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 31, 2003
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ------- EXCHANGE ACT OF 1934
Commission File Number 0-20476
INDEPENDENCE TAX CREDIT PLUS L.P.
---------------------------------
(Formerly known as Independence Tax Credit Plus Program)
(Exact name of registrant as specified in its charter)
Delaware 13-3589920
- ------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
625 Madison Avenue, New York, New York 10022
- ---------------------------------------- ----------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212)
421-5333
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Beneficial Assignment Certificates (including underlying Limited
Partnership Interests)
(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 requirements for the past 90 days. Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes No X
----- -----
The approximate aggregate book value of the voting and non-voting common
equity held by non-affiliates of the Registrant as of September 30, 2002 was
$23,099,000, based on Limited Partner equity as of such date.
DOCUMENTS INCORPORATED BY REFERENCE
None
PART I
Item 1. Business.
General
- -------
Independence Tax Credit Plus L.P. (the "Partnership") is a limited partnership
which was formed under the laws of the State of Delaware on November 7, 1990.
The general partner of the Partnership is Related Independence Associates L.P.,
a Delaware limited partnership (the "General Partner"). The general partner of
the General Partner is Related Independence Associates Inc., a Delaware
corporation.
On July 1, 1991, the Partnership commenced a public offering (the "Offering") of
Beneficial Assignment Certificates ("BACs") representing assignments of limited
partnership interests in the Partnership ("Limited Partnership Interests"),
managed by Related Equities Corporation (the "Dealer Manager"), pursuant to a
prospectus dated July 1, 1991, as supplemented by Master Supplement No. 1a
thereto dated April 28, 1992 and Master Supplement No. 2a thereto dated November
3, 1992 (as so supplemented, the "Prospectus").
The Partnership received $76,786,000 of Gross Proceeds from the Offering from
5,351 investors and no further issuance of BACs is anticipated.
The Partnership was formed to invest as a limited partner in other partnerships
("Local Partnerships") owning apartment complexes ("Apartment Complexes" or
"Properties") that are eligible for the low-income housing tax credit ("Housing
Tax Credit") enacted in the Tax Reform Act of 1986, some of which may also be
eligible for the historic rehabilitation tax credit ("Historic Tax Credit" and
together with Housing Tax Credits, "Tax Credits"). The Partnership's investment
in each Local Partnership represents from 98% to 98.99% of the Partnership's
interests in the Local Partnership. As of March 31, 2003, the Partnership had
acquired interests in twenty-eight Local Partnerships. As of March 31, 2003,
approximately $59,700,000 (not including acquisition fees of approximately
$4,500,000) of net proceeds had been invested in Local Partnerships of which
approximately $28,000 remains to be paid to the Local Partnerships, as certain
benchmarks such as occupancy levels must be attained prior to the release of the
funds. The Partnership does not intend to acquire additional properties. See
Item 2, Properties, below.
The investment objectives of the Partnership are to:
1. Entitle qualified BACs holders to Tax Credits over the period of the
Partnership's entitlement to claim Tax Credits (for each Property, generally ten
years from the date of investment or, if later, the date the Property is placed
in service; referred to herein as the "Credit Period") with respect to each
Apartment Complex.
2. Preserve and protect the Partnership's capital.
3. Participate in any capital appreciation in the value of the Properties and
provide distributions of Sale or Refinancing Proceeds upon the disposition of
the Properties.
4. Allocate passive losses to individual BACs holders to offset passive income
that they may realize from rental real estate investments and other passive
activities, and allocate passive losses to corporate BACs holders to offset
business income.
One of the Partnership's objectives is to entitle qualified BACs holders to Tax
Credits over the Credit Period. Each of the Local Partnerships in which the
Partnership has acquired an interest has been allocated by the relevant state
credit agencies the authority to recognize Tax Credits during the Credit Period
provided that the Local Partnership satisfies the rent restriction, minimum
2
set-aside and other requirements for recognition of the Tax Credits at all times
during such period. Once a Local Partnership has become eligible to recognize
Tax Credits, it may lose such eligibility and suffer an event of "recapture" if
its Property fails to remain in compliance with the Tax Credit requirements.
None of the Local Partnerships in which the Partnership has acquired an interest
has suffered an event of recapture.
There can be no assurance that the Partnership will achieve its investment
objectives as described above.
The Partnership is subject to the risks incident to potential losses arising
from the management and ownership of improved real estate. The Partnership can
also be affected by poor economic conditions generally, however no more than 21%
of the Properties are located in any single state. There are also substantial
risks associated with owning interests in properties, as does the Partnership,
which receive government assistance, for example the possibility that Congress
may not appropriate funds to enable HUD to make rental assistance payments. HUD
also restricts annual cash distributions to partners based on operating results
and a percentage of the owner's equity contribution. The Partnership cannot sell
or substantially liquidate its investments in subsidiary partnerships during the
period that the subsidy agreements are in existence, without HUD's approval.
Furthermore, there may not be market demand for apartments at full market rents
when the rental assistance contracts expire.
Segments
- --------
The Partnership operates in one segment, which is the investment in multi-family
residential property.
Competition
- -----------
The real estate business is highly competitive and substantially all of the
Properties acquired by the Partnership are subject to active competition from
similar properties in their respective vicinities. In addition, various other
limited partnerships have, in the past, and may, in the future, be formed by the
General Partner and/or its affiliates to engage in businesses which may be
competitive with the Partnership. The General Partner is also the general
partner of Independence Tax Credit Plus L.P. II.
Employees
- ---------
The Partnership does not have any direct employees. All services are performed
for the Partnership by its General Partner and its affiliates. The General
Partner receives compensation in connection with such activities as set forth in
Items 11 and 13. In addition, the Partnership reimburses the General Partner and
certain of its affiliates for expenses incurred in connection with the
performance by their employees of services for the Partnership in accordance
with the Partnership's Amended and Restated Agreement of Limited Partnership
(the "Partnership Agreement").
Item 2. Properties.
The Partnership holds a 98.99% limited partnership interest in twenty-seven and
a 98% limited partnership interest in one Local Partnership as of March 31,
2003. Set forth below is a schedule of the Local Partnerships including certain
information concerning their respective Apartment Complexes (the "Local
Partnership Schedule"). Further information concerning these Local Partnerships
and their Properties, including any encumbrances affecting the Properties, may
be found in Item 15, Schedule III.
3
Local Partnership Schedule
--------------------------
% of Units Occupied at May 1,
Name and Location --------------------------------
(Number of Units) Date Acquired 2003 2002 2001 2000 1999
- ------------------------------------- ------------- ---- ---- ---- ---- ----
Harbor Court Limited Partnership December 1991 98% 100% 100% 98% 95%
Staten Island, NY (40)
Old Public Limited Partnership December 1991 93% 61% 85% 48% 87%
Lawrenceburg, TN (30)
Lancaster Terrace Limited Partnership February 1992 86% 97% 91% 97% 99%
Salem, OR (104)
655 North Street Limited Partnership March 1992 87% 83% 85% 80% 74%
Baton Rouge, LA (195)
Landreth Venture March 1992 96% 94% 90% 90% 90%
Philadelphia, PA (47)
Homestead Apartments Associates Ltd. March 1992 93% 97% 98% 96% 94%
Homestead, FL (123)
Bethel Villa Associates, L.P. April 1992 99% 97% 99% 96% 100%
Wilmington, DE (150)
West Diamond Street Associates May 1992 96% 100% 96% 100% 93%
Philadelphia, PA (28)
Susquehanna Partners May 1992 96% 94% 100% 85% 87%
Philadelphia, PA (47)
Boston Bay Limited Partnership August 1992 98% 100% 96% 98% 98%
Boston, MA (88)
Morrant Bay Limited Partnership August 1992 98% 97% 96% 98% 99%
Boston, MA (130)
Hope Bay Limited Partnership August 1992 100% 96% 100% 98% 98%
Boston, MA (45)
Lares Apartments Limited Partnership August 1992 100% 100% 100% 100% 100%
Lares, PR (102)
Lajas Apartments Limited Partnership August 1992 100% 100% 100% 100% 100%
Lajas, PR (99)
Arlington-Rodeo Properties August 1992 100% 90% 100% 100% 100%
Los Angeles, CA (29)
Conifer Bateman Associates August 1992 92% 88% 83% 83% 92%
Lowville, NY (24)
Hampden Hall Associates, L.P. September 1992 99% 95% 97% 100% 93%
St. Louis, MO (75)
Chester Renaissance Associates September 1992 100% 95% 95% 100% 100%
Chester, PA (20)
4
Local Partnership Schedule (continued)
--------------------------
% of Units Occupied at May 1,
Name and Location --------------------------------
(Number of Units) Date Acquired 2003 2002 2001 2000 1999
- ------------------------------------- ------------- ---- ---- ---- ---- ----
Homestead Apts. II LTD October 1992 96% 99% 95% 96% 94%
Homestead, FL (112)
P.S. 157 Associates, L.P. November 1992 100% 100% 100% 100% 100%
New York, NY (73)
Cloisters Limited Partnership II November 1992 98% 97% 100% 95% 100%
Philadelphia, PA (65)
Creative Choice Homes II, LTD December 1992 97% 98% 94% 97% 98%
Opa-Locka, FL (328)
Milford Crossing Associates L.P. December 1992 100% 94% 99% 100% 99%
Milford, DE (73)
BX-7F Associates, L.P. January 1993 100% 98% 99% 95% 99%
Bronx, NY (85)
Los Angeles Limited Partnership May 1993 100% 100% 100% 100% 100%
Rio Piedras, PR (124)
Christine Apartments, L.P. June 1993 100% 94% 100% 88% 94%
Buffalo, NY (32)
Plainsboro Housing Partners, L.P. July 1993 98% 99% 98% 98% 98%
Plainsboro, NJ (126)
Rolling Green Associates, L.P. October 1993 90% 84% 91% 94% 92%
Syracuse, NY (395)
All leases are generally for periods not exceeding one to two years and no
tenant occupies more than 10% of the rentable square footage.
Rents from commercial tenants (to which average rental per square foot applies)
comprise less than 5% of the rental revenues of the Partnership. Maximum rents
for the residential units are determined annually by HUD and reflect
increases/decreases in consumer price indices in various geographic areas.
Market conditions, however, determine the amount of rent actually charged.
Management annually reviews the physical state of the Properties and suggests to
the respective general partners of the Local Partnerships ("Local General
Partners") budget improvements, which are generally funded from cash flow from
operations or release of replacement reserve escrows to the extent available.
Management annually reviews the insurance coverage of the Properties and
believes such coverage is adequate.
See Item 1, Business, above, for the general competitive conditions to which the
Properties described above are subject.
5
Real estate taxes are calculated using rates and assessed valuations determined
by the township or city in which the property is located. Such taxes have
approximated 1% of the aggregate cost of the properties as shown in Schedule III
to the financial statements included herein.
Tax Credits with respect to a given Apartment Complex are available for a
ten-year period that commences when the property is leased to qualified tenants.
However, the annual Tax Credits available in the year in which the Apartment
Complex is leased to qualified tenants must be prorated based upon the months
remaining in the year. The amount of the annual Tax Credit not available in the
first year will be available in the eleventh year. In certain cases, the
Partnership acquired its interest in a Local Partnership after the Local
Partnership had placed its Apartment Complex in service. In these cases, the
Partnership may be allocated Tax Credits only beginning in the month following
the month in which it acquired its interest and Tax Credits allocated in any
prior period were not available to the Partnership.
Item 3. Legal Proceedings.
None.
Item 4. Submission of Matters to a Vote of Security
Holders.
None.
PART II
Item 5. Market for the Registrant's Common Equity and Related Security Holder
Matters.
As of March 31, 2003, the Partnership had issued and outstanding 76,786 Limited
Partnership Interests, each representing a $1,000 capital contribution to the
Partnership, or an aggregate capital contribution of $76,786,000. All of the
issued and outstanding Limited Partnership Interests have been issued to
Independence Assignor Inc. (the "Assignor Limited Partner"), which has in turn
issued 76,786 BACs to the purchasers thereof for an aggregate purchase price of
$76,786,000. Each BAC represents all of the economic and virtually all of the
ownership rights attributable to a Limited Partnership Interest held by the
Assignor Limited Partner. BACs may be converted into Limited Partnership
Interests at no cost to the holder (other than the payment of transfer costs not
to exceed $100), but Limited Partnership Interests so acquired are not
thereafter convertible into BACs.
Neither the BACs nor the Limited Partnership Interests are traded on any
established trading market. The Partnership does not intend to include the BACs
for quotation on NASDAQ or for listing on any national or regional stock
exchange or any other established securities market. The Revenue Act of 1987
contained provisions which have an adverse impact on investors in "publicly
traded partnerships." Accordingly, the General Partner has imposed limited
restrictions on the transferability of the BACs and the Limited Partnership
Interests in secondary market transactions. These restrictions should prevent a
public trading market from developing but may adversely affect the ability of an
investor to liquidate his or her investment quickly. It is expected that such
procedures will remain in effect until such time, if ever, as further revision
of the Revenue Act of 1987 may permit the Partnership to lessen the scope of the
restrictions.
As of May 6, 2003, the Partnership has approximately 4,608 registered holders of
an aggregate of 76,786 BACs.
All of the Partnership's general partnership interests, representing an
aggregate capital contribution of $1,000, are held by the General Partner.
There are no material legal restrictions in the Partnership Agreement on the
ability of the Partnership to make distributions. The Partnership has made no
distributions to the BACs holders as of March 31, 2003. The Partnership does not
anticipate providing cash distributions to its BACs holders other than from net
refinancing or sales proceeds.
6
In January 2001, affiliates of Everest Properties, Inc. ("Everest") conducted a
tender offer for up to 1,578 BACs. In connection with a prior tender offer for
BACs, an affiliate of the General Partner entered into a standstill agreement
dated as of April 23, 1997 (the "Standstill"), which precluded Everest from
independently soliciting BACs (by tender offer or otherwise). At Everest's
request, the General Partner caused its affiliate to release Everest from the
Standstill for the limited purpose of permitting Everest to make its tender
offer. In connection with such arrangements, Everest agreed to cover all of the
Partnership's expenses with respect to processing the tender offer including
mailing costs, legal fees and other administrative costs incurred by the
Partnership. These reimbursements resulted in aggregate payments to the
Partnership of $2,789 which are reflected as "other income" on the financial
statements for Fiscal Year 2001.
7
Item 6. Selected Financial Data.
The information set forth below presents selected financial data of the
Partnership. Additional financial information is set forth in the audited
consolidated financial statements in Item 8 hereof.
Year Ended March 31,
---------------------------------------------------------------------------------
OPERATIONS 2003 2002 2001 2000 1999
- ----------------------- ------------- ------------- ------------- ------------- -------------
Revenues $ 21,055,542 $ 20,573,977 $ 20,741,395 $ 20,786,356 $ 20,525,657
Operating expenses (26,413,948) (26,069,921) (26,200,525) (26,611,223) (25,708,315)
------------- ------------- ------------- ------------- -------------
Loss before (5,358,406) (5,495,944) (5,459,130) (5,824,867) (5,182,658)
minority interest
Minority interest
in loss of
subsidiaries 14,661 13,750 15,252 20,636 17,208
------------- ------------- ------------- ------------- -------------
Net loss $ (5,343,745) $ (5,482,194) $ (5,443,878) $ (5,804,231) $ (5,165,450)
============= ============= ============= ============= =============
Net loss per Weighted
average BAC $ (68.91) $ (70.70) $ (70.20) $ (74.85) $ (66.61)
============= ============= ============= ============= =============
March 31,
---------------------------------------------------------------------------------
FINANCIAL POSITION 2003 2002 2001 2000 1999
- ----------------------- ------------- ------------- ------------- ------------- -------------
Total assets $ 142,581,513 $ 147,768,441 $ 153,954,157 $ 159,362,792 $ 164,969,973
============= ============= ============= ============= =============
Total liabilities $ 118,327,823 $ 117,856,272 $ 117,841,568 $ 117,620,369 $ 117,234,753
============= ============= ============= ============= =============
Minority interest $ 5,193,688 $ 5,508,422 $ 6,226,648 $ 6,412,604 $ 6,601,170
============= ============= ============= ============= =============
Total partners' capital $ 19,060,002 $ 24,403,747 $ 29,885,941 $ 35,329,819 $ 41,134,050
============= ============= ============= ============= =============
During the years ended March 31, 2003, 2002, 2001, 2000 and 1999, total assets
decreased primarily due to depreciation.
8
Selected Quarterly Financial Data (Unaudited)
Quarter Ended
--------------------------------------------------------
June 30, September 30, December 31, March 31,
OPERATIONS 2002 2002 2002 2003
- -------------------- ----------- ------------ ----------- -----------
Revenues $ 5,274,412 $ 5,321,842 $ 5,088,667 $ 5,370,621
Operating ex-
penses (6,067,443) (6,298,518) (6,476,130) (7,571,857)
----------- ----------- ----------- -----------
Loss before
minority inter-
est (793,031) (976,679) (1,387,463) (2,201,236)
Minority interest
in loss of sub-
sidiaries 6,875 2,113 1,022 4,651
----------- ----------- ----------- -----------
Net loss $ (786,156) $ (974,563) $(1,386,441) $(2,196,585)
=========== =========== =========== ===========
Net loss per
weighted
average BAC $ (10.14) $ (12.57) $ (17.88) $ (28.32)
=========== =========== =========== ===========
Quarter Ended
--------------------------------------------------------
June 30, September 30, December 31, March 31,
OPERATIONS 2001 2001 2001 2002
- -------------------- ----------- ------------ ----------- -----------
Revenues $ 4,988,399 $ 5,146,228 $ 5,140,099 $ 5,299,251
Operating ex-
penses (6,144,950) (6,332,261) (6,392,606) (7,200,104)
----------- ----------- ----------- -----------
Loss before
minority inter-
est (1,156,551) (1,186,033) (1,252,507) (1,900,853)
Minority interest
in loss of sub-
sidiaries 7,562 1,944 2,000 2,244
----------- ----------- ----------- -----------
Net loss $(1,148,989) $(1,184,089) $(1,250,507) $(1,898,609)
=========== =========== =========== ===========
Net loss per
weighted
average BAC $ (14.81) $ (15.27) $ (16.12) $ (24.50)
=========== =========== =========== ===========
Cash Distributions
- ------------------
There are no legal restrictions on the Partnership making distributions to BACs
holders; however, the Partnership has made no distributions to the BACs holders
as of March 31, 2003 and does not expect to be able to make distributions except
out of net sale proceeds when the Partnership begins to dispose of its
investments.
9
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Liquidity and Capital Resources
- -------------------------------
The Partnership's primary source of funds is the cash distributions from the
operations of the Local Partnerships. These cash distributions, which remain
relatively immaterial, are available to meet obligations of the Partnership.
Distributions of approximately $186,000, $102,000 and $288,000 were received
during the years ended March 31, 2003, 2002 and 2001, respectively. However,
management expects that the distributions received from the Local Partnerships
will increase, although not to a level sufficient to permit providing cash
distributions to BACs holders. These distributions, as well as the working
capital reserves and the continued deferral of fees payable to the General
Partner discussed below, will be used to meet the operating expenses of the
Partnership.
As of March 31, 2003, the Partnership has invested all of the net proceeds in
twenty-eight Local Partnerships. Approximately $28,000 of the purchase price
remains to be paid (all of which is held in escrow). During the year ended March
31, 2003, $5,000 was paid from escrow.
During the year ended March 31, 2003, cash and cash equivalents increased
approximately $185,000. This increase is due to cash provided by operating
activities ($2,162,000) and a decrease in cash held in escrow relating to
investing activities ($401,000) which exceeded acquisitions of property and
equipment ($436,000), an increase in deferred costs ($13,000), repayments on
mortgage notes ($1,377,000), a net decrease in due to local general partners and
affiliates relating to investing and financing activities ($252,000) and a
decrease in capitalization of consolidated subsidiaries attributable to minority
interest ($300,000). Included in the adjustments to reconcile the net loss to
cash provided by operating activities is depreciation and amortization
($5,854,000).
The Partnership's unconsolidated working capital reserve at March 31, 2003 was
approximately $1,000.
Partnership management fees owed to the General Partner amounting to
approximately $4,839,000 were accrued and unpaid as of March 31, 2003. Without
the General Partner's advances and continued accrual without payment of certain
fees and expense reimbursements, the Partnership will not be in a position to
meet its obligations. The General Partner has continued to advance and allow the
accrual without payment of these amounts but is under no obligation to continue
to do so.
For a discussion of contingencies affecting certain Local Partnerships, see
Results of Operations of Certain Local Partnerships, below. Since the maximum
loss the Partnership would be liable for is its net investment in the respective
subsidiary partnerships, the resolution of the existing contingencies is not
anticipated to impact future results of operations, liquidity or financial
condition in a material way. However, the Partnership's loss of its investment
in a Local Partnership will eliminate the ability to generate future Tax Credits
from such Local Partnership and may also result in recapture of Tax Credits if
the investment is lost before expiration of the Credit Period.
Management is not aware of any trends or events, commitments or uncertainties,
which have not otherwise been disclosed, that will or are likely to impact
liquidity in a material way. Management believes the only impact would be from
laws that have not yet been adopted. The portfolio is diversified by the
location of the Properties around the United States so that if one area of the
country is experiencing downturns in the economy, the remaining Properties in
the portfolio may be experiencing upswings. However, the geographic
diversification of the portfolio may not protect against a general downturn in
the national economy. The Partnership has fully invested the proceeds of its
offering in 28 Local Partnerships, all of which fully have their Tax Credits in
place. The Tax Credits are attached to the Property for a period of ten years,
and are transferable with the Property during the remainder of the ten-year
10
period. If trends in the real estate market warranted the sale of a property,
the remaining Tax Credits would transfer to the new owner; thereby adding
significant value to the property on the market, which value is not included in
the financial statement carrying amount.
Critical Accounting Policies
- ----------------------------
In preparing the consolidated financial statements, management has made
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting periods. Actual results could differ
from those estimates. Set forth below is a summary of the accounting policies
that management believes are critical to the preparation of the consolidated
financial statements. The summary should be read in conjunction with the more
complete discussion of the Partnership's accounting policies included in Note 2
to the consolidated financial statements in this annual report on Form 10-K.
Property and Equipment
- ----------------------
Property and equipment to be held and used are carried at cost which includes
the purchase price, acquisition fees and expenses, construction period interest
and any other costs incurred in acquiring the properties. The cost of property
and equipment is depreciated over their estimated useful lives using accelerated
and straight-line methods. Expenditures for repairs and maintenance are charged
to expense as incurred; major renewals and betterments are capitalized. At the
time property and equipment are retired or otherwise disposed of, the cost and
accumulated depreciation are eliminated from the assets and accumulated
depreciation accounts and the profit or loss on such disposition is reflected in
earnings. The Partnership complies with Statement of Financial Accounting
Standards (SFAS) No. 144 "Accounting for the Impairment or Disposal of
Long-Lived Assets". A loss on impairment of assets is recorded when management
estimates amounts recoverable through future operations and sale of the property
on an undiscounted basis is below depreciated cost. At that time, property
investments themselves are reduced to estimated fair value (generally using
discounted cash flows) when the property is considered to be impaired and the
depreciated cost exceeds estimated fair value.
At the time management commits to a plan to dispose of assets, said assets are
adjusted to the lower of carrying amount or fair value less costs to sell. These
assets are classified as property and equipment-held for sale and are not
depreciated.
Through March 31, 2003, the Partnership has recorded approximately $500,000 as
an aggregate loss on impairment of assets.
Income Taxes
- ------------
The Partnership is not required to provide for, or pay, any federal income
taxes. Net income or loss generated by the Partnership is passed through to the
partners and is required to be reported by them. The Partnership may be subject
to state and local taxes in jurisdictions in which it operates. For income tax
purposes, the Partnership has a fiscal year ending December 31.
Results of Operations
- ---------------------
The following is a summary of the results of operations of the Partnership for
the years ended March 31, 2003, 2002 and 2001 (the 2002, 2001 and 2000 Fiscal
Years, respectively.)
The Partnership's results of operations for the 2002, 2001 and 2000 Fiscal Years
consisted primarily of the results of the Partnership's investment in the
twenty-eight Local Partnerships. The majority of Local Partnership income
continues to be in the form of rental income with the corresponding expenses
being divided among operations, depreciation and mortgage interest.
The net loss for the 2002, 2001 and 2000 Fiscal Years totaled $5,343,745,
$5,482,194 and $5,443,878, respectively.
11
The Partnership and BACs holders began to recognize Housing Tax Credits with
respect to a Property when the Credit Period for such Property commenced.
Because of the time required for the acquisition, completion and rent-up of
Properties, the amount of Tax Credits per BAC gradually increased over the first
three years of the Partnership. Housing Tax Credits not recognized in the first
three years will be recognized in the 11th through 13th years. The Partnership
generated $11,256,724, $11,986,066 and $11,986,066 of Housing Tax Credits during
the 2002, 2001 and 2000 tax years, respectively.
2002 vs. 2001
- -------------
Rental income remained fairly consistent with an increase of 3% for the 2002
Fiscal Year as compared to the 2001 Fiscal Year.
Other income decreased approximately $112,000 for the 2002 Fiscal Year as
compared to the 2001 Fiscal Year primarily due to a decrease in interest income
due to lower interest rates on cash and cash equivalent balances at the Local
Partnerships and Partnership level, as well as a decrease in grant income at one
Local Partnership.
Total expenses, excluding taxes and insurance, remained fairly consistent with a
decrease of approximately 1% for the 2002 Fiscal Year as compared with the 2001
Fiscal Year.
Taxes increased approximately $152,000 for the 2002 Fiscal Year as compared to
the 2001 Fiscal Year primarily due to fees associated with fighting the real
estate tax assessment at one Local Partnership.
Insurance increased approximately $415,000 for the 2002 Fiscal Year as compared
to the 2001 Fiscal Year primarily due to an increase in insurance premiums at
the Local Partnerships.
2001 vs. 2000
- -------------
Rental income remained fairly consistent with an increase of less than 1% for
the 2001 Fiscal Year as compared to the 2000 Fiscal Year.
Other income decreased approximately $268,000 for the 2001 Fiscal Year as
compared to the 2000 Fiscal Year due to an decrease in escrow interest received
at one Local Partnership and a decrease in transfer fees received at the
Partnership Level.
Total expenses, excluding insurance, remained fairly consistent with a decrease
of approximately 1% for the 2001 Fiscal Year as compared with the 2000 Fiscal
Year.
Insurance increased approximately $156,000 for the 2001 Fiscal Year as compared
to the 2000 Fiscal Year primarily due to an underaccrual of insurance charges at
four Local Partnerships during the 2000 Fiscal year.
Other
- -----
The Partnership's investment as a limited partner in the Local Partnerships is
subject to the risks incident to the potential losses arising from management
and ownership of improved real estate. The Partnership's investments also could
be adversely affected by poor economic conditions, generally, which could
increase vacancy levels and rental payment defaults and by increased operating
expenses, any or all of which could threaten the financial viability of one or
more of the Local Partnerships.
There also are substantial risks associated with the operations of Apartment
Complexes receiving government assistance. These include governmental
regulations concerning tenant eligibility, which may make it more difficult to
rent apartments in the complexes; difficulties in obtaining government approval
for rent increases; limitations on the percentage of income which low and
12
moderate-income tenants may pay as rent; the possibility that Congress may not
appropriate funds to enable the Department of Housing and Urban Development to
make the rental assistance payments it has contracted to make; and that when the
rental assistance contracts expire there may not be market demand for apartments
at full market rents in a Local Partnership's Apartment Complex.
The Local Partnerships are impacted by inflation in several ways. Inflation
allows for increases in rental rates generally to reflect the impact of higher
operating and replacement costs. Inflation also affects the Local Partnerships
adversely by increasing operating costs, such as fuel, utilities and labor.
Item 7A. Quantitative and Qualitative Disclosure About Market Risk.
Not Applicable.
13
Item 8. Financial Statements and Supplementary Data.
Sequential
Page
----------
(a) 1. Consolidated Financial Statements
Independent Auditors' Report 15
Consolidated Balance Sheets at March 31, 2003 and 2002 78
Consolidated Statements of Operations for the Years Ended March 31,
2003, 2002 and 2001 79
Consolidated Statements of Changes in Partners' Capital (Deficit) for
the Years Ended March 31, 2003, 2002 and 2001 80
Consolidated Statements of Cash Flows for the Years Ended March 31,
2003, 2002 and 2001 81
Notes to Consolidated Financial Statements 82
14
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Partners of
Independence Tax Credit Plus L.P. and Subsidiaries
(A Delaware Limited Partnership)
We have audited the consolidated balance sheets of Independence Tax Credit Plus
L.P. and Subsidiaries (A Delaware Limited Partnership) as of March 31, 2003 and
2002, and the related consolidated statements of operations, changes in
partners' capital (deficit), and cash flows for the years ended March 31, 2003,
2002 and 2001 (the 2002, 2001 and 2000 Fiscal Years). These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits. We did not
audit the financial statements for twenty-eight (2002, 2001 and 2000 Fiscal
Years) subsidiary partnerships whose losses aggregated $4,165,568, $4,071,996
and $4,195,591 for the 2002, 2001 and 2000 Fiscal Years, respectively, and whose
assets constituted 99% of the Partnership's assets at March 31, 2003 and 2002,
presented in the accompanying consolidated financial statements. The financial
statements for twenty-seven of these subsidiary partnerships were audited by
other auditors whose reports thereon have been furnished to us and our opinion
expressed herein, insofar as it relates to the amounts included for these
subsidiary partnerships is based solely upon the reports of the other auditors.
The financial statements for one of these subsidiary partnerships were
unaudited.
We conducted our audits in accordance with U.S. generally accepted auditing
standards. Those standards require that we plan and perform the audits 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, based upon our audits, and the reports of the other auditors
referred to above, the consolidated financial statements referred to in the
first paragraph present fairly, in all material respects, the financial position
of Independence Tax Credit Plus L.P. and Subsidiaries at March 31, 2003 and
2002, and the results of their operations and their cash flows for the years
ended March 31, 2003, 2002 and 2001, in conformity with U.S. generally accepted
accounting principles.
TRIEN ROSENBERG ROSENBERG
WEINBERG CIULLO & FAZZARI LLP
New York, New York
June 9, 2003
15
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Harbor Court L.P.
We have audited the accompanying balance sheets of Harbor Court L.P. as of
December 31, 2002 and 2001, and the related statements of income, partners'
equity and cash flows for the years then ended. 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 audit in accordance with auditing standards generally accepted
in the United States of America. 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 Harbor Court L.P., as of
December 31, 2002 and 2001, and the results of its income, the changes in
partners' equity and its cash flows for the years then ended, in conformity with
accounting principles generally accepted in the United States of America.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland
January 25, 2003
16
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Harbor Court L.P.
We have audited the accompanying balance sheets of Harbor Court L.P. as of
December 31, 2001 and 2000, and the related statements of operations, partners'
equity and cash flows for the years then ended. 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 audit in accordance with auditing standards generally accepted
in the United States of America. 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 audit provides 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 Harbor Court L.P., as of
December 31, 2001 and 2000, and the results of its operations, the changes in
partners' equity and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland
January 31, 2002
17
[Letterhead of Mack Roberts & Company, L.L.C.]
INDEPENDENT AUDITOR'S REPORT
The Partners
Lancaster Terrace Limited Partnership
Salem, Oregon
We have audited the balance sheets of Lancaster Terrace Limited Partnership as
of December 31, 2002 and 2001, and the related statements of operations, changes
in partners' capital, and cash flows for the years then ended. 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 U.S. 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 Lancaster Terrace Limited
Partnership as of December 31, 2002 and 2001, and the results of its operations
and its cash flows for the years then ended in conformity with U.S. generally
accepted accounting principles.
/s/ Mack, Roberts & Co., L.L.C.
Portland, Oregon
February 5, 2003
18
[Letterhead of Mack Roberts & Company, L.L.C.]
INDEPENDENT AUDITOR'S REPORT
The Partners
Lancaster Terrace Limited Partnership
Salem, Oregon
We have audited the balance sheets of Lancaster Terrace Limited Partnership as
of December 31, 2001 and 2000, and the related statements of operations, changes
in partners' capital, and cash flows for the years then ended. 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 U.S. 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 Lancaster Terrace Limited
Partnership as of December 31, 2001 and 2000, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/ Mack, Roberts & Co., L.L.C.
Portland, Oregon
February 4, 2002
19
[Letterhead of Pailet, Meunier and LeBlanc, L.L.P.]
INDEPENDENT AUDITOR'S REPORT
To the Partners
655 North Street Limited Partnership
New Orleans, Louisiana
We have audited the accompanying balance sheets of 655 North Street Limited
Partnership, HUD Project No. 064-12001, as of December 31, 2002 and 2001, and
the related statements of income, changes in partners' equity, and cash flows
for the years then ended. 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 auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and free of
material misstatement. An audit includes examining, or 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 655 North Street Limited
Partnership, HUD Project No. 064-12001, as of December 31, 2002 and 2001, and
the results of its operations, changes in partners' equity, and cash flows for
the years then ended in conformity with accounting principles generally accepted
in the United States of America.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated February 10, 2003, on our
consideration of 655 North Street Limited Partnership's internal control, and
reports dated February 10, 2003, on its compliance with specific requirements
applicable to major HUD programs and specific requirements applicable to Fair
Housing and Non-Discrimination. Those reports are an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental information
on pages 21 to 28 is presented for purposes of additional analysis and is not a
required part of the basic financial statements of the Project. Such information
has been subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects, in relation to the basic financial statements taken as a whole.
/s/ Pailet, Meunier & LeBlanc, L.L.P.
Metairie, Louisiana
February 10, 2003
20
[Letterhead of Pailet, Meunier and LeBlanc, L.L.P.]
INDEPENDENT AUDITOR'S REPORT
To the Partners
655 North Street Limited Partnership
New Orleans, Louisiana
We have audited the accompanying balance sheets of 655 North Street Limited
Partnership, HUD Project No. 064-12001, as of December 31, 2001 and 2000, and
the related statements of income, changes in partners' equity, and cash flows
for the years then ended. 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 auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and free of
material misstatement. An audit includes examining, or 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 655 North Street Limited
Partnership, HUD Project No. 064-12001, as of December 31, 2001 and 2000, and
the results of its operations, changes in partners' equity, and cash flows for
the years then ended in conformity with accounting principles generally accepted
in the United States of America.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 28, 2002, on our
consideration of 655 North Street Limited Partnership's internal control, and
reports dated January 28, 2002, on its compliance with specific requirements
applicable to major HUD programs and specific requirements applicable to Fair
Housing and Non-Discrimination. Those reports are an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental information
on pages 21 to 28 is presented for purposes of additional analysis and is not a
required part of the basic financial statements of the Project. Such information
has been subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects, in relation to the basic financial statements taken as a whole.
/s/ Pailet, Meunier & LeBlanc, L.L.P.
Metairie, Louisiana
January 28, 2002
21
[Letterhead of Reznick, Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Landreth Venture
We have audited the accompanying balance sheet of Landreth Venture as of
December 31, 2002, and the related statements of profit and loss, changes in
partners' equity (deficit) and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on the financial statements based on our
audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of
the United States. 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 audit provides 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 Landreth Venture as of December
31, 2002 and 2001, and the results of its operations, the changes in partners'
equity (deficit) and its cash flows for the year then ended, in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report
for the year ended December 31, 2002, dated February 7, 2003, on our
consideration of Landreth Venture's internal control over financial reporting
and on our tests of its compliance with certain provisions of laws, regulations,
contracts and grants. The report is an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.
Our audits were made for the purpose of forming an opinion on the basis
financial statements taken as a whole. The supplemental information on pages 26
through 29 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ Reznick Fedder & Silverman
Baltimore, Maryland
February 7, 2003
22
[Letterhead of Reznick, Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Landreth Venture
We have audited the accompanying balance sheet of Landreth Venture as of
December 31, 2001, and the related statements of profit and loss, changes in
partners' equity (deficit) and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on the financial statements based on our
audit. The financial statements of Landreth Venture for the year ended December
31, 2000, were audited by other auditors whose report, dated February 9, 2001,
expressed an unqualified opinion on those statements.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of
the United States. 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 audit provides a reasonable basis for our
opinion.
In our opinion, the 2001 financial statements referred to above present fairly,
in all material respects, the financial position of Landreth Venture as of
December 31, 2001, and the results of its operations, the changes in partners'
equity (deficit) and its cash flows for the year then ended, in conformity with
accounting principles generally accepted in the United States of America.
Our 2001 audit was made for the purpose of forming an opinion on the basis
financial statements taken as a whole. The supplemental information on pages 27
through 30 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued our report
for the year ended December 31, 2001, dated February 8, 2002, on our
consideration of Landreth Venture's internal control over financial reporting
and on our tests of its compliance with certain provisions of laws, regulations,
contracts and grants. The report is an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.
/s/ Reznick Fedder & Silverman
Baltimore, Maryland
February 8, 2002
23
[Letterhead of Ziner, Kennedy, Lehan LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Landreth Venture
We have audited the accompanying balance sheet of Landreth Venture (a
Pennsylvania limited partnership) as of December 31, 2000 and 1999, and the
related statements of operations, changes in partners' equity and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's general partners and contracted management agent. Our
responsibility is to express an opinion on the financial statements based on our
audits.
We conducted our audit in accordance with generally 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 audit provides 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 Landreth Venture as of December
31, 2000 and 1999, and the results of its operations, the changes in partners'
equity and its cash flows for the year then ended, in conformity with generally
accepted accounting principles.
/s/ Ziner, Kennedy, Lehan LLP
February 9, 2001
Boston, Massachusetts
24
[Letterhead of Friedman, Alpren & Green LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners
Homestead Apartments Associates, Ltd.
We have audited the accompanying balance sheet of HOMESTEAD APARTMENTS
ASSOCIATES, LTD. (a limited partnership) as of December 31, 2002 and the related
statements of operations, changes in partners' capital and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. 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 audit provides 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 HOMESTEAD APARTMENTS
ASSOCIATES, LTD. as of December 31, 2002, and the results of its operations, and
its cash flows for the year then ended in conformity with accounting principles
generally accepted in the United States of America.
/s/ Friedman, Alpren & Green LLP
New York, New York
January 25, 2003
25
[Letterhead of Friedman, Alpren & Green LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners
Homestead Apartments Associates, Ltd.
We have audited the accompanying balance sheet of HOMESTEAD APARTMENTS
ASSOCIATES, LTD. (a limited partnership) as of December 31, 2001 and the related
statements of operations, changes in partners' capital and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. 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 audit provides 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 HOMESTEAD APARTMENTS
ASSOCIATES, LTD. as of December 31, 2001, and the results of its operations, and
its cash flows for the year then ended in conformity with accounting principles
generally accepted in the United States of America.
/s/Friedman, Alpren & Green LLP
New York, New York
January 30, 2002
26
[Letterhead of Friedman, Alpren & Green LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners
Homestead Apartments Associates, Ltd.
We have audited the accompanying balance sheets of HOMESTEAD APARTMENTS
ASSOCIATES, LTD.(a limited partnership) as of December 31, 2000 and the related
statements of operations, changes in partners' capital and cash flows for the
year then ended. 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 auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits 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 provides 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 HOMESTEAD APARTMENTS
ASSOCIATES, LTD. as of December 31, 2000, and the results of its operations, and
its cash flows for the year then ended in conformity with accounting principles
generally accepted in the United States of America.
/s/Friedman, Alpren & Green LLP
New York, New York
February 1, 2001
27
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Bethel Villa Associates, L.P.
We have audited the accompanying balance sheets of Bethel Villa Associates, L.P.
as of December 31, 2002 and 2001, and the related statements of profit and loss
(on Form No. 92410), partners' equity (deficit) and cash flows for the years
then ended. 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 auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards issued by the Comptroller General of
the United States. 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, or 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 Bethel Villa Associates, LP. as
of December 31, 2002 and 2001, and the results of its operations, the changes in
partners' equity (deficit) and cash flows for the years then ended, in
conformity with accounting principles generally accepted in the United States of
America.
In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated January 17,
2003 on our consideration of Bethel Villa Associates, L.P.'s internal control
and on its compliance with specific requirements applicable to major HUD and
DSHA programs and fair housing and non-discrimination. Those reports are in
integral part of an audit performed in accordance with Government Auditing
Standards and should be read in conjunction with this report in considering the
results of our audit.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 27
and 33 is presented for the purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland Taxpayer Identification Number:
January 17, 2003 52-1088612
Lead Auditor: James P. Martinko
28
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Bethel Villa Associates, L.P.
We have audited the accompanying balance sheets of Bethel Villa Associates, L.P.
as of December 31, 2001 and 2000, and the related statements of operations,
partners' equity (deficit), and cash flows for the years then ended. 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 auditing standards generally accepted
in the United States of America and Government Auditing Standards issued by the
Comptroller General of the United States. 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, or 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 Bethel Villa Associates, LP. as
of December 31, 2001 and 2000 and 2000, and the results of its operations, the
changes in partners' equity (deficit) and cash flows for the years then ended,
in conformity with accounting principles generally accepted in the United States
of America.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 26
and 30 is presented for the purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated January 31,
2002 on our consideration of Bethel Villa Associates, L.P.'s internal control
and on its compliance with specific requirements applicable to major HUD and
DSHA programs, and fair housing and non-discrimination. Those reports are in
integral part of an audit performed in accordance with Government Auditing
Standards and should be read in conjunction with this report in considering the
results of our audit.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland Taxpayer Identification Number:
January 31, 2002 52-1088612
Lead Auditor: James P. Martinko
29
[Letterhead of Asher & Company Ltd.]
Independent Auditors' Report
The Partners
West Diamond Street Associates
T/A Sedgley Park Apartments
Marlton, New Jersey
We have audited the accompanying balance sheets of WEST DIAMOND STREET
ASSOCIATES T/A SEDGLEY PARK APARTMENTS (A LIMITED PARTNERSHIP), PHFA PROJECT NO.
O-0198, as of December 31, 2002 and 2001 and the related statements of loss,
Partners' capital and cash flows for the years then ended. 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 auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of
the United States. 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 WEST DIAMOND STREET ASSOCIATES
T/A SEDGLEY PARK APARTMENTS (A LIMITED PARTNERSHIP), PHFA PROJECT NO. O-0198, as
of December 31, 2002 and 2001, and the results of its operations, changes in its
Partners' capital and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report
dated January 11, 2003 on our consideration of West Diamond Street Associates'
T/A Sedgley Park Apartments (A Limited Partnership), PHFA Project No. O-0198,
internal control over financial reporting and our tests of its compliance with
certain provisions of laws, regulations, contracts and grants. That report is an
integral part of an audit performed in accordance with Government Auditing
Standards and should be read in conjunction with this report in considering the
results of our audit.
/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 11, 2003
30
[Letterhead of Asher & Company Ltd.]
Independent Auditors' Report
The Partners
West Diamond Street Associates
T/A Sedgley Park Apartments
Marlton, New Jersey
We have audited the accompanying balance sheets of WEST DIAMOND STREET
ASSOCIATES T/A SEDGLEY PARK APARTMENTS (A LIMITED PARTNERSHIP), PHFA PROJECT NO.
O-0198, as of December 31, 2001 and 2000 and the related statements of loss,
Partners' capital and cash flows for the years then ended. 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 auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of
the United States. 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 WEST DIAMOND STREET ASSOCIATES
T/A SEDGLEY PARK APARTMENTS (A LIMITED PARTNERSHIP), PHFA PROJECT NO. O-0198, as
of December 31, 2001 and 2000, and the results of its operations, changes in its
Partners' capital and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report
dated January 16, 2002 on our consideration of West Diamond Street Associates'
T/A Sedgley Park Apartments (A Limited Partnership), PHFA Project No. O-0198,
internal control over financial reporting and our tests of its compliance with
certain provisions of laws, regulations, contracts and grants. That report is an
integral part of an audit performed in accordance with Government Auditing
Standards and should be read in conjunction with this report in considering the
results of our audit.
/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 16, 2002
31
[Letterhead of J.H. Williams & Co., LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners
Susquehanna Partners (a Limited Partnership)
Philadelphia, Pennsylvania
We have audited the accompanying balance sheets of Susquehanna Partners (a
Limited Partnership) as of December 31, 2002 and 2001 and the related statements
of income, changes in partners' equity and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's general
partner and contracted management agent. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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 the Partnership's management and contracted
management agent, 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 Susquehanna Partners (a Limited
Partnership) at December 31, 2002 and 2001, and the results of its operations,
changes in partners' equity and cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
/s/ J.H. Williams & Co., LLP
Kingston, Pennsylvania
January 31, 2003
32
[Letterhead of J.H. Williams & Co., LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners
Susquehanna Partners (a Limited Partnership)
Philadelphia, Pennsylvania
We have audited the accompanying balance sheets of Susquehanna Partners (a
Limited Partnership) as of December 31, 2001 and 2000 and the related statements
of income, changes in partners' equity and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's general
partner and contracted management agent. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards (issued by the Comptroller General of
the United States. 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 the Partnership's general partner and contracted management agent, 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 Susquehanna Partners (a Limited
Partnership) at December 31, 2001 and 2000, and the results of its operations,
changes in partners' equity and cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
/s/ J.H. Williams & Co., LLP
Kingston, Pennsylvania
February 8, 2002
33
[Letterhead of Robert Ercolini & Company LLP]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Boston Bay Limited Partnership
Boston, Massachusetts
We have audited the accompanying balance sheet of Boston Bay Limited Partnership
(a Massachusetts Limited Partnership), MHFA Project No. 70-071-R, as of December
31, 2002, and the related statements of operations, partners' deficiency, and
cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial
statement audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. 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 audit provides 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 Boston Bay Limited Partnership
as of December 31, 2002, and the results of its operations, changes in partners'
deficiency, and its cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report
dated January 16, 2003 on our consideration of Boston Bay Limited Partnership's
internal control, a report dated January 16, 2003 on its compliance with laws
and regulations, and reports dated January 16, 2003 on its compliance with
specific requirements applicable to HUD programs. Those reports are an integral
part of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 15 through 28) is presented for the purpose of additional
analysis and to comply with reporting requirements of the MassHousing and is not
a required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ Robert Ercolini & Company LLP
Boston, Massachusetts
January 16, 2003
34
[Letterhead of Robert Ercolini & Company LLP]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Boston Bay Limited Partnership
Boston, Massachusetts
We have audited the accompanying balance sheet of Boston Bay Limited Partnership
(a Massachusetts Limited Partnership), MHFA Project No. 70-071-R, as of December
31, 2001, and the related statements of operations, partners' deficiency, and
cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial
statement audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. 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 audit provides 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 Boston Bay Limited Partnership
as of December 31, 2001, and the results of its operations, changes in partners'
deficiency, and its cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report
dated January 15, 2002 on our consideration of Boston Bay Limited Partnership's
internal control, a report dated January 15, 2002 on its compliance with laws
and regulations, and reports dated January 15, 2002 on its compliance with
specific requirements applicable to HUD programs. Those reports are an integral
part of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 15 through 28) is presented for the purpose of additional
analysis and to comply with reporting requirements of the Massachusetts Housing
Finance Agency and is not a required part of the basic financial statements.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated in
all material respects in relation to the basic financial statements taken as a
whole.
/s/ Robert Ercolini & Company LLP
Boston, Massachusetts
January 15, 2002
35
[Letterhead of Robert Ercolini & Company LLP]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Boston Bay Limited Partnership
Boston, Massachusetts
We have audited the accompanying balance sheet of Boston Bay Limited Partnership
(a Massachusetts Limited Partnership), MHFA Project No. 70-071-R, as of December
31, 2000, and the related statements of operations, partners' capital, and cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial
statement audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. 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 audit provides 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 Boston Bay Limited Partnership
as of December 31, 2000, and the results of its operations, changes in partners'
capital, and its cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report
dated January 16, 2001 on our consideration of Boston Bay Limited Partnership's
internal control, a report dated January 16, 2001 on its compliance with laws
and regulations, and reports dated January 16, 2001 on its compliance with
specific requirements applicable to HUD programs.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 15 through 28) is presented for the purpose of additional
analysis and to comply with reporting requirements of the Massachusetts Housing
Finance Agency (MHFA) and is not a required part of the basic financial
statements. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/ Robert Ercolini & Company LLP
Boston, Massachusetts
January 16, 2001
36
[Letterhead of Robert Ercolini & Company LLP]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Morrant Bay Limited Partnership
Boston, Massachusetts
We have audited the accompanying balance sheet of Morrant Bay Limited
Partnership (a Massachusetts Limited Partnership), MHFA Project No. 70-095-R, as
of December 31, 2002, and the related statements of operations, partners'
deficiency, and cash flows for the year then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of
the United States. 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 audit provides 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 Morrant Bay Limited Partnership
as of December 31, 2002, and the results of its operations, changes in partners'
deficiency, and its cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report
dated January 17, 2003 on our consideration of Morrant Bay Limited Partnership's
internal control, a report dated January 17, 2003 on its compliance with laws
and regulations, and reports dated January 17, 2003 on its compliance with
specific requirements applicable to HUD programs. Those reports are an integral
part of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 16 through 29) is presented for the purpose of additional
analysis and to comply with reporting requirements of the MassHousing and is not
a required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ Robert Ercolini & Company LLP
Boston, Massachusetts
January 17, 2003
37
[Letterhead of Robert Ercolini & Company LLP]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Morrant Bay Limited Partnership
Boston, Massachusetts
We have audited the accompanying balance sheet of Morrant Bay Limited
Partnership (a Massachusetts Limited Partnership), MHFA Project No. 70-095-R, as
of December 31, 2001, and the related statements of operations, partners'
deficiency, and cash flows for the year then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of
the United States. 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 audit provides 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 Morrant Bay Limited Partnership
as of December 31, 2001, and the results of its operations, changes in partners'
deficiency, and its cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report
dated January 17, 2002 on our consideration of Morrant Bay Limited Partnership's
internal control, a report dated January 17, 2002 on its compliance with laws
and regulations, and reports dated January 17, 2002 on its compliance with
specific requirements applicable to HUD programs. Those reports are an integral
part of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 16 through 29) is presented for the purpose of additional
analysis and to comply with reporting requirements of the Massachusetts Housing
Finance Agency and is not a required part of the basic financial statements.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated in
all material respects in relation to the basic financial statements taken as a
whole.
/s/ Robert Ercolini & Company LLP
Boston, Massachusetts
January 17, 2002
38
[Letterhead of Robert Ercolini & Company LLP]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Morrant Bay Limited Partnership
Boston, Massachusetts
We have audited the accompanying balance sheet of Morrant Bay Limited
Partnership (a Massachusetts Limited Partnership), MHFA Project No. 70-095-R, as
of December 31, 2000, and the related statements of operations, partners'
capital, and cash flows for the year then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of
the United States. 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 audit provides 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 Morrant Bay Limited Partnership
as of December 31, 2000, and the results of its operations, changes in partners'
capital, and its cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report
dated January 19, 2001 on our consideration of Morrant Bay Limited Partnership's
internal control, a report dated January 19, 2001 on its compliance with laws
and regulations, and reports dated January 19, 2001 on its compliance with
specific requirements applicable to HUD programs.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 15 through 28) is presented for the purpose of additional
analysis and to comply with reporting requirements of the Massachusetts Housing
Finance Agency and is not a required part of the basic financial statements.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated in
all material respects in relation to the basic financial statements taken as a
whole.
/s/ Robert Ercolini & Company LLP
Boston, Massachusetts
January 19, 2001
39
[Letterhead of Robert Ercolini & Company LLP]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Hope Bay Limited Partnership
Boston, Massachusetts
We have audited the accompanying balance sheet of Hope Bay Limited Partnership
(a Massachusetts Limited Partnership), MHFA Project No. 70-168-R, as of December
31, 2002, and the related statements of operations, partners' deficiency, and
cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the Standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of
the United States. 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 audit provides 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 Hope Bay Limited Partnership as
of December 31, 2002, and the results of its operations, changes in partners'
deficiency, and its cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report
dated January 20, 2003 on our consideration of Hope Bay Limited Partnership's
internal control, a report dated January 20, 2003 on its compliance with laws
and regulations, and reports dated January 20, 2003 on its compliance with
specific requirements applicable to HUD programs. Those reports are an integral
part of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 15 through 28) is presented for the purpose of additional
analysis and to comply with reporting requirements of the MassHousing and is not
a required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ Robert Ercolini & Company LLP
Boston, Massachusetts
January 20, 2003
40
[Letterhead of Robert Ercolini & Company LLP]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Hope Bay Limited Partnership
Boston, Massachusetts
We have audited the accompanying balance sheet of Hope Bay Limited Partnership
(a Massachusetts Limited Partnership), MHFA Project No. 70-168-R, as of December
31, 2001, and the related statements of operations, partners' deficiency, and
cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the Standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of
the United States. 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 audit provides 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 Hope Bay Limited Partnership as
of December 31, 2001, and the results of its operations, changes in partners'
deficiency, and its cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report
dated January 15, 2002 on our consideration of Hope Bay Limited Partnership's
internal control, a report dated January 15, 2002 on its compliance with laws
and regulations, and reports dated January 15, 2002 on its compliance with
specific requirements applicable to HUD programs. Those reports are an integral
part of an audit performed in accordance with Government Auditing Standards and
should be read in conjuction with this report in considering the results of our
audit.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 15 through 28) is presented for the purpose of additional
analysis and to comply with reporting requirements of the Massachusetts Housing
Finance Agency and is not a required part of the basic financial statements.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated in
all material respects in relation to the basic financial statements taken as a
whole.
/s/ Robert Ercolini & Company LLP
Boston, Massachusetts
January 15, 2002
41
[Letterhead of Robert Ercolini & Company LLP]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Hope Bay Limited Partnership
Boston, Massachusetts
We have audited the accompanying balance sheet of Hope Bay Limited Partnership
(a Massachusetts Limited Partnership), MHFA Project No. 70-168-R, as of December
31, 2000, and the related statements of operations, partners' capital, and cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of
the United States. 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 audit provides 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 Hope Bay Limited Partnership as
of December 31, 2000, and the results of its operations, changes in partners'
capital, and its cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report
dated January 15, 2001 on our consideration of Hope Bay Limited Partnership's
internal control, a report dated January 15, 2001 on its compliance with laws
and regulations, and reports dated January 15, 2001 on its compliance with
specific requirements applicable to HUD programs.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 15 through 28) is presented for the purpose of additional
analysis and to comply with reporting requirements of the Massachusetts Housing
Finance Agency and is not a required part of the basic financial statements.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated in
all material respects in relation to the basic financial statements taken as a
whole.
/s/ Robert Ercolini & Company LLP
Boston, Massachusetts
January 15, 2001
42
[Letterhead of Armando A. Suarez, CPA]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Lares Apartments Limited Partnership
I have audited the accompanying balance sheets of Lares Apartments Limited
Partnership, Rural Development Project No.: 63-034-660467896, as of December 31,
2002 and 2001, and the related statements of income, changes in partners'
capital (deficit), and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audits.
I conducted my audits in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that I 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. I believe that my audits provide a reasonable basis for my
opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Lares Apartments Limited
Partnership, as of December 31, 2002 and 2001, and the results of its
operations, changes in partners' capital (deficit) and cash flows for the years
then ended in conformity with accounting principles generally accepted in the
United States of America.
In accordance with Government Auditing Standards, I have also issued my report
dated January 28, 2003, on my consideration of Lares Apartments Limited
Partnership internal control over financial reporting and my tests of its
compliance with certain provisions of laws, regulations, contracts, and grants.
That report is an integral part of an audit performed in accordance with
Government auditing Standards and should be read in conjunction with this report
in considering the results of my audit.
My audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information on pages 20 thru 31 is presented for purposes of additional analysis
and is not a required part of the basic financial statements of the Partnership.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in my opinion, is fairly stated in
all material respects in relation to the basic financial statements taken as a
whole.
/s/ Armando A. Suarez, CPA
January 28, 2003
San Juan, Puerto Rico
43
[Letterhead of Armando A. Suarez, CPA]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Lares Apartments Limited Partnership
I have audited the accompanying balance sheets of Lares Apartments Limited
Partnership, Rural Development Project No.: 63-034-660467896, as of December 31,
2001 and 2000, and the related statements of income, changes in partners'
capital (deficit), and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audits.
I conducted my audits in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that I 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. I believe that my audits provide a reasonable basis for my
opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Lares Apartments Limited
Partnership, as of December 31, 2001 and 2000, and the results of its
operations, changes in partners' capital (deficit) and cash flows for the years
then ended in conformity with accounting principles generally accepted in the
United States of America.
In accordance with Government Auditing Standards, I have also issued my report
dated January 29, 2002, on my consideration of Lares Apartments Limited
Partnership internal control over financial reporting and my tests of its
compliance with certain provisions of laws, regulations, contracts, and grants.
That report is an integral part of an audit performed in accordance with
Government auditing Standards and should be read in conjunction with this report
in considering the results of my audit.
My audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information on pages 20 thru 31 is presented for purposes of additional analysis
and is not a required part of the basic financial statements of the Partnership.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in my opinion, is fairly stated in
all material respects in relation to the basic financial statements taken as a
whole.
/s/ Armando A. Suarez, CPA
San Juan, Puerto Rico
January 29, 2002
The stamp #1713602 of the CPA's College of PR was affixed to the original of
this report.
44
[Letterhead of Armando A. Suarez, CPA]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Lajas Apartments Limited Partnership
I have audited the accompanying balance sheets of Lajas Apartments Limited
Partnership, Rural Development Project No.: 63-017-0660422313, as of December
31, 2002 and 2001, and the related statements of income, changes in partners'
capital (deficit), and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audits.
I conducted my audits in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of
the United States. Those standards require that I 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. I believe that my audits provide a reasonable basis for my
opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Lajas Apartments Limited
Partnership, as of December 31, 2002 and 2001, and the results of its
operations, changes in partners' capital (deficit) and cash flows for the years
then ended in conformity with accounting principles generally accepted in the
United States of America.
In accordance with Government Auditing Standards, I have also issued my report
dated January 24, 2003, on my consideration of Lajas Apartments Limited
Partnership internal control over financial reporting and my tests of its
compliance with certain provisions of laws, regulations, contracts, and grants.
That report is an integral part of an audit performed in accordance with
Government Auditing Standards and should be read in conjunction with this report
in considering the results of my audit.
My audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information on pages 20 thru 31 is presented for purposes of additional analysis
and is not a required part of the basic financial statements of the Partnership.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in my opinion, is fairly stated in
all material respects in relation to the basic financial statements taken as a
whole.
/s/ Armando A. Suarez, CPA
January 24, 2003
San Juan, Puerto Rico
45
[Letterhead of Armando A. Suarez, CPA]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Lajas Apartments Limited Partnership
I have audited the accompanying balance sheets of Lajas Apartments Limited
Partnership, Rural Development Project No.: 63-017-0660422313, as of December
31, 2001 and 2000, and the related statements of income, changes in partners'
capital (deficit), and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audits.
I conducted my audits in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of
the United States. Those standards require that I 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. I believe that my audits provide a reasonable basis for my
opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Lajas Apartments Limited
Partnership, as of December 31, 2001 and 2000, and the results of its
operations, changes in partners' capital (deficit) and cash flows for the years
then ended in conformity with accounting principles generally accepted in the
United States of America.
In accordance with Government Auditing Standards, I have also issued my report
dated January 25, 2002, on my consideration of Lajas Apartments Limited
Partnership internal control over financial reporting and my tests of its
compliance with certain provisions of laws, regulations, contracts, and grants.
That report is an integral part of an audit performed in accordance with
Government Auditing Standards and should be read in conjunction with this report
in considering the results of my audit.
My audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information on pages 20 thru 31 is presented for purposes of additional analysis
and is not a required part of the basic financial statements of the Partnership.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in my opinion, is fairly stated in
all material respects in relation to the basic financial statements taken as a
whole.
/s/ Armando A. Suarez, CPA
January 25, 2002
San Juan, Puerto Rico
The stamp #1713599 of the CPA's College of PR was affixed to the original of
this report.
46
[Letterhead of Ree & Kim]
To the Partners
Arlington - Rodeo Properties
(A California Limited Partnership)
We have audited the accompanying balance sheet of Arlington - Rodeo Properties
(A California Limited Partnership) as of December 31, 2002 and 2001 and the
related statements of operations, changes in partners' equity, and cash flows
for the years then ended. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We have conducted our audit 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 audit provides 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 Arlington - Rodeo Properties as
of December 31, 2002 and 2001 and the results of its operations and its cash
flows for the year then ended in conformity with generally accepted accounting
principles.
/s/ Ree and Kim
Los Angeles, California
February 27, 2003
47
[Letterhead of Ree & Kim]
To the Partners
Arlington - Rodeo Properties
(A California Limited Partnership)
We have audited the accompanying balance sheet of Arlington - Rodeo Properties
(A California Limited Partnership) as of December 31, 2001 and 2000 and the
related statements of operations, changes in partners' equity, and cash flows
for the years then ended. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We have conducted our audit 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 audit provides 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 Arlington - Rodeo Properties as
of December 31, 2001 and 2000 and the results of its operations and its cash
flows for the year then ended in conformity with generally accepted accounting
principles.
/s/ Ree and Kim
Los Angeles, California
February 23, 2002
48
[Letterhead of Salmin, Celona, Wehrle & Flaherty, LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Conifer Bateman Associates
We have audited the accompanying balance sheets of Conifer Bateman Associates (A
Limited Partnership) as of December 31, 2002 and the related statements of
changes in partners' capital (deficit), and cash flows for the years then ended.
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. The financial statements of Conifer Bateman
Associates as of December 31, 2001, were audited by other auditors whose report
dated January 30, 2002, expressed an unqualified opinion on those statements.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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 Conifer Bateman Associates as
of December 31, 2002, and the results of its operations and cash flows for the
years then ended in conformity with accounting principles generally accepted in
the United States of America.
/s/ Salmin, Celona, Wehrle & Flaherty, LLP
Certified Public Accountants
January 20, 2003
49
[Letterhead of Insero, Kasperski, Ciaccia & Co., P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Conifer Bateman Associates
(A Limited Partnership)
Lowville, New York
We have audited the accompanying balance sheets of Conifer Bateman Associates (A
Limited Partnership) as of December 31, 2001 and 2000 and the related statements
of changes in partners' equity, operations, and cash flows for the years then
ended. 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 auditing standards generally accepted
in the United States of America. 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 Conifer Bateman Associates (A
Limited Partnership) as of December 31, 2001 and 2000, and the results of its
operations and cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.
Respectfully Submitted,
/s/ Insero, Kasperski, Ciaccia & Co., P.C.
Certified Public Accountants
Rochester, New York
January 30, 2002
50
[Letterhead of Mortland Co. P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners'
Hampden Hall Associates, L.P.
St. Louis, Missouri
We have audited the accompanying balance sheet of Hampden Hall Associates, L.P.,
as of December 31, 2002 and the related statements of loss, partners' capital,
and cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require 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 balance sheet. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall balance sheet presentation. We
believe that our audit provides 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 Hampden Hall associates, L.P.,
as of December 31, 2002 and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.
/s/ Mortland & Co., P.C.
St. Louis, Missouri
February 20, 2003
51
[Letterhead of Mortland Co. P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners'
Hampden Hall Associates, L.P.
St. Louis, Missouri
We have audited the accompanying balance sheet of Hampden Hall Associates, L.P.,
as of December 31, 2001 and the related statements of loss, partners' capital,
and cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require 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 balance sheet. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall balance sheet presentation. We
believe that our audit provides 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 Hampden Hall associates, L.P.,
as of December 31, 2001 and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.
/s/ Mortland & Co., P.C.
St. Louis, Missouri
February 15, 2002
52
[Letterhead of Mortland & Co. P.C.]
Independent Auditors' Report
To the Partners'
Hampden Hall Associates, L.P.
St. Louis, Missouri
We have audited the accompanying balance sheet of Hampden Hall Associates, L.P.,
as of December 31, 2000 and the related statements of loss, partners' capital,
and cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require 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 balance sheet. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall balance sheet presentation. We
believe that our audit provides 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 Hampden Hall Associates, L.P.,
as of December 31, 2000 and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.
/s/ Mortland & Co. P.C.
St. Louis, Missouri
February 17, 2001
53
[Letterhead of Reznick, Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Chester Renaissance Associates
We have audited the accompanying balance sheet of Chester Renaissance Associates
as of December 31, 2002 and 2001, and the related statements of operations,
changes in partners' equity (deficit) and cash flows for the year then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of
the United States. 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 audit provides a reasonable basis for our
opinion.
In our opinion, the 2001 financial statements referred to above present fairly,
in all material respects, the financial position of Chester Renaissance
Associates as of December 31, 2002, and the results of its operations, the
changes in partners' equity (deficit) and its cash flows for the year then
ended, in conformity with accounting principles generally accepted in the United
States of America.
In accordance with Government Auditing Standards, we have also issued a report
for the year ended December 31, 2002, dated January 24, 2003, on our
consideration of Chester Renaissance Associates' internal control over financial
reporting and on our tests of its compliance with certain provisions of laws,
regulations, contracts and grants. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 25 through 28
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ Reznick, Fedder & Silverman
Baltimore, Maryland
January 24, 2003
54
[Letterhead of Ziner, Kennedy & Lehan, LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Chester Renaissance Associates
We have audited the accompanying balance sheets of Chester Renaissance
Associates (a Pennsylvania limited partnership) as of December 31, 2000 and 1999
and the related statements of operations, changes in partners' equity and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's general partners and contracted management
agent. 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 audits 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 the
Partnership's general partners and contracted management agent, 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 Chester Renaissance Associates
as of December 31, 2000 and 1999, and the results of its operations, changes in
partners' equity and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/ Ziner, Kennedy & Lehan, LLP
Boston, Massachusetts
January 15, 2001
55
[Letterhead of Friedman, Alpren & Green L.L.P.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Homestead Apartments Associates II, Ltd.
We have audited the accompanying balance sheet of HOMESTEAD APARTMENTS
ASSOCIATES II, LTD. (a limited partnership), as of December 31, 2002, and the
related statements of operations, changes in partners' capital and cash flows
for the year then ended. 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 audit in accordance with auditing standards generally accepted
in the United States of America. 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 audit provides 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 HOMESTEAD APARTMENTS ASSOCIATES
II, LTD. as of December 31, 2002, and the results of its operations, and its
cash flows for the year then ended in conformity with accounting principles
generally accepted in the United States of America.
/s/ Friedman, Alpren & Green L.L.P.
New York, New York
January 27, 2003
56
[Letterhead of Friedman, Alpren & Green L.L.P.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Homestead Apartments Associates II, Ltd.
We have audited the accompanying balance sheet of HOMESTEAD APARTMENTS
ASSOCIATES II, LTD. (a limited partnership), as of December 31, 2001, and the
related statements of operations, changes in partners' capital and cash flows
for the year then ended. 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 audit in accordance with auditing standards generally accepted
in the United States of America. 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 audit provides 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 HOMESTEAD APARTMENTS ASSOCIATES
II, LTD. as of December 31, 2001, and the results of its operations, and its
cash flows for the year then ended in conformity with accounting principles
generally accepted in the United States of America.
/s/ Friedman, Alpren & Green L.L.P.
New York, New York
January 30, 2002
57
[Letterhead of Friedman, Alpren & Green L.L.P.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Homestead Apartments Associates II, Ltd.
We have audited the accompanying balance sheet of HOMESTEAD APARTMENTS
ASSOCIATES II, LTD. (a limited partnership), as of December 31, 2000, and the
related statements of operations, changes in partners' capital and cash flows
for the year then ended. 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 audit in accordance with auditing standards generally accepted
in the United States of America. 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 audit provides 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 HOMESTEAD APARTMENTS ASSOCIATES
II, LTD. as of December 31, 2000, and the results of its operations, and its
cash flows for the year then ended in conformity with accounting principles
generally accepted in the United States of America.
/s/ Friedman Alpren & Green L.L.P.
New York, New York
February 1, 2001
58
[Letterhead of Rosen, Seymour, Shapss, Martin & Co., L.L.P.]
INDEPENDENT AUDITORS' REPORT
To the Partners
P.S. 157 Associates, L.P.
Brooklyn, New York
We have audited the accompanying balance sheet of P.S. 157 Associates, L.P. (a
limited partnership), as of December 31, 2002 and 2001, and the related
statements of operations, partners' capital, and cash flows for the year then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. 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 audit provides 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 P.S. 157 Associates, L.P. (a
limited partnership) as of December 31, 2002, and the results of its operations
and its cash flows for the year then ended in conformity and accounting
principles generally accepted in the United States of America.
/s/ Rosen, Seymour, Shapss, Martin & Co., L.L.P.
New York, New York
March 4, 2003
59
[Letterhead of Klein, Petitto, Zapolsky & Company, LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners
P.S. 157 Associates, L.P.
Brooklyn, NY
We have audited the accompanying balance sheets of P.S. 157 Associates, L.P. (a
limited partnership), as of December 31, 2000 and 1999 and the related
statements of operations, partners' capital, and cash flows for the years then
ended. 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 P.S. 157 Associates, L.P. (a
limited partnership) as of December 31, 2000 and 1999, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/ Klein, Petitto, Zapolsky, & Company, LLP
Great Neck, NY
January 31, 2001
except for Note 10, as to which the date is
February 15, 2001
60
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Cloisters Limited Partnership II
We have audited the accompanying balance sheet of Cloisters Limited Partnership
II as of December 31, 2002 and 2001, and the related statements of operations,
changes in partners' equity (deficit) and cash flows for the year then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audits in accordance with generally accepted in the United
States of America. Those standards require that we plan and perform the audits
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 Cloisters Limited Partnership
II as of December 31, 2002, the results of its operations, the changes in
partners' equity (deficit) and its cash flows for the year then ended, in
conformity with accounting principles generally accepted in the United States of
America.
/s/ Reznick Fedder & Silverman
Baltimore, Maryland
February 14, 2003
61
[Letterhead of Ziner, Kennedy & Lehan L.L.P.]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Cloisters Limited Partnership II
We have audited the accompanying balance sheets of Cloisters Limited Partnership
II (a Pennsylvania limited partnership) as of December 31, 2000 and 1999, and
the related statements of operations, changes in partners' equity and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's general partner and contracted management agent. 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 audits 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 the
Partnership's general partner and contracted management agent, 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 Cloisters Limited Partnership
II at December 31, 2000 and 1999, and the results of its operations, changes in
partners' equity and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/ Ziner, Kennedy & Lehan L.L.P.
Boston, Massachusetts
February 6, 2001
62
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Creative Choice Homes II, Ltd.
(A Limited Partnership)
d/b/a The Gardens Apartments
We have audited the accompanying balance sheet of Creative Choice Homes II, LTD.
(A Limited Partnership) d/b/a The Gardens Apartments as of December 31, 2002,
and the related statements of operations, partners' equity (deficit) and cash
flows for the year then ended. These financial statements are the responsibility
of the partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of
the United States. 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 audit provides 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 Creative Choice Homes II, LTD.
(A Limited Partnership) d/b/a The Gardens Apartments as of December 31, 2002,
and the results of its operations, the changes in partners' equity (deficit) and
cash flows for the year then ended, in conformity with accounting principles
generally accepted in the United States of America.
In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated February 5,
2003 on our consideration of Creative Choice Homes II, Ltd.'s internal control
and on its compliance with specific requirements applicable to major HUD
programs and fair housing and non-discrimination. Those reports are an integral
part of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 25 through 31
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland Taxpayer Identification Number
February 5, 2003 52-1088612
Lead Auditor: James P. Martinko
63
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Creative Choice Homes II, Ltd.
(A Limited Partnership)
d/b/a The Gardens Apartments
We have audited the accompanying balance sheet of Creative Choice Homes II, LTD.
(A Limited Partnership) d/b/a The Gardens Apartments as of December 31, 2001,
and the related statements of operations, partners' equity (deficit) and cash
flows for the year then ended. These financial statements are the responsibility
of the partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and Government Auditing Standards, issued by the
Comptroller General of the United States. 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 audit provides 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 Creative Choice Homes II, LTD.
(A Limited Partnership) d/b/a The Gardens Apartments as of December 31, 2001,
and the results of its operations, the changes in partners' equity (deficit) and
cash flows for the year then ended, in conformity with accounting principles
generally accepted in the United States of America.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 24 through 28
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated January 18,
2002 on our consideration of Creative Choice Homes II, Ltd.'s internal control
and on its compliance with specific requirements applicable to major HUD
programs and fair housing and non-discrimination. Those reports are an integral
part of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland
January 18, 2002
64
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Creative Choice Homes II, Ltd.
(A Limited Partnership)
d/b/a The Gardens Apartments
We have audited the accompanying balance sheet of Creative Choice Homes II, LTD.
(A Limited Partnership) d/b/a The Gardens Apartments as of December 31, 2000,
and the related statements of operations, partners' equity (deficit) and cash
flows for the year then ended. These financial statements are the responsibility
of the partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. 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 audit provides 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 Creative Choice Homes II, LTD.
(A Limited Partnership) d/b/a The Gardens Apartments as of December 31, 2000,
and the results of its operations, the changes in partners' equity (deficit) and
cash flows for the year then ended, in conformity with generally accepted
accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 24 through 28
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
In accordance with Government Auditing Standards and "Consolidated Audit Guide
for Audits of HUD Programs," we have also issued reports dated January 22, 2001
on our consideration of Creative Choice Homes II, LTD. (A Limited Partnership)
d/b/a The Gardens Apartments' internal control and on its compliance with
specific requirements applicable to major HUD programs and fair housing and
non-discrimination. Those reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.
/s/ Reznick Fedder & Silverman
Lead Auditor: James P. Martinko
Bethesda, Maryland
Taxpayer Identification Number: 52-1088612
January 22, 2001
65
[Letterhead of Mayer, Hoffman, McCann P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Milford Crossing Associates, L.P.
Wilmington, Delaware
We have audited the accompanying balance sheets of MILFORD CROSSING ASSOCIATES,
L.P., as of December 31, 2002 and the related statements of loss, partners'
capital (deficiency) and cash flows for the years then ended. These financial
statements are the responsibility of Milford Crossing Associates, L.P.
management. Our responsibility is to express an opinion on these financial
statements based on our audit. The financial statements of Milford Crossing
Associates, L.P. as of December 31, 2001, were audited by other auditors whose
report dated January 31, 2002, expressed an unqualified opinion on those
statements.
We conducted our audits in accordance with U.S. 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 MILFORD CROSSING ASSOCIATES,
L.P. as of December 31, 2002 and the results of its operations, changes in
partners' capital (deficiency) and cash flows for the years then ended in
conformity with U.S. generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information, relating to
2002, shown on pages 14 to 16 is presented for the purpose of additional
analysis for the year ended December 31, 2002, and is not a required part of the
2002 basic financial statements of MILFORD CROSSING ASSOCIATES, L.P. Such
information has been subjected to the auditing procedures applied in the audit
of the 2002 basic financial statements and, in our opinion, is fairly stated in
all material respects in relation to the financial statements taken as a whole.
The additional information, relating to 2001, shown on pages 14 and 15 is
presented for the purpose of additional analysis for the year December 31, 2001,
and is not a required part of the 2001 basic financial statements of MILFORD
CROSSING ASSOCIATES, LP. Such information was prepared by other auditors and was
subjected to the auditing procedures applied in their audit of the 2001 basic
financial statements and, in their opinion, was fairly stated in all material
respects in relation to those financial statements taken as a whole.
/s/ Mayer, Hoffman, McCann P.C.
Philadelphia, Pennsylvania
January 31, 2003
66
[Letterhead of Halbert, Katz & Co., P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Milford Crossing Associates, L.P.
Wilmington, Delaware
We have audited the accompanying balance sheets of MILFORD CROSSING ASSOCIATES,
L.P., as of December 31, 2001 and December 31, 2000, and the related statements
of loss, partners' capital (capital deficiency) and cash flows for the years
then ended. These financial statements are the responsibility of the project's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America and GOVERNMENT AUDITING STANDARDS issued by the
comptroller general of the United States. 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 MILFORD CROSSING ASSOCIATES,
L.P. as of December 31, 2001 and December 31, 2000 and the results of its
operations, changes in partners' capital (capital deficiency) and cash flows for
the years then ended, in conformity with accounting principles generally
accepted in the United States of America.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
the report (shown on pages 14 to 26) is presented for the purpose of additional
analysis and is not a required part of the basic financial statements of MILFORD
CROSSING ASSOCIATES, L.P. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
In accordance with GOVERNMENT AUDITING STANDARDS, and the CONSOLIDATED AUDIT
GUIDE FOR AUDITS OF HUD PROGRAMS, issued buy the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 31, 2002, on our
consideration of MILFORD CROSSING ASSOCIATES, L.P'S internal controls, and
reports dated January 31, 2002, on its compliance with specific requirements
applicable to major HUD programs and specific requirements applicable to Fair
Housing and Non-Discrimination. Those reports are an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.
/s/ Halbert, Katz & Co., P.C.
Philadelphia, Pennsylvania
January 31, 2002
67
[Letterhead of Citrin Cooperman & Company, L.L.P.]
INDEPENDENT AUDITORS' REPORT
To the Partners BX-7X ASSOCIATES, L.P.
We have audited the accompanying balance sheets of BX-7F Associates, L.P. as of
December 31, 2002 and 2001 and the related statements of operations, partners'
capital, and cash flows for the years then ended. 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 auditing standards generally accepted
in the United States of America. 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 BX-7F Associates, L.P. as of
December 31, 2002 and 2001, and the results of its operations and its cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.
/s/ Citrin Cooperman & Company, L.L.P.
January 25, 2003
White Plains, New York
68
[Letterhead of Citrin Cooperman & Company, L.L.P.]
INDEPENDENT AUDITORS' REPORT
To the Partners BX-7X ASSOCIATES, L.P.
We have audited the accompanying balance sheets of BX-7F Associates, L.P. as of
December 31, 2001 and 2000 and the related statements of operations, partners'
capital, and cash flows for the years then ended. 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 auditing standards generally accepted
in the United States of America. 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 BX-7F Associates, L.P. as of
December 31, 2001 and 2000, and the results of its operations and its cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.
/s/ Citrin Cooperman & Company, L.L.P.
January 31, 2002
White Plains, New York
69
[Letterhead of Amilcar Torres Rivera, CPA]
INDEPENDENT AUDITORS' REPORT
To the Partners
Los Angeles Limited Partnership
I have audited the accompanying balance sheets of Los Angeles Limited
Partnership as of December 31, 2002 and 2001, and the related statements of
loss, changes in Partners' capital and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. My responsibility is to express an opinion on these financial
statements based on my audit.
I conducted my audit in accordance with auditing standards generally accepted in
the United States of America which require that I 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. I believe that my audit provides a reasonable basis for my
opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Los Angeles Limited Partnership as
of December 31, 2002 and 2001, and the results of its operations and its cash
flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
/s/ Amilcar Torres Rivera, CPA
San Juan, Puerto Rico
January 29, 2003
Stamp #1784085 of the
Puerto Rico Society of
CPA's was affixed to the original.
70
[Letterhead of Amilcar Torres Rivera, CPA]
INDEPENDENT AUDITORS' REPORT
To the Partners
Los Angeles Limited Partnership
I have audited the accompanying balance sheets of Los Angeles Limited
Partnership as of December 31, 2001 and 2000, and the related statements of
loss, changes in Partners' capital and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. My responsibility is to express an opinion on these financial
statements based on my audit.
I conducted my audit in accordance with auditing standards generally accepted in
the United States of America which require that I 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. I believe that my audit provides a reasonable basis for my
opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Los Angeles Limited Partnership as
of December 31, 2001 and 2000, and the results of its operations and its cash
flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
Los Angeles Limited Partnership rent income from subsidies is approximately 86%
of total Partnership revenues. As disclosed in Note 1-A, the actual rent subsidy
contract is due since December 31, 2001 (124 units).
/s/ Amilcar Torres Rivera, CPA
Stamp #1652577 of the
Puerto Rico Society of
CPA's was affixed to the original.
San Juan, Puerto Rico
January 28, 2002
71
[Letterhead of Toski, Schaefer & Co., P.C.]
INDEPENDENT AUDITOR'S REPORT
The Partners
Christine Apartments, L.P.:
We have audited the accompanying balance sheets of Christine Apartments, L.P. as
of December 31, 2002 and 2001 and the related statements of operations,
partners' equity and cash flows for the years then ended. 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 auditing standards generally accepted
in the United States of America and Government Auditing Standards, issued by the
Comptroller General of the United States. 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 Christine Apartments, L.P. as
of December 31, 2002 and 2001 and the results of its operations, changes in
partners' equity and cash flows for the years then ended, in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report
dated February 5, 2003 on our consideration of the Partnership's internal
control and on its compliance with laws and regulations applicable to the
financial statements. That report is an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.
/s/ Toski, Schaefer & Co., P.C.
Williamsville, New York
February 5, 2003
72
[Letterhead of Toski, Schaefer & Co., P.C.]
INDEPENDENT AUDITOR'S REPORT
The Partners
Christine Apartments, L.P.:
We have audited the accompanying balance sheets of Christine Apartments, L.P. as
of December 31, 2001 and 2000 and the related statements of operations,
partners' equity and cash flows for the years then ended. 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 auditing standards generally accepted
in the United States of America and Government Auditing Standards, issued by the
Comptroller General of the United States. 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 Christine Apartments, L.P. as
of December 31, 2001 and 2000 and the results of its operations, changes in
partners' equity and cash flows for the years then ended, in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report
dated February 5, 2002 on our consideration of the Partnership's internal
control and on its compliance with laws and regulations applicable to the
financial statements. That report is an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.
/s/ Toski, Schaefer & Co., P.C.
Williamsville, New York
February 5, 2002
73
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Plainsboro Housing Partners Limited Partnership
We have audited the accompanying balance sheets of Plainsboro Housing Partners
Limited Partnership as of December 31, 2002 and 2001, and the related statements
of revenue and expenses, changes in partners' equity and cash flows for the
years then ended. 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 auditing standards generally accepted
in the United States of America. 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 Plainsboro Housing Partners
Limited Partnership as of December 31, 2002 and 2001, and the results of its
operations, changes in partners' equity and its cash flows for the years then
ended, in conformity with accounting principles generally accepted in the United
States of America.
/s/ Reznick Fedder & Silverman
Baltimore, Maryland
January 7, 2003
74
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Plainsboro Housing Partners Limited Partnership
We have audited the accompanying balance sheets of Plainsboro Housing Partners
Limited Partnership as of December 31, 2001 and 2000, and the related statements
of revenue and expenses, changes in partners' equity and cash flows for the
years then ended. 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 auditing standards generally accepted
in the United States of America. 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 Plainsboro Housing Partners
Limited Partnership as of December 31, 2001 and 2000, and the results of its
operations, changes in partners' equity and its cash flows for the years then
ended, in conformity with accounting principles generally accepted in the United
States of America.
/s/ Reznick Fedder & Silverman
Baltimore, Maryland
January 3, 2002
75
[Letterhead of Koch Group & Company, LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners
Rolling Green Associates, L.P.
(A Limited Partnership)
We have audited the accompanying balance sheets of Rolling Green Associates,
L.P. (A Limited Partnership) as of December 31, 2002, and the related statements
of operations, changes in partners' equity (deficit), and cash flows for the
years then ended. 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 auditing standards generally accepted
in the United States of America. 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 Rolling Green Associates, L.P.
as of December 31, 2002, and the results of its operations, changes in partners'
equity (deficit) and its cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information on pages 12 to 16 is presented for purposes of additional analysis
and is not a required part of the basic financial statements. Such information
has been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the financial statements taken as a whole.
/s/ Koch Group & Company, LLP
New York, New York
February 4, 2003
76
[Letterhead of Asher & Company, Ltd.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Rolling Green Associates, L.P.
(A Limited Partnership)
We have audited the accompanying balance sheets of Rolling Green Associates,
L.P. (A Limited Partnership) as of December 31, 2001 and 2000, and the related
statements of profit and loss, Partners' capital, and cash flows for the years
then ended December 31, 2001. 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 auditing standards generally accepted
in the United States of America and Government Auditing Standards, issued by the
Comptroller General of the United States. 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 Rolling Green Associates, L.P.
(A Limited Partnership) as of December 31, 2001 and 2000, and the results of its
operations, changes in Partners' capital, and its cash flows for the year then
ended December 31, 2001 in conformity with accounting principles generally
accepted in the United States of America.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 24, 2002
77
INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
March 31,
------------------------------
2003 2002*
------------- -------------
Property and equipment - net of accumulated depreciation
(Notes 2 and 4) $ 128,704,171 $ 133,957,550
Cash and cash equivalents (Notes 2 and 10) 1,445,745 1,261,107
Cash held in escrow (Note 5) 9,305,504 9,401,655
Deferred costs, less accumulated amortization (Notes 2 and 6) 1,585,761 1,737,440
Other assets 1,540,332 1,410,689
------------- -------------
Total assets $ 142,581,513 $ 147,768,441
============= =============
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Liabilities
Mortgage notes payable (Note 7) $ 93,200,138 $ 94,576,806
Accounts payable and other liabilities 11,974,677 11,545,339
Due to local general partners and affiliates (Note 8) 5,853,665 5,781,340
Due to general partner and affiliates (Note 8) 7,299,343 5,952,787
------------- -------------
Total liabilities 118,327,823 117,856,272
------------- -------------
Minority interest (Note 2) 5,193,688 5,508,422
------------- -------------
Commitments and contingencies (Notes 8 and 10)
Partners' capital (deficit)
Limited partners (76,786 BACs issued and outstanding) $ 19,552,276 $ 24,842,584
General partner (492,274) (438,837)
------------- -------------
Total partners' capital (deficit) 19,060,002 24,403,747
------------- -------------
Total liabilities and partners' capital (deficit) $ 142,581,513 $ 147,768,441
============= =============
* Reclassified for comparative purposes.
See accompanying notes to consolidated financial statements.
78
INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended March 31,
--------------------------------------------
2003 2002 2001
------------ ------------ ------------
Revenues
Rental income $ 20,303,052 $ 19,709,111 $ 19,608,699
Other 752,490 864,866 1,132,696
------------ ------------ ------------
21,055,542 20,573,977 20,741,395
------------ ------------ ------------
Expenses
General and management 4,277,906 4,464,570 4,562,706
General and management-related
parties (Note 8) 2,082,344 2,034,370 2,036,822
Repairs and maintenance 4,241,405 4,181,192 4,417,480
Operating 2,252,377 2,282,654 2,117,002
Taxes 1,405,187 1,252,782 1,276,023
Insurance 1,275,627 860,878 704,620
Financial, primarily interest 5,025,307 5,209,654 5,335,735
Depreciation and amortization 5,853,795 5,783,821 5,750,137
------------ ------------ ------------
Total expenses 26,413,948 26,069,921 26,200,525
------------ ------------ ------------
Loss before minority interest (5,358,406) (5,495,944) (5,459,130)
Minority interest in loss of subsidiaries 14,661 13,750 15,252
------------ ------------ ------------
Net loss $ (5,343,745) $ (5,482,194) $ (5,443,878)
============ ============ ============
Net loss-limited partners $ (5,290,308) $ (5,427,372) $ (5,389,439)
============ ============ ============
Number of BACs outstanding 76,768 76,768 76,768
============ ============ ============
Net loss per BAC $ (68.91) $ (70.70) $ (70.20)
============ ============ ============
See accompanying notes to consolidated financial statements.
79
INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
Limited General
Total Partners Partner
------------ ------------ ------------
Partners' capital (deficit) - April 1, 2000 $ 35,329,819 $ 35,659,395 $ (329,576)
Net loss (5,443,878) (5,389,439) (54,439)
------------ ------------ ------------
Partners' capital (deficit) - March 31, 2001 29,885,941 30,269,956 (384,015)
Net loss (5,482,194) (5,427,372) (54,822)
------------ ------------ ------------
Partners' capital (deficit) - March 31, 2002 24,403,747 24,842,584 (438,837)
Net loss (5,343,745) (5,290,308) (53,437)
------------ ------------ ------------
Partners' capital (deficit) - March 31, 2003 $ 19,060,002 $ 19,552,276 $ (492,274)
============ ============ ============
See accompanying notes to consolidated financial statements.
80
INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Year Ended March 31,
-----------------------------------------
2003 2002 2001
----------- ----------- -----------
Cash flows from operating activities:
Net loss $(5,343,745) $(5,482,194) $(5,443,878)
----------- ----------- -----------
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 5,853,795 5,783,821 5,750,137
Minority interest in loss of subsidiaries (14,661) (13,750) (15,252)
(Increase) decrease in assets:
Cash held in escrow (304,467) (218,043) 42,310
Other assets (129,643) 726,673 (373,978)
Increase (decrease) in liabilities:
Accounts payable and other liabilities 429,338 1,558,034 928,973
Due to local general partners and affiliates 324,750 (47,947) (13,254)
Due to general partner and affiliates 1,346,556 1,031,064 1,379,523
----------- ----------- -----------
Total adjustments 7,505,668 8,819,852 7,698,459
----------- ----------- -----------
Net cash provided by operating activities 2,161,923 3,337,658 2,254,581
----------- ----------- -----------
Cash flows from investing activities:
Acquisition of property and equipment (436,047) (510,757) (437,204)
Decrease (increase) in cash held in escrow 400,618 (139,931) 54,258
Decrease in due to local general partners and
affiliates (225,357) (239,002) (153,913)
----------- ----------- -----------
Net cash used in investing activities (260,786) (889,690) (536,859)
----------- ----------- -----------
Cash flows from financing activities:
Increase in deferred costs (12,690) (26,730) (51,595)
Proceeds from mortgage notes 0 0 6,909,970
Repayments of mortgage notes (1,376,668) (2,253,590) (2,058,616)
Repayments of construction loan 0 0 (6,740,018)
Decrease in due to local general partners and
affiliates (27,068) (33,855) (31,466)
Decrease in capitalization of consolidated
subsidiaries attributable to minority interest (300,073) (704,476) (170,704)
----------- ----------- -----------
Net cash used in financing activities (1,716,499) (3,018,651) (2,142,429)
----------- ----------- -----------
Net increase (decrease) in cash and cash
equivalents 184,638 (570,683) (424,707)
Cash and cash equivalents at beginning of year 1,261,107 1,831,790 2,256,497
----------- ----------- -----------
Cash and cash equivalents at end of year $ 1,445,745 $ 1,261,107 $ 1,831,790
=========== =========== ===========
Supplemental disclosure of cash flows information:
Cash paid during the year for interest $ 3,889,793 $ 3,936,342 $ 4,265,915
=========== =========== ===========
See accompanying notes to consolidated financial statements.
81
INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2003
NOTE 1 - General
Independence Tax Credit Plus L.P. (the "Partnership"), a Delaware limited
partnership, was organized on November 7, 1990, but had no activity until May
31, 1991 (which date is considered to be inception for financial accounting
purposes) and commenced its public offering on July 1, 1991. The general partner
of the Partnership is Related Independence Associates L.P., a Delaware limited
partnership (the "General Partner").
The Partnership's business is to invest in other partnerships ("Local
Partnerships," "subsidiaries" or "subsidiary partnerships") owning leveraged
Apartment Complexes that are eligible for the low-income housing tax credit
("Tax Credit") enacted in the Tax Reform Act of 1986, some of which complexes
may also be eligible for the historic rehabilitation tax credit.
The Partnership has interests in twenty-eight Local Partnerships as of March 31,
2003.
The Partnership was authorized to issue a total of 200,000 Beneficial Assignment
Certificates ("BACs") which were registered with the Securities and Exchange
Commission for sale to the public. Each BAC represents all of the economic and
virtually all of the ownership rights attributable to a limited partnership
interest. As of March 31, 2003, the Partnership had raised a total of
$76,786,000 representing 76,786 BACs and no further issuance of BACs is
anticipated.
The terms of the Partnership's Amended and Restated Agreement of Limited
Partnership (the "Partnership Agreement") provide, among other things, that net
profits or losses and distributions of cash flow are, in general, allocated 99%
to the limited partners and BACs holders and 1% to the General Partner.
NOTE 2 - Summary of Significant Accounting Policies
a) Basis of Accounting
For financial reporting purposes the Partnership's fiscal year ends on March 31.
All subsidiaries have fiscal years ending December 31. Accounts of the
subsidiaries have been adjusted for intercompany transactions from January 1
through March 31. The Partnership's fiscal year ends March 31 in order to allow
adequate time for the subsidiaries financial statements to be prepared and
consolidated. The books and records of the Partnership are maintained on the
accrual basis of accounting, in accordance with U.S. generally accepted
accounting principles ("GAAP").
b) Basis of Consolidation
The consolidated financial statements include the accounts of the Partnership
and twenty-eight subsidiary partnerships in which the Partnership is a limited
partner. Through the rights of the Partnership and/or an affiliate of the
General Partner, which affiliate has a contractual obligation to act on behalf
of the Partnership, to remove the general partner of the subsidiary local
partnerships and to approve certain major operating and financial decisions, the
Partnership has a controlling financial interest in the subsidiary local
partnerships. All intercompany accounts and transactions with the subsidiary
partnerships have been eliminated in consolidation.
Increases (decreases) in the capitalization of consolidated subsidiaries
attributable to minority interest arise from cash contributions and cash
distributions to the minority interest partners.
82
INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2003
Losses attributable to minority interest which exceed the minority interests'
investment in a subsidiary have been charged to the Partnership. Such losses
aggregated approximately $33,000, $35,000 and $35,000 for the years ended March
31, 2003, 2002 and 2001, respectively (the 2002, 2001 and 2000 Fiscal Years,
respectively). The Partnership's investment in each subsidiary is equal to the
respective subsidiary's partners' equity less minority interest capital, if any.
In consolidation, all subsidiary partnership losses are included in the
Partnership's capital account except for losses allocated to minority interest
capital.
c) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, cash in banks, and investments
in short-term highly liquid instruments purchased with original maturities of
three months or less.
d) Property and Equipment
Property and equipment to be held and used are carried at cost which includes
the purchase price, acquisition fees and expenses, construction period interest
and any other costs incurred in acquiring the properties. The cost of property
and equipment is depreciated over their estimated useful lives using accelerated
and straight-line methods. Expenditures for repairs and maintenance are charged
to expense as incurred; major renewals and betterments are capitalized. At the
time property and equipment are retired or otherwise disposed of, the cost and
accumulated depreciation are eliminated from the assets and accumulated
depreciation accounts and the profit or loss on such disposition is reflected in
earnings. A loss on impairment of assets is recorded when management estimates
amounts recoverable through future operations and sale of the property on an
undiscounted basis is below depreciated cost. At that time, property investments
themselves are reduced to estimated fair value (generally using discounted cash
flows) when the property is considered to be impaired and the depreciated cost
exceeds estimated fair value.
At the time management commits to a plan to dispose of assets, said assets are
adjusted to the lower of carrying amount or fair value less costs to sell. These
assets are classified as property and equipment-held for sale and are not
depreciated.
Through March 31, 2003, the Partnership has recorded approximately $500,000 as
an aggregate loss on impairment of assets.
e) Income Taxes
The Partnership is not required to provide for, or pay, any federal income
taxes. Net income or loss generated by the Partnership is passed through to the
partners and is required to be reported by them. The Partnership may be subject
to state and local taxes in jurisdictions in which it operates. For income tax
purposes, the Partnership has a fiscal year ending December 31.
f) Offering Costs
Costs incurred to sell BACs, including brokerage and the nonaccountable expense
allowance, are considered selling and offering expenses. These costs are charged
directly to limited partners' capital.
83
INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2003
g) Loss Contingencies
The Partnership records loss contingencies as a charge to income when
information becomes available which indicates that it is probable that an asset
has been impaired or a liability has been incurred as of the date of the
financial statements and the amount of loss can be reasonably estimated.
h) Use of Estimates
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly,
actual results could differ from those estimates.
NOTE 3 - Fair Value of Financial Instruments
The following methods and assumptions were used to estimate the fair value of
each class of financial instruments (all of which are held for nontrading
purposes) for which it is practicable to estimate that value:
Cash and Cash Equivalents and Cash Held in Escrow
- ---------------------------------------------------------
The carrying amount approximates fair value.
Mortgage Notes Payable
- ----------------------
The fair value of mortgage notes payable is estimated, where practicable, based
on the borrowing rate currently available for similar loans.
The estimated fair values of the Partnership's mortgage notes payable are as
follows:
March 31, 2003 March 31, 2002
------------------------- -------------------------
Carrying Carrying
Amount Fair Value Amount Fair Value
----------- ----------- ----------- -----------
Mortgage notes payable for
which it is:
Practicable to estimate fair value $39,404,826 $34,533,070 $39,806,784 $35,034,048
Not practicable $53,795,312 * $54,770,022 *
*Management believes it is not practical to estimate the fair value of these
mortgage notes payable because mortgage programs with similar characteristics
are not currently available to the Local Partnerships.
The carrying amount of other financial instruments that require such disclosure
approximates fair value.
84
INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2003
NOTE 4 - Property and Equipment
The components of property and equipment are as follows:
March 31, Estimated
----------------------------- Useful Lives
2003 2002 (Years)
------------- ------------ -------------
Land $ 5,692,516 $ 5,692,516 --
Building and improvements 174,948,799 174,729,217 15-40
Furniture and fixtures 3,138,905 2,957,753 3-10
------------- ------------
183,780,220 183,379,486
Less: Accumulated depreciation (55,076,049) (49,421,936)
------------- ------------
$ 128,704,171 $133,957,550
============= ============
Included in property and equipment is approximately $4,500,000 of acquisition
fees paid to the general partner and $1,057,104 of acquisition expenses as of
March 31, 2003 and 2002. In addition, as of March 31, 2003 and 2002, building
and improvements include approximately $4,378,000 of capitalized interest.
In connection with the rehabilitation of the properties, the subsidiary
partnerships have incurred developer's fees of approximately $14,500,000 to the
Local General Partners and affiliates, net of approximately $979,000 earned by
the Partnership. Such fees have been included in the cost of property and
equipment.
Depreciation expense for the years ended March 31, 2003, 2002 and 2001 amounted
to, $5,689,426, $5,591,004 and $5,576,423, respectively.
During the years ended March 31, 2003 and 2002, accumulated depreciation of
$35,312 and $684, respectively, was written off.
NOTE 5 - Cash Held in Escrow
Cash held in escrow consists of the following:
March 31,
--------------------------
2003 2002
---------- ----------
Purchase price payments* $ 28,000 $ 32,666
Real estate taxes, insurance and other 5,064,851 4,772,877
Reserve for replacements 3,493,460 3,889,412
Tenant security deposits 719,193 706,700
---------- ----------
$9,305,504 $9,401,655
========== ==========
*Represents amounts to be paid to seller after completion of properties under
construction and upon meeting specified rental achievement criteria.
85
INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2003
NOTE 6 - Deferred Costs
The components of deferred costs and their periods of amortization are as
follows:
March 31,
----------------------------------------
2003 2002 Period
----------- ----------- ----------
Financing expenses $ 2,975,515 $ 2,962,825 *
Less: Accumulated amortization (1,389,754) (1,225,385)
----------- -----------
$ 1,585,761 $ 1,737,440
=========== ===========
*Over the life of the related mortgages.
Amortization expense for the years ended March 31, 2003, 2002 and 2001 amounted
to $164,369, $192,817 and $173,714, respectively.
NOTE 7 - Mortgage Notes Payable
The mortgage notes are payable in aggregate monthly installments of
approximately $582,000, including principal and interest at rates varying from
0% to 10.29% per annum, through the year 2048. Each subsidiary partnership's
mortgage note payable is collateralized by the land and buildings of the
respective subsidiary partnership, the assignment of certain subsidiary
partnership's rents and leases, and is without further recourse.
Certain mortgage notes with balances aggregating $10,472,133 and $10,619,405 at
December 31, 2002 and 2001, respectively, which bear interest at rates ranging
from 8.5% to 9% per annum, were eligible for interest rate subsidies.
Accordingly, the subsidiary partnerships paid only that portion of the monthly
payments that would be required if the interest rate was 1% and the balance was
subsidized under Sections 236 and 551(b) of the National Housing Act.
Annual principal payment requirements, as of March 31, 2003, for each of the
next five fiscal years and thereafter, are as follows:
Fiscal Year Ending Amount
- ------------------ ------------
2003 $ 2,819,098
2004 2,955,808
2005 3,146,591
2006 3,347,801
2007 4,306,094
Thereafter 76,624,746
------------
$ 93,200,138
============
The mortgage agreements require monthly deposits to replacement reserves of
approximately $58,000 and monthly deposits to escrow accounts for real estate
taxes, hazard and mortgage insurance and other (Note 5).
86
INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2003
NOTE 8 - Related Party Transactions
An affiliate of the General Partner, Independence SLP L.P., has either a 0.1% or
1% interest as a special limited partner in each of the Local Partnerships. An
affiliate of the General Partner also has a minority interest in certain Local
Partnerships.
A) Other Related Party Expenses
The General Partner and its affiliates perform services for the Partnership. The
costs incurred for the years ended March 31, 2003, 2002 and 2001 were as
follows:
Year Ended March 31,
------------------------------------
2003 2002 2001
---------- ---------- ----------
Partnership management fees (i) $ 880,000 $ 880,000 $ 880,000
Expense reimbursement (ii) 158,434 135,388 148,577
Local administrative fee (iv) 77,000 61,000 63,000
---------- ---------- ----------
Total general and administrative-
General Partner 1,115,434 1,076,388 1,091,577
---------- ---------- ----------
Property management fees incurred to
affiliates of the subsidiary partnerships'
general partners (iii) 966,910 957,982 945,245
---------- ---------- ----------
Total general and administrative-
related parties $2,082,344 $2,034,370 $2,036,822
========== ========== ==========
(i) The General Partner is entitled to receive a partnership management fee,
after payment of all partnership expenses, which together with the local annual
administrative fees will not exceed a maximum of 0.5% per annum of invested
assets (as defined in the Partnership Agreement), for administering the affairs
of the Partnership. Subject to the foregoing limitation, the partnership
management fee will be determined by the General Partner in its sole discretion
based upon its review of the Partnership's investments. Unpaid partnership
management fees for any year have been, and will continue to be, accrued without
interest and will be payable only to the extent of available funds after the
Partnership has made distributions to the limited partners of sale or
refinancing proceeds equal to their original capital contributions plus a 10%
priority return thereon (to the extent not theretofore paid out of cash flow).
Partnership management fees owed to the General Partner amounting to
approximately $4,839,000 and $3,959,000 were accrued and unpaid as of March 31,
2003 and 2002, respectively.
(ii) The Partnership reimburses the General Partner and its affiliates for
actual Partnership operating expenses incurred by the General Partner and its
affiliates on the Partnership's behalf. The amount of reimbursement from the
Partnership is limited by the provisions of the Partnership Agreement. Another
affiliate of the General Partner performs asset monitoring for the Partnership.
These services include site visits and evaluations of the subsidiary
partnerships' performance. Expense reimbursements owed to the General Partners
and its affiliates amounting to approximately $818,000 and $660,000 were accrued
and unpaid as of March 31, 2003 and 2002, respectively.
(iii) Property management fees incurred to affiliates of the subsidiary
partnerships amounted to $966,910, $957,982 and $945,245 for the 2002, 2001 and
2000 Fiscal Years, respectively.
(iv) Independence SLP L.P. is entitled to receive a local administrative fee of
up to $2,500 per year from each subsidiary partnership.
87
INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2003
(v) As of March 31, 2003 and 2002, the Partnership owes an affiliate, of the
General Partner, approximately $1,298,000 and $977,000 respectively for
operating advances. These advances are non-interest bearing and have no set
repayment terms.
B) Due to Local General Partners and Affiliates
Due to local general partners and affiliates consists of the following:
March 31,
-----------------------
2003 2002
---------- ----------
Development deficit advances $ 50,000 $ 50,000
Operating advances (i) 1,769,359 1,669,922
Development fee payable 1,936,175 2,161,532
Long-term notes payable (ii) 1,550,953 1,578,021
Management and other fees 547,178 321,865
---------- ----------
$5,853,665 $5,781,340
========== ==========
(i) Operating advances include the following loans:
Christine Apartments, L.P. $ 116,100 $ 116,100
- --------------------------
This loan is noninterest bearing and has no set repayment
terms
(ii) Long-term notes payable consist of the following:
Creative Choice Homes II, LTD. $ 979,770 $ 979,770
- ---------------------------------
The first note bears interest at 7% payable monthly. Princi-
pal on the loan is due and payable in full on December 31,
2009. The second note bears interest at 12% payable
monthly. Principal on the loan is due and payable in full on
December 31, 2009
Plainsboro Housing Partners, L.P. $ 571,183 $ 598,251
- ---------------------------------
This loan accrues interest at a rate of 7.34% per annum on
the outstanding principal balance for 20 years. Repayment
of the principal and interest shall be made from net cash
flow to the extent available pursuant to the promissory note
All accrued interest and principal are due in a balloon pay-
ment in December 2012
Interest expense incurred on such long-term notes payable
amounted to approximately $125,000, $105,000 and $108,000
for the 2002, 2001 and 2000 Fiscal Years, respectively
C) Other
Pursuant to the Partnership Agreement and the Local Partnership Agreements, the
General Partner and Independence SLP L.P. received their pro rata share of
profits, losses and tax credits.
88
INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2003
NOTE 9 - Income Taxes
A reconciliation of the financial statements net loss to the income tax loss for
the Partnership and its consolidated subsidiaries follows:
Year Ended December 31,
-----------------------------------------
2002 2001 2000
----------- ----------- -----------
Financial statement net loss $(5,343,745) $(5,482,194) $(5,443,878)
Differences between depreciation and amortiza-
tion expense recorded for financial reporting
purposes and the accelerated cost recovery
system utilized for income tax purposes (935,964) (2,173,172) (2,113,459)
Differences resulting from parent company
having a different fiscal yearfor income tax and
financial reporting purposes 11,739 88,461 (83,865)
Other (69,850) 224,941 (72,707)
----------- ----------- -----------
Net loss as shown on the income tax return for
the calendar year ended $(6,337,820) $(7,341,964) $(7,713,909)
=========== =========== ===========
NOTE 10 - Commitments and Contingencies
a) Uninsured Cash and Cash Equivalents
The Partnership maintains its cash and cash equivalents in various banks.
Accounts at each bank are guaranteed by the Federal Deposit Insurance
Corporation up to $100,000. As of March 31, 2003, uninsured cash and cash
equivalents approximated $635,000.
b) Other
The Partnership is subject to the risks incident to potential losses arising
from the management and ownership of improved real estate. The Partnership can
also be affected by poor economic conditions generally, however no more than 21%
of the properties are located in any single state. There are also substantial
risks associated with owning properties receiving government assistance; for
example, the possibility that Congress may not appropriate funds to enable the
U.S. Department of Housing and Urban Development ("HUD") to make rental
assistance payments. HUD also restricts annual cash distributions to partners
based on operating results and a percentage of the owner's equity contribution.
The Partnership cannot sell or substantially liquidate its investments in
subsidiary partnerships during the period that the subsidy agreements are in
existence, without HUD's approval. Furthermore, there may not be market demand
for apartments at full market rents when the rental assistance contracts expire.
The Partnership and BACs holders began to recognize Housing Tax Credits with
respect to a Property when the Credit Period for such Property commenced.
Because of the time required for the acquisition, completion and rent-up of
Properties, the amount of Tax Credits per BAC gradually increased over the first
three years of the Partnership. Housing Tax Credits not recognized in the first
three years will be recognized in the 11th through 13th years. The Partnership
generated $11,256,724, $11,986,066 and $11,986,066 Housing Tax Credits during
the 2002, 2001 and 2000 tax years, respectively.
89
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.
The Partnership has no directors or executive officers. The Partnership's
affairs are managed and controlled by the General Partner.
In December 2002, Charter Municipal Mortgage Acceptance Company ("CharterMac"),
which is also managed by an affiliate of Related Capital Company, announced a
proposed acquisition of Related Capital Company, an affiliate of the General
Partner. Pursuant to the proposed acquisition, CharterMac will acquire a
controlling interest in the general partner of the General Partner. This
acquisition is not anticipated to affect the Partnership or its day-to-day
operations as management of the General Partner will not change.
Certain information concerning the directors and executive officers of Related
Independence Associates Inc. ("RIAI"), the sole general partner of Related
Independence Associates L.P., the General Partner, is set forth below.
Name Position
- ---- --------
Stephen M. Ross Director
Michael Brenner President
Alan P. Hirmes Senior Vice President
Stuart J. Boesky Senior Vice President
Marc D. Schnitzer Vice President
Denise L. Kiley Vice President
Glenn F. Hopps Treasurer
Teresa Wicelinski Secretary
STEPHEN M. ROSS, 63, is the President, a Director and a shareholder of The
Related Realty Group, Inc., the General Partner of The Related Companies, L.P.
He graduated from the University of Michigan School of Business Administration
with a Bachelor of Science degree and from Wayne State University School of Law
with a Juris Doctor degree. Mr. Ross than received a Master of Laws degree in
taxation from New York University School of Law. He joined the accounting firm
of Coopers & Lybrand in Detroit as a tax specialist and later moved to New York,
where he worked for two large Wall Street investment banking firms in their real
estate and corporate finance departments. Mr. Ross formed the predecessor of The
Related Companies, L.P. ("TRCLP") in 1972 to develop, manage, finance and
acquire subsidized and conventional apartment developments. Mr. Ross also serves
on the Board of Trustees of Charter Municipal Mortgage Acceptance Company.
MICHAEL BRENNER, 57, is the Executive Vice President and Chief Financial Officer
of TRCLP. Prior to joining TRCLP in 1996, Mr. Brenner was a partner with Coopers
& Lybrand, having served as managing partner of its Industry Programs and Client
Satisfaction initiatives from 1993-1996, managing partner of the Detroit group
90
of offices from 1986-1993 and the Chairman of its National Real Estate Industry
Group from 1984-1986. Mr. Brenner graduated summa cum laude from the University
of Detroit with a Bachelors degree in Business Administration and from the
University of Michigan with a Masters of Business Administration, with
distinction. Mr. Brenner also serves on the Board of Trustees of Charter
Municipal Mortgage Acceptance Company.
ALAN P. HIRMES, 48, has been a Certified Public Accountant in New York since
1978. Prior to joining Capital in October 1983, Mr. Hirmes was employed by
Weiner & Co., Certified Public Accountants. Mr. Hirmes is also a Vice President
of Capital. Mr. Hirmes graduated from Hofstra University with a Bachelor of Arts
degree. Mr. Hirmes also serves on the Board of Trustees of Charter Municipal
Mortgage Acceptance Company and American Mortgage Acceptance Company.
STUART J. BOESKY, 47, practiced real estate and tax law in New York City with
the law firm of Shipley & Rothstein from 1984 until February 1986 when he joined
Capital. From 1983 to 1984, Mr. Boesky practiced law with the Boston law firm of
Kaye Fialkow Richard & Rothstein (which subsequently merged with Strook & Strook
& Lavan) and from 1978 to 1980 was a consultant specializing in real estate at
the accounting firm of Laventhol & Horwath. Mr. Boesky graduated from Michigan
State University with a Bachelor of Arts degree and from Wayne State School of
Law with a Juris Doctor degree. He then received a Master of Laws degree in
Taxation from Boston University School of Law. Mr. Boesky also serves on the
Board of Trustees of Charter Municipal Acceptance Company and American Mortgage
Acceptance Company.
MARC D. SCHNITZER, 42, is responsible both for financial restructurings of real
estate properties and directing Capital's acquisitions of properties generating
Housing Tax Credits. Mr. Schnitzer received a Masters of Business Administration
from The Wharton School of the University of Pennsylvania in December 1987
before joining Related in January 1988. From 1983 to January 1986, he was a
financial analyst for the First Boston Corporation in New York. Mr. Schnitzer
graduated summa cum laude with a Bachelor of Science in Business Administration
from the School of Management at Boston University in May 1983.
DENISE L. KILEY, 43, is responsible for overseeing the due diligence and asset
management of all multifamily residential properties invested in RCC sponsored
corporate, public and private equity and debt funds. Prior to joining Related in
1990, Ms. Kiley had experience acquiring, financing and asset managing
multifamily residential properties. From 1981-1985 she was an auditor with Price
Waterhouse. Ms. Kiley holds a Bachelor of Science in Accounting from Boston
College.
GLENN F. HOPPS, 40, joined Related in December, 1990, and prior to that date was
employed by Mark Shron & Company and Weissbarth, Altman and Michaelson certified
public accountants. Mr. Hopps graduated from New York State University at Albany
with a Bachelor of Science Degree in Accounting.
TERESA WICELINSKI, 37, joined Related in June 1992, and prior to that date was
employed by Friedman, Alpren & Green, certified public accountants. Ms.
Wicelinski graduated from Pace University with a Bachelor of Arts Degree in
Accounting.
91
Item 11. Executive Compensation.
The Partnership has no officers or directors. The Partnership does not pay or
accrue any fees, salaries or other forms of compensation to directors or
officers of the general partner of the General Partner for their services. Under
the terms of the Partnership Agreement, the General Partner and its affiliates
are entitled to receive compensation from the Partnership in consideration of
certain services rendered to the Partnership by such parties. In addition, the
General Partner is entitled to 1% of all cash distributions and Tax Credit
allocations and a subordinated 15% interest in Net Sales or Refinancings
Proceeds. See Note 8 to the Financial Statements in Item 8 above for a
presentation of the types and amounts of compensation paid to the General
Partner and its affiliates, which is incorporated herein by reference thereto.
Tabular information concerning salaries, bonuses and other types of compensation
payable to executive officers has not been included in this annual report. As
noted above, the Partnership has no executive officers. The levels of
compensation payable to the General Partner and/or its affiliates is limited by
the terms of the Partnership Agreement and may not be increased therefrom on a
discretionary basis.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
Name and Address of Amount and Nature of Percentage
Title of Class Beneficial Ownership Beneficial Ownership of Class
- -------------- -------------------- -------------------- ----------
General Partnership Related Independence $1,000 capital contribution 100%
Interest in the Associates L.P. -directly owned
Partnership 625 Madison Avenue
New York, NY 10022
Independence SLP L.P., a limited partnership whose general partner is the
General Partner of the Partnership and which acts as the special limited partner
of each Local Partnership, holds either a 0.1% or 1% limited partnership
interest in each Local Partnership. See Note 8 to the Financial Statements in
Item 8 above, which information is incorporated herein by reference thereto.
Except as set forth in the table below, no person is known by the Partnership to
be the beneficial owner of more than 5% of the Limited Partnership Interests and
neither the Related General Partner nor any director or executive officer of the
Related General Partner owns any Limited Partnership Interests. The following
table sets forth the number of BACs beneficially owned, as of June 2, 2003, by
(i) each BACs holder known to the Partnership to be a beneficial owner of more
than 5% of the BACs, (ii) each director and executive officer of the general
partner of the Related General Partner and (iii) the directors and executive
officers of the general partner of the Related General Partner as a group.
Unless otherwise noted, all BACs are owned directly with sole voting and
dispositive powers.
92
Amount and Nature of
Name of Beneficial Owner (1) Beneficial Ownership Percent of Class
- ------------------------ -------------------- ----------------
Lehigh Tax Credit Partners, Inc. 6,846.30 (2) (3) 8.9%
J. Michael Fried 6,846.30 (2) (3) (4) 8.9%
Alan P. Hirmes 6,846.30 (2) (3) (4) 8.9%
Stuart J. Boesky 6,846.30 (2) (3) (4) 8.9%
Stephen M. Ross - -
Michael Brenner - -
Marc D. Schnitzer 6,846.30 (2) (3) (4) 8.9%
Denise L. Kiley 6,846.30 (2) (3) (4) 8.9%
Glenn F. Hopps - -
Teresa Wicelinski - -
All directors and executive officers 6,846.30 (2) (3) (4) 8.9%
of the general partner of the
Related General Partner as a group
(ten persons)
(1) The address for each of the persons in the table is 625 Madison Avenue, New
York, New York 10022.
(2) As set forth in Schedule 13D filed by Lehigh Tax Credit Partners L.L.C.
("Lehigh I") and Lehigh Tax Credit Partners, Inc., (the "Managing Member") on
June 10, 1997 with the Securities and Exchange Commission (the "Commission") and
pursuant to a letter agreement dated May 28, 1997 among the Partnership, Lehigh
I and the Related General Partner (the "Standstill Agreement"), Lehigh I agreed
that, prior to May 28, 2007 (the "Standstill Expiration Date"), it will not and
it will cause certain affiliates including (Lehigh II) not to (i) acquire,
attempt to acquire or make a proposal to acquire, directly or indirectly, more
than 45% (including BACs acquired through all other means) of the outstanding
BACs, (ii) seek to propose to enter into, directly or indirectly, any merger,
consolidation, business combination, sale or acquisition of assets, liquidation,
dissolution or other similar transaction involving the Partnership, (iii) make,
or in any way participate, directly or indirectly, in any "solicitation" of
"proxies" or "consents" (as such terms are used in the proxy rules of the
Commission) to vote any voting securities of the Partnership, (iv) form, join or
otherwise participate in a "group" (within the meaning of Section 13 (d)(3) of
the Securities and Exchange Act of 1934) with respect to any voting securities
of the Partnership, except those affiliates bound by the Standstill Agreement
will not be deemed to have violated it and formed a "group" solely by acting in
accordance with the Standstill Agreement, (v) disclose in writing to any third
party any intention, plan or arrangement inconsistent with the terms of the
Standstill Agreement, or (vi) loan money to, advise, assist or encourage any
person in connection with any action inconsistent with the terms of the
Standstill Agreement. In addition, Lehigh I agreed that until the Standstill
Expiration Date it will not sell any BACs acquired by it unless the buyer of
such BACs agrees to be bound by the Standstill Agreement; provided, however,
Lehigh I may make transfers in the secondary market to any purchaser which
represents that following such sale it will not own three (3%) percent or more
of the BACs outstanding. By the terms of the Standstill Agreement, Lehigh I also
agreed to vote its BACs in the same manner as a majority of all voting BACs
holders; provided, however, Lehigh I is entitled to vote its BACs as it
determines with regard to any proposal (i) to remove the Related General Partner
93
as a general partner of the Partnership or (ii) concerning the reduction of any
fees, profits, distributions or allocations for the benefit of the Related
General Partner or its affiliates. The addresses of each of the Partnership,
Lehigh I and the Related General Partner is 625 Madison Avenue, New York, New
York 10022.
(3) All of such BACs represent BACs owned directly by Lehigh, I and Lehigh Tax
Credit Partners II, L.L.C. ("Lehigh II") for which the Managing Member serves as
managing member. As of June 2, 2003, Lehigh I held 3,410.65 BACs and Lehigh II
held 3,435.65 BACs.
(4) Each such party serves as a director and executive officer of the Managing
Member and owns an equity interest therein except J. Michael Fried who owns only
an economic interest.
Item 13. Certain Relationships and Related Transactions.
The Partnership has and will continue to have certain relationships with the
General Partner and its affiliates, as discussed in Item 11 and also Note 8 to
the Financial Statements in Item 8 above, which are incorporated herein by
reference. However, there have been no direct financial transactions between the
Partnership and the directors and officers of the general partner of the General
Partner.
Item 14. Controls and Procedures
The Principal Executive Officer and Principal Financial Officer of Related
Independence Inc., the general partner of Related Independence Associates L.P.
which is the General Partner of the Partnership, have evaluated the
Partnership's disclosure controls and procedures relating to the Partnership's
annual report on Form 10-K for the period ending March 31, 2003 as filed with
the Securities and Exchange Commission and have judged such controls and
procedures to be effective as of March 31, 2003 (the "Evaluation Date").
There have been no significant changes in the internal controls or in other
factors that could significantly affect internal controls relating to the
Partnership since the Evaluation Date.
94
PART IV
Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
Sequential
Page
----------
(a) 1. Consolidated Financial Statements
Independent Auditors' Report 15
Consolidated Balance Sheets at March 31, 2003 and 2002 78
Consolidated Statements of Operations for the Years Ended March 31,
2003, 2002 and 2001 79
Consolidated Statements of Changes in Partners' Capital (Deficit) for
the Years Ended March 31, 2003, 2002 and 2001 80
Consolidated Statements of Cash Flows for the Years Ended March 31,
2003, 2002 and 2001 81
Notes to Consolidated Financial Statements 82
(a) 2. Consolidated Financial Statement Schedules
------------------------------------------
Independent Auditors' Report 106
Schedule I - Condensed Financial Information of Registrant 107
Schedule III - Real Estate and Accumulated Depreciation 110
(a) 3. Exhibits
--------
(3A) Form of Amended and Restated Agreement of Limited Partnership of
Independence Tax Credit Plus L.P., attached to the Prospectus as Ex-
hibit A*
(3B) Amended and Restated Certificate of Limited Partnership of Independence
Tax Credit Plus L.P.*
(10A) Form of Subscription Agreement attached to the Prospectus as Exhibit
B*
(10B) Form of Purchase and Sales Agreement pertaining to the Partnership's
acquisition of Local Partnership Interests*
(10C) Form of Amended and Restated Agreement of Limited Partnership of
Local Partnerships*
(21) Subsidiaries of the Registrant 97
99.1 Certification Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 104
99.2 Certification Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 105
95
Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(continued).
Sequential
Page
----------
*Incorporated herein as an exhibit by reference to exhibits filed with
Pre-Effective Amendment No. 1 to the Independence Tax Credit Plus
L.P. Registration Statement on Form S-11 (Registration No. 33-37704)
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed during the quarter ended March
31, 2003.
96
Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(continued).
Jurisdiction
(c) Subsidiaries of the Registrant (Exhibit 21) of Organization
------------------------------ ---------------
Harbor Court Limited Partnership NY
Old Public Limited Partnership TN
Lancaster Terrace Limited Partnership OR
655 North Street Limited Partnership LA
Landreth Venture PA
Homestead Apartments Associates Ltd. FL
Bethel Villa Associates, L.P. DE
West Diamond Street Associates PA
Susquehanna Partners PA
Boston Bay Limited Partnership MA
Morrant Bay Limited Partnership MA
Hope Bay Limited Partnership MA
Lares Apartments Limited Partnership PR
Lajas Apartments Limited Partnership PR
Arlington-Rodeo Properties CA
Conifer Bateman Associates NY
Hampden Hall Associates, L.P. MO
Chester Renaissance Associates PA
Homestead Apartments II, LTD. FL
P.S. 157 Associates, L.P. NY
Cloisters Limited Partnership II PA
Creative Choice Homes II, LTD. FL
Milford Crossing Associates L.P. DE
BX-7F Associates, L.P. NY
Los Angeles Limited Partnership PR
Christine Apartments, L.P. NY
Plainsboro Housing Partners, L.P. NJ
Rolling Green Associates, L.P. NY
(d) Not applicable
97
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.
INDEPENDENCE TAX CREDIT PLUS L.P.
---------------------------------
(Registrant)
By: RELATED INDEPENDENCE ASSOCIATES L.P.,
its General Partner
By: RELATED INDEPENDENCE ASSOCIATES INC.,
a General Partner
Date: June 13, 2003 By: /s/ Michael Brenner
-------------------
Michael Brenner
President and Chief Executive Officer
(Principal Executive Officer)
98
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated:
Signature Title Date
- ------------------- --------------------------------------- -------------
/s/ Michael Brenner President and Chief Executive Officer
- ------------------- (principal executive officer)
Michael Brenner of Related Independence Associates Inc. June 13, 2003
/s/ Alan P. Hirmes Senior Vice President
- ------------------- (principal financial officer)
Alan P. Hirmes of Related Independence Associates Inc. June 13, 2003
/s/ Glenn F. Hopps Treasurer
- ------------------- (principal accounting officer) of
Glenn F. Hopps Related Independence Associates Inc. June 13, 2003
/s/ Stephen M. Ross
- ------------------- Director of
Stephen M. Ross Related Independence Associates Inc. June 13, 2003
99
CERTIFICATION
I, Michael Brenner, Principal Executive Officer of Related Independence
Associates Inc. the general partner of Related Independence Associates L.P.
which is the General Partner of Independence Tax Credit Plus L.P. (the
"Partnership"), hereby certify that:
1. I have reviewed this annual report on Form 10-K for the year ending
March 31, 2003 of the Partnership;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the Partnership as of, and for, the periods presented in
this annual report;
4. The Partnership's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15-d-14) for the Partnership
and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the Partnership, including its
consolidated subsidiaries, is made known to me by others within those
entities, particularly during the period in which this annual report
was being prepared;
b) evaluated the effectiveness of the Partnership's disclosure
controls and procedures as of March 31, 2003 (the "Evaluation Date");
and
100
c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The Partnership's other certifying officers and I have disclosed,
based on my most recent evaluation, to the Partnership's auditors and
to the boards of directors of the General Partner:
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the Partnership's ability to
record, process, summarize and report financial data and have
identified for the Partnership's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Partnership's
internal controls; and
6. The Partnership's other certifying officers and I have indicated in
this annual report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
By: /s/ Michael Brenner
-------------------
Michael Brenner
Principal Executive Officer
June 13, 2003
101
CERTIFICATION
I, Alan P. Hirmes, Principal Financial Officer of Related Independence
Associates Inc. the general partner of Related Independence Associates L.P.
which is the General Partner of Independence Tax Credit Plus L.P. (the
"Partnership"), hereby certify that:
1. I have reviewed this annual report on Form 10-K for the year ending
March 31, 2003 of the Partnership;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the Partnership as of, and for, the periods presented in
this annual report;
4. The Partnership's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15-d-14) for the Partnership
and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the Partnership, including its
consolidated subsidiaries, is made known to me by others within those
entities, particularly during the period in which this annual report
was being prepared;
b) evaluated the effectiveness of the Partnership's disclosure
controls and procedures as of March 31, 2003 (the "Evaluation Date");
and
102
c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The Partnership's other certifying officers and I have disclosed,
based on my most recent evaluation, to the Partnership's auditors and
to the boards of directors of the General Partner:
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the Partnership's ability to
record, process, summarize and report financial data and have
identified for the Partnership's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Partnership's
internal controls; and
6. The Partnership's other certifying officers and I have indicated in
this annual report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
Principal Financial Officer
June 13, 2003
103
Exhibit 99.1
CERTIFICATION PURSUANT TO
18.U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Independence Tax Credit Plus L.P. (the
"Partnership") on Form 10-K for the year ending March 31, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Michael
Brenner, Principal Executive Officer of Related Independence Associates Inc. the
general partner of Related Independence Associates L.P. which is the General
Partner of the Partnership, certify, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Partnership.
By: /s/ Michael Brenner
-------------------
Michael Brenner
Principal Executive Officer
June 13, 2003
104
Exhibit 99.2
CERTIFICATION PURSUANT TO
18.U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Independence Tax Credit Plus L.P. (the
"Partnership") on Form 10-K for the year ending March 31, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Alan P.
Hirmes, Principal Financial Officer of Related Independence Associates Inc. the
general partner of Related Independence Associates L.P. which is the General
Partner of the Partnership, certify, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Partnership.
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
Principal Financial Officer
June 13, 2003
105
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Partners of
Independence Tax Credit Plus L.P. and Subsidiaries
(A Delaware Limited Partnership)
In connection with our audits of the consolidated financial statements of
Independence Tax Credit Plus L.P. and Subsidiaries (A Delaware Limited
Partnership) included in the Form 10-K as presented in our opinion dated June 9,
2003 on page 15, and based on the reports of other auditors, we have also
audited supporting Schedule I for the 2002, 2001 and 2000 Fiscal Years and
Schedule III at March 31, 2003. In our opinion, and based upon the reports of
the other auditors, these consolidated schedules present fairly, when read in
conjunction with the related consolidated financial statements, the financial
data required to be set forth therein.
TRIEN ROSENBERG ROSENBERG
WEINBERG CIULLO & FAZZARI LLP
New York, New York
June 9, 2003
106
INDEPENDENCE TAX CREDIT PLUS L.P.
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
(NOT INCLUDING CONSOLIDATED SUBSIDIARY PARTNERSHIPS)
CONDENSED BALANCE SHEETS
ASSETS
March 31,
----------- ---------
2003 2002
----------- -----------
Cash and cash equivalents $ 1,491 $ 9,708
Advances and investment in subsidiary partnerships 28,808,492 31,564,522
Cash held in escrow 28,000 32,666
Other assets 116,299 116,299
----------- -----------
Total assets $28,954,282 $31,723,195
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Other liabilities $ 14,060 $ 7,466
Due to general partners and affiliates 6,956,964 5,597,447
----------- -----------
Total liabilities 6,971,024 5,604,913
Partners' capital* 21,983,258 26,118,282
----------- -----------
Total liabilities and partners' capital $28,954,282 $31,723,195
=========== ===========
Investments in subsidiary partnerships are recorded in accordance with the
equity method of accounting, wherein the investments are not reduced below zero.
Accordingly, partners' capital on the consolidated balance sheet will differ
from partners' capital shown above.
*Condensed partners' capital includes $623,530 and $659,125 of related party
income at March 31, 2003 and 2002, respectively.
107
INDEPENDENCE TAX CREDIT PLUS L.P.
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
(NOT INCLUDING CONSOLIDATED SUBSIDIARY PARTNERSHIPS)
CONDENSED STATEMENTS OF OPERATIONS
Year Ended March 31,
-----------------------------------------
2003 2002 2001
----------- ----------- -----------
Revenues $ 5,264 $ (61,217) $ 103,969
----------- ----------- -----------
Expenses
Administrative and management 158,743 142,020 141,644
Administrative and management-related
parties 1,038,434 1,015,388 1,028,577
----------- ----------- -----------
Total expenses 1,197,177 1,157,408 1,170,221
----------- ----------- -----------
Loss from operations (1,191,913) (1,218,625) (1,066,252)
Equity in loss of subsidiary partnerships (2,943,111) (3,349,455) (4,306,890)
----------- ----------- -----------
Net loss $(4,135,024) $(4,568,080) $(5,373,142)
=========== =========== ===========
108
INDEPENDENCE TAX CREDIT PLUS L.P.
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
(NOT INCLUDING CONSOLIDATED SUBSIDIARY PARTNERSHIPS)
CONDENSED STATEMENTS OF CASH FLOWS
Year Ended March 31,
-----------------------------------------
2003 2002 2001
----------- ----------- -----------
Cash flows from operating activities:
Net loss $(4,135,024) $(4,568,080) $(5,373,142)
----------- ----------- -----------
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Equity in loss of subsidiary partnerships 2,943,111 3,349,455 4,306,890
Increase (decrease) in other liabilities 6,594 (6,313) (46,581)
Increase in due to general partner
and affiliates 1,359,517 1,028,588 1,342,491
----------- ----------- -----------
Total adjustments 4,309,222 4,371,730 5,602,800
----------- ----------- -----------
Net cash provided by (used in) operating
activities 174,198 (196,350) 229,658
----------- ----------- -----------
Cash flows from investing activities:
Decrease in cash
held in escrow-purchase price payments 4,666 59,334 200,000
Decrease in other assets 0 0 15,501
Investment in subsidiary partnerships (4,666) (59,334) (200,000)
Distributions from subsidiary partnerships 185,671 101,666 288,119
Advances to subsidiary partnerships (368,086) (227,892) (218,564)
----------- ----------- -----------
Net cash (used in) provided by
investing activities (182,415) (126,226) 85,056
----------- ----------- -----------
Net (decrease) increase in cash and cash
equivalents (8,217) (322,576) 314,714
Cash and cash equivalents, beginning of year 9,708 332,284 17,570
----------- ----------- -----------
Cash and cash equivalents, end of year $ 1,491 $ 9,708 $ 332,284
=========== =========== ===========
109
INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 31, 2003
Initial Cost to Partnership Cost Capitalized
----------------------------- Subsequent to
Buildings and Acquisition:
Description Encumbrances Land Improvements Improvements
- -------------------- ------------ ----------- ------------- ----------------
Apartment Complexes
Harbor Court Limited Partnership,
Staten Island, NY $ 0 $ 137,450 $ 1,007,966 $ 69,289
Old Public Limited Partnership
Lawrenceburg, TN 455,879 10,000 1,713,310 81,678
Lancaster Terrace Limited Partnership
Salem, OR 1,544,623 161,269 3,679,601 40,470
655 North Street Limited Partnership
Baton Rouge, LA 3,990,920 125,500 3,040,980 5,618,940
Landreth Venture
Philadelphia, PA 3,299,745 1,761 5,903,337 98,609
Homestead Apartments Associates Ltd.
Homestead, FL 3,468,454 329,402 0 5,943,165
Bethel Villa Associates, L.P.
Wilmington, DE 4,468,575 270,000 5,969,354 3,173,905
West Diamond Street Associates
Philadelphia, PA 1,576,000 30,829 3,444,649 (987,118)
Susquehanna Partners
Philadelphia, PA 1,797,682 16,000 0 3,998,995
Boston Bay Limited Partnership
Boston, MA 2,697,841 440,000 4,143,758 828,559
Morrant Bay Limited Partnership
Boston, MA 4,033,979 650,000 5,522,250 1,237,703
Hope Bay Limited Partnership
Boston, MA 1,320,286 225,000 1,435,185 628,202
Lares Apartments Limited Partnership
Lares, PR 4,437,422 137,000 0 5,604,639
Lajas Apartments Limited Partnership
Lajas, PR 4,094,028 110,090 4,952,929 245,659
Arlington-Rodeo Properties
Los Angeles, CA 3,543,123 624,052 0 5,064,598
Conifer Bateman Associates
Lowville, NY 950,669 15,000 2,525,729 80,046
Hampden Hall Associates, L.P.
St. Louis, MO 2,165,502 0 0 7,454,310
Chester Renaissance Associates
Chester, PA 873,000 33,667 168,333 1,782,784
Homestead Apartments II, LTD.
Homestead, FL 3,405,294 338,966 0 5,287,011
P.S. 157 Associates, L.P.
New York, NY 6,711,515 36,500 9,350,642 89,330
Gross Amount at which Carried At Close of Period
------------------------------------------------
Buildings and Accumulated
Description Land Improvements Total Depreciation
- -------------------- ----------- ------------- -------------- ------------
Apartment Complexes
Harbor Court Limited Partnership,
Staten Island, NY $ 140,813 $ 1,073,892 $ 1,214,705 $ 352,838
Old Public Limited Partnership
Lawrenceburg, TN 13,640 1,791,348 1,804,988 701,896
Lancaster Terrace Limited Partnership
Salem, OR 163,105 3,718,235 3,881,340 1,649,791
655 North Street Limited Partnership
Baton Rouge, LA 127,751 8,657,669 8,785,420 3,220,051
Landreth Venture
Philadelphia, PA 3,645 6,000,062 6,003,707 1,632,762
Homestead Apartments Associates Ltd.
Homestead, FL 340,868 5,931,699 6,272,567 1,553,518
Bethel Villa Associates, L.P.
Wilmington, DE 275,099 9,138,160 9,413,259 2,898,616
West Diamond Street Associates
Philadelphia, PA 32,414 2,455,946 2,488,360 1,109,513
Susquehanna Partners
Philadelphia, PA 17,585 3,997,410 4,014,995 1,034,484
Boston Bay Limited Partnership
Boston, MA 441,585 4,970,732 5,412,317 1,972,175
Morrant Bay Limited Partnership
Boston, MA 651,585 6,758,368 7,409,953 2,657,611
Hope Bay Limited Partnership
Boston, MA 226,585 2,061,802 2,288,387 807,308
Lares Apartments Limited Partnership
Lares, PR 151,585 5,590,054 5,741,639 1,631,578
Lajas Apartments Limited Partnership
Lajas, PR 111,675 5,197,003 5,308,678 1,434,488
Arlington-Rodeo Properties
Los Angeles, CA 625,637 5,063,013 5,688,650 1,516,407
Conifer Bateman Associates
Lowville, NY 16,585 2,604,190 2,620,775 1,021,632
Hampden Hall Associates, L.P.
St. Louis, MO 1,585 7,452,725 7,454,310 2,622,835
Chester Renaissance Associates
Chester, PA 42,153 1,942,631 1,984,784 483,712
Homestead Apartments II, LTD.
Homestead, FL 340,551 5,285,426 5,625,977 1,293,895
P.S. 157 Associates, L.P.
New York, NY 38,085 9,438,387 9,476,472 2,413,720
Life on which
Depreciation in
Year of Latest Income
Construction/ Date Statement is
Description Renovation Acquired Computed*
- -------------------- ------------- ----------- ---------------
Apartment Complexes
Harbor Court Limited Partnership,
Staten Island, NY 1991 Dec. 1991 27.5 years
Old Public Limited Partnership
Lawrenceburg, TN 1991 Dec. 1991 27.5 years
Lancaster Terrace Limited Partnership
Salem, OR 1992 Feb. 1992 15-27.5 years
655 North Street Limited Partnership
Baton Rouge, LA 1992 Mar. 1992 27.5 years
Landreth Venture
Philadelphia, PA 1992 Mar. 1992 40 years
Homestead Apartments Associates Ltd.
Homestead, FL 1992 Mar. 1992 40 years
Bethel Villa Associates, L.P.
Wilmington, DE 1992 Apr. 1992 27.5 years
West Diamond Street Associates
Philadelphia, PA 1992 May 1992 40 years
Susquehanna Partners
Philadelphia, PA 1992 May 1992 20-40 years
Boston Bay Limited Partnership
Boston, MA 1991 Aug. 1992 27.5 years
Morrant Bay Limited Partnership
Boston, MA 1991 Aug. 1992 27.5 years
Hope Bay Limited Partnership
Boston, MA 1991 Aug. 1992 27.5 years
Lares Apartments Limited Partnership
Lares, PR 1992 Aug. 1992 40 years
Lajas Apartments Limited Partnership
Lajas, PR 1992 Aug. 1992 40 years
Arlington-Rodeo Properties
Los Angeles, CA 1992 Aug. 1992 27.5 years
Conifer Bateman Associates
Lowville, NY 1990 Aug. 1992 15-27.5 years
Hampden Hall Associates, L.P.
St. Louis, MO 1992 Sep. 1992 27.5 years
Chester Renaissance Associates
Chester, PA 1992 Sep. 1992 40 years
Homestead Apartments II, LTD.
Homestead, FL 1992 Oct. 1992 40 years
P.S. 157 Associates, L.P.
New York, NY 1992 Nov 1992 40 years
110
INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 31, 2003
Initial Cost to Partnership Cost Capitalized
----------------------------- Subsequent to
Buildings and Acquisition:
Description Encumbrances Land Improvements Improvements
- -------------------- ------------ ----------- ------------- ----------------
Apartment Complexes
Cloisters Limited Partnership II
Philadelphia, PA 0 35,160 0 9,578,163
Creative Choice Homes II, LTD.
Opa-Locka, FL 9,777,495 0 0 21,433,650
Milford Crossing Associates L.P.(**)
Milford, DE 2,480,496 203,006 0 4,379,722
BX-7F Associates, L.P.
Bronx, NY 3,104,303 4 5,705,064 77,118
Los Angeles Limited Partnership
Rio Piedras, PR 3,863,073 201,210 0 6,667,434
Christine Apartments, L.P.
Buffalo, NY 1,245,000 10,000 2,351,072 240,397
Plainsboro Housing Partners, L.P.
Plainsboro, NJ 3,895,174 800,000 0 8,851,487
Rolling Green Associates, L.P.
Syracuse, NY 14,000,060 180,000 19,583,101 592,349
------------ ----------- ------------- -------------
$ 93,200,138 $ 5,121,866 $ 80,497,260 $ 98,161,094
============ =========== ============= =============
Gross Amount at which Carried At Close of Period
------------------------------------------------
Buildings and Accumulated
Description Land Improvements Total Depreciation
- -------------------- ----------- ------------- -------------- ------------
Apartment Complexes
Cloisters Limited Partnership II
Philadelphia, PA 36,745 9,576,578 9,613,323 2,345,733
Creative Choice Homes II, LTD.
Opa-Locka, FL 574,637 20,859,013 21,433,650 4,996,282
Milford Crossing Associates L.P.(**)
Milford, DE 115,519 4,467,209 4,582,728 1,668,394
BX-7F Associates, L.P.
Bronx, NY 2,178 5,780,008 5,782,186 1,472,042
Los Angeles Limited Partnership
Rio Piedras, PR 203,384 6,665,260 6,868,644 1,592,552
Christine Apartments, L.P.
Buffalo, NY 13,174 2,588,295 2,601,469 872,526
Plainsboro Housing Partners, L.P.
Plainsboro, NJ 802,174 8,849,313 9,651,487 2,663,177
Rolling Green Associates, L.P.
Syracuse, NY 182,174 20,173,276 20,355,450 7,456,513
----------- ------------- -------------- ------------
$ 5,692,516 $178,087,704 $ 183,780,220 $ 55,076,049
=========== ============= ============== ============
Life on which
Depreciation in
Year of Latest Income
Construction/ Date Statement is
Description Renovation Acquired Computed*
- -------------------- ------------- ----------- ---------------
Apartment Complexes
Cloisters Limited Partnership II
Philadelphia, PA 1992 Nov 1992 40 years
Creative Choice Homes II, LTD.
Opa-Locka, FL 1988 Dec 1992 40 years
Milford Crossing Associates L.P.(**)
Milford, DE 1992 Dec. 1992 27.5 years
BX-7F Associates, L.P.
Bronx, NY 1993 Jan. 1993 40 years
Los Angeles Limited Partnership
Rio Piedras, PR 1994 Apr. 1993 40 years
Christine Apartments, L.P.
Buffalo, NY 1993 June 1993 27.5 years
Plainsboro Housing Partners, L.P.
Plainsboro, NJ 1994 July 1993 27.5 years
Rolling Green Associates, L.P.
Syracuse, NY 1992 Oct. 1993 27.5 years
* Personal property is depreciated over the estimated useful life ranging
from 3 to 10 years.
** During the year ended December 31, 1997, the Partnership sold a parcel of
land for $210,000 to an entity with a member who is also the general
partner of the Partnership.
111
INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 31, 2003
(continued)
Cost of Property and Equipment Accumulated Depreciation
----------------------------------------------- -----------------------------------------------
Year Ended March 31,
--------------------------------------------------------------------------------------------------
2003 2002 2001 2003 2002 2001
------------- ------------- ------------- ------------- ------------- -------------
Balance at beginning of period $ 183,379,486 $ 182,869,413 $ 182,441,409 $ 49,421,936 $ 43,831,616 $ 38,264,393
Additions during period:
Improvements 436,047 510,610 437,204
Depreciation expense 5,689,426 5,591,004 5,576,423
Deductions during period:
Dispositions (35,313) (537) (9,200) (35,313) (684) (9,200)
------------- ------------- ------------- ------------- ------------- -------------
Balance at close of period $ 183,780,220 $ 183,379,486 $ 182,869,413 $ 55,076,049 $ 49,421,936 $ 43,831,616
============= ============= ============= ============= ============= =============
At the time the Local Partnerships were acquired by Independence Tax Credit Plus
L.P., the entire purchase price paid by Independence Tax Credit Plus L.P. was
pushed down to the local partnerships as property and equipment with an
offsetting credit to capital. Since the projects were in the construction phase
at the time of acquisition, the capital accounts were insignificant at the time
of purchase. Therefore, there are no material differences between the original
cost basis for tax and GAAP.
112