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 December 31, 1996
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ________ to ___________
Commission file number: 0-21897
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
California 33-0707612
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
3158 Redhill Avenue, Suite 120, Costa Mesa, CA 92626
(714) 662-5565
Securities registered pursuant to Section 12(b) of the Act:
Title of Securities Exchanges on which Registered
NONE NONE
Securities registered pursuant to section 12(g) of the Act:
NONE
<PAGE>
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|
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
<PAGE>
Item 1. Business
PART I.
Organization
WNC Housing Tax Credit Fund, V, L.P., Series 4 (the "Partnership") or ("Series
4") was formed under the California Revised Limited Partnership Act on July 26,
1995 and commenced operations on July 1, 1996. The Partnership was formed to
invest primarily in other limited partnerships ("Local Limited Partnerships")
which will own and operate multi-family housing complexes that will qualify for
low income housing credits (the "Low Income Housing Credit").
The general partner of the Partnership is WNC & Associates, Inc. (the "General
Partner".) Wilfred N. Cooper, Sr., through the Cooper Revocable Trust, owns 70%
of the outstanding stock of WNC & Associates, Inc. John B. Lester, Jr. is the
original limited partner of the Partnership and owns, through the Lester Family
Trust, 30% of the outstanding stock of WNC & Associates, Inc. The business of
the Partnership is conducted primarily through the General Partner as the
Partnership has no employees of its own.
On July 1, 1996, 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
December 31, 1996, the Partnership has received and accepted subscriptions in
the amount of $8,386,805 (8,413 Units), of which $187,000 currently is
represented by Promissory Notes. Holders of Units are referred to herein as
"Limited Partners."
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 in Local Limited
Partnerships each of which will own and operate an apartment complex ("Apartment
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 against Federal taxes
otherwise due in each year of a ten-year period. The Apartment Complex is
subject to a 15-year compliance period (the "Compliance Period").
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 a Local Limited Partnership of any Apartment Complex prior to the end of the
applicable Compliance Period. Because of (i) the nature of the Apartment
Complexes, (ii) the difficulty of predicting the resale market for low-income
housing 15 or more years in the future, and (iii) the inability of the
Partnership to directly cause the sale of Apartment Complexes by the general
partners of the respective Local Limited Partnerships ("Local General
Partners"), but generally only to require such Local General Partners to use
their respective best efforts to find a purchaser for the Apartment Complexes,
it is not possible at this time to predict whether the liquidation of
substantially all of the Partnership's assets and the disposition of the
proceeds, if any, in accordance with the Partnership's Agreement of Limited
Partnership ("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 an Apartment Complex, it is anticipated that the Local General Partner will
either continue to operate such Apartment Complex or take such other actions as
the Local General Partner believes to be in the best interest of the Local
Limited Partnership. In addition, circumstances beyond the control of the
General Partner may occur during the Compliance Period which would require the
Partnership to approve the disposition of an Apartment Complex prior to the end
thereof.
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As of December 31, 1996, the Partnership has invested in three Local Limited
Partnerships. Each of these Local Limited Partnerships own an Apartment Complex
that is or is expected to be eligible for the Low Income Housing Credit. All of
the Local Limited Partnerships 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 multifamily 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 Apartment Complexes owned by the
Local Limited Partnerships will be readily marketable. Additionally, there can
be no assurance that the Partnership will be able to dispose of its interest in
the Local Limited Partnerships at the end of the Compliance Period. 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
Apartment Complexes and the Partnership. The Apartment Complexes could be
subject to loss through foreclosure. In addition, each Local Limited Partnership
is subject to risks relating to environmental hazards which might be
uninsurable. Because the Partnership's ability to control its 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 Partnership
operations will be profitable or that the anticipated Low Income Housing Credits
will be available to Limited Partners.
As of December 31, 1996, one of the Apartment Complexes acquired by the
Partnership was completed and in operation. Two of the Apartment Complexes are
still under construction. The Apartment Complexes were developed by the
respective Local General Partners who acquired the sites and applied for
applicable mortgages and subsidies. The Partnership and WNC Housing Tax Credit
Fund V, L.P., Series 3 ("Series 3") each acquired equal limited partnership
interests in Blessed Rock. (The General Partner of the Partnership is also the
general partner of Series 3). The Partnership became the principal limited
partner in the remaining Local Limited Partnerships pursuant to arm's-length
negotiations with the Local General Partner. As a limited partner, the
Partnership's liability for obligations of each Local Limited Partnership is
limited to its investment. The Local General Partners of the Local Limited
Partnership retain responsibility for developing, constructing, maintaining,
operating and managing the Apartment Complex.
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SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
IN WHICH THE PARTNERSHIP HAS AN INVESTMENT
AS OF DECEMBER 31, 1996
Percentage
Total Units Units of Units
Name & Location Units Completed Occupied Occupied
- --------------- ----- --------- -------- --------
Ashford Place LP 100 0 0%
Pottawatomie, Oklahoma
Blessed Rock of El Monte 137 0 0%
El Monte, California
Crescent City Apartments 55 55 48 88%
Crescent City, California _____ __________ ________ __________
292 55 48 100%
==== === === ====
<TABLE>
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
LOCAL
ACTUAL OR LIMITED
ESTIMATED ESTIMATED PERMANENT PARTNER-
PROJECT CONSTRUC- DEVELOPMENT MORTGAGE SHIP'S
LOCAL NAME AND TION COST NUMBER OF BASIC LOAN ANTICIPATED
LIMITED NUMBER COMPLETION (INCLUDING APARTMENT MONTHLY PRINCIPAL TAX CREDITS
PARTNERSHIP OF BUILDING DATE LAND COST) UNITS RENTS AMOUNT (1)
- ------------------------------------------------------------------------------------------------------------
ASHFORD PLACE Ashford December $813,449 244 1BR units $360 $2,700,000 $3,901,370
Place 1997 109 2BR units $438 FNBM (5)
Apartments 154 3BR units $506
7 buildings
(2)
- ------------------------------------------------------------------------------------------------------------
BLESSED Blessed August $9,867,800 136 1BR $402 $2,600,000 $9,147,920
ROCK Rock of El 1997 units $0 (mgr FENB (3)
Monte 1 2BR unit unit)
Apartments $275,000
EMCRA
14 (6)
buildings
(4) $650,000
DCF (7)
- ------------------------------------------------------------------------------------------------------------
CRESCENT The Surf October $3,251,878 18 Studio $266 $1,960,000 $2,220,520
CITY Apartments 1995 units $300 CDHCD (9)
37 1BR units
1 building
(4)(8)
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Low Income Housing Credits are available over a 10-year period. For the
year in which the credit first becomes available, SERIES 4 will receive
only that percentage of the annual credit which corresponds to the number
of months during which SERIES 4 was a limited partner of the Local Limited
Partnership, and during which the Apartment Complex was completed and in
service. See the discussion under "The Low Income Housing Credit" in the
Prospectus.
4
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(2) Property designed for both families and senior citizens.
(3) First National Bank of Michigan (FNBM) will provide the mortgage loan for a
term of 15 years at an annual interest rate of 13.95%. Principal and
interest will be payable monthly based on a 15-year amortization schedule.
(4) Property designed for senior citizens.
(5) Far East National Bank ("FENB") will provide the first mortgage loan for a
term of 30 years at an annual interest rate of 8.5%. Principal and interest
will be payable monthly, based on a 20-year amortization schedule.
(6) El Monte Community Redevelopment Agency ("EMCRA") will provide the second
mortgage loan for a term of 15 years at an annual interest rate of 4%. The
loan will be repaid based on residual receipts.
(7) Deferred City Fees ("DCF") will provide the third mortgage loan for a term
of 30 years at an annual interest rate of 1%. The loan will be repaid based
on residual receipts.
(8) Rehabilitation property.
(9) California Department of Housing and Community Development ("CDHCD") will
provide the mortgage loan for a term of 50 years at an annual interest rate
of 3%. Principal and interest will be payable annually based on a 50-year
amortization schedule.
Shawnee (ASHFORD PLACE): Shawnee (population 26,800) is in central Oklahoma near
the juncture of Interstate Highway 40 and U.S. Highway 177 approximately 35
miles east of Oklahoma City. The major employers for Shawnee residents are TDK
Ferrites (ceramic magnets), Mobil Chemical, Wolverine Tube (copper tubing) and
Shawnee Regional Hospital.
El Monte (BLESSED ROCK): El Monte (population 106,000) is in Los Angeles County,
California, in the San Gabriel Valley, approximately 12 miles east of downtown
Los Angeles. The major employers for El Monte residents are Wells Fargo Bank,
Von's Co., Inc. (distribution warehouse), and Sargent-Fletcher (air frames).
Crescent City (CRESCENT CITY): Crescent City (population 4,000) is the county
seat of Del Norte County, California, and is on the Pacific coast near the
Oregon border on U.S. Highway 101, approximately 370 miles north of San
Francisco. The major employers for Crescent City residents are Pelican Bay State
Prison, Del Norte Unified School District, and Del Norte County.
5
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<TABLE>
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SHARING RATIOS:
LOCAL LOCAL SHARING ALLOCATIONS (4) AND
LIMITED GENERAL PROPERTY RATIOS: SALE OR REFINANCING SERIES 4's CAPITAL
PARTNERSHIP PARTNERS MANAGER (1) CASH FLOW (3) PROCEEDS (5) CONTRIBUTION (6)
- -------------------------------------------------------------------------------------------------
ASHFORD The Cowen Insignia WNC: 15% but 98.99/.01/1 $2,317,180
PLACE Group, Management no less than 50/50
L.L.C Group (8) $2,500 per
(7) year
LGP: 67% of
the balance:
WNC: 25%
LGP: 75%
- -------------------------------------------------------------------------------------------------
BLESSED Everland, Professional WNC: Greater 98.99/.01/1 $2,581,086 (11)
ROCK Inc. Apartment of 30% or 50/50
(9) Management, $12,000
Inc. (10) LGP: 40% of
the balance
The balance:
50/50
- -------------------------------------------------------------------------------------------------
CRESCENT Crescent Crescent WNC: Greater 99/1 $1,191,878
CITY City City of 50/50
Surf, Inc. Surf, Inc. 15% or $800
(12) (12) LGP: 40%
The balance:
50/50
- -------------------------------------------------------------------------------------------------
</TABLE>
(1) The maximum annual management fee payable to the property manager generally
is determined pursuant to lender regulations. Each Local General Partner is
authorized to employ either itself or one of its Affiliates, or a third party,
as property manager for leasing and management of the Apartment Complex so long
as the fee therefor does not exceed the amount authorized and approved by the
lender for the Apartment Complex.
(2) Each Local Limited Partnership will pay its Local General Partner or an
Affiliate of its Local General Partner a development fee in the amount set
forth, for services incident to the development and construction of the
Apartment Complex, which services include: negotiating the financing commitments
for the Apartment Complex; securing necessary approvals and permits for the
development and
6
<PAGE>
construction of the Apartment Complex; and obtaining allocations of Low Income
Housing Credits. This payment will be made in installments after receipt of each
installment of the capital contributions made by SERIES 4 (and "SERIES 3" in the
case of BLESSED ROCK).
(3) Reflects the amount of the net cash flow from operations, if any, to be
distributed to SERIES 4 (and SERIES 3 in the case of BLESSED ROCK) ("WNC") and
the Local General Partner ("LGP") of the Local Limited Partnership for each year
of operations. Generally, to the extent that the specific dollar amounts which
are to be paid to WNC are not paid annually, they will accrue and be paid from
sale or refinancing proceeds as an obligation of the Local Limited Partnership.
(4) Subject to certain special allocations, reflects the respective percentage
interests in profits, losses and Low Income Housing Credits of (i) in the case
of BLESSED ROCK and OGALLALLA (a) SERIES 4 (and SERIES 3 in the case of BLESSED
ROCK), (b) WNC Housing, L.P., an Affiliate of the Sponsor which is the special
limited partner, and (c) the Local General Partner; and (ii) in the case of
CRESCENT CITY (a) SERIES 4, and (b) the Local General Partner.
(5) Reflects the percentage interests of (i) SERIES 4 (and SERIES 3 in the case
of BLESSED ROCK) and (ii) the Local General Partner, in any net cash proceeds
from sale or refinancing of the Apartment Complex, after payment of the mortgage
loan and other Local Limited Partnership obligations (see, e.g., note 3), and
the following, in the order set forth: the capital contributions of SERIES 4 and
(and SERIES 3 in the case of BLESSED ROCK); and the capital contribution of the
Local General Partner.
(6) SERIES 4 (and SERIES 3 in the case of BLESSED ROCK) will make their capital
contributions to the Local Limited Partnership in stages, with each contribution
due when certain conditions regarding construction or operations of the
Apartment Complex have been fulfilled. See "Investment Policies" and "Terms of
the Local Limited Partnership Agreements" under "Investment Objectives and
Policies" in the Prospectus.
(7) The Cowen Group, L.L.C. is owned by E. Allen Cowen II, who has more than
nine years' experience in affordable housing development. The Cowen Group has
represented to Series 4 that, as of August 6, 1996, it had a net worth in excess
of $13,000.
(8) Insignia Management Group has more than 10 years' experience in property
management. The company manages in excess of 207,000 apartment units, 51,800 of
which are affordable housing units.
(9) Everland, Inc. is a California corporation which was formed in 1986. It
has acted as developer of projects in El Monte and Rosemead, California. The
corporation's president, Tom Y. Lee, is a Certified Public Accountant and one
of the founding organizers and directors of First Continental Bank in Rosemead.
Everland, Inc. has represented that, as of June 30, 1996, its total equity was
($382,185); however, construction and operating deficit guarantees will be
provided by Tom Y. Lee. Mr. Lee, age 47, has represented that, as of December
31, 1995, he had a net worth in excess of $3,500,000.
7
<PAGE>
(10) Professional Apartment Management, Inc. is a California licensed real
estate broker which provides full property management services for more than 100
facilities, consisting of more than 5,000 units, and having a combined value of
more than $200 million. The company has been managing affordable housing for 26
years, and currently manages approximately 500 tax credit units.
(11) SERIES 3 will make a capital contribution in the same amount.
(12) Crescent City Surf, Inc. is a California corporation which was formed in
1993. William L. Kjelland is the president of the corporation. He has been
involved in the development and management of five other subsidized properties
in California. The corporation has represented to SERIES 4 that its net worth is
negligible. Construction and operating deficit guarantees will be provided by
Mr. Kjelland. Mr. Kjelland, age 86, has represented to SERIES 4 that, as of May
1, 1996, he had a net worth in excess of $500,000.
Item 2. Properties
Through its investment in Local Limited Partnerships the Partnership holds an
interest in Apartment Complexes. See Item 1 for information pertaining to these
Apartment Complexes.
Item 3. Legal Proceedings
NONE
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted during the fourth quarter of the fiscal year covered
by this report to a vote of security holders, through the solicitation of
proxies or otherwise.
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
PART II.
The Units are not traded on a public exchange but are being sold through a
public offering. It is not anticipated that any public market will develop for
the purchase and sale of any Unit. Units can be assigned only if certain
requirements in the Partnership Agreement are satisfied. At December 31, 1996,
there were 485 Limited Partners. 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. The Limited
Partners who invested in the Partnership received Housing Tax Credits of $14 to
$2 per unit depending on the month of investment in 1996.
8
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Item 6. Selected Financial Data
July 1, 1996
(Date operations
commenced) through
December 31,1996
Revenue $15,529
Partnership operating expenses (33,034)
Equity in loss of
Local Limited Partnerships (29,329)
-------
Net loss $(46,834)
========
Net loss per Limited
Partnership Interest $(26.83)
=======
Total assets $11,609,334
===========
Net investment in
Local Limited Partnerships $6,700,570
==========
Capital contributions payable to
Local Limited Partnerships $4,267,232
==========
Accrued fees and expenses due to
affiliates $291,396
========
Tax credits per $1,000 invested $2 TO $14
=========
9
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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operation
Liquidity and Capital Resources
Overall, as reflected in its Statement of Cash Flows, the Partnership had a net
increase in cash and cash equivalents of approximately $3,916,700 for the period
ended December 31, 1996. This increase in cash was provided by the Partnership's
financing activities, including the proceeds from the offering. Cash from
financing activities for the period ended December 31, 1996 of approximately
$6,457,000 was sufficient to fund the investing activities of the Partnership in
the aggregate amount of approximately $2,544,000 which consisted of capital
contributions to Local Limited Partnerships, loans to Local Limited Partnerships
and acquisition fees of approximately $1,822,900 $100,200 and $621,300,
respectively. Cash provided and used by the operating activities of the
Partnership was minimal compared to its other activities. Cash provided
consisted primarily of interest received on cash deposits, and cash used
consisted primarily of payments for operating fees and expenses. The major
components of all these activities are discussed in greater detail below.
The Partnership is indebted to WNC & Associates, Inc. in the amount of
approximately $291,400. The component items of such indebtedness are as follows:
Acquisition fees $21,300
Advances made for acquisition costs,
organizational, offering and
selling expenses $221,800
Advance from affiliate for property deposit 26,100
Asset management fees $23,200
As of April 14, 1997 and December 31, 1996, the Partnership had received and
accepted subscription funds in the amount of approximately $14,206,000 and
8,318,000, respectively of which $217,000 and 187,000 is represented by Limited
Partner promissory notes. The following information pertains to the
Partnership's investments in to Local Limited Partnerships:
<TABLE>
<CAPTION>
April 14, 1997 December 31, 1996
Approximately Approximately
<S> <C> <C>
Capital contributions made to
Local Limited Partnerships $7,152,410 $1,822,911
Commitments for additional Capital
contributions made to Local Limited Partnerships 6,462,866 4,267,232
Loans outstanding to Local Limited Partnerships 51,900 126,381
</TABLE>
10
<PAGE>
Prior to sale of the Apartment Complexes, it is not expected that any of the
Local Limited Partnerships in which the Partnership has invested or will invest
will generate cash from operations sufficient to provide distributions to the
Limited Partners in any material amount. Such cash from operations, if any,
would first be used to meet operating expenses of the Partnership, including
payment of the asset management fee to the General Partner. As a result, it is
not anticipated that the Partnership will provide distributions to the Limited
Partners prior to the sale of the Apartment Complexes ,if ever.
The Partnership's investments will not be readily marketable and may be affected
by adverse general economic conditions which, in turn, could substantially
increase the risk of operating losses for the Apartment Complexes, the Local
Limited Partnerships and the Partnership. These problems may result from a
number of factors, many of which cannot be controlled by the General Partner.
Nevertheless, the General Partner anticipates that capital raised from the sale
of the Units will be sufficient to fund the Partnership's investment commitments
and proposed operations.
The Partnership will establish working capital reserves of at least 3% of
capital contributions, an amount which is anticipated to be sufficient to
satisfy general working capital and administrative expense requirements of the
Partnership excluding payment of the asset management fee as well as expenses
attendant to the preparation of tax returns and reports to the Limited Partners
and other investor servicing obligations of the Partnership. Liquidity would,
however, be adversely affected by unanticipated or greater than anticipated
operating costs. The Partnership's liquidity could also be affected by defaults
or delays in payment of the Limited Partners' promissory notes, from which a
portion of the working capital reserves is expected to be funded. To the extent
that working capital reserves are insufficient to satisfy the cash requirements
of the Partnership, it is anticipated that additional funds would be sought
through bank loans or other institutional financing. The General Partner may
also apply any cash distributions received
11
<PAGE>
from the Local Limited Partnerships for such purposes or to replenish or
increase working capital reserves.
Under its Partnership Agreement the Partnership does not have the ability to
assess the Limited Partners for additional capital contributions to provide
capital if needed by the Partnership or Local Limited Partnerships. Accordingly,
if circumstances arise that cause the Local Limited Partnerships to require
capital in addition to that contributed by the Partnership and any equity
contributed by the general partners of the Local Limited Partnerships, the only
sources from which such capital needs will be able to be satisfied (other than
the limited reserves available at the Partnership level) will be (i) third-party
debt financing (which may not be available, if, as expected, the Apartment
Complexes owned by the Local Limited Partnerships are already substantially
leveraged), (ii) additional equity contributions or advances of the general
partners of the Local Limited Partnerships, (iii) other equity sources (which
could adversely affect the Partnership's interest in Housing Tax Credits, cash
flow and/or proceeds of sale or refinancing of the Apartment Complexes and
result in adverse tax consequences to the Limited Partners), or (iv) the sale or
disposition of the Apartment Complexes (which could have the same adverse
effects as discussed in (iii) above). There can be no assurance that funds from
any of such sources would be readily available in sufficient amounts to fund the
capital requirement of the Local Limited Partnerships in question. If such funds
are not available, the Local Limited Partnerships would risk foreclosure on
their Apartment Complexes if they were unable to renegotiate the terms of their
first mortgages and any other debt secured by the Apartment Complexes to the
extent the capital requirements of the Local Limited Partnerships relate to such
debt.
The Partnership's capital needs and resources are expected to undergo major
changes during their first several years of operations as a result of the
completion of its offering of Units and its acquisition of investments.
Thereafter, the Partnership's capital needs and resources are expected to be
relatively stable over the holding periods of the investments except to the
extent of proceeds received in payment of Local Limited Partnership promissory
notes and disbursed to fund the deferred obligations of the Partnership.
Results of Operations
As reflected on its Statements of Operations, the Partnership had a loss of
$46,834 for the period ended December 31, 1996. The component items of revenue
and expense are discussed below.
Revenue. The Partnership's revenue consists entirely of interest earned on
Limited Partner promissory notes and cash deposits held in financial
institutions (i) as reserves, or (ii) pending investment in Local Limited
Partnerships. Interest revenue in future years will be a function of prevailing
interest rates and the amount of cash balances. It is anticipated that the
Partnership will maintain cash reserves in an amount not materially in excess of
the minimum amount required by its Partnership Agreement, which is 3% of capital
contributions.
Expenses. The most significant component of operating expenses is expected to be
the asset management fee. The asset management fees is equal to the greater of
(i) $2,000 for each Apartment Complex or (ii) 0.275% of gross proceeds, and will
be decreased or increased annually based on changes to the Consumer Price Index.
Management fees of $23,139 were incurred for the period ended December 31, 1996.
Amortization expense consist of the amortization over a period of 30 years of
acquisition fees and other expenses attributable to the acquisition of Local
Limited Partnership investments.
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<PAGE>
Item 8. Financial Statements and Supplementary Data
WNC HOUSING TAX CREDIT FUND, V, L.P., SERIES 4
(A California Limited Partnership)
FINANCIAL STATEMENTS
For The Period July 1, 1996 (Date Operations
Commenced) to December 31, 1996
with
INDEPENDENT AUDITORS' REPORT THEREON
<PAGE>
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Partners
WNC Housing Tax Credit Fund V, L.P., Series 4
We have audited the accompanying balance sheet of WNC Housing Tax Credit Fund V,
L.P., Series 4 (a California Limited Partnership) (the "Partnership") as of
December 31, 1996, and the related statements of operations, partners' equity
(deficit) and cash flows for the period July 1, 1996 (date operations commenced)
to December 31, 1996. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit. We did not audit the financial
statements of one of the three limited partnerships in which WNC Housing Tax
Credit Fund V, L.P., Series 4 is a limited partner. This investment, as
discussed in Note 3 to the financial statements, is accounted for by the equity
method. The investment in this limited partnership represented 10% of the total
assets of WNC Housing Tax Credit Fund V, L.P., Series 4 at December 31, 1996.
The financial statements of this limited partnership was audited by other
auditors whose report has been furnished to us, and our opinion, insofar as it
relates to the amounts included for this limited partnership, is based solely on
the report 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 report of the other auditors provide a
reasonable basis for our opinion.
In our opinion, based on our audit and the report of the other auditors, the
1996 financial statements referred to above present fairly, in all material
respects, the financial position of WNC Housing Tax Credit Fund V, L.P., Series
4 (a California Limited Partnership) as of December 31, 1996, and the results of
its operations and its cash flows for the period July 1, 1996 (date operations
commenced) to December 31, 1996 in conformity with generally accepted accounting
principles.
/s/ CORBIN & WERTZ
___________________
CORBIN & WERTZ
Irvine, California
April 14, 1997
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
BALANCE SHEET
December 31, 1996
ASSETS
Cash and cash equivalents $ 3,916,658
Subscriptions receivable (Note 7) 861,250
Loans receivable (Note 2) 126,381
Investments in limited partnerships (Note 3) 6,700,570
Other assets 4,475
-----
$ 11,609,334
=============
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities:
Payables to limited partnerships (Note 5) $ 4,267,232
Due to General Partner and affiliates
(Note 4) 291,396
-------
Total liabilities 4,558,628
---------
Commitments and contingencies (Note 8)
Partners' equity (deficit):
General partner (11,401)
Limited partners (25,000 units authorized;
8,413 units outstanding) 7,062,107
---------
Total partners' equity 7,050,706
---------
$ 11,609,334
=============
See accompanying notes to financial statements
FS-2
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
STATEMENT OF OPERATIONS
For The Period July 1, 1996 (Date Operations
Commenced) to December 31, 1996
Interest income $ 15,529
-----------
Operating expenses:
Amortization 2,851
Management fees (Note 4) 23,139
Other 7,044
-----
Total operating expenses 33,034
------
Loss from operations (17,505)
Equity in losses from limited partnerships
(Note 3) (29,329)
-------
Net loss $ (46,834)
===========
Net loss allocated to:
General partner $ (468)
===========
Limited partners $ (46,366)
===========
Net loss per weighted limited partner units $ (26.83)
===========
Outstanding weighted limited partner units 1,728
=====
See accompanying notes to financial statements
FS-3
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
STATEMENT OF PARTNERS' EQUITY (DEFICIT)
For The Period From July 1, 1996 (Date Operations
Commenced) to December 31, 1996
<TABLE>
<CAPTION>
General Limited
Partner Partners Total
<S> <C> <C> <C>
Capital contributions $ 100 $ 900 $ 1,000
Sale of limited partnership units,
net of discount of $26,195 --- 8,386,805 8,386,805
Offering expenses (11,033) (1,092,232) (1,103,265)
Capital issued for notes
receivable (Note 7) --- (187,000) (187,000)
Net loss (468) (46,366) (46,834)
---- ------- -------
Equity (deficit)
December 31, 1996 $ (11,401) $ 7,062,107 $ 7,050,706
========== ============ ============
</TABLE>
See accompanying notes to financial statements
FS-4
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
STATEMENT OF CASH FLOWS
For The Period From July 1, 1996 (Date Operations
Commenced) to December 31, 1996
Cash flows from operating activities:
Net loss $ (46,834)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Amortization 2,851
Equity in loss of limited partnerships 29,329
Management fees incurred 23,139
Change in other assets (4,475)
------
Net cash provided by operating activities 4,010
=====
Cash flows from investing activities:
Investments in limited partnerships (1,822,912)
Loans receivable (100,226)
Acquisition fees (621,335)
--------
Net cash used in investing activities (2,544,473)
----------
Cash flows from financing activities:
Capital contributions from partners 7,339,555
Offering expenses (882,434)
--------
Net cash provided by financing activities 6,457,121
---------
Net increase in cash and cash equivalents 3,916,658
Cash and cash equivalents, beginning of period ---
Cash and cash equivalents, end of period $ 3,916,658
===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash paid during the period
for:
Interest $ ---
===========
Income taxes $ ---
===========
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING AND INVESTING ACTIVITIES:
During the period ended December 31, 1996, the Partnership incurred, but did not
pay, $21,271 of payables to affiliates for acquisition fees (see Note 4).
During the period ended December 31, 1996, the Partnership incurred, but did not
pay, $4,267,232 of payables to limited partnerships (in connection with its
investments in limited partnerships (see Note 5).
During the period ended December 31, 1996, the Partnership incurred, but did not
pay, $220,831 of payables to an affiliate for offering and acquisition expenses
(see Note 4).
As of December 31, 1996, $861,250 of capital contributions were recorded as
subscriptions receivable.
See accompanying notes to financial statements
FS-5
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
During 1996, the Partnership had incurred, but did not pay, $23,139 in
management fees (see Note 4).
During the period ended December 31, 1996, the Partnership incurred, but did not
pay, $26,155 in payable to an affiliate for a property deposit.
See accompanying notes to financial statements
FS-6
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For The Period From July 1, 1996 (Date Operations
Commenced) To December 31, 1996
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
WNC Housing Tax Credit Fund V, L.P., Series 4 (the "Partnership") was formed
under the California Revised Limited Partnership Act on July 26, 1995, and
commenced operations on July 1, 1996. Prior to July 1, 1996, the Partnership was
considered a development-stage enterprise. The Partnership was formed to invest
primarily in other limited partnerships which will own and operate multi-family
housing complexes that will qualify for low income housing credits.
The general partner is WNC Tax Credit Partners, V, L.P. (the "General
Partner"), a California limited partnership. WNC & Associates, Inc. is the
general partner of the WNC Tax Credit Partners V, L.P. Wilfred N. Cooper,
Sr., through the Cooper Revocable Trust, owns 70% of the outstanding stock of
WNC & Associates, Inc. John B. Lester, Jr. is the original limited partner of
the Partnership and owns, through the Lester Family Trust, 30% of the
outstanding stock of WNC & Associates, Inc.
Pursuant to the Partnership Agreement, the Partnership is authorized to sell
25,000 Units at $1,000 per Unit (the "Units") of which 8,413 Units in the amount
of $8,413,000, net of $26,195 of discounts for volume purchases, had been sold
as of December 31, 1996. The General Partner has a 1% interest in operating
profits and losses, taxable income and loss and in cash available for
distribution from the Partnership. The limited partners will be allocated the
remaining 99% of these items in proportion to their respective investments.
After the limited partners have received 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 a
subordinated disposition fee (as described in Note 4), 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.
The Partnership's investments in limited partnerships are subject to the risks
incident to the management and ownership of multifamily residential real estate,
and include the risks that neither the Partnership's investments nor the
apartment complexes owned by the limited partnerships will be readily
marketable. Additionally, there can be no assurance that the Partnership will be
able to dispose of its interest in the 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
apartment complexes and the Partnership. The apartment complexes could be
subject to loss through foreclosure. In addition, each limited partnership is
subject to risks relating to environmental hazards which might be uninsurable.
Because the Partnership's ability to control its operations will depend on these
and other factors beyond the control of the General Partner and the general
partners of the limited partnerships, there can be no assurance that Partnership
operations will be profitable or that the anticipated housing tax credits will
be available to limited partners.
Continued
FS-7
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Period From July 1, 1996 (Date Operations
Commenced) To December 31, 1996
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
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 limited partnership's results of operations and for
any distributions received. The accounting policies of the limited partnerships
are consistent with the Partnership. Costs incurred by the Partnership in
acquiring the investments in limited partnerships are capitalized as part of the
investment and amortized over 30 years (see Note 4).
Losses from limited partnerships allocated to the Partnership will not be
recognized to the extent that the investment balance would be adjusted below
zero.
Cash and Cash Equivalents
The partnership considers highly liquid investments with remaining maturities of
three months or less when purchased to be cash equivalents.
Concentration of Credit Risk
At December 31, 1996, the Partnership maintained cash balances at certain
financial institutions in excess of the federally insured maximum.
Offering Expenses
Offering expenses consist of underwriting commissions, dealer-management fees,
legal fees, printing, filing and recordation fees, and other costs incurred in
connection with the selling of limited partnership interests in the Partnership.
The General Partner is obligated to pay all offering and organization costs in
excess of 14.5% (including sales commissions) of the total offering proceeds.
Offering expenses are reflected as a reduction of limited partners' capital and
for the period ended December 31, 1996, the Partnership incurred offering
expenses and selling expenses of $490,805 and $612,460, respectively.
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.
Net loss per limited partner unit is computed by dividing the limited partners'
share of net loss by the weighted number of limited partner units outstanding
during the period.
Continued
FS-8
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Period From July 1, 1996 (Date Operations
Commenced) To December 31, 1996
NOTE 2 - LOANS RECEIVABLE
Loans receivable represent amounts loaned by the Partnership to certain limited
partnerships in which the Partnership may invest. These loans will be applied
against the first capital contribution due if the Partnership ultimately
acquires a limited partnership interest. In the event that the Partnership does
not acquire a limited partnership interest, the loans are to be repaid with
interest at a rate which is equal to the rate charged to the holder (10.25% at
December 31, 1996). Loans receivable with a balance of $126,381 at December 31,
1996 were collectible from two limited partnerships acquired in 1997 (see Note
8).
NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS
As of December 31, 1996, the Partnership had acquired limited partnership
interests in three limited partnerships, each of which owns one apartment
complex. As of December 31, 1996, construction and rehabilitation of two of the
apartment complexes had been partially completed and the other had begun
operations. The respective general partners of the limited partnerships manage
the day to day operations of the limited partnerships. Significant limited
partnership business decisions require the approval of the Partnership. The
Partnership, as a limited partner, is entitled to 99%, as specified in the
partnership agreements, of the operating profits and losses of the limited
partnerships upon its acquisition of its limited partnership interests.
The Partnership investments in the limited partnerships as shown in the
accompanying balance sheet as of December 31, 1996 are approximately $4,908,000
greater than the Partnership's equity as shown in the limited partnerships'
financial statements. This difference is primarily due to acquisition costs
related to the acquisition of the investments that have been capitalized in the
Partnership's investment account and are being amortized over 30 years (see Note
4) and certain capital contributions accrued but not paid (see Note 5).
Following is a summary of the equity method activity of the investments in
limited partnerships for the year ended December 31, 1996:
Investments per balance sheet, beginning of period $ ---
Capital contributions to limited partnerships 1,822,912
Capital contributions payable to limited
partnerships 4,267,232
Capitalized acquisition fees and costs 642,606
Amortization of acquisition fees and costs (2,851)
Equity in losses of limited partnerships (29,329)
-------
Investments per balance sheet, end of period $ 6,700,570
============
Continued
FS-9
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Period From July 1, 1996 (Date Operations
Commenced) To December 31, 1996
NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
Approximate combined condensed financial information from the individual
financial statements of the limited partnerships as of December 31, 1996 and for
the period then ended is as follows:
COMBINED CONDENSED BALANCE SHEET
ASSETS
Land $ 1,515,000
Construction in progress 1,759,000
Buildings, net of accumulated depreciation
of $62,000 2,564,000
Due from related parties 256,000
Other assets 742,000
-------
$ 6,836,000
===========
LIABILITIES AND PARTNERS' EQUITY
Liabilities:
Construction and mortgage loans payable $ 3,017,000
Other liabilities (including due to related
parties of $274,000) 419,000
-------
Total liabilities 3,436,000
---------
Partners' equity:
WNC Housing Tax Credit Fund V, L.P., Series 4 1,793,000
WNC Housing Tax Credit Fund V, L.P., Series 3 1,291,000
Other partners 316,000
Total partners' equity 3,400,000
---------
$ 6,836,000
============
COMBINED CONDENSED STATEMENT OF OPERATIONS
Total revenue $ 62,000
------------
Expenses:
Operating expenses 36,000
Interest expense 19,000
Depreciation 34,000
------
Total expenses 89,000
------
Net loss $ (27,000)
============
Net loss allocable to Partnership $ (29,000)
============
In the event these limited partnerships continue to incur operating losses,
additional capital contributions by the Partnership may be required to sustain
operations of such limited partnerships. If additional capital contributions are
not made when they are required, the Partnership's investment in certain of such
limited partnerships could be impaired.
Continued
FS-10
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Period From July 1, 1996 (Date Operations
Commenced) To December 31, 1996
NOTE 4 - RELATED PARTY TRANSACTIONS
Under the terms of the Partnership Agreement, the Partnership 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
Partnership units as compensation for services rendered in connection
with the acquisition of limited partnerships. As of December 31, 1996,
the Partnership incurred acquisition fees of $582,690. Accumulated
amortization was insignificant for 1996.
Reimbursement of costs incurred by an affiliate of the General Partner
in connection with the acquisition of limited partnerships. These
reimbursements will not exceed 1% of the gross proceeds. As of December
31, 1996, the Partnership incurred acquisition costs of $59,916 which
have been included in limited partnership investment. Accumulated
amortization was insignificant for 1996.
An annual asset management fee equal to the greater amount of (i)
$2,000 for each apartment complex, or (ii) 0.275% of gross proceeds. In
either case, the fee will be decreased or increased annually based on
changes to the Consumer Price Index. However, in no event will the
maximum amount exceed 0.2% of the invested assets (defined as the
Partnership's capital contributions plus its allocable percentage of
the mortgage debt encumbering the apartment complexes) of the limited
partnerships. The Partnership incurred asset management fees of $23,139
for the period ended December 31, 1996.
A subordinated disposition fee in an amount equal to 1% of the sales
price of real estate sold. Payment of this fee is subordinated to the
limited partners receiving a return on investment (as defined in the
Partnership Agreement) and is payable only if services are rendered in
the sales effort.
Due to General Partner and affiliates on the accompanying balance sheet consists
of the following at December 31, 1996:
Acquisition fees $ (21,271)
Advances made for acquisition costs, and
organizational, offering and selling
expenses (220,831)
Advance from affiliate for property deposit (26,155)
Management fees (23,139)
-------
$ (291,396)
============
Continued
FS-11
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Period From July 1, 1996 (Date Operations
Commenced) To December 31, 1996
NOTE 5 - PAYABLES TO LIMITED PARTNERSHIPS
Payables to limited partnerships represent amounts which are due at various
times based on conditions specified in the limited partnership agreements. These
contributions are non-interest bearing, are payable in installments and are due
upon the 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.
NOTE 7 - SUBSCRIPTIONS AND NOTES RECEIVABLE
As of December 31, 1996, the Partnership had received subscriptions for 1,049
units consisting of receivables of $861,250, net of discounts of $750, and
promissory notes of $187,000. 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, with interest at the rate of 9.75% per annum and
due no later than 13 months after the subscription date. Since the subscription
receivables were collected subsequent to year-end, the Partnership has reflected
such amounts as capital contributions and an asset in the accompanying financial
statements as of December 31, 1996. Since the promissory notes had not been
collected prior to issuance of the financial statements, the unpaid balance has
been reflected as a reduction of limited partners' equity in the accompanying
financial statements.
NOTE 8 - COMMITMENTS AND CONTINGENCIES
Subsequent to December 31, 1996, the Partnership acquired five limited
partnership interests which required capital contributions totaling
approximately $6,607,000, of which $126,381 has been advanced as of December 31,
1996. (see Note 2). The Partnership is negotiating to acquire two additional
limited partnership interests which would commit the Partnership to additional
capital contributions of approximately $970,000.
NOTE 9 - SUBSEQUENT EVENT
The Company has received subscriptions for an additional 5,793 units.
FS-12
<PAGE>
Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
None.
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 the Sponsor are Wilfred N. Cooper, Sr., who serves as
Chairman of the Board, John B. Lester, Jr., and Kay L. Cooper. All of the shares
of the Sponsor are owned by Wilfred N. Cooper, Sr., through the Cooper Revocable
Trust, and John B. Lester, Jr., through the Lester Family Trust.
WILFRED N. COOPER, SR., age 65, has been the principal shareholder and a
Director of WNC & ASSOCIATES, INC. since its organization in 1971, of SHELTER
RESOURCE CORPORATION since its organization in 1981 and of WNC RESOURCES, INC.
from its organization in 1988 through its acquisition by WNC & ASSOCIATES, INC.
in 1991, serving as President of those companies until 1992 and as Chief
Executive Officer since 1992, and has been a Director of WNC CAPITAL CORPORATION
since its organization. He is also a general partner with WNC & ASSOCIATES, INC.
in WNC FINANCIAL GROUP, L.P. and WNC TAX CREDIT PARTNERS, L.P. During 1970 and
1971 he was a 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. Previously, he had responsibility for new business
development including factory-built housing evaluation and project management in
urban planning and development. Mr. Cooper is a Director and a member of the
Executive Committee of the National Association of Home Builders ("NAHB") and a
Chairman of the NAHB's Rural Housing Council, a Director of the National Housing
Conference, a Director of the Affordable Housing Tax Credit Coalition, a past
President of the Rural Builders Council of California ("RBCC") and a past
President of Southern California Chapter II of the Real Estate Syndication and
Securities Institute ("RESSI") of the National Association of Realtors ("NAR").
Mr. Cooper graduated from Pomona College in 1956 with a Bachelor of Arts degree.
JOHN B. LESTER, JR., age 62, has been a shareholder, a Director and Secretary of
WNC & ASSOCIATES, INC. since 1986, Executive Vice President from 1986 to 1992,
and President and Chief Operating Officer since 1992, and has been a Director of
WNC CAPITAL CORPORATION since its organization. He was a shareholder, Executive
Vice President, Secretary and a Director of WNC RESOURCES, INC. from 1988
through its acquisition by WNC & ASSOCIATES, INC. in 1991. From 1973 to 1986 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 is a former
Director of the Los Angeles Chapter of the Associated General Contractors of
California. His responsibilities at WNC & ASSOCIATES, INC. include property
acquisitions and company operations. Mr. Lester graduated from the University of
Southern California in 1956 with a Bachelor of Science degree in Mechanical
Engineering.
<PAGE>
DAVID N. SHAFER, age 44, has been a Senior Vice President of WNC & ASSOCIATES,
INC. since 1992 and General Counsel since 1990, and served as Asset Management
Director from 1990 to 1992. Previously he was employed as an associate attorney
by the law firms of Morinello, Barone, Holden & Nardulli from 1987 until 1990,
Frye, Brandt & Lyster from 1986 to 1987 and Simon and Sheridan from 1984 to
1986. Mr. Shafer is a Director and President of RBCC, a member of NAHB's Rural
Housing Council, a past President of Southern California Chapter II of RESSI, a
past Director of the Council of Affordable and Rural Housing and Development 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
and from the University of San Diego in 1986 with a Master of Law degree in
Taxation.
WILFRED N. COOPER, JR., age 33, has been employed by WNC & ASSOCIATES, INC.
since 1988 and has been a Senior Vice President or Vice President since 1992.
Mr. Cooper heads the Acquisition Origination department at WNC and has been
President of and a registered principal with WNC CAPITAL CORPORATION, a member
firm of the NASD, since its organization. Previously, he was employed as a
government affairs assistant by Honda North America from 1987 to 1988, and as a
legal assistant with respect to Federal legislative and regulatory matters by
the law firm of Schwartz, Woods and Miller from 1986 to 1987. Mr. Cooper is a
member of NAHB's Rural Housing Council and serves as Chairman of its Membership
Committee. Mr. Cooper graduated from The American University in 1985 with a
Bachelor of Arts degree.
THEODORE M. PAUL, age 40, has been Vice President - Finance of WNC & ASSOCIATES,
INC. since 1992 and Chief Financial Officer since 1990. Previously, he was a
Vice President and Chief Financial Officer of National Partnership Investments
Corp., a sponsor and general partner of syndicated partnerships investing in
affordable rental housing qualified for tax credits, from 1986 until 1990, and
was employed as an associate by the accounting firms of Laventhol & Horwath,
during 1985, and Mann & Pollack Accountants, from 1979 to 1984. Mr. Paul is a
member of the California Society of Certified Public Accountants and the
American Institute of Certified Public Accountants. His responsibilities at WNC
& ASSOCIATES, INC. include supervision of investor partnership accounting and
tax reporting matters and monitoring the financial condition of the Local
Limited Partnerships in which the Partnership will invest. Mr. Paul graduated
from the University of Illinois in 1978 with a Bachelor of Science degree and is
a Certified Public Accountant in the State of California.
<PAGE>
THOMAS J. RIHA, age 41, has been Vice President - Asset Management of WNC &
ASSOCIATES, INC. since 1994. He has more than 17 years' experience in commercial
and multi-family real estate investment and management. Previously, Mr. Riha was
employed by Trust Realty Advisor, a real estate acquisition and management
company, from 1988 to 1994, last serving as Vice President - Operations. His
responsibilities at WNC & ASSOCIATES, INC. include monitoring the operations and
financial performance of, and regulatory compliance by, properties in the WNC
portfolio. 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 in the State
of California and a member of the California Society of Certified Public
Accountants and the American Institute of Certified Public Accountants.
SY GARBAN, age 50, has 19 years' experience in the real estate securities and
syndication industry. He has been associated with WNC & ASSOCIATES, INC., since
1989, serving as National Sales Director through 1992 and as Vice President
National Sales since 1992. Previously, he was employed by MRW, Inc., Newport
Beach, California from 1980 to 1989, a real estate acquisition, development and
management firm. Mr. Garban is a member of the International Association of
Financial Planners. Mr. Garban graduated from Michigan State University in 1967
with a Bachelor of Science degree in Business Administration.
CARL FARRINGTON, age 50, has been associated with WNC & ASSOCIATES, INC. since
1993, currently serving as Director - Originations since 1994. Mr. Farrington
has more than 12 years' experience in finance and real estate acquisitions.
Previously, he served as Acquisitions Director for The Arcand Company from 1991
to 1993, and as Treasurer and Director of Finance and Administrator for Polytron
Corporation from 1988 to 1991. Mr. Farrington is a member and Director of the
Council of Affordable and Rural Housing and Development. Mr. Farrington
graduated from Yale University with a Bachelor of Arts degree in 1966 and from
Dartmouth College with a Master of Business Administration in 1970.
MICHELE M. TAYLOR, age 41, has been employed by WNC & ASSOCIATES, INC. since
1986, serving as a paralegal and office manager, and currently is the Investor
Services Director. Previously she was self-employed between 1982 and 1985 in
non-financial services activities and from 1978 to 1981 she was employed as a
paralegal by a law firm which specialized in real estate limited partnership
transactions. Ms. Taylor graduated from the University of California, Irvine in
1976 with a Bachelor of Arts degree.
THERESA I. CHAMPANY, age 38, has been employed by WNC & ASSOCIATES, INC., since
1989 and currently is the Marketing Services Director and a registered principal
with WNC CAPITAL CORPORATION. Previously, she was employed as Manager of
Marketing Services by August Financial Corporation from 1986 to 1989 and as
office manager and Assistant to the Vice President of Real Estate Syndications
by McCombs Securities Co., Inc. from 1979 to 1986. Ms. Champany attended
Manchester (Conn.) Community College from 1976 to 1978.
KAY L. COOPER, age 59, has been an officer and Director of WNC & ASSOCIATES,
INC. since 1971 and of WNC RESOURCES, INC. from 1988 through its acquisition by
WNC & ASSOCIATES, INC. in 1991. Mrs. Cooper has also been the sole proprietor of
Agate 108, a manufacturer and retailer of home accessory products, since 1975.
She is the wife of Wilfred N. Cooper, Sr., the mother of Wilfred N. Cooper, Jr.
and the sister of John B. Lester, Jr. Mrs. Cooper graduated from the University
of Southern California in 1958 with a Bachelor of Science degree.
<PAGE>
Item 11. Executive Compensation
(1)
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) Acquisition fees in an amount equal to 7.5% of the gross proceeds of the
Partnership's Offering ("Gross Proceeds") allocable to each of the Local Limited
Partnerships. Through December 31, 1996, the aggregate amount of acquisition
fees paid was approximately $582,700.
(b) An annual asset management fee in an amount equal to the greater of (i)
$2,000 for each Apartment Complex, or (ii) 0.275% of Gross Proceeds. Asset
management fee of $23,139 was incurred for the period of July 1, 1996 and
December 31, 1996.
(d) A subordinated disposition fee in an amount equal to 1% of the sale price
received in connection with the sale or disposition of an Apartment 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 Parners. "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) 13% through December 31, 2006, and (ii) 6% for the balance of the
Partnerships term. No disposition fees have been paid.
(e) The General Partner was allocated Low Income Housing Credits of $659 in
1996.
Item 12. Security Ownership of Certain Beneficial Owners and Management
(a) Security Ownership of Certain Beneficial Owners
No person is known to own beneficially in excess of 5% of the outstanding Units.
(b) Security Ownership of Management
Neither the General Partner, Associates nor any of the officers or directors of
Associates own directly or beneficially any limited partnership interests in the
Partnership.
<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
All of the Partnership's affairs are managed by the General Partner, through
Associates. The transactions with the General and Associates are primarily in
the form of fees paid by the Partnership for services rendered to the
Partnership, as discussed in Item 11 and in the notes to the accompanying
financial statements.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
Report of independent public accountants
Balance sheets as of December 31, 1996.
Statements of Operations for the period of July 1, 1996 (date operations
commenced) through December 31, 1996
Statements of Partners' Equity for the period of July 1, 1996 (date operations
commenced) through December 31, 1996
Statements of Cash Flows for the period of July 1, 1996 (date operations
commenced) through December 31, 1996
Notes to Financial Statements.
Financial Statement Schedules:
N/A
<PAGE>
Exhibits
(3.1): Articles of incorporation and by-laws: The registrant is not
incorporated. The Partnership Agreement is included as Exhibit B to the Post
Effective Amendment No. 6 dated March 25, 1997
(3.2): First Amendment to Agreement of Limited Partnership included as Exhibit B
to the Post Effective Amendment No. 6 dated March 25, 1997
10.1 Blessed Rock of El Monte filed as exhibit 10.1 to Form 8-K Current Report
dated September 19, 1996 is herein incorporated by reference as exhibit 10.1.
10.2 Agreement of Limited Partnership of Crescent City Apartments filed as
exhibit 10.1 to Form 8-K Current Report dated September 25, 1996 is herein
incorporated by reference as exhibit 10.2.
10.3 Agreement of Limited Partnership of Ashford Place, a Limited Partnership
filed as exhibit 10.1 to Form 8-K Current Report dated December 31, 1996 is
herein incorporated by reference as exhibit 10.3.
10.4 Amended and Restated Agreement of Limited Partnership of Lamar Plaza
Apartments, L.P. filed as exhibit 10.2 to Form 8-K Current Report dated December
31, 1996 is herein incorporated by reference as exhibit 10.4
10.5 Amended and Restated Agreement of Limited Partnership of Woodland, Ltd.
filed as exhibit 10.3 to Form 8-K Current Report dated December 31, 1996 is
herein incorporated by reference as exhibit 10.5
10.6 Amended and Restated Agreement of Limited Partnership of Ogallalla
Apartments I Limited Partnership filed as exhibit 10.1 to Form 8-K Current
Report dated October 15, 1996 is herein incorporated by reference as exhibit
10.6
10.7 Amended and Restated Agreement of Limited Partnership of Mesa Verde
Apartments, Limited Partnership filed as exhibit 10.1 to Form 8-K Current Report
dated December 31, 1996 is herein incorporated by reference as exhibit 10.7
10.8 Amended and Restated Agreement of Limited Partnership of D. Hilltop
Apartments, Ltd. filed as exhibit 10.1 to Form 8-K Current Report dated April
14, 1997 is herein incorporated by reference as exhibit 10.8
REPORTS ON 8-K.
Form 8K Form 8K/A Amendment No. 1 to Current Report dated September 17, 1996.
Form 8K Form 8K/A Amendment No. 1 to Current Report dated September 25, 1996.
Form 8K Current Report dated October 1, 1996. Form 8K Form 8K/A Amendment No. 1
to Current Report dated October 1, 1996. Form 8K Form 8KA Current Report dated
October 15, 1996. Form 8K Form 8K/A Amendment No. 1 to Current Report dated
October 15, 1996. Form 8K Current Report dated December 31, 1996.
<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 4
By: WNC Tax Credit Partners, L.P. General Partner
By: WNC & Associates, Inc. General Partner
By: /s/ John B. Lester, Jr.
_____________________________________________________
John B. Lester, Jr. President of WNC & Associates, Inc.
Date: April 29, 1997
By: /s/ Theodore M. Paul
_____________________________________________________
Theodore M. Paul Vice-President, Finance
Date: April 29, 1997
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, Sr.
_____________________________________________________
Wilfred N. Cooper, Sr. Chairman of the Board
Date: April 29, 1996
By: /s/ John B. Lester, Jr.
_____________________________________________________
John B. Lester, Jr. Secretary of the Board
Date: April 29, 1997
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