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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 30, 1999
OR
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 For the
transition period from _________ to _________
0-18405
- --------------------------------------------------------------------------------
(Commission File Number)
American Tax Credit Properties II L.P.
(Exact name of registrant as specified in its governing instruments)
Delaware 13-3495678
- ---------------------------- ------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of organization)
Richman Tax Credit Properties II L.P.
599 West Putnam Avenue, 3rd floor
Greenwich, Connecticut 06830
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 869-0900
--------------
Securities registered pursuant to Section 12(b) of the Act:
None None
- --------------------- ------------------------
(Title of each Class) (Name of each exchange on
which registered)
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
- --------------------------------------------------------------------------------
(Title of Class)
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
requirement 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 a 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
Registrant has no voting stock.
Documents incorporated by reference:
Part I - pages 20 through 33 and 47 through 70 of the prospectus dated May 10,
1989, as supplemented by Supplement No. 1 and Supplement No. 2 dated July 25,
1989 and September 18, 1989, respectively, filed pursuant to Rule 424(b)(3)
under the Securities Act of 1933.
PART I
Item 1. Business
Formation
American Tax Credit Properties II L.P. ("Registrant"), a Delaware limited
partnership, was formed on October 26, 1988 to invest primarily in leveraged
low-income multifamily residential complexes (the "Property" or "Properties")
which qualify for the low-income tax credit in accordance with Section 42 of the
Internal Revenue Code (the "Low-income Tax Credit"), through the acquisition of
limited partnership equity interests in partnerships (the "Local Partnership" or
"Local Partnerships") that are the owners of the Properties. Registrant invested
in fifty such Properties including one Property which also qualifies for the
historic rehabilitation tax credit in accordance with Section 48(g) of the
Internal Revenue Code of 1986 (the "Historic Rehabilitation Tax Credit").
Registrant considers its activity to constitute a single industry segment.
Richman Tax Credit Properties II L.P. (the "General Partner"), a Delaware
limited partnership, was formed on October 26, 1988 to act as the general
partner of Registrant. The general partner of the General Partner is Richman Tax
Credits Inc. ("Richman Tax Credits"), a Delaware corporation which is
wholly-owned by Richard Paul Richman. Richman Tax Credits is an affiliate of The
Richman Group, Inc. ("Richman Group"), a Delaware corporation founded by Richard
Paul Richman in 1988.
The Amendment No. 2 to the Registration Statement on Form S-11 was filed with
the Securities and Exchange Commission (the "Commission") on April 21, 1989
pursuant to the Securities Act of 1933 under Registration Statement File No.
33-25337, and was declared effective on May 9, 1989. Reference is made to the
prospectus dated May 10, 1989, as supplemented by Supplement No. 1 and
Supplement No. 2 dated July 25, 1989 and September 18, 1989, respectively, filed
with the Commission pursuant to Rule 424(b)(3) under the Securities Act of 1933
(the "Prospectus"). Pursuant to Rule 12b-23 of the Commission's General Rules
and Regulations promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), the description of Registrant's business set forth
under the heading "Investment Objectives and Policies" at pages 47 through 70 of
the Prospectus is incorporated herein by reference.
On June 14, 1989, Registrant commenced, through Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch"), the offering of up to 100,000 units of
limited partnership interest ("Unit") at $1,000 per Unit to investors. On June
28, 1989, July 31, 1989 and September 22, 1989, the closings for 13,533, 20,560
and 21,653 Units, respectively, took place, amounting to aggregate limited
partners' capital contributions of $55,746,000.
Competition
Pursuant to Rule 12b-23 of the Commission's General Rules and Regulations
promulgated under the Exchange Act, the description of Registrant's competition,
general risks, tax risks and partnership risks set forth under the heading "Risk
Factors" at pages 20 through 33 of the Prospectus is incorporated herein by
reference.
Employees
Registrant employs no personnel and incurs no payroll costs. All management
activities of Registrant are conducted by the General Partner. An affiliate of
the General Partner employs individuals who perform the management activities of
Registrant. This entity also performs similar services for other affiliates of
the General Partner.
Tax Reform Act of 1986, Revenue Act of 1987, Technical and Miscellaneous Revenue
Act of 1988, Omnibus Budget Reconciliation Act of 1989, Omnibus Budget
Reconciliation Act of 1990, Tax Extension Act of 1991, Omnibus Budget
Reconciliation Act of 1993, Uruguay Round Agreements Act and Taxpayer Relief Act
of 1997 (collectively the "Tax Acts")
Registrant is organized as a limited partnership and is a "pass through" tax
entity which does not, itself, pay federal income tax. However, the partners of
Registrant who are subject to federal income tax may be affected by the Tax
Acts. Registrant will consider the effect of certain aspects of the Tax Acts on
the partners when making decisions regarding its investments. Registrant does
not anticipate that the Tax Acts will currently have a material adverse impact
on Registrant's business operations, capital resources and plans or liquidity.
Item 2. Properties
The executive offices of Registrant and the General Partner are located at 599
West Putnam Avenue, 3rd floor, Greenwich, Connecticut 06830. Registrant does not
own or lease any properties. Registrant pays no rent; all charges for leased
space are borne by an affiliate of the General Partner.
Registrant's primary objective is to provide Low-income Tax Credits to limited
partners generally over a ten year period. The relevant state tax credit agency
has allocated each of Registrant's Local Partnerships an amount of Low-income
Tax Credits, which are generally available for a ten year period from the year
the Property is placed in service. The required holding period of each Property,
in order to avoid Low-income Tax Credit recapture, is fifteen years from the
year in which the Low-income Tax Credits commence on the last building of the
Property (the "Compliance Period"). In addition, certain of the Local
Partnerships have entered into agreements with the relevant state tax credit
agencies whereby the Local Partnerships must maintain the low-income nature of
the Properties for a period which exceeds the Compliance Period, regardless of
any sale of the Properties by the Local Partnerships after the Compliance
Period. The Properties must satisfy various requirements including rent
restrictions and tenant income limitations (the "Low-income Tax Credit
Requirements") in order to maintain eligibility for the recognition of the
Low-income Tax Credit at all times during the Compliance Period. Once a Local
Partnership has become eligible for the Low-income Tax Credit, it may lose such
eligibility and suffer an event of recapture if its Property fails to remain in
compliance with the Low-income Tax Credit Requirements. Through December 31,
1998, none of the Local Partnerships have suffered an event of recapture of
Low-income Tax Credits.
Although Registrant generally owns a 98.9%-99% limited partnership interest
("Local Partnership Interest") in the Local Partnerships, Registrant and
American Tax Credit Properties L.P. ("ATCP"), a Delaware limited partnership and
an affiliate of Registrant, together, in the aggregate, own a 99% Local
Partnership Interest in Santa Juanita Limited Dividend Partnership L.P. ("Santa
Juanita"); the ownership percentages of Registrant and ATCP of Santa Juanita are
64.36% and 34.64%, respectively. In addition, Registrant and American Tax Credit
Properties III L.P. ("ATCP III"), a Delaware limited partnership and an
affiliate of Registrant, together, in the aggregate, own a 99% Local Partnership
Interest in the following Local Partnerships:
Registrant ATCP III
---------- --------
Batesville Family, L.P. 37.25% 61.75%
Bruce Housing Associates, L.P. 37.25 61.75
Carrington Limited Dividend Housing
Association Limited Partnership 33.05 65.95
Ivy Family, L.P. 37.25 61.75
Lawrence Road Properties, Ltd. 37.25 61.75
Mirador del Toa Limited Partnership 39.94 59.06
Purvis Heights Properties, L.P. 37.25 61.75
Queen Lane Investors 50.50 48.50
Many of the Local Partnerships receive rental subsidy payments, including
payments under Section 8 of Title II of the Housing and Community Development
Act of 1974 ("Section 8") (see descriptions of subsidies on pages 7 and 8). The
subsidy agreements expire at various times during and after the Compliance
Periods of the Local Partnerships. In October 1997, Congress passed the
Multifamily Assisted Housing and Reform and Affordability Act, whereby the
United States Department of Housing and Urban Development ("HUD") was given the
authority to renew certain project based Section 8 contracts expiring during
HUD's fiscal year 1998, where requested by an owner, for an additional one year
term generally at or below current rent levels, subject to certain guidelines.
In October 1998, HUD issued a directive related to project based Section 8
contracts expiring during HUD's fiscal year 1999 which defines owners'
notification responsibilities, advises owners of project based Section 8
properties of what their options are regarding the renewal of Section 8
contracts, provides guidance and procedures to owners, management agents,
contract administrators and HUD staff on renewing Section 8 contracts, provides
guidance on setting renewal rents and handling renewal rent increases and
provides the requirements and procedures for opting-out of a Section 8 project
based contract. Registrant cannot reasonably predict legislative initiatives and
governmental budget negotiations, the outcome of which could result in a
reduction in funds available for the various federal and state administered
housing programs including the Section 8 program. Such changes could adversely
affect the future net operating income and debt structure of any or all Local
Partnerships currently receiving such subsidy or similar subsidies. Seven Local
Partnerships' Section 8 contracts, certain of which cover only certain, rental
units, are scheduled to expire in 1999.
Item 2. Properties (continued)
Mortgage
Name of Local Partnership Number loans payable as of
Name of apartment complex of rental Capital December 31, Subsidy
Apartment complex location units contribution 1998 (see footnotes)
- -------------------------- --------- ------------ ------------------- ---------------
1989 Westview Arms Limited Partnership
Westview Arms
Dumas, Arkansas 60 $ 130,796 $ 509,860 (1a&g)
2000-2100 Christian Street Associates
Christian Street Apartments II
Philadelphia, Pennsylvania 57 1,406,949 2,647,362 (1c&f)
Ann Ell Apartments Associates, Ltd.
Ann Ell Apartments
Miami Beach, Florida 54 809,177 2,305,690 (1c)
Auburn Hills Apartments Limited
Partnership
Auburn Hills Apartments
Cabot, Arkansas 24 201,649 798,696 (1c)
Auburn Hills Townhouses Limited
Partnership
Auburn Hills Townhouse Apartments
Pontiac, Michigan 250 3,206,110 6,456,493 (1a&g)
Batesville Family, L.P.
Westridge Apartments
Batesville, Mississippi 48 160,741 (2) 1,441,209 (1c)
Browning Road Phase I, L.P.
Browning Road Apartments, Phase I
Greenwood, Mississippi 60 197,808 855,027 (1c)
Bruce Housing Associates, L.P.
Bruce Family Apartments
Bruce, Mississippi 40 122,814 (2) 1,110,021 (1c&d)
Canton Partners, L.P.
Pecan Village
Canton, Mississippi 48 380,199 1,442,732 (1c)
Carrington Limited Dividend Housing
Association Limited Partnership
Carrington Place
Farmington Hills, Michigan 100 1,058,976 (2) 3,440,212 (1e)
Christian Street Associates Limited
Partnership
Christian Street Apartments
Philadelphia, Pennsylvania 72 2,355,353 2,576,533 (1c&f)
Cityside Apartments, Phase II, L.P.
Cityside Apartments Phase II
Trenton, New Jersey 107 6,592,092 7,540,877 (1a&c)
Cleveland Square, Ltd.
Cleveland Square Apartments
Cleveland, Texas 48 223,327 843,325 (1c)
Item 2. Properties (continued)
Mortgage
Name of Local Partnership Number loans payable as of
Name of apartment complex of rental Capital December 31, Subsidy
Apartment complex location units contribution 1998 (see footnotes)
- -------------------------- --------- ------------ ------------------- -------------
College Avenue Apartments Limited
Partnership
College Avenue Apartments
Natchitoches, Louisiana 41 $ 324,847 $ 604,399 (1a)
Corrigan Square, Ltd.
Corrigan Square Apartments
Corrigan, Texas 96 372,833 1,451,300 (1c)
De Queen Villas Limited Partnership
De Queen Villas Apartments
De Queen, Arkansas 37 296,051 1,168,522 (1c)
Dermott Villas Limited Partnership
Dermott Villas
Dermott, Arkansas 32 272,802 1,065,681 (1c)
Eagle View, Ltd.
Eagle View Apartments
Clearfield, Kentucky 24 102,850 413,259 (1c)
Elm Hill Housing Limited Partnership
Elm Hill Housing
Boston, Massachusetts 142 5,712,391 6,915,685 (1a)
Eudora Manor Limited Partnership
Eudora Manor Apartments
Eudora, Arkansas 24 188,838 752,462 (1c)
Forest Village Housing Partnership
Forest Village Apartments
Auburn, Washington 89 504,891 1,488,652 (1b&c)
Harborside Housing Limited Partnership
Cal-View Apartments
East Chicago, Indiana 255 1,789,434 3,461,819 (1a,c&g)
Hill Com I Associates Limited
Partnership
Hill Com I Apartments
Pittsburgh, Pennsylvania 67 887,635 1,296,398 (1a&g)
Hill Com II Associates Limited
Partnership
Hill Com II Apartments
Pittsburgh, Pennsylvania 48 683,172 1,027,502 (1a&g)
Hughes Manor Limited Partnership
Hughes Manor
Hughes, Arkansas 32 287,261 1,115,820 (1c)
Ivy Family, L.P.
Ivy Apartments
Louisville, Mississippi 32 90,878 (2) 798,004 (1c&d)
Item 2. Properties (continued)
Mortgage
Name of Local Partnership Number loans payable as
Name of apartment complex of rental Capital of December 31, Subsidy
Apartment complex location units contribution 1998 (see footnotes)
- -------------------------- --------- ------------ ---------------- -------------
Lakeside Housing Limited Partnership
Lakeside Garden Apartments
East Chicago, Indiana 312 $ 3,147,863 $7,862,891 (1a,c&g)
Lawrence Road Properties, Ltd.
Hillcrest Apartments
Newton, Mississippi 24 83,013 (2) 760,577 (1c&d)
Lexington Estates Ltd.,
A Mississippi Limited Partnership
Lexington Estates
Lexington, Mississippi 24 176,225 709,376 (1c)
Littleton Avenue Community Village, L.P.
Littleton Avenue Community Village
Newark, New Jersey 102 3,087,138 4,303,080 (1c)
Lula Courts Ltd., L.P.
Lula Courts
Lula, Mississippi 24 176,645 701,607 (1c)
Magee Elderly, L.P.
Eastgate Manor
Magee, Mississippi 24 150,952 591,718 (1c&d)
Mirador del Toa Limited Partnership
Mirador del Toa Apartments
Toa Alta, Puerto Rico 48 186,717 (2) 1,887,322 (1c&d)
Nixa Heights Apartments, L.P.
Nixa Heights Apartments
Nixa, Missouri 40 250,030 1,007,210 (1c)
North Hills Farms Limited Partnership
North Hills Farms Apartments
Pontiac, Michigan 525 3,443,762 2,807,527 (1a&g)
Patton Place Limited Partnership
Patton Street Apartments
Springfield, Massachusetts 24 794,044 981,230 (1a)
Plantersville Family, L.P.
Regal Ridge Apartments
Plantersville, Mississippi 24 152,268 600,084 (1c)
Powelton Gardens Associates
Powelton Gardens Apartments
West Philadelphia, Pennsylvania 25 782,958 993,656 (1a&f)
Purvis Heights Properties, L.P.
Pineview Apartments
Purvis, Mississippi 40 128,419 (2) 1,149,032 (1c)
Item 2. Properties (continued)
Mortgage
Name of Local Partnership Number loans payable as
Name of apartment complex of rental Capital of December 31, Subsidy
Apartment complex location units contribution 1998 (see footnotes)
- -------------------------- --------- ------------ ---------------- -------------
Queen Lane Investors
Queen's Row
Philadelphia, Pennsylvania 29 $ 603,552 (2) $ 1,572,111 (1c&f)
Renova Properties, L.P.
Hymon Lucas Manor
Renova, Mississippi 24 165,582 639,370 (1c&d)
Santa Juanita Limited Dividend
Partnership L.P.
Santa Juanita Apartments
Bayamon, Puerto Rico 45 584,117 (2) 1,494,484 (1a&c)
Simpson County Family, L.P.
Azalea Apartments
Magee, Mississippi 24 211,823 814,897 (1d)
Summers Village Limited Partnership
Summers Village Apartments
Summersville, West Virginia 24 194,674 810,495 (1c)
Tchula Courts Apartments, L.P.
Tchula Courts Apartments
Tchula, Mississippi 24 150,984 737,957 (1c)
The Pendleton (A Louisiana
Partnership in Commendam)
The Pendleton
Shreveport, Louisiana 36 444,321 613,426 (1a&c)
Trenton Heights Apartments, L.P.
Trenton Heights Apartments
Trenton, Mississippi 40 100,434 440,946 (1c)
Twin Pine Family, L.P.
Twin Pine Apartments
Louisville, Mississippi 24 163,172 615,502 (1c)
Village Creek Limited Partnership
Village Creek Apartments
Arkadelphia, Arkansas 40 288,216 1,215,710 (1c)
York Park Associates Limited Partnership
York Park Apartments
Dundalk, Maryland 80 2,146,200 3,963,912 (1a)
------------ ---------------
$ 45,972,983 $ 90,801,660
(1) Description of subsidies:
(a) Section 8 of Title II of the Housing and Community Development Act of
1974 allows qualified low-income tenants to pay thirty percent of their
monthly income as rent with the balance paid by the federal government.
Item 2. Properties (continued)
(b) King County Housing Authority provided an interest subsidy through
issuance of tax exempt bonds which provided first and second mortgage loans
for the acquisition and rehabilitation of the complex.
(c) The Local Partnership's debt structure includes a principal or interest
payment subsidy.
(d) The Rural Housing Service (formerly the Farmers Home Administration) of
the United States Department of Agriculture Rental Assistance Program
allows qualified low-income tenants to receive rental subsidies.
(e) The Michigan State Housing Development Authority allows tenants, who
would otherwise pay more than 40% of their income for rent and utilities,
to receive rental subsidies.
(f) The City of Philadelphia Housing Authority allows qualified low-income
tenants to receive rental certificates.
(g) The Local Partnership's Section 8 contracts, certain of which cover
only certain rental units, are scheduled to expire in 1999.
(2) Reflects amount attributable to Registrant only.
Item 3. Legal Proceedings
As a result of increasing deficits and declining occupancy, Forest Village
Housing Partnership ("Forest Village") filed for protection under Chapter 11 of
the federal Bankruptcy Code in the United States Bankruptcy Court, Western
District of Washington on March 25, 1999. Forest Village has not yet filed a
plan of reorganization.
Registrant is not aware of any other material legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of the limited partners of Registrant
during the fourth quarter of the fiscal year covered by this report.
PART II
Item 5. Market for Registrant's Common Equity
and Related Security Holder Matters
Market Information and Holders
There is no established public trading market for Registrant's Units.
Accordingly, accurate information as to the market value of a Unit at any given
date is not available. The number of owners of Units as of June 15, 1999 was
3,259, holding 55,746 Units.
Merrill Lynch follows internal guidelines for providing estimated values of
limited partnerships and other direct investments reported on client account
statements. Pursuant to such guidelines, estimated values for limited
partnership interests reported on Merrill Lynch client account statements (such
as Registrant's Units) are provided to Merrill Lynch by independent valuation
services. These estimated values are based on financial and other information
available to the independent services (1) on the prior August 15th for reporting
on December year-end and subsequent client account statements through the
following May's month-end client account statements and (2) on March 31st for
reporting on June month-end and subsequent client account statements through the
November month-end client account statements of the same year. In addition,
Registrant may provide an estimate of value to Unit holders from time to time in
Registrant's reports to limited partners. The estimated values provided by the
independent services and Registrant, which may differ, are not market values and
Unit holders may not be able to sell their Units or realize either amount upon a
sale of their Units. In addition, Unit holders may not realize such estimated
values upon the liquidation of Registrant.
Distributions
Registrant owns a limited partnership interest in Local Partnerships that are
the owners of Properties which are leveraged and receive government assistance
in various forms of rental and debt service subsidies. The distribution of cash
flow generated by the Local Partnerships may be restricted, as determined by
each Local Partnership's financing and subsidy agreements. Accordingly,
Registrant does not anticipate that it will provide significant cash
distributions to its partners. There were no cash distributions to the partners
during the years ended March 30, 1999 and 1998.
Low-income Tax Credits and Historic Rehabilitation Tax Credits (together, the
"Tax Credits"), which are subject to various limitations, may be used by
partners to offset federal income tax liabilities. The Tax Credits per Unit
generated by Registrant and allocated to the limited partners for the tax years
ended December 31, 1998 and 1997 and the cumulative Tax Credits allocated from
inception through December 31, 1998 are as follows:
Historic
Rehabilitation Low-income
Tax Credits Tax Credits
-------------- -----------
Tax year ended December 31, 1998 $ -- $ 144.49
Tax year ended December 31, 1997 -- 144.49
Cumulative totals $ 6.56 $ 1,302.82
Notwithstanding future circumstances which may give rise to recapture or loss of
future benefits (see Part I, Item 2 Properties, herein), Registrant expects to
generate total Tax Credits from investments in Local Partnerships of
approximately $1,500 per Unit through December 31, 2001.
Item 6. Selected Financial Data
The information set forth below presents selected financial data of Registrant.
Additional detailed financial information is set forth in the audited financial
statements included under Part II, Item 8 herein.
Years Ended March 30,
---------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
------------ ------------ ------------ ----------- ------------
Interest and other revenue $ 339,756 $ 352,811 $ 359,806 $ 360,324 $ 335,780
============ ============ ============ =========== ============
Equity in loss of investment
in local partnerships $ (2,363,768) $ (2,806,299) $ (5,180,297) $(3,514,333) $ (3,914,008)
============ ============ ============ =========== ============
Net loss $ (2,759,975) $ (3,189,990) $ (5,506,972) $(3,837,432) $ (4,266,419)
============ ============ ============ =========== ============
Net loss per unit of limited
partnership interest $ (49.01) $ (56.65) $ (97.80) $ (68.15) $ (75.77)
============ ============ ============ =========== ============
As of March 30,
---------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
------------ ------------ ------------ ----------- ------------
Total assets $ 17,409,763 $ 20,162,596 $ 23,022,129 $28,509,605 $ 32,573,919
============ ============ ============ =========== ============
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Capital Resources and Liquidity
Registrant admitted limited partners in three closings with aggregate limited
partners' capital contributions of $55,746,000. In connection with the offering
of the sale of Units, Registrant incurred organization and offering costs of
approximately $6,534,000 and established a working capital reserve of
approximately $3,345,000. The remaining net proceeds of approximately
$45,867,000 (the "Net Proceeds") were available to be applied to the acquisition
of limited partnership interests in local partnerships (the "Local
Partnerships") which own low-income multifamily residential complexes (the
"Property" or "Properties") which qualify for the low-income tax credit in
accordance with Section 42 of the Internal Revenue Code (the "Low-income Tax
Credit"); one Local Partnership owns a Property which also qualifies for the
historic rehabilitation tax credit in accordance with Section 48(g) of the
Internal Revenue Code of 1986. Registrant has utilized the Net Proceeds in
acquiring an interest in fifty Local Partnerships.
As of March 30, 1999, Registrant has cash and cash equivalents and investments
in bonds totaling $4,438,442 which is available for operating expenses of
Registrant and circumstances which may arise in connection with the Local
Partnerships. As of March 30, 1999, Registrant's investments in bonds represent
corporate bonds of $2,617,522, U.S. Treasury bonds of $530,423 and U.S.
government agency bonds of $551,379 with various maturity dates ranging from
2000 to 2023. Registrant acquired such investments in bonds with the intention
of utilizing proceeds generated by such investments to meet its annual
obligations. Future sources of Registrant funds are expected primarily from
interest earned on working capital and limited cash distributions from Local
Partnerships.
During the year ended March 30, 1999, Registrant received cash from interest
revenue, maturity/redemption of bonds and distributions and other income from
Local Partnerships and utilized cash for operating expenses and investments in
Local Partnerships. Cash and cash equivalents and investments in bonds
available-for-sale decreased, in the aggregate, by approximately $345,000 during
the year ended March 30, 1999 (which includes a net unrealized loss on
investments in bonds of approximately $31,000, the amortization of net premium
on investments in bonds of approximately $90,000 and the accretion of zero
coupon bonds of approximately $39,000). Notwithstanding circumstances that may
arise in connection with the Properties, Registrant does not expect to realize
significant gains or losses on its investments in bonds, if any.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
During the year ended March 30, 1999, the investment in Local Partnerships
decreased as a result of Registrant's equity in the Local Partnerships' net loss
for the year ended December 31, 1998 of $1,741,004, an adjustment to
Registrant's carrying value of its investment in one Local Partnership in
accordance with applicable accounting guidelines of $622,764 (see discussion
below under Results of Operations). and cash distributions received from Local
Partnerships of $131,045 (exclusive of distributions from Local Partnerships of
$388 classified as other income), partially offset by investments in Local
Partnerships of $95,818. Accounts payable and accrued expenses and payable to
general partner in the accompanying balance sheet as of March 30, 1999 include
deferred administration fees and management fees, respectively.
Results of Operations
Registrant's operating results are dependent upon the operating results of the
Local Partnerships and are significantly impacted by the Local Partnerships'
policies. In addition, the operating results herein are not necessarily the same
for tax reporting. Registrant accounts for its investment in Local Partnerships
in accordance with the equity method of accounting. Accordingly, the investment
is carried at cost and is adjusted for Registrant's share of each Local
Partnership's results of operations and by cash distributions received. Equity
in loss of each investment in Local Partnership allocated to Registrant is
recognized to the extent of Registrant's investment balance in each Local
Partnership. Equity in loss in excess of Registrant's investment balance in a
Local Partnership is allocated to other partners' capital in any such Local
Partnership. As a result, the reported equity in loss of investment in Local
Partnerships is expected to decrease as Registrant's investment balances in the
respective Local Partnerships become zero. However, the combined statements of
operations of the Local Partnerships reflected in Note 5 to Registrant's
financial statements include the operating results of the Local Partnerships,
indicated, irrespective of Registrant's investment balances.
Cumulative losses and cash distributions in excess of investment in Local
Partnerships may result from a variety of circumstances, including a Local
Partnership's accounting policies, subsidy structure, debt structure and
operating deficits, among other things. In addition, the carrying value of
Registrant's investment in Local Partnerships may be reduced if the carrying
value is considered to exceed the estimated value derived by management (which
contemplates remaining Low-income Tax Credits and potential residual value,
among other things). Accordingly, cumulative losses and cash distributions in
excess of the investment or an adjustment to an investment's carrying value are
not necessarily indicative of adverse operating results of a Local Partnership.
See discussion below under Local Partnership Matters regarding certain Local
Partnerships currently operating below economic break even levels.
Registrant's operations for the years ended March 30, 1999, 1998 and 1997
resulted in net losses of $2,759,975, $3,189,990 and $5,506,972, respectively.
The decrease in net loss from 1998 to 1999 is primarily attributable to a
decrease in equity in loss of investment in Local Partnerships of approximately
$443,000. The decrease in net loss from 1997 to 1998 is primarily attributable
to a decrease in equity in loss of investment in Local Partnerships of
approximately $2,374,000, partially offset by an increase in professional fees
of approximately $46,000. Equity in loss of investment in Local Partnerships has
fluctuated over the last three years as a result of (i) Registrant adjusting the
carrying value of its investment in Cityside Apartments, Phase II L.P. during
the year ended March 30, 1999 by $622,764, (ii) losses from impairment of
long-lived assets in connection with Christian Street Associates Limited
Partnership ("Christian Street") and 2000-2100 Christian Street Associates
("2000 Christian Street") of $7,314,852 during the year ended December 31, 1996
and (iii) changes in the net operating losses of those Local partnerships in
which Registrant continues to have an investment balance.
The Local Partnerships' net loss of approximately $2,573,000 for the year ended
December 31, 1998 includes depreciation and amortization expense of
approximately $4,892,000 and interest on non-mandatory debt of approximately
$703,000, and does not include principal payments on permanent mortgages of
approximately $1,219,259. The Local Partnerships' net loss of approximately
$3,570,000 for the year ended December 31, 1997 includes depreciation and
amortization expense of approximately $5,272,000 and interest on non-mandatory
debt of approximately $698,000, and does not include principal payments on
permanent mortgages of approximately $1,031,000. The Local Partnerships' net
loss of approximately $11,942,000 for the year ended December 31, 1996 includes
depreciation and amortization expense of approximately $6,115,000, interest on
non-mandatory debt of approximately $695,000 and a loss from impairment of
long-lived assets of approximately $7,315,000, and does not include principal
payments on permanent mortgages of approximately $1,045,000. The results of
operations of the Local Partnerships for the year ended December 31, 1998 are
not necessarily indicative of results that may be expected in the future
periods.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
Local Partnership Matters
Registrant's primary objective is to provide Low-income Tax Credits to limited
partners generally over a ten year period. The required holding period of each
Property, in order to avoid Low-income Tax Credit recapture, is fifteen years
from the year in which the Low-income Tax Credits commence on the last building
of the Property (the "Compliance Period"). In addition, certain of the Local
partnerships have entered into agreements with the relevant state tax credit
agencies whereby the Local Partnerships must maintain the low-income nature of
the Properties for a period which exceeds the Compliance Period, regardless of
any sale of the Properties by the Local Partnerships after the Compliance
Period. The Properties must satisfy various requirements including rent
restrictions and tenant income limitations (the "Low-income Tax Credit
Requirements") in order to maintain eligibility for the recognition of the
Low-income Tax Credit at all times during the Compliance Period. Once a Local
Partnership has become eligible for the Low-income Tax Credit, it may lose such
eligibility and suffer an event of recapture if its Property fails to remain in
compliance with the Low-income Tax Credit Requirements. The Local Partnerships
will have generated substantially all of the Low-income Tax Credits allocated to
limited partners by December 31, 2001.
The Properties are principally comprised of subsidized and leveraged low-income
multifamily residential complexes located throughout the United States and
Puerto Rico. Many of the Local Partnerships receive rental subsidy payments,
including payments under Section 8 of Title II of the Housing and Community
Development Act of 1974 ("Section 8). The subsidy agreements expire at various
times during and after the Compliance Periods of the Local Partnerships. In
October 1997, Congress passed the Multifamily Assisted Housing and Reform and
Affordability Act, whereby the United States Department of Housing and Urban
Development ("HUD") was given the authority to renew certain project based
Section 8 contracts expiring during HUD's fiscal year 1998, where requested by
an owner, for an additional one year term generally at or below current rent
levels, subject to certain guidelines. In October 1998, HUD issued a directive
related to project based Section 8 contracts expiring during HUD's fiscal year
1999 which defines owners' notification responsibilities, advises owners of
project based Section 8 properties of what their options are regarding the
renewal of Section 8 contracts, provides guidance and procedures to owners,
management agents, contract administrators and HUD staff on renewing Section 8
contracts, provides guidance on setting renewal rents and handling renewal rent
increases and provides the requirements and procedures for opting-out of a
Section 8 project based contract. Registrant cannot reasonably predict
legislative initiatives and governmental budget negotiations, the outcome of
which could result in a reduction in funds available for the various federal and
state administered housing programs including the Section 8 program. Such
changes could adversely affect the future net operating income and debt
structure of any or all Local Partnerships currently receiving such subsidy or
similar subsidies. Seven Local Partnerships' Section 8 contracts, certain of
which cover only certain rental units, are scheduled to expire in 1999.
The Local Partnerships have various financing structures which include (i)
required debt service payments ("Mandatory Debt Service") and (ii) debt service
payments which are payable only from available cash flow subject to the terms
and conditions of the notes, which may be subject to specific laws, regulations
and agreements with appropriate federal and state agencies ("Non-Mandatory Debt
Service or Interest"). During the year ended December 31, 1998, revenue from
operations of the Local Partnerships have generally been sufficient to cover
operating expenses and Mandatory Debt Service. Substantially all of the Local
Partnerships are effectively operating at or near break even levels, although
certain Local Partnerships' operating information reflects operating deficits
that do not represent cash deficits due to their mortgage and financing
structure and the required deferral of property management fees. However, as
discussed below, certain Local Partnerships' operating information indicates
below break even operations after taking into account their mortgage and
financing structure and any required deferral of property management fees.
The terms of the partnership agreements of Christian Street and 2000 Christian
Street (collectively, the "Christian Street Local Partnerships"), which Local
Partnerships have certain common general partner interests and a common first
mortgage lender, require the Local General Partners to cause the management
agent to defer property management fees in order to avoid a default under the
respective mortgages. The properties have experienced ongoing operating deficits
and, as of December 31, 1998, the Local General Partners have advanced
approximately $1,058,000 to the Christian Street Local Partnerships, which
amount includes deferred property management fees. However, the Local General
Partners, which have fulfilled their respective deficit guarantees, had informed
Registrant that they do not intend to continue to voluntarily fund the operating
deficits of the properties. The Local General Partners had also informed
Registrant that the Christian Street Local Partnerships are current under their
respective first mortgage obligations as a result of the Local General Partners'
funding of operating deficits and deferral of property management fees. The
Local General Partners have approached the lender and are attempting to
restructure the loans; however, the lender has indicated that in connection with
any such restructuring, the respective Local Partnerships would be responsible
for certain costs, which may be significant. There can be no assurance that any
such restructuring will be achieved. The Christian Street Local Partnerships
have incurred operating deficits of approximately $192,000 for the year ended
December 31, 1998, which includes property management fees of approximately
$41,000. The Christian Street Local Partnerships have allocated approximately
8.5 years of Low-income Tax Credits to Registrant through December 31, 1998.
Accordingly, if the Local General Partners cease to fund the operating deficits,
Registrant may incur substantial recapture of Low-income Tax Credits.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
However, effective October 1, 1998, in an attempt to avoid potential adverse tax
consequences, Registrant and the Local General Partners of the Christian Street
Local Partnerships agreed to equally share the funding of operating deficits
through June 30, 2000 in the case of Christian Street and through September 30,
2000 in the case of 2000 Christian Street. Either party's obligation may be
cancelled in the event the anticipated annualized operating deficit exceeds
$168,000 in the case of Christian Street and $132,000 in the case of 2000
Christian Street. The Local General Partners of the Christian Street Local
Partnerships have agreed to cause the management agent to accrue and defer its
management fees during the period of the agreements. The accrued management fees
will not be included when determining the operating deficits. In addition,
Registrant and the Local General Partners have each funded $37,500 to the
Christian Street Local Partnerships under the terms of the agreements through
March 30, 1999. Registrant's investment balances in the Christian Street Local
Partnerships, after cumulative equity losses, became zero during the year ended
March 30, 1997. Of Registrant's total annual Low-income Tax Credits,
approximately 9% is allocated from the Christian Street Local Partnerships and
are scheduled to expire in 2000.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
During the year ended December 31, 1998, Forest Village Housing Partnership
("Forest Village") reported an operating deficit of approximately $51,000,
resulting primarily from costs associated with increased vacancies, tenant
turnover and maintenance costs. As a result of increasing deficits and declining
occupancy, Forest Village filed for protection under Chapter 11 of the federal
Bankruptcy Code in the United States Bankruptcy Court, Western District of
Washington (the "Court") on March 25, 1999. As of June 1999, the Property is
approximately 81% occupied and the first and second mortgages are nine and seven
months in arrears, respectively. In addition, Registrant made an advance of
$44,000 during June 1999 in order to pay for needed maintenance for vacant
dwelling units. Forest Village has not yet filed a plan of reorganization (the
"Plan"). In the event that the Plan is confirmed, it is anticipated that
Registrant will make additional advances up to $200,000 in the aggregate to make
needed capital improvements to the Property. There can be no assurance that the
Court will confirm the Plan. Registrant utilized reserves of approximately
$39,000 during the year ended March 30, 1999 in connection with Forest Village.
Registrant's investment balance in Forest Village, after cumulative equity
losses, became zero during the year ended March 30, 1995. Of Registrant's total
annual Low-income Tax Credits, approximately 1% is allocated from Forest
Village.
During the year ended December 31, 1998, Ann Ell Apartments Associates, Ltd.
("Ann Ell") incurred an operating deficit of approximately $66,000. Payments on
the mortgage and real estate taxes are current. Registrant utilized reserves of
approximately $19,000 during the year ended March 30, 1999 in connection with
Ann Ell Registrant's investment balance in Ann Ell, after cumulative equity
losses, became zero during the year ended March 30, 1994. Of Registrant's total
annual Low-income Tax Credits, less than 1% is allocated from Ann Ell.
The terms of the partnership agreement of Batesville Family, L.P. ("Batesville")
require the management agent to defer property management fees in order to avoid
a default under the mortgage. Batesville incurred an operating deficit of
approximately $11,000 for the year ended December 31, 1998, which includes
property management fees of approximately $3,000. Payments on the mortgage and
real estate taxes are current. Registrant's investment balance in Batesville,
after cumulative equity losses, became zero during the year ended March 30,
1998. Of Registrant's total annual income Low-income Tax Credits, less than 1%
is allocated from Batesville.
Littleton Avenue Community Village, L.P. ("Littleton") was a defendant in a
lawsuit resulting from an accident in 1989 during the construction of the
complex owned by Littleton. In November 1995, Littleton and one co-defendant
were found liable in the lawsuit, of which Littleton's potential liability was
approximately $300,000. Littleton has appealed the result of the trial and filed
a lawsuit against the construction period insurance companies, which were not
co-defendants in the lawsuit. During January 1999, the parties reached a
settlement resulting in no adverse economic impact to Littleton.
Inflation
Inflation is not expected to have a material adverse impact on Registrant's
operations during its period of ownership of the Local Partnership Interests.
Adoption of Accounting Standards
Registrant has adopted Statement of Financial Accounting Standard ("SFAS") No.
130, "Reporting Comprehensive Income." SFAS No. 130 establishes standards for
reporting and display of comprehensive income and its components (revenues,
expenses, gains and losses) in a full set of general-purpose financial
statements. Other comprehensive income (loss) in the accompanying statements of
operations resulted from net unrealized gains (losses) on investments in bonds
available-for-sale. Accumulated other comprehensive income in the accompanying
balance sheets reflects the net unrealized gain on investments in bonds
available-for-sale. The statements of operations for the years ended March 30,
1998 and 1997 include certain reclassifications to reflect the adoption of SFAS
No. 130.
Registrant has adopted SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information," which establishes standards for reporting
information about operating segments and related disclosures about products and
services, geographic areas and major customers. Registrant is in one business
segment and follows the requirements of SFAS No. 131.
Year 2000 Compliance
The inability of computers, software and other equipment utilizing
microprocessors to recognize and properly process data fields containing a two
digit year is commonly referred to as the year 2000 compliance ("Y2K") issue. As
the year 2000 approaches, such systems may be unable to accurately process
certain data-based information. Many businesses may need to upgrade existing
systems or purchase new ones to correct the Y2K issue. Registrant has performed
an assessment of its computer software and hardware and believes it has made the
necessary upgrades in an effort to ensure compliance. However, there can be no
assurance that the systems of other entities on which Registrant relies,
including the Local Partnerships which report to Registrant on a periodic basis
for the. purpose of Registrant's reporting to its investors, will be timely
converted. Registrant has corresponded with the Local Partnerships to ensure
their awareness of the Y2K issue and has requested details regarding their
efforts to ensure compliance. The total cost associated with Y2K implementation
is not expected to materially impact Registrant's financial position or results
of operations in any given year. However, there can be no assurance that a
failure to convert by Registrant or another entity would not have a material
adverse impact on Registrant.
Item 7A. Quantitative and Qualitative Disclosure About Market Risk
Registrant has invested a significant portion of its working capital reserves in
corporate bonds and U.S. Treasury instruments. The market value of such
investments is subject to fluctuation based upon changes in interest rates
relative to each investment's maturity date. Since Registrant's investments in
bonds have various maturity dates through 2023, the value of such investments
may be adversely impacted in an environment of rising interest rates in the
event Registrant decides to liquidate any such investment prior to its maturity.
Although Registrant may utilize reserves to assist an underperforming Property,
it otherwise intends to hold such investments to their respective maturities.
Therefore, Registrant does not anticipate any material adverse impact in
connection with such investments.
The Properties are generally located where there is a demand for low-income
housing. Accordingly, there is a significant likelihood that new low-income
housing properties could be built in the general vicinity of the respective
Properties. As a result, the respective Properties' ability to operate at high
occupancy levels is subject to competition from newly built low-income housing.
AMERICAN TAX CREDIT PROPERTIES II L.P.
Item 8. Financial Statements and Supplementary Data
Table of Contents
Page
Independent Auditors' Report..................................................16
Balance Sheets................................................................17
Statements of Operations......................................................18
Statements of Changes in Partners' Equity (Deficit)...........................19
Statements of Cash Flows......................................................20
Notes to Financial Statements.................................................22
No financial statement schedules are included because of the absence of the
conditions under which they are required or because the information is included
in the financial statements or the notes thereto.
Independent Auditors' Report
To the Partners
American Tax Credit Properties II L.P.
We have audited the accompanying balance sheets of American Tax Credit
Properties II L.P. as of March 30, 1999 and 1998, and the related statements of
operations, changes in partners' equity (deficit) and cash flows for each of the
three years in the period ended March 30, 1999. These financial statements are
the responsibility of the partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We 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 provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of American Tax Credit
Properties II L.P. as of March 30, 1999 and 1998, and the results of its
operations and its cash flows for each of the three years in the period ended
March 30, 1999, in conformity with generally accepted accounting principles.
/s/ Reznick Fedder and Silverman
Bethesda, Maryland
May 13, 1999
AMERICAN TAX CREDIT PROPERTIES II L.P.
BALANCE SHEETS
MARCH 30, 1999 AND 1998
Notes 1999 1998
----- ------------ ------------
ASSETS
Cash and cash equivalents 3,9 $ 739,118 $ 513,536
Investments in bonds available-for-sale 4,9 3,699,324 4,270,266
Investment in local partnerships 5,8 12,905,421 15,304,416
Interest receivable 9 65,900 74,378
------------ ------------
$ 17,409,763 $ 20,162,596
============ ============
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities
Accounts payable and accrued expenses 8 $ 645,210 $ 639,905
Payable to general partner 6,8 585,806 546,015
Other 48,600 55,600
------------ ------------
1,279,616 1,241,520
------------ ------------
Commitments and contingencies 5,8
Partners' equity (deficit) 2,4
General partner (331,942) (304,342)
Limited partners (55,746 units of limited partnership
interest outstanding)
16,414,878 19,147,253
Accumulated other comprehensive income, net 47,211 78,165
------------ ------------
16,130,147 18,921,076
------------ ------------
$ 17,409,763 $ 20,162,596
============ ============
See Notes to Financial Statements.
AMERICAN TAX CREDIT PROPERTIES II L.P.
STATEMENTS OF OPERATIONS
YEARS ENDED MARCH 30, 1999, 1998 AND 1997
Notes 1999 1998 1997
----- ------------ ------------ ------------
REVENUE
Interest $ 339,368 $ 351,463 $ 359,806
Other income from local partnerships 388 1,348
------------ ------------ ------------
TOTAL REVENUE 339,756 352,811 359,806
------------ ------------ ------------
EXPENSES
Administration fees 8 299,307 299,307 299,307
Management fees 6,8 299,307 299,307 299,307
Professional fees 102,877 102,651 57,140
Printing, postage and other 34,472 35,237 30,727
------------ ------------ ------------
TOTAL EXPENSES 735,963 736,502 686,481
------------ ------------ ------------
Loss from operations (396,207) (383,691) (326,675)
Equity in loss of investment in local
partnerships 5 (2,363,768) (2,806,299) (5,180,297)
------------ ------------ ------------
NET LOSS (2,759,975) (3,189,990) (5,506,972)
Other comprehensive income (loss) 4 (30,954) 199,608 (114,191)
------------ ------------ ------------
COMPREHENSIVE LOSS $ (2,790,929) $ (2,990,382) $ (5,621,163)
============ ============ ============
NET LOSS ATTRIBUTABLE TO 2
General partner $ (27,600) $ (31,900) $ (55,070)
Limited partners (2,732,375) (3,158,090) (5,451,902)
------------ ------------ ------------
$ (2,759,975) $ (3,189,990) $ (5,506,972)
============ ============ ============
NET LOSS per unit of limited partnership
interest (55,746 units of limited
partnership interest) $ (49.01) $ (56.65) $ (97.80)
============ ============ ============
See Notes to Financial Statements.
AMERICAN TAX CREDIT PROPERTIES II L.P.
STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIT)
YEARS ENDED MARCH 30, 1999, 1998 AND 1997
Accumulated
Other
Comprehensive
General Limited Income (Loss),
Partner Partners Net Total
----------- ------------- ------------ -------------
Partners' equity (deficit), March 30, 1996 $ (217,372) $ 27,757,245 $ (7,252) $ 27,532,621
Net loss (55,070) (5,451,902) (5,506,972)
Other comprehensive loss, net (114,191) (114,191)
----------- ------------- ------------ -------------
Partners' equity (deficit), March 30, 1997 (272,442) 22,305,343 (121,443) 21,911,458
Net loss (31,900) (3,158,090) (3,189,990)
Other comprehensive income, net 199,608 199,608
----------- ------------- ------------ -------------
Partners' equity (deficit), March 30, 1998 (304,342) 19,147,253 78,165 18,921,076
Net loss (27,600) (2,732,375) (2,759,975)
Other comprehensive loss, net (30,954) (30,954)
----------- ------------- ------------ -------------
Partners' equity (deficit), March 30, 1999 $ (331,942) $ 16,414,878 $ 47,211 $ 16,130,147
=========== ============= ============ =============
See Notes to Financial Statements.
AMERICAN TAX CREDIT PROPERTIES II L.P.
STATEMENTS OF CASH FLOWS
YEARS ENDED MARCH 30, 1999, 1998 AND 1997
1999 1998 1997
---------- ----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received $ 387,834 $ 356,833 $ 370,043
Cash used for local partnerships for deferred expenses (7,000) (7,000) (7,000)
Cash paid for
administration fees (259,516) (239,513) (239,513)
management fees (259,516) (239,516) (239,523)
professional fees (122,473) (76,622) (51,890)
printing, postage and other expenses (49,362) (43,001) (14,868)
---------- ----------- -----------
Net cash used in operating activities (310,033) (248,819) (182,751)
---------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash distributions and other income from local partnerships 131,433 194,287 117,999
Maturity/redemption of bonds 500,000 130,000 200,000
Investment in local partnerships (95,818) (184,503)
Investments in bonds (includes $1,089 of accrued interest) (51,589)
---------- ----------- -----------
Net cash provided by investing activities 535,615 88,195 317,999
---------- ----------- -----------
Net increase (decrease) in cash and cash equivalents 225,582 (160,624) 135,248
Cash and cash equivalents at beginning of year 513,536 674,160 538,912
---------- ----------- -----------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 739,118 $ 513,536 $ 674,160
========== =========== ===========
SIGNIFICANT NON-CASH INVESTING ACTIVITIES
Unrealized gain (loss) on investments in bonds available-for-sale, net $ (30,954) $ 199,608 $ (114,191)
========== =========== ===========
See reconciliation of net loss to net cash used in operating activities on page
21.
See Notes to Financial Statements.
AMERICAN TAX CREDIT PROPERTIES II L.P.
STATEMENTS OF CASH FLOWS - (Continued)
YEARS ENDED MARCH 30, 1999, 1998 AND 1997
1999 1998 1997
RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING
ACTIVITIES
Net loss $ (2,759,975) $ (3,189,990) $ (5,506,972)
Adjustments to reconcile net loss to net cash used in
operating activities
Equity in loss of investment in local partnerships 2,363,768 2,806,299 5,180,297
Distributions from local partnerships classified as other
income (388) (1,348)
Gain on redemption of bonds (10,543)
Amortization of net premium on investments in bonds 89,613 41,917 50,524
Accretion of zero coupon bonds (39,082) (40,597) (39,095)
Decrease (increase) in interest receivable 8,478 4,051 (1,192)
Increase in accounts payable and accrued expenses 5,305 78,058 80,903
Increase in payable to general partner 39,791 59,791 59,784
Decrease in other liabilities (7,000) (7,000) (7,000)
-------------- ------------- -------------
NET CASH USED IN OPERATING ACTIVITIES $ (310,033) $ (248,819) $ (182,751)
============== ============= =============
See Notes to Financial Statements.
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS
MARCH 30, 1999, 1998 AND 1997
1. Organization, Purpose and Summary of Significant Accounting Policies
American Tax Credit Properties II L.P. (the "Partnership") was formed on October
26, 1988 and the Certificate of Limited Partnership of the Partnership was filed
under the Delaware Revised Uniform Limited Partnership Act. There was no
operating activity until admission of the limited partners on June 28, 1989. The
Partnership was formed to invest primarily in leveraged low-income multifamily
residential complexes (the "Property" or "Properties") which qualify for the
low-income tax credit in accordance with Section 42 of the Internal Revenue Code
(the "Low-income Tax Credit"), through the acquisition of limited partnership
equity interests (the "Local Partnership Interests") in partnerships (the "Local
Partnership" or "Local Partnerships") that are the owners of the Properties. The
Partnership has invested in one Property which also qualifies for the historic
rehabilitation tax credit in accordance with Section 48(g) of the Internal
Revenue Code of 1986. Richman Tax Credit Properties II L.P. (the "General
Partner") was formed on October 26, 1988 to act as a general partner of the
Partnership.
Basis of Accounting and Fiscal Year
The Partnership's records are maintained on the accrual basis of accounting for
both financial reporting and tax purposes. For financial reporting purposes, the
Partnership's fiscal year ends March 30 and its quarterly periods end June 29,
September 29 and December 30. The Local Partnerships have a calendar year for
financial reporting purposes. The Partnership and the Local Partnerships each
have a calendar year for income tax purposes.
Investment in Local Partnerships
The Partnership accounts for its investment in Local Partnerships in accordance
with the equity method of accounting, under which the investment is carried at
cost and is adjusted for the Partnership's share of each Local Partnership's
results of operations and by cash distributions received. Equity in loss of each
investment in Local Partnership allocated to the Partnership is recognized to
the extent of the Partnership's investment balance in each Local Partnership.
Equity in loss in excess of the Partnership's investment balance in a Local
Partnership is allocated to other partners' capital in any such Local
Partnership. Previously unrecognized equity in loss of any Local Partnership is
recognized in the fiscal year in which equity in income is earned by such Local
Partnership. Distributions received subsequent to the elimination of an
investment balance for any such investment in a Local Partnership are recorded
as other income from local partnerships.
The Partnership regularly assesses the carrying value of its investment in Local
Partnerships. If the carrying value is considered to exceed the estimated value
derived by management (which contemplates remaining Low-income Tax Credits and
potential residual value, among other things), the Partnership reduces its
investment in any such Local Partnership and includes such reduction in equity
in loss of investment in local partnerships.
Advances made to Local Partnerships are recorded as investments in Local
Partnerships. Such advances are considered by the Partnership to be voluntary
loans to the respective Local Partnerships and the Partnership may be reimbursed
at a future date to the extent such Local Partnerships generate distributable
cash flow or receive proceeds from sale or refinancing.
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 as of the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
Adoption of Accounting Standards
The Partnership has adopted Statement of Financial Accounting Standard ("SFAS")
No. 130, "Reporting Comprehensive Income." SFAS No. 130 establishes standards
for reporting and display of comprehensive income and its components (revenues,
expenses, gains and losses) in a full set of general-purpose financial
statements. Other comprehensive income (loss) in the accompanying statements of
operations resulted from net unrealized gains (losses) on investments in bonds
available-for-sale. Accumulated other comprehensive income in the
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
1. Organization, Purpose and Summary of Significant Accounting Policies
(continued)
accompanying balance sheets reflects the net unrealized gain on investments in
bonds available-for-sale. The statements of operations for the years ended March
30, 1998 and 1997 include certain reclassifications to reflect the adoption of
SFAS No. 130.
The Partnership has adopted SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information," which establishes standards for reporting
information about operating segments and related disclosures about products and
services, geographic areas and major customers. The Partnership is in one
business segment and follows the requirements of SFAS No. 131.
Cash and Cash Equivalents
The Partnership considers all highly liquid investments purchased with an
original maturity of three months or less at the date of acquisition to be cash
equivalents. Cash and cash equivalents are stated at cost which approximates
market value.
Investments in Bonds Available-For-Sale
Investments in bonds classified as available-for-sale represent investments that
the Partnership intends to hold for an indefinite period of time but not
necessarily to maturity. Any decision to sell an investment classified as
available-for-sale would be based on various factors, including significant
movements in interest rates and liquidity needs. Investments in bonds
available-for-sale are carried at estimated fair value and unrealized gains or
losses are included as items of comprehensive income (loss) and are reported as
a separate component of partners' equity (deficit).
Premiums and discounts on investments in bonds available-for-sale are amortized
(accreted) using the straight-line method over the life of the investment.
Amortized premiums offset interest revenue, while the accretion of discounts and
zero coupon bonds are included in interest revenue. Realized gain (loss) on
redemption or sale of investments in bonds available-for-sale are included in,
or offset against, interest revenue on the basis of the adjusted cost of each
specific investment redeemed or sold.
Interest on Capital Contributions Payable to Local Partnerships
Pursuant to agreements with certain Local Partnerships, interest was accrued on
certain installments of capital contributions. Such amounts were recorded as a
liability and an offset to interest revenue.
Income Taxes
No provision for income taxes has been made because all income, losses and tax
credits are allocated to the partners for inclusion in their respective tax
returns. In accordance with SFAS No. 109, "Accounting for Income Taxes," the
Partnership has included in Note 7 disclosures related to differences in the
book and tax bases of accounting.
2. Capital Contributions
On June 14, 1989, the Partnership commenced the offering of units (the "Units")
through Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Selling
Agent"). On June 28, 1989, July 31, 1989 and September 22, 1989, under the terms
of the Amended and Restated Agreement of Limited Partnership of the Partnership
(the "Partnership Agreement"), the General Partner admitted limited partners to
the Partnership in three closings. At these closings, subscriptions for a total
of 55,746 Units representing $55,746,000 in limited partners' capital
contributions were accepted. In connection with the offering of Units, the
Partnership incurred organization and offering costs of $6,534,064, of which
$75,000 was capitalized as organization costs and $6,459,064 was charged to the
limited partners' equity as syndication costs. The Partnership received a
capital contribution of $100 from the General Partner.
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
2. Capital Contributions (continued)
Net loss is allocated 99% to the limited partners and 1% to the General Partner
in accordance with the Partnership Agreement.
3. Cash and Cash Equivalents
As of March 30, 1999, the Partnership has $739,118 in cash and cash equivalents
which are deposited in interest-bearing accounts with an institution which is
not insured by the Federal Deposit Insurance Corporation.
4. Investments in Bonds Available-For-Sale
The Partnership carries its investments in bonds as available-for-sale because
such investments are used to facilitate and provide flexibility for the
Partnership's obligations, including resolving circumstances which may arise in
connection with the Local Partnerships. Investments in bonds available-for-sale
are reflected in the accompanying balance sheets at estimated fair value.
As of March 30, 1999, certain information concerning investments in bonds
available-for-sale is as follows:
Gross Gross
Amortized unrealized unrealized Estimated
Description and maturity cost gains losses fair value
- ------------------------ ----------- ----------- ---------- ----------
Corporate debt securities
After one year through five years $ 757,216 $ 21,052 $ -- $ 778,268
After five years through ten years 1,665,944 43,421 (15,733) 1,693,632
After ten years 148,424 -- (2,802) 145,622
----------- ----------- ---------- ----------
2,571,584 64,473 (18,535) 2,617,522
----------- ----------- ---------- ----------
U.S. Treasury debt securities
After five years through ten years 522,118 8,305 -- 530,423
----------- ----------- ---------- ----------
U.S. government and agency securities
After five years through ten years 558,411 2,108 (9,140) 551,379
----------- ----------- ---------- ----------
$ 3,652,113 $ 74,886 $ (27,675) $3,699,324
=========== =========== ========= ==========
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
4. Investments in Bonds Available-For-Sale (continued)
As of March 30, 1998, certain information concerning investments in bonds
available-for-sale is as follows:
Gross Gross
Amortized unrealized unrealized Estimated
Description and maturity cost gains losses fair value
---------- ---------- ---------- ----------
Corporate debt securities
Within one year $ 202,580 $ 4,534 $ -- $ 207,114
After one year through five years 999,290 32,660 -- 1,031,950
After five years through ten years 1,719,550 38,362 (10,124) 1,747,788
After ten years 202,667 -- (3,353) 199,314
---------- ---------- ---------- ----------
3,124,087 75,556 (13,477) 3,186,166
---------- ---------- ---------- ----------
U.S. Treasury debt securities
After ten years 483,036 5,652 -- 488,688
---------- ---------- ---------- ----------
U.S. government and agency securities
After five years through ten years 584,978 10,434 -- 595,412
---------- ---------- ---------- ----------
$4,192,101 $ 91,642 $ (13,477) $4,270,266
========== ========== ========== ==========
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
5. Investment in Local Partnerships
As of March 30, 1999, the Partnership owns a limited partnership interest in the
following Local Partnerships:
1. 1989 Westview Arms Limited Partnership;
2. 2000-2100 Christian Street Associates ("2000 Christian Street");
3. Ann Ell Apartments Associates, Ltd. *;
4. Auburn Hills Apartments Limited Partnership;
5. Auburn Hills Townhouses Limited Partnership;
6. Batesville Family, L.P.;
7. Browning Road Phase I, L.P.;
8. Bruce Housing Associates, L.P.;
9. Canton Partners, L.P.;
10. Carrington Limited Dividend Housing Association Limited Partnership;
11. Christian Street Associates Limited Partnership ("Christian Street");
12. Cityside Apartments, Phase II, L.P. ("Cityside")*;
13. Cleveland Square, Ltd.;
14. College Avenue Apartments Limited Partnership;
15. Corrigan Square, Ltd.;
16. De Queen Villas Limited Partnership;
17. Dermott Villas Limited Partnership;
18. Eagle View, Ltd.;
19. Elm Hill Housing Limited Partnership;
20 Eudora Manor Limited Partnership;
21. Forest Village Housing Partnership ("Forest Village")*;
22. Harborside Housing Limited Partnership;
23. Hill Com I Associates Limited Partnership;
24. Hill Com II Associates Limited Partnership;
25. Hughes Manor Limited Partnership;
26. Ivy Family, L.P.;
27. Lakeside Housing Limited Partnership;
28. Lawrence Road Properties, Ltd.;
29. Lexington Estates Ltd., A Mississippi Limited Partnership;
30. Littleton Avenue Community Village, L.P.;
31. Lula Courts Ltd., L.P.;
32. Magee Elderly, L.P.;
33. Mirador del Toa Limited Partnership;
34. Nixa Heights Apartments, L.P.;
35. North Hills Farms Limited Partnership;
36. Patton Place Limited Partnership;
37. Plantersville Family, L.P.;
38. Powelton Gardens Associates;
39. Purvis Heights Properties, L.P.;
40. Queen Lane Investors;
41. Renova Properties, L.P.;
42. Santa Juanita Limited Dividend Partnership L.P. ("Santa Juanita");
43. Simpson County Family, L.P.;
44. Summers Village Limited Partnership;
45. Tchula Courts Apartments, L.P.;
46. The Pendleton (A Louisiana Partnership in Commendam);
47. Trenton Heights Apartments, L.P.;
48. Twin Pine Family, L.P.;
49. Village Creek Limited Partnership; and
50. York Park Associates Limited Partnership*.
* An affiliate of the General Partner is a general partner of and/or provides
services to the Local Partnership.
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
5. Investment in Local Partnerships (continued)
Although the Partnership generally owns a 98.9%-99% limited partnership interest
in the Local Partnerships, the Partnership and American Tax Credit Properties
L.P. ("ATCP"), a Delaware limited partnership and an affiliate of the
Partnership, together, in the aggregate, own a 99% Local Partnership Interest in
Santa Juanita; the ownership percentages of the Partnership and ATCP of Santa
Juanita are 64.36% and 34.64%, respectively. In addition, the Partnership and
American Tax Credit Properties III L.P. ("ATCP III"), a Delaware limited
partnership and an affiliate of the Partnership, together, in the aggregate, own
a 99% Local Partnership Interest in the following Local Partnerships:
The
Partnership ATCP III
----------- --------
Batesville Family, L.P. 37.25% 61.75%
Bruce Housing Associates, L.P. 37.25 61.75
Carrington Limited Dividend Housing
Association Limited Partnership 33.05 65.95
Ivy Family, L.P. 37.25 61.75
Lawrence Road Properties, Ltd. 37.25 61.75
Mirador del Toa Limited Partnership 39.94 59.06
Purvis Heights Properties, L.P. 37.25 61.75
Queen Lane Investors 50.50 48.50
The Properties are principally comprised of subsidized and leveraged low-income
multifamily residential complexes located throughout the United States and
Puerto Rico. The required holding period of each Property, in order to avoid
Low-income Tax Credit recapture, is fifteen years from the year in which the
Low-income Tax Credits commence on the last building of the Property (the
"Compliance Period"). The rents of the Properties are controlled by federal and
state agencies pursuant to applicable laws and regulations. Under the terms of
each of the Local Partnership's partnership agreements, the Partnership has made
capital contributions in the aggregate amount of $45,972,983, which includes
advances made to certain Local Partnerships. As of December 31, 1998, the Local
Partnerships have outstanding mortgage loans payable totaling approximately
$90,802,000 and accrued interest payable on such loans totaling approximately
$5,065,000, which are secured by security interests and liens common to mortgage
loans on the Local Partnerships' real property and other assets.
Equity in loss of investment in Local Partnerships is limited to the
Partnership's investment balance in each Local Partnership; any excess is
applied to other partners' capital in any such Local Partnership (see Note 1).
The amount of such excess losses applied to other partners' capital was
$530,083, $430,912 and $6,301,666 for the years ended December 31, 1998, 1997
and 1996, respectively, as reflected in the combined statements of operations of
the Local Partnerships reflected herein Note 5.
The Properties are subject to evaluation for the existence of permanent
impairment under applicable accounting guidelines, whereby the carrying value of
the real property may be adjusted downward based on results of operations and
other events. As a result of such evaluation, the accompanying statement of
operations of the Local Partnerships reflected herein Note 5 include loss from
impairment for the years ended December 31, 1996 of $7,314,852 in connection
with 2000 Christian Street and Christian Street (collectively the "Christian
Street Local Partnerships").
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
5. Investment in Local Partnerships (continued)
As a result of management's assessment of the carrying value of the investment
in Local Partnerships under applicable accounting guidelines (see Note 1), the
Partnership has reduced its investment in Cityside during the year ended March
30, 1999 by $622,764. Such loss is included in equity in loss of investment in
local partnerships in the accompanying statement of operations of the
Partnership of the partnership for the year ended March 30, 1999.
The combined balance sheets of the Local Partnerships as of December 31, 1998
and 1997 and the combined statements of operations of the Local Partnerships for
the years ended December 31, 1998, 1997 and 1996 are reflected on pages 29 and
30, respectively.
The combined balance sheets of the Local Partnerships as of December 31, 1998
and 1997 are as follows:
1998 1997
------------ ------------
ASSETS
Cash and cash equivalents $ 3,806,606 $ 4,208,629
Rents receivable 585,071 334,976
Escrow deposits and reserves 5,572,647 5,438,953
Land 4,180,673 4,180,673
Buildings and improvements (net of accumulated
depreciation of $46,950,143 and $42,156,402) 93,551,328 97,712,120
Intangible assets (net of accumulated amortization
of $1,050,154 and $962,322) 1,623,218 1,718,369
Other 1,125,436 1,082,118
------------ ------------
$110,444,979 $114,675,838
============ ============
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities
Accounts payable and accrued expenses $ 1,368,829 $ 1,386,630
Due to related parties 4,488,367 4,763,846
Mortgage loans 90,801,660 92,291,126
Notes payable 2,382,595 2,599,572
Accrued interest 5,065,190 4,603,549
Other 649,750 630,192
------------ ------------
104,756,391 106,274,915
------------ ------------
Partners' equity (deficit)
American Tax Credit Properties II L.P.
Capital contributions, net of distributions 44,985,009 45,045,349
Cumulative loss (31,452,077) (29,711,073)
------------ ------------
13,532,932 15,334,276
------------ ------------
General partners and other limited partners, including
ATCP and ATCP III
Capital contributions, net of distributions 3,283,927 3,363,369
Cumulative loss (11,128,271) (10,296,722)
------------ ------------
(7,844,344) (6,933,353)
------------ ------------
5,688,588 8,400,923
------------ ------------
$110,444,979 $114,675,838
============ ============
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
5. Investment in Local Partnerships (continued)
The combined statements of operations of the Local Partnerships for the years
ended December 31, 1998, 1997 and 1996 are as follows:
1998 1997 1996
------------- ------------ ------------
REVENUE
Rental $ 20,393,579 $ 20,068,350 $ 19,816,507
Interest and other 928,297 647,155 774,491
------------- ------------ ------------
TOTAL REVENUE 21,321,876 20,715,505 20,590,998
------------- ------------ ------------
EXPENSES
Administrative 3,477,599 3,326,215 3,061,254
Utilities 2,593,190 2,601,460 2,572,103
Operating, maintenance and other 4,268,481 4,180,233 4,511,247
Taxes and insurance 2,270,860 2,354,860 2,335,380
Financial (including amortization of
$95,152, $130,448 and $93,966) 6,487,950 6,680,294 6,717,508
Depreciation 4,796,349 5,141,966 6,020,910
Loss from impairment of long-lived assets 7,314,852
------------- ------------ ------------
TOTAL EXPENSES 23,894,429 24,285,028 32,533,254
------------- ------------ ------------
NET LOSS $ (2,572,553) $ (3,569,523) $(11,942,256)
============ ============ ============
NET LOSS ATTRIBUTABLE TO
American Tax Credit Properties II L.P. $ (1,741,004) $ (2,806,299) $ (5,180,297)
General partners and other limited partners,
including ATCP & ATCP III, which includes
specially allocated items of revenue to
certain general partners of $1,027,
$22,425 and $38,171, and $530,083, $430,912
and $6,301,666 of Partnership loss in
excess of investment (831,549) (763,224) (6,761,959)
------------- ------------ ------------
$ (2,572,553) $ (3,569,523) $(11,942,256)
============ ============ ============
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
5. Investment in Local Partnerships (continued)
Investment activity with respect to each Local Partnership for the year ended
March 30, 1999 is as follows:
Cash
Investment in Partnership's Adjustment to distributions Investment in
Local Investment equity in income carrying value received Local
Partnership during the (loss) for the during the year during the Partnership
balance as of year ended year ended ended 1999 year ended balance as of
March 30, March 30, December 31, March 30, March 30, March 30,
Name of Local Partnership 1998 1999 1998 1999 1999 1999
- ------------------------------------------- ----------- ---------- --------------- --------------- ------------- -------------
1989 Westview Arms Limited Partnership $ 64,052 $ -- $ 2,166 $ -- $ -- $ 66,218
2000-2100 Christian Street Associates -- 16,500 (16,500) (1) -- -- --
Ann Ell Apartments Associates, Ltd. -- 19,015 (19,015) (1) -- -- --
Auburn Hills Apartments Limited 20,449 -- (20,449) (1) -- -- --
Partnership
Auburn Hills Townhouses Limited 855,412 -- (37,189) -- (2,500) 815,723
Partnership
Batesville Family, L.P. -- -- -- (2) -- -- --
Browning Road Phase I, L.P. 8,201 -- 14,261 -- -- 22,462
Bruce Housing Associates, L.P. 49,703 -- (9,001) -- -- 40,702
Canton Partners, L.P. 11,464 -- (11,464) (1) -- -- --
Carrington Limited Dividend Housing
Association Limited Partnership 475,820 -- (57,083) -- -- 418,737
Christian Street Associates Limited -- 21,000 (21,000) (1) -- -- --
Partnership
Cityside Apartments, Phase II, L.P. 2,415,994 -- (560,256) (622,764)(3) -- 1,232,974
Cleveland Square, Ltd. 2,605 -- (2,005) (1) -- (600) --
College Avenue Apartments Limited 33,040 -- (33,040) (1) -- -- --
Partnership
Corrigan Square, Ltd. 39,576 -- (38,376) (1) -- (1,200) --
De Queen Villas Limited Partnership -- -- -- (2) -- -- --
Dermott Villas Limited Partnership 75,837 -- (45,112) -- -- 30,725
Eagle View, Ltd. 17,989 -- (7,484) -- -- 10,505
Elm Hill Housing Limited Partnership 2,646,590 -- (156,325) -- -- 2,490,265
Eudora Manor Limited Partnership 30,582 -- (11,787) -- -- 18,795
Forest Village Housing Partnership -- 39,303 (39,303) (1) -- -- --
Harborside Housing Limited Partnership 1,569,123 -- 82,589 -- (12,537) 1,639,175
Hill Com I Associates Limited Partnership 793,135 -- (23,676) -- -- 769,459
Hill Com II Associates Limited Partnership 534,727 -- (11,701) -- -- 523,026
Hughes Manor Limited Partnership 76,332 -- (16,725) -- -- 59,607
Ivy Family, L.P. 32,111 -- (8,230) -- -- 23,881
Lakeside Housing Limited Partnership 832,940 -- (190,184) -- (103,438) 539,318
Lawrence Road Properties, Ltd. -- -- -- (2) -- -- --
Lexington Estates Ltd. -- -- -- (2) -- -- --
Littleton Avenue Community Village, L.P. 291,880 -- (291,880) (1) -- -- --
Lula Courts Ltd., L.P. -- -- -- (2) -- -- --
Magee Elderly, L.P. 28,840 -- (6,521) -- -- 22,319
Mirador del Toa Limited Partnership -- -- -- (2) -- -- (4) --
Nixa Heights Apartments, L.P. 28,966 -- (10,719) -- -- 18,247
North Hills Farms Limited Partnership 2,616,433 -- 268,802 -- (2,500) 2,882,735
Patton Place Limited Partnership 438,227 -- (33,474) -- -- 404,753
Plantersville Family, L.P. 25,731 -- (17,311) -- -- 8,420
Powelton Gardens Associates 333,945 -- (35,786) -- -- 298,159
Purvis Heights Properties, L.P. 36,686 -- 8,043 -- (1,426) 43,303
Queen Lane Investors 197,189 -- (69,485) -- (5,326) 122,378
Renova Properties, L.P. 2,843 -- (2,843) (1) -- -- --
Santa Juanita Limited Dividend 215,205 -- (27,990) -- -- 187,215
Partnership L.P.
Simpson County Family, L.P. -- -- -- (2) -- -- --
Summers Village Limited Partnership 33,356 -- (29,492) -- -- 3,864
Tchula Courts Apartments, L.P. -- -- - (2) -- -- --
The Pendleton 154,914 -- (13,211) -- -- 141,703
Trenton Heights Apartments, L.P. 5,090 -- (5,090) (1) -- -- --
Twin Pine Family, L.P. 41,180 -- (14,074) -- -- 27,106
Village Creek Limited Partnership 92,097 -- (46,932) -- (1,518) 43,647
York Park Associates Limited Partnership 176,152 -- (176,152) (1) -- -- --
----------- -------- ----------- --------- --------- -----------
$15,304,416 $ 95,818 $(1,741,004) $(622,764) $(131,045) $12,905,421
=========== ======== =========== ========= ========= ===========
(1)The Partnership's equity in loss of an investment in a Local Partnership is
limited to the remaining investment balance.
(2)Additional equity in loss of investment is not allocated to the Partnership
until equity in income is earned.
(3)The Partnership has adjusted the investment's carrying value in accordance
with applicable accounting guidelines.
(4)A distribution of $388 was received and classified as other income from local
partnerships.
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
5. Investment in Local Partnerships (continued)
Investment activity with respect to each Local Partnership for the year ended
March 30, 1998 is as follows:
Cash
distributions
Partnership's Cash classified
Investment equity in distributions as other Investment
in Local Investment income (loss) received income in Local
Partnership during the for the year during the during the Partnership
balance as of year ended ended year ended year ended balance as of
Name of Local Partnership March30, March 30, December 31, March 30, March 30, March 30,
1997 1998 1997 1998 1998 1998
- ------------------------------------------- ------------- ----------- ------------- ------------ ----------- -----------
1989 Westview Arms Limited Partnership $ 54,461 $ -- $ 9,591 $ -- $ -- $ 64,052
2000-2100 Christian Street Associates -- -- -- (2) -- -- --
Ann Ell Apartments Associates, Ltd. -- 184,503 (184,503)(1) -- -- --
Auburn Hills Apartments Limited 52,531 -- (32,082) -- -- 20,449
Partnership
Auburn Hills Townhouses Limited 1,068,341 -- (207,929) (5,000) -- 855,412
Partnership
Batesville Family, L.P. 8,218 -- (8,218)(1) -- -- --
Browning Road Phase I, L.P. 34,129 -- (24,728) (1,200) -- 8,201
Bruce Housing Associates, L.P. 59,372 -- (9,669) -- -- 49,703
Canton Partners, L.P. 57,096 -- (42,052) (3,580) -- 11,464
Carrington Limited Dividend Housing
Association Limited Partnership 533,540 -- (57,720) -- -- 475,820
Christian Street Associates Limited -- -- --(2) -- -- --
Partnership
Cityside Apartments, Phase II, L.P. 2,962,238 -- (543,744) (2,500) -- 2,415,994
Cleveland Square, Ltd. 38,183 -- (34,978) (600) -- 2,605
College Avenue Apartments Limited 69,196 -- (35,336) (820) -- 33,040
Partnership
Corrigan Square, Ltd. 101,955 -- (61,179) (1,200) -- 39,576
De Queen Villas Limited Partnership -- -- --(2) -- -- --
Dermott Villas Limited Partnership 104,833 -- (28,996) -- -- 75,837
Eagle View, Ltd. 27,807 -- (9,818) -- -- 17,989
Elm Hill Housing Limited Partnership 3,066,618 -- (420,028) -- -- 2,646,590
Eudora Manor Limited Partnership 48,431 -- (17,849) -- -- 30,582
Forest Village Housing Partnership -- -- --(2) -- -- --
Harborside Housing Limited Partnership 1,481,827 -- 100,823 (13,527) -- 1,569,123
Hill Com I Associates Limited Partnership 813,579 -- (8,372) (12,072) -- 793,135
Hill Com II Associates Limited Partnership 562,428 -- (25,201) (2,500) -- 534,727
Hughes Manor Limited Partnership 109,065 -- (32,733) -- -- 76,332
Ivy Family, L.P. 42,428 -- (10,317) -- -- 32,111
Lakeside Housing Limited Partnership 1,229,071 -- (262,690) (133,441) -- 832,940
Lawrence Road Properties, Ltd. 7,732 -- (7,732)(1) -- -- --
Lexington Estates Ltd. -- -- --(2) (480) 480 --
Littleton Avenue Community Village, L.P. 684,961 -- (390,581) (2,500) -- 291,880
Lula Courts Ltd., L.P. 5,947 -- (5,467)(1) (480) -- --
Magee Elderly, L.P. 35,993 -- (7,153) -- -- 28,840
Mirador del Toa Limited Partnership -- -- --(2) (388) 388 --
Nixa Heights Apartments, L.P. 36,326 -- (7,360) -- -- 28,966
North Hills Farms Limited Partnership 2,482,774 -- 138,659 (5,000) -- 2,616,433
Patton Place Limited Partnership 465,226 -- (26,999) -- -- 438,227
Plantersville Family, L.P. 42,356 -- (16,625) -- -- 25,731
Powelton Gardens Associates 383,695 -- (49,750) -- -- 333,945
Purvis Heights Properties, L.P. 50,520 -- (13,834) -- -- 36,686
Queen Lane Investors 262,002 -- (61,032) (3,781) -- 197,189
Renova Properties, L.P. 20,606 -- (17,763) -- -- 2,843
Santa Juanita Limited Dividend 241,870 -- (26,665) -- -- 215,205
Partnership L.P.
Simpson County Family, L.P. -- -- --(2) -- -- --
Summers Village Limited Partnership 52,538 -- (19,182) -- -- 33,356
Tchula Courts Apartments, L.P. -- -- --(2) (480) 480 --
The Pendleton 183,135 -- (27,501) (720) -- 154,914
Trenton Heights Apartments, L.P. 14,824 -- (9,734) -- -- 5,090
Twin Pine Family, L.P. 57,622 -- (16,442) -- -- 41,180
Village Creek Limited Partnership 139,379 -- (45,764) (1,518) -- 92,097
York Park Associates Limited Partnership 426,298 -- (247,646) (2,500) -- 176,152
----------- ---------- ----------- ----------- ----------- -----------
$18,119,151 $ 184,503 $(2,806,299) $ (194,287) $ 1,348 $15,304,416
=========== ========== =========== =========== =========== ===========
(1) The Partnership's equity in loss of an investment in a Local Partnership is
limited to the remaining investment balance.
(2) Additional equity in loss of investment is not allocated to the Partnership
until equity in income is earned.
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
5. Investment in Local Partnerships (continued)
Property information for each Local Partnership as of December 31, 1998 is
as follows:
Mortgage Buildings and Accumulated
Name of Local Partnership loans payable Land improvements depreciation
--------------------------------------------------------- --------------- ---------------- ----------------- ----------------
1989 Westview Arms Limited Partnership $ 509,860 $ 20,275 $ 736,245 $ (191,395)
2000-2100 Christian Street Associates 2,647,362 -- -- --
Ann Ell Apartments Associates, Ltd. 2,305,690 199,645 2,838,576 (864,058)
Auburn Hills Apartments Limited Partnership 798,696 48,245 1,009,662 (244,655)
Auburn Hills Townhouses Limited Partnership 6,456,493 225,000 10,519,824 (4,308,975)
Batesville Family, L.P. 1,441,209 52,000 1,808,219 (519,311)
Browning Road Phase I, L.P. 855,027 43,000 1,002,515 (352,319)
Bruce Housing Associates, L.P. 1,110,021 16,000 1,420,798 (459,525)
Canton Partners, L.P. 1,442,732 35,000 1,819,130 (585,098)
Carrington Limited Dividend Housing
Association Limited Partnership 3,440,212 200,000 6,369,080 (2,037,049)
Christian Street Associates Limited Partnership 2,576,533 -- 1,791 --
Cityside Apartments, Phase II, L.P. 7,540,877 87,997 14,242,965 (4,550,324)
Cleveland Square, Ltd. 843,325 20,000 1,137,848 (379,860)
College Avenue Apartments Limited Partnership 604,399 24,600 997,538 (308,448)
Corrigan Square, Ltd. 1,451,300 63,358 1,871,646 (611,739)
De Queen Villas Limited Partnership 1,168,522 37,000 1,453,688 (384,720)
Dermott Villas Limited Partnership 1,065,681 15,000 1,348,882 (322,901)
Eagle View, Ltd. 413,259 35,000 496,686 (122,878)
Elm Hill Housing Limited Partnership 6,915,685 119,200 12,454,174 (4,026,779)
Eudora Manor Limited Partnership 752,462 16,000 936,661 (224,910)
Forest Village Housing Partnership 1,488,652 250,000 2,273,454 (739,726)
Harborside Housing Limited Partnership 3,461,819 39,400 6,583,302 (2,002,608)
Hill Com I Associates Limited Partnership 1,296,398 143,404 2,758,592 (866,564)
Hill Com II Associates Limited Partnership 1,027,502 112,110 2,110,131 (676,038)
Hughes Manor Limited Partnership 1,115,820 16,007 1,422,747 (338,129)
Ivy Family, L.P. 798,004 11,000 1,044,294 (342,231)
Lakeside Housing Limited Partnership 7,862,891 50,000 11,882,506 (3,844,215)
Lawrence Road Properties, Ltd. 760,577 50,000 929,308 (262,417)
Lexington Estates Ltd. 709,376 30,750 868,426 (321,051)
Littleton Avenue Community Village, L.P. 4,303,080 512,331 6,981,560 (2,124,273)
Lula Courts Ltd., L.P. 701,607 19,600 880,377 (314,413)
Magee Elderly, L.P. 591,718 30,000 715,103 (214,173)
Mirador del Toa Limited Partnership 1,887,322 105,000 2,329,996 (778,399)
Nixa Heights Apartments, L.P. 1,007,210 31,500 1,279,291 (373,434)
North Hills Farms Limited Partnership 2,807,527 525,000 11,576,255 (5,613,051)
Patton Place Limited Partnership 981,230 56,015 1,764,078 (396,796)
Plantersville Family, L.P. 600,084 12,000 755,120 (258,602)
Powelton Gardens Associates 993,656 29,207 1,934,005 (604,787)
Purvis Heights Properties, L.P. 1,149,032 47,000 1,455,334 (397,101)
Queen Lane Investors 1,572,111 60,301 2,742,479 (771,356)
Renova Properties, L.P. 639,370 22,700 798,794 (277,024)
Santa Juanita Limited Dividend Partnership L.P. 1,494,484 228,718 2,329,619 (770,901)
Simpson County Family, L.P. 814,897 24,700 1,011,224 (325,498)
Summers Village Limited Partnership 810,495 71,000 944,309 (234,126)
Tchula Courts Apartments, L.P. 737,957 10,000 912,250 (435,259)
The Pendleton 613,426 40,000 1,269,163 (445,451)
Trenton Heights Apartments, L.P. 440,946 29,200 575,804 (188,283)
Twin Pine Family, L.P. 615,502 7,000 784,136 (259,845)
Village Creek Limited Partnership 1,215,710 37,950 1,467,258 (379,331)
York Park Associates Limited Partnership 3,963,912 321,460 5,656,628 (1,900,117)
----------- ---------- ------------ ------------
$90,801,660 $4,180,673 $140,501,471 $(46,950,143)
=========== ========== ============ ============
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
5. Investment in Local Partnerships (continued)
Property information for each Local Partnership as of December 31, 1997 is as
follows:
Mortgage Buildings and Accumulated
Name of Local Partnership loans payable Land improvements depreciation
--------------------------------------------------------- --------------- ---------------- ----------------- ----------------
1989 Westview Arms Limited Partnership $528,748 $20,275 $736,245 $(173,819)
2000-2100 Christian Street Associates 2,822,479 -- -- --
Ann Ell Apartments Associates, Ltd. 2,350,410 199,645 2,838,576 (759,764)
Auburn Hills Apartments Limited Partnership 800,535 48,245 1,009,662 (220,118)
Auburn Hills Townhouses Limited Partnership 6,517,826 225,000 10,246,589 (3,809,452)
Batesville Family, L.P. 1,443,783 52,000 1,806,202 (474,324)
Browning Road Phase I, L.P. 860,934 43,000 999,617 (313,209)
Bruce Housing Associates, L.P. 1,112,700 16,000 1,418,598 (408,466)
Canton Partners, L.P. 1,449,534 35,000 1,812,723 (517,312)
Carrington Limited Dividend Housing
Association Limited Partnership 3,464,852 200,000 6,364,620 (1,803,962)
Christian Street Associates Limited Partnership 2,815,516 -- 721 --
Cityside Apartments, Phase II, L.P. 7,625,959 87,997 14,242,965 (4,032,450)
Cleveland Square, Ltd. 848,367 20,000 1,133,387 (334,100)
College Avenue Apartments Limited Partnership 606,954 24,600 997,538 (272,099)
Corrigan Square, Ltd. 1,459,790 63,358 1,862,552 (539,523)
De Queen Villas Limited Partnership 1,171,606 37,000 1,453,688 (343,283)
Dermott Villas Limited Partnership 1,068,171 15,000 1,348,882 (285,762)
Eagle View, Ltd. 415,863 35,000 496,686 (111,042)
Elm Hill Housing Limited Partnership 6,945,821 119,200 12,345,131 (3,746,810)
Eudora Manor Limited Partnership 753,953 16,000 936,661 (202,179)
Forest Village Housing Partnership 1,550,458 250,000 2,273,454 (652,784)
Harborside Housing Limited Partnership 3,625,485 39,400 6,583,302 (1,760,511)
Hill Com I Associates Limited Partnership 1,349,104 143,404 2,745,006 (762,289)
Hill Com II Associates Limited Partnership 1,061,757 112,110 2,105,354 (594,312)
Hughes Manor Limited Partnership 1,118,194 16,007 1,422,747 (302,779)
Ivy Family, L.P. 801,919 11,000 1,035,459 (304,284)
Lakeside Housing Limited Partnership 7,985,174 50,000 11,882,506 (3,420,710)
Lawrence Road Properties, Ltd. 762,171 50,000 928,273 (238,923)
Lexington Estates Ltd. 711,055 30,750 867,869 (289,959)
Littleton Avenue Community Village, L.P. 4,303,080 512,331 6,944,418 (1,858,439)
Lula Courts Ltd., L.P. 703,005 19,600 878,231 (282,252)
Magee Elderly, L.P. 592,809 30,000 714,094 (196,603)
Mirador del Toa Limited Partnership 1,891,902 105,000 2,327,341 (682,219)
Nixa Heights Apartments, L.P. 1,009,653 31,500 1,278,193 (350,728)
North Hills Farms Limited Partnership 2,994,864 525,000 11,487,928 (5,272,264)
Patton Place Limited Partnership 985,550 56,015 1,764,078 (352,694)
Plantersville Family, L.P. 601,762 12,000 751,194 (231,181)
Powelton Gardens Associates 1,025,667 29,207 1,934,005 (534,459)
Purvis Heights Properties, L.P. 1,153,999 47,000 1,443,465 (367,819)
Queen Lane Investors 1,580,073 60,301 2,735,277 (670,274)
Renova Properties, L.P. 640,657 22,700 791,905 (246,924)
Santa Juanita Limited Dividend Partnership L.P. 1,508,243 228,718 2,321,226 (688,156)
Simpson County Family, L.P. 816,364 24,700 1,010,582 (289,077)
Summers Village Limited Partnership 812,180 71,000 942,632 (208,116)
Tchula Courts Apartments, L.P. 739,611 10,000 911,318 (408,110)
The Pendleton (A Louisiana Partnership in Commendam); 651,771 40,000 1,269,163 (397,398)
Trenton Heights Apartments, L.P. 441,960 29,200 563,381 (176,251)
Twin Pine Family, L.P. 618,833 7,000 782,816 (231,553)
Village Creek Limited Partnership 1,218,140 37,950 1,465,634 (342,411)
York Park Associates Limited Partnership 3,971,885 321,460 5,656,628 (1,695,249)
------------ ----------- ------------- -----------
$ 92,291,126 $ 4,180,673 $ 139,868,522 $(42,156,402)
============ =========== ============= ============
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
5. Investment in Local Partnerships (continued)
The summary of property activity during the year ended December 31, 1998
is as follows:
Net change during
Balance as of the year ended Balance as of
December 31, 1997 December 31, 1998 December 31, 1998
----------------- ----------------- -----------------
Land $ 4,180,673 $ $ 4,180,673
Buildings and improvements 139,868,522 632,949 140,501,471
------------ ----------- ------------
144,049,195 632,949 144,682,144
Accumulated depreciation (42,156,402) (4,793,741) (46,950,143)
------------ ----------- ------------
$101,892,793 $(4,160,792) $97,732,001
============ =========== ===========
As a result of increasing deficits and declining occupancy, Forest Village filed
for protection under Chapter 11 of the federal Bankruptcy Code in the United
States Bankruptcy Court, Western District of Washington (the "Court") on March
25, 1999. As of June 1999, the Property is approximately 81% occupied and the
first and second mortgages are nine and seven months in arrears, respectively.
In addition, the Partnership made an advance of $44,000 during June 1999 in
order to pay for needed maintenance for vacant dwelling units. Forest Village
has not yet filed a plan of reorganization (the "Plan"). In the event that the
Plan is confirmed, it is anticipated that the Partnership will make additional
advances up to $200,000 in the aggregate to make needed capital improvements to
the Property. There can be no assurance that the Court will confirm the Plan.
The Partnership utilized reserves of approximately $39,000 during the year ended
March 30, 1999 in connection with Forest Village.
An affiliate of the General Partner is the temporary local general partner of
Forest Village. Since March 30, 1995, the Partnership has had a zero investment
balance in Forest Village and continues to account for such investment under the
equity method of accounting. The mortgage loans of Forest Village are
nonrecourse to the Partnership. Selected balance sheet data of Forest Village as
of December 31, 1998 includes land and building of $1,783,720 net of accumulated
depreciation of $739,726, total assets of $1,868,348, mortgage loans and accrued
interest of $1,609,889, total liabilities of $2,056,252 (of which $378,101
represents advances due to the Partnership) and partners' deficit of $187,904.
Selected balance sheet data of Forest Village as of December 31, 1997 includes
land and building of $1,870,670 net of accumulated depreciation of $652,784,
total assets of $1,916,450, mortgage loans and accrued interest of $1,610,286,
total liabilities of $2,082,568 (of which $387,624 represents advances due to
the Partnership) and partners' deficit of $166,118. Selected statement of
operations data for the year ended December 31, 1998 includes rental income of
$382,064, interest and other revenue of $29,577, interest expense of $134,297,
depreciation and amortization expenses of $89,928, operating and maintenance
expenses of $60,642, administrative expenses of $85,542, utilities expenses of
$52,385 and taxes and insurance expenses of $49,936. Selected statement of
operations data for the year ended December 31, 1997 includes rental income of
$402,404, interest and other revenue of $49,573, interest expense of $146,814,
depreciation and amortization expenses of $89,928, operating and maintenance
expenses of $44,803, administrative expenses of $91,868, utilities expenses of
$51,598 and taxes and insurance expenses of $49,407. Selected statement of
operations data for the year ended December 31, 1996 includes rental income of
$395,538, interest and other revenue of $37,390, interest expense of $154,745,
depreciation and amortization expenses of $91,569, operating and maintenance
expenses of $63,959, administrative expenses of $73,725, utilities expenses of
$42,291 and taxes and insurance expenses of $48,183.
Effective October 1, 1998, in an attempt to avoid potential adverse tax
consequences, Registrant and the local general partners of the Christian Street
Local Partnerships agreed to equally share the funding of operating deficits
through June 30, 2000 in the case of Christian Street and through September 30,
2000 in the case of 2000 Christian Street. Either party's obligation may be
cancelled in the event the anticipated annualized operating deficit exceeds
$168,000 in the case of Christian Street and $132,000 in the case of 2000
Christian Street. The local general partners of the Christian Street Local
Partnerships have agreed to cause the management agent to accrue and defer its
management fees during the period of the agreements. The accrued management fees
are included when determining the operating deficits. In addition, the
Partnership and the local general partners have each funded $37,500 to the
Christian Street Local Partnerships under the terms of the agreements through
March 30, 1999.
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
6. Transactions with General Partner and Affiliates
For the years ended March 30, 1999, 1998 and 1997, the Partnership paid
and/or incurred the following amounts to the General Partner and/or
affiliates in connection with services provided to the Partnership:
1999 1998 1997
---- ---- ----
Paid Incurred Paid Incurred Paid Incurred
---------- ---------- --------- ---------- -------- ----------
Management fees (see Note 8) $ 259,516 $ 299,307 $ 239,516 $ 299,307 $239,523 $ 299,307
For the years ended December 31, 1998, 1997 and 1996, the Local
Partnerships paid and/or incurred the following amounts to the General
Partner and/or affiliates in connection with services provided to the
Local Partnerships:
1998 1997 1996
---- ---- ----
Paid Incurred Paid Incurred Paid Incurred
--------- ---------- -------- ---------- --------- ----------
Property management fees $ 119,706 $ 118,582 $117,817 $ 117,694 $ 121,649 $ 124,326
Insurance and other services 68,242 68,242 69,999 70,078 62,504 64,315
7. Taxable Loss
A reconciliation of the financial statement net loss of the Partnership
for the years ended March 30, 1999, 1998 and 1997 to the tax return net
loss for the years ended December 31, 1998, 1997 and 1996 is as follows:
1999 1998 1997
---- ---- ----
Financial statement net loss for the years ended
March 30, 1999, 1998 and 1997 $ (2,759,975) $ (3,189,990) $ (5,506,972)
Add (less) net transactions occurring between:
January 1, 1996 to March 30, 1996 -- -- (76,176)
January 1, 1997 to March 30, 1997 -- (92,433) 92,433
January 1, 1998 to March 30, 1998 (117,828) 117,828
January 1, 1999 to March 30, 1999 116,775 -- --
------------- ------------ -------------
Adjusted financial statement net loss for the years
ended December 31, 1998, 1997and 1996 (2,761,028) (3,164,595) (5,490,715)
Adjustment to management fees pursuant to Internal
Revenue Code Section 267 39,791 57,344 59,791
Differences arising from equity in loss of
investment in local partnerships (618,842) 204,609 673,859
Other differences 2,925 2,986 2,180
------------- ------------ -------------
Tax return net loss for the years ended December 31,
1998, 1997 and 1996 $ (3,337,154) $ (2,899,656) $ (4,754,885)
============= ============ =============
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
7. Taxable Loss (continued)
The differences between the investment in local partnerships for tax and
financial reporting purposes as of December 31, 1998 and 1997 are as
follows:
1998 1997
---- ----
Investment in local partnerships - financial reporting $ 13,532,932 $ 15,334,276
Investment in local partnerships - tax 13,195,086 16,338,795
-------------- --------------
$ 337,846 $ (1,004,519
============== ==============
Payable to general partner in the accompanying balance sheets represents accrued
management fees not deductible for tax purposes pursuant to Internal Revenue
Code Section 267.
8. Commitments and Contingencies
Pursuant to the Partnership Agreement, the Partnership is required to pay the
General Partner an annual management fee ("Management Fee") and an annual
additional management fee ("Additional Management Fee") for its services in
connection with the management of the affairs of the Partnership, subject to
certain provisions of the Partnership Agreement. The annual Management Fee is
equal to .14% of all proceeds as of December 31 of any year, invested or
committed for investment in Local Partnerships plus all debts of the Local
Partnerships related to the Properties ("Invested Assets"). The Partnership
incurred a Management Fee of $209,514 for each of the three years ended March
30, 1999. The annual Additional Management Fee is equal to .06% of Invested
Assets. The Partnership incurred an Additional Management Fee of $89,793 for
each of the three years ended March 30, 1999. Such amounts are aggregated and
reflected under the caption management fees in the accompanying financial
statements. Unpaid Additional Management Fees in the amount of $585,806 and
$546,015 are recorded as payable to general partner in the accompanying balance
sheets as of March 30, 1999 and 1998, respectively.
In addition, pursuant to the Partnership Agreement, the Partnership is required
to pay ML Fund Administrators Inc., an affiliate of the Selling Agent, an annual
administration fee ("Administration Fee") and an annual additional
administration fee ("Additional Administration Fee") for its administrative
services provided to the Partnership. The annual Administration Fee is equal to
.14% of Invested Assets. The Partnership incurred an Administration Fee of
$209,514 for each of the three years ended March 30, 1999. The annual Additional
Administration Fee is subject to certain provisions of the Partnership Agreement
and is equal to .06% of Invested Assets. The Partnership incurred an Additional
Administration Fee of $89,793 for each of the three years ended March 30, 1999.
Such amounts are aggregated and reflected under the caption administration fees
in the accompanying financial statements. Unpaid Additional Administration Fees
in the amount of $585,806 and $546,025 are included in accounts payable and
accrued expenses in the accompanying balance sheets as of March 30, 1999 and
1998, respectively.
In connection with Forest Village, the Partnership facilitated the purchase of
the first mortgage bonds (the "Series A Bonds") at par by a group of investors
(the "Group"). Though no member of the Partnership is a participant of the
Group, the individuals are closely associated with the General Partner.
Notwithstanding the close association between the General Partner and the Group,
the Group has all the rights and remedies of the former first mortgagee. In
connection with this transaction, on November 12, 1993, the Partnership entered
into a Promissory Note and Loan Agreement (the "Note") with the Group for the
purpose of assisting the Partnership by providing advances to it so it may help
fund part of future operating deficits of Forest Village. The rate of interest
is 10.5% per annum on the principal balance from time to time outstanding. In
the event that no balance is outstanding under this Note, it shall continue as
an effective instrument at the option of the Group, to evidence future advances
or re-advances made by the Group. The entire outstanding principal balance and
all accrued and unpaid interest thereon shall be due and payable in full on the
earliest of (i) the final maturity of the Series A Bonds, (ii) the prepayment in
full or default under the terms of the loan or the Series A bonds or (iii) the
sale or other disposition of Forest Village. The Note is nonrecourse except to
the extent that the sum of the amounts advanced under the Note and amounts
received by the Partnership from Forest Village exceeds amounts paid by the
Partnership in connection with Forest Village. As of March 30, 1999 and 1998,
the Partnership has no outstanding advance due under the Note and has incurred
no interest charges for the years ended March 30, 1999, 1998 and 1997.
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
8. Commitments and Contingencies (continued)
The rents of the Properties, many of which receive rental subsidy payments,
including payments under Section 8 of Title II of the Housing and Community
Development Act of 1974 ("Section 8"), are subject to specific laws, regulations
and agreements with federal and state agencies. The subsidy agreements expire at
various times during and after the Compliance Periods of the Local Partnerships.
In October 1997, Congress passed the Multifamily Assisted Housing and Reform and
Affordability Act, whereby the United States Department of Housing and Urban
Development ("HUD") was given the authority to renew certain project based
Section 8 contracts expiring during HUD's fiscal year 1998, where requested by
an owner, for an additional one year term generally at or below current rent
levels, subject to certain guidelines. In October 1998, HUD issued a directive
related to project based Section 8 contracts expiring during HUD's fiscal year
1999 which defines owners' notification responsibilities, advises owners of
project based Section 8 properties of what their options are regarding the
renewal of Section 8 contracts, provides guidance and procedures to owners,
management agents, contract administrators and HUD staff on renewing Section 8
contracts, provides guidance on setting renewal rents and handling renewal rent
increases and provides the requirements and procedures for opting-out of a
Section 8 project based contract. The Partnership cannot reasonably predict
legislative initiatives and governmental budget negotiations, the outcome of
which could result in a reduction in funds available for the various federal and
state administered housing programs including the Section 8 program. Such
changes could adversely affect the future net operating income and debt
structure of any or all Local Partnerships currently receiving such subsidy or
similar subsidies. Seven Local Partnerships' Section 8 contracts, certain of
which cover only certain rental units, are scheduled to expire in 1999.
9. Fair Value of Financial Instruments
The following disclosure of the estimated fair value of financial instruments is
made in accordance with the requirements of SFAS No. 107, "Disclosures about
Fair Value of Financial Instruments." The estimated fair value amounts have been
determined using available market information, assumptions, estimates and
valuation methodologies.
Cash and Cash Equivalents
The carrying amount approximates fair value.
Investments in Bonds Available-For-Sale
Fair value is estimated based on market quotes provided by an independent
service as of the balance sheet dates.
Interest Receivable
The carrying amount approximates fair value due to the terms of the underlying
investments.
The estimated fair value of the Partnership's financial instruments as of March
30, 1999 and 1998 are disclosed elsewhere in the financial statements.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None
PART III
Item 10. Directors and Executive Officers of the Registrant
Registrant has no officers or directors. The General Partner manages
Registrant's affairs and has general responsibility and authority in all matters
affecting its business. The responsibilities of the General Partner are
currently carried out by Richman Tax Credits. The executive officers and
directors of Richman Tax Credits are:
Served in present
Name capacity since (1) Position held
-------------------------------------------- ------------------------------- ---------------------------------
Richard Paul Richman October 26, 1988 President and Director
Eric P. Richelson October 26, 1988 Vice President
Neal Ludeke October 26, 1988 Vice President and Treasurer
David A. Salzman October 26, 1988 Vice President
Gina S. Scotti October 26, 1988 Secretary
(1) Director holds office until his successor is elected and qualified.
All officers serve at the pleasure of the Director.
Richard Paul Richman, age 51, is the sole Director and President of Richman
Tax Credits. Mr. Richman is the President and principal stockholder of Richman
Group. Mr. Richman is involved in the syndication and management of residential
property. Mr. Richman is also a director of Wilder Richman Resources Corp., an
affiliate of Richman Tax Credits and the general partner of Secured Income L.P.,
a director of Wilder Richman Historic Corporation, an affiliate of Richman Tax
Credits and the general partner of Wilder Richman Historic Properties II, L.P.,
a director of Richman Tax Credit Properties Inc., an affiliate of Richman Tax
Credits and the general partner of the general partner of American Tax Credit
Properties L.P., a director of Richman Housing Credits Inc., an affiliate of
Richman Tax Credits and the general partner of the general partner of American
Tax Credit Properties III L.P. and a director of Richman American Credit Corp.,
an affiliate of Richman Tax Credits and the manager of American Tax Credit
Trust, a Delaware statutory business trust.
Eric P. Richelson, age 47, is a Vice President of Richman Tax Credits. Mr.
Richelson, formerly President of Wilder Richman Management Corporation, a
property management company affiliated with Richman Tax Credits, is a Vice
President of Richman Asset Management, Inc. ("RAM"), an affiliate of Richman Tax
Credits. Mr. Richelson's responsibilities in connection with RAM include
advisory services provided to a small business investment company.
Neal Ludeke, age 41, is a Vice President and the Treasurer of Richman Tax
Credits. Mr. Ludeke, a Vice President and the Treasurer of Richman Group, is
engaged primarily in the syndication, asset management and finance operations of
Richman Group. In addition, Mr. Ludeke is a Vice President and the Treasurer of
RAM. Mr. Ludeke's responsibilities in connection with RAM include advisory
services provided to a small business investment company and various partnership
management functions.
David A. Salzman, age 38, is a Vice President of Richman Tax Credits and
minority stockholder of Richman Group. Mr. Salzman is responsible for the
acquisition and development of residential real estate for syndication as a Vice
President of acquisitions of Richman Group.
Gina S. Scotti, age 43, is the Secretary of Richman Tax Credits. Ms. Scotti is a
Vice President and the Secretary of Richman Group. As the Director of Investor
Services, Ms. Scotti is responsible for communications with investors.
Item 11. Executive Compensation
Registrant has no officers or directors. Registrant does not pay the officers or
director of Richman Tax Credits any remuneration. During the year ended March
30, 1999, Richman Tax Credits did not pay any remuneration to any of its
officers or its director.
Item 12. Security Ownership of Certain Beneficial Owners and Management
As of June 28, 1999, no person or entity was known by Registrant to be the
beneficial owner of more than five percent of the Units. Richman Tax Credits is
wholly-owned by Richard Paul Richman.
Item 13. Certain Relationships and Related Transactions
The General Partner and certain of its affiliates are entitled to receive
certain fees and reimbursement of expenses and have received/earned fees for
services provided to Registrant as described in Notes 6 and 8 to the audited
financial statements included in Item 8 - "Financial Statements and
Supplementary Data" herein.
Transactions with General Partner and Affiliates
The net tax loss and Low-income Tax Credits generated by Registrant during the
year ended December 31, 1998 allocated to the General Partner were $33,372 and
$81,360, respectively. The net tax losses and Low-income Tax Credits generated
by the General Partner during the year ended December 31, 1998 (from the
allocation of Registrant discussed above) and allocated to Richman Tax Credits
were $21,157 and $51,577, respectively.
Indebtedness of Management
No officer or director of the General Partner or any affiliate of the foregoing
was indebted to Registrant at any time during the year ended March 30, 1999.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) Financial Statements, Financial Statement Schedules and Exhibits
(1) Financial Statements
See Item 8 - "Financial Statements and Supplementary Data."
(2) Financial Statement Schedules
No financial statement schedules are included because of the
absence of the conditions under which they are required or because
the information is included in the financial statements or the
notes thereto.
(3) Exhibits
Incorporated by
Exhibit Reference to
10.01 1989 Westview Arms Limited Partnership Exhibit 10.8 to Form 10-Q
Amended and Restated Certificate and Report dated September 29, 1990
Articles of Limited Partnership (File No. 0-18405)
10.02 2000-2100 Christian Street Associates Exhibit 10.8 to Form 10-Q
Amended and Restated Agreement of Report dated December 30, 1989
Limited Partnership (File No. 33-25337)
10.03 Ann Ell Apartments Associates, Ltd. Exhibit 10.1 to Form 10-Q
Second Amended and Restated Agreement of Report dated June 29, 1990
Limited Partnership (File No. 0-18405)
10.04 Auburn Hills Apartments Limited Exhibit 10.2 to Form 10-Q
Partnership Amended and Report dated June 29, 1990
Restated Certificate and Articles (File No. 0-18405)
of Limited Partnership
10.05 Auburn Hills Townhouses Limited Exhibit 10.01 to Form 10-K
Partnership Amended and Restated Report dated March 30, 1990
Agreement of Limited Partnership (File No. 0-18405)
10.06 Batesville Family, L.P. Amended and Exhibit 10.02 to Form 10-K
Restated Agreement of Limited Report dated March 30, 1990
Partnership (File No. 0-18405)
10.07 Batesville Family, L.P. First Exhibit 10.05 to Form 10-K
Amendment to the Amended and Report dated March 30, 1992
Restated Agreement of Limited Partnership (File No 0-18405)
10.08 Amendment No. 1 to the Batesville Family, L.P. Exhibit 10.06 to Form 10-K
Amended and Restated Report dated March 30, 1992
Agreement of Limited Partnership (File No. 0-18405)
10.09 Amendment No. 2 to the Batesville Exhibit 10.1 to Form 10-Q
Family, L.P. Amended and Restated Report dated December 30, 1990
Agreement of Limited Partnership (File No. 0-18405)
Incorporated by
Exhibit Reference to
10.10 Batesville Family, L.P. Amendment Exhibit 10.1 to Form 10-Q
No. 3 to Amended and Restated Report dated December 30, 1991
Agreement of Limited Partnership (File No. 0-18405)
10.11 Browning Road Phase I, L.P. Exhibit 10.1 to Form 10-Q
Amended and Restated Agreement Report dated September 29, 1990
of Limited Partnership (File No. 0-18405)
10.12 Browning Road Phase I, L.P. Exhibit 10.2 to Form 10-Q
First Agreement to Amended and Report dated September 29, 1990
Restated Agreement of Limited Partnership (File No. 0-18405)
10.13 Bruce Housing Associates, L.P. Exhibit 10.03 to Form 10-K
Amended and Restated Agreement of Report dated March 30, 1990
Limited Partnership (File No. 0-18405)
10.14 Amendment No. 1 to the Exhibit 10.12 to Form 10-K
Bruce Housing Associates, L.P. Report dated March 30, 1992
Amended and Restated Agreement (File No. 0-18405)
of Limited Partnership
10.15 Bruce Housing Associates, L.P. Exhibit 10.13 to Form 10-K
First Amendment to Amended and Restated Report dated March 30, 1992
Agreement of Limited Partnership (File No. 0-18405)
10.16 Amendment No. 2 to the Bruce Housing Exhibit 10.2 to Form 10-Q
Associates, L.P. Amended and Report dated December 30, 1990
Restated Agreement of Limited Partnership (File No. 0-18405)
10.17 Bruce Housing Associates, L.P. Exhibit 10.2 to Form 10-Q
Amendment No. 3 to the Amended Report dated December 30, 1991
and Restated Agreement of (File No. 0-18405)
Limited Partnership
10.18 Canton Partners, L.P. Exhibit 10.2 to Form 10-Q
Amended and Restated Agreement of Report dated December 30, 1989
Limited Partnership (File No. 33-25337)
10.19 Carrington Limited Dividend Housing Exhibit 10.3 to Form 10-Q
Association Limited Partnership Report dated September 29, 1990
Amended and Restated Agreement (File No. 0-18405)
of Limited Partnership
10.20 Carrington Limited Dividend Exhibit 10.4 to Form 10-Q
Housing Association Limited Partnership Report dated September 29, 1990
Second Amended and Restated (File No. 0-18405)
Agreement of Limited Partnership
10.21 Carrington Limited Dividend Housing Association Exhibit 10.3 to Form 10-Q
Limited Partnership Amendment No. 1 to the Report dated December 30, 1990
Second Amended and Restated Agreement (File No. 0-18405)
of Limited Partnership
10.22 Christian Street Associates Exhibit 10.2 to Form 10-Q
Limited Partnership Second Amended and Report dated September 29, 1989
Restated Agreement and Certificate (File No. 33-25337)
of Limited Partnership
Incorporated by
Exhibit Reference to
10.23 Cityside Apartments, Phase II, L.P. Exhibit 10.1 to Form 10-Q
Amended and Restated Agreement of Report dated September 29, 1989
Limited Partnership (File No. 33-25337)
10.24 Amendment No. 1 to Cityside Exhibit 10.22 to Form 10-K
Apartments, Phase II, L.P. Report dated March 30, 1992
Amended and Restated Agreement of (File No. 0-18405)
Limited Partnership
10.25 Cleveland Square, Ltd. Exhibit 10.07 to Form 10-K
Amended and Restated Agreement of Report dated March 30, 1990
Limited Partnership (File No. 0-18405)
10.26 College Avenue Apartments Exhibit 10.7 to Form 10-Q
Limited Partnership Amended Report dated December 30, 1989
and Restated and Articles of (File No. 33-25337)
Partnership in Commendam
10.27 Corrigan Square, Ltd. Exhibit 10.09 to Form 10-K
Amended and Restated Agreement of Report dated March 30, 1990
Limited Partnership (File No. 0-18405)
10.28 Critical Ventures Housing Exhibit 10.3 to Form 10-Q
Partnership III, A Washington Limited Report dated June 29, 1990
Partnership Amended and Restated (File No. 0-18405)
Agreement of Limited Partnership
10.29 De Queen Villas Limited Partnership Exhibit 10.11 to Form 10-K
Amended and Restated Certificate and Report dated March 30, 1990
Agreement of Limited Partnership (File No. 0-18405)
10.30 Dermott Villas Limited Partnership Exhibit 10.12 to Form 10-K
Amended and Restated Certificate and Report dated March 30, 1990
Agreement of Limited Partnership (File No. 0-18405)
10.31 Eagle View, Ltd. Second Amended and Exhibit 10.4 to Form 10-K
Restated Certificate of Limited Report dated June 29, 1990
Partnership and Limited Partnership Agreement (File No. 0-18405)
10.32 Elm Hill Housing Limited Partnership Exhibit 10.13 to Form 10-K
Second Amended and Restated Report dated March 30, 1990
Agreement and Certificate of Limited Partnership (File No. 0-18405)
10.33 Eudora Manor Limited Partnership Exhibit 10.14 to Form 10-K
Amended and Restated Agreement Report dated March 30, 1990
and Certificate of Limited Partnership (File No. 0-18405)
10.34 Forest Village Housing Partnership Exhibit 10.2 to Form 10-Q
Amendment No. 1 to Amended and Restated Report dated December 30, 1993
Agreement of Limited Partnership (File No. 0-18405)
10.35 Amended and Restated Agreement Exhibit 10.5 to Form 10-Q
of Limited Partnership Report dated September 29, 1990
Harborside Housing Limited Partnership (File No. 0-18405)
Incorporated by
Exhibit Reference to
10.36 Hill Com I Associates Limited Exhibit 10.9 to Form 10-Q
Partnership Amended and Restated Report dated December 30, 1989
Agreement and Certificate of Limited Partnership (File No. 33-25337)
10.37 Hill Com I Associates Exhibit 10.35 to Form 10-K
Limited Partnership First Amendment Report dated March 30, 1992
to Amended and Restated Agreement and (File No. 0-18405)
Certificate of Limited Partnership
10.38 Hill Com II Associates Limited Exhibit 10.10 to Form 10-Q
Partnership Amended and Restated Report dated December 30, 1989
Agreement and Certificate of Limited Partnership (File No. 33-25337)
10.39 Hill Com II Associates Limited Exhibit 10.37 to Form 10-K
Partnership First Amendment to Report dated March 30, 1992
Amended and Restated Agreement and (File No. 0-18405)
Certificate of Limited Partnership
10.40 Hughes Manor Limited Partnership Exhibit 10.17 to Form 10-K
Amended and Restated Certificate Report dated March 30, 1990
and Articles of Limited Partnership (File No. 0-18405)
10.41 Ivy Family, L.P. Amended and Exhibit 10.18 to Form 10-K
Restated Agreement of Limited Report dated March 30, 1990
Partnership (File No. 0-18405)
10.42 Amendment No. 1 to the Ivy Family, Exhibit 10.4 to Form 10-Q
L.P. Amended and Restated Agreement Report dated December 31, 1990
of Limited Partnership (File No. 0-18405)
10.43 Ivy Family, L.P. Amendment No. 3 to the Exhibit 10.3 to Form 10-Q
Amended and Restated Agreement Report dated December 30, 1991
of Limited Partnership (File No. 0-18405)
10.44 Second Amended and Restated Agreement Exhibit 10.6 to Form 10-Q
of Limited Partnership Lakeside Housing Report dated September 29, 1990
Limited Partnership (File No. 0-18405)
10.45 Lawrence Road Properties, Ltd. Exhibit 10.11 to Form 10-Q
Amended and Restated Agreement of Report dated December 30, 1989
Limited Partnership (File No. 33-25337)
10.46 Amendment No. 2 to the Lawrence Road Exhibit 10.5 to Form 10-Q
Properties, Ltd. Amended and Report dated December 31, 1990
Restated Agreement of Limited (File No. 0-18405)
Partnership
10.47 Lawrence Road Properties, Ltd. Exhibit 10.4 to Form 10-Q
Amendment No. 3 to the Amended and Restated Report dated December 30, 1991
Agreement of Limited Partnership (File No. 0-18405)
10.48 Lexington Estates Ltd., A Mississippi Exhibit 10.20 to Form 10-K
Limited Partnership Amended and Restated Report dated March 30, 1990
Agreement of Limited Partnership (File No. 0-18405)
Incorporated by
Exhibit Reference to
10.49 Littleton Avenue Community Exhibit 10.3 to Form 10-Q
Village, L.P. Amended and Report dated September 29, 1989
Restated Agreement of Limited Partnership (File No. 33-25337)
10.50 Lula Courts Ltd., L.P. Exhibit 10.22 to Form 10-K
Amended and Restated Agreement of Report dated March 30, 1990
Limited Partnership (File No. 0-18405)
10.51 Magee Elderly, L.P. Amended Exhibit 10.1 to Form 10-Q
and Restated Agreement of Report dated December 30, 1989
Limited Partnership (File No. 33-25337)
10.52 Mirador del Toa Limited Partnership Exhibit 10.5 to Form 10-Q
(A Delaware Limited Partnership) Report dated June 29, 1990
Amended and Restated Agreement (File No. 0-18405)
of Limited Partnership
10.53 Amendment No. 1 to the Mirador Exhibit 10.40 to Form 10-K
del Toa Limited Partnership Report dated March 30, 1991
(A Delaware Limited Partnership) (File No. 0-18405)
Amended and Restated Agreement
of Limited Partnership
10.54 Nixa Heights Apartments, L.P. Exhibit 10.24 to Form 10-K
Amended and Restated Agreement and Report dated March 30, 1990
Certificate of Limited Partnership (File No. 0-18405)
10.55 North Hills Farms Limited Exhibit 10.6 to Form 10-Q
Partnership Second Amended and Restated Report dated June 29, 1990
Agreement of Limited Partnership (File No. 0-18405)
10.56 First Amendment to the Exhibit 10.54 to Form 10-K
North Hills Farms Limited Partnership Report dated March 30, 1992
Second Amended and Restated Agreement (File No. 0-18405)
of Limited Partnership
10.57 Patton Place Limited Partnership Exhibit 10.25 to Form 10-K
Second Amended and Restated Agreement Report dated March 30, 1990
of Limited Partnership (File No. 0-18405)
10.58 Plantersville Family, L.P. Exhibit 10.26 to Form 10-K
Amended and Restated Agreement of Report dated March 30, 1990
Limited Partnership (File No. 0-18405)
10.59 Powelton Gardens Associates Exhibit 10.6 to Form 10-Q
Amended and Restated Agreement of Report dated December 30, 1989
Limited Partnership (File No. 33-25337)
10.60 Purvis Heights Properties, L.P. Exhibit 10.28 to Form 10-K
Amended and Restated Agreement of Report dated March 30, 1990
Limited Partnership (File No. 0-18405)
Exhibit Incorporated by
Reference to
10.61 Purvis Heights Properties, L.P. Exhibit 10.60 to Form 10-K
First Amendment to Amended and Report dated March 30, 1992
Restated Agreement of Limited Partnership (File No. 0-18405)
10.62 Amendment No. 1 to the Purvis Heights Exhibit 10.61 to Form 10-K
Properties, L.P. Amended and Restated Report dated March 30, 1992
Agreement of Limited Partnership (File No. 0-18405)
10.63 Amendment No. 2 to the Purvis Heights Exhibit 10.6 to Form 10-Q
Properties, L.P. Amended and Report dated December 31, 1990
Restated Agreement of Limited (File No. 0-18405)
Partnership
10.64 Purvis Heights Properties, L.P. Exhibit 10.5 to Form 10-K
Amendment No. 3 to the Report dated December 30, 1991
Amended and Restated (File No. 0-18405)
Agreement of Limited Partnership
10.65 Queen Lane Investors Amended and Exhibit 10.29 to Form 10-K
Restated Agreement and Certificate Report dated March 30, 1990
of Limited Partnership (File No. 0-18405)
10.66 Queen Lane Investors Amendment No. 1 Exhibit 10.7 to Form 10-Q
to Amended and Restated Agreement Report dated December 31, 1990
and Certificate of Limited Partnership (File No. 0-18405)
10.67 Renova Properties, L.P. Amended Exhibit 10.3 to Form 10-Q
and Restated Agreement of Report dated December 30, 1989
Limited Partnership (File No. 33-25337)
10.68 Santa Juanita Limited Dividend Exhibit 10.5 to Form 10-Q
Partnership Amended and Restated Report dated December 30, 1989
Agreement of Limited Partnership (File No. 33-25337)
10.69 Second Amendment of Limited Partnership Exhibit 10.68 to Form 10-K
of Santa Juanita Limited Dividend Partnership Report dated March 30, 1994
and Amendment No. 2 to the Amended and (File No. 0-18405)
Restated Agreement of Limited Partnership
10.70 Amendment No. 1 to Santa Juanita Limited Exhibit 10.1 to Form 10-Q
Dividend Partnership L.P. Amended and Report dated September 29, 1995
Restated Agreement of Limited Partnership (File No. 0-18405)
(Replaces in its entirety Exhibit 10.69 hereof.)
10.71 Amendment No. 2 to Santa Juanita Limited Exhibit 10.2 to Form 10-Q
Dividend Partnership L.P. Amended and Report dated September 29, 1995
Restated Agreement of Limited Partnership (File No. 0-18405)
10.72 Simpson County Family, L.P. Exhibit 10.4 to Form 10-Q
Amended and Restated Agreement of Report dated December 30, 1989
Limited Partnership (File No. 33-25337)
Incorporated by
Exhibit Reference to
10.73 Summers Village Limited Partnership Exhibit 10.7 to Form 10-Q
Amended and Restated Certificate Report dated June 29, 1990
of Limited Partnership and (File No. 0-18405)
Limited Partnership Agreement
10.74 Tchula Courts Apartments, L.P. Exhibit 10.33 to Form 10-K
Amended and Restated Agreement and Report dated March 30, 1990
Certificate of Limited Partnership (File No. 0-18405)
10.75 The Pendleton (A Louisiana Partnership Exhibit 10.7 to Form 10-Q
in Commendam) Third Amended and Report dated September 29, 1990
Restated Articles of Partnership (File No. 0-18405)
10.76 Trenton Heights Apartments, L.P. Exhibit 10.34 to Form 10-K
Amended and Restated Agreement and Report dated March 30, 1990
Certificate of Limited Partnership (File No. 0-18405)
10.77 Twin Pine Family, L.P. Amended and Exhibit 10.35 to Form 10-K
Restated Agreement of Limited Report dated March 30, 1990
Partnership (File No. 0-18405)
10.78 Village Creek Limited Partnership Exhibit 10.8 to Form 10-Q
Amended and Restated Certificate and Report dated June 29, 1990
Articles of Limited Partnership (File No. 0-18405)
10.79 York Park Associates Limited Partnership Exhibit 10.1 to Form 10-Q
Amended and Restated Agreement of Report dated June 29, 1989
Limited Partnership (File No. 33-25337)
10.80 Non-Negotiable Purchase Money Exhibit 10.8 to Form 10-Q
Promissory Notes dated as of Report dated December 30, 1990
January 19, 1990 (File No. 0-18405)
10.81 Non-Negotiable Purchase Money Exhibit 10.9 to Form 10-Q
Promissory Notes dated as of May 1, 1990 Report dated December 30, 1990
(File No. 0-18405)
10.82 Assignment and Assumption Agreements Exhibit 10.63 to Form 10-K
dated as of June 28, 1991 on the Report dated March 30, 1991
Non-Negotiable Purchase Money (File No. 0-18405)
Promissory Notes dated as of January 19, 1990
10.83 Assignment and Assumption Agreements Exhibit 10.64 to Form 10-K
dated as of June 28, 1991 on the Report dated March 30, 1991
Non-Negotiable Purchase Money (File No. 0-18405)
Promissory Notes dated as of May 1, 1990
10.84 Promissory Note and Loan Agreement Exhibit 10.1 to Form 10-Q
dated November 12, 1993 Report dated December 30, 1993
(File No. 0-18405)
Incorporated by
Exhibit Reference to
27 Financial Data Schedule
28.1 Pages 14 through 33, 47 through 70 Exhibit 28.1 to Form 10-K
and 86 through 88 of prospectus dated Report dated March 30, 1990
May 10, 1989 filed pursuant to Rule 424(b)(3) (File No. 0-18405)
under the Securities Act of 1933
28.2 Supplement No. 1 dated Exhibit 28.2 to Form 10-K
July 25, 1989 of Prospectus Report dated March 30, 1991
(File No. 0-18405)
28.3 Supplement No. 2 dated Exhibit 28.3 to Form 10-K
September 18, 1989 of Prospectus Report dated March 30, 1991
(File No. 0-18405)
(b) Reports on Form 8-K
No reports on Form 8-K were filed by Registrant during the last
quarter of the period covered by this report.
(c) Exhibits
See (a)(3) above.
(d) Financial Statement Schedules
See (a)(2) above.
SIGNATURES
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.
AMERICAN TAX CREDIT PROPERTIES II L.P.
(a Delaware limited partnership)
By: Richman Tax Credit Properties II L.P.,
General Partner
by: Richman Tax Credits Inc.,
general partner
Dated: June 29, 1999 /s/ Richard Paul Richman
------------- ------------------------
by: Richard Paul Richman
President
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 in
the capacities and on the dates indicated.
Signature Title Date
/s/ Richard Paul Richman President, Chief Executive Officer June 29, 1999
- ------------------------------------
----------------------
(Richard Paul Richman) and Director of the general partner
of the General Partner
/s/ Neal Ludeke Vice President and Treasurer of the June 29, 1999
- ------------------------------------
----------------------
(Neal Ludeke) general partner of the General Partner
(Principal Financial and Accounting
Officer of Registrant)