UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the fiscal year ended March 30, 2002
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the transition period from _________ to _________
0-18405
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(Commission File Number)
American Tax Credit Properties II L.P.
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(Exact name of registrant as specified in its governing instruments)
Delaware 13-3495678
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(State or other jurisdiction (I.R.S. Employer
of organization) Identification No.)
Richman Tax Credit Properties II L.P.
599 West Putnam Avenue, 3rd floor
Greenwich, Connecticut 06830
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 869-0900
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Securities registered pursuant to Section 12(b) of the Act:
None None
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(Title of each Class) (Name of each exchange on which registered)
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
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(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirement for the past 90 days. Yes X No___
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in a definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. X
-----
Registrant has no voting stock.
Documents incorporated by reference:
Part I - pages 20 through 33 and 47 through 70 of the prospectus dated May 10,
1989, as supplemented by Supplement No. 1 and Supplement No. 2 dated July 25,
1989 and September 18, 1989, respectively, filed pursuant to Rule 424(b)(3)
under the Securities Act of 1933.
PART I
Item 1. Business
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Formation
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American Tax Credit Properties II L.P. ("Registrant"), a Delaware limited
partnership, was formed on October 26, 1988 to invest primarily in leveraged
low-income multifamily residential complexes (the "Property" or "Properties")
that qualify for the low-income tax credit in accordance with Section 42 of the
Internal Revenue Code (the "Low-income Tax Credit"), through the acquisition of
limited partnership equity interests in partnerships (the "Local Partnership" or
"Local Partnerships") that are the owners of the Properties. Registrant invested
in fifty such Local Partnerships, including one whose Property also qualifies
for the historic rehabilitation tax credit in accordance with Section 48(g) of
the Internal Revenue Code of 1986 (the "Historic Rehabilitation Tax Credit").
Registrant considers its activity to constitute a single industry segment.
Richman Tax Credit Properties II L.P. (the "General Partner"), a Delaware
limited partnership, was formed on October 26, 1988 to act as the general
partner of Registrant. The general partner of the General Partner is Richman Tax
Credits Inc. ("Richman Tax Credits"), a Delaware corporation that is
wholly-owned by Richard Paul Richman. Richman Tax Credits is an affiliate of The
Richman Group, Inc. ("Richman Group"), a Delaware corporation founded by Richard
Paul Richman in 1988.
The Amendment No. 2 to the Registration Statement on Form S-11 was filed with
the Securities and Exchange Commission (the "Commission") on April 21, 1989
pursuant to the Securities Act of 1933 under Registration Statement File No.
33-25337, and was declared effective on May 9, 1989. Reference is made to the
prospectus dated May 10, 1989, as supplemented by Supplement No. 1 and
Supplement No. 2 dated July 25, 1989 and September 18, 1989, respectively, filed
with the Commission pursuant to Rule 424(b)(3) under the Securities Act of 1933
(the "Prospectus"). Pursuant to Rule 12b-23 of the Commission's General Rules
and Regulations promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), the description of Registrant's business set forth
under the heading "Investment Objectives and Policies" at pages 47 through 70 of
the Prospectus is incorporated herein by reference.
On June 14, 1989, Registrant commenced, through Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch"), the offering of up to 100,000 units of
limited partnership interest ("Unit") at $1,000 per Unit to investors. On June
28, 1989, July 31, 1989 and September 22, 1989, the closings for 13,533, 20,560
and 21,653 Units, respectively, took place, amounting to aggregate limited
partners' capital contributions of $55,746,000.
Competition
- -----------
Pursuant to Rule 12b-23 of the Commission's General Rules and Regulations
promulgated under the Exchange Act, the description of Registrant's competition,
general risks, tax risks and partnership risks set forth under the heading "Risk
Factors" at pages 20 through 33 of the Prospectus is incorporated herein by
reference.
Employees
- ---------
Registrant employs no personnel and incurs no payroll costs. All management
activities of Registrant are conducted by the General Partner. An affiliate of
the General Partner employs individuals who perform the management activities of
Registrant. This entity also performs similar services for other affiliates of
the General Partner.
Tax Reform Act of 1986, Revenue Act of 1987, Technical and Miscellaneous Revenue
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Act of 1988, Omnibus Budget Reconciliation Act of 1989, Omnibus Budget
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Reconciliation Act of 1990, Tax Extension Act of 1991, Omnibus Budget
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Reconciliation Act of 1993, Uruguay Round Agreements Act, Tax and Trade Relief
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Extension Act of 1998, Tax and Trade Relief Extension Act of 1999, Community
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Renewal Tax Relief Act of 2000, Economic Growth and Tax Relief Reconciliation
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Act of 2001 and Job Creation and Worker Assistance Act of 2002 (collectively the
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"Tax Acts")
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Registrant is organized as a limited partnership and is a "pass through" tax
entity which does not, itself, pay federal income tax. However, the partners of
Registrant who are subject to federal income tax may be affected by the Tax
Acts. Registrant will consider the effect of certain aspects of the Tax Acts on
the partners when making decisions regarding its investments. Registrant does
not anticipate that the Tax Acts will currently have a material adverse impact
on Registrant's business operations, capital resources and plans or liquidity.
2
Item 2. Properties
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The executive offices of Registrant and the General Partner are located at 599
West Putnam Avenue, 3rd floor, Greenwich, Connecticut 06830. Registrant does not
own or lease any properties. Registrant pays no rent; all charges for leased
space are borne by an affiliate of the General Partner.
Registrant's primary objective is to provide Low-income Tax Credits to limited
partners generally over a ten year period. The relevant state tax credit agency
has allocated each of Registrant's Local Partnerships an amount of Low-income
Tax Credits, which are generally available for a ten year period from the year
the Property is placed in service (the "Ten Year Credit Period"). The Ten Year
Credit Period is expected to be exhausted by the Local Partnerships as of
December 31, 2001. The required holding period of each Property, in order to
avoid Low-income Tax Credit recapture, is fifteen years from the year in which
the Low-income Tax Credits commence on the last building of the Property (the
"Compliance Period"). In addition, certain of the Local Partnerships have
entered into agreements with the relevant state tax credit agencies whereby the
Local Partnerships must maintain the low-income nature of the Properties for a
period which exceeds the Compliance Period, regardless of any sale of the
Properties by the Local Partnerships after the Compliance Period. The Properties
must satisfy various requirements including rent restrictions and tenant income
limitations (the "Low-income Tax Credit Requirements") in order to maintain
eligibility for the recognition of the Low-income Tax Credit at all times during
the Compliance Period. Once a Local Partnership has become eligible for the
Low-income Tax Credit, it may lose such eligibility and suffer an event of
recapture if its Property fails to remain in compliance with the Low-income Tax
Credit Requirements. Through December 31, 2001, none of the Local Partnerships
have suffered an event of recapture of Low-income Tax Credits.
Although Registrant generally owns a 98.9%-99% limited partnership interest
("Local Partnership Interest") in the Local Partnerships, Registrant and
American Tax Credit Properties L.P. ("ATCP"), a Delaware limited partnership and
an affiliate of Registrant, together, in the aggregate, own a 99% Local
Partnership Interest in Santa Juanita Limited Dividend Partnership L.P. ("Santa
Juanita"); the ownership percentages of Registrant and ATCP of Santa Juanita are
64.36% and 34.64%, respectively. In addition, Registrant and American Tax Credit
Properties III L.P. ("ATCP III"), a Delaware limited partnership and an
affiliate of Registrant, together, in the aggregate, own a 99% Local Partnership
Interest in the following Local Partnerships:
Registrant ATCP III
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Batesville Family, L.P. 37.25% 61.75%
Bruce Housing Associates, L.P. 37.25 61.75
Carrington Limited Dividend Housing
Association Limited Partnership 33.05 65.95
Ivy Family, L.P. 37.25 61.75
Lawrence Road Properties, Ltd. 37.25 61.75
Mirador del Toa Limited Partnership 39.94 59.06
Purvis Heights Properties, L.P. 37.25 61.75
Queen Lane Investors 50.50 48.50
Many of the Local Partnerships receive rental subsidy payments, including
payments under Section 8 of Title II of the Housing and Community Development
Act of 1974 ("Section 8") (see descriptions of subsidies on pages 7 and 8). The
subsidy agreements expire at various times during and after the Compliance
Periods of the Local Partnerships. Since October 1997, the United States
Department of Housing and Urban Development ("HUD") has issued a series of
directives related to project based Section 8 contracts that define owners'
notification responsibilities, advise owners of project based Section 8
properties of what their options are regarding the renewal of Section 8
contracts, provide guidance and procedures to owners, management agents,
contract administrators and HUD staff concerning renewal of Section 8 contracts,
provide policies and procedures on setting renewal rents and handling renewal
rent adjustments and provide the requirements and procedures for opting-out of a
Section 8 project based contract. Registrant cannot reasonably predict
legislative initiatives and governmental budget negotiations, the outcome of
which could result in a reduction in funds available for the various federal and
state administered housing programs including the Section 8 program. Such
changes could adversely affect the future net operating income before debt
service ("NOI") and debt structure of any or all Local Partnerships currently
receiving such subsidy or similar subsidies. Six Local Partnerships' Section 8
contracts, certain of which cover only certain rental units, are currently
subject to renewal under applicable HUD guidelines. In addition, two Local
Partnerships have entered into restructuring agreements, resulting in both a
lower rent subsidy (resulting in lower NOI) and lower mandatory debt service
with no anticipated material adverse impact to the operating results of the
Properties through the respective Compliance Periods.
3
Item 2. Properties (continued)
Mortgage
Name of Local Partnership Number loans payable as of
Name of apartment complex of rental Capital December 31, Subsidy
Apartment complex location units contribution 2001 (see footnotes)
- -------------------------- ----- ------------ ------------------- ---------------
1989 Westview Arms Limited Partnership
Westview Arms
Dumas, Arkansas 60 $ 130,796 $ 444,599 (1a&g)
2000-2100 Christian Street Associates
Christian Street Apartments II
Philadelphia, Pennsylvania 57 1,485,275 2,474,296 (1c&f)
Ann Ell Apartments Associates, Ltd.
Ann Ell Apartments
Miami Beach, Florida 54 948,204 2,134,064 (1c)
Auburn Hills Apartments Limited
Partnership
Auburn Hills Apartments
Cabot, Arkansas 24 201,649 792,112 (1c)
Auburn Hills Townhouses Limited
Partnership
Auburn Hills Townhouse Apartments
Pontiac, Michigan 250 3,206,110 6,236,893 (1a&g)
Batesville Family, L.P.
Westridge Apartments
Batesville, Mississippi 48 160,741 (2) 1,431,853 (1c)
Browning Road Phase I, L.P.
Browning Road Apartments, Phase I
Greenwood, Mississippi 60 197,808 834,094 (1c)
Bruce Housing Associates, L.P.
Bruce Family Apartments
Bruce, Mississippi 40 122,814 (2) 1,100,431 (1c&d)
Canton Partners, L.P.
Pecan Village
Canton, Mississippi 48 380,199 1,444,937 (1c)
Carrington Limited Dividend Housing
Association Limited Partnership
Carrington Place
Farmington Hills, Michigan 100 1,058,976 (2) 3,349,699 (1e)
Christian Street Associates Limited
Partnership
Christian Street Apartments
Philadelphia, Pennsylvania 72 2,434,744 2,315,225 (1c&f)
Cityside Apartments, Phase II, L.P.
Cityside Apartments Phase II
Trenton, New Jersey 107 6,592,092 7,225,344 (1a&c)
Cleveland Square, Ltd.
Cleveland Square Apartments
Cleveland, Texas 48 223,327 824,701 (1c)
4
Item 2. Properties (continued)
---------------------
Mortgage
Name of Local Partnership Number loans payable as of
Name of apartment complex of rental Capital December 31, Subsidy
Apartment complex location units contribution 2001 (see footnotes)
- -------------------------- ----- ------------ ------------------- ---------------
College Avenue Apartments Limited
Partnership
College Avenue Apartments
Natchitoches, Louisiana 41 $ 335,997 $ 595,011 (1a)
Corrigan Square, Ltd.
Corrigan Square Apartments
Corrigan, Texas 96 372,833 1,420,904 (1c)
De Queen Villas Limited Partnership
De Queen Villas Apartments
De Queen, Arkansas 37 296,051 1,157,536 (1c)
Dermott Villas Limited Partnership
Dermott Villas
Dermott, Arkansas 32 272,802 1,056,764 (1c)
Eagle View, Ltd.
Eagle View Apartments
Clearfield, Kentucky 14 102,850 403,931 (1c)
Elm Hill Housing Limited Partnership
Elm Hill Housing
Boston, Massachusetts 142 5,712,391 6,804,401 (1a)
Eudora Manor Limited Partnership
Eudora Manor Apartments
Eudora, Arkansas 24 188,838 747,071 (1c)
Forest Village Housing Partnership
Forest Village Apartments
Auburn, Washington 89 1,248,462 1,483,913 (1b&c)(3)
Harborside Housing Limited Partnership
Cal-View Apartments
East Chicago, Indiana 255 1,789,434 2,924,624 (1a,c&g)
Hill Com I Associates Limited
Partnership
Hill Com I Apartments
Pittsburgh, Pennsylvania 67 887,635 1,165,986 (1a&h)
Hill Com II Associates Limited
Partnership
Hill Com II Apartments
Pittsburgh, Pennsylvania 48 683,172 938,031 (1a&h)
Hughes Manor Limited Partnership
Hughes Manor
Hughes, Arkansas 32 287,261 1,107,276 (1c)
Ivy Family, L.P.
Ivy Apartments
Louisville, Mississippi 32 90,878(2) 783,986 (1c&d)
5
Item 2. Properties (continued)
---------------------
Mortgage
Name of Local Partnership Number loans payable as of
Name of apartment complex of rental Capital December 31, Subsidy
Apartment complex location units contribution 2001 (see footnotes)
- -------------------------- ----- ------------ ------------------- ---------------
Lakeside Housing Limited Partnership
Lakeside Garden Apartments
East Chicago, Indiana 312 $ 3,147,863 $ 7,436,465 (1a,c&g)
Lawrence Road Properties, Ltd.
Hillcrest Apartments
Newton, Mississippi 24 83,013(2) 754,841 (1c&d)
Lexington Estates Ltd.,
A Mississippi Limited Partnership
Lexington Estates
Lexington, Mississippi 24 176,225 703,328 (1c)
Littleton Avenue Community Village, L.P.
Littleton Avenue Community Village
Newark, New Jersey 102 3,087,138 4,303,080 (1c)
Lula Courts Ltd., L.P.
Lula Courts
Lula, Mississippi 24 176,645 696,526 (1c)
Magee Elderly, L.P.
Eastgate Manor
Magee, Mississippi 24 150,952 587,752 (1c&d)
Mirador del Toa Limited Partnership
Mirador del Toa Apartments
Toa Alta, Puerto Rico 48 186,717(2) 1,870,929 (1c&d)
Nixa Heights Apartments, L.P.
Nixa Heights Apartments
Nixa, Missouri 40 250,030 998,461 (1c)
North Hills Farms Limited Partnership
North Hills Farms Apartments
Pontiac, Michigan 525 3,443,762 3,615,303 (1a&g)
Patton Place Limited Partnership
Patton Street Apartments
Springfield, Massachusetts 24 794,044 968,270 (1a&g)
Plantersville Family, L.P.
Regal Ridge Apartments
Plantersville, Mississippi 24 152,268 594,079 (1c)
Powelton Gardens Associates
Powelton Gardens Apartments
West Philadelphia, Pennsylvania 25 782,958 882,803 (1a&f)
Purvis Heights Properties, L.P.
Pineview Apartments
Purvis, Mississippi 40 128,419(2) 1,139,573 (1c)
6
Item 2. Properties (continued)
---------------------
Mortgage
Name of Local Partnership Number loans payable as of
Name of apartment complex of rental Capital December 31, Subsidy
Apartment complex location units contribution 2001 (see footnotes)
- -------------------------- ----- ------------ ------------------- ---------------
Queen Lane Investors
Queen's Row
Philadelphia, Pennsylvania 29 $ 603,552(2) $ 1,543,391 (1c&f)
Renova Properties, L.P.
Hymon Lucas Manor
Renova, Mississippi 24 165,582 634,691 (1c&d)
Santa Juanita Limited Dividend
Partnership L.P.
Santa Juanita Apartments
Bayamon, Puerto Rico 45 584,117(2) 1,443,590 (1a&c)
Simpson County Family, L.P.
Azalea Apartments
Magee, Mississippi 24 211,823 809,563 (1d)
Summers Village Limited Partnership
Summers Village Apartments
Summersville, West Virginia 24 194,674 804,429 (1c)
Tchula Courts Apartments, L.P.
Tchula Courts Apartments
Tchula, Mississippi 24 150,984 731,894 (1c)
The Pendleton (A Louisiana
Partnership in Commendam)
The Pendleton
Shreveport, Louisiana 36 444,321 566,748 (1a&c)
Trenton Heights Apartments, L.P.
Trenton Heights Apartments
Trenton, Mississippi 40 100,434 437,301 (1c)
Twin Pine Family, L.P.
Twin Pine Apartments
Louisville, Mississippi 24 163,172 603,819 (1c)
Village Creek Limited Partnership
Village Creek Apartments
Arkadelphia, Arkansas 40 288,216 1,206,875 (1c)
York Park Associates Limited Partnership
York Park Apartments
Dundalk, Maryland 80 2,146,200 3,922,544 (1a)
------------ -----------
$ 47,024,448 $88,453,937
============ ===========
(1) Description of subsidies:
(a) Section 8 of Title II of the Housing and Community Development
Act of 1974 allows qualified low-income tenants to pay thirty
percent of their monthly income as rent with the balance paid by
the federal government.
(b) King County Housing Authority provided an interest subsidy
through issuance of tax exempt bonds, which provided first and
second mortgage loans for the acquisition and rehabilitation of
the complex.
(c) The Local Partnership's debt structure includes a principal or
interest payment subsidy.
7
Item 2. Properties (continued)
---------------------
(d) The Rural Housing Service (formerly the Farmers Home
Administration) of the United States Department of Agriculture
Rental Assistance Program allows qualified low-income tenants to
receive rental subsidies.
(e) The Michigan State Housing Development Authority allows tenants,
who would otherwise pay more than 40% of their income for rent
and utilities, to receive rental subsidies.
(f) The City of Philadelphia Housing Authority allows qualified
low-income tenants to receive rental certificates.
(g) The Local Partnership's Section 8 contracts, certain of which
cover only certain rental units, are subject to renewal under
applicable HUD guidelines.
(h) The Local Partnership has entered into a restructuring agreement
of its Section 8 contracts and debt structure under applicable
HUD guidelines.
(2) Reflects amount attributable to Registrant only.
(3) The underlying Property was sold subsequent to March 30, 2002. See
discussion herein under Item 7, Management's Discussion and Analysis
of Financial Condition and Results of Operations.
Item 3. Legal Proceedings
-----------------
Registrant is not aware of any material legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
There were no matters submitted to a vote of the limited partners of Registrant
during the fourth quarter of the fiscal year covered by this report.
8
PART II
Item 5. Market for Registrant's Common Equity and Related Security Holder
Matters
----------------------------------------------------------------
Market Information and Holders
- ------------------------------
There is no established public trading market for Registrant's Units.
Accordingly, accurate information as to the market value of a Unit at any given
date is not available. The number of owners of Units as of May 31, 2002 was
approximately 3,255, holding 55,746 Units.
Merrill Lynch follows internal guidelines for providing estimated values of
limited partnerships and other direct investments reported on client account
statements. Pursuant to such guidelines, estimated values for limited
partnership interests reported on Merrill Lynch client account statements (such
as Registrant's Units) are provided to Merrill Lynch by independent valuation
services. These estimated values are based on financial and other information
available to the independent services (i) on the prior August 15th for reporting
on December year-end and subsequent client account statements through the
following May's month-end client account statements and (ii) on March 31st for
reporting on June month-end and subsequent client account statements through the
November month-end client account statements of the same year. In addition,
Registrant may provide an estimate of value to Unit holders from time to time in
Registrant's reports to limited partners. The estimated values provided by the
independent services and Registrant, which may differ, are not market values and
Unit holders may not be able to sell their Units or realize either amount upon a
sale of their Units. In addition, Unit holders may not realize such estimated
values upon the liquidation of Registrant.
Distributions
- -------------
Registrant owns a limited partnership interest in Local Partnerships that are
the owners of Properties that are leveraged and receive government assistance in
various forms of rental and debt service subsidies. The distribution of cash
flow generated by the Local Partnerships may be restricted, as determined by
each Local Partnership's financing and subsidy agreements. Accordingly,
Registrant does not anticipate that it will provide significant cash
distributions to its partners. There were no cash distributions to the partners
during the years ended March 30, 2002 and 2001.
Low-income Tax Credits and Historic Rehabilitation Tax Credits (together, the
"Tax Credits"), which are subject to various limitations, may be used by
partners to offset federal income tax liabilities. The Tax Credits per Unit
generated by Registrant and allocated to the limited partners for the tax years
ended December 31, 2001 and 2000 and the cumulative Tax Credits allocated from
inception through December 31, 2001 are as follows:
Historic
Rehabilitation Low-income
Tax Credits Tax Credits
-------------- -----------
Tax year ended December 31, 2001 $ -- $ 2.02
Tax year ended December 31, 2000 -- 46.94
Cumulative totals $ 6.56 $ 1,494.22
Registrant generated total Tax Credits from investments in Local Partnerships of
approximately $1,501 per Unit through December 31, 2001, notwithstanding future
circumstances which may give rise to recapture and loss of future benefits (see
Part I, Item 2 - Properties and Part II, Item 7 - Management's Discussion and
Analysis of Financial Condition and Results of Operations, herein). The Ten Year
Credit Period for all of the Properties was fully exhausted as of December 31,
2001.
9
Item 6. Selected Financial Data
-----------------------
The information set forth below presents selected financial data of Registrant.
Additional detailed financial information is set forth in the audited financial
statements included under Part II, Item 8 herein.
Years Ended March 30,
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2002 2001 2000 1999 1998
----------- ----------- ----------- ----------- -----------
Interest and other revenue $ 243,818 $ 239,583 $ 272,075 $ 339,756 $ 352,811
=========== =========== =========== =========== ===========
Equity in loss of
investment in local partnerships $ (927,455) $(2,877,726) $(1,598,531) $(2,363,768) $(2,806,299)
=========== =========== =========== =========== ===========
Net loss $(1,396,994) $(3,375,703) $(2,048,082) $(2,759,975) $(3,189,990)
=========== =========== =========== =========== ===========
Net loss per unit of limited
partnership interest $ (24.81) $ (59.95) $ (36.74) $ (49.01) $ (56.65)
=========== =========== =========== =========== ===========
As of March 30,
---------------------------------------------------------------------------------------
2002 2001 2000 1999 1998
----------- ----------- ----------- ----------- -----------
Total assets $10,952,650 $12,318,749 $15,407,107 $17,409,763 $20,162,596
=========== =========== =========== =========== ===========
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
----------------------------------------------------------------------
Capital Resources and Liquidity
- -------------------------------
Registrant admitted limited partners in three closings with aggregate limited
partners' capital contributions of $55,746,000. In connection with the offering
of the sale of units, Registrant incurred organization and offering costs of
approximately $6,534,000 and established a working capital reserve of
approximately $3,345,000. The remaining net proceeds of approximately
$45,867,000 (the "Net Proceeds") were available to be applied to the acquisition
of limited partnership interests in local partnerships (the "Local
Partnerships") that own low-income multifamily residential complexes (the
"Property" or "Properties") that qualify for the low-income tax credit in
accordance with Section 42 of the Internal Revenue Code (the "Low-income Tax
Credit"); one Local Partnership owns a Property that also qualified for the
historic rehabilitation tax credit in accordance with Section 48(g) of the
Internal Revenue Code of 1986. The Net Proceeds were utilized in acquiring an
interest in fifty Local Partnerships.
As of March 30, 2002, Registrant has cash and cash equivalents and investments
in bonds totaling $2,803,365 which is available for operating expenses of
Registrant and circumstances that may arise in connection with the Local
Partnerships. As of March 30, 2002, Registrant's investments in bonds represent
corporate bonds of $2,144,708 U.S. Treasury bonds of $636,439 and U.S.
government agency bonds of $11,698 with various maturity dates ranging from 2002
to 2008. Registrant acquired such investments in bonds with the intention of
utilizing proceeds generated by such investments to meet its annual obligations.
Future sources of Registrant funds are expected to be primarily from interest
earned on working capital and limited cash distributions from Local
Partnerships.
During the year ended March 30, 2002, Registrant received cash from interest
revenue, maturity/redemption and sale of bonds and distributions from Local
Partnerships and utilized cash for operating expenses and investments in Local
Partnerships. Cash and cash equivalents and investments in bonds decreased, in
the aggregate, by approximately $433,000 during the year ended March 30, 2002
(which includes the amortization of net premium on investments in bonds of
approximately $6,000 and the accretion of zero coupon bonds of approximately
$39,000). Notwithstanding circumstances that may arise in connection with the
Properties, Registrant does not expect to realize significant gains or losses on
its investments in bonds, if any.
10
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
-----------------------------------------------------------------------
During the year ended March 30, 2002, the investment in local partnerships
decreased as a result of Registrant's equity in the Local Partnerships' net loss
for the year ended December 31, 2001 of $927,455 (including an adjustment to
Registrant's carrying value of its investment in a Local Partnership of $279,273
in accordance with applicable accounting guidelines) (see discussion below under
Results of Operations) and cash distributions received from Local Partnerships
of $200,343 (exclusive of distributions from Local Partnerships of $26,093
classified as other income), partially offset by investments in Local
Partnerships of $192,242 (see discussion below under Local Partnership Matters).
Accounts payable and accrued expenses and payable to general partner and
affiliate in the accompanying balance sheet as of March 30, 2002 include
cumulative deferred administration fees and management fees of $1,523,513.
Results of Operations
- ---------------------
Registrant's operating results are dependent upon the operating results of the
Local Partnerships and are significantly impacted by the Local Partnerships'
policies. In addition, the operating results herein are not necessarily the same
for tax reporting. Registrant accounts for its investment in local partnerships
in accordance with the equity method of accounting. Accordingly, the investment
is carried at cost and is adjusted for Registrant's share of each Local
Partnership's results of operations and by cash distributions received. Equity
in loss of each investment in Local Partnership allocated to Registrant is
recognized to the extent of Registrant's investment balance in each Local
Partnership. Equity in loss in excess of Registrant's investment balance in a
Local Partnership is allocated to other partners' capital in any such Local
Partnership. As a result, the reported equity in loss of investment in local
partnerships is expected to decrease as Registrant's investment balances in the
respective Local Partnerships become zero. However, the combined statements of
operations of the Local Partnerships reflected in Note 5 to Registrant's
financial statements include the operating results of all Local Partnerships,
irrespective of Registrant's investment balances.
Cumulative losses and cash distributions in excess of investment in local
partnerships may result from a variety of circumstances, including a Local
Partnership's accounting policies, subsidy structure, debt structure and
operating deficits, among other things. In addition, the carrying value of
Registrant's investment in local partnerships may be reduced if the book value
(the "Local Partnership Carrying Value") is considered to exceed the estimated
value derived by management. Accordingly, cumulative losses and cash
distributions in excess of the investment or an adjustment to a Local
Partnership's Carrying Value are not necessarily indicative of adverse operating
results of a Local Partnership. See discussion below under Local Partnership
Matters regarding certain Local Partnerships currently operating below economic
break even levels.
Registrant's operations for the years ended March 30, 2002, 2001 and 2000
resulted in net losses of $1,396,994, $3,375,703 and $2,048,082, respectively.
The decrease in net loss from fiscal 2001 to fiscal 2002 is primarily
attributable to a decrease in equity in loss of investment in local partnerships
of approximately $1,950,000. The increase in net loss from fiscal 2000 to fiscal
2001 is primarily attributable to an increase in equity in loss of investment in
local partnerships of approximately $1,279,000. Equity in loss of investment in
local partnerships has fluctuated over the last three years as a result of (i)
Registrant adjusting the Local Partnership Carrying Value in connection with its
investments in certain Local Partnerships during each of the three years in the
period ended March 30, 2002 as reflected in Note 5 to the financial statements,
(ii) fluctuations in the nonrecognition of losses in accordance with the equity
method of accounting and (iii) changes in the net operating losses of those
Local Partnerships in which Registrant continues to have an investment balance.
The Local Partnerships' net loss of approximately $3,114,000 for the year ended
December 31, 2001 includes depreciation and amortization expense of
approximately $4,541,000 and interest on non-mandatory debt of approximately
$739,000, and does not include principal payments on permanent mortgages of
approximately $1,274,000. The Local Partnerships' net loss of approximately
$4,191,000 for the year ended December 31, 2000 includes depreciation and
amortization expense of approximately $5,239,000 and interest on non-mandatory
debt of approximately $709,000, and does not include principal payments on
permanent mortgages of approximately $1,263,000. The Local Partnerships' net
loss of approximately $2,839,000 for the year ended December 31, 1999 includes
depreciation and amortization expense of approximately $4,828,000 and interest
on non-mandatory debt of approximately $692,000, and does not include principal
payments on permanent mortgages of approximately $1,278,000. The results of
operations of the Local Partnerships for the year ended December 31, 2001 are
not necessarily indicative of results that may be expected in future periods.
11
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
-----------------------------------------------------------------------
Local Partnership Matters
- -------------------------
Registrant's primary objective is to provide Low-income Tax Credits to limited
partners generally over a ten year period. The relevant state tax credit agency
has allocated each of Registrant's Local Partnerships an amount of Low-income
Tax Credits, which are generally available for a ten year period from the year
the Property is placed in service (the ("Ten Tear Credit Period"). The Ten Year
Credit Period has been fully exhausted by the Local Partnerships as of December
31, 2001. The required holding period of each Property, in order to avoid
Low-income Tax Credit recapture, is fifteen years from the year in which the
Low-income Tax Credits commence on the last building of the Property (the
"Compliance Period"). In addition, certain of the Local Partnerships have
entered into agreements with the relevant state tax credit agencies whereby the
Local Partnerships must maintain the low-income nature of the Properties for a
period which exceeds the Compliance Period, regardless of any sale of the
Properties by the Local Partnerships after the Compliance Period. The Properties
must satisfy various requirements including rent restrictions and tenant income
limitations (the "Low-income Tax Credit Requirements") in order to maintain
eligibility for the recognition of the Low-income Tax Credit at all times during
the Compliance Period. Once a Local Partnership has become eligible for the
Low-income Tax Credit, it may lose such eligibility and suffer an event of
recapture if its Property fails to remain in compliance with the Low-income Tax
Credit Requirements.
The Properties are principally comprised of subsidized and leveraged low-income
multifamily residential complexes located throughout the United States and
Puerto Rico. Many of the Local Partnerships receive rental subsidy payments,
including payments under Section 8 of Title II of the Housing and Community
Development Act of 1974 ("Section 8"). The subsidy agreements expire at various
times during and after the Compliance Periods of the Local Partnerships. Since
October 1997, the United States Department of Housing and Urban Development
("HUD") has issued a series of directives related to project based Section 8
contracts that define owners' notification responsibilities, advise owners of
project based Section 8 properties of what their options are regarding the
renewal of Section 8 contracts, provide guidance and procedures to owners,
management agents, contract administrators and HUD staff concerning renewal of
Section 8 contracts, provide policies and procedures on setting renewal rents
and handling renewal rent adjustments and provide the requirements and
procedures for opting-out of a Section 8 project based contract. Registrant
cannot reasonably predict legislative initiatives and governmental budget
negotiations, the outcome of which could result in a reduction in funds
available for the various federal and state administered housing programs
including the Section 8 program. Such changes could adversely affect the future
NOI and debt structure of any or all Local Partnerships currently receiving such
subsidy or similar subsidies. Six Local Partnerships' Section 8 contracts,
certain of which cover only certain rental units, are currently subject to
renewal under applicable HUD guidelines. In addition, two Local Partnerships
entered into restructuring agreements, resulting in both a lower rent subsidy
(resulting in lower NOI) and lower mandatory debt service with no anticipated
material adverse impact to the operating results of the Properties through the
respective Compliance Periods.
The Local Partnerships have various financing structures which include (i)
required debt service payments ("Mandatory Debt Service") and (ii) debt service
payments which are payable only from available cash flow subject to the terms
and conditions of the notes, which may be subject to specific laws, regulations
and agreements with appropriate federal and state agencies ("Non-Mandatory Debt
Service or Interest"). During the year ended December 31, 2001, revenue from
operations of the Local Partnerships has generally been sufficient to cover
operating expenses and Mandatory Debt Service. Substantially all of the Local
Partnerships are effectively operating at or above break even levels, although
certain Local Partnerships' operating information reflects operating deficits
that do not represent cash deficits due to their mortgage and financing
structure and the required deferral of property management fees. However, as
discussed below, certain Local Partnerships' operating information indicates
below break even operations after taking into account their mortgage and
financing structure and any required deferral of property management fees.
As a result of increasing deficits and declining occupancy caused by
deteriorating physical conditions, Forest Village Housing Partnership ("Forest
Village") filed for protection under Chapter 11 of the federal Bankruptcy Code
in the United States Bankruptcy Court, Western District of Washington (the
"Court") on March 25, 1999. Forest Village filed a plan of reorganization (the
"Plan") that was confirmed by the Court on December 14, 1999. The terms of the
Plan called for Registrant to provide up to $500,000 (the "Bankruptcy Advance"),
all of which was funded as of March 30, 2000, which Forest Village utilized to
pay certain obligations including all first mortgage arrears and certain secured
and unsecured creditors and to make necessary repairs to the complex. The Plan
also resulted in recasting the second mortgage and cumulative arrears over a new
30 year amortization period that reduced Forest Village's mandatory debt service
by approximately $77,000 per annum. In addition to the Bankruptcy Advance,
Registrant has provided additional advances of $282,874 to Forest Village as of
March 30, 2002, of which $9,419 was advanced during the year then ended.
Registrant's investment balance in Forest Village, after cumulative equity
losses, became zero during the year ended March 30, 1995 and advances made by
Registrant, including the Bankruptcy Advance, have been offset by additional
equity in loss of investment in local partnerships. Forest Village generated
approximately $1.5 per Unit per year to the limited partners upon the expiration
of its Low-income Tax Credit allocation in 2001.
12
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
----------------------------------------------------------------------
In May 2002, Forest Village sold its underlying Property for $2,600,000. The
sale proceeds were utilized to repay the outstanding mortgages in full, post a
bond for the purpose of avoiding Low-income Tax Credit Recapture and repay
Registrant for advances noted above. Under the terms of the sale, the purchaser
is required to continue to operate the Property as low-income pursuant to
Section 42 through the remainder of the Compliance Period. In connection with
the sale, Registrant received $700,000, while Forest Village is maintaining a
reserve to pay for certain expenses incurred in connection with the transaction
and other expenses to be incurred in connection with the termination of Forest
Village. Any remaining funds after the payment of all such expenses will be
returned to Registrant. The financial statements as of and for the year ended
March 30, 2002 do not include the results of the sale.
Christian Street Associates Limited Partnership ("Christian Street") and
2000-2100 Christian Street Associates ("2000 Christian Street"), which Local
Partnerships have certain common general partner interests and a common first
mortgage lender, have experienced ongoing operating deficits. Under terms of the
partnership agreements, the Local General Partners exceeded their respective
operating deficit guarantees and, as of September 30, 1998, had advanced in
excess of $1,000,000 in the aggregate to Christian Street and 2000 Christian
Street. The Local General Partners approached the lender with the intention to
restructure the loans; however the lender indicated that in connection with any
such restructuring, the respective Local Partnerships would be responsible for
certain costs, which may be significant. If the Local General Partners were to
cease funding the operating deficits, Registrant would likely incur substantial
recapture of Low-income Tax Credits. Effective October 1, 1998, in an attempt to
avoid potential adverse tax consequences, Registrant and the Local General
Partners agreed to equally share the funding of operating deficits through June
30, 2000 in the case of Christian Street and through September 30, 2000 in the
case of 2000 Christian Street (the respective "Funding Agreements"). The Funding
Agreements have been extended through June 30, 2002. The Local General Partners
agreed to cause the management agent to accrue and defer its management fees
during the period of the Funding Agreements and the accrued management fees are
excluded when determining the operating deficits. Christian Street and 2000
Christian Street reported a combined operating deficit of approximately
$147,000, excluding accrued management fees of approximately $42,000, for the
year ended December 31, 2001. Under the terms of the Funding Agreements,
Registrant has advanced $195,217 as of March 31, 2002, of which $90,646 was
advanced during the year then ended. Payments on the mortgages and real estate
taxes are current. Registrant's investment balances in Christian Street and 2000
Christian Street, after cumulative equity losses, became zero during the year
ended March 30, 1997 and advances made by Registrant have been offset by
additional equity in loss of investment in local partnerships. Christian Street
and 2000 Christian Street generated approximately $8.2 and approximately $4.4
per Unit per year to the limited partners upon the expiration of their
Low-income Tax Credit allocations in 2000 and 2001, respectively.
During the year ended December 31, 2001, Ann Ell Apartments Associates, Ltd.
("Ann Ell") reported an operating deficit of approximately $46,000. Registrant
has made cumulative advances to Ann Ell of $342,545 as of March 31, 2002, of
which $81,027 was advanced during the year then ended. Payments on the mortgage
and real estate taxes are current. Registrant's investment balance in Ann Ell,
after cumulative equity losses, became zero during the year ended March 30, 1994
and advances made by Registrant have been offset by additional equity in loss of
investment in local partnerships. Ann Ell generated approximately $1.7 per Unit
per year to the limited partners upon the expiration of its Low-income Tax
Credit allocation in 2001.
The terms of the partnership agreement of College Avenue Apartments Limited
Partnership ("College Avenue") require the management agent to defer property
management fees in order to avoid a default under the mortgage. College Avenue
reported an operating deficit of approximately $34,000 for the year ended
December 31, 2001, which includes property management fees of approximately
$14,000. Registrant advanced $11,150 during the year ended March 30, 2002.
Payments on the mortgage and real estate taxes are current. Registrant's
investment balance in College Avenue, after cumulative equity losses, became
zero during the year ended March 30, 1999 and advances made by Registrant have
been offset by additional equity in loss of investment in local partnerships.
College Avenue generated approximately $1.2 per Unit per year to the limited
partners upon the expiration of its Low-income Tax Credit allocation in 2000.
Inflation
- ---------
Inflation is not expected to have a material adverse impact on Registrant's
operations during its period of ownership of the Local Partnership Interests.
13
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
----------------------------------------------------------------------
Critical Accounting Policies and Estimates
- ------------------------------------------
The financial statements are prepared in accordance with accounting principles
generally accepted in the United States of America, which requires Registrant to
make certain estimates and assumptions. A summary of significant accounting
policies is provided in Note 1 to the financial statements. The following
section is a summary of certain aspects of those accounting policies that may
require subjective or complex judgments and are most important to the portrayal
of Registrant's financial condition and results of operations. Registrant
believes that there is a low probability that the use of different estimates or
assumptions in making these judgments would result in materially different
amounts being reported in the financial statements.
o Registrant accounts for its investment in local partnerships in
accordance with the equity method of accounting since Registrant
cannot control the operations of a Local Partnership.
o If the book value of Registrant's investment in a Local Partnership
exceeds the estimated value derived by management, Registrant reduces
its investment in any such Local Partnership and includes such
reduction in equity in loss of investment in local partnerships.
Recent Accounting Pronouncement Not Yet Adopted
- -----------------------------------------------
In August 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard ("SFAS") No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets, which is effective for financial
statements issued for fiscal years beginning after December 15, 2001, and
interim periods within those fiscal years, with early application encouraged.
SFAS No. 144 supersedes and provides additional clarification under the
guidelines established by SFAS No. 121. Registrant does not anticipate that the
adoption of SFAS No. 144 will have a material impact on its financial
statements.
Item 7A. Quantitative and Qualitative Disclosure About Market Risk
---------------------------------------------------------
Registrant has invested a significant portion of its working capital reserves in
corporate bonds, U.S. Treasury instruments and U.S. government and agency
securities. The market value of such investments is subject to fluctuation based
upon changes in interest rates relative to each investment's maturity date.
Since Registrant's investments in bonds have various maturity dates through
2008, the value of such investments may be adversely impacted in an environment
of rising interest rates in the event Registrant decides to liquidate any such
investment prior to its maturity. Although Registrant may utilize reserves to
assist an under performing Property, it otherwise intends to hold such
investments to their respective maturities. Therefore, Registrant does not
anticipate any material adverse impact in connection with such investments.
14
AMERICAN TAX CREDIT PROPERTIES II L.P.
Item 8. Financial Statements and Supplementary Data
-------------------------------------------
Table of Contents
-----------------
Page
----
Independent Auditors' Report..................................................16
Balance Sheets................................................................17
Statements of Operations......................................................18
Statements of Changes in Partners' Equity (Deficit)...........................19
Statements of Cash Flows......................................................20
Notes to Financial Statements.................................................22
No financial statement schedules are included because of the absence of the
conditions under which they are required or because the information is included
in the financial statements or the notes thereto.
15
INDEPENDENT AUDITORS' REPORT
To the Partners
American Tax Credit Properties II L.P.
We have audited the accompanying balance sheets of American Tax Credit
Properties II L.P. as of March 30, 2002 and 2001, and the related statements of
operations, partners' equity (deficit) and cash flows for each of the three
years in the period ended March 30, 2002. 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 American Tax Credit
Properties II L.P. as of March 30, 2002 and 2001, and the results of its
operations, changes in partners' equity (deficit) and its cash flows for each of
the three years in the period ended March 30, 2002, in conformity with
accounting principles generally accepted in the United States of America.
/s/ Reznick Fedder and Silverman
Bethesda, Maryland
June 24, 2002
16
AMERICAN TAX CREDIT PROPERTIES II L.P.
BALANCE SHEETS
MARCH 30, 2002 AND 2001
Notes 2002 2001
----- ------------ -------------
ASSETS
Cash and cash equivalents 3,9 $ 10,520 $ 81,216
Investments in bonds 4,9 2,792,845 3,155,194
Investment in local partnerships 5,8 8,101,733 9,037,289
Interest receivable 9 47,552 45,050
------------ ------------
$ 10,952,650 $ 12,318,749
============ ============
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities
Accounts payable and accrued expenses 8 $ 698,440 $ 734,858
Payable to general partner and affiliate 6,8 929,773 855,501
Other liabilities 27,600 34,600
------------ ------------
1,655,813 1,624,959
------------ ------------
Commitments and contingencies 5,8
Partners' equity (deficit) 2,4
General partner (400,150) (386,180)
Limited partners (55,746 units of limited partnership
interest outstanding) 9,662,307 11,045,331
Accumulated other comprehensive income, net 34,680 34,639
------------ ------------
9,296,837 10,693,790
------------ ------------
$ 10,952,650 $ 12,318,749
============ ============
See Notes to Financial Statements.
17
AMERICAN TAX CREDIT PROPERTIES II L.P.
STATEMENTS OF OPERATIONS
YEARS ENDED MARCH 30, 2002, 2001 AND 2000
Notes 2002 2001 2000
----- ----------- ----------- -----------
REVENUE
Interest $ 217,725 $ 235,425 $ 261,846
Other income from local partnerships 26,093 4,158 10,229
----------- ----------- -----------
TOTAL REVENUE 243,818 239,583 272,075
----------- ----------- -----------
EXPENSES
Administration fees 8 299,307 299,307 299,307
Management fees 6,8 299,307 299,307 299,307
Professional fees 80,427 92,870 74,277
Printing, postage and other 34,316 46,076 48,735
----------- ----------- -----------
TOTAL EXPENSES 713,357 737,560 721,626
----------- ----------- -----------
Loss from operations (469,539) (497,977) (449,551)
Equity in loss of investment in local
partnerships 5 (927,455) (2,877,726) (1,598,531)
----------- ----------- -----------
NET LOSS (1,396,994) (3,375,703) (2,048,082)
Other comprehensive income (loss) 4 41 150,497 (163,069)
----------- ----------- -----------
COMPREHENSIVE LOSS $(1,396,953) $(3,225,206) $(2,211,151)
=========== =========== ===========
NET LOSS ATTRIBUTABLE TO 2
General partner $ (13,970) $ (33,757) $ (20,481)
Limited partners
(1,383,024) (3,341,946) (2,027,601)
----------- ----------- -----------
$(1,396,994) $(3,375,703) $(2,048,082)
=========== =========== ===========
NET LOSS per unit of limited
partnership interest (55,746 units
of limited partnership interest) $ (24.81) $ (59.95) $ (36.74)
=========== =========== ===========
See Notes to Financial Statements.
18
AMERICAN TAX CREDIT PROPERTIES II L.P.
STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIT)
YEARS ENDED MARCH 30, 2002, 2001 AND 2000
Accumulated
Other
Comprehensive
General Limited Income Loss),
Partner Partners Net Total
------------- ------------- ------------- ------------
Partners' equity (deficit),
March 30, 1999 $ (331,942) $ 16,414,878 $ 47,211 $ 16,130,147
Net loss (20,481) (2,027,601) (2,048,082)
Other comprehensive loss, net (163,069) (163,069)
------------ ------------ ------------ ------------
Partners' equity (deficit),
March 30, 2000 (352,423) 14,387,277 (115,858) 13,918,996
Net loss (33,757) (3,341,946) (3,375,703)
Other comprehensive income, net 150,497 150,497
------------ ------------ ------------ ------------
Partners' equity (deficit), March 30, (386,180) 11,045,331 34,639 10,693,790
Net loss (13,970) (1,383,024) (1,396,994)
Other comprehensive income, net 41 41
------------ ------------ ------------ ------------
Partners' equity (deficit),
March 30, 2002 $ (400,150) $ 9,662,307 $ 34,680 $ 9,296,837
============ ============ ============ ============
See Notes to Financial Statements.
19
AMERICAN TAX CREDIT PROPERTIES II L.P.
STATEMENTS OF CASH FLOWS
YEARS ENDED MARCH 30, 2002, 2001 AND 2000
2002 2001 2000
--------- --------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received $ 177,040 $ 211,952 $ 261,308
Cash used for local partnerships for deferred expenses (7,000) (7,000) (7,000)
Cash paid for
administration fees (304,826) (242,224) (178,343)
management fees (269,516) (239,516) (209,516)
professional fees (62,215) (87,316) (81,277)
printing, postage and other expenses (38,946) (24,656) (36,995)
--------- --------- ---------
Net cash used in operating activities (505,463) (388,760) (251,823)
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash distributions from local partnerships 226,436 81,877 183,608
Maturity/redemption and sale of bonds 400,573 306,264 576,297
Investment in local partnerships (192,242) (253,486) (605,737)
Investments in bonds (includes accrued interest of $5,832) (306,142)
--------- --------- ---------
Net cash provided by (used in) investing activities 434,767 (171,487) 154,168
--------- --------- ---------
Net decrease in cash and cash equivalents (70,696) (560,247) (97,655)
Cash and cash equivalents at beginning of year 81,216 641,463 739,118
--------- --------- ---------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 10,520 $ 81,216 $ 641,463
========= ========= =========
SIGNIFICANT NON-CASH INVESTING ACTIVITIES
Unrealized gain (loss) on investments in bonds, net $ 41 $ 150,497 $(163,069)
========= ========= =========
- -----------------------------------------------------------------------------------------------------------------
See reconciliation of net loss to net cash used in operating activities on page 21.
See Notes to Financial Statements.
20
AMERICAN TAX CREDIT PROPERTIES II L.P.
STATEMENTS OF CASH FLOWS - (Continued)
YEARS ENDED MARCH 30, 2002, 2001 AND 2000
2002 2001 2000
------------ ------------ ------------
RECONCILIATION OF NET LOSS TO NET CASH USED IN
OPERATING ACTIVITIES
Net loss $(1,396,994) $(3,375,703) $(2,048,082)
Adjustments to reconcile net loss to net cash used
in operating activities
Equity in loss of investment in local
partnerships 927,455 2,877,726 1,598,531
Distributions from local partnerships classified
as other income (26,093) (4,158) (10,229)
Loss (gain) on redemption/sale of bonds (4,918) (129) 10,000
Amortization of net premium on investments in
bonds 5,817 8,387 9,321
Accretion of zero coupon bonds (39,082) (39,082) (39,190)
Decrease (increase) in interest receivable (2,502) 7,351 19,331
Increase (decrease) in accounts payable and
accrued expenses (36,418) 26,974 62,674
Increase in payable to general partner and
affiliate 74,272 116,874 152,821
Decrease in other liabilities (7,000) (7,000) (7,000)
----------- ----------- -----------
NET CASH USED IN OPERATING ACTIVITIES $ (505,463) $ (388,760) $ (251,823)
=========== =========== ===========
See Notes to Financial Statements.
21
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS
MARCH 30, 2002, 2001 AND 2000
1. Organization, Purpose and Summary of Significant Accounting Policies
American Tax Credit Properties II L.P. (the "Partnership") was formed on
October 26, 1988 and the Certificate of Limited Partnership of the
Partnership was filed under the Delaware Revised Uniform Limited
Partnership Act. There was no operating activity until admission of the
limited partners on June 28, 1989. The Partnership was formed to invest
primarily in leveraged low-income multifamily residential complexes (the
"Property" or "Properties") that qualify for the low-income tax credit in
accordance with Section 42 of the Internal Revenue Code (the "Low-income
Tax Credit"), through the acquisition of limited partnership equity
interests (the "Local Partnership Interests") in partnerships (the "Local
Partnership" or "Local Partnerships") that are the owners of the
Properties. The Partnership has invested in one Local Partnership whose
Property also qualifies for the historic rehabilitation tax credit in
accordance with Section 48(g) of the Internal Revenue Code of 1986.
Richman Tax Credit Properties II L.P. (the "General Partner") was formed
on October 26, 1988 to act as a general partner of the Partnership.
Basis of Accounting and Fiscal Year
-----------------------------------
The Partnership's records are maintained on the accrual basis of
accounting for both financial reporting and tax purposes. For financial
reporting purposes, the Partnership's fiscal year ends March 30 and its
quarterly periods end June 29, September 29 and December 30. The Local
Partnerships have a calendar year for financial reporting purposes. The
Partnership and the Local Partnerships each have a calendar year for
income tax purposes.
Investment in Local Partnerships
--------------------------------
The Partnership accounts for its investment in local partnerships in
accordance with the equity method of accounting, under which the
investment is carried at cost and is adjusted for the Partnership's share
of each Local Partnership's results of operations and by cash
distributions received. Equity in loss of each investment in Local
Partnership allocated to the Partnership is recognized to the extent of
the Partnership's investment balance in each Local Partnership. Equity in
loss in excess of the Partnership's investment balance in a Local
Partnership is allocated to other partners' capital in any such Local
Partnership. Previously unrecognized equity in loss of any Local
Partnership is recognized in the fiscal year in which equity in income is
earned by such Local Partnership or additional investment is made by the
Partnership. Distributions received subsequent to the elimination of an
investment balance for any such investment in a Local Partnership are
recorded as other income from local partnerships.
The Partnership regularly assesses the carrying value of its investments
in local partnerships. If the carrying value of an investment in a Local
Partnership exceeds the estimated value derived by management, the
Partnership reduces its investment in any such Local Partnership and
includes such reduction in equity in loss of investment in local
partnerships.
Advances made to Local Partnerships are recorded as investments in local
partnerships. Such advances are considered by the Partnership to be
voluntary loans to the respective Local Partnerships and the Partnership
may be reimbursed at a future date to the extent such Local Partnerships
generate distributable cash flow or receive proceeds from sale or
refinancing. The Partnership recognizes additional equity in loss of
investment in local partnerships to the extent of such advances.
Use of Estimates
----------------
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities as of the date of the financial statements and the reported
amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
Reclassifications
-----------------
Certain prior year amounts have been reclassified to conform to the
current year presentation.
Cash and Cash Equivalents
-------------------------
The Partnership considers all highly liquid investments purchased with an
original maturity of three months or less at the date of acquisition to be
cash equivalents. Cash and cash equivalents are stated at cost, which
approximates market value.
22
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 2002, 2001 AND 2000
1. Organization, Purpose and Summary of Significant Accounting Policies
(continued)
Investments in Bonds
--------------------
Investments in bonds are classified as available-for-sale and represent
investments that the Partnership intends to hold for an indefinite period
of time but not necessarily to maturity. Any decision to sell an
investment would be based on various factors, including significant
movements in interest rates and liquidity needs. Investments in bonds are
carried at estimated fair value and unrealized gains or losses are
included as items of comprehensive income (loss) and are reported as a
separate component of partners' equity (deficit).
Premiums and discounts on investments in bonds are amortized (accreted)
using the straight-line method over the life of the investment. Amortized
premiums offset interest revenue, while the accretion of discounts and
zero coupon bonds are included in interest revenue. Realized gain (loss)
on redemption or sale of investments in bonds are included in, or offset
against, interest revenue on the basis of the adjusted cost of each
specific investment redeemed or sold.
Income Taxes
------------
No provision for income taxes has been made because all income, losses and
tax credits are allocated to the partners for inclusion in their
respective tax returns. In accordance with Statement of Financial
Accounting Standards ("SFAS") No. 109 "Accounting for Income Taxes," the
Partnership has included in Note 7 disclosures related to differences in
the book and tax bases of accounting.
Recent Accounting Pronouncement Not Yet Adopted
-----------------------------------------------
In August 2001, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets, which is effective for financial statements issued for fiscal
years beginning after December 15, 2001, and interim periods within those
fiscal years, with early application encouraged. SFAS No. 144 supersedes
and provides additional clarification under the guidelines established by
SFAS No. 121. The Partnership does not anticipate that the adoption of
SFAS No. 144 will have a material impact on its financial statements.
2. Capital Contributions
On June 14, 1989, the Partnership commenced the offering of units (the
"Units") through Merrill Lynch, Pierce, Fenner & Smith Incorporated (the
"Selling Agent"). On June 28, 1989, July 31, 1989 and September 22, 1989,
under the terms of the Amended and Restated Agreement of Limited
Partnership of the Partnership (the "Partnership Agreement"), the General
Partner admitted limited partners to the Partnership in three closings. At
these closings, subscriptions for a total of 55,746 Units representing
$55,746,000 in limited partners' capital contributions were accepted. In
connection with the offering of Units, the Partnership incurred
organization and offering costs of $6,534,064, of which $75,000 was
capitalized as organization costs and $6,459,064 was charged to the
limited partners' equity as syndication costs. The Partnership received a
capital contribution of $100 from the General Partner.
Net loss is allocated 99% to the limited partners and 1% to the General
Partner in accordance with the Partnership Agreement.
3. Cash and Cash Equivalents
As of March 30, 2002, the Partnership has $10,520 in cash and cash
equivalents that are deposited in interest-bearing accounts with an
institution that is not insured by the Federal Deposit Insurance
Corporation.
23
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 2002, 2001 AND 2000
4. Investments in Bonds
The Partnership carries its investments in bonds as available-for-sale
because such investments are used to facilitate and provide flexibility
for the Partnership's obligations, including resolving circumstances that
may arise in connection with the Local Partnerships. Investments in bonds
are reflected in the accompanying balance sheets at estimated fair value.
As of March 30, 2002 certain information concerning investments in bonds
is as follows:
Gross Gross
Amortized unrealized unrealized Estimated
Description and maturity cost gains losses fair value
------------------------ --------- ---------- ---------- ----------
Corporate debt securities
Within one year $ 450,800 $ 13,605 $ -- $ 464,405
After one year through five years 1,656,689 49,033 (25,419) 1,680,303
----------- ----------- ----------- -----------
2,107,489 62,638 (25,419) 2,144,708
----------- ----------- ----------- -----------
U.S. Treasury debt securities
After five years through ten years 639,473 -- (3,034) 636,439
----------- ----------- ----------- -----------
U.S. government and agency securities
After one year through five years 11,203 495 -- 11,698
----------- ----------- ----------- -----------
$ 2,758,165 $ 63,133 $ (28,453) $ 2,792,845
=========== =========== =========== ===========
As of March 30, 2001, certain information concerning investments in bonds
is as follows:
Gross Gross
Amortized unrealized unrealized Estimated
Description and maturity cost gains losses fair value
------------------------ --------- ---------- ---------- ----------
Corporate debt securities
Within one year $ 186,667 $ 819 $ -- $ 187,486
After one year through five years 2,099,123 50,107 (53,575) 2,095,655
After five years through ten years 213,033 14,269 -- 227,302
----------- ----------- ----------- -----------
2,498,823 65,195 (53,575) 2,510,443
----------- ----------- ----------- -----------
U.S. Treasury debt securities
After five years through ten years 600,390 22,373 -- 622,763
----------- ----------- ----------- -----------
U.S. government and agency securities
After five years through ten years 21,342 646 -- 21,988
----------- ----------- ----------- -----------
$ 3,120,555 $ 88,214 $ (53,575) $ 3,155,194
=========== =========== =========== ===========
24
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 2002, 2001 AND 2000
5. Investment in Local Partnerships
As of March 30, 2002, the Partnership owns a limited partnership interest
in the following Local Partnerships:
1. 1989 Westview Arms Limited Partnership;
2. 2000-2100 Christian Street Associates ("2000 Christian Street");
3. Ann Ell Apartments Associates, Ltd. ("Ann Ell")*;
4. Auburn Hills Apartments Limited Partnership;
5. Auburn Hills Townhouses Limited Partnership;
6. Batesville Family, L.P.;
7. Browning Road Phase I, L.P.;
8. Bruce Housing Associates, L.P.;
9. Canton Partners, L.P.;
10. Carrington Limited Dividend Housing Association Limited Partnership;
11. Christian Street Associates Limited Partnership ("Christian Street");
12. Cityside Apartments, Phase II, L.P.*;
13. Cleveland Square, Ltd.;
14. College Avenue Apartments Limited Partnership ("College Avenue");
15. Corrigan Square, Ltd.;
16. De Queen Villas Limited Partnership;
17. Dermott Villas Limited Partnership;
18. Eagle View, Ltd.;
19. Elm Hill Housing Limited Partnership;
20. Eudora Manor Limited Partnership;
21. Forest Village Housing Partnership ("Forest Village")*;
22. Harborside Housing Limited Partnership;
23. Hill Com I Associates Limited Partnership ("Hill Com I");
24. Hill Com II Associates Limited Partnership ("Hill Com II");
25. Hughes Manor Limited Partnership;
26. Ivy Family, L.P.;
27. Lakeside Housing Limited Partnership;
28. Lawrence Road Properties, Ltd.;
29. Lexington Estates Ltd., A Mississippi Limited Partnership;
30. Littleton Avenue Community Village, L.P.;
31. Lula Courts Ltd., L.P.;
32. Magee Elderly, L.P.;
33. Mirador del Toa Limited Partnership;
34. Nixa Heights Apartments, L.P.;
35. North Hills Farms Limited Partnership;
36. Patton Place Limited Partnership ("Patton Place");
37. Plantersville Family, L.P.;
38. Powelton Gardens Associates ("Powelton Gardens");
39. Purvis Heights Properties, L.P.;
40. Queen Lane Investors;
41. Renova Properties, L.P.;
42. Santa Juanita Limited Dividend Partnership L.P. ("Santa Juanita");
43. Simpson County Family, L.P.;
44. Summers Village Limited Partnership;
45. Tchula Courts Apartments, L.P.;
46. The Pendleton (A Louisiana Partnership in Commendam);
47. Trenton Heights Apartments, L.P.;
48. Twin Pine Family, L.P.;
49. Village Creek Limited Partnership; and
50. York Park Associates Limited Partnership*.
*An affiliate of the General Partner is a general partner of and/or
provides services to the Local Partnership.
25
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 2002, 2001 AND 2000
5. Investment in Local Partnerships (continued)
Although the Partnership generally owns a 98.9%-99% limited partnership
interest in the Local Partnerships, the Partnership and American Tax
Credit Properties L.P. ("ATCP"), a Delaware limited partnership and an
affiliate of the Partnership, together, in the aggregate, own a 99% Local
Partnership Interest in Santa Juanita; the ownership percentages of the
Partnership and ATCP of Santa Juanita are 64.36% and 34.64%, respectively.
In addition, the Partnership and American Tax Credit Properties III L.P.
("ATCP III"), a Delaware limited partnership and an affiliate of the
Partnership, together, in the aggregate, own a 99% Local Partnership
Interest in the following Local Partnerships:
The
Partnership ATCP III
----------- --------
Batesville Family, L.P. 37.25% 61.75%
Bruce Housing Associates, L.P. 37.25 61.75
Carrington Limited Dividend Housing
Association Limited Partnership 33.05 65.95
Ivy Family, L.P. 37.25 61.75
Lawrence Road Properties, Ltd. 37.25 61.75
Mirador del Toa Limited Partnership 39.94 59.06
Purvis Heights Properties, L.P. 37.25 61.75
Queen Lane Investors 50.50 48.50
The Properties are principally comprised of subsidized and leveraged
low-income multifamily residential complexes located throughout the United
States and Puerto Rico. The required holding period of each Property, in
order to avoid Low-income Tax Credit recapture, is fifteen years from the
year in which the Low-income Tax Credits commence on the last building of
the Property (the "Compliance Period"). The rents of the Properties are
controlled by federal and state agencies pursuant to applicable laws and
regulations. Under the terms of each of the Local Partnership's
partnership agreements, the Partnership has made capital contributions in
the aggregate amount of $47,024,448, which includes advances made to
certain Local Partnerships. As of December 31, 2001, the Local
Partnerships have outstanding mortgage loans payable totaling
approximately $88,454,000 and accrued interest payable on such loans
totaling approximately $6,959,000, which are secured by security interests
and liens common to mortgage loans on the Local Partnerships' real
property and other assets.
Equity in loss of investment in local partnerships is limited to the
Partnership's investment balance in each Local Partnership; any excess is
applied to other partners' capital in any such Local Partnership (see Note
1). The amount of such excess losses applied to other partners' capital
was $2,125,501, $1,916,796 and $1,457,955 for the years ended December 31,
2001, 2000 and 1999, respectively, as reflected in the combined statements
of operations of the Local Partnerships reflected herein Note 5.
As a result of management's assessment of the carrying value of the
investment in local partnerships under applicable accounting guidelines
(see Note 1), the Partnership has reduced its investment in Hill Com I by
$279,273 for the year ended March 30, 2002, in Hill Com I, Hill Com II and
Powelton Gardens by $387,000, $409,511 and $141,000, respectively, for the
year ended March 30, 2001 and in Patton Place and Powelton Gardens by
$107,000 and $73,000, respectively, for the year ended March 30, 2000.
Such losses are included in equity in loss of investment in local
partnerships in the accompanying statements of operations of the
Partnership for the years indicated.
The combined balance sheets of the Local Partnerships as of December 31,
2001 and 2000 and the combined statements of operations of the Local
Partnerships for the years ended December 31, 2001, 2000 and 1999 are
reflected on pages 27 and 28, respectively.
26
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 2002, 2001 AND 2000
5. Investment in Local Partnerships (continued)
The combined balance sheets of the Local Partnerships as of December 31,
2001 and 2000 are as follows:
2001 2000
------------- --------------
ASSETS
Cash and cash equivalents $ 2,127,352 $ 3,332,561
Rents receivable 431,523 440,713
Escrow deposits and reserves 5,755,211 5,516,361
Land 4,180,673 4,180,673
Buildings and improvements (net of accumulated
depreciation of $61,229,767 and $56,806,969) 84,160,541 86,143,179
Intangible assets (net of accumulated amortization
of $1,258,567 and $1,171,094) 1,407,245 1,436,987
Other assets 1,387,096 1,140,790
------------- -------------
$ 99,449,641 $ 102,191,264
============= =============
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities
Accounts payable and accrued expenses $ 1,812,873 $ 1,813,276
Due to related parties 4,165,047 4,008,867
Mortgage loans 88,453,937 88,273,451
Notes payable 1,418,799 2,115,382
Accrued interest 6,958,723 6,274,662
Other liabilities 710,234 683,883
------------- -------------
103,519,613 103,169,521
------------- -------------
Partners' equity (deficit)
American Tax Credit Properties II L.P.
Capital contributions, net of distributions 45,555,964 45,514,198
Cumulative loss (35,459,009) (34,810,823)
------------- -------------
10,096,955 10,703,375
------------- -------------
General partners and other limited partners
Capital contributions, net of distributions 3,098,307 3,118,133
Cumulative loss (17,265,234) (14,799,765)
------------- -------------
(14,166,927) (11,681,632)
------------- -------------
(4,069,972) (978,257)
------------- -------------
$ 99,449,641 $ 102,191,264
============= =============
27
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 2002, 2001 AND 2000
5. Investment in Local Partnerships (continued)
The combined statements of operations of the Local Partnerships for the
years ended December 31, 2001, 2000 and 1999 are as follows:
2001 2000 1999
------------ ------------ ------------
REVENUE
Rental $ 21,389,069 $ 20,607,114 $ 20,308,267
Interest and other 693,807 749,692 948,722
------------ ------------ ------------
TOTAL REVENUE 22,082,876 21,356,806 21,256,989
------------ ------------ ------------
EXPENSES
Administrative 3,788,594 3,874,564 3,521,015
Utilities 3,427,028 2,702,949 2,647,031
Operating and maintenance 4,572,352 4,972,828 4,456,940
Taxes and insurance 2,712,638 2,550,207 2,269,563
Financial 6,155,379 6,208,603 6,373,617
Depreciation and amortization 4,540,540 5,239,002 4,827,716
------------ ------------ ------------
TOTAL EXPENSES 25,196,531 25,548,153 24,095,882
------------ ------------ ------------
NET LOSS $ (3,113,655) $ (4,191,347) $ (2,838,893)
============ ============ ============
NET LOSS ATTRIBUTABLE TO
American Tax Credit Properties II L.P. $ (648,186) $ (1,940,215) $ (1,418,531)
General partners and other limited partners,
which includes specially allocated items of
revenue to certain general partners of $54,577,
$59,700 and $381,305, and Partnership loss
in excess of investment of $2,125,501, $1,916,796
and $1,457,955 (2,465,469) (2,251,132) (1,420,362)
------------ ------------ ------------
$ (3,113,655) $ (4,191,347) $ (2,838,893)
============ ============ ============
28
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 2002, 2001 AND 2000
5. Investment in Local Partnerships (continued)
Investment activity with respect to each Local Partnership for the year ended
March 30, 2002 is as follows:
Investment Partnership's Adjustment Cash
in Local equity in to carrying distributions Investment
Partnership Investment income (loss) value received in Local
balance during the for the during the during the Partnership
as of year ended year ended year ended year ended balance as of
March 30, March 30, December 31, March 30, March 30, March 30,
Name of Local Partnership 2001 2001 2001 200 2002(4) 2002
- ------------------------- ----------- ------------ -------------- ------------ ------------- -------------
1989 Westview Arms Limited
Partnership $ 67,155 $ -- $ (6,772) $ -- $ -- $ 60,383
2000-2100 Christian Street
Associates -- 44,102 (44,102) (2) -- -- --
Ann Ell Apartments Associates, Ltd. -- 81,027 (81,027) (2) -- -- --
Auburn Hills Apartments Limited
Partnership -- -- -- (2) -- -- --
Auburn Hills Townhouses Limited
Partnership 388,752 -- 281,106 -- (5,000) 664,858
Batesville Family, L.P. -- -- -- (2) -- -- --
Browning Road Phase I, L.P. -- -- -- (2) -- -- --
Bruce Housing Associates, L.P. 17,635 -- (8,014) -- -- 9,621
Canton Partners, L.P. -- -- -- (2) -- -- --
Carrington Limited Dividend
Housing Association
Limited Partnership 275,025 -- (74,329) -- -- 200,696
Christian Street Associates
Limited Partnership -- 46,544 (46,544) (2) -- -- --
Cityside Apartments, Phase II, L.P. 217,866 -- (217,866) (1) -- -- --
Cleveland Square, Ltd. -- -- -- (2) -- -- --
College Avenue Apartments Limited
Partnership -- 11,150 (11,150) -- -- --
Corrigan Square, Ltd. -- -- -- (2) -- -- --
De Queen Villas Limited Partnership -- -- -- (2) -- -- --
Dermott Villas Limited Partnership -- -- -- (2) -- -- --
Eagle View, Ltd. -- -- -- (2) -- -- --
Elm Hill Housing Limited
Partnership 2,036,747 -- (135,234) -- (120,959) 1,780,554
Eudora Manor Limited Partnership -- -- -- (2) -- -- --
Forest Village Housing Partnership -- 9,419 (9,419) -- -- --
Harborside Housing Limited
Partnership 1,784,095 -- (91,246) -- -- 1,692,849
Hill Com I Associates Limited
Partnership 345,449 -- (66,176) (279,273)(3) -- --
Hill Com II Associates Limited
Partnership -- -- -- (2) -- -- --
Hughes Manor Limited Partnership 5,368 -- (5,368) (1) -- -- --
Ivy Family, L.P. 5,542 -- (5,542) (1) -- -- --
Lakeside Housing Limited
Partnership 154,117 -- (85,807) (1) -- (68,310) --
Lawrence Road Properties, Ltd. -- -- -- (2) -- -- --
Lexington Estates Ltd. -- -- -- (2) -- -- --
Littleton Avenue Community
Village, L.P. -- -- -- (2) -- -- --
Lula Courts Ltd., L.P. -- -- -- (2) -- -- --
Magee Elderly, L.P. 2,680 -- (2,680) (1) -- --
Mirador del Toa Limited Partnership -- -- -- (2) -- -- --
Nixa Heights Apartments, L.P. -- -- -- (2) -- -- --
North Hills Farms Limited
Partnership 3,343,268 -- 113,661 -- (5,000) 3,451,929
Patton Place Limited Partnership 217,347 -- (42,471) -- -- 174,876
Plantersville Family, L.P. -- -- -- (2) -- -- --
Powelton Gardens Associates 21,138 -- (21,138) (1) -- -- --
Purvis Heights Properties, L.P. 35,474 -- (6,819) -- (1,074) 27,581
Queen Lane Investors -- -- -- (2) -- -- --
Renova Properties, L.P. -- -- -- (2) -- -- --
Santa Juanita Limited Dividend
Partnership L.P. 91,527 -- (53,141) -- -- 38,386
Simpson County Family, L.P. -- -- -- (2) -- -- --
Summers Village Limited Partnership -- -- -- (2) -- -- --
Tchula Courts Apartments, L.P. -- -- -- (2) -- -- --
The Pendleton 28,104 -- (28,104) (1) -- -- --
Trenton Heights Apartments, L.P. -- -- -- (2) -- -- --
Twin Pine Family, L.P. -- -- -- (2) -- -- --
Village Creek Limited Partnership -- -- -- -- -- --
York Park Associates Limited
Partnership -- -- -- (2) -- -- --
----------- -------- --------- --------- --------- -----------
$ 9,037,289 $192,242 $(648,182) $(279,273) $(200,343) $ 8,101,733
=========== ======== ========= ========= ========= ===========
(1) The Partnership's equity in loss of an investment in a Local
Partnership is limited to the remaining investment balance.
(2) Additional equity in loss of investment is not allocated to the
Partnership until equity in income is earned or additional investment
is made by the Partnership.
(3) The Partnership has adjusted the investment's carrying value in
accordance with applicable accounting guidelines. (4) The total
excludes $26,093 of distributions received classified as other income
from local partnerships.
29
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 2002, 2001 AND 2000
5. Investment in Local Partnerships (continued)
Investment activity with respect to each Local Partnership for the year ended
March 30, 2001 is as follows:
Investment Partnership's Adjustment Cash
in Local equity in to carrying distributions Investment
Partnership Investment income (loss) value received in Local
balance during the for the during the during the Partnership
as of year ended year ended year ended year ended balance as of
March 30, March 30, December 31, March 30, March 30, March 30,
Name of Local Partnership 2001 2001 2001 2002 2002(4) 2002
- ------------------------- ----------- ------------ ------------- -------------- ------------- ------------
1989 Westview Arms Limited
Partnership $ 52,477 $ -- $ 14,678 $ -- $ -- $ 67,155
2000-2100 Christian Street
Associates -- 23,357 (23,357) (1) -- -- --
Ann Ell Apartments Associates, Ltd. -- 58,000 (58,000) (2) -- -- --
Auburn Hills Apartments Limited
Partnership -- -- -- (2) -- -- --
Auburn Hills Townhouses Limited
Partnership 963,005 -- (569,253) -- (5,000) 388,752
Batesville Family, L.P. -- -- -- (2) -- -- --
Browning Road Phase I, L.P. 11,894 -- (11,894) (1) -- -- --
Bruce Housing Associates, L.P. 28,562 -- (10,927) -- -- 17,635
Canton Partners, L.P. -- -- -- (2) -- -- --
Carrington Limited Dividend Housing
Association Limited Partnership 356,219 -- (81,194) -- -- 275,025
Christian Street Associates
Limited Partnership -- 16,477 (16,477) (1) -- -- --
Cityside Apartments, Phase II, L.P. 763,402 -- (545,536) -- -- 217,866
Cleveland Square, Ltd. -- -- -- (2) -- -- --
College Avenue Apartments Limited
Partnership -- -- -- (2) -- -- --
Corrigan Square, Ltd. -- -- -- (2) -- -- --
De Queen Villas Limited Partnership -- -- -- (2) -- -- --
Dermott Villas Limited Partnership -- -- -- (2) -- -- --
Eagle View, Ltd. 4,870 -- (4,870) (1) -- -- --
Elm Hill Housing Limited
Partnership 2,235,431 -- (198,684) -- -- 2,036,747
Eudora Manor Limited Partnership 7,054 -- (7,054) (1) -- -- --
Forest Village Housing Partnership -- 155,652 (155,652) (1) -- -- --
Harborside Housing Limited 1,762,371 -- 34,350 -- (12,626) 1,784,095
Hill Com I Associates Limited
Partnership 761,448 -- (15,557) (387,000)(3) (13,442) 345,449
Hill Com II Associates Limited
Partnership 484,741 -- (71,220) (409,511)(3) (4,010) --
Hughes Manor Limited Partnership 25,637 -- (20,269) -- -- 5,368
Ivy Family, L.P. 15,577 -- (10,035) -- -- 5,542
Lakeside Housing Limited
Partnership 396,296 -- (202,769) -- (39,410) 154,117
Lawrence Road Properties, Ltd. -- -- -- (2) -- -- --
Lexington Estates Ltd. -- -- -- (2) -- -- --
Littleton Avenue Community
Village, L.P. -- -- -- (2) -- -- --
Lula Courts Ltd., L.P. -- -- -- (2) -- -- --
Magee Elderly, L.P. 10,288 -- (6,877) -- (731) 2,680
Mirador del Toa Limited Partnership -- -- -- (2) -- -- --
Nixa Heights Apartments, L.P. 9,061 -- (9,061) (1) -- -- --
North Hills Farms Limited
Partnership 3,062,707 -- 283,061 -- (2,500) 3,343,268
Patton Place Limited Partnership 262,358 -- (45,011) -- -- 217,347
Plantersville Family, L.P. 3,371 -- (3,371) (1) -- -- --
Powelton Gardens Associates 194,678 -- (32,540) (141,000)(3) -- 21,138
Purvis Heights Properties, L.P. 40,073 -- (4,599) -- -- 35,474
Queen Lane Investors 49,845 -- (49,845) (1) -- -- --
Renova Properties, L.P. -- -- -- (2) -- -- --
Santa Juanita Limited Dividend
Partnership L.P. 155,153 -- (63,626) -- -- 91,527
Simpson County Family, L.P. -- -- -- (2) -- -- --
Summers Village Limited Partnership 5,590 -- (5,590) (1) -- -- --
Tchula Courts Apartments, L.P. -- -- -- (2) -- -- --
The Pendleton 67,977 -- (39,873) -- -- 28,104
Trenton Heights Apartments, L.P. -- -- -- (2) -- -- --
Twin Pine Family, L.P. 9,163 -- (9,163) (1) -- -- --
Village Creek Limited Partnership -- -- -- (2) -- -- --
York Park Associates Limited
Partnership -- -- -- (2) -- -- --
------------ --------- ----------- ---------- ----------- ----------
$ 11,739,248 $ 253,486 $(1,940,215) $ (937,511) $ (77,719) $9,037,289
============ ========= =========== ========== =========== ==========
(1) The Partnership's equity in loss of an investment in a Local
Partnership is limited to the remaining investment balance.
(2) Additional equity in loss of investment is not allocated to the
Partnership until equity in income is earned or additional investment
is made by the Partnership.
(3) The Partnership has adjusted the investment's carrying value in
accordance with applicable accounting guidelines.
(4) The total excludes $4,158 of distributions received classified as
other income from local partnerships.
30
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 2002, 2001 AND 2000
5. Investment in Local Partnerships (continued)
Property information for each Local Partnership as of December 31, 2001 is
as follows:
Mortgage Buildings
loans and Accumulated
Name of Local Partnership payable Land improvements depreciation
------------------------------------------------- ------------ ------------ -------------- -------------
1989 Westview Arms Limited Partnership $ 444,599 $ 20,275 $ 736,245 $ (244,123)
2000-2100 Christian Street Associates 2,474,296 -- 31,325 (1,790)
Ann Ell Apartments Associates, Ltd. 2,134,064 199,645 2,838,576 (1,176,850)
Auburn Hills Apartments Limited Partnership 792,112 48,245 1,013,162 (317,793)
Auburn Hills Townhouses Limited Partnership 6,236,893 225,000 12,329,691 (5,872,681)
Batesville Family, L.P. 1,431,853 52,000 1,816,601 (656,198)
Browning Road Phase I, L.P. 834,094 43,000 1,061,001 (484,390)
Bruce Housing Associates, L.P. 1,100,431 16,000 1,441,646 (622,106)
Canton Partners, L.P. 1,444,937 35,000 1,851,080 (795,645)
Carrington Limited Dividend Housing
Association Limited Partnership 3,349,699 200,000 6,524,793 (2,744,908)
Christian Street Associates Limited Partnership 2,315,225 -- 36,189 (8,122)
Cityside Apartments, Phase II, L.P. 7,225,344 87,997 14,242,965 (6,104,086)
Cleveland Square, Ltd. 824,701 20,000 1,177,656 (526,757)
College Avenue Apartments Limited Partnership 595,011 24,600 999,333 (424,920)
Corrigan Square, Ltd. 1,420,904 63,358 1,888,580 (831,196)
De Queen Villas Limited Partnership 1,157,536 37,000 1,686,819 (506,224)
Dermott Villas Limited Partnership 1,056,764 15,000 1,353,243 (427,761)
Eagle View, Ltd. 403,931 35,000 496,686 (158,357)
Elm Hill Housing Limited Partnership 6,804,401 119,200 12,530,741 (4,867,960)
Eudora Manor Limited Partnership 747,071 16,000 939,452 (293,191)
Forest Village Housing Partnership 1,483,913 250,000 2,273,454 (1,019,330)
Harborside Housing Limited Partnership 2,924,624 39,400 6,594,750 (2,513,825)
Hill Com I Associates Limited Partnership 1,165,986 143,404 2,926,545 (1,188,026)
Hill Com II Associates Limited Partnership 938,031 112,110 2,183,158 (923,645)
Hughes Manor Limited Partnership 1,107,276 16,007 1,422,747 (444,091)
Ivy Family, L.P. 783,986 11,000 1,067,700 (459,469)
Lakeside Housing Limited Partnership 7,436,465 50,000 11,938,171 (4,722,853)
Lawrence Road Properties, Ltd. 754,841 50,000 943,132 (334,816)
Lexington Estates Ltd. 703,328 30,750 875,930 (416,496)
Littleton Avenue Community Village, L.P. 4,303,080 512,331 7,147,462 (2,976,439)
Lula Courts Ltd., L.P. 696,526 19,600 887,958 (412,391)
Magee Elderly, L.P. 587,752 30,000 716,577 (267,636)
Mirador del Toa Limited Partnership 1,870,929 105,000 2,335,743 (1,069,149)
Nixa Heights Apartments, L.P. 998,461 31,500 1,314,353 (446,199)
North Hills Farms Limited Partnership 3,615,303 525,000 13,048,098 (6,860,190)
Patton Place Limited Partnership 968,270 56,015 1,765,001 (529,287)
Plantersville Family, L.P. 594,079 12,000 762,533 (343,573)
Powelton Gardens Associates 882,8003 29,207 1,960,851 (819,423)
Purvis Heights Properties, L.P. 1,139,573 47,000 1,498,309 (502,897)
Queen Lane Investors 1,543,391 60,301 2,778,023 (1,081,767)
Renova Properties, L.P. 634,691 22,700 810,814 (372,118)
Santa Juanita Limited Dividend Partnership L.P. 1,443,590 228,718 2,429,898 (1,023,187)
Simpson County Family, L.P. 809,563 24,700 1,020,163 (436,417)
Summers Village Limited Partnership 804,429 71,000 969,818 (303,394)
Tchula Courts Apartments, L.P. 731,894 10,000 919,420 (519,582)
The Pendleton 566,748 40,000 1,269,163 (588,707)
Trenton Heights Apartments, L.P. 437,301 29,200 591,572 (233,856)
Twin Pine Family, L.P. 603,819 7,000 797,832 (349,374)
Village Creek Limited Partnership 1,206,875 37,950 1,469,536 (491,147)
York Park Associates Limited Partnership 3,922,544 321,460 5,675,813 (2,515,425)
------------ ----------- ------------ ------------
$ 88,453,937 $ 4,180,673 $145,390,308 $(61,229,767)
============ =========== ============ ============
31
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 2002, 2001 AND 2000
5. Investment in Local Partnerships (continued)
Property information for each Local Partnership as of December 31, 2000 is as
follows:
Mortgage Buildings
loans and Accumulated
Name of Local Partnership payable Land improvements depreciation
------------------------------------------------- ------------ ------------ -------------- -------------
1989 Westview Arms Limited Partnership $ 467,888 $ 20,275 $ 736,245 $ (226,547)
2000-2100 Christian Street Associates 2,522,903 -- 31,325 (651)
Ann Ell Apartments Associates, Ltd. 2,185,412 199,645 2,838,576 (1,072,576)
Auburn Hills Apartments Limited Partnership 794,501 48,245 1,009,662 (293,371)
Auburn Hills Townhouses Limited Partnership 6,316,560 225,000 11,483,551 (5,833,984)
Batesville Family, L.P. 1,435,270 52,000 1,808,219 (609,824)
Browning Road Phase I, L.P. 841,652 43,000 1,058,568 (435,617)
Bruce Housing Associates, L.P. 1,103,910 16,000 1,441,646 (568,592)
Canton Partners, L.P. 1,448,416 35,000 1,841,493 (724,728)
Carrington Limited Dividend Housing
Association Limited Partnership 3,382,920 200,000 6,485,189 (2,501,459)
Christian Street Associates Limited Partnership 2,382,792 -- 34,939 (4,215)
Cityside Apartments, Phase II, L.P. 7,336,993 87,997 14,242,965 (5,586,214)
Cleveland Square, Ltd. 831,822 20,000 1,167,322 (477,014)
College Avenue Apartments Limited Partnership 598,456 24,600 997,538 (384,804)
Corrigan Square, Ltd. 1,431,931 63,358 1,882,283 (757,712)
De Queen Villas Limited Partnership 1,161,512 37,000 1,683,688 (465,543)
Dermott Villas Limited Partnership 1,059,999 15,000 1,348,882 (394,851)
Eagle View, Ltd. 407,315 35,000 496,686 (146,550)
Elm Hill Housing Limited Partnership 6,844,303 119,200 12,530,741 (4,587,988)
Eudora Manor Limited Partnership 749,036 16,000 936,661 (270,342)
Forest Village Housing Partnership 1,501,653 250,000 2,273,454 (913,610)
Harborside Housing Limited Partnership 3,111,891 39,400 6,594,750 (2,344,025)
Hill Com I Associates Limited Partnership 1,181,339 143,404 2,870,372 (1,080,488)
Hill Com II Associates Limited Partnership 952,753 112,110 2,164,529 (842,931)
Hughes Manor Limited Partnership 1,110,383 16,007 1,422,747 (408,770)
Ivy Family, L.P. 789,071 11,000 1,047,168 (419,211)
Lakeside Housing Limited Partnership 7,589,310 50,000 11,938,171 (4,431,253)
Lawrence Road Properties, Ltd. 756,927 50,000 940,652 (309,845)
Lexington Estates Ltd. 705,527 30,750 872,350 (384,460)
Littleton Avenue Community Village, L.P. 4,303,080 512,331 7,103,738 (2,680,268)
Lula Courts Ltd., L.P. 698,382 19,600 884,622 (379,559)
Magee Elderly, L.P. 589,201 30,000 716,577 (249,702)
Mirador del Toa Limited Partnership 1,876,877 105,000 2,335,713 (971,059)
Nixa Heights Apartments, L.P. 1,001,635 31,500 1,308,668 (421,046)
North Hills Farms Limited Partnership 2,394,657 525,000 11,836,630 (6,352,285)
Patton Place Limited Partnership 972,590 56,015 1,764,078 (485,000)
Plantersville Family, L.P. 596,257 12,000 759,260 (314,952)
Powelton Gardens Associates 926,457 29,207 1,950,862 (747,488)
Purvis Heights Properties, L.P. 1,143,029 47,000 1,493,777 (464,232)
Queen Lane Investors 1,553,845 60,301 2,752,080 (976,098)
Renova Properties, L.P. 636,400 22,700 810,814 (341,195)
Santa Juanita Limited Dividend Partnership L.P. 1,456,361 228,718 2,363,130 (933,383)
Simpson County Family, L.P. 811,512 24,700 1,012,038 (398,317)
Summers Village Limited Partnership 806,635 71,000 967,019 (279,943)
Tchula Courts Apartments, L.P. 734,116 10,000 918,405 (491,660)
The Pendleton 576,341 40,000 1,269,163 (540,995)
Trenton Heights Apartments, L.P. 438,627 29,200 588,801 (221,072)
Twin Pine Family, L.P. 608,017 7,000 789,052 (317,903)
Village Creek Limited Partnership 1,210,102 37,950 1,469,536 (453,784)
York Park Associates Limited Partnership 3,936,885 321,460 5,675,813 (2,309,853)
------------ ----------- ------------ ------------
$ 88,273,451 $ 4,180,673 $142,950,148 $(56,806,969)
============ =========== ============ ============
32
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 2002, 2001 AND 2000
5. Investment in Local Partnerships (continued)
The summary of property activity during the year ended December 31, 2001 is as
follows:
Net change during
Balance as of the year ended Balance as of
December 31, 2000 December 31, 2001 December 31, 2001
----------------- ------------------ -----------------
Land $ 4,180,673 $ -- $ 4,180,673
Buildings and improvements 142,950,148 2,440,160 145,390,308
------------- ------------- -------------
147,130,231 2,440,160 149,570,981
Accumulated depreciation (56,806,969) (4,422,798) (61,229,767)
------------- ------------- -------------
$ 90,323,852 $ (1,982,638) $ 88,341,214
============= ============= =============
Effective October 1, 1998, in an attempt to avoid potential adverse tax
consequences, the Partnership and the local general partners of 2000-2100
Christian Street Associates ("2000 Christian Street") and Christian Street
Associates Limited Partnership ("Christian Street") agreed to equally share
the funding of operating deficits through June 30, 2000 in the case of
Christian Street and through September 30, 2000 in the case of 2000
Christian Street (the respective "Funding Agreements"). The Funding
Agreements have been extended through June 30, 2002. Under the terms of the
Funding Agreements, the Partnership has advanced $195,217 as of March 30,
2002, of which $90,646 and $39,834, respectively, was advanced during the
years ended March 30, 2002 and 2001. Such advances have been recorded as
investment in local partnerships and have been offset by additional equity
in loss of investment in local partnerships (see Note 1).
The Partnership advanced $81,027 and $58,000 during the years ended March
30, 2002 and 2001, respectively, to Ann Ell to fund operating deficits.
Cumulative advances as of March 30, 2002 are $342,545. Such advances have
been recorded as investment in local partnerships and have been offset by
additional equity in loss of investment in local partnerships (see Note 1).
The Partnership advanced $11,150 during the year ended March 30, 2002 to
College Avenue to fund operating deficits. Such advances have been recorded
as investment in local partnerships and have been offset by additional
equity in loss of investment in local partnerships (see Note 1).
As a result of increasing deficits and declining occupancy caused by
deteriorating physical conditions, Forest Village filed for protection
under Chapter 11 of the federal Bankruptcy Code in the United States
Bankruptcy Court, Western District of Washington (the "Court") on March 25,
1999. Forest Village filed a plan of reorganization (the "Plan") which was
confirmed by the Court on December 14, 1999. The terms of the Plan called
for the Partnership to provide up to $500,000 (the "Bankruptcy Advance"),
all of which was funded as of March 31, 2000, which Forest Village utilized
to pay certain obligations including all first mortgage arrears and certain
secured and unsecured creditors and to make necessary repairs to the
complex. The Plan also resulted in recasting the second mortgage and
cumulative arrears over a new 30 year amortization period that reduced
Forest Village's mandatory debt service by approximately $77,000 per annum.
In addition to the Bankruptcy Advance, the Partnership has provided
additional advances of $282,874 to Forest Village as of March 30, 2002, of
which $9,419 and $155,652 was advanced during the years ended March 30,
2002 and 2001, respectively. Such advances, including the Bankruptcy
Advance, have been recorded as investment in local partnerships and have
been offset by additional equity in loss of investment in local
partnerships (see Note 1). Of all such amounts advanced by the Partnership,
$534,500 bears interest at 8.5% and is repayable out of net cash flow from
the operations of the Property. No interest has been recorded by the
Partnership as of March 30, 2002.
33
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 2002, 2001 AND 2000
5. Investment in Local Partnerships (continued)
In May 2002, Forest Village sold its underlying Property for $2,600,000.
The sale proceeds were utilized to repay the outstanding mortgages in full,
post a bond for the purpose of avoiding Low-income Tax Credit Recapture and
repay the Partnership for advances discussed above. Under the terms of the
sale, the purchaser is required to continue to operate the Property as
low-income pursuant to Section 42 through the remainder of the Compliance
Period. In connection with the sale, the Partnership received $700,000,
while Forest Village is maintaining a reserve to pay for certain expenses
incurred in connection with the transaction and other expenses to be
incurred in connection with the termination of Forest Village. Any
remaining funds after the payment of all such expenses will be returned to
the Partnership.
An affiliate of the General Partner is the temporary local general partner
of Forest Village. Since March 30, 1995, the Partnership has had a zero
investment balance in Forest Village and continues to account for such
investment under the equity method of accounting. The mortgage loans of
Forest Village are nonrecourse to the Partnership. Selected balance sheet
data of Forest Village as of December 31, 2001 includes land and building
of $1,504,124 net of accumulated depreciation of $1,019,330, total assets
of $1,603,066, mortgage loans and accrued interest of $1,590,394, total
liabilities of $2,059,088 (of which $378,101 represents advances due to the
Partnership) and partners' deficit of $456,022. Selected balance sheet data
of Forest Village as of December 31, 2000 includes land and building of
$1,609,844 net of accumulated depreciation of $913,610, total assets of
$1,651,768, mortgage loans and accrued interest of $1,587,033, total
liabilities of $2,046,768 (of which $378,101 represents advances due to the
Partnership) and partners' deficit of $395,000. Selected balance sheet data
of Forest Village as of December 31, 1999 includes land and building of
$1,696,786 net of accumulated depreciation of $826,668, total assets of
$1,730,629, mortgage loans and accrued interest of $1,728,543, total
liabilities of $2,200,819 (of which $378,101 represents advances due to the
Partnership) and partners' deficit of $470,190. Selected statement of
operations data for the year ended December 31, 2001 includes rental income
of $477,874, interest and other revenue of $15,285, interest expense of
$130,745, depreciation and amortization expenses of $108,706, operating and
maintenance expenses of $119,909, administrative expenses of $92,836,
utilities expenses of $43,154 and taxes and insurance expenses of $58,144.
Selected statement of operations data for the year ended December 31, 2000
includes rental income of $309,045, interest and other revenue of $61,519,
interest expense of $134,444, depreciation and amortization expenses of
$89,928, operating and maintenance expenses of $459,170, administrative
expenses of $83,243, utilities expenses of $38,480 and taxes and insurance
expenses of $63,769. Selected statement of operations data for the year
ended December 31, 1999 includes rental income of $163,712, interest and
other revenue of $8,797, interest expense of $134,297, depreciation and
amortization expenses of $89,928, operating and maintenance expenses of
$106,721, administrative expenses of $75,088, utilities expenses of $42,786
and taxes and insurance expenses of $66,553.
6. Transactions with General Partner and Affiliates
For the years ended March 30, 2002, 2001 and 2000, the Partnership paid
and/or incurred the following amounts to the General Partner and/or
affiliates in connection with services provided to the Partnership:
2002 2001 2000
---------------------- ---------------------- ----------------------
Paid Incurred Paid Incurred Paid Incurred
-------- -------- -------- -------- -------- --------
Management fees (see Note 8) $269,516 $299,307 $239,516 $299,307 $209,516 $299,307
Administration fees (see Note 8) 254,826 299,307 242,224 299,307 5,416 68,446
34
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 2002, 2001 AND 2000
6. Transactions with General Partner and Affiliates (continued)
For the years ended December 31, 2001, 2000 and 1999, the Local
Partnerships paid and/or incurred the following amounts to the General
Partner and/or affiliates in connection with services provided to the Local
Partnerships:
2001 2000 1999
---------------------- ---------------------- ----------------------
Paid Incurred Paid Incurred Paid Incurred
-------- -------- -------- -------- -------- --------
Property management fees $101,513 $146,756 $117,080 $136,107 $119,921 $135,915
Insurance and other services 106,694 108,380 90,351 93,208 91,341 99,116
Advances -- -- -- -- -- 27,985
7. Taxable Loss
A reconciliation of the financial statement net loss of the Partnership for
the years ended March 30, 2002, 2001 and 1999 to the tax return net loss
for the years ended December 31, 2001, 2000 and 1999 is as follows:
2002 2001 2000
----------- ----------- -----------
Financial statement net loss for the years ended $(1,396,994) $(3,375,703) $(2,048,082)
March 30, 2002, 2001 and 2000
Add (less) net transactions occurring between
January 1, 1999 to March 30, 1999 -- -- (116,775)
January 1, 2000 to March 30, 2000 -- (115,420) 115,420
January 1, 2001 to March 30, 2001 (122,139) 122,139 --
January 1, 2002 to March 30, 2002 131,136 -- --
----------- ----------- -----------
Adjusted financial statement net loss for
the years ended December 31, 2001, 2000
and 1999 (1,387,997) (3,368,984) (2,049,437)
Adjustment to management and administration
fees pursuant to Internal Revenue Code
Section 267 116,144 96,464 111,740
Differences arising from equity in loss of
investment in local partnerships (2,723,735) (1,264,990) (1,034,674)
Other income from local partnerships (26,021) (958) (11,132)
Other differences (5,917) (4,921) 6,990
----------- ----------- -----------
Tax return net loss for the years ended
December 31, 2001, 2000 and 1999 $(4,027,526) $(4,543,389) $(2,976,513)
=========== =========== ===========
35
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 2002, 2001 AND 2000
7. Taxable Loss (continued)
The differences between the investment in local partnerships for tax and
financial reporting purposes as of December 31, 2001 and 2000 are as
follows:
2001 2000
---------- ----------
Investment in local partnerships - financial
reporting $8,076,136 $8,967,809
Investment in local partnerships - tax 2,281,776 6,153,671
---------- ----------
$5,794,360 $2,814,138
========== ==========
Payable to general partner and affiliate in the accompanying balance
sheets represents accrued management and administration fees not
deductible for tax purposes pursuant to Internal Revenue Code Section 267.
8. Commitments and Contingencies
Pursuant to the Partnership Agreement, the Partnership incurs an annual
management fee ("Management Fee") and an annual additional management fee
("Additional Management Fee") payable to the General Partner for its
services in connection with the management of the affairs of the
Partnership. The annual Management Fee is equal to .14% of all proceeds as
of December 31 of any year, invested or committed for investment in Local
Partnerships plus all debts of the Local Partnerships related to the
Properties ("Invested Assets"). The Partnership incurred a Management Fee
of $209,514 for each of the three years ended March 30, 2002. The annual
Additional Management Fee is equal to .06% of Invested Assets. The
Partnership incurred an Additional Management Fee of $89,793 for each of
the three years ended March 30, 2002. Such amounts are aggregated and
reflected under the caption management fees in the accompanying financial
statements. Unpaid Additional Management Fees in the amount of $765,179
and $735,388 are included in payable to general partner and affiliate in
the accompanying balance sheets as of March 30, 2002 and 2001,
respectively.
In addition, pursuant to the Partnership Agreement, the Partnership is
authorized to contract for administrative services provided to the
Partnership. From the inception of the Partnership through November 23,
1999, such administrative services were provided by ML Fund Administrators
Inc. ("MLFA"), an affiliate of the Selling Agent, pursuant to an
Administrative Services Agreement. MLFA resigned the performance of its
basic services under the Administrative Services Agreement effective
November 23, 1999, with certain transitional services continuing through
April 30, 2000. The General Partner transitioned the administrative
services to an affiliate of the General Partner without any changes to the
terms of the Administrative Services Agreement. Pursuant to such
agreement, the Partnership incurs an annual administration fee
("Administration Fee") and an annual additional administration fee
("Additional Administration Fee") for administrative services provided to
the Partnership. The annual Administration Fee is equal to .14% of
Invested Assets. The Partnership incurred an Administration Fee of
$209,514 for each of the three years ended March 30, 2002. The annual
Additional Administration Fee is subject to certain provisions of the
Partnership Agreement and is equal to .06% of Invested Assets. The
Partnership incurred an Additional Administration Fee of $89,793 for each
of the three years ended March 30, 2002. Such amounts are aggregated and
reflected under the caption administration fees in the accompanying
financial statements. Unpaid Additional Administration Fees due to MLFA in
the amount of $593,740 and $643,740 are included in accounts payable and
accrued expenses as of March 30, 2002 and 2001, respectively, in the
accompanying balance sheets. Cumulative unpaid Administration Fees and
Additional Administration Fees due to an affiliate of the General Partner
in the cumulative amount of $164,594 and $120,113 are included in due to
general partner and affiliate in the accompanying balance sheets as of
March 30, 2002 and 2001, respectively.
36
AMERICAN TAX CREDIT PROPERTIES II L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 2002, 2001 AND 2000
8. Commitments and Contingencies (continued)
The rents of the Properties, many of which receive rental subsidy
payments, including payments under Section 8 of Title II of the Housing
and Community Development Act of 1974 ("Section 8"), are subject to
specific laws, regulations and agreements with federal and state agencies.
The subsidy agreements expire at various times during and after the
Compliance Periods of the Local Partnerships. Since October 1997, the
United States Department of Housing and Urban Development ("HUD") has
issued a series of directives related to project based Section 8 contracts
that define owners' notification responsibilities, advise owners of
project based Section 8 properties of what their options are regarding the
renewal of Section 8 contracts, provide guidance and procedures to owners,
management agents, contract administrators and HUD staff concerning
renewal of Section 8 contracts, provide policies and procedures on setting
renewal rents and handling renewal rent adjustments and provide the
requirements and procedures for opting-out of a Section 8 project based
contract. The Partnership cannot reasonably predict legislative
initiatives and governmental budget negotiations, the outcome of which
could result in a reduction in funds available for the various federal and
state administered housing programs including the Section 8 program. Such
changes could adversely affect the future net operating income before debt
service ("NOI") and debt structure of any or all Local Partnerships
currently receiving such subsidy or similar subsidies. Six Local
Partnerships' Section 8 contracts, certain of which cover only certain
rental units, are currently subject to renewal under applicable HUD
guidelines. In addition, two Local Partnerships entered into restructuring
agreements, resulting in both a lower rent subsidy (resulting in lower
NOI) and lower mandatory debt service with no anticipated material adverse
impact to the operating results of the Properties through the respective
Compliance Periods.
9. Fair Value of Financial Instruments
The following disclosure of the estimated fair value of financial
instruments is made in accordance with the requirements of SFAS No. 107,
"Disclosures about Fair Value of Financial Instruments." The estimated
fair value amounts have been determined using available market
information, assumptions, estimates and valuation methodologies.
Cash and cash equivalents
-------------------------
The carrying amount approximates fair value.
Investments in bonds
--------------------
Fair value is estimated based on market quotes provided by an independent
service as of the balance sheet dates.
Interest receivable
-------------------
The carrying amount approximates fair value due to the terms of the
underlying investments.
The estimated fair value of the Partnership's financial instruments as of
March 30, 2002 and 2001 are disclosed elsewhere in the financial
statements.
37
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
---------------------------------------------------------------
None
PART III
Item 10. Directors and Executive Officers of the Registrant
--------------------------------------------------
Registrant has no officers or directors. The General Partner manages
Registrant's affairs and has general responsibility and authority in all matters
affecting its business. The responsibilities of the General Partner are
currently carried out by Richman Tax Credits. The executive officers and
directors of Richman Tax Credits are:
Served in present
Name capacity since (1) Position held
---------------------- -------------------- -------------------------------
Richard Paul Richman October 26, 1988 Director
David A. Salzman February 1, 2001 President
Neal Ludeke October 26, 1988 Vice President and Treasurer
Gina S. Dodge October 26, 1988 Secretary
- --------------------------------------------------------------------------------
(1) Director holds office until his successor is elected and qualified. All
officers serve at the pleasure of the Director.
Richard Paul Richman, age 54, is the sole Director of Richman Tax Credits. Mr.
Richman is the Chairman and principal stockholder of Richman Group. Mr. Richman
is involved in the syndication, development and management of residential
property. Mr. Richman is also a director of Wilder Richman Resources Corp., an
affiliate of Richman Tax Credits and the general partner of Secured Income L.P.,
a director of Wilder Richman Historic Corporation, an affiliate of Richman Tax
Credits and the general partner of Wilder Richman Historic Properties II, L.P.,
a director of Richman Tax Credit Properties Inc., an affiliate of Richman Tax
Credits and the general partner of the general partner of American Tax Credit
Properties L.P., a director of Richman Housing Credits Inc., an affiliate of
Richman Tax Credits and the general partner of the general partner of American
Tax Credit Properties III L.P. and a director of Richman American Credit Corp.,
an affiliate of Richman Tax Credits and the manager of American Tax Credit
Trust, a Delaware statutory business trust.
David A. Salzman, age 41, is the President of Richman Tax Credits and is a
minority stockholder and the President of Richman Group. Mr. Salzman is
responsible for the acquisition and development of residential real estate for
syndication for Richman Group.
Neal Ludeke, age 44, is a Vice President and the Treasurer of Richman Tax
Credits. Mr. Ludeke, a Vice President and the Treasurer of Richman Group, is
engaged primarily in the syndication, asset management and finance operations of
Richman Group. In addition, Mr. Ludeke is a Vice President and the Treasurer of
Richman Asset Management, Inc. ("RAM"), an affiliate of Richman Tax Credits. Mr.
Ludeke's responsibilities in connection with RAM include various partnership
management functions.
Gina S. Dodge, age 46, is the Secretary of Richman Tax Credits. Ms. Dodge is a
Vice President and the Secretary of Richman Group. As the Director of Investor
Services, Ms. Scotti is responsible for communications with investors.
Item 11. Executive Compensation
----------------------
Registrant has no officers or directors. Registrant does not pay the officers or
director of Richman Tax Credits any remuneration. During the year ended March
30, 2002, Richman Tax Credits did not pay any remuneration to any of its
officers or its director.
Item 12. Security Ownership of Certain Beneficial Owners and Management
--------------------------------------------------------------
As of May 31, 2002, no person or entity was known by Registrant to be the
beneficial owner of more than five percent of the Units. Richman Tax Credits is
wholly owned by Richard Paul Richman.
38
Item 13. Certain Relationships and Related Transactions
----------------------------------------------
The General Partner and certain of its affiliates are entitled to receive
certain fees and reimbursement of expenses and have received/earned fees for
services provided to Registrant as described in Notes 6 and 8 to the audited
financial statements included in Item 8 - "Financial Statements and
Supplementary Data" herein.
Transactions with General Partner and Affiliates
- ------------------------------------------------
The net tax loss and Low-income Tax Credits generated by Registrant during the
year ended December 31, 2001 allocated to the General Partner were $40,275 and
$1,139, respectively. The net tax losses and Low-income Tax Credits generated by
the General Partner during the year ended December 31, 2001 (from the allocation
of Registrant discussed above) and allocated to Richman Tax Credits were $25,537
and $721, respectively.
Indebtedness of Management
- --------------------------
No officer or director of the General Partner or any affiliate of the foregoing
was indebted to Registrant at any time during the year ended March 30, 2002.
39
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on form 8-K
----------------------------------------------------------------
(a) Financial Statements, Financial Statement Schedules and Exhibits
(1) Financial Statements
See Item 8 - "Financial Statements and Supplementary Data."
(2) Financial Statement Schedules
No financial statement schedules are included because of the
absence of the conditions under which they are required or
because the information is included in the financial
statements or the notes thereto.
(3) Exhibits
Incorporated by
Exhibit Reference to
------- ------------
10.01 1989 Westview Arms Limited Partnership Exhibit 10.8 to Form 10-Q
Amended and Restated Certificate and Report dated September 29, 1990
Articles of Limited Partnership (File No. 0-18405)
10.02 2000-2100 Christian Street Associates Exhibit 10.8 to Form 10-Q
Amended and Restated Agreement of Report dated December 30, 1989
Limited Partnership (File No. 33-25337)
10.03 Ann Ell Apartments Associates, Ltd. Exhibit 10.1 to Form 10-Q
Second Amended and Restated Agreement of Report dated June 29, 1990
Limited Partnership (File No. 0-18405)
10.04 Auburn Hills Apartments Limited Exhibit 10.2 to Form 10-Q
Partnership Amended and Report dated June 29, 1990
Restated Certificate and Articles (File No. 0-18405)
of Limited Partnership
10.05 Auburn Hills Townhouses Limited Exhibit 10.01 to Form 10-K
Partnership Amended and Restated Report dated March 30, 1990
Agreement of Limited Partnership (File No. 0-18405)
10.06 Batesville Family, L.P. Amended and Exhibit 10.02 to Form 10-K
Restated Agreement of Limited Report dated March 30, 1990
Partnership (File No. 0-18405)
10.07 Batesville Family, L.P. First Exhibit 10.05 to Form 10-K
Amendment to the Amended and Report dated March 30, 1992
Restated Agreement of Limited Partnership (File No 0-18405)
10.08 Amendment No. 1 to the Batesville Family, L.P. Exhibit 10.06 to Form 10-K
Amended and Restated Report dated March 30, 1992
Agreement of Limited Partnership (File No. 0-18405)
10.09 Amendment No. 2 to the Batesville Exhibit 10.1 to Form 10-Q
Family, L.P. Amended and Restated Report dated December 30, 1990
Agreement of Limited Partnership (File No. 0-18405)
40
Incorporated by
Exhibit Reference to
------- ------------
10.10 Batesville Family, L.P. Amendment Exhibit 10.1 to Form 10-Q
No. 3 to Amended and Restated Report dated December 30, 1991
Agreement of Limited Partnership (File No. 0-18405)
10.11 Browning Road Phase I, L.P. Exhibit 10.1 to Form 10-Q
Amended and Restated Agreement Report dated September 29, 1990
of Limited Partnership (File No. 0-18405)
10.12 Browning Road Phase I, L.P. Exhibit 10.2 to Form 10-Q
First Agreement to Amended and Report dated September 29, 1990
Restated Agreement of Limited Partnership (File No. 0-18405)
10.13 Bruce Housing Associates, L.P. Exhibit 10.03 to Form 10-K
Amended and Restated Agreement of Report dated March 30, 1990
Limited Partnership (File No. 0-18405)
10.14 Amendment No. 1 to the Exhibit 10.12 to Form 10-K
Bruce Housing Associates, L.P. Report dated March 30, 1992
Amended and Restated Agreement (File No. 0-18405)
of Limited Partnership
10.15 Bruce Housing Associates, L.P. Exhibit 10.13 to Form 10-K
First Amendment to Amended and Restated Report dated March 30, 1992
Agreement of Limited Partnership (File No. 0-18405)
10.16 Amendment No. 2 to the Bruce Housing Exhibit 10.2 to Form 10-Q
Associates, L.P. Amended and Report dated December 30, 1990
Restated Agreement of Limited Partnership (File No. 0-18405)
10.17 Bruce Housing Associates, L.P. Exhibit 10.2 to Form 10-Q
Amendment No. 3 to the Amended Report dated December 30, 1991
and Restated Agreement of (File No. 0-18405)
Limited Partnership
10.18 Canton Partners, L.P. Exhibit 10.2 to Form 10-Q
Amended and Restated Agreement of Report dated December 30, 1989
Limited Partnership (File No. 33-25337)
10.19 Carrington Limited Dividend Housing Exhibit 10.3 to Form 10-Q
Association Limited Partnership Report dated September 29, 1990
Amended and Restated Agreement (File No. 0-18405)
of Limited Partnership
10.20 Carrington Limited Dividend Exhibit 10.4 to Form 10-Q
Housing Association Limited Partnership Report dated September 29, 1990
Second Amended and Restated (File No. 0-18405)
Agreement of Limited Partnership
10.21 Carrington Limited Dividend Housing Association Exhibit 10.3 to Form 10-Q
Limited Partnership Amendment No. 1 to the Report dated December 30, 1990
Second Amended and Restated Agreement (File No. 0-18405)
of Limited Partnership
10.22 Christian Street Associates Exhibit 10.2 to Form 10-Q
Limited Partnership Second Amended and Report dated September 29, 1989
Restated Agreement and Certificate (File No. 33-25337)
of Limited Partnership
41
Incorporated by
Exhibit Reference to
------- ------------
10.23 Cityside Apartments, Phase II, L.P. Exhibit 10.1 to Form 10-Q
Amended and Restated Agreement of Report dated September 29, 1989
Limited Partnership (File No. 33-25337)
10.24 Amendment No. 1 to Cityside Exhibit 10.22 to Form 10-K
Apartments, Phase II, L.P. Report dated March 30, 1992
Amended and Restated Agreement of (File No. 0-18405)
Limited Partnership
10.25 Cleveland Square, Ltd. Exhibit 10.07 to Form 10-K
Amended and Restated Agreement of Report dated March 30, 1990
Limited Partnership (File No. 0-18405)
10.26 College Avenue Apartments Exhibit 10.7 to Form 10-Q
Limited Partnership Amended Report dated December 30, 1989
and Restated and Articles of (File No. 33-25337)
Partnership in Commendam
10.27 Corrigan Square, Ltd. Exhibit 10.09 to Form 10-K
Amended and Restated Agreement of Report dated March 30, 1990
Limited Partnership (File No. 0-18405)
10.28 Critical Ventures Housing Exhibit 10.3 to Form 10-Q
Partnership III, A Washington Limited Report dated June 29, 1990
Partnership Amended and Restated (File No. 0-18405)
Agreement of Limited Partnership
10.29 De Queen Villas Limited Partnership Exhibit 10.11 to Form 10-K
Amended and Restated Certificate and Report dated March 30, 1990
Agreement of Limited Partnership (File No. 0-18405)
10.30 Dermott Villas Limited Partnership Exhibit 10.12 to Form 10-K
Amended and Restated Certificate and Report dated March 30, 1990
Agreement of Limited Partnership (File No. 0-18405)
10.31 Eagle View, Ltd. Second Amended and Exhibit 10.4 to Form 10-K
Restated Certificate of Limited Report dated June 29, 1990
Partnership and Limited Partnership Agreement (File No. 0-18405)
10.32 Elm Hill Housing Limited Partnership Exhibit 10.13 to Form 10-K
Second Amended and Restated Report dated March 30, 1990
Agreement and Certificate of Limited (File No. 0-18405)
Partnership
10.33 Eudora Manor Limited Partnership Exhibit 10.14 to Form 10-K
Amended and Restated Agreement Report dated March 30, 1990
and Certificate of Limited Partnership (File No. 0-18405)
10.34 Forest Village Housing Partnership Exhibit 10.2 to Form 10-Q
Amendment No. 1 to Amended and Restated Report dated December 30, 1993
Agreement of Limited Partnership (File No. 0-18405)
10.35 Amended and Restated Agreement Exhibit 10.5 to Form 10-Q
of Limited Partnership Report dated September 29, 1990
Harborside Housing Limited Partnership (File No. 0-18405)
42
Incorporated by
Exhibit Reference to
------- ------------
10.36 Hill Com I Associates Limited Exhibit 10.9 to Form 10-Q
Partnership Amended and Restated Report dated December 30, 1989
Agreement and Certificate of Limited (File No. 33-25337)
Partnership
10.37 Hill Com I Associates Exhibit 10.35 to Form 10-K
Limited Partnership First Amendment Report dated March 30, 1992
to Amended and Restated Agreement and (File No. 0-18405)
Certificate of Limited Partnership
10.38 Hill Com II Associates Limited Exhibit 10.10 to Form 10-Q
Partnership Amended and Restated Report dated December 30, 1989
Agreement and Certificate of Limited (File No. 33-25337)
Partnership
10.39 Hill Com II Associates Limited Exhibit 10.37 to Form 10-K
Partnership First Amendment to Report dated March 30, 1992
Amended and Restated Agreement and (File No. 0-18405)
Certificate of Limited Partnership
10.40 Hughes Manor Limited Partnership Exhibit 10.17 to Form 10-K
Amended and Restated Certificate Report dated March 30, 1990
and Articles of Limited Partnership (File No. 0-18405)
10.41 Ivy Family, L.P. Amended and Exhibit 10.18 to Form 10-K
Restated Agreement of Limited Report dated March 30, 1990
Partnership (File No. 0-18405)
10.42 Amendment No. 1 to the Ivy Family, Exhibit 10.4 to Form 10-Q
L.P. Amended and Restated Agreement Report dated December 31, 1990
of Limited Partnership (File No. 0-18405)
10.43 Ivy Family, L.P. Amendment No. 3 to the Exhibit 10.3 to Form 10-Q
Amended and Restated Agreement Report dated December 30, 1991
of Limited Partnership (File No. 0-18405)
10.44 Second Amended and Restated Agreement Exhibit 10.6 to Form 10-Q
of Limited Partnership Lakeside Housing Report dated September 29, 1990
Limited Partnership (File No. 0-18405)
10.45 Lawrence Road Properties, Ltd. Exhibit 10.11 to Form 10-Q
Amended and Restated Agreement of Report dated December 30, 1989
Limited Partnership (File No. 33-25337)
10.46 Amendment No. 2 to the Lawrence Road Exhibit 10.5 to Form 10-Q
Properties, Ltd. Amended and Report dated December 31, 1990
Restated Agreement of Limited (File No. 0-18405)
Partnership
10.47 Lawrence Road Properties, Ltd. Exhibit 10.4 to Form 10-Q
Amendment No. 3 to the Amended and Restated Report dated December 30, 1991
Agreement of Limited Partnership (File No. 0-18405)
10.48 Lexington Estates Ltd., A Mississippi Exhibit 10.20 to Form 10-K
Limited Partnership Amended and Restated Report dated March 30, 1990
Agreement of Limited Partnership (File No. 0-18405)
43
Incorporated by
Exhibit Reference to
------- ------------
10.49 Littleton Avenue Community Exhibit 10.3 to Form 10-Q
Village, L.P. Amended and Report dated September 29, 1989
Restated Agreement of Limited Partnership (File No. 33-25337)
10.50 Lula Courts Ltd., L.P. Exhibit 10.22 to Form 10-K
Amended and Restated Agreement of Report dated March 30, 1990
Limited Partnership (File No. 0-18405)
10.51 Magee Elderly, L.P. Amended Exhibit 10.1 to Form 10-Q
and Restated Agreement of Report dated December 30, 1989
Limited Partnership (File No. 33-25337)
10.52 Mirador del Toa Limited Partnership Exhibit 10.5 to Form 10-Q
(A Delaware Limited Partnership) Report dated June 29, 1990
Amended and Restated Agreement (File No. 0-18405)
of Limited Partnership
10.53 Amendment No. 1 to the Mirador Exhibit 10.40 to Form 10-K
del Toa Limited Partnership Report dated March 30, 1991
(A Delaware Limited Partnership) (File No. 0-18405)
Amended and Restated Agreement
of Limited Partnership
10.54 Nixa Heights Apartments, L.P. Exhibit 10.24 to Form 10-K
Amended and Restated Agreement and Report dated March 30, 1990
Certificate of Limited Partnership (File No. 0-18405)
10.55 North Hills Farms Limited Exhibit 10.6 to Form 10-Q
Partnership Second Amended and Restated Report dated June 29, 1990
Agreement of Limited Partnership (File No. 0-18405)
10.56 First Amendment to the Exhibit 10.54 to Form 10-K
North Hills Farms Limited Partnership Report dated March 30, 1992
Second Amended and Restated Agreement (File No. 0-18405)
of Limited Partnership
10.57 Patton Place Limited Partnership Exhibit 10.25 to Form 10-K
Second Amended and Restated Agreement Report dated March 30, 1990
of Limited Partnership (File No. 0-18405)
10.58 Plantersville Family, L.P. Exhibit 10.26 to Form 10-K
Amended and Restated Agreement of Report dated March 30, 1990
Limited Partnership (File No. 0-18405)
10.59 Powelton Gardens Associates Exhibit 10.6 to Form 10-Q
Amended and Restated Agreement of Report dated December 30, 1989
Limited Partnership (File No. 33-25337)
10.60 Purvis Heights Properties, L.P. Exhibit 10.28 to Form 10-K
Amended and Restated Agreement of Report dated March 30, 1990
Limited Partnership (File No. 0-18405)
44
Incorporated by
Exhibit Reference to
------- ------------
10.61 Purvis Heights Properties, L.P. Exhibit 10.60 to Form 10-K
First Amendment to Amended and Report dated March 30, 1992
Restated Agreement of Limited Partnership (File No. 0-18405)
10.62 Amendment No. 1 to the Purvis Heights Exhibit 10.61 to Form 10-K
Properties, L.P. Amended and Restated Report dated March 30, 1992
Agreement of Limited Partnership (File No. 0-18405)
10.63 Amendment No. 2 to the Purvis Heights Exhibit 10.6 to Form 10-Q
Properties, L.P. Amended and Report dated December 31, 1990
Restated Agreement of Limited (File No. 0-18405)
Partnership
10.64 Purvis Heights Properties, L.P. Exhibit 10.5 to Form 10-K
Amendment No. 3 to the Report dated December 30, 1991
Amended and Restated (File No. 0-18405)
Agreement of Limited Partnership
10.65 Queen Lane Investors Amended and Exhibit 10.29 to Form 10-K
Restated Agreement and Certificate Report dated March 30, 1990
of Limited Partnership (File No. 0-18405)
10.66 Queen Lane Investors Amendment No. 1 Exhibit 10.7 to Form 10-Q
to Amended and Restated Agreement Report dated December 31, 1990
and Certificate of Limited Partnership (File No. 0-18405)
10.67 Renova Properties, L.P. Amended Exhibit 10.3 to Form 10-Q
and Restated Agreement of Report dated December 30, 1989
Limited Partnership (File No. 33-25337)
10.68 Santa Juanita Limited Dividend Exhibit 10.5 to Form 10-Q
Partnership Amended and Restated Report dated December 30, 1989
Agreement of Limited Partnership (File No. 33-25337)
10.69 Second Amendment of Limited Partnership Exhibit 10.68 to Form 10-K
of Santa Juanita Limited Dividend Partnership Report dated March 30, 1994
and Amendment No. 2 to the Amended and (File No. 0-18405)
Restated Agreement of Limited Partnership
10.70 Amendment No. 1 to Santa Juanita Limited Exhibit 10.1 to Form 10-Q
Dividend Partnership L.P. Amended and Report dated September 29, 1995
Restated Agreement of Limited Partnership (File No. 0-18405)
(Replaces in its entirety Exhibit 10.69
hereof.)
10.71 Amendment No. 2 to Santa Juanita Limited Exhibit 10.2 to Form 10-Q
Dividend Partnership L.P. Amended and Report dated September 29, 1995
Restated Agreement of Limited Partnership (File No. 0-18405)
10.72 Simpson County Family, L.P. Exhibit 10.4 to Form 10-Q
Amended and Restated Agreement of Report dated December 30, 1989
Limited Partnership (File No. 33-25337)
45
Incorporated by
Exhibit Reference to
------- ------------
10.73 Summers Village Limited Partnership Exhibit 10.7 to Form 10-Q
Amended and Restated Certificate Report dated June 29, 1990
of Limited Partnership and (File No. 0-18405)
Limited Partnership Agreement
10.74 Tchula Courts Apartments, L.P. Exhibit 10.33 to Form 10-K
Amended and Restated Agreement and Report dated March 30, 1990
Certificate of Limited Partnership (File No. 0-18405)
10.75 The Pendleton (A Louisiana Partnership Exhibit 10.7 to Form 10-Q
in Commendam) Third Amended and Report dated September 29, 1990
Restated Articles of Partnership (File No. 0-18405)
10.76 Trenton Heights Apartments, L.P. Exhibit 10.34 to Form 10-K
Amended and Restated Agreement and Report dated March 30, 1990
Certificate of Limited Partnership (File No. 0-18405)
10.77 Twin Pine Family, L.P. Amended and Exhibit 10.35 to Form 10-K
Restated Agreement of Limited Report dated March 30, 1990
Partnership (File No. 0-18405)
10.78 Village Creek Limited Partnership Exhibit 10.8 to Form 10-Q
Amended and Restated Certificate and Report dated June 29, 1990
Articles of Limited Partnership (File No. 0-18405)
10.79 York Park Associates Limited Partnership Exhibit 10.1 to Form 10-Q
Amended and Restated Agreement of Report dated June 29, 1989
Limited Partnership (File No. 33-25337)
10.80 Non-Negotiable Purchase Money Exhibit 10.8 to Form 10-Q
Promissory Notes dated as of Report dated December 30, 1990
January 19, 1990 (File No. 0-18405)
10.81 Non-Negotiable Purchase Money Exhibit 10.9 to Form 10-Q
Promissory Notes dated as of May 1, 1990 Report dated December 30, 1990
(File No. 0-18405)
10.82 Assignment and Assumption Agreements Exhibit 10.63 to Form 10-K
dated as of June 28, 1991 on the Report dated March 30, 1991
Non-Negotiable Purchase Money (File No. 0-18405)
Promissory Notes dated as of January 19, 1990
10.83 Assignment and Assumption Agreements Exhibit 10.64 to Form 10-K
dated as of June 28, 1991 on the Report dated March 30, 1991
Non-Negotiable Purchase Money (File No. 0-18405)
Promissory Notes dated as of May 1, 1990
10.84 Promissory Note and Loan Agreement Exhibit 10.1 to Form 10-Q
dated November 12, 1993 Report dated December 30, 1993
(File No. 0-18405)
46
Incorporated by
Exhibit Reference to
------- ------------
28.1 Pages 14 through 33, 47 through 70 and 86 Exhibit 28.1 to Form 10-K
through 88 of prospectus dated May 10, 1989 Report dated March 30, 1990
filed pursuant to Rule 424(b)(3) under the (File No. 0-18405)
Securities Act of 1933
28.2 Supplement No. 1 dated Exhibit 28.2 to Form 10-K
July 25, 1989 of Prospectus Report dated March 30, 1991
(File No. 0-18405)
28.3 Supplement No. 2 dated Exhibit 28.3 to Form 10-K
September 18, 1989 of Prospectus Report dated March 30, 1991
(File No. 0-18405)
(b) Reports on Form 8-K
No reports on Form 8-K were filed by Registrant during the last
quarter of the period covered by this report.
(c) Exhibits
See (a)(3) above.
(d) Financial Statement Schedules
See (a)(2) above.
47
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
AMERICAN TAX CREDIT PROPERTIES II L.P.
(a Delaware limited partnership)
By: Richman Tax Credit Properties II
L.P., General Partner
by: Richman Tax Credits Inc.,
general partner
Dated: June 28, 2002 /s/ Richard Paul Richman
------------- ------------------------------------
by: Richard Paul Richman
Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant in
the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Richard Paul Richman Director of the general June 28, 2002
- --------------------------------- partner of the General -------------
(Richard Paul Richman) Partner
/s/ Neal Ludeke Vice President and June 28, 2002
- --------------------------------- Treasurer of the -------------
(Neal Ludeke) general partner of
the General Partner
(Principal Financial
and Accounting
Officer of Registrant)
48