AMENDMENT NO. 1 TO 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, 1997
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
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:
UNITS OF LIMITED PARTNERSHIP INTEREST
<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
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Item 1. Business
PART I.
Organization
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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 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.
The Partnership conducted its public offering ("Offering") from July 1,1996 to
July 11, 1997. 25,000 units of limited partnership interests ("Units"), at a
price of $1,000 per Unit were offered. Since inception a total of 22,000 Units
representing approximately $21,915,000, net of discounts of $85,000, were sold
throughout the offering of which $175,000 currently is represented by Promissory
Notes. Holders of Units are referred to herein as "Limited Partners."
Description of Business
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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 ("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.
As of December 31, 1997, the Partnership has invested in 10 Local Limited
Partnerships. Each of these Local Limited Partnerships own an Apartment Complex
2
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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 interests 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, 1997, nine of the Apartment Complexes acquired by the
Partnership were completed and in operation. One of the Apartment Complexes is
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.
The following is a schedule of the status as of December 31, 1997, of the
Apartment Complexes owned by Local Limited Partnerships in which Series 4 was a
limited partner as of December 31, 1997.
SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
IN WHICH THE PARTNERSHIP HAS AN INVESTMENT
AS OF DECEMBER 31, 1997
Percentage
Total Units Units of Units
Name & Location Units Completed Occupied Occupied
Ashford Place LP 100 100 18 18%
Belen Vista Associates 57 57 57 100%
Blessed Rock of El Monte 137 137 136 99%
Crescent City Apartments 55 55 42 76%
Crescent City, California
D. Hilltop Apt Ltd, Palestine TX 24 24 23 98%
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Percentage
Total Units Units of Units
Name & Location Units Completed Occupied Occupied
Greyhound Assoc I, Windsor MO 24 24 0 0%
Lamar Plaza, Lamar MO 28 28 8 29%
Mesa Verde, Los Alamos, NM 142 0 0 0%
Mountain Vista Los Alamos, NM 96 96 92 96%
Woodland Townhomes, LP Mairon, AL 42 42 22 52%
-- -- -- ---
Total 705 563 398 71%
=== === ===
Series 4 has acquired a Local Limited Partnership Interest in Ashford
Place, L.P., an Oklahoma limited partnership ("ASHFORD PLACE"); Crescent City
Apartments, a California limited partnership ("CRESCENT CITY"); Lamar Plaza,
L.P., a Missouri limited partnership ("LAMAR"); Mesa Verde Apartments, Limited
Partnership, a New Mexico limited partnership ("MESA VERDE"); and Woodland
Townhomes, L.P., an Alabama limited partnership ("WOODLAND TOWNHOMES"); and has
acquired one-half of the Local Limited Partnership Interest in Blessed Rock of
El Monte, a California limited partnership ("BLESSED ROCK"). WNC Housing Tax
Credit Fund V, L.P., Series 3 ("Series 3") has acquired the other one-half of
the Local Limited Partnership Interest in BLESSED ROCK. Series 4 expects to
become a limited partner in Belen Vista, L.P., a New Mexico limited partnership
("BELEN VISTA"); Greyhound Associates I, L.P., a Missouri limited partnership
("GREYHOUND"), Hilltop, L.P., a Texas limited partnership ("HILLTOP"); and
Mountain Vista Associates, L.P., a New Mexico limited partnership ("MOUNTAIN
VISTA").
ASHFORD PLACE owns the Ashford Place Apartments in Shawnee, Oklahoma;
BELEN VISTA owns the Belen Vista Apartments in Belen, New Mexico; BLESSED ROCK
owns the Blessed Rock of El Monte Apartments in El Monte, California; CRESCENT
CITY owns The Surf Apartments in Crescent City, California; GREYHOUND owns the
Greyhound Apartments in Winsor, Missouri, HILLTOP owns the Hilltop Apartments in
Palestine, Texas; LAMAR owns the Lamar Plaza Apartments in Lamar, Missouri; MESA
VERDE owns the Mesa Verde Apartments in Roswell, New Mexico; MOUNTAIN VISTA owns
the Mountain Vista Apartments in Los Alamos, New Mexico; and WOODLAND TOWNHOMES
owns the Woodland Townhomes in Marion, Alabama.
The following tables contain information concerning the Apartment
Complexes and the Local Limited Partnerships identified herein:
<TABLE>
<CAPTION>
- ---------- --------------- ------------ ----------- ------------ --------- ------------ --------------
ESTIMATED LOCAL LIMITED
LOCAL ACTUAL OR DEVELOP- PERMANENT PARTNERSHIP'S
LIMITED PROJECT ESTIMATED MENT COST NUMBER OF BASIC LOAN AGGREGATE
PARTNERSHIP NAME/NUMBER COMPLETION (INCLUDING APARTMENT MONTHLY PRINCIPAL TAX CREDIT
OF BUILDINGS DATE LAND COST) UNITS RENTS AMOUNT (1)
- ---------- --------------- ------------ ----------- ------------ --------- ------------ --------------
- ---------- --------------- ------------ ----------- ------------ --------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASHFORD Ashford Place December $4,748,683 32 1BR $360 $2,187,000 $3,901,370
PLACE Apartments 1997 units $438 Greystone
60 2BR $506 & Co. (2)
7 buildings units
8 3BR units
- ---------- --------------- ------------ ----------- ------------ --------- ------------ --------------
- ---------- --------------- ------------ ----------- ------------ --------- ------------ --------------
BELEN Belen Vista August $1,998,882 30 1BR $470 $1,546,000 $896,740
VISTA Apartments 1997 26 2BR $509 RECDS (5)
15 buildings
(3)(4)
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BLESSED Blessed August $9,867,800 36 1BR $402 $2,600,000 $9,147,920
ROCK Rock of El 1997 units $0 FENB (7)
Monte 1 2BR (mgr
Apartments unit unit) $275,000
EMCRA (8)
14 buildings
(6)
$650,000
DCF (9)
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<CAPTION>
- ---------- --------------- ------------ ----------- ------------ --------- ------------ --------------
ESTIMATED LOCAL LIMITED
LOCAL ACTUAL OR DEVELOP- PERMANENT PARTNERSHIP'S
LIMITED PROJECT ESTIMATED MENT COST NUMBER OF BASIC LOAN AGGREGATE
PARTNERSHIP NAME/NUMBER COMPLETION (INCLUDING APARTMENT MONTHLY PRINCIPAL TAX CREDIT
OF BUILDINGS DATE LAND COST) UNITS RENTS AMOUNT (1)
- ---------- --------------- ------------ ----------- ------------ --------- ------------ --------------
- ---------- --------------- ------------ ----------- ------------ --------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C> <C>
CRESCENT The Surf October $3,251,878 18 Studio $266 $1,960,000 $2,220,520
CITY Apartments 1995 units $300 CDHCD (10)
37 1BR
1 building units
(3) (6)
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GYEYHOUND Greyhound March $1,382,000 16 2BR $270 $643,000 $1,127,500
Apartments 1998 units $305 MHDC (17)
8 3BR
3 buildings units
- ---------- --------------- ------------ ----------- ------------ --------- ------------ --------------
- ---------- --------------- ------------ ----------- ------------ --------- ------------ --------------
HILLTOP Hilltop December $596,919 8 1BR $262 $371,450 $221,880
Apartments 1996 16 2BR $320 RECDS (5)
4 buildings
(3)
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- ---------- --------------- ------------ ----------- ------------ --------- ------------ --------------
LAMAR Lamar Plaza June $1,679,720 24 2BR $285 $888,400 $1,343,440
Apartments 1997 4 3BR $320 MHDC (federal)
(11) $53,738
7 buildings (Missouri)
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- ---------- --------------- ------------ ----------- ------------ --------- ------------ --------------
MESA Mesa Verde December $6,840,387 11 1BR $256 $2,280,000 $6,427,180
VERDE Apartments 1997 45 1BR $314 Bank of
6 2BR $305 America
18 buildings 23 2BR $374 (12)
11 3BR $351 $277,904
46 4BR $431 HOME (13)
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MOUNTAIN Mountain July $1,960,261 16 1BR $317 $1,450,000 $884,480
VISTA Vista 1997 36 2BR $374 U.S. Dept.
Apartments of
Agriculture
7 buildings (FmHA)
(3) (14)
- ---------- --------------- ------------ ----------- ------------ --------- ------------ --------------
- ---------- --------------- ------------ ----------- ------------ --------- ------------ --------------
WOODLAND Woodland September $2,616,040 32 1BR $178 $51,500 $2,230,740
TOWNHOMES Townhomes 1997 units $212 Regions
10 2BR Bank (15)
6 buildings units
$1,245,000
HOME (16)
- ---------- --------------- ------------ ----------- ------------ --------- ------------ --------------
</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.
(2) Greystone & Co. will provide the mortgage loan for a term of 18 years
at an annual interest rate of 8.5%. Principal and interest will be
payable monthly based on a 30-year amortization schedule. Outstanding
principal will be due on maturity.
(3) Rehabilitation property.
(4) Property designed for both families and senior citizens.
(5) RECDS provides mortgage loans under the RECDS Section 515 Mortgage
Loan Program. Each of these mortgage loans will be a 50-year loan and
will bear annual interest at a market rate prior to reduction of the
interest rate by a mortgage interest subsidy to an annual rate of 1%,
with principal and interest payable monthly based on a 50-year
amortization schedule.
5
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(6) Property designed for senior citizens.
(7) 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. Outstanding principal will be due on maturity.
(8) 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 repayable based on residual receipts.
(9) 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
repayable based on residual receipts.
(10) 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.
(11) Missouri Housing Development Commission ("MHDC") will provide the
mortgage loan for a term of 40 years at an annual interest rate of 1%.
Principal and interest will be payable monthly based on a 40-year
amortization schedule.
(12) Bank of America will provide the first mortgage loan for a term of 15
years at an annual interest rate equal to the 15-year Treasury Bond
yield plus 225 basis points. Principal and interest will be payable
monthly based on a 30-year amortization schedule. Outstanding
principal will be due on maturity.
(13) HOME will provide the second mortgage loan for a term of 30 years at
an annual interest rate of 7.13%. Principal and interest will be
payable monthly based on a 30-year amortization schedule.
(14) U.S. Department of Agriculture (FmHA) will provide the mortgage loan
for a term of 50 years at an annual interest rate of 7.25%. Principal
and interest will be payable monthly based on a 50-year amortization
schedule.
(15) Regions Bank will provide the first mortgage loan for a term of 20
years at an annual interest rate of 9.5%. Principal and interest will
be payable monthly based on a 20-year amortization schedule.
(16) HOME will provide the second mortgage loan for a term of 30 years at
an annual interest rate of 0.5%. Principal and interest will be
payable monthly based on a 30-year amortization schedule.
(17) Missouri Housing Development Commission ("MHDC") will provide the
mortgage loan for a term of 40 years at an annual interest rate of 1%.
Principal and interest will be payable monthly based on a 40-year
amortization schedule.
The following is a discussion of the approximate population and general location
of, and the employers in, the communities in which the Apartment Complexes are
located:
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Shawnee (ASHFORD PLACE): Shawnee (population 26,800) is in central
Oklahoma near the intersection 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.
Belen (BELEN VISTA): Belen (population 7,700) is in west-central New
Mexico, approximately 20 miles south of Albuquerque, the state's capital, on
Interstate Highway 25. The major employers for Belen residents are Los Lunas
Hospital and Training School, Belen Consolidated School District and the
Atchison, Topeka and Santa Fe Railroad.
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.
Windsor (GREYHOUND): Windsor (population 3,100) is in Henry County, in
west-central Missouri, approximately 80 miles southeast of Kansas City, on State
Highway 52. The major employers for residents of Henry County are U.S. Safety
(Parmelee) (personal safety products), Windsor schools, and Royal Oaks Hospital.
Palestine (HILLTOP): Palestine (population 18,100) is in eastern Texas
at the intersection of U.S. Highways 287, 79 and 84, approximately 100 miles
southeast of Dallas. The major employers for Palestine residents are Texas
Department of Corrections, Memorial Hospital, and Murray Corp. (air conditioning
compressors).
Lamar (LAMAR): Lamar (population 4,500) is in southwestern Missouri on
U.S. Highway 160 near the intersection of U.S. Highway 71, approximately 51
miles northwest of Springfield. The major employers for Lamar residents are
O'Sullivan Furniture, Thorco Display Metal Racks and Barton County Hospital.
Roswell (MESA VERDE): Roswell (population 48,700) is in southeast New
Mexico at the intersection of U.S. Highways 380 and 285, approximately 175 miles
southeast of Albuquerque. The major employers for Roswell residents are Roswell
Independent School District, Eastern New Mexico Medical Center and Levi Strauss.
Los Alamos (MOUNTAIN VISTA): Los Alamos (population 12,000) is in
north-central New Mexico on State Route 4 approximately 16 miles northwest of
Santa Fe. The major employers for Los Alamos residents are the U.S. Department
of Energy and the Los Alamos National Laboratory.
Marion (WOODLAND TOWNHOMES): Marion (population 4,400) is in central
Alabama, approximately 91 miles northwest of Montgomery on State Route 5. The
major employers for Portage residents are the Perry County Board of Education,
C-T South (iron casting), Niemands Industries (packaging and filling) and
Griffin Wood (lumber).
7
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<TABLE>
<CAPTION>
- ---------------- -------------- ------------ ------------- ---------------- --------------- ----------------
LOCAL SHARING RATIOS SHARING SERIES 4'S
LOCAL LOCAL GENERAL CASH-FLOW RATIOS: CAPITAL
LIMITED GENERAL PROPERTY PARTNER' (3) ALLOCATIONS CONTRIBUTION
PARTNERSHIP PARTNERS MANAGER DEVELOPMENT (4) (6)
FEE AND SALE OR
REFINANCING
PROCEEDS (5)
- ---------------- -------------- ------------ ------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
ASHFORD PLACE The Cowen Insignia $591,714 WNC: 15% but 98.99/.01/1 $2,317,180
Group, Management no less than 50/50
L.L.C. (7) Group (8) $2,500 per year
LGP: 67% of
the balance
The balance:
WNC: 25%
LGP: 75%
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- ---------------- -------------- ------------ ------------- ---------------- --------------- ----------------
BELEN VISTA Monarch Monarch $205,101 WNC: 33% but 99/1 $488,274
Properties, Properties, no less than 50/50
Inc. (9) Inc. (9) $1,944 per
year; maximum
46%
LGP: The
balance
- ---------------- -------------- ------------ ------------- ---------------- --------------- ----------------
- ---------------- -------------- ------------ ------------- ---------------- --------------- ----------------
BLESSED Everland, Professional $1,061,100 WNC: Greater 98.99/.01/1 $2,581,086
ROCK Inc. (10) Apartment of 30% or 50/50 (12)
Management $12,000
Inc. (11) LGP: 40% of
the balance
The balance:
50/50
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- ---------------- -------------- ------------ ------------- ---------------- --------------- ----------------
CRESCENT CITY Crescent Crescent $311,546 WNC: Greater 99/1 $1,191,878
City Surf, City of 15% or 50/50
Inc. (14) Surf, $800 LGP: 40%
Inc. (14) of the balance
The balance:
50/50
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- ---------------- -------------- ------------ ------------- ---------------- --------------- ----------------
GREYHOUND WMC WMC $198,834 WNC: 15% but 99/1 (25) $641,829
Community Community no less than 50/.1/49.9
Development Development $1,500 per year (26)
Corporation Corporation LGP: 40% of
(25) the balance
Lockwood The balance:
Realty, WNC: 50%
Inc (27) LGP: 50%
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- ---------------- -------------- ------------ ------------- ---------------- --------------- ----------------
HILLTOP Donald W. Wilmic $72,330 WNC: 1/3 99/1 $120,814
Sowell Ventures, LGP: 2/3 5050
(15) Inc. (16)
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- ---------------- -------------- ------------ ------------- ---------------- --------------- ----------------
LAMAR MBL The Remus $146,700 WNC: 15% but (19) $797,842
Development, Company no less than
Co. (18) $850 per year
(17) LGP: 40% of
the balance
The balance:
WNC: 50%
LGP: 50%
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<CAPTION>
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LOCAL SHARING RATIOS SHARING SERIES 4'S
LOCAL LOCAL GENERAL CASH-FLOW RATIOS: CAPITAL
LIMITED GENERAL PROPERTY PARTNER' (3) ALLOCATIONS CONTRIBUTION
PARTNERSHIP PARTNERS MANAGER DEVELOPMENT (4) (6)
FEE AND SALE OR
REFINANCING
PROCEEDS (5)
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<S> <C> <C> <C> <C> <C> <C>
MESA VERDE Trianon-Mesa Trianon $735,611 WNC: 15% but 99/1 $3,940,587
Verde, Development no less than 50/50
L.L.C. (20) Corporation $5,000 per
(20) year
LGP: $5,000
plus 40% of
the balance
The balance:
WNC: 50%
LGP: 50%
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- ---------------- -------------- ------------ ------------- ---------------- --------------- ----------------
MOUNTAIN VISTA Monarch Monarch $202,500 WNC: 33% but 99/1 $481,602
Properties, Properties, no less than 50/50
Inc. (9) Inc. (9) $2,015 per
year
Low Income LGP: The
Housing balance
Foundation
of New
Mexico
(21)
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- --------------- -------------- ------------ ------------- ---------------- --------------- ------------------
WOODLAND Alabama Charter $267,400 WNC: 30% but 98.99/.01/1 $1,347,008
TOWNHOMES Council on Property no less than 50/50
Human Management $1,200 per
Relations, Co., Inc. year
Housing Corp. (23) LGP: 40% of
(22) the balance
The balance:
WNC: 15%
LGP: 85%
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</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(s) or an
Affiliate of its Local General Partner(s) 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 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(s) ("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 ASHFORD PLACE, BLESSED ROCK, and WOODLAND TOWNHOMES (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 BELEN VISTA, CRESCENT CITY, HILLTOP, MESA VERDE and
MOUNTAIN VISTA (a) Series 4, and (b) the Local General Partner(s). For a
discussion of LAMAR, see note 19.
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(5) Reflects the respective percentage interests of (i) Series 4 (and Series 3
in the case of BLESSED ROCK) and (ii) the Local General Partner(s), 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
(the tax liability in the case of ASHFORD PLACE) of Series 4 (and Series 3 in
the case of BLESSED ROCK); the capital contribution of the special limited
partner (if any); and the capital contribution (the tax liability in the case of
ASHFORD PLACE) of the Local General Partner(s).
(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) Monarch Properties, Inc. is a Texas corporation which is involved with the
management of conventionally-financed and government-assisted multi-family
apartment communities. Monarch Properties, Inc. has more than 20 years'
experience in affordable housing property management. It manages in excess of
4,300 properties of which 92% are affordable housing units. The corporation has
represented to Series 4 that, as of October 31, 1996, its net worth was in
excess of $2,500,000.
(10) 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
approximately ($382,000); however, construction and operating deficit guarantees
will be provided by Tom Y. Lee. Mr. Lee, age 47, has represented to Series 4
that, as of December 31, 1995, he had a net worth in excess of $3,500,000.
(11) 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.
(12) Series 3 will make a capital contribution in the same amount.
(13) Series 3 will pay an acquisition fee to the Fund Manager in the same
amount.
(14) 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 $1,000,000.
(15) Donald W. Sowell has been a principal and chief executive officer of D.W. &
S. Construction Inc. since 1985. The corporation was formed for the purpose of
providing construction and construction-related services to the multi-family,
single-family and commercial-use markets. D.W. & S. Construction, Inc. has
completed more than $12,000,000 in multi-family, light commercial and
residential construction. Since 1979 Mr. Sowell has been a principal and chief
executive officer of Don Sowell Development, Inc., a property development
company which has developed $19,000,000 of real estate in Texas and Mississippi.
Mr. Sowell, age 58, has represented to Series 4 that, as of June 30, 1996, he
had a net worth in excess of $3,100,000.
10
<PAGE>
(16) Wilmic Ventures, Inc. is a Texas corporation which was incorporated in
1984. The corporation is comprised of Wilmic Property Management and Wilmic
Laundries, two separate divisions. Donald W. Sowell is a principal and chief
executive officer of Wilmic Ventures, Inc. Wilmic Property Management began
operating in 1979 and manages more than 1,200 apartment units, 386 of which are
Tax Credit units.
(17) D. Kim Lingle is the president of MBL Development Co., which has the
primary goal of developing and constructing affordable housing. Ted Scwermer is
vice president of MBL Development Co., and is also the uncle of Mr. Lingle. Mr
Lingle and Mr. Scwermer have a background in banking and development. MBL
Development Co. has represented to Series 4 that, as of June 30, 1996, its total
shareholder's equity was in excess of $400,000.
(18) The Remus Company is owned by William F. Gillen, who has 26 years'
experience in multi-family and commercial property management. Prior to forming
The Remus Company, Mr. Gillen was vice president of administration and
operations of Midland Property Management, Inc., a Kansas City-based real estate
development and property management firm, where he was employed for 14 years.
The Remus Company currently manages seven apartment complexes including three
government-subsidized properties.
(19) Subject to certain special allocations, Federal Tax Credits, losses and
income are allocated 98.98% to Series 4, .01% to WNC Housing, L.P., the special
limited partner, .01% to D. Kim Lingle, the original limited partner, and 1% to
the Local General Partner. This property also has Missouri Tax Credits which are
allocated solely to the original limited partner. Net cash proceeds from sale or
refinancing of the Apartment Complex, after payment of the mortgage loan and
other Local Limited Partnership obligations, and the capital contributions of
Series 4, the special limited partner, the Local General Partner and the
original limited partner, are distributable 50% to Series 4 and 50% to the Local
General Partner.
(20) Trianon-Mesa Verde, L.L.C., is a New Mexico limited liability company
recently formed by Trianon Development Corporation, a California corporation,
and Foundation For Social Resources, Inc., a Delaware non-profit corporation, to
serve as the Local General Partner. Trianon Development Corporation was formed
in 1986 by Lester G. Day. Mr. Day, who is currently the corporation's chairman,
has 40 years' experience in property development and management. Trianon
Development Corporation currently manages 72 affordable housing projects
consisting of approximately 6,500 units. The Local General Partner has
represented to Series 4 that its net worth is nominal. Construction, operating
deficit and Tax Credit guarantees will be provided by Lester Day. Mr. Day, age
70, has represented to Series 4 that, as of December 31, 1996, he had a net
worth in excess of $3,000,000.
(21) Low Income Housing Foundation of New Mexico is a newly-formed non-profit
organization whose primary goal is to develop affordable housing for low-income
New Mexico residents. The organization has represented to Series 4 that, as of
September 30, 1996, its net worth was approximately $19,000.
(22) Alabama Council on Human Relations, Housing Corp. was founded in 1954 as a
forum for interracial communication throughout Alabama. It is now a private
non-profit organization. The organization has represented that, as of February
29, 1996, its net assets were in excess of $600,000.
(23) Charter Properties Management Co., Inc. was incorporated in 1991. The
company's emphasis is the professional management of affordable housing,
particularly multi-family properties. Charter Properties Management Co., Inc.
currently manages 28 properties (946 units).
(24) Lockwood Realty, Inc. ("Lockwood") is a Missouri corporation which was
formed in 1979, originally under the name of SMR Realty, Inc. Lockwood has been
involved in property management for 18 years. Currently, Lockwood manages more
than 6,000 units in 258 projects.
11
<PAGE>
(25) Subject to certain special allocations, the profits, losses and Low Income
Housing Credits of GREYHOUND will be allocated 99% to Series 4 and 1% to the
Local General Partner. The Local Limited Partnership will also generate Missouri
low income housing tax credits which will be allocated entirely to Affordable
Equity Partners, Inc., a Missouri corporation which is the special limited
partner.
(26) Reflects the respective percentage interests of (a) Series 4, (b)
Affordable Equity Partners, Inc., the special limited partner, and (c) 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 contribution of Series 4; and the capital contribution of the
Local General Partner.
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
NONE
12
<PAGE>
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 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.
(b) At December 31, 1997, there were 1,295 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. The Limited Partners, who invested in
the Partnership received Housing Tax Credits of $20 to $11 and $14 to $2 per
Unit depending on the month of investment in 1997 and 1996, respectively.
13
<PAGE>
Item 6. Selected Financial Data
July 1, 1996
(Date operations
Year ended commenced) through
December 31, 1997 December 31,1996
----------------- ----------------
Revenue $225,609 $15,529
Partnership operating expenses
(128,240) (33,034)
Equity in loss of
Local Limited Partnerships (334,756) (29,329)
-------- --------
Net loss $(237,387) $(46,834)
========== =======
Net loss per Limited
Partnership Interest $(13.01) $ (26.83)
========== =======
Total assets $21,456,998 $11,609,334
========== ==========
Net investment in
Local Limited Partnerships $14,894,897 $6,700,570
========== =========
Capital contributions payable
to Local Limited Partnerships $2,880,839 $4,267,232
========= =========
Accrued fees and expenses due
to affiliates $52,203 $291,396
====== =======
Tax credits per $1,000 $11 to $20 $2 to $14
invested ========= ========
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 $1,990,300 for the period
ended December 31, 1997. This increase in cash was primarily provided by the
Partnership's financing activities, including the proceeds from the offering.
Cash from financing activities for the year ended December 31, 1996 of
approximately $12,304,700 was sufficient to fund the investing activities of the
Partnership in the aggregate amount of approximately $10,490,100 which consisted
of capital contributions to Local Limited Partnerships, advances to affiliates,
loans to Local Limited Partnerships and acquisition fees of approximately
$8,910,200, $276,800, $174,800 and $1,047,300, respectively. Cash provided and
used by the operating activities of the Partnership was minimal compared to its
other activities and 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.
14
<PAGE>
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 primarily 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 $6,457,100 was sufficient to fund the investing activities of the
Partnership in the aggregate amount of approximately $2,544,500 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 by
operating activities 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.
As of December 31, 1997 the Partnership is indebted to WNC & Associates, Inc. in
the amount of approximately $52,200 as follows:
Advances made for acquisition costs, organizational, offering and selling
expenses $1,100 Asset management fees $51,100
As of September 15, 1998 and December 31, 1997, the Partnership had received and
accepted subscription funds in the amount of approximately $21,915,000 of which
$0 and $175,000, respectively is represented by Limited Partner promissory
notes. The following information pertains to the Partnership's investments in to
Local Limited Partnerships:
September 15, 1998 December 31, 1997
Approximately Approximately
------------- -------------
Capital contributions made to
Local Limited Partnerships $12,620,000 $10,733,000
Commitments for additional Capital contri-
butions made to Local Limited Partnerships $2,009,000 $2,881,000
Loans outstanding to Local Limited Partnerships $91,000 $301,000
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
15
<PAGE>
also apply any cash distributions received 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 discussed in Item 1 above, as of December 31, 1997, the Partnership had
acquired ten Local Limited Partnership Interests. Each of the Apartment
Complexes owned by such Local Limited Partnerships has received a reservation or
an allocation for Low Income Low Income Housing Credits. Nine of the ten
Apartment Complexes are completed and in operation.
Consistent with The Partnership's investment objectives, each Local Limited
Partnership is generating or is expected to generate Low Income Housing Credits
for a period of approximately ten years, commencing with completion of
construction or rehabilitation of its Apartment Complex and is generating or is
expected to generate losses until sale of the Apartment Complex.
As reflected on its Statements of Operations, the Partnership had losses of
approximately $237,400 and $46,800 for the years ended December 31, 1997 and
1996, respectively. 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
16
<PAGE>
be decreased or increased annually based on changes to the Consumer Price Index.
Management fees of approximately $58,000 and $23,100 were incurred for the
periods ended December 31, 1997 and 1996, respectively. The Partnership paid the
General Partner or its affiliates $30,000 of such fees in 1997. No asset
management fees were paid in 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.
Other expenses consists of administrative expenses, such as accounting and legal
fees, bank charges and investor reporting expenses.
Item 8. Financial Statements and Supplementary Data
17
<PAGE>
WNC HOUSING TAX CREDIT FUND, V, L.P., SERIES 4
(A California Limited Partnership)
FINANCIAL STATEMENTS
For The Year Ended December 31, 1997 and
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 sheets of WNC Housing Tax Credit Fund
V, L.P., Series 4 (a California Limited Partnership) (the "Partnership") as of
December 31, 1997 and 1996, and the related statements of operations, partners'
equity (deficit) and cash flows for the year ended December 31, 1997 and 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 audits. We did not audit a substantial portion of the financial statements
of the limited partnerships in which WNC Housing Tax Credit Fund V, L.P., Series
4 is a limited partner. These investments, as discussed in Note 3 to the
financial statements, are accounted for by the equity method. The investments in
these limited partnerships represents 69% and 58% of the total assets of WNC
Housing Tax Credit Fund V, L.P., Series 4 at December 31, 1997 and 1996,
respectively. 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 this
limited partnership, is based solely on the reports of the other auditors.
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.
In our opinion, based on our audits and the reports of the other auditors, 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 4 (a
California Limited Partnership) as of December 31, 1997 and 1996, and the
results of its operations and its cash flows for the year ended December 31,
1997 and 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
September 17, 1998
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
BALANCE SHEETS
December 31, 1997 and 1996
1997 1996
--------------- ----------------
ASSETS
Cash and cash equivalents $ 5,906,978 $ 3,916,658
Subscriptions receivable - 861,250
Loans receivable 301,226 126,381
Due from affiliates 276,775 -
Investments in limited
partnerships 14,894,897 6,700,570
Interest receivable 76,622 4,475
Other assets 500 -
--------------- ----------------
$ 21,456,998 $ 11,609,334
=============== ================
LIABILITIES AND PARTNERS'
EQUITY (DEFICIT)
Liabilities:
Payables to limited partnerships $ 2,880,839 $ 4,267,232
Due to General Partner
and affiliates 52,203 291,396
--------------- ----------------
Total liabilities 2,933,042 4,558,628
--------------- ----------------
Commitments and contingencies
Partners' equity (deficit):
General partner (32,069) (11,401)
Limited partners (25,000 units
authorized; 22,000 and 8,413 units
outstanding at December 31, 1997
and 1996, respectively) 18,556,025 7,062,107
--------------- ----------------
Total partners' equity 18,523,956 7,050,706
--------------- ----------------
$ 21,456,998 $ 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)
STATEMENTS OF OPERATIONS
For The Year Ended December 31, 1997 and
For The Period July 1, 1996 (Date Operations
Commenced) to December 31, 1996
1997 1996
------------------- --------------------
Interest income $ 225,609 $ 15,529
--------------- ----------------
Operating expenses:
Amortization 42,034 2,851
Management fees 57,976 23,139
Other 28,230 7,044
--------------- ----------------
Total operating expenses 128,240 33,034
--------------- ----------------
Income (loss) from operations 97,369 (17,505)
Equity in losses from limited
partnerships (334,756) (29,329)
---------------- ----------------
Net loss $ (237,387) $ (46,834)
================ ================
Net loss allocated to:
General partner $ (2,374) $ (468)
================ ================
Limited partners $ (235,013) $ (46,366)
================ ================
Net loss per weighted
limited partner units $ (13.01) $ (26.83)
================ ================
Outstanding weighted limited
partner units 18,063 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)
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
For The Year Ended December 31, 1997 and
For The Period July 1, 1996 (Date Operations
Commenced) to December 31, 1996
General Limited
Partner Partners Total
---------- ---------- ----------
Capital contributions $ 100 $ 900 $ 1,000
Sale of limited partnership units,
net of discount of $26,195 - 8,386,805 8,386,805
Offering and selling expenses (11,033) (1,092,232) (1,103,265)
Sale of limited partnership units
issued for notes receivable - (187,000) (187,000)
Net loss (468) (46,366) (46,834)
---------- --------- ---------
Equity (deficit), December 31, 1996 (11,401) 7,062,107 7,050,706
Sale of limited partnership units,
net of discount of $58,975 - 13,528,025 13,528,025
Offering and selling expenses (18,294) (1,811,094) (1,829,388)
Sale of limited partnership units
issued for notes receivable - (175,000) (175,000)
Collection on notes receivable - 187,000 187,000
Net loss (2,374) (235,013) (237,387)
---------- --------- ---------
Equity (deficit),
December 31, 1997 $ (32,069) $ 18,556,025 $ 18,523,956
========== ========== ==========
See accompanying notes to financial statements
FS-4
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
For The Year Ended December 31, 1997 and
For The Period July 1, 1996 (Date Operations
Commenced) to December 31, 1996
1997 1996
------ ------
Cash flows from operating activities:
Net loss $ (237,387) $ (46,834)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Amortization 42,034 2,851
Equity in loss of limited partnerships 334,756 29,329
Management fees incurred 27,976 23,139
Change in interest receivable (72,147) (4,475)
Change in other assets (500) -
----------- -----------
Net cash provided by operating activities 94,732 4,010
----------- -----------
Cash flows from investing activities:
Investments in limited partnerships (8,910,195) (1,822,912)
Due from affiliates (276,775) -
Loans receivable (174,845) (100,226)
Acquisition fees (1,047,315) (621,335)
----------- -----------
Net cash used in investing activities (10,409,130) (2,544,473)
----------- -----------
Cash flows from financing activities:
Capital contributions from partners 14,401,275 7,339,555
Offering expenses (1,829,388) (882,434)
Advances from general partner and affiliates (267,169) -
----------- -----------
Net cash provided by financing activities 12,304,718 6,457,121
----------- -----------
Net increase in cash and cash equivalents 1,990,320 3,916,658
Cash and cash equivalents, beginning of period 3,916,658 -
----------- -----------
Cash and cash equivalents, end of period $ 5,906,978 $ 3,916,658
=========== ===========
Continued . . . .
FS-5
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS - CONTINUED
For The Year Ended December 31, 1997 and
For The Period July 1, 1996 (Date Operations
Commenced) to December 31, 1996
1997 1996
--------- ---------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION -
Cash paid during the period for:
Interest $ - $ -
=============== ================
Income taxes $ 800 $ -
=============== ================
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING AND INVESTING ACTIVITIES:
During the year and period ended December 31, 1997 and 1996, respectively,
the Partnership incurred, but did not pay, $27,976 and $23,139 in management
fees, respectively.
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.
During the period ended December 31, 1996, the Partnership incurred, but did
not pay, $21,271 of payables to affiliates for acquisition fees.
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.
As of December 31, 1996, $861,250 of capital contributions were recorded as
subscriptions receivable.
During the period ended December 31, 1996, the Partnership incurred, but did
not pay, $26,155 in payables 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 Year Ended December 31, 1997 and
For The Period 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"). The offering of Units concluded
in July 1997 at which time 22,000 Units in the amount of $21,914,830, net of
$85,170 of discounts for volume purchases, had been accepted. 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 interests 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.
FS-7
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS -CONTINUED
For The Year Ended December 31, 1997 and
For The Period 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 all investments with maturities of three months or
less when purchased to be cash equivalents. Cash equivalents totaled
approximately $5,651,000 at December 31, 1997 and represented investments in
U.S. Treasury Bills. There were no cash equivalents at December 31, 1996.
Concentration of Credit Risk
- ----------------------------
At December 31, 1997 and 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 13.5% (including sales commissions) of the total offering proceeds.
Offering expenses are reflected as a reduction of limited partners' capital.
Through December 31, 1997, the Partnership incurred offering expenses and
selling expenses of $1,348,208 and $1,584,445, respectively (see Note 4).
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.
FS-8
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS -CONTINUED
For The Year Ended December 31, 1997 and
For The Period July 1, 1996 (Date Operations
Commenced) To December 31, 1996
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
- --------------------------------------------------------------
Net Loss Per Limited Partner Unit
- ---------------------------------
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.
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 (8.75% at
December 31, 1997). Loans receivable with a balance of $301,226 at December 31,
1997, were collectible from three limited partnerships, one of which was
acquired during 1998 (see Note 8).
NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS
- --------------------------------------------
As of December 31, 1997, the Partnership had acquired limited partnership
interests in ten limited partnerships, each of which owns one apartment complex.
As of December 31, 1997, construction of one of the apartment complexes had been
partially completed and the other nine 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 sheets as of December 31, 1997 and 1996 are approximately
$4,273,000 and $4,908,000, respectively, 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, 1997 and for the period
ended December 31, 1996:
FS-9
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS -CONTINUED
For The Year Ended December 31, 1997 and
For The Period July 1, 1996 (Date Operations
Commenced) To December 31, 1996
NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
- -------------------------------------------------------
1997 1996
--------- ---------
Investments per balance sheet,
beginning of period $ 6,700,570 $ -
Capital contributions to limited
partnerships 6,194,337 1,822,912
Capital contributions payable to
limited partnerships 1,329,465 4,267,232
Capitalized acquisition fees and costs 1,047,315 642,606
Amortization of acquisition fees and costs (42,034) (2,851)
Equity in losses of limited partnerships (334,756) (29,329)
--------------- ----------------
Investments per balance sheet,
end of period $ 14,894,897 $ 6,700,570
=============== ================
The financial information from the individual financial statements of the
limited partnerships includes rental and interest subsidies. Rental subsidies
are generally included in total revenues and interest subsidies are generally
netted in interest expense. Approximate combined condensed financial information
from the individual financial statements of the limited partnerships as of
December 31, 1997 and 1996 and for the year and period then ended is as follows:
COMBINED CONDENSED BALANCE SHEETS
1997 1996
--------- --------
ASSETS
Land $ 2,262,000 $ 1,515,000
Construction in progress 545,000 1,759,000
Buildings, net of accumulated
depreciation of $409,000 and $62,000
in 1997 and 1996, respectively 28,089,000 2,564,000
Due from related parties 36,000 256,000
Other assets 2,211,000 742,000
--------------- ----------------
$ 33,143,000 $ 6,836,000
=============== ================
FS-10
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS -CONTINUED
For The Year Ended December 31, 1997 and
For The Period July 1, 1996 (Date Operations
Commenced) To December 31, 1996
NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
COMBINED CONDENSED BALANCE SHEETS - CONTINUED
1997 1996
--------- --------
LIABILITIES AND PARTNERS' EQUITY
Liabilities:
Construction and mortgage loans payable $ 17,372,000 $ 3,017,000
Other liabilities (including due to
related parties of $2,238,000 and
$274,000 in 1997 and 1996, respectively) 2,476,000 419,000
------------- ------------
Total liabilities 19,848,000 3,436,000
------------- ------------
Partners' equity:
WNC Housing Tax Credit Fund V, L.P.
Series 4 10,622,000 1,793,000
WNC Housing Tax Credit Fund V, L.P.
Series 3 2,021,000 1,291,000
Other partners 652,000 316,000
------------- ------------
Total partners' equity 13,295,000 3,400,000
------------- ------------
$ 33,143,000 $ 6,836,000
============= ============
COMBINED CONDENSED STATEMENT OF OPERATIONS
1997 1996
--------- --------
Total revenue $ 944,000 $ 62,000
--------------- ------------
Expenses:
Operating expenses 667,000 36,000
Interest expense 333,000 19,000
Depreciation 347,000 34,000
--------------- ------------
Total expenses 1,347,000 89,000
--------------- ------------
Net loss $ (403,000) $ (27,000)
=============== ============
Net loss allocable to Partnership $ (335,000) $ (29,000)
=============== ============
FS-11
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS -CONTINUED
For The Year Ended December 31, 1997 and
For The Period July 1, 1996 (Date Operations
Commenced) To December 31, 1996
NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
- -------------------------------------------------------
Certain of the limited partnerships have incurred 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.
NOTE 4 - RELATED PARTY TRANSACTIONS
- -----------------------------------
As of December 31, 1997, due from affiliates consisted of an overpayment of
commissions totaling $65,875 and an advance to an affiliate for the purchase of
a certain limited partnership interest totaling $210,900. Such advances are
non-interest bearing, due on demand and are expected to be collected within one
year.
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. Through December 31, 1997
and 1996, the Partnership incurred acquisition fees of $1,571,597 and
$582,690, respectively. Accumulated amortization totaled $44,885 as of
December 31, 1997 and 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. Through
December 31, 1997 and 1996, the Partnership incurred acquisition costs
of $118,324 and $59,916, respectively, which have been included in
limited partnership investment. Accumulated amortization was
insignificant for 1997 and 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 $57,976
for the year ended December 31, 1997 and $23,139 for the period ended
December 31, 1996. During 1997, the Partnership paid $30,000 of asset
management fees.
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.
FS-12
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS -CONTINUED
For The Year Ended December 31, 1997 and
For The Period July 1, 1996 (Date Operations
Commenced) To December 31, 1996
NOTE 4 - RELATED PARTY TRANSACTIONS, continued
- ----------------------------------------------
Due to General Partner and affiliates on the accompanying balance sheet consists
of the following at December 31, 1997 and 1996:
1997 1996
--------- ---------
Acquisition fees $ - $ 21,271
Advances made for acquisition costs,
and organizational, offering and selling
expenses 1,088 220,831
Advance from affiliate for property deposit - 26,155
Management fees 51,115 23,139
--------- ----------
$ 52,203 $ 291,396
========= ==========
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.
FS-13
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS -CONTINUED
For The Year Ended December 31, 1997 and
For The Period July 1, 1996 (Date Operations
Commenced) To December 31, 1996
NOTE 7 - SUBSCRIPTIONS AND NOTES RECEIVABLE
- -------------------------------------------
The Partnership had received 175 units consisting of promissory notes of
$175,000 as of December 31, 1997, all of which were collected in 1998. As of
December 31, 1996, the Partnership had subscriptions for 1,049 units consisting
of receivables of $861,250, net of discounts of $750, and promissory notes of
$187,000, 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, with interest at the rate of 9.75%
per annum and due no later than 13 months after the subscription date. Since the
subscriptions receivable 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.
NOTE 8 - COMMITMENTS AND CONTINGENCIES
- --------------------------------------
Subsequent to December 31, 1997, the Partnership acquired two limited
partnership interests which required capital contributions totaling
approximately $1,087,000, of which $110,000 had been advanced for one of the
limited partnership interests as of December 31, 1997 (see Note 2). The
Partnership is negotiating to acquire one additional limited partnership
interest which would commit the Partnership to an additional capital
contribution of approximately $1,622,000, of which $91,000 was advanced as of
December 31, 1997 (see Note 2).
FS-14
<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 Associates 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. Substantially all of the shares of Associates 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 67, 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 of the Executive
Committee of the National Association of Home Builders (NAHB) and a past
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 California Council of Affordable Housing (CCAH) (formerly Rural
Builders Council of California), 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 64, 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.
DAVID N. SHAFER, age 45, has been a Director of WNC & ASSOCIATES, INC. since
1997, a Senior Vice President since 1992, and General Counsel since 1990, and
served as Asset Management Director from 1990 to 1992, and has been a Director
and Secretary of WNC Management, Inc. since its organization. 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
CCAH, 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.
18
<PAGE>
WILFRED N. COOPER, JR., age 35, has been employed by WNC & ASSOCIATES, INC.
since 1988 and has been a Director since 1997 Executive Vice President since
1998, and a Senior Vice President since 1992. Mr. Cooper heads the Acquisition
Originations department at WNC, has been President of, and a registered
principal with, WNC CAPITAL CORPORATION, a member firm of the NASD, since its
organization, and has been a Director of WNC Management Inc. 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 an alternate director and 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 42, has been Vice President - Finance of WNC & ASSOCIATES,
INC. since 1992 and Chief Financial Officer since 1990, and has been a Director
and Chief Financial Officer of WNC Management Inc. since its organization.
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.
THOMAS J. RIHA, age 43, has been Vice President - Asset Management of WNC &
ASSOCIATES, INC. since 1994, and has been a Director and Chief Executive Officer
of WNC Management Inc. since its organization. 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
American Institute of Certified Public Accountants.
SY P. GARBAN, age 52, has 20 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 as Executive Vice
President by MRW, Inc., Newport Beach, California from 1980 to 1989, 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.
CARL FARRINGTON, age 55, has been associated with WNC & ASSOCIATES, INC. since
1993, and has served 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
19
<PAGE>
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.
DAVID TUREK, age 43, has been Director - Originations of WNC & ASSOCIATES, INC.
since 1996. He has 23 years' experience in real estate finance and acquisitions.
Previously, from 1995 to 1996 Mr. Turek served as a consultant for a national
Low Income Housing Credit sponsor where he was responsible for on-site
feasibility studies and due diligence analyses of Low Income Housing Credit
properties, from 1992 to 1995 he served as Executive Vice President for Levcor,
Inc., a multi-family development company, and from 1990 to 1992 he served as
Vice President for the Paragon Group where he was responsible for Low Income
Housing Credit development activities. Mr. Turek graduated from Southern
Methodist University in 1976 with a Bachelor of Business Administration degree.
N. PAUL BUCKLAND, age 36, has been employed by WNC & ASSOCIATES, INC. since 1994
and currently serves as Vice President - Acquisitions. He has 11 years'
experience in analysis pertaining to the development of multi-family and
commercial properties. Previously, from 1986 to 1994 he served on the
development team of the Bixby Ranch which constructed more than 700 apartment
units and more than one million square feet of "Class A" office space in
California and neighboring states, and from 1984 to 1986 he served 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.
MICHELE M. TAYLOR, age 43, 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 40, 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 61, 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.
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) Organization and Offering Expenses. The Partnership accrued or paid the
General Partner or its affiliates as of December 31, 1997 approximately
$2,932,700 for selling commissions and other fees and expenses of the
Partnership's offering of Units. Of the total accrued or paid, approximately
20
<PAGE>
$2,496,100 was paid or to be paid to unaffiliated persons participating in the
Partnership's offering or rendering other services in connection with the
Partnership's offering.
(b) 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, 1997, the aggregate amount of acquisition
fees paid was approximately $1,571,600.
(c) The Partnership reimbursed the General Partner or its affiliates as of
December 31, 1997 for acquisition expense, not to exceed 1% of the Gross
Proceeds, expended by such persons on behalf of the Partnership in the amount of
approximately $118,300.
(d) 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 $57,976 and $23,139 was incurred for the year ended December
31, 1997 and the period of July 1, 1996 through December 31, 1996, respectively
of which $30,000 was paid in 1997.
(e) 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 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) 13% through December 31, 2006, and (ii) 6% for the balance of the
Partnerships term. No disposition fees have been paid.
(f) The General Partner was allocated Low Income Housing Credits of $3,587 and
$659 in 1997 and 1996, respectively.
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.
(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
21
<PAGE>
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
Financial statements. Report of independent public accountants Balance sheets as
of December 31, 1997 and 1996.
Statements of Operations for the year ended December 31, 1997 and the period of
July 1, 1996 (Date Operations Commenced) to December 31, 1996 Statements of
Partners' Equity for the year ended December 31, 1997 and the period of July 1,
1996 (Date Operations Commenced) to December 31, 1996 Statements of Cash Flows
for the year ended December 31, 1997 and the period of July 1, 1996 (Date
Operations Commenced) to December 31, 1996 Notes to Financial Statements.
Financial Statement Schedules:
N/A
Exhibits
(3.1): Articles of incorporation and by-laws: The registrant is not
incorporated. The Partnership Agreement is included as Exhibit B to the
to Post Effective Amendment No. 6 dated March 25, 1997
(3.2) First Amendment to Agreement of Limited Partnership included as Exhibit B
to the to Post Effective Amendment No. 6 dated March 25, 1997
Material Contracts
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.
22
<PAGE>
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.
10.9 Amended and Restated Agreement of Limited Partnership of Broadway
Apartments Limited Partnership filed as exhibit 10.1 to Form 8-K Current Report
dated April 10, 1997 is herein incorporated by reference as exhibit 10.9.
10.10 Amended and Restated Agreement of Limited Partnership of Mountain Vista
Limited Partnership filed as exhibit 10.1 to Form 8-K Current Report dated May
15, 1997 is herein incorporated by reference as exhibit 10.10.
REPORTS ON 8-K.
No Forms 8-K Current Reports were filed in the quarter ended December 31, 1997.
23
<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: October 28, 1998
By: /s/ Theodore M. Paul
-----------------------------------------------------
Theodore M. Paul Vice-President, Finance
Date: October 28, 1998
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: October 28, 1998
By: /s/ John B. Lester, Jr.
-----------------------------------------------------
John B. Lester, Jr. Secretary of the Board
Date: October 28, 1998
24
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