FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2002
OR
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number: 0-21895
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
California 33-6163848
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3158 Redhill Avenue, Suite 120, Costa Mesa, CA 92626
(714) 662-5565
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to section 12(g) of the Act:
UNITS OF LIMITED PARTNERSHIP INTEREST
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes__X No ___
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. <060>o<048><057><057><062>
1
State the aggregate market value of the voting and non-voting common equity held
by non-affiliates of the registrant.
INAPPLICABLE
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and the Part
of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is
incorporated: (1) Any annual report to security holders; (2) Any proxy or
information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or
(c) under the Securities Act of 1933. The listed documents should be clearly
described for identification purposes (e.g., annual report to security holders
for fiscal year ended December 24, 1980).
NONE
2
PART I.
Item 1. Business
Organization
WNC Housing Tax Credit Fund V, L.P., Series 3 (the "Partnership") is a
California Limited Partnership formed under the laws of the State of California
on March 28, 1995, and commenced operations on October 24, 1995. The Partnership
was formed to acquire limited partnership interests in other limited
partnerships or limited liability companies ("Local Limited Partnerships") which
own multifamily apartment complexes that are eligible for low-income housing
federal and, in some cases, California income tax credits (the "Low Income
Housing Credit").
The general partner of the Partnership is WNC & Associates, Inc. (the "General
Partner" or "Associates" or "WNC"). The chairman and the president own
substantially all of the outstanding stock of Associates. The business of the
Partnership is conducted primarily through the General Partner as the
Partnership has no employees of its own.
Pursuant to a registration statement filed with the Securities and Exchange
Commission on July 26, 1995, the Partnership commenced a public offering of
25,000 Units of Limited Partnership Interest ("Units") at a price of $1,000 per
Unit. As of the close of the public offering, January 21, 1996 a total of 18,000
Limited Partnership Interests representing $17,558,985 had been sold.
Sempra Energy Financial, a California corporation, which is not an affiliate of
the Partnership or General Partner, has purchased 4,560 Units, which represents
25.3% of the Units outstanding for the Partnership. Sempra Energy Financial
invested $4,282,600. A discount of $277,400 was allowed due to a volume
discount. Western Financial Savings Bank, which is not an affiliate of the
Partnership or General Partner, has purchased 1,068 units, which represent 5.9%
of the Units outstanding for the Partnership. Western Financial Savings Bank
invested $1,000,000. A discount of $68,000 was allowed due to a volume discount.
See Item 12(a) in this 10-K.
Description of Business
The Partnership's principal business objective is to provide its Limited
Partners with Low Income Housing Credits. The Partnership's principal business
therefore consists of investing as a limited partner or non-managing member in
Local Limited Partnerships each of which will own and operate a multi-family
housing complex (the "Housing Complex") which will qualify for the Low Income
Housing Credit. In general, under Section 42 of the Internal Revenue Code, an
owner of low-income housing can receive the Low Income Housing Credit to be used
to reduce Federal taxes otherwise due in each year of a ten-year period. In
general, under Section 17058 of the California Revenue and Taxation Code, an
owner of low-income housing can receive the Low Income Housing Credit to be used
against California taxes otherwise due in each year of a four-year period. The
Housing Complex is subject to a fifteen-year compliance period (the "Compliance
Period"), and under state law may have to be maintained as low income housing
for 30 or more years.
In general, in order to avoid recapture of Low Income Housing Credits, the
Partnership does not expect that it will dispose of its interests in Local
Limited Partnerships ("Local Limited Partnership Interests") or approve the sale
by any Local Limited Partnership of its Housing Complex prior to the end of the
applicable Compliance Period. Because of (i) the nature of the Housing
Complexes, (ii) the difficulty of predicting the resale market for low-income
housing 15 or more years in the future, and (iii) the ability of government
lenders to disapprove of transfer, it is not possible at this time to predict
whether the liquidation of the Partnership's assets and the disposition of the
proceeds, if any, in accordance with the Partnership's Agreement of Limited
Partnership, as amended "by Supplements thereto" (the "Partnership Agreement"),
will be able to be accomplished promptly at the end of the 15-year period. If a
Local Limited Partnership is unable to sell its Housing Complex, it is
anticipated that the local general partner ("Local General Partner") will either
continue to operate such Housing Complex or take such other actions as the Local
General Partner believes to be in the best interest of the Local Limited
Partnership. Notwithstanding the preceding, circumstances beyond the control of
the General Partner or the Local General Partners may occur during the
Compliance Period, which would require the Partnership to approve the
disposition of a Housing Complex prior to the end thereof, possibly resulting in
recapture of Low Income Housing Credits.
3
As of March 31, 2002, the Partnership had invested in seventeen Local Limited
Partnerships. Each of these Local Limited Partnerships owns a Housing Complex
that is eligible for the federal Low Income Housing Credit. Certain Local
Limited Partnerships may also benefit from government programs promoting low- or
moderate-income housing.
The Partnership's investments in Local Limited Partnerships are subject to the
risks incident to the management and ownership of low-income housing and to the
management and ownership of multi-unit residential real estate. Some of these
risks are that the Low Income Housing Credit could be recaptured and that
neither the Partnership's investments nor the Housing Complexes owned by the
Local Limited Partnerships will be readily marketable. To the extent the Housing
Complexes receive government financing or operating subsidies, they may be
subject to one or more of the following risks: difficulties in obtaining tenants
for the Housing Complexes; difficulties in obtaining rent increases; limitations
on cash distributions; limitations on sales or refinancing of Housing Complexes;
limitations on transfers of Local Limited Partnership Interests; limitations on
removal of Local General Partners; limitations on subsidy programs; and possible
changes in applicable regulations. The Housing Complexes are subject to mortgage
indebtedness. If a Local Limited Partnership does not make its mortgage
payments, the lender could foreclose resulting in a loss of the Housing Complex
and Low Income Housing Credits. As a limited partner or non-managing member of
the Local Limited Partnerships, the Partnership will have very limited rights
with respect to management of the Local Limited Partnerships, and will rely
totally on the general partners or managing members of the Local Limited
Partnerships for management of the Local Limited Partnerships. The value of the
Partnership's investments will be subject to changes in national and local
economic conditions, including unemployment conditions, which could adversely
impact vacancy levels, rental payment defaults and operating expenses. This, in
turn, could substantially increase the risk of operating losses for the Housing
Complexes and the Partnership. In addition, each Local Limited Partnership is
subject to risks relating to environmental hazards and natural disasters, which
might be uninsurable. Because the Partnership's operations will depend on these
and other factors beyond the control of the General Partner and the Local
General Partners, there can be no assurance that the anticipated Low Income
Housing Credits will be available to Limited Partners.
In addition, Limited Partners are subject to risks in that the rules governing
the Low Income Housing Credit are complicated, and the use of credits can be
limited. The only material benefit from an investment in Units may be the Low
Income Housing Credits. There are limits on the transferability of Units, and it
is unlikely that a market for Units will develop. All Partnership management
decisions are made by the General Partner.
As a limited partner or non-managing member, the Partnership's liability for
obligations of each Local Limited Partnership is limited to its investment. The
Local General Partners of each Local Limited Partnership retain responsibility
for developing, constructing, maintaining, operating and managing the Housing
Complexes.
Item 2. Properties
Through its investments in Local Limited Partnerships, the Partnership holds
limited partnership interests in the Housing Complexes. The following table
reflects the status of the seventeen Housing Complexes as of the dates and for
the periods indicated:
4
------------------------- -----------------------------------------------
As of March 31, 2002 As of December 31, 2001
------------------------- -----------------------------------------------
Partnership's Estimated Encumbrances
Total Investment Amount of Low Income of Local
General Partner In Local Limited Investment Number Housing Limited
Partnership Name Location Name Partnerships Paid to Date Of Units Occupancy Credits Partnerships
- ------------------------------------------------------------------------------------------------------------------------------------
Alliance Apartments I Alliance, Retro Development,
Limited Partnership Nebraska Inc. $ 604,000 $ 604,000 19 79% $ 363,000 $ 592,000
Blessed Rock of El El Monte, Everland,
Monte California Inc. 2,511,000 2,511,000 137 100% 8,899,000 3,721,000
Broadway Trianon - Broadway,
Apartments, Hobbs, LLC, a New
Limited New Mexico Limited
Partnership Mexico Liability Company 2,029,000 2,029,000 78 92% 2,335,000 1,371,000
Urban Residential
Management,
Cascade Pines, Atlanta, Inc., a Georgia
L.P. II Georgia Corporation 1,347,000 1,347,000 376 82% 2,533,000 7,845,000
Curtis Associates I, Curtis, Joseph A. Shepard and
L.P. Nebraska Kenneth M. Vitor 88,000 88,000 12 92% 156,000 424,000
Escatawpa Village Escatawpa, Clifford E. Olsen
Associates, Limited Mississippi
Partnership 249,000 249,000 32 97% 458,000 890,000
Hastings Retro Development, Inc. of
Apartments Hastings, Oklahoma and Most Worshipful
I, Limited Nebraska Prince Hall
Partnership Grand Lodge 542,000 542,000 18 83% 1,005,000 585,000
Heritage Apartments Berkeley, Joseph A. Shepard and
I, L.P. Missouri Kenneth M. Vitor 752,000 752,000 30 90% 1,333,000 650,000
Hillcrest Associates, Ontario, Riley J. Hill
A Limited Partnership Oregon 354,000 354,000 28 93% 683,000 1,291,000
Patten Towers, Chattanooga, Patten Towers
L.P. II Tennessee Partners, LLC 2,154,000 2,154,000 221 88% 3,938,000 6,463,000
Prairieland
Properties of Syracuse, Kenneth M.
Syracuse II, L.P. Kansas Vitor 85,000 85,000 8 88% 152,000 376,000
5
------------------------- -----------------------------------------------
As of March 31, 2002 As of December 31, 2001
------------------------- -----------------------------------------------
Partnership's Estimated Encumbrances
Total Investment Amount of Low Income of Local
General Partner In Local Limited Investment Number Housing Limited
Partnership Name Location Name Partnerships Paid to Date Of Units Occupancy Credits Partnerships
- ------------------------------------------------------------------------------------------------------------------------------------
Raymond S. King Greensboro, Project
Apartments Limited North Homestead,
Partnership Carolina Inc. 437,000 437,000 23 100% 883,000 782,000
Rosedale Limited Silver City, Deke Noftsker and ABO
Partnership New Mexico Corporation 309,000 309,000 32 91% 547,000 1,314,000
Shepherd South Shepherd, Donald W.
Apartments I, Ltd. Texas Sowell 121,000 121,000 24 96% 223,000 564,000
Solomon Joseph A. Shepard
Associates I, Solomon, and Kenneth
L.P. Kansas M. Vitor 138,000 138,000 16 94% 250,000 565,000
Talladega Apartment Developers,
County Talladega, Inc. and
Housing Ltd. Alabama Thomas H. Cooksey 653,000 653,000 30 93% 1,200,000 787,000
The Willows John C. Loving,
Apartments Morganton, Gordon D. Brown, Jr.
Limited North and Western N.C.
Partnership Carolina Housing Partnership 841,000 841,000 36 97% 1,545,000 1,091,000
------------ ------------ ----- ----- ------------ -----------
$13,214,000 $ 13,214,000 1,120 91.4% $ 26,503,000 $29,311,000
============ ============ ====== ===== ============ ===========
6
-------------------------------------------------------------------------------
For the year ended December 31, 2001
-------------------------------------------------------------------------------
Low Income Housing
Credits Allocated to
Partnership Name Rental Income Net Loss Partnership
- --------------------------------------------------------------------------------------------------------------------
Alliance Apartments I Limited
Partnership $ 74,000 $ (38,000) 99%
Blessed Rock of El Monte 742,000 (103,000) 49.49%
Broadway Apartments, Limited
Partnership 307,000 (174,000) 99%
Cascade Pines, L.P. II 1,915,000 (369,000) 98%
Curtis Associates I, L.P. 65,000 (16,000) 99%
Escatawpa Village Associates,
Limited Partnership 126,000 (38,000) 99%
Hastings Apartments I, Limited
Partnership 74,000 (39,000) 99%
Heritage Apartments I, L.P. 113,000 (41,000) 98.9%
Hillcrest Associates, A Limited
Partnership 187,000 (11,000) 99%
Patten Towers, L.P. II 1,505,000 (252,000) 99%
Prairieland Properties of Syracuse
II, L.P. 55,000 (11,000) 99%
Raymond S. King Apartments Limited
Partnership 73,000 (38,000) 99%
Rosedale Limited Partnership 131,000 (30,000) 99%
Shepherd South Apartments I, Ltd. 89,000 (7,000) 99%
Solomon Associates I, L.P. 97,000 (12,000) 99%
Talladega County Housing Ltd. 95,000 (19,000) 99%
The Willows Apartments Limited
Partnership 120,000 (37,000) 99%
------------ -------------
$ 5,768,000 $ (1,235,000)
============ =============
7
Item 3. Legal Proceedings
During 2000, Associates identified a potential problem with a developer who, at
the time, was the local general partner in six Local Limited Partnerships. The
Partnership has a 99% limited partnership interest in three of those six Local
Limited Partnerships. Those investments are Alliance Apartments I, Evergreen
Apartments I and Hastings Apartments I. All the properties continue to
experience operating deficits. The local general partner ceased funding the
operating deficits, which placed the Local Limited Partnerships in jeopardy of
foreclosure. Consequently, Associates voted to remove the local general partner
and the management company from the Local Limited Partnerships. After the local
general partner contested its removal, Associates commenced legal action on
behalf of the Local Limited Partnerships and was successful in getting a
receiver appointed to manage the Local Limited Partnerships and an unaffiliated
entity appointed as property manager. Associates was subsequently successful in
attaining a summary judgment to confirm the removal of the local general
partner, the receiver was discharged and Associates now controls all six of the
Local Limited Partnerships.
The six Local Limited Partnerships (hereinafter referred to as "Defendants")
were defendants in a separate lawsuit. The lawsuit was filed by eight other
partnerships in which the local general partner of the Local Limited
Partnerships is or was involved (the "Plaintiffs"). The Plaintiffs allege that
the local general partner accepted funds from the Plaintiffs and improperly
loaned these funds to the Defendants. In July 2001, this lawsuit was settled for
an aggregate amount of $35,000 of which the Partnership's share was
approximately $17,500.
The Partnership has a 99% limited partnership investment in Cascade Pines, L.P.
II ("Cascade"). Cascade is a defendant in a wrongful death lawsuit and related
injury lawsuits. Cascade carries general liability and extended liability
insurance. The wrongful death claim has been compromised, released and
dismissed. Liability insurance covered the settlement. In the related injury
lawsuits, the insurers for both the general liability, limited to $2 million,
and extended liability insurance, limited to a further $15 million, have
acknowledged coverage for the potential loss, should the outcome be unfavorable.
Discovery for the related injury lawsuits is ongoing, but the management of
Cascade and WNC are unable to determine the outcome of these lawsuits at this
time or their impact, if any, on the Partnership's financial statements.
The Partnership has a 99% limited partnership investment in Heritage Apartments,
L.P. ("Heritage"). Heritage is a defendant in several wrongful death lawsuits
and related injury lawsuits. Heritage carries general liability and extended
liability insurance. Discovery for these lawsuits is ongoing, but the management
of Heritage and WNC are unable to determine the outcome of these lawsuits at
this time or their impact, if any, on the Partnership's financial statements.
Should Heritage be unsuccessful in its defense and the insurer denies coverage
or the insurance coverage proves to be inadequate, the Partnership may be
required to sell its investment or may otherwise lose its investment in
Heritage. Loss of the Heritage investment could result in the cessation and
recapture of tax credits and certain prior tax deductions.
Item 4. Submission of Matters to a Vote of Security Holders
NONE.
PART II.
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
Item 5a.
(a) The Units are not traded on a public exchange but were sold through a
public offering. It is not anticipated that any public market will develop
for the purchase and sale of any Unit and none exists. Units can be
assigned only if certain requirements in the Partnership Agreement are
satisfied.
(b) At March 31, 2002, there were 868 Limited Partners.
(c) The Partnership was not designed to provide cash distributions to Limited
Partners in circumstances other than refinancing or disposition of its
investments in Local Limited Partnerships.
(d) No unregistered securities were sold by the Partnership during the year
ended March 31, 2002.
Item 5b.
NOT APPLICABLE
8
Item 6. Selected Financial Data
Selected balance sheet information for the Partnership is as follows:
March 31 December 31
---------------------------------------------------------- -----------------------------
2002 2001 2000 1999 1998 1997
----------- ------------ ------------ ------------- -------------- ------------
ASSETS
Cash and cash equivalents $ 78,098 $ 20,126 $ 365,942 $ 911,080 $ 950,372 $ 2,018,591
Investments in limited
partnerships, net 8,970,406 10,245,015 10,968,078 12,250,789 12,559,525 13,836,734
Interest receivable - - - - - 19,435
----------- ------------ ------------ ------------- -------------- ------------
$ 9,048,504 $ 10,265,141 $ 11,334,020 $ 13,161,869 $ 13,509,897 $ 15,874,760
=========== ============ ============ ============= ============== ============
LIABILITIES
Payables to limited
partnerships $ - $ - $ 72,938 $ 95,030 $ 95,030 $ 1,290,351
Accrued expenses 6,067 82,699 149,735 - - -
Accrued fees and expenses
due to general partner and
affiliates 87,990 39,531 26,540 28,677 62,496 4,640
PARTNERS' EQUITY 8,954,447 10,142,911 11,084,807 13,038,162 13,352,371 14,579,769
----------- ------------ ------------ ------------- -------------- ------------
$ 9,048,504 $ 10,265,141 $ 11,334,020 $ 13,161,869 $ 13,509,897 $ 15,874,760
=========== ============ ============ ============= ============== ============
Selected results of operations, cash flows, and other information for the
Partnership is as follows:
For the Years Ended For the Three Months For the Years Ended
March 31 Ended March 31 December 31
--------------------------------------- ------------------------ ------------------------
2002 2001 2000 1999 1998 1998 1997
----------- ----------- ----------- ---------- ----------- ----------- ----------
(Unaudited)
Income (loss) from
operations (Note 1) $ (132,420) $ (285,185) $ (1,099,531) $ (20,391) $ (10,209) $ (52,065) $ 20,214
Equity in losses of limited
partnerships (1,225,735) (656,711) (853,824) (293,818) (170,900) (1,175,333) (789,697)
Gain on sale of investment
in limited partnership
interest 169,691 - - - - - -
----------- ----------- ----------- ---------- ----------- ----------- ----------
Net loss $ (1,188,464) $ (941,896) $ (1,953,355) $ (314,209) $ (181,109) $ (1,227,398) $ (769,483)
=========== =========== =========== ========== =========== =========== ==========
Net loss allocated to:
General partner $ (11,855) $ (9,419) $ (19,534) $ (3,142) $ (1,811) $ (12,274) $ (7,695)
=========== =========== =========== ========== =========== =========== =========
Limited partners $ (1,176,579) $ (932,477) $ (1,933,821) $ (311,067) $ (179,298) $ (1,215,124) $ (761,788)
=========== =========== =========== ========== =========== =========== ==========
Net loss per limited partner
unit $ (65.37) $ (51.80) $ (107.43) $ (17.28) $ (9.96) $ (67.51) $ (42.32)
=========== =========== =========== ========== =========== =========== ==========
Outstanding weighted
limited partner units 18,000 18,000 18,000 18,000 18,000 18,000 18,000
=========== =========== =========== ========== =========== =========== ==========
Note 1 - Loss from operations in 2000 includes a charge for impairment losses on
investments in limited partnerships of $955,804. (See Note 2 to the audited
financial statements.)
9
For the Years Ended For the Three Months For the Years Ended
March 31 Ended March 31 December 31
-------------------------------------- ------------------------ ------------------------
2002 2001 2000 1999 1998 1998 1997
----------- --------- ---------- ---------- ----------- ----------- -----------
(Unaudited)
Net cash provided by
(used in):
Operating activities $ (122,013) $ (295,186) $ (59,825) $ (45,335) $ 27,295 $ 60,991 $ 102,215
Investing activities 179,985 (50,630) (485,313) 6,043 (515,359) (1,129,210) (2,888,629)
Financing activities - - - - - - 2,237,788
----------- --------- ---------- ---------- ----------- ----------- -----------
Net change in cash and cash
equivalents 57,972 (345,816) (545,138) (39,292) (488,064) (1,068,219) (548,626)
Cash and cash equivalents,
beginning of period 20,126 365,942 911,080 950,372 2,018,591 2,018,591 2,567,217
----------- --------- ---------- ---------- ----------- ----------- -----------
Cash and cash equivalents,
end of period $ 78,098 $ 20,126 $ 365,942 $ 911,080 $ 1,530,527 $ 950,372 $ 2,018,591
=========== ========= ========== ========== =========== =========== ===========
Low Income Housing Credit per Unit was as follows for the years ended December 31:
2001 2000 1999 1998 1997
----------- ------------ ----------- ----------- -----------
Federal $ 134 $ 136 $ 137 $ 131 $ 83
State - - - - -
----------- ------------ ----------- ----------- -----------
Total $ 134 $ 136 $ 137 $ 131 $ 83
=========== ============ =========== =========== ===========
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Forward Looking Statements
With the exception of the discussion regarding historical information,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and other discussions elsewhere in this Form 10-K contain forward
looking statements. Such statements are based on current expectations subject to
uncertainties and other factors which may involve known and unknown risks that
could cause actual results of operations to differ materially from those
projected or implied. Further, certain forward-looking statements are based upon
assumptions about future events which may not prove to be accurate.
Risks and uncertainties inherent in forward looking statements include, but are
not limited to, our future cash flows and ability to obtain sufficient
financing, level of operating expenses, conditions in the low income housing tax
credit property market and the economy in general, as well as legal proceedings.
Historical results are not necessarily indicative of the operating results for
any future period.
Subsequent written and oral forward looking statements attributable to us or
persons acting on our behalf are expressly qualified in their entirety by
cautionary statements in this Form 10-K and in other reports we filed with the
Securities and Exchange Commission. The following discussion should be read in
conjunction with the Consolidated Financial Statements and the Notes thereto
included elsewhere in this filing.
10
Uncertainty and Commitments with Respect to Investments in Alliance, Evergreen
and Hastings
The Partnership has three investments accounted for under the equity method,
consisting of 99% limited partnership interests in each of Alliance Apartments
I, Limited Partnership ("Alliance"), Evergreen Apartments I, Limited Partnership
("Evergreen") and Hastings Apartments I, Limited Partnership ("Hastings").
During the year ended March 31, 2000, Alliance, Evergreen and Hastings were
experiencing operational difficulties and negative cash flows from operations,
and ceased paying their lenders. Foreclosure procedures were commenced by these
three Local Limited Partnerships' lenders. Management performed an evaluation of
the Partnership's remaining investment balances in Alliance, Evergreen and
Hastings, including any anticipated costs and determined that an impairment
adjustment was necessary. An impairment loss of $995,804 was recognized at March
31, 2000. This impairment loss included $644,589 in remaining book value of the
Partnership's investments in Alliance, Evergreen and Hastings, $205,080 and
$74,631 of cash advances, a $50,000 accrual for anticipated legal costs, and
$21,504 of estimated accounting and other related costs.
As a result of the foregoing, the Partnership, Alliance, Hastings, and a WNC
subsidiary executed a work-out agreement with their lender (the "Agreement"),
which was effective December 14, 2001. The balance of the indebtedness due and
owing to the lender by Alliance was satisfied by the execution of two promissory
notes. The first note totals $116,000, bears interest at 7% per annum, and
requires principal and interest payments totaling $800 per month through
February 2011, at which date the unpaid principal balance is due. The second
note totals $328,000, bears interest at 1% per annum, and has payments due
monthly out of available cash flow, as defined, with the unpaid principal
balance due February 2011. The balance of the indebtedness due and owing to the
lender by Hastings was also satisfied by the execution of two promissory notes.
The first note totals $165,000, bears interest at 7% per annum, and requires
principal and interest payments totaling $1,100 per month through September
2011, at which date the unpaid principal is due. The second note totals
$261,000, bears interest at 1% per annum, and has payments due monthly out of
available cash flow, as defined, with the unpaid principal balance due September
2011. The Partnership and a WNC subsidiary have executed a guarantee for the
payment of both notes of Alliance and Hastings. In addition, several other
commitments were made. Alliance and Hastings executed a grant deed to the lender
in the event that either entity defaults under the terms and provisions of the
notes. The deeds are held in escrow, and if Alliance or Hastings defaults on
either note, the lender may, at its option, record the respective deed. In
addition, the Partnership has given the lender as additional collateral all of
its residual value interests, as defined, in all of the Local Limited
Partnerships. The Partnership and the Local Limited Partnerships are prohibited
from selling, assigning, transferring or further encumbering the Housing
Complexes retained by each Local Limited Partnership.
As a result of the operating difficulties mentioned above, there is uncertainty
as to additional costs, if any, that the Partnership may incur in connection
with its investment in Alliance and Hastings and as to whether the Partnership
will ultimately retain its interest in these Local Limited Partnerships. In the
event the Partnership does not successfully retain its interest in Alliance and
Hastings, the Partnership would be exposed to the cessation and recapture of the
related tax credits. The Partnership's financial statements do not include any
adjustments that might result from the outcome of these uncertainties.
On July 19, 2001, Evergreen's Housing Complex was sold for a gross sales price
of $1,300,000, which after payment of its outstanding loans and closing costs,
yielded net proceeds to the Partnership of approximately $170,000 in the form of
a return of advances. As the investment in Evergreen together with cash advances
had been previously impaired, the entire proceeds were reflected as a gain on
sale of investments in Local Limited Partnerships of $169,691, for the period
ended March 31, 2002. Due to the sale of the property, approximately $428,000
(unaudited) of tax credits are no longer available to the Partnership's
investors ($23.80 per Limited Partner Unit). In addition, there can be no
assurance that tax credits and loss deductions previously taken will not be
subject to recapture in the future.
11
Uncertainty with Respect to Investments in Cascade and Patten Towers
The Partnership has a 99% limited partnership investment in Cascade Pines, L.P.
II ("Cascade"). Cascade is a defendant in a wrongful death lawsuit and related
injury lawsuits. Cascade carries general liability and extended liability
insurance. The wrongful death claim has been compromised, released and
dismissed. Liability insurance covered the settlement. In the related injury
lawsuits, the insurers for both the general liability, limited to $2 million,
and extended liability insurance, limited to a further $15 million, have
acknowledged coverage for the potential loss, should the outcome be unfavorable.
Discovery for the related injury lawsuits is ongoing; management of Cascade and
WNC are unable to determine the outcome of these lawsuits at this time or their
impact, if any, on the Partnership's financial statements. Should Cascade be
unsuccessful in its defense and the insurance coverage proves to be inadequate,
Cascade's assets could be subject to an adverse judgment. This could result in
the loss of the Cascade investment, which could result in the recapture of tax
credits and certain prior tax deductions. As a result, there is an uncertainty
as to the Partnership's ability to ultimately realize the carrying value of its
investment in Cascade, which totaled $556,051 at March 31, 2002. The
Partnership's financial statements, presented elsewhere herein, do not reflect
any adjustments that may result from any unfavorable outcome that may occur upon
the ultimate resolution of this uncertainty.
One Local Limited Partnership, Patten Towers L.P. II ("Patten Towers"), in which
the Partnership owns a 99% interest, has a promissory note payable aggregating
approximately $6,453,000 which was funded with proceeds from the issuance of
Multifamily Housing Revenue Bonds as of December 31, 2001. Patten Towers failed
to make timely principal payments of approximately $233,000 for the year ended
December 31, 2001 in accordance with the note payable. Consequently, the Local
Limited Partnership is in default of its bond covenants and the property could
be foreclosed on by the Bond Trustee to satisfy its obligations under the bonds.
These conditions raise substantial doubt as to the Local Limited Partnership's
ability to continue as a going concern. Patten Towers is attempting to negotiate
a refinance of the bonds, but as of June 6, 2002 the past due principal payments
owed have not been paid and the bonds are fully payable under the event of a
default. There can be no assurances that Patten Towers will be successful in its
negotiations. Accordingly, Patten Towers is subject to the risk of foreclosure
and sale of the property by the lender which would result in the loss and
potential cessation and recapture of certain tax losses and the tax credits. As
a result, there is an uncertainty as to the Partnership's ability to ultimately
realize the carrying value of its investment in Patten Towers, which totaled
$1,683,732 at March 31, 2002. The Partnership's financial statements, presented
elsewhere herein, do not reflect any adjustments that may result from any
unfavorable outcome that may occur upon the ultimate resolution of this
uncertainty.
Financial Condition
The Partnership's assets at March 31, 2002 consisted primarily of $78,000 in
cash and aggregate investments in the eighteen Local Limited Partnerships of
$8,970,000. Liabilities at March 31, 2001 primarily consisted of $6,000 of
accrued expenses and $88,000 due to general partner or affiliates for advances.
Results of Operations
Year Ended March 31, 2002 Compared to Year Ended March 31, 2001 The Partnerships
net loss for the year ended March 31, 2001 was $(1,188,000), reflecting an
increase of $(246,000) from the net loss experienced for the year ended March
31, 2000 of $(942,000). The increase in net loss is due, primarily to an
increase in the equity in losses of limited partnerships which increased by
$(569,000) offset by an increase in income of $171,000 and a decrease in other
operating expenses of $151,000.
Year Ended March 31, 2001 Compared to Year Ended March 31, 2000 The Partnerships
net loss for the year ended March 31, 2001 was $(942,000), reflecting a decrease
of $(1,011,000) from the net loss experienced for the year ended March 31, 2000
of $(1,953,000). The decline in net loss is due to the impairment loss recorded
during 2000 in connection with three of the limited partnership investments
totaling $996,000, a reduction in the equity in losses of limited partnerships
which decreased by $197,000 due largely to the impairment loss recorded in 2000,
offset by a reduction in income of $8,000 and an increase in other operating
expense of $174,000. Operating expenses increased due to costs incurred of
$160,000 on behalf of one of the impaired properties and additional legal bills
related to litigation.
12
Cash Flows
Year Ended March 31, 2002 Compared to Year Ended March 31, 2001 Net increase in
cash for the year ended March 31, 2001 was $58,000 compared to a net decrease in
cash for the year ended March 31, 2000 of $(346,000). The change of $404,000 was
due primarily to the change of $173,000 in operating activities along with
change of $231,000 in cash provided by investing activities. The change in
investing activities resulted primarily from the proceeds of $170,000 from the
sale of the Evergreen investment along with the decrease in cash advances to
limited partnerships of $73,000 offset by a decrease in capitalized acquisition
cost of $10,000 and decrease of $2,000 in distributions from limited
partnership. The change in operating activities was caused primarily by the
decrease in other operating expenses of $145,000.
Year Ended March 31, 2001 Compared to Year Ended March 31, 2000 Net decrease in
cash for the year ended March 31, 2001 was $(346,000) compared to a net decrease
in cash for the year ended March 31, 2000 of $(545,000). The change of $199,000
was due primarily to a decrease in cash advances to limited partnerships of
$205,000, a decrease of $244,000 in capitalized acquisition costs and fees, an
increase of $12,000 in distributions from limited partnerships, offset by an
increase in cash used in operations of $236,000.
During the year ended March 31, 2002 and 2001, accrued payables, which consist
primarily of related party management fees due to the General Partner, increased
by $48,000 and $13,000, respectively. The General Partner does not anticipate
that these accrued fees will be paid in full until such time as capital reserves
are in excess of future foreseeable working capital requirements of the
Partnership.
The Partnership does not expect its future cash flows, together with its net
available assets at March 31, 2002, to be sufficient to meet all currently
foreseeable future cash requirements. Accordingly, WNC has agreed to provide
advances sufficient to fund the operations and working capital requirements of
the Partnership through April 1, 2003.
Impact of New Accounting Pronouncement
In October 2001, the FASB issued Statement of Financial Accounting Standards No.
144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS
144"), which addresses accounting and financial reporting for the impairment or
disposal of long-lived assets. SFAS 144 is effective for fiscal years beginning
after December 15, 2001, and generally, is to be applied prospectively. The
Partnership has not yet completed its evaluation of the impact of SFAS 144 on
its financial position or results of operations.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
NOT APPLICABLE
Item 8. Financial Statements and Supplementary Data
13
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners
WNC Housing Tax Credit Fund V, L.P., Series 3
We have audited the accompanying balance sheets of WNC Housing Tax Credit Fund
V, L.P., Series 3 (a California Limited Partnership) (the "Partnership") as of
March 31, 2002 and 2001, and the related statements of operations, partners'
equity (deficit) and cash flows for the years ended March 31, 2002, 2001 and
2000. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits. A significant portion of the financial
statements of the limited partnerships in which the Partnership is a limited
partner were audited by other auditors whose reports have been furnished to us.
As discussed in Note 3 to the financial statements, the Partnership accounts for
its investments in limited partnerships using the equity method. The portion of
the Partnership's investment in limited partnerships audited by other auditors
represented 87% and 89% of the total assets of the Partnership at March 31, 2002
and 2001, respectively. Our opinion, insofar as it relates to the amounts
included in the financial statements for the limited partnerships which were
audited by others, is based solely on the reports of the other auditors.
We conducted our audits in accordance with 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 and the reports of
the other auditors provide a reasonable basis for our opinion.
In our opinion, based on our audits and the reports of other auditors, the
financial statements referred to above present fairly, in all material respects,
the financial position of WNC Housing Tax Credit Fund V, L.P., Series 3 (a
California Limited Partnership) as of March 31, 2002 and 2001, and the results
of its operations and its cash flows for the years ended March 31, 2002, 2001
and 2000, in conformity with accounting principles generally accepted in the
United States of America.
As further discussed in Note 7 to the accompanying financial statements, the
Partnership retains an interest in two partnerships, Cascade Pines and Patten
Towers. The carrying value of the Partnership's interest in the two partnerships
aggregated $2,239,783 at March 31, 2002. Certain issues exist with respect to
the housing complexes owned and operated by the two Partnerships that create
uncertainty as to the ability of the Partnership to ultimately realize its
investment in such partnerships.
The Partnership currently has insufficient working capital to fund its
operations. As discussed in Note 7 to the accompanying financial statements, WNC
& Associates, Inc., has agreed to provide advances sufficient enough to fund the
operations and working capital requirements of the Partnership through April 1,
2003.
/s/BDO SEIDMAN, LLP
Orange County, California
June 6, 2002
14
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
BALANCE SHEETS
March 31
---------------------------------
2002 2001
------------- ----------------
ASSETS
Cash and cash equivalents (Note 8) $ 78,098 $ 20,126
Investments in limited partnerships, net (Notes 2, 3, 4, 7,
and 8) 8,970,406 10,245,015
------------- ----------------
$ 9,048,504 $ 10,265,141
============= ================
LIABILITIES AND PARTNERS' EQUITY
(DEFICIT)
Liabilities:
Accrued expenses (Note 2) $ 6,067 $ 82,699
Accrued fees and advances due to General
Partner and affiliates (Note 4) 87,990 39,531
------------- ----------------
Total liabilities 94,057 122,230
------------- ----------------
Commitments and contingencies (Notes 2, 3 and 7)
Partners' equity (deficit):
General partner (85,947) (74,062)
Limited partners (25,000 units authorized,
18,000 units issued and outstanding) 9,040,394 10,216,973
------------- ----------------
Total partners' equity 8,954,447 10,142,911
------------- ----------------
$ 9,048,504 $ 10,265,141
============= ================
See report of independent certified public accountants and accompanying notes to
financial statements.
15
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
For the Years Ended
March 31
-----------------------------------------------
2002 2001 2000
------------ ------------- ----------------
Interest income $ 2,008 $ 9,790 $ 29,172
Reporting fees 27,078 18,049 6,676
------------ ------------- ----------------
Total income 29,086 27,839 35,848
------------ ------------- ----------------
Operating expenses:
Amortization (Notes 3 and 4) 38,580 44,044 42,439
Asset management fees (Note 4) 49,500 50,152 49,500
Legal, accounting and other 73,426 218,828 47,636
Impairment on investments in limited
partnerships (Notes 2 and 3) - - 995,804
------------ ------------- ----------------
Total operating expenses 161,506 313,024 1,135,379
------------ ------------- ----------------
Loss from operations (132,420) (285,185) (1,099,531)
Equity in losses of limited
partnerships (Note 3) (1,225,735) (656,711) (853,824)
Gain on sale of investment in limited
partnership interest (Note 2) 169,691 - -
------------ ------------- ----------------
Net loss $ (1,188,464) $ (941,896) $ (1,953,355)
============ ============= ================
Net loss allocated to:
General partner $ (11,885) $ (9,419) $ (19,534)
============ ============= ================
Limited partners $ (1,176,579) $ (932,477) $ (1,933,821)
============ ============= ================
Net loss per limited partner unit $ (65.37) $ (51.80) $ (107.43)
============ ============= ================
Outstanding weighted limited
partner units 18,000 18,000 18,000
============ ============= ================
See report of independent certified public accountants and accompanying notes to
financial statements.
16
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
For The Years Ended March 31, 2002, 2001 and 2000
General Limited Total
Partner Partners
--------------- --------------- ---------------
Partners' equity (deficit) at March 31, 1999 $ (45,109) $ 13,083,271 $ 13,038,162
Net loss (19,534) (1,933,821) (1,953,355)
--------------- --------------- ---------------
Partners' equity (deficit) at March 31, 2000 (64,643) 11,149,450 11,084,807
Net loss (9,419) (932,477) (941,896)
--------------- --------------- ---------------
Partners' equity (deficit) at March 31, 2001 (74,062) 10,216,973 10,142,911
Net loss (11,885) (1,176,579) (1,188,464)
--------------- --------------- ---------------
Partners' equity (deficit) at March 31, 2002 $ (85,947) $ 9,040,394 $ 8,954,447
=============== =============== ===============
See report of independent certified public accountants and accompanying notes to
financial statements.
17
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
For the Years Ended
March 31
------------------------------------------------
2002 2001 2000
------------ ------------ --------------
Cash flows from operating activities:
Net loss $ (1,188,464) $ (941,896) $ (1,953,355)
Adjustments to reconcile net loss to
net cash used in operating activities:
Amortization 38,580 44,044 42,439
Impairment loss on investments in limited
partnerships - - 995,804
Equity in losses of limited
partnerships 1,225,735 656,711 853,824
Gain on sale of investment in Limited
Partnership (169,691) - -
Change in accrued fees and
expenses due to General Partner
and affiliates 48,459 12,991 (2,137)
Change in accrued expenses (76,632) (67,036) 3,600
------------ ------------ --------------
Net cash used in operating activities (122,013) (295,186) (59,825)
------------ ------------ --------------
Cash flows from investing activities:
Investments in limited partnerships, net - (72,938) (47,092)
Capitalized acquisition costs and fees - 10,452 (233,141)
Distributions from limited
partnerships 10,294 11,856 -
Proceeds on sale of investment is Limited
Partnership, net 169,691 - -
Cash advances to limited partnerships - - (205,080)
------------ ------------ --------------
Net cash provided by (used in)
investing activities 179,985 (50,630) (485,313)
------------ ------------ --------------
Net increase (decrease) in cash and cash
equivalents 57,972 (345,816) (545,138)
Cash and cash equivalents, beginning of period 20,126 365,942 911,080
------------ ------------ --------------
Cash and cash equivalents, end of period $ 78,098 $ 20,126 $ 365,942
============ ============ ==============
SUPPLEMENTAL DISCLOSURE
OF CASH FLOW INFORMATION
Taxes paid $ 800 $ 800 $ 800
============ ============ ==============
See report of independent certified public accountants and accompanying notes to
financial statements.
18
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For The Years Ended March 31, 2002, 2001 and 2000
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ---------------------------------------------------
Organization
- ------------
WNC Housing Tax Credit Fund V, L.P., Series 3, a California Limited Partnership
(the "Partnership"), was formed on March 28, 1995, under the laws of the state
of California. The Partnership was formed to invest primarily in other limited
partnerships (the "Local Limited Partnerships") which own and operate
multi-family housing complexes (the "Housing Complex") that are eligible for low
income housing credits. The local general partners (the "Local General
Partners") of each Local Limited Partnership retain responsibility for
maintaining, operating and managing the Housing Complex.
The general partner is WNC & Associates, Inc. ("WNC"). The chairman and
president own substantially all of the outstanding stock of WNC.
The Partnership shall continue in full force and effect until December 31, 2050
unless terminated prior to that date pursuant to the partnership agreement or
law.
The financial statements include only activity relating to the business of the
Partnership, and do not give effect to any assets that the partners may have
outside of their interests in the Partnership, or to any obligations, including
income taxes, of the partners.
The partnership agreement authorized the sale of up to 25,000 units at $1,000
per Unit ("Units"). The offering of Units concluded in January 1996, at which
time 18,000 Units representing subscriptions in the amount of $17,558,985, net
of $441,015 of discounts for volume purchases, had been accepted. The General
Partner has a 1% interest in operating profits and losses, taxable income and
losses, cash available for distribution from the Partnership and tax credits.
The limited partners will be allocated the remaining 99% of these items in
proportion to their respective investments.
After the limited partners have received proceeds from a sale or refinancing
equal to their capital contributions and their return on investment (as defined
in the Partnership Agreement) and the General Partner has received proceeds
equal to its capital contribution and a subordinated disposition fee (as
described in Note 3) from the remainder, any additional sale or refinancing
proceeds will be distributed 90% to the limited partners (in proportion to their
respective investments) and 10% to the General Partner.
19
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Years Ended March 31, 2002, 2001 and 2000
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
- --------------------------------------------------------------
Risks and Uncertainties
- -----------------------
The Partnership's investments in Local Limited Partnerships are subject to the
risks incident to the management and ownership of low-income housing and to the
management and ownership of multi-unit residential real estate. Some of these
risks are that the low income housing credit could be recaptured and that
neither the Partnership's investments nor the Housing Complexes owned by the
Local Limited Partnerships will be readily marketable. To the extent the Housing
Complexes receive government financing or operating subsidies, they may be
subject to one or more of the following risks: difficulties in obtaining tenants
for the Housing Complexes; difficulties in obtaining rent increases; limitations
on cash distributions; limitations on sales or refinancing of Housing Complexes;
limitations on transfers of Local Limited Partnership Interests; limitations on
removal of Local General Partners; limitations on subsidy programs; and possible
changes in applicable regulations. The Housing Complexes are or will be subject
to mortgage indebtedness. If a Local Limited Partnership does not make its
mortgage payments, the lender could foreclose resulting in a loss of the Housing
Complex and low income housing credits. As a limited partner of the Local
Limited Partnerships, the Partnership will have very limited rights with respect
to management of the Local Limited Partnerships, and will rely totally on the
Local General Partners of the Local Limited Partnerships for management of the
Local Limited Partnerships. The value of the Partnership's investments will be
subject to changes in national and local economic conditions, including
unemployment conditions, which could adversely impact vacancy levels, rental
payment defaults and operating expenses. This, in turn, could substantially
increase the risk of operating losses for the Housing Complexes and the
Partnership. In addition, each Local Limited Partnership is subject to risks
relating to environmental hazards and natural disasters which might be
uninsurable. Because the Partnership's operations will depend on these and other
factors beyond the control of the General Partner and the Local General
Partners, there can be no assurance that the anticipated low income housing
credits will be available to Limited Partners.
In addition, Limited Partners are subject to risks in that the rules governing
the low income housing credit are complicated, and the use of credits can be
limited. The only material benefit from an investment in Units may be the low
income housing credits. There are limits on the transferability of Units, and it
is unlikely that a market for Units will develop. All management decisions will
be made by the General Partner.
Method of Accounting For Investments in Limited Partnerships
- ------------------------------------------------------------
The Partnership accounts for its investments in limited partnerships using the
equity method of accounting, whereby the Partnership adjusts its investment
balance for its share of the Local Limited Partnership's results of operations
and for any distributions received. The accounting policies of the Local Limited
Partnerships are consistent with those of the Partnership. Costs incurred by the
Partnership in acquiring the investments are capitalized as part of the
investment account and are being amortized over 30 years (see Notes 3 and 4).
Equity in losses of limited partnerships for the years ended March 31, 2002,
2001 and 2000 have been recorded by the Partnership based on nine months of
reported results provided by the Local Limited Partnerships and on three months
of results estimated by management of the Partnership. Equity in losses of the
limited partnerships allocated to the Partnership will not be recognized to the
extent that the investment balance would be adjusted below zero.
20
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Years Ended March 31, 2002, 2001 and 2000
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
- --------------------------------------------------------------
Offering Expenses
- -----------------
Offering expenses consist of underwriting commissions, legal fees, printing,
filing and recordation fees, and other costs incurred in connection with selling
limited partnership interests in the Partnership. The General Partner is
obligated to pay all offering and organization costs in excess of 15% (including
sales commissions) of the total offering proceeds. Offering expenses are
reflected as a reduction of limited partners' capital and amounted to $2,132,000
at the end of all periods presented.
Use of Estimates
- ----------------
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
reporting period. Actual results could materially differ from those estimates.
Cash and Cash Equivalents
- -------------------------
The Partnership considers highly liquid investments with remaining maturities of
three months or less when purchased to be cash equivalents. As of March 31, 2002
and 2001, the Partnership had no cash equivalents.
Net Loss Per Limited Partner Unit
- ---------------------------------
Net loss per limited partner unit is calculated pursuant to Statement of
Financial Accounting Standards No. 128, Earnings Per Share. Net loss per unit
includes no dilution and is computed by dividing loss available to limited
partners by the weighted average number of units outstanding during the period.
Calculation of diluted net income per unit is not required.
Reporting Comprehensive Income
- ------------------------------
The Statement of Financial Accounting Standards ("SFAS") No. 130, Reporting
Comprehensive Income established standards for the reporting and display of
comprehensive income (loss) and its components in a full set of general-purpose
financial statements. The Partnership had no items of other comprehensive income
during the years ended March 31, 2002, 2001 and 2000, as defined by SFAS No.
130.
New Accounting Pronouncement
- ----------------------------
In October 2001, the FASB issued Statement of Financial Accounting Standards No.
144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS
144"), which addresses accounting and financial reporting for the impairment or
disposal of long-lived assets. SFAS 144 is effective for fiscal years beginning
after December 15, 2001, and generally, is to be applied prospectively. The
Partnership has not yet completed its evaluation of the impact of SFAS 144 on
its financial position or results of operations.
21
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Years Ended March 31, 2002, 2001 and 2000
NOTE 2 - UNCERTAINTY AND COMMITMENTS WITH RESPECT TO INVESTMENTS IN ALLIANCE,
- -----------------------------------------------------------------------------
EVERGREEN AND HASTINGS
----------------------
The Partnership has three investments accounted for under the equity method,
consisting of 99% limited partnership interests in each of Alliance Apartments
I, Limited Partnership ("Alliance"), Evergreen Apartments I, Limited Partnership
("Evergreen") and Hastings Apartments I, Limited Partnership ("Hastings").
During the year ended March 31, 2000, Alliance, Evergreen and Hastings were
experiencing operational difficulties and negative cash flows from operations,
and ceased paying their lenders. Foreclosure procedures were commenced by these
two Local Limited Partnerships' lenders. Management performed an evaluation of
the Partnership's remaining investment balances in Alliance, Evergreen and
Hastings, including the cash advances noted above and other anticipated costs
and determined that an impairment adjustment was necessary. An impairment loss
of $995,804 was recognized at March 31, 2000. This impairment loss included
$644,589 in remaining book value of the Partnership's investments in Alliance,
Evergreen and Hastings, $205,080 and $74,631 of cash advances, a $50,000 accrual
for anticipated legal costs, and $21,504 of estimated accounting and other
related costs.
As a result of the foregoing, the Partnership, Alliance, Hastings, and a WNC
subsidiary executed a work-out agreement with their lender (the "Agreement"),
which was effective December 14, 2001. The balance of the indebtedness due and
owing to the lender by Alliance was satisfied by the execution of two promissory
notes. The first note totals $116,000, bears interest at 7% per annum, and
requires principal and interest payments totaling $800 per month through
February 2011, at which date the unpaid principal balance is due. The second
note totals $328,000, bears interest at 1% per annum, and has payments due
monthly out of available cash flow, as defined, with the unpaid principal
balance due February 2011. The balance of the indebtedness due and owing to the
lender by Hastings was also satisfied by the execution of two promissory notes.
The first note totals $165,000, bears interest at 7% per annum, and requires
principal and interest payments totaling $1,100 per month through September
2011, at which date the unpaid principal is due. The second note totals
$261,000, bears interest at 1% per annum, and has payments due monthly out of
available cash flow, as defined, with the unpaid principal balance due September
2011. The Partnership and a WNC subsidiary have executed a guarantee for the
payment of both notes of Alliance and Hastings. In addition, several other
commitments were made. Alliance and Hastings executed a grant deed to the lender
in the event that either entity defaults under the terms and provisions of the
notes. The deeds are held in escrow, and if Alliance or Hastings defaults on
either note, the lender may, at its option, record the respective deed. In
addition, the Partnership has assigned the lender as additional collateral its
residual value interests, as defined, in all of the Local Limited Partnerships.
The Partnership and the Local Limited Partnerships are prohibited from selling,
assigning, transferring or further encumbering the Housing Complexes retained by
each Local Limited Partnership.
As a result of the operating difficulties mentioned above, there is uncertainty
as to additional costs, if any, that the Partnership may incur in connection
with its investment in Alliance and Hastings and as to whether the Partnership
will ultimately retain its interest in these Local Limited Partnerships. In the
event the Partnership does not successfully retain its interest in Alliance and
Hastings, the Partnership would be exposed to the cessation and recapture of the
related tax credits. The Partnership's financial statements do not include any
adjustments that might result from the outcome of these uncertainties.
On July 19, 2001, Evergreen's Housing Complex was sold for a gross sales price
of $1,300,000, which after payment of its outstanding loans and closing costs,
yielded net proceeds to the Partnership of approximately $170,000 in the form of
a return of advances. As the investment in Evergreen together with cash advances
had been previously impaired, the entire proceeds were reflected as a gain on
sale of investments in Limited Partnerships of $169,691, for the period ended
March 31, 2002. Due to the sale of the property, approximately $428,000
(unaudited) of tax credits are no longer available to the Partnership's
investors ($23.80 per Limited Partner Unit). In addition, there can be no
assurance that tax credits and loss deductions previously taken will not be
subject to recapture in the future.
22
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Years Ended March 31, 2002, 2001 and 2000
NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS
- --------------------------------------------
As of March 31, 2002, the Partnership has acquired limited partnership interests
in 17 Local Limited Partnerships, each of which owns one Housing Complex
consisting of an aggregate of 1,120 apartment units. The respective general
partners of the Local Limited Partnerships manage the day to day operations of
the entities. Significant Local Limited Partnership business decisions require
approval from the Partnership. The Partnership, as a limited partner, is
generally entitled to 99%, as specified in the Local Limited Partnership
agreements, of the operating profits and losses, taxable income and losses and
tax credits of the Local Limited Partnerships, except for one of the investments
in which it is entitled to 49.49% of such amounts.
The Partnership's investments in Local Limited Partnerships as reflected in the
balance sheet at March 31, 2002 and 2001, are approximately $208,000 and
$358,000, respectively, greater than the Partnership's equity as shown in the
Local Limited Partnerships' combined financial statements presented below. This
difference is partially due to acquisition costs related to the acquisition of
the investments that have been capitalized in the Partnership's investment
account, unrecorded losses and capital contributions payable to the limited
partnerships which were netted against partner capital in the Local Limited
Partnerships' financial statements. The Partnership's investment is also lower
than the Partnership's equity as shown in the Local Limited Partnership's
combined financial statements due to the losses recorded by the Partnership for
the three month period ended March 31, and the impairment of two Local Limited
Partnerships (see Note 2).
Equity in losses of Local Limited Partnerships is recognized in the financial
statements until the related investment account is reduced to a zero balance.
Losses incurred after the investment account is reduced to zero are not
recognized. If the Local Limited Partnerships report net income in future years,
the Partnership will resume applying the equity method only after its share of
such net income equals the share of net losses not recognized during the
period(s) the equity method was suspended.
Distributions received by limited partners are accounted for as a reduction of
the investment balance. Distributions received after the investment has reached
zero are recognized as income.
At March 31, 2002, the investment accounts in certain Local Limited Partnerships
have reached a zero balance. Consequently, a portion of the Partnership's
estimate of its share of losses for the years ended March 31, 2002, 2001 and
2000 amounting to approximately $4,827, $0 and $0, respectively, have not been
recognized.
23
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Years Ended March 31, 2002, 2001 and 2000
NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
- -------------------------------------------------------
Following is a summary of the equity method activity of the investments in Local
Limited Partnerships for the periods presented:
For the Years Ended
March 31
--------------------------------------------------
2002 2001 2000
------------- ---------------- ---------------
Investments per balance sheet, beginning of period $ 10,245,015 $ 10,968,078 12,250,789
Capital contributions paid, net - - 25,000
Impairment loss on investments in limited
partnerships (Note 2) - - (995,804)
Cash advanced (Note 2) - - 205,080
Accrued expenses (Note 2) - - 146,135
Capitalized acquisition fees and costs - (10,452) 233,141
Distributions received (10,294) (11,856) -
Equity in losses of limited partnerships (1,225,735) (656,711) (853,824)
Amortization of capitalized acquisition fees
and costs (38,580) (44,044) (42,439)
------------- ---------------- ---------------
Investments per balance sheet, end of period $ 8,970,406 $ 10,245,015 10,968,078
============= ================ ===============
24
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Years Ended March 31, 2002, 2001 and 2000
NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
- -------------------------------------------------------
The financial information from the individual financial statements of the Local
Limited Partnerships include rental and interest subsidies. Rental subsidies are
included in total revenues and interest subsidies are generally netted against
interest expense. Approximate combined condensed financial information from the
individual financial statements of the Local Limited Partnerships as of December
31 and for the years then ended is as follows (Combined condensed financial
information for Alliance and Hastings were previously excluded from the 2000 and
1999 presentation but have now been included in all periods presented below.
Evergreen has been excluded from all years presented below. See Note 2 for
further discussion):
COMBINED CONDENSED BALANCE SHEETS
2001 2000
--------------- ---------------
(restated)
ASSETS
Land $ 2,903,000 $ 2,903,000
Buildings and improvements, net of accumulated
depreciation for 2001 and 2000 of $8,030,000 and
$6,528,000, respectively 37,752,000 39,139,000
Other assets (including due from affiliates of $13,000
and $9,000, respectively) 4,055,000 4,275,000
--------------- ---------------
$ 44,710,000 $ 46,317,000
=============== ===============
LIABILITIES
Mortgage and construction loans payable $ 29,311,000 $ 29,417,000
Other liabilities (including due to related parties of
$2,482,000 and $2,643,000 as of December 31, 2001
and 2000, respectively) 3,901,000 4,194,000
--------------- ---------------
33,212,000 33,611,000
--------------- ---------------
PARTNERS' CAPITAL
WNC Housing Tax Credit Fund V, L.P., Series 3 8,762,000 9,887,000
Other partners 2,736,000 2,819,000
--------------- ---------------
11,498,000 12,706,000
--------------- ---------------
$ 44,710,000 $ 46,317,000
=============== ===============
25
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Years Ended March 31, 2002, 2001 and 2000
NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
- -------------------------------------------------------
COMBINED CONDENSED STATEMENTS OF OPERATIONS
2001 2000 1999
--------------- --------------- ---------------
(restated) (restated)
Revenues $ 6,005,000 $ 5,858,000 $ 5,626,000
--------------- --------------- ---------------
Expenses:
Operating expenses 4,117,000 3,494,000 3,379,000
Interest expense 1,554,000 1,565,000 1,608,000
Depreciation and amortization 1,569,000 1,529,000 1,505,000
--------------- --------------- ---------------
Total expenses 7,240,000 6,588,000 6,492,000
--------------- --------------- ---------------
Net loss $ (1,235,000) $ (730,000) $ (866,000)
=============== =============== ===============
Net loss allocable to the Partnership $ (1,168,000) $ (644,000) $ (815,000)
=============== =============== ===============
Net loss recorded by the Partnership $ (1,226,000) $ (657,000) $ (854,000)
=============== =============== ===============
Certain Local Limited Partnerships have incurred significant operating losses
and have working capital deficiencies. In the event these Local Limited
Partnerships continue to incur significant operating losses, additional capital
contributions by the Partnership and/or the Local General Partner may be
required to sustain the operations of such Local Limited Partnerships. If
additional capital contributions are not made when they are required, the
Partnership's investment in certain of such Local Limited Partnerships could be
impaired, and the loss and recapture of the related tax credits could occur
(furthermore, see Notes 7 and 8).
26
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Years Ended March 31, 2002, 2001 and 2000
NOTE 4 - RELATED PARTY TRANSACTIONS
- -----------------------------------
Under the terms of the Partnership Agreement, the Partnership has paid or is
obligated to the General Partner or its affiliates for the following items:
Acquisition fees of up to 7.5% of the gross proceeds from the sale of
Units as compensation for services rendered in connection with the
acquisition of Local Limited Partnerships. As of March 31, 2002 and
2001, the Partnership incurred total acquisition fees of $1,200,785,
which have been included in investments in limited partnerships.
Accumulated amortization of these capitalized costs was $339,575 and
$299,672 as of March 31, 2002 and 2001, respectively. Of the
accumulated amortization recorded on the balance sheet at March 31,
2001, $126,614 of the related expense was reflected as equity in
losses of limited partnerships on the statement of operations during
the fourth quarter of the year ended March 31, 2001 to reduce the
respective net acquisition fee component of investments in local
limited partnerships to zero for those Local Limited Partnerships
which would otherwise be below a zero balance. During the year ended
March 31, 2002, an additional $4,827 was recognized under the same
methodology.
Reimbursement of costs incurred by an affiliate of the General Partner
in connection with the acquisition of Local Limited Partnerships.
These reimbursements have not exceeded 1% of the gross proceeds. As of
March 31, 2002 and 2001, the Partnership incurred acquisition costs of
$120,510, which have been included in investments in limited
partnerships. Accumulated amortization was $32,871 and $29,367 as of
March 31, 2002 and 2001, respectively. Of the accumulated amortization
recorded on the balance sheet at March 31, 2001, $12,806 of the
related expense was reflected as equity in losses of limited
partnerships on the statement of operations during the fourth quarter
of the year ended March 31, 2001 to reduce the respective net
acquisition fee component of investments in local limited partnerships
to zero for those Local Limited Partnerships which would otherwise be
below a zero balance.
An annual asset management fee equal to the greater amount of (i)
$2,000 for each Housing complex, or (ii) 0.275% of gross proceeds. In
either case, the fee will be decreased or increased annually based on
changes to the Consumer Price Index. However, in no event will the
maximum amount exceed 0.2% of the invested assets of the limited
partnerships, including the Partnership's allocable share of the
mortgages. Management fees of $49,500, $50,152 and $49,500 were
incurred during the years ended March 31, 2002, 2001 and 2000,
respectively, of which $0, $12,375 and $63,242 were paid,
respectively.
A subordinated disposition fee in an amount equal to 1% of the sales
price of real estate sold. Payment of this fee is subordinated to the
limited partners receiving a preferred return of 14% through December
31, 2006 and 6% thereafter (as defined in the Partnership Agreement)
and is payable only if the General Partner or its affiliates render
services in the sales effort.
27
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Years Ended March 31, 2002, 2001 and 2000
NOTE 4 - RELATED PARTY TRANSACTIONS, continued
- ----------------------------------------------
The accrued fees and expenses due to the General Partner and affiliates
consisted of the following:
March 31
-----------------------------
2002 2001
------------ --------------
Reimbursements for expenses paid by the General
Partner or an affiliate $ 1,365 $ 2,406
Asset management fees payable 86,625 37,125
------------ --------------
Total $ 87,990 $ 39,531
============ ==============
NOTE 5 - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
- ----------------------------------------------------
The following is a summary of the quarterly operations for the years ended March
31, 2002 and 2001:
June 30 September 30 December 31 March 31
--------------- --------------- --------------- ---------------
2002
----
Income $ - $ 1,000 $ 1,000 $ 27,000
Operating expenses (41,000) (40,000) (79,000) (2,000)
Equity in losses of limited
partnerships (139,000) (139,000) (139,000) (808,000)
Gain on sale of investment of
Limited partnership interest - 168,000 - 2,000
Net loss (180,000) (10,000) (217,000) (781,000)
Loss available to limited partners (179,000) (10,000) (215,000) (772,000)
Loss per limited partner unit (10) (1) (12) (42)
2001
----
Income $ 10,000 $ 3,000 $ 2,000 $ 13,000
Operating expenses (29,000) (71,000) (79,000) (134,000)
Equity in losses of limited
partnerships (179,000) (179,000) (179,000) (120,000)
Net loss (198,000) (247,000) (256,000) (241,000)
Loss available to limited partners (196,000) (244,000) (253,000) (239,000)
Loss per limited partner unit (11) (14) (14) (13)
28
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Years Ended March 31, 2002, 2001 and 2000
NOTE 6 - INCOME TAXES
- ---------------------
No provision for income taxes has been recorded in the accompanying financial
statements as any liability for income taxes is the obligation of the partners
of the Partnership.
NOTE 7 - COMMITMENTS AND CONTINGENCIES
- --------------------------------------
During 2000, WNC identified a potential problem with a developer who, at the
time, was the local general partner in six Local Limited Partnerships. The
Partnership has 99% limited partnership investments in three of those six Local
Limited Partnerships. Those investments are Alliance Apartments I, Evergreen
Apartments I and Hastings Apartments I. All the properties continue to
experience operating deficits. The local general partner ceased funding the
operating deficits, which placed the Local Limited Partnerships in jeopardy of
foreclosure. Consequently, WNC voted to remove the local general partner and the
management company from the Local Limited Partnerships. After the local general
partner contested its removal, WNC commenced legal action on behalf of the Local
Limited Partnerships and was successful in getting a receiver appointed to
manage the Local Limited Partnerships and an unaffiliated entity appointed as
property manager. WNC was subsequently successful in attaining a summary
judgment to confirm the removal of the local general partner, the receiver was
discharged and WNC now controls all six of the Local Limited Partnerships.
The six Local Limited Partnerships (hereinafter referred to as "Defendants")
were defendants in a separate lawsuit. The lawsuit was filed by eight other
partnerships in which the local general partner of the Local Limited
Partnerships is or was involved (the "Plaintiffs"). The Plaintiffs allege that
the local general partner accepted funds from the Plaintiffs and improperly
loaned these funds to the Defendants. In July 2001, this lawsuit was settled for
an aggregate amount of $35,000. The Partnerships allocated share of $17,500 had
been accrued in full at March 31, 2001 and paid in full at March 31, 2002.
The Partnership has a 99% limited partnership investment in Cascade Pines, L.P.
II ("Cascade"). Cascade is a defendant in a wrongful death lawsuit and related
injury lawsuits. Cascade carries general liability and extended liability
insurance. The wrongful death claim has been compromised, released and
dismissed. Liability insurance covered the settlement. In the related injury
lawsuits, the insurers for both the general liability, limited to $2 million,
and extended liability insurance, limited to a further $15 million, have
acknowledged coverage for the potential loss, should the outcome be unfavorable.
Discovery for the related injury lawsuits is ongoing; management of Cascade and
WNC are unable to determine the outcome of these lawsuits at this time or their
impact, if any, on the Partnership's financial statements. Should Cascade be
unsuccessful in its defense and the insurance coverage proves to be inadequate,
Cascade's assets could be subject to an adverse judgment. This could result in
the loss of the Cascade investment, which could result in the cessation and
recapture of tax credits and certain prior tax deductions. As a result, there is
an uncertainty as to the Partnership's ability to ultimately realize the
carrying value of its investment in Cascade, which totaled $556,051 at March 31,
2002. The accompanying financial statements do not reflect any adjustments that
may result from any unfavorable outcome that may occur upon the ultimate
resolution of this uncertainty.
29
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Years Ended March 31, 2002, 2001 and 2000
NOTE 7 - COMMITMENTS AND CONTINGENCIES, continued
- -------------------------------------------------
One Local Limited Partnership, Patten Towers L.P. II ("Patten Towers"), in which
the Partnership owns a 99% interest, has a promissory note payable aggregating
approximately $6,453,000 which was funded with proceeds from the issuance of
Multifamily Housing Revenue Bonds as of December 31, 2001. Patten Towers failed
to make timely principal payments of approximately $233,000 for the year ended
December 31, 2001 in accordance with the note payable. Consequently, the Local
Limited Partnership is in default of its bond covenants and the property could
be foreclosed on by the Bond Trustee to satisfy its obligations under the bonds.
These conditions raise substantial doubt as to the Local Limited Partnership's
ability to continue as a going concern. Patten Towers is attempting to negotiate
a refinance of the bonds, but as of June 6, 2002 the past due principal payments
owed have not been paid and the bonds are fully payable under the event of a
default. There can be no assurances that Patten Towers will be successful in its
negotiations. Accordingly, Patten Towers is subject to the risk of foreclosure
and sale of the property by the lender, which would result in the loss and
potential recapture of certain tax losses and the tax credits (furthermore, see
Note 8). As a result, there is an uncertainty as to the Partnership's ability to
ultimately realize the carrying value of its investment in Patten Towers, which
totaled $1,683,732 at March 31, 2002. The accompanying financial statements do
not reflect any adjustments that may result from any unfavorable outcome that
may occur upon the ultimate resolution of this uncertainty.
The Partnership has a 99% limited partnership investment in Heritage Apartments,
L.P. ("Heritage"). Heritage is a defendant in several wrongful death lawsuits
and related injury lawsuits. Heritage carries general liability and extended
liability insurance. Discovery for these lawsuits is ongoing, but the management
of Heritage and WNC are unable to determine the outcome of these lawsuits at
this time or their impact, if any, on the Partnership's financial statements.
Should Heritage be unsuccessful in its defense and the insurer denies coverage
or the insurance coverage proves to be inadequate, the Partnership may be
required to sell its investment or may otherwise lose its investment in
Heritage. Loss of the Heritage investment could result in the cessation and
recapture of tax credits and certain prior tax deductions.
The Partnership currently has insufficient working capital to fund its
operations. WNC has agreed to provide advances sufficient enough to fund the
operations and working capital requirements of the Partnership through April 1,
2003.
NOTE 8 - SUBSEQUENT EVENTS
- --------------------------
Through June 6, 2002, $50,000 has been advanced to Patten Towers by the
Partnership to fund operating expenses.
30
Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
NOT APPLICABLE
PART III.
Item 10. Directors and Executive Officers of the Registrant
The Partnership has no directors or executive officers of its own. The following
biographical information is presented for the directors and executive officers
of Associates which has principal responsibility for the Partnership's affairs.
Directors and Executive Officers of WNC & Associates, Inc.
The directors of WNC & Associates, Inc. are Wilfred N. Cooper, Sr., who serves
as Chairman of the Board, David N. Shafer, Wilfred N. Cooper, Jr. and Kay L.
Cooper. The principal shareholder of WNC & Associates, Inc. is a trust
established by Wilfred N. Cooper, Sr.
Wilfred N. Cooper, Sr., age 71, is the founder, Chief Executive Officer,
Chairman of the Board and a Director of WNC & Associates, Inc., a Director of
WNC Capital Corporation, and a general partner in some of the programs
previously sponsored by the Sponsor. Mr. Cooper has been involved in real estate
investment and acquisition activities since 1968. Previously, during 1970 and
1971, he was founder and principal of Creative Equity Development Corporation, a
predecessor of WNC & Associates, Inc., and of Creative Equity Corporation, a
real estate investment firm. For 12 years prior to that, Mr. Cooper was employed
by Rockwell International Corporation, last serving as its manager of housing
and urban developments where he had responsibility for factory-built housing
evaluation and project management in urban planning and development. Mr. Cooper
is a Director of the National Association of Home Builders (NAHB) and a National
Trustee for NAHB's Political Action Committee, a Director of the National
Housing Conference (NHC) and a member of NHC's Executive Committee and a
Director of the National Multi-Housing Council (NMHC). Mr. Cooper graduated from
Pomona College in 1956 with a Bachelor of Arts degree.
Wilfred N. Cooper, Jr., age 39, is President, Chief Operating Officer, a
Director and a member of the Acquisition Committee of WNC & Associates, Inc. He
is President of, and a registered principal with, WNC Capital Corporation, a
member firm of the NASD, and is a Director of WNC Management, Inc. He has been
involved in investment and acquisition activities with respect to real estate
since he joined the Sponsor in 1988. Prior to this, he served as Government
Affairs Assistant with Honda North America in Washington, D.C. Mr. Cooper is a
member of the Advisory Board for LIHC Monthly Report, a Director of NMHC and an
Alternate Director of NAHB. He graduated from The American University in 1985
with a Bachelor of Arts degree.
David N. Shafer, age 50, is Executive Vice President, a Director, General
Counsel and a member of the Acquisition Committee of WNC & Associates, Inc., and
a Director and Secretary of WNC Management, Inc. Mr. Shafer has been involved in
real estate investment and acquisition activities since 1984. Prior to joining
the Sponsor in 1990, he was practicing law with a specialty in real estate and
taxation. Mr. Shafer is a Director and President of the California Council of
Affordable Housing and a member of the State Bar of California. Mr. Shafer
graduated from the University of California at Santa Barbara in 1978 with a
Bachelor of Arts degree, from the New England School of Law in 1983 with a Juris
Doctor degree (cum laude) and from the University of San Diego in 1986 with a
Master of Law degree in Taxation.
Thomas J. Riha, age 47, became Chief Financial Officer effective January 2001.
Prior to his appointment as Chief Financial Officer he was Vice President -
Asset Management and a member of the Acquisition Committee of WNC & Associates,
Inc. and a Director and Chief Executive Officer of WNC Management, Inc. Mr. Riha
has been involved in acquisition and investment activities with respect to real
estate since 1979. Prior to joining the Sponsor in 1994, Mr. Riha was employed
by Trust Realty Advisor, a real estate acquisition and management company, last
serving as Vice President - Operations. Mr. Riha graduated from the California
State University, Fullerton in 1977 with a Bachelor of Arts degree (cum laude)
in Business Administration with a concentration in Accounting and is a Certified
Public Accountant and a member of the American Institute of Certified Public
Accountants.
31
Sy P. Garban, age 56, is Vice President - Institutional Investments of WNC &
Associates, Inc. and has been employed by the Sponsor since 1989. Mr. Garban has
been involved in real estate investment activities since 1978. Prior to joining
the Sponsor he served as Executive Vice President of MRW, Inc., a real estate
development and management firm. Mr. Garban is a member of the International
Association of Financial Planners. He graduated from Michigan State University
in 1967 with a Bachelor of Science degree in Business Administration.
Michael J. Gaber, age 36, is Vice President - Acquisitions and a member of the
Acquisitions Committee of WNC & Associates, Inc. Mr. Gaber has been involved in
real estate acquisition, valuation and investment activities since 1989 and has
been employed with WNC since 1997. Prior to joining WNC & Associates, Inc., he
was involved in the valuation and classification of major assets, restructuring
of debt and analysis of real estate taxes with the H.F. Ahmanson company, parent
to Home Savings of America. Mr. Gaber graduated from the California State
University, Fullerton in 1991 with a Bachelor of Science degree in Business
Administration - Finance.
David Turek, age 47, is Vice President - Originations of WNC & Associates, Inc.
He has been involved with real estate investment and finance activities since
1976 and has been employed by WNC & Associates, Inc. since 1996. From 1995 to
1996, Mr. Turek served as a consultant for a national Tax Credit sponsor where
he was responsible for on-site feasibility studies and due diligence analyses of
Tax Credit properties. From 1990 to 1995, he was involved in the development of
conventional and tax credit multi-family housing. He is a Director with the
Texas Council for Affordable Rural Housing and graduated from Southern Methodist
University in 1976 with a Bachelor of Business Administration degree.
Kay L. Cooper, age 65, is a Director of WNC & Associates, Inc. Mrs. Cooper was
the founder and sole proprietor of Agate 108, a manufacturer and retailer of
home accessory products, from 1975 until 1998. She is the wife of Wilfred N.
Cooper, Sr., the mother of Wilfred N. Cooper, Jr. and the sister of John B.
Lester, Jr. Ms. Cooper graduated from the University of Southern California in
1958 with a Bachelor of Science degree.
32
Item 11. Executive Compensation
The Partnership has no officers, employees, or directors. However, under the
terms of the Partnership Agreement the Partnership is obligated to the General
Partner or Associates for the following fees:
(a) Annual Asset Management Fee. An annual asset management fee of the greater
of (i) $2,000 per multi-family housing complex or (ii) 0.275% of Gross
Proceeds. The base fee amount will be adjusted annually based on changes in
the Consumer Price Index, however in no event will the annual asset
management fee exceed 0.2% of Invested Assets. "Invested Assets" means the
sum of the Partnership's Investment in Local Limited Partnerships and the
Partnership's allocable share of the amount of mortgages on and other
indebtedness related to the Housing Complexes. Fees of $49,500, $50,152 and
$49,500 were incurred during the years ended March 31, 2002, 2001 and 2000,
respectively. The Partnership paid the General Partner or its affiliates
$0, $12,375 and $63,242 of these fees during the years ended March 31,
2002, 2001 and 2000.
(b) Subordinated Disposition Fee. A subordinated disposition fee in an amount
equal to 1% of the sale price received in connection with the sale or
disposition of a Housing Complex or Local Limited Partnership Interest.
Subordinated disposition fees will be subordinated to the prior return of
the Limited Partners' capital contributions and payment of the Return on
Investment to the Limited Partners. "Return on Investment" means an annual,
cumulative but not compounded, "return" to the Limited Partners (including
Low Income Housing Credits) as a class on their adjusted capital
contributions commencing for each Limited Partner on the last day of the
calendar quarter during which the Limited Partner's capital contribution is
received by the Partnership, calculated at the following rates: (i) 14%
through December 31, 2006 and (ii) 6% for the balance of the Partnerships
term. No disposition fees have been paid.
(c) Interest in Partnership. The General Partner receives 1% of the
Partnership's allocated Low Income Housing Credits, which approximated
$24,000, $25,000, and $25,000 for the General Partner for the years ended
December 31, 2001, 2000 and 1999, respectively. The General Partners are
also entitled to receive 1% of cash distributions. There were no
distributions of cash to the General Partners during the years ended March
31, 2002, 2001 and 2000.
Item 12. Security Ownership of Certain Beneficial Owners and Management
(a) Security Ownership of Certain Beneficial Owners
-----------------------------------------------
The following are the only limited partners known to the General Partner to
own beneficially in excess of 5% of the outstanding Units.
Title of Class Name and Address of Beneficial Owner Amount of Percent of Class
Units
Controlled
------------------------------------------------------------------------------------------------------
Units of Limited Sempra Energy Financial 4,560 units 25.3%
Partnership Interests P.O. Box 126943
San Diego, CA 92113-6943
Units of Limited Western Financial Savings Bank 1,068 units 5.9%
Partnership Interests 23 Pasteur
Irvine, CA 92718
(b) Security Ownership of Management
--------------------------------
Neither the General Partner, its affiliates, nor any of the officers
or directors of the General Partner or its affiliates own directly or
beneficially any Units in the Partnership.
33
(c) Changes in Control
------------------
The management and control of the General Partner may be changed at
any time in accordance with its organizational documents, without the
consent or approval of the Limited Partners. In addition, the
Partnership Agreement provides for the admission of one or more
additional and successor General Partners in certain circumstances.
First, with the consent of any other General Partners and a
majority-in-interest of the Limited Partners, any General Partner may
designate one or more persons to be successor or additional General
Partners. In addition, any General Partner may, without the consent of
any other General Partner or the Limited Partners, (i) substitute in
its stead as General Partner any entity which has, by merger,
consolidation or otherwise, acquired substantially all of its assets,
stock or other evidence of equity interest and continued its business,
or (ii) cause to be admitted to the Partnership an additional General
Partner or Partners if it deems such admission to be necessary or
desirable so that the Partnership will be classified a partnership for
Federal income tax purposes. Finally, a majority-in-interest of the
Limited Partners may at any time remove the General Partner of the
Partnership and elect a successor General Partner.
Item 13. Certain Relationships and Related Transactions
The General Partner manages all of the Partnership's affairs. The transactions
with the General Partner are primarily in the form of fees paid by the
Partnership for services rendered to the Partnership and the General Partner's
interest in the Partnership, as discussed in Item 11 and in the notes to the
Partnership's financial statements.
34
PART IV.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
Financial Statements
- --------------------
(a)(1) Financial statements included in Part II hereof:
-----------------------------------------------
Report of Independent Certified Public Accountants
Balance Sheets, March 31, 2002 and 2001
Statements of Operations for the years ended March 31, 2002, 2001 and
2000
Statements of Partners' Equity (Deficit) for the years ended March 31,
2002, 2001 and 2000
Statements of Cash Flows for the years ended March 31, 2002, 2001 and
2000
Notes to Financial Statements
(a)(2) Financial statement schedules included in Part IV hereof:
--------------------------------------------------------
Report of Independent Certified Public Accountants on Financial
Statement Schedules
Schedule III - Real Estate Owned by Local Limited Partnerships
(b) Reports on Form 8-K
-------------------
1. NONE
(c) Exhibits
--------
3.1 Articles of incorporation and by-laws: The registrant is not
incorporated. The Partnership Agreement is included as Exhibit B to the
Prospectus, filed as Exhibit 28.1 to Form 10-K dated December 31, 1995
is hereby incorporated herein by reference as exhibit 3.1.
10.1 Amended and Restated Agreement of Limited Partnership of Evergreen
Apartments I Limited Partnership filed as exhibit 10.1 to Form 8-K
dated November 14, 1995 is hereby incorporated herein by reference as
exhibit 10.1.
10.2 Amended and Restated Agreement of Limited Partnership of Shepherd South
Apartments I, Ltd. filed as exhibit 10.1 to Form 8-K dated December 14,
1995 is hereby incorporated herein by reference as exhibit 10.2.
10.3 Amended and Restated Agreement of Limited Partnership of Patten Towers,
L.P. II filed as exhibit 10.1 to Form 8-K dated December 21, 1995 is
hereby incorporated herein by reference as exhibit 10.3.
10.4 Second Amended and Restated Agreement of Limited Partnership of
Alliance Apartments I Limited Partnership filed as exhibit 10.7 to
Post-Effective Amendment No.2 to Registration Statement on Form S-11 of
the Partnership is hereby incorporated herein by reference as exhibit
10.4.
10.5 Amended and Restated Agreement of Limited Partnership of Hastings
Apartments I Limited Partnership filed as exhibit 10.8 to
Post-Effective Amendment No.2 to Registration Statement on Form S-11 of
the Partnership is hereby incorporated herein by reference as exhibit
10.5.
10.6 Agreement of Limited Partnership of Raymond S. King Apartments I
Limited Partnership filed as exhibit 10.9 to Post-Effective Amendment
No. 2 to Registration Statement on Form S-11 of the Partnership is
hereby incorporated herein by reference as exhibit 10.6
35
10.7 Amended and Restated Agreement of Limited Partnership of Talladega
County Housing, Ltd. filed as exhibit 10.10 to Post-Effective Amendment
No. to Registration Statement on Form S-11 of the Partnership is hereby
incorporated herein by reference as exhibit 10.7.
10.8 Amended and Restated Agreement of Limited Partnership of The Willows
Limited Partnership filed as exhibit 10.11 to Post-Effective Amendment
No. to Registration Statement on Form S-11 of the Partnership is hereby
incorporated herein by reference as exhibit 10.8
10.9 Amended and Restated Agreement of Limited Partnership of Cascade Pines
L.P. II filed as exhibit 10.1 to Form 8-K dated April 26, 1996 is
hereby incorporated herein by reference as exhibit 10.9
10.10 Amended and Restated Agreement of Limited Partnership of Rosedale
Limited Partnership filed as exhibit 10.2 to Form 8-K dated April 26,
1996 is hereby incorporated herein by reference as exhibit 10.10
10.11 Amended and Restated Agreement of Limited Partnership of Blessed Rock
of El Monte filed as exhibit 10.1 to Form 8-K dated September 17, 1996
is hereby incorporated herein by reference as exhibit 10.11
10.12 Amended and Restated Agreement of Limited Partnership of Broadway
Apartments, Limited Partnership filed as exhibit 10.1 to Form 8-K dated
April 10, 1997 is hereby incorporated herein by reference as exhibit
10.12
21.1 Financial statements of Blessed Rock of El Monte, for the years ended
December 31, 2001 and 2000 together with Independent Auditors' Report
thereon; a significant subsidiary of the Partnership.
21.2 Financial statements of Cascade Pines L.P. II, for the years ended
December 31, 2001 and 2000 together with Independent Auditors' Report
thereon; a significant subsidiary of the Partnership.
21.3 Financial statements of Patten Towers L.P. II, for the years ended
December 31, 2001 and 2000 together with Independent Auditors' Report
thereon; a significant subsidiary of the Partnership.
(d) Financial statement schedules follow, as set forth in subsection (a)(2)
------------------------------------
hereof.
36
Report of Independent Certified Public Accountants on
Financial Statement Schedules
To the Partners
WNC Housing Tax Credit Fund V, L.P., Series 3
The audits referred to in our report dated June 6, 2002, relating to the 2002,
2001 and 2000 financial statements of WNC Housing Tax Credit Fund V, L.P.,
Series 3 (the "Partnership"), which is contained in Item 8 of this Form 10-K,
included the audit of the accompanying financial statement schedules. The
financial statement schedules are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statement schedules based upon our audits.
In our opinion, such financial statement schedules present fairly, in all
material respects, the financial information set forth therein.
/s/BDO SEIDMAN, LLP
Orange County, California
June 6, 2002
37
WNC Housing Tax Credit Fund V, L.P., Series 3
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2002
-------------------------------------- --------------------------------------------------
As of March 31, 2002 As of December 31, 2001
-------------------------------------- --------------------------------------------------
Partnership's Encumbrances
Total Investment Amount of of Local
in Local Limited Investment Limited Property and Accumulated Net Book
Partnership Name Location Partnerships Paid to Date Partnerships Equipment Depreciation Value
- ------------------------------------------------------------------------------------------------------------------------------------
Alliance Apartments I Alliance,
Limited Partnership Nebraska $ 604,000 $ 604,000 $ 592,000 $ 1,549,000 $ 258,000 $ 1,291,000
Blessed Rock El Monte,
of El Monte California 2,511,000 2,511,000 3,721,000 9,300,000 901,000 8,399,000
Broadway Apartments, Hobbs, New
Limited Partnership Mexico 2,029,000 2,029,000 1,371,000 3,428,000 586,000 2,842,000
Cascade Pines, Atlanta,
L.P. II Georgia 1,347,000 1,347,000 7,845,000 8,733,000 1,408,000 7,325,000
Curtis Associates I, Curtis,
L.P. Nebraska 88,000 88,000 424,000 519,000 97,000 422,000
Escatawpa Village
Associates, Limited Escatawpa,
Partnership Mississippi 249,000 249,000 890,000 1,417,000 250,000 1,167,000
Hastings Apartments I, Hastings,
Limited Partnership Nebraska 542,000 542,00 585,000 1,335,000 227,000 1,108,000
Heritage Apartments I, Berkeley,
L.P. Missouri 752,000 752,000 650,000 1,679,000 260,000 1,419,000
Hillcrest Associates, a Ontario,
Limited Partnership Oregon 354,000 354,000 1,291,000 1,700,000 316,000 1,384,000
Patten Towers, Chattanooga,
L.P. II Tennessee 2,154,000 2,154,000 6,463,000 10,894,000 2,303,000 8,591,000
Prairieland Properties of Syracuse,
Syracuse II, L.P. Kansas 85,000 85,000 376,000 511,000 94,000 417,000
Raymond S. King Greensboro,
Apartments North
Limited Partnership Carolina 437,000 437,000 782,000 1,096,000 181,000 915,000
38
WNC Housing Tax Credit Fund V, L.P., Series 3
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2002
-------------------------------------- --------------------------------------------------
As of March 31, 2002 As of December 31, 2001
-------------------------------------- --------------------------------------------------
Partnership's Encumbrances
Total Investment Amount of of Local
in Local Limited Investment Limited Property and Accumulated Net Book
Partnership Name Location Partnerships Paid to Date Partnerships Equipment Depreciation Value
- ------------------------------------------------------------------------------------------------------------------------------------
Rosedale Limited Silver City,
Partnership New Mexico 309,000 309,000 1,314,000 1,681,000 363,000 1,318,000
Shepherd South Apartments I, Shepherd,
Ltd. Texas 121,000 121,000 564,000 744,000 134,000 610,000
Solomon Associates I, Solomon,
L.P. Kansas 138,000 138,000 565,000 717,000 154,000 563,000
Talladega County Talladega,
Housing Ltd. Alabama 653,000 653,000 787,000 1,477,000 242,000 1,235,000
The Willows Morganton,
Apartments Limited North
Partnership Carolina 841,000 841,000 1,091,000 1,905,000 256,000 1,649,000
------------- ------------- ------------ ------------ ------------ ------------
$ 13,214,000 $ 13,214,000 $29,311,000 $48,686,000 $ 8,030,00 $ 40,655,000
============= ============= ============ ============ ============ ============
39
WNC Housing Tax Credit Fund V, L.P., Series 3
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2002
---------------------------------------------------------------------------------
For the year ended December 31, 2001
---------------------------------------------------------------------------------
Year Estimated
Investment Useful Life
Partnership Name Rental Income Net Loss Status Acquired (Years)
- --------------------------------------------------------------------------------------------------------------------------
Alliance Apartments I Limited
Partnership $ 74,000 $ (38,000) Completed 1997 40
Blessed Rock of El Monte 742,000 (103,000) Completed 1997 40
Broadway Apartments,
Limited Partnership 307,000 (174,000) Completed 1997 40
Cascade Pines, L.P. II 1,915,000 (369,000) Completed 1997 40
Curtis Associates I, L.P. 65,000 (16,000) Completed 1997 27.5
Escatawpa Village Associates,
Limited Partnership 126,000 (38,000) Completed 1997 27.5
Hastings Apartments I, Limited
Partnership 74,000 (39,000) Completed 1996 40
Heritage Apartments I, L.P. 113,000 (41,000) Completed 1997 27.5
Hillcrest Associates, A Limited
Partnership 187,000 (11,000) Completed 1997 40
Patten Towers, L.P. II 1,505,000 (252,000) Completed 1996 27.5
Prairieland Properties of
Syracuse II, L.P. 55,000 (11,000) Completed 1997 27.5
Raymond S. King Apartments Limited
Partnership 73,000 (38,000) Completed 1997 30
Rosedale Limited Partnership 131,000 (30,000) Completed 1997 30
Shepherd South Apartments I, Ltd. 89,000 (7,000) Completed 1996 40
Solomon Associates I, L.P. 97,000 (12,000) Completed 1997 27.5
Talladega County Housing Ltd. 95,000 (19,000) Completed 1996 40
The Willows Apartments Limited
Partnership 120,000 (37,000) Completed 1997 40
----------- -------------
$ 5,768,000 $ (1,235,000)
=========== =============
40
WNC Housing Tax Credit Fund V, L.P., Series 3
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2001
-------------------------------------- --------------------------------------------------
As of March 31, 2001 As of December 31, 2000
-------------------------------------- --------------------------------------------------
Partnership's Encumbrances
Total Investment Amount of of Local
in Local Limited Investment Limited Property and Accumulated Net Book
Partnership Name Location Partnerships Paid to Date Partnerships Equipment Depreciation Value
- ------------------------------------------------------------------------------------------------------------------------------------
Alliance Apartments I Alliance,
Limited Partnership Nebraska $ 604,000 $ 604,000 $ 598,000 $ 1,549,000 $ 219,000 $ 1,330,000
Blessed Rock El Monte,
of El Monte California 2,511,000 2,511,000 3,754,000 9,300,000 695,000 8,605,000
Broadway Apartments, Hobbs, New
Limited Partnership Mexico 2,029,000 2,029,000 1,375,000 3,428,000 442,000 2,986,000
Cascade Pines, Atlanta,
L.P. II Georgia 1,347,000 1,347,000 7,763,000 8,652,000 1,169,000 7,483,000
Curtis Associates I, Curtis,
L.P. Nebraska 88,000 88,000 424,000 497,000 79,000 418,000
Escatawpa Village
Associates, Limited Escatawpa,
Partnership Mississippi 249,000 249,000 893,000 1,417,000 200,000 1,217,000
Evergreen Apartments I Tulsa,
Limited Partnership Oklahoma 549,000 549,000 * * * *
Hastings Apartments I, Hastings,
Limited Partnership Nebraska 542,000 542,00 586,000 1,334,000 186,000 1,148,000
Heritage Apartments I, Berkeley,
L.P. Missouri 752,000 752,000 664,000 1,679,000 200,000 1,479,000
Hillcrest Associates, a Ontario,
Limited Partnership Oregon 354,000 354,000 1,295,000 1,700,000 277,000 1,423,000
* Results of Evergreen Apartments I, L.P. has not been audited and thus
has been excluded. See Note 2 to the financial statements and report of
certified public accountants.
41
WNC Housing Tax Credit Fund V, L.P., Series 3
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2001
-------------------------------------- --------------------------------------------------
As of March 31, 2001 As of December 31, 2000
-------------------------------------- --------------------------------------------------
Partnership's Encumbrances
Total Investment Amount of of Local
in Local Limited Investment Limited Property and Accumulated Net Book
Partnership Name Location Partnerships Paid to Date Partnerships Equipment Depreciation Value
- ------------------------------------------------------------------------------------------------------------------------------------
Patten Towers, Chattanooga,
L.P. II Tennessee 2,154,000 2,154,000 6,595,000 10,893,000 1,886,000 9,007,000
Prairieland Properties of Syracuse,
Syracuse II, L.P. Kansas 85,000 85,000 325,000 511,000 75,000 436,000
Raymond S. King Greensboro,
Apartments North
Limited Partnership Carolina 437,000 437,000 782,000 1,096,000 150,000 946,000
Rosedale Limited Silver City,
Partnership New Mexico 309,000 309,000 1,317,000 1,681,000 307,000 1,374,000
Shepherd South Apartments I, Shepherd,
Ltd. Texas 121,000 121,000 570,000 738,000 111,000 627,000
Solomon Associates I, Solomon,
L.P. Kansas 138,000 138,000 579,000 719,000 128,000 591,000
Talladega County Talladega,
Housing Ltd. Alabama 653,000 653,000 796,000 1,472,000 199,000 1,273,000
The Willows Morganton,
Apartments Limited North
Partnership Carolina 841,000 841,000 1,101,000 1,904,000 205,000 1,699,000
------------- ------------- ------------ ------------ ------------ ------------
$ 13,763,000 $ 13,763,000 $ 29,417,000 $48,570,000 $ 6,528,00 $ 42,042,000
============= ============= ============ ============ ============ ============
42
WNC Housing Tax Credit Fund V, L.P., Series 3
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2001
---------------------------------------------------------------------------------
For the year ended December 31, 2000
---------------------------------------------------------------------------------
Year Estimated
Investment Useful Life
Partnership Name Rental Income Net Loss Status Acquired (Years)
- --------------------------------------------------------------------------------------------------------------------------
Alliance Apartments I Limited
Partnership $ 64,000 $ (45,000) Completed 1997 40
Blessed Rock of El Monte 693,000 (160,000) Completed 1997 40
Broadway Apartments,
Limited Partnership 256,000 (190,000) Completed 1997 40
Cascade Pines, L.P. II 1,920,000 (1,000) Completed 1997 40
Curtis Associates I, L.P. 43,000 (12,000) Completed 1997 27.5
Escatawpa Village Associates,
Limited Partnership 119,000 (33,000) Completed 1997 27.5
Evergreen Apartments I Limited
Partnership * * Completed 1996 40
Hastings Apartments I, Limited
Partnership 77,000 (43,000) Completed 1996 40
Heritage Apartments I, L.P. 112,000 (39,000) Completed 1997 27.5
Hillcrest Associates, A Limited
Partnership 190,000 (8,000) Completed 1997 27.5
Patten Towers, L.P. II 1,486,000 (28,000) Completed 1996 27.5
Prairieland Properties of Syracuse II,
L.P. 35,000 (16,000) Completed 1997 27.5
Raymond S. King Apartments Limited
Partnership 68,000 (24,000) Completed 1997 30
Rosedale Limited Partnership 138,000 (35,000) Completed 1997 30
Shepherd South Apartments I, Ltd. 90,000 (4,000) Completed 1996 40
Solomon Associates I, L.P. 58,000 (25,000) Completed 1997 27.5
Talladega County Housing Ltd. 87,000 (38,000) Completed 1996 40
The Willows Apartments Limited
Partnership 121,000 (29,000) Completed 1997 40
----------- -----------
$ 5,557,000 $ (730,000)
=========== ===========
* Results of Evergreen Apartments I, L.P. has not been audited and thus has
been excluded. See Note 2 to the financial statements and report of
certified public accountants.
43
WNC Housing Tax Credit Fund V, L.P., Series 3
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2000
-------------------------------------- --------------------------------------------------
As of March 31, 2000 As of December 31, 1999
-------------------------------------- --------------------------------------------------
Partnership's Encumbrances
Total Investment Amount of of Local
in Local Limited Investment Limited Property and Accumulated Net Book
Partnership Name Location Partnerships Paid to Date Partnerships Equipment Depreciation Value
- ------------------------------------------------------------------------------------------------------------------------------------
Alliance Apartments I Alliance,
Limited Partnership Nebraska $ 604,000 $ 604,000 $ 601,000 $ 1,549,000 $ 180,000 $ 1,369,000
Blessed Rock El Monte,
of El Monte California 2,511,000 2,511,000 2,678,000 9,291,000 489,000 8,802,000
Broadway Apartments, Hobbs, New
Limited Partnership Mexico 2,029,000 1,957,000 1,391,000 3,425,000 298,000 3,127,000
Cascade Pines, Atlanta,
L.P. II Georgia 1,347,000 1,347,000 7,898,000 8,488,000 937,000 7,551,000
Curtis Associates I, Curtis,
L.P. Nebraska 88,000 88,000 426,000 497,000 61,000 436,000
Escatawpa Village
Associates, Limited Escatawpa,
Partnership Mississippi 249,000 249,000 895,000 1,418,000 150,000 1,268,000
Evergreen Apartments I Tulsa,
Limited Partnership Oklahoma 549,000 549,000 * * * *
Hastings Apartments I, Hastings,
Limited Partnership Nebraska 542,000 542,00 588,000 1,335,000 147,000 1,188,000
Heritage Apartments I, Berkeley,
L.P. Missouri 752,000 752,000 680,000 1,679,000 140,000 1,539,000
Hillcrest Associates, a Ontario,
Limited Partnership Oregon 354,000 354,000 1,298,000 1,700,000 239,000 1,461,000
* Results of Evergreen Apartments I, L.P. has not been audited and thus
has been excluded. See Note 2 to the financial statements and report of
certified public accountants.
44
WNC Housing Tax Credit Fund V, L.P., Series 3
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2000
-------------------------------------- --------------------------------------------------
As of March 31, 2000 As of December 31, 1999
-------------------------------------- --------------------------------------------------
Partnership's Encumbrances
Total Investment Amount of of Local
in Local Limited Investment Limited Property and Accumulated Net Book
Partnership Name Location Partnerships Paid to Date Partnerships Equipment Depreciation Value
- ------------------------------------------------------------------------------------------------------------------------------------
Patten Towers, Chattanooga,
L.P. II Tennessee 2,154,000 2,154,000 6,945,000 10,823,000 1,475,000 9,348,000
Prairieland Properties of Syracuse,
Syracuse II, L.P. Kansas 85,000 85,000 294,000 511,000 56,000 455,000
Raymond S. King Greensboro,
Apartments North
Limited Partnership Carolina 437,000 437,000 782,000 1,096,000 118,000 978,000
Rosedale Limited Silver City,
Partnership New Mexico 309,000 309,000 1,321,000 1,679,000 250,000 1,429,000
Shepherd South Apartments I, Shepherd,
Ltd. Texas 121,000 121,000 561,000 732,000 88,000 644,000
Solomon Associates I, Solomon,
L.P. Kansas 138,000 138,000 567,000 717,000 98,000 619,000
Talladega County Talladega,
Housing Ltd. Alabama 653,000 653,000 804,000 1,469,000 156,000 1,313,000
The Willows Morganton,
Apartments Limited North
Partnership Carolina 841,000 841,000 1,112,000 1,905,000 154,000 1,751,000
------------- ------------- ------------ ------------ ------------ ------------
$ 13,763,000 $ 13,691,000 $ 28,841,000 $48,314,000 $ 5,036,00 $ 43,278,000
============= ============= ============ ============ ============ ============
45
WNC Housing Tax Credit Fund V, L.P., Series 3
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2000
---------------------------------------------------------------------------------
For the year ended December 31, 1999
---------------------------------------------------------------------------------
Year Estimated
Investment Useful Life
Partnership Name Rental Income Net (Loss) Income Status Acquired (Years)
- --------------------------------------------------------------------------------------------------------------------------
Alliance Apartments I Limited
Partnership $ 77,000 $ (52,000) Completed 1997 40
Blessed Rock of El Monte 660,000 (80,000) Completed 1997 40
Broadway Apartments,
Limited Partnership 221,000 (178,000) Completed 1997 40
Cascade Pines, L.P. II 1,785,000 (280,000) Completed 1997 40
Curtis Associates I, L.P. 35,000 (15,000) Completed 1997 27.5
Escatawpa Village Associates,
Limited Partnership 120,000 (25,000) Completed 1997 27.5
Evergreen Apartments I Limited
Partnership * * Completed 1996 40
Hastings Apartments I, Limited
Partnership 71,000 (49,000) Completed 1996 40
Heritage Apartments I, L.P. 99,000 (56,000) Completed 1997 27.5
Hillcrest Associates, A Limited
Partnership 191,000 (5,000) Completed 1997 27.5
Patten Towers, L.P. II 1,489,000 37,000 Completed 1996 27.5
Prairieland Properties of
Syracuse II, L.P. 53,000 (6,000) Completed 1997 27.5
Raymond S. King Apartments Limited
Partnership 58,000 (37,000) Completed 1997 30
Rosedale Limited Partnership 138,000 (39,000) Completed 1997 30
Shepherd South Apartments I, Ltd. 79,000 4,000 Completed 1996 40
Solomon Associates I, L.P. 90,000 (22,000) Completed 1997 27.5
Talladega County Housing Ltd. 86,000 (43,000) Completed 1996 40
The Willows Apartments Limited
Partnership 120,000 (20,000) Completed 1997 40
----------- -----------
$ 5,372,000 $ (817,000)
=========== ===========
* Results of Evergreen Apartments I, L.P. has not been audited and thus
has been excluded. See Note 2 to the financial statements and report of
certified public accountants.
46
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
By: WNC & Associates, Inc. General Partner
By: /s/ Wilfred N. Cooper, Sr.
----------------------
Wilfred N. Cooper, Sr.,
President - Chairman and Chief Executive Officer of WNC & Associates, Inc.
Date: JULY 10, 2002
By: /s/ Thomas J. Riha
--------------
Thomas J. Riha,
Vice-President - Chief Financial Officer of WNC & Associates, Inc.
Date: JULY 10, 2002
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
By /s/ Wilfred N. Cooper, Jr.
----------------------
Wilfred N. Cooper, Jr., Director of WNC & Associates, Inc.
Date: JULY 10, 2002
By: /s/ David N. Shafer
-------------------
David N Shafer, Director of WNC & Associates, Inc.
Date: JULY 10, 2002