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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, 2003
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the period from __________ to __________
Commission file number: 0-21897
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
California 33-0707612
(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. |X|
Indicate by check mark whether the registrant is an accelerated filer.
Yes No X
----------- ---------------
State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was last sold, or the average bid and asked price of such common equity, as of
the last business day of the registrant's most recently completed second fiscal
quarter.
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
Item 1. Business
PART I.
- -------
Organization
WNC Housing Tax Credit Fund, V, L.P., Series 4 (the "Partnership") or ("Series
4") was formed under the California Revised Limited Partnership Act on July 26,
1995 and commenced operations on July 1, 1996. The Partnership was formed to
acquire limited partnership interests in limited partnerships or limited
liability companies ("Local Limited Partnerships") which own multi-family
housing complexes that are eligible for low-income housing federal and, in
certain cases, California income tax credits ("Low Income Housing Credit").
The general partner of the Partnership is WNC & Associates, Inc. (the "General
Partner" or "Associates".) The chairman and 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, on July 1, 1996 the Partnership commenced a public
offering of 25,000 Units of Limited Partnership Interests ("Units"), at a price
of $1,000 per Unit. The Partnership's offering terminated on July 11, 1997.
Since inception a total of 22,000 Units representing approximately $21,915,000
were sold throughout the offering.
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, dated May 5, 1996 (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 an Housing
Complex prior to the end thereof, possibly resulting in recapture of Low Income
Housing Credits.
As of March 31, 2003 the Partnership had invested in fourteen 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.
Certain Risks and Uncertainties
3
An investment in the Partnership and the Partnership's investments in Local
Limited Partnerships and their Housing Complexes are subject to risks. These
risks may impact the tax benefits of an investment in the Partnership, and the
amount of proceeds available for distribution to the Limited Partners, if any,
on liquidation of the Partnership's investments. Some of those risks include the
following:
The Low Income Housing Credit rules are extremely complicated. Noncompliance
with these rules results in the loss of future Low Income Housing Credit s and
the fractional recapture of Low Income Housing Credits already taken. In most
cases the annual amount of Low Income Housing Credits that an individual can use
is limited to the tax liability due on the person's last $25,000 of taxable
income. The Local Limited Partnerships may be unable to sell the Housing
Complexes at a profit. Accordingly, the Partnership may be unable to distribute
any cash to its investors. Low Income Housing Credits may be the only benefit
from an investment in the Partnership.
The Partnership has invested in a limited number of Local Limited Partnerships.
Such limited diversity means that the results of operation of each single
Housing Complex will have a greater impact on the Partnership. With limited
diversity, poor performance of one Housing Complex could impair the
Partnership's ability to satisfy its investment objectives. Each Housing Complex
is subject to mortgage indebtedness. If a Local Limited Partnership failed to
pay its mortgage, it could lose its Housing Complex in foreclosure. If
foreclosure were to occur during the first 15 years, the loss of any remaining
future Low Income Housing Credits, a fractional recapture of prior Low Income
Housing Credits, and a loss of the Partnership's investment in the Housing
Complex would occur. The Partnership is a limited partner or non-managing member
of each Local Limited Partnership. Accordingly, the Partnership will have very
limited rights with respect to management of the Local Limited Partnerships. The
Partnership will rely totally on the Local General Partners. Neither the
Partnership's investments in Local Limited Partnerships, nor the Local Limited
Partnerships' investments in Housing Complexes, are 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 interests
in Local Limited Partnerships; limitations on removal of Local General Partners;
limitations on subsidy programs; and possible changes in applicable regulations.
Uninsured casualties could result in loss of property and Low Income Housing
Credits and recapture of Low Income Housing Credits previously taken. The value
of real estate is subject to risks from fluctuating economic conditions,
including employment rates, inflation, tax, environmental, land use and zoning
policies, supply and demand of similar properties, and neighborhood conditions,
among others.
The ability of Limited Partners to claim tax losses from the Partnership is
limited. The IRS may audit the Partnership or a Local Limited Partnership and
challenge the tax treatment of tax items. The amount of Low Income Housing
Credits and tax losses allocable to the investors could be reduced if the IRS
were successful in such a challenge. The alternative minimum tax could reduce
tax benefits from an investment in the Partnership. Changes in tax laws could
also impact the tax benefits from an investment in the Partnership and/or the
value of the Housing Complexes.
No trading market for the Units exists or is expected to develop. Investors may
be unable to sell their Units except at a discount and should consider their
Units to be a long-term investment. Individual investors will have no recourse
if they disagree with actions authorized by a vote of the majority of Limited
Partners.
Exit Strategy
The IRS compliance period for low-income housing tax credit properties is
generally 15 years from occupancy following construction or rehabilitation
completion. WNC was one of the first in the industry to offer investments using
the tax credit. Now these very first programs are completing their compliance
period.
With that in mind, we are continuing our review of the Partnership's holdings,
with special emphasis on the more mature properties including those that have
satisfied the IRS compliance requirements. Our review will consider many factors
including extended use requirements on the property (such as those due to
mortgage restrictions or state compliance agreements), the condition of the
property, and the tax consequences to the investors from the sale of the
property.
4
Upon identifying those properties with the highest potential for a successful
sale, refinancing or syndication, we expect to proceed with efforts to liquidate
those properties. Our objective is to maximize the investors' return wherever
possible and, ultimately, to wind down those funds that no longer provide tax
benefits to investors. To date no properties in the Partnership have been
selected.
Item 2. Properties
Through its investment in Local Limited Partnerships, the Partnership holds
limited partnership interests in the Housing Complexes. The following table
reflects the status of the fourteen Housing Complexes as of the dates and for
the periods indicated.
5
---------------------------------- -----------------------------------------------
As of March 31, 2003 As of December 31, 2002
---------------------------------- -----------------------------------------------
Partnership's Original
Total Original Estimated Low Encumbrances
Investment in Amount of Income of Local
General Partner Local Limited Investment Number Housing Limited
Partnership Name Location Name Partnerships Paid to Date of Units Occupancy Credits Partnerships
- ------------------------------------------------------------------------------------------------------------------------------------
Ashford Place,
a Limited Shawnee, The Cowen
Partnership Oklahoma Group, LLC $ 2,317,000 $ 2,317,000 100 76% $ 3,931,000 $ 2,255,000
Belen Vista Monarch Properties,
Associates, Belen, Inc. and Low Income
Limited New Housing Foundation
Partnership Mexico of NM 416,000 416,000 57 98% 714,000 1,524,000
Blessed Rock El Monte, Everland,
of El Monte California Inc. 2,511,000 2,511,000 137 100% 8,899,000 3,686,000
Bolivar MBL
Plaza Boliver, Development
Apartments Missouri Co. 1,181,000 1,181,000 32 97% 1,658,000 539,000
Williams
Management and
Consulting,
Cleveland Inc. and
Apartments Coffeyville, Eastern Housing
L.P. Kansas Corp. 515,000 440,000 48 75% 737,000 1,587,000
Crescent Crescent Crescent
City City, City Surf,
Apartments California Inc. 1,166,000 1,166,000 56 96% 2,221,000 1,960,000
D. Hilltop Prairie
Apartments View, Donald W.
Ltd. Texas Sowell 101,000 101,000 24 100% 187,000 460,000
Greyhound WCM Community
Associates I, Windsor, Development
L.P. Missouri Corp. 642,000 642,000 24 83% 1,128,000 579,000
Lamar Plaza Lamar, MBL Development
Apts., L.P. Missouri Co. 738,000 738,000 28 93% 1,230,000 789,000
Mesa Verde
Apartments Roswell, Trianon-Mesa
Limited New Verde,
Partnership Mexico LLC 3,941,000 3,941,000 142 86% 6,472,000 2,147,000
6
---------------------------------- -----------------------------------------------
As of March 31, 2003 As of December 31, 2002
---------------------------------- -----------------------------------------------
Partnership's Original
Total Original Estimated Low Encumbrances
Investment in Amount of Income of Local
General Partner Local Limited Investment Number Housing Limited
Partnership Name Location Name Partnerships Paid to Date of Units Occupancy Credits Partnerships
- ------------------------------------------------------------------------------------------------------------------------------------
Mountain Monarch Properties,
Vista Los Inc.and Low
Associates Alamos, Income Housing
Limited New Foundation
Partnership Mexico of NM 315,000 315,000 53 96% 543,000 1,428,000
North New City and
Central York, Suburban
Limited New Development
Partnership York Corp. 751,000 751,000 18 94% 1,054,000 443,000
Woodland, Marion, ACHR
Ltd. Alabama Corp. 1,288,000 1,288,000 42 95% 2,112,000 1,288,000
Regency
Investment
Associates,
Wynwood Inc., ATO,
Place, Raleigh, Inc., a Non-Profit
Limited North Corp. and
Partnership Carolina Gordon Blackwell. 534,000 454,000 24 75% 780,000 558,000
------------ ----------- --- --- ------------ ------------
$ 16,416,000 $ 16,261,000 785 90% $ 31,666,000 $ 19,243,000
============= =========== === === ============ ============
7
-----------------------------------------------------------------------------
For the year ended December 31, 2002
----------------------------------------------------------------------------
Low Income Housing
Credits Allocated to
Partnership Name Rental Income Net Loss Partnership
- -------------------------------------------------------------------------------------------------------------------
Ashford Place, a Limited Partnership $ 416,000 $ (229,000) 98.99%
Belen Vista Associates, Limited
Partnership 354,000 (16,000) 98.99%
Blessed Rock of El Monte 79,000 (50,000) 49.50%
Bolivar Plaza Apartments 106,000 (45,000) 98.98%
Cleveland Apartments L.P. 211,000 (56,000) 99.98%
Crescent City Apartments 185,000 (164,000) 99.00%
D. Hilltop Apartments Ltd. 68,000 (19,000) 99.00%
Greyhound Associates I, L.P. 80,000 (15,000) 99.00%
Lamar Plaza Apts., L.P. 94,000 (2,000) 99.97%
Mesa Verde Apartments Limited
Partnership 502,000 (159,000) 99.00%
Mountain Vista Associates Limited
Partnership 240,000 (18,000) 98.99%
North Central Limited Partnership 111,000 (55,000) 99.89%
Woodland, Ltd. 103,000 (84,000) 99.98%
Wynwood Place, Limited Partnership 103,000 (49,000) 99.98%
----------- ----------
$ 3,369,000 $(961,000)
=========== ==========
8
Item 3. Legal Proceedings
NONE
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, 2003, there were 1,285 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, 2003.
Item 5b.
NOT APPLICABLE
Item 6. Selected Financial Data
Selected balance sheet information for the Partnership is as follows:
March 31 December 31
------------------------------------------------------------------ -----------
2003 2002 2001 2000 1999 1998
---------- ----------- ----------- ----------- ----------- -----------
ASSETS
Cash and cash equivalents $ 1,006,242 $ 1,221,951 $ 1,316,217 $ 1,725,133 $ 3,460,935 $ 3,817,546
Due from affiliates - 9,732 9,732 - 52,835 52,835
Investments in limited partnerships,
net 12,237,450 13,261,486 14,075,565 15,243,007 15,345,027 15,573,510
Loans receivable - - - 12,080 12,080 91,000
Other assets 574 574 574 574 500 500
---------- ----------- ----------- ----------- ----------- -----------
$ 13,244,266 $ 14,493,743 $ 15,402,088 $ 16,980,794 $ 18,871,377 $ 19,535,391
========== =========== =========== =========== =========== ===========
LIABILITIES
Due to limited partnerships $ 154,741 $ 164,475 $ 257,889 $ 672,640 $ 1,182,870 $ 1,657,666
Accrued fees and expenses due to
general
partner and affiliates 18,451 18,143 1,664 1,936 181,131 121,498
PARTNERS' EQUITY 13,071,074 14,311,125 15,142,535 16,306,218 17,507,376 17,756,227
---------- ----------- ----------- ----------- ----------- -----------
$ 13,244,266 $ 14,493,743 $ 15,402,088 $ 16,980,794 $ 18,871,377 $ 19,535,391
========== =========== =========== =========== =========== ===========
9
Selected results of operations, cash flows, and other information for the Partnership as follows:
For the For the
For the Years Three Months Ended Year Ended
Ended March 31 March 31 December 31
---------------------------------------------------- ------------------------- -------------
2003 2002 2001 2000 1999 1998 1998
---------- ---------- ---------- ------------ ---------- ----------- -------------
(Unaudited)
Income (loss) from
operations $ (282,566) $ (86,263) $ (60,248)$ (54,888)$ 586 $ 18,142 $ 95,280
Equity in losses of
limited partnerships (957,485) (745,147) (1,103,435) (1,146,270) (249,437) (153,500) (1,010,334)
---------- ---------- ---------- ------------ ---------- ----------- -------------
Net loss $(1,240,051) $ (831,410) $(1,163,683)$ (1,201,158)$ (248,851) $ (135,358)$ (915,054)
========== ========== ========== ============ ========== =========== =============
Net loss allocated to:
General partner $ (12,401) $ (8,314) $ (11,637)$ (12,012)$ (2,489) $ (1,354)$ (9,151)
========== ========== ========== ============ ========== =========== =============
Limited partners $(1,227,650) $ (823,096) $(1,152,046)$ (1,189,146)$ (246,362) $ (134,004)$ (905,903)
========== ========== ========== ============ ========== =========== =============
Net loss per limited
partner unit $ (55.80) $ (37.41) $ (52.37)$ (54.05)$ (11.20) $ (6.09)$ (41.18)
========== ========== ========== ============ ========== =========== =============
Outstanding weighted
limited partner units 22,000 22,000 22,000 22,000 22,000 22,000 22,000
========== ========== ========== ============ ========== =========== =============
For the For the
For the Years Three Months Ended Year Ended
Ended March 31 March 31 December 31
---------------------------------------------------- ------------------------- -------------
2003 2002 2001 2000 1999 1998 1998
---------- ---------- ---------- ------------ ---------- ----------- -------------
(Unaudited))
Net cash provided by
(used in):
Operating activities $ (212,962) $ (10,220)$ 1,392 $ (121,756)$ 75,111 $ 77,854 $ 297,891
Investing activities (2,747) (84,046) (410,308) (1,614,046) (431,722) (814,796) (2,534,648)
Financing activities - - - - - 148,448 147,325
---------- ----------- ----------- ------------ ----------- ----------- --------------
Net change in cash and
cash equivalents (215,709) (94,266) (408,916) (1,735,802) (356,611) (588,494) (2,089,432)
Cash and cash
equivalents, beginning
of period 1,221,951 1,316,217 1,725,133 3,460,935 3,817,546 5,906,978 5,906,978
---------- ----------- ----------- ------------ ----------- ----------- --------------
Cash and cash
equivalents, end of
period $ 1,006,242 $ 1,221,951 $ 1,316,217 $ 1,725,133 $ 3,460,935 $ 5,318,484 $ 3,817,546
========== =========== =========== ============ =========== =========== ==============
Low Income Housing Credits Per Unit was as follows for the years ended December 31:
2002 2001 2000 1999 1998
----------- ------------ ----------- ------------ -----------
Federal $ 120 $ 121 $ 114 $ 104 $ 81
State - - - - -
----------- ------------ ----------- ------------ -----------
Total $ 120 $ 121 $ 114 $ 104 $ 81
=========== ============ =========== ============ ===========
10
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 Financial Statements and the Notes thereto included
elsewhere in this filing.
Critical Accounting Policies and Certain Risks and Uncertainties
The Company believes that the following discussion addresses the Partnership's
most significant accounting policies, which are the most critical to aid in
fully understanding and evaluating the Company's reported financial results, and
certain of the Partnership's risks and uncertainties.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities 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.
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 Partnerships' results of operations
and for any contributions made or distributions received. The Partnership
reviews the carrying amount of an individual investment in a Local Limited
Partnership for possible impairment whenever events or changes in circumstances
indicate that the carrying amount of such investment may not be recoverable.
Recoverability of such investment is measured by a comparison of the carrying
amount to future undiscounted net cash flows expected to be generated. If an
investment is considered to be impaired, the impairment to be recognized is
measured by the amount by which the carrying amount of the investment exceeds
fair value. The accounting policies of the Local Limited Partnerships are
generally 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.
Equity in losses of the Local Limited Partnerships for each year ended March 31
have been recorded by the Partnership based on nine months of reported results
provided by the Local Limited Partnerships for each year ended December 31 and
on three months of results estimated by management of the Partnership for each
three-month period ended March 31. Management's estimate for the three-month
period is based on either actual unaudited results reported by the Local Limited
Partnerships or historical trends in the operations of the Local Limited
Partnerships. Equity in losses of the Local Limited Partnerships are 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
11
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 from the Local Limited Partnerships are accounted for as
a reduction of the investment balance. Distributions received after the
investment has reached zero are recognized as income.
Income Taxes
No provision for income taxes has been recorded in the financial statements as
any liability for income taxes is the obligation of the partners of the
Partnership.
Certain Risks and Uncertainties
An investment in the Partnership and the Partnership's investments in Local
Limited Partnerships and their Housing Complexes are subject to risks. These
risks may impact the tax benefits of an investment in the Partnership, and the
amount of proceeds available for distribution to the Limited Partners, if any,
on liquidation of the Partnership's investments. Some of those risks include the
following:
The Low Income Housing Credit rules are extremely complicated. Noncompliance
with these rules results in the loss of future Low Income Housing Credit s and
the fractional recapture of Low Income Housing Credits already taken. In most
cases the annual amount of Low Income Housing Credits that an individual can use
is limited to the tax liability due on the person's last $25,000 of taxable
income. The Local Limited Partnerships may be unable to sell the Housing
Complexes at a profit. Accordingly, the Partnership may be unable to distribute
any cash to its investors. Low Income Housing Credits may be the only benefit
from an investment in the Partnership.
The Partnership has invested in a limited number of Local Limited Partnerships.
Such limited diversity means that the results of operation of each single
Housing Complex will have a greater impact on the Partnership. With limited
diversity, poor performance of one Housing Complex could impair the
Partnership's ability to satisfy its investment objectives. Each Housing Complex
is subject to mortgage indebtedness. If a Local Limited Partnership failed to
pay its mortgage, it could lose its Housing Complex in foreclosure. If
foreclosure were to occur during the first 15 years, the loss of any remaining
future Low Income Housing Credits, a fractional recapture of prior Low Income
Housing Credits, and a loss of the Partnership's investment in the Housing
Complex would occur. The Partnership is a limited partner or non-managing member
of each Local Limited Partnership. Accordingly, the Partnership will have very
limited rights with respect to management of the Local Limited Partnerships. The
Partnership will rely totally on the Local General Partners. Neither the
Partnership's investments in Local Limited Partnerships, nor the Local Limited
Partnerships' investments in Housing Complexes, are 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 interests
in Local Limited Partnerships; limitations on removal of Local General Partners;
limitations on subsidy programs; and possible changes in applicable regulations.
Uninsured casualties could result in loss of property and Low Income Housing
Credits and recapture of Low Income Housing Credits previously taken. The value
of real estate is subject to risks from fluctuating economic conditions,
including employment rates, inflation, tax, environmental, land use and zoning
policies, supply and demand of similar properties, and neighborhood conditions,
among others.
The ability of Limited Partners to claim tax losses from the Partnership is
limited. The IRS may audit the Partnership or a Local Limited Partnership and
challenge the tax treatment of tax items. The amount of Low Income Housing
Credits and tax losses allocable to the investors could be reduced if the IRS
were successful in such a challenge. The alternative minimum tax could reduce
tax benefits from an investment in the Partnership. Changes in tax laws could
also impact the tax benefits from an investment in the Partnership and/or the
value of the Housing Complexes.
No trading market for the Units exists or is expected to develop. Investors may
be unable to sell their Units except at a discount and should consider their
Units to be a long-term investment. Individual investors will have no recourse
if they disagree with actions authorized by a vote of the majority of Limited
Partners.
12
To date, 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.
Financial Condition
The Partnership's assets at March 31, 2003 consisted primarily of $1,006,000 in
cash and cash equivalents and investments in the fourteen Local Limited
Partnerships of $12,237,000. Liabilities at March 31, 2003 were $155,000 due to
limited partnerships, $18,000 of accrued annual management fees and expenses
paid by an affiliate of the General Partner or due to the General Partner or
affiliate.
Results of Operations
Year Ended March 31, 2003 Compared to Year Ended March 31 2002. The
Partnership's net loss for the year ended March 31, 2003 was $(1,240,000),
reflecting an increase of $(409,000) from the net loss experienced for the year
ended March 31, 2002. The increase in net loss is primarily due to equity in
losses of limited partnerships which increased by $(212,000) to $(957,000) for
the year ended March 31, 2003 from $(745,000) for the year ended March 31, 2002,
along with an increase in loss from operations of $(197,000). The increase in
equity in losses of limited partnerships was mainly due to the decrease in
occupancy rate in certain Local Limited Partnerships. The increase in loss from
operations was due primarily to the write-off of advances to a limited
partnership and a decrease in interest income.
Year Ended March 31, 2002 Compared to Year Ended March 31, 2001. The
Partnership's net loss for the year ended March 31, 2002 was $(831,000),
reflecting a decrease of $333,000 from the net loss experienced for the year
ended March 31, 2001. The decline in net loss is primarily due to equity in
losses of limited partnerships which decreased by $358,000 to $(745,000) for the
year ended March 31, 2002 from $(1,103,000) for the year ended March 31, 2001,
offset by an increase in loss from operations of $26,000. The decrease in equity
in losses of limited partnerships was mainly due to the increase in occupancy
rate in certain Local Limited Partnerships.
Liquidity and Capital Resources
Year Ended March 31, 2003 Compared to Year Ended March 31, 2002. Net cash used
during the year ended March 31, 2003 was $(216,000), compared to net cash used
for the year ended March 31, 2002 of $(94,000). Net cash flows used in investing
activities decreased by $81,000 to $(3,000) for the year ended March 31, 2003
from $(84,000) due primarily to a decrease in capital contributions paid to
Local Limited Partnerships of $83,000. Net cash flows used in operating
activities increased by $(203,000) to net cash used in operating activities of
$(213,000) for the year ended March 31, 2003 from net cash used in operating
activities of $(10,000) for the year ended March 31, 2002 as a result of certain
advances to a Local Limited Partnership that were expensed. No cash was provided
by or used in financing activities for the years ended March 31, 2003 or 2002.
Year Ended March 31, 2002 Compared to Year Ended March 31, 2001. Net cash used
during the year ended March 31, 2002 was $(94,000), compared to net cash used
for the year ended March 31, 2001 of $(409,000). Net cash flows used in
investing activities decreased by $326,000 to $(84,000) for the year ended March
31, 2002 from $(410,000) due primarily to a decrease in capital contributions
paid to Local Limited Partnerships of $324,000. Net cash flows from operating
activities decreased by $11,000 to net cash used in operating activities of
$(10,000) for the year ended March 31, 2001 from net cash provided by operating
activities of $1,000 for the year ended March 31, 2001. No cash was provided by
or used in financing activities for the years ended March 31, 2002 or 2001.
During the fiscal year ended March 31, 2003, the Partnership advanced
approximately $168,000 to one Local Limited Partnership, Ashford Place, LP, in
which the Partnership is a limited partner. These advances were used to pay for
repairs and fund certain recurring and nonrecurring operating expenses. The
Partnership determined the recoverability of these advances to be doubtful and,
accordingly, has fully reserved the amounts due from the affiliate as of March
31, 2003.
13
The Partnership expects its future cash flows, together with its net available
assets at March 31, 2003, to be sufficient to meet all currently foreseeable
future cash requirements. This excludes amounts owed to Associates by the
Partnership disclosed below.
Future Contractual Cash Obligations
The following table summarizes our future contractual cash obligations as of March 31, 2003:
2004 2005 2006 2007 2008 Thereafter Total
--------- --------- --------- --------- ---------- ----------- -----------
Asset Management Fees $ 77,061 $ 60,500 $ 60,500 $ 60,500 $ 60,500 $ 2,541,000 $ 2,860,061
Capital Contributions
Payable to Lower Tier
Partnerships 154,741 - - - - - 154,741
--------- --------- --------- --------- ---------- ----------- -----------
Total contractual cash
obligations $ 231,802 $ 60,500 $ 60,500 $ 60,500 $ 60,500 $ 2,541,000 $ 3,014,802
========= ========= ========= ========= ========== =========== ===========
(1) Asset Management Fees are payable annually until termination of the
Partnership, which is to occur no later than 2050. The estimate of the fees
payable included herein assumes the retention of the Partnership's interest
in all Housing Complexes until 2050. Amounts due to the General Partners as
of March 31, 2003 have been included in the 2004 column.
For additional information on our Asset Management Fees and Capital
Contributions Payable to Lower Tier Partnerships, see Notes 3 and 5 to the
financial statements included elsewhere herein.
Exit Strategy
The IRS compliance period for low-income housing tax credit properties is
generally 15 years from occupancy following construction or rehabilitation
completion. WNC was one of the first in the industry to offer investments using
the tax credit. Now these very first programs are completing their compliance
period.
With that in mind, we are continuing our review of the Partnership's holdings,
with special emphasis on the more mature properties including those that have
satisfied the IRS compliance requirements. Our review will consider many factors
including extended use requirements on the property (such as those due to
mortgage restrictions or state compliance agreements), the condition of the
property, and the tax consequences to the investors from the sale of the
property.
Upon identifying those properties with the highest potential for a successful
sale, refinancing or syndication, we expect to proceed with efforts to liquidate
those properties. Our objective is to maximize the investors' return wherever
possible and, ultimately, to wind down those funds that no longer provide tax
benefits to investors. To date no properties in the Partnership have been
selected.
New Accounting Pronouncements
In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards ("SFAS") No. 143, "Accounting for Asset
Retirement Obligations", which requires that the fair value of a liability for
an asset retirement obligation be recognized in the period in which it is
incurred with the associated asset retirement costs being capitalized as a part
of the carrying amount of the long-lived asset. SFAS No. 143 also includes
disclosure requirements that provide a description of asset retirement
obligations and reconciliation of changes in the components of those
obligations. The statement is effective for fiscal years beginning after June
15, 2002. The adoption of SFAS No. 143 did not have a material impact on the
Partnership's financial position or results of operations.
In August 2001, the FASB issued SFAS No. 144, "Impairment or Disposal of
Long-Lived Assets," which addresses accounting and financial reporting for the
impairment or disposal of long-lived assets. This standard was effective for the
14
Partnership's financial statements beginning January 1, 2002. The implementation
of SFAS No. 144 did not have a material impact on the Partnership's financial
position or results of operations.
In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements No.
4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections."
SFAS No. 145 rescinded three previously issued statements and amended SFAS No.
13, "Accounting for Leases." The statement provides reporting standards for debt
extinguishments and provides accounting standards for certain lease
modifications that have economic effects similar to sale-leaseback transactions.
The statement is effective for certain lease transactions occurring after May
15, 2002 and all other provisions of the statement shall be effective for
financial statements issued on or after May 15, 2002. The implementation of SFAS
No. 145 did not have a material impact on the Partnership's financial position
or results of operations.
In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities," which updates accounting and reporting
standards for personnel and operational restructurings. The Partnership adopted
SFAS No. 146 for exit, disposal or other restructuring activities initiated
after December 31, 2002. The adoption of SFAS No. 146 did not have a material
effect on the Partnership's financial position or results of operations.
In November 2002, the FASB issued Interpretation No. 45 ("FIN 45"), "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others." The adoption of FIN 45 did not have a
material impact on the Partnership's finacial position or results of operations.
In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure - an Amendment to SFAS No. 123." SFAS
No. 148 provides alternative methods of transition for a voluntary change to the
fair value based method on accounting for stock-based employee compensation. The
adoption of SFAS No. 148 did not have a material impact on the Partnership's
financial position or results of operations.
In January 2003, the FASB issued Interpretation No. 46 ("FIN 46"),
"Consolidation of Variable Interest Entities." The adoption of FIN 46 did not
have a material impact on the Partnership's financial position or results of
operations.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
NOT APPLICABLE
Item 8. Financial Statements and Supplementary Data
15
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
--------------------------------------------------
To the Partners
WNC Housing Tax Credit Fund V, L.P., Series 4
We have audited the accompanying balance sheets of WNC Housing Tax Credit Fund
V, L.P., Series 4 (a California Limited Partnership) (the "Partnership") as of
March 31, 2003 and 2002, and the related statements of operations, partners'
equity (deficit) and cash flows for the years ended March 31, 2003, 2002 and
2001. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits. 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 2 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 79% and 80% of the total assets of the Partnership at March 31, 2003
and 2002, respectively, and 97%, 98% and 100% of the Partnership's equity in
losses of limited partnerships for the years ended March 31, 2003, 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 the 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 4 (a
California Limited Partnership) as of March 31, 2003 and 2002, and the results
of its operations and its cash flows for the years ended March 31, 2003, 2002
and 2001, in conformity with accounting principles generally accepted in the
United States of America.
/s/ BDO SEIDMAN, LLP
Costa Mesa, California
July 10, 2003
16
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
BALANCE SHEETS
March 31
-----------------------------------
2003 2002
--------------- ----------------
ASSETS
Cash and cash equivalents $ 1,006,242 $ 1,221,951
Due from affiliate (Note 7) - 9,732
Investments in limited partnerships, net (Notes 2 and 3) 12,237,450 13,261,486
Other assets 574 574
--------------- ----------------
$ 13,244,266 $ 14,493,743
=============== ================
LIABILITIES AND PARTNERS' EQUITY
(DEFICIT)
Liabilities:
Payables to limited partnerships (Note 5) $ 154,741 $ 164,475
Accrued fees and expenses due to General
Partner and affiliates (Note 3) 18,451 18,143
--------------- ----------------
Total liabilities 173,192 182,618
--------------- ----------------
Commitments and contingencies
Partners' equity (deficit)
General partner (88,350) (75,949)
Limited partners (25,000 units authorized,
22,000 units issued and outstanding) 13,159,424 14,387,074
--------------- ----------------
Total partners' equity 13,071,074 14,311,125
--------------- ----------------
$ 13,244,266 $ 14,493,743
=============== ================
See accompanying notes to financial statements
17
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
For The Years
Ended March 31
------------------------------------------------
2003 2002 2001
------------- ------------- --------------
Interest income $ 17,660 $ 47,072 $ 78,942
Reporting fee income 17,673 20,255 12,422
------------- ------------- --------------
Total income 35,333 67,327 91,364
------------- ------------- --------------
Operating expenses:
Amortization (Notes 2 and 3) 59,564 59,564 59,564
Asset management fees
(Note 3) 60,500 60,500 60,500
Write-off of advances to a limited
partnership (Note 7) 168,139 - -
Other 29,696 33,526 31,548
------------- ------------- --------------
Total operating expenses 317,899 153,590 151,612
------------- ------------- --------------
Loss from operations (282,566) (86,263) (60,248)
Equity in losses of
limited partnerships (Note 2) (957,485) (745,147) (1,103,435)
------------- ------------- --------------
Net loss $ (1,240,051) $ (831,410)$ (1,163,683)
============= ============= ==============
Net loss allocated to:
General partner $ (12,401) $ (8,314)$ (11,637)
============= ============= ==============
Limited partners $ (1,227,650) $ (823,096)$ (1,152,046)
============= ============= ==============
Net loss per limited partner unit $ (55.80) $ (37.41)$ (52.37)
============= ============= ==============
Outstanding weighted limited
partner units 22,000 22,000 22,000
============= ============= ==============
See accompanying notes to financial statements
18
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
For The Years Ended March 31, 2003, 2002 and 2001
General Limited
Partner Partners Total
--------------- --------------- ---------------
Partners' equity (deficit) at March 31, 2000 $ (55,998) $ 16,362,216 $ 16,306,218
Net loss (11,637) (1,152,046) (1,163,683)
--------------- --------------- ---------------
Partners' equity (deficit) at March 31, 2001 (67,635) 15,210,170 15,142,535
Net loss (8,314) (823,096) (831,410)
--------------- --------------- ---------------
Partners' equity (deficit) at March 31, 2002 (75,949) 14,387,074 14,311,125
Net loss (12,401) (1,227,650) (1,240,051)
--------------- --------------- ---------------
Partners' equity (deficit) at March 31, 2003 $ (88,350) $ 13,159,424 $ 13,071,074
=============== =============== ===============
See accompanying notes to financial statements
19
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
For the Years Ended March 31
-----------------------------------------------
2003 2002 2001
------------ ------------- -------------
Cash flows from operating activities:
Net loss $ (1,240,051) $ (831,410) $ (1,163,683)
Adjustments to reconcile net
loss to net cash provided by (used in)
operating activities:
Amortization 59,564 59,564 59,564
Equity in losses of limited
partnerships 957,485 745,147 1,103,435
Change in due from affiliates 9,732 - -
Change in accrued fees and
expenses due to General
Partner and affiliate 308 16,479 (272)
Change in other assets - - 2,348
------------ ------------- -------------
Net cash provided by (used in) operating
activities (212,962) (10,220) 1,392
------------ ------------- -------------
Cash flows from investing
activities:
Investments in limited
partnerships, net (9,734) (93,414) (416,901)
Distributions from limited
partnerships 6,987 9,368 6,593
------------ ------------- -------------
Net cash used in investing
activities (2,747) (84,046) (410,308)
------------ ------------- -------------
Net decrease in cash
and cash equivalents (215,709) (94,266) (408,916)
Cash and cash equivalents,
beginning of period 1,221,951 1,316,217 1,725,133
------------ ------------- -------------
Cash and cash equivalents, end
of period $ 1,006,242 $ 1,221,951 $ 1,316,217
============ ============= =============
SUPPLEMENTAL
DISCLOSURE OF CASH
FLOW INFORMATION:
Taxes paid $ 800 $ 800 $ 800
============ ============= =============
See accompanying notes to financial statements
20
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For The Years Ended March 31, 2003, 2002 and 2001
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ---------------------------------------------------
Organization
- ------------
WNC Housing Tax Credit Fund V, L.P., Series 4, a California Limited Partnership
(the "Partnership"), was formed on July 26, 1995 under the laws of the state of
California, and commenced operations on July 1, 1996. The Partnership was formed
to invest primarily in other limited partnerships and limited liability
companies (the "Local Limited Partnerships") which own and operate multi-family
housing complexes (the "Housing Complexes") 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 "General Partner"), a
California limited partnership. The chairman and president own substantially all
of the outstanding stock of WNC. The business of the Partnership is conducted
primarily through WNC, as the Partnership has no employees of its own.
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 on July 11, 1997 at which
time 22,000 Units representing subscriptions in the amount of $21,914,830, net
of discounts of $79,550 for volume purchases and $5,620 for dealer discounts,
had been accepted. The General Partner has a 1% interest in operating profits
and losses, taxable income and losses and in 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.
21
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Years Ended March 31, 2003, 2002 and 2001,
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
- --------------------------------------------------------------
Risks and Uncertainties
- -----------------------
An investment in the Partnership and the Partnership's investments in Local
Limited Partnerships and their Housing Complexes are subject to risks. These
risks may impact the tax benefits of an investment in the Partnership, and the
amount of proceeds available for distribution to the Limited Partners, if any,
on liquidation of the Partnership's investments. Some of those risks include the
following:
The Low Income Housing Credit rules are extremely complicated. Noncompliance
with these rules results in the loss of future Low Income Housing Credit s and
the fractional recapture of Low Income Housing Credits already taken. In most
cases the annual amount of Low Income Housing Credits that an individual can use
is limited to the tax liability due on the person's last $25,000 of taxable
income. The Local Limited Partnerships may be unable to sell the Housing
Complexes at a profit. Accordingly, the Partnership may be unable to distribute
any cash to its investors. Low Income Housing Credits may be the only benefit
from an investment in the Partnership.
The Partnership has invested in a limited number of Local Limited Partnerships.
Such limited diversity means that the results of operation of each single
Housing Complex will have a greater impact on the Partnership. With limited
diversity, poor performance of one Housing Complex could impair the
Partnership's ability to satisfy its investment objectives. Each Housing Complex
is subject to mortgage indebtedness. If a Local Limited Partnership failed to
pay its mortgage, it could lose its Housing Complex in foreclosure. If
foreclosure were to occur during the first 15 years, the loss of any remaining
future Low Income Housing Credits, a fractional recapture of prior Low Income
Housing Credits, and a loss of the Partnership's investment in the Housing
Complex would occur. The Partnership is a limited partner or non-managing member
of each Local Limited Partnership. Accordingly, the Partnership will have very
limited rights with respect to management of the Local Limited Partnerships. The
Partnership will rely totally on the Local General Partners. Neither the
Partnership's investments in Local Limited Partnerships, nor the Local Limited
Partnerships' investments in Housing Complexes, are 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 interests
in Local Limited Partnerships; limitations on removal of Local General Partners;
limitations on subsidy programs; and possible changes in applicable regulations.
Uninsured casualties could result in loss of property and Low Income Housing
Credits and recapture of Low Income Housing Credits previously taken. The value
of real estate is subject to risks from fluctuating economic conditions,
including employment rates, inflation, tax, environmental, land use and zoning
policies, supply and demand of similar properties, and neighborhood conditions,
among others.
The ability of Limited Partners to claim tax losses from the Partnership is
limited. The IRS may audit the Partnership or a Local Limited Partnership and
challenge the tax treatment of tax items. The amount of Low Income Housing
Credits and tax losses allocable to the investors could be reduced if the IRS
were successful in such a challenge. The alternative minimum tax could reduce
tax benefits from an investment in the Partnership. Changes in tax laws could
also impact the tax benefits from an investment in the Partnership and/or the
value of the Housing Complexes.
No trading market for the Units exists or is expected to develop. Investors may
be unable to sell their Units except at a discount and should consider their
Units to be a long-term investment. Individual investors will have no recourse
if they disagree with actions authorized by a vote of the majority of Limited
Partners.
22
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For The Years Ended March 31, 2003, 2002 and 2001
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
- --------------------------------------------------------------
Exit Strategy
- -------------
The IRS compliance period for low-income housing tax credit properties is
generally 15 years from occupancy following construction or rehabilitation
completion. WNC was one of the first in the industry to offer investments using
the tax credit. Now these very first programs are completing their compliance
period.
With that in mind, the Partnership is continuing to review the Partnership's
holdings, with special emphasis on the more mature properties including those
that have satisfied the IRS compliance requirements. The Partnership's review
will consider many factors including extended use requirements on the property
(such as those due to mortgage restrictions or state compliance agreements), the
condition of the property, and the tax consequences to the investors from the
sale of the property.
Upon identifying those properties with the highest potential for a successful
sale, refinancing or syndication, the Partnership expects to proceed with
efforts to liquidate those properties. The Partnership's objective is to
maximize the investors' return wherever possible and, ultimately, to wind down
those funds that no longer provide tax benefits to investors. To date no
properties in the Partnership have been selected.
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 Partnerships' results of operations
and for any contributions made and distributions received. The Partnership
reviews the carrying amount of an individual investment in a Local Limited
Partnership for possible impairment whenever events or changes in circumstances
indicate that the carrying amount of such investment may not be recoverable.
Recoverability of such investment is measured by a comparison of the carrying
amount to future undiscounted net cash flows expected to be generated. If an
investment is considered to be impaired, the impairment to be recognized is
measured by the amount by which the carrying amount of the investment exceeds
fair value. The accounting policies of the Local Limited Partnerships are
generally 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 Note 2).
Losses from Local Limited Partnerships for the years ended March 31, 2003, 2002
and 2001 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. Management's estimate for
the three-month period is based on either actual unaudited results reported by
the Local Limited Partnerships or historical trends in the operations of the
Local Limited Partnerships. Losses from Local Limited Partnerships allocated to
the Partnership are not recognized to the extent that the investment balance
would be adjusted below zero. As soon as the investment balance reaches zero,
amortization of the related costs of acquiring the investment are accelerated to
the extent of losses available.
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 14.5%
(including sales commissions) of the total offering proceeds. Offering expenses
are reflected as a reduction of limited partners' capital and amounted to
$2,960,328 at the end of all periods presented.
23
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For The Years Ended March 31, 2003, 2002 and 2001
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
- --------------------------------------------------------------
Use of Estimates
- ----------------
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities 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 all highly liquid investments with remaining
maturities of three months or less when purchased to be cash equivalents. As of
March 31, 2003 and 2002, the Partnership had no cash equivalents.
Concentration of Credit Risk
- ----------------------------
At March 31, 2003 and 2002, the Partnership maintained cash balances at a
certain financial institution in excess of the federally insured maximum.
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 loss 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, 2003, 2002 and 2001, as defined by SFAS No.
130.
New Accounting Pronouncements
- -----------------------------
In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards ("SFAS") No. 143, "Accounting for Asset
Retirement Obligations", which requires that the fair value of a liability for
an asset retirement obligation be recognized in the period in which it is
incurred with the associated asset retirement costs being capitalized as a part
of the carrying amount of the long-lived asset. SFAS No. 143 also includes
disclosure requirements that provide a description of asset retirement
obligations and reconciliation of changes in the components of those
obligations. The statement is effective for fiscal years beginning after June
15, 2002. The adoption of SFAS No. 143 did not have a material impact on the
Partnerhip's financial position or results of operations.
In August 2001, the FASB issued SFAS No. 144, "Impairment or Disposal of
Long-Lived Assets," which addresses accounting and financial reporting for the
impairment or disposal of long-lived assets. This standard was effective for the
Partnership's financial statements beginning January 1, 2002. The implementation
of SFAS No. 144 did not have a material impact on the Partnership's financial
position or results of operations.
24
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For The Years Ended March 31, 2003, 2002 and 2001
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
- --------------------------------------------------------------
In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements No.
4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections."
SFAS No. 145 rescinded three previously issued statements and amended SFAS No.
13, "Accounting for Leases." The statement provides reporting standards for debt
extinguishments and provides accounting standards for certain lease
modifications that have economic effects similar to sale-leaseback transactions.
The statement is effective for certain lease transactions occurring after May
15, 2002 and all other provisions of the statement shall be effective for
financial statements issued on or after May 15, 2002. The implementation of SFAS
No. 145 did not have a material impact on the Partnership's financial position
or results of operations.
In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities," which updates accounting and reporting
standards for personnel and operational restructurings. The Partnership adopted
SFAS No. 146 for exit, disposal or other restructuring activities initiated
after December 31, 2002. The adoption of SFAS No. 146 did not have a material
effect on the Partnership's financial position or results of operations.
In November 2002, the FASB issued Interpretation No. 45 ("FIN 45"), "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others." The adoption of FIN 45 did not have a
material impact on the Partnership's finacial position or results of operations.
In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure - an Amendment to SFAS No. 123." SFAS
No. 148 provides alternative methods of transition for a voluntary change to the
fair value based method on accounting for stock-based employee compensation. The
adoption of SFAS No. 148 did not have a material impact on the Partnership's
financial position or results of operations.
In January 2003, the FASB issued Interpretation No. 46 ("FIN 46"),
"Consolidation of Variable Interest Entities." The adoption of FIN 46 did not
have a material impact on the Partnership's financial position or results of
operations.
25
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For The Years Ended March 31, 2003, 2002 and 2001
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS
- --------------------------------------------
As of the periods presented, the Partnership has acquired limited partnership
interests in fourteen Local Limited Partnerships, each of which owns one Housing
Complex consisting of an aggregate of 785 apartment units. As of March 31, 2003,
construction or rehabilitation of all of the Housing Complexes was complete. 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 approximately 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 49.5% of such
amounts.
The Partnership's investments in limited partnerships as reflected in the
balance sheets at March 31, 2003 and 2002 are approximately $1,564,000 and
$1,653,000, respectively, greater than the Partnership's equity at the preceding
December 31 as shown in the Local Limited Partnerships' combined financial
statements presented below. This difference is primarily due to acquisition,
selection, and other costs related to the acquisition of the investments which
have been capitalized in the Partnership's investment account and to capital
contributions payable to the limited partnerships which were netted against
partner capital in the Local Limited Partnerships' financial statements (see
Note 5). 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 estimated losses recorded by the Partnership for the three month
period ended March 31.
Equity in losses of the 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 from Local Limited Partnerships 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, 2003, the investment account in one certain Local Limited
Partnership had reached a zero balance. Consequently, a portion of the
Partnership's estimate of its share of losses for the year ended March 31, 2003
amounted to approximately $13,000, has not been recognized.
The following is a summary of the equity method activity of the investments in
limited partnerships for the periods presented:
For the Years Ended March 31
-----------------------------------------------
2003 2002 2001
------------- ------------- --------------
Investments per balance sheet, beginning of period $ 13,261,486 $ 14,075,565 $ 15,243,007
Tax credit adjustment - 2,151
Distributions received (6,987) (9,368) (6,594)
Equity in losses of limited partnerships (957,485) (745,147) (1,103,435)
Amortization of capitalized acquisition fees and costs (59,564) (59,564) (59,564)
------------- ------------- --------------
Investments per balance sheet, end of period $ 12,237,450 $ 13,261,486 $ 14,075,565
============= ============= ==============
26
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For The Years Ended March 31, 2003, 2002 and 2001
NOTE 2 - 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 in
interest expense. Approximate combined condensed financial information from the
individual financial statements of the individual financial statements of the
Local Limited Partnerships as of December 31 and for the years then ended is as
follows:
COMBINED CONDENSED BALANCE SHEETS
2002 2001
--------------- ---------------
ASSETS
Land $ 2,465,000 $ 2,465,000
Buildings and improvements, net of accumulated depreciation for
2002 and 2001 of $5,973,000 and $4,744,000, respectively 32,329,000 33,460,000
Other assets 2,405,000 2,220,000
--------------- ---------------
$ 37,199,000 $ 38,145,000
=============== ===============
LIABILITIES
Mortgage and construction loans payable $ 19,243,000 $ 19,409,000
Due to related parties 1,779,000 1,858,000
Other liabilities 1,174,000 903,000
--------------- ---------------
22,196,000 22,170,000
--------------- ---------------
PARTNERS' CAPITAL
WNC Housing Tax Credit Fund V, L.P., Series 4 10,673,000 11,608,000
WNC Housing Tax Credit Fund V, L.P., Series 3 2,197,000 2,222,000
Other partners 2,133,000 2,145,000
--------------- ---------------
15,003,000 15,975,000
--------------- ---------------
$ 37,199,000 $ 38,145,000
=============== ===============
27
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For The Years Ended March 31, 2003, 2002 and 2001
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
- -------------------------------------------------------
COMBINED CONDENSED STATEMENTS OF OPERATIONS
2002 2001 2000
--------------- --------------- ---------------
Revenues $ 3,498,000 $ 3,446,000 $ 3,139,000
--------------- --------------- ---------------
Expenses:
Operating expenses 2,268,000 2,128,000 2,117,000
Interest expense 912,000 941,000 953,000
Depreciation and amortization 1,279,000 1,252,000 1,267,000
--------------- --------------- ---------------
Total expenses 4,459,000 4,321,000 4,337,000
--------------- --------------- ---------------
Net loss $ (961,000) $ (875,000) $ (1,198,000)
=============== =============== ===============
Net loss allocable to the Partnership $ (930,000) $ (818,000) $ (1,110,000)
=============== =============== ===============
Net loss recorded by the Partnership $ (957,000) $ (745,000) $ (1,103,000)
=============== =============== ===============
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.
NOTE 3 - RELATED PARTY TRANSACTIONS
- -----------------------------------
Under the terms of the Partnership Agreement, the Partnership has paid or is
obligated to the General Partner or their 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 interests in Local Limited Partnerships. As of March
31, 2003 and 2002, the Partnership incurred acquisition fees of
$1,630,375. Accumulated amortization of these capitalized costs was
$338,249 and $270,605 as of March 31, 2003 and 2002, respectively. Of
the accumulated amortization recorded on the balance sheet at March
31, 2003, $13,298, $0 and $0 of the related expense was reflected as
equity in losses of limited partnerships during the years ended March
31, 2003, 2002 and 2001, respectively, 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.
Reimbursement of costs incurred by the General Partner in connection
with the acquisition of interests in Local Limited Partnerships. These
reimbursements have not exceeded 1% of the gross proceeds. As of March
31, 2003 and 2002, the Partnership incurred acquisition costs of
$156,589, which have been included in investments in limited
partnerships. Accumulated amortization was $29,780 and $24,560 as of
March 31, 2003 and 2002, respectively.
28
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For The Years Ended March 31, 2003, 2002 and 2001
NOTE 3 - RELATED PARTY TRANSACTIONS, continued
- ----------------------------------------------
An annual asset management fee equal to the greater amount of (i)
$2,000 for each housing complex, or (ii) 0.275% of the gross proceeds.
In either case, the fee will be decreased or increased annually based
on changes in the Consumer Price Index. However, in no event will the
maximum amount exceed 0.2% of the invested assets (defined as the
Partnership's capital contributions plus reserves of the Partnership
of up to 5% of gross proceeds plus its allocable percentage of the
mortgage debt encumbering the housing complexes) of the Local Limited
Partnerships. Management fees of $60,500 were incurred for each of the
years ended March 31, 2003, 2002 and 2001, of which $60,500, $45,375
and $60,500 were paid during the years ended March 31, 2003, 2002 and
2001, 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.
The accrued fees and expenses due to General Partner and affiliates consist of the following at:
March 31
--------------------------------
2003 2002
-------------- --------------
Asset management fees payable $ 16,561 $ 16,561
Advances from WNC 1,890 1,582
-------------- --------------
Total $ 18,451 $ 18,143
============== ==============
NOTE 4 - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
- ----------------------------------------------------
The following is a summary of the quarterly operations for the years ended March 31, 2003 and 2002:
June 30 September 30 December 31 March 31
--------------- --------------- --------------- ---------------
2003
----
Income $ 6,000 $ 5,000 $ 4,000 $ 20,000
Operating expenses (38,000) (41,000) (34,000) (205,000)
Equity in losses of limited
partnerships (205,000) (205,000) (205,000) (342,000)
Net loss (237,000) (241,000) (235,000) (527,000)
Loss available to limited partners (235,000) (237,000) (233,000) (523,000)
Loss available per limited
partner unit (11) (11) (11) (23)
29
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For The Years Ended March 31, 2003, 2002 and 2001
NOTE 4 - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED), continued
- ---------------------------------------------------------------
June 30 September 30 December 31 March 31
--------------- --------------- --------------- ---------------
2002
----
Income $ 14,000 $ 18,000 $ 9,000 $ 26,000
Operating expenses (35,000) (43,000) (38,000) (37,000)
Equity in losses of limited
partnerships (278,000) (278,000) (278,000) 89,000
Net loss (299,000) (302,000) (307,000) 77,000
Loss available to limited partners (296,000) (299,000) (304,000) 76,000
Loss per limited partner unit (13) (14) (14) 3
NOTE 5 - PAYABLES TO LIMITED PARTNERSHIPS
- -----------------------------------------
Payables to limited partnerships represent amounts which are due at various
times based on conditions specified in the limited partnership agreements. These
contributions are payable in installments and are generally due upon the limited
partnerships achieving certain development and operating benchmarks (generally
within two years of the Partnership's initial investment).
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 - DUE FROM AFFILIATE
- ---------------------------
During the fiscal year ended March 31, 2003, the Partnership advanced
approximately $168,000 to one Local Limited Partnership, Ashford Place, LP, in
which the Partnership is a limited partner. These advances were used to pay for
repairs and fund certain recurring and nonrecurring operating expenses. The
Partnership determined the recoverability of these advances to be doubtful and,
accordingly, has fully reserved the amounts due from the affiliate as of March
31, 2003.
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
(a) Identification of Directors, (b) Identification of Executive Officers, (c)
Identification of Certain Significant Employees, (d) Family Relationships,
and (e) Business Experience
The Partnership has no directors, executive officers or employees of its own.
The following biographical information is presented for the directors, executive
officers and significant employees of Associates, which has principal
responsibility for the Partnership's affairs.
Associates is a California corporation which was organized in 1971. Its officers
and significant employees are:
Wilfred N. Cooper, Sr. Chairman of the Board
Wilfred N. Cooper, Jr. President and Chief Executive Officer
David N. Shafer, Esq. Executive Vice President and Director of Asset Management
Sylvester P. Garban Senior Vice President - Institutional Investments
David C. Turek Senior Vice President - Originations
Thomas J. Riha, CPA Vice President - Chief Financial Officer
Michael J. Gaber Vice President - Acquisitions
Diemmy T. Tran Vice President - Portfolio Management
J. Brad Hurlbut Director of Syndications
In addition to Wilfred N. Cooper, Sr., the directors of Associates are Wilfred
N. Cooper, Jr., David N. Shafer, and Kay L. Cooper. The principal shareholder of
Associates is a trust established by Wilfred N. Cooper, Sr.
Wilfred N. Cooper, Sr., age 72, is the founder and Chairman of the Board of
Directors of Associates, a Director of WNC Capital Corporation, and a general
partner in some of the partnerships previously sponsored by Associates Mr.
Cooper has been actively involved in the affordable housing industry since 1968.
Previously, during 1970 and 1971, he was founder and a principal of Creative
Equity Development Corporation, a predecessor of Associates, and of Creative
Equity Corporation, a real estate investment firm. For 12 years before 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. He has testified before committees of the U.S. Senate and the U.S.
House of Representatives. Mr. Cooper is a Life Director of the National
Association of Home Builders and a National Trustee for NAHB's Political Action
Committee, and the Chairman of NAHB's Multifamily Council. He is a Director of
the National Housing Conference and a member of NHC's Executive Committee, and a
founder and Director of the California Housing Consortium. He is the husband of
Kay Cooper and the father of Wilfred N. Cooper, Jr. Mr. Cooper graduated from
Pomona College in 1956 with a Bachelor of Arts degree.
Wilfred N. Cooper, Jr., age 40, is President, Chief Executive Officer, Secretary
and a Director and a member of the Acquisition Committee of Associates He is
President of, and a registered principal with, WNC Capital Corporation, and is a
Director of WNC Management, Inc. He has been involved in real estate investment
and acquisition activities since 1988 when he joined Associates Previously, he
served as a Government Affairs Assistant with Honda North America in Washington,
D.C. Mr. Cooper is a member of the Editorial Advisory Boards of Affordable
Housing Finance and LIHC Monthly Report, a Steering Member of the Housing Credit
Group of the National Association of Home Builders, an Alternate Director of
NAHB, a member of the Advisory Board of the New York State Association for
Affordable Housing and a member of the Urban Land Institute. He is the son of
Wilfred Cooper, Sr. and Kay Cooper. Mr. Cooper graduated from The American
University in 1985 with a Bachelor of Arts degree.
31
David N. Shafer, age 50, is Executive Vice President, a Director, Director of
Asset Management and a member of the Acquisition Committee of Associates, and a
Director and Secretary of WNC Management, Inc. Mr. Shafer has been active in the
real estate industry since 1984. Before joining Associates in 1990, he was
engaged as an attorney in the private practice of 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.
Sylvester P. Garban, age 57, is Senior Vice President - Institutional
Investments of Associates Mr. Garban has been involved in real estate investment
activities since 1978. Before joining Associates in 1989, he served as Executive
Vice President with MRW, Inc., a real estate development and management firm.
Mr. Garban is a member of the National Association of Affordable Housing Lenders
and the Financial Planning Association. He graduated from Michigan State
University in 1967 with a Bachelor of Science degree in Business Administration.
David C. Turek, age 48, is Senior Vice President - Originations of Associates
His experience with real estate investments and finance has continued since
1976, and he has been employed by Associates since 1996. Previously, 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 1992 to 1995 he served as Executive Vice
President for Levcor, Inc., a multi-family development company, and from 1990 to
1992 he served as Vice President for the Paragon Group where he was responsible
for tax credit development activities. He is a Director of the National Housing
and Rehabilitation Association, the Rural Rental Housing Association of Texas,
and the Alabama Council of Affordable Rental Housing. Mr. Turek graduated from
Southern Methodist University in 1976 with a Bachelor of Business Administration
degree.
Thomas J. Riha, age 47, is Vice President - Chief Financial Officer and a member
of the Acquisition Committee of Associates and President, Treasurer and a
Director of WNC Management, Inc. He has been involved in real estate acquisition
and investment activities since 1979. Before joining Associates in 1994, Mr.
Riha was employed by Trust Realty Advisor, a real estate acquisition and
management company, last serving as Vice President - Operations. He is a
Director of the Task Force on Housing Credit Certification of the National
Association of Home Builders. 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.
Michael J. Gaber, age 37, is Vice President - Acquisitions and a member of the
Acquisition Committee of Associates Mr. Gaber has been involved in real estate
acquisition, valuation and investment activities since 1989 and has been
associated with Associates since 1997. Prior to joining Associates, he was
involved in the valuation and classification of major assets, restructuring of
debt and analysis of real estate taxes with H.F. Ahmanson & Company, parent of
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.
Diemmy T. Tran, age 37, is Vice President - Portfolio Management of Associates
She is responsible for overseeing portfolio management and investor reporting
for all WNC funds, and for monitoring investment returns for all WNC
institutional funds. Ms. Tran has been involved in real estate asset management
and finance activities for 12 years. Prior to joining Associates in 1998, Ms.
Tran served as senior asset manager for a national Tax Credit sponsor and as an
asset specialist for the Resolution Trust Corporation where she was responsible
for the disposition and management of commercial loan and REO portfolios. Ms.
Tran is licensed as a California real estate broker. She graduated from
California State University, Northridge in 1989 with a Bachelor of Science
degree in finance and a minor in real estate.
J. Brad Hurlbut, age 43, is Director of Syndications of Associates He is
responsible for the financial structuring of WNC's institutional funds. Mr.
Hurlbut has 20 years of experience in real estate investment and development.
Prior to joining WNC in 2000, he served as corporate controller for Great
Western Hotels Corporation. Mr. Hurlbut has been an enrolled agent licensed to
practice before the IRS since 1984. He graduated from the University of Redlands
in 1981 with a Bachelor of Science degree in business management and from
California State University, Fullerton in 1985 with a Master of Science degree
in taxation.
32
Kay L. Cooper, age 66, is a Director of Associates Mrs. Cooper was the sole
proprietor of Agate 108, a manufacturer and retailer of home accessory products,
from 1975 until its sale in 1998. She is the wife of Wilfred Cooper, Sr. and the
mother of Wilfred Cooper, Jr. Ms. Cooper graduated from the University of
Southern California in 1958 with a Bachelor of Science degree.
(f) Involvement in Certain Legal Proceedings
Inapplicable.
(g) Promoters and Control Persons
Inapplicable.
(h) Audit Committee Financial Expert
Neither the Partnership nor Associates has an audit committee.
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 indebtedness related to the
Housing Complexes. Asset management fees of $60,500 were incurred for each
of the years ended March 31, 2003, 2002 and 2001, of which $60,500, $45,375
and $60,500 were paid during the years ended March 31, 2003, 2002 and 2001,
respectively.
(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) Operating Expense. The Partnership reimbursed the General Partner or its
affiliates for operating expenses of approximately $27,800, $31,400 and
$50,600, during the years ended March 31, 2003, 2002 and 2001,
respectively.
(d) Interest in Partnership. The General Partner will receive 1% of the Low
Income Housing Credits. The General Partner was allocated Low Income
Housing Credits of $26,737, $26,875 and $25,684 for the years ended
December 31, 2002, 2001 and 2000. The General Partners are also entitled to
receive 1% of cash distributions. There were no distributions of cash to
the General Partner during the years ended March 31, 2003, 2002 and 2001.
Item 12. Security Ownership of Certain Beneficial Owners and Management
(a) Securities Authorized for Issuance Under Equity Compensation Plans
Inapplicable
33
(b) Security Ownership of Certain Beneficial Owners
No person is known to own beneficially in excess of 5% of the
outstanding Units.
(c) 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.
(d) 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.
Item 14. Controls and Procedures
Associates, on behalf of the Partnership, maintains disclosure controls and
procedures that are designed to ensure that information required to be disclosed
in our periodic reports filed with the Securities and Exchange Commission
("SEC") is recorded, processed, summarized and reported within the time periods
specified in the rules and forms of the SEC and that such information is
accumulated and communicated to our management as appropriate to allow timely
decisions regarding required disclosure. In designing and evaluating the
disclosure controls and procedures, our management recognized that any controls
and procedures, no matter how well designed and operated, can provide only
reasonable assurance of achieving the desired control objectives and management
necessarily was required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures.
Based on their most recent evaluation, which was completed within 90 days of the
filing of this Annual Report on Form 10-K, our Principal Executive Officer and
Principal Financial Officer believe that our disclosure controls and procedures
(as defined in Rules 13a-14 and 15d-14 of the Securities Exchange Act of 1934,
as amended) are effective. There were no significant changes in internal
controls or in other factors that could significantly affect these internal
controls subsequent to the date of their most recent evaluation.
34
PART IV
Item 15. 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, 2003 and 2002
Statements of Operations for the years ended March 31, 2003, 2002 and
2001
Statements of Partners' Equity (Deficit) for the years ended March 31,
2003, 2002 and 2001
Statements of Cash Flows for the years ended March 31, 2003, 2002 and
2001
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 2.1 to
the Form 8-A12G dated May 5, 1996.
3.2 First Amendment to Agreement of Limited Partnership included as
Exhibit 2.2 to the Form 8-A12G dated May 5, 1996.
10.1 Amended and Restated Agreement of Limited Partnership of Blessed Rock
of El Monte filed as exhibit 10.1 to Form 8-K Current Report dated
September 19, 1996 is herein incorporated by reference as exhibit
10.1.
10.2 Agreement of Limited Partnership of Crescent City Apartments filed as
exhibit 10.1 to Form 8-K Current Report dated September 25, 1996 is
herein incorporated by reference as exhibit 10.2.
10.3 Agreement of Limited Partnership of Ashford Place, a Limited
Partnership filed as exhibit 10.1 to Form 8-K Current Report dated
January 27, 1997 is herein incorporated by reference as exhibit 10.3
10.4 Amended and Restated Agreement of Limited Partnership of Lamar Plaza
Apts., L. P. filed as exhibit 10.2 to Form 8-K Current Report dated
January 27, 1997 is herein incorporated by reference as exhibit 10.4.
10.5 Amended and Restated Agreement of Limited Partnership of Woodland ,
Ltd. filed as exhibit 10.3 to Form 8-K Current Report dated January
27, 1997 is herein incorporated by reference as exhibit 10.5.
10.6 Amended and Restated Agreement of Limited Partnership of Mesa Verde
Apartments Limited Partnership filed as exhibit 10.1 to Form 8-K
Current Report dated March 6, 1997 is herein incorporated by reference
as exhibit 10.6.
10.7 Amended and Restated Agreement of Limited Partnership of Hilltop
Apartments, Ltd. filed as exhibit 10.1 to Form 8-K Current Report
dated April 27, 1997 is herein incorporated by reference as exhibit
10.7.
35
10.8 Amended and Restated Agreement of Limited Partnership of Mountain
Vista Associates Limited Partnership filed as exhibit 10.1 to Form 8-K
Current Report dated May 27, 1997 is herein incorporated by reference
as exhibit 10.8.
10.9 Amended and Restated Agreement of Limited Partnership of Belen Vista
Associates Limited Partnership filed as exhibit 10.1 to Form 8-K
Current Report dated May 5, 1997 is here in incorporated by reference
as exhibit 10.9.
10.10 Amended and Restated Agreement of Limited Partnership of Greyhound
Associates I, Limited Partnership filed as exhibit 10.1 to Form 8-K
Current Report dated May 20, 1997 is herein incorporated by reference
as exhibit 10.10.
99.1 Certification of the Principal Executive Officer pursuant to 18 U.S.C.
section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley
Act of 2002. (filed herewith)
99.2 Certification of the Principal Financial Officer pursuant to 18 U.S.C.
section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley
Act of 2002. (filed herewith)
99.3 Financial Statements of Ashford Place, as of and for the years ended
December 31, 2001 and 2000 together with Independent Auditors Report
thereon; filed as exhibit 20.1 on Form 10-K dated March 31, 2002; a
significant subsidiary of the Partnership.
99.4 Financial Statements of Ashford Place, as of and for the years ended
December 31, 2002 and 2001 together with Independent Auditors Report
thereon; a significant subsidiary of the Partnership. (filed herewith)
(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 4
The audits referred to in our report dated July 10, 2003 relating to the 2003,
2002 and 2001 financial statements of WNC Housing Tax Credit Fund V, L.P.,
Series 4 (the "Partnership"), which are contained in Item 8 of this Form 10-K,
included the audit of the accompanying financial statement schedules. The
financial statement schedules, listed in Item 15(a) 2 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
Costa Mesa, California
July 10, 2003
37
WNC Housing Tax Credit Fund V, L.P. Series 4
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2003
------------------------------------ ------------------------------------------------
As of March 31, 2003 As of December 31, 2002
- ------------------------------------------------------------------------------------------------------------------------------------
Partnerships Total Amount of Encumbrances
Original Investment Investment of Local Net
in Local Limited Paid Limited Property and Accumulated Book
Partnership Name Location Partnerships to Date Partnerships Equipment Depreciation Value
- ------------------------------------------------------------------------------------------------------------------------------------
Ashford Place,
a Limited Shawnee,
Partnership Oklahoma
$ 2,317,000 $ 2,317,000 $ 2,255,000 $ 5,065,000 $ 1,001,000 $ 4,064,000
Belen Vista
Associates,
Limited Belen,
Partnership New Mexico 416,000 416,000 1,524,000 1,826,000 391,000 1,435,000
Blessed Rock El Monte,
of El Monte California 2,511,000 2,511,000 3,686,000 9,308,000 1,109,000 8,199,000
Bolivar Plaza Bolivar,
Apartments Missouri 1,181,000 1,181,000 539,000 2,141,000 149,000 1,992,000
Cleveland Coffeyville,
Apartments L.P. Kansas 515,000 440,000 1,587,000 1,643,000 235,000 1,408,000
Crescent City Crescent City,
Apartments California 1,166,000 1,166,000 1,960,000 3,131,000 723,000 2,408,000
D. Hilltop Prairie
Apartments View,
Ltd. Texas 101,000 101,000 460,000 588,000 95,000 493,000
Greyhound
Associates Windsor,
I, L.P. Missouri 642,000 642,000 579,000 1,362,000 170,000 1,192,000
Lamar Plaza Lamar,
Apts., L.P. Missouri 738,000 738,000 789,000 1,696,000 219,000 1,477,000
Mesa Verde
Apartments
Limited Roswell,
Partnership New Mexico 3,941,000 3,941,000 2,147,000 6,303,000 938,000 5,365,000
38
WNC Housing Tax Credit Fund V, L.P. Series 4
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2003
------------------------------------ ------------------------------------------------
As of March 31, 2003 As of December 31, 2002
- ------------------------------------------------------------------------------------------------------------------------------------
Partnerships Total Amount of Encumbrances
Original Investment Investment of Local Net
in Local Limited Paid Limited Property and Accumulated Book
Partnership Name Location Partnerships to Date Partnerships Equipment Depreciation Value
- ------------------------------------------------------------------------------------------------------------------------------------
Mountain
Vista
Associates Los Alamos,
Limited New
Partnership Mexico 315,000 315,000 1,428,000 1,646,000 296,000 1,350,000
North
Central
Limited New York,
Partnership New York 751,000 751,000 443,000 2,389,000 187,000 2,202,000
Woodland, Marion,
Ltd. Alabama 1,288,000 1,288,000 1,288,000 2,541,000 366,000 2,175,000
Wynwood
Place, Raleigh,
Limited North
Partnership Carolina 534,000 454,000 558,000 1,128,000 94,000 1,034,000
------------- ------------ ------------- ------------ ----------- ------------
$ 16,416,000 $ 16,261,000 $ 19,243,000 $ 40,767,000 $ 5,973,000 $ 34,794,000
============= ============ ============= ============ =========== ============
39
WNC Housing Tax Credit Fund V, L.P. Series 4
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2003
------------------------------------------------------------------------------
For the year ended December 31, 2002
------------------------------------------------------------------------------
Rental Net Year Investment Estimated Useful
Partnership Name Income loss Acquired Status Life (Years)
- --------------------------------------------------------------------------------------------------------------------
Ashford Place, a Limited
Partnership $ 416,000 $ (229,000) 1996 Completed 40
Belen Vista Associates,
Limited Partnership 354,000 (16,000) 1997 Completed 27.5
Blessed Rock of
El Monte 796,000 (50,000) 1996 Completed 40
Bolivar Plaza Apartments 106,000 (45,000) 2000 Completed 30
Cleveland Apartments L.P. 211,000 (56,000) 1998 Completed 27.5
Crescent City Apartments 185,000 (164,000) 1996 Completed 27.5
D. Hilltop Apartments Ltd. 68,000 (19,000) 1997 Completed 30
Greyhound Associates I,
L.P. 80,000 (15,000) 1997 Completed 40
Lamar Plaza Apts., L.P. 94,000 (2,000) 1997 Completed 40
Mesa Verde Apartments
Limited Partnership 502,000 (159,000) 1997 Completed 40
Mountain Vista Associates
Limited Partnership 240,000 (18,000) 1997 Completed 27.5
North Central Limited
Partnership 111,000 (55,000) 1998 Completed 40
Woodland, Ltd. 103,000 (84,000) 1997 Completed 40
Wynwood Place, Limited
Partnership 103,000 (49,000) 1998 Completed 50
----------- ----------
$ 3,369,000 $(961,000)
=========== ==========
40
WNC Housing Tax Credit Fund V, L.P. Series 4
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2002
------------------------------------ ------------------------------------------------
As of March 31, 2002 As of December 31, 2001
- ------------------------------------------------------------------------------------------------------------------------------------
Partnerships Total Amount of Encumbrances
Investment Investment of Local Net
in Local Limited Paid Limited Property and Accumulated Book
Partnership Name Location Partnerships to Date Partnerships Equipment Depreciation Value
- ------------------------------------------------------------------------------------------------------------------------------------
Ashford Place,
a Limited Shawnee,
Partnership Oklahoma
$ 2,317,000 $ 2,317,000 $ 2,280,000 $ 5,066,000 $ (783,000) $ 4,283,000
Belen Vista
Associates,
Limited Belen,
Partnership New Mexico 416,000 416,000 1,527,000 1,795,000 (323,000) 1,472,000
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
Bolivar Plaza Bolivar,
Apartments Missouri 1,181,000 1,181,000 556,000 2,142,000 (76,000) 2,066,000
Cleveland Coffeyville,
Apartments L.P. Kansas 515,000 431,000 1,595,000 1,643,000 (176,000) 1,467,000
Crescent City Crescent City,
Apartments California 1,166,000 1,166,000 1,960,000 3,118,000 (610,000) 2,508,000
D. Hilltop Prairie
Apartments View,
Ltd. Texas 101,000 101,000 464,000 587,000 (76,000) 511,000
Greyhound
Associates Windsor,
I, L.P. Missouri 642,000 642,000 593,000 1,362,000 (136,000) 1,226,000
Lamar Plaza Lamar,
Apts., L.P. Missouri 738,000 738,000 808,000 1,696,000 (178,000) 1,518,000
Mesa Verde
Apartments
Limited Roswell,
Partnership New Mexico 3,941,000 3,941,000 2,160,000 6,298,000 (748,000) 5,550,000
Mountain
Vista
Associates Los Alamos,
Limited New
Partnership Mexico 315,000 315,000 1,433,000 1,608,000 (243,000) 1,365,000
North
Central
Limited New York,
Partnership New York 751,000 751,000 454,000 2,388,000 (128,000) 2,260,000
41
WNC Housing Tax Credit Fund V, L.P. Series 4
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2002
------------------------------------ ------------------------------------------------
As of March 31, 2002 As of December 31, 2001
- ------------------------------------------------------------------------------------------------------------------------------------
Partnerships Total Amount of Encumbrances
Investment Investment of Local Net
in Local Limited Paid Limited Property and Accumulated Book
Partnership Name Location Partnerships to Date Partnerships Equipment Depreciation Value
- ------------------------------------------------------------------------------------------------------------------------------------
Woodland, Marion,
Ltd. Alabama 1,288,000 1,288,000 1,292,000 2,537,000 (297,000) 2,240,000
Wynwood
Place, Raleigh,
Limited North
Partnership Carolina 534,000 454,000 566,000 1,129,000 (69,000) 1,060,000
------------- ------------ ------------- ------------ ----------- ------------
$ 16,416,000 $ 16,252,000 $ 19,409,000 $ 40,669,000 $ (4,744,000) $ 35,925,000
============= ============ ============= ============ =========== ============
42
WNC Housing Tax Credit Fund V, L.P. Series 4
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2002
------------------------------------------------------------------------------
For the year ended December 31, 2001
------------------------------------------------------------------------------
Rental Net Year Investment Estimated Useful
Partnership Name Income loss Acquired Status Life (Years)
- --------------------------------------------------------------------------------------------------------------------
Ashford Place, a Limited
Partnership $ 447,000 $ (174,000) 1996 Completed 40
Belen Vista Associates,
Limited Partnership 327,000 (1,000) 1997 Completed 27.5
Blessed Rock of
El Monte 742,000 (103,000) 1996 Completed 40
Bolivar Plaza Apartments 101,000 (21,000) 2000 Completed 30
Cleveland Apartments L.P. 194,000 (61,000) 1998 Completed 27.5
Crescent City Apartments 171,000 (146,000) 1996 Completed 27.5
D. Hilltop Apartments Ltd. 71,000 (15,000) 1997 Completed 30
Greyhound Associates I,
L.P. 77,000 (29,000) 1997 Completed 40
Lamar Plaza Apts., L.P. 90,000 (9,000) 1997 Completed 40
Mesa Verde Apartments
Limited Partnership 509,000 (143,000) 1997 Completed 40
Mountain Vista Associates
Limited Partnership 244,000 (8,000) 1997 Completed 27.5
North Central Limited
Partnership 113,000 (68,000) 1998 Completed 40
Woodland, Ltd. 93,000 (65,000) 1997 Completed 40
Wynwood Place, Limited
Partnership 120,000 (32,000) 1998 Completed 50
------------ -----------
$ 3,299,000 $ (875,000)
============ ===========
43
WNC Housing Tax Credit Fund V, L.P. Series 4
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2001
------------------------------------ ------------------------------------------------
As of March 31, 2001 As of December 31, 2000
- ------------------------------------------------------------------------------------------------------------------------------------
Partnerships Total Amount of Encumbrances
Investment Investment of Local Net
in Local Limited Paid Limited Property and Accumulated Book
Partnership Name Location Partnerships to Date Partnerships Equipment Depreciation Value
- ------------------------------------------------------------------------------------------------------------------------------------
Ashford Place,
a Limited Shawnee,
Partnership Oklahoma
$ 2,317,000 $ 2,317,000 $ 2,305,000 $ 5,065,000 $ 564,000 $ 4,501,000
Belen Vista
Associates,
Limited Belen,
Partnership New Mexico 416,000 416,000 1,532,000 1,790,000 256,000 1,534,000
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
Bolivar Plaza Bolivar,
Apartments Missouri 1,181,000 1,087,000 573,000 2,141,000 25,000 2,116,000
Cleveland Coffeyville,
Apartments L.P. Kansas 515,000 431,000 1,602,000 1,643,000 117,000 1,526,000
Crescent City Crescent City,
Apartments California 1,166,000 1,166,000 1,960,000 3,119,000 497,000 2,622,000
D. Hilltop Prairie
Apartments View,
Ltd. Texas 101,000 101,000 466,000 585,000 58,000 527,000
Greyhound
Associates Windsor,
I, L.P. Missouri 642,000 642,000 607,000 1,362,000 102,000 1,260,000
Lamar Plaza Lamar,
Apts., L.P. Missouri 738,000 738,000 840,000 1,697,000 138,000 1,559,000
Mesa Verde
Apartments
Limited Roswell,
Partnership New Mexico 3,941,000 3,941,000 2,174,000 6,289,000 558,000 5,731,000
Mountain
Vista
Associates Los Alamos,
Limited New
Partnership Mexico 315,000 315,000 1,437,000 1,606,000 192,000 1,414,000
North
Central
Limited New York,
Partnership New York 751,000 751,000 463,000 2,389,000 69,000 2,320,000
44
WNC Housing Tax Credit Fund V, L.P. Series 4
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2001
------------------------------------ ------------------------------------------------
As of March 31, 2001 As of December 31, 2000
- ------------------------------------------------------------------------------------------------------------------------------------
Partnerships Total Amount of Encumbrances
Investment Investment of Local Net
in Local Limited Paid Limited Property and Accumulated Book
Partnership Name Location Partnerships to Date Partnerships Equipment Depreciation Value
- ------------------------------------------------------------------------------------------------------------------------------------
Woodland, Marion,
Ltd. Alabama 1,288,000 1,288,000 1,294,000 2,535,000 229,000 2,306,000
Wynwood
Place, Raleigh,
Limited North
Partnership Carolina 534,000 454,000 574,000 1,128,000 43,000 1,085,000
------------- ------------ ------------- ------------ ----------- ------------
$ 16,416,000 $ 16,158,000 $ 19,581,000 $ 40,649,000 $ 3,543,000 $ 37,106,000
============= ============ ============= ============ =========== ============
45
WNC Housing Tax Credit Fund V, L.P. Series 4
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2001
------------------------------------------------------------------------------
For the year ended December 31, 2000
------------------------------------------------------------------------------
Rental Net Year Investment Estimated Useful
Partnership Name Income (Loss)Income Acquired Status Life (Years)
- --------------------------------------------------------------------------------------------------------------------
Ashford Place, a Limited
Partnership $ 398,000 $ (184,000) 1996 Completed 40
Belen Vista Associates,
Limited Partnership 324,000 (12,000) 1997 Completed 27.5
Blessed Rock of
El Monte 693,000 (160,000) 1996 Completed 40
Under
Bolivar Plaza Apartments 33,000 (40,000) 2000 2001 Construction
Cleveland Apartments L.P. 139,000 (117,000) 1998 Completed 27.5
Crescent City Apartments 174,000 (142,000) 1996 Completed 27.5
D. Hilltop Apartments Ltd. 71,000 (3,000) 1997 Completed 30
Greyhound Associates I,
L.P. 76,000 (30,000) 1997 Completed 40
Lamar Plaza Apts., L.P. 78,000 (18,000) 1997 Completed 40
Mesa Verde Apartments
Limited Partnership 460,000 (271,000) 1997 Completed 40
Mountain Vista Associates
Limited Partnership 227,000 2,000 1997 Completed 27.5
North Central Limited
Partnership 111,000 (125,000) 1998 Completed 40
Woodland, Ltd. 87,000 (71,000) 1997 Completed 40
Wynwood Place, Limited
Partnership 127,000 (27,000) 1998 Completed 50
------------ -------------
$ 2,998,000 $ (1,198,000)
============ =============
46
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
By: WNC & Associates, Inc.,
General Partner
By: /s/ Wilfred N. Cooper, Jr.
--------------------------
Wilfred N. Cooper, Jr.,
President of WNC & Associates, Inc.
Date: August 07, 2003
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.,
Chief Executive Officer, President and Director of
WNC & Associates, Inc. (principal executive officer)
Date: August 07, 2003
By: /s/ Thomas J. Riha
-------------------
Thomas J. Riha,
Vice-President - Chief Financial Officer of WNC & Associates, Inc.
(principal financial officer and principal accounting officer)
Date: August 07, 2003
By: /s/ Wilfred N. Cooper, Sr.
--------------------------
Wilfred N. Cooper, Sr.,
Chairman of the Board of WNC & Associates, Inc.
Date: August 07, 2003
By: /s/ David N. Shafer
-------------------
David N Shafer,
Director of WNC & Associates, Inc.
Date: August 07, 2003
47
CERTIFICATIONS
I, Wilfred N. Cooper, Jr., certify that:
1. I have reviewed this annual report on Form 10-K of WNC HOUSING
TAX CREDITS FUND V, L.P., Series 4;
2. Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not
misleading with respect to the periods covered by this annual
report;
3. Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly
present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for,
the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14)
for the registrant and we have:
(a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this annual report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this annual report (the "Evaluation
Date"); and
(c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures
based on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors
and the audit committee of registrant's board of directors (or
persons performing the equivalent function):
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and
(b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated
in this annual report whether or not there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of
our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: August 07, 2003
/s/ Wilfred N. Cooper, Jr.
---------------------------
[Signature]
Chairman and Chief Executive Officer of WNC & Associates, Inc.
48
CERTIFICATIONS
I, Thomas J. Riha, certify that:
1. I have reviewed this annual report on Form 10-K of WNC HOUSING
TAX CREDITS FUND V, L.P., Series 4;
2. Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not
misleading with respect to the periods covered by this annual
report;
3. Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly
present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for,
the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14)
for the registrant and we have:
(d) designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this annual report is being prepared;
(e) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this annual report (the "Evaluation
Date"); and
(f) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures
based on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors
and the audit committee of registrant's board of directors (or
persons performing the equivalent function):
(c) all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and
(d) any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated
in this annual report whether or not there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of
our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: August 07, 2003
/s/ Thomas J. Riha
-------------------
[Signature]
Vice-President - Chief Financial Officer of WNC & Associates, Inc.
49