FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
0 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended ___________________
OR
X TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from January 1, 1999 to March 31, 1999
Commission file number: 0-21897
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
California 33-0707612
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3158 Redhill Avenue, Suite 120, Costa Mesa, CA 92626
(714) 662-5565
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to section 12(g) of the Act:
UNITS OF LIMITED PARTNERSHIP INTEREST
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ____
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. x
1
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State the aggregate market value of the voting and non-voting common equity held
by non-affiliates of the registrant.
INAPPLICABLE
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and the Part
of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is
incorporated: (1) Any annual report to security holders; (2) Any proxy or
information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or
(c) under the Securities Act of 1933. The listed documents should be clearly
described for identification purposes (e.g., annual report to security holders
for fiscal year ended December 24, 1980).
NONE
2
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Item 1. Business
PART I.
Organization
WNC Housing Tax Credit Fund, V, L.P., Series 4 (the "Partnership") or ("Series
4") was formed under the California Revised Limited Partnership Act on July 26,
1995 and commenced operations on July 1, 1996. The Partnership was formed to
acquire limited partnership interests in limited partnerships or limited
liability companies ("Local Limited Partnerships") which own multi-family
housing complexes that are eligible for low-income housing federal and, in
certain cases, California income tax credits ("Low Income Housing Credit").
The general partner of the Partnership is WNC & Associates, Inc. (the "General
Partner" or "Associates".) Wilfred N. Cooper, Sr., through the Cooper Revocable
Trust, owns 66.8% of the outstanding stock of Associates. John B. Lester, Jr.
was the original limited partner of the Partnership and owns, through the Lester
Family Trust, 28.6% of the outstanding stock of Associates. The business of the
Partnership is conducted primarily through the General Partner as the
Partnership has no employees of its own.
Pursuant to a registration statement filed with the Securities and Exchange
Commission, on July 26, 1995, on July 1, 1996 the Partnership commenced a public
offering of 25,000 Units of Limited Partnership Interests ("Units"), at a price
of $1,000 per Unit. The Partnership's offering terminated on July 11, 1997.
Since inception a total of 22,000 Units representing approximately $21,915,000
were sold throughout the offering.
Description of Business
The Partnership's principal business objective is to provide its Limited
Partners with Low Income Housing Credits. The Partnership's principal business
therefore consists of investing as a limited partner or non-managing member in
Local Limited Partnerships each of which will own and operate a multi-family
housing complex (the "Housing Complex") which will qualify for the Low Income
Housing Credit. In general, under Section 42 of the Internal Revenue Code, an
owner of low-income housing can receive the Low Income Housing Credit to be used
to reduce Federal taxes otherwise due in each year of a ten-year period. In
general, under Section 17058 of the California Revenue and Taxation Code, an
owner of low-income housing can receive the Low Income Housing Credit to be used
against California taxes otherwise due in each year of a four-year period. The
Housing Complex is subject to a fifteen-year compliance period (the "Compliance
Period"), and under state law may have to be maintained as low income housing
for 30 or more years.
In general, in order to avoid recapture of Low Income Housing Credits, the
Partnership does not expect that it will dispose of its interests in Local
Limited Partnerships ("Local Limited Partnership Interests") or approve the sale
by any Local Limited Partnership of its Housing Complex prior to the end of the
applicable Compliance Period. Because of (i) the nature of the Housing
Complexes, (ii) the difficulty of predicting the resale market for low-income
housing 15 or more years in the future, and (iii) the ability of government
lenders to disapprove of transfer, it is not possible at this time to predict
whether the liquidation of the Partnership's assets and the disposition of the
proceeds, if any, in accordance with the Partnership's Agreement of Limited
Partnership, as amended by Supplements to the Prospectus thereto (the
"Partnership Agreement"), will be able to be accomplished promptly at the end of
the 15-year period. If a Local Limited Partnership is unable to sell its Housing
Complex, it is anticipated that the local general partner ("Local General
Partner") will either continue to operate such Housing Complex or take such
other actions as the Local General Partner believes to be in the best interest
of the Local Limited Partnership. Notwithstanding the preceding, circumstances
beyond the control of the General Partner or the Local General Partners may
occur during the Compliance Period, which would require the Partnership to
approve the disposition of an Housing Complex prior to the end thereof, possibly
resulting in recapture of Low Income Housing Credits.
3
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As of March 31, 1999 the Partnership had invested in thirteen Local Limited
Partnerships. Each of these Local Limited Partnerships owns a Housing Complex
that is eligible for the federal Low Income Housing Credit. Certain Local
Limited Partnerships may also benefit from government programs promoting low- or
moderate-income housing. The Partnership's investments in Local Limited
Partnerships are subject to the risks incident to the management and ownership
of low-income housing and to the management and ownership of multi-unit
residential real estate. Some of these risks are that the Low Income Housing
Credit could be recaptured and that neither the Partnership's investments nor
the Housing Complexes owned by the Local Limited Partnerships will be readily
marketable. To the extent the Housing Complexes receive government financing or
operating subsidies, they may be subject to one or more of the following risks:
difficulties in obtaining tenants for the Housing Complexes; difficulties in
obtaining rent increases; limitations on cash distributions; limitations on
sales or refinancing of Housing Complexes; limitations on transfers of Local
Limited Partnership Interests; limitations on removal of Local General Partners;
limitations on subsidy programs; and possible changes in applicable regulations.
The Housing Complexes are subject to mortgage indebtedness. If a Local Limited
Partnership does not make its mortgage payments, the lender could foreclose
resulting in a loss of the Housing Complex and Low Income Housing Credits. As a
limited partner or non-managing member of the Local Limited Partnerships, the
Partnership will have very limited rights with respect to management of the
Local Limited Partnerships, and will rely totally on the general partners or
managing members of the Local Limited Partnerships for management of the Local
Limited Partnerships. The value of the Partnership's investments will be subject
to changes in national and local economic conditions, including unemployment
conditions, which could adversely impact vacancy levels, rental payment defaults
and operating expenses. This, in turn, could substantially increase the risk of
operating losses for the Housing Complexes and the Partnership. In addition,
each Local Limited Partnership is subject to risks relating to environmental
hazards and natural disasters, which might be uninsurable. Because the
Partnership's operations will depend on these and other factors beyond the
control of the General Partner and the Local General Partners, there can be no
assurance that the anticipated Low Income Housing Credits will be available to
Limited Partners.
In addition, Limited Partners are subject to risks in that the rules governing
the Low Income Housing Credit are complicated, and the use of credits can be
limited. The only material benefit from an investment in Units may be the Low
Income Housing Credits. There are limits on the transferability of Units, and it
is unlikely that a market for Units will develop. All Partnership management
decisions are made by the General Partner.
As a limited partner or non-managing member, the Partnership's liability for
obligations of each Local Limited Partnership is limited to its investment. The
Local General Partners of each Local Limited Partnership retain responsibility
for developing, constructing, maintaining, operating and managing the Housing
Complexes.
Item 2. Properties
Through its investment in Local Limited Partnerships, the Partnership holds
limited partnership interests in the Housing Complexes. The following table
reflects the status of the thirteen Housing Complexes as of the dates and for
the periods indicated.
4
<PAGE>
<TABLE>
<CAPTION>
---------------------------- ---------------------------------------
As of March 31, 1999 As of December 31, 1998
---------------------------- ---------------------------------------
Partnership's Amount of Estimated Encumbrances
Total Investment Investment Number Low Income of Local
in Local Limited Paid of Occu Housing Limited
Partnership Name Location General Partner Name Partnerships to Date Units pancy Credits Partnerships
- -------------------------------------------------------------------------------------------- ---------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ashford Place, a Limited Shawnee, The Cowen Group, LLC $ 2,317,000 $ 2,317,000 100 69% $ 3,931,000 $ 2,435,000
Partnership Oklahoma
Belen Vista Associates, Belen, New Monarch Properties, Inc.
Limited Partnership Mexico and Low Income Housing
Foundation of NM 416,000 416,000 57 100% 714,000 1,539,000
Blessed Rock of El Monte El Monte, Everland, Inc. 2,511,000 2,511,000 137 100% 8,899,000 3,841,000
California
Cleveland Apartments L.P. Coffeyville, Williams Management and
Kansas Consulting, Inc. and
Eastern Housing Corp. 552,000 396,000 48 21% 737,000 654,000
Cresent City Apartments Cresent City, Cresent City Surf, Inc. 1,192,000 715,000 56 86% 2,221,000 1,976,000
California
D. Hilltop Apartments Prairie View, Donald W. Sowell 102,000 87,000 24 100% 187,000 447,000
Ltd. Texas
Greyhound Associates I, Windsor, WCM Community
L.P. Missouri Development Corp. 642,000 642,000 24 96% 1,128,000 633,000
Lamar Plaza Apts., L.P. Lamar, MBL Development Co. 738,000 716,000 28 86% 1,230,000 864,000
Missouri
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
---------------------------- ---------------------------------------
As of March 31, 1999 As of December 31, 1998
---------------------------- ---------------------------------------
Partnership's Amount of Estimated Encumbrances
Total Investment Investment Number Low Income of Local
in Local Limited Paid of Occu Housing Limited
Partnership Name Location General Partner Name Partnerships to Date Units pancy Credits Partnerships
- -------------------------------------------------------------------------------------------- ---------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Mesa Verde Apartments Roswell, New Trianon-Mesa Verde, LLC 3,941,000 3,846,000 142 58% 6,472,000 2,459,000
Limited Partnership Mexico
Mountain Vista Los Alamos, Monarch Properties, Inc.
Associates Limited New Mexico and Low Income Housing
Partnership Foundation of NM 315,000 315,000 52 96% 543,000 1,444,000
North Central Limited New York, City and Suburban
Partnership New York Development Corp. 758,000 500,000 18 0% 1,054,000 75,000
Woodland, Ltd. Marion, ACHR Corp. 1,288,000 1,288,000 42 95% 2,112,000 1,296,000
Alabama
Wynwood Place, Limited Raleigh, Regency Investment
Partnership North Associates, Inc., ATO,
Carolina Inc., a Non-Profit Corp.
and Gordon Blackwell. 534,000 374,000 24 0% 780,000 554,000
---------- ---------- --- ---- ---------- ----------
$ 15,306,000 $ 14,123,000 752 70% $ 30,008,000 $ 18,217,000
========== ========== === ==== ========== ==========
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------
For the year ended December 31, 1998
------------------------------------------------------------------
Low Income Housing
Credits Allocated to
Partnership Name Rental Income Net Loss Partnership
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Ashford Place, a Limited Partnership $ 301,000 $ (191,000) 98.99%
Belen Vista Associates, Limited
Partnership 326,000 (21,000) 98.99%
Blessed Rock of El Monte 656,000 (111,000) 49.50%
Cleveland Apartments L.P. 84,000 (219,000) 99.98%
Crescent City Apartments 148,000 (120,000) 99.00%
D. Hilltop Apartments Ltd. 62,000 (4,000) 99.00%
Greyhound Associates I, L.P. 59,000 (21,000) 99.00%
Lamar Plaza Apts., L.P. 46,000 (47,000) 99.97%
Mesa Verde Apartments Limited
Partnership 227,000 (372,000) 99.00%
Mountain Vista Associates Limited
Partnership 227,000 (9,000) 98.99%
North Central Limited Partnership - - 99.89%
Woodland, Ltd. 85,000 (72,000) 99.98%
Wynwood Place, Limited Partnership - (33,000) 99.98%
--------- ---------
$ 2,221,000 $ (1,220,000)
========= =========
</TABLE>
7
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Item 3. Legal Proceedings
NONE
Item 4. Submission of Matters to a Vote of Security Holders
NONE
PART II.
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
Item 5a.
(a) The Units are not traded on a public exchange but were sold through a
public offering. It is not anticipated that any public market will develop
for the purchase and sale of any Unit and none exists. Units can be
assigned only if certain requirements in the Partnership Agreement are
satisfied.
(b) At March 31, 1999, there were 1,301 Limited Partners.
(c) The Partnership was not designed to provide cash distributions to Limited
Partners in circumstances other than refinancing or disposition of its
investments in Local Limited Partnerships.
(d) No unregistered securities were sold by the Partnership during 1998.
Item 5b.
NOT APPLICABLE
Item 6. Selected Financial Data
Selected balance sheet information for the Partnership is as follows as of
December 31:
<TABLE>
<CAPTION>
March 31 December 31
---------------------------- -------------------------------------------
1999 1998 1998 1997 1996
---- ---- ---- ---- ----
(Unaudited)
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 3,460,935 $ 5,318,484 $ 3,817,546 $ 5,906,978 $ 3,916,658
Due from affiliates 52,835 286,900 52,835 276,775 -
Subscriptions receivable - - - - 861,250
Investments in limited
partnerships, net 15,345,027 14,723,512 15,573,510 14,894,897 6,700,570
Interest receivable - 37,182 - 76,622 4,475
Loans receivable 12,080 301,226 91,000 301,226 126,381
Other assets 500 500 500 500 -
---------- ---------- ---------- ---------- ----------
$ 18,871,377 $ 20,667,804 $ 19,535,391 $ 21,456,998 $ 11,609,334
========== ========== ========== ========== ==========
LIABILITIES
Due to limited partnerships $ 1,182,870 $ 2,062,335 $ 1,657,666 $ 2,880,839 $ 4,267,232
Accrued fees and expenses
due to general
partner and affiliates 181,131 68,423 121,498 52,203 291,396
PARTNERS' EQUITY 17,507,376 18,537,046 17,756,227 18,523,956 7,050,706
---------- ---------- ---------- ---------- ----------
$ 18,871,377 $ 20,667,804 $ 19,535,391 $ 21,456,998 $ 11,609,334
========== ========== ========== ========== ==========
</TABLE>
8
<PAGE>
Selected results of operations, cash flows, and other information for the
Partnership is as follows for the for the three months ended March 31, 1999 and
the years ended December 31, 1998 and 1997, and for the period from July 1, 1996
(Date Operations Commenced) to December 31, 1996:
<TABLE>
<CAPTION>
March 31 December 31
---------------------------- --------------------------------------------
1999 1998 1998 1997 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Income (loss) from operations $ 586 $ 18,142 $ 95,280 $ 97,369 $ (17,505)
Equity in losses from limited
partnerships (249,437) (153,500) (1,010,334) (334,756) (29,329)
---------- ---------- ---------- ---------- ----------
Net loss $ (248,851) $ (135,358) $ (915,054) $ (237,387) $ (46,834)
========== ========== ========== ========== ==========
Net loss allocated to:
General partner $ (2,489) $ (1,354) $ (9,151) $ (2,374) $ (468)
========== ========== ========== ========== ==========
Limited partners $ (246,362) $ (134,004) $ (905,903) $ (235,013) $ (46,366)
========== ========== ========== ========== ==========
Net loss per limited partner
unit $ (11.20) $ (6.09) $ (41.18) $ (13.01) $ (26.83)
========== ========== ========== ========== ==========
Outstanding weighted limited
partner units 22,000 22,000 22,000 18,063 1,728
========== ========== ========== ========== ==========
March 31 December 31
---------------------------- --------------------------------------------
1999 1998 1998 1997 1996
---- ---- ---- ---- ----
Net cash provided by (used in):
Operating activities $ 75,111 $ 77,854 $ 297,891 $ 94,732 $ 4,010
Investing activities (431,722) (814,796) (2,534,648) (10,409,130) (2,544,473)
Financing activities - 148,448 147,325 12,304,718 6,457,121
---------- ---------- ---------- ---------- ----------
Net change in cash and cash
equivalents (356,611) (588,494) (2,089,432 1,990,320 3,916,658
Cash and cash equivalents,
beginning of period 3,817,546 5,906,978 5,906,978 3,916,658 -
---------- ---------- ---------- ---------- ----------
Cash and cash equivalents, end
of period $ 3,460,935 $ 5,318,484 $ 3,817,546 $ 5,906,978 $ 3,916,658
========== ========== ========== ========== ==========
March 31 December 31
---------------------------- --------------------------------------------
1999 1998 1998 1997 1996
---- ---- ---- ---- ----
Federal $ - $ - $ 81 $ 20 $ 38
State - - - - -
---------- ---------- ---------- ---------- ----------
Total $ - $ - $ 81 $ 20 $ 38
========== ========== ========== ========== ==========
</TABLE>
9
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operation
Financial Condition
The Partnership's assets at March 31, 1999 December 31, 1998 consisted primarily
of $3,461,000 in cash and aggregate investments in the thirteen Local Limited
Partnerships of $15,345,000. Liabilities at March 31, 1999 were $1,183,000 due
to limited partnerships, $118,000 of accrued annual management fees, $59,000 of
accrued acquisition fees and $4,000 of expenses paid by an affiliate of the
General Partner or due to the General Partner or affiliate.
Results of Operations
Three Months Ended March 31, 1999 Compared to Three Months Ended March 31, 1998.
The Partnership's net loss for the three months ended March 31, 1999 was
$(249,000), reflecting an increase of $114,000 from the net loss experienced for
the three months ended March 31, 1998. The change is primarily due to an
increase in equity in losses from limited partnerships of $95,000, an increase
in operating expenses of $7,000 offset by a decrease in interest income of
$10,000.
Year Ended December 31, 1998 Compared to Year Ended December 31, 1997. The
Partnership's net loss for 1998 was $(915,000), reflecting an increase of
$678,000 from the net loss experienced in 1997. The increase in net loss is
primarily due to an increase in equity in losses from limited partnerships of
$675,000, an increase in operating expenses of $8,000, offset by an increase in
interest income of $5,000.
Year Ended December 31, 1997 Compared to Year Ended December 31, 1996. The
Partnership's net loss for 1997 was $(237,000), reflecting an increase of
$190,000 from the net loss experienced in 1996. The increase in net loss is
primarily due to an increase in equity in losses from limited partnerships of
$305,000, operating expenses increased by $95,000 and these were offset by an
increase in interest income of $210,000.
Cash Flows
Three Months Ended March 31, 1999 Compared to Three Months Ended March 31, 1998.
Net decrease in cash during the three months ended March 31, 1999 was
$(357,000), compared to a net decrease in cash for the three months ended March
31, 1998 of $(588,000). The change was due primarily to a decrease in cash used
for investing activities of $301,000, an increase in cash provided by repayments
of loans receivable of $79,000 offset by a decrease in capital contributions of
$150,000.
Year Ended December 31, 1998 Compared to Year Ended December 31, 1997. Net cash
used in 1998 was $(2,089,000), compared to net cash provided in 1997 of
$1,990,000. The change was primarily due to a decrease in capital contributions
of $14,214,000, a decrease in cash collected on notes receivable of $12,000.
These decreases in cash collected were offset by a decrease in offering costs of
$1,801,000, a decrease in advances from the General Partner or affiliate of
$267,000, a decrease in cash expended on investing activities of $7,874,000, an
increase in distributions from limited partnerships of $4,000, an increase in
accrued fees and expenses due to the General Partner and affiliate of $41,000, a
decrease in operating costs paid to third parties of $8,000, an increase in
interest income of $6,000, and an increase in interest received of $149,000.
Year Ended December 31, 1997 Compared to Year Ended December 31, 1996. Net cash
provided in 1997 was $1,990,000, compared to $3,917,000 in 1996. The change was
due primarily to an increase in cash used for investing activities of
$7,588,000, an increase in cash spent on offering costs of $947,000, an increase
in advances from the General Partner and affiliate of $267,000, an increase in
due from affiliates of $277,000, an increase in cash paid to the General Partner
and affiliate for fees and expenses of $30,000, an increase in operating costs
paid to third parties of $21,000, and an increase in interest receivable of
$72,000. Offset by an increase in capital contributions of $6,875,000, an
increase in collections on notes receivable of $187,000, and an increase in
interest income of $210,000.
The Partnership expects its future cash flows, together with its net available
assets at December 31, 1998, to be sufficient to meet all currently foreseeable
future cash requirements.
10
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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.
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.
11
<PAGE>
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.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
NOT APPLICABLE
Item 8. Financial Statements and Supplementary Data
12
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
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
March 31, 1999 and December 31, 1998, and the related statements of operations,
partners' equity (deficit) and cash flows for the three months ended March 31,
1999 and the year ended December 31, 1998. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits. A significant
portion of the financial statements of the limited partnerships in which the
Partnership is a limited partner were audited by other auditors whose reports
have been furnished to us. As discussed in Note 3 to the financial statements,
the Partnership accounts for its investments in limited partnerships using the
equity method. The portion of the Partnership's investment in limited
partnerships audited by other auditors represented 63% and 60% of the total
assets of the Partnership at March 31, 1999 and December 31, 1998, respectively.
Our opinion, insofar as it relates to the amounts included in the financial
statements for the limited partnerships which were audited by others, is based
solely on the reports of the other auditors.
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 March 31, 1999 and December 31, 1998, and
the results of its operations and its cash flows for the three months ended
March 31, 1999 and the year ended December 31, 1998, in conformity with
generally accepted accounting principles.
/s/ BDO SEIDMAN, LLP
BDO SEIDMAN, LLP
Orange County, California
August 25, 1999
13
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Partners
WNC Housing Tax Credit Fund V, L.P., Series 4
We have audited the accompanying balance sheet of WNC Housing Tax Credit Fund V,
L.P., Series 4 (a California Limited Partnership) (the "Partnership") as of
December 31, 1997, 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 audit. We did not audit 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 investment in these limited partnerships
represented 69% of the total assets of WNC Housing Tax Credit Fund V, L.P.,
Series 4 at December 31, 1997. A substantial portion of the financial statements
of the limited partnerships were audited by other auditors whose reports have
been furnished to us, and our opinion, insofar as it relates to the amounts
included for these limited partnerships, is based solely on the reports of the
other auditors.
We conducted our 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 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
<TABLE>
<CAPTION>
March 31 December 31
------------------------------ ------------------------------
1999 1998 1998 1997
---- ---- ---- ----
(Unaudited)
ASSETS
<S> <C> <C> <C> <C>
Cash and cash equivalents $ 3,460,935 $ 5,318,484 $ 3,817,546 $ 5,906,978
Loans receivable (Note 2) 12,080 301,226 91,000 301,226
Due from affiliates 52,835 286,900 52,835 276,775
Investments in limited partnerships (Note 3) 15,345,027 14,723,512 15,573,510 14,894,897
Interest receivable - 37,182 - 76,622
Other assets 500 500 500 500
---------- ---------- ---------- ----------
$ 18,871,377 $ 20,667,804 $ 19,535,391 $ 21,456,998
========== ========== ========== ==========
LIABILITIES AND PARTNERS' EQUITY
(DEFICIT)
Liabilities:
Payables to limited partnerships (Note 5) $ 1,182,870 $ 2,062,335 $ 1,657,666 $ 2,880,839
Accrued fees and expenses due to General
Partner and affiliates (Note 4) 181,131 68,423 121,498 52,203
---------- ---------- ---------- ----------
Total liabilities 1,364,001 2,130,758 1,779,164 2,933,042
---------- ---------- ---------- ----------
Commitments and contingencies (Note 8)
Partners' equity (deficit) (Note 7)
General partner (43,986) (33,439) (41,497) (32,069)
Limited partners (25,000 units authorized,
22,000 units issued and outstanding) 17,551,362 18,570,485 17,797,724 18,556,025
---------- ---------- ---------- ----------
Total partners' equity 17,507,376 18,537,046 17,756,227 18,523,956
---------- ---------- ---------- ----------
$ 18,871,377 $ 20,667,804 $ 19,535,391 $ 21,456,998
========== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements
15
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
For The Three Months Ended March 31, 1999 and 1998 (Unaudited) and
For The Years Ended December 31, 1998 and 1997 and For The Period July 1, 1996
(Date Operations Commenced) to December 31, 1996
<TABLE>
<CAPTION>
March 31 December 31
---------------------------- --------------------------------------------
1999 1998 1998 1997 1996
---- ---- ---- ---- ----
(Unaudited)
<S> <C> <C> <C> <C> <C>
Interest income $ 39,963 $ 49,943 $ 231,113 $ 225,609 $ 15,529
---------- ---------- ---------- ---------- ----------
Operating expenses:
Amortization (Note 3) 14,892 14,177 56,694 42,034 2,851
Asset management fees (Note 4) 15,125 14,794 59,351 57,976 23,139
Other 9,360 2,830 19,788 28,230 7,044
---------- ---------- ---------- ---------- ----------
Total operating expenses 39,377 31,801 135,833 128,240 33,034
---------- ---------- ---------- ---------- ----------
Income (loss) from operations 586 18,142 95,280 97,369 (17,505)
Equity in income losses of
limited partnerships (Note 3) (249,437) (153,500) (1,010,334) (334,756) (29,329)
---------- ---------- ---------- ---------- ----------
Net loss $ (248,851) $ (135,358) $ (915,054) $ (237,387) $ (46,834)
========== ========== ========== ========== ==========
Net loss allocated to:
General partner $ (2,489) $ (1,354) $ (9,151) $ (2,374) $ (468)
========== ========== ========== ========== ==========
Limited partners $ (246,362) $ (134,004) $ (905,903) $ (235,013) $ (46,366)
========== ========== ========== ========== ==========
Net loss per limited partner unit $ (11.20) $ (6.09) $ (41.18) $ (13.01) $ (26.83)
========== ========== ========== ========== ==========
Outstanding weighted limited
partner units 22,000 22,000 22,000 18,063 1,728
========== ========== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements
16
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
For The Three Months Ended March 31, 1999 and
For The Years Ended December 31, 1998 and 1997 and For The Period July 1, 1996
(Date Operations Commenced) to December 31, 1996
<TABLE>
<CAPTION>
General Limited
Partner Partners Total
------- -------- -----
<S> <C> <C> <C>
Contribution from General Partner and initial limited
partner $ 100 $ 900 $ 1,000
Sale of limited partnership units, net of discounts
of $26,195 - 8,386,805 8,386,805
Offering expenses (11,033) (1,092,232) (1,103,265)
Sale of limited partnership units issued for
promissory notes receivable (Note 7) - (187,000) (187,000)
Net loss (468) (46,366) (46,834)
---------- ----------- -----------
Partners' equity (deficit) at 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 expenses (18,294) (1,811,094) (1,829,388)
Sale of limited partnership units issued for
promissory notes receivable (Note 7) - (175,000) (175,000)
Collection on notes receivable - 187,000 187,000
Net loss (2,374) (235,013) (237,387)
---------- ----------- -----------
Partners' equity (deficit) at December 31, 1997 (32,069) 18,556,025 18,523,956
Offering expenses (277) (27,398) (27,675)
Collection on notes receivable - 175,000 175,000
Net loss (9,151) (905,903) (915,054)
---------- ----------- -----------
Partners' equity (deficit), December 31, 1998 (41,497) 17,797,724 17,756,227
Net loss (2,489) (246,362) (248,851)
---------- ----------- -----------
Partners' equity (deficit) at March 31, 1999 $ (43,986) $ 17,551,362 $ 17,507,376
========== =========== ===========
</TABLE>
See accompanying notes to financial statements
17
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
For The Three Months Ended March 31, 1999 and 1998 (Unaudited) and
For The Years Ended December 31, 1998 and 1997 and For The Period July 1, 1996
(Date Operations Commenced) to December 31, 1996
<TABLE>
<CAPTION>
March 31 December 31
---------------------------- --------------------------------------------
1999 1998 1998 1997 1996
---- ---- ---- ---- ----
(Unaudited)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (248,851) $ (135,358) $ (915,054) $ (237,387) $ (46,834)
Adjustments to reconcile net
loss to net cash provided by
operating activities:
Amortization 14,892 14,177 56,694 42,034 2,851
Equity in losses from limited
partnerships 249,437 153,500 1,010,334 334,756 29,329
Change in accrued fees and
expenses due to General
Partner and affiliate 59,633 16,220 69,295 27,976 23,139
Change in interest receivable - - 76,622 (72,147) (4,475)
Change in other assets - 29,315 - (500) -
---------- ---------- ---------- ---------- -----------
Net cash provided by operating
activities 75,111 77,854 297,891 94,732 4,010
---------- ---------- ---------- ---------- -----------
Cash flows from investing activities:
Investments in limited (455,608) (818,504) (2,934,293) (8,910,195) (1,822,912)
partnerships, net
Due from affiliates - - 223,940 (276,775) -
Distributions from limited 3,744 3,744 3,744 - -
partnerships
Loans receivable 78,920 - 210,226 (174,845) (100,226)
Capitalized acquisition cost
and fees (58,778) (36) (38,265) (1,047,315) (621,335)
---------- ---------- ---------- ---------- -----------
Net cash used in investing
activities (431,722) (814,796) (2,534,648) (10,409,130) (2,544,473)
---------- ---------- ---------- ---------- -----------
Cash flows from financing activities:
Capital contributions from
partners - 150,000 - 14,214,275 7,339,555
Offering costs - (1,552) (27,675) (1,829,388) (882,434)
Collection on notes receivable - - 175,000 187,000 -
Advances from General Partner
and affiliate - - - (267,169) -
---------- ---------- ---------- ---------- -----------
Net cash provided by financing
activities - 148,448 147,325 12,304,718 6,457,121
---------- ---------- ---------- ---------- -----------
</TABLE>
Continued
18
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS - CONTINUED
For The Three Months Ended March 31, 1999 and 1998 (Unaudited) and
For The Years Ended December 31, 1998 and 1997 and For The Period July 1, 1996
(Date Operations Commenced) to December 31, 1996
<TABLE>
<CAPTION>
March 31 December 31
---------------------------- --------------------------------------------
1999 1998 1998 1997 1996
---- ---- ---- ---- ----
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net increase (decrease) in cash
and cash equivalents (356,611) (588,494) (2,089,432) 1,990,320 3,916,658
Cash and cash equivalents,
beginning of period 3,817,546 5,906,978 5,906,978 3,916,658 -
---------- ---------- ---------- ---------- ----------
Cash and cash equivalents, end
of period $ 3,460,935 $ 5,318,484 $ 3,817,546 $ 5,906,978 $ 3,916,658
========== ========== ========== ========== ==========
SUPPLEMENTAL
DISCLOSURE OF CASH
FLOW INFORMATION:
Taxes paid $ - $ - $ 800 $ 800 $ -
========== ========== ========== ========== ==========
</TABLE>
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING AND INVESTING ACTIVITIES:
During the year ended December 31, 1998 and the period ended December 31,
1996, the Partnership incurred, but did not pay, $574,471 and $4,267,232 of
payables to limited partnerships respectively (in connection with its
investments in limited partnerships).
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.
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
19
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For The Three Months Ended March 31, 1999 and 1998 (Unaudited) and
For The Years Ended December 31, 1998 and 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, 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 shall continue in full force and effect until December 31, 2050,
unless terminated prior to that date, pursuant to the partnership agreement or
law.
The financial statements include only activity relating to the business of the
Partnership, and do not give effect to any assets that the partners may have
outside of their interests in the Partnership, or to any obligations, including
income taxes, of the partners.
The partnership agreement authorized the sale of up to 25,000 units at $1,000
per Unit ("Units"). The offering of Units concluded 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.
Change in Reporting Year End
The Partnership has elected to change its year end for financial reporting
purposes from December 31 to March 31. All financial information reflected in
the financial statements and related footnotes has been adjusted for this change
in year end except for the combined condensed financial information relating to
the Local Limited Partnerships included in Note 3.
Due to the change in year end, unaudited financial information as of and for the
three months ended March 31, 1998 is included in the financial statements for
comparative purposes only. The financial statements as of and for the three
months ended March 31, 1998 are unaudited but include all adjustments
(consisting of normal recurring adjustments) which are, in the opinion of
management, necessary for a fair statement of financial position and results of
operations of the Partnership for the interim period.
20
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Three Months Ended March 31, 1999 and 1998 (Unaudited) and
For The Years Ended December 31, 1998 and 1997 and For The Period July 1, 1996
(Date Operations Commenced) to December 31, 1996
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
Risks and Uncertainties
The Partnership's investments in Local Limited Partnerships are subject to the
risks incident to the management and ownership of low-income housing and to the
management and ownership of multi-unit residential real estate. Some of these
risks are that the low income housing credit could be recaptured and that
neither the Partnership's investments nor the Housing Complexes owned by the
Local Limited Partnerships will be readily marketable. To the extent the Housing
Complexes receive government financing or operating subsidies, they may be
subject to one or more of the following risks: difficulties in obtaining tenants
for the Housing Complexes; difficulties in obtaining rent increases; limitations
on cash distributions; limitations on sales or refinancing of Housing Complexes;
limitations on transfers of Local Limited Partnership Interests; limitations on
removal of Local General Partners; limitations on subsidy programs; and possible
changes in applicable regulations. The Housing Complexes are or will be subject
to mortgage indebtedness. If a Local Limited Partnership does not make its
mortgage payments, the lender could foreclose resulting in a loss of the Housing
Complex and low-income housing credits. As a limited partner of the Local
Limited Partnerships, the Partnership will have very limited rights with respect
to management of the Local Limited Partnerships, and will rely totally on the
Local General Partners of the Local Limited Partnerships for management of the
Local Limited Partnerships. The value of the Partnership's investments will be
subject to changes in national and local economic conditions, including
unemployment conditions, which could adversely impact vacancy levels, rental
payment defaults and operating expenses. This, in turn, could substantially
increase the risk of operating losses for the Housing Complexes and the
Partnership. In addition, each Local Limited Partnership is subject to risks
relating to environmental hazards and natural disasters, which might be
uninsurable. Because the Partnership's operations will depend on these and other
factors beyond the control of the General Partner and the Local General
Partners, there can be no assurance that the anticipated low income housing
credits will be available to Limited Partners.
In addition, Limited Partners are subject to risks in that the rules governing
the low income housing credit are complicated, and the use of credits can be
limited. The only material benefit from an investment in Units may be the low
income housing credits. There are limits 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).
Losses from Local Limited Partnerships allocated to the Partnership are not
recognized to the extent that the investment balance would be adjusted below
zero.
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, $2,960,328 and $2,932,653 as of March 31, 1999 and December 31, 1998
and 1997, respectively.
21
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Three Months Ended March 31, 1999 and 1998 (Unaudited) and
For The Years Ended December 31, 1998 and 1997 and For The Period July 1, 1996
(Date Operations Commenced) to December 31, 1996
NOTE 1 - 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. The
Partnerships had cash equivalents of $0, $0 and $5,650,595 as of March 31, 1999,
and December 31, 1998 and 1997, respectively.
Concentration of Credit Risk
At March 31, 1999, the Partnership maintained cash balances at certain financial
institutions in excess of the federally insured maximum.
Net Loss Per Limited Partner Unit
Net loss per limited partnership unit is calculated pursuant to Statement of
Financial Accounting Standards No. 128, Earnings Per Share. Net loss per unit
includes no dilution and is computed by dividing loss available to limited
partners by the weighted average number of units outstanding during the period.
Calculation of diluted net income per unit is not required.
Reporting Comprehensive Income
In June 1997, the FASB issued Statement of Financial Accounting Standards
("SFAS") No. 130, Reporting Comprehensive Income. This statement establishes
standards for reporting the components of comprehensive income and requires that
all items that are required to be recognized under accounting standards as
components of comprehensive income be included in a financial statement that is
displayed with the same prominence as other financial statements. Comprehensive
income includes net income as well as certain items that are reported directly
within a separate component of partners' equity and bypass net income. The
Partnership adopted the provisions of this statement in 1998. For the years
presented, the Partnership has no elements of other comprehensive income, as
defined by SFAS No. 130.
Reclassifications
Certain prior year balances have been reclassified to conform to the 1999
presentation.
NOTE 2 - LOANS RECEIVABLE
Loans receivable represent amounts loaned by the Partnership to certain Local
Limited Partnerships in which the Partnership may invest. These loans are
generally applied against the first capital contribution due if the Partnership
ultimately invests in such entities. In the event that the Partnership does not
invest in such entities, the loans are to be repaid with interest at a rate
which is equal to the rate charged to the holder. Loans receivable with a
balance of $110,000 at December 31, 1997 were collectible from one Local Limited
Partnership, which was acquired in 1998. Loans receivable with a balance of
$100,226 at December 31, 1997 were collectible from one Local Limited
Partnership and were repaid to the Partnership in 1998. Loans receivable with a
balance of $91,000 at December 31, 1998 and 1997, were collectible from one
Local Limited Partnership and has been partially repaid to the Partnership as of
March 31, 1999.
22
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Three Months Ended March 31, 1999 and 1998 (Unaudited) and
For The Years Ended December 31, 1998 and 1997 and For The Period July 1, 1996
(Date Operations Commenced) to December 31, 1996
NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS
As of March 31, 1999 and December 31, 1998 and 1997, 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 March 31, 1999 and December 31, 1998 and 1997 construction or
rehabilitation of 3 of the Housing Complexes was still in process. The
respective general partners of the Local Limited Partnerships manage the
day-to-day operations of the entities. Significant Local Limited Partnership
business decisions require approval from the Partnership. The Partnership, as a
limited partner, is generally entitled to 99%, as specified in the Local Limited
Partnership agreements, of the operating profits and losses, taxable income and
losses and tax credits of the Local Limited Partnerships, except for one of the
investments in which it is entitled to 49.5% of such amounts.
The Partnership's investments in limited partnerships as reflected in the
balance sheets at December 31, 1998 and 1997, are approximately $2,840,000 and
$4,273,000, respectively, greater than the Partnership's equity as shown in the
Local Limited Partnerships' financial statements. This difference is primarily
due to acquisition, selection, and other costs related to the acquisition of the
investments which have been capitalized in the Partnership's investment account
and to capital contributions payable to the limited partnerships which were
netted against partner capital in the Local Limited Partnerships' financial
statements (see Note 5).
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.
Distributions received by limited partners are accounted for as a reduction of
the investment balance. Distributions received after the investment has reached
zero are recognized as income. As of March 31, 1999, no investment accounts in
Local Limited Partnerships had reached a zero balance.
The following is a summary of the equity method activity of the investments in
limited partnerships for the periods presented:
<TABLE>
<CAPTION>
For the Three
Months Ended For the Years Ended
March 31 December 31
--------------- ----------------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Investments per balance sheet, beginning of period $ 15,573,510 $ 14,894,897 $ 6,700,570
Capital contributions (19,187) 1,277,728 6,194,337
Capital contributions payable - 433,392 1,329,465
Capitalized acquisition fees and costs 58,777 38,265 1,047,315
Distributions received (3,744) (3,744) -
Equity in losses of limited partnerships (249,437) (1,010,334) (334,756)
Amortization of paid acquisition fees and costs (14,892) (56,694) (42,034)
----------- ----------- -----------
Investments in limited partnerships, end of period $ 15,345,027 $ 15,573,510 $ 14,894,897
=========== =========== ===========
</TABLE>
23
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Three Months Ended March 31, 1999 and 1998 (Unaudited) and
For The Years Ended December 31, 1998 and 1997 and For The Period July 1, 1996
(Date Operations Commenced) to December 31, 1996
NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
The financial information from the individual financial statements of the Local
Limited Partnerships include rental and interest subsidies. Rental subsidies are
included in total revenues and interest subsidies are generally netted in
interest expense. Approximate combined condensed financial information from the
individual financial statements of the individual financial statements of the
Local Limited Partnerships as of December 31 and for the years then ended is as
follows:
COMBINED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
1998 1997
---- ----
ASSETS
<S> <C> <C>
Buildings and improvements, net of accumulated
depreciation for 1998 and 1997 of $1,292,000 and
$409,000, respectively $ 30,282,000 $ 28,089,000
Land 2,344,000 2,262,000
Construction in progress 1,244,000 545,000
Other assets (including due from related parties at
December 31, 1998 and 1997 of $322,000 and
$36,000, respectively) 3,288,000 2,247,000
----------- -----------
$ 37,158,000 $ 33,143,000
=========== ===========
LIABILITIES
Mortgage and construction loans payable $ 18,217,000 $ 17,372,000
Other liabilities (including due to related parties at
December 31, 1998 and 1997 of $2,765,000 and
$2,238,000, respectively) 3,305,000 2,476,000
----------- -----------
21,522,000 19,848,000
----------- -----------
PARTNERS' CAPITAL
WNC Housing Tax Credit Fund V, L.P., Series 4 12,734,000 10,622,000
WNC Housing Tax Credit Fund V, L.P., Series 3 2,391,000 2,021,000
Other partners 511,000 652,000
----------- -----------
15,636,000 13,295,000
----------- -----------
$ 37,158,000 $ 33,143,000
=========== ===========
</TABLE>
24
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Three Months Ended March 31, 1999 and 1998 (Unaudited) and
For The Years Ended December 31, 1998 and 1997 and For The Period July 1, 1996
(Date Operations Commenced) to December 31, 1996
NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
COMBINED CONDENSED STATEMENTS OF OPERATIONS
1998 1997
---- ----
Revenues $ 2,333,000 $ 944,000
------------ -----------
Expenses:
Operating expenses 1,821,000 667,000
Interest expense 808,000 333,000
Depreciation and amortization 924,000 347,000
------------ -----------
Total expenses 3,553,000 1,347,000
------------ -----------
Net (loss) $ (1,220,000) $ (403,000)
============ ===========
Net (loss) allocable to the Partnership $ (1,010,000) $ (335,000)
============ ===========
Net (loss) recorded by the Partnership $ (1,010,000) $ (335,000)
============ ===========
Certain Local Limited Partnerships have incurred significant operating losses
and have working capital deficiencies. In the event these Local Limited
Partnerships continue to incur significant operating losses, additional capital
contributions by the Partnership and/or the Local General Partner may be
required to sustain the operations of such Local Limited Partnerships. If
additional capital contributions are not made when they are required, the
Partnership's investment in certain of such Local Limited Partnerships could be
impaired.
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 Local Limited Partnership interest totaling $210,900. As of March 31,
1999 and December 31, 1998, due from affiliates consisted of an overpayment of
commissions totaling $52,835.
Under the terms of the Partnership Agreement, the Partnership has paid or is
obligated to the General Partner or their affiliates for the following items:
Acquisition fees of up to 7.5% of the gross proceeds from the sale of Units
as compensation for services rendered in connection with the acquisition of
Local Limited Partnerships. As of March 31, 1999 and December 31, 1998 and
1997, the Partnership incurred acquisition fees of $1,630,375, $1,571,597
and $1,571,597, respectively. Accumulated amortization of these capitalized
costs was $107,571, $93,984 and $41,592 for March 31, 1999 and December 31,
1998, 1997, respectively.
Reimbursement of costs incurred by the General Partner in connection with
the acquisition of Local Limited Partnerships. These reimbursements have
not exceeded 1% of the gross proceeds. As of March 31, 1999 and December
31, 1998 and 1997, the Partnership incurred acquisition costs of $156,589,
$156,589 and $118,324, respectively, which have been included in
investments in limited partnerships. Accumulated amortization was $8,900,
$7,595 and $3,293 as of March 31, 1999 and December 31, 1998 and 1997,
respectively.
25
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Three Months Ended March 31, 1999 and 1998 (Unaudited) and
For The Years Ended December 31, 1998 and 1997 and For The Period July 1, 1996
(Date Operations Commenced) to December 31, 1996
NOTE 4 - RELATED PARTY TRANSACTIONS, continued
An annual asset management fee equal to the greater amount of (i) $2,000
for each housing complex, or (ii) 0.275% of the gross proceeds. In either
case, the fee will be decreased or increased annually based on changes in
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 reserves of the Partnership of up to 5% of gross
proceeds plus its allocable percentage of the mortgage debt encumbering the
housing complexes) of the Local Limited Partnerships. Management fees of
$15,125 were incurred for the three months ended March 31, 1999, and fees
of $59,351, $57,976 and $23,139 were incurred for 1998, 1997 and 1996,
respectively, of which $7,779 was paid during 1999 and $30,000 was paid
during 1997. No management fees were paid during 1996 or 1998.
A subordinated disposition fee in an amount equal to 1% of the sales price
of real estate sold. Payment of this fee is subordinated to the limited
partners receiving a preferred return of 14% through December 31, 2006 and
6% thereafter (as defined in the Partnership Agreement) and is payable only
if the General Partner or its affiliates render services in the sales
effort.
The accrued fees and expenses due to General Partner and affiliates consist of
the following at December 31:
March 31 December 31
------------- ------------------------
1999 1998 1997
---- ---- ----
Asset management fee payable $ 117,816 $ 110,466 $ 51,115
Acquisition fee payable 58,778 - -
Advances from WNC 4,537 11,032 1,088
--------- -------- --------
Total $ 181,131 $ 121,498 $ 52,203
========= ======== ========
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 accompanying financial
statements as any liability for income taxes is the obligation of the partners
of the Partnership.
NOTE 7 - SUBSCRIPTIONS AND NOTES RECEIVABLE
The Partnership had received subscriptions for 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.
26
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Three Months Ended March 31, 1999 and 1998 (Unaudited) and
For The Years Ended December 31, 1998 and 1997 and For The Period July 1, 1996
(Date Operations Commenced) to December 31, 1996
NOTE 8 - SUBSEQUENT EVENTS
Subsequent to March 31, 1999, the Partnership acquired one additional Local
Limited Partnership interest which committed the Partnership to additional
capital contributions of $414,000, of which $0 has been advanced as of March 31,
1999.
27
<PAGE>
Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
NOT APPLICABLE
PART III.
Item 10. Directors and Executive Officers of the Registrant
The Partnership has no directors or executive officers of its own. The following
biographical information is presented for the directors and executive officers
of Associates which has principal responsibility for the Partnership's affairs.
Directors and Executive Officers of WNC & Associates, Inc.
The directors of WNC & Associates, Inc. are Wilfred N. Cooper, Sr., who serves
as Chairman of the Board, John B. Lester, Jr., David N. Shafer, Wilfred N.
Cooper, Jr. and Kay L. Cooper. The principal shareholders of WNC & Associates,
Inc. are trusts established by Wilfred N. Cooper, Sr. and John B. Lester, Jr.
Wilfred N. Cooper, Sr., age 68, is the founder, Chief Executive Officer and a
Director of WNC & Associates, Inc., a Director of WNC Capital Corporation, and a
general partner in some of the programs previously sponsored by the Sponsor. Mr.
Cooper has been involved in real estate investment and acquisition activities
since 1968. Previously, during 1970 and 1971, he was founder and principal of
Creative Equity Development Corporation, a predecessor of WNC & Associates,
Inc., and of Creative Equity Corporation, a real estate investment firm. For 12
years prior to that, Mr. Cooper was employed by Rockwell International
Corporation, last serving as its manager of housing and urban developments where
he had responsibility for factory-built housing evaluation and project
management in urban planning and development. Mr. Cooper is a Director of the
National Association of Home Builders (NAHB) and a National Trustee for NAHB's
Political Action Committee, a Director of the National Housing Conference (NHC)
and a member of NHC's Executive Committee and a Director of the National
Multi-Housing Council (NMHC). Mr. Cooper graduated from Pomona College in 1956
with a Bachelor of Arts degree.
John B. Lester, Jr., age 65, is President, a Director, Secretary and a member of
the Acquisition Committee of WNC & Associates, Inc., and a Director of WNC
Capital Corporation. Mr. Lester has 27 years of experience in engineering and
construction and has been involved in real estate investment and acquisition
activities since 1986 when he joined the Sponsor. Previously, he was Chairman of
the Board and Vice President or President of E & L Associates, Inc., a provider
of engineering and construction services to the oil refinery and petrochemical
industries, which he co-founded in 1973. Mr. Lester graduated from the
University of Southern California in 1956 with a Bachelor of Science degree in
Mechanical Engineering.
Wilfred N. Cooper, Jr., age 36, is Executive Vice President, a Director and a
member of the Acquisition Committee of WNC & Associates, Inc. He is President
of, and a registered principal with, WNC Capital Corporation, a member firm of
the NASD, and is a Director of WNC Management, Inc. He has been involved in
investment and acquisition activities with respect to real estate since he
joined the Sponsor in 1988. Prior to this, he served as Government Affairs
Assistant with Honda North America in Washington, D.C. Mr. Cooper is a member of
the Advisory Board for LIHC Monthly Report, a Director of NMHC and an Alternate
Director of NAHB. He graduated from The American University in 1985 with a
Bachelor of Arts degree.
David N. Shafer, age 47, is Senior Vice President, a Director, General Counsel,
and a member of the Acquisition Committee of WNC & Associates, Inc., and a
Director and Secretary of WNC Management, Inc. Mr. Shafer has been involved in
real estate investment and acquisition activities since 1984. Prior to joining
the Sponsor in 1990, he was practicing law with a specialty in real estate and
taxation. Mr. Shafer is a Director and President of the California Council of
Affordable Housing and a member of the State Bar of California. Mr. Shafer
graduated from the University of California at Santa Barbara in 1978 with a
Bachelor of Arts degree, from the New England School of Law in 1983 with a Juris
Doctor degree (cum laude) and from the University of San Diego in 1986 with a
Master of Law degree in Taxation.
28
<PAGE>
Michael L. Dickenson, age 42, is Vice President and Chief Financial Officer, and
a member of the Acquisition Committee of WNC & Associates, Inc., and Chief
Financial Officer of WNC Management, Inc. He has been involved with acquisition
and investment activities with respect to real estate since 1985. Prior to
joining the Sponsor in March 1999, he was the Director of Financial Services at
TrizecHahn Centers Inc., a developer and operator of commercial real estate,
from 1995 to 1999, a Senior Manager with E&Y Kenneth Leventhal Real Estate
Group, Ernst & Young, LLP, from 1988 to 1995, and Vice President of Finance with
Great Southwest Companies, a commercial and residential real estate developer,
from 1985 to 1988. Mr. Dickenson is a member of the Financial Accounting
Standards Committee for the National Association of Real Estate Companies and
the American Institute of Certified Public Accountants, and a Director of
HomeAid Southern California, a charitable organization affiliated with the
building industry. He graduated from Texas Tech University in 1978 with a
Bachelor of Business Administration - Accounting degree, and is a Certified
Public Accountant in California and Texas.
Thomas J. Riha, age 44, is Vice President - Asset Management and a member of the
Acquisition Committee of WNC & Associates, Inc. and a Director and Chief
Executive Officer of WNC Management, Inc. Mr. Riha has been involved in
acquisition and investment activities with respect to real estate since 1979.
Prior to joining the Sponsor in 1994, Mr. Riha was employed by Trust Realty
Advisor, a real estate acquisition and management company, last serving as Vice
President - Operations. Mr. Riha graduated from the California State University,
Fullerton in 1977 with a Bachelor of Arts degree (cum laude) in Business
Administration with a concentration in Accounting and is a Certified Public
Accountant and a member of the American Institute of Certified Public
Accountants.
Sy P. Garban, age 53, is Vice President - National Sales of WNC & Associates,
Inc. and has been employed by the Sponsor since 1989. Mr. Garban has been
involved in real estate investment activities since 1978. Prior to joining the
Sponsor he served as Executive Vice President of MRW, Inc., a real estate
development and management firm. Mr. Garban is a member of the International
Association of Financial Planners. He graduated from Michigan State University
in 1967 with a Bachelor of Science degree in Business Administration.
N. Paul Buckland, age 36, is Vice President - Acquisitions of WNC & Associates,
Inc. He has been involved in real estate acquisitions and investments since 1986
and has been employed with WNC & Associates, Inc. since 1994. Prior to that, he
served on the development team of the Bixby Ranch that constructed apartment
units and Class A office space in California and neighboring states, and as a
land acquisition coordinator with Lincoln Property Company where he identified
and analyzed multi-family developments. Mr. Buckland graduated from California
State University, Fullerton in 1992 with a Bachelor of Science degree in
Business Finance.
David Turek, age 44, is Vice President - Originations of WNC & Associates, Inc.
He has been involved with real estate investment and finance activities since
1976 and has been employed by WNC & Associates, Inc. since 1996. From 1995 to
1996, Mr. Turek served as a consultant for a national Tax Credit sponsor where
he was responsible for on-site feasibility studies and due diligence analyses of
Tax Credit properties. From 1990 to 1995, he was involved in the development of
conventional and tax credit multi-family housing. He is a Director with the
Texas Council for Affordable Rural Housing and graduated from Southern Methodist
University in 1976 with a Bachelor of Business Administration degree.
Kay L. Cooper, age 62, is a Director of WNC & Associates, Inc. Mrs. Cooper was
the founder and sole proprietor of Agate 108, a manufacturer and retailer of
home accessory products, from 1975 until 1998. She is the wife of Wilfred N.
Cooper, Sr., the mother of Wilfred N. Cooper, Jr. and the sister of John B.
Lester, Jr. Ms. Cooper graduated from the University of Southern California in
1958 with a Bachelor of Science degree.
Item 11. Executive Compensation
The Partnership has no officers, employees, or directors. However, under the
terms of the Partnership Agreement the Partnership is obligated to the General
Partner or Associates for the following fees:
(a) 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 March 31, 1999 and December 31,
1998, the aggregate amount of acquisition fees paid or accrued was
approximately $1,630,000 and $1,571,600, respectively.
29
<PAGE>
(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 $59,351 were
incurred for the three months ended March 31, 1999 and the year ended
December 31, 1998, of which, $7,779 were paid in 1999 and none were paid in
1998.
(d) 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.
(e) 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 March 31, 1999 and December 31, 1998 the Partnership
incurred acquisition expense reimbursements of $156,589.
(f) 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 March 31, 1999 or the year ended December 31, 1998.
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, its affiliates, nor any of the officers or
directors of the General Partner or its affiliates own directly or
beneficially any Units in the Partnership.
(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.
30
<PAGE>
First, with the consent of any other General Partners and a
majority-in-interest of the Limited Partners, any General Partner may
designate one or more persons to be successor or additional General
Partners. In addition, any General Partner may, without the consent of any
other General Partner or the Limited Partners, (i) substitute in its stead
as General Partner any entity which has, by merger, consolidation or
otherwise, acquired substantially all of its assets, stock or other
evidence of equity interest and continued its business, or (ii) cause to be
admitted to the Partnership an additional General Partner or Partners if it
deems such admission to be necessary or desirable so that the Partnership
will be classified a partnership for Federal income tax purposes. Finally,
a majority-in-interest of the Limited Partners may at any time remove the
General Partner of the Partnership and elect a successor General Partner.
31
<PAGE>
Item 13. Certain Relationships and Related Transactions
The General Partner manages all of the Partnership's affairs. The transactions
with the General Partner are primarily in the form of fees paid by the
Partnership for services rendered to the Partnership and the General Partner's
interest in the Partnership, as discussed in Item 11 and in the notes to the
Partnership's financial statements.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
Financial Statements
(a)(1) Financial statements included in Part II hereof:
Report of Independent Certified Public Accountants
Independent Auditors' Report
Balance Sheets, March 31, 1999 and 1998 (Unaudited) and December 31,
1998 and 1997
Statements of Operations for the three months ended March 31, 1999 and
1998 (Unaudited) and for the years ended December 31, 1998 and 1997
and the period July 1, 1996 (Date Operations Commenced) through
December 31, 1996
Statements of Partners' Equity (Deficit) for the three months ended
March 31, 1999 and for the years ended December 31, 1998 and 1997 and
the period July 1, 1996 (Date Operations Commenced) through December
31, 1996
Statements of Cash Flows for the three months ended March 31, 1999 and
1998 (Unaudited) and for the years ended December 31, 1998 and 1997
and the period July 1, 1996 (Date Operations Commenced) through
December 31, 1996
Notes to Financial Statements
(a)(2) Financial statement schedules included in Part IV hereof:
Report of Independent Certified Public Accountants on Financial State-
ment Schedules
Schedule III - Real Estate Owned by Local Limited Partnerships
(b) Reports on Form 8-K.
1. A Form 8-K dated May 13, 1999 was filed on May 14, 1999 reporting
the Partnership's change in fiscal year end to March 31. No financial
statements were included.
(c) Exhibits.
3.1 Articles of incorporation and by-laws: The registrant is not incorpora-
ted. The Partnership Agreement is included as Exhibit 2.1 to the
Form 8-A12G dated May 5, 1996.
3.2 First Amendment to Agreement of Limited Partnership included as Exhibit
2.2 to the Form 8-A12G dated May 5, 1996.
10.1 Amended and Restated Agreement of Limited Partnership of 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.
32
<PAGE>
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 Partner-
ship filed as exhibit 10.1 to Form 8-K Current Report dated January 27,
1997 is herein incorporated by reference as exhibit 10.3
10.4 Amended and Restated Agreement of Limited Partnership of Lamar Plaza
Apts., L. P. filed as exhibit 10.2 to Form 8-K Current Report dated
January 27, 1997 is herein incorporated by reference as exhibit 10.4.
10.5 Amended and Restated Agreement of Limited Partnership of Woodland,
Ltd. filed as exhibit 10.3 to Form 8-K Current Report dated January 27,
1997 is herein incorporated by reference as exhibit 10.5.
10.6 Amended and estated Agreement of Limited Partnership of Mesa Verde
Apartments Limited Partnership filed as exhibit 10.1 to Form 8-K Cur-
rent Report dated March 6, 1997 is herein incorporated by reference as
exhibit 10.6.
10.7 Amended and Restated Agreement of Limited Partnership of Hilltop
Apartments, Ltd. filed as exhibit 10.1 to Form 8-K Current Report
dated April 27, 1997 is herein incorporated by reference as exhibit
10.7.
10.8 Amended and Restated Agreement of Limited Partnership of Mountain Vista
Associates Limited Partnership filed as exhibit 10.1 to Form 8-K
Current Report dated May 27, 1997 is herein incorporated by reference
as exhibit 10.8.
10.9 Amended and Restated Agreement of Limited Partnership of Belen Vista
Associates Limited Partnership filed as exhibit 10.1 to Form 8-K Cur-
rent Report dated May 5, 1997 is here in incorporated by reference as
exhibit 10.9.
10.10 Amended and Restated Agreement of Limited Partnership of Greyhound
Associates I, Limited Partnership filed as exhibit 10.1 to Form 8-K
Current Report dated May 20, 1997 is herein incorporated by reference
as exhibit 10.10.
(d) Financial statement schedules follow, as set forth in subsection (a)(2)
hereof.
33
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULES
To the Partners
WNC Housing Tax Credit Fund V, L.P., Series 4
The audits referred to in our report dated August 25, 1999 relating to the 1999
and 1998 financial statements of WNC Housing Tax Credit Fund V, L.P., Series 4
(the "Partnership"), which is contained in Item 8 of this Form 10-K, included
the audit of the accompanying financial statement schedules. The financial
statement schedules are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statement schedules
based upon our audits.
In our opinion, such financial statement schedules present fairly, in all
material respects, the financial information set forth therein.
/s/ BDO SEIDMAN, LLP
BDO SEIDMAN, LLP
Orange County, California
August 25, 1999
34
<PAGE>
WNC Housing Tax Credit Fund V, L.P. Series 4
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 1999
<TABLE>
<CAPTION>
------------------------------ --------------------------------------------------
As of March 31, 1999 As of December 31, 1998
------------------------------ --------------------------------------------------
Partnership's Encumbrances
Total Investment Amount of of Local Net
in Local Limited Investment Limited Property and Accumulated Book
Partnership Name Location Partnerships Paid to Date Partnerships Equipment Depreciation Value
- ------------------------------------------------------------------------------- ------------- -----------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ashford Place, a Limited Shawnee,
Partnership Oklahoma $ 2,317,000 $ 2,317,000 $ 2,435,000 $ 5,065,000 $ 127,000 $ 4,938,000
Belen Vista Associates, Limited Belen,
Partnership New Mexico 416,000 416,000 1,539,000 1,771,000 118,000 1,653,000
Blessed Rock of El Monte El Monte,
California 2,511,000 2,511,000 3,841,000 9,289,000 279,000 9,010,000
Cleveland Apartments L.P. Coffeyville,
Kansas 552,000 396,000 654,000 841,000 17,000 824,000
Cresent City Apartments Cresent City,
California 1,192,000 715,000 1,976,000 2,972,000 271,000 2,701,000
D. Hilltop Apartments Ltd. Prairie View,
Texas 102,000 87,000 447,000 583,000 22,000 561,000
Greyhound Associates I, L.P. Windsor,
Missouri 642,000 642,000 633,000 1,362,000 34,000 1,328,000
Lamar Plaza Apts., L.P. Lamar,
Missouri 738,000 716,000 864,000 1,697,000 56,000 1,641,000
Mesa Verde Apartments Limited Roswell,
Partnership New Mexico 3,941,000 3,846,000 2,459,000 6,161,000 185,000 5,976,000
</TABLE>
35
<PAGE>
WNC Housing Tax Credit Fund V, L.P. Series 4
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 1999
<TABLE>
<CAPTION>
------------------------------ --------------------------------------------------
As of March 31, 1999 As of December 31, 1998
------------------------------ --------------------------------------------------
Partnership's Encumbrances
Total Investment Amount of of Local Net
in Local Limited Investment Limited Property and Accumulated Book
Partnership Name Location Partnerships Paid to Date Partnerships Equipment Depreciation Value
- ------------------------------------------------------------------------------- ------------- -----------------------------------
<S> <C> <C> <C> <C> <C> <C>
Mountain Vista Associates Limited Los Alamos,
Partnership New Mexico 315,000 315,000 1,444,000 1,574,000 91,000 1,483,000
North Central Limited Partnership New York,
New York 758,000 500,000 75,000 441,000 - 441,000
Woodland, Ltd. Marion,
Alabama 1,288,000 1,288,000 1,296,000 2,533,000 92,000 2,441,000
Wynwood Place, Limited Partnership Raleigh,
North Carolina 534,000 374,000 554,000 873,000 - 873,000
---------- ---------- ---------- ---------- --------- ----------
$ 15,306,000 $ 14,123,000 $ 18,217,000 $ 35,162,000 $ 1,292,000 $ 33,870,000
========== ========== ========== ========== ========= ==========
</TABLE>
36
<PAGE>
WNC Housing Tax Credit Fund V, L.P. Series 4
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 1999
<TABLE>
<CAPTION>
------------------------------------------------------------------
For the year ended December 31, 1998
------------------------------------------------------------------
Year
Investment Estimated Useful
Partnership Name Rental Income Net Loss Acquired Status Life (Years)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ashford Place, a Limited
Partnership $ 301,000 $ (191,000) 1996 Completed 40
Belen Vista Associates,
Limited Partnership 326,000 (21,000) 1997 Completed 27.5
Blessed Rock of El Monte 656,000 (111,000) 1996 Completed 40
Cleveland Apartments L.P. 84,000 (219,000) 1998 1999 27.5
Cresent City Apartments 148,000 (120,000) 1996 Completed 27.5
D. Hilltop Apartments Ltd. 62,000 (4,000) 1997 Completed 30
Greyhound Associates I,
L.P. 59,000 (21,000) 1997 Completed 40
Lamar Plaza Apts., L.P. 46,000 (47,000) 1997 Completed 40
Mesa Verde Apartments
Limited Partnership 227,000 (372,000) 1997 Completed 40
Mountain Vista Associates 27.5
Limited Partnership 227,000 (9,000) 1997 Completed
North Central Limited Under Construction
Partnership - - 1998 2000
Woodland, Ltd. 85,000 (72,000) 1997 Completed 40
Wynwood Place, Limited
Partnership - (33,000) 1998 1999 Under Construction
----------- ----------
$ 2,221,000 $ (1,220,000)
=========== ==========
</TABLE>
37
<PAGE>
WNC Housing Tax Credit Fund V, L.P. Series 4
Schedule III
Real Estate Owned by Local Limited Partnerships
December 31, 1998
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
As of December 31, 1998
-----------------------------------------------------------------------------------
Partnership's Encumbrances
Total Investment Amount of of Local Net
in Local Limited Investment Limited Property and Accumulated Book
Partnership Name Location Partnerships Paid to Date Partnerships Equipment Depreciation Value
- ------------------------------------------------------------------------------- ------------- -----------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ashford Place, a Limited Shawnee,
Partnership Oklahoma $ 2,317,000 $ 2,069,000 $ 2,435,000 $ 5,065,000 $ 127,000 $ 4,938,000
Belen Vista Associates, Limited Belen,
Partnership New Mexico 416,000 416,000 1,539,000 1,771,000 118,000 1,653,000
Blessed Rock of El Monte El Monte,
California 2,511,000 2,511,000 3,841,000 9,289,000 279,000 9,010,000
Cleveland Apartments L.P. Coffeyville,
Kansas 552,000 397,000 654,000 841,000 17,000 824,000
Cresent City Apartments Cresent City,
California 1,192,000 715,000 1,976,000 2,972,000 271,000 2,701,000
D. Hilltop Apartments Ltd. Prairie View,
Texas 121,000 72,000 447,000 583,000 22,000 561,000
Greyhound Associates I, L.P. Windsor,
Missouri 642,000 578,000 633,000 1,362,000 34,000 1,328,000
Lamar Plaza Apts., L.P. Lamar,
Missouri 738,000 716,000 864,000 1,697,000 56,000 1,641,000
Mesa Verde Apartments Limited Roswell,
Partnership New Mexico 3,941,000 3,846,000 2,459,000 6,161,000 185,000 5,976,000
</TABLE>
38
<PAGE>
WNC Housing Tax Credit Fund V, L.P. Series 4
Schedule III
Real Estate Owned by Local Limited Partnerships
December 31, 1998
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
As of December 31, 1998
-----------------------------------------------------------------------------------
Partnership's Encumbrances
Total Investment Amount of of Local Net
in Local Limited Investment Limited Property and Accumulated Book
Partnership Name Location Partnerships Paid to Date Partnerships Equipment Depreciation Value
- ------------------------------------------------------------------------------- ------------- -----------------------------------
<S> <C> <C> <C> <C> <C> <C>
Mountain Vista Associates Limited Los Alamos,
Partnership New Mexico 315,000 315,000 1,444,000 1,574,000 91,000 1,483,000
North Central Limited Partnership New York,
New York 758,000 500,000 75,000 441,000 - 441,000
Woodland, Ltd. Marion,
Alabama 1,288,000 1,158,000 1,296,000 2,533,000 92,000 2,441,000
Wynwood Place, Limited Partnership Raleigh,
North Carolina 534,000 374,000 554,000 873,000 - 873,000
---------- ---------- ---------- ---------- --------- ----------
$ 15,325,000 $ 13,667,000 $ 18,217,000 $ 35,162,000 $ 1,292,000 $ 33,870,000
========== ========== ========== ========== ========= ==========
</TABLE>
39
<PAGE>
WNC Housing Tax Credit Fund V, L.P. Series 4
Schedule III
Real Estate Owned by Local Limited Partnerships
December 31, 1998
<TABLE>
<CAPTION>
--------------------------------------------
For the year ended December 31, 1998
--------------------------------------------
Year
Investment
Partnership Name Rental Income Net Loss Acquired Status
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ashford Place, a Limited
Partnership $ 301,000 $ (191,000) 1996 Completed
Belen Vista Associates,
Limited Partnership 326,000 (21,000) 1997 Completed
Blessed Rock of El Monte 656,000 (111,000) 1996 Completed
Cleveland Apartments L.P. 84,000 (219,000) 1998 1999
Cresent City Apartments 148,000 (120,000) 1996 Completed
D. Hilltop Apartments Ltd. 62,000 (4,000) 1997 Completed
Greyhound Associates I,
L.P. 59,000 (21,000) 1997 Completed
Lamar Plaza Apts., L.P. 46,000 (47,000) 1997 Completed
Mesa Verde Apartments
Limited Partnership 227,000 (372,000) 1997 Completed
Mountain Vista Associates
Limited Partnership 227,000 (9,000) 1997 Completed
North Central Limited
Partnership - - 1998 2000
Woodland, Ltd. 85,000 (72,000) 1997 Completed
Wynwood Place, Limited
Partnership - (33,000) 1998 1999
----------- ----------
$ 2,221,000 $ (1,220,000)
=========== ==========
</TABLE>
40
<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 & Associates, Inc. General Partner
By: /s/ John B. Lester, Jr
John B. Lester, Jr. President of WNC & Associates, Inc.
Date: August 31, 1999
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 of WNC & Associates, Inc.
Date: August 31, 1999
By: /s/ John B. Lester, Jr
John B. Lester, Jr.
President of WNC & Associates, Inc.
Date: August 31, 1999
By: /s/ Michael L. Dickenson
Michael L. Dickenson
Vice-President - Chief Financial Officer of WNC & Associates, Inc.
Date: August 31, 1999
By: /s/ David N. Shafer
David N. Shafer
Director of WNC & Associates, Inc.
Date: August 31, 1999
41
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000943906
<NAME> WNC HOUSING TAX CREDIT FUND V, L.P., SERIES4
<MULTIPLIER> 1
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<EXCHANGE-RATE> 1
<CASH> 3,460,935
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,460,935
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 18,871,377
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 17,507,376
<TOTAL-LIABILITY-AND-EQUITY> 18,871,377
<SALES> 0
<TOTAL-REVENUES> 39,963
<CGS> 0
<TOTAL-COSTS> 39,377
<OTHER-EXPENSES> 249,437
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (248,851)
<INCOME-TAX> 0
<INCOME-CONTINUING> (248,851)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (248,851)
<EPS-BASIC> (11.20)
<EPS-DILUTED> 0
</TABLE>
