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FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

(Mark One)

(X)   QUARTERLY REPORT PERSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934.

      For the quarterly period ended June 30, 2002

                                             or

( )   TRANSITION REPORT PERSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934

      For the transition period from _______ to _______
Commission file number        0-19443

BOSTON CAPITAL TAX CREDIT FUND II LIMITED PARTNERSHIP.
(Exact name of registrant as specified in its charter)

Delaware

04-3066791

(State or other jurisdiction

(I.R.S. Employer

of incorporation or organization)

Identification No.)

 

One Boston Place, Suite 2100, Boston, Massachusetts  02108
(Address of principal executive offices)           (Zip Code)

Registrants telephone number, including area code (617)624-8900

(Former name, former address and former fiscal year, if changed since last report)

      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 preceeding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

X

  

No

_

 

 

BOSTON CAPITAL TAX CREDIT FUND II LIMITED PARTNERSHIP

QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2002

TABLE OF CONTENTS

FOR THE QUARTER ENDED JUNE 30, 2002

BALANCE SHEETS

Balance_Sheet_Series_07 Page 5

Balance_Sheet_Series_09 Page 6

Balance_Sheet_Series_10 Page 7

Balance_Sheet_Series_11 Page 8

Balance_Sheet_Series_12 Page 9

Balance_Sheet_Series_14 Page 10

Statement_of_Operations_Three_Months

Three Months Ended JUNE 30,

Statement_of_Operations_Series_07 Page 12

Statement_of_Operations_Series_09 Page 13

Statement_of_Operations_Series_10 Page 14

Statement_of_Operations_Series_11 Page 15

Statement_of_Operations_Series_12 Page 16

Statement_of_Operations_Series_14 Page 17

THREE MONths Ended JUNE 30,

Partners_Capital_Series_7 page 19

Partners_Capital_Series_9 page 19

Partners_Capital_Series_10 page 20

Partners_Capital_Series_11 Page 20

Partners_Capital_Series_12 Page 21

Partners_Capital_Series_14 Page 21

Statement_of_Cash_Flows

THREE Months Ended JUNE 30,

Cash_Flows_Series_7 page 23

Cash_Flows_Series_9 Page 24

Cash_Flows_Series_10 Page 25

Cash_Flows_Series_11 page 26

Cash_Flows_Series_12 page 27

Cash_Flows_Series_14 Page 28

 

 

 

 

 

 

 

 

 

 

 

 

 

BOSTON CAPITAL TAX CREDIT FUND II LIMITED PARTNERSHIP

QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2002

 

Notes_to_Financial_Statements

Note_A_Organization Page 29

Note_B_Accounting_Financial_Reporting Page 29

Note_C_Related_Party_Transaction page 30

Note_D_Investments page 32

Combined_Statements_of_Operations

Combined_Statements_Series_7 Page 33

Combined_Statements_Series_9 Page 34

Combined_Statements_Series_10 page 35

Combined_Statements_Series_11 Page 36

Combined_Statements_Series_12 page 37

Combined_Statements_Series_14 Page 38

NOTE_E_TAXABLE_LOSS Page 39

Liquidity page 40

Capital_Resources page 40

Results_of_Operations Page 42

Part_II_Other_Information

Signatures page 49

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Boston Capital Tax Credit Fund II Limited Partnership
BALANCE SHEETS

 

 

June 30,
2002 

(Unaudited)

March 31,
2002

(Audited)

ASSETS

INVESTMENTS IN OPERATING
   PARTNERSHIPS(Note D)


$ 33,247,629


$ 34,447,755

OTHER ASSETS

Cash and cash equivalents

1,270,935

1,132,906

Investements

313,604

411,470

Notes receivable

543,584

543,584

Deferred acquisition costs (Note B)

983,374

995,515

Other assets

 1,063,320

 1,037,563

$37,422,446

$38,568,793

LIABILITIES

Accounts payable

$    14,241

      3,224

Accounts payable affiliates (Note C)

25,236,370

24,608,073

Capital contributions payable (Note D)

    259,803

    259,804

 25,510,414

 24,871,101

PARTNERS' CAPITAL

Limited Partners

  

Units of limited partnership 
interest, $10 stated value per
BAC; 20,000,000 authorized BACs;
18,679,738 issued and outstanding




13,409,627




15,177,430

General Partner

(1,497,595)

(1,479,738)

 11,912,032

 13,697,692

$ 37,422,446

$ 38,568,793

 

 

 

The accompanying notes are an integral part of this statement

Table_of_Contents

Boston Capital Tax Credit Fund II Limited Partnership
BALANCE SHEETS

Series 7

 

 

June 30,
2002 

(Unaudited)

March 31,
2002

(Audited)

ASSETS

 

 

 

INVESTMENTS IN OPERATING
   PARTNERSHIPS(Note D)

$   223,168

$  263,836

OTHER ASSETS

Cash and cash equivalents

25,024

   8,525

Investments

-

-

Notes receivable

     -

-

Deferred acquisition costs (Note B)

-

-

Other assets

    77,204

   73,704
 

$   325,396

$   346,065

LIABILITIES

Accounts payable
  

$    12,861

$         -

Accounts payable affiliates (Note C)

1,445,724

1,417,866

Capital contributions payable (Note D)

        -

         -

1,458,585

1,417,866

PARTNERS' CAPITAL

Limited Partners

 
 

Units of limited partnership 
interest, $10 stated value per
BAC; 20,000,000 authorized BACs;
1,036,100 issued and outstanding




 (1,031,930)




(971,156)

General Partner

 (101,259)

 (100,645)

(1,133,189)

(1,071,801)

$    325,396

$   346,065

The accompanying notes are an integral part of this statement

Table_of_Contents

Boston Capital Tax Credit Fund II Limited Partnership
BALANCE SHEETS

Series 9



June 30,
2002 
(Unaudited)

March 31,
2002
(Audited)

ASSETS

  

 

INVESTMENTS IN OPERATING
   PARTNERSHIPS(Note D)

$4,607,100

$4,855,581

OTHER ASSETS

Cash and cash equivalents

327,552

215,236

Investments

-

97,866

Notes receivable

-

-

Deferred acquisition costs (Note B)

17,615

17,832

Other assets

  237,558

241,754


$5,189,825


$5,428,269

LIABILITIES

 

Accounts payable

$        -

$        -

Accounts payable affiliates (Note C)

5,900,231

5,758,079

 

Capital contributions payable (NoteD)

        -

-

5,900,231

5,758,079

PARTNERS' CAPITAL

Limited Partners

 
 

Units of limited partnership 
Interest, $10 stated value per
BAC; 20,000,000 authorized BACs;
4,178,029 issued and outstanding




(342,962)




33,828

General Partner

(367,444)

(363,638)

(710,406)

(329,810)

$5,189,825

$5,428,269

The accompanying notes are an integral part of this statement

Table_of_Contents

Boston Capital Tax Credit Fund II Limited Partnership
BALANCE SHEETS

Series 10



June 30,
2002 

(Unaudited)

March 31,
2002

(Audited)

ASSETS

  

 

INVESTMENTS IN OPERATING 
   PARTNERSHIPS (Note D)

$5,976,681

$5,996,854

OTHER ASSETS

 Cash and cash equivalents

51,255

47,305

Investments

99,621

99,621

 Notes receivable

-

-

 Deferred acquisition costs (Note B)

69,689

70,549

 Other assets

   42,775

   41,769

 

$6,240,021

$6,256,098

LIABILITIES

 

Accounts payable

$        -

$        -

 

Accounts payable affiliates (Note C)

3,850,396

3,761,520

 

Capital contributions payable (Note D)

        -

        -

3,850,396

3,761,520

PARTNERS' CAPITAL

Limited Partners

 
 

Units of limited partnership 
Interest, $10 stated value per
BAC; 20,000,000 authorized BACs;
2,428,925  issued and outstanding




2,576,542




2,680,445

General Partner

(186,917)

 (185,867)

2,389,625

2,494,578

$6,240,021

$6,256,098

 

The accompanying notes are an integral part of this statement

Table_of_Contents

Boston Capital Tax Credit Fund II Limited Partnership
BALANCE SHEETS

Series 11



June 30,
2002 

(Unaudited)

March 31,
2002

(Audited)

ASSETS

  

 

INVESTMENTS IN OPERATING   
   PARTNERSHIPS (NOTE D)

$ 6,328,397

$ 6,453,652

OTHER ASSETS

 

Cash and cash equivalents

251,909

  262,105

Investments

157,136

157,136

Notes receivable

-

-

 

Deferred acquisition costs (Note B)

35,322

35,759

 

Other assets

   111,585

99,944

$ 6,884,349

$ 7,008,596

LIABILITIES

 

Accounts payable 

$         -

$         -

 

Accounts payable affiliates (Note C)

3,010,294

2,928,874

 

Capital contributions payable (Note D)

    22,528

    22,528

 3,032,822

 2,951,402

PARTNERS' CAPITAL

Limited Partners

 
 

Units of limited partnership 
Interest, $10 stated value per
BAC; 20,000,000 authorized BACs;
2,489,599 issued and outstanding




4,027,697




4,231,307

General Partner

 (176,170)

 (174,113)

 3,851,527

 4,057,194

$ 6,884,349

$ 7,008,596

The accompanying notes are an integral part of this statement

Table_of_Contents

Boston Capital Tax Credit Fund II Limited Partnership
BALANCE SHEETS

Series 12



June 30,
2002 

(Unaudited)

March 31,
2002

(Audited)

ASSETS

  

 

INVESTMENTS IN OPERATING
   PARTNERSHIPS (NOTE D)    

$ 6,068,263

$ 6,265,977

OTHER ASSETS

 

Cash and cash equivalents

51,655

  48,058

Investments

-

-

Notes receivable

-

-

Deferred acquisition costs (Note B)

269,665

272,994

Other assets

   116,367

   116,367
 

$ 6,505,950

$ 6,703,396

LIABILITIES

Accounts payable 

$         -

$      -

Accounts payable affiliates (Note C)

3,754,716

3,655,860

Capital contributions payable (Note D)

    11,405

    11,405

 3,766,121

 3,667,265

PARTNERS' CAPITAL

Limited Partners

 
 

Units of limited partnership 
Interest, $10 stated value per
BAC; 20,000,000 authorized BACs;
2,972,795 issued and outstanding




2,969,690




3,263,029

General Partner

 (229,861)

 (226,898)

 2,739,829

 3,036,131

$ 6,505,950

$ 6,703,396

The accompanying notes are an integral part of this statement

Table_of_Contents

Boston Capital Tax Credit Fund II Limited Partnership
BALANCE SHEETS

Series 14



June 30,
2002 

(Unaudited)

March 31,
2002

(Audited)

ASSETS

  

 

INVESTMENTS IN OPERATING
   PARTNERSHIPS (NOTE D)    

$ 10,044,020

$ 10,611,855

OTHER ASSETS

 

Cash and cash equivalents

563,540

  551,677

Investments

56,847

56,847

 

Notes receivable

543,584

543,584

 

Deferred acquisition costs (Note B)

591,083

598,381

 

Other assets

    477,831

    464,025

$ 12,276,905

$ 12,826,369
     

LIABILITIES

    
     

 

Accounts payable

$      1,380

$      3,224

 

Accounts payable affiliates (Note C)

7,275,009

 7,085,874

Capital contributions payable (Note D)

    225,870

    225,871

  7,502,259

  7,314,969
     

PARTNERS' CAPITAL

    
     

Limited Partners

    

 
 

Units of limited partnership 
Interest, $10 stated value per
BAC; 20,000,000 authorized BACs;
5,574,290 issued and outstanding




5,210,591




5,939,977

General Partner

  (435,945)

  (428,577)

  4,774,646

  5,511,400

$ 12,276,905

$ 12,826,369

 

The accompanying notes are an integral part of this statement

Table_of_Contents

 

Boston Capital Tax Credit Fund II Limited Partnership

STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)

 


2002


2001
     

Income

    

  

Interest income

$       6,461

$      13,568

Other income

       6,959

       2,134
 

      13,420

      15,702

Share of loss from Operating 
  Partnerships(Note D)

 (1,188,719)

 (1,344,547)
     

Expenses

    

  

    

Partnership management fee (Note C)

528,265

562,852

Professional Fee

51,807

48,246

  

Amortization

12,139

12,139

General and administrative expenses

      18,150

      17,806

  

     610,361

 

     641,043

  NET LOSS

$ (1,785,660)

$ (1,969,888)

Net loss allocated to limited partners

$ (1,767,803)

$ (1,950,189)

Net loss allocated general partner

$    (17,857)

$    (19,699)

Net loss per BAC

$       (.51)

$       (.61)
     

The accompanying notes are an integral part of this statement

Table_of_Contents

 

Boston Capital Tax Credit Fund II Limited Partnership

STATEMENTS OF OPERATIONS

Three Months Ended June 30,

(Unaudited)

Series 7


2002


2001
     

Income

Interest income

$       44

$        28

  

Other income

        -

         -

       44

        28

Share of loss from Operating 
  Partnerships(Note D)

 (40,138)

  (79,368)

Expenses

  

Partnership management fee (Note C)   

16,585

28,287

Professional Fee

3,492

2,738

  

Amortization

-

-

  

General and administrative expenses

    1,217

     1,079

  

    21,294

    32,104

  NET LOSS

$ (61,388)

$ (111,444)

Net loss allocated to limited partners

$ (60,774)

$ (110,330)

Net loss allocated general partner

$    (614)

$   (1,114)

Net loss per BAC

$    (.06)

$     (.11)











The accompanying notes are an integral part of this statement

Table_of_Contents

 

Boston Capital Tax Credit Fund II Limited Partnership

STATEMENTS OF OPERATIONS

Three Months Ended June 30,
(Unaudited)

Series 9


2002


2001
     

Income

    

  

Interest income

$     1,004

$     2,569

  

Other income

       896

       252
 

     1,900

     2,821

Share of loss from Operating 
  Partnerships(Note D)

 (244,350)

 (298,234)
     

Expenses

    

  

    

Partnership management fee (Note C)   

125,669

134,833

Professional fee

8,837

10,543

Amortization

217

     217

General and administrative expenses

     3,423

    3,453

  

   138,146

   149,046

  NET LOSS

$ (380,596)

$ (444,459)
     

Net loss allocated to limited partners

$ (376,790)

$ (440,014)

Net loss allocated general partner

$   (3,806)

$   (4,445)

Net loss per BAC

$     (.09)

$     (.11)
     















The accompanying notes are an integral part of this statement

 

 

 

Table_of_Contents

 

 

 

Boston Capital Tax Credit Fund II Limited Partnership

STATEMENTS OF OPERATIONS

Three Months Ended June 30,
(Unaudited)

Series 10


2002


2001

Income

  

Interest income

$     1,144

$     1,565

Other income

     1,168

         -

     2,312

     1,565

Share of loss from Operating 
  Partnerships(Note D)

  (19,942)

  (93,837)

Expenses

  

Partnership management fee (Note C)   

76,151

84,853

Professional fee

7,722

6,968

Amortization

860

860

General and administrative expenses

     2,590

     2,606

  

    87,323

    95,287

  NET LOSS

$ (104,953)

$ (187,559)

Net loss allocated to limited partners

$ (103,903)

$ (185,683)

Net loss allocated general partner

$   (1,050)

$   (1,876)

Net loss per BAC

$     (.04)

$     (.08)












The accompanying notes are an integral part of this statement

Table_of_Contents

 

Boston Capital Tax Credit Fund II Limited Partnership

STATEMENTS OF OPERATIONS

Three Months Ended June 30,
(Unaudited)

Series 11


2002


2001
     

Income

    

  

Interest income

$     2,247

$     3,644

 

Other income

        -

      1,882 

 

     2,247

     5,526

Share of loss from Operating 
  Partnerships(Note D)

 (125,256)

 (212,862)
     

Expenses

    

  

    

Partnership management fee (Note C)   

72,784

71,190

Professional fee

7,137

6,389

  

Amortization

436

436

General and administrative expenses

     2,301

     2,327

  

    82,658

    80,342
     

 

 NET LOSS

$  (205,667)

$ (287,678)
     

Net loss allocated to limited partners

$  (203,610)

$ (284,801)
     

Net loss allocated general partner

$   (2,057)

$   (2,877)
     

Net loss per BAC

$     (.08)

$     (.11)
     















The accompanying notes are an integral part of this statement

 

 

 

Table_of_Contents

 

Boston Capital Tax Credit Fund II Limited Partnership

STATEMENTS OF OPERATIONS

Three Months Ended June 30,
(Unaudited)

Series 12


2002


2001
     

Income

    

  

Interest income

$       130

$       311

 

Other income

       150

      -

 

      280

      311

Share of loss from Operating 
  Partnerships(Note D)

 (196,130)

 (167,114)
     

Expenses

    

  

    

Partnership management fee (Note C)   

85,562

88,858

Professional fee

8,587

7,834

  

Amortization

3,329

3,329

General and administrative expenses

     2,974

    3,018

  

   100,452

   103,039
     

 

 NET LOSS

$ (296,302)

$ (269,842)
     

Net loss allocated to limited partners

$ (293,339)

$ (267,144)

Net loss allocated general partner

$   (2,963)

$   (2,698)

Net loss per BAC

$     (.10)

$     (.09)
     













 

 

 

 

 

 

 

Table_of_Contents

Boston Capital Tax Credit Fund II Limited Partnership

STATEMENTS OF OPERATIONS

Three Months Ended June 30,
(Unaudited)

Series 14


2002


2001
     

Income

    

  

Interest income

$     1,892

$     5,451

  

Other income

     4,745

      -
 

     6,637

     5,451

Share of loss from Operating 
  Partnerships(Note D)

 (562,903)

 (493,132)
     

Expenses

    

  

Partnership management fee (Note C)   

151,514

154,831

Professional Fee

16,032

13,774

 

Amortization

7,297

7,297

 

General and administrative expenses

     5,645

    5,323

  

   180,488

   181,225
     

  NET LOSS

$ (736,754)

$ (668,906)
     

Net loss allocated to limited partners

$ (729,386)

$ (662,217)

Net loss allocated general partner

$   (7,368)

$   (6,689)

Net loss per BAC

$     (.13)

$     (.11)











The accompanying notes are an integral part of this statement


Table_of_Contents

 

Boston Capital Tax Credit Fund II Limited Partnership

STATEMENTS OF CHANGES IN PARTNERS' CAPITAL

Three Months Ended June 30,
(Unaudited)

 





Assignees



General
Partner





Total
       

Partners' capital 
 (deficit)
  April 1, 2002



$ 15,177,430



$ (1,479,738)



$ 13,697,692

    

      
       

Net income (loss)

(1,767,803)

   (17,857)

(1,785,660)
       

Partners' capital 
 (deficit),
  June 30, 2002

 

$ 13,409,627

 

$ (1,497,595)

 

$ 11,912,032
       






























The accompanying notes are an integral part of this statement

Boston Capital Tax Credit Fund II Limited Partnership

STATEMENTS OF CHANGES IN PARTNERS' CAPITAL


Three Months Ended June 30,
(Unaudited)

Assignees

General
Partner

Total

Series 7

Partners' capital 
 (deficit)
  April 1, 2002



$  (971,156)



$ (100,645)



$(1,071,801)

Net income (loss)

   (60,774)

    (614)

  (61,388)

Partners' capital 
 (deficit)
  June 30, 2002    

 

$(1,031,930)

 

$ (101,259)

 

$(1,133,189)

Series 9

Partners' capital 
 (deficit)
  April 1, 2002



$     33,828



$ (363,638)



$  (329,810)

Net income (loss)

(376,790)

   (3,806)

(380,596)
       

Partners' capital 
 (deficit)
  June 30, 2002    

 

$ (342,962)

 

$ (367,444)

 

$ (710,406)
       








 

 

 

 

 

The accompanying notes are an integral part of these statements.

 

 

 

 

 

 

 

 

 

Table_of_Contents

 

Boston Capital Tax Credit Fund II Limited Partnership

STATEMENTS OF CHANGES IN PARTNERS' CAPITAL


Three Months Ended June 30,
(Unaudited)

 

Assignees

General
Partner

Total

Series 10

Partners' capital 
 (deficit)
  April 1, 2002



$ 2,680,445



$ (185,867)



$ 2,494,578

Net income (loss)

 (103,903)

   (1,050)

 (104,953)

Partners' capital 
 (deficit)
  June 30, 2002    

 

$ 2,576,542

 

$ (186,917)

 

$ 2,389,625

Series 11

Partners' capital 
 (deficit)
  April 1, 2002



$ 4,231,307



$ (174,113)



$ 4,057,194

Net income (loss)

 (203,610)

   (2,057)

 (205,667)
       

Partners' capital 
 (deficit)
  June 30, 2002   

 

$ 4,027,697

 

$ (176,170)

 

$ 3,851,527
       

















The accompanying notes are an integral part of this statement

 

 

 

Table_of_Contents

 

Boston Capital Tax Credit Fund II Limited Partnership

STATEMENTS OF CHANGES IN PARTNERS' CAPITAL

Three Months Ended June 30,
(Unaudited)

 

Assignees

General
Partner

Total

Series 12

Partners' capital 
 (deficit)
  April 1, 2002



$  3,263,029



$  (226,898)



$  3,036,131

Net income (loss)

(293,339)

   (2,963)

(296,302)
       

Partners' capital 
 (deficit)
  June 30, 2002   

 

$ 2,969,690

 

$ (229,861)

 

$ 2,739,829

Series 14

Partners' capital 
 (deficit)
  April 1, 2002



$  5,939,977



$  (428,577)



$  5,511,400

Net income (loss)

(729,386)

   (7,368)

(736,754)
       

Partners' capital 
 (deficit)
  June 30, 2002    

 

$ 5,210,591

 

$(435,945)

 

$ 4,774,646
       


















The accompanying notes are an integral part of this statement

Boston Capital Tax Credit Fund II Limited Partnership

STATEMENTS OF CASH FLOWS

Three Months Ended June 30,
(Unaudited)

 

2002

2001

Cash flows from operating activities:

    
     


   Net Loss


$(1,785,660)


$(1,969,888)

   Adjustments

    

Distributions from Operating Partnerships

11,408

2,211

Amortization

12,139

12,139

Share of Loss from Operating Partnerships

1,188,719

1,344,547

Changes in assets and liabilities

(Decrease) Increase in accounts payable

639,314

628,592

Decrease (Increase) in other assets

   (25,757)

  (3,838)
     
 

Net cash (used in) provided by
operating activities

   40,163

  13,763

   
     

Cash flows from investing activities:

    
     
 

Capital Contributions paid to Operating 
  Partnerships

-

-
 

Investments

97,866

  
 

Advances (made to) repaid from Operating 
  Partnerships

          -

         -
     

   Net cash (used in) provided by
     investing activities

    97,866

         -
     

Cash flows from financing activity:

    
     
 

Credit adjusters received from
(refunded to) Operating Partnerships

          -

         -
     
 

Net cash (used in) provided by
financing activity

          -

         -
     
     
 

INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS

    138,029

   13,763
     

Cash and cash equivalents, beginning

  1,132,906

  1,545,818
     

Cash and cash equivalents, ending

$  1,270,935

$  1,559,581
     


The accompanying notes are an integral part of this statement

Table_of_Contents

Boston Capital Tax Credit Fund II Limited Partnership

STATEMENTS OF CASH FLOWS

Three Months Ended June 30,
(Unaudited)

Series 7

 

2002

2001

Cash flows from operating activities:

    
     

   Net Loss

$  (61,388)

$  (111,444)

   Adjustments

    

Distributions from Operating Partnerships

530

-

Amortization

-

-

Share of Loss from Operating Partnerships

40,138

79,368
         

Changes in assets and liabilities

(Decrease) Increase in accounts payable

40,719

28,436

Decrease (Increase) in other assets

    (3,500)

        -
     
       
 

Net cash (used in) provided by
operating activities

     16,499

     (3,640)
     
     

Cash flows from investing activities:

    
     
 

Capital Contributions paid to Operating 

  Partnerships

-

-
 

Investments

-

  
 

Advances (made to) repaid from Operating 

  Partnerships

          -

         -
     

   Net cash (used in) provided by
     investing activities

          -

         -
     

Cash flows from financing activity:

    
     
 

Credit adjusters received from
(refunded to) Operating Partnerships

         -

         -
     
 

Net cash (used in) provided by
financing activity

         -

         -
     
     
 

INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS

16,499

(3,640)
     

Cash and cash equivalents, beginning

     8,525

     6,561
     

Cash and cash equivalents, ending

$    25,024

$     2,921
     


The accompanying notes are an integral part of this statement

Table_of_Contents

 

Boston Capital Tax Credit Fund II Limited Partnership

STATEMENTS OF CASH FLOWS

Three Months Ended June 30,
(Unaudited)

Series 9

 

2002

2001

Cash flows from operating activities:

    
     

   Net Loss

$(380,596)

$(444,459)

   Adjustments

    

Distributions from Operating Partnerships

4,131

1,026

Amortization

217

217

Share of Loss from Operating Partnerships

244,350

298,234

Changes in assets and liabilities

(Decrease) Increase in accounts payable

142,152

143,946

Decrease (Increase) in other assets

   4,196

   3,958
       
     
 

Net cash (used in) provided by
operating activities

   14,450

     2,922
     
     

Cash flows from investing activities:

    
     
 

Capital Contributions paid to Operating 

  Partnerships

-

-
 

Investments

97,866

-
 

Advances (made to) repaid from Operating 

  Partnerships

         -

         -
     

   Net cash (used in) provided by
     investing activities

    97,866

         -

Cash flows from financing activity:

    
     
 

Credit adjusters received from
(refunded to) Operating Partnerships

         -

         -
     
 

Net cash (used in) provided by
financing activity

         -

         -
     
     
 

INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS

112,316

2,922
     

Cash and cash equivalents, beginning

   215,236

   338,742
     

Cash and cash equivalents, ending

$   327,552

$   341,664
     


The accompanying notes are an integral part of this statement

Table_of_Contents

 

Boston Capital Tax Credit Fund II Limited Partnership

STATEMENTS OF CASH FLOWS

Three Months Ended June 30,
(Unaudited)

Series 10

 

2002

2001

Cash flows from operating activities:

    
     

   Net Loss

$  (104,953)

$  (187,559)

   Adjustments

    

Distributions from Operating Partnerships

231

230

Amortization

860

860

Share of Loss from Operating Partnerships

19,942

93,837

Changes in assets and liabilities

(Decrease) Increase in accounts payable

88,876

88,878

Decrease (Increase) in other assets

    (1,006)

   (1,406)
       
     
 

Net cash (used in) provided by
operating activities

  3,950

   (5,160)
     
     

Cash flows from investing activities:

    
     
 

Capital Contributions paid to Operating 

  Partnerships

-

-
 

Investments

-

-
 

Advances (made to) repaid from Operating 

  Partnerships

         -

         -
     

   Net cash (used in) provided by
     investing activities

         -

         -
     

Cash flows from financing activity:

    
     
 

Credit adjusters received from
(refunded to) Operating Partnerships

         -

         -
     
 

Net cash (used in) provided by
financing activity

         -

         -
     
     
 

INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS

3,950

(5,160)
     

Cash and cash equivalents, beginning

    47,305

   143,831
     

Cash and cash equivalents, ending

$   51,255

$   138,671
     


The accompanying notes are an integral part of this statement

Table_of_Contents

Boston Capital Tax Credit Fund II Limited Partnership

STATEMENTS OF CASH FLOWS

Three Months Ended June 30,
(Unaudited)

Series 11

 

2002

2001

Cash flows from operating activities:

    
     

   Net Loss

$  (205,667)

$  (287,678)

   Adjustments

    

Distributions from Operating Partnerships

-

80

Amortization

436

436

Share of Loss from Operating Partnerships

125,256

212,862

Changes in assets and liabilities

(Decrease) Increase in accounts payable

81,420

81,420

Decrease (Increase) in other assets

   (11,641)

   (2,238)
     
 

Net cash (used in) provided by
operating activities

   (10,196)

   4,882
     
     

Cash flows from investing activities:

    
     
 

Capital Contributions paid to Operating 

  Partnerships

-

-
 

Advances (made to) repaid from Operating 

  Partnerships

         -

         -
     

   Net cash (used in) provided by
     investing activities

         -

         -
     

Cash flows from financing activity:

    
     
 

Credit adjusters received from
(refunded to) Operating Partnerships

         -

         -
     
 

Net cash (used in) provided by
financing activity

         -

         -
     
     
 

INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS

(10,196)

4,882
     

Cash and cash equivalents, beginning

   262,105

   447,611
     

Cash and cash equivalents, ending

$   251,909

$   452,493
     


The accompanying notes are an integral part of this statement

 

 

 

 

 

 

 

Table_of_Contents

Boston Capital Tax Credit Fund II Limited Partnership

STATEMENTS OF CASH FLOWS

Three Months Ended June 30,
(Unaudited)

Series 12

 

2002

2001

Cash flows from operating activities:

    
     

   Net Loss

$(296,302)

$(269,842)

   Adjustments

    

Distributions from Operating Partnerships

1,584

651

Amortization

3,329

3,329

Share of Loss from Operating Partnerships

196,130

167,114

Changes in assets and liabilities

(Decrease) Increase in accounts payable

98,856

96,777

Decrease (Increase) in other assets

         -

         -
     
 

Net cash (used in) provided by
operating activities

   3,597

   (1,971)
     
     

Cash flows from investing activities:

    
     
 

Capital Contributions paid to Operating 

  Partnerships

-

-
 

Advances (made to) repaid from Operating 

  Partnerships

         -

         -
     

   Net cash (used in) provided by
     investing activities

         -

         -
     

Cash flows from financing activity:

    
     
 

Credit adjusters received from
(refunded to) Operating Partnerships

         -

         -
     
 

Net cash (used in) provided by
financing activity

         -

         -
     
     
 

INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS

3,597

(1,971)
     

Cash and cash equivalents, beginning

    48,058

    61,416
     

Cash and cash equivalents, ending

$    51,655

$    59,445
     


The accompanying notes are an integral part of this statement

Table_of_Contents

Boston Capital Tax Credit Fund II Limited Partnership

STATEMENTS OF CASH FLOWS

Three Months Ended June 30,
(Unaudited)

Series 14

 

2002

2001

Cash flows from operating activities:

    
     

   Net Loss

$(736,754)

$(668,906)

   Adjustments

    

Distributions from Operating Partnerships

4,932

224

Amortization

7,297

7,297

Share of Loss from Operating Partnerships

562,903

493,132

Changes in assets and liabilities

(Decrease) Increase in accounts payable

187,291

189,135

Decrease (Increase) in other assets

   (13,806)

  (4,152)
     
 

Net cash (used in) provided by
operating activities

    11,863

  (16,730)
     
     

Cash flows from investing activities:

    
     
 

Capital Contributions paid to Operating 

  Partnerships

-

-
 

Investments

-

-
 

Advances (made to) repaid from Operating 

  Partnerships

      -

         -
     

   Net cash (used in) provided by
     investing activities

         -

         -
     

Cash flows from financing activity:

    
     
 

Credit adjusters received from
(refunded to) Operating Partnerships

         -

         -
     
 

Net cash (used in) provided by
financing activity

         -

         -
     
     
 

INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS

11,863

(16,730)
     

Cash and cash equivalents, beginning

   551,677

   547,657
     

Cash and cash equivalents, ending

$   563,540

$   564,387
     


The accompanying notes are an integral part of this statement

Boston Capital Tax Credit Fund II Limited Partnership

NOTES TO FINANCIAL STATEMENTS

June 30, 2002

(Unaudited)

NOTE A - ORGANIZATION

Boston Capital Tax Credit Fund II Limited Partnership (the "Partnership") was
formed under the laws of the State of Delaware as of June 28, 1989, for the
purpose of acquiring, holding, and disposing of limited partnership interests
in operating partnerships which will acquire, develop, rehabilitate, operate
and own newly constructed, existing or rehabilitated low-income apartment
complexes ("Operating Limited Partnerships"). Effective as of June 1, 2001 there was a restructuring, and as a result, the Fund's general partner was reorganized as follows. The General Partner of the Partnerships continues to be Boston Capital Associates II Limited Partnership, a Delaware limited partnership. The general partner of the General Partner is BCA Associates Limited Partnership, a Massachusetts limited partnership, whose sole general partner is C&M Management, Inc., a Massachusetts corporation and whose limited partners are Herbert F. Collins and John P. Manning. Mr. Manning is the principal of Boston Capital Partners, Inc. The limited partner of the General Partner is Capital Investment Holdings, a general partnership whose partners are certain officers and employees of Boston Capital Partners, Inc., and its affiliates. The Assignor Limited Partner is BCTC II Assignor Corp., a Delaware corporation which is now wholly-owned by John P. Manning.

Pursuant to the Securities Act of 1933, the Partnership filed a Form S-11
Registration Statement with the Securities and Exchange Commission, effective
October 25, 1989, which covered the offering (the "Public Offering") of the
Partnership's beneficial assignee certificates ("BACs") representing
assignments of units of the beneficial interest of the limited partnership
interest of the Assignor Limited Partner. The Partnership registered
20,000,000 BACs at $10 per BAC for sale to the public in six series. The
Partnership sold 1,036,100 of Series 7 BACs, 4,178,029 of Series 9 BACs,
2,428,925 of Series 10 BACs, 2,489,599 of Series 11 BACs, 2,972,795 of Series
12 BACs, and 5,574,290 of Series 14 BACs. The Partnership issued the
last BACs in Series 14 on January 27, 1992. This concluded the Public
Offering of the Partnership.

NOTE B - ACCOUNTING AND FINANCIAL REPORTING POLICIES

The condensed financial statements included herein as of June 30, 2002
and for the three months then ended have been prepared by the Partnership, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. No BACs with respect to Series 8 and Series 13 were offered. The Partnership accounts for its investments in Operating Partnerships using the equity method, whereby the partnership adjusts its investment cost for its share of each Operating Partnership's results of operations and for any distributions received or accrued.

Table_of_Contents

Boston Capital Tax Credit Fund II Limited Partnership

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

June 30, 2002

(Unaudited)

NOTE - B ACCOUNTING AND FINANCIAL REPORTING POLICIES - CONTINUED

Costs incurred by the Partnership in acquiring the investments in
Operating Partnerships are capitalized to the investment account. The
Partnership's accounting and financial reporting policies are in conformity with generally accepted accounting principles and include adjustments in interim periods considered necessary for a fair presentation of the results of
operations. Such adjustments are of a normal recurring nature. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. It is suggested
that these condensed financial statements be read in conjunction with the
financial statements and the notes thereto included in the Partnership Annual
Report on Form 10-K.

On July 1, 1995, the Partnership began amortizing unallocated acquisition
costs over 330 months from April 1, 1995. As of June 30, 2002, the
Partnership has accumulated unallocated acquisition amortization totaling
$352,072. The breakdown of accumulated unallocated acquisition amortization
within the Partnership as of June 30, 2002 for Series 9, Series 10,
Series 11, Series 12, and Series 14 is $6,307, $24,950, $12,646, $96,547, and
$211,622, respectively.

NOTE C - RELATED PARTY TRANSACTIONS

The Partnership has entered into several transactions with various affiliates of the general partner, including Boston Capital Hoildings, LP., and Boston Capital Asset Management Limited Partnership as follows:

Accounts payable - affiliates at June 30, 2002 and 2001 represents
accrued general and administrative expenses, accrued partnership management fees, and advances from an affiliate of the general partner, which are payable to Boston Capital Holdings, LP., and Boston Capital Asset Management Limited
Partnership.

An annual partnership management fee based on .5 percent of the aggregate
cost of all apartment complexes owned by the Operating Partnerships has been
accrued to Boston Capital Asset Management Limited Partnership. The
partnership management fee accrued for the quarters ended June 30, 2002 and 2001 are as follows:

 

      2002

     2001

Series 7

$    26,193

$    28,287

Series 9

    142,152

    143,946

Series 10

     88,878

     88,878

Series 11

     81,420

     81,420

Series 12

     95,817

     95,817

Series 14

    189,135

    189,135
     
 

$   623,595

$   627,483

 

 

 

 

Table_of_Contents

 

Boston Capital Tax Credit Fund II Limited Partnership

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

June 30, 2002

(Unaudited)

 

As of June 30, 2002, an affiliate of the general partner advanced a
total of $401,714 to the Partnership to pay certain operating expenses and to
make advances and/or loans to Operating Partnerships. These advances are included in Accounts payable-affiliates. A total of $13,212 was advanced during the quarter ended June 30, 2002. Below is a table that breaks down the total advances, by series as of June 30, 2002.

            2002

Series 7

$161,547

Series 9

4,959

Series 12

62,550

Series 14

172,658
   
 

$401,714

 

Payables to affiliates will be repaid, without interest, from available cash flow or the proceeds of sales or refinancing of the Partnership's interests in Operating Partnerships.

Table_of_Contents

 

Boston Capital Tax Credit Fund II Limited Partnership

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

June 30, 2002

(Unaudited)

NOTE D - INVESTMENTS IN OPERATING LIMITED PARTNERSHIPS

At June 30, 2002 and 2001 the Partnership had limited partnership
interests in 307 Operating Partnerships which own apartment complexes. The number of Operating Partnerships in which the Partnership had limited partnership interests at June 30, 2002 and 2001 by series is as follows:

 

2002

2001

Series 7

14

14

Series 9

54

54

Series 10

45

45

Series 11

40

40

Series 12

53

53

Series 14

101

101
     
 

307

307
     

 

Under the terms of the Partnership's investment in each Operating
Partnership, the Partnership is required to make capital contributions to the
Operating Partnerships. These contributions are payable in installments over
several years upon each Operating Partnership achieving specified levels of
construction and/or operations.

The contributions payable at June 30, 2002 and 2001 by series are as
follows:

 

2002

    2001

Series 7

      $      -

$      -

Series 9

             -

   -

Series 10

             -

       -

Series 11

        22,526

  22,528

Series 12

        11,404

  11,405

Series 14

       225,872

 227,170
     
 

      $259,802

$261,103
     

The Partnership's fiscal year ends March 31 of each year, while all the

Operating Partnerships' fiscal years are the calendar year. Pursuant to the provisions of each Operating Partnership Agreement, financial results for each of the Operating Partnerships are provided to the Partnership within 45 days after the close of each Operating Partnership's quarterly period Accordingly, he current financial results available for the Operating Partnerships are for the three months ended March 31, 2002.

 

 

 

 

Table_of_Contents

 

Boston Capital Tax Credit Fund II Limited Partnership

NOTES TO FINANCIAL STATEMENTS

June 30, 2002

(Unaudited)

NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)

COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three Months Ended March 31,

(Unaudited)

Series 7

 

                2002

                2001
     

Revenues

    
 

Rental

$   580,948

$   555,312
 

Interest and other

     64,643

     18,475
 

   645,591

   573,787
     

Expenses

    
 

Interest

232,336

239,582
 

Depreciation and amortization

173,906

175,357
 

Operating expenses

   374,104

   349,321
 

   780,346

    764,260
     

NET LOSS

$  (134,755)

$  (190,473)
     
 

Net loss allocated to Boston Capital Tax Credit Fund II Limited 

Partnership



$   (40,138)



$   (79,368)
     
     
 

Net loss allocated to other partners


$    (1,348)


$    (1,905)
     
 

Net loss suspended

$   (93,269)

$  (109,200)

 

 

The Partnership accounts for its investments using the equity method of
accounting. Under the equity method of accounting, the Partnership adjusts
its investment cost for its share of each Operating Partnerships results of
operations and for any distributions received or accrued. However, the
Partnership recognizes individual operating losses only to the extent of
capital contributions. Excess losses are suspended for use in future years to
offset excess income.

Table_of_Contents

 

Boston Capital Tax Credit Fund II Limited Partnership

NOTES TO FINANCIAL STATEMENTS
June 30, 2002
(Unaudited)

NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)

COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three Months Ended March 31,
(Unaudited)

Series 9

 

                 2002

            2001
     

Revenues

    
 

Rental

$  2,733,552

$  2,659,321
 

Interest and other

    124,214

     97,946
 

  2,857,766

  2,757,267
     

Expenses

    
 

Interest

822,502

770,372
 

Depreciation and amortization

933,276

926,767
 

Operating expenses

  1,811,537

  1,675,870
 

  3,567,315

  3,373,009
     

NET LOSS

$ (709,549)

$ (615,742)
     
 

Net loss allocated to Boston Capital Tax Credit Fund 

II Limited Partnership



$ (244,350)



$  (298,234)
     
     
 

Net loss allocated to other partners


$    (7,095)


$    (6,157)
     
 

Net loss suspended

$ (495,104)

$  (311,351)

 

 

The Partnership accounts for its investments using the equity method of
accounting. Under the equity method of accounting, the Partnership adjusts
its investment cost for its share of each Operating Partnerships results of
operations and for any distributions received or accrued. However, the
Partnership recognizes individual operating losses only to the extent of
capital contributions. Excess losses are suspended for use in future years to
offset excess income.

 

Table_of_Contents

 

Boston Capital Tax Credit Fund II Limited Partnership

NOTES TO FINANCIAL STATEMENTS
June 30, 2002
(Unaudited)

NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)

COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three Months Ended March 31,
(Unaudited)

Series 10
 

                 2002

            2001
     

Revenues

    
 

Rental

$  1,981,548

$  1,958,501
 

Interest and other

     85,492

     83,937
 

  2,067,040

  2,042,438
     

Expenses

    
 

Interest

474,181

460,393
 

Depreciation and amortization

560,561

576,542
 

Operating expenses

  1,261,809

  1,210,760
 

  2,296,551

  2,247,695
     

NET LOSS

$  (229,511)

$  (205,257)
     
 

Net loss allocated to Boston Capital Tax Credit Fund 
II Limited Partnership



$   (19,942)



$   (93,837)
     
     
 

Net loss allocated to other partners


$    (2,295)


$    (2,053)
     
 

Net loss suspended

$  (207,274)

$  (109,367)

 

The Partnership accounts for its investments using the equity method of
accounting. Under the equity method of accounting, the Partnership adjusts
its investment cost for its share of each Operating Partnerships results of
operations and for any distributions received or accrued. However, the
Partnership recognizes individual operating losses only to the extent of
capital contributions. Excess losses are suspended for use in future years to
offset excess income.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table_of_Contents

 

 

Boston Capital Tax Credit Fund II Limited Partnership

NOTES TO FINANCIAL STATEMENTS
June 30, 2002
(Unaudited)

NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)

COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three Months Ended March 31,
(Unaudited)

Series 11

 

                  2002

            2001
     

Revenues

    

Rental

$  1,709,710

$  1,625,004
 

Interest and other

     85,469

     98,689
 

  1,795,179

  1,723,693
     

Expenses

    
 

Interest

469,789

   449,693
 

Depreciation and amortization

  596,167

   597,856
 

Operating expenses

  1,166,417

  1,129,526
 

  2,232,373

  2,177,075
     

NET LOSS

$ (437,194)

$ (453,382)
     
 

Net loss allocated to Boston Capital Tax Credit Fund 
II Limited Partnership



$  (125,256)



$  (212,862)
     
     
 

Net loss allocated to other partners


$    (4,372)


$    (4,534)
     

Netloss suspended

$  (307,566)

$  (235,986)

 

 

 

The Partnership accounts for its investments using the equity method of
accounting. Under the equity method of accounting, the Partnership adjusts
its investment cost for its share of each Operating Partnerships results of
operations and for any distributions received or accrued. However, the
Partnership recognizes individual operating losses only to the extent of
capital contributions. Excess losses are suspended for use in future years to
offset excess income.

 

Table_of_Contents

 

Boston Capital Tax Credit Fund II Limited Partnership

NOTES TO FINANCIAL STATEMENTS
June 30, 2002
(Unaudited)

NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)

COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three Months Ended March 31,
(Unaudited)

Series 12
 

               2002

            2001
     

Revenues

    

Rental

$  1,888,712

$  1,826,799
 

Interest and other

    128,399

    137,539
 

  2,017,111

  1,964,338
     

Expenses

    
 

Interest

532,058

478,990
 

Depreciation and amortization

640,399

620,812
 

Operating expenses

  1,309,446

  1,300,926
 

  2,481,903

  2,400,728
     

NET LOSS

$ (464,792)

$ (436,390)
     

 

Net loss allocated to Boston Capital Tax Credit Fund 
II Limited Partnership 



$  (196,130)



$  (167,114)
     
     
 

Net loss allocated to other partners


$    (4,648)


$    (4,364)
     

Net loss suspended

$  (264,014)

$  (264,912)

 

 

 

The Partnership accounts for its investments using the equity method of
accounting. Under the equity method of accounting, the Partnership adjusts
its investment cost for its share of each Operating Partnerships results of
operations and for any distributions received or accrued. However, the
Partnership recognizes individual operating losses only to the extent of
capital contributions. Excess losses are suspended for use in future years to
offset excess income.

 

 

 

 

 

 

 

 

 

Table_of_Contents

 

 

Boston Capital Tax Credit Fund II Limited Partnership

NOTES TO FINANCIAL STATEMENTS
June 30, 2002
(Unaudited)

NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)

COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three Months Ended March 31,
(Unaudited)

Series 14
 

                2002

            2001
     

Revenues

    
 

Rental

$  4,088,308

$  3,942,080
 

Interest and other

    317,646

    161,367
 

  4,405,954

  4,103,447
     

Expenses

    
 

Interest

1,203,597

  1,138,883
 

Depreciation and amortization

1,261,487

1,247,166
 

Operating expenses

  2,807,287

  2,551,272
 

  5,272,371

  4,937,321
     

NET LOSS

$ (866,417)

$ (833,874)
     
 

Net loss allocated to Boston Capital Tax Credit Fund 
II Limited Partnership



$ (562,903)



$ (493,132)
     
     
 

Net loss allocated to other partners


$    (8,664)


$    (8,339)
     

Net loss suspended

$  (294,850)

$  (332,403)

 

 

 

The Partnership accounts for its investments using the equity method of
accounting. Under the equity method of accounting, the Partnership adjusts
its investment cost for its share of each Operating Partnerships results of
operations and for any distributions received or accrued. However, the
Partnership recognizes individual operating losses only to the extent of
capital contributions. Excess losses are suspended for use in future years to
offset excess income.

Table_of_Contents

 

Boston Capital Tax Credit Fund II Limited Partnership

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 2002
(Unaudited)

NOTE E - TAXABLE LOSS

The taxable loss for the year ended December 31, 2002 is expected to differ from its loss for financial reporting purposes. This is primarily due to accounting differences in depreciation incurred by the Operating Partnerships and also differences between the equity method of accounting and the IRS accounting methods. No provision or benefit for income taxes has been included in these financial statements since taxable income or loss passes through to, and is reportable by, the partners and assignees individually.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table_of_Contents

 

 

Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations

Liquidity

The Partnership's primary source of funds was the proceeds of its Public Offering. Other sources of liquidity include (i) interest earned on capital contributions unpaid as of June 30, 2002 or on working capital reserves and (ii) cash distributions from operations of the Operating Partnerships in which the Partnership has invested in. These sources of liquidity, along with the Partnerships working capital reserve, are available to meet the obligations of the Partnership. The Partnership does not anticipate significant cash distributions from operations of the Operating Partnerships.

The Partnership has recognized other income as of June 30, 2002 in the amount of $6,959 of the total, $150 represents transfer fee income. This balance represents distributions received from Operating Partnerships, which the Partnership normally records as a decrease in the Investment in Operating Partnerships. Due to the equity method of accounting, the Partnership has recorded these distributions as other income.

The Partnership's currently accruing the annual partnership management fee to enable each series to meet current and future third party obligations. Pursuant to the Partnership Agreement, such liabilities will be deferred until the Partnership receives sales or refinancing proceeds from Operating Partnerships and at that time proceeds from such sales or refinancing will be used to satisfy such liabilities.

The Partnership has recorded $458,058 as payable to affiliates, which represents advances to pay certain third party operating expenses, advances and/or loans to Operating Partnerships, and accrued overhead allocations. The breakout between series is: $183,279 in Series 7, $4,959 in Series 9 and none in 10, $401 in Series 11, $96,759 in Series 12, and $172,660 in Series 14. These and any future advances or accruals will be paid, without interest, from available cash flow, reporting fees, or proceeds of sales or refinancing of the Partnership's interest in Operating Partnerships. The Partnership anticipates that there will be sufficient cash to meet future third party obligations.


Capital Resources

The Partnership offered BACs in a Public offering declared effective by the Securities and Exchange Commission on October 25, 1989. The Partnership received and accepted subscriptions for $186,337,017 representing 18,679,738 BACs from investors admitted as BAC Holders in Series 7 through Series 14 of the Partnership.

Table_of_Contents

 

 

 

Capital Resources (continued)

As of June 30, 2002 the Partnership had $763,255 in remaining net offering proceeds. Below is a table, which provides, by series, the equity raised, number of BAC's sold, final date BAC's were offered, number of properties acquired, and remaining proceeds. All capital contributions have been paid by Series 7,9 and 10; proceeds remaining listed for these series represent current cash balance.

 

 

Series

Equity

BAC's 

Final Close Date

Number of 

Properties

Proceeds 

Remaining

7

$ 10,361,000

1,036,100

12/29/89

14

$ 25,024

9

41,574,018

4,178,029

05/04/90

54

327,552

10

24,288,997

2,428,925

08/24/90

45

150,876

11

24,735,002

2,489,599

12/27/90

40

22,526

12

29,710,003

2,972,795

04/30/91

53

11,405

14

55,728,997

5,574,290

01/27/92

101

225,872
           
 

$186,398,017

18,679,738

  

307

$763,255
           

 

(Series 8) No BAC's with respect to Series 8 were offered.

(Series 13) No BAC's with respect to Series 13 were offered.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table_of_Contents

Results of Operations

As of June 30, 2002 and 2001 the Partnership held limited partnership interests in 307 Operating Partnerships. In each instance the Apartment Complex owned by the applicable Operating Partnership is eligible for the Federal Housing Tax Credit. Initial occupancy of a unit in each Apartment Complex which initially complied with the Minimum Set-Aside Test (i.e., initial occupancy by tenants with incomes equal to no more than a certain percentage of area median income) and the Rent Restriction Test (i.e., gross rent charged tenants does not exceed 30% of the applicable income standards) is referred to hereinafter as "Qualified Occupancy." Each of the Operating Partnerships and each of the respective Apartment Complexes are described more fully in the Prospectus or applicable report on Form 8-K. The General Partner believes that there is adequate casualty insurance on the properties.

The Partnership incurs a partnership management fee to Boston Capital Asset Management Limited Partnership in an amount equal to 0.5% of the aggregate cost of the apartment complexes owned by the Operating Partnerships, less the amount of certain asset management and reporting fees paid by the Operating Partnerships. The annual partnership management fee is currently being accrued. It is anticipated that all outstanding fees will be repaid from sale or refinancing proceeds. The partnership management fees incurred, net of reporting fees received, for the quarters ended June 30, 2002 and 2001 were $528,265 and $562,852, respectively.

The Partnership's investment objectives do not include receipt of significant cash distributions from the Operating Partnerships in which it has invested.

The Partnership's investments in Operating Partnerships have been made principally with a view towards realization of Federal Housing Tax Credits for allocation to its partners and BAC holders.

The General Partner and its affiliate, Boston Capital Asset Management Limited Partnership, monitor the operations of all the properties in the Partnership. The Operating Partnerships that are mentioned in the following discussion of each series' results of operations are being closely monitored so as to improve the overall results of each series' operations.

(Series 7) As of June 30, 2002 and 2001, the average Qualified Occupancy for the series was 100%. The series had a total of 14 properties, all of which were 100% at June 30, 2002.

For the three months being reported the series reflects a net loss from the Operating Partnerships of $134,755. When adjusted for depreciation, which is a non-cash item, the Operating Partnerships reflect positive operations of $39,151. This is an interim period estimate; it is not necessarily indicative of the final year end results.

The reduction in net loss per BAC in the current quarter is the result of a reduction in the share of loss from Operating Partnerships reported by the series. The reduction in the Operating Partnership loss is a result of losses suspended due to limitations of the equity method of accounting.

The city of Miami Beach issued a safety and health violations notice to Metropole Apartments Associates LP (Metropole Apartments) in the fourth quarter of 2000. The Operating General Partner evaluated the issue, conducted a needs assessment on the property, provided funding for corrective actions, and has addressed as many of the issues as possible. At this time the

 

Results of Operations-con't

management company reports that the issues have been satisfactorily addressed. The Residential section of the property has now achieved an occupancy rate of 95% and rent collections are strong. In addition, the leasing activity remains very strong. The Investment General Partner will continue to monitor this partnership.

 

(Series 9) As of June 30, 2002 and 2001, the average Qualified Occupancy for the series was 99.7%. The series had a total of 54 properties at June 30, 2002. Out of the total, 52 were at 100% Qualified Occupancy.

For the three months being reported the series reflects a net loss from the Operating Partnerships of $709,549. When adjusted for depreciation, which is a non-cash item, the Operating Partnerships reflect positive operations of $223,727. This is an interim period estimate; it is not necessarily indicative of the final year end results.

The reduction in net loss per BAC in the current quarter is the result of a reduction in the share of loss from Operating Partnerships reported by the series. The reduction in the Operating Partnership loss is a result of losses suspended due to limitations of the equity method of accounting.

In April of 2000, School Street II Limited Partnership (School Street Apts. II) inserted Marshall School Street II, LLC as the Operating General Partner and property management company. Since taking control, the management company has completed the capital improvements program and improved the tenant selection criteria. As a result, occupancy has increased and stabilized. During 2001, the average occupancy was 98%, and it increased to 99% for the first six months of 2002. The improved occupancy and tenant selection criteria increased cash flow significantly in 2001, but operations remained below breakeven due to high operating expenses. During 2001 operating expenses declined by 26% versus 2000. The Operating General Partner continues to fund any operating cash deficits. The mortgage, taxes, insurance and accounts payables are current.

The Operating Partnership Glennwood Hotel Investors (Glennwood Hotel) operated with an average occupancy of 62% for the year 2001. During the first six months of 2002, occupancy averaged 56.94%. As a result of the high vacancy rate it is not anticipated that the property will achieve breakeven operations in 2002. The area has an oversupply of affordable rental housing, including new Section 8 projects, which has negatively impacted the property. Without significant structural improvements that are at this time physically and financially unfeasible, the property will not be able to compete effectively in the market. The management agent continues to market the available units to the housing authority as well as performing various outreach efforts to attract qualified residents. The Operating General Partner continues to financially support the partnership. The mortgage, taxes, insurance and payables are current. The Investment General Partner continues to monitor this situation to ensure the property reac hes the end of the tax credit compliance period.

Warrensburg Estates Limited Partnership (Warrensburg Estates), located in Warrensburg, Missouri, operated below breakeven during the second quarter of 2002. The main reason for the operating deficits was low occupancy, which averaged 84% for the second quarter of 2002. This is a significant improvement over the first quarter average occupancy of 69%. The poor occupancy has stemmed from the public's inaccurate perception that the property is a nursing home. In addition, occupancy has been impacted by the lack of rental assistance and increased competition. Current management,

 

Results of Operations-con't

which took over at the beginning of 2001, has been working with local civic organizations in an effort to change the image of the property. The management company has also been advertising in local newspapers and contacting churches and local senior organizations in an effort to increase occupancy. Payment of the management fee has been deferred in order to keep the taxes, insurance and mortgage for the property current.

(Series 10) As of June 30, 2002 and 2001, the average Qualified Occupancy for the series was 99.9%. The series had a total of 45 properties at June 30, 2002, Out of the total, 44 were at 100% Qualified Occupancy.

For the three months being reported the series reflects a net loss from the Operating Partnerships of $229,511. When adjusted for depreciation, which is a non-cash item, the Operating Partnerships reflect positive operations of $331,050. This is an interim period estimate; it is not necessarily indicative of the final year end results.

The reduction in net loss per BAC in the current quarter is the result of a reduction in the share of loss from Operating Partnerships reported by the series. The reduction in the Operating Partnership loss is a result of losses suspended due to limitations of the equity method of accounting.

The 1999, 2000 and 2001 audited financial statements for Chuckatuck Square (Chuckatuck Square) were prepared assuming the partnership would continue as a Going Concern. Despite high occupancy, the property had suffered from excessive bad debt expenses due to the seasonal nature of employment opportunities in the local economy. As a result, the property was delinquent in funding its replacement reserves. In January of 2000, the partnership entered a two-year workout plan with Rural Development (RD) that allowed for reduced debt service payments. The workout plan called for funding reserves to cover preparation of vacant units, payment of insurance and real estate taxes, reduction in monthly debt service and rental assistance for existing residents to reduce collection problems. In addition, the plan required quarterly reports to be submitted to RD as to the progress of the workout plan. As part of the workout plan, the partnership entered into a supplementary payment agreement with RD that called for twen ty-four monthly payments of interest only in the amount of $622, beginning in January 2000. As of December 31 2001, unpaid interest of $28,713 was added to the mortgage payable. At December 31, 2001 the cumulative unpaid principle and interest, deferred under the plan, amount to $50,513. The management company reports that the property did not have any bad debt expenses in 2001. The twelve-month average occupancy for the year ending December 31, 2001 was 92% and as of August 1, 2002 occupancy is 100%. It appears that the property will be able to maintain the high occupancy because it currently maintains a small waiting list. The workout plan was concluded at the end of 2001 and was not renewed. The Operating General Partner continues to work with Rural Development to permanently restructure the loan terms and/or extend the workout agreement.

Lawton Apartments Company Limited Partnership (Village Commons) has historically had occupancy problems, which have resulted in delinquent taxes for the years 1998, 2000, and 2001. In May of 2002, Rural Development vouchered mortgage funds to pay real estate taxes for 1998, 2000, and 2001. The vouchered funds will be repaid over the remaining years of the mortgage. Additionally, the local municipality is considering a property tax abatement.

Occupancy problems are due to the lack of employment and the high level of affordable housing in the area. As of December 31, 2001 occupancy was 86%, however, the occupancy decreased to 82% by the end of the first quarter of 2002. As of June of 2002, the physical occupancy was 76%. The Regional

 

Results of Operations-con't

Property Manager expects the occupancy to reach 90% by the end of September of 2002. The management company will continue aggressive outreach programs in an attempt to attract prospective tenants. The mortgage, insurance and payables are current.

Centreville Apartments Company Limited (Wood Hollow Apartments) has historically suffered from low occupancy. For 2001, the occupancy averaged 90%, an increase from the prior year average of 87%. Physical occupancy improved in the second quarter of 2002 to 93%. Aggressive outreach programs have been successful in attracting prospective tenants. In May of 2002, Rural Development vouchered mortgage funds to pay real estate taxes for 1998-2001. The vouchered funds will be repaid over remaining years of the mortgage. The mortgage, insurance and payables are current.

(Series 11) As of June 30, 2002 and 2001 the average Qualified Occupancy for the series was 100%. The series had a total of 40 properties, all of which were 100% at June 30, 2002.

For the three months being reported the series reflects a net loss from the Operating Partnerships of $437,195. When adjusted for depreciation, which is a non-cash item, the Operating Partnerships reflect positive operations of $158,972. This is an interim period estimate; it is not necessarily indicative of the final year end results.

The reduction in net loss per BAC in the current quarter is the result of a reduction in the share of loss from Operating Partnerships reported by the series. The reduction in the Operating Partnership loss is a result of losses suspended due to limitations of the equity method of accounting.

In June of 2001,the Investment General Partner became aware that unauthorized distributions in excess of Rural Development's (mortgage) allowable limits were made to the Operating General Partner of Aspen Square Limited Partnership (Aspen Square Apartments), Copper Creek Limited Partnership (Copper Creek Apartments) and Sierra Springs Limited Partnership (Sierra Springs Apartments). These unauthorized distributions have been classified as receivables from the Operating General Partner on the Operating Partnerships audited financial statements as of December 31, 2001 and 2000. The Investment General Partner is actively seeking the immediate return of these funds through the Estate of the Operating General Partner. Claims in the name of the individual Partnerships have been filed against the Estate. In addition, the Investment General Partner is continuing to weigh all available options to expedite the return of the unauthorized distributions and continues to monitor the Partnerships.

Franklin School Associates (Franklin School Apartments) operated above breakeven during the second quarter of 2002 but is still showing a loss for the year. The Operating Partnership is likely to continue to show deficits with respect to operational issues until funds can be obtained for required capital improvements. The Operating General Partner is currently working with the property manager to develop a scope of work and to obtain funds for those improvements. Occupancy for the second quarter 2002 increased to 86%, but is still down from 90% for all of 2001. After obtaining a 100% occupancy during the first quarter of 2001, the property has had difficulty achieving an occupancy above the low 90's. The lower than expected occupancy stems from both current conditions at the property and in the local market. In January

Results of Operations-con't

2002, the property was cited for housing code violations by the Montana Department of Commerce. The citation letter noted several areas of deferred maintenance that the property manager is working to correct. The Investment General Partner has funded $30,000 through June 2002 to the partnership, and the mortgage, taxes and insurance are all current. In May 2002, a resident of the property was killed by another resident outside the building. The incident resulted in extensive press coverage and has created a sense of unease among many tenants. It is likely that the homicide will result in higher turnover and slow leasing in the coming months.

The Operating General Partner of London Arms/Lyn Mar Limited (London Arms Apartments) commissioned a capital needs assessment during the first quarter of 2001. Several deferred maintenance items were identified and later targeted for completion. The management company reports that the work has all been completed. The residential section of the property has achieved an occupancy rate of 98% and the leasing activity remains very strong. The Investment General Partner will continue to monitor this Partnership.

(Series 12) As of June 30, 2002 and 2001 the average Qualified Occupancy for the series was 99.9%. The series had a total of 53 properties at June 30, 2002. Out of the total, 52 were at 100% qualified occupancy.

For the three months being reported the series reflects a net loss from the Operating Partnerships of $464,793. When adjusted for depreciation, which is a non-cash item, the Operating Partnerships reflect positive operations of $175,606. This is an interim period estimate; it is not necessarily indicative of the final year end results.

In June of 2001,the Investment General Partner became aware that unauthorized distributions in excess of Rural Development's (mortgage) allowable limits were made to the Operating General Partner of Cananche Creek Limited Partnership (Cananche Creek Apartments) and Shawnee Ridge Limited Partnership (Shawnee Ridge Apartments). These unauthorized distributions have been classified as receivables from the Operating General Partner on the Operating Partnerships audited financial statements as of December 31, 2001 and 2000. The Investment General Partner is actively seeking the immediate return of
these funds through the Estate of the Operating General Partner. Claims in the name of the individual Partnerships have been filed against the Estate. In addition, the Investment General Partner is weighing all available options to expedite the return of the unauthorized distributions and continues to monitor the partnerships.

Union Baptist Plaza, Limited Partnership (Union Baptist Plaza Apartments), located in Springfield, Illinois, suffers from below breakeven operations due to high operating expenses. The 2000 audited financial statement was prepared assuming the Partnership would continue as a Going Concern. The Partnership suffered recurring operating losses and its total liabilities exceed its total assets. The property has achieved a history of high occupancy. However, high operating expenses, particularly taxes and utilities, prevent the property from achieving breakeven operations. Due to the lack of cash flow, the 1999 and 2000 property taxes became delinquent and accrued in the amount of $42,810 plus interest. In the first quarter of 2002, the Partnership, working with the first mortgage lender, utilized reserve funds to bring the delinquent property taxes current. The lender and Investment Limited Partner are currently working on the refinance of the existing first mortgage loan which will significantly impro ve the cash flow of the property. The Operating General Partner is actively seeking to transfer its General Partner interest to this property. Negotiations are ongoing with the Springfield Housing

Results of Operations-con't

Authority as a potential replacement. The goal is to find a strategic partner, preferably a nonprofit organization that is capable of operating the property more efficiently on an ongoing basis.

(Series 14) As of June 30, 2002 and 2001 the average Qualified Occupancy for the series was 99.8%. The series had a total of 101 properties at June 30, 2002. Out of the total, 98 were at 100% Qualified Occupancy.

For the three months being reported the series reflects a net loss from the Operating Partnerships of $866,417. When adjusted for depreciation, which is a non-cash item, the Operating Partnerships reflect positive operations of $395,070. This is an interim period estimate; it is not necessarily indicative of the final year end results.

The property owned by Glenhaven Park Partners, A California L.P. (Glenhaven Estates) continues to suffer from excessive operating expenses compared to operating income. Effective October 4, 2000, San Mar Properties of Fresno, California assumed the role of management agent. An affiliate of San Mar Properties, Central Valley Affordable Housing LLC, assumed the General Partner interest effective December 31, 2000, and is now responsible for funding all future operating deficits. In February 2001 the property was no longer able to meet the mortgage obligations. The Operating General Partner with the assistance from the Investment General Partner attempted to restructure the debt, but was unsuccessful. The Operating General Partner advanced funds to bring five of the mortgage notes current. The Operating General Partner has agreed to keep these units tax credit compliant. The mortgage holder with the seven remaining mortgage notes was unwilling to negotiate a restructure of those loans. Therefore, in a n attempt to stay of relief from foreclosure on the seven remaining notes, the Partnership filed for Chapter 11 bankruptcy protection on October 2, 2001. The US Trustee approved cash collateral, which permitted the Partnership to remit a reduced monthly mortgage payment to the lender until January 15, 2002. The Reorganization Plan involved bringing current one of the seven delinquent loans in order to remain compliant with IRS Section 42 minimum requirements, thus avoiding disallowance and full recapture of the tax credits. This plan has been successful and shortly after January 15th the General Partner filed a motion of dismissal of bankruptcy protection. The bankruptcy was dismissed in February 2002. The Operating General Partner and Investment Limited Partner attempted negotiations with the lender to again avoid foreclosure on the remaining units but negotiations were not successful. The six remaining units were foreclosed upon and removed from the Partnership. As a result of the foreclo sure the Partnership will face partial recapture of tax credits previously taken of approximately $50,000. The remaining six units are 100% occupied as of June 2002. The Partnership has filed for a welfare tax exemption for 2001-2002 and 2002-2003, and is currently awaiting a decision by the state. If granted, the tax exemption will have a positive effect on the cash flow.

The property owned by Haven Park Partners II, A California LP (Glenhaven Park II) continues to suffer from excessive operating expenses compared to operating income. New management put in place in the fourth quarter of 2000 has been successful in maintaining strong occupancy, however the Operating Partnership continues to operate below breakeven. Management was able to

Results of Operations-con't

bring operating expenses to more acceptable levels in 2001, and although the Partnership did not generate positive cash flow, the deficit was much smaller than in prior years. This trend continues through June 2002, with operations running slightly below breakeven. The property has filed for welfare tax exemption. According to the management company the County of Merced has approved the exemption pending the receipt of additional Partnership documents. If the exemption is received, it is expected to be retroactive to 2000 and is expected to have a positive effect on cash flow. Physical occupancy at Haven Park II has stabilized at 100% through the second quarter of 2002.

The properties owned by Haven Park Partners III, A California L.P. (Glenhaven Park III) and Haven Park Partners IV, A California L.P. (Glenhaven Park IV) continue to suffer from excessive operating expenses compared to operating income. New management put in place in the fourth quarter of 2000 has been successful in maintaining strong occupancy, however the Operating Partnerships are not operating at breakeven. Operating expenses remain high, and debt service requirements are more than 50% of the operating income. Both Partnerships continue to operate below breakeven into the second quarter of 2002. The Partnerships have filed for welfare tax exemption. According to the management company the County of Merced has approved the exemption pending the receipt of additional Partnership documentation. If the exemption is received, it is expected to be retroactive to 2000. This is expected have a positive effect on cash flow. As of March 31, 2002 physical occupancy at Haven Park III and Haven Park IV was 100% and 97%, respectively.

Summer Lane Limited Partnership (Summer Lane Apartments) has historically suffered from low occupancy and consequently negative cash flow. The primary cause of the low occupancy has been a lack of rental assistance. The Operating General Partner was recently able to secure an additional 5 units of rental assistance for this property from Rural Development. As a result, the property achieved 92% occupancy as of June 30, 2002. Operating expenses are within average levels and the condition of the property appears to be exceptional. The real estate taxes, though current, are being paid by Rural Development as a result of inadequate cash flow from the property. The property is making repayment to Rural Development with the monthly mortgage payment. There are no deposits being made to the replacement reserve account. The General Partner has requested that Rural Development restructure the mortgage to reduce the payme nts and authorize funds for a rehabilitation loan.

Woodfield Commons Limited Partnership (Rainbow Commons Apartments) received 60-Day letters issued by the IRS stating that the Operating Partnership had not met certain IRC Section 42 requirements for the tax years 1993-1998. The 60-Day letters were the result of an IRS audit of the Operating Partnership's tenant files. As a result of their audit, the IRS has proposed an adjustment that would disallow 100% of past and future tax credits. The adjustment would also include interest and penalties on the past tax credit being disallowed. The Investment General Partner and its counsel along with the Operating General Partner and its counsel have filed an appeal and continue ongoing discussions with the appellate officer. The Investment General Partner believes that the audit is nearing completion, and while an actual settlement has not yet been reached, there is a likelihood that the potential disallowance of 100% of credits could be reduced by 50% or more. In the absence of a settlement as of the date of this filing, the auditors continue to include a contingency footnote in the annual financial statement (Note H) which is a part of the most recently filed 10-K dated, March 31, 2002.

 

 

 

 

 

 

 

Table_of_Contents

 

PART II - OTHER INFORMATION

 

 

 

Item 1.

Legal Proceedings
   
 

None
   

Item 2.

Changes in Securities
   
 

None
   

Item 3.

Defaults upon Senior Securities
   
 

None
   

Item 4.

Submission of Matters to a Vote of Security 
Holders
   
 

None
   

Item 5.

Other Information
   
 

None
   

Item 6.

Exhibits and Reports on Form 8-K
   
 

(a)Exhibits
   
   

99 (a) Certification pursuant to 18 U.S.C. Section 1350, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herein
     
   

99 (b) Certification pursuant to 18 U.S.C. Section 1350, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herein
   
 

(b)Reports on Form 8-K
   
   

None

 

 

 

 

 

 

 

 

 

 

Table_of_Contents

 

 

 

 

 

 

SIGNATURES

Pursuant to the requirements of Section 13 of the Securities

Exchange Act of 1934, the Partnership has duly caused this Report to be

signed on its behalf by the undersigned, thereunto duly authorized.

 

Boston Capital Tax Credit Fund II Limited Partnership
 

By:

Boston Capital Associates II L.P.
General Partner
   
 

By:

BCA Associates Limited Partnership,
General Partner
   
 

By:

C&M Management Inc.,
General Partner
   

Date: August 20, 2002

By:

/s/ John P. Manning
     
   

John P. Manning