345) (5,379)
Tenant security deposits 3,639 (3,634) (91)
Other assets (25,447) (6,430) 2,874
Accounts payable to affiliates 163,051 195,920 204,058
Accounts payable and accrued expenses 326,667 7,794 (33,737)
Accrued interest - (1,879) 80,645
Security deposits payable (3,639) 1,614 (413)
------------- ------------ ------------
Net cash provided by (used for) operating activities 222,985 (69,797) (179,673)
------------- ------------ ------------
Cash flows from investing activities:
Investments in Local Limited Partnerships (59,640) - (195,000)
Return of investment in Local Limited
Partnership - 18,929 -
Advances to affiliate (24,173) - -
Purchases of marketable securities (1,794,815) (890,245) (1,212,343)
Proceeds from sales and maturities of
marketable securities 1,402,469 683,419 1,681,418
Payment of acquisition expenses - (15,990) (1,805)
Cash distributions received from Local
Limited Partnerships 90,599 196,602 97,141
Adjustment to cash upon liquidation
of general partner interest in a
Combined Entity (2,115) - -
Purchase of rental property - (260,604) (219,340)
------------- ------------ ------------
Net cash provided by (used for) investing activities (387,675) (267,889) 150,071
------------- ------------ ------------
The accompanying notes are an integral part of these combined financial statements.
</TABLE>
<PAGE>
COMBINED STATEMENTS OF CASH FLOWS (continued)
For the Years Ended March 31, 1998, 1997 and 1996
<TABLE>
<CAPTION>
1998 1997 1996
------------- ------------ ------------
<S> <C> <C> <C>
Cash flows from financing activities:
Proceeds from mortgage notes payable - 233,487 160,500
Payment of mortgage notes payable - (3,473) (15,242)
------------- ------------ ------------
Net cash provided by financing activities - 230,014 145,258
------------- ------------ ------------
Net increase (decrease) in cash and cash
equivalents (164,690) (107,672) 115,656
Cash and cash equivalents, beginning of year 381,519 489,191 373,535
------------- ------------ ------------
Cash and cash equivalents, end of year $ 216,829 $ 381,519 $ 489,191
============= ============ ============
Supplemental disclosure of cash flow activity:
Cash paid for interest $ 22,275 $ 36,670 $ 10,510
============= ============ ============
</TABLE>
Non-cash disclosure:
See Note 11 for discussion on the change in control of certain Local Limited
Partnerships.
See Note 9 for information regarding cancellation of indebtedness.
The accompanying notes are an integral part of these combined financial
statements.
<PAGE>
F-25
NOTES TO THE COMBINED FINANCIAL STATEMENTS
1. Organization
Boston Financial Tax Credit Fund Plus, A Limited Partnership (the "Fund") is a
Massachusetts limited partnership organized to invest in other limited
partnerships ("Local Limited Partnerships") which own and operate apartment
complexes which are eligible for low income housing tax credits which may be
applied against the federal income tax liability of an investor. The Fund also
invests in, for the benefit of the Class B Limited Partners, United States
Treasury obligations from which the interest coupons have been stripped or in
such interest coupons themselves (collectively "Treasury STRIPS"). The Fund used
approximately 28% of the Class B Limited Partners' capital contributions to
purchase Treasury STRIPS with maturities of 13 to 18 years, with a total
redemption amount equal to the Class B Limited Partners' capital contributions.
Arch Street VI, Inc., a Massachusetts corporation ("Arch Street, Inc."), is the
Managing General Partner of the Fund. Arch Street VI Limited Partnership ("Arch
Street L.P."), a Massachusetts limited partnership whose general partner
consists of Arch Street, Inc., is also a General Partner. Both of the General
Partners are affiliates of The Boston Financial Group Limited Partnership, a
Massachusetts limited partnership ("Boston Financial"). An affiliate of the
General Partners ("SLP Affiliate") is a special limited partner in each Local
Limited Partnership in which the Fund invests, with the right to become a
general partner under certain circumstances.
The fiscal year of the Fund ends on March 31.
The Fund offered two classes of Limited Partnership Interests - Class A Limited
Partnership Interests, represented by Class A Units, and Class B Limited
Partnership Interests, represented by Class B Units. The capital contributions
of Class A Limited Partners available for investment by the Fund are invested
entirely in Local Limited Partnerships. The capital contributions of Class B
Limited Partners available for investment by the Fund are invested partially in
Local Limited Partnerships and partially in Treasury STRIPS.
The Partnership Agreement authorized the sale of up to 100,000 Units of limited
partnership interests ("Units") at $1,000 per Unit. Boston Financial Securities,
Inc., an affiliate of the General Partners, received selling commissions and
underwriting advisory fees in the amount of 7.0% and 1.5%, respectively, of the
Class A Gross Proceeds and 5.04% and 1.08%, respectively, of the Class B Gross
Proceeds for Units sold by the entity as a soliciting dealer. On January 11,
1994, the Fund held its final investor closing. In total, the Fund received
$34,642,300 of capital contributions, net of discounts, from investors admitted
as Class A Limited Partners for 34,643 Units and $3,290,000 of capital
contributions, net of discounts, from investors admitted as Class B Limited
Partners for 3,290 Units.
The Partnership Agreement provides that all cash available for distribution will
be allocated 99% to the Limited Partners and 1% to the General Partners. Sale or
refinancing proceeds generally will be distributed first to the Limited Partners
in an amount equal to their adjusted capital contributions, second to the
General Partners in an amount equal to their capital contributions, third to the
General Partners (after payment of the 6% return as set forth in Section 4.2.3
of the Partnership Agreement and of any accrued but unpaid Subordinated
Disposition Fee) in such amount as is necessary to cause the General Partners to
have received 5% of all distributions to the Partners and lastly, 95% to the
Limited Partners and 5% to the General Partners.
Profits and losses for tax purposes arising from general operations and tax
credits generally will be allocated 99% to the Limited Partners and 1% to the
General Partners. However, as set forth in the Partnership Agreement, profits
and losses for tax purposes arising from a sale or refinancing generally will be
allocated among the Partners in such manner as is necessary to cause their
respective capital accounts to reflect the amount that would be distributable to
them in accordance with the priorities set forth in the preceding paragraph, if
all of the Fund's assets were sold for their federal adjusted basis and the Fund
were then liquidated.
<PAGE>
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
1. Organization (continued)
All distributions of cash available for distribution or distributions of sale or
refinancing proceeds, and all allocations of profits and losses for tax purposes
from normal operations and from a sale or refinancing or of tax credits, which
are distributed or allocated to the General Partners, will be allocated 1% to
Arch Street, Inc. and 99% to Arch Street L.P.
Because each class of Limited Partners had a different amount of its capital
contribution available for investment by the Fund in Local Limited Partnerships
(100% for Class A Limited Partners and approximately 72% for Class B Limited
Partners), the two classes of Limited Partners have different percentage
participation as to cash distributions, sale or refinancing proceeds and
allocation of profits, losses and credits attributable to investments in Local
Limited Partnerships. As such, profits and losses for financial reporting
purposes are allocated 1% to the General Partners, 92.66% to the Class A Limited
Partners and 6.34% to the Class B Limited Partners. All profits and losses and
cash distributions attributable to Treasury STRIPS are allocable only to Class B
Limited Partners.
Under the terms of the Partnership Agreement, the Fund initially designated 4%
of the Adjusted Gross Proceeds (which generally means Gross Proceeds minus the
amounts committed to the acquisition of Treasury STRIPS) from the sale of Units
as a reserve for working capital of the Fund and contingencies related to
ownership of Local Limited Partnership interests. The Managing General Partner
may increase or decrease such amounts from time to time, as it deems
appropriate. At March 31, 1998, the Managing General Partner has designated
approximately $907,000 of cash, cash equivalents and marketable securities as
such Reserve.
2. Significant Accounting Policies
Basis of Presentation and Combination
The Fund accounts for its investments in Local Limited Partnerships, with the
exception of the Combined Entity through the date of disposition, using the
equity method of accounting, because the Fund does not have a majority control
of the major operating and financial policies of the Local Limited Partnerships
in which it invests. Under the equity method, the investment is carried at cost,
adjusted for the Fund's share of income or loss of the Local Limited
Partnership, additional investments and cash distributions from the Local
Limited Partnerships. Equity in income or loss of the Local Limited Partnerships
is included currently in the Fund's operations. The Fund has no obligation to
fund liabilities of the Local Limited Partnership beyond its investment,
therefore, a Local Limited Partnership's investment will not be carried below
zero. To the extent that equity losses are incurred when a Local Limited
Partnership's respective investment value has been reduced to zero, the losses
will be suspended to be used against future income. Distributions received from
Local Limited Partnerships whose respective investment value has been reduced to
zero are included in income.
Excess investment costs over the underlying net assets acquired have arisen from
acquisition fees paid and expenses reimbursed to an affiliate of the Fund. These
fees and expenses are included in Investments in Local Limited Partnerships and
are being amortized on a straight-line basis over 35 years.
In October of 1993, an affiliate of the Fund's Managing General Partners, BF
Texas Limited Partnership, became an additional Local General Partner in three
Local Limited Partnerships (the "Texas Partnerships"). As such, as of November
1, 1993, the Fund is deemed to have a controlling financial interest over the
Texas Partnerships, as set forth in paragraph 22 of ARB 51. During the year
ended March 31, 1996, control of two of these Texas Partnerships was transferred
to unrelated parties, and as such, as of that date, these Local Limited
Partnerships were accounted for on the equity method (see Note 11). During the
year ended March 31, 1997, the Managing General Partner transferred all of the
assets of these two Texas Partnerships subject to their liabilities to
unaffiliated entities. As of March 31, 1998, the Managing General Partner
transferred all of the assets of the remaining Combined Entity, Leatherwood,
subject to its liabilities, to an unaffiliated entity.
<PAGE>
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
2. Significant Accounting Policies (continued)
Basis of Presentation and Combination (continued)
The General Partner has decided to report results of the Local Limited
Partnerships on a 90-day lag basis, because the Local Limited Partnerships
report their results on a calendar year basis. Accordingly, the financial
information of the Local Limited Partnerships that is included in the
accompanying combined financial statements is as of December 31, 1997, 1996 and
1995. As used herein, the "Combined Entities" refers to the Texas Partnership,
prior to the transfer of control and ownership referenced above.
The Fund recognizes a decline in the carrying value of its investment in Local
Limited 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 investments
in Local Limited Partnerships may be subject to material near term adjustments.
The Fund, as a limited partner in the Local Limited 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 for tax credits. If the
cost of operating a property exceeds the rental income earned thereon, the Fund
may deem it in its best interest to voluntarily provide funds in order to
protect its investment.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Cash Equivalents
Cash equivalents consist of short-term money market instruments with original
maturities of 90 days or less at acquisition and approximate fair value.
Marketable Securities and Other Investments
The Fund's marketable securities are classified as "Available for Sale"
securities and reported at fair value as reported by the brokerage firm at which
the securities are held. Realized gains and losses from the sales of securities
are based on the specific identification method. Unrealized gains and losses are
excluded from earnings and reported as a separate component of partners' equity.
The Fund accounts for its investments in Treasury STRIPS, which are included in
other investments in the balance sheets, using the effective interest method of
accretion for the original issue discount. The Fund has the ability and it is
its intention to hold the Treasury STRIPS until maturity. Therefore, they are
classified as "Held to Maturity" and are carried at cost plus the adjustments
for the discount using the effective interest method.
Organization Costs
Costs incurred in connection with the organization of the Fund amounting to
$50,000 have been deferred and are being amortized on a straight-line basis over
60 months.
Rental Property
Real estate and personal property of the Combined Entity prior to the date of
disposition are recorded in accordance with SFAS 121. Valuation allowances are
established when the carrying value of such assets exceeds their estimated
recoverable amounts. Depreciation is computed using the straight-line method
over the estimated useful lives of the assets of 7 to 40 years. Maintenance and
repairs are charged to expense as incurred.
<PAGE>
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
2. Significant Accounting Policies (continued)
Rental Income
Rental income, principally from short-term leases on the Combined Entity's
apartment units prior to date of disposition, was recognized as income under the
accrual method of accounting as rents became due.
Effect of recently issued Accounting Standard
The Financial Accounting Standards Board recently issued Statement of Financial
Accounting Standards No. 130, Reporting Comprehensive Income. The standard
requires that changes in comprehensive income be shown in a financial statement
that is displayed with the same prominence as other financial statements. The
standard is effective for fiscal years beginning after December 15, 1997. The
Fund will adopt the new standard beginning in the first quarter of the fiscal
year ending March 31, 1999, but is not expected to have a significant effect on
the Fund's financial position or results of operations.
Fair Value of Financial Instruments
Statements of Financial Accounting Standards No. 107 ("SFAS No. 107"),
Disclosures About Fair Value of Financial Instruments, requires disclosure of
the fair value of most on- and off-balance sheet financial instruments for which
it is practicable to estimate that value. The scope of SFAS No. 107 excludes
certain financial instruments, such as trade receivables and payables when the
carrying value approximates the fair value and investments accounted for under
the equity method, and all nonfinancial assets, such as real property. The fair
values of the Fund's assets and liabilities, except as discussed in Note 8,
which qualify as financial instruments under SFAS No. 107, approximate their
carrying amounts in the accompanying balance sheets.
Income Taxes
No provision for income taxes has been made as the liability for such taxes is
an obligation of the partners of the Fund.
Reclassifications
Certain reclassifications have been made to prior years' financial statements to
conform to the current year presentation.
3. Marketable Securities
A summary of marketable securities is as follows:
<TABLE>
<CAPTION>
Gross Gross
Unrealized Unrealized Fair
Cost Gains Losses Value
<S> <C> <C> <C> <C>
Debt securities issued by
the US Treasury and
other US Government agencies $ 1,288,646 $ 7,069 $ (1,190) $ 1,294,525
.
Mortgage backed securities 107,116 267 (269) 107,114
----------- --------- ---------- -----------
Marketable securities
at March 31, 1998 $ 1,395,762 $ 7,336 $ (1,459) $ 1,401,639
=========== ========= =========== ===========
</TABLE>
<PAGE>
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
3. Marketable Securities (continued)
<TABLE>
<CAPTION>
Gross Gross
Unrealized Unrealized Fair
Cost Gains Losses Value
<S> <C> <C> <C> <C>
Debt securities issued by
the US Treasury and
other US Government agencies $ 901,810 $ 2,209 $ (1,839) $ 902,180
Mortgage backed securities 72,696 - (1,862) 70,834
Other debt securities 25,780 2 (101) 25,681
----------- --------- ---------- -----------
Marketable securities
at March 31, 1997 $ 1,000,286 $ 2,211 $ (3,802) $ 998,695
=========== ========= =========== ===========
</TABLE>
The contractual maturities at March 31, 1998 are as follows:
Fair
Cost Value
Due in less than one year $ 620,557 $ 623,796
Due in one year to five years 668,089 670,729
Mortgage backed securities 107,116 107,114
----------- -----------
$ 1,395,762 $ 1,401,639
=========== ===========
Actual maturities may differ from contractual maturities because some borrowers
have the right to call or prepay obligations. Proceeds from sales and maturities
of securities were approximately $1,402,000, $683,000 and $1,681,000 in fiscal
years 1998, 1997 and 1996, respectively. Gross gains of $3,540, $1,252 and $538
and gross losses of $410 , $856 and $19,399 were realized on these sales in
fiscal years 1998, 1997 and 1996, respectively, and are included in investment
income in the combined statements of operations.
4. Investments in Local Limited Partnerships
The Fund uses the equity method to account for its limited partner interests in
twenty-five Local Limited Partnerships, excluding the Combined Entities (see
Note 11) and Villas de Montellano, which were disposed of. Each of these Local
Limited Partnerships own and operate multi-family housing complexes, most of
which are government assisted. The Fund, as Investor Limited Partner pursuant to
the various Local Limited Partnership Agreements, has generally acquired a 99%
interest, except for Livingston Arms, Metropolitan and New Garden Place, in
which an 82%, 98.75% and 97.9% interest has been acquired, respectively, in the
profits, losses, tax credits and cash flows from operations of each of the Local
Limited Partnerships. Upon dissolution, proceeds will be distributed according
to each respective partnership agreement.
<PAGE>
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
4. Investments in Local Limited Partnerships (continued)
The following is a summary of Investments in Local Limited Partnerships,
excluding the Combined Entities, for the years ended March 31:
<TABLE>
<CAPTION>
1998 1997 1996
-------------- --------------- --------------
<S> <C> <C> <C>
Capital contributions paid to Local Limited
Partnerships and purchase price paid to
withdrawing partners of Local Limited
Partnerships $ 26,757,518 $ 28,192,878 $ 28,364,048
Cumulative equity in losses of Local Limited
Partnerships (excluding cumulative unrecognized
losses of $1,114,301 in 1997) (9,402,967) (9,388,746) (6,956,866)
Cash distributions received from Local Limited
Partnerships (421,883) (331,284) (134,682)
------------- --------------- -------------
Investments in Local Limited Partnerships
before adjustments 16,932,668 18,472,848 21,572,500
Excess of investment cost over the underlying
net assets acquired:
Acquisition fees and expenses 1,122,226 1,168,545 1,156,686
Accumulated amortization of acquisition
fees and expenses (157,480) (129,976) (98,093)
------------- --------------- -------------
17,897,414 19,511,417 22,331,093
Reserve for valuation (1,554,780) - (41,381)
------------- --------------- -------------
Investments in Local Limited Partnerships $ 16,342,634 $ 19,511,417 $ 22,289,712
============= =============== =============
</TABLE>
During the year ended March 31, 1994, the Managing General Partner exercised its
rights under the Repurchase Agreement made with the Local General Partner of
Villas de Montellano and requested the repayment of the capital contributions
advanced by the Fund and of certain expenses associated with this Local Limited
Partnership investment. In May and August of 1994, the Local General Partner and
the Guarantor of the Local General Partner, respectively, filed for bankruptcy
and it is unlikely that they will meet all of their obligations under the
Repurchase Agreement. In addition, the Managing General Partner of the Fund
elected to abandon its interest in the property through a quit claim deed to the
Local General Partner which has been executed. As a result of these
circumstances, during the year ended March 31, 1996, the Fund established a
reserve for valuation of investments in Local Limited Partnerships equal to the
investment in Villas de Montellano. At March 31, 1997, the Fund wrote off its
investment in Villas de Montellano against the established reserve due to the
remote possibility of recovery.
The Fund has provided a reserve for valuation for four of its investments in
Local Limited Partnerships, Bancroft Court, Phoenix Housing, Primrose and
Sycamore, because there is evidence of non-temporary declines in the recoverable
amount of the investments.
As discussed in Notes 2 and 11, as of March 31, 1998, the Managing General
Partner transferred all of the assets of three of the Texas Partnerships
(Tamaric, Northwest and Leatherwood) subject to their liabilities to
unaffiliated entities.
As discussed in Note 11, as of March 31, 1998 the Managing General Partner
transferred all of the assets of Capitol Park subject to its liabilities to an
affiliated entity.
<PAGE>
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
4. Investments in Local Limited Partnerships (continued)
Summarized financial information for each of the three years ended December 31,
1997, 1996 and 1995 (due to the Fund's policy of reporting the financial
information of its Local Limited Partnership interests on a 90 day lag basis) of
all Local Limited Partnerships in which the Fund has invested (excluding the
Combined Entities) is as follows:
<TABLE>
<CAPTION>
Summarized Balance Sheets - as of December 31,
1997 1996 1995
------------ ------------ --------
<S> <C> <C> <C>
Assets:
Investment property, net $ 71,413,801 $ 74,654,414 $ 79,965,584
Current assets 1,948,305 1,297,435 1,229,803
Other assets 4,084,126 5,621,032 5,791,489
------------ ------------ ------------
Total Assets $ 77,446,232 $ 81,572,881 $ 86,986,876
============ ============ ============
Liabilities and Partners' Equity:
Current liabilities (includes current portion
of long-term debt) $ 2,670,740 $ 4,132,210 $ 4,198,027
Long-term debt 53,816,347 56,134,225 57,556,933
Other debt 2,402,905 2,245,256 2,013,530
------------ ------------ ------------
Total Liabilities 58,889,992 62,511,691 63,768,490
Fund's Equity 16,763,725 17,448,026 21,272,482
Other Partners' Equity 1,792,515 1,613,164 1,945,904
------------ ------------ ------------
Total Liabilities and Partners' Equity $ 77,446,232 $ 81,572,881 $ 86,986,876
============ ============ ============
Summarized Income Statements -
for the years ended December 31,
Rental and other income $ 10,191,319 $ 10,410,334 $ 10,372,306
------------ ------------ ------------
Expenses:
Operating 5,370,009 7,389,352 5,586,071
Interest 3,558,581 3,775,340 3,862,343
Depreciation and amortization 2,837,510 2,952,750 2,996,711
------------ ------------ ------------
Total Expenses 11,766,100 14,117,442 12,445,125
------------ ------------ ------------
Net Loss $ (1,574,781) $ (3,707,108) $ (2,072,819)
============ ============ ============
Fund's share of net loss $ (1,546,727) $ (3,660,705) $ (2,034,515)
============ ============ ============
Other Partners' share of net loss $ (28,054) $ (46,403) $ (38,304)
============ ============ ============
</TABLE>
For the year ended March 31, 1997, the Fund has not recognized $1,114,301, of
equity in losses relating to a Local Limited Partnership in which cumulative
equity in losses have exceeded its total investment.
The Fund's equity as reflected by the Local Limited Partnerships of $16,763,725
differs from the Fund's investments in Local Limited Partnerships before
adjustment of $16,932,668 primarily because of differences in the accounting
treatment of miscellaneous items.
<PAGE>
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
5. Other Investments
Other investments consists of the aggregate cost of the Treasury STRIPS
purchased by the Fund for the benefit of the Class B Limited Partners. The
amortized cost at March 31, 1998 and 1997 is composed of the following:
1998 1997
----------- -----------
Aggregate cost of Treasury STRIPS $ 918,397 $ 918,397
Accumulated accretion of
Original Issue Discount 513,978 407,317
----------- -----------
$ 1,432,375 $1,325,714
=========== ==========
The fair value of these securities at March 31, 1998 is $1,756,447. Maturity
dates for the STRIPS range from February 15, 2007 to May 15, 2010 with a final
maturity value of $3,290,000.
6. Rental Property
Real estate and personal property belonging to the Texas Partnership at December
31, 1996 is as follows:
1996
Land $ 20,000
Building and improvements 1,361,444
Equipment 165,316
-----------
1,546,760
Less: Accumulated depreciation (219,363)
Reserve for impairment (600,000)
Total $ 727,397
===========
7. Transactions with Affiliates
In accordance with the Partnership Agreement, the Fund is required to pay
acquisition fees to and reimburse acquisition expenses of the Managing General
Partner or its affiliates for selecting, evaluating, structuring, negotiating
and closing the Fund's investments in Local Limited Partnerships. Acquisition
fees totaled 7.0% of Adjusted Gross Proceeds. Acquisition expenses did not
exceed 1.5% of Adjusted Gross Proceeds. Acquisition fees totaling $2,590,827
(prior to the write off of Villas de Montellano, the Texas Partnerships and
Capitol Park) have been paid to an affiliate of the Managing General Partner for
the closing of the Fund's Local Limited Partnership Investments; $2,138,541 of
these fees are classified as capital contributions to Local Limited Partnerships
in Note 4 of the Financial Statements. Acquisition expenses totaling $825,516
were incurred and have been reimbursed to an affiliate of the Managing General
Partner.
An affiliate of the Managing General Partner currently receives the base amount
of $6,468 per Local Limited Partnership (as adjusted by the CPI factor) annually
as the Asset Management Fee for administering the affairs of the Fund. Included
in the combined statements of operations for the years ended March 31, 1998,
1997 and 1996 is $170,028, $179,719 and $174,687, respectively, of fees earned
by the affiliate. At March 31, 1998 and 1997, the affiliate is due $1,028,863
and $858,835, respectively, for these fees.
An affiliate of the Managing General Partner is reimbursed for the actual cost
of the Fund's operating expenses. Included in general and administrative
expenses for the years ended March 31, 1998, 1997 and 1996 is $95,037, $92,130
and $99,377, respectively, that has been paid or is payable by the Fund as
reimbursements for salaries and benefits expenses. At March 31, 1998 and 1997,
$13,527 and $21,667, respectively, is payable to an affiliate of the Managing
General Partner.
<PAGE>
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
7. Transactions with Affiliates (continued)
Boston Financial Property Management ("BFPM"), an affiliate of the Managing
General Partner, currently manages Pilot House and Preston Place, properties in
which the Fund has invested. Included in operating expenses in the summarized
income statements in Note 4 to the Financial Statements is $78,722, $56,739 and
$58,363 of fees earned by BFPM for the years ended December 31, 1997, 1996 and
1995, respectively.
Lansing Management Company ("LMC"), an affiliate of the Managing General
Partner, currently manages Linden Square, a property in which the Fund has
invested. Included in operating expenses in the summarized income statements in
Note 4 to the Financial Statements is $33,120, $33,120 and $32,442 of fees
earned by LMC for the years ended December 31, 1997, 1996 and 1995,
respectively.
LMC is also the management agent for the Texas Partnerships. Included in the
combined statements of operations is $8,268, $8,845 and $4,260 of fees earned by
BFPM for the years ended December 31, 1997, 1996 and 1995, respectively. During
1995, a provision in the Combined Entities workout agreement came into effect
which prohibited this fee from being charged. This provision ended during 1996,
and fees were again charged. Included in accounts payable to affiliates at March
31, 1997 is $1,239 of property management fees due to an affiliate of the
Managing General Partner.
8. Mortgage Notes Payable
During 1995, Village Oaks transferred its obligation to Rural Economic and
Community Development, now Rural Development ("RD"), formerly the Farmers Home
Administration of the U.S. Department of Agriculture, in the amount of $794,855
to Texas Properties Limited Partnership VI, also known as Leatherwood Terrace
("Leatherwood"), a partnership which is affiliated with the Fund's Managing
General Partner. In conjunction with this transfer, Leatherwood and RD entered
into a new loan agreement for $350,000 which resulted in a gain on cancellation
of indebtedness of $444,855 during the year ended March 31, 1996.
In addition, a rehabilitation loan in the amount of $393,987 was approved by RD
to complete various rehabilitations and renovations of Leatherwood. At December
31, 1996, the rehabilitations and renovations were complete, therefore the loan
was converted to a note payable to RD.
The mortgage notes payable to RD required monthly principal and interest
payments of $2,153 and mature in 2030. Leatherwood and RD entered into an
Interest Credit and Rental Assistance Agreement which provides for an effective
interest rate of 1 percent, plus all rental income over basic rents as
determined by RD. During the years ended December 31, 1996 and 1995, $3,473 and
$520, respectively, ofprincipal payments had been paid on the mortgage
notes. The notes were collateralized by all property of Leatherwood.
On September 23, 1997, the Managing General Partner transferred all of the
assets of Leatherwood subject to their liabilities to an unaffiliated entity.
This resulted in a gain on cancellation of indebtedness of $73,252.
<PAGE>
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
9. Former general partner loan
A general partner loan in the amount of $198,654 represented a loan made to
Village Oaks by the original Local General Partner to pay rehabilitation costs.
The loan was uncollateralized, non-interest bearing and had no maturity date.
Upon transfer of the Village Oaks interest to Leatherwood during fiscal 1996,
this debt was forgiven by the Local General Partner and included in gain on
cancellation of indebtedness in the Combined Financial Statements.
10. Commitments
At March 31, 1998, the Fund has committed to make future capital contributions
and pay future purchase price installments on its investment in a Local Limited
Partnership. These future payments are contingent upon the achievement of
certain criteria as set forth in the Local Limited Partnership Agreement and
total $340,000.
11. Transfer and Liquidation of Interests in Local Limited Partnerships
As previously reported, the Managing General Partner transferred all of the
assets of two of the Texas Partnerships, subject to their liabilities, to
unaffiliated entities. The two Texas Partnerships (Tamaric and Northwest) were
transferred to new owners effective May 31, 1996.
On September 23, 1997, the Managing General Partner transferred all of the
assets of the remaining Texas Partnership, Leatherwood, subject to its
liabilities, to an unaffiliated entity. For financial reporting purposes, loss
on liquidation of interest in Local Limited Partnership of $4,182 and
extraordinary gain on cancellation of indebtedness of $73,252 were recognized in
the year ended March 31, 1998 as a result of this transfer. For tax purposes,
this event results in both Section 1231 Gain and Cancellation of Indebtedness
income. In addition, the transfer of ownership results in a nominal recapture of
tax credits, since Leatherwood represents only 0.6% of the Partnership's tax
credits.
On November 10, 1997, the Managing General Partner transferred 50% of its
interest in capital and profits of Phoenix Housing, Primrose and Sycamore to the
local general partner. Included in this transfer is a put option. The put option
grants the Managing General Partner the right to put the Fund's remaining
interest to the local general partner any time after one year has elapsed. For
financial reporting purposes, the Fund has decided to reserve the remaining
carrying value of this investment, because it is unknown as to whether the Fund
will be able to recover its invested balances. The Fund will retain its full
share of tax credits until such time as the remaining interest is put to
the local general partner.
As previously reported, the Local General Partner of Capitol Park in Oklahoma
City, Oklahoma filed a Chapter 7 liquidation plan for the property during the
second quarter of 1997. The Chapter 7 filing was dismissed by the Bankruptcy
Court after its review. Therefore, the Fund recognized tax credit recapture,
plus interest, and the allocation of taxable income to the Fund, which was
reflected on the 1997 tax return. The Fund's carrying value of this investment
for financial reporting purposes was zero; therefore, the transfer had no
impact on the Fund operating results.
<PAGE>
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
12. Federal Income Taxes
A reconciliation of the loss reported in the Combined Statements of Operations
for the years ended March 31, 1998, 1997 and 1996 to the loss reported for
federal income tax purposes for the years ended December 31, 1997, 1996 and 1995
is as follows:
<TABLE>
<CAPTION>
1998 1997 1996
------------- -------------- ------------
<S> <C> <C> <C>
Net Loss per Combined Statement of Operations $ (3,302,890) $ (2,822,852) $ (2,427,884)
Adjustment to reflect March 31 fiscal year end
to December 31 tax year end 49,839 (26,333) (80,602)
Adjustment for equity in losses of Local Limited
Partnerships for tax purposes under (over)
equity in losses for financial
reporting purposes (1,386,665) 1,347,065 (287,257)
Equity in loss of Local Limited Partnership
not recognized for financial reporting purposes - (1,114,301) -
Provision for valuation of Investments in
Local Limited Partnerships not deductible
for tax purposes 1,554,780 - 41,381
Loss on write-off of Villas de Montellano recorded
as a loss for tax purposes and a reversal of the
provision for valuation of Investments in Local
Limited Partnership for financial reporting purposes - - (538,686)
Expenses deductible for financial reporting (tax)
purposes not deductible for
(financial reporting) tax purposes (53,513) (13,456) 13,456
Related party expenses not paid at December 31,
not deductible for tax purposes 170,651 177,436 179,076
Adjustment for amortization for financial reporting
purposes over amortization for tax purposes (10,314) (10,204) (8,869)
------------ ------------ ------------
Net Loss for federal income tax purposes $(2,978,112) $ (2,462,645) $ (3,109,385)
============ ============ ============
</TABLE>
<PAGE>
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
12. Federal Income Taxes (continued)
The differences of the assets and liabilities of the Fund for financial
reporting purposes and tax reporting purposes for the year ended March 31, 1998
are as follows:
<TABLE>
<CAPTION>
Financial Tax
Reporting Reporting
Purposes Purposes Differences
<S> <C> <C> <C>
Investments in Local Limited Partnerships $ 16,342,634 $ 15,235,124 $ 1,107,510
============= ============= ================
Other assets $ 3,072,702 $ 8,290,905 $ (5,218,203)
============= ============= ================
Liabilities $ 1,399,718 $ 30,990 $ 1,368,728
============= ============= ================
</TABLE>
The differences in the assets and liabilities of the Fund for financial
reporting purposes are primarily attributable to: i) the cumulative equity in
loss from Local Limited Partnerships for tax reporting purposes is approximately
$2,602,000 greater than for financial reporting purposes. ii) organizational and
offering costs of approximately $5,132,000 that have been capitalized for tax
reporting purposes but are charged to Limited Partners' equity for financial
reporting purposes; and iii) related party expenses which are deductible for
financial reporting purposes of approximately $1,029,000 but which are not
deductible for tax reporting purposes.
The differences of the assets and liabilities of the Fund for financial
reporting purposes and tax reporting purposes for the year ended March 31, 1997
are as follows:
<TABLE>
<CAPTION>
Financial Tax
Reporting Reporting
Purposes Purposes Differences
<S> <C> <C> <C>
Investments in Local Limited Partnerships $ 19,511,417 $ 18,726,513 $ 784,904
============= ============= ================
Other assets $ 3,477,757 $ 7,767,299 $ (4,289,542)
============= ============= ================
Liabilities $ 1,678,819 $ 20,661 $ 1,658,158
============= ============= ================
</TABLE>
The differences in the assets and liabilities of the Fund for financial
reporting purposes are primarily attributable to: i) for financial reporting
purposes, the Fund combines the financial statements of one Local Limited
Partnership with its financial statements; for tax purposes, this entity is
carried on the equity method; ii) the cumulative equity in loss from Local
Limited Partnerships, including the Combined Entity, for tax reporting purposes
is approximately $824,000 greater than for financial reporting purposes,
including approximately $1,114,000 of losses the Fund has not recognized
relating to one Local Limited Partnership whose cumulative equity in losses
exceeded its total investment; iii) organizational and offering costs of
approximately $5,132,000 that have been capitalized for tax reporting purposes
but are charged to Limited Partners' equity for financial reporting purposes;
and iv) related party expenses which are deductible for financial reporting
purposes of approximately $859,000 but which are not deductible for tax
reporting purposes.
<PAGE>
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
13. Supplemental Combining Schedules
<TABLE>
<CAPTION>
Balance Sheets
Boston Financial Combined
Tax Credit Entity Combined
Fund Plus (A) (B) Eliminations (A)
<S> <C> <C> <C> <C>
Assets
Cash and cash equivalents $ 216,829 $ - $ - $ 216,829
Marketable securities, at fair value 1,401,639 - - 1,401,639
Other investments 1,432,375 - - 1,432,375
Investments in Local Limited
Partnerships 16,342,634 - - 16,342,634
Other assets 21,859 - - 21,859
------------- ------------- ------------- -------------
Total Assets $ 19,415,336 $ - $ - $ 19,415,336
============= ============= ============= =============
Liabilities and Partners' Equity (Deficiency)
Accounts payable to affiliates $ 1,042,390 $ - $ - $ 1,042,390
Accounts payable and accrued
expenses 357,328 - - 357,328
-------------- ------------ ------------- -------------
Total Liabilities 1,399,718 - - 1,399,718
------------- ------------ ------------- -------------
General, Initial and Investor
Limited Partners' Equity 18,009,741 - - 18,009,741
Net unrealized gain on
marketable securities 5,877 - - 5,877
------------- ------------ ------------- -------------
Total Partners' Equity 18,015,618 - - 18,015,618
------------- ------------ ------------- -------------
Total Liabilities and
Partners' Equity $ 19,415,336 $ - $ - $ 19,415,336
============= ============ ============= =============
</TABLE>
(A) As of March 31, 1998. (B) As of December 31, 1997 - See Note 2.
<PAGE>
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
13. Supplemental Combining Schedules (continued)
Statements of Operations
<TABLE>
<CAPTION>
Boston Financial Combined
Tax Credit Entity Combined
Fund Plus (A) (B) Eliminations (A)
<S> <C> <C> <C> <C>
Revenue:
Rental $ - $ 85,552 $ - $ 85,552
Investment 91,226 - - 91,226
Accretion of Original Issue Discount 106,661 - - 106,661
Other 11,195 7,852 - 19,047
------------ ------------- ------------- -------------
Total Revenue 209,082 93,404 - 302,486
------------ ------------- ------------- -------------
Expenses:
Asset management fees, related party 170,028 - - 170,028
General and administrative 194,458 - - 194,458
Rental operations, exclusive of
depreciation - 61,983 - 61,983
Property management fees, related party - 8,268 - 8,268
Interest - 20,532 - 20,532
Bad debt expense 32,665 - - 32,665
Provision for valuation of Investments
in Local Limited Partnerships 1,554,780 - - 1,554,780
Depreciation - 52,185 - 52,185
Amortization 32,135 - - 32,135
------------ ------------- ------------- -------------
Total Expenses 1,984,066 142,968 - 2,127,034
------------ ------------- ------------- -------------
Loss before equity in losses of
Local Limited Partnerships, minority
interest, loss on liquidation
of interest in Local Limited Partnership
and extraordinary item (1,774,984) (49,564) - (1,824,548)
Equity in losses of Local Limited
Partnerships (1,523,724) - (23,003) (1,546,727)
Minority interest in income of
Local Limited Partnership - - (685) (685)
Loss on liquidation of interest in
Local Limited Partnership (4,182) - - (4,182)
------------ ------------- ------------- -------------
Net Loss before extraordinary item (3,302,890) (49,564) (23,688) (3,376,142)
Extraordinary gain on cancellation
of indebtedness - 73,252 - 73,252
------------ ------------- ------------- -------------
Net Loss $ (3,302,890) $ 23,688 $ (23,688) $ (3,302,890)
============ ============= ============= =============
</TABLE>
(A) For the year ended March 31, 1998. (B) For the year ended December 31, 1997
- - See Note 2.
<PAGE>
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
13. Supplemental Combining Schedules (continued)
<TABLE>
<CAPTION>
Statements of Cash Flows
Boston Financial Combined
Tax Credit Entity Combined
Fund Plus (A) (B) Eliminations (A)
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net Income (Loss) $ (3,302,890) $ 23,688 $ (23,688) $ (3,302,890)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Accretion of Original
Issue Discount (106,661) - - (106,661)
Equity in losses of Local Limited
Partnerships 1,523,724 - 23,003 1,546,727
Bad debt expense 32,665 - - 32,665
Extraordinary gain on cancellation
of indebtedness - (73,252) - (73,252)
Loss on liquidation of interest in
Local Limited Partnerships 4,182 - - 4,182
Provision for valuation of Investments
in Local Limited Partnership 1,554,780 - - 1,554,780
Gain on sales and maturities of
marketable securities (3,130) - - (3,130)
Minority interest in loss of
Local Limited Partnership - - 685 685
Depreciation and amortization 32,135 52,185 - 84,320
Increase (decrease) in cash
arising from changes in operating
assets and liabilities:
Accounts receivable - 7,943 - 7,943
Mortgagee escrow deposits - 13,345 - 13,345
Tenant security deposits - 3,639 - 3,639
Other assets (3,510) (21,937) - (25,447)
Accounts payable to affiliates 161,888 1,163 - 163,051
Accounts payable and accrued
expenses 328,019 (1,352) - 326,667
Security deposits payable - (3,639) - (3,639)
-------------- ------------ -------------- ----------------
Net cash provided by operating
activities 221,202 1,783 - 222,985
-------------- ------------ -------------- ----------------
Cash flows from investing activities:
Investment in Local Limited Partnership (59,640) - - (59,640)
Advances to affiliate (24,173) - - (24,173)
Purchases of marketable securities (1,794,815) - - (1,794,815)
Proceeds from sales and maturities
of marketable securities 1,402,469 - - 1,402,469
Cash distributions received from
Local Limited Partnerships 90,599 - - 90,599
Adjustment to cash upon liquidation of
general partner interest in a Combined
Entity - (2,115) - (2,115)
------------- ------------ -------------- ----------------
Net cash used for investing activities (385,560) (2,115) - (387,675)
-------------- ------------ -------------- ----------------
</TABLE>
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
13. Supplemental Combining Schedules (continued)
<TABLE>
<CAPTION>
Statements of Cash Flows (continued)
Boston Financial Combined
Tax Credit Entity Combined
Fund Plus (A) (B) Eliminations (A)
<S> <C> <C> <C> <C>
Net decrease in cash and
cash equivalents (164,358) (332) - (164,690)
Cash and cash equivalents, beginning 381,187 332 - 381,519
-------------- ------------ -------------- ----------------
Cash and cash equivalents, ending $ 216,829 $ - $ - $ 216,829
============== ============ ============== ================
</TABLE>
(A) For the year ended March 31, 1998.
(B) For the year ended December 31, 1997 - See Note 2.
<PAGE>
Boston Financial Tax Credit Fund Plus, A Limited
Partnership
Schedule III - Real Estate and Accumulated Depreciation
of Property owned by Local Limited Partnerships
Which Registrant has Invested at March 31, 1998
<TABLE>
<CAPTION>
COST OF INTEREST AT ACQU'N DATE
------------------------------------
NET IMPROVEMENTS
NUMBER TOTAL BUILDINGS / CAPITALIZED
OF ENCUM- IMPROVEMENTS SUBSEQUENT TO
DESCRIPTION UNITS BRANCES*** LAND & EQUIPMENT ACQUISITION
<S> <C> <C> <C> <C> <C>
Low and Moderate
Income Apartment Complexes
Village Oaks/Leatherwood (4)
Yoakum, TX
Tamaric Apartments (3)
Cedar Park, TX
Northwest Apartments (3)
Georgetown, TX
Pilot House 132 $ 3,294,678 $ 382,800 $ 5,680,595 $ 25,416
Newport News, VA
Jardines 60 2,621,337 90,000 3,204,272 43,308
Juncos,Puerto Rico
Livingston Arms 25 526,806 50,820 1,827,287 (23,683)
Poughkeepsie, NY
Broadway Towers 92 5,986,333 352,627 6,929,593 211,860
Revere, MA
Phoenix Housing 40 1,935,000 46,000 2,563,267 4,755
Moorhead, MN
Cottages of Aspen 114 4,755,000 413,024 4,375,829 1,286,174
Oakdale, MN
45th & Vincennes 19 669,209 5,173 1,320,445 27,647
Chicago, IL
Long Creek Court 14 554,529 20,000 686,849 8,779
Kittrell, NC
Atkins Glen 24 956,977 18,000 1,032,162 131,176
Stoneville, NC
Tree Trail 108 2,679,116 160,000 5,076,748 (190,502)
Gainesville, FL
Meadow Wood 88 2,666,882 240,300 4,175,452 (139,294)
Smyrna,TN
Primrose 48 1,097,042 234,269 1,704,025 (47,389)
Grand Forks, ND
Sycamore 48 1,268,927 143,966 1,677,505 186,911
Sioux Falls, SD
Preston Place 120 3,217,300 1,147,522 4,402,487 320,321
Winchester, VA
Kings Grant Court 36 905,964 43,000 1,664,102 10,726
Statesville, NC
Chestnut Plains 24 604,861 29,750 935,968 5,065
Winston-Salem, NC
Capitol Park (5)
Oklahoma City, OK
Bancroft Street 97 1,335,373 51,289 2,366,139 31,417
Toledo, OH
Hudson Square 82 879,276 16,500 1,325,732 6,734
Baton Rouge, LA
Walker Woods II 19 827,775 120,263 1,292,998 (10,562)
Dover, DE
Vista Villa 100 4,469,939 10 3,475,268 2,944,659
Saginaw County, MI
Metropolitan Apartments 69 2,105,452 40,000 2,569,593 1,946,582
Chicago, IL
Carolina Woods II 40 910,594 100,189 694,813 1,011,026
Greensboro, NC
Linden Square 120 5,284,991 285,000 767,091 5,846,800
Genesee County, MI
New Garden Place 76 2,280,549 95,000 3,396,078 0
Gilmer, NC
Findley Place Apts 89 2,805,000 64,787 3,465,022 111,827
Minneapolis, MN
-------------------------------------------------------------------------------
===============================================================================
TOTAL 1,684 $54,638,910 $4,150,289 $ 66,609,320 $13,749,753
===============================================================================
</TABLE>
(1) The aggregate cost for Federal Income Tax purposes is approximately
$85,246,000.
(2) The Managing General Partner of the Fund elected to abandon its interest in
Villas de Montellano, in Morovis, Puerto Rico, as of May 1, 1995.
(3) The Managing General Partner of the Fund transferred its interest in Tamaric
Apartments in Cedar Park, TX and Northwest Apartments in Georgetown, TX as of
May 31, 1996.
(4) The Managing General Partner of the Fund transferred its interest in
Leatherwood in Toakum, TX as of September 23, 1997.
(5) The Managing General Partner of the Fund transferred its interest in Capitol
Park in Oklahoma City, OK as of November 10, 1997.
*** Mortgage notes payable generally represent
non-recourse financing of low-income housing
projects payable with terms of up to 40 years
with interest payable at rates ranging from 5%
to 11%. The Fund has not guaranteed any of these
mortgage notes payable.
Boston Financial Tax Credit Fund Plus, A Limited Partnership Schedule III - Real
Estate and Accumulated Depreciation of Property owned by Local Limited
Partnerships Which Registrant has Invested at March 31, 1998
<TABLE>
<CAPTION>
GROSS AMOUNT AT WHICH CARRIED AT DECEMBER 31, 1997 LIFE ON
------------------------------------------------------------
WHICH
BUILDINGS DEPRECIATION
LAND AND AND ACCUMULATED DATE IS COMPUTED DATE
DESCRIPTION IMPROVEMENTS IMPROVEMENTS TOTAL DEPRECIATION BUILT (YEARS) ACQUIRED
- ----------- ------------ ------------ ----- ------------ ----- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Low and Moderate
Income Apartment Complexes
Village Oaks/Leatherwood (4)
Yoakum, TX
Tamaric Apartments (3)
Cedar Park, TX
Northwest Apartments (3)
Georgetown, TX
Pilot House $ 382,800 $5,706,011 $6,088,811 $ 919,166 12/31/92 8, 20, 40 02/25/92
Newport News, VA
Jardines 90,000 3,247,580 3,337,580 589,605 02/28/92 5, 35 04/14/92
Juncos,Puerto Rico
Livingston Arms 50,820 1,803,604 1,854,424 368,033 05/01/92 5-7, 27.5 05/01/92
Poughkeepsie, NY
Broadway Towers 352,627 7,141,453 7,494,080 1,258,740 09/30/91 5-10, 40 06/02/92
Revere, MA
Phoenix Housing 46,000 2,568,022 2,614,022 369,295 09/30/92 10, 40 07/06/92
Moorhead, MN
Cottages of Aspen 273,023 5,802,004 6,075,027 994,038 11/30/92 7, 15-27.5 07/02/92
Oakdale, MN
45th & Vincennes 5,173 1,348,092 1,353,265 275,983 01/04/93 Useful Lives 06/26/92
Chicago, IL
Long Creek Court 27,551 688,077 715,628 93,626 01/01/92 Useful Lives 07/01/92
Kittrell, NC
Atkins Glen 14,000 1,167,338 1,181,338 143,457 01/15/93 Useful Lives 07/01/92
Stoneville, NC
Tree Trail 160,000 4,886,246 5,046,246 997,810 12/18/92 10, 30 10/30/92
Gainesville, FL
Meadow Wood 240,300 4,036,158 4,276,458 880,982 07/20/92 10, 30 10/30/92
Smyrna,TN
Primrose 181,829 1,709,076 1,890,905 217,279 12/28/92 7, 40 12/09/92
Grand Forks, ND
Sycamore 143,966 1,864,416 2,008,382 257,768 02/28/93 7, 40 12/17/92
Sioux Falls, SD
Preston Place 1,174,617 4,695,713 5,870,330 815,420 10/01/93 8, 20, 40 12/21/92
Winchester, VA
Kings Grant Court 43,000 1,674,828 1,717,828 388,083 07/30/92 15 - 27.5 12/23/92
Statesville, NC
Chestnut Plains 29,750 941,033 970,783 203,589 09/30/90 5, 10, 40 12/24/92
Winston-Salem, NC
Capitol Park (5)
Oklahoma City, OK
Bancroft Street 51,289 2,397,556 2,448,845 434,144 12/18/92 Useful Lives 12/31/92
Toledo, OH
Hudson Square 16,500 1,332,466 1,348,966 275,105 11/30/92 4-10, 27.5 03/08/93
Baton Rouge, LA
Walker Woods II 233,263 1,169,436 1,402,699 246,468 10/29/93 7, 16, 27.5 06/11/93
Dover, DE
Vista Villa 773,930 5,646,007 6,419,937 958,984 10/20/94 5-7, 15, 27.5 08/04/93
Saginaw County, MI
Metropolitan Apartments 40,000 4,516,175 4,556,175 717,268 08/30/94 Useful Lives 08/19/93
Chicago, IL
Carolina Woods II 100,189 1,705,839 1,806,028 145,347 08/19/94 Useful Lives 10/11/93
Greensboro, NC
Linden Square 313,500 6,585,391 6,898,891 560,999 12/31/94 Useful Lives 10/29/93
Genesee County, MI
New Garden Place 186,314 3,304,764 3,491,078 506,188 08/15/94 7, 15, 27.5 06/24/94
Gilmer, NC
Findley Place Apts 120,737 3,520,899 3,641,636 478,184 11/28/94 5-7, 15, 27.5 07/15/94
Minneapolis, MN
------------------------------------------------------------
============================================================
TOTAL $5,051,178 $79,458,184 $84,509,362 $13,095,561
============================================================
</TABLE>
Summary of property owned and accumulated depreciation:
Property Owned December 31, 1997
- --------------------------------------------------------------------------------
Balance at beginning of period $85,046,368
Additions during period:
Other acquisitions 37,008
Improvements etc. 162,930
-------------
199,938
Deductions during period:
Write off of Properties transferred (4) (1,546,760)
Write off of Properties transferred (5) (736,944)
Eliminations Texas Partnerships 1996 1,546,760
-------------
(736,944)
=============
Balance at close of period $84,509,362
=============
Property Owned December 31, 1996
- --------------------------------------------------------------------------------
Balance at beginning of period $88,196,508
Additions during period:
Other acquisitions 6,240
Improvements etc. 469,103
-------------
475,343
Deductions during period:
Disposals (24,964)
Impairment of assets (5) (2,455,826)
Write off of Properties transferred (3) (884,089)
Eliminations Texas Partnerships 1996 (1,546,760)
Eliminations Texas Partnerships 1995 1,286,156
-------------
(3,625,483)
=============
Balance at close of period $85,046,368
=============
Property Owned December 31, 1995
- --------------------------------------------------------------------------------
Balance at beginning of period $87,000,025
Additions during period:
Other acquisitions 203,563
Improvements etc. 328,167
-------------
531,730
Deductions during period:
Disposal of Villas de Montellano (2) (3,630,214)
Eliminations Texas Partnerships 1995 (1,286,156)
Eliminations Texas Partnerships 1994 5,581,123
-------------
664,753
=============
Balance at close of period $88,196,508
=============
Accumulated Depreciation December 31, 1996
- -------------------------------------------------------------------
Balance at beginning of period $10,391,954
Additions during period:
Depreciation 2,772,759
Write off of Properties transferred (4) (819,363)
Write off of Properties transferred (5) (69,152)
Eliminations Texas Partnerships 1996 819,363
------------
Balance at close of period $13,095,561
============
Accumulated Depreciation December 31, 1996
- -------------------------------------------------------------------
Balance at beginning of period $ 8,230,924
Additions during period:
Depreciation 2,916,742
Impairment of assets (596,212)
Write off of Properties transferred (3) (88,836)
Eliminations Texas Partnerships 1996 (819,363)
Eliminations Texas Partnerships 1995 748,699
-----------
Balance at close of period $10,391,954
===========
Accumulated Depreciation December 31, 1995
- -------------------------------------------------------------------
Balance at beginning of period $5,288,351
Additions during period:
Depreciation 2,917,191
Impairment of assets 600,000
Eliminations Texas Partnerships 1995 (748,699)
Eliminations Texas Partnerships 1994 174,081
-----------
Balance at close of period $8,230,924
===========
BOSTON FINANCIAL TAX CREDITS PLUS
(A Limited Partnership)
Annual Report on form 10-K
For The Year Ended March 31, 1998
Reports of Independent Auditors
<PAGE>
[Letterhead]
[LOGO]
HALBERT, KATZ & CO., P.C.
Philadelphia, Pennsylvania
INDEPENDENT AUDITORS' REPORT
To the Partners
Carolina Woods Associates II, Limited Partnership
Wilmington, Delaware
We have audited the accompanying balance sheets of Carolina Woods Associates II,
Limited Partnership as of December 31, 1997 and December 31, 1996, and the
related statements of income (loss), partners' capital and cash flows for the
years then ended. These financial statements are the responsibility of the
project's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above presents fairly, in
all material respects, the financial position of Carolina Woods Associates II,
Limited Partnership as of December 31, 1997 and December 31, 1996, and the
results of its operations, changes in partners' capital and cash flows for the
years then ended, in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
the report (shown on page 11) is presented for the purpose of additional
analysis and is not a required part of the basic financial statements of
Carolina Woods Associates II, Limited Partnership. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Halbert, Katz & Co., P.C.
January 30, 1998
<PAGE>
[Letterhead]
[LOGO]
HALBERT, KATZ & CO., P.C.
Philadelphia, Pennsylvania
INDEPENDENT AUDITORS' REPORT
To the Partners
Carolina Woods Associates II, Limited Partnership
Wilmington, Delaware
We have audited the accompanying balance sheets of Carolina Woods Associates II,
Limited Partnership as of December 31, 1996 and December 31, 1995, and the
related statements of income (loss), partners' capital and cash flows for the
years then ended. These financial statements are the responsibility of the
project's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above presents fairly, in
all material respects, the financial position of Carolina Woods Associates II,
Limited Partnership as of December 31, 1996 and December 31, 1995, and the
results of its operations, changes in partners' capital and cash flows for the
years then ended, in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
the report (shown on page 11) is presented for the purpose of additional
analysis and is not a required part of the basic financial statements of
Carolina Woods Associates II, Limited Partnership. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Halbert, Katz & Co., P.C.
January 30, 1997
<PAGE>
Letterhead]
[LOGO]
PATTERSON & KELLY
PROFESSIONAL ASSOCIATION
CERTIFIED PUBLIC ACCOUNTANTS
To the Partners
Walker Woods Partners, II, L.P.
Dover, Delaware 19901
Independent Auditors Report
We have audited the accompanying balance sheets of Walker Woods Partners, II,
L.P. as of December 31, 1997 and 1996, and the statements of income, cash flows
and owners' equity for the years then ended. These financial statements are the
responsibility of the company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Walker Woods Partners, II, L.P.
as of December 31, 1997 and 1996, and the results of its operations and its cash
flows and owners' equity for the years then ended in conformity with generally
accepted accounting principles.
/s/ Patterson & Kelly, P.A.
PATTERSON & KELLY, P.A.
Dover, Delaware
February 25, 1998
<PAGE>
Letterhead]
[LOGO]
PATTERSON & KELLY
PROFESSIONAL ASSOCIATION
CERTIFIED PUBLIC ACCOUNTANTS
To the Partners
Walker Woods Partners, II, L.P.
Dover, Delaware 19901
Independent Auditors Report
We have audited the accompanying balance sheets of Walker Woods Partners, II,
L.P. as of December 31, 1996 and 1995, and the statements of income, cash flows
and owners' equity for the years then ended. These financial statements are the
responsibility of the company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Walker Woods Partners, II, L.P.
as of December 31, 1996 and 1995, and the results of its operations and its cash
flows and owners' equity for the years then ended in conformity with generally
accepted accounting principles.
/s/ Patterson & Kelly, P.A.
PATTERSON & KELLY, P.A.
Dover, Delaware
February 15, 1997
<PAGE>
[Letterhead]
[LOGO]
Jorge del Manzano Venegas, C.P.A.
INDEPENDENT AUDITOR'S REPORT
To the Partners of,
Jardines Limited Dividend Partnership, S.E., L.P.
Juncos, Puerto Rico
I have audited the accompanying balance sheets of Jardines Limited Dividend
Partnership, S.E., L.P., a Delaware limited partnership, as of December 31, 1997
and 1996 and the related statements of operations, changes in partners' equity
and of cash flows for the years then ended. These financial statements are the
responsibility of the Partnership and of its management. My responsibility is to
express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Jardines Limited Dividend
Partnership, S.E., L.P. as of December 31, 1997 and 1996, and the results of its
operations, the changes in its partners' equity and its cash flows for the years
then ended, in conformity with generally accepted accounting principles.
continues........
<PAGE>
J.D.M, C.P.A.
To the Partners of,
Jardines Limited Dividend Partnership, S.E., L.P.
Page 2
My examinations were made primarily for the purpose of forming an opinion on the
basic financial statements taken as a whole. The additional information included
in this report is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subject to the auditing procedures applied in the examination of the basic
financial statements and, in my opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
San Juan, Puerto Rico
February 02, 1998
/s/ Jorge del Manzano Venegas
Stamp no. 1443881 of the
Puerto Rico Society of CPA's
was affixed to the original
<PAGE>
[Letterhead]
[LOGO]
Jorge del Manzano Venegas, C.P.A.
INDEPENDENT AUDITOR'S REPORT
To the Partners of,
Jardines Limited Dividend Partnership, S.E., L.P.
Juncos, Puerto Rico
I have audited the accompanying balance sheets of Jardines Limited Dividend
Partnership, S.E., L.P., a Delaware limited partnership, as of December 31, 1996
and 1995 and the related statements of operations, changes in partners' equity
and of cash flows for the years then ended. These financial statements are the
responsibility of the Partnership and of its management. My responsibility is to
express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Jardines Limited Dividend
Partnership, S.E., L.P. as of December 31, 1996 and 1995, and the results of its
operations, the changes in its partners' equity and its cash flows for the years
then ended, in conformity with generally accepted accounting principles.
continues........
<PAGE>
J.D.M, C.P.A.
To the Partners of,
Jardines Limited Dividend Partnership, S.E., L.P.
Page 2
My examinations were made primarily for the purpose of forming an opinion on the
basic financial statements taken as a whole. The additional information included
in this report is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subject to the auditing procedures applied in the examination of the basic
financial statements and, in my opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
San Juan, Puerto Rico
February 14, 1997
/s/ Jorge del Manzano Venegas
Stamp no. 1366201 of the
Puerto Rico Society of CPA's
was affixed to the original
<PAGE>
[Letterhead]
[LOGO]
O. DOUGLAS COVINGTON, C.P.A., P.A.
To The Partners
New Garden Associates
A Limited Partnership
Greensboro, North Carolina
I have audited the accompanying balance sheets of New Garden Associates, A
Limited Partnership, as of December 31, 1997 and 1996, and the related
statements of operations, changes in partners' equity and cash flows for the
years then ended. These financial statements are the responsibility of the
partnership's management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of New Garden Associates, A Limited
Partnership, as of December 31, 1997 and 1996, and the results of its
operations, changes in partners' equity and cash flows for the years then ended
in conformity with generally accepted accounting principles.
/s/O. DOUGLAS COVINGTON
O. DOUGLAS COVINGTON, CPA
Greensboro, North Carolina
February 10, 1998
<PAGE>
[Letterhead]
[LOGO]
O. DOUGLAS COVINGTON, C.P.A., P.A.
To The Partners
New Garden Associates
A Limited Partnership
Greensboro, North Carolina
I have audited the accompanying balance sheets of New Garden Associates, A
Limited Partnership, as of December 31, 1996 and 1995, and the related
statements of operations, changes in partners' equity and cash flows for the
years then ended. These financial statements are the responsibility of the
partnership's management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of New Garden Associates, A Limited
Partnership, as of December 31, 1996 and 1995, and the results of its
operations, changes in partners' equity and cash flows for the years then ended
in conformity with generally accepted accounting principles.
/s/O. DOUGLAS COVINGTON
O. DOUGLAS COVINGTON, CPA
Greensboro, North Carolina
February 10, 1997
<PAGE>
[Letterhead]
[LOGO]
Coopers & Lybrand
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
Broadway Tower Limited Partnership
We have audited the accompanying balance sheet of Broadway Tower Limited
Partnership as of December 31, 1997, and the related statements of operations,
partner's equity (deficiency), and cash flow for the year then ended. These
financial statements are the responsibility of the management of Broadway Tower
Limited Partnership. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Broadway Tower Limited
Partnership as of December 31, 1997, and the results of its operations, and its
cash flow for the year then ended in conformity with generally accepted
accounting principles.
/s/Coopers & Lybrand L.L.P.
Boston, Massachusetts
January 30, 1998
<PAGE>
[Letterhead]
[LOGO]
Coopers & Lybrand
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
Broadway Tower Limited Partnership
We have audited the accompanying balance sheet of Broadway Tower Limited
Partnership as of December 31, 1996, and the related statements of operations,
partner's equity (deficiency), and cash flow for the year then ended. These
financial statements are the responsibility of the management of Broadway Tower
Limited Partnership. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Broadway Tower Limited
Partnership as of December 31, 1996, and the results of its operations, and its
cash flow for the year then ended in conformity with generally accepted
accounting principles.
/s/Coopers & Lybrand L.L.P.
Boston, Massachusetts
January 31, 1997
<PAGE>
[Letterhead]
[LOGO]
Coopers & Lybrand
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
Broadway Tower Limited Partnership
We have audited the accompanying balance sheet of Broadway Tower Limited
Partnership as of December 31, 1995, and the related statements of operations,
partner's equity (deficiency), and cash flow for the year then ended. These
financial statements are the responsibility of the management of Broadway Tower
Limited Partnership. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Broadway Tower Limited
Partnership as of December 31, 1995, and the results of its operations, and its
cash flow for the year then ended in conformity with generally accepted
accounting principles.
/s/Coopers & Lybrand L.L.P.
Boston, Massachusetts
February 9, 1996
<PAGE>
[Letterhead]
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ZINNER & CO.
Cleveland, Ohio
INDEPENDENT AUDITORS' REPORT
To the Partners
Bancroft Street Limited Partnership
We have audited the accompanying balance sheets of Bancroft Street Limited
Partnership as of December 31, 1997 and 1996 and the related statements of
operations, partners' equity (deficit) and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bancroft Street Limited
Partnership as of December 31, 1997 and 1996 and the results of its operations
and its cash flows for the years then ended, in conformity with generally
accepted accounting principles.
/s/Zinner & Co.
January 27, 1998
<PAGE>
[Letterhead]
[LOGO]
ZINNER & CO.
Cleveland, Ohio
INDEPENDENT AUDITORS' REPORT
To the Partners
Bancroft Street Limited Partnership
We have audited the accompanying balance sheets of Bancroft Street Limited
Partnership as of December 31, 1996 and 1995 and the related statements of
operations, partners' equity (deficit) and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bancroft Street Limited
Partnership as of December 31, 1996 and 1995 and the results of its operations
and its cash flows for the years then ended, in conformity with generally
accepted accounting principles.
/s/Zinner & Co.
January 13, 1997
<PAGE>
[Letterhead]
[LOGO]
Haran & Associates Ltd.
INDEPENDENT AUDITOR'S REPORT
To the Partners
45TH & VINCENNES LIMITED PARTNERSHIP
Chicago, Illinois
We have audited the accompanying balance sheet of 45TH & VINCENNES LIMITED
PARTNERSHIP (a Limited Partnership) as of December 31, 1997, and the related
statements of profit and loss, changes in partners' equity and statement of cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
These standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audit provided a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 45TH & VINCENNES LIMITED
PARTNERSHIP at December 31, 1997, and its operations, changes in partners'
equity and its cash flows for the year then ended, in conformity with generally
accepted accounting principles.
/s/Haran & Associates LTD
HARAN & ASSOCIATES LTD
Certified Public Accountants
Wilmette, Illinois
Illinois Certificate No. 060-002892
Employer Identification No. 36-3097692
January 29, 1998
<PAGE>
[Letterhead]
[LOGO]
Haran & Associates Ltd.
INDEPENDENT AUDITOR'S REPORT
To the Partners
45TH & VINCENNES LIMITED PARTNERSHIP
Chicago, Illinois
We have audited the accompanying balance sheet of 45TH & VINCENNES LIMITED
PARTNERSHIP (a Limited Partnership) as of December 31, 1996, and the related
statements of operations, changes in partners' equity and statement of cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
These standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audit provided a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 45TH & VINCENNES LIMITED
PARTNERSHIP at December 31, 1996, and its operations, changes in partners'
equity and its cash flows for the year then ended, in conformity with generally
accepted accounting principles.
/s/Haran & Associates LTD
HARAN & ASSOCIATES LTD
Certified Public Accountants
Wilmette, Illinois
Illinois Certificate No. 060-002892
Employer Identification No. 36-3097692
January 21, 1997
<PAGE>
[Letterhead]
[LOGO]
Haran & Associates Ltd.
INDEPENDENT AUDITOR'S REPORT
To the Partners
45TH & VINCENNES LIMITED PARTNERSHIP
Chicago, Illinois
We have audited the accompanying balance sheet of 45TH & VINCENNES LIMITED
PARTNERSHIP (a Limited Partnership) as of December 31, 1995, and the related
statements of operations, changes in partners' equity and statement of cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
These standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audit provided a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 45TH & VINCENNES LIMITED
PARTNERSHIP as of December 31, 1995, and its operations, changes in partners'
equity and its cash flows for the year then ended, in conformity with generally
accepted accounting principles.
/s/Haran & Associates LTD
HARAN & ASSOCIATES LTD
Certified Public Accountants
Wilmette, Illinois
Illinois Certificate No. 060-002892
Employer Identification No. 36-3097692
February 4, 1996
<PAGE>
[Letterhead]
[LOGO]
Charles Bailly & Company P.L.L.P.
INDEPENDENT AUDITOR'S REPORT
The Partners
Duluth Limited Partnership II
Wahpeton, North Dakota
We have audited the accompanying balance sheets of Duluth Limited Partnership II
as of December 31, 1997 and 1996, and the related statements of operations,
partners' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Duluth Limited Partnership II
as of December 31, 1997 and 1996, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 8 to the
financial statements, the Partnership has suffered recurring vacancies and cash
deficiencies that raise substantial doubt about its ability to continue as a
going concern. Management's plans in regard to these matters are also described
in Note 8. The financial statements to not included any adjustments that might
result from the outcome of this uncertainty.
/s/Charles Bailly & Company P.L.L.P.
Fargo, North Dakota
January 21, 1998
<PAGE>
[Letterhead]
[LOGO]
Charles Bailly & Company P.L.L.P.
INDEPENDENT AUDITOR'S REPORT
The Partners
Duluth Limited Partnership II
Wahpeton, North Dakota
We have audited the accompanying balance sheets of Duluth Limited Partnership II
as of December 31, 1996 and 1995, and the related statements of operations,
partners' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Duluth Limited Partnership II
as of December 31, 1996 and 1995, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
/s/Charles Bailly & Company P.L.L.P.
Fargo, North Dakota
January 18, 1997
<PAGE>
[Letterhead]
[LOGO]
Charles Bailly & Company P.L.L.P.
INDEPENDENT AUDITOR'S REPORT
The Partners
Dakota Square Manor Limited Partnership
Wahpeton, North Dakota
We have audited the accompanying balance sheets of Dakota Square Manor Limited
Partnership as of December 31, 1997 and 1996, and the related statements of
operations, partners' equity and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Dakota Square Manor Limited
Partnership as of December 31, 1997 and 1996, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/Charles Bailly & Company P.L.L.P.
Fargo, North Dakota
January 21, 1998
<PAGE>
[Letterhead]
[LOGO]
Charles Bailly & Company P.L.L.P.
INDEPENDENT AUDITOR'S REPORT
The Partners
Dakota Square Manor Limited Partnership
Wahpeton, North Dakota
We have audited the accompanying balance sheets of Dakota Square Manor Limited
Partnership as of December 31, 1996 and 1995, and the related statements of
operations, partners' equity and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Dakota Square Manor Limited
Partnership as of December 31, 1996 and 1995, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/Charles Bailly & Company P.L.L.P.
Fargo, North Dakota
January 18, 1997
<PAGE>
[Letterhead]
[LOGO]
Charles Bailly & Company P.L.L.P.
INDEPENDENT AUDITOR'S REPORT
The Partners
Phoenix Housing Limited Partnership
Wahpeton, North Dakota
We have audited the accompanying balance sheets of Phoenix Housing Limited
Partnership as of December 31, 1997 and 1996, and the related statements of
operations, partners' equity and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Phoenix Housing Limited
Partnership as of December 31, 1997 and 1996, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/Charles Bailly & Company P.L.L.P.
Fargo, North Dakota
January 21, 1998
<PAGE>
[Letterhead]
[LOGO]
Charles Bailly & Company P.L.L.P.
INDEPENDENT AUDITOR'S REPORT
The Partners
Phoenix Housing Limited Partnership
Wahpeton, North Dakota
We have audited the accompanying balance sheets of Phoenix Housing Limited
Partnership as of December 31, 1996 and 1995, and the related statements of
operations, partners' equity and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Phoenix Housing Limited
Partnership as of December 31, 1996 and 1995, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/Charles Bailly & Company P.L.L.P.
Fargo, North Dakota
January 18, 1997
<PAGE>
[Letterhead]
[LOGO]
Haran & Associates Ltd.
INDEPENDENT AUDITOR'S REPORT
To the Partners
METROPOLITAN APARTMENTS LIMITED PARTNERSHIP
Chicago, Illinois
We have audited the accompanying balance sheet of METROPOLITAN APARTMENTS
LIMITED PARTNERSHIP (a Limited Partnership) as of December 31, 1997, and the
related statements of profit and loss (HUD 92410), changes in partners' equity
and statement of cash flows for the year then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
These standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of METROPOLITAN APARTMENTS LIMITED
PARTNERSHIP at December 31, 1997, and its operations, changes in partners'
equity and its cash flows for the year then ended, in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in the notes to the
financial statements, the Partnership is several months delinquent on its first
mortgage which raised substantial doubt about its ability to continue as a going
concern. the financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/s/Haran & Associates LTD
Wilmette, Illinois
January 23, 1998
<PAGE>
[Letterhead]
[LOGO]
Haran & Associates Ltd.
INDEPENDENT AUDITOR'S REPORT
To the Partners
METROPOLITAN APARTMENTS LIMITED PARTNERSHIP
Chicago, Illinois
We have audited the accompanying balance sheet of METROPOLITAN APARTMENTS
LIMITED PARTNERSHIP (a Limited Partnership) as of December 31, 1996, and the
related statements of profit and loss (HUD 92410), changes in partners' equity
and statement of cash flows for the year then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
These standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of METROPOLITAN APARTMENTS LIMITED
PARTNERSHIP at December 31, 1996, and its operations, changes in partners'
equity and its cash flows for the year then ended, in conformity with generally
accepted accounting principles.
/s/Haran & Associates LTD
HARAN & ASSOCIATES LTD
Certified Public Accountants
Wilmette, Illinois
Illinois Certificate No. 060-002892
Federal Identification No. 36-3097692
Audit Partner; James E.Haran (847) 853-2580
January 17, 1997
<PAGE>
[Letterhead]
[LOGO]
Haran & Associates Ltd.
INDEPENDENT AUDITOR'S REPORT
To the Partners
METROPOLITAN APARTMENTS LIMITED PARTNERSHIP
Chicago, Illinois
We have audited the accompanying statement of assets, liabilities and partners'
equity-income tax basis of METROPOLITAN APARTMENTS LIMITED PARTNERSHIP (a
Limited Partnership) as of December 31, 1995, and the related statements of
income (loss)-income tax basis, changes in partners' equity-income tax basis and
statement of cash flows-income tax basis for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
These standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the assets, liabilities and partners' equity of
METROPOLITAN APARTMENTS LIMITED PARTNERSHIP at December 31, 1995, and its income
(loss), changes in partners' equity and its cash flows for the year then ended,
in conformity with generally accepted accounting principals.
/s/Haran & Associates LTD
HARAN & ASSOCIATES LTD
Certified Public Accountants
Wilmette, Illinois
Illinois Certificate No. 060-002892
Federal Identification No. 36-3097692
Audit Partner; James E.Haran (847) 853-2580
January 19, 1996
<PAGE>
[Letterhead]
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MILLER WELLE HEISER
INDEPENDENT AUDITOR'S REPORT
To the Partners
Cottage Homesteads of Aspen Limited Partnership
St. Paul, Minnesota
We have audited the balance sheets of COTTAGE HOMESTEADS OF ASPEN LIMITED
PARTNERSHIP as of December 31, 1997 and 1996, and the related statements of
income, partners' equity, and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of COTTAGE HOMESTEADS OF ASPEN
LIMITED PARTNERSHIP as of December 31, 1997 and 1996, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/Miller, Welle, Heiser & Co, Ltd.
MILLER, WELLE, HEISER & CO., LTD.
Certified Public Accountants
St. Cloud, Minnesota
January 28, 1998
<PAGE>
[Letterhead]
[LOGO]
MILLER WELLE HEISER
INDEPENDENT AUDITOR'S REPORT
To the Partners
Cottage Homesteads of Aspen Limited Partnership
St. Paul, Minnesota
We have audited the balance sheets of COTTAGE HOMESTEADS OF ASPEN LIMITED
PARTNERSHIP as of December 31, 1996 and 1995, and the related statements of
income, partners' equity, and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of COTTAGE HOMESTEADS OF ASPEN
LIMITED PARTNERSHIP as of December 31, 1996 and 1995, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/Miller, Welle, Heiser & Co, Ltd.
MILLER, WELLE, HEISER & CO., LTD.
Certified Public Accountants
St. Cloud, Minnesota
January 25, 1997
<PAGE>
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DIXON ODOM, P.L.L.C.
Highpoint, N.C.
To the Partners
Atkins Glen Limited Partnership
Raleigh, North Carolina
We have compiled the accompanying balance sheets of Atkins Glen Limited
Partnership as of December 31, 1997 and 1996 and the related statements of
operations, partners' equity (deficit), and cash flows for the year then ended,
in accordance with Statements on Standards for Accounting and Review Services
issued by the American Institute of Certified Public Accountants.
A compilation is limited to presenting in the form of financial statements
information that is the representation of management. We have not audited or
reviewed the accompanying 1997 financial statements and, accordingly, do not
express an opinion or any other form of assurance on them.
/s/ Dixon Odom, P.L.L.C.
January 30, 1998
<PAGE>
[Letterhead]
[LOGO]
DIXON, ODOM & CO., L.L.P.
Highpoint, NC
To the Partners
Atkins Glen Limited Partnership
Raleigh, North Carolina
We have compiled the accompanying balance sheet of Atkins Glen Limited
Partnership as of December 31, 1996 and the related statements of operations,
partners' equity (deficit), and cash flows for the year then ended, in
accordance with Statements on Standards for Accounting and Review Services
issued by the American Institute of Certified Public Accountants.
A compilation is limited to presenting in the form of financial statements
information that is the representation of management. We have not audited or
reviewed the accompanying 1996 financial statements and, accordingly, do not
express an opinion or any other form of assurance on them.
The financial statements for the year ended December 31, 1995 were audited by
other accountants and they expressed an unqualified opinion on them in their
report dated January 27, 1996, but they not performed any auditing procedures
since that date.
/s/ Dixon, Odom & Co. L.L.P
February 10, 1997
<PAGE>
[Letterhead]
[LOGO]
The Daniel Professional Group, Inc.
Independent Auditors' Report
To the General Partners of
Atkins Glen Limited Partnership
(A North Carolina Limited Partnership)
We have audited the accompanying balance sheets of Atkins Glen Limited
Partnership as of December 31, 1995 and the related statements of revenues and
expenses and changes in partners' equity, statements of partners' equity
(deficit) and of cash flows for the year then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit. The
financial statements of Atkins Glen Limited Partnership as of December 31, 1994,
were audited by other auditors whose report dated January 13, 1995, expressed an
unqualified opinion on those statements.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Atkins Glen Limited Partnership
as of December 31, 1995 and the results of its operations and its cash flows for
the year then ended, in conformity with generally accepted accounting
principles.
/s/ The Daniel Professional Group, Inc.
January 22, 1996
Winston-Salem, North Carolina
<PAGE>
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DIXON ODOM, P.L.L.C.
Highpoint, NC
INDEPENDENT AUDITORS' REPORT
To the Partners
Kings Grant Court Limited Partnership
Raleigh, North Carolina
We have audited the accompanying balance sheets of Kings Grant Court Limited
Partnership as of December 31, 1997 and 1996 and the related statements of
operations, partners' equity (deficit), and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Kings Grant Court Limited
Partnership as of December 31, 1997 and 1996, and the results of its operations
and its cash flows for the years then ended on the basis of accounting described
in Note A.
/s/ Dixon Odom, P.L.L.C.
January 23, 1998
<PAGE>
[Letterhead]
[LOGO]
DIXON, ODOM & CO., L.L.P.
Highpoint, NC
INDEPENDENT AUDITORS' REPORT
To the Partners
Kings Grant Court Limited Partnership
Raleigh, North Carolina
We have audited the accompanying balance sheets of Kings Grant Court Limited
Partnership as of December 31, 1996 and 1995 and the related statements of
operations, partners' equity (deficit), and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
As described in Note A, the Partnership's policy is to prepare its financial
statements on the accounting basis used for federal income tax purposes, which
is a comprehensive basis of accounting other than generally accepted accounting
principles.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Kings Grant Court Limited
Partnership as of December 31, 1996 and 1995, and the results of its operations
and its cash flows for the years then ended, on the basis of accounting
described in Note A.
/s/ Dixon, Odom & Co., L.L.P.
February 7, 1997
<PAGE>
[Letterhead]
[LOGO]
DIXON ODOM, P.L.L.C.
Highpoint, NC
INDEPENDENT AUDITORS' REPORT
To the Partners
Chestnut Plains Limited Partnership
Raleigh, North Carolina
We have audited the accompanying balance sheets of Chestnut Plains Limited
Partnership as of December 31, 1997 and 1996 and the related statements of
operations, partners' equity (deficit), and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Chestnut Plains Limited
Partnership as of December 31, 1997 and 1996 and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/ Dixon Odom, P. L.L.C.
January 23, 1998
<PAGE>
[Letterhead]
[LOGO]
DIXON, ODOM & CO., L.L.P.
Highpoint, N.C.
INDEPENDENT AUDITORS' REPORT
To the Partners
Chestnut Plains Limited Partnership
Raleigh, North Carolina
We have audited the accompanying balance sheets of Chestnut Plains Limited
Partnership as of December 31, 1996 and 1995 and the related statements of
operations, partners' equity (deficit), and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Chestnut Plains Limited
Partnership as of December 31, 1996 and 1995 and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/ Dixon, Odom & Co. L.L.P.
February 7, 1997
<PAGE>
[Letterhead]
[LOGO]
Dixon Odom, P. L.L.C.
Highpoint, NC
INDEPENDENT AUDITORS' REPORT
To the Partners
Long Creek Court Limited Partnership
Raleigh, North Carolina
We have compiled the accompanying balance sheet of Long Creek Court Limited
Partnership as of December 31, 1997 and the related statements of operations,
partners' equity (deficit) and cash flows for the year then ended, in accordance
with Statements of Standards for Accounting and Review Services issued by the
American Institute of Certified Public Accountants.
A compilation is limited to presenting in the form of financial statements
information that is the representation of management. We have not audited or
reviewed the accompanying 1997 financial statements and, accordingly, do not
express an opinion or any other form of assurance on them.
The 1996 financial statements of Long Creek Court Limited Partnership were
compiled by other accountants whose report dated January 23, 1997 stated that
they did not express an opinion or any other form of assurance on those
statements.
/s/ Dixon Odom, P. L.L.C.
January 28, 1997
<PAGE>
[Letterhead]
[LOGO]
DIXON, ODOM & CO., L.L.P.
Highpoint, NC
INDEPENDENT AUDITORS' REPORT
To the Partners
Long Creek Court Limited Partnership
Raleigh, North Carolina
We have audited the accompanying balance sheets of Long Creek Court Limited
Partnership as of December 31, 1996 and 1995 and the related statements of
operations, partners" equity (deficit), and cash flows for the years then ended.
These financial statements are the responsibility of the Partnerships'
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all materiel respects, the financial position of Long Creek Court Limited
Partnership as of December 31, 1996 and 1995 and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principle.
/s/Dixon, Odom & Co. L.L.P.
January 26, 1997
<PAGE>
[Letterhead]
[LOGO]
JOHN D. SCHULER
Independent Auditor's Report
To the Partners
Prince Hall Housing Associates, Limited
Marlton, New Jersey
We have audited the accompanying balance sheets of Prince Hall Housing
Associates, Limited, An Oklahoma Limited Partnership, Section 8 Number
OK56-E000-014, as of December 31, 1996, and 1995, and the related statements of
income and expense, changes in partners' (deficiency) and cash flows for the
year ended December 31, 1996. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Prince Hall Housing Associates,
Limited, as of December 31, 1996, and 1995, and the results of its operations
and the changes in partners' (deficiency) and cash flows for the year ended
December 31, 1996, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As described more fully in Notes
13 and 14, shown in the financial statements, the Partnership incurred
significant operating losses including the year ended December 31, 1996, and as
of that date, had a working capital deficiency of $663,737.
<PAGE>
The Company is not aware of any alternate sources of capital to meet such
demands, if made. Those conditions raise substantial doubt about the Company's
ability to continue as a going concern. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty except
for the recognition of the impairment loss through the statement of profit and
loss.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 18, 1997, on our
consideration of Prince Hall Housing Associates, Limited's internal control
structure and reports dated January 18, 1997, on its compliance with specific
requirements applicable to major HUD programs, specific requirements applicable
to Affirmative Fair Housing, and specific requirements applicable to nonmajor
HUD program transactions. <PAGE>
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information shown on pages 17 to 23 is presented for purposes of additional
analysis and not a required part of the basic financial statements of the
Partnership. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the financial statements
taken as a whole.
/s/John D. Schuler
Tulsa, Oklahoma
January 18, 1997
<PAGE>
[Letterhead]
[LOGO]
BERC &
FOX LIMITED
Independent Auditors' Report
To the Partners,
Exodus/Lyndale/Windsor Limited Partnership:
We have audited the accompanying balance sheets of Exodus/Lyndale/Windsor
Limited Partnership (a Minnesota Limited Partnership) as of December 31, 1997
and 1996, and the related statements of operations, partners' equity and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Exodus/Lyndale/Windsor Limited
Partnership as of December 31, 1997 and 1996, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/ Berc & Fox Limited
Minneapolis, Minnesota
January 23, 1998
<PAGE>
[Letterhead]
[LOGO]
BERC &
FOX LIMITED
Independent Auditors' Report
To the Partners,
Exodus/Lyndale/Windsor Limited Partnership:
We have audited the accompanying balance sheets of Exodus/Lyndale/Windsor
Limited Partnership (a Minnesota Limited Partnership) as of December 31, 1996
and 1995, and the related statements of operations, partners' equity and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Exodus/Lyndale/Windsor Limited
Partnership as of December 31, 1996 and 1995, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/ Berc & Fox Limited
Minneapolis, Minnesota
January 23, 1997
<PAGE>
[Letterhead]
[LOGO]
HUNGERFORD & CO. Certified Public Accountants
Southgate, Michigan
To the Partners
Vista Villa/MHT Limited Dividend Housing
Association Limited Partnership
Southfield, Michigan
We have audited the accompanying Balance Sheet of Vista Villa/MHT Limited
Dividend Housing Association Limited Partnership (a Michigan limited
partnership), MSHDA Development No. 906 as of December 31, 1997 and the related
Statements of Profit and Loss, Partners' Equity and Cash Flow for the year then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Vista Villa/MHT Limited
Dividend Housing Association Limited Partnership at December 31, 1997 and the
results of its operations and its cash flow for the year then ended, in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated February 12, 1998 on our consideration of Vista Villa/MHT Limited Dividend
Housing Association Limited Partnership's internal control structure and a
report dated February 11, 1998 on its compliance with laws and regulation.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary data on pages 12
through 16 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated, in all material respects, in
relation to the financial statements taken as a whole.
/s/Hungerford & Co
February 11, 1998
<PAGE>
[Letterhead]
[LOGO]
HUNGERFORD & CO. Certified Public Accountants
Southgate, Michigan
To the Partners
Vista Villa/MHT Limited Dividend Housing
Association Limited Partnership
Southfield, Michigan
We have audited the accompanying Balance Sheet of Vista Villa/MHT Limited
Dividend Housing Association Limited Partnership (a Michigan limited
partnership), MSHDA Development No. 906 as of December 31, 1996 and the related
Statements of Profit and Loss, Partners' Equity and Cash Flow for the year then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Vista Villa/MHT Limited
Dividend Housing Association Limited Partnership at December 31, 1996 and the
results of its operations and its cash flow for the year then ended, in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated February 12, 1997 on our consideration of Vista Villa/MHT Limited Dividend
Housing Association Limited Partnership's internal control structure and a
report dated February 12, 1997 on its compliance with laws and regulation.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary data on pages 12
through 16 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated, in all material respects, in
relation to the financial statements taken as a whole.
/s/Hungerford & Co
February 12, 1997
<PAGE>
[Letterhead]
[LOGO]
HUNGERFORD & CO. Certified Public Accountants
Southgate, Michigan
To the Partners
Vista Villa/MHT Limited Dividend Housing
Association, Limited Partnership
Southfield, Michigan
We have audited the accompanying Balance Sheet of Vista Villa/MHT Limited
Dividend Housing Association Limited Partnership (a Michigan limited
partnership), MSHDA Development No. 906 as of December 31, 1995 and the related
Statements of Profit and Loss, Partners' Equity and Cash Flow for the year then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Vista Villa/MHT Limited
Dividend Housing Association Limited Partnership at December 31, 1995 and the
results of its operations and its cash flow for the year then ended, in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated February 5, 1996 on our consideration of Vista Villa/MHT Limited Dividend
Housing Association Limited Partnership's internal control structure and a
report dated February 5, 1996 on its compliance with laws and regulation.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplementary data on pages 12 through 16 is
presented for purposes of additional analysis and is not a required part of the
basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated, in all material respects, in relation to the
financial statements taken as a whole.
/s/Hungerford & Co
February 5, 1996
<PAGE>
[Letterhead]
[LOGO]
Reznick Fedder & Silverman
INDEPENDENT AUDITOR'S REPORT
To the Partners
Linden Square Limited Dividend
Housing Association Limited Partnership
We have audited the financial statements on Linden Square Dividend Housing
Association Limited Partnership, MSHDA Development No.: 918, as of and for the
year ended December 31, 1997, and have issued our report thereon dated February
6, 1998.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement.
The management of the Linden Square Limited Dividend Housing Association Limited
Partnership is responsible for establishing and maintaining internal control. In
fulfilling this responsibility, estimates and judgments by management are
required to asses the expected benefits and related costs of controls. The
objectives of internal control. In fulfilling this responsibility, estimates and
judgments by management are required to assess the expected benefits and related
costs of controls. The objectives of internal control are to provide management
with reasonable, but not absolute, assurance that assets are safeguarded against
loss from unauthorized use or disposition, that transactions are executed in
accordance with management's authorization and recorded property to permit the
preparation of the financial statements in accordance with generally accepted
accounting principles. Because of inherent limitations in any internal control,
errors, fraud or instances or noncompliance may nevertheless occur and not be
detected. Also, projection of any evaluation of internal control to future
periods in subject to the risk that procedures may become inadequate because of
changes in conditions or that the effectiveness of the design of controls may
deteriorate.
In planning and performing our audit of the financial statements of Linden
Square Limited Dividend Housing Association Limited Partnership for the year
ended December 31, 1997, we obtained an understanding of the design of relevant
controls and determined whether they have been placed in operation, and we
assessed control risk in order to determine our auditing procedure for the
purpose of expressing our opinion on the financial statements and not to provide
an opinion on internal control. Accordingly, we do not express such n opinion.
Our consideration of internal control would not necessarily disclose all matters
in internal control that might be material weaknesses under standards
established b the American Institute of Certified Pubic Accountants. A material
weakness is a reportable condition in which the design or operation of one or
more of the specific internal control elements does not reduce to a relatively
low level the risk that errors or fraud in amounts that would be material in
relation to the financial statements being audited may occur and not be detected
within a timely period by employees in the normal course of performing their
assigned functions. We noted no matters involving the internal control and its
operations that we consider to be material weaknesses as defined above.
Additionally, no management letter was issued in relation to our audit of the
financial statements of Linden Square Limited Dividend Housing Association
Limited Partnership as of and for the year ended December 31, 1997.
This report is intended for the information of management and the Michigan State
Housing Development Authority. However, this report is a matter of public record
and its distribution in not limited.
/s/Reznick Fedder & Silverman
Charlotte, North Carolina
February 6, 1998
<PAGE>
[Letterhead]
[LOGO]
Reznick Fedder & Silverman
INDEPENDENT AUDITOR'S REPORT
To the Partners
Linden Square Limited Dividend
Housing Association Limited Partnership
We have audited the accompanying balance sheet of Linden Square Limited Dividend
Housing Association Limited Partnership as of December 31, 1996, and the related
statements of profit and loss (on HUD Form No. 92410), partners' capital and
cash flows for the year then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Linden Square Limited Dividend
Housing Association Limited Partnership as of December 31, 1996, and the results
of its operations, the changes in partners' capital and cash flows for the year
then ended, in conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 18
through 21 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole. <PAGE> In accordance with
Government Auditing Standards, we have also issued a report dated January 30,
1997 on our consideration of Linden Square Limited Dividend Housing Association
Limited Partnership's internal control structure and a report dated January 30,
1997 on laws and regulations applicable to the financial statements.
/s/Reznick Fedder & Silverman
Bethesda, Maryland
January 30, 1997
<PAGE>
[Letterhead]
[LOGO]
Reznick Fedder & Silverman
INDEPENDENT AUDITOR'S REPORT
To the Partners
Linden Square Limited Dividend
Housing Association Limited Partnership
We have audited the accompanying balance sheet of Linden Square Limited Dividend
Housing Association Limited Partnership as of December 31, 1995, and the related
statements of profit and loss (on HUD Form No. 92410), partners' equity and cash
flows for the year then ended. These financial statements are the responsibility
of the partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Linden Square Limited Dividend
Housing Association Limited Partnership as of December 31, 1995, and the results
of its operations, the changes in partners' equity and cash flows for the year
then ended, in conformity with generally accepted accounting principles.
<PAGE>
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 22
through 24 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects, in
relation to the financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report
dated January 26, 1996 on our consideration of Linden Square Limited Dividend
Housing Association Limited Partnership's internal control structure and a
report dated January 26, 1996 on laws and regulations applicable to the
financial statements.
/s/Reznick Fedder & Silverman
Bethesda, Maryland
January 26, 1996
<PAGE>
[Letterhead]
[LOGO]
KPMG Peat Marwick LLP
Atlanta, GA
Independent Auditors' Report
The Partners
Tree Trail Apartments, A Limited Partnership:
We have audited the balance sheets of Tree Trail Apartments, A Limited
Partnership as of December 31, 1997 and 1996, and the related statements of
loss, partners' capital, and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Tree Trail Apartments, A
Limited Partnership as of December 31, 1997 and 1996, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
February 16, 1998
<PAGE>
[Letterhead]
[LOGO]
KPMG Peat Marwick LLP
Atlanta, GA
Independent Auditors' Report
The Partners
Tree Trail Apartments, A Limited Partnership:
We have audited the balance sheets of Tree Trail Apartments, A Limited
Partnership as of December 31, 1996 and 1995, and the related statements of
loss, partners' capital, and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Tree Trail Apartments, A
Limited Partnership as of December 31, 1996 and 1995, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
February 6, 1997
<PAGE>
[Letterhead]
[LOGO]
KPMG Peat Marwick LLP
Atlanta, GA
Independent Auditors' Report
The Partners
Meadow Wood Townhomes, A Limited Partnership:
We have audited the balance sheets of Meadow Wood Townhomes, A Limited
Partnership as of December 31, 1997 and 1996, and the related statements of
loss, partners' capital, and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Meadow Wood Townhomes, A
Limited Partnership as of December 31, 1997 and 1996, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
February 16, 1998
<PAGE>
[Letterhead]
[LOGO]
KPMG Peat Marwick LLP
Atlanta, GA
Independent Auditors' Report
The Partners
Meadow Wood Townhomes, A Limited Partnership:
We have audited the balance sheets of Meadow Wood Townhomes, A Limited
Partnership as of December 31, 1996 and 1995, and the related statements of
loss, partners' capital, and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Meadow Wood Townhomes, A
Limited Partnership as of December 31, 1996 and 1995, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
January 29, 1997
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[Letterhead]
[LOGO]
Richard J. Bellew
Independent Auditor's Report
To the Partners,
99 Livingston Associates, L.P.
I have audited the accompanying balance sheet of 99 LIVINGSTON ASSOCIATES, L.P.
(the Partnership) as of December 31, 1997 and the related statements of
operations, partners' capital and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of 99 LIVINGSTON ASSOCIATES, L.P. as
of December 31, 1997 and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.
/s/ Richard J. Bellew
Garrison, New York
February 17, 1998
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[Letterhead]
[LOGO]
Richard J. Bellew
Independent Auditor's Report
To the Partners,
99 Livingston Associates, L.P.
I have audited the accompanying balance sheet of 99 LIVINGSTON ASSOCIATES, L.P.
(the Partnership) as of December 31, 1996 and the related statements of
operations, partners' capital and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of 99 LIVINGSTON ASSOCIATES, L.P. as
of December 31, 1996 and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.
/s/ Richard J. Bellew
Garrison, New York
February 17, 1997
<PAGE>
[Letterhead]
[LOGO]
Richard J. Bellew
Independent Auditor's Report
To the Partners,
99 Livingston Associates, L.P.
I have audited the accompanying balance sheet of 99 Livingston Associates, L.P.
(the Partnership) as of December 31, 1995 and the related statements of
operations, partners' capital and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audits in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of 99 Livingston Associates, L.P. as
of December 31, 1995 and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.
/s/ Richard J. Bellew
Garrison, New York
February 9, 1996
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Letterhead]
[LOGO]
POST, FORD & GUSTAVSON
Independent Auditor's Report
To the Partners
Hudson Square Apartments Company
Houston, Texas
We have audited the accompanying balance sheet of Hudson Square Apartments
Company Project No. 064-44036, (a Limited Partnership) as of December 31, 1997
and the related statements of income, partners' capital, and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's Management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and with generally accepted government auditing standards for financial and
compliance audits issued by the Comptroller General of the United States. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of HUD Project No. 064-44036 at
December 31, 1997 and the results of its operations, charges in partners'
capital and its cash flows for the year then ended, in conformity with generally
accepted accounting principles.
In accordance with Government Auditing Standards and the consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
urban development, we have also issued a report dated January 15, 1998, on our
consideration of Hampton Village Limited Partnership's internal control, and
reports dated January 15, 1998, on its compliance with specific requirements
applicable to major HUD programs and specific requirements applicable to
Affirmative Fair Housing.
/s/Post Ford & Gustovson
Shreveport, Louisiana
January 15, 1998
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Letterhead]
[LOGO]
POST, FORD & GUSTAVSON
Independent Auditor's Report
To the Partners
Hudson Square Apartments Company
Houston, Texas
We have audited the accompanying balance sheet of Hudson Square Apartments
Company Project No. 064-44036, (a Limited Partnership) as of December 31, 1996
and the related statements of income, partners' capital, and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's Management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and with generally accepted government auditing standards for financial and
compliance audits issued by the Comptroller General of the United States. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of HUD Project No. 064-44036 at
December 31, 1996 and the results of its operations and its cash flows for the
year then ended, in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the reports (shown
on pages 13 through 17) are presented for the purposes of additional analysis
and are not a required part of the financial statements of the HUD Project No.
064-44036. Such information has been subjected to the auditing procedures
applied in the audit of the financial statements and, in our opinion, is fairly
presented in all material respects in relation to the financial statements taken
as a whole.
/s/Post Ford & Gustovson
Shreveport, Louisiana
February 10, 1997
PAGE>
[Letterhead]
[LOGO]
POST, FORD & GUSTAVSON
Independent Auditor's Report
To the Partners
Hudson Square Apartments Company
Houston, Texas
We have audited the accompanying balance sheet of Hudson Square Apartments
Company Project No. 064-44036, (a Limited Partnership) as of December 31, 1995
and the related statements of income, partners' capital, and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and with generally accepted government auditing standards for financial and
compliance audits issued by the Comptroller General of the United States. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of HUD Project No. 064-44036 at
December 31, 1995 and the results of its operations and its cash flows or the
year then ended, in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the reports (shown
on pages 13 through 17) are presented for purposes of additional analysis and
are not a required part of the financial statements of the HUD Project No.
064-44036. Such information has been subjected to the auditing procedures
applied in the audit of the financial statements and, in our opinion, is fairly
stated in all material respects in relation to the financial statements taken as
a whole.
/s/Post Ford & Gustovson
Shreveport, Louisiana
February 10, 1996
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[Letterhead]
[LOGO]
L.P. MARTIN & COMPANY
Glen Allen, Virginia
Independent Auditors' Report
To the Partners
Pilot House Associates, L.P.
We have audited the accompanying balance sheet of Pilot House Associates, L.P.,
a Virginia Limited Partnership (the "Partnership"), as of December 31, 1997, and
the related statements of operations, changes in partners' capital, and cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the assets, liabilities and partners' capital of Pilot
House Associates, L.P. at December 31, 1997, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/L.P. Martin & Company P.C.
January 28, 1998
<PAGE>
[Letterhead]
[LOGO]
L.P. MARTIN & COMPANY
Glen Allen, Virginia
Independent Auditors' Report
To the Partners
Pilot House Associates, L.P.
We have audited the accompanying statement of assets, liabilities and partners'
capital of Pilot House Associates, L.P., a Virginia Limited Partnership (the
"Partnership"), as of December 31, 1996, and the related statements of
operations, changes in partners' capital, and cash flows for the year then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the assets, liabilities and partners' capital of Pilot
House Associates, L.P. at December 31, 1996, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/L.P. Martin & Company P.C.
January 29, 1997
<PAGE>
[Letterhead]
[LOGO]
L.P. MARTIN & COMPANY
Glen Allen, Virginia
Independent Auditor's Report
To the Partners
Pilot House Associates, L.P.
We have audited the accompanying statement of assets, liabilities and partners'
capital of Pilot House Associates, L.P., a Virginia Limited Partnership (the
"Partnership"), as of December 31, 1995, and the related statements of
operations, changes in partners' capital, and cash flows for the year then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the assets, liabilities and partners' capital of Pilot
House Associates, L.P. at December 31, 1995, and the results of its operations
and its cash flows for the year then ended in accordance with generally accepted
accounting principles.
/s/L.P. Martin & Company P.C.
February 11, 1996
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[Letterhead]
[LOGO]
L.P. MARTIN & COMPANY
Glen Allen, Virginia
Independent Auditors' Report
To the Partners
Preston Place Associates, L.P.
We have audited the accompanying balance sheet of Preston Place Associates,
L.P., a Virginia Limited Partnership (the "Partnership"), as of December 31,
1997, and the related statements of operations, changes in partners' capital,
and cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the assets, liabilities and partners' capital of Preston
Place Associates, L.P. at December 31, 1997, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/L.P. Martin & Company P.C.
January 28, 1998
<PAGE>
[Letterhead]
[LOGO]
L.P. MARTIN & COMPANY
Glen Allen, Virginia
Independent Auditors' Report
To the Partners
Preston Place Associates, L.P.
We have audited the accompanying statement of assets, liabilities and partners'
capital of Preston Place Associates, L.P., a Virginia Limited Partnership (the
"Partnership"), as of December 31, 1996, and the related statements of
operations, changes in partners' capital, and cash flows for the year then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the assets, liabilities and partners' capital of Preston
Place Associates, L.P. at December 31, 1996, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/L.P. Martin & Company P.C.
January 29, 1997
<PAGE>
[Letterhead]
[LOGO]
L.P. MARTIN & COMPANY
Glen Allen, Virginia
Independent Auditor's Report
To the Partners
Preston Place Associates, L.P.
We have audited the accompanying statement of assets, liabilities and partners'
capital of Preston Place Associates, L.P., a Virginia Limited Partnership (the
"Partnership"), as of December 31, 1995, and the related statements of
operations, changes in partners' capital, and cash flows for the year then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the assets, liabilities and partners' capital of Preston
Place Associates, L.P. at December 31, 1995, and the results of its operations
and its cash flows for the year then ended in accordance with generally accepted
accounting principles.
/s/L.P. Martin & Company P.C.
January 26, 1996
<PAGE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 216,829
<SECURITIES> 1,401,639
<RECEIVABLES> 000
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 000
<PP&E> 000
<DEPRECIATION> 000
<TOTAL-ASSETS> 19,586,732<F1>
<CURRENT-LIABILITIES> 000
<BONDS> 000
<COMMON> 000
000
000
<OTHER-SE> 18,187,014
<TOTAL-LIABILITY-AND-EQUITY> 19,586,732<F2>
<SALES> 000
<TOTAL-REVENUES> 302,486<F3>
<CGS> 000
<TOTAL-COSTS> 000
<OTHER-EXPENSES> 1,936,106<F4>
<LOSS-PROVISION> 000
<INTEREST-EXPENSE> 20,532
<INCOME-PRETAX> 000
<INCOME-TAX> 000
<INCOME-CONTINUING> 000
<DISCONTINUED> 000
<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> (3,131,494)<F5>
<EPS-PRIMARY> (86.62)
<EPS-DILUTED> 000
<FN>
<F1>Included in total assets: Investments in Local Limited Partnerships
$16,342,634, Other investments $1,432,375 and Other assets $21,859. <F2>Included
in Total Liabilities and Equity: Accounts payable to affiliates $1,042,390 and
Accounts payable and accrued expenses $357,328. <F3>Total revenue includes:
Rental $85,552, Investment $91,226, Accretion of Original Issue Discount
$106,661 and Other $19,047. <F4>Included in Other Expenses: Asset Management
Fees $170,028, General and Administrative $194,458, Property Management Fees
$8,268, Rental operations, exclusive of depreciation $61,983, Provision for
valuation of real estate $1,383,384, Depreciation $52,185 and Amortization
$32,135. <F5>Net loss reflects: Equity in losses of Local Limited Partnerships
of $1,546,727, loss on liquidation of interest in Local Limited Partnership of
$4,182, gain on transfer and liquidation of $73,252 and minority interest in
loss of Local Limited Partnerships $685.
</FN>
</TABLE>
