FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
OR
o 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
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 ____ No X
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1999
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets
June 30, 1999 and March 31, 1999..................................3
Statements of Operations
For the three months ended June 30, 1999 and 1998 ................4
Statement of Partners' Equity
For the three months ended June 30, 1999..........................5
Statements of Cash Flows
For the three months ended June 30, 1999 and 1998.................6
Notes to Financial Statements..........................................7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.................................12
Item 3: Quantitative and Qualitative Disclosures Above Market Risks.....14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings...............................................14
Item 6. Exhibits and Reports on Form 8-K................................14
Signatures..............................................................15
2
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
BALANCE SHEETS
June 30, 1999 March 31, 1999
------------- --------------
(Unaudited)
ASSETS
Cash and cash equivalents $ 3,124,787 $ 3,460,935
Loans receivable - Note 2 12,080 12,080
Due from affiliates 52,835 52,835
Investment in limited
partnerships - Note 3 15,080,298 15,345,027
Other assets 500 500
------------ ------------
$ 18,270,500 $ 18,871,377
============ ============
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities:
Payable to limited partnerships
- Note 5 $ 810,738 $ 1,182,870
Accrued fees and expenses due to
general partner and affiliates
- Note 4 204,210 181,131
------------ ------------
1,014,948 1,364,001
------------ ------------
Commitments and contingencies
Partners' equity (deficit):
General partner (46,504) (43,986)
Limited partners (25,000 units
authorized, 22,000 units issued
and outstanding) 17,302,056 17,551,362
------------ ------------
Total partners' equity 17,255,552 17,507,376
------------ ------------
$ 18,270,500 $ 18,871,377
============ ============
See accompanying notes to financial statements
3
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
For the Three Months Ended June 30, 1999 and 1998
(Unaudited)
1999 1998
---- ----
Interest income $ 36,384 $ 51,834
----------- -----------
Operating expenses:
Amortization 14,892 14,174
Asset management fees - Note 4 15,125 14,881
Other 8,754 9,634
----------- -----------
Total operating expenses 38,771 38,689
----------- -----------
Income (loss) from operations (2,387) 13,145
Equity in loss from
limited partnerships (249,437) (165,500)
----------- -----------
Net loss $ (251,824) $ (152,355)
=========== ===========
Net loss allocated to:
General partner $ (2,518) $ (1,524)
=========== ===========
Limited partners $ (249,306) $ (150,831)
=========== ===========
Net loss per weighted limited
partnership unit (22,000 and 10,770) $ (11) $ (6)
=========== ===========
See accompanying notes to financial statements
4
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
STATEMENT OF PARTNERS' EQUITY
For the Three Months Ended June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
General Limited
Partner Partners Total
------- -------- -----
<S> <C> <C> <C>
Equity (deficit), March 31, 1999 $ (43,986) $ 17,551,362 $ 17,507,376
Net loss for the three months
ended June 30, 1999 (2,518) (249,306) (251,824)
--------- ----------- -----------
Equity (deficit), June 30, 1999 $ (46,504) $ 17,302,056 $ 17,255,552
========= =========== ===========
</TABLE>
See accompanying notes to financial statements
5
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
STATEMENTS OF CASH FLOW
For the Three Months Ended June 30, 1999 and 1998
(Unaudited)
1999 1998
---- ----
Cash flows from operating activities:
Net loss $ (251,824) $ (152,355)
Adjustments to reconcile net loss to
net cash provided by (used in) operating
activities:
Equity in loss from limited partnerships 249,437 165,500
Amortization 14,892 14,174
Asset management fee 15,125 14,881
Change in other assets - 12,261
Accrued fees and expense due
to general partner and affiliates 7,954 (14,972)
---------- ----------
Net cash provided by operating
activities 35,584 39,489
---------- ----------
Cash flows from investing activities:
Investment in limited partnerships (372,132) (890,107)
Distributions from limited partnerships 400 -
Acquisition fees and costs - (15)
---------- ----------
Net cash used in investing activities (371,732) (890,122)
---------- ----------
Cash flows from financing activities:
Capital contributions from partners - 25,000
Offering expenses - (207,709)
---------- ----------
Net cash used in financing activities - (182,709)
---------- ----------
Net decrease in cash and cash equivalents (336,148) (1,033,342)
Cash and cash equivalents, beginning of period 3,460,935 5,318,484
---------- ----------
Cash and cash equivalents, end of period $ 3,124,787 $ 4,285,142
========== ==========
See accompanying notes to financial statements
6
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
June 30, 1999
(Unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General
The information contained in the following notes to the financial statements is
condensed from that which would appear in the annual financial statements;
accordingly, the financial statements included herein should be reviewed in
conjunction with the audited financial statements and related notes thereto
contained in the WNC Housing Tax Credit Fund V, L.P., Series 4 (the
"Partnership") Annual Report on form 10-K for the year end March 31, 1999
(audited). Accounting measurements at interim dates inherently involve greater
reliance on estimates than at year end. The results of operations for the
interim period presented are not necessarily indicative of the results for the
entire year.
In the opinion of the General Partner, the accompanying unaudited financial
statements contain all adjustments (consisting of normal recurring accruals)
necessary to present fairly the financial position as of June 30, 1999 and the
results of operations and changes in cash flows for the three months ended.
Organization
WNC Housing Tax Credit Fund V, L.P., Series 4, a California Limited Partnership
(the "Partnership"), was formed on July 26, 1995 under the laws of the state of
California, and commenced operations on July 1, 1996. The Partnership was formed
to invest primarily in other limited partnerships and limited liability
companies (the "Local Limited Partnerships") which own and operate multi-family
housing complexes (the "Housing Complex") that are eligible for low income
housing credits. The local general partners (the "Local General Partners") of
each Local Limited Partnership retain responsibility for maintaining, operating
and managing the Housing Complex.
The general partner is WNC & Associates, Inc. ("WNC") (the "General Partner"), a
California limited partnership. Wilfred N. Cooper, Sr., through the Cooper
Revocable Trust, owns 66.8% of the outstanding stock of WNC. John B. Lester was
the original limited partner of the Partnership and owns, through the Lester
Family Trust, 28.6% of the outstanding stock of WNC.
The partnership agreement authorized the sale of up to 25,000 units at $1,000
per Unit ("Units"). The offering of Units concluded on July 11, 1997 at which
time 22,000 Units representing subscriptions in the amount of $21,914,830, net
of discount of $79,550 for volume purchases and $5,620 for dealer discounts, had
been accepted. The General Partner has a 1% interest in operating profits and
losses, taxable income and losses and in cash available for distribution from
the Partnership and tax credits. The limited partners will be allocated the
remaining 99% of these items in proportion to their respective investments.
After the limited partners have received proceeds from a sale or refinancing
equal to their capital contributions and their return on investment (as defined
in the Partnership Agreement) and the General Partner has received proceeds
equal to its capital contribution and a subordinated disposition fee (as
described in Note 4) from the remainder, any additional sale or refinancing
proceeds will be distributed 90% to the limited partners (in proportion to their
respective investments) and 10% to the General Partner.
7
<PAGE>
WNC HOUSING TAX CREDIT FUND V L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1999
(Unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
Risks and Uncertainties
The Partnership's investments in Local Limited Partnerships are subject to the
risks incident to the management and ownership of low-income housing and to the
management and ownership of multi-unit residential real estate. Some of these
risks are that the low income housing credit could be recaptured and that
neither the Partnership's investments nor the Housing Complexes owned by the
Local Limited Partnerships will be readily marketable. To the extent the Housing
Complexes receive government financing or operating subsidies, they may be
subject to one or more of the following risks: difficulties in obtaining tenants
for the Housing Complexes; difficulties in obtaining rent increases; limitations
on cash distributions; limitations on sales or refinancing of Housing Complexes;
limitations on transfers of Local Limited Partnership Interests; limitations on
removal of Local General Partners; limitations on subsidy programs; and possible
changes in applicable regulations. The Housing Complexes are or will be subject
to mortgage indebtedness. If a Local Limited Partnership does not make its
mortgage payments, the lender could foreclose resulting in a loss of the Housing
Complex and low-income housing credits. As a limited partner of the Local
Limited Partnerships, the Partnership will have very limited rights with respect
to management of the Local Limited Partnerships, and will rely totally on the
Local General Partners of the Local Limited Partnerships for management of the
Local Limited Partnerships. The value of the Partnership's investments will be
subject to changes in national and local economic conditions, including
unemployment conditions, which could adversely impact vacancy levels, rental
payment defaults and operating expenses. This, in turn, could substantially
increase the risk of operating losses for the Housing Complexes and the
Partnership. In addition, each Local Limited Partnership is subject to risks
relating to environmental hazards and natural disasters, which might be
uninsurable. Because the Partnership's operations will depend on these and other
factors beyond the control of the General Partner and the Local General
Partners, there can be no assurance that the anticipated low income housing
credits will be available to Limited Partners.
In addition, Limited Partners are subject to risks in that the rules governing
the low income housing credit are complicated, and the use of credits can be
limited. The only material benefit from an investment in Units may be the low
income housing credits. There are limits in the transferability of Units, and it
is unlikely that a market for Units will develop. All management decisions will
be made by the General Partner.
Method of Accounting for Investments in Limited Partnerships
The Partnership accounts for its investments in limited partnerships using the
equity method of accounting, whereby the Partnership adjusts its investment
balance for its share of the Local Limited Partnership's results of operations
and for any distributions received. The accounting policies of the Local Limited
Partnerships are consistent with those of the Partnership. Costs incurred by the
Partnership in acquiring the investments are capitalized as part of the
investment account and are being amortized over 30 years (see Note 3).
Offering Expenses
Offering expenses consist of underwriting commissions, legal fees, printing,
filing and recordation fees, and other costs incurred in connection with selling
limited partnership interests in the Partnership. The General Partner is
obligated to pay all offering and organization costs in excess of 14.5%
(including sales commissions) of the total offering proceeds. Offering expenses
are reflected as a reduction of limited partners' capital and amounted to
$2,960,328 as of June 30, 1999 and March 31, 1999.
8
<PAGE>
WNC HOUSING TAX CREDIT FUND V L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1999
(Unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenues and expenses during the reporting period.
Actual results could materially differ from those estimates.
Cash and Cash Equivalents
The Partnership considers all highly liquid investments with remaining
maturities of three months or less when purchased to be cash equivalents. As of
June 30, 1999, the Paertnership had no cash equivalents.
Net Loss Per Weighted Limited Partnership Unit
Net loss per weighted limited partnership unit is calculated pursuant to
Statement of Financial Accounting Standards No. 128, Earnings Per Share. Net
loss per unit includes no dilution and is computed by dividing loss available to
limited partners by the weighted average number of units outstanding during the
period. Calculation of diluted net income per unit is not required.
NOTE 2 - LOANS RECEIVABLE
Loans receivable at June 30, 1999, represent amounts advanced by the Partnership
to two Local Limited Partnerships. The Partnership applied the advances against
the first capital contributions due upon the purchase of the Local Limited
Partnership investments in July 1999.
NOTE 3 - INVESTMENT IN LIMITED PARTNERSHIPS
As of June 30, 1999 and March 31, 1999, the Partnership has acquired limited
partnership interests in 13 Local Limited Partnerships, each of which owns one
Housing Complex consisting of an aggregate of 752 apartment units. As of June
30, 1999 and March 31, 1999, construction or rehabilitation of 3 of the Housing
Complexes was still in process. The respective Local General Partners of the
Local Limited Partnerships manage the day-to-day operations of the entities.
Significant Local Limited Partnership business decisions require approval from
the Partnership. The Partnership, as a limited partner, is generally entitled to
99%, as specified in the Local Limited Partnership agreements, of the operating
profits and losses, taxable income and losses and tax credits of the Local
Limited Partnerships, except for one of the investments in which it is entitled
to 49.5% of such amounts.
Equity in losses of the Local Limited Partnerships is recognized in the
financial statements until the related investment account is reduced to a zero
balance. Losses incurred after the investment account is reduced to zero are not
recognized. If the Local Limited Partnerships report net income in future years,
the Partnership will resume applying the equity method only after its share of
such net income equals the share of net losses not recognized during the
period(s) the equity method was suspended.
9
<PAGE>
WNC HOUSING TAX CREDIT FUND V L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1999
(Unaudited)
NOTE 3 - INVESTMENT IN LIMITED PARTNERSHIPS, continued
The following is a summary of the equity method activity of the investments in
limited partnerships as of:
<TABLE>
<CAPTION>
June 30, 1999 March 30, 1999
------------- --------------
<S> <C> <C>
Investment balance beginning of period $ 15,345,027 $ 15,573,510
Capital contributions to limited partnerships - (19,187)
Capitalized acquisition fees and costs - 58,777
Distributions from limited partnerships (400) (3,744)
Equity in loss of limited partnership (249,437) (249,437)
Amortization of capitalized acquisition costs (14,892) (14,892)
----------- -----------
Investment Balance - end of period $ 15,080,298 $ 15,345,027
=========== ===========
Selected financial information for the three months ended June 30, 1999 and 1998
from the combined financial statements of the Local Limited Partnerships in
which the partnership has invested is as follows:
1999 1998
---- ----
Total revenue $ 577,249 $ 524,500
Interest expense 208,308 145,800
Depreciation 229,839 182,300
Operating expenses 403,179 380,800
----------- -----------
Total expenses 841,326 708,900
----------- -----------
Net Loss $ (264,077) $ (184,400)
=========== ===========
Net loss allocable to the Partnership $ (249,437) $ (165,500)
=========== ===========
</TABLE>
NOTE 4- RELATED PARTY TRANSACTIONS
The Partnership has no officers, employees, or directors. However, under the
terms of the Partnership Agreement the Partnership is obligated to the WNC or
General Partner for the following fees:
(a) Acquisition Fees. 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. As of June 30,
1999 and March 31, 1999, the aggregate amount of acquisition fees paid
or accrued was approximately $1,630,000.
10
<PAGE>
WNC HOUSING TAX CREDIT FUND V L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1999
(Unaudited)
NOTE 4- RELATED PARTY TRANSACTIONS, continued
(b) Annual Asset Management Fee. An annual asset management fee of the greater
of (i) $2,000 per multi-family housing complex or (ii) 0.275% of Gross
Proceeds. The base fee amount will be adjusted annually based on changes in
the Consumer Price Index, however in no event will the annual asset
management fee exceed 0.2% of Invested Assets. "Invested Assets" means the
sum of the Partnership's Investment in Local Limited Partnerships and the
Partnership's allocable share of the amount of indebtedness related to the
Housing Complexes. Asset management fees of $15,125 and $15,125 were
incurred for the three months ended June 30, 1999 and the year ended March
30, 1999, of which, $7,779 were paid in 1999.
(c) Subordinated Disposition Fee. A subordinated disposition fee in an amount
equal to 1% of the sale price received in connection with the sale or
disposition of a Housing Complex or Local Limited Partnership Interest.
Subordinated disposition fees will be subordinated to the prior return of
the Limited Partners' capital contributions and payment of the Return on
Investment to the Limited Partners. "Return on Investment" means an annual,
cumulative but not compounded, "return" to the Limited Partners (including
Low Income Housing Credits) as a class on their adjusted capital
contributions commencing for each Limited Partner on the last day of the
calendar quarter during which the Limited Partner's capital contribution is
received by the Partnership, calculated at the following rates: (i) 14%
through December 31, 2006, and (ii) 6% for the balance of the Partnerships
term. No disposition fees have been paid.
(d) Acquisition Expense. Acquisition expenses are reimbursed to the General
Partner for expenses associated with the acquisition of Local Limited
Partnerships. The reimbursements will not exceed 1% of the "Gross
Proceeds". As of June 31, 1999 the Partnership incurred acquisition expense
reimbursements of $156,589.
(e) Interest in Partnership. The General Partner will receive 1% of the Low
Income Housing Credits. The General Partner was allocated Low Income
Housing Credits of $17,771 for the year ended December 31, 1998. The
General Partners are also entitled to receive 1% of cash distributions.
There were no distributions of cash to the General Partner during the three
months ended June 30, 1999.
Accrued fees and expenses due to general partner and affiliates presented on the
balance sheets consist of the following:
<TABLE>
<CAPTION>
June 30, 1999 March 31, 1999
------------- --------------
<S> <C> <C>
Advances made for acquisition costs, organizational,
offering and selling expenses and acquisition fees $ 71,269 $ 63,315
Management fees 132,941 117,816
--------- ---------
$ 204,210 $ 181,131
========= =========
</TABLE>
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 payable in installments and are generally 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 financial statements as
any liability for income taxes is the obligation of the partners of the
Partnership.
11
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operation
Financial Condition
The Partnership's assets at June 30, 1999 consisted primarily of $3,125,000 in
cash and aggregate investments in the thirteen Local Limited Partnerships of
$15,080,000. Liabilities at June 30, 1999 were $811,000 due to limited
partnerships, $133,000 of accrued annual management fees, $59,000 of accrued
acquisition fees and $12,000 of expenses paid by an affiliate of the General
Partner or due to the General Partner or affiliate.
Results of Operations
Three Months Ended June 30, 1999 Compared to Three Months Ended June 30, 1998.
The Partnership's net loss for the three months ended March 31, 1999 was
$(252,000), reflecting an increase of $(100,000) from the net loss experienced
for the three months ended June 30, 1998. The change is primarily due to an
increase in equity in loss from limited partnerships of $84,000 as Local Limited
Partnerships have completed construction and initiated operations. Also
contributing to the loss was a decrease in interest income of $16,000 as cash
available for short-term investments been used to fund investments in limited
partnerships.
Cash Flows
Three Months Ended June 30, 1999 Compared to Three Months Ended June 30, 1998.
The decrease in cash during the three months ended March 31, 1999 was
$(336,000), compared to a net decrease in cash for the three months ended June
30, 1998 of $(1,033,000). The change was due primarily to a decrease in cash
used for investing activities of $518,000, a decrease of offering expenses of
$208,000, offset by a decrease in operating activities of $3,000 and a decrease
in capital contributions from partners of $25,000.
The Partnership expects its future cash flows, together with its net available
assets at June 30, 1999, to be sufficient to meet all currently foreseeable
future cash requirements.
Impact of Year 2000
WNC & Associates, Inc.
Status of Readiness
Information Technology (IT) Systems. The Partnership relies on the IT systems of
WNC, its general partner. IT systems include computer hardware and software used
to produce financial reports and tax return information. This information is
then used to generate reports to investors and regulatory agencies, including
the Internal Revenue Service and the Securities and Exchange Commission. The IT
systems of WNC are year 2000 compliant.
Non-IT Systems. The Partnership also relies on the non-IT systems of WNC. Non-IT
systems include machinery and equipment such as telephones, voice mail and
electronic postage equipment. Except for one telephone system, the non-IT
systems of WNC are year 2000 compliant. The one telephone system will require
the replacement of one computer and one software application, both of which will
be completed on or before October 1, 1999.
Service Providers. WNC also relies on the IT and non-IT systems of service
providers. Service providers include utility companies, financial institutions,
telecommunications carriers, municipalities, and other outside vendors. WNC has
obtained verbal assurances from its material service providers (electrical power
provider, financial institutions and telecommunications carriers) that their IT
and non-IT systems are year 2000 compliant. There can be no assurance that this
compliance information is correct. There also can be no assurance that the
systems of other, less-important service providers and outside vendors will be
year 2000 compliant.
12
<PAGE>
Costs to Address Year 2000 Issues
The cost to address year 2000 issues for WNC has been less than $20,000. The
cost to replace the telephone system noted above will be less than $5,000. The
cost to deal with potential year 2000 issues of other outside vendors cannot be
estimated at this time.
Risk of Year 2000 Issues
The most reasonable and likely result from non-year 2000 compliance of systems
of the service providers noted above will be the disruption of normal business
operations for WNC. This disruption would, in turn, lead to delays in performing
reporting and fiduciary responsibilities on behalf of the Partnership. The worst
case scenario would be the replacement of a service provider. These delays would
likely be temporary and would likely not have a material effect on the
Partnership or WNC.
Local Limited Partnerships
Status of Readiness
WNC is in the process of obtaining year 2000 certifications from each Local
General Partner of each Local Limited Partnership. Those certifications will
represent to the Partnership that the IT and non-IT systems critical to the
operation of the Housing Complexes and investor reporting to the Partnership are
year 2000 compliant. These certifications will also represent to the Partnership
that the IT and non-IT systems of property management companies, independent
accountants, electrical power providers, financial institutions and
telecommunications carriers used by the Local Limited Partnership are year 2000
compliant.
There can be no assurance that the representations in the certifications will be
correct. There also can be no assurance that the systems of other,
less-important service providers and outside vendors, upon which the Local
Limited Partnerships rely, will be year 2000 compliant.
Costs to Address Year 2000 Issues
There will be no cost to the Partnership as a result of assessing year 2000
issues for the Local Limited Partnerships. The cost to deal with potential year
2000 issues of the Local Limited Partnerships cannot be estimated at this time.
Risk of Year 2000 Issues
There may be Local General Partners who indicate that they or their property
management company are not year 2000 compliant and do not have plans to become
year 2000 compliant before the end of 1999. There may be other Local General
Partners who are unwilling to respond to the certification request. The most
likely result of either non-compliance or failure to respond will be the removal
and replacement of the property management company and/or the Local General
Partner with year 2000 compliant operators.
Despite the efforts to obtain certifications, there can be no assurance that the
Partnership will be unaffected by year 2000 issues. The most reasonable and
likely result from non-year 2000 compliance will be the disruption of normal
business operations for the Local Limited Partnerships, including but not
limited to the possible failure to properly collect rents and meet their
obligations in a timely manner. This disruption would, in turn, lead to delays
by the Local Limited Partnerships in performing reporting and fiduciary
responsibilities on behalf of the Partnership. The worst-case scenario would
include the initiation of foreclosure proceedings on the property by mortgage
debt holders. Under these circumstances, WNC or its affiliates will take actions
necessary to minimize the risk of foreclosure, including the removal and
replacement of a Local General Partner by the Partnership. These delays would
likely be temporary and would likely not have a material effect on the
Partnership or WNC.
13
<PAGE>
Item 3. Quantitative and Qualitative Disclosures Above Market Risks
None.
Part II. Other Information
Item 1. Legal Proceedings
None.
Item 6. Exhibits and Reports on Form 8-K
1. A report on Form 8-K dated May 13, 1999 was filed on May 14, 1999
reporting the change in fiscal year ended to March 31.
14
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
WNC HOUSING TAX CREDIT FUND V - Series 4
By: WNC & Associates, Inc. General Partner
By: /s/ John B. Lester, Jr., President
John B. Lester, Jr., President
WNC & Associates, Inc
Date: September 15, 1999
By: /s/ Michael L. Dickenson
Michael L. Dickenson, Vice President - Chief Financial Officer
WNC & Associates, Inc
Date: September 15, 1999
15
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000943906
<NAME> WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
<MULTIPLIER> 1
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-30-2000
<PERIOD-START> APR-01-1999
<PERIOD-END> JUN-30-1999
<EXCHANGE-RATE> 1
<CASH> 3,124,787
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,124,787
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 18,270,500
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 17,255,552
<TOTAL-LIABILITY-AND-EQUITY> 18,270,500
<SALES> 0
<TOTAL-REVENUES> 36,384
<CGS> 0
<TOTAL-COSTS> 38,771
<OTHER-EXPENSES> 249,437
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (251,824)
<INCOME-TAX> 0
<INCOME-CONTINUING> (251,824)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
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<NET-INCOME> (251,824)
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</TABLE>
