FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission file number: 33-76970
WNC CALIFORNIA HOUSING TAX CREDITS IV, L.P., Series 4 through 9
(Exact name of registrant as specified in its charter)
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
California 33-0531301 (Series 4) &
33-0676287 (Series 5)
WNC CALIFORNIA HOUSING TAX CREDITS IV, L.P., Series 4 through 9
3158 Redhill Avenue, Suite 120, Costa Mesa, CA 92626
(Address of principal executive offices)
(714) 662-5565
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 [ ]
<PAGE>
WNC CALIFORNIA HOUSING TAX CREDITS IV, L.P., Series 4 through 9
(A California Limited Partnership)
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED June 30, 1996
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements- Series 4
Balance Sheets, June 30, 1996 and December 31, 1995........................4
Statement of Operations
For the three and six months ended June 30, 1996 and 1995................5
Statement of Partners' Equity
For the six months ended June 30, 1996 and 1995..........................6
Statement of Cash Flows
For the six months ended June 30, 1996 and 1995..........................7
Notes to Financial Statements
Item 1. Financial Statements- Series 5
Balance Sheets, June 30, 1996 and December 31, 1995........................9
Statement of Operations...................................................10
For the Period from February 26, 1996
(Date Operations commenced) to June 30, 1996
Statement of Partners' Equity.............................................11
For the Period from February 26, 1996
(Date Operations commenced) to June 30, 1996
Statement of Cash Flows...................................................12
For the Period from February 26, 1996
(Date Operations commenced) to June 30, 1996
Notes to Financial Statements.............................................13
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.........................
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K..................................14
Signatures................................................................15
-2-
<PAGE>
WNC CALIFORNIA HOUSING TAX CREDITS IV, L.P., SERIES 4
(A California Limited Partnership)
BALANCE SHEETS
June 30, 1996 and December 31, 1995
1996 1995
------ ------
ASSETS
Cash and cash equivalents $ 3,275,565 $ 3,827,214
Offering costs reimbursements due
from affiliates -Note 2 142,141
Investment in limited
partnerships - Note 3 8,341,649 8,494,018
Other assets 12,236 25,824
------- -------
$ 11,771,591 $ 12,347,056
========== ==========
LIABILITIES AND PARTNERS' EQUITY
Liabilities:
Payable to limited partnership - Note 5 $ 2,101,640 $ 2,785,857
Accrued fees and expenses due to
general partner and affiliates - Note 4 92,996 102,526
------- -------
Total liabilities 2,194,636 2,888,383
--------- ---------
Comitments and contingencies - Note 8
Partners' equity (deficit):
General partner (14,524) (14,581)
Limited partners (25,000 units authorized,
11,500 issued and outstanding) 9,591,479 9,473,254
--------- ---------
Total partners' equity 9,576,955 9,458,673
--------- ---------
$ 11,771,591 $ 12,347,056
========== ==========
UNAUDITED
See Accompanying Notes to Financial Statements
-3-
<PAGE>
WNC CALIFORNIA HOUSING TAX CREDITS IV, L.P., SERIES 4
(A California Limited Partnership)
STATEMENT OF OPERATIONS
For the Three and Six Months Ended June 30, 1996 and 1995
1996 1995
----------- ----------
Three Six Three Six
Months Months Months Months
Interest income $ 36,504 $ 80,480 $ 16,568 $ 19,498
------- ------- ------- ------
Operating expenses:
Amortization 6,189 12,212 3,312 4,808
Asset management fees (Note 4) 7,907 15,813 500 943
Legal and accounting 3,175 5,175 7,000
Interest expenses 2,960 28,554
Other 4,039 4,630 2,641 6,240
----- ----- ----- -----
Total operating expenses 21,310 37,830 9,413 47,545
------ ------ ----- -------
Loss from operations 15,194 42,650 7,155 (28,047)
Equity in loss from
limited partnerships (109,629) (172,000) (8,535) (14,209)
--------- --------- ------- --------
Net loss $ (94,435) $(129,350) $ (1,380) $ (42,256)
======== ========= ======= ========
Net loss allocated to:
General partner $ (944) $ (1,294) $ (138) $ (423)
===== ======= ===== =====
Limited partners $ (93,491) $(128,056) $ (1,242) $ (41,833)
======== ========= ======= ========
Net loss per weighted limited
partner units (11,500 and 6,607
units outstanding at June 30,
1996 and 1995) $ (8.13) $ (11.14) $ (0.21) $ (12.18)
====== ======= ====== =======
UNAUDITED
See Accompanying Notes to Financial Statements
-4-
<PAGE>
WNC CALIFORNIA HOUSING TAX CREDITS IV, L.P., SERIES 4
(A California Limited Partnership)
STATEMENT OF PARTNERS' EQUITY
For the Six Months Ended June 30, 1996 and 1995
For the Six Months Ended June 30, 1996
General Limited
Partner Partner Total
Equity (deficit), December 31, 1995 $ (14,581) $ 9,473,254 $ 9,458,673
Capital collected from notes receivable 112,500 112,500
Offering expense 1,351 133,781 135,132
Net loss for the six months ended
June 30, 1996 (1,294) (128,056) (129,350)
------- --------- ---------
Equity (deficit), June 30, 1996 $ (14,524) $ 9,591,479 $ 9,576,955
======== ========== ==========
For the Six Months Ended June 30, 1995
General Limited
Partner Partner Total
Equity (deficit), December 31, 1994 $ (3,015) $ 1,703,189 $ 1,700,174
Capital contributions 7,271,000 7,271,000
Capital issued for notes receivable -Note 8 (90,000) (90,000)
Capital collected from notes receivable 150,500 150,500
Offering expense (9,103) (901,175) (910,278)
Net loss for the six months ende
June 30, 1995 $ (423) $ (41,833) $ (42,256)
----- -------- --------
Equity (deficit), June 30, 1995 $ (12,541) $ 8,091,681 $ 8,079,140
======== ========= ==========
UNAUDITED
See Accompanying Notes to Financial Statements
-5-
<PAGE>
WNC CALIFORNIA HOUSING TAX CREDITS IV, L.P., SERIES 4
(A California Limited Partnership)
STATEMENT OF CASH FLOWS
For the Six Months Ended June 30, 1996 and 1995
1996 1995
------ ------
Cash flows provided (used) by operating activities:
Net loss $ (129,350) $ (42,256)
Adjustments to reconcile net loss to
net cash used in operating activities:
Equity in loss of limited partnerships 172,000 14,209
Amortization 12,212 4,808
Asset management fee 15,813 943
(Increase) decrease in interest receivable 13,588 (3,616)
Decrease in interest payable (13,388)
Accrued fees and expense due
to general partner and affiliates 6,066 -
------- --------
Net cash provided (used) by operating activities 90,329 (39,300)
------- --------
Cash flows used by investing activities:
Investments in limited partnerships (689,566) (320,089)
Payment of advance for investment in limited
partnerships (797,178)
Payment of advance for acquisition costs and fees (15,194)
Payment of advance for loans to limited
partnerships (451,430)
Acquisition costs and fees (14,250) (540,123)
-------- ---------
Net cash used by investing activities (703,816) (2,124,014)
--------- -----------
Cash flows provided by financing activities:
Capital contributions from partners 112,500 7,346,200
Offering costs (2,587) (1,365,796)
Payment of advance for offering expense (48,075)
Payment of loan payable - (1,200,000)
----- -----------
Net cash provided by financing activities 61,838 4,780,404
------- ----------
Net decrease in cash and cash equivalents (551,649) 2,617,090
Cash and cash equivalents, beginning of period 3,827,214 484,771
---------- ----------
Cash and cash equivalent, end of period $ 3,275,565 $ 3,101,861
========== ==========
UNAUDITED
See Accompanying Notes to Financial Statements
-6-
<PAGE>
WNC CALIFORNIA HOUSING TAX CREDITS IV, L.P., SERIES 4
(A California Limited Partnership)
(A Development-Stage Enterprise)
STATEMENT OF CASH FLOWS - CONTINUED
For the Six months ended June 30, 1996 and 1995
Supplemental disclosure of noncash financing and investing activity:
For the Six For the Six
Months Ended Months Ended
June 30, 1996 June 30, 1995
The Partnership has incurred but not paid:
Capital contributions in connection with
investments in limited partnerships $ 741,938
The Partnership has incurred but not paid:
Acquisition fees payable to affiliate of
general partner $ 12,244
Selling fees advanced by affiliate of
general partner 4,422
The Partnership applied loans receivable
from limited partnerships to investments
in limited partnerships 647,178
The Partnership has not received O & O
reimbursements from an affiliate $ 142,141
UNAUDITED
See Accompanying Notes to Financial Statements
-7-
<PAGE>
WNC CALIFORNIA HOUSING TAX CREDITS IV, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
WNC CALIFORNIA TAX CREDITS IV, L.P., Series 4 (the "Partnership") was formed
under the California Revised Limited Partnership Act on February 16, 1995, and
commenced operations on July 26, 1995. The Partnership was formed to invest
primarily in other limited partnerships which will own and operate multi-family
housing complexes that will qualify for low income housing credits.
The general partner of the Partnership is WNC California Tax Credit
Partners IV, L.P. (the "General Partner"), a California limited partnership. WNC
& Associates, Inc. is the general partner of the General Partner. Wilfred N.
Cooper, Sr., through the Cooper Revocable Trust, owns 70% of the outstanding
stock of WNC & Associates, Inc. John B. Lester, Jr. is the original limited
partner of the Partnership and owns, through the Lester Family Trust, 30% of the
outstanding stock of WNC & Associates, Inc.
General
The information contained in the following notes to the financial statements is
condensed from that which would appear in the annual financial statements;
accordingly, the financial statements included herein should be reviewed in
conjunction with the audited financial statements and related notes thereto
contained in the Partnership's financial statements for the period ended
December 31, 1995 (audited).
In the opinion of the General Partner, the accompanying unaudited financial
statements contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the financial position as of June 30, 1996
and the results of operations and changes in cash flows for the six months ended
June 30, 1996 and 1995.
Allocations Under the Terms of the Partnership Agreement
The General Partner has a 1% interest in operating profits and losses, taxable
income and loss and in cash available for distribution from the Partnership. The
limited partners will be allocated the remaining 99% of these items in
proportion to their respective investments.
After the limited partners have received sale or refinancing proceeds equal to
their capital contributions and their return on investment (as defined in the
Partnership's Agreement of Limited Partnership) and the General Partner has
received a subordinated disposition fee (as described in Note 3 below), any
additional sale or refinancing proceeds will be distributed 90% to the limited
partners (in proportion to their respective investments) and 10% to the General
Partner.
Method of Accounting For Investment in Limited Partnerships
The investment in limited partnerships is accounted for on the equity method of
accounting whereby the Partnership adjusts its investment balance for its share
of each limited partnership's results of operations and for any distributions
received. Costs incurred by the Partnership in acquiring the investments in
limited partnerships are capitalized as part of the investment account.
Losses from the limited partnerships will not be recognized to the extent that
the individual investment balance would be adjusted below zero.
-8-
<PAGE>
WNC CALIFORNIA TAX CREDITS IV, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
Offering Expenses
Offering expenses consist of underwriting commissions, legal fees, printing,
filing and recordation fees, and other costs incurred with selling limited
partnership interests in the Partnership. The General Partner is obligated to
pay all offering and organization costs in excess of 15% (including sales
commissions) of the total offering proceeds. Offering expenses are reflected as
a reduction of partners' capital.
Organization Costs
Organization costs will be amortized on the straight-line method over 60 months.
Cash and Cash Equivalents
The Partnership considers investments with an original maturity of three months
or less as cash equivalents.
NOTE 2 - O & O REIMBURSEMENTS DUE FROM AFFILIATE
O & O Reimbursements Due Form Affiliate represents amounts due from WNC
California Housing Tax Credits IV, Series 5 for reimbursement of Organizational
and Offering Expenses. Section 5.3.1. (iii) of the partnership agreement
provides that if Organizational and Offering Expenses on a per-Unit basis are
higher for one series than for another (excluding certain discounts), the total
of Organizational and Offering Expenses incurred by all such series shall be
allocated among them so that the per-Unit amount is the same (excluding
discounts). Consequently, offering expenses of $142,141 already paid by the
Partnership was allocated to WNC California Housing Tax Credits IV, Series 5 in
regards to equalizing offering expenses on a per-Unit basis.
NOTE 3 - INVESTMENT IN LIMITED PARTNERSHIPS
As of June 30, 1996 the Partnership had acquired limited partnership interests
in eight limited partnerships each of which owns one Apartment Complex. As of
June 30, 1996, construction or rehabilitation of six of the Apartment Complexes
had been completed and two were undergoing construction or rehabilitation
As of June 30, 1995 the Partnership had acquired limited partnership interests
in three limited partnerships each of which owns one Apartment Complex. As of
June 30, 1995, construction or rehabilitation of one of the Apartment Complexes
had been completed and two were undergoing construction or rehabilitation.
The Partnership, as a limited partner, is entitled to 99%, as specified in the
partnership agreements, of the operating profits and losses of the limited
partnerships upon the acquisition of its limited partnership interest. Following
is a summary of the components of investment in limited partnerships as of June
30, 1996 and December 31, 1995:
1996 1995
------ ------
Investment per balance sheet, beginning
of period $ 8,494,018 $ 3,355,553
Capital contributions to limited
partnerships 5,349 4,702,910
Increase in capitalized acquisition fees
and costs 26,494 551,835
Amoritization (12,212) (16,056)
Equity in income (loss) of limited
partnerships (172,000) (100,224)
--------- ---------
Investment per balance sheet, end of
period $ 8,341,649 $ 8,494,018
========= =========
-9-
<PAGE>
WNC CALIFORNIA TAX CREDITS IV, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 3 - INVESTMENT IN LIMITED PARTNERSHIPS (CONTINUED)
Selected financial information from the financial statements of the limited
partnerships with operations for the six months ended June 30, 1996 and 1995 is
as follows:
Six months ended
June 30, 1996 June 30, 1995
Total revenue $338,000 $30,800
-------- -------
Expenses:
Operating expenses -
exclusive of depreciation
and interest 211,000 22,100
Interest expense 119,000 9,600
Depreciation 182,000 13,400
------- ------
Total expenses 512,000 45,100
------- ------
Net loss $(174,000) $(14,300)
========== =========
Net loss allocable to $(172,000) $(14,209)
========== =========
Partnership
NOTE 4 - RELATED PARTY TRANSACTIONS
Under the terms of its Agreement of Limited Partnership, the Partnership is
obligated to the General Partner or its affiliates for the following items:
Acquisition fees of up to 7% of the gross proceeds from the sale of
Partnership units. Acquisition fees of $13,650 and $353,210 were
incurred for the six months ended June 30, 1996 and 1995.
An annual asset management fee equal to the greater amount of (i) $2,000
for each Apartment Complex, or (ii) 0.275% of Gross Proceeds. In either
case, the fee will be decreased or increased annually based on changes
to the Consumer Price Index. However, in no event will the maximum
amount exceed 0.2 % of the invested assets (defined as the Partnership's
capital contributions to the limited partnerships plus its allocable
percentage of the permanent financing) of the limited
<PAGE>
WNC CALIFORNIA TAX CREDITS IV, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 4 - RELATED PARTY TRANSACTIONS (CONTINUED)
partnerships which are subsidized under one or more Federal, state or
local government programs. The Partnership has incurred fees of $15,813
and $943 for the six months ended June 30, 1996 and 1995.
Reimbursement for organizational, offering and selling expenses advanced
by an affiliate of the General Partner on behalf of the Partnership.
These reimbursements plus all other organizational and offering expenses
inclusive of sales commissions will not exceed 15% of the gross
proceeds. During the six moths ended June 30, 1996 the Partnership
incurred organizational, offering and selling expenses of $-0-, $7,009
and $-0-, respectively and during the six months ended June 30, 1995 the
Partnership incurred organizational, offering and selling expenses of
$-0-, $590,400 and $319,850 respectively.
A subordinated disposition fee in an amount equal to 1% of the sales
price of real estate sold. Payment of this fee is subordinated to the
limited partners receiving a return on investment (as defined in the
Agreement of Limited Partnership) and is payable only if services are
rendered in the sales effort.
Accrued fees and advances due to affiliates of the General Partner included in
the accompanying balance sheet consists of the following at June 30, 1996 and
December 31, 1995:
1996 1995
---------- --------
Acquisition fees $ 26,565 $ 14,321
Advances made for acquisition costs,
organizational, offering and selling
expenses 6,900 56,680
Asset management fees accrued 47,438 31,625
Other advances and expenses 12,093 0
------ ----------
$ 92,996 $ 102,526
====== ========
See Note 2 for additional related party transaction.
<PAGE>
WNC CALIFORNIA TAX CREDITS IV, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 5 - PAYABLE TO LIMITED PARTNERSHIPS
Payable to limited partnerships represent amounts which are due at various times
based on conditions specified in the respective limited partnership agreements.
These contributions are payable in installments, are generally due upon the
limited partnerships achieving certain operating benchmarks and are generally
expected to be paid within two years of the Partnership's initial investment.
NOTE 6 - INCOME TAXES
The Partnership will not make a provision for income taxes since all items of
taxable income and loss will be allocated to the partners for inclusion in their
respective income tax returns.
NOTE 7 - SUBSCRIPTION AND INVESTOR NOTES RECEIVABLE
Limited partners who subscribe for ten or more units of limited partnership
interest ($10,000) may elect to pay 50% of such purchase price in cash upon
subscription and the remaining 50% by the delivery of a promissory note payable
bearing interest at the rate of 8% per annum. Principal and interest are due (i)
January 31, 1996 if the investor subscribes between January 1, 1996 and June 1,
1996 or (ii) the later of the date of subscription or June 30, 1996 if the
investor subscribes after June 1, 1996. This amount is presented as a reduction
in partners' equity.
During the six months ended June 30, 1996, the Partnership collected payments of
$112,500 for those promissory notes previously issued. During the six months
ended June 30, 1995, the Partnership accepted $137,500 in promissory notes from
limited partners and collected payments of $150,500 for those promissory notes
previously issued.
NOTE 8 - COMMITMENTS AND CONTINGENCIES
The Partnership is negotiating to acquire one additional limited partnership
interest which would commit the Partnership to additional capital contributions
of approximately $483,000.
<PAGE>
WNC CALIFORNIA HOUSING TAX CREDITS IV, L.P., SERIES 5
(A California Limited Partnership)
(A Development-Stage Enterprise)
BALANCE SHEETS
June 30, 1996 and December 31, 1995
1996 1995
---- ----
ASSETS
Cash and cash equivalents $ 3,105,388 $1,000
Subscriptions receivable - Note 8 28,850
Loans receivable -Note 2 60,456
Investment in limited
partnerships - Note 3 3,987,459
Other assets - 701
---- -----
$7,182,854 $ 1,000
========== =====
LIABILITIES AND PARTNERS' EQUITY
Liabilities:
Accrued fees and expenses due to
general partner and affiliates - Note 4 138,707 $ -
Offering cost reimbursements due from
affiliate -Note 5 142,141
Capital contributions payable -Note 6 1,370,424
---------
Total liabilities 1,509,131
---------
Partners' equity (deficit):
General partner (6,663) 100
Limited partners (10,000 units
authorized, 6,507 units issued
and outstanding) 5,538,245 900
--------- ---
Total partners' equity 5,531,582 1,000
--------- -----
$ 7,182,854 $ 1,000
============= ===========
UNAUDITED
See Accompanying Notes to Financial Statements
<PAGE>
WNC CALIFORNIA HOUSING TAX CREDITS IV, L.P., SERIES 5
(A California Limited Partnership)
(A Development-Stage Enterprise)
STATEMENT OF OPERATIONS
For the Three Months Ended June 30, 1996 and the Period from
February 26, 1996 (Date Operations Commenced) to June 30,1996
Period from
February 26,
1996 (Date
Operations
Three Commenced) to
Months June 30, 1996
------- -----------
Interest income $ 12,055 $16,315
------- -----------
Operating expenses:
Amortization
2,126 2,468
Other
881 893
---- ---
Total operating expenses 3,007 3,361
Income from operations 9,048 12,954
------ ------
Net incomes $9,048 $12,954
====== ======
Net loss allocated to:
General partner $ 90 $ 130
=== ===
Limited partners $8,958 $ 12,824
====== ======
Net income per 2,915 weighted limited
partner units outstanding June 30, 1996 $ 3.07 $4.40
======== =====
UNAUDITED
See Accompanying Notes to Financial Statements
<PAGE>
WNC CALIFORNIA HOUSING TAX CREDITS IV, L.P., SERIES 5
(A California Limited Partnership)
(A Development-Stage Enterprise)
STATEMENT OF PARTNERS' EQUITY
For Period from February 26, 1996 (Date Operations Commenced) to June 30, 1996
General Limited
Partner Partner Total
Equity, December 31, 1995 $ 100 $ 900 $ 1,000
Capital contributions (25,000 units
authorized, 6,507 units issued and
outstanding 6,253,900 6,253,900
Capital issued for notes receivable (47,000) (47,000)
Offering expenses (6,893) (682,379) (689,272)
Net loss for the Period from
February 26, 1996 (Date Operations
Commenced) to June 30, 1996 130 12,824 12,954
--------- ---------- ---------
Equity (deficit), June 30,1996 $(6,663) $5,538,245 $5,531,582
========= ========= ==========
UNAUDITED
See Accompanying Notes to Financial Statements
<PAGE>
WNC CALIFORNIA HOUSING TAX CREDITS IV, L.P., SERIES 5
(A California Limited Partnership)
(A Development-Stage Enterprise)
STATEMENT OF CASH FLOWS
For Period from February 26, 1996 (Date Operations Commenced) to June 30, 1996
Cash flows provided by operating activities:
Net loss $ 12,954
Adjustments to reconcile net loss to net
cash used in operating activities:
Amortization 2,468
Change in other assets (701)
Accrued fees and expense due
to general partner and affiliates 4,042
-----
Net cash provided by operating activities 18,763
------
Cash flows used by investing activities:
Investment in limited partnerships (2,319,104)
Increase in loans receivable to limited partnerships (60,456)
Acquisition costs and fees (213,497)
--------
Net cash flows used by investing activities (2,593,057)
----------
Cash flows provided by financing activities:
Capital contributions from partners 6,178,050
Offering costs (499,368)
--------
Net cash flows used by financing activities 5,678,682
----------
Net decrease in cash and cash equivalents 3,104,388
Cash and cash equivalents, beginning of period 1,000
-----
Cash and cash equivalent, end of period $ 3,105,388
============
UNAUDITED
See Accompanying Notes to Financial Statements
<PAGE>
WNC CALIFORNIA HOUSING TAX CREDITS IV, L.P., SERIES 5
(A California Limited Partnership)
(A Development-Stage Enterprise)
STATEMENT OF CASH FLOWS - CONTINUED
For Period from February 26, 1996 (Date Operations Commenced) to June 30, 1996
Supplemental disclosure of noncash financing and investing activity:
The Partnership has incurred but not paid:
Capital contributions in connection with investments in
limited partnerships $1,370,424
Acquisition fees payable to affiliate of general partner 86,902
Offering and selling expenses payable to affiliate of
general partner 47,763
Offering cost reimbursements due to an affiliate 142,141
The Partnership has not received:
Subscriptions in connection with capital contributions 28,800
Notes in connection with capital contributions 47,000
UNAUDITED
See Accompanying Notes to Financial Statements
<PAGE>
WNC CALIFORNIA HOUSING TAX CREDITS IV, L.P., SERIES 5
(A California Limited Partnership)
(A Development Stage-Enterprise)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
WNC California Tax Credits IV, L.P., Series 5 (the "Partnership") was formed
under the California Revised Limited Partnership Act on September 12, 1995, and
commenced operations on February 26, 1996. The Partnership was formed to invest
primarily in other limited partnerships which will own and operate multi-family
housing complexes that will qualify for low income housing credits.
The information contained in the following notes to the financial statements is
condensed from that which would appear in the annual financial statements;
accordingly, the financial statements included herein should be reviewed in
conjunction with the financial statements and related notes thereto contained in
the Partnership's Annual Report for the year ended December 31, 1995.
In the opinion of the Partnership, the accompanying unaudited financial
statements contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the financial position as of June 30, 1996
and changes in cash flows for the three months then ended. Accounting
measurements at interim dates inherently involve greater reliance on estimates
than at year end. The results of operations for the interim period presented are
not necessarily indicative of the results for the entire year.
The general partner of the Partnership is WNC & Associates, Inc. (the "General
Partner"). Wilfred N. Cooper, Sr., through the Cooper Revocable Trust, owns 70%
of the outstanding stock of WNC & Associates, Inc. John B. Lester, Jr. is the
original limited partner of the Partnership and owns, through the Lester Family
Trust, 30% of the outstanding stock of WNC & Associates, Inc.
Allocations Under the Terms of the Partnership Agreement
The General Partner has a 1% interest in operating profits and losses, taxable
income and loss and in cash available for distribution from the Partnership. The
limited partners will be allocated the remaining 99% of these items in
proportion to their respective investments.
<PAGE>
WNC CALIFORNIA HOUSING TAX CREDITS IV, L.P., SERIES 5
(A California Limited Partnership)
(A Development Stage-Enterprise)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 1 - ORGANIZATION AND OTHER MATTERS (CONTINUED)
After the limited partners have received sale or refinancing proceeds equal to
their capital contributions and their preferred return (as defined in the
Partnership's Agreement of Limited Partnership) and the general partner has
received a subordinated disposition fee any additional sale or refinancing
proceeds will be distributed 90% to the limited partners (in proportion to their
respective investments) and 10% to the General Partner.
Method of Accounting For Investment in Limited Partnerships
The Partnership accounts for its investments in limited partnerships using the
equity method of accounting, whereby the Partnership adjusts its investment
balance for its share of each limited partnership's results of operations and
for any distributions received. Costs incurred by the Partnership in acquiring
the investments in limited partnerships are capitalized as part of the
investment.
Losses from the limited partnerships will not be recognized to the extent that
the individual investment balance would be adjusted below zero.
Cash and Cash Equivalents
- -------------------------
The Partnership considers all bank certificates of deposit with a maturity of
less than three months to be cash equivalents.
Offering Expenses
- -----------------
Offering expenses consist of underwriting commissions, legal fees, printing,
filing and recordation fees, and other costs incurred with selling limited
partnership interests in the Partnership. The General Partner is obligated to
pay all offering and organization costs in excess of 15% (including sales
commissions) of the total offering proceeds. Offering expenses are reflected as
a reduction of partners' capital.
Organization Costs
- ------------------
Organization costs are being amortized on the straight-line method over 60
months.
<PAGE>
WNC CALIFORNIA HOUSING TAX CREDITS IV, L.P., SERIES 5
(A California Limited Partnership)
(A Development Stage-Enterprise)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2 - LOANS RECEIVABLE
- -------------------------
Loans receivable represent amounts loaned by the Partnership to certain limited
partnerships in which the Partnership may invest. These loans will be applied
against the first capital contribution due if the Partnership ultimately
acquires a limited partnership interest. In the event that the Partnership does
not acquire a limited partnership interest, the loans are to be repaid with
interest with at a rate of prime plus 1% per annum. Loans receivable have been
incurred in the amount of $60,456 and $0 at June 30, 1996 and December 31, 1995.
NOTE 3 - INVESTMENT IN LIMITED PARTNERSHIPS
- -------------------------------------------
As of June 30, 1996 the Partnership had acquired limited partnership interests
in two limited partnerships which each own one Apartment Complex. As of June 30,
1996, one Apartment had started construction and the other had not.
The Partnership, as a limited partner, is entitled to 99%, as specified in the
partnership agreements, of the operating profits and losses of the limited
partnership upon the acquisition of its limited partnership interest. Following
is a summary of the components of investment in limited partnerships as of June
30, 1996.
1996
Investment per balance sheet, beginning of
period $ 0
Capital contributions to limited partnerships 3,689,528
Increase in capitalized acquisition fees
and costs 300,399
Amortization (2,468)
------
Investment per balance sheet, end of period $ 3,987,459
=========
<PAGE>
WNC CALIFORNIA HOUSING TAX CREDITS IV, L.P., SERIES 5
(A California Limited Partnership)
(A Development Stage-Enterprise)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 3 - INVESTMENT IN LIMITED PARTNERSHIPS (Continued)
No operations were incurred by limited partnerships for the period from February
26, 1996 (Date Operations Commenced) to June 30, 1996.
NOTE 4 - RELATED PARTY TRANSACTIONS
Under the terms of its Agreement of Limited Partnership, the Partnership is
obligated to the General Partner or its affiliates for the following items:
Acquisition fees of up to 7% of the gross proceeds from the sale of
Partnership units. Acquisition fees of $293,360 were incurred for the six
months ended June 30, 1996. An annual asset management fee equal to the
greater amount of (i) $2,000
for each Apartment Complex, or (ii) 0.275% of Gross Proceeds. In either
case, the fee will be decreased or increased annually based on changes to
the Consumer Price Index. However, in no event will the maximum amount
exceed 0.2 % of the invested assets (defined as the Partnership's capital
contributions to the limited partnerships plus its allocable percentage of
the permanent financing) of the limited partnerships which are subsidized
under one or more Federal, state or local government programs. The
Partnership incurred no fees for the six months ended June 30, 1996.
Reimbursement for organizational, offering and selling expenses advanced by
an affiliate of the General Partner on behalf of the Partnership. These
reimbursements plus all other organizational and offering expenses
inclusive of sales commissions will not exceed 15% of the gross proceeds.
During the six months ended June 30, 1996 the Partnership incurred
organizational, offering and selling expenses of $-0-, $249,541 and
$297,590, respectively.
A subordinated disposition fee in an amount equal to 1% of the sales price
of real estate sold. Payment of this fee is subordinated to the limited
partners receiving a return on investment (as defined in the Agreement of
Limited Partnership) and is payable only if services are rendered in the
sales effort.
<PAGE>
WNC CALIFORNIA HOUSING TAX CREDITS IV, L.P., SERIES 5
(A California Limited Partnership)
(A Development Stage-Enterprise)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 4 - RELATED PARTY TRANSACTIONS (Continued)
- -----------------------------------------------
Accrued fees and advances due to affiliates of the General Partner included in
the accompanying balance sheet consists of the following at June 30, 1996 and
December 31, 1995:
1996 1995
-------- ----
Acquisition fees $86,902 $ 0
Advances made for acquisition costs,
organizational, offering and selling expenses 51,805 0
------- -
$ 138,707 $ 0
======= =
See Note 5 for additional related party transaction.
NOTE 5 - O & O REIMBURSEMENTS DUE TO AFFILIATE
- ----------------------------------------------
O & O Reimbursements Due To Affiliate represents amounts due to WNC California
Housing Tax Credits IV, Series 4 for reimbursement of Organizational and
Offering Expenses. Section 5.3.1. (iii) of the partnership agreement provides
that if Organizational and Offering Expenses on a per-Unit basis are higher for
one series than for another (excluding certain discounts), the total of
Organizational and Offering Expenses incurred by all such series shall be
allocated among them so that the per-Unit amount is the same (excluding
discounts). Consequently, offering expenses of $142,141 already paid by WNC
California Housing Tax Credits IV, Series 4 was allocated to the Partnership in
regards to equalizing offering expenses on a per-Unit basis.
NOTE 6 - PAYABLE TO LIMITED PARTNERSHIPS
- ----------------------------------------
Payable to limited partnerships represent amounts which are due at various times
based on conditions specified in the respective limited partnership agreements.
These contributions are payable in installments, are generally due upon the
limited partnerships achieving certain operating benchmarks and are generally
expected to be paid within two years of the Partnership's initial investment.
NOTE 6 - INCOME TAXES
- ---------------------
The Partnership will not make a provision for income taxes since all items of
taxable income and loss will be allocated to the partners for inclusion in their
respective income tax returns.
<PAGE>
WNC CALIFORNIA HOUSING TAX CREDITS IV, L.P., SERIES 5
(A California Limited Partnership)
(A Development Stage-Enterprise)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 8 - SUBSCRIPTION AND INVESTOR NOTES RECEIVABLE
During the six months ended June 30, 1996, the Partnership accepted $47,000 in
promissory notes from limited partners. Limited partners who subscribe for ten
or more units of limited partnership interest ($10,000) may elect to pay 50% of
such purchase price in cash upon subscription and the remaining 50% by the
delivery of a promissory note payable bearing interest at the rate of 8% per
annum. Principal and interest are due (i) January 31, 1997 if the investor
subscribes between January 1, 1996 and June 1, 1996 or (ii) the later of the
date of subscription or June 30, 1997 if the investor subscribes after June 1,
1996. This amount is presented as a reduction in partners' equity.
<PAGE>
WNC CALIFORNIA HOUSING TAX CREDITS IV, L.P., Series 4
and Series 5 (California Limited Partnerships)
(A Development Stage-Enterprise)
June 30, 1996
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
WNC California Housing Tax Credits IV, L.P., Series 4 - Series 9 are California
Limited Partnerships formed under the laws of the State of California on May 4,
1993 to acquire limited partnership interests in limited partnerships ("Limited
Partnerships") which own multifamily apartment complexes that are eligible for
low-income housing federal income tax credits (the "Housing Tax Credit"). WNC
California Housing Tax Credits IV, L.P., Series 4 ("Series 4") and Series 5
("Series 5") are the only registrants to have commenced an offering. Series 4
and Series 5 are referred together as the Partnerships".
The partnerships are raising funds from investors through their public offering
of units of limited partnership interest ("Units") and intends to apply such
funds, including the installment payments of the limited partners' promissory
notes as received, to the acquisition of investments in Limited Partnerships,
acquisition fees, the establishment of reserves, the payment of operating
expenses and the payment of expenses of this offering.
Liquidity and Capital Resources-Series 4
- ----------------------------------------
Overall, as reflected in its Statement of Cash Flows, Series 4 had a net
decrease in cash and cash equivalents of approximately $552,000 for the six
months ended June 30, 1996. Cash of approximately $26,000 and $90,000 was
provided by financing activities and operating activities during six months
ended June 30, 1996. Cash of approximately $704,000 used by investing activities
and consisted of capital contributions to limited partnerships and acquisition
fees and expenses of approximately $690,000 and $14,000, respectively. Cash
provided by operating activities consisted primarily of interest received on
cash deposits and investors notes receivable, and cash used consisted primarily
of payments operating fees and expenses. The major components of all these
activities are discussed in greater detail below.
Overall, as reflected in its Statement of Cash Flows, Series 4 had a net
increase in cash and cash equivalents of approximately $2,617,000 for the six
months ended June 30, 1995. This increase in cash was provided by financing
activities, including the proceeds from the Offering and short term indebtedness
described below. Cash from financing activities for the period ended June 30,
1995 was sufficient to fund the investing activities of the Partnership during
such periods in the amount of approximately $2,124, 0000, which consisted of
investments in limited partnerships and acquisition fees and costs.. Cash
provided by operating activities consisted primarily of interest received on
cash deposits, and cash used consisted primarily of payments for interest
expense of approximately $29,000. The major components of all these activities
are discussed in greater detail below.
As of June 30, 1996, Series 4 was indebted to WNC & Associates, Inc. for
approximately $93,000. The component items of such indebtedness were as follows:
accrued Acquisition Fees of approximately $27,000, advances to pay front-end
fees of approximately $13,000, Asset Management Fees of $47,000 and advances to
for payment of operating fees and expenses $6,000. As of December 31, 1995
Series 4 was indebted to WNC & Associates for approximately $103,000 consisting
of accrued Acquisition Fees of approximately $14,000, advances to pay front-end
fees of $57,000, and Asset Management Fees of $32,000. Associates obtained the
necessary funds for its 1995 advances to Series 4 for capital contributions
pursuant to a bank line of credit. As permitted by Series 4 Agreement, such
funds bore interest at the lender's rate (i.e., the rate paid by Associates
pursuant to its line of credit, which is equal to 1% per annum over the prime
rate published in The Wall Street Journal from time to time) which has ranged
from 9.75 to 10.5% per cent per annum. Associates' loan is payable upon demand.
and amounts lent in 1995 were repaid in May 1995. In addition, during 1995
Series 4 obtained a bank loan in the amount of $1,200,000. The loan bore
interest at a variable rate equal to the lender's prime rate less 0.75% per
annum and was payable interest only on a monthly basis until April 1996 when the
entire principal amount was repaid.
As of June 30, 1996 the Series 4 has made offering costs reimbursements in
excess of the amount allocated on a per-Unit basis among the issuers of WNC
California Housing Tax Credits IV, L.P., Series 4 through Series 9. The
Partnership is due approximately $142,000 from the other issuer, Series 5.
As of June 30, 1996 and December 31, 1995, Series 4 has received and accepted
subscriptions funds in the amount of $11,099,000, of which $60,000 and $172,500,
respectively were represented by Promissory Notes. As of June 30, 1996 and
December 31, 1995, Series 4 had made capital contributions to Local Limited
Partnerships in the amount of approximately $5,791,000, and $5,102,000,
respectively, and had commitments for additional capital contributions of
approximately $2,101,000 and $2,786,000, respectively.
Series 4 and 5
- --------------
Prior to sale of the Apartment Complexes, it is not expected that any of the
Local Partnerships in which the Partnerships have invested or will invest will
generate cash from operations sufficient to provide distributions to the Limited
Partners in any material amount except possibly in the circumstances discussed
in the Prospectus under "Investment Objectives and Policies - Principal
Investment Objectives." Such cash from operations, if any, would first be used
to meet operating expenses of the Partnerships, including payment of the asset
management fee to CTCP IV. See "Management Compensation" in the Prospectus. As a
result, it is not anticipated that the Partnerships will provide distributions
to the Limited Partners prior to the sale of the Apartment Complexes.
The Partnerships' investments will not be readily marketable and may be affected
by adverse general economic conditions which, in turn, could substantially
increase the risk of operating losses for the Apartment Complexes, the Local
Partnerships and the Partnerships. These problems may result from a number of
factors, many of which cannot be controlled by the General Partner. See "Risk
Factors - Investment Risks" in the Prospectus. Nevertheless, the General Partner
anticipates that capital raised from the sale of the Units will be sufficient to
fund the Partnerships' investment commitments and proposed operations.
The Partnerships will establish working capital reserves of at least 3% of
capital contributions, an amount which is anticipated to be sufficient to
satisfy general working capital and administrative expense requirements of the
Partnerships excluding payment of the asset management fee as well as expenses
attendant to the preparation of tax returns and reports to the Limited Partners
and other investor servicing obligations of the Partnerships. Liquidity would,
however, be adversely affected by unanticipated or greater than anticipated
operating costs. The Partnerships' liquidity could also be affected by defaults
or delays in payment of the Limited Partners' promissory notes, from which a
portion of the working capital reserves is expected to be funded. To the extent
that working capital reserves are insufficient to satisfy the cash requirements
of the Partnerships, it is anticipated that additional funds would be sought
through bank loans or other institutional financing. The General Partner may
also apply any cash distributions received from the Local Partnerships for such
purposes or to replenish or increase working capital reserves.
Under the Partnership Agreements the Partnerships do not have the ability to
assess the Limited Partners for additional capital contributions to provide
capital if needed by the Partnerships or Local Partnerships. Accordingly, if
circumstances arise that cause the Local Partnerships to require capital in
addition to that contributed by the Partnerships and any equity contributed by
the general partners of the Local Partnerships, the only sources from which such
capital needs will be able to be satisfied (other than the limited reserves
available at the Partnership level) will be (i) third-party debt financing
(which may not be available, if, as expected, the Apartment Complexes owned by
the Local Partnerships are already substantially leveraged), (ii) additional
equity contributions or advances of the general partners of the Local
Partnerships, (iii) other equity sources (which could adversely affect the
Partnerships' interest in Housing Tax Credits, cash flow and/or proceeds of sale
or refinancing of the Apartment Complexes and result in adverse tax consequences
to the Limited Partners), or (iv) the sale or disposition of the Apartment
Complexes (which could have the same adverse effects as discussed in (iii)
above). There can be no assurance that funds from any of such sources would be
readily available in sufficient amounts to fund the capital requirement of the
Local Partnerships in question. If such funds are not available, the Local
Partnerships would risk foreclosure on their Apartment Complexes if they were
unable to re-negotiate the terms of their first mortgages and any other debt
secured by the Apartment Complexes to the extent the capital requirements of the
Local Partnerships relate to such debt. See "Risk Factors - Investment Risks -
Risks Associated With Use of Leverage" and "Investment Objectives and Policies -
Use of Leverage" in the Prospectus.
The Partnerships' capital needs and resources are expected to undergo major
changes during their first several years of operations as a result of the
completion of their offerings of Units and their acquisition of investments.
Thereafter, the Partnerships' capital needs and resources are expected to be
relatively stable over the holding periods of the investments except to the
extent of proceeds received in payment of Promissory Notes and disbursed to fund
the deferred obligations of the Partnerships. See, however, "Risk Factors -
Investment Risks - Risks of Real Estate Ownership" in the Prospectus.
<PAGE>
Liquidity and Capital Resources-Series 5
- ----------------------------------------
Overall, as reflected in its Statement of Cash Flows, Series 5 had a net
increase in cash and cash equivalents of approximately $3,104,000 for the six
months ended June 30, 1996. Cash from financing activities for the period ended
June 30, 1996 of approximately $5,679,000 was sufficient to fund the investing
activities of Series 5 during such periods in the amount of approximately
$2,593,000, which consisted of capital contributions to limited partnerships,
loan to limited partnership and acquisition fees and costs of approximately
$2,319,000, $60,000 and $214,000, respectively. Cash used by the Partnership's
operating activities was minimal compared to the Partnership's other activities
and consisted primarily of payments for operating fees and expenses. Cash
provided from operations consisted primarily of interest received. The major
components of all these activities are discussed in greater detail below.
As of June 30, 1996 Series 5 was indebted to WNC & Associates, Inc. for
approximately $139,000. The component items of such indebtedness were as
follows: accrued Acquisition Fees of approximately $87,000 and advances to pay
front-end fees of approximately $51,000.
As of June 30, 1996 the Series 5 has made offering costs reimbursements less
than the amount allocated on a per-Unit basis among the issuers of WNC
California Housing Tax Credits IV, L.P., Series 4 through Series 9.
Approximately $142,000 is due to the other issuer, Series 4.
As of August 1 and June 30, 1996, Series 5 has received and accepted
subscriptions funds in the amount of $6,254,000 , of which $27,500 and $37,500
was represented by Promissory Notes. As of August 1 1996, June 30, 1996 and
December 31, 1995, Series 5 had made capital contributions to Local Limited
Partnerships in the amount of approximately $2,319,000, $2,319,000 and $0,
respectively, and had commitments for additional capital contributions of
approximately $1,370,000, $1,370,000 and $0, respectively.
Results of Operations - Series 4
- --------------------------------
As of June 30, 1996 and 1995, Series 4 had acquired 8 and 3 Local Limited
Partnership Interests, respectively. Each of the eight Local Limited
Partnerships receives or is expected to receive government assistance and each
of them has received a reservation for Housing Tax Credits. As of June 30, 1996
and 1995, only six and one, respectively, of the Apartment Complexes in Series 4
had commenced operations. Accordingly, the "Equity in losses from limited
partnerships" for the period ended June 30, 1996 and 1995 reflected in the
Statement of Operations of Series 4 is not indicative of the amounts to be
reported in future years.
As reflected on its Statements of Operations, Series 4 had a loss of
approximately $129,000 and $42,000 for the six months ended June 30, 1996 and
1995 respectively. The component items of revenue and expense are discussed
below.
Revenue. Series 4's revenues consisted entirely of interest earned on Promissory
Notes and cash deposits held in financial institutions (i) as Reserves, or (ii)
pending investment in Local Partnerships. Interest revenue in future years will
be a function of prevailing interest rates and the amount of cash balances. It
is anticipated that Series 4 will maintain cash Reserves in an amount not
materially in excess of the minimum amount required by its Partnership
Agreement, which is 3% of Capital Contributions.
Expenses. The most significant component of operating expenses was interest
expense on borrowings of approximately $29,000 for the six months ended March
31, 1995; for the six months ended June 30, 1996 and in the future the Asset
Management Fee was and is expected to be the most significant component. The
Asset Management Fees is equal to the greater of (i) $2,000 for each Apartment
Complex or (ii) 0.275% of gross proceeds, and will be decreased or increased
annually based on changes to the Consumer Price Index. Asset management fee of
approximately $16,000 was accrued for the six months ended June 30, 1996.
Amortization expense consist of the amortization over a period of 30 years of
the Acquisition Fee and other expenses attributable to the acquisition of Local
Limited Partnership Interests. Interest expense was incurred as described above
under "Liquidity and Capital Resources." Interest expense is expected to minimal
after 1995. Office expense consist of Series 4's administrative expenses, such
as legal fees, bank charges and investor reporting expenses.
Because of the amounts of the Asset Management Fee and amortization expense
primarily are determined by the Gross Proceeds from the Offering, the number and
size of Apartment Complexes and the number of investors, until termination of
the Offering and investment of the net proceeds therefrom, Series 4 cannot
predict with any accuracy what these amounts will be.
Results of Operations - Series 5
- --------------------------------
As of June 30, 1996 and December 31, 1995, Series 5 had acquired 2 and 0 Local
Limited Partnership Interest, respectively. The Local Limited Partnerships are
expected to receive government assistance and have received a reservation for
Housing Tax Credits. As of June 30, 1996, the Apartment Complexes in Series 5
had not commenced operations. Accordingly, the Statement of Operations of Series
5 for the period ended June 30, 1996 is not indicative of the amounts to be
reported in future years.
As reflected on its Statements of Operations, Series 5 had income of
approximately $9,000 for the period ended June 30, 1996. There were no
operations as of June 30, 1995. The component items of revenue and expense are
discussed below.
Revenue. Series 5's revenues consisted entirely of interest earned on Promissory
Notes and cash deposits held in financial institutions (i) as Reserves, or (ii)
pending investment in Local Partnerships. Interest revenue in future years will
be a function of prevailing interest rates and the amount of cash balances. It
is anticipated that Series 5 will maintain cash Reserves in an amount not
materially in excess of the minimum amount required by its Partnership
Agreement, which is 3% of Capital Contributions.
Expenses. The components of operating expenses were not significant; in the
future the Asset Management Fee is expected to be the most significant
component. The Asset Management Fees is equal to the greater of (i) $2,000 for
each Apartment Complex or (ii) 0.275% of gross proceeds, and will be decreased
or increased annually based on changes to the Consumer Price Index.
Amortization expense consist of the amortization over a period of 30 years of
the Acquisition Fee and other expenses attributable to the acquisition of Local
Limited Partnership Interests. Interest expense was incurred as described above
under "Liquidity and Capital Resources." Interest expense is expected to minimal
after 1995. Office expense consist of Series 5's administrative expenses, such
as legal fees, bank charges and investor reporting expenses.
Because of the amounts of the Asset Management Fee and amortization expense
primarily are determined by the Gross Proceeds from the Offering, the number and
size of Apartment Complexes and the number of investors, until termination of
the Offering and investment of the net proceeds therefrom, Series 5 cannot
predict with any accuracy what these amounts will be.
Equity in Losses from Local Limited Partnership. Series 5's equity in losses
from Local Limited Partnerships is equal to 99% of the aggregate net losses of
each Local Limited Partnership incurred after admission of Series 5 as a limited
Partner thereof.
After rent-up all Local Limited Partnerships are expected to generate losses
during each year of operations; this is so because, although rental income is
expected to exceed cash operating expenses, depreciation and amortization
deductions claimed by the Local Limited Partnerships are expected to exceed net
rental income.
<PAGE>
PART II - OTHER INFORMATION
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) None
(b) A current report on Form 8-K dated May 30, 1996 was filed during
the quarter ended June 30, 1996. The current report set forth
information pertaining to the acquisition by the Partnership of
one Limited Partnership interests under Item 2 thereof and pro
forma financial information required by Article 11 of Regulation
S-X were provided by the current report.
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
WNC CALIFORNIA HOUSING TAX CREDITS IV, L.P., Series 4
(Registrant)
By: WNC CALIFORNIA TAX CREDIT PARTNERS IV, L.P.,
General Partner
By: WNC & ASSOCIATES, INC., General Partner
By /s/ John B. Lester, Jr.
--------------------------------
John B. Lester, Jr.
President
Date: 08/20/1996
By /s/ Theodore M. Paul
---------------------------
Theodore M. Paul, Chief Financial Officer
Date: 08/20/1996
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000921052
<NAME> WNC CALIFORNIA HOUSING TAX CREDITS IV - SERIES 4
<MULTIPLIER> 1
<CURRENCY> US CURRENCY
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1
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0
0
<COMMON> 0
<OTHER-SE> 9,576,955
<TOTAL-LIABILITY-AND-EQUITY> 11,771,591
<SALES> 0
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<CGS> 0
<TOTAL-COSTS> 37,830
<OTHER-EXPENSES> 172,000
<LOSS-PROVISION> 0
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (94,435)
<EPS-PRIMARY> (8.13)
<EPS-DILUTED> 0
</TABLE>
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<CIK> 0000921054
<NAME> WNC CALIFORNIA HOUSING TAX CREDITS IV, L.P. SERIES 5
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<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
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