FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
|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: 33-91136
WNC HOUSING TAX CREDIT FUND V, L.P., Series 3 and Series 4
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
California 33-6163848
WNC HOUSING TAX CREDIT FUND V, L.P., Series 3 and Series 4 3158 Redhill Avenue,
Suite 120, Costa Mesa, CA 92626 (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>
Part I. Financial Information
Item 1. Financial Statements
Index
WNC HOUSING TAX CREDIT FUND V, L.P., Series 3
(A California Limited Partnership)
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1996
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheet, June 30, 1996 and December 31, 1995...................3
Statement of Operations
For the Six Months Ended June 30, 1996..............................4
Statement of Partners' Equity
For the Six Months Ended June 30, 1996..............................5
Statement of Cash Flows
For the Six Months Ended June 30, 1996..............................6
Notes to Financial Statements........................................8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations......................13
PART II. OTHER INFORMATION
Item 1. Legal Proceedings............................................16
Item 6. Exhibits and Reports on Form 8-K.............................16
Signatures...........................................................17
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4 IS INACTIVE AT THIS TIME.
-2-
<PAGE>
Financial Statements
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
(A Development-Stage Enterprise)
BALANCE SHEETS
June 30, 1996 and December 31, 1995
1996 1995
------ ------
ASSETS
Cash and cash equivalents $ 6,590,926 $ 660,999
Cash in escrow - 1,873,262
Subscriptions receivable - Note 7 1,685,130 484,000
Loans Receivable - Note 2 30,541 661,306
Receivable from General Partner
Investment in limited
partnerships - Note 3 8,768,957 1,046,532
Other assets 18,534 73
------- --
$ 17,094,088 $ 4,726,172
========== =========
LIABILITIES AND PARTNERS' EQUITY
Liabilities:
Payable to limited partnerships - Note 5 $ 3,469,560 $ 309,852
Accrued fees and expenses due to
general partner and affiliates - Note 4 349,518 570,137
-------- -------
3,819,078 879,989
---------- -------
Commitments and contingencies - Note 8
Partners' equity (deficit):
General partner (20,133) (6,029)
Limited partners (10,000 units
authorized, 17,990 units issued
and outstanding) 13,295,143 3,852,212
---------- ---------
Total partners' equity 13,275,010 3,846,183
---------- ---------
$ 17,094,088 $ 4,726,172
========== =========
UNAUDITED
See Accompanying Notes to Financial Statements
-3-
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
(A Development-Stage Enterprise)
STATEMENT OF OPERATIONS
For the Three Months and Six Months Ended June 30, 1996
Three Six
Months Months
------- -------
Interest income $ 30,910 $ 36,504
Operating expenses:
Amortization 3,768 8,155
Asset management fees (Note 4) 19,883 24,750
Legal and accounting 1,864 1,864
Other 3,242 3,247
------ ------
Total operating expenses 28,757 38,016
------- ------
Income (loss) from operations 2,153 (1,512)
Equity in loss from
limited partnerships (43,666) (45,200)
-------- --------
Net loss $ (41,513) $ (46,712)
======== ========
Net loss allocated to:
General partner $ (415) $ (467)
===== =====
Limited partners $ (41,098) $ (46,245)
======== ========
Net loss per weighted limited
partner unit (9,009) $ (4.56) $ (5.13)
====== ======
UNAUDITED
See Accompanying Notes to Financial Statements
-4-
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
(A Development-Stage Enterprise)
STATEMENT OF PARTNERS' EQUITY
For the Six Months Ended June 30, 1996
General Limited
Partner Partner Total
Equity (deficit), December 31, 1995 $ (6,029) $ 3,852,212 $ 3,846,183
Capital contributions 13,060,580 13,060,580
Offering expenses (13,637) (1,350,089) (1,363,726)
Capital issued for notes receivable (2,221,315) (2,221,315)
Net loss for the six months ended
June 30, 1996 (467) (46,245) (46,712)
----- -------- --------
Equity (deficit), June 30, 1996 $ (20,133) $ 13,295,143 $ 13,275,010
======== =========== ===========
UNAUDITED
See Accompanying Notes to Financial Statements
-5-
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
(A Development-Stage Enterprise)
STATEMENT OF CASH FLOWS
For the Six Months Ended June 30, 1996
Cash flows used by operating activities:
Net loss $ (46,712)
Adjustments to reconcile net loss to net
cash used in operating activities:
Equity in loss of limited partnerships 45,200
Amortization 8,155
Asset management fee 24,750
Change in other assets (18,461)
Accrued fees and expense due to
general partner and affiliates (734)
-----
Net cash provided by operating activities 12,198
-------
Cash flows used by investing activities:
Investment in limited partnerships (1,710,386)
Acquisition fees (664,382)
---------
Net cash used by investing activities (2,374,768)
------------
Cash flows provide by financing activities:
Capital contributions 9,638,135
Offering costs (1,345,638)
------------
Net cash provided by financing activities 8,292,497
------------
Net increase in cash and cash equivalents 5,929,927
Cash and cash equivalents, beginning of period 660,999
--------
Cash and cash equivalent, end of period $ 6,590,926
============
UNAUDITED
See Accompanying Notes to Financial Statements
-6-
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., Series 3
(A California Limited Partnership)
(A Development-Stage Enterprise)
STATEMENT OF CASH FLOWS(CONTINUED
For the Six Months Ended June 30, 1996
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING AND INVESTING ACTIVITIES:
During the six months ended June 30, 1996, the Partnership incurred, but did not
pay, $17,688 of payables to affiliates for acquisitions costs and offering
expenses (see Note 4).
During the six months ended June 30, 1996, the Partnership incurred, but did not
pay, $3,159,708 of payables to limited partnerships; the Partnership applied
cash in escrow of $1,873,262 and loans receivable of $630,765 (in connection
with its investments in limited partnerships) (see Note 3)
During the six months ended June 30, 1996, $1,201,130 of capital contributions
were recordeded as subscriptions receivable.
During the six months ended June 30, 1996, the Partnership incurred, but did not
pay, $24,750 in management fees. (see Note 4 ).
UNAUDITED
See Accompanying Notes to Financial Statements
-7-
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., Series 3
(A California Limited Partnership)
(A Development-Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
WNC Housing Tax Credit Fund, V, L.P., Series 3 (the "Partnership") was formed
under the California Revised Limited Partnership Act on March 28, 1995 and
commenced operations on October 23, 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 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 Tax Credit Partners V, 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.
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 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.
-8-
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., Series 3
(A California Limited Partnership)
(A Development-Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS-CONTINUED
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 will be amortized on the straight-line method over 60 months.
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 (10.5 % at June 30,1996).
Loans receivable of $661,306 at December 31, 1995 were applied to capital
contributions due for limited partnership interests acquired in February 1996.
(see Note 9). The $30,541 is due at June 30, 1996.
-9-
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., Series 3
(A California Limited Partnership)
(A Development-Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS-CONTINUED
NOTE 3 - INVESTMENT IN LIMITED PARTNERSHIPS
As of June 30, 1996, the Partnership had acquired limited partnership interests
in eleven limited partnerships each of which owns one apartment complex. As of
June 30, 1996, construction and rehabilitation of five of the apartment
complexes had been completed. The remaining six have started construction. The
Partnership, as a limited partner, is a 99% owner and is entitled to 99% of the
operating profits and losses of the limited partnerships.
The following is a summary of the investment in limited partnerships and
reconciliation to the limited partnership accounts as of June 30, 1996 and
December 31, 1995:
1996 1995
------ ------
Investment Balance - Beginning of period $ 1,046,532 $ 0
Capital contributions to limited partnerships 4,214,413 397,395
Capital contributions payable to
limited partnerships 3,159,708 309,852
Capitalized acquisition fees and costs 401,659 340,082
Equity in loss of limited partnership (45,200) (343)
Amortization of capitalized acquisition costs (8,155) (454)
------- -----
Investment Balance - end of period $ 8,768,957 $ 1,046,532
========= =========
Selected financial information for the three months ended June 30, 1996 from the
combined financial statements of the limited partnerships in which the
partnership has invested is as follows:
Total revenue $ 278,000
-------
Interest expense 67,000
Depreciation 77,000
Operating expenses 180,000
-------
Total expenses 324,000
-------
Net Loss $ (46,000)
========
Net loss allocable to the Partnership $ (45,200)
========
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<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., Series 3
(A California Limited Partnership)
(A Development-Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS-CONTINUED
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 up to 7.5% of the gross proceeds from the sale of
Partnership units. Acquisition fees of $364,719 were incurred for the six
months ended June 30, 1996.
Reimbursement for organizational, offering and selling expenses advanced
by the General Partner or affiliates on behalf of the Partnership. These
reimbursements plus all other organizational and offering expenses inclusive
of sales commissions will not exceed 14.5% of the gross proceeds. During the
six months ended June 30, 1996 the Partnership incurred organizational,
offering and selling expenses of $0, $634,401, and $729,325, respectively.
An annual management fee equal to the greater of (i) $2,000 for each
apartment complex or (ii) .275% of the gross proceeds, in either case
increased or decreased based on annual changes in the Consumer Price Index.
However, the maximum fee may not exceed .2% of the invested assets (defined
as the Partnership's capital contributions plus its allocable percentage of
the permanent financing) of the local limited partnerships.The Partnership
has incurred fees of $24,750 for the six months ended June 30, 1996.
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
Partnership's 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 $ 65,674 $ 327,997
Advances made for acquisition costs,
organizational, offering and selling
expenses 246,727 229,773
Asset management fees 37,117 12,367
------ ------
$ 349,518 $ 570,137
======== ========
-11-
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., Series 3
(A California Limited Partnership)
(A Development-Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS-CONTINUED
NOTE 5 - PAYABLE TO LIMITED PARTNERSHIPS
Payable to limited partnerships at June 30, 1996 represents amounts which are
due at various times based on conditions specified in the respective local
limited partnership agreements. These contributions are payable in installments,
generally due upon the local limited partnership 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 income and
losses will be allocated to the Partners for inclusion in their respective
returns.
NOTE 7 - SUBSCRIPTION AND INVESTOR NOTES RECEIVABLE
During the six months ended June 30, 1996, the Partnership accepted $2,256,315
in promissory notes from limited partners and collected payments of $35,000 for
those promissory notes previously issued. 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.
Subscriptions receivable of $1,685,130 has been received subsequent to June 30,
1996 and accordingly has been classified as an asset.
NOTE 8 - COMMITMENTS AND CONTINGENCIES
Subsequent to June 30, 1996, the Partnership acquired a limited partnership
interest totaling approximately $753,300.
The Partnership is negotiating to acquire three additional limited partnership
interest which would commit the Partnership to additional capital contributions
of approximately $709,000.
-12-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operation
WNC Housing Tax Credit Fund V, L.P., Series 3 (the Partnership) is a
California Limited Partnership formed under the laws of the State of California
on March 28, 1995, and commenced operations on October 24, 1995 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 Housing Tax Credit Fund V, L.P., Series 4 is inactive at this time.
As of June 30, 1996, the Partnership had received subscriptions for 17,990 Units
consisting of cash, notes receivable and subscriptions receivable of $13,613,000
and $2,256,000, and $1,685,000, respectively.
Liquidity and Capital Resources
Overall, as reflected in its Statement of Cash Flows, the Partnership had a net
increase in cash and cash equivalents of approximately $5,930,000 for the six
months ended June 30, 1996. This increase in cash was provided by the
Partnership's financing activities, including the proceeds from the offering.
Cash from financing activities for the period ended June 30, 1996 of
approximately $8,292,000 was sufficient to fund the investing activities of the
Partnership during such period in the aggregate amount of approximately
$2,375,000, which consisted primarily of capital contributions to Limited
Partnerships. Cash provided and used by the operating activities of the
Partnership was minimal compared to its other activities. Cash provided from
operations consisted primarily of interest received on cash deposits, and cash
used in operations consisted primarily of payments for operating fees and
expenses. The major components of all these activities are discussed in greater
detail below.
As of December 31, 1995 and June 30, 1996 the Partnership was indebted to WNC &
Associates, Inc. in the amount of approximately $570,000 and $350,000,
respectively. The component items of such indebtedness were as follows: accrued
acquisition fees of approximately $328,000 and $66,000, respectively, advances
to pay front-end fees of approximately $230,000 and $247,000, respectively,
accrued asset management fees of approximately $12,000 and $37,000 respectively.
As of July 31, 1996, the Partnership has received and accepted subscriptions
funds in the amount of $17,555,000, of which $2,256,000 currently is represented
by Promissory Notes. As of July 31, 1996, as of June 30, 1996 and as of December
31, 1995, the Partnership had made capital contributions to Limited Partnerships
in the amount of approximately $6,410,000 , $4,932,000 and $397,000,
respectively, and had commitments for additional capital contributions of
approximately $3,134,000, $3,470,000 and $3,277,000, respectively. Further, the
Partnership had loans outstanding to Limited Partnerships as of May 2, 1996, as
of June 30, 1996 and as of December 31, 1995, of approximately $31,000, $31,000
and $661,000, respectively. Of the amount outstanding as of December 31, 1995,
approximately $172,000 was loaned to TALLEDEGA and was applied to the
Partnership's purchase price upon acquisition of that Limited Partnership
Interest in February 1996. The balance of $489,000 was loaned to ALLIANCE and
was applied to the Partnership's purchase price upon acquisition of that Limited
Partnership Interest in February 1996. Of the amount outstanding as of June 30
and August 31, 1996 the entire amount of approximately $31,000 was loaned to
CURTIS.
Prior to sale of the Apartment Complexes, it is not expected that any of the
Limited Partnerships in which the Partnership has invested or will invest will
generate cash from operations sufficient to provide distributions to the Limited
Partners in any material amount. Such cash from operations, if any, would first
be used to meet operating expenses of the Partnership, including payment of the
asset management fee to the General Partner. As a result, it is not anticipated
that the Partnership will provide distributions to the Limited Partners prior to
the sale of the Apartment Complexes.
-13-
<PAGE>
The Partnership's 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 Limited
Partnerships and the Partnership. These problems may result from a number of
factors, many of which cannot be controlled by the General Partner.
Nevertheless, the General Partner anticipates that capital raised from the sale
of the Units will be sufficient to fund the Partnership's investment commitments
and proposed operations.
The Partnership 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
Partnership 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 Partnership. Liquidity would,
however, be adversely affected by unanticipated or greater than anticipated
operating costs. The Partnership's 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 Partnership, 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 Limited Partnerships for
such purposes or to replenish or increase working capital reserves.
Under the Partnership Agreements the Partnership does not have the ability to
assess the Limited Partners for additional capital contributions to provide
capital if needed by the Partnership or Limited Partnerships. Accordingly, if
circumstances arise that cause the Limited Partnerships to require capital in
addition to that contributed by the Partnership and any equity contributed by
the general partners of the Limited 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 Limited Partnerships are already substantially leveraged), (ii) additional
equity contributions or advances of the general partners of the Limited
Partnerships (in this regard, each local general partner is required to fund
operating deficits, but only for a period of two years following construction
completion), (iii) other equity sources (which could adversely affect the
Partnership's 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
Limited Partnerships in question. If such funds are not available, the Limited
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
Limited Partnerships relate to such debt.
The Partnership's 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 Partnership's 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 Partnership.
Results of Operations
As of December 31, 1995 and June 30, 1996 the Partnership had acquired 2 and 11
Limited Partnership Interests, respectively. Each of the 11 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, five of the
Apartment Complexes in the Partnership had commenced operations, none of them
for a full year. Accordingly, the "Equity in losses from limited partnerships"
for the periods ended December 31, 1995 and June 30, 1996 reflected in the
Statement of Operations of the Partnership is not indicative of the amounts to
be reported in future years.
-14-
<PAGE>
The Partnership was formed in March 1995 and commenced operations in October
1995. Consequently, there are no operations for the six months ended June 30,
1995.
As reflected on its Statements of Operations, the Partnership had a loss of
approximately $47,000 for the six months ended June 30, 1996. The component
items of revenue and expense are discussed below.
Revenue. The Partnership'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 Limited Partnerships. Interest revenue
in future years will be a function of prevailing interest rates and the amount
of cash balances. It is anticipated that the Partnership 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 and is
expected to be the Asset Management Fee. The Asset Management Fee 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
Limited Partnership Interests.
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 the Partnership cannot
predict with any accuracy what these amounts will be.
Equity in Losses from Limited Partnership. The Partnership's equity in losses
from Limited Partnerships is equal to 99% of the aggregate net losses of each
Limited Partnership incurred after admission of the Partnership as a limited
partner thereof.
After rent-up all 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 Limited Partnerships are expected to exceed net rental income.
The Partnership accounts for its investments in Local Partnerships using the
equity method of accounting, whereby the Partnership reduces its investment
balance for its share of Local Partnerships' losses and distributions. Losses
are not recognized to the extent that the investment balance would be adjusted
below zero.
-15-
<PAGE>
Part II. Other Information
Item 1. Legal Proceedings
None.
Item 6. Exhibits and Reports on Form 8-K
1. None.
No reports on Form 8-K were filed during the quarter ended June 30, 1996.
-16-
<PAGE>
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 HOUSING TAX CREDIT FUND V, L.P., Series 3 and Series 4
By: WNC & ASSOCIATES, INC.
General Partner
By: /s/John B. Lester, Jr.
- -------------------------
John B. Lester, Jr.
President
Date: August 14, 1996
By: /s/ Theodore M. Paul
- -----------------------------
Theodore M. Paul
Vice President - Finance
Date: August 14, 1996
-17-
<TABLE> <S> <C>
<ARTICLE> 5
<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
<CASH> 6,590,926
<SECURITIES> 0
<RECEIVABLES> 1,685,130
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 8,276,056
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 17,094,088
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0
0
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<INCOME-PRETAX> (46,712)
<INCOME-TAX> 0
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<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (46,245)
<EPS-PRIMARY> (5)
<EPS-DILUTED> 0
</TABLE>
