FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended March 31, 2000
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: 0-21895
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
California 33-6163848
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3158 Redhill Avenue, Suite 120, Costa Mesa, CA 92626
(714) 662-5565
Securities registered pursuant to Section 12(b) of
the Act:
NONE
Securities registered pursuant to section 12(g) of
the Act:
UNITS OF LIMITED PARTNERSHIP INTEREST
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 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
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State the aggregate market value of the voting and non-voting common equity held
by non-affiliates of the registrant.
INAPPLICABLE
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and the Part
of the Form 10-K (e.g., Part I, Part II, etc.) 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. The listed documents should be clearly
described for identification purposes (e.g., annual report to security holders
for fiscal year ended December 24, 1980).
NONE
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PART I.
Item 1. Business
Organization
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. The Partnership
was formed to acquire limited partnership interests in other limited
partnerships or limited liability companies ("Local Limited Partnerships") which
own multifamily apartment complexes that are eligible for low-income housing
federal and, in some cases, California income tax credits (the "Low Income
Housing Credit").
The general partner of the Partnership is WNC & Associates, Inc. (the "General
Partner" or "Associates"). Wilfred N. Cooper, Sr., through the Cooper Revocable
Trust, owns 66.8% of the outstanding stock of Associates. John B. Lester, Jr.
was the original limited partner of the Partnership and owns, through the Lester
Family Trust, 28.6% of the outstanding stock of Associates. Wilfred N. Cooper,
Jr., President of Associates, owns 2.1% of the outstanding stock of Associates.
The business of the Partnership is conducted primarily through the General
Partner as the Partnership has no employees of its own.
Pursuant to a registration statement filed with the Securities and Exchange
Commission on July 26, 1995, the Partnership commenced a public offering of
25,000 Units of Limited Partnership Interest ("Units") at a price of $1,000 per
Unit. As of the close of the public offering, January 21, 1996 a total of 18,000
Limited Partnership Interests representing $17,558,985 had been sold.
Sempra Energy Financial, a California corporation, which is not an affiliate of
the Partnership or General Partner, has purchased 4,560 Units, which represents
25.3% of the Units outstanding for the Partnership. Sempra Energy Financial
invested $4,282,600. A discount of $277,400 was allowed due to a volume
discount. Western Financial Savings Bank, which is not an affiliate of the
Partnership or General Partner, has purchased 1,068 units, which represent 5.9%
of the Units outstanding for the Partnership. Western Financial Savings Bank
invested $1,000,000. A discount of $68,000 was allowed due to a volume discount.
See Item 12(a) in this 10-K.
Description of Business
The Partnership's principal business objective is to provide its Limited
Partners with Low Income Housing Credits. The Partnership's principal business
therefore consists of investing as a limited partner or non-managing member in
Local Limited Partnerships each of which will own and operate a multi-family
housing complex (the "Housing Complex") which will qualify for the Low Income
Housing Credit. In general, under Section 42 of the Internal Revenue Code, an
owner of low-income housing can receive the Low Income Housing Credit to be used
to reduce Federal taxes otherwise due in each year of a ten-year period. In
general, under Section 17058 of the California Revenue and Taxation Code, an
owner of low-income housing can receive the Low Income Housing Credit to be used
against California taxes otherwise due in each year of a four-year period. The
Housing Complex is subject to a fifteen-year compliance period (the "Compliance
Period"), and under state law may have to be maintained as low income housing
for 30 or more years.
In general, in order to avoid recapture of Low Income Housing Credits, the
Partnership does not expect that it will dispose of its interests in Local
Limited Partnerships ("Local Limited Partnership Interests") or approve the sale
by any Local Limited Partnership of its Housing Complex prior to the end of the
applicable Compliance Period. Because of (i) the nature of the Housing
Complexes, (ii) the difficulty of predicting the resale market for low-income
housing 15 or more years in the future, and (iii) the ability of government
lenders to disapprove of transfer, it is not possible at this time to predict
whether the liquidation of the Partnership's assets and the disposition of the
proceeds, if any, in accordance with the Partnership's Agreement of Limited
Partnership, as amended "by Supplements thereto" (the "Partnership Agreement"),
will be able to be accomplished promptly at the end of the 15-year period. If a
Local Limited Partnership is unable to sell its Housing Complex, it is
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anticipated that the local general partner ("Local General Partner") will either
continue to operate such Housing Complex or take such other actions as the Local
General Partner believes to be in the best interest of the Local Limited
Partnership. Notwithstanding the preceding, circumstances beyond the control of
the General Partner or the Local General Partners may occur during the
Compliance Period, which would require the Partnership to approve the
disposition of a Housing Complex prior to the end thereof, possibly resulting in
recapture of Low Income Housing Credits.
As of March 31, 2000, the Partnership had invested in eighteen Local Limited
Partnerships. Each of these Local Limited Partnerships owns a Housing Complex
that is eligible for the federal Low Income Housing Credit. Certain Local
Limited Partnerships may also benefit from government programs promoting low- or
moderate-income housing.
The Partnership's investments in Local Limited Partnerships are subject to the
risks incident to the management and ownership of low-income housing and to the
management and ownership of multi-unit residential real estate. Some of these
risks are that the Low Income Housing Credit could be recaptured and that
neither the Partnership's investments nor the Housing Complexes owned by the
Local Limited Partnerships will be readily marketable. To the extent the Housing
Complexes receive government financing or operating subsidies, they may be
subject to one or more of the following risks: difficulties in obtaining tenants
for the Housing Complexes; difficulties in obtaining rent increases; limitations
on cash distributions; limitations on sales or refinancing of Housing Complexes;
limitations on transfers of Local Limited Partnership Interests; limitations on
removal of Local General Partners; limitations on subsidy programs; and possible
changes in applicable regulations. The Housing Complexes are subject to mortgage
indebtedness. If a Local Limited Partnership does not make its mortgage
payments, the lender could foreclose resulting in a loss of the Housing Complex
and Low Income Housing Credits. As a limited partner or non-managing member of
the Local Limited Partnerships, the Partnership will have very limited rights
with respect to management of the Local Limited Partnerships, and will rely
totally on the general partners or managing members of the Local Limited
Partnerships for management of the Local Limited Partnerships. The value of the
Partnership's investments will be subject to changes in national and local
economic conditions, including unemployment conditions, which could adversely
impact vacancy levels, rental payment defaults and operating expenses. This, in
turn, could substantially increase the risk of operating losses for the Housing
Complexes and the Partnership. In addition, each Local Limited Partnership is
subject to risks relating to environmental hazards and natural disasters, which
might be uninsurable. Because the Partnership's operations will depend on these
and other factors beyond the control of the General Partner and the Local
General Partners, there can be no assurance that the anticipated Low Income
Housing Credits will be available to Limited Partners.
In addition, Limited Partners are subject to risks in that the rules governing
the Low Income Housing Credit are complicated, and the use of credits can be
limited. The only material benefit from an investment in Units may be the Low
Income Housing Credits. There are limits on the transferability of Units, and it
is unlikely that a market for Units will develop. All Partnership management
decisions are made by the General Partner.
As a limited partner or non-managing member, the Partnership's liability for
obligations of each Local Limited Partnership is limited to its investment. The
Local General Partners of each Local Limited Partnership retain responsibility
for developing, constructing, maintaining, operating and managing the Housing
Complexes.
Item 2. Properties
Through its investments in Local Limited Partnerships, the Partnership holds
limited partnership interests in the Housing Complexes. The following table
reflects the status of the eighteen Housing Complexes as of the dates and for
the periods indicated:
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<TABLE>
<CAPTION>
------------------------------- ----------------------------------------
As of March 31, 2000 As of December 31, 1998
------------------------------- ----------------------------------------
Partnership's Estimated Encumbrances
Total Investment Amount of Low Income of Local
in Local Limited Investment Number Occu- Housing Limited
Partnership Name Location General Partner Name Partnerships Paid to Date of Units pancy Credits Partnerships
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Alliance Apartments I Alliance, Retro Development, Inc. $ 604,000 $ 604,000 19 100% $ 363,000 $ 601,000
Limited Partnership Nebraska
Blessed Rock of El El Monte, Everland, Inc. 2,511,000 2,511,000 137 99% 8,899,000 2,678,000
Monte California
Broadway Apartments, Hobbs, New Trianon - Broadway, LLC,
Limited Partnership Mexico a New Mexico Limited
Liability Company 2,029,000 1,957,000 78 71% 2,335,000 1,391,000
Cascade Pines, L.P. Atlanta, Urban Residential
II Georgia Management, Inc., a Georgia
Corporation 1,347,000 1,347,000 376 89% 2,533,000 7,898,000
Curtis Associates I, Curtis, Joseph A. Shepard and
L.P. Nebraska Kenneth M. Vitor 88,000 88,000 12 83% 156,000 426,000
Escatawpa Village Escatawpa, Clifford E. Olsen 249,000 249,000 32 97% 458,000 895,000
Associates, Limited Mississippi
Partnership
Evergreen Apartments Tulsa, Retro Development, Inc. of
I Limited Partnership Oklahoma Oklahoma and Most Worshipful
Prince Hall Grand Lodge 549,000 549,000 76 51% 991,000 637,000
Hastings Apartments Hastings, Retro Development, Inc. of
I, Limited Partnership Nebraska Oklahoma and Most Worshipful
Prince Hall Grand Lodge 542,000 542,000 18 94% 1,005,000 588,000
Heritage Apartments Berkeley, Joseph A. Shepard and
I, L.P. Missouri Kenneth M. Vitor 752,000 752,000 30 97% 1,333,000 680,000
Hillcrest Associates, Ontario, Riley J. Hill 354,000 354,000 28 100% 683,000 1,298,000
A Limited Partnership Oregon
</TABLE>
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<TABLE>
<CAPTION>
------------------------------- ----------------------------------------
As of March 31, 2000 As of December 31, 1998
------------------------------- ----------------------------------------
Partnership's Estimated Encumbrances
Total Investment Amount of Low Income of Local
in Local Limited Investment Number Occu- Housing Limited
Partnership Name Location General Partner Name Partnerships Paid to Date of Units pancy Credits Partnerships
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Patten Towers, L.P. II Chattanooga, Patten Towers Partners,
Tennessee LLC 2,154,000 2,154,000 221 97% 3,938,000 6,945,000
Prairieland Syracuse, Kenneth M. Vitor 85,000 85,000 8 100% 152,000 294,000
Properties of Kansas
Syracuse II, L.P.
Raymond S. King Greensboro, Project Homestead, Inc. 437,000 437,000 23 100% 883,000 782,000
Apartments Limited North
Partnership Carolina
Rosedale Limited Silver City, Deke Noftsker and ABO
Partnership New Mexico Corporation 309,000 309,000 32 94% 547,000 1,321,000
Shepherd South Shepherd, Donald W. Sowell 121,000 121,000 24 75% 223,000 561,000
Apartments I, Ltd. Texas
Solomon Associates I, Solomon, Joseph A. Shepard and
L.P. Kansas Kenneth M. Vitor 138,000 138,000 16 81% 250,000 567,000
Talladega County Talladega, Apartment Developers, Inc.
Housing Ltd. Alabama and Thomas H. Cooksey 653,000 653,000 30 100% 1,200,000 804,000
The Willows Morganton, John C. Loving, Gordon D.
Apartments Limited North Brown, Jr. and
Partnership Carolina Western N.C.
Housing Partnership 841,000 841,000 36 97% 1,545,000 1,112,000
---------- ---------- ----- ---- ---------- ----------
$ 13,763,000 $ 13,691,000 1,196 89.7% $ 27,494,000 $ 29,478,000
========== ========== ===== ==== ========== ==========
</TABLE>
6
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<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
For the year ended December 31, 1999
-------------------------------------------------------------------------------
Low Income Housing
Credits Allocated to
Partnership Name Rental Income Net Loss Partnership
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Alliance Apartments I Limited
Partnership $ 77,000 $ (52,000) 99%
Blessed Rock of El Monte 660,000 (80,000) 49.49%
Broadway Apartments, Limited
Partnership 221,000 (178,000) 99%
Cascade Pines, L.P. II 1,785,000 (280,000) 98%
Curtis Associates I, L.P. 35,000 (15,000) 99%
Escatawpa Village Associates,
Limited Partnership 120,000 (25,000) 99%
Evergreen Apartments I Limited
Partnership 194,000 (218,000) 99%
Hastings Apartments I, Limited
Partnership 71,000 (49,000) 99%
Heritage Apartments I, L.P. 99,000 (56,000) 98.9%
Hillcrest Associates, A Limited
Partnership 191,000 (5,000) 99%
Patten Towers, L.P. II 1,489,000 (37,000) 99%
Prairieland Properties of Syracuse
II, L.P. 53,000 (6,000) 99%
Raymond S. King Apartments Limited
Partnership 58,000 (37,000) 99%
Rosedale Limited Partnership 138,000 (39,000) 99%
Shepherd South Apartments I, Ltd. 79,000 4,000 99%
Solomon Associates I, L.P. 90,000 (22,000) 99%
Talladega County Housing Ltd. 86,000 (43,000) 99%
The Willows Apartments Limited
Partnership 120,000 (20,000) 99%
----------- -----------
$ 5,566,000 $ (1,084,000)
=========== ===========
</TABLE>
7
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Item 3. Legal Proceedings
During the year, Associates identified a potential problem with a developer who,
at the time, was the local general partner in six Local Limited Partnerships.
The Partnership has a 99% limited partnership interest in three of those six
Local Limited Partnerships. Those investments are Alliance Apartments I,
Evergreen Apartments I and Hastings Apartments I. All the properties continue to
experience operating deficits. The local general partner ceased funding the
operating deficits, which placed the Local Limited Partnerships in jeopardy of
foreclosure. Consequently, Associates voted to remove the local general partner
and the management company from the Local Limited Partnerships. After the local
general partner contested its removal, Associates commenced legal action on
behalf of the Local Limited Partnerships and was successful in getting a
receiver appointed to manage the Local Limited Partnerships and an unaffiliated
entity appointed as property manager. Associates was subsequently successful in
attaining a summary judgment to confirm the removal of the local general
partner, the receiver was discharged and Associates now controls all six of the
Local Limited Partnerships.
The six Local Limited Partnerships (hereinafter referred to as "Defendants") are
now defendants in a separate lawsuit. The lawsuit has been filed by eight other
partnerships in which the local general partner of the Local Limited
Partnerships is or was involved (the "Plaintiffs"). The Plaintiffs allege that
the local general partner accepted funds from the Plaintiffs and improperly
loaned these funds to the Defendants. Discovery in this lawsuit is ongoing and
Associates will continue to pursue an aggressive defense on behalf of the
Defendants.
The Partnership has a 99% limited partnership investment in Cascade Pines, L.P.
II ("Cascade"). Cascade is a defendant in a wrongful death lawsuit and a related
injury lawsuit. Cascade carries general liability and extended liability
insurance. Discovery for these lawsuits is ongoing, but the management of
Cascade and Associates are unable to determine the outcome of these lawsuits at
this time or their impact, if any, on the Partnership's financial statements.
Should Cascade be unsuccessful in its defense and the insurer denies coverage,
which they have indicated that they might, or the insurance coverage proves to
be inadequate, the Partnership may be required to sell its investment or may
otherwise lose its investment in Cascade. Loss of the Cascade investment could
result in recapture of tax credits and certain prior tax deductions.
Item 4. Submission of Matters to a Vote of Security Holders
NONE.
PART II.
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
Item 5a.
(a) The Units are not traded on a public exchange but were sold through a
public offering. It is not anticipated that any public market will develop
for the purchase and sale of any Unit and none exists. Units can be
assigned only if certain requirements in the Partnership Agreement are
satisfied.
(b) At March 31, 2000, there were 863 Limited Partners.
(c) The Partnership was not designed to provide cash distributions to Limited
Partners in circumstances other than refinancing or disposition of its
investments in Local Limited Partnerships.
(d) No unregistered securities were sold by the Partnership during the year
ended March 31, 2000.
Item 5b.
NOT APPLICABLE
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Item 6. Selected Financial Data
Selected balance sheet information for the Partnership is as follows:
<TABLE>
<CAPTION>
March 31 December 31
------------------------- -----------------------------------------------------
2000 1999 1998 1997 1996 1995
---------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 365,942 $ 911,080 $ 950,372 $ 2,018,591 $ 2,567,217 $ 660,999
Cash in escrow - - - - - 1,873,262
Subscriptions receivable - - - - 2,195,000 484,000
Investments in limited
partnerships, net 10,968,078 12,250,789 12,559,525 13,836,734 12,782,751 1,046,532
Interest receivable - - - 19,435 - -
Loan receivable - - - - 522,190 661,306
Other assets - - - - 105,998 73
---------- ----------- ----------- ----------- ----------- -----------
$ 11,334,020 $ 13,161,869 $ 13,509,897 $ 15,874,760 $ 18,173,156 $ 4,726,172
========== =========== =========== =========== =========== ===========
LIABILITIES
Due to limited partnerships $ 72,938 $ 95,030 $ 95,030 $ 1,290,351 $ 2,822,885 $ 309,852
Accrued expenses 149,735 - - - - -
Accrued fees and expenses
due to general partner and
affiliates 26,540 28,677 62,496 4,640 43,807 570,137
PARTNERS' EQUITY 11,084,807 13,038,162 13,352,371 14,579,769 15,306,464 3,846,183
---------- ----------- ----------- ----------- ----------- -----------
$ 11,334,020 $ 13,161,869 $ 13,509,897 $ 15,874,760 $ 18,173,156 $ 4,726,172
========== =========== =========== =========== =========== ===========
Selected results of operations, cash flows, and other information for the
Partnership is as follows:
For the
Year
Ended For the Three Months
March 31 Ended March 31 For the Years Ended December 31
---------- ----------------------- ---------------------------------------------------
2000 1999 1998 1998 1997 1996 1995
---------- --------- ---------- ---------- ---------- --------- ----------
(Unaudited)
Income (loss) from
operations (Note 1) $ (1,099,531) $ (20,391) $ (10,209) $ (52,065) $ 20,214 $ 117,374 $ (9,346)
Equity in losses of limited
partnerships (853,824) (293,818) (170,900) (1,175,333) (789,697) (185,071) (343)
---------- --------- ---------- ---------- ---------- --------- ----------
Net loss $ (1,953,355) $ (314,209) $ (181,109) $ (1,227,398) $ (769,483) $ (67,697) $ (9,689)
========== ========= ========== ========== ========== ========= ==========
Net loss allocated to:
General partner $ (19,534) $ (3,142) $ (1,811) $ (12,274) $ (7,695) $ (677) $ (97)
========== ========= ========== ========== ========== ========= ==========
Limited partners $ (1,933,821) $ (311,067) $ (179,298) $ (1,215,124) $ (761,788) $ (67,020) $ (9,592)
========== ========= ========== ========== ========== ========= ==========
Net loss per limited
partner $ (107.43) $ (17.28) $ (9.96) $ (67.51) $ (42.32) $ (4.94) $ (14.58)
========== ========= ========== ========== ========== ========= ==========
Outstanding weighted
limited partner units 18,000 18,000 18,000 18,000 18,000 13,564 658
========== ========= ========== ========== ========== ========= ==========
Note 1 - Loss from operations includes a charge for impairment losses on
investments in limited partnerships of $955,804. (See Note 2 to the audited
financial statements.)
</TABLE>
9
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<TABLE>
<CAPTION>
For the
Year
Ended For the Three Months
March 31 Ended March 31 For the Years Ended December 31
----------- ------------------------ ---------------------------------------------------
2000 1999 1998 1998 1997 1996 1995
----------- ---------- ----------- ----------- ----------- ---------- ----------
(Unaudited)
Net cash provided by
(used in):
<S> <C> <C> <C> <C> <C> <C> <C>
Operating activities $ (59,825) $ (45,335) $ 27,295 $ 60,991 $ 102,215 $ (205,999) $ 3,402
Investing activities (485,313) 6,043 (515,359) (1,129,210) (2,888,629) (7,704,761) (2,944,048)
Financing activities - - - - 2,237,788 9,816,978 3,601,645
----------- ---------- ----------- ----------- ----------- ---------- ----------
Net change in cash and cash
equivalents (545,138) (39,292) (488,064) (1,068,219) (548,626) 1,906,218 660,999
Cash and cash equivalents,
beginning of period 911,080 950,372 2,018,591 2,018,591 2,567,217 660,999 -
----------- ---------- ----------- ----------- ----------- ----------- ----------
Cash and cash equivalents,
end of period $ 365,942 $ 911,080 $ 1,530,527 $ 950,372 $ 2,018,591 $ 2,567,217 $ 660,999
=========== ========== =========== =========== =========== =========== ==========
Low Income Housing Credit per Unit was as follows for the years ended December
31:
1999 1998 1997 1996 1995
--------------- ---------------- --------------- --------------- ----------------
Federal $ 137 $ 131 $ 83 $ 59 $ 14
State - - - - -
------------ ------------- ------------ ------------- -------------
Total $ 137 $ 131 $ 83 $ 59 $ 14
============ ============= ============ ============= =============
</TABLE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operation
Forward Looking Statements
With the exception of the discussion regarding historical information,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and other discussions elsewhere in this Form 10-K contain forward
looking statements. Such statements are based on current expectations subject to
uncertainties and other factors which may involve known and unknown risks that
could cause actual results of operations to differ materially from those
projected or implied. Further, certain forward-looking statements are based upon
assumptions about future events which may not prove to be accurate.
Risks and uncertainties inherent in forward looking statements include, but are
not limited to, our future cash flows and ability to obtain sufficient
financing, level of operating expenses, conditions in the low income housing tax
credit property market and the economy in general, as well as legal proceedings.
Historical results are not necessarily indicative of the operating results for
any future period.
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Subsequent written and oral forward looking statements attributable to us or
persons acting on our behalf are expressly qualified in their entirety by
cautionary statements in this Form 10-K and in other reports we filed with the
Securities and Exchange Commission. The following discussion should be read in
conjunction with the Consolidated Financial Statements and the Notes thereto
included elsewhere in this filing.
Uncertainty with Respect to Investment in Alliance, Evergreen and Hastings
The Partnership has three investments accounted for under the equity method,
consisting of 99% limited partnership interests in each of Alliance Apartments
I, Limited Partnership ("Alliance"), Evergreen Apartments I, Limited Partnership
("Evergreen"), and Hastings Apartments I, Limited Partnership ("Hastings").
The independent auditors engaged to perform an audit of Alliance, Evergreen, and
Hastings' financial statements as of and for the year ended December 31, 1999,
were unable to form an opinion on those financial statements. This was due to
the inability to obtain from the former local general partner certain general
ledger information for a period of approximately three months and reliable
confirmations of advances to/notes receivable from the former local general
partner. Further, the independent auditors were unable to obtain management
representation letters from the former property management company, which is an
affiliate of the former local general partner. As a result, the Partnership has
not included the financial information of Alliance, Evergreen and Hastings in
the combined condensed financial statements presented in Note 3 to the financial
statements. The combined condensed financial information presented in Note 3 for
prior periods has been restated to exclude the accounts of Alliance, Evergreen
and Hastings. The Partnership has reflected equity in the net losses of
Alliance, Evergreen and Hastings totaling $167,793 ($(9.32) per limited
partnership unit) for the year ended March 31, 2000, based on nine months of
reported results provided by Alliance, Evergreen and Hastings and on three
months of results estimated by Associates. Such estimates may be materially
misstated due to the lack of corroborative financial information.
Alliance, Evergreen and Hastings continue to experience negative cash flows from
operations. During the year ended March 31, 2000, the Partnership advanced
$205,080 in cash to Alliance, Evergreen and Hastings for operating expenses,
including legal fees relating to certain litigation involving these and other
properties as outlined in Note 8, as well as another $74,631 in cash since year
end. Associates is currently negotiating for a restructuring of the related bank
loans, which would increase cash flow from operations. Associates may not be
successful in the restructuring of these loans. If the loans are not
restructured, the Partnership may be unable to support these properties.
Consequently, the Partnership may be forced to sell all or a portion of its
interests in these properties. Further, the lender may attempt to foreclose on
the Alliance, Hastings and Evergreen properties.
As a result of the foregoing, Associates has performed an evaluation of the
Partnership's remaining investment balances in Alliance, Evergreen and Hastings,
including the cash advances noted above and other anticipated costs. It has been
determined that an impairment adjustment is necessary and an impairment loss of
$995,804 has been recognized at March 31, 2000. This impairment loss includes
$644,589 in remaining book value of the Partnership's investments in Alliance,
Evergreen and Hastings, the $205,080 and $74,631 cash advances, a $50,000
accrual for anticipated legal costs, and $21,504 of estimated accounting and
other related costs.
As a result of the aforementioned operating difficulties and the litigation as
discussed in Item 3, Legal Proceedings, there is uncertainty as to whether the
Partnership will ultimately retain its interests in Alliance, Evergreen and
11
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Hastings. If the investments are sold or otherwise not retained, the Partnership
could be subject to recapture of tax credits and certain prior tax deductions.
There is further uncertainty as to costs that the Partnership may ultimately
incur in connection with its investments in Alliance, Evergreen and Hastings.
The Partnership's financial statements do not include any adjustments that might
result from the outcome of these uncertainties.
Financial Condition
The Partnership's assets at March 31, 2000 consisted primarily of $366,000 in
cash and aggregate investments in the eighteen Local Limited Partnerships of
$10,968,078. Liabilities at March 31, 2000 primarily consisted of $73,000 due to
limited partnerships, $150,000 of accrued expenses and $27,000 due to general
partner or affiliates for advances.
Results of Operations
Year Ended March 31, 2000 Compared to Year Ended December 31, 1998. The
Partnerships net loss for the year ended March 31, 2000 was $(1,953,000),
reflecting an increase of $(726,000) from the net loss experienced for the year
ended December 31, 1998 of $(1,227,000). The increase in net loss is due to the
impairment loss recorded in connection with three of the limited partnership
investments totaling $(996,000), a reduction in income of $(19,000), offset by a
reduction in the equity in losses of limited partnerships which decreased by
$321,000.
Three Months Ended March 31, 1999 Compared to Three Months Ended March 31, 1998.
The Partnership's net loss for the three months ended March 31, 1999 was
$(314,000), reflecting an increase of $133,000 from the net loss experienced for
the three months ended March 31, 1998. The increase in net loss is due to equity
in losses of limited partnerships which increased by $123,000 to $(294,000) for
the three month period ended March 31, 1999 from $(171,000) for the three month
period ended March 31, 1998. In addition to the increase in equity in losses of
limited partnerships, the Partnership experienced an increase in net loss from
operations of $10,000 to $(20,000) for the three month period ended March 31,
1999 from $(10,000) for the three month period ended March 31, 1998 due to a
decrease in interest income of $7,000 and an increase in operating expenses of
$3,000.
Year Ended December 31, 1998 Compared to Year Ended December 31, 1997. The
Partnership's net loss for 1998 was $(1,227,000), reflecting an increase of
$458,000 from the net loss experienced in 1997. The increase in net loss is
primarily due to equity in losses from limited partnerships which increased to
$(1,175,000) in 1998 from $(790,000) in 1997, in addition to a decrease in
interest income of $67,000 and an increase in operating expenses of $6,000.
Cash Flows
Year Ended March 31, 2000 Compared to Year Ended December 31, 1998. Net decrease
in cash for the year ended March 31, 2000 was $(545,000) compared to a net
decrease in cash for the year ended December 31, 1998 of $(1,068,000). The
change was due primarily to a decrease in investments in limited partnerships of
$1,073,000 offset by an increase of $(205,000) in cash advances paid to limited
partnerships and an increase of $(191,000) in capitalized acquisition costs and
fees.
Three Months Ended March 31, 1999 Compared to Three Months Ended March 31, 1998.
Net decrease in cash during the three months ended March 31, 1999 was $(39,000)
compared to a net decrease in cash for the three months ended March 31, 1998 of
$(488,000). The change was due primarily to a decrease in investments in limited
partnerships of $523,000 offset by an increase in cash paid to the General
Partner or affiliates of $48,000 and a decrease in interest received of $22,000.
12
<PAGE>
Year Ended December 31, 1998 Compared to Year Ended December 31, 1997. Net
decrease in cash in 1998 was $(1,068,000), compared to a net decrease in cash in
1997 of $(549,000). The decrease in cash was higher in 1998 as compared to 1997
due primarily to a decrease in capital contributions from partners of $2,250,000
and a decrease in cash provided by operating activities of $41,000, offset by a
decrease in offering expenses of $12,000, a decrease in investments in Limited
Partnerships of $1,745,000 and an increase in distributions from Limited
Partnerships of $15,000.
During the year ended March 31, 2000 and the three months ended March 31, 1999,
accrued payables, which consist primarily of related party management fees due
to the General Partner, decreased by $2,000 and $34,000, respectively. During
the year ended December 31, 1998, accrued payables increased by $58,000. The
General Partner does not anticipate that these accrued fees will be paid in full
until such time as capital reserves are in excess of future foreseeable working
capital requirements of the Partnership.
The Partnership expects its future cash flows, together with its net available
assets at March 31, 2000, to be sufficient to meet all currently foreseeable
future cash requirements.
Impact of Year 2000
WNC & Associates, Inc.
Status of Readiness
Information Technology (IT) Systems. The Partnership relies on the IT systems of
WNC, its general partner. IT systems include computer hardware and software used
to produce financial reports and tax return information. This information is
then used to generate reports to investors and regulatory agencies, including
the Internal Revenue Service and the Securities and Exchange Commission. The IT
systems of WNC are year 2000 compliant.
Non-IT Systems. The Partnership also relies on the non-IT systems of WNC. Non-IT
systems include machinery and equipment such as telephones, voice mail and
electronic postage equipment. The non-IT systems of WNC are year 2000 compliant.
Service Providers. WNC also relies on the IT and non-IT systems of service
providers. Service providers include utility companies, financial institutions,
telecommunications carriers, municipalities, and other outside vendors. WNC has
obtained verbal assurances from its material service providers (electrical power
provider, financial institutions and telecommunications carriers) that their IT
and non-IT systems are year 2000 compliant. To date, WNC has not encountered
significant year 2000 issues or business disruptions from its service providers.
Costs to Address Year 2000 Issues
The cost to address year 2000 issues for WNC has been less than $25,000.
13
<PAGE>
Risk of Year 2000 Issues
Although WNC has encountered no significant year 2000 issues to date, the most
reasonable and likely result from non-year 2000 compliance of systems of the
service providers noted above would be the disruption of normal business
operations for WNC. This disruption could, in turn, lead to delays in performing
reporting and fiduciary responsibilities on behalf of the Partnership. The worst
case scenario would be the replacement of a service provider. These delays would
likely be temporary and would likely not have a material effect on the
Partnership or WNC.
Local Limited Partnerships
Status of Readiness
To date, WNC and the Partnership have encountered no significant year 2000
issues with respect to the Local Limited Partnerships.
Costs to Address Year 2000 Issues
There has been and will be no cost to the Partnership as a result of assessing
year 2000 issues for the Local Limited Partnerships. Although no significant
year 2000 issues have been encountered to date, the cost to deal with potential
year 2000 issues of the Local Limited Partnerships cannot be estimated at this
time.
Risk of Year 2000 Issues
Although no significant year 2000 issues have been encountered to date, there
can be no assurance that the Partnership will be unaffected by year 2000 issues.
The most reasonable and likely result from non-year 2000 compliance will be the
disruption of normal business operations for the Local Limited Partnerships,
including but not limited to the possible failure to properly collect rents and
meet their obligations in a timely manner. This disruption would, in turn, lead
to delays by the Local Limited Partnerships in performing reporting and
fiduciary responsibilities on behalf of the Partnership. The worst-case scenario
would include the initiation of foreclosure proceedings on the property by
mortgage debt holders. Under these circumstances, WNC or its affiliates will
take actions necessary to minimize the risk of foreclosure, including the
removal and replacement of a Local General Partner by the Partnership. These
delays would likely be temporary and would likely not have a material effect on
the Partnership or WNC.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
NOT APPLICABLE
Item 8. Financial Statements and Supplementary Data
14
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners
WNC Housing Tax Credit Fund V, L.P., Series 3
We have audited the accompanying balance sheets of WNC Housing Tax Credit Fund
V, L.P., Series 3 (a California Limited Partnership) (the "Partnership") as of
March 31, 2000 and 1999, and December 31, 1998, and the related statements of
operations, partners' equity (deficit) and cash flows for the year ended March
31, 2000, the three months ended March 31, 1999 and the year ended December 31,
1998. 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. A significant portion of the financial
statements of the limited partnerships in which the Partnership is a limited
partner were audited by other auditors whose reports have been furnished to us.
As discussed in Note 3 to the financial statements, the Partnership accounts for
its investments in limited partnerships using the equity method. The portion of
the Partnership's investment in limited partnerships audited by other auditors
represented 65%, 83% and 83% of the total assets of the Partnership at March 31,
2000 and 1999, and December 31, 1998, respectively. Our opinion, insofar as it
relates to the amounts included in the financial statements for the limited
partnerships which were audited by others, is based solely on the reports of the
other auditors.
Except as discussed in the following paragraph, 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 and the reports of the other auditors provide a reasonable basis for our
opinion.
As more thoroughly discussed in Note 2 to the financial statements, the
independent auditors engaged to perform the audits of the financial statements
as of and for the year ended December 31, 1999 for Alliance Apartments I, L.P.
("Alliance"), Evergreen Apartments I, L.P. ("Evergreen") and Hastings Apartments
I, L.P. ("Hastings"), were unable to express an opinion on those financial
statements. The Partnership has reflected equity in the net losses of Alliance,
Evergreen and Hastings totaling $167,793 ($(9.32) per limited partnership unit)
for the year ended March 31, 2000. The Partnership has also recorded an
impairment of its investment in all three limited partnerships totaling $995,804
($(55.32) per limited partnership unit) for the year ended March 31, 2000.
In our opinion, except for the effects of such adjustments, if any, as might
have been determined to be necessary had the independent auditors been able to
form an opinion on Alliance, Evergreen and Hastings' financial statements, the
financial statements referred to above present fairly, in all material respects,
the financial position of WNC Housing Tax Credit Fund V, L.P., Series 3 (a
California Limited Partnership) as of March 31, 2000 and 1999, and December 31,
1998, and the results of its operations and its cash flows for the year ended
March 31, 2000, the three months ended March 31, 1999 and the year ended
December 31, 1998, in conformity with generally accepted accounting principles.
/s/ BDO SEIDMAN, LLP
BDO SEIDMAN, LLP
Orange County, California
July 3, 2000
15
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Partners
WNC Housing Tax Credit Fund V, L.P., Series 3
We have audited the statements of operations, partners' equity (deficit) and
cash flows of WNC Housing Tax Credit Fund V, L.P., Series 3 (a California
Limited Partnership) (the "Partnership") for the year ended December 31, 1997.
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 did not audit the financial statements of the
limited partnerships in which WNC Housing Tax Credit Fund V, L.P., Series 3 is a
limited partner. These investments, as discussed in Note 3 to the financial
statements, are accounted for by the equity method. The investment in these
limited partnerships represented 87% of the total assets of WNC Housing Tax
Credit Fund V, L.P., Series 3 at December 31, 1997. A substantial portion of the
financial statements of the limited partnerships were audited by other auditors
whose reports have been furnished to us, and our opinion, insofar as it relates
to the amounts included for these limited partnerships, is based solely on the
reports of the other auditors.
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 and the reports of the other auditors provide a
reasonable basis for our opinion.
In our opinion, based on our audit and the reports of the other auditors, the
financial statements referred to above present fairly, in all material respects,
and the results of its operations and its cash flows of WNC Housing Tax Credit
Fund V, L.P., Series 3 (a California Limited Partnership) for the year ended
December 31, 1997, in conformity with generally accepted accounting principles.
/s/ CORBIN & WERTZ
CORBIN & WERTZ
Irvine, California
April 21, 1998
16
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
BALANCE SHEETS
<TABLE>
<CAPTION>
March 31 December 31
------------------------------ ----------------
2000 1999 1998
-------------- ------------- ----------------
ASSETS
<S> <C> <C> <C>
Cash and cash equivalents $ 365,942 $ 911,080 $ 950,372
Investments in limited partnerships (Notes 2 and 3) 10,968,078 12,250,789 12,559,525
-------------- ------------- ----------------
$ 11,334,020 $ 13,161,869 $ 13,509,897
============== ============= ================
LIABILITIES AND PARTNERS' EQUITY
(DEFICIT)
Liabilities:
Payables to limited partnerships (Note 5) $ 72,938 $ 95,030 $ 95,030
Accrued expenses (Note 2) 149,735 - -
Accrued fees and advances due to General
Partner and affiliates (Note 4) 26,540 28,677 62,496
-------------- ------------- ----------------
Total liabilities 249,213 123,707 157,526
-------------- ------------- ----------------
Partners' equity (deficit):
General partner (64,643) (45,109) (41,967)
Limited partners (25,000 units authorized,
18,000 units issued and outstanding) 11,149,450 13,083,271 13,394,338
-------------- ------------- ----------------
Total partners' equity 11,084,807 13,038,162 13,352,371
-------------- ------------- ----------------
$ 11,334,020 $ 13,161,869 $ 13,509,897
============== ============= ================
</TABLE>
See independent auditor's report and
accompanying notes to financial statements
17
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the For the
Year Ended Three Months
March 31 Ended March 31 For the Years Ended December 31
----------- -------------- -------------------------------
2000 1999 1998 1997
------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
Interest income $ 29,172 $ 9,994 $ 55,326 $ 121,703
Other income 6,676 - - -
------------- ------------- ------------- --------------
Total income 35,848 9,994 55,326 121,703
------------- ------------- ------------- --------------
Operating expenses:
Amortization (Notes 3 and 4) 42,439 8,875 35,765 34,605
Asset management fees (Note 4) 49,500 12,375 49,500 49,500
Other 47,636 9,135 22,126 17,384
Impairment on investments in limited
partnerships (Note 2) 995,804 - - -
------------- ------------- ------------- --------------
Total operating expenses 1,135,379 30,385 107,391 101,489
------------- ------------- ------------- --------------
Income (loss) from operations (1,099,531) (20,391) (52,065) 20,214
Equity in losses of limited
partnerships (Note 3) (853,824) (293,818) (1,175,333) (789,697)
------------- ------------ ------------- --------------
Net loss $ (1,953,355) $ (314,209) $ (1,227,398) $ (769,483)
============= ============= ============= ==============
Net loss allocated to:
General partner $ (19,534) $ (3,142) $ (12,274) $ (7,695)
============= ============= ============= ==============
Limited partners $ (1,933,821) $ (311,067) $ (1,215,124) $ (761,788)
============= ============= ============= ==============
Net loss per limited partner unit $ (107.43) $ (17.28) $ (67.51) $ (42.32)
============= ============= ============= ==============
Outstanding weighted limited
partner units 18,000 18,000 18,000 18,000
============= ============= ============= ==============
</TABLE>
See independent auditor's report and
accompanying notes to financial statements
18
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
For The Year Ended March 31, 2000,
For The Three Months Ended March 31, 1999 and
For The Years Ended December 31, 1998 and 1997
<TABLE>
<CAPTION>
General Limited
Partner Partners Total
--------------- --------------- ---------------
<S> <C> <C> <C> <C>
Partners' equity (deficit) at January 1, 1997 $ (21,876) $ 15,328,340 $ 15,306,464
Offering expenses (122) (12,090) (12,212)
Cash collected on notes receivable (Note 7) - 55,000 55,000
Net loss (7,695) (761,788) (769,483)
--------------- --------------- ---------------
Partners' equity (deficit) at December 31, 1997 (29,693) 14,609,462 14,579,769
Net loss (12,274) (1,215,124) (1,227,398)
--------------- --------------- ---------------
Partners' equity (deficit) at December 31, 1998 (41,967) 13,394,338 13,352,371
Net loss (3,142) (311,067) (314,209)
--------------- --------------- ---------------
Partners' equity (deficit) at March 31, 1999 (45,109) 13,083,271 13,038,162
Net loss (19,534) (1,933,821) (1,953,355)
--------------- --------------- ---------------
Partners' equity (deficit) at March 31, 2000 $ (64,643) $ 11,149,450 $ 11,084,807
=============== =============== ===============
</TABLE>
See independent auditor's report and
accompanying notes to financial statements
19
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
For the For the
Year Ended Three Months For the Years Ended
March 31 Ended March 31 December 31
------------ -------------- ---------------------------
2000 1999 1998 1997
------------ -------------- ------------ ------------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (1,953,355) $ (314,209) $ (1,227,398) $ (769,483)
Adjustments to reconcile net loss to
net cash provided by (used in)
operating activities:
Amortization 42,439 8,875 35,765 34,605
Impairment loss on investments in limited
partnerships 995,804 - - -
Equity in losses of limited
partnerships 853,824 293,818 1,175,333 789,697
Change in interest receivable - - 19,435 86,563
Change in accrued fees and
expenses due to general partner
and affiliates (2,137) (33,819) 57,856 (39,167)
Change in accrued expenses 3,600 - - -
------------ ------------ ------------ -----------
Net cash provided by (used in)
operating activities (59,825) (45,335) 60,991 102,215
------------ ------------ ------------ -----------
Cash flows from investing activities:
Investments in limited partnerships, net (47,092) - (1,120,181) (3,432,735)
Loans receivable - - - 522,190
Capitalized acquisition costs and fees (233,141) (1,520) (32,076) (28,975)
Return of acquisition fees (Note 3) - - - 42,551
Distributions from limited
partnerships - 7,563 23,047 8,340
Cash advances to limited partnerships (205,080) - - -
------------ ------------ ------------ -----------
Net cash provided by (used in)
investing activities (485,313) 6,043 (1,129,210) (2,888,629)
------------ ------------ ------------ -----------
Cash flows from financing activities:
Capital contributions from partners - - - 2,250,000
Offering expenses - - - (12,212)
------------ ------------ ------------ -----------
Net cash provided by financing
activities - - - 2,237,788
------------ ------------ ------------ -----------
Net decrease in cash and cash equivalents (545,138) (39,292) (1,068,219) (548,626)
Cash and cash equivalents, beginning of period 911,080 950,372 2,018,591 2,567,217
------------ ------------ ------------ -----------
Cash and cash equivalents, end of period $ 365,942 $ 911,080 $ 950,372 $ 2,018,591
============ ============ ============ ===========
</TABLE>
See independent auditor's report and
accompanying notes to financial statements
20
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS - CONTINUED
<TABLE>
<CAPTION>
For the For the
Year Ended Three Months For the Years Ended
March 31 Ended March 31 December 31
----------- ------------ --------------------------
2000 1999 1998 1997
----------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
SUPPLEMENTAL DISCLOSURE
OF CASH FLOW INFORMATION
Taxes paid $ 800 $ - $ 800 $ 800
=========== ============ ============ ============
</TABLE>
See independent auditor's report and
accompanying notes to financial statements
21
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Year Ended March 31, 2000,
For The Three Months Ended March 31, 1999 and
For The Years Ended December 31, 1998 and 1997
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
WNC Housing Tax Credit Fund V, L.P., Series 3, a California Limited Partnership
(the "Partnership"), was formed on March 28, 1995, under the laws of the state
of California. The Partnership was formed to invest primarily in other limited
partnerships (the "Local Limited Partnerships") which own and operate
multi-family housing complexes (the "Housing Complex") that are eligible for low
income housing credits. The local general partners (the "Local General
Partners") of each Local Limited Partnership retain responsibility for
maintaining, operating and managing the Housing Complex.
The general partner is WNC & Associates, Inc. ("WNC"). Wilfred N. Cooper, Sr.,
through the Cooper Revocable Trust owns 66.8% of the outstanding stock of WNC.
John B. Lester was the original limited partner of the Partnership and owns
28.6% of the outstanding stock of WNC. Wilfred N. Cooper, Jr., President of WNC,
owns 2.1% of the outstanding stock of WNC.
The Partnership shall continue in full force and effect until December 31, 2050
unless terminated prior to that date pursuant to the partnership agreement or
law.
The financial statements include only activity relating to the business of the
Partnership, and do not give effect to any assets that the partners may have
outside of their interests in the Partnership, or to any obligations, including
income taxes, of the partners.
The partnership agreement authorized the sale of up to 25,000 units at $1,000
per Unit ("Units"). The offering of Units concluded in January 1996, at which
time 18,000 Units representing subscriptions in the amount of $17,558,985, net
of $441,015 of discounts for volume purchases, had been accepted. The General
Partner has a 1% interest in operating profits and losses, taxable income and
losses, cash available for distribution from the Partnership and tax credits.
The limited partners will be allocated the remaining 99% of these items in
proportion to their respective investments.
After the limited partners have received proceeds from a sale or refinancing
equal to their capital contributions and their return on investment (as defined
in the Partnership Agreement) and the General Partner has received proceeds
equal to its capital contribution and a subordinated disposition fee (as
described in Note 3) from the remainder, 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.
Change in Reporting Year End
In 1999, the Partnership elected to change its year end for financial reporting
purposes from December 31 to March 31. All financial information reflected in
the financial statements and related footnotes has been adjusted for this change
in year end except for the combined condensed financial information relating to
the Local Limited Partnerships included in Note 3.
22
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the Year Ended March 31, 2000,
For The Three Months Ended March 31, 1999 and
For The Years Ended December 31, 1998 and 1997
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
Risks and Uncertainties
The Partnership's investments in Local Limited Partnerships are subject to the
risks incident to the management and ownership of low-income housing and to the
management and ownership of multi-unit residential real estate. Some of these
risks are that the low income housing credit could be recaptured and that
neither the Partnership's investments nor the Housing Complexes owned by the
Local Limited Partnerships will be readily marketable. To the extent the Housing
Complexes receive government financing or operating subsidies, they may be
subject to one or more of the following risks: difficulties in obtaining tenants
for the Housing Complexes; difficulties in obtaining rent increases; limitations
on cash distributions; limitations on sales or refinancing of Housing Complexes;
limitations on transfers of Local Limited Partnership Interests; limitations on
removal of Local General Partners; limitations on subsidy programs; and possible
changes in applicable regulations. The Housing Complexes are or will be subject
to mortgage indebtedness. If a Local Limited Partnership does not make its
mortgage payments, the lender could foreclose resulting in a loss of the Housing
Complex and low income housing credits. As a limited partner of the Local
Limited Partnerships, the Partnership will have very limited rights with respect
to management of the Local Limited Partnerships, and will rely totally on the
Local General Partners of the Local Limited Partnerships for management of the
Local Limited Partnerships. The value of the Partnership's investments will be
subject to changes in national and local economic conditions, including
unemployment conditions, which could adversely impact vacancy levels, rental
payment defaults and operating expenses. This, in turn, could substantially
increase the risk of operating losses for the Housing Complexes and the
Partnership. In addition, each Local Limited Partnership is subject to risks
relating to environmental hazards and natural disasters which might be
uninsurable. Because the Partnership's operations will depend on these and other
factors beyond the control of the General Partner and the Local General
Partners, there can be no assurance that the anticipated low income housing
credits will be available to Limited Partners.
In addition, Limited Partners are subject to risks in that the rules governing
the low income housing credit are complicated, and the use of credits can be
limited. The only material benefit from an investment in Units may be the low
income housing credits. There are limits on the transferability of Units, and it
is unlikely that a market for Units will develop. All management decisions will
be made by the General Partner.
Method of Accounting For Investments 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 the Local Limited Partnership's results of operations
and for any distributions received. The accounting policies of the Local Limited
Partnerships are consistent with those of the Partnership. Costs incurred by the
Partnership in acquiring the investments are capitalized as part of the
investment account and are being amortized over 30 years (see Note 3).
Losses from limited partnerships for the years ended December 31, 1998 and 1997
have been recorded by the Partnership based on reported results provided by the
Local Limited Partnerships. Losses from limited partnerships for the three
months ended March 31, 1999 have been estimated by management of the
Partnership. Losses from limited partnerships for the year ended March 31, 2000
have been recorded by the Partnership based on nine months of reported results
provided by the Local Limited Partnerships and on three months of results
estimated by management of the Partnership. Losses from the limited partnerships
allocated to the Partnership will not be recognized to the extent that the
investment balance would be adjusted below zero.
23
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the Year Ended March 31, 2000,
For The Three Months Ended March 31, 1999 and
For The Years Ended December 31, 1998 and 1997
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 in connection 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 limited partners' capital and amounted to $2,132,000
at the end of all periods presented.
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 disclosure 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 materially differ from those estimates.
Cash and Cash Equivalents
The Partnership considers highly liquid investments with remaining maturities of
three months or less when purchased to be cash equivalents. As of March 31, 2000
and 1999, and December 31, 1998, the Partnership had no cash equivalents.
Concentration of Credit Risk
At March 31, 2000, the Partnership maintained cash balances at certain financial
institutions in excess of the federally insured maximum.
Net Loss Per Limited Partner Unit
Net loss per limited partnership unit is calculated pursuant to Statement of
Financial Accounting Standards No. 128, Earnings Per Share. Net loss per unit
includes no dilution and is computed by dividing loss available to limited
partners by the weighted average number of units outstanding during the period.
Calculation of diluted net income per unit is not required.
Reporting Comprehensive Income
In June 1997, the FASB issued Statement of Financial Accounting Standards
("SFAS") No. 130, Reporting Comprehensive Income. This statement establishes
standards for reporting the components of comprehensive income and requires that
all items that are required to be recognized under accounting standards as
components of comprehensive income be included in a financial statement that is
displayed with the same prominence as other financial statements. Comprehensive
income includes net income as well as certain items that are reported directly
within a separate component of partners' equity and bypass net income. The
Partnership adopted the provisions of this statement in 1998. For the periods
presented, the Partnership has no elements of other comprehensive income, as
defined by SFAS No. 130.
Reclassifications
Certain prior year balances have been reclassified to conform to the 2000
presentation.
24
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the Year Ended March 31, 2000,
For The Three Months Ended March 31, 1999 and
For The Years Ended December 31, 1998 and 1997
NOTE 2 - UNCERTAINTY WITH RESPECT TO INVESTMENTS IN ALLIANCE, EVERGREEN AND
HASTINGS: IMPAIRMENT OF INVESTMENTS
The Partnership has three investments accounted for under the equity method,
consisting of a 99% limited partnership interest in each of Alliance Apartments
I, Limited Partnership ("Alliance"), Evergreen Apartments I, Limited Partnership
("Evergreen"), and Hastings Apartments I, Limited Partnership ("Hastings").
The independent auditors engaged to perform an audit of Alliance, Evergreen, and
Hastings' financial statements as of and for the year ended December 31, 1999,
were unable to form an opinion on those financial statements. This was due to
the inability to obtain from the former local general partner certain general
ledger information for a period of approximately three months and reliable
confirmations of advances to/notes receivable from the former local general
partner. Further, the independent auditors were unable to obtain management
representation letters from the former property management company, which is an
affiliate of the former local general partner. As a result, the Partnership has
not included the financial information of Alliance, Evergreen and Hastings in
the combined condensed financial statements presented in Note 3. The combined
condensed financial information presented in Note 3 for prior periods has been
restated to exclude the accounts of Alliance, Evergreen and Hastings. The
Partnership has reflected equity in the net losses of Alliance, Evergreen and
Hastings totaling $167,793 ($(9.32) per limited partnership unit) for the year
ended March 31, 2000, based on nine months of reported results provided by
Alliance, Evergreen and Hastings and on three months of results estimated by
WNC. Such estimates may be materially misstated due to the lack of corroborative
financial information.
Alliance, Evergreen and Hastings continue to experience negative cash flows from
operations. During the year ended March 31, 2000, the Partnership advanced
$205,080 in cash to Alliance, Evergreen and Hastings for operating expenses,
including legal fees relating to certain litigation involving these and other
properties as outlined in Note 8, as well as another $74,631 in cash since year
end. WNC is currently negotiating for a restructuring of the related bank loans,
which would increase cash flow from operations. WNC may not be successful in the
restructuring of these loans. If the loans are not restructured, the Partnership
may be unable to support these properties. Consequently, the Partnership may be
forced to sell all or a portion of its interests in these properties. Further,
the lender may attempt to foreclose on the Alliance, Hastings and Evergreen
properties.
As a result of the foregoing, WNC has performed an evaluation of the
Partnership's remaining investment balances in Alliance, Evergreen and Hastings,
including the cash advances noted above and other anticipated costs. It has been
determined that an impairment adjustment is necessary and an impairment loss of
$995,804 has been recognized at March 31, 2000. This impairment loss includes
$644,589 in remaining book value of the Partnership's investments in Alliance,
Evergreen and Hastings, the $205,080 and $74,631 cash advances, a $50,000
accrual for anticipated legal costs, and $21,504 of estimated accounting and
other related costs.
As a result of the aforementioned operating difficulties and the litigation as
discussed in Note 8, there is uncertainty as to whether the Partnership will
ultimately retain its interests in Alliance, Evergreen and Hastings. If the
investments are sold or otherwise not retained, the Partnership could be subject
to recapture of tax credits and certain prior tax deductions. There is further
uncertainty as to costs that the Partnership may ultimately incur in connection
with its investments in Alliance, Evergreen and Hastings. The Partnership's
financial statements do not include any adjustments that might result from the
outcome of these uncertainties.
25
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the Year Ended March 31, 2000,
For The Three Months Ended March 31, 1999 and
For The Years Ended December 31, 1998 and 1997
NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS
As of the periods presented, the Partnership has acquired limited partnership
interests in 18 Local Limited Partnerships, each of which owns one Housing
Complex consisting of an aggregate of 1,196 apartment units. The respective
general partners of the Local Limited Partnerships manage the day to day
operations of the entities. Significant Local Limited Partnership business
decisions require approval from the Partnership. The Partnership, as a limited
partner, is generally entitled to 99%, as specified in the Local Limited
Partnership agreements, of the operating profits and losses, taxable income and
losses and tax credits of the Local Limited Partnerships, except for one of the
investments in which it is entitled to 49.49% of such amounts.
The Partnership's investments in Local Limited Partnerships as reflected in the
balance sheet at March 31, 2000 and at the preceding December 31, 1999, are
approximately $1,137,000 and $1,729,000, respectively, greater than the
Partnership's equity as shown in the Local Limited Partnerships' combined
financial statements presented below. This difference is partially due to
acquisition costs related to the acquisition of the investments that have been
capitalized in the Partnership's investment account, unrecorded losses and
capital contributions payable to the limited partnerships which were netted
against partner capital in the Local Limited Partnerships' financial statements.
The Partnership's investment is also lower than the Partnership's equity as
shown in the Local Limited Partnership's combined financial statements due to
the losses recorded by the Partnership for the three month period ended March
31. Lastly, the difference is due to the exclusion of the financial statements
of Alliance, Hastings and Evergreen from the combined condensed financial
information presented below. See Note 2 for discussion.
Equity in losses of Local Limited Partnerships is recognized in the financial
statements until the related investment account is reduced to a zero balance.
Losses incurred after the investment account is reduced to zero are not
recognized. If the Local Limited Partnerships report net income in future years,
the Partnership will resume applying the equity method only after its share of
such net income equals the share of net losses not recognized during the
period(s) the equity method was suspended.
Distributions received by limited partners are accounted for as a reduction of
the investment balance. Distributions received after the investment has reached
zero are recognized as income. During the year ended March 31, 2000, one of the
investment accounts reached a zero balance. Losses related to that investment
totaled $123,000.
26
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the Year Ended March 31, 2000,
For The Three Months Ended March 31, 1999 and
For The Years Ended December 31, 1998 and 1997
NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
Following is a summary of the equity method activity of the investments in Local
Limited Partnerships for the periods presented:
<TABLE>
<CAPTION>
For the Year For the Three
Ended Months Ended For the Years Ended
March 31 March 31 December 31
---------------- --------------- -------------------------------
2000 1999 1998 1997
---------------- --------------- -------------- -------------
<S> <C> <C> <C> <C>
Investments per balance sheet, beginning of period $ 12,250,789 $ 12,559,525 $ 13,836,734 $ 12,782,751
Capital contributions paid, net 25,000 - - 1,373,557
Capital contributions payable to limited
partnerships - - - 526,644
Impairment loss on investments in limited
partnerships (Note 2) (995,804) - - -
Cash advanced (Note 2) 205,080 - - -
Accrued expense (Note 2) 146,135 - - -
Capitalized acquisition fees and costs 233,141 1,520 32,076 28,975
Tax credit adjustments - - (75,140) -
Return of acquisition fees - - - (42,551)
Distributions received - (7,563) (23,047) (8,340)
Equity in losses of limited partnerships (853,824) (293,818) (1,175,333) (789,697)
Amortization of paid acquisition fees and costs (42,439) (8,875) (35,765) (34,605)
---------------- --------------- -------------- -------------
Investments per balance sheet, end of period $ 10,968,078 $ 12,250,789 $ 12,559,525 $ 13,836,734
================ =============== ============== =============
</TABLE>
27
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the Year Ended March 31, 2000,
For The Three Months Ended March 31, 1999 and
For The Years Ended December 31, 1998 and 1997
NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
The financial information from the individual financial statements of the Local
Limited Partnerships include rental and interest subsidies. Rental subsidies are
included in total revenues and interest subsidies are generally netted against
interest expense. Approximate combined condensed financial information from the
individual financial statements of the Local Limited Partnerships as of December
31 and for the years then ended is as follows (Combined condensed financial
information for Alliance, Evergreen and Hastings have been excluded from the
presentation below. See Note 2 for further discussion):
COMBINED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
1999 1998
(Restated)
--------------- ---------------
ASSETS
<S> <C> <C>
Buildings and improvements, net of accumulated
depreciation for 1999 and 1998 of $4,709,000 and
$3,311,000, respectively $ 37,998,000 $ 39,079,000
Land 2,723,000 2,723,000
Other assets (including due from affiliates of $0 and
$44,000 as of December 31, 1999 and 1998,
respectively) 4,354,000 4,251,000
--------------- ---------------
$ 45,075,000 $ 46,053,000
=============== ===============
LIABILITIES
Mortgage and construction loans payable $ 27,652,000 $ 29,340,000
Other liabilities (including due to related parties of
$979,000 and $2,147,000 as of December 31, 1999 and
1998, respectively) 4,733,000 3,219,000
--------------- ---------------
32,385,000 32,559,000
--------------- ---------------
PARTNERS' CAPITAL
WNC California Housing Tax Credits Fund, V,
L.P., Series 3 9,831,000 10,522,000
Other partners 2,859,000 2,972,000
--------------- ---------------
12,690,000 13,494,000
--------------- ---------------
$ 45,075,000 $ 46,053,000
=============== ===============
</TABLE>
28
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENT - CONTINUED
For the Year Ended March 31, 2000,
For The Three Months Ended March 31, 1999 and
For The Years Ended December 31, 1998 and 1997
NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
COMBINED CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
1999 1998 1997
(Restated) (Restated)
--------------- --------------- ---------------
<S> <C> <C> <C>
Revenues $ 5,457,000 $ 5,332,000 $ 4,788,000
--------------- --------------- ---------------
Expenses:
Operating expenses 3,278,000 3,164,000 2,885,000
Interest expense 1,519,000 1,579,000 1,465,000
Depreciation and amortization 1,425,000 1,484,000 1,105,000
--------------- --------------- ---------------
Total expenses 6,222,000 6,227,000 5,455,000
--------------- --------------- ---------------
Net loss $ (765,000) $ (895,000) $ (667,000)
=============== =============== ===============
Net loss allocable to the Partnership, before equity
in losses of Alliance, Evergreen and Hastings $ (715,000) $ (832,000) $ (596,000)
=============== =============== ===============
Net loss recorded by the Partnership, before equity in
losses of Alliance, Evergreen and Hastings $ (686,000) (832,000) (596,000)
Net loss of Alliance allocable to the Partnership (49,000) (63,000) (79,000)
Net loss of Evergreen allocable to the Partnership (73,000) (222,000) (68,000)
Net loss of Hastings allocable to the Partnership (46,000) (58,000) (47,000)
--------------- --------------- ---------------
Net loss recorded by the Partnership $ (854,000) $ (1,175,000) $ (790,000)
=============== =============== ===============
</TABLE>
Certain Local Limited Partnerships have incurred significant operating losses
and have working capital deficiencies. In the event these Local Limited
Partnerships continue to incur significant operating losses, additional capital
contributions by the Partnership and/or the Local General Partner may be
required to sustain the operations of such Local Limited Partnerships. If
additional capital contributions are not made when they are required, the
Partnership's investment in certain of such Local Limited Partnerships could be
impaired and the loss and recapture of the related tax credits could occur.
NOTE 4 - RELATED PARTY TRANSACTIONS
Under the terms of the Partnership Agreement, the Partnership has paid or is
obligated to the General Partner or its affiliates for the following items:
Acquisition fees of up to 7.5% of the gross proceeds from the sale of
Units as compensation for services rendered in connection with the
acquisition of Local Limited Partnerships. As of December 31, 1996, the
Partnership incurred acquisition fees of $1,008,550 which were included
in investments in limited partnerships. During 1997, acquisition fees
of $42,551 were returned to the Partnership by an affiliate, as allowed
by the terms of the Partnership Agreement, resulting in acquisition
fees of $965,999 as of December 31, 1998 and March 31, 1999. Additional
acquisition fees of $234,796 were recorded during the year ended March
31, 2000 bringing total acquisition fees to $1,200,785. Accumulated
amortization of these capitalized costs was $133,032, $94,962 and
$86,912 as of March 31, 2000 and 1999, and December 31, 1998,
respectively.
29
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the Year Ended March 31, 2000,
For The Three Months Ended March 31, 1999 and
For The Years Ended December 31, 1998 and 1997
NOTE 4 - RELATED PARTY TRANSACTIONS, continued
Reimbursement of costs incurred by an affiliate of the General Partner
in connection with the acquisition of Local Limited Partnerships. These
reimbursements have not exceeded 1% of the gross proceeds. As of March
31, 2000 and 1999, and December 31, 1998, the Partnership incurred
acquisition costs of $130,962, $132,607 and $131,087, respectively,
which have been included in investments in limited partnerships.
Accumulated amortization was $12,542, $8,173 and $7,348 as of March 31,
2000 and 1999, and December 31, 1998, respectively.
An annual asset management fee equal to the greater amount of (i)
$2,000 for each Housing 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 of the limited
partnerships, including the Partnership's allocable share of the
mortgages. Management fees of $49,500 and $12,375 were incurred during
the year ended March 31, 2000 and the three months ended March 31, 1999
and fees of $49,500 were incurred for the years ended December 31, 1998
and 1997, of which $63,242 and $49,500 were paid during the year ended
March 31, 2000 and the three months ended March 31, 1999, respectively,
and $0 and $110,000 were paid during the years ended December 31, 1998
and 1997, 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 preferred return of 14% through December
31, 2006 and 6% thereafter (as defined in the Partnership Agreement)
and is payable only if the General Partner or its affiliates render
services in the sales effort.
The accrued fees and expenses due to the General Partner and affiliates consist
of the following:
<TABLE>
<CAPTION>
March 31 December 31
------------------------------ -----------------------------
2000 1999 1998 1997
------------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Reimbursements for expenses paid by the General
Partner or an affiliate $ 26,540 $ 14,935 $ 11,629 $ 3,273
Asset management fee payable - 13,742 50,867 1,367
------------- ------------- ------------ -------------
Total $ 26,540 $ 28,677 $ 62,496 $ 4,640
============= ============= ============ =============
</TABLE>
NOTE 5 - PAYABLES TO LIMITED PARTNERSHIPS
Payables to Local 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 and are
generally due upon the Local Limited Partnerships achieving certain development
and operating benchmarks (generally within two years of the Partnership's
initial investment).
NOTE 6 - INCOME TAXES
No provision for income taxes has been recorded in the accompanying financial
statements as any liability for income taxes is the obligation of the partners
of the Partnership.
30
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the Year Ended March 31, 2000,
For The Three Months Ended March 31, 1999 and
For The Years Ended December 31, 1998 and 1997
NOTE 7 - SUBSCRIPTIONS AND NOTES RECEIVABLE
During 1996, the Partnership received subscriptions for 2,250 Units consisting
of receivables of $2,195,000 and promissory notes of $55,000, all of which were
collected in 1997. Limited partners who subscribed for ten or more Units of
limited partnership interest ($10,000) could elect to pay 50% of the purchase
price in cash upon subscription and the remaining 50% by the delivery of a
promissory note payable, together with interest at the rate of 10.25% per annum,
due no later than 13 months after the subscription date. Since subscription
receivables were collected subsequent to year end but before the issuance of the
respective financial statements, the Partnership reflected such amounts as
capital contributions and an asset in the financial statements. Since the
promissory notes had not been collected prior to issuance of the respective
financial statements, the unpaid balance was reflected as a reduction of
partners' equity in the financial statements. Upon collection of the promissory
notes, such amounts were reflected as capital contributions in the year
collected.
NOTE 8 - COMMITMENTS AND CONTINGENCIES
During the year, WNC identified a potential problem with a developer who, at the
time, was the local general partner in six Local Limited Partnerships. The
Partnership has 99% limited partnership investments in three of those six Local
Limited Partnerships. Those investments are Alliance Apartments I, Evergreen
Apartments I and Hastings Apartments I. All the properties continue to
experience operating deficits. The local general partner ceased funding the
operating deficits, which placed the Local Limited Partnerships in jeopardy of
foreclosure. Consequently, WNC voted to remove the local general partner and the
management company from the Local Limited Partnerships. After the local general
partner contested its removal, WNC commenced legal action on behalf of the Local
Limited Partnerships and was successful in getting a receiver appointed to
manage the Local Limited Partnerships and an unaffiliated entity appointed as
property manager. WNC was subsequently successful in attaining a summary
judgment to confirm the removal of the local general partner, the receiver was
discharged and WNC now controls all six of the Local Limited Partnerships.
The six Local Limited Partnerships (hereinafter referred to as "Defendants") are
now defendants in a separate lawsuit. The lawsuit has been filed by eight other
partnerships in which the local general partner of the Local Limited
Partnerships is or was involved (the "Plaintiffs"). The Plaintiffs allege that
the local general partner accepted funds from the Plaintiffs and improperly
loaned these funds to the Defendants. Discovery in this lawsuit is ongoing and
WNC will continue to pursue an aggressive defense on behalf of the Defendants.
The Partnership has a 99% limited partnership investment in Cascade Pines, L.P.
II ("Cascade"). Cascade is a defendant in a wrongful death lawsuit and a related
injury lawsuit. Cascade carries general liability and extended liability
insurance. Discovery for these lawsuits is ongoing, but the management of
Cascade and WNC are unable to determine the outcome of these lawsuits at this
time or their impact, if any, on the Partnership's financial statements. Should
Cascade be unsuccessful in its defense and the insurer denies coverage, which
they have indicated that they might, or the insurance coverage proves to be
inadequate, the Partnership may be required to sell its investment or may
otherwise lose its investment in Cascade. Loss of the Cascade investment could
result in recapture of tax credits and certain prior tax deductions.
31
<PAGE>
Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
NOT APPLICABLE
PART III.
Item 10. Directors and Executive Officers of the Registrant
The Partnership has no directors or executive officers of its own. The following
biographical information is presented for the directors and executive officers
of Associates which has principal responsibility for the Partnership's affairs.
Directors and Executive Officers of WNC & Associates, Inc.
The directors of WNC & Associates, Inc. are Wilfred N. Cooper, Sr., who serves
as Chairman of the Board, John B. Lester, Jr., David N. Shafer, Wilfred N.
Cooper, Jr. and Kay L. Cooper. The principal shareholders of WNC & Associates,
Inc. are trusts established by Wilfred N. Cooper, Sr. and John B. Lester, Jr.
Wilfred N. Cooper, Sr., age 69, is the founder, Chief Executive Officer,
Chairman of the Board and a Director of WNC & Associates, Inc., a Director of
WNC Capital Corporation, and a general partner in some of the programs
previously sponsored by the Sponsor. Mr. Cooper has been involved in real estate
investment and acquisition activities since 1968. Previously, during 1970 and
1971, he was founder and principal of Creative Equity Development Corporation, a
predecessor of WNC & Associates, Inc., and of Creative Equity Corporation, a
real estate investment firm. For 12 years prior to that, Mr. Cooper was employed
by Rockwell International Corporation, last serving as its manager of housing
and urban developments where he had responsibility for factory-built housing
evaluation and project management in urban planning and development. Mr. Cooper
is a Director of the National Association of Home Builders (NAHB) and a National
Trustee for NAHB's Political Action Committee, a Director of the National
Housing Conference (NHC) and a member of NHC's Executive Committee and a
Director of the National Multi-Housing Council (NMHC). Mr. Cooper graduated from
Pomona College in 1956 with a Bachelor of Arts degree.
John B. Lester, Jr., age 66, is Vice-Chairman, a Director, and a member of the
Acquisition Committee of WNC & Associates, Inc., and a Director of WNC Capital
Corporation. Mr. Lester has 27 years of experience in engineering and
construction and has been involved in real estate investment and acquisition
activities since 1986 when he joined the Sponsor. Previously, he was Chairman of
the Board and Vice President or President of E & L Associates, Inc., a provider
of engineering and construction services to the oil refinery and petrochemical
industries, which he co-founded in 1973. Mr. Lester graduated from the
University of Southern California in 1956 with a Bachelor of Science degree in
Mechanical Engineering.
Wilfred N. Cooper, Jr., age 37, is President, Chief Operating Officer, a
Director and a member of the Acquisition Committee of WNC & Associates, Inc. He
is President of, and a registered principal with, WNC Capital Corporation, a
member firm of the NASD, and is a Director of WNC Management, Inc. He has been
involved in investment and acquisition activities with respect to real estate
since he joined the Sponsor in 1988. Prior to this, he served as Government
Affairs Assistant with Honda North America in Washington, D.C. Mr. Cooper is a
member of the Advisory Board for LIHC Monthly Report, a Director of NMHC and an
Alternate Director of NAHB. He graduated from The American University in 1985
with a Bachelor of Arts degree.
David N. Shafer, age 48, is Executive Vice President, a Director, General
Counsel and a member of the Acquisition Committee of WNC & Associates, Inc., and
a Director and Secretary of WNC Management, Inc. Mr. Shafer has been involved in
real estate investment and acquisition activities since 1984. Prior to joining
the Sponsor in 1990, he was practicing law with a specialty in real estate and
taxation. Mr. Shafer is a Director and President of the California Council of
Affordable Housing and a member of the State Bar of California. Mr. Shafer
graduated from the University of California at Santa Barbara in 1978 with a
Bachelor of Arts degree, from the New England School of Law in 1983 with a Juris
Doctor degree (cum laude) and from the University of San Diego in 1986 with a
Master of Law degree in Taxation.
32
<PAGE>
Michael L. Dickenson, age 43, is Vice President and Chief Financial Officer, and
a member of the Acquisition Committee of WNC & Associates, Inc., and Chief
Financial Officer of WNC Management, Inc. He has been involved with acquisition
and investment activities with respect to real estate since 1985. Prior to
joining the Sponsor in March 1999, he was the Director of Financial Services at
TrizecHahn Centers Inc., a developer and operator of commercial real estate,
from 1995 to 1999, a Senior Manager with E&Y Kenneth Leventhal Real Estate
Group, Ernst & Young, LLP, from 1988 to 1995, and Vice President of Finance with
Great Southwest Companies, a commercial and residential real estate developer,
from 1985 to 1988. Mr. Dickenson is a member of the Financial Accounting
Standards Committee for the National Association of Real Estate Companies and
the American Institute of Certified Public Accountants, and a Director of
HomeAid Southern California, a charitable organization affiliated with the
building industry. He graduated from Texas Tech University in 1978 with a
Bachelor of Business Administration - Accounting degree, and is a Certified
Public Accountant in California and Texas.
Thomas J. Riha, age 45, is Vice President - Asset Management and a member of the
Acquisition Committee of WNC & Associates, Inc. and a Director and Chief
Executive Officer of WNC Management, Inc. Mr. Riha has been involved in
acquisition and investment activities with respect to real estate since 1979.
Prior to joining the Sponsor in 1994, Mr. Riha was employed by Trust Realty
Advisor, a real estate acquisition and management company, last serving as Vice
President - Operations. Mr. Riha graduated from the California State University,
Fullerton in 1977 with a Bachelor of Arts degree (cum laude) in Business
Administration with a concentration in Accounting and is a Certified Public
Accountant and a member of the American Institute of Certified Public
Accountants.
Sy P. Garban, age 54, is Vice President - Institutional Investments of WNC &
Associates, Inc. and has been employed by the Sponsor since 1989. Mr. Garban has
been involved in real estate investment activities since 1978. Prior to joining
the Sponsor he served as Executive Vice President of MRW, Inc., a real estate
development and management firm. Mr. Garban is a member of the International
Association of Financial Planners. He graduated from Michigan State University
in 1967 with a Bachelor of Science degree in Business Administration.
N. Paul Buckland, age 37, is Vice President - Acquisitions and a member of the
Acquisition Committee of WNC & Associates, Inc. He has been involved in real
estate acquisitions and investments since 1986 and has been employed with WNC &
Associates, Inc. since 1994. Prior to that, he served on the development team of
the Bixby Ranch that constructed apartment units and Class A office space in
California and neighboring states, and as a land acquisition coordinator with
Lincoln Property Company where he identified and analyzed multi-family
developments. Mr. Buckland graduated from California State University, Fullerton
in 1992 with a Bachelor of Science degree in Business Finance.
David Turek, age 45, is Vice President - Originations of WNC & Associates, Inc.
He has been involved with real estate investment and finance activities since
1976 and has been employed by WNC & Associates, Inc. since 1996. From 1995 to
1996, Mr. Turek served as a consultant for a national Tax Credit sponsor where
he was responsible for on-site feasibility studies and due diligence analyses of
Tax Credit properties. From 1990 to 1995, he was involved in the development of
conventional and tax credit multi-family housing. He is a Director with the
Texas Council for Affordable Rural Housing and graduated from Southern Methodist
University in 1976 with a Bachelor of Business Administration degree.
Kay L. Cooper, age 63, is a Director of WNC & Associates, Inc. Mrs. Cooper was
the founder and sole proprietor of Agate 108, a manufacturer and retailer of
home accessory products, from 1975 until 1998. She is the wife of Wilfred N.
Cooper, Sr., the mother of Wilfred N. Cooper, Jr. and the sister of John B.
Lester, Jr. Ms. Cooper graduated from the University of Southern California in
1958 with a Bachelor of Science degree.
33
<PAGE>
Item 11. Executive Compensation
The Partnership has no officers, employees, or directors. However, under the
terms of the Partnership Agreement the Partnership is obligated to the General
Partner or Associates for the following fees:
(a) Annual Asset Management Fee. An annual asset management fee of the greater
of (i) $2,000 per multi-family housing complex or (ii) 0.275% of Gross
Proceeds. The base fee amount will be adjusted annually based on changes
in the Consumer Price Index, however in no event will the annual asset
management fee exceed 0.2% of Invested Assets. "Invested Assets" means the
sum of the Partnership's Investment in Local Limited Partnerships and the
Partnership's allocable share of the amount of mortgages on and other
indebtedness related to the Housing Complexes. Fees of $49,500, $12,375
and $49,500 were incurred during the year ended March 31, 2000, the three
months ended March 31, 1999 and the year ended December 31, 1998,
respectively. The Partnership paid the General Partner or its affiliates
$63,242, $49,500 and $0 of these fees during the year ended March 31, 2000
and the three months ended March 31, 1999 and the year ended December 31,
1998, respectively.
(b) Subordinated Disposition Fee. A subordinated disposition fee in an amount
equal to 1% of the sale price received in connection with the sale or
disposition of a Housing Complex or Local Limited Partnership Interest.
Subordinated disposition fees will be subordinated to the prior return of
the Limited Partners' capital contributions and payment of the Return on
Investment to the Limited Partners. "Return on Investment" means an
annual, cumulative but not compounded, "return" to the Limited Partners
(including Low Income Housing Credits) as a class on their adjusted
capital contributions commencing for each Limited Partner on the last day
of the calendar quarter during which the Limited Partner's capital
contribution is received by the Partnership, calculated at the following
rates: (i) 14% through December 31, 2006 and (ii) 6% for the balance of
the Partnerships term. No disposition fees have been paid.
(c) Interest in Partnership. The General Partner receives 1% of the
Partnership's allocated Low Income Housing Credits, which approximated
$24,000 for the General Partner for the year ended December 31, 1998. The
General Partners are also entitled to receive 1% of cash distributions.
There were no distributions of cash to the General Partners during the
year ended March 31, 2000, the three months ended March 31, 1999 or during
the year ended December 31, 1998.
Item 12. Security Ownership of Certain Beneficial Owners and Management
(a) Security Ownership of Certain Beneficial Owners
The following are the only limited partners known to the General
Partner to own beneficially in excess of 5% of the outstanding Units.
<TABLE>
<CAPTION>
Title of Class Name and Address of Beneficial Owner Amount of Percent of Class
Units
Controlled
-------------------------- -------------------------------------- ---------------- ------------------
<S> <C> <C> <C>
Units of Limited Sempra Energy Financial 4,560 units 25.3%
Partnership Interests P.O. Box 126943
San Diego, CA 92113-6943
Units of Limited Western Financial Savings Bank 1,068 units 5.9%
Partnership Interests 23 Pasteur
Irvine, CA 92718
</TABLE>
(b) Security Ownership of Management
Neither the General Partner, its affiliates, nor any of the officers or
directors of the General Partner or its affiliates own directly or
beneficially any Units in the Partnership.
34
<PAGE>
(c) Changes in Control
The management and control of the General Partner may be changed at any
time in accordance with its organizational documents, without the
consent or approval of the Limited Partners. In addition, the
Partnership Agreement provides for the admission of one or more
additional and successor General Partners in certain circumstances.
First, with the consent of any other General Partners and a
majority-in-interest of the Limited Partners, any General Partner may
designate one or more persons to be successor or additional General
Partners. In addition, any General Partner may, without the consent of
any other General Partner or the Limited Partners, (i) substitute in
its stead as General Partner any entity which has, by merger,
consolidation or otherwise, acquired substantially all of its assets,
stock or other evidence of equity interest and continued its business,
or (ii) cause to be admitted to the Partnership an additional General
Partner or Partners if it deems such admission to be necessary or
desirable so that the Partnership will be classified a partnership for
Federal income tax purposes. Finally, a majority-in-interest of the
Limited Partners may at any time remove the General Partner of the
Partnership and elect a successor General Partner.
Item 13. Certain Relationships and Related Transactions
The General Partner manages all of the Partnership's affairs. The transactions
with the General Partner are primarily in the form of fees paid by the
Partnership for services rendered to the Partnership and the General Partner's
interest in the Partnership, as discussed in Item 11 and in the notes to the
Partnership's financial statements.
35
<PAGE>
PART IV.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
Financial Statements
(a)(1) Financial statements included in Part II hereof:
Report of Independent Certified Public Accountants
Independent Auditors' Report
Balance Sheets, March 31, 2000 and 1999 and December 31, 1998
Statements of Operations for the year ended March 31, 2000, the three
months ended March 31, 1999 and for the years ended December 31,
1998 and 1997
Statements of Partners' Equity (Deficit) for the year ended March 31,
2000, the three months ended March 31, 1999 and for the years ended
December 31, 1998 and 1997
Statements of Cash Flows for the year ended March 31, 2000, the three
months ended March 31, 1999 and for the years ended December 31,
1998 and 1997
Notes to Financial Statements
(a)(2) Financial statement schedules included in Part IV hereof:
Report of Independent Certified Public Accountants on Financial Stat-
ment Schedules
Schedule III - Real Estate Owned by Local Limited Partnerships
(b) Reports on Form 8-K
1. A Form 8-K dated May 13, 1999 was filed on May 14, 1999 reporting the
Partnership's change in fiscal year end to March 31. No financial
statements were included.
(c) Exhibits
3.1 Articles of incorporation and by-laws: The registrant is not
incorporated. The Partnership Agreement is included as Exhibit B to the
Prospectus, filed as Exhibit 28.1 to Form 10-K dated December 31, 1995
is hereby incorporated herein by reference as exhibit 3.1.
10.1 Amended and Restated Agreement of Limited Partnership of Evergreen
Apartments I Limited Partnership filed as exhibit 10.1 to Form 8-K
dated November 14, 1995 is hereby incorporated herein by reference as
exhibit 10.1.
10.2 Amended and Restated Agreement of Limited Partnership of Shepherd
South Apartments I, Ltd. filed as exhibit 10.1 to Form 8-K dated
December 14, 1995 is hereby incorporated herein by reference as
exhibit 10.2.
10.3 Amended and Restated Agreement of Limited Partnership of Patten
Towers, L.P. II filed as exhibit 10.1 to Form 8-K dated December 21,
1995 is hereby incorporated herein by reference as exhibit 10.3.
36
<PAGE>
10.4 Second Amended and Restated Agreement of Limited Partnership of
Alliance Apartments I Limited Partnership filed as exhibit 10.7 to
Post-Effective Amendment No.2 to Registration Statement on Form S-11 of
the Partnership is hereby incorporated herein by reference as exhibit
10.4.
10.5 Amended and Restated Agreement of Limited Partnership of Hastings
Apartments I Limited Partnership filed as exhibit 10.8 to
Post-Effective Amendment No.2 to Registration Statement on Form S-11 of
the Partnership is hereby incorporated herein by reference as exhibit
10.5.
10.6 Agreement of Limited Partnership of Raymond S. King Apartments I
Limited Partnership filed as exhibit 10.9 to Post-Effective Amendment
No. 2 to Registration Statement on Form S-11 of the Partnership is
hereby incorporated herein by reference as exhibit 10.6
10.7. Amended and Restated Agreement of Limited Partnership of Talladega
County Housing, Ltd. filed as exhibit 10.10 to Post-Effective
Amendment No. to Registration Statement on Form S-11 of the
Partnership is hereby incorporated herein by reference as exhibit
10.7.
10.8 Amended and Restated Agreement of Limited Partnership of The Willows
Limited Partnership filed as exhibit 10.11 to Post-Effective Amendment
No. to Registration Statement on Form S-11 of the Partnership is hereby
incorporated herein by reference as exhibit 10.8
10.9 Amended and Restated Agreement of Limited Partnership of Cascade Pines
L.P. II filed as exhibit 10.1 to Form 8-K dated April 26, 1996 is
hereby incorporated herein by reference as exhibit 10.9
10.10 Amended and Restated Agreement of Limited Partnership of Rosedale
Limited Partnership filed as exhibit 10.2 to Form 8-K dated April 26,
1996 is hereby incorporated herein by reference as exhibit 10.10
10.11 Amended and Restated Agreement of Limited Partnership of Blessed Rock
of El Monte filed as exhibit 10.1 to Form 8-K dated September 17, 1996
is hereby incorporated herein by reference as exhibit 10.11
10.12 Amended and Restated Agreement of Limited Partnership of Broadway
Apartments, Limited Partnership filed as exhibit 10.1 to Form 8-K
dated April 10, 1997 is hereby incorporated herein by reference as
exhibit 10.12
(d) Financial statement schedules follow, as set forth in subsection (a)(2)
hereof.
37
<PAGE>
Report of Independent Certified Public Accountants on
Financial Statement Schedules
To the Partners
WNC Housing Tax Credit Fund V, L.P., Series 3
The audits referred to in our report dated July 3, 2000, relating to the 2000,
1999 and 1998 financial statements of WNC Housing Tax Credit Fund V, L.P.,
Series 3 (the "Partnership"), which is contained in Item 8 of this Form 10-K,
included the audit of the accompanying financial statement schedules. The
financial statement schedules are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statement schedules based upon our audits. The opinion to the financial
statements contains an audit scope limitation paragraph describing the inability
of other auditors to express an opinion on the financial statements of three
limited partnerships.
In our opinion, such financial statement schedules present fairly, in all
material respects, the financial information set forth therein.
/s/ BDO SEIDMAN, LLP
BDO SEIDMAN, LLP
Orange County, California
July 3, 2000
38
<PAGE>
WNC Housing Tax Credit Fund V, L.P., Series 3
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2000
<TABLE>
<CAPTION>
---------------------------------- ------------------------------------------------------
As of March 31, 2000 As of December 31, 1999
---------------------------------- ------------------------------------------------------
Partnership's Total Amount of Encumbrances of Net
Investment in Local Investment Local Limited Property and Accumulated Book
Partnership Name Location Limited Partnerships Paid to Date Partnerships Equipment Depreciation Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Alliance Apartments I Alliance,
Limited Partnership Nebraska $ 604,000 $ 604,000 * * * *
Blessed Rock of El Monte El Monte,
California 2,511,000 2,511,000 2,678,000 9,291,000 489,000 8,802,000
Broadway Apartments, Hobbs,
Limited Partnership New Mexico 2,029,000 1,957,000 1,391,000 3,425,000 298,000 3,127,000
Cascade Pines, L.P. II Atlanta,
Georgia 1,347,000 1,347,000 7,898,000 8,488,000 937,000 7,551,000
Curtis Associates I, L.P. Curtis,
Nebraska 88,000 88,000 426,000 497,000 61,000 436,000
Escatawpa Village Escatawpa,
Associates, Limited Mississippi 249,000 249,000 895,000 1,418,000 150,000 1,268,000
Partnership
Evergreen Apartments I Tulsa,
Limited Partnership Oklahoma 549,000 549,000 * * * *
Hastings Apartments I, Hastings,
Limited Partnership Nebraska 542,000 542,000 * * * *
Heritage Apartments I, Berkeley,
L.P. Missouri 752,000 752,000 680,000 1,679,000 140,000 1,539,000
* Results of Alliance Apartments I, L.P., Evergreen Apartments I, L.P. and
Hastings Apartments I, L.P. have not been audited and thus have been excluded.
See Note 2 to the financial statements and report of certified public account-
ants.
</TABLE>
39
<PAGE>
WNC Housing Tax Credit Fund V, L.P., Series 3
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2000
<TABLE>
<CAPTION>
---------------------------------- ------------------------------------------------------
As of March 31, 2000 As of December 31, 1999
---------------------------------- ------------------------------------------------------
Partnership's Total Amount of Encumbrances of Net
Investment in Local Investment Local Limited Property and Accumulated Book
Partnership Name Location Limited Partnerships Paid to Date Partnerships Equipment Depreciation Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Hillcrest Associates, a Ontario,
Limited Partnership Oregon 354,000 354,000 1,298,000 1,700,000 239,000 1,461,000
Patten Towers, L.P. II Chattanooga,
Tennessee 2,154,000 2,154,000 6,945,000 10,823,000 1,475,000 9,348,000
Prairieland Properties Syracuse,
of Syracuse II, L.P. Kansas 85,000 85,000 294,000 511,000 56,000 455,000
Raymond S. King Greensboro,
Apartments Limited North Carolina 437,000 437,000 782,000 1,096,000 118,000 978,000
Partnership
Rosedale Limited Silver City,
Partnership New Mexico 309,000 309,000 1,321,000 1,679,000 250,000 1,429,000
Shepherd South Shepherd,
Apartments I, Ltd. Texas 121,000 121,000 561,000 732,000 88,000 644,000
Solomon Associates I, Solomon,
L.P. Kansas 138,000 138,000 567,000 717,000 98,000 619,000
Talladega County Talladega,
Housing Ltd. Alabama 653,000 653,000 804,000 1,469,000 156,000 1,313,000
The Willows Apartments Morganton, North
Limited Partnership Carolina 841,000 841,000 1,112,000 1,905,000 154,000 1,751,000
---------- ---------- ---------- ---------- --------- ----------
$ 13,763,000 $ 13,691,000 $ 27,652,000 $ 45,430,000 $ 4,709,000 $ 40,721,000
========== ========== ========== ========== ========= ==========
</TABLE>
40
<PAGE>
WNC Housing Tax Credit Fund V, L.P., Series 3
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2000
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------
For the year ended December 31, 1999
---------------------------------------------------------------------------------
Year Estimated
Investment Useful Life
Partnership Name Rental Income Net Loss Status Acquired (Years)
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alliance Apartments I Limited
Partnership * * Completed 1997 40
Blessed Rock of El Monte $ 660,000 $ (80,000) Completed 1997 40
Broadway Apartments, Limited
Partnership 221,000 (178,000) Completed 1997 40
Cascade Pines, L.P. II 1,785,000 (280,000) Completed 1997 40
Curtis Associates I, L.P. 35,000 (15,000) Completed 1997 27.5
Escatawpa Village Associates, Limited
Partnership 120,000 (25,000) Completed 1997 27.5
Evergreen Apartments I Limited
Partnership * * Completed 1996 40
Hastings Apartments I, Limited
Partnership * * Completed 1996 40
Heritage Apartments I, L.P. 99,000 (56,000) Completed 1997 27.5
Hillcrest Associates, A Limited
Partnership 191,000 (5,000) Completed 1997 27.5
Patten Towers, L.P. II 1,489,000 37,000 Completed 1996 27.5
Prairieland Properties of Syracuse
II, L.P. 53,000 (6,000) Completed 1997 27.5
Raymond S. King Apartments Limited
Partnership 58,000 (37,000) Completed 1997 30
Rosedale Limited Partnership 138,000 (39,000) Completed 1997 30
Shepherd South Apartments I, Ltd. 79,000 4,000 Completed 1996 40
Solomon Associates I, L.P. 90,000 (22,000) Completed 1997 27.5
Talladega County Housing Ltd. 86,000 (43,000) Completed 1996 40
The Willows Apartments Limited
Partnership 120,000 (20,000) Completed 1997 40
------------ ----------
$ 5,224,000 $ (765,000)
============ ==========
</TABLE>
41
<PAGE>
WNC Housing Tax Credit Fund V, L.P., Series 3
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 1999
<TABLE>
<CAPTION>
----------------------------------- -------------------------------------------------------
As of March 31, 1999 As of December 31, 1998
----------------------------------- -------------------------------------------------------
Partnership's Total Amount of Encumbrances of Net
Investment in Local Investment Local Limited Property and Accumulated Book
Partnership Name Location Limited Partnerships Paid to Date Partnerships Equipment Depreciation Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Alliance Apartments I Alliance,
Limited Partnership Nebraska $ 604,000 $ 604,000 $ 615,000 $ 1,549,000 $ 141,000 $ 1,408,000
Blessed Rock of El Monte El Monte,
California 2,511,000 2,511,000 3,841,000 9,289,000 279,000 9,010,000
Broadway Apartments, Hobbs,
Limited Partnership New Mexico 2,004,000 1,931,000 1,402,000 3,334,000 156,000 3,178,000
Cascade Pines, L.P. II Atlanta,
Georgia 1,347,000 1,347,000 8,023,000 8,392,000 706,000 7,686,000
Curtis Associates I, L.P. Curtis,
Nebraska 88,000 66,000 427,000 497,000 44,000 453,000
Escatawpa Village Escatawpa,
Associates, Limited Mississippi 249,000 249,000 898,000 1,417,000 100,000 1,317,000
Partnership
Evergreen Apartments I Tulsa,
Limited Partnership Oklahoma 549,000 549,000 652,000 1,886,000 199,000 1,687,000
Hastings Apartments I, Hastings,
Limited Partnership Nebraska 542,000 542,000 611,000 1,335,000 106,000 1,229,000
Heritage Apartments I, Berkeley,
L.P. Missouri 752,000 752,000 694,000 1,679,000 80,000 1,599,000
</TABLE>
42
<PAGE>
WNC Housing Tax Credit Fund V, L.P., Series 3
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 1999
<TABLE>
<CAPTION>
----------------------------------- -------------------------------------------------------
As of March 31, 1999 As of December 31, 1998
----------------------------------- -------------------------------------------------------
Partnership's Total Amount of Encumbrances of Net
Investment in Local Investment Local Limited Property and Accumulated Book
Partnership Name Location Limited Partnerships Paid to Date Partnerships Equipment Depreciation Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Hillcrest Associates, a Ontario,
Limited Partnership Oregon 354,000 354,000 1,301,000 1,697,000 198,000 1,499,000
Patten Towers, L.P. II Chattanooga,
Tennessee 2,154,000 2,154,000 7,275,000 10,715,000 1,095,000 9,620,000
Prairieland Properties Syracuse,
of Syracuse II, L.P. Kansas 85,000 85,000 294,000 511,000 37,000 474,000
Raymond S. King Greensboro,
Apartments North Carolina 437,000 437,000 782,000 1,096,000 84,000 1,012,000
Limited
Partnership
Rosedale Limited Silver City,
Partnership New Mexico 309,000 309,000 1,324,000 1,679,000 193,000 1,486,000
Shepherd South Shepherd,
Apartments I, Ltd. Texas 121,000 121,000 577,000 720,000 57,000 663,000
Solomon Associates I, Solomon,
L.P. Kansas 138,000 138,000 569,000 716,000 68,000 648,000
Talladega County Talladega,
Housing Ltd. Alabama 653,000 653,000 811,000 1,466,000 112,000 1,354,000
The Willows Apartments Morganton, North
Limited Partnership Carolina 841,000 841,000 1,122,000 1,905,000 102,000 1,803,000
---------- ---------- ---------- ---------- --------- ----------
$ 13,738,000 $ 13,643,000 $ 31,218,000 $ 49,883,000 $ 3,757,000 $ 46,126,000
========== ========== ========== ========== ========= ==========
</TABLE>
43
<PAGE>
WNC Housing Tax Credit Fund V, L.P., Series 3
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 1999
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------
For the year ended December 31, 1998
---------------------------------------------------------------------------------
Year Estimated
Investment Useful Life
Partnership Name Rental Income Net Loss Status Acquired (Years)
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alliance Apartments I Limited
Partnership $ 65,000 $ (64,000) Completed 1997 40
Blessed Rock of El Monte 656,000 (111,000) Completed 1997 40
Broadway Apartments, Limited
Partnership 152,000 (285,000) Completed 1997 40
Cascade Pines, L.P. II 1,821,000 (152,000) Completed 1997 40
Curtis Associates I, L.P. 30,000 (24,000) Completed 1997 27.5
Escatawpa Village Associates, Limited
Partnership 119,000 (25,000) Completed 1997 27.5
Evergreen Apartments I Limited
Partnership 174,000 (224,000) Completed 1996 40
Hastings Apartments I, Limited
Partnership 83,000 (59,000) Completed 1996 40
Heritage Apartments I, L.P. 102,000 (45,000) Completed 1997 27.5
Hillcrest Associates, A Limited
Partnership 188,000 (37,000) Completed 1997 27.5
Patten Towers, L.P. II 1,483,000 (38,000) Completed 1996 27.5
Prairieland Properties of Syracuse
II, L.P. 51,000 (9,000) Completed 1997 27.5
Raymond S. King Apartments Limited
Partnership 65,000 (32,000) Completed 1997 30
Rosedale Limited Partnership 135,000 (47,000) Completed 1997 30
Shepherd South Apartments I, Ltd. 87,000 (4,000) Completed 1996 40
Solomon Associates I, L.P. 92,000 (27,000) Completed 1997 27.5
Talladega County Housing Ltd. 86,000 (41,000) Completed 1996 40
The Willows Apartments Limited
Partnership 112,000 (19,000) Completed 1997 40
------------ ----------
$ 5,501,000 $ (1,243,000)
============ ==========
</TABLE>
44
<PAGE>
WNC Housing Tax Credit Fund V, L.P., Series 3
Schedule III
Real Estate Owned by Local Limited Partnerships
December 31, 1998
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
As of December 31, 1998
-------------------------------------------------------------------------------------------
Partnership's Total Amount of Encumbrances of Net
Investment in Local Investment Local Limited Property and Accumulated Book
Partnership Name Location Limited Partnerships Paid to Date Partnerships Equipment Depreciation Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Alliance Apartments I Alliance,
Limited Partnership Nebraska $ 604,000 $ 604,000 $ 615,000 $ 1,549,000 $ 141,000 $ 1,408,000
Blessed Rock of El Monte El Monte,
California 2,511,000 2,511,000 3,841,000 9,289,000 279,000 9,010,000
Broadway Apartments, Hobbs,
Limited Partnership New Mexico 2,004,000 1,931,000 1,402,000 3,334,000 156,000 3,178,000
Cascade Pines, L.P. II Atlanta,
Georgia 1,347,000 1,347,000 8,023,000 8,392,000 706,000 7,686,000
Curtis Associates I, L.P. Curtis,
Nebraska 88,000 66,000 427,000 497,000 44,000 453,000
Escatawpa Village Escatawpa,
Associates, Limited Mississippi 249,000 249,000 898,000 1,417,000 100,000 1,317,000
Partnership
Evergreen Apartments I Tulsa,
Limited Partnership Oklahoma 549,000 549,000 652,000 1,886,000 199,000 1,687,000
Hastings Apartments I, Hastings,
Limited Partnership Nebraska 542,000 542,000 611,000 1,335,000 106,000 1,229,000
Heritage Apartments I, Berkeley,
L.P. Missouri 752,000 752,000 694,000 1,679,000 80,000 1,599,000
</TABLE>
45
<PAGE>
WNC Housing Tax Credit Fund V, L.P., Series 3
Schedule III
Real Estate Owned by Local Limited Partnerships
December 31, 1998
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
As of December 31, 1998
-------------------------------------------------------------------------------------------
Partnership's Total Amount of Encumbrances of Net
Investment in Local Investment Local Limited Property and Accumulated Book
Partnership Name Location Limited Partnerships Paid to Date Partnerships Equipment Depreciation Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Hillcrest Associates, a Ontario,
Limited Partnership Oregon 354,000 354,000 1,301,000 1,697,000 198,000 1,499,000
Patten Towers, L.P. II Chattanooga,
Tennessee 2,154,000 2,154,000 7,275,000 10,715,000 1,095,000 9,620,000
Prairieland Properties Syracuse,
of Syracuse II, L.P. Kansas 85,000 85,000 294,000 511,000 37,000 474,000
Raymond S. King Greensboro,
Apartments Limited North Carolina 437,000 437,000 782,000 1,096,000 84,000 1,012,000
Partnership
Rosedale Limited Silver City,
Partnership New Mexico 309,000 309,000 1,324,000 1,679,000 193,000 1,486,000
Shepherd South Shepherd,
Apartments I, Ltd. Texas 121,000 121,000 577,000 720,000 57,000 663,000
Solomon Associates I, Solomon,
L.P. Kansas 138,000 138,000 569,000 716,000 68,000 648,000
Talladega County Talladega,
Housing Ltd. Alabama 653,000 653,000 811,000 1,466,000 112,000 1,354,000
The Willows Apartments Morganton, North
Limited Partnership Carolina 841,000 841,000 1,122,000 1,905,000 102,000 1,803,000
---------- ---------- ---------- ---------- --------- ----------
$ 13,738,000 $ 13,643,000 $ 31,218,000 $ 49,883,000 $ 3,757,000 $ 46,126,000
========== ========== ========== ========== ========= ==========
</TABLE>
46
<PAGE>
WNC Housing Tax Credit Fund V, L.P., Series 3
Schedule III
Real Estate Owned by Local Limited Partnerships
December 31, 1998
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------
For the year ended December 31, 1998
---------------------------------------------------------------------------------
Year Estimated
Investment Useful Life
Partnership Name Rental Income Net Loss Status Acquired (Years)
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alliance Apartments I Limited
Partnership $ 65,000 $ (64,000) Completed 1997 40
Blessed Rock of El Monte 656,000 (111,000) Completed 1997 40
Broadway Apartments, Limited
Partnership 152,000 (285,000) Completed 1997 40
Cascade Pines, L.P. II 1,821,000 (152,000) Completed 1997 40
Curtis Associates I, L.P. 30,000 (24,000) Completed 1997 27.5
Escatawpa Village Associates, Limited
Partnership 119,000 (25,000) Completed 1997 27.5
Evergreen Apartments I Limited
Partnership 174,000 (224,000) Completed 1996 40
Hastings Apartments I, Limited
Partnership 83,000 (59,000) Completed 1996 40
Heritage Apartments I, L.P. 102,000 (45,000) Completed 1997 27.5
Hillcrest Associates, A Limited
Partnership 188,000 (37,000) Completed 1997 27.5
Patten Towers, L.P. II 1,483,000 (38,000) Completed 1996 27.5
Prairieland Properties of Syracuse
II, L.P. 51,000 (9,000) Completed 1997 27.5
Raymond S. King Apartments Limited
Partnership 65,000 (32,000) Completed 1997 30
Rosedale Limited Partnership 135,000 (47,000) Completed 1997 30
Shepherd South Apartments I, Ltd. 87,000 (4,000) Completed 1996 40
Solomon Associates I, L.P. 92,000 (27,000) Completed 1997 27.5
Talladega County Housing Ltd. 86,000 (41,000) Completed 1996 40
The Willows Apartments Limited
Partnership 112,000 (19,000) Completed 1997 40
------------ ----------
$ 5,501,000 $ (1,243,000)
============ ==========
</TABLE>
47
<PAGE>
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.
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
By: WNC & Associates, Inc. General Partner
By: /s/ Wilfred N. Cooper, Sr.
Wilfred N. Cooper, Sr.,
Chairman and Chief Executive Officer of WNC & Associates, Inc.
Date: September 1, 2000
By: /s/ Michael L. Dickenson
Michael L. Dickenson,
Vice-President - Chief Financial Officer of WNC & Associates, Inc.
Date: September 1, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
By /s/ Wilfred N. Cooper, Jr.
Wilfred N. Cooper, Jr., President and Chief Operating Officer
of WNC & Associates, Inc.
Date: September 1, 2000
By: /s/ John B. Lester, Jr.
John B. Lester, Jr., Director of WNC & Associates, Inc.
Date: September 1, 2000
By: /s/ David N. Shafer
David N Shafer, Director of WNC & Associates, Inc.
Date: Septemebr 1, 2000
48
