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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended March 31, 2005
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 0-24652
FREEDOM TAX CREDIT PLUS L.P.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 13-3533987
- -------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
625 Madison Avenue, New York, New York 10022
- ---------------------------------------- --------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 317-5700
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Title of Class
Beneficial Assignment Certificates and Limited Partnership Interests
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Act). Yes [ ] No [X]
The approximate aggregate book value of the voting and non-voting common
equity held by non-affiliates of the Registrant as of September 30, 2004 was
$789,309 based on Limited Partner equity as of such date.
Registrant's voting and non-voting common equity is not publicly traded.
DOCUMENTS INCORPORATED BY REFERENCE
None
CAUTIONARY STATEMENT FOR PURPOSES OF
THE "SAFE HARBOR" PROVISIONS OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
WHEN USED IN THIS ANNUAL REPORT ON FORM 10-K, THE WORDS "BELIEVES,"
"ANTICIPATES," "EXPECTS" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY
FORWARD-LOOKING STATEMENTS. STATEMENTS LOOKING FORWARD IN TIME ARE INCLUDED IN
THIS ANNUAL REPORT ON FORM 10-K PURSUANT TO THE "SAFE HARBOR" PROVISION OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH STATEMENTS ARE SUBJECT TO
CERTAIN RISKS AND UNCERTAINTIES WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY, INCLUDING, BUT NOT LIMITED TO, THOSE SET FORTH IN "MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS."
READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING
STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE HEREOF.
2
PART I
Item 1. Business
General
- -------
Freedom Tax Credit Plus L.P. (the "Partnership") is a limited partnership which
was formed under the laws of the State of Delaware on August 28, 1989. The
General Partners of the Partnership are Related Freedom Associates L.P., a
Delaware limited partnership (the "Related General Partner"), and Freedom GP
Inc., a Delaware corporation (the "Freedom General Partner" and together with
the Related General Partner, the "General Partners"). The general partner of the
Related General Partner is Related Freedom Associates Inc., a Delaware
corporation. The General Partners are both affiliates of Related Capital
Company. On November 25, 1997, an affiliate of the Related General Partner
purchased 100% of the stock of the Freedom General Partner. On November 17,
2003, CharterMac acquired Related Capital Company, which is the indirect parent
of RCC Manager L.L.C., the sole shareholder of Related Freedom Associates, Inc.,
the general partner of the Related General Partner. Pursuant to the acquisition,
CharterMac acquired controlling interests in the General Partners. This
acquisition did not affect the Partnership or its day-to-day operations, as the
majority of the General Partners' management team remained unchanged.
On February 9, 1990, the Partnership commenced a public offering (the
"Offering") of Beneficial Assignment Certificates ("BACs") representing
assignments of limited partnership interests in the Partnership ("Limited
Partnership Interests"), pursuant to a prospectus dated February 9, 1990, as
supplemented by supplements thereto, dated December 7, 1990, May 10, 1991, July
10, 1991 and July 23, 1991 (as so supplemented, the "Prospectus").
The Partnership received $72,896,000 of the gross proceeds of the Offering from
4,780 investors, and the Offering was terminated on August 8, 1991. (See Item 8,
"Financial Statements and Supplementary Data," Note 1 of Notes to Consolidated
Financial Statements.)
The Partnership was formed to invest as a limited partner in other limited
partnerships ("Local Partnerships"), each of which owns one or more leveraged
low-income multi-family residential complexes ("Apartment Complexes" or
"Properties") that are eligible for the low-income housing tax credit ("Housing
Tax Credit") enacted in the Tax Reform Act of 1986, and some of which may also
be eligible for the historic rehabilitation tax credit ("Historic Tax Credit";
together with Housing Tax Credits, the "Tax Credits"). The Partnership's
investment in each Local Partnership represents 98% to 99% of the partnership
interests in the Local Partnership. As of March 31, 2005, the Partnership has
acquired interests in forty-two Local Partnerships. As of March 31, 2005,
approximately $58,000,000 of net proceeds had been invested in such Local
Partnerships, representing all of the Partnership's net proceeds available for
investment. Subsequent to March 31, 2005 and as of the date of this filing,
there have been no additional investments, nor are any other investments
expected. See Item 2, "Properties," below.
The investment objectives of the Partnership are described below.
1. Entitle qualified BACs holders to Housing Tax Credits over the Credit Period
(as defined below) with respect to each Apartment Complex.
2. Preserve and protect the Partnership's capital.
3. Participate in any capital appreciation in the value of the Properties and
provide distributions of sale or refinancing proceeds upon the disposition of
the Properties.
4. Allocate passive losses to individual BACs holders to offset passive income
that they may realize from rental real estate investments and other passive
activities, and allocate passive losses to corporate BACs holders to offset
business income.
One of the Partnership's objectives is to entitle qualified BACs holders to
Housing Tax Credits over the period of the Partnership's entitlement to claim
Tax Credits (for each Property, generally ten years from the date of investment
or, if later, the date the Property is leased to qualified tenants; referred to
herein as the "Credit Period"). Each of the Local Partnerships in which the
Partnership has an interest has been allocated by the relevant state credit
agency the authority to recognize Housing Tax Credits during the Credit Period,
provided that the Local Partnership satisfies the rent restriction, minimum
set-aside and other requirements for recognition of the Housing Tax Credits at
all times during the 15-year period (the "Compliance Period"). Once a Local
Partnership has become eligible to recognize Housing Tax Credits, it may lose
such eligibility and suffer an event of "recapture" if its Property fails to
remain in compliance with the Housing Tax Credit requirements. None of the Local
Partnerships in which the Partnership has acquired an interest has suffered an
event of recapture.
Housing Tax Credits with respect to a given Apartment Complex are available for
a ten-year period that commences when the property is leased to qualified
tenants. However, the annual Housing Tax Credits available in the year in which
the Apartment Complex is leased to qualified tenants must be prorated based upon
the months remaining in the year. The amount of the annual Housing Tax Credits
not available in the first year will be available in the eleventh year. Internal
Revenue Code Section 42 regulates the use of the Apartment Complexes as to
occupancy, eligibility, and unit gross rent, among other requirements. Each
Apartment Complex must meet the provisions of these regulations during each of
fifteen consecutive years (the "Compliance Period") in order to remain qualified
to receive the credits. Certain Apartment Complexes have extended compliance
periods of up to fifty years.
A loss on impairment of assets is recorded when management estimates amounts
recoverable through future operations and sale of the property on an
undiscounted basis are below depreciated cost. At that time the property
investments themselves are reduced to estimated fair value (generally using the
discounted cash flow valuation method). Through March 31, 2005, the Partnership
has not recorded any loss on impairment of assets or reduction to estimated fair
value. While the value of the remaining Tax Credits are a factor in calculating
fair value, the expiration of the Tax Credit Period, in and of itself, is not
the only factor in determining whether there is an impairment and generally does
not have any adverse impact on the fair value of the Local Partnerships.
The Partnership generated $1,710,233 in Tax Credits during the 2002 Fiscal Year.
As of December 31, 2002, all the Local Partnerships have completed their Tax
Credit Periods and the Partnership has met its primary objective of generating
Tax Credits for qualified BACs holders. However, each Local Partnership must
3
continue to comply with the Tax Credit requirements until the end of the
Compliance Period in order to avoid recapture of the Tax Credits. The Compliance
Period will end between December 31, 2004 and December 31, 2007 with respect to
the Properties depending upon when the Credit Period commenced.
The Partnership continues to meet its objective of allocating passive losses to
individual BACs holders to offset passive income that they may realize from
rental real estate investments and other passive activities, and allocating
passive losses to corporate BACs holders to offset business income.
As of March 31, 2005, cash distributions received from the Local Partnerships
have been immaterial. Management expects that the distributions received from
the Local Partnerships will increase, although not to a level sufficient to
permit cash distributions to BACs holders. The Partnership does not anticipate
providing cash distributions to BACs holders in circumstances other than
refinancings or sales.
Segments
- --------
The Partnership operates in one segment, which is the investment in multi-family
residential property.
Competition
- -----------
The real estate business is highly competitive and substantially all of the
properties acquired are subject to active competition from similar properties in
their respective vicinities. In addition, various other limited partnerships
may, in the future, be formed by the General Partners and/or their affiliates to
engage in businesses which may compete with the Partnership.
Employees
- ---------
The Partnership does not have any direct employees. All services are performed
for the Partnership by its General Partners and their affiliates. The General
Partners receive compensation in connection with such activities as set forth in
Items 11 and 13. In addition, the Partnership reimburses the General Partners
and certain of their affiliates for expenses incurred in connection with the
performance by their employees of services for the Partnership in accordance
with the Partnership's Amended and Restated Agreement and Certificate of Limited
Partnership (the "Partnership Agreement").
Item 2. Properties
The Partnership holds a 99%, 98.99% and 98% limited partnership interest in
nine, ten and twenty-three Local Partnerships, respectively. Set forth below is
a schedule of these Local Partnerships including certain information concerning
the Apartment Complexes (the "Local Partnership Schedule"). Further information
concerning these Local Partnerships and their Properties, including any
encumbrances affecting the Properties, may be found in Item 15 (a) 2; Schedule
III.
Local Partnership Schedule
--------------------------
% of Units Occupied at May 1,
Name of Location ------------------------------------------------
(Number of Units) Date Acquired 2005 2004 2003 2002 2001
- ---------------------------------- -------------- -------- -------- -------- -------- --------
Parkside Townhomes
York, PA (53) September 1990 92% 98% 89% 87% 94%
Twin Trees
Layton, UT (43) October 1990 93% 95% 95% 98% 100%
Bennion (Mulberry)
Taylorsville, UT (80) October 1990 95% 93% 88% 96% 94%
Hunters Chase
Madison, AL (91) October 1990 80% 80% 95% 93% 95%
Wilshire Park
Huntsville, AL (65) October 1990 85% 91% 88% 94% 95%
Bethel Park
Bethel, OH (84) October 1990 83% 96% 89% 80% 86%
Zebulon Park
Owensville, OH (66) October 1990 86% 94% 94% 95% 97%
Tivoli Place
Murphreesboro, TN (61) October 1990 95% 90% 92% 89% 88%
Northwood (Hartwood)
Jacksonville, FL (110) October 1990 93% 97% 92% 100% 95%
Oxford Trace
Aiken, SC (29) October 1990 90% 96% 97% 79% 97%
4
Local Partnership Schedule
--------------------------
% of Units Occupied at May 1,
Name of Location ------------------------------------------------
(Number of Units) Date Acquired 2005 2004 2003 2002 2001
- ---------------------------------- -------------- -------- -------- -------- -------- --------
Ivanhoe Apts
Salt Lake City, UT (19) January 1991 95% 100% 79% 95% 95%
Washington Brooklyn
Brooklyn, NY (24) January 1991 100% 100% 100% 100% 100%
Manhattan B (C.H. Development)
New York, NY (35) January 1991 100% 97% 100% 100% 97%
Davidson Court
Staten Island, NY (38) March 1991 100% 97% 100% 100% 100%
Magnolia Mews
Philadelphia, PA (63) March 1991 97% 95% 98% 100% 100%
Oaks Village
Whiteville, NC (40) March 1991 100% 100% 98% 100% 98%
Greenfield Village
Dunn, NC (40) March 1991 98% 98% 98% 100% 95%
Morris Avenue (CLM Equities)
Bronx, NY (58) April 1991 100% 100% 100% 100% 100%
Victoria Manor
Riverside, CA (112) April 1991 98% 100% 100% 100% 100%
Ogontz Hall
Philadelphia, PA (35) April 1991 97% 90% 100% 65%(a) 100%
Eagle Ridge
Stoughton, WI (54) May 1991 83% 87% 89% 93% 96%
Nelson Anderson
Bronx, NY (81) June 1991 93% 98% 98% 96% 98%
Abraham Lincoln Apts
Irondequoit, NY (69) September 1991 88% 86% 83% 94% 91%
Wilson Stree
(Middletown)t Apts
Middletown, PA (44) September 1991 89% 98% 98% 95% 91%
Lauderdale Lakes
Lauderdale Lakes, FL (172) October 1991 100% 99% 97% 96% 95%
Flipper Temple
Atlanta, GA (163) October 1991 100% 100% 97% 100% 96%
220 Cooper Street
Camden, NJ (29) December 1991 90% 100% 100% 93% 97%
Pecan Creek
Tulsa, OK (47) December 1991 85% 96% 92% 94% 98%
Vendome
Brooklyn, NY (24) December 1991 100% 100% 100% 100% 100%
Rainer Villas
New Augusta, MS (20) December 1991 90% 100% 85% 100% 100%
Pine Shadow Apts
Waveland, MS (48) December 1991 100% 100% 98% 100% 100%
Windsor Place
Wedowee, AL (24) December 1991 100% 100% 100% 100% 100%
5
Local Partnership Schedule
--------------------------
% of Units Occupied at May 1,
Name of Location ------------------------------------------------
(Number of Units) Date Acquired 2005 2004 2003 2002 2001
- ---------------------------------- -------------- -------- -------- -------- -------- --------
Brookwood Apts
Foley, AL (38) December 1991 95% 84% 95% 98% 95%
Heflin Hills Apts
Heflin, AL (24) December 1991 100% 100% 100% 100% 100%
Shadowood Apts
Stevenson, AL (24) December 1991 96% 100% 100% 100% 100%
Brittany Apts
DeKalb, MS (25) December 1991 96% 100% 100% 100% 100%
Hidden Valley Apts
Brewton, AL (40) December 1991 100% 100% 100% 99% 100%
Westbrook Square
Carthage, MS (32) December 1991 94% 97% 97% 88% 88%
Royal Pines pts. (Warsaw Elderly)
Warsaw, KY (36) December 1991 97% 100% 100% 100% 100%
West Hill Square
Gordo, AL (24) December 1991 96% 100% 100% 100% 100%
Elmwood Manor
Picayune, MS (24) December 1991 100% 100% 100% 100% 100%
Harmony Gate Apts
Los Angeles, CA (70) January 1992 93% 97% 99% 97% 97%
None of the Local Partnership's assets or revenue balances are greater than 10%
of the Partnership's total assets or revenue balances.
All leases are generally for periods not greater than one to two years and no
tenant occupies more than 10% of the rentable square footage.
Commercial tenants (to which average rental per square foot applies) comprise
less than 5% of the rental revenues of the Local Partnerships. Rents for the
residential units are determined annually by the U.S. Department of Housing and
Urban Development ("HUD") and reflect increases, if any, in consumer price
indices in various geographic areas.
Management of the General Partners periodically reviews the physical state of
the Properties and suggests to the respective Local General Partners budget
improvements which are generally funded from cash flow from operations or
release of replacement reserve escrows.
Management of the General Partners periodically reviews the insurance coverage
of the Properties and believes such coverage is adequate.
See Item 1, Business, above for the general competitive conditions to which the
Properties described above are subject.
Real estate taxes are calculated using rates and assessed valuations determined
by the township or city in which the Property is located. Such taxes have
approximated 1% of the aggregate cost of the Properties as shown in Schedule III
to the financial statements included herein.
The General Partners generally required that the general partners of the Local
Partnerships ("Local General Partners") undertake an obligation to fund
operating deficits of the Local Partnership (up to a stated maximum amount)
during a limited period of time (typically three to five years) following the
achievement of break-even operations ("Operating Deficit Guarantees"). Under the
terms of the Operating Deficit Guarantees, amounts funded are treated as
operating loans, which do not bear interest and which will be repaid only out of
50% of available cash flow or out of available net sale or refinancing proceeds.
As of March 31, 2005, all Operating Deficit Guarantees have expired.
Item 3. Legal Proceeding
Washington Brooklyn
- -------------------
In or about September 2003, two putative mortgagees commenced a mortgage
foreclosure action in the Supreme Court of the State of New York, Kings County
(the "Court"), entitled 150 Beach 120th Street Inc. v. Washington Brooklyn
Limited Partnership, Index No. 35255/2003, seeking to foreclose on an alleged
$100,000 loan and mortgage against the real property (the "Apartment Complex")
owned by Washington Brooklyn Limited Partnership ("Washington"). Apparently, the
former general partner of Washington, BUFNY Houses of Brooklyn, Inc. ("BUFNY"),
allegedly granted two mortgages in the amounts of $225,000 and $100,000 secured
by the Apartment Complex. Each of the foregoing mortgages was granted without
the knowledge of Freedom SLP, L.P. (the "Special Limited Partner") or the
Partnership (collectively the "Freedom LPs") or the consent of the Special
Limited Partner, as required by Washington's Amended and Restated Agreement of
Limited Partnership (the "Partnership Agreement"). The Freedom LPs believe that
6
BUFNY did not use the alleged loan proceeds for the benefit of Washington or the
Apartment Complex. For these and other reasons, the Freedom LPs contend that the
alleged mortgages are invalid.
In addition, BUFNY allegedly failed to comply with the terms of either mortgage,
which resulted in the holders of the alleged $100,000 mortgage commencing the
foreclosure proceedings. BUFNY did not appear in or otherwise respond to the
foreclosure proceedings. The holders of the alleged $225,000 mortgage have not
yet, to the knowledge of the Freedom LPs, commenced any foreclosure proceedings.
Shortly after the Freedom LPs became aware of these foreclosure proceedings,
their counsel contacted counsel for the plaintiffs and mortgagees in an effort
to learn more about the alleged mortgages and to resolve the disputes relating
to the mortgages. When those efforts failed, the Freedom LPs filed a motion to
intervene in the foreclosure action and for leave to file a late answer on
behalf of themselves and Washington. The Freedom LPs contend that the mortgages
are invalid and that Washington is not liable for them or the underlying
indebtedness. In an order dated September 7, 2004, the Court granted the Freedom
L.P.s' motion to intervene and to file a late answer on behalf of the
Partnership.
On or about September 21, 2004, the Freedom LPs, on behalf of themselves and the
Partnership, served an answer, counterclaims and crossclaims in defending
against the action. The answer denied the material allegations of the complaint
and asserted certain affirmative defenses, counterclaims and crossclaims. Among
other things, the Freedom LPs, on behalf of themselves and the Partnership,
added The Levites Organization, one of the two co-holders of the $225,000
mortgage for which the plaintiffs' complaint did not seek foreclosure, as an
additional counterclaim defendant, and the Freedom LPs assert that both the
$100,000 and $225,000 mortgages are invalid and void ab initio. The parties are
currently engaged in taking discovery.
The Freedom LPs intend to defend the action and prosecute their counterclaims
and crossclaims vigorously. The final outcome of this case, however, cannot be
determined at this time. If the Court were to reject the Freedom LPs defenses
and counterclaims, then it is possible that the Apartment Complex might be
foreclosed upon and the Partnership might lose its title to and interests in the
Apartment Complex.
In addition, due to BUFNY's breach of fiduciary duties and breaches of the
Partnership Agreement, the Special Limited Partner exercised its rights under
the Partnership Agreement to remove BUFNY as Washington's general partner and to
substitute itself as the new replacement general partner, effective April 26,
2004.
Item 4. Submission of Matters to a Vote of Security Holders
None
7
PART II
Item 5. Market for the Registrant's Common Equity, Related Security Holder
Matters And Issuer Purchases of Equity Securities
As of March 31, 2005, the Partnership had issued and has outstanding 72,896
Limited Partnership Interests, each representing a $1,000 capital contribution
to the Partnership, or an aggregate capital contribution of $72,896,000. All of
the issued and outstanding Limited Partnership Interests have been issued to
Freedom Assignor Inc. (the "Assignor Limited Partner"), which has in turn issued
72,896 BACs to the purchasers thereof for an aggregate purchase price of
$72,896,000. Each BAC represents all of the economic and virtually all of the
ownership rights attributable to a Limited Partnership Interest held by the
Assignor Limited Partner. BACs may be converted into Limited Partnership
Interests at no cost to the holder (other than the payment of transfer costs not
to exceed $100), but Limited Partnership Interests so acquired are not
thereafter convertible into BACs. As of May 5, 2005, the Partnership has 4,146
registered holders of an aggregate of 72,896 BACs.
Neither the BACs nor the Limited Partnership Interests are traded on any
established trading market. The Partnership does not intend to include the BACs
for quotation on NASDAQ or for listing on any national or regional stock
exchange or any other established securities market. The Revenue Act of 1987
contained provisions which have an adverse impact on investors in "publicly
traded partnerships." Accordingly, the General Partners have imposed
restrictions limiting the transferability of the BACs and the Limited
Partnership Interests in secondary market transactions. These restrictions
should prevent a public trading market from developing that would adversely
affect the ability of an investor to liquidate his or her investment quickly. It
is expected that such procedures will remain in effect until such time, if ever,
as further revision of the Revenue Act of 1987 may permit the Partnership to
lessen the scope of the restrictions.
All of the Partnership's general partnership interests, representing an
aggregate capital contribution of $2,000, are held by the two General Partners.
There are no material restrictions in the Partnership Agreement on the ability
of the Partnership to make distributions. The Partnership has made no
distributions to the BACs holders as of March 31, 2005. The Partnership does not
anticipate providing cash distributions to its BACs holders other than from net
refinancing or sales proceeds.
Item 6. Selected Financial Data.
The information set forth below presents selected financial data of the
Partnership. Additional financial information is set forth in the audited
consolidated financial statements in Item 8 hereof.
For the Year Ended March 31,
-----------------------------------------------------------------------------
OPERATIONS 2005 2004 2003 2002 2001
- --------------------------------- ------------ ------------ ------------ ------------ ------------
Revenues $ 16,579,681 $ 16,373,601 $ 15,732,226 $ 15,417,026 $ 14,946,838
Expenses (20,842,844) (20,165,525) (19,523,423) (19,207,657) (19,238,172)
Loss on impairment of assets 0 0 0 0 (2,065,000)
------------ ------------ ------------ ------------ ------------
Loss before minority interest (4,263,163) (3,791,924) (3,791,197) (3,790,631) (6,356,334)
Minority interest 43,525 36,960 37,450 39,461 48,280
------------ ------------ ------------ ------------ ------------
Net loss $ (4,219,638) $ (3,754,964) $ (3,753,747) $ (3,751,170) $ (6,308,054)
============ ============ ============ ============ ============
Per BAC:
Net loss $ (57.31) $ (51.00) $ (50.98) $ (50.94) $ (85.67)
============ ============ ============ ============ ============
For the Year Ended March 31,
-----------------------------------------------------------------------------
FINANCIAL POSITION 2005 2004 2003 2002 2001
- --------------------------------- ------------ ------------ ------------ ------------ ------------
Total assets $ 85,974,318 $ 89,939,866 $ 93,667,833 $ 97,175,105 $100,937,211
============ ============ ============ ============ ============
Mortgage notes payable $ 65,119,347 $ 66,285,158 $ 67,366,819 $ 68,063,227 $ 69,021,892
============ ============ ============ ============ ============
Total liabilities $ 80,056,413 $ 79,841,161 $ 79,736,876 $ 79,553,880 $ 79,602,583
============ ============ ============ ============ ============
Total partners' (deficit) capital $ (2,122,902) $ 2,096,736 $ 5,851,700 $ 9,605,982 $ 13,357,152
============ ============ ============ ============ ============
8
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Liquidity and Capital Resources
- -------------------------------
General
- -------
During the year ended March 31, 2005, the primary sources of liquidity included
working capital, interest earned on working capital, and distributions received
from the Local Partnerships. None of these sources generated substantial amounts
of funds.
Working capital of approximately $81,000, exclusive of Local Partnerships'
working capital, remains as of March 31, 2005. It is used to pay operating
expenses of the Partnership, including Partnership management fees payable to
the General Partners and advances to Local Partnerships if warranted.
During the fiscal year ended March 31, 2005, cash and cash equivalents of the
Partnership and its forty-two Local Partnerships decreased approximately
$342,000 due to capital improvements ($568,000), a net decrease in due to local
general partners and affiliates relating to investing and finance activities
($322,000) and net repayments of mortgage loans ($1,166,000) which exceeded cash
provided by operating activities ($1,626,000), an increase in deferred costs
($5,000) and an increase in capitalization of consolidated subsidiaries
attributable to minority interest ($82,000). Included in the adjustments to
reconcile the net loss to cash provided by operating activities is depreciation
and amortization ($5,074,000).
During the years ended March 31, 2005 ("Fiscal Year 2005"), March 31, 2004
("Fiscal Year 2004"), and March 31, 2003 ("Fiscal Year 2003") the amounts
received from the Local Partnerships were $138,247, $15,544 and $54,651,
respectively. Cash distributions from Local Partnerships are not expected to
reach a level sufficient to permit cash distributions to BACs holders. These
distributions, as well as the working capital reserves referred to in the
paragraph above, will be used to meet the operating expenses of the Partnership.
Total expenses for the years ended March 31, 2005 and 2004, excluding
depreciation and amortization, interest and general and administrative - related
parties, totaled $9,696,515 and $9,006,457. Accounts payable and other
liabilities totaled $2,455,386 and $1,771,574, which is comprised of the
following amounts:
March 31,
-------------------------------
2005 2004
----------- ------------
Accounts payable $ 234,182 $ (291,828)
Accrued interest payable 1,484,260 1,336,537
Security deposits payable 736,944 726,865
----------- -----------
Total accounts payable $ 2,455,386 $ 1,771,574
=========== ===========
Accounts payable are short term liabilities which are expected to be paid from
operating cash flows, working capital balances at the Local Partnership level,
local general partner advances and in certain circumstances advances from the
Partnership. Because the provisions of the secondary loans defer the payment of
accrued interest of the respective Local Partnerships, the Partnership believes
it (and the applicable Local Partnerships) has sufficient liquidity and ability
to generate cash and to meet existing and known or reasonably likely future cash
requirements over both the short and long term.
As indicated in the above table, accrued interest payable comprised
approximately 60% and 75% of the total accounts payable and other liabilities
amount at March 31, 2005 and 2004, respectively. Such amount represents the
accrued interest on all mortgage loans, which include primary and secondary
loans. Certain secondary loans have provisions such that interest is accrued but
not payable until a future date. The Partnership anticipates the payment of
accrued interest on the secondary loans (which make up the majority of the
accrued interest payable amount indicated in the above table and which have been
accumulating since the Partnership's investment in the respective Local
Partnership) will be made from future refinancings or sales proceeds of the
respective Local Partnerships. In addition, each Local Partnership's mortgage
notes are collateralized by the land and buildings of the respective Local
Partnership, and are without further recourse to the Partnership.
Security deposits payable are offset by cash held in security deposits, which
are included in "Cash held in escrow" on the financial statements.
Partnership management fees owed to General Partners amounting to approximately
$6,884,000 and $6,208,000 were accrued and unpaid as of March 31, 2005 and 2004,
respectively. Without the General Partners continued accrual without payment,
the Partnership will not be in a position to meet its obligations. The General
Partners have continued allowing the accrual without payment of these amounts,
but are under no obligation to continue to do so. The Partnership is dependent
upon the support of the General Partners and certain of its affiliates in order
to meet its obligations at the Partnership level. The General Partners and these
affiliates have agreed to continue such support for the foreseeable future.
Effective January 1, 1999 the State of California requires owners of a property
benefiting from FHA insured mortgages under Section 236 or 221(a)(3) to provide
a nine month notice of contract termination or prepayment of the FHA insured
loan. In addition, with respect to the Partnership's California investments, the
owner must offer the properties for sale to those entities who agree to maintain
the property as affordable housing.
On October 20, 1999 President Clinton signed the Fiscal Year 2000 VA, the HUD
Independent Agencies Appropriations Act (the "Appropriations Act"). The
Appropriations Act contains revisions to the HUD Mark-to-Market Program and
other HUD programs concerning the preservation of the HUD housing stock. On
December 29, 1999 HUD issued Notice H99-36 addressing "Project Based Section 8
Contracts Expiring in Fiscal Year 2000," reflecting the changes in the
Appropriations Act and superceding earlier HUD Notices 98-34, 99-08, 99-15,
99-21 and 99-32. Notice 99-36 clarifies many of the earlier uncertainties with
respect to the earlier HUD Section 8 Mark-to-Market Programs and continued the
Mark-to-Market Program which allows owners with Section 8 contracts to increase
the rents to market levels where contract rents are currently below market. As
9
of March 31, 2005, none of the Local Partnerships have opted to enter the
Mark-to-Market Program and therefore this has no impact on the Partnership.
Except as described above, management is not aware of any trends or events,
commitments or uncertainties, which have not otherwise been disclosed, that will
or are likely to impact liquidity in a material way. Management believes the
only impact would be from laws that have not yet been adopted. The portfolio is
diversified by the location of the Properties around the United States so that
if one area of the country is experiencing downturns in the economy, the
remaining Properties in the portfolio may not be affected. However, the
geographic diversification of the portfolio may not protect against a general
downturn in the national economy.
Tabular Disclosure of Contractual Obligations
- ---------------------------------------------
The following table summarizes the Partnership's commitments as of March 31,
2005 to make future payments under its debt agreements and other contractual
obligations.
Less than 1 - 3 3 -5 More than
Total 1 Year Years Years 5 Years
------------ ------------- ------------ ------------ ------------
Mortgage notes payable (a) $ 65,119,347 $ 1,232,658 $ 21,677,629 $ 1,808,003 $ 40,401,057
(a) The mortgage notes are payable in aggregate monthly installments of
approximately $438,000 including principal and interest with rates varying
from 0% to 13.50% per annum and have maturity dates ranging from 2005
through 2042. The loans are collateralized by the land and buildings of the
subsidiary partnerships, the assignment of certain subsidiary partnerships'
rents, leases, and replacement reserves, and are without further recourse.
Off Balance Sheet Arrangements
- ------------------------------
The Partnership has no off-balance sheet arrangements.
Critical Accounting Estimates
- -----------------------------
In preparing the consolidated financial statements, management has made
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting periods. Actual results could differ
from those estimates. Set forth below is a summary of the accounting policies
that management believes are critical to the preparation of the consolidated
financial statements.
a) Property and Equipment/Valuation of Long-Lived Assets
Property and equipment to be held and used are carried at cost which includes
the purchase price, acquisition fees and expenses, and any other costs incurred
in acquiring the properties. The cost of property and equipment is depreciated
over their estimated useful lives using accelerated and straight-line methods.
Expenditures for repairs and maintenance are charged to expense as incurred;
major renewals and betterments are capitalized. At the time property and
equipment are retired or otherwise disposed of, the cost and accumulated
depreciation are eliminated from the assets and accumulated depreciation
accounts and the profit or loss on such disposition is reflected in earnings.
The Partnership complies with Statement of Financial Accounting Standards (SFAS)
No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets". A loss
on impairment of assets is recorded when management estimates amounts
recoverable through future operations and sale of the property on an
undiscounted basis are below depreciated cost. At that time property investments
themselves are reduced to estimated fair value (generally using discounted cash
flows) when the property is considered to be impaired and the depreciated cost
exceeds estimated fair value.
Through March 31, 2005, the Partnership has not recorded any loss on impairment
of assets or reductions to estimated fair value.
b) Revenue Recognition
Rental income is earned under standard residential operating leases and is
typically due the first day of each month, but can vary by property due to the
terms of the tenant leases. Rental income is recognized when earned and charged
to tenants' accounts receivable if not received by the due date. Rental payments
received in advance of the due date are deferred until earned.
Rental subsidies are recognized as rental income during the month in which it is
earned. The Partnership received rental subsidies which amounted to
approximately $3,488,027, $3,326,225 and $3,178,000 for the years ended March
31, 2005, 2004 and 2003, respectively. The related rental subsidy programs have
expiration dates that terminate upon total disbursement of the assistance
obligation.
Other revenues are recorded when earned and consist of the following items:
Interest income earned on cash and cash equivalent balances and cash held in
escrow balances, income from forfeited security deposits, late charges, laundry
and vending income and other rental related items.
Other revenues include the following amounts at both the Partnership and Local
Partnership level:
March 31,
------------------------------------------
2005 2004 2003
---------- ---------- ----------
Interest $ 146,855 $ 142,223 $ 259,247
Other 1,401,069 1,434,220 1,190,255
---------- ---------- ----------
Total other revenue $1,547,924 $1,576,443 $1,449,502
========== ========== ==========
10
c) Related Parties
Under the terms of the Partnership Agreement , the General Partners and their
affiliates are entitled to receive compensation from the Partnership in
consideration of certain services rendered to the Partnership by such parties.
In addition, the General Partners collectively hold a 1% interest in all
profits, losses and distributions attributable to operations and a subordinated
15% interest in such items attributable to sales and refinancings. Certain
directors and officers of the General Partners receive compensation from the
General Partner and their affiliates for services performed for various
affiliated entities which may include services performed for the Partnership.
The maximum annual partnership management fee paid to the General Partner is
0.5% of invested assets. See Note 7 to the Financial Statements in Item 8, which
is incorporated herein by reference.
New Accounting Pronouncements
- -----------------------------
On December 16, 2004, the FASB issued Statement of Financial Accounting
Standards ("SFAS") No. 153, Exchanges of Nonmonetary Assets - An Amendment of
APB Opinion NO. 29 ("SFAS No. 153"). The Amendments made by SFAS No. 153 are
based on the principle that exchanges of nonmonetary assets should be measured
based on the fair value of the assets exchanged. Further, the amendments
eliminate the narrow exception for nonmonetary exchanges of similar productive
assets and replace it with a broader exception for exchanges of nonmonetary
assets that do not have "commercial substance." SFAS No. 153 is effective for
nonmonetary asset exchanges occurring in fiscal periods beginning after June 15,
2005. The Partnership does not believe that the adoption of SFAS No. 153 on June
15, 2005 will have a material effect on the Partnership's consolidated financial
statements.
In January 2003, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46").
FIN 46 is applicable immediately for variable interest entities created after
January 31, 2003. For variable interest entities created before February 1,
2003, the provisions of FIN 46 were originally applicable no later than December
15, 2003. The Partnership has not created any variable interest entities after
January 31, 2003. In December 2003 the FASB redeliberated certain proposed
modifications and revised FIN 46 ("FIN 46 (R)"). The revised provisions are
applicable no later than the first reporting period ending after March 15, 2004.
The adoption of FIN 46 (R) does not have a material impact on the Partnership's
financial reporting and disclosures.
In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." SFAS No. 150
changes the accounting for certain financial instruments that, under previous
guidance, could be classified as equity or "mezzanine" equity, by now requiring
those instruments to be classified as liabilities (or assets in some
circumstances) in the Consolidated Balance Sheets. Further, SFAS No. 150
requires disclosure regarding the terms of those instruments and settlement
alternatives. The guidance in SFAS No. 150 generally was effective for all
financial instruments entered into or modified after May 31, 2003, and was
otherwise effective at the beginning of the first interim period beginning after
June 15, 2003. The Partnership has evaluated SFAS No. 150 and determined that it
does not have an impact on the Partnership's financial reporting and
disclosures.
Results of Operations
- ---------------------
Property and equipment to be held and used are carried at cost which includes
the purchase price, acquisition fees and expenses, construction period interest
and any other costs incurred in acquiring the Properties. The cost of property
and equipment is depreciated over their estimated useful lives using accelerated
and straight-line methods. Expenditures for repairs and maintenance are charged
to expense as incurred; major renewals and betterments are capitalized. At the
time property and equipment are retired or otherwise disposed of, the cost and
accumulated depreciation are eliminated from the assets and accumulated
depreciation accounts and the profit or loss on such disposition is reflected in
earnings. A loss on impairment of assets is recorded when management estimates
amounts recoverable through future operations and sale of the property on an
undiscounted basis are below depreciated cost. At that time property investments
themselves are reduced to estimated fair value (generally using discounted
estimated future cash flows) when the property is considered to be impaired and
the carrying value exceeds estimated fair value.
During the years ended March 31, 2005, 2004 and 2003, the Partnership did not
record a loss on impairment of assets. Through March 31, 2005, the Partnership
has recorded an aggregate of $3,665,000 of losses on impairment of assets.
The Partnership's primary source of income continues to be rental income with
the corresponding expenses being divided among operations, depreciation, and
mortgage interest.
2005 vs. 2004
- -------------
Rental income increased approximately 2% for the year ended March 31, 2005 as
compared to 2004, primarily due to rental rate increases.
Total expenses, excluding real estate taxes and general and administrative,
remained fairly consistent with an increase of less than 1% for the year ended
March 31, 2005, as compared to 2004.
Real estate taxes increased approximately $108,000 for the year ended March 31,
2005 as compared to 2004, primarily due to an increase in state property taxes
in 2004 at one Local Partnership and an increase in the assessment value due to
a property revaluation at another Local Partnership.
General and administrative increased approximately $411,000 for the year ended
March 31, 2005 as compared to 2004, primarily due to the recognized loss on the
write-off of an amount due from the former Local General Partner at one Local
Partnership, the payment of an incentive supervisory management fees to the
Local General Partner at a second Local Partnership and an increase in legal
fees relating to the Washington Brooklyn legal proceeding at the Partnership
level (Item 3).
11
2004 vs. 2003
- -------------
Rental income increased approximately 4% for the year ended March 31, 2004 as
compared to 2003, primarily due to rental rate increases.
Total expenses, excluding repairs and maintenance, remained fairly consistent
with an increase of approximately 2% for the year ended March 31, 2004 as
compared to 2003.
Repairs and maintenance increased approximately $298,000 for the year ended
March 31, 2004 as compared to 2003, primarily due to exterior painting and the
replacement of awnings at one Local Partnership and the replacement of carpets,
interior painting and fire damage repairs at a second Local Partnership.
Other
- -----
As of December 31, 2002, the Tax Credit Period for all of the Properties has
expired, although each Local Partnership must continue to comply with the Tax
Credit requirements until the end of the Compliance Period in order to avoid
recapture of the Tax Credits. During the years ended March 31, 2003, the Housing
Tax Credits received by the Partnership for income tax purposes totaled
$1,710,233. The Compliance Period will end between December 31, 2004 and
December 31, 2007 with respect to the Properties depending upon when the Tax
Credit Period commenced.
The Partnership's investments as limited partners in the Local Partnerships are
subject to the risks incident to the management and ownership of improved real
estate. The Partnership's investments also could be adversely affected by poor
economic conditions generally, which could increase vacancy levels, rental
payment defaults and operating expenses, any or all of which could threaten the
financial viability of one or more of the Local Partnerships.
There are also substantial risks associated with the operation of Apartment
Complexes receiving government assistance. These include governmental
regulations concerning tenant eligibility, which may make it more difficult to
rent apartments in the complexes; difficulties in obtaining government approval
for rent increases; limitations on the percentage of income which low and
moderate income tenants may pay as rent; the possibility that Congress may not
appropriate funds to enable HUD to make the rental assistance payments it has
contracted to make; and that when the rental assistance contracts expire there
may not be market demand for apartments at full market rents in a Local
Partnership's Apartment Complex.
The Local Partnerships are impacted by inflation in several ways. Inflation
generally allows for increases in rental rates to reflect the impact of higher
operating and replacement costs. Inflation also affects the Local Partnerships
adversely by increasing operating costs as a result of higher costs of such
items as fuel, utilities and labor. However, continued inflation may result in
appreciated values of the Local Partnerships' Apartment Complexes over a period
of time as rental revenues and replacement costs continue to increase.
The Partnership does not anticipate that it will be in a position to make cash
distributions at any time prior to the disposition of the Properties. If
distributions of operating cash flow are made, it is expected that they will be
limited. As of March 31, 2005, no such distributions have been made.
Item 7a. Quantitative and Qualitative Disclosures about Market Risk
The Partnership has mortgage notes that are payable in aggregate monthly
installments including principal and interest at rates varying from 0% to 13.50%
per annum. The Partnership does not believe there is a material risk associated
with the various interest rates associated with the mortgage notes as the
majority of the Local Partnership mortgage notes have fixed rates. The
Partnership currently discloses in Item 8, Note 3 of the Notes to Consolidated
Financial Statements, the fair value of the mortgage notes payable. The
Partnership does not have any other market sensitive instruments.
12
Item 8. Financial Statements and Supplementary Data
Sequential
Page
----------
(a) 1. Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm 14
Consolidated Balance Sheets as of March 31, 2005 and 2004 107
Consolidated Statements of Operations for the years ended March 31,
2005, 2004 and 2003 108
Consolidated Statements of Changes in Partners' Capital (Deficit) for
the years ended March 31, 2005, 2004 and 2003 109
Consolidated Statements of Cash Flows for the years ended March 31,
2005, 2004 and 2003 110
Notes to Consolidated Financial Statements 111
13
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
-------------------------------------------------------
TO THE PARTNERS OF FREEDOM TAX CREDIT PLUS L.P.
We have audited the accompanying consolidated balance sheets of FREEDOM
TAX CREDIT PLUS L.P. AND SUBSIDIARIES as of March 31, 2005 and 2004, and the
related consolidated statements of operations, changes in partners' capital
(deficit) and cash flows for each of the years in the three-year period ended
March 31, 2005. These consolidated financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits. We did not audit the financial
statements of forty-two, forty-two and forty subsidiary partnerships, whose
losses aggregated $3,170,560, $2,809,693 and $3,382,460 for the years ended
March 31, 2005, 2004 and 2003, respectively, and whose assets constituted 99% of
consolidated assets at March 31, 2005 and 2004. Those statements were audited by
other auditors whose reports have been furnished to us, and our opinion, insofar
as it relates to the amounts included for these subsidiary partnerships, is
based solely on the reports of the other auditors.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of FREEDOM TAX CREDIT
PLUS L.P. AND SUBSIDIARIES as of March 31, 2005 and 2004, and the results of
their operations and their cash flows for each of the years in the three-year
period ended March 31, 2005, in conformity with accounting principles generally
accepted in the United States of America.
/s/ Friedman LLP
New York, New York
June 10, 2005
14
[Letterhead of McKonly & Asbury LLP]
INDEPENDENT AUDITOR'S REPORT
The Partners of
Parkside Townhomes Associates
Lancaster, Pennsylvania
We have audited the accompanying Balance Sheets of Parkside Townhomes Associates
(a limited partnership), as of December 31, 2004 and 2003, and the related
statements of Income, Partners' Equity (Deficit), and Cash Flows, for the years
then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America and standards applicable to financial audits
contained in GOVERNMENT AUDITING STANDARDS issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Parkside Townhomes Associates
at December 31, 2004 and 2003, and the results of its operations, and its cash
flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
In accordance with GOVERNMENT AUDITING STANDARDS and Pennsylvania Housing
Finance Agency's Financial Reporting Manual, we have also issued a report dated
February 4, 2005, on our consideration of Parkside Townhomes Associates'
internal control over financial reporting and our tests of its compliance with
certain provisions of laws, regulations, contracts and grant agreements, and
other matters. The purpose of that report is to describe the scope of our
testing of internal control over financial reporting and compliance and the
results of that testing and not to provide an opinion on the internal control
over financial reporting or on compliance. That report is an integral part of an
audit performed in accordance with GOVERNMENT AUDITING STANDARDS and should be
considered in assessing the results of our audits.
/s/ McKonly & Asbury LLP
Harrisburg, Pennsylvania
February 4, 2005
15
[Letterhead of McKonly & Asbury LLP]
INDEPENDENT AUDITOR'S REPORT
The Partners of
Parkside Townhomes Associates Pennsylvania Housing Finance Agency
Lancaster, Pennsylvania Harrisburg, Pennsylvania
We have audited the accompanying balance sheets of Parkside Townhomes Associates
(a limited partnership), PHFA Project No. 0 - 90 as of December 31, 2003 and
2002, and the related statements of profit and loss, partners' equity, and cash
flows, for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America and Government Auditing Standards issued by the
Comptroller General of the United States. Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Parkside Townhomes Associates
at December 31, 2003 and 2002, and its profit and loss, partners' equity, and
cash flows for the years then ended, in conformity with accounting principles
generally accepted in the United States of America.
In accordance with Government Auditing Standards and Pennsylvania Housing
Finance Agency's Financial Reporting Manual, we have also issued our report
dated January 27, 2004 on our consideration of Parkside Townhomes Associates'
internal control over financial reporting and our tests of its compliance with
certain provisions of laws, PHFA regulations, contracts and grants and have
rendered our reports thereon on pages 25 and 26. Those reports are an integral
part of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audits.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information on pages 18
through 24 is presented for the purpose of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ McKonly & Asbury LLP
Harrisburg, Pennsylvania
January 27, 2004
16
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Twin Trees Apartments, A Limited Partnership:
We have audited the accompanying balance sheets of Twin Trees Apartments, A
Limited Partnership (the Partnership) as of December 31, 2004 and 2003, and the
related statements of loss, partners' capital, and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Twin Trees Apartments, A
Limited Partnership as of December 31, 2004 and 2003, and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 4, 2005
17
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Twin Trees Apartments, A Limited Partnership:
We have audited the accompanying balance sheets of Twin Trees Apartments, A
Limited Partnership (the Partnership) as of December 31, 2003 and 2002, and the
related statements of loss, partners' capital, and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Twin Trees Apartments, A
Limited Partnership as of December 31, 2003 and 2002, and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 6, 2004
18
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Bennion Park Apartments, A Limited Partnership:
We have audited the accompanying balance sheets of Bennion Park Apartments, A
Limited Partnership as of December 31, 2004 and 2003, and the related statements
of loss, partners' capital, and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bennion Park Apartments, A
Limited Partnership as of December 31, 2004 and 2003, and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 4, 2005
19
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Bennion Park Apartments, A Limited Partnership:
We have audited the accompanying balance sheets of Bennion Park Apartments, A
Limited Partnership as of December 31, 2003 and 2002 and the related statements
of loss, partners' capital, and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bennion Park Apartments, A
Limited Partnership as of December 31, 2003 and 2002 and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 6, 2004
20
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Hunters Chase Apartments,
A Limited Partnership:
We have audited the accompanying balance sheets of Hunters Chase Apartments, A
Limited Partnership as of December 31, 2004 and 2003, and the related statements
of loss, partners' capital (deficit), and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
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
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Hunters Chase Apartments, A
Limited Partnership as of December 31, 2004 and 2003, and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 4, 2005
21
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Hunters Chase Apartments, A Limited Partnership:
We have audited the accompanying balance sheets of Hunters Chase Apartments, A
Limited Partnership as of December 31, 2003 and 2002 and the related statements
of loss, partners' capital (deficit), and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
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
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Hunters Chase Apartments, A
Limited Partnership as of December 31, 2003 and 2002 and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 6, 2004
22
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Wilshire Apartments, A Limited Partnership:
We have audited the accompanying balance sheets of Wilshire Apartments, A
Limited Partnership as of December 31, 2004 and 2003, and the related statements
of loss, partners' deficit, and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Wilshire Apartments, A Limited
Partnership as of December 31, 2004 and 2003, and the results of its operations
and its cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 4, 2005
23
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Wilshire Apartments, A Limited Partnership:
We have audited the accompanying balance sheets of Wilshire Apartments, A
Limited Partnership as of December 31, 2003 and 2002, and the related statements
of loss, partners' capital, and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Wilshire Apartments, A Limited
Partnership as of December 31, 2003 and 2002, and the results of its operations
and its cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 6, 2004
24
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Bethel Park Apartments, A Limited Partnership:
We have audited the accompanying balance sheets of Bethel Park Apartments, A
Limited Partnership (the Partnership) as of December 31, 2004 and 2003, and the
related statements of loss, partners' capital (deficit), and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
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
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bethel Park Apartments, A
Limited Partnership as of December 31, 2004 and 2003, and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 4, 2005
25
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Bethel Park Apartments, A Limited Partnership:
We have audited the accompanying balance sheets of Bethel Park Apartments, A
Limited Partnership (the Partnership) as of December 31, 2003 and 2002, and the
related statements of loss, partners' capital (deficit), and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
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
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bethel Park Apartments, A
Limited Partnership as of December 31, 2003 and 2002, and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 6, 2004
26
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Zebulon Park Apartments, A Limited Partnership:
We have audited the accompanying balance sheet of Zebulon Park Apartments, A
Limited Partnership (the Partnership) as of December 31, 2004, and 2003, and the
related statements of loss, partners' capital (deficit), and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
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
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Zebulon Park Apartments, A
Limited Partnership as of December 31, 2004 and 2003, and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 4, 2005
27
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Zebulon Park Apartments, A Limited Partnership:
We have audited the accompanying balance sheet of Zebulon Park Apartments, A
Limited Partnership (the Partnership) as of December 31, 2003, and 2002, and the
related statements of loss, partners' capital, and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Zebulon Park Apartments, A
Limited Partnership as of December 31, 2003 and 2002, and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 6, 2004
28
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Tivoli Place Apartments, A Limited Partnership:
We have audited the accompanying balance sheets of Tivoli Place Apartments, A
Limited Partnership (the Partnership) as of December 31, 2004 and 2003 and the
related statements of loss, partners' capital, and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Tivoli Place Apartments, A
Limited Partnership as of December 31, 2004and 2003 and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 4, 2005
29
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Tivoli Place Apartments, A Limited Partnership:
We have audited the accompanying balance sheets of Tivoli Place Apartments, A
Limited Partnership (the Partnership) as of December 31, 2003, and 2002, and the
related statements of loss, partners' capital, and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Tivoli Place Apartments, A
Limited Partnership as of December 31, 2003 and 2002, and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 6, 2004
30
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Northwood Apartments of Georgia,
A Limited Partnership:
We have audited the accompanying balance sheets of Northwood Apartments of
Georgia, A Limited Partnership as of December 31, 2004 and 2003, and the related
statements of operations, partners' capital, and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Northwood Apartments of
Georgia, A Limited Partnership as of December 31, 2004 and 2003, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 4, 2005
31
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Northwood Apartments of Georgia,
A Limited Partnership:
We have audited the accompanying balance sheets of Northwood Apartments of
Georgia, A Limited Partnership as of December 31, 2003 and 2002 and the related
statements of loss, partners' capital, and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Northwood Apartments of
Georgia, A Limited Partnership as of December 31, 2003 and 2002, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 6, 2004
32
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Oxford Trace Apartments,
A Limited Partnership:
We have audited the accompanying balance sheets of Oxford Trace Apartments, A
Limited Partnership (the Partnership) as of December 31, 2004 and 2003 and the
related statements of loss, partners' capital (deficit), and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
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
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Oxford Trace Apartments, A
Limited Partnership as of December 31, 2004 and 2003, and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 4, 2005
33
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Oxford Trace Apartments,
A Limited Partnership:
We have audited the accompanying balance sheets of Oxford Trace Apartments, A
Limited Partnership (the Partnership) as of December 31, 2003 and 2002 and the
related statements of loss, partners' capital (deficit), and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
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
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Oxford Trace Apartments, A
Limited Partnership as of December 31, 2003 and 2002, and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 6, 2004
34
INDEPENDENT AUDITORS' REPORT
To the Partners of
Ivanhoe Apartments Limited Partnership
We have audited the accompanying balance sheet of Ivanhoe Apartments Limited
Partnership (a Limited Partnership) as of December 31, 2004 and 2003 and the
related statements of operations, changes in partners' capital and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Ivanhoe Apartments Limited
Partnership at December 31, 2004 and 2003, and the results of its operations and
cash flows for the years then ended, in conformity with accounting principles
generally accepted in the United States of America.
/s/ Lake, Hill & Myers
Salt Lake City, Utah
January 13, 2005
35
INDEPENDENT AUDITORS' REPORT
To the Partners of
Ivanhoe Apartments Limited Partnership
We have audited the accompanying balance sheet of Ivanhoe Apartments Limited
Partnership (a Limited Partnership) as of December 31, 2003 and 2002 and the
related statements of operations, changes in partners' capital and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Ivanhoe Apartments Limited
Partnership at December 31, 2003 and 2002, and the results of its operations and
cash flows for the years then ended, in conformity with accounting principles
generally accepted in the United States of America.
/s/ Lake, Hill & Myers
Salt Lake City, Utah
January 13, 2004
36
[Letterhead of Koch Group & Company, LLP]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Washington Brooklyn Limited Partnership
We have audited the accompanying balance sheet of Washington Brooklyn Limited
Partnership (A State of Delaware Limited Partnership) as of December 31, 2004,
and the related statements of operations, partners' equity and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain a reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to in the first paragraph,
present fairly in all material respects, the financial position of Washington
Brooklyn Limited Partnership as of December 31, 2004, and the results of its
operations and its cash flows for the year then ended, in conformity with
accounting principles generally accepted in the United States of America.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The accompanying information in Schedule I is
presented for purposes of additional analysis and is not a required part of the
basic financial statement. Such information has been subjected to the procedures
applied in the audits of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the financial statements
taken as a whole.
/s/ Koch Group & Company, LLP
Certified Public Accountants
New York, New York
February 23, 2005
37
[Letterhead of AGBIMSON & CO., PLLC]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Washington Brooklyn Limited Partnership
(A State of Delaware Limited Partnership)
We have audited the accompanying balance sheet of Washington Brooklyn Limited
Partnership (A State of Delaware Limited Partnership) as of December 31, 2003,
and the related statements of operations, partners' equity and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted the audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain a reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to in the first paragraph,
present fairly in all material respects, the financial position of Washington
Brooklyn Limited Partnership as of December 31, 2003, and the results of its
operations and its cash flows for the year then ended, in conformity with
accounting principles generally accepted in the United States of America.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplementary information in Schedule I is
presented for purposes of additional analysis and is not a required part of the
basic financial statement. Such information has been subjected to the procedures
applied in the audits of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the financial statements
taken as a whole.
/s/ AGBIMSON & CO., PLLC
Rockville Centre, New York
March 31, 2004
38
[Letterhead of Richard J. Klinkowitz]
To the Partners C-H DEVELOPMENT GROUP ASSOCIATES (A LIMITED PARTNERSHIP) 625
Madison Avenue New York, New York 10022-1801
Gentlemen:
I have audited the accompanying balance sheet of C-H DEVELOPMENT GROUP
ASSOCIATES (a New York Limited Partnership) as of December 31, 2004 and the
related statement of operations, partners' equity and cash flows for the year
then ended. These financial statements are the responsibility of the
Partnership's management. My responsibility is to express an opinion on these
financial statements based on the audit.
I conducted the audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain a reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that the audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of C-H DEVELOPMENT GROUP ASSOCIATES as
of December 31, 2004 and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.
Respectfully submitted,
/s/ Richard J. Klinkowitz
Far Rockaway, New York
February 11, 2005
39
[Letterhead of Richard J. Klinkowitz]
To the Partners C-H DEVELOPMENT GROUP ASSOCIATES (A LIMITED PARTNERSHIP) 625
Madison Avenue New York, New York 10022
Gentlemen:
I have audited the accompanying balance sheet of C-H DEVELOPMENT GROUP
ASSOCIATES (a New York Limited Partnership) as of December 31, 2003 and the
related statement of operations, partners' equity and cash flows for the year
then ended. These financial statements are the responsibility of the
Partnership's management. My responsibility is to express an opinion on these
financial statements based on the audit.
I conducted the audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain a reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that the audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of C-H DEVELOPMENT GROUP ASSOCIATES as
of December 31, 2003 and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.
Respectfully submitted,
/s/ Richard J. Klinkowitz
Far Rockaway, New York
February 18, 2004
40
[Letterhead of Richard J. Klinkowitz]
To the Partners C-H DEVELOPMENT GROUP ASSOCIATES (A LIMITED PARTNERSHIP) 625
Madison Avenue New York, New York 10022
Gentlemen:
I have audited the accompanying balance sheet of C-H DEVELOPMENT GROUP
ASSOCIATES (a New York Limited Partnership) as of December 31, 2002 and the
related statement of operations, partners' equity and cash flows for the year
then ended. These financial statements are the responsibility of the
Partnership's management. My responsibility is to express an opinion on these
financial statements based on the audit.
I conducted the audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain a reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that the audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of C-H DEVELOPMENT GROUP ASSOCIATES as
of December 31, 2002 and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.
Respectfully submitted,
/s/ Richard J. Klinkowitz
Far Rockaway, New York
February 22, 2003
41
[Letterhead of Reznick Group, P.C.]
INDEPENDENT AUDITORS'REPORT
To the Partners
Davidson Court, L.P.
We have audited the accompanying balance sheets of Davidson Court, L.P. as of
December 31, 2004 and 2003, and the related statements of income, partners'
equity and cash flows for the years then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our 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 provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Davidson Court, L.P., as of
December 31, 2004 and 2003, and the results of its operations, the changes in
partners' equity and its cash flows for the years then ended, in conformity with
accounting principles generally accepted in the United States of America.
/s/ Reznick Group, P.C.
Bethesda, Maryland
February 1, 2005
42
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS'REPORT
To the Partners
Davidson Court, L.P.
We have audited the accompanying balance sheets of Davidson Court, L.P. as of
December 31, 2003 and 2002, and the related statements of income, partners'
equity (deficit) and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Davidson Court, L.P., as of
December 31, 2003 and 2002, and the results of its operations, the changes in
partners' equity (deficit) and its cash flows for the years then ended, in
conformity with accounting principles generally accepted in the United States of
America.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland
January 23, 2004
43
[Letterhead of Haefele, Flanagan & Co., p.c.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Magnolia Mews Limited Partnership
Philadelphia, Pennsylvania
We have audited the accompanying balance sheet of MAGNOLIA MEWS LIMITED
PARTNERSHIP (a Pennsylvania Limited Partnership) as of December 31, 2004, and
the related statements of operations, partners' equity, and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of MAGNOLIA MEWS LIMITED
PARTNERSHIP as of December 31, 2004, and the results of its operations, changes
in partners' equity and its cash flows for the year then ended in conformity
with accounting principles generally accepted in the United States of America.
/s/ Haefele, Flanagan & Co., p.c.
Moorestown, New Jersey
February 8, 2005
44
[Letterhead of Haefele, Flanagan & Co., p.c.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Magnolia Mews Limited Partnership
Philadelphia, Pennsylvania
We have audited the accompanying balance sheet of MAGNOLIA MEWS LIMITED
PARTNERSHIP (a Pennsylvania Limited Partnership) as of December 31, 2003, and
the related statements of operations, partners' equity, and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of MAGNOLIA MEWS LIMITED
PARTNERSHIP as of December 31, 2003, and the results of its operations, changes
in partners' equity and its cash flows for the year then ended in conformity
with accounting principles generally accepted in the United States of America.
/s/ Haefele, Flanagan & Co., p.c.
Moorestown, New Jersey
February 9, 2004
45
[Letterhead of Haefele, Flanagan & Co., p.c.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Magnolia Mews Limited Partnership
Philadelphia, Pennsylvania
We have audited the accompanying balance sheet of MAGNOLIA MEWS LIMITED
PARTNERSHIP (a Pennsylvania Limited Partnership) as of December 31, 2002, and
the related statements of operations, partners' equity, and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of MAGNOLIA MEWS LIMITED
PARTNERSHIP as of December 31, 2002, and the results of its operations, changes
in partners' equity and its cash flows for the year then ended in conformity
with accounting principles generally accepted in the United States of America.
/s/ Haefele, Flanagan & Co., p.c.
Moorestown, New Jersey
February 7, 2003
46
[Letterhead of Snipes, Gower & Associates, P.A.]
To the Partners
The Oaks Village Limited Partnership
We have audited the accompanying balance sheets of The Oaks Village Limited
Partnership, RHS Project No. 38-024-561572445 as of December 31, 2004 and 2003,
and the related statements of operations, partners' equity (deficit), and cash
flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The Oaks Village Limited
Partnership, RHS Project No. 38-024-561572445 as of December 31, 2004 and 2003,
and the results of its operations, the changes in partners' equity (deficit) and
cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report
dated January 12, 2005, on our consideration of The Oaks Village Limited
Partnership's internal control over financial reporting and our tests of its
compliance with certain provisions of laws, regulations, contracts and grant
agreements and other matters. The purpose of that report is to describe the
scope of our testing of internal control over financial reporting and compliance
and the results of that testing, and not to provide an opinion on the internal
control over financial reporting or on compliance. That report is an integral
part of an audit performed in accordance with Government Auditing Standards, and
should be read in conjunction with this report in considering the results of our
audit.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental information
on page 14 is presented for purposes of additional analysis and is not a
required part of the basic financial statements of the partnership. Such
information has been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ Snipes, Gower & Assoc., P.A.
Dunn, North Carolina
January 12, 2005
47
[Letterhead of Snipes, Gower & Associates, P.A.]
To the Partners
The Oaks Village Limited Partnership
We have audited the accompanying balance sheets of The Oaks Village Limited
Partnership, RHS Project No. 38-024-561572445 as of December 31, 2003 and 2002,
and the related statements of operations, partners' equity (deficit), and cash
flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The Oaks Village Limited
Partnership, RHS Project No. 38-024-561572445 as of December 31, 2003 and 2002,
and the results of its operations, the changes in partners' equity (deficit) and
cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental information
on Page 14 is presented for purposes of additional analysis and is not a
required part of the basic financial statements of the partnership. Such
information has been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also issued a report
dated January 28, 2004 on our consideration of The Oaks Village Limited
Partnership's internal control over financial reporting and our tests of its
compliance with certain provisions of laws, regulations, contracts and grants.
That report is an integral part of an audit performed in accordance with
Government Auditing Standards, and should be read in conjunction with this
report in considering the results of our audit.
/s/ Snipes, Gower & Assoc., P.A.
Dunn, North Carolina
January 28, 2004
48
[Letterhead of Snipes, Gower & Associates, P.A.]
To the Partners
Greenfield Village Limited Partnership
We have audited the accompanying balance sheets of Greenfield Village Limited
Partnership, RHS Project No. 38-043-561614646, as of December 31, 2004 and 2003,
and the related statements of operations, partners' equity (deficit), and cash
flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Greenfield Village Limited
Partnership, RHS Project No. 38-043-561614646 as of December 31, 2004 and 2003,
and the results of its operations, the changes in partners' equity (deficit) and
its cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report
dated January 19, 2005, on our consideration of Greenfield Village Limited
Partnership's internal control over financial reporting and our tests of its
compliance with certain provisions of laws, regulations, contracts and grant
agreements and other matters. The purpose of that report is to describe the
scope of our testing of internal control over financial reporting and compliance
and the results of that testing, and not to provide an opinion on the internal
control over financial reporting or on compliance. This report is an integral
part of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplement information
on page 14 is presented for purposes of additional analysis and is not a
required part of the basic financial statements of the partnership. Such
information has been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ Snipes, Gower & Associates, P.A.
Dunn, North Carolina
January 19, 2005
49
[Letterhead of Snipes, Gower & Associates, P.A.]
To the Partners
Greenfield Village Limited Partnership
We have audited the accompanying balance sheets of Greenfield Village Limited
Partnership, RHS Project No.: 38-043-561614646, as of December 31, 2003 and
2002, and the related statements of operations, partners' equity (deficit), and
cash flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Greenfield Village Limited
Partnership, RHS Project No.: 38-043-561614646 as of December 31, 2003 and 2002,
and the results of its operations, the changes in partners' equity (deficit) and
its cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplement information
on Page 14 is presented for purposes of additional analysis and is not a
required part of the basic financial statements of the partnership. Such
information has been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also issued a report
dated January 20, 2004 on our consideration of Greenfield Village Limited
Partnership's internal control over financial reporting and our tests of its
compliance with certain provisions of laws, regulations, contracts and grants.
This report is an integral part of an audit performed in accordance with
Government Auditing Standards and should be read in conjunction with this report
in considering the results of our audit.
/s/ Snipes, Gower & Associates, P.A.
Dunn, North Carolina
January 20, 2004
50
[Letterhead of KOCH GROUP & CO., LLP]
INDEPENDENT AUDITOR'S REPORT
To the Partners
CLM Equities
We have audited the accompanying balance sheet of CLM Equities (A Limited
Partnership) as of December 31, 2004 and the related statements of operations,
changes in partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of CLM Equities (A Limited
Partnership) as of December 31, 2004 and the results of its operations, changes
in its partners' equity and its cash flows for the year then ended in conformity
with accounting principles generally accepted in the United States of America.
/s/ Koch Group & Co., LLP
Certified Public Accountants
New York, New York
January 14, 2005
51
[Letterhead of KOCH GROUP & CO., LLP]
INDEPENDENT AUDITOR'S REPORT
To the Partners
CLM Equities
We have audited the accompanying balance sheet of CLM Equities (A Limited
Partnership) as of December 31, 2003 and the related statements of operations,
changes in partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of CLM Equities (A Limited
Partnership) as of December 31, 2003 and the results of its operations, changes
in its partners' equity and its cash flows for the year then ended in conformity
with accounting principles generally accepted in the United States of America.
/s/ Koch Geringer & Co., LLP
Certified Public Accountants
New York, New York
January 23, 2004
52
[Letterhead of KOCH GERINGER & CO., LLP]
INDEPENDENT AUDITOR'S REPORT
To the Partners
CLM Equities
We have audited the accompanying balance sheet of CLM Equities (A Limited
Partnership) as of December 31, 2002 and the related statements of operations,
changes in partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of CLM Equities (A Limited
Partnership) as of December 31, 2002 and the results of its operations, changes
in its partners' equity and its cash flows for the year then ended in conformity
with accounting principles generally accepted in the United States of America.
/s/ Koch Geringer & Co., LLP
Certified Public Accountants
New York, New York
January 9, 2003
53
[Letterhead of DAUBY O'CONNOR & ZALESKI]
INDEPENDENT AUDITORS' REPORT
The Partners of
Victoria Manor Associates
(A California Limited Partnership)
We have audited the accompanying balance sheet of Victoria Manor Associates (a
California Limited Partnership) as of December 31, 2004, and the related
statement of income (loss), changes in partners' equity and cash flows for the
year then ended December 31, 2004. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Victoria Manor Associates (a
California Limited Partnership) as of December 31, 2004 and the results of its
operations and its cash flows for the year then ended December 31, 2004, in
conformity with accounting principles generally accepted in the United States of
America.
The accompanying information is presented for additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the same auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is presented fairly in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Dauby O'Connor & Zaleski, LLC
Certified Public Accountants
March 4, 2005
Carmel, Indiana
54
[Letterhead of NSBN LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Victoria Manor Associates
Los Angeles, California
We have audited the accompanying balance sheet of Victoria Manor Associates (a
California limited partnership), as of December 31, 2003, and the related
statements of partners' equity, operations and cash flows for the year then
ended. These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Victoria Manor Associates as of
December 31, 2003, and the results of its operations and its cash flows for the
year then ended in conformity with accounting principles generally accepted in
the United States of America.
/s/ NSBN LLP
March 19, 2004
Beverly Hills, California
55
[Letterhead of NSBN LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Victoria Manor Associates
Los Angeles, California
We have audited the accompanying balance sheet of Victoria Manor Associates (a
California limited partnership), as of December 31, 2002, and the related
statements of partners' equity, operations and cash flows for the year then
ended. These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Victoria Manor Associates as of
December 31, 2002, and the results of its operations and its cash flows for the
year then ended in conformity with accounting principles generally accepted in
the United States of America.
/s/ NSBN LLP
January 23, 2003
Beverly Hills, California
56
[Letterhead of LARSON, ALLEN, WEISHAIR & CO., LLP]
INDEPENDENT AUDITOR'S REPORT
Partners
Ogontz Hall Investors
Philadelphia, Pennsylvania
We have audited the accompanying balance sheets of Ogontz Hall Investors (A
Limited Partnership) as of December 31, 2004 and 2003, and the related
statements of profit and loss, partners' equity (deficit) and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit. The financial statements of Ogontz Hall
Investors as of December 31, 2003, were audited by Joyce Miller and Associates,
P.C. (whose practice became part of Larson, Allen, Weishair & Co., LLP Effective
June 1, 2004), whose report dated February 15, 2004, expressed an unqualified
opinion on those financial statements.
We conducted our audit in accordance with generally accepted auditing standards
in the United States of America and the standards applicable to financial audits
contained in GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Ogontz Hall Investors (A
Limited Partnership) as of December 31, 2004, and the results of its operations
and its cash flows for the year then ended in conformity with U.S. generally
accepted accounting principles.
In accordance with GOVERNMENT AUDITING STANDARDS, we have issued our report
dated March 24, 2005, on our consideration of Ogontz Hall Investors' internal
control over financial reporting and our test of its compliance with certain
provisions of laws, regulations, contracts and grant agreements. The purpose of
that report is to describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing, and not to
provide an opinion on the internal control over financial reporting or on
compliance. That report is an integral part of an audit performed in accordance
with GOVERNMENT AUDITING STANDARDS and should be considered in assessing the
results of our audit.
Our audit was performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information on pages 16 to 28 is presented for the purposes of additional
analysis, including supplementary information required by PHFA, and is not a
required part of the financial statements of Ogontz Hall Investors (A Limited
Partnership). The 2004 information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole. The 2003 supplementary information was reported
upon by Joyce Miller and Associates, P.C., as referenced in the first paragraph.
Their report, dated February 15, 2004, stated that, in their opinion, such 2003
information was fairly stated in all material respects in relation to the basic
financial statements taken as whole.
/s/ LARSON, ALLEN, WEISHAIR & CO., LLP
Blue Bell, Pennsylvania
March 24, 2005
57
[Letterhead of Joyce Miller & Associates, P.C.]
INDEPENDENT AUDITOR'S REPORT
To The Partners
Ogontz Hall Investors
Philadelphia, Pennsylvania
We have audited the accompanying balance sheets of Ogontz Hall Investors (A
Limited Partnership), PHFA changes in Project #O-116, as of December 31, 2003
and 2002, and the related statements of profit and loss, changes in partners'
capital and cash flows for the years then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing standards
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Ogontz Hall Investors (A
Limited Partnership) as of December 31, 2003 and 2002, and the results of its
operations, changes in partners' capital, and its cash flows for the years then
ended in conformity with accounting principles generally accepted in the United
States of America.
Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report (shown
on pages 23 to 26) is presented for the purposes of additional analysis and is
not a required part of the basic financial statements of Ogontz Hall Investors
(A Limited Partnership). Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
In accordance with Government Auditing Standards, we have issued a separate
report dated February 15, 2004, on our consideration of Ogontz Hall Investors'
internal control over financial reporting and our test of its compliance with
certain provisions of laws, regulations, contracts and grants. That report is an
integral part of an audit performed in accordance with Government Auditing
Standards and should be read in conjunction with this report in considering the
results of our audit.
/s/ Joyce Miller & Associates, P.C.
Glenside, Pennsylvania
February 15, 2004
58
INDEPENDENT AUDITORS' REPORT
To the Partners
Eagle Ridge Limited Partnership
Madison, Wisconsin
We have audited the accompanying balance sheets of Eagle Ridge Limited
Partnership as of December 31, 2004 and 2003 and the related statements of
operations, partners' deficit and cash flows for the years then ended. These
financial statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Eagle Ridge Limited Partnership
as of December 31, 2004 and 2003 and the results of its operations and cash
flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information provided, as
identified in the table of contents, is presented for purposes of additional
analysis and is not a required part of the basic financial statements. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ Virchow, Krause & Company, LLP
Madison, Wisconsin
March 8, 2005
59
INDEPENDENT AUDITORS' REPORT
To the Partners
Eagle Ridge Limited Partnership
Madison, Wisconsin
We have audited the accompanying balance sheets of Eagle Ridge Limited
Partnership as of December 31, 2003 and 2002 and the related statements of
operations, partners' capital (deficit) and cash flows for the years then ended.
These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Eagle Ridge Limited Partnership
as of December 31, 2003 and 2002, and the results of its operations and cash
flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information provided, as
identified in the table of contents, is presented for purposes of additional
analysis and is not a required part of the basic financial statements. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ Virchow, Krause & Company, LLP
Madison, Wisconsin
January 21, 2004
60
[Regen, Benz & MacKenzie C.P.A.'s, P.C. Letterhead]
INDEPENDENT AUDITORS' REPORT
To the Partners
Nelson Anderson Affordable Housing Limited Partnership
We have audited the accompanying balance sheet of Nelson Anderson Affordable
Housing Limited Partnership as of December 31, 2004, and the related statements
of operations, changes in partners' capital and cash flows for the year then
ended. These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
used in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Nelson Anderson Affordable
Housing Limited Partnership as of December 31, 2004, and the results of its
operations, the changes in partners' capital and cash flows for the year then
ended, in conformity with generally accepted accounting principles used in the
United States of America.
/s/ Regen, Benz & MacKenzie C.P.A.'s, P.C.
New York, New York
February 25, 2005
61
[Regen, Benz, MacKenzie & Anopolsky, C.P.A.'s, P.C. Letterhead]
INDEPENDENT AUDITORS' REPORT
To the Partners
Nelson Anderson Affordable Housing
Limited Partnership
We have audited the accompanying balance sheet of Nelson Anderson Affordable
Housing Limited Partnership as of December 31, 2003, and the related statements
of operations, changes in partners' capital and cash flows for the year then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
used in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Nelson Anderson Affordable
Housing Limited Partnership as of December 31, 2003, and the results of its
operations, the changes in partners' capital and cash flows for the year then
ended, in conformity with generally accepted accounting principles used in the
United States of America.
/s/ Regen, Benz, MacKenzie & Anopolsky, C.P.A.'s, P.C.
New York, New York
February 25, 2004
62
[Regen, Benz, MacKenzie & Anopolsky, C.P.A.'s, P.C. Letterhead]
INDEPENDENT AUDITORS' REPORT
To the Partners
Nelson Anderson Affordable Housing
Limited Partnership
We have audited the accompanying balance sheet of Nelson Anderson Affordable
Housing Limited Partnership as of December 31, 2002, and the related statements
of operations, changes in partners' capital and cash flows for the year then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
used in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Nelson Anderson Affordable
Housing Limited Partnership as of December 31, 2002, and the results of its
operations, the changes in partners' capital and cash flows for the year then
ended, in conformity with generally accepted accounting principles used in the
United States of America.
/s/ Regen, Benz, MacKenzie & Anopolsky, C.P.A.'s, P.C.
New York, New York
February 21, 2003
63
[Letterhead of Insero, Kasperski, Ciaccia & Co., P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Conifer Irondequoit Associates
(A Limited Partnership)
Irondequoit, New York
We have audited the accompanying balance sheets of Conifer Irondequoit
Associates (A Limited Partnership) as of December 31, 2004 and 2003 and the
related statements of changes in partners' equity, operations and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Conifer Irondequoit Associates
(A Limited Partnership) as of December 31, 2004 and 2003, and the results of its
operations and cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 8 to the
financial statements, the Partnership has lost a major tenant. This condition
raises substantial doubt about its ability to continue as a going concern.
Management's plans regarding this matter are described in Note 8. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
Respectfully Submitted,
/s/ Insero, Kasperski, Ciaccia & Co., P.C.
Certified Public Accountants
Rochester, New York
February 9, 2005
64
[Letterhead of Insero, Kasperski, Ciaccia & Co., P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Conifer Irondequoit Associates
(A Limited Partnership)
Irondequoit, New York
We have audited the accompanying balance sheets of Conifer Irondequoit
Associates (A Limited Partnership), as of December 31, 2003 and 2002 and the
related statements of changes in partners' equity, operations and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Conifer Irondequoit Associates
(A Limited Partnership) as of December 31, 2003 and 2002, and the results of its
operations and cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.
Respectfully Submitted,
/s/ Insero, Kasperski, Ciaccia & Co., P.C.
Rochester, New York
January 28, 2004
65
[Letterhead of REZNICK GROUP, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Middletown Associates
We have audited the accompanying balance sheets of Middletown Associates as of
December 31, 2004 and 2003, and the related statements of profit and loss,
changes in partners' equity (deficit) and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Middletown Associates as of
December 31, 2004 and 2003, and the results of its operations, changes in
partners' equity (deficit) and its cash flows for the year then ended, in
conformity with accounting principles generally accepted in the United States of
America.
In accordance with Government Auditing Standards, we have also issued our report
dated January 21, 2005, on our consideration Middletown Associates' internal
control over financial reporting and on our tests of it compliance with certain
provisions of laws, regulations, contracts and grant agreements and other
matters. The purpose of that report is to describe the scope of our testing of
internal control over financial reporting and compliance and the results of that
testing, and not to provide an opinion on the internal control over financial
reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with the report in considering the results of our audit.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The 2004 supplemental information on
pages 24 through 27 is presented for purposes of additional analysis and is not
a required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ REZNICK GROUP, P.C.
Baltimore, Maryland
January 21, 2005
66
[Letterhead of REZNICK FEDDER & SILVERMAN]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Middletown Associates
We have audited the accompanying balance sheets of Middletown Associates as of
December 31, 2003 and 2002, and the related statements of profit and loss,
changes in partners' equity (deficit) and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Middletown Associates as of
December 31, 2003 and 2002, and the results of its operations, changes in
partners' equity (deficit) and its cash flows for the year then ended, in
conformity with accounting principles generally accepted in the United States of
America.
In accordance with Government Auditing Standards, we have also issued our report
for the year ended December 31, 2003, dated January 16, 2004, on our
consideration Middletown Associates' internal control over financial reporting
and on our tests of it compliance with certain provisions of laws, regulations,
contracts and grants. That report is an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with the report in considering the results of our audit.
Our audits was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 25 through 28
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ REZNICK FEDDER & SILVERMAN
Baltimore, Maryland
January 16, 2004
67
[Letterhead of REZNICK GROUP, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Lauderdale Lakes Associates, Ltd.
We have audited the accompanying balance sheets of Lauderdale Lakes Associates,
Ltd. as of December 31, 2004 and 2003, and the related statements of operations,
partners' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with the auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Lauderdale Lakes Associates,
Ltd. at December 31, 2004 and 2003, and the results of its operations and its
cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on page 19
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, is fairly stated in all material aspects in relation to the
basic financial statements taken as a whole.
/s/ Reznick Group, P.C.
Atlanta, Georgia
February 7, 2005
68
[Letterhead of REZNICK FEDDER & SILVERMAN]
INDEPENDENT AUDITORS' REPORT
To the Partners
Lauderdale Lakes Associates, Ltd.
We have audited the accompanying balance sheets of Lauderdale Lakes Associates,
Ltd., as of December 31, 2003 and 2002, and the related statements of
operations, partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audit in accordance with the auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Lauderdale Lakes Associates,
Ltd. at December 31, 2003 and 2002, and the results of its operations and its
cash flows for the years then ended, in conformity with accounting principles
generally accepted in the United States of America.
/s/ Reznick Fedder & Silverman
Atlanta, Georgia
January 27, 2004
69
[REZNICK GROUP, P.C. LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Flipper Temple Associates, L.P.
We have audited the accompanying balance sheet of Flipper Temple Associates,
L.P. as of December 31, 2004, and the related statements of operations,
partners' equity (deficit) and cash flows for the year then ended. These
financial statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Flipper Temple Associates, L.P.
as of December 31, 2004, and the results of its operations, the changes in
partners' equity (deficit) and cash flows for the year then ended, in conformity
with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs," (the "Guide") we have also issued reports
dated January 21, 2005 on our consideration of Flipper Temple Associates, L.P.'s
internal control over financial reporting and on our tests of its compliance
with specific requirements applicable to major HUD programs and fair housing and
non-discrimination. Those reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be considered in
assessing the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental information
on pages 24 through 36 is presented for purposes of additional analysis and is
not a required part of the basic financial statements of the partnership. Such
information has been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, is fairly stated in all
material respects, in relation to the basic financial statements taken as a
whole.
/s/ Reznick Group, P.C.
Taxpayer Identification Number: 52-1088612
Bethesda, Maryland
January 21, 2005
Lead Auditor: Nelson D. Gomez
70
[REZNICK FEDDER & SILVERMAN LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Flipper Temple Associates, L.P.
We have audited the accompanying balance sheet of Flipper Temple Associates,
L.P., as of December 31, 2003, and the related statements of operations,
partners' equity (deficit) and cash flows for the year then ended. These
financial statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Flipper Temple Associates,
L.P., as of December 31, 2003, and the results of its operations, the changes in
partners' equity (deficit) and cash flows for the year then ended, in conformity
with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated January 22,
2004 on our consideration of Flipper Temple Associates, L.P.'s internal control
and on its compliance with specific requirements applicable to major HUD
programs and fair housing and non-discrimination. Those reports are an integral
part of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental information
on pages 24 through 37 is presented for purposes of additional analysis and is
not a required part of the basic financial statements of the partnership. Such
information has been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, is fairly stated in all
material respects, in relation to the basic financial statements taken as a
whole.
/s/ Reznick Fedder & Silverman
Taxpayer Identification Number: 52-1088612
Bethesda, Maryland
January 22, 2004
Lead Auditor: James P. Martinko
71
[REZNICK FEDDER & SILVERMAN LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Flipper Temple Associates, L.P.
We have audited the accompanying balance sheet of Flipper Temple Associates,
L.P., as of December 31, 2002, and the related statements of operations,
partners' equity (deficit) and cash flows for the year then ended. These
financial statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Flipper Temple Associates,
L.P., as of December 31, 2002, and the results of its operations, the changes in
partners' equity (deficit) and cash flows for the year then ended, in conformity
with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated January 22,
2003 on our consideration of Flipper Temple Associates, L.P.'s internal control
and on its compliance with specific requirements applicable to major HUD
programs and fair housing and non-discrimination. Those reports are an integral
part of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental information
on pages 23 through 27 is presented for purposes of additional analysis and is
not a required part of the basic financial statements of the partnership. Such
information has been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, is fairly stated in all
material respects, in relation to the basic financial statements taken as a
whole.
/s/ Reznick Fedder & Silverman
Taxpayer Identification Number: 52-1088612
Bethesda, Maryland
January 22, 2003
Lead Auditor: James P. Martinko
72
[Letterhead of Heffler, Radetich & Saitta L.L.P]
INDEPENDENT AUDITORS' REPORT
To the Partners of
220 Cooper Street, L.P.
We have audited the accompanying balance sheets of 220 Cooper Street, L.P. as of
December 31, 2004 and 2003, and the related statements of operations, partners'
equity and cash flows for the years then ended. These financial statements are
the responsibility of the partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 220 Cooper Street, L.P. as of
December 31, 2004 and 2003, and the results of its operations and its cash flows
for the years then ended, in conformity with accounting principles generally
accepted in the United States of America.
/s/ Heffler, Radetich & Saitta L.L.P.
Mount Laurel, NJ
January 26, 2005
73
[Letterhead of Heffler, Radetich & Saitta L.L.P]
INDEPENDENT AUDITORS' REPORT
To the Partners of
220 Cooper Street, L.P.
We have audited the accompanying balance sheets of 220 Cooper Street, L.P., as
of December 31, 2003 and 2002, and the related statements of operations,
partners' equity and cash flows for the years then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 220 Cooper Street, L.P. as of
December 31, 2003 and 2002, and the results of its operations and its cash flows
for the years then ended, in conformity with accounting principles generally
accepted in the United States of America.
/s/ Heffler, Radetich & Saitta L.L.P.
Mount Laurel, NJ
January 26, 2004
74
[ARCHAMBO, MUEGGENBORG & DICK, INC. LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners
PECAN CREEK LIMITED PARTNERSHIP
Bartlesville, Oklahoma
We have audited the accompanying balance sheets of PECAN CREEK LIMITED
PARTNERSHIP, HUD Project No. 118-35121 (a limited partnership), as of December
31, 2004 and 2003 and the related statements of income, changes in partners'
equity, and cash flows for the years then ended. These financial statements are
the responsibility of the Project's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America and standards applicable to financial audits
contained in GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of PECAN CREEK LIMITED PARTNERSHIP
as of December 31, 2004 and 2003, and the results of its operations, changes in
its partners' equity and cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
In accordance with GOVERNMENT AUDITING STANDARDS, we have issued reports dated
February 2, 2005, and January 30, 2004, on our consideration of PECAN CREEK
LIMITED PARTNERSHIP'S internal control over financial reporting and our tests of
its compliance with certain provisions of laws, regulations, contracts, grant
agreements and other matters. The purpose of those reports is to describe the
scope of our testing of internal control over financial reporting and compliance
and the results of that testing and not to provide an opinion on the internal
control over financial reporting on compliance. Those reports are an integral
part of an audit performed in accordance GOVERNMENT AUDITING STANDARDS and
should be read in conjunction with this report in considering the results of our
audit.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplementary information on pages
15-17 is presented for the purpose of additional analysis and is not a required
part of the basic financial statements of PECAN CREEK LIMITED PARTNERSHIP. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ Archambo, Mueggenborg & Dick, Inc.
Deborah E. Mueggenborg, Audit Partner
Certified Public Accountants
73-1439902
Bartlesville, Oklahoma
February 2, 2005
75
[ARCHAMBO, MUEGGENBORG & DICK, INC. LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Pecan Creek Limited Partnership
Bartlesville, Oklahoma
We have audited the accompanying balance sheets of Pecan Creek Limited
Partnership, HUD Project No. FHA 118-35121 (a limited partnership), as of
December 31, 2003 and 2002 and the related statements of income, changes in
partners' equity, and cash flows for the years then ended. These financial
statements are the responsibility of the Project's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America and Government Auditing Standards issued by the
Comptroller General of the United States. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Pecan Creek Limited Partnership
as of December 31, 2003 and 2002, and the results of its operations, changes in
its partners' equity, and cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued reports dated January 30, 2004 on our
consideration of Pecan Creek Limited Partnership's internal control, on its
compliance with specific requirements applicable to major HUD programs, specific
requirements applicable to non-major HUD program transactions, and specific
requirements applicable to Fair Housing and Non-Discrimination. Those reports
are an integral part of an audit performed in accordance Government Auditing
Standards and should be read in conjunction with this report in considering the
results of our audit.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information shown on pages 15-17
and the information transmitted to the Department of Housing and Urban
Development (HUD) is prepared for the purpose of additional analysis and is not
a required part of the financial statements of Pecan Creek Limited Partnership.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly presented
in all material respects in relation to the basic financial statements taken as
a whole.
/s/ Archambo, Mueggenborg & Dick, Inc.
Deborah E. Mueggenborg, Audit Partner
Certified Public Accountants
73-1439902
Bartlesville, Oklahoma
January 30, 2004
76
[Letterhead of AGBIMSON & CO., PLLC]
INDEPENDENT AUDITOR'S REPORT
To the Partners
363 Grand Vendome Associates, Limited Partnership
We have audited the accompanying balance sheet of 363 Grand Vendome Associates,
Limited Partnership, as of December 31, 2004, and the related statements of
Loss, Partners' Capital and Cash Flows for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 363 Grand Vendome Associates,
Limited Partnership, as of December 31, 2004, and the results of its operations
and its cash flows for the year then ended, in conformity with accounting
principles generally accepted in the United States of America.
/s/ Agbimson & Co., PLLC
Rockville Centre, New York
January 31, 2005
77
[Letterhead of AGBIMSON & CO., PLLC]
INDEPENDENT AUDITOR'S REPORT
To the Partners
363 Grand Vendome Associates, Limited Partnership
We have audited the accompanying balance sheet of 363 Grand Vendome Associates,
Limited Partnership, as of December 31, 2003, and the related statements of
Loss, Partners' Capital and Cash Flows for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 363 Grand Vendome Associates,
Limited Partnership, as of December 31, 2003, and the results of its operations
and its cash flows for the year then ended, in conformity with accounting
principles generally accepted in the United States of America.
/s/ Agbimson & Co., PLLC
Rockville Centre, New York
January 30, 2004
78
[Letterhead of AGBIMSON & CO., PLLC]
INDEPENDENT AUDITOR'S REPORT
To the Partners
363 Grand Vendome Associates, Limited Partnership
We have audited the accompanying balance sheet of 363 Grand Vendome Associates,
Limited Partnership, as of December 31, 2002, and the related statements of
Loss, Partners' Capital and Cash Flows for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
Except as discussed in the following paragraph, we conducted our audit in
accordance with auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
We are unable to obtain adequate support for the carrying value for the building
construction and rehabilitation costs included in the fixed assets at December
31, 2002, which also affected material amounts included in the Statements of
Loss and Partners' Capital for the year then ended as described in Note 10.
In our opinion, except for the effects on the financial statements of such
adjustments, if any, as might have been determined to be necessary had we been
able to examine evidence regarding the carrying value of building and
rehabilitation costs, the financial statements referred to in the first
paragraph above present fairly, in all material respects, the financial position
of 363 Grand Vendome Associates, Limited Partnership, as of December 31, 2002,
and the results of its operations and its cash flows for the year then ended in
conformity with accounting principles generally accepted in the United States of
America.
/s/ Agbimson & Co., PLLC
Rockville Centre, New York
January 30, 2003
79
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
New Augusta Associates, Ltd.
New Augusta, Mississippi
We have audited the accompanying balance sheets of New Augusta Associates, Ltd.,
a limited partnership, RHS Project No.: 28-056-640665470 as of December 31, 2004
and 2003, and the related statements of operations, partners' capital and cash
flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted the audits in accordance with auditing standards generally accepted
in the United States of America and GOVERNMENT AUDITING STANDARDS issued by the
Comptroller General of the United States, and the U.S. Department of
Agriculture, Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that the
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of New Augusta Associates, Ltd.,
RHS Project No.: 28-056-640665470 as of December 31, 2004 and 2003, and the
results of its operations and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 12 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 2004 and 2003, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with GOVERNMENT AUDITING STANDARDS, we have also issued a report
dated February 18, 2005 on our consideration of New Augusta Associates, Ltd.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations. That report is an integral part
of an audit performed in accordance with GOVERNMENT AUDITING STANDARDS and
should be read in conjunction with this report in considering the results of our
audit.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 18, 2005
80
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
New Augusta Associates, Ltd.
New Augusta, Mississippi
We have audited the accompanying balance sheets of New Augusta Associates, Ltd.,
a limited partnership, RHS Project No.: 28-056-640665470 as of December 31, 2003
and 2002, and the related statements of operations, partners' capital and cash
flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted the audits in accordance with auditing standards generally accepted
in the United States of America and Government Auditing Standards issued by the
Comptroller General of the United States, and the U.S. Department of
Agriculture, Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that the
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of New Augusta Associates, Ltd.,
RHS Project No.: 28-056-640665470 as of December 31, 2003 and 2002, and the
results of its operations and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 12 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 2003 and 2002, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also issued a report
dated February 8, 2004 on our consideration of New Augusta Associates, Ltd.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations. That report is an integral part
of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 8, 2004
81
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Pine Shadow, Ltd.
Waveland, Mississippi
We have audited the accompanying balance sheets of Pine Shadow, Ltd. a limited
partnership, RHS Project No.: 28-023-640661063 as of December 31, 2004 and 2003,
and the related statements of operations, partners' capital and cash flows for
the years then ended. These financial statements are the responsibility of the
partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted the audits in accordance with auditing standards generally accepted
in the United States of America and GOVERNMENT AUDITING STANDARDS issued by the
Comptroller General of the United States, and the U.S. Department of
Agriculture, Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that the
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Pine Shadow, Ltd., RHS Project
No.: 28-023-640661063 as of December 31, 2004 and 2003, and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 12 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 2004 and 2003, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with GOVERNMENT AUDITING STANDARDS, we have also issued a report
dated February 18, 2005 on our consideration of Pine Shadow, Ltd.'s internal
control over financial reporting and on our tests of its compliance with certain
provisions of laws and regulations. That report is an integral part of an audit
performed in accordance with GOVERNMENT AUDITING STANDARDS and should be read in
conjunction with this report in considering the results of our audit.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 18, 2005
82
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Pine Shadow, Ltd.
Waveland, Mississippi
We have audited the accompanying balance sheets of Pine Shadow, Ltd. a limited
partnership, RHS Project No.: 28-023-640661063 as of December 31, 2003 and 2002,
and the related statements of operations, partners' capital and cash flows for
the years then ended. These financial statements are the responsibility of the
partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted the audits in accordance with auditing standards generally accepted
in the United States of America and Government Auditing Standards issued by the
Comptroller General of the United States, and the U.S. Department of
Agriculture, Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that the
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Pine Shadow, Ltd., RHS Project
No.: 28-023-640661063 as of December 31, 2003 and 2002, and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 12 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 2003 and 2002, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also issued a report
dated January 27, 2004 on our consideration of Pine Shadow, Ltd.'s internal
control over financial reporting and on our tests of its compliance with certain
provisions of laws and regulations. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
January 27, 2004
83
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Windsor Place, L.P.
Wedowee, Alabama
We have audited the accompanying balance sheets of Windsor Place, L.P. a limited
partnership, RHS Project No.: 01-056-631024917 as of December 31, 2004 and 2003,
and the related statements of operations, partners' capital and cash flows for
the years then ended. These financial statements are the responsibility of the
partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted the audits in accordance with auditing standards generally accepted
in the United States of America and GOVERNMENT AUDITING STANDARDS issued by the
Comptroller General of the United States, and the U.S. Department of
Agriculture, Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that the
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Windsor Place, L.P., RHS
Project No.: 01-056-631024917 as of December 31, 2004 and 2003, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 11
through 14 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 2004 and 2003, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with GOVERNMENT AUDITING STANDARDS, we have also issued a report
dated February 19, 2005 on our consideration of Windsor Place, L.P.'s internal
control over financial reporting and on our tests of its compliance with certain
provisions of laws and regulations. That report is an integral part of an audit
performed in accordance with GOVERNMENT AUDITING STANDARDS and should be read in
conjunction with this report in considering the results of our audit.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 19, 2005
84
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Windsor Place, L.P.
Wedowee, Alabama
We have audited the accompanying balance sheets of Windsor Place, L.P. a limited
partnership, RHS Project No.: 01-056-631024917 as of December 31, 2003 and 2002,
and the related statements of operations, partners' capital and cash flows for
the years then ended. These financial statements are the responsibility of the
partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted the audits in accordance with auditing standards generally accepted
in the United States of America and Government Auditing Standards issued by the
Comptroller General of the United States, and the U.S. Department of
Agriculture, Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that the
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Windsor Place, L.P., RHS
Project No.: 01-056-631024917 as of December 31, 2003 and 2002, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 11
through 14 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 2003 and 2002, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also issued a report
dated January 26, 2004 on our consideration of Windsor Place, L.P.'s internal
control over financial reporting and on our tests of its compliance with certain
provisions of laws and regulations. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
January 26, 2004
85
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Brookwood Associates, Ltd.
Foley, Alabama
We have audited the accompanying balance sheets of Brookwood Associates, Ltd., a
limited partnership, RHS Project No.: 01-002-621394754 as of December 31, 2004
and 2003, and the related statements of operations, partners' deficit and cash
flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted the audits in accordance with auditing standards generally accepted
in the United States of America and GOVERNMENT AUDITING STANDARDS issued by the
Comptroller General of the United States, and the U.S. Department of
Agriculture, Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that the
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Brookwood Associates, Ltd., RHS
Project No.: 01-002-621394754 as of December 31, 2004 and 2003, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 11
through 12 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 2004 and 2003, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with GOVERNMENT AUDITING STANDARDS, we have also issued a report
dated February 22, 2005 on our consideration of Brookwood Associates, Ltd.,'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations. That report is an integral part
of an audit performed in accordance with GOVERNMENT AUDITING STANDARDS and
should be read in conjunction with this report in considering the results of our
audit.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 22, 2005
86
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Brookwood Associates, Ltd.
Foley, Alabama
We have audited the accompanying balance sheets of Brookwood Associates, Ltd., a
limited partnership, RHS Project No.: 01-002-621394754 as of December 31, 2003
and 2002, and the related statements of operations, partners' deficit and cash
flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted the audits in accordance with auditing standards generally accepted
in the United States of America and Government Auditing Standards issued by the
Comptroller General of the United States, and the U.S. Department of
Agriculture, Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that the
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Brookwood Associates, Ltd., RHS
Project No.: 01-002-621394754 as of December 31, 2003 and 2002, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 2003 and 2002, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also issued a report
dated February 21, 2004 on our consideration of Brookwood Associates, Ltd.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations. That report is an integral part
of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 21, 2004
87
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Heflin Hills Apartments, Ltd.
Heflin, Alabama
We have audited the accompanying balance sheets of Heflin Hills Apartments,
Ltd., a limited partnership, RHS Project No.: 01-015-631039371 as of December
31, 2004 and 2003, and the related statements of operations, partners' deficit
and cash flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted the audits in accordance with auditing standards generally accepted
in the United States of America and GOVERNMENT AUDITING STANDARDS issued by the
Comptroller General of the United States, and the U.S. Department of
Agriculture, Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that the
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Heflin Hills Apartments, Ltd.,
RHS Project No.: 01-015-631039371 as of December 31, 2004 and 2003, and the
results of its operations and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 2004 and 2003, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also issued a report
dated January 27, 2005 on our consideration of Heflin Hills Apartments, Ltd.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations. That report is an integral part
of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
January 27, 2005
88
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Heflin Hills Apartments, Ltd.
Heflin, Alabama
We have audited the accompanying balance sheets of Heflin Hills Apartments,
Ltd., a limited partnership, RHS Project No.: 01-015-631039371 as of December
31, 2003 and 2002, and the related statements of operations, partners' deficit
and cash flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted the audits in accordance with auditing standards generally accepted
in the United States of America and Government Auditing Standards issued by the
Comptroller General of the United States, and the U.S. Department of
Agriculture, Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that the
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Heflin Hills Apartments, Ltd.,
RHS Project No.: 01-015-631039371 as of December 31, 2003 and 2002, and the
results of its operations and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 2003 and 2002, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also issued a report
dated February 8, 2004 on our consideration of Heflin Hills Apartments, Ltd.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations. That report is an integral part
of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 8, 2004
89
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Shadowood Apartments, Ltd.
Stevenson, Alabama
We have audited the accompanying balance sheets of Shadowood Apartments, Ltd., a
limited partnership, RHS Project No.: 01-036-631030182 as of December 31, 2004
and 2003, and the related statements of operations, partners' deficit and
capital and cash flows for the years then ended. These financial statements are
the responsibility of the partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted the audits in accordance with auditing standards generally accepted
in the United States of America and GOVERNMENT AUDITING STANDARDS issued by the
Comptroller General of the United States, and the U.S. Department of
Agriculture, Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that the
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, In
all material respects, the financial position of Shadowood Apartments, Ltd., RHS
Project No.: 01-036-631030182 as of December 31, 2004 and 2003, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 2004 and 2003, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with GOVERNMENT AUDITING STANDARDS, we have also issued a report
dated February 20, 2005 on our consideration of Shadowood Apartments, Ltd.'s.,
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations. That report is an integral part
of an audit performed in accordance with GOVERNMENT AUDITING STANDARDS and
should be read in conjunction with this report in considering the results of our
audit.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 20, 2005
90
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Shadowood Apartments, Ltd.
Stevenson, Alabama
We have audited the accompanying balance sheets of Shadowood Apartments, Ltd., a
limited partnership, RHS Project No.: 01-036-631030182 as of December 31, 2003
and 2002, and the related statements of operations, partners' deficit and
capital and cash flows for the years then ended. These financial statements are
the responsibility of the partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted the audits in accordance with auditing standards generally accepted
in the United States of America and Government Auditing Standards issued by the
Comptroller General of the United States, and the U.S. Department of
Agriculture, Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that the
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, In
all material respects, the financial position of Shadowood Apartments, Ltd., RHS
Project No.: 01-036-631030182 as of December 31, 2003 and 2002, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 2003 and 2002, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also issued a report
dated February 20, 2004 on our consideration of Shadowood Apartments, Ltd.'s.,
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations. That report is an integral part
of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 20, 2004
91
[Letterhead of Donald W. Causey & Associates, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Brittany Associates, L.P.
Dekalb, Mississippi.
We have audited the accompanying balance sheets of Brittany Associates, L.P., a
limited partnership, RHS Project No.: 28-035-581896085 as of December 31, 2004
and 2003, and the related statements of operations, partners' capital and cash
flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted the audits in accordance with auditing standards generally accepted
in the United States of America and GOVERNMENT AUDITING STANDARDS issued by the
Comptroller General of the United States, and the U.S. Department of
Agriculture, Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that the
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Brittany Associates, L.P. RHS
Project No.: 28-035-581896085 as of December 31, 2004 and 2003, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on page 10
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. The supplemental information presented in the
Multiple Family Housing Borrower Balance Sheet (Form FmHA 1930-8) Parts I and II
for the year ended December 31, 2004 and 2003, is presented for purposes of
complying with the requirements of the Rural Housing Services and is also not a
required part of the basic financial statements. Such information has been
subjected to the audit procedures applied in the audit of the basic financial
statements and, in our opinion is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
In accordance with GOVERNMENT AUDITING STANDARDS, we have also issued a report
dated February 21, 2005 on our consideration of Brittany Associates, L.P.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations. That report is an integral part
of an audit performed in accordance with GOVERNMENT AUDITING STANDARDS and
should be read in conjunction with this report in considering the results of our
audit.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 21, 2005
92
[Letterhead of Donald W. Causey & Associates, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Brittany Associates, L.P.
Dekalb, Mississippi.
We have audited the accompanying balance sheets of Brittany Associates, L.P., a
limited partnership, RHS Project No.: 28-035-581896085 as of December 31, 2003
and 2002, and the related statements of operations, partners' capital and cash
flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted the audits in accordance with auditing standards generally accepted
in the United States of America and Government Auditing Standards issued by the
Comptroller General of the United States, and the U.S. Department of
Agriculture, Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that the
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Brittany Associates, L.P. RHS
Project No.: 28-035-581896085 as of December 31, 2003 and 2002, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 12 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 2003 and 2002, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also issued a report
dated February 20, 2004 on our consideration of Brittany Associates, L.P.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations. That report is an integral part
of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 20, 2004
93
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Hidden Valley Apartments, Ltd.
Brewton, Alabama
We have audited the accompanying balance sheets of Hidden Valley Apartments,
Ltd. a limited partnership, RHS Project No.: 01-027-631025600 as of December 31,
2004 and 2003, and the related statements of operations, partners' capital and
cash flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted the audits in accordance with auditing standards generally accepted
in the United States of America and GOVERNMENT AUDITING STANDARDS issued by the
Comptroller General of the United States, and the U.S. Department of
Agriculture, Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that the
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Hidden Valley Apartments, Ltd.
RHS Project No.: 01-027-631025600 as of December 31, 2004 and 2003, and the
results of its operations and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 11
and 12 is presented for purposes of additional analysis and is not a required
part of the basic financial statements. The supplemental information presented
in the Multiple Family Housing Borrower Balance Sheet (Form FmHA 1930-8) Parts I
and II for the year ended December 31, 2004 and 2003, is presented for purposes
of complying with the requirements of the Rural Housing Services and is also not
a required part of the basic financial statements. Such information has been
subjected to the audit procedures applied in the audit of the basic financial
statements and, in our opinion is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
In accordance with GOVERNMENT AUDITING STANDARDS, we have also issued a report
dated February 23, 2005 on our consideration of Hidden Valley Apartments, Ltd.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations. That report is an integral part
of an audit performed in accordance with GOVERNMENT AUDITING STANDARDS and
should be read in conjunction with this report in considering the results of our
audit.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 23, 2005
94
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Hidden Valley Apartments, Ltd.
Brewton, Alabama
We have audited the accompanying balance sheets of Hidden Valley Apartments,
Ltd. a limited partnership, RHS Project No.: 01-027-631025600 as of December 31,
2003 and 2002, and the related statements of operations, partners' capital and
cash flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted the audits in accordance with auditing standards generally accepted
in the United States of America and Government Auditing Standards issued by the
Comptroller General of the United States, and the U.S. Department of
Agriculture, Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that the
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Hidden Valley Apartments, Ltd.
RHS Project No.: 01-027-631025600 as of December 31, 2003 and 2002, and the
results of its operations and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 11
through 14 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 2003 and 2002, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also issued a report
dated February 23, 2004 on our consideration of Hidden Valley Apartments, Ltd.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations. That report is an integral part
of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 23, 2004
95
[Letterhead of Matthews, Cutrer & Lindsay, P.A.]
To the Partners
Westbrook Square, LP
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying balance sheets of Westbrook Square, LP (a
Mississippi limited partnership), RHS Project No. 28-040-640770978, as of
December 31, 2004 and 2003, and the related statements of operations, partners'
capital (deficit) and cash flows for the years then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America and GOVERNMENT AUDITING STANDARDS, issued by the
Comptroller General of the United States. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Westbrook Square, LP as of
December 31, 2004 and 2003, and the results of its operations and its cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.
In accordance with GOVERNMENT AUDITING STANDARDS, we have also issued a report
dated February 1, 2005, on our consideration Westbrook Square, LP's internal
control over financial reporting and on our tests of its compliance with certain
provisions of laws, regulations, contracts, grants, agreements, and other
matters. The purpose of this report is to describe the scope of our testing on
internal control over financial reporting and compliance and the results of that
testing and not to provide an opinion on the internal control over financial
reporting or on compliance. This reports are an integral part of an audit
performed in accordance with GOVERNMENT AUDITING STANDARDS and should be read in
conjunction with this report in considering the results of our audit.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental information is
presented for the purposes of additional analysis and is not a required part of
the basic financial statements. We have prepared the Multiple Family Housing
Borrower Balance Sheet (RHS Form RD 18930-8) and the Multiple Family Housing
Project Budget (RHS Form RD 1930-7). Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ Matthews, Cutrer & Lindsay, P.A.
Ridgeland, Mississippi
February 1, 2005
96
[Letterhead of Bob T. Robinson]
To the Partners of
Westbrook Square, Ltd.
INDEPENDENT AUDITOR'S REPORT
I have audited the accompanying balance sheet of Westbrook Square, Ltd. (RD Case
number 28-040-640770978) as of December 31, 2002 and 2001 and the related
statements of income, partners' equity and cash flows for the years then ended.
These financial statements are the responsibility of the partnership's
management. My responsibility is to express an opinion on these financial
statements based on my audit.
I conducted my audits in accordance with auditing standards generally accepted
in the United States of America and Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that I plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. I believe that my
audits provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Westbrook Square, Ltd. as of
December 31, 2002 and 2001, and the results of its operations and its cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.
In accordance with Government Auditing Standards, I have also issued my report
dated February 14, 2003 on my consideration of Westbrook Square, Ltd.'s internal
control and on my tests of its compliance with certain provisions of laws,
regulations, contracts, and grants. This report is an integral part of the
audits performed in accordance with Government Auditing Standards and should be
read in conjunction with this report in considering the results of my audits.
My audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information is presented for the
purposes of additional analysis and is not a required part of the financial
statements of Westbrook Square, Ltd. Such information has been subjected to the
auditing procedures applied in the audit of the financial statements and, in my
opinion, is fairly presented in all material respects in relation to the
financial statements taken as a whole.
The annual budgets of Westbrook Square, Ltd. included in the accompanying
prescribed form RD 1930-7 (Rev 7-00) have not been compiled or examined by me,
and I do not express any form of assurance on them. In addition they may contain
departures from guidelines for presentation of prospective financial information
established by the American Institute of Certified Public Accountants. The
actual results may vary from the presentation and the variations may be
material.
/s/ Bob T. Robinson
Jackson, Mississippi
February 14, 2003
97
[Letterhead of DONALD W. CAUSEY, CPA, P.C.]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Warsaw Elderly Housing, Ltd.
Warsaw, Kentucky
I have audited the accompanying balance sheets of Warsaw Elderly Housing, Ltd.,
a limited partnership, RHS Project No.: 20-039-621409235 as of December 31, 2004
and 2003, and the related statements of operations, partners' capital and cash
flows for the years then ended. These financial statements are the
responsibility of the partnership's management. My responsibility is to express
an opinion on these financial statements based on my audits.
I conducted the audits in accordance with auditing standards generally accepted
in the United States of America and GOVERNMENT AUDITING STANDARDS issued by the
Comptroller General of the United States, and the U.S. Department of
Agriculture, Farmers Home Administration Audit Program. Those standards require
that I plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. I believe that the
audits provide a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Warsaw Elderly Housing, Ltd., RHS
Project No.: 20-039-621409235 as of December 31, 2004 and 2003, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 9
through 12 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 2004 and 2003, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in my opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with GOVERNMENT AUDITING STANDARDS, I have also issued a report
dated February 25, 2005 on my consideration of, Warsaw Elderly Housing, Ltd.'s
internal control over financial reporting and on my tests of its compliance with
certain provisions of laws and regulations. That report is an integral part of
an audit performed in accordance with GOVERNMENT AUDITING STANDARDS and should
be read in conjunction with this report in considering the results of our audit.
Donald W. Causey, CPA, P.C.
Gadsden, Alabama
February 25, 2005
98
[Letterhead of DONALD W. CAUSEY, CPA, P.C.]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Warsaw Elderly Housing, Ltd.
Warsaw, Kentucky
I have audited the accompanying balance sheets of Warsaw Elderly Housing, Ltd.,
a limited partnership, RHS Project No.: 20-039-621409235 as of December 31, 2003
and 2002, and the related statements of operations, partners' capital and cash
flows for the years then ended. These financial statements are the
responsibility of the partnership's management. My responsibility is to express
an opinion on these financial statements based on my audits.
I conducted the audits in accordance with auditing standards generally accepted
in the United States of America and Government Auditing Standards issued by the
Comptroller General of the United States, and the U.S. Department of
Agriculture, Farmers Home Administration Audit Program. Those standards require
that I plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. I believe that the
audits provide a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Warsaw Elderly Housing, Ltd., RHS
Project No.: 20-039-621409235 as of December 31, 2003 and 2002, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 9
through 12 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 2003 and 2002, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in my opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, I have also issued a report
dated February 25, 2004 on my consideration of Warsaw Elderly Housing, Ltd.,
internal control over financial reporting and on my tests of its compliance with
certain provisions of laws and regulations. That report is an integral part of
an audit performed in accordance with Government Auditing Standards and should
be read in conjunction with this report in considering the results of our audit.
Donald W. Causey, CPA, P.C.
Gadsden, Alabama
February 25, 2004
99
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
West Hill Square, Ltd.
Gordo, Alabama
We have audited the accompanying balance sheets of West Hill Square, Ltd., a
limited partnership, RHS Project No.: 01-054-631010865 as of December 31, 2004
and 2003, and the related statements of operations, partners' capital and cash
flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted the audits in accordance with auditing standards generally accepted
in the United States of America and GOVERNMENT AUDITING STANDARDS issued by the
Comptroller General of the United States, and the U.S. Department of
Agriculture, Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that the
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of West Hill Square, Ltd., RHS
Project No.: 01-054-631010865 as of December 31, 2004 and 2003, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 11
through 14 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 2004 and 2003, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with GOVERNMENT AUDITING STANDARDS, we have also issued a report
dated February 12, 2005 on our consideration of West Hill Square, Ltd.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations. That report is an integral part
of an audit performed in accordance with GOVERNMENT AUDITING STANDARDS and
should be read in conjunction with this report in considering the results of our
audit.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 12, 2005
100
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
West Hill Square, Ltd.
Gordo, Alabama
We have audited the accompanying balance sheets of West Hill Square, Ltd., a
limited partnership, RHS Project No.: 01-054-631010865 as of December 31, 2003
and 2002, and the related statements of operations, partners' capital and cash
flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted the audits in accordance with auditing standards generally accepted
in the United States of America and Government Auditing Standards issued by the
Comptroller General of the United States, and the U.S. Department of
Agriculture, Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that the
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of West Hill Square, Ltd., RHS
Project No.: 01-054-631010865 as of December 31, 2003 and 2002, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 11
through 14 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 2003 and 2002, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also issued a report
dated February 12, 2004 on our consideration of West Hill Square, Ltd.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations. That report is an integral part
of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 12, 2004
101
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Elmwood Associates, L.P.
Picayune, Mississippi
We have audited the accompanying balance sheets of Elmwood Associates, L.P., a
limited partnership, RHS Project No.: 28-055-640804193 as of December 31, 2004
and 2003, and the related statements of operations, partners' capital and cash
flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted the audits in accordance with auditing standards generally accepted
in the United States of America and GOVERNMENT AUDITING STANDARDS issued by the
Comptroller General of the United States, and the U.S. Department of
Agriculture, Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that the
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Elmwood Associates, L.P., RHS
Project No.: 28-055-640804193 as of December 31, 2004 and 2003, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on page 10
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. The supplemental information presented in the
Multiple Family Housing Borrower Balance Sheet (Form FmHA 1930-8) Parts I and II
for the year ended December 31, 2004 and 2003, is presented for purposes of
complying with the requirements of the Rural Housing Services and is also not a
required part of the basic financial statements. Such information has been
subjected to the audit procedures applied in the audit of the basic financial
statements and, in our opinion is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
In accordance with GOVERNMENT AUDITING STANDARDS, we have also issued a report
dated February 22, 2005 on our consideration of Elmwood Associates, L.P.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations. That report is an integral part
of an audit performed in accordance with GOVERNMENT AUDITING STANDARDS and
should be read in conjunction with this report in considering the results of our
audit.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 22, 2005
102
[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Elmwood Associates, L.P.
Picayune, Mississippi
We have audited the accompanying balance sheets of Elmwood Associates, L.P., a
limited partnership, RHS Project No.: 28-055-640804193 as of December 31, 2003
and 2002, and the related statements of operations, partners' capital and cash
flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted the audits in accordance with auditing standards generally accepted
in the United States of America and Government Auditing Standards issued by the
Comptroller General of the United States, and the U.S. Department of
Agriculture, Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that the
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Elmwood Associates, L.P., RHS
Project No.: 28-055-640804193 as of December 31, 2003 and 2002, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 12 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 2003 and 2002, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also issued a report
dated February 21, 2004 on our consideration of Elmwood Associates, L.P.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations. That report is an integral part
of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.
/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 21, 2004
103
[Letterhead of Holthouse Carlin & Van Trigt LLP]
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners of
Harmony Associates, L.P.:
We have audited the accompanying balance sheet of Harmony Associates, L.P. as of
December 31, 2004, and the related statements of operations, partners' capital
(deficit) and cash flows for the year then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes consideration of
internal controls over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Partnership's internal control
over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Harmony Associates, L.P. as of
December 31, 2004 and the results of its operations and its cash flows for the
year then ended, in conformity with accounting principles generally accepted in
the United States of America.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The information included in the
accompanying Schedule I is presented for purposes of additional analysis and is
not a required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ Holthouse Carlin & Van Trigt LLP
Santa Monica, California
February 3, 2005
104
[Letterhead of Grant Thornton LLP]
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners
Harmony Associates, L.P.
We have audited the accompanying balance sheet of Harmony Associates, L.P. as of
December 31, 2003, and the related statements of operations, partners' equity
and cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Harmony Associates, L.P. as of
December 31, 2003, and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.
/s/ Grant Thornton LLP
Los Angeles, California
January 14, 2004
105
[Letterhead of Grant Thornton LLP]
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners
Harmony Associates, L.P.
We have audited the accompanying balance sheet of Harmony Associates, L.P. as of
December 31, 2002, and the related statements of operations, partners' equity
and cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Harmony Associates, L.P. as of
December 31, 2002, and the results of its operations and its cash flows for the
year then ended in conformity with accounting principles generally accepted in
the United States of America.
/s/ Grant Thornton LLP
Los Angeles, California
January 24, 2003
106
FREEDOM TAX CREDIT PLUS L.P.
AND CONSOLIDATED PARTNERSHIPS
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2005 and 2004
ASSETS
2005 2004
------------ ------------
Property and equipment - (at cost, net of accumulated
depreciation of $68,560,673 and $63,733,516,
respectively) (Notes 4 and 6) $ 76,216,658 $ 80,476,651
Cash and cash equivalents 2,150,450 2,492,636
Cash held in escrow 5,549,963 4,743,491
Deferred costs (net of accumulated amortization of
$2,098,661 and $1,988,501, respectively) (Note 5) 727,764 979,385
Other assets 1,329,483 1,247,703
------------ ------------
Total Assets $ 85,974,318 $ 89,939,866
============ ============
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Liabilities:
Mortgage notes payable (Note 6) $ 65,119,347 $ 66,285,158
Accounts payable and other liabilities 2,455,386 1,771,574
Due to local general partners and affiliates (Note 7) 3,628,588 3,922,555
Due to general partners and affiliates (Note 7) 8,853,092 7,861,874
------------ ------------
Total Liabilities 80,056,413 79,841,161
------------ ------------
Minority interests 8,040,807 8,001,969
------------ ------------
Partners' Capital (Deficit):
Limited partners (72,896 BACs issued and outstanding) (1,421,027) 2,756,415
General partners (701,875) (659,679)
------------ ------------
Total Partners' Capital (Deficit) (2,122,902) 2,096,736
------------ ------------
Commitments and Contingencies (Notes 7 and 9)
Total Liabilities and Partners' Capital (Deficit) $ 85,974,318 $ 89,939,866
============ ============
See accompanying notes to consolidated financial statements.
107
FREEDOM TAX CREDIT PLUS L.P.
AND CONSOLIDATED PARTNERSHIPS
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED MARCH 31, 2005, 2004 and 2003
2005 2004 2003
------------ ------------ ------------
Revenues:
Rental income $ 15,031,757 $ 14,797,158 $ 14,282,724
Other 1,547,924 1,576,443 1,449,502
------------ ------------ ------------
Total Revenues 16,579,681 16,373,601 15,732,226
------------ ------------ ------------
Expenses:
Repairs and maintenance 2,881,570 2,832,897 2,534,896
Operating and other 2,349,565 2,267,403 2,094,185
Real estate taxes 1,068,210 959,803 995,566
Interest 4,244,176 4,335,979 4,509,840
Depreciation and amortization (Notes 4 and 5) 5,074,408 4,978,566 4,915,164
General and administrative 3,357,170 2,946,354 2,767,712
General and administrative-related parties (Note 7) 1,867,745 1,844,523 1,706,060
------------ ------------ ------------
Total Expenses 20,842,844 20,165,525 19,523,423
------------ ------------ ------------
Loss before minority interest (4,263,163) (3,791,924) (3,791,197)
Minority interest in loss of subsidiaries 43,525 36,960 37,450
------------ ------------ ------------
Net loss $ (4,219,638) $ (3,754,964) $ (3,753,747)
============ ============ ============
Net loss - limited partners $ (4,177,442) $ (3,717,414) $ (3,716,210)
============ ============ ============
Number of BACs outstanding 72,896 72,896 72,896
============ ============ ============
Net loss per BAC $ (57.31) $ (51.00) $ (50.98)
============ ============ ============
See accompanying notes to consolidated financial statements.
108
FREEDOM TAX CREDIT PLUS L.P.
AND CONSOLIDATED PARTNERSHIPS
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
YEARS ENDED MARCH 31, 2005, 2004 and 2003
Accumulated
Other
Limited General Comprehensive Comprehensive
Total Partners Partners Income (Loss) Loss
------------ ------------ ------------ ------------- -------------
Partners' capital (deficit) -
April 1, 2002 $ 9,605,982 $ 10,186,465 $ (584,628) $ 4,145
Comprehensive Loss:
Net Loss (3,753,747) (3,716,210) (37,537) 0 $ (3,753,747)
Other Comprehensive Loss:
Net unrealized loss on
marketable securities (535) 0 0 (535) (535)
------------ ------------ ------------ ------------ ------------
Total Comprehensive Loss (3,754,282)
============
Partners' capital (deficit) -
March 31, 2003 5,851,700 6,470,255 (622,165) 3,610
Comprehensive Loss:
Net Loss (3,754,964) (3,717,414) (37,550) 0 (3,751,426)
Other Comprehensive Loss:
Net unrealized loss on
marketable securities 0 3,574 36 (3,610) 3,610
------------ ------------ ------------ ------------ ------------
Total Comprehensive Loss (3,747,816)
============
Partners' capital (deficit) -
March 31, 2004 2,096,736 2,756,415 (659,679) 0
Comprehensive Loss:
Net Loss (4,219,638) (4,177,442) (42,196) 0 (4,219,638)
------------ ------------ ------------ ------------ ------------
Total Comprehensive Loss: $ (4,219,638)
============
Partners' Capital (Deficit) -
March 31, 2005 $ (2,122,902) $ (1,421,027) $ (701,875) $ 0
============ ============ ============ ============
See accompanying notes to consolidated financial statements.
109
FREEDOM TAX CREDIT PLUS L.P.
AND CONSOLIDATED PARTNERSHIPS
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED MARCH 31, 2005, 2004 and 2003
2005 2004 2003
----------- ----------- -----------
Cash flows from operating activities:
Net loss $(4,219,638) $(3,754,964) $(3,753,747)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation and amortization 5,074,408 4,978,566 4,915,164
Minority interest in loss of subsidiaries (43,525) (36,960) (37,450)
Increase in other assets (81,783) (7,012) (238,552)
Increase (decrease) in accounts payable and other liabilities 683,812 360,497 (238,880)
(Increase) decrease in cash held in escrow (806,472) (88,879) 16,647
Increase in due to general partners and affiliates 991,218 928,343 912,768
Increase in due to local general partners and affiliates 119,303 247,420 47,959
Decrease in due to local general partners and affiliates (91,390) (26,314) (134,954)
----------- ----------- -----------
Net cash provided by operating activities 1,625,933 2,600,697 1,488,955
----------- ----------- -----------
Cash flows from investing activities:
Additions to property and equipment (567,870) (1,013,627) (751,333)
Decrease (increase) in marketable securities 0 109,498 (1,028)
Decrease in due to local general partners and affiliates (662,425) (213,462) (17,863)
----------- ----------- -----------
Net cash used in investing activities (1,230,295) (1,117,591) (770,224)
----------- ----------- -----------
Cash flows from financing activities:
Decrease (increase) in deferred costs 5,079 (5,071) (20,876)
Repayments of mortgage loans (1,165,811) (1,081,661) (696,408)
Increase in due to local general partners and affiliates 418,782 140,400 547,880
Decrease in due to local general partners and affiliates (78,237) (250,938) (237,506)
Increase (decrease) in capitalization of consolidated
subsidiaries attributable to minority interest 82,363 (40,328) 101,464
----------- ----------- -----------
Net cash used in financing activities (737,824) (1,237,598) (305,446)
----------- ----------- -----------
Net (decrease) increase in cash and cash equivalents (342,186) 245,508 413,285
Cash and cash equivalents at beginning of year 2,492,636 2,247,128 1,833,843
----------- ----------- -----------
Cash and cash equivalents at end of year $ 2,150,450 $ 2,492,636 $ 2,247,128
=========== =========== ===========
Supplemental disclosure of cash flow information:
Cash paid during the year for interest $ 2,879,716 $ 2,992,620 $ 3,303,877
=========== =========== ===========
See accompanying notes to consolidated financial statements.
110
FREEDOM TAX CREDIT PLUS L.P.
AND CONSOLIDATED PARTNERSHIPS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005, 2004 and 2003
NOTE 1 - General
Freedom Tax Credit Plus L.P., a Delaware limited partnership (the
"Partnership"), was organized on August 28, 1989 and commenced its public
offering on February 9, 1990 (the "Offering"). The general partners of the
Partnership are Related Freedom Associates L.P. (the "Related General Partner"),
a Delaware limited partnership, and its affiliate, Freedom GP Inc. (the "Freedom
General Partner"), a Delaware corporation, together (the "General Partners"). On
November 17, 2003, CharterMac acquired Related Capital Company, which is the
indirect parent of RCC Manager LLC, the sole shareholder of Related Freedom
Associates, Inc., the general partner of the Related General Partner. Pursuant
to the acquisition, CharterMac acquired controlling interests in the General
Partners. This acquisition did not affect the Partnership or its day-to-day
operations, as the majority of the General Partners' management team remained
unchanged. The Partnership will terminate on December 31, 2030, unless
terminated sooner under the provisions of the partnership agreement.
The Partnership's business is to invest in other partnerships ("Local
Partnerships," "subsidiaries" or "subsidiary partnerships") owning leveraged
apartment complexes that are eligible for the low-income housing tax credit
("Tax Credit") enacted in the Tax Reform Act of 1986 and to entitle qualified
BACs holders to Tax Credits over the period of the Partnership's entitlement to
claim Tax Credits (for each Property, generally ten years from the date of
investment or, if later, the date the Property is leased to qualified tenants;
referred to herein as the "Credit Period"). Each of the Local Partnerships in
which the Partnership has an interest has been allocated by the relevant state
credit agency the authority to recognize Tax Credits during the Credit Period,
provided that the Local Partnership satisfies the rent restriction, minimum
set-aside and other requirements for recognition of the Tax Credits at all times
during the 15-year period (the "Compliance Period").
As of December 31, 2002, the Credit Period for all of the apartment complexes
have expired, although each Local Partnership must continue to comply with the
Tax Credit requirements until the end of the Compliance Period in order to avoid
recapture of the Tax Credits. During Fiscal Year 2003, the Partnership generated
$1,710,233 in Housing Tax Credits. The Compliance Period will end between
December 31, 2004 and December 31, 2007 with respect to the Properties depending
upon when the Tax Credit Period commenced.
The Partnership was authorized to issue a total of 200,000 Beneficial Assignment
Certificates ("BACs"), which had been registered with the Securities and
Exchange Commission for sale to the public. As of August 8, 1991 (the date on
which the Partnership held the final closing of the sale of BACs and on which
the offering was terminated), the Partnership had received $72,896,000 of gross
proceeds of the Offering from 4,780 investors.
The terms of the Partnership's Limited Partnership Agreement provide, among
other things, that net profits or losses and distributions of cash flow are, in
general, allocated 99% to the limited partners and BACs holders and 1% to the
General Partners.
NOTE 2 - Summary of Significant Accounting Policies
a) Basis of Accounting and Presentation
The Partnership's fiscal year ends on March 31. All subsidiaries have calendar
year ends. Accounts of the subsidiaries have been adjusted for intercompany
transactions from January 1 through March 31. The Partnership's fiscal year ends
March 31 in order to allow adequate time for the subsidiaries financial
statements to be prepared and consolidated. The books and records of the
Partnership are maintained on the accrual basis of accounting in accordance with
accounting principles generally accepted in the United States.
b) Basis of Consolidation
The consolidated financial statements include the accounts of the Partnership
and 42 subsidiary partnerships, in which the Partnership is a limited partner,
with an ownership interest ranging from approximately 98% to 99%. All
intercompany accounts and transactions with the subsidiary partnerships have
been eliminated in consolidation. Through the rights of the Partnership and/or
an affiliate of the General Partners, which affiliate has a contractual
obligation to act on behalf of the Partnership, to remove the general partner of
the subsidiary partnerships and to approve certain major operating and financial
decisions, the Partnership has a controlling financial interest in the
subsidiary partnerships.
Increases (decreases) in the capitalization of consolidated subsidiaries
attributable to minority interest arises from cash contributions and cash
distributions to the minority interest partners.
The Partnership's investment in each subsidiary is equal to the respective
subsidiary's partners' equity less minority interest capital, if any.
c) Cash and Cash Equivalents
For purposes of the consolidated statements of cash flows, cash and cash
equivalents include cash on hand, cash in banks, and investments in short-term
money market accounts (which were purchased with original maturities of three
months or less).
d) Investment in Marketable Securities
Available-for-sale securities were carried at fair value with net unrealized
gain (loss) reported as a separate component of other comprehensive income until
realized. A decline in the market value of any available-for-sale security below
cost, that is deemed other than temporary, was charged to earnings resulting in
the establishment of a new cost basis for the security. In 2004, the Partnership
sold its marketable securities.
111
FREEDOM TAX CREDIT PLUS L.P.
AND CONSOLIDATED PARTNERSHIPS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005, 2004 and 2003
e) Cash Held in Escrow
Cash held in escrow includes cash held in escrow, replacement reserves and
tenant security deposits.
f) Property and Equipment
Property and equipment to be held and used are carried at cost which includes
the purchase price, acquisition fees and expenses, construction period interest
and any other costs incurred in acquiring the properties. The cost of property
and equipment is depreciated over their estimated useful lives using accelerated
and straight-line methods. Expenditures for repairs and maintenance are charged
to expense as incurred; major renewals and betterments are capitalized. At the
time property and equipment are retired or otherwise disposed of, the cost and
accumulated depreciation are eliminated from the assets and accumulated
depreciation accounts and the profit or loss on such disposition is reflected in
earnings. The Partnership complies with Statement of Financial Accounting
Standards (SFAS) No. 144 "Accounting for the Impairment or Disposal of
Long-Lived Assets". A loss on impairment of assets is recorded when management
estimates amounts recoverable through future operations and sale of the property
on an undiscounted basis are below depreciated cost. At that time property
investments themselves are reduced to estimated fair value (generally using
estimated future discounted net cash flows) when the property is considered to
be impaired and the depreciated cost exceeds estimated fair value.
At the time management commits to a plan to dispose of assets, said assets are
adjusted to the lower of carrying amount or fair value less costs to sell. These
assets are classified as property and equipment-held for sale and are not
depreciated. There are no assets classified as property and equipment-held for
sale through March 31, 2005.
Through March 31, 2005, the Partnership has not recorded any loss on impairment
of assets or reductions to estimated fair value.
g) Revenue Recognition
Rental income is earned under standard residential operating leases and is
typically due the first day of each month, but can vary by property due to the
terms of the tenant leases. Rental income is recognized when earned and charged
to tenants' accounts receivable if not received by the due date. Rental payments
received in advance of the due date are deferred until earned.
Rental subsidies are recognized as rental income during the month in which it is
earned. The Partnership received rental subsidies which amounted to
approximately $3,488,027, $3,326,225 and $3,178,000 for the years ended March
31, 2005, 2004 and 2003, respectively. The related rental subsidy programs have
expiration dates that terminate upon total disbursement of the assistance
obligation.
Other revenues are recorded when earned and consist of the following items:
Interest income earned on cash and cash equivalent balances and cash held in
escrow balances, income from forfeited security deposits, late charges, laundry
and vending income and other rental related items.
Other revenues include the following amounts at both the Partnership and Local
Partnership level:
March 31,
------------------------------------------
2005 2004 2003
---------- ---------- ----------
Interest $ 146,855 $ 142,223 $ 259,247
Other 1,401,069 1,434,220 1,190,255
---------- ---------- ----------
Total other revenue $1,547,924 $1,576,443 $1,449,502
========== ========== ==========
h) Income Taxes
The Partnership is not required to provide for, or pay, any federal income
taxes. Net income or loss generated by the Partnership is passed through to the
partners and is required to be reported by them. The Partnership may be subject
to state and local taxes in jurisdictions in which it operates. For income tax
purposes, the Partnership has a fiscal year ending December 31 (see Note 8).
i) Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make certain
estimates and assumptions relating to reporting of assets, liabilities, revenues
and expenses disclosed in the consolidated financial statements. Accordingly,
actual results could differ from those estimates.
j) Net Loss per BAC
Net loss per BAC is computed based on the net loss for the period attributed to
BAC Holders, divided by the number of BACs outstanding for the period.
112
FREEDOM TAX CREDIT PLUS L.P.
AND CONSOLIDATED PARTNERSHIPS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005, 2004 and 2003
k) New Accounting Pronouncements
On December 16, 2004, the FASB issued Statement of Financial Accounting
Standards ("SFAS") No. 153, Exchanges of Nonmonetary Assets - An Amendment of
APB Opinion No. 29 ("SFAS No. 153"). The amendments made by SFAS No. 153 are
based on the principle that exchanges of nonmonetary assets should be measured
based on the fair value of the assets exchanged. Further, the amendments
eliminate the narrow exception for nonmonetary exchanges of similar productive
assets and replace it with a broader exception for exchanges of nonmonetary
assets that do not have "commercial substance." SFAS No. 153 is effective for
nonmonetary assets exchanges occurring in fiscal periods beginning after June
15, 2005. The Company does not believe that the adoption of SFAS No. 153 on June
15, 2005. The Company does not believe that the adoption of SFAS No. 153 on June
15, 2005 will have a material effect on the Company's consolidated financial
statements.
In January 2003, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46").
FIN 46 is applicable immediately for variable interest entities created after
January 31, 2003. For variable interest entities created before February 1,
2003, the provisions of FIN 46 were originally applicable no later than December
15, 2003. The Partnership has not created any variable interest entities after
January 31, 2003. In December 2003 the FASB redeliberated certain proposed
modifications and revised FIN 46 ("FIN 46 (R)"). The revised provisions are
applicable no later than the first reporting period ending after March 15, 2004.
The adoption of FIN 46 (R) does not have a material impact on the Partnership's
financial reporting and disclosures.
In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." SFAS No. 150
changes the accounting for certain financial instruments that, under previous
guidance, could be classified as equity or "mezzanine" equity, by now requiring
those instruments to be classified as liabilities (or assets in some
circumstances) in the Consolidated Balance Sheets. Further, SFAS No. 150
requires disclosure regarding the terms of those instruments and settlement
alternatives. The guidance in SFAS No. 150 generally was effective for all
financial instruments entered into or modified after May 31, 2003, and was
otherwise effective at the beginning of the first interim period beginning after
June 15, 2003. The Partnership has evaluated SFAS No. 150 and determined that it
does not have an impact on the Partnership's financial reporting and
disclosures.
NOTE 3 - Fair Value of Financial Instruments
In accordance with SFAS No. 107 "Disclosures about Fair Value of Financial
Instruments," the following methods and assumptions were used to estimate the
fair value of each class of financial instruments for which it is practicable to
estimate that value:
Cash and Cash Equivalents, Cash Held in Escrow, Accounts Payable and Other
- --------------------------------------------------------------------------------
Liabilities, Due to Local General Partners and Affiliates, and Due to General
- --------------------------------------------------------------------------------
Partners and Affiliates
- -----------------------
The carrying amount of cash and cash equivalents, cash held in escrow, accounts
payable and other liabilities approximates fair value. The fair values of Due to
Local General Partners and Affiliates and Due to General Partners and Affiliates
are not readily determinable because no market exists for these instruments.
Mortgage Notes Payable
- ----------------------
The fair value of mortgage notes payable is estimated, where practicable, based
on the borrowing rate currently available for similar loans.
The estimated fair values of the Partnership's mortgage notes payable are as
follows:
March 31, 2005 March 31, 2004
------------------------- -------------------------
Carrying Carrying
Amount Fair Value Amount Fair Value
----------- ----------- ----------- -----------
Mortgage Notes Payable for which it is:
Practicable to estimate fair value $48,409,326 $49,519,246 $51,901,654 $51,768,160
Not Practicable $16,710,021 (*) $14,383,504 (*)
(*) Management believes it is not practicable to estimate the fair value of the
mortgage notes payable because mortgage programs with similar
characteristics are not currently available to the Local Partnerships.
113
FREEDOM TAX CREDIT PLUS L.P.
AND CONSOLIDATED PARTNERSHIPS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005, 2004 and 2003
NOTE 4 - Property and Equipment
The components of property and equipment are as follows:
March 31,
----------------------------------
2005 2004
------------- --------------
Land $ 5,720,520 $ 5,720,520
Buildings and improvements 130,972,585 130,814,666
Other 8,084,226 7,674,981
------------- -------------
144,777,331 144,210,167
Less: Accumulated depreciation (68,560,673) (63,733,516)
------------- -------------
$ 76,216,658 $ 80,476,651
============= =============
Depreciation expense for the years ended March 31, 2005, 2004 and 2003 amounted
to $4,827,863, $4,811,387 and $4,749,489, respectively. Additionally, $706 and
$5,513 of accumulated depreciation on dispositions of assets was written-off for
the years ended March 31, 2005 and 2004, respectively.
NOTE 5 - Deferred Costs
The components of deferred costs and their periods of amortization are as
follows:
March 31,
-------------------------------
2005 2004
----------- ------------
Financing expenses $ 2,826,425 $ 2,967,886
Less: Accumulated amortization (2,098,661) (1,988,501)
----------- -----------
$ 727,764 $ 979,385
=========== ===========
Financing expenses are being amortized over the life of the related mortgages,
ranging from 15 to 50 years, using a method approximating the interest method.
Amortization of deferred costs for the years ended March 31, 2005, 2004 and 2003
amounted to $246,545, $167,179 and $165,675, respectively. In addition, $136,385
of accumulated amortization has been written-off due to mortgage refinancing of
the Abraham Lincoln property in the year ended March 31, 2005.
NOTE 6 - Mortgage Notes Payable
The mortgage notes are payable in aggregate monthly installments of
approximately $438,000 including principal and interest with rates varying from
0% to 13.50% per annum and have maturity dates ranging from 2005 through 2042.
The loans are collateralized by the land and buildings of the subsidiary
partnerships, the assignment of certain subsidiary partnerships' rents, leases,
and replacement reserves, and are without further recourse.
Annual principal payments on the permanent debt requirements for mortgage notes
payable for each of the next five fiscal years and thereafter are as follows:
Fiscal Year Ending March 31, Amount
- ---------------------------- ------------
2005 $ 1,232,658
2006 2,031,135
2007 19,646,494
2008 882,528
2009 925,475
Thereafter 40,401,057
-----------
Total $65,119,347
===========
On June 17, 2004, the Abraham Lincoln property modified its original mortgage to
reduce the principal balance to $1,945,000. The new mortgage payable to New York
State HFA in monthly installments of $15,382, with an interest rate of 6.64% per
annum, will mature in June 2022.
114
FREEDOM TAX CREDIT PLUS L.P.
AND CONSOLIDATED PARTNERSHIPS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005, 2004 and 2003
Accrued interest payable as of March 31, 2005 and 2004 was approximately
$1,484,000 and $1,337,000, respectively. Interest accrues on all mortgage loans,
which include primary and secondary loans. Certain secondary loans have
provisions such that interest is accrued but not payable until a future date.
The Partnership anticipates the payment of accrued interest on the secondary
loans (which make up the majority of the accrued interest payable amount and
which have been accumulating since the Partnership's investment in the
respective Local Partnership) will be made from future refinancings or sales
proceeds of the respective Local Partnerships.
NOTE 7 - Related Party Transactions and Transactions with General Partners and
Affiliates
Freedom SLP L.P., an affiliate of the General Partners, has either a .01% or 1%
interest, as a special limited partner, in each of the Local Partnerships.
The General Partners and their affiliates and the Local General Partners and
their affiliates perform services for the Partnership and the Local
Partnerships, respectively. The costs incurred are as follows:
a) Due to Local General Partners and Affiliates
Due to Local General Partners and affiliates at March 31, 2005 and 2004 consists
of the following:
March 31,
----------------------------
2005 2004
---------- ----------
Operating advances $1,963,493 $1,666,763
Development fees (i) 610,024 1,272,449
Operating deficit loans (ii) 297,172 288,259
Long-term note payable 98,615 63,713
Management and other fees 659,284 631,371
---------- ----------
$3,628,588 $3,922,555
========== ==========
(i) Development fees were incurred in connection with the development of the
property and have been included in the basis of the property.
(ii) Operating deficit loans consist of the following:
March 31,
----------------------------
2005 2004
---------- ----------
Wilshire Park $ 191,775 $ 191,775
This loan to fund operating deficits is unsecured, non-interest bearing and is
payable out of available surplus cash of the respective subsidiary partnership,
or at the time of sale or refinancing.
March 31,
----------------------------
2005 2004
---------- ----------
Parkside Townhomes $ 87,035 $ 87,035
Ogontz Hall $ 18,362 $ 9,449
These loans to fund operating deficits are unsecured, non-interest bearing and
are subordinate to the second mortgage and are payable out of available surplus
cash of the respective subsidiary partnership, or at the time of sale or
refinancing.
115
FREEDOM TAX CREDIT PLUS L.P.
AND CONSOLIDATED PARTNERSHIPS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005, 2004 and 2003
b) Other Expenses
The costs incurred to related parties for the years ended March 31, 2005, 2004
and 2003 were as follows:
Year Ended March 31,
------------------------------------
2005 2004 2003
---------- ---------- ----------
Partnership management fees (a) $ 676,000 $ 676,000 $ 676,000
Expense reimbursement (b) 223,042 178,723 155,977
Local administrative fee (d) 51,193 53,000 53,000
---------- ---------- ----------
Total general and administrative - General 950,235 907,723 884,977
Partners
---------- ---------- ----------
Property management fees incurred to
affiliates of the subsidiary partnerships'
general partners (c) 917,510 936,800 821,083
---------- ---------- ----------
Total general and administrative - related $1,867,745 $1,844,523 $1,706,060
parties ========== ========== ==========
(a) The General Partners are entitled to receive a partnership management fee,
after payment of all Partnership expenses, which together with the annual local
administrative fees will not exceed a maximum of 0.5% per annum of Invested
Assets (as defined in the Partnership Agreement), for administering the affairs
of the Partnership. Subject to the foregoing limitation, the partnership
management fee will be determined by the General Partners in their sole
discretion based upon their review of the Partnership's investments. Unpaid
partnership management fees for any year will be accrued without interest and
will be payable from working capital reserves or to the extent of available
funds after the Partnership has made distributions to the Limited Partners and
BACs holders of sale or refinancing proceeds equal to their original capital
contributions plus a 10% priority return thereon (to the extent not theretofore
paid out of Cash Flow). Partnership management fees owed to General Partners
amounting to approximately $6,884,000 and $6,208,000 were accrued and unpaid as
of March 31, 2005 and 2004, respectively. Without the General Partners continued
accrual without payment, the Partnership will not be in a position to meet its
obligations. The General Partners have continued allowing the accrual without
payment of these amounts, but are under no obligation to continue to do so. The
Partnership is dependent upon the support of the General Partner and certain of
its affiliates in order to meet its obligations at the Partnership level. The
General Partner and these affiliates have agreed to continue such support for
the foreseeable future.
(b) The Partnership reimburses the General Partners and their affiliates for
actual Partnership operating expenses incurred by the General Partners and their
affiliates on the Partnership's behalf. The amount of reimbursement from the
Partnership is limited by the provisions of the Partnership Agreement. Another
affiliate of the General Partners performs asset monitoring for the Partnership.
These services include site visits and evaluations of the subsidiary
partnerships' performance.
(c) Property management fees incurred by subsidiary partnerships amounted to
$1,036,574, $1,108,295 and $1,071,815 for the 2005, 2004 and 2003 Fiscal Years,
respectively. Of these fees, $917,510, $936,800 and 821,083 were incurred to
affiliates of the subsidiary partnerships.
(d) Freedom SLP L.P., a special limited partner of the subsidiary partnerships,
is entitled to receive an annual local administrative fee of up to $2,500 from
each Local Partnership.
NOTE 8 - Income Taxes
A reconciliation of the financial statement net loss to the income tax loss for
the Partnership and its consolidated subsidiaries follows:
2004 2003 2002
----------- ----------- -----------
Financial statement
Net loss $(4,219,638) $(3,754,964) $(3,753,747)
Difference resulting from parent company
having a different fiscal year for
income tax and financial reporting purposes 376,180 (17,957) 4,268
Difference between depreciation and
amortization expense recorded for financial
statement and income tax reporting purposes 468,213 386,864 (682,390)
Tax-exempt interest income (40) (25) (39)
Other (154,830) 48,724 1,317,852
----------- ----------- -----------
Net loss as shown on the Partnership's income
tax returns $(3,530,115) $(3,337,358) $(3,114,056)
=========== =========== ===========
116
FREEDOM TAX CREDIT PLUS L.P.
AND CONSOLIDATED PARTNERSHIPS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005, 2004 and 2003
NOTE 9 - Selected Quarterly Financial Data (Unaudited)
The following table summarizes the Partnership's quarterly results of operations
for the years ended March 31, 2005 and 2004.
Quarter Ended
--------------------------------------------------------
June 30, September 30, December 31, March 31,
OPERATIONS 2004 2004 2004 2005
- ----------------------------------------- ----------- ------------- ----------- -----------
Revenues $ 4,065,553 $ 4,192,866 $ 4,063,547 $ 4,257,715
Operating expenses (5,134,170) (5,130,072) (4,993,540) (5,585,062)
----------- ----------- ----------- -----------
Loss before minority interest (1,068,617) (937,206) (929,993) (1,327,347)
Minority interest in loss of subsidiaries 10,363 8,484 9,222 15,456
----------- ----------- ----------- -----------
Net loss $(1,058,254) $ (928,722) $ (920,771) $(1,311,891)
=========== =========== =========== ===========
Net loss per BAC $ (14.37) $ (12.61) $ (12.51) $ (17.82)
=========== =========== =========== ===========
Quarter Ended
--------------------------------------------------------
June 30, September 30, December 31, March 31,
OPERATIONS 2003 2003 2003 2004
- ----------------------------------------- ----------- ------------- ----------- -----------
Revenues $ 3,991,288 $ 4,037,962 $ 4,035,354 $ 4,308,997
Operating expenses (5,057,470) (4,973,610) (4,881,673) (5,252,772)
----------- ----------- ----------- -----------
Loss before minority interest (1,066,182) (935,648) (846,319) (943,775)
Minority interest in loss of subsidiaries 11,698 9,275 7,923 8,064
----------- ----------- ----------- -----------
Net loss $(1,054,484) $ (926,373) $ (838,396) $ (935,711)
=========== =========== =========== ===========
Net loss per BAC $ (14.32) $ (12.58) $ (11.39) $ (12.71)
=========== =========== =========== ===========
NOTE 10 - Commitments and Contingencies
Washington Brooklyn
- -------------------
In or about September 2003, two putative mortgagees commenced a mortgage
foreclosure action in the Supreme Court of the State of New York, Kings County
(the "Court"), entitled 150 Beach 120th Street Inc. v. Washington Brooklyn
Limited Partnership, Index No. 35255/2003, seeking to foreclose on an alleged
$100,000 loan and mortgage against the real property (the "Apartment Complex")
owned by Washington Brooklyn Limited Partnership ("Washington"). Apparently, the
former general partner of Washington, BUFNY Houses of Brooklyn, Inc. ("BUFNY"),
allegedly granted two mortgages in the amounts of $225,000 and $100,000 secured
by the Apartment Complex. Each of the foregoing mortgages was granted without
the knowledge of Freedom SLP, L.P. (the "Special Limited Partner") or the
Partnership (collectively the "Freedom LPs") or the consent of the Special
Limited Partner, as required by Washington's Amended and Restated Agreement of
Limited Partnership (the "Partnership Agreement"). The Freedom LPs believe that
BUFNY did not use the alleged loan proceeds for the benefit of Washington or the
Apartment Complex. For these and other reasons, the Freedom LPs contend that the
alleged mortgages are invalid.
In addition, BUFNY allegedly failed to comply with the terms of either mortgage,
which resulted in the holders of the alleged $100,000 mortgage commencing the
foreclosure proceedings. BUFNY did not appear in or otherwise respond to the
foreclosure proceedings. The holders of the alleged $225,000 mortgage have not
yet, to the knowledge of the Freedom LPs, commenced any foreclosure proceedings.
Shortly after the Freedom LPs became aware of these foreclosure proceedings,
their counsel contacted counsel for the plaintiffs and mortgagees in an effort
to learn more about the alleged mortgages and to resolve the disputes relating
to the mortgages. When those efforts failed, the Freedom LPs filed a motion to
intervene in the foreclosure action and for leave to file a late answer on
behalf of themselves and Washington. The Freedom LPs contend that the mortgages
are invalid and that Washington is not liable for them or the underlying
indebtedness. In an order dated September 7, 2004, the Court granted the Freedom
L.P.s' motion to intervene and to file a late answer on behalf of the
Partnership.
On or about September 21, 2004, the Freedom LPs, on behalf of themselves and the
Partnership, served an answer, counterclaims and crossclaims in defending
against the action. The answer denied the material allegations of the complaint
and asserted certain affirmative defenses, counterclaims and crossclaims. Among
other things, the Freedom LPs, on behalf of themselves and the Partnership,
added The Levites Organization, one of the two co-holders of the $225,000
117
FREEDOM TAX CREDIT PLUS L.P.
AND CONSOLIDATED PARTNERSHIPS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005, 2004 and 2003
mortgage for which the plaintiffs' complaint did not seek foreclosure, as an
additional counterclaim defendant, and the Freedom LPs assert that both the
$100,000 and $225,000 mortgages are invalid and void ab initio. The parties are
currently engaged in taking discovery.
The Freedom LPs intend to defend the action and prosecute their counterclaims
and crossclaims vigorously. The final outcome of this case, however, cannot be
determined at this time. If the Court were to reject the Freedom LPs defenses
and counterclaims, then it is possible that the Apartment Complex might be
foreclosed upon and the Partnership might lose its title to and interests in the
Apartment Complex.
In addition, due to BUFNY's breach of fiduciary duties and breaches of the
Partnership Agreement, the Special Limited Partner exercised its rights under
the Partnership Agreement to remove BUFNY as Washington's general partner and to
substitute itself as the new replacement general partner, effective April 26,
2004.
Other
- -----
The Partnership is subject to risks incident to potential losses arising from
the management and ownership of improved real estate. The Partnership can also
be affected by poor economic conditions generally, however no more than 24% of
the properties are located in any single state. There are also substantial risks
associated with owning properties receiving government assistance, for example
the possibility that Congress may not appropriate funds to enable HUD to make
rental assistance payments. HUD also restricts annual cash distributions to
partners based on operating results and a percentage of the owners' equity
contribution. The Partnership cannot sell or substantially liquidate its
investments in subsidiary partnerships during the period that the subsidy
agreements are in existence, without HUD's approval. Furthermore there may not
be market demand for apartments at full market rents when the rental assistance
contract expires.
Except as described above, management is not aware of any trends or events,
commitments or uncertainties, which have not otherwise been disclosed, that will
or are likely to impact liquidity in a material way. Management believes the
only impact would be from laws that have not yet been adopted. The portfolio is
diversified by the location of the properties around the United States so that
if one area of the country is experiencing downturns in the economy, the
remaining properties in the portfolio may not be affected. However, the
geographic diversification of the portfolio may not protect against a general
downturn in the national economy.
118
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None
Item 9A. Controls and Procedures
(a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. The Chief Executive
Officer and Chief Financial Officer of Freedom Associates L.P. and Freedom G.P.
Inc., the general partners of the Partnership, have evaluated the effectiveness
of the Partnership's disclosure controls and procedures (as such term is defined
in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as
amended ("Exchange Act") as of the end of the period covered by this report. In
designing and evaluating our 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 their objectives,
and our management necessarily applied its judgment in evaluating the
cost-benefit relationship of possible controls and procedures. Based on this
evaluation, the Chief Executive Officer and Chief Financial Officer of Freedom
Associates L.P. and Freedom G.P. Inc., the general partners of the Partnership,
concluded that, as of the period covered by this report, our disclosure controls
and procedures were (1) designed to ensure that material information relating to
us, including our consolidated subsidiaries, is made known to the Chief
Executive Officer and Chief Financial Officer of Freedom Associates L.P. and
Freedom G.P. Inc., the general partners of the Partnership by others within
those entities, particularly during the period in which this report was being
prepared and (2) effective, in that they provide reasonable assurance that
information required to be disclosed by us in the reports we file or submit
under the Securities Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and forms.
(b) Changes in INTERNAL CONTROLS OVER FINANCIAL REPORTING. There have not been
any changes in the Partnership's internal control over financial reporting
during the fiscal year to which this report relates that have materially
affected, or are reasonably likely to materially affect, the Partnership's
internal control over financial reporting.
119
PART III
Item 10. Directors and Executive Officers of the Registrant
The Partnership has no directors or executive officers. The Partnership's
affairs are managed and controlled by the General Partners. On November 25,
1997, an affiliate of the Related General Partner purchased 100% of the stock of
the Freedom General Partner. Prior to such purchase the Freedom General Partner
was an affiliate of Lehman Brothers. The Partnership has not adopted a separate
code of ethics because the Partnership has no directors or executive officers.
However, the parent company of Related Capital Company, which controls the
General Partners, has adopted a code of ethics. See http://www.chartermac.com.
On November 17, 2003, CharterMac acquired Related Capital Company ("RCC"), which
is the indirect parent of RCC Manager LLC, the sole shareholder of the general
partner of the Related General Partner. RCC Manager LLC is also the Managing
Member of the Freedom General Partner. Pursuant to the acquisition, CharterMac
acquired controlling interests in the General Partners. Alan P. Hirmes replaced
Stephen M. Ross as Director of the Related General Partner and also replaced
Michael Brenner as Director of the Freedom General Partner, each effective April
1, 2004 as a result of this acquisition. This acquisition did not affect the
Partnership or its day-to-day operations, as the majority of the General
Partners' management team remained unchanged.
Certain information concerning the directors and executive officers of each of
the General Partners is set forth below.
The Related General Partner
- ---------------------------
Related Freedom Associates Inc., ("RFAI") is the sole general partner of Related
Freedom Associates L.P.
Name Position
- ------------------------ ---------------------
Alan P. Hirmes Director and President
Stuart J. Boesky Senior Vice President
Marc D. Schnitzer Vice President
Denise L. Kiley (1) Vice President
Glenn F. Hopps Treasurer
Teresa Wicelinski Secretary
(1) On February 25, 2005, Ms. Kiley announced her retirement as Chief Credit
Officer and trustee of CharterMac, the indirect parent of RCC Manager LLC,
the sole shareholder of the Related General Partner and Managing Member of
the Freedom General Partner. Upon her retirement, she will also resign from
her position as Vice President of the Related General Partner and the
Freedom General Partner.
ALAN P. HIRMES, 50, is the Director and President of the Related General
Partner. Mr. Hirmes has been a certified public accountant in New York since
1978. Prior to joining RCC in October 1983, Mr. Hirmes was employed by Weiner &
Co., certified public accountants.
Mr. Hirmes is also the Managing Director of Related. Mr. Hirmes graduated from
Hofstra University with a Bachelor of Arts degree. Mr. Hirmes also serves on the
Board of Trustees of CharterMac and American Mortgage Acceptance Company
("AMAC").
STUART J. BOESKY, 49, practiced real estate and tax law in New York City with
the law firm of Shipley & Rothstein from 1984 until February 1986 when he joined
RCC. From 1983 to 1984, Mr. Boesky practiced law with the Boston law firm of
Kaye, Fialkow, Richard & Rothstein (which subsequently merged with Strook &
Strook & Lavan) and from 1978 to 1980 was a consultant specializing in real
estate at the accounting firm of Laventhol & Horwath. Mr. Boesky graduated from
Michigan State University with a Bachelor of Arts degree and from Wayne State
School of Law with a Juris Doctor degree. He then received a Master of Laws
degree in Taxation from Boston University School of Law. Mr. Boesky also serves
on the Board of Trustees of CharterMac and AMAC.
MARC D. SCHNITZER, 44, is responsible both for financial restructurings of real
estate properties and directing Related's acquisition of properties generating
Housing Tax Credits. Mr. Schnitzer received a Masters of Business Administration
from The Wharton School of the University of Pennsylvania in December 1987
before joining RCC in January 1988. From 1983 to January 1986, he was a
financial analyst for the First Boston Corporation in New York. Mr. Schnitzer
graduated summa cum laude with a Bachelor of Science in Business Administration
from the School of Management at Boston University in May 1983. Mr. Schnitzer
also serves on the Board of Trustees of CharterMac.
DENISE L. KILEY, 45, is responsible for overseeing the due diligence and asset
management of all multifamily residential properties invested in
Related-sponsored corporate, public and private equity and debt funds. Prior to
joining RCC in 1990, Ms. Kiley had experience acquiring, financing and asset
managing multifamily residential properties. From 1981 through 1985 she was an
auditor with PricewaterhouseCoopers. Ms. Kiley holds a Bachelor of Science in
Accounting from Boston College. Ms. Kiley also serves on the Board of Trustees
of CharterMac. As noted above, Ms. Kiley is retiring from CharterMac.
GLENN F. HOPPS, 42, joined RCC in December, 1990, and prior to that date was
employed by Marks Shron & Company and Weissbarth, Altman and Michaelson,
certified public accountants. Mr. Hopps graduated from New York State University
at Albany with a Bachelor of Science Degree in Accounting.
TERESA WICELINSKI, 39, joined RCC in June 1992, and prior to that date was
employed by Friedman LLP formerly Friedman, Alpren & Green LLP, certified public
accountants. Ms. Wicelinski graduated from Pace University with a Bachelor of
Arts Degree in Accounting.
120
The Freedom General Partner
- ---------------------------
The officers and directors of the Freedom General Partner are as follows:
Name Position
- ---------------------------- -----------------------
Alan P. Hirmes Director and President
Stuart J. Boesky Executive Vice President
Marc D. Schnitzer Vice President
Denise L. Kiley (1) Vice President
Glenn F. Hopps Treasurer
Teresa Wicelinski Secretary
Biographical information with respect to Messrs. Hirmes, Boesky, Schnitzer,
Hopps, Ms. Kiley and Ms. Wicelinski is set forth above.
Item 11. Executive Compensation
The Partnership has no officers or directors. The Partnership does not pay or
accrue any fees, salaries or other forms of compensation to directors or
officers of the General Partners for their services. However, under the terms of
the Partnership Agreement , the General Partners and their affiliates are
entitled to receive compensation from the Partnership in consideration of
certain services rendered to the Partnership by such parties. In addition, the
General Partners collectively hold a 1% interest in all profits, losses and
distributions attributable to operations and a subordinated 15% interest in such
items attributable to sales and refinancings. Certain directors and officers of
the General Partners receive compensation from the General Partner and their
affiliates for services performed for various affiliated entities which may
include services performed for the Partnership. The maximum annual partnership
management fee paid to the General Partner is 0.5% of invested assets. See Note
7 to the Financial Statements in Item 8 above, which is incorporated herein by
reference.
Tabular information concerning salaries, bonuses and other types of compensation
payable to executive officers has not been included in this annual report. As
noted above, the Partnership has no executive officers. The levels of
compensation payable to the General Partners and/or their affiliates is limited
by the terms of the Partnership Agreement and may not be increased therefrom on
a discretionary basis.
Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Security Holder Matters
Name and address of Amount and Nature of
Title of Class Beneficial Ownership Beneficial Ownership Percentage of Class
- -------------------------- ------------------------- ---------------------- -----------------------
General Partnership Related Freedom $1,000 capital 50%
Interest in the Partnership Associates L.P. contribution -
625 Madison Avenue directly owned
New York, NY 10022
General Partnership Freedom GP Inc. $1,000 capital 50%
Interest in the Partnership 625 Madison Avenue contribution -
New York, NY 10022 directly owned
Freedom SLP L.P., a limited partnership whose general partners are the General
Partners of the Partnership and which acts as the special limited partner of
each Local Partnership, has either a .01% or 1% interest in each Local
Partnership.
Except as set forth below, no person (other than the Assignor Limited Partner)
was known by the Partnership to be the beneficial owner of more than five
percent of the Limited Partnership Interests and/or BACs and neither the General
Partners nor any director or officer of the General Partners owns any Limited
Partnership Interests or BACs.
Amount and Nature of Percentage
Name of Beneficial Owner (1) Beneficial Ownership of Class
- ----------------------------------------------------------------------- ------------------------ -----------------
Lehigh Tax Credit Partners, Inc. 8,375.66(2) (3) 11.5%
J. Michael Fried 8,375.66(2) (3) (4) 11.5%
Alan P. Hirmes 8,375.66(2) (3) (4) 11.5%
Stuart J. Boesky 8,375.66(2) (3) (4) 11.5%
Marc D. Schnitzer - -
Denise L. Kiley - -
Glenn F. Hopps - -
All directors and executive officers of RFAI and The Freedom General
Partner as a group (seven persons) 8,375.66(2) (3) (4) 11.5%
(1) The address for each of the persons in the table is 625 Madison Avenue, New
York, New York 10022.
121
(2) As set forth in schedule 13D filed by the Partnership, Lehigh Tax Credit
L.L.C. (Lehigh) and Lehigh Tax Credit Partners, Inc. (the "Managing Member") on
October 24, 1997 with the Securities and Exchange Commission (the "Commission")
and pursuant to a letter agreement dated August 26, 1997 among the Partnership,
Lehigh and Related Freedom Associates L.P. ("RFA") (the "Standstill Agreement"),
Lehigh agreed that, prior to August 26, 2007 (the "Standstill Expiration Date"),
it will not and it will cause certain affiliates (including Lehigh Tax Credit
Partners II, LLC ("Lehigh II")), not to (i) acquire, attempt to acquire or make
a proposal to acquire, directly or indirectly, more than 45% (including BACs
acquired through all other means) of the outstanding BACs, (ii) seek to propose
to enter into, directly or indirectly, any merger, consolidation, business
combination, sale or acquisition of assets, liquidation, dissolution or other
similar transaction involving the Partnership, (iii) make, or in any way
participate, directly or indirectly, in any "solicitation" of "proxies" or
"consents" (as such terms are used in the proxy rules of the Securities and
Exchange Commission (the "Commission")) to vote any voting securities of the
Partnership, (iv) form, join or otherwise participate in a "group" (within the
meaning of Section 13(d)(3) of the Act) with respect to any voting securities of
the Partnership, except that those affiliates bound by the Standstill Agreement
will not be deemed to have violated it and formed a "group" solely by acting in
accordance with the Standstill Agreement, (v) disclose in writing to any third
party any intention, plan or arrangement inconsistent with the terms of the
Standstill Agreement, or (vi) loan money to, advise, assist or encourage any
person in connection with any action inconsistent with the terms of the
Standstill Agreement. In addition, Lehigh agreed that until the Standstill
Expiration Date it will not sell any BACs acquired by it unless the buyer of
such BACs agrees to be bound by the Standstill Agreement; provided, however,
Lehigh may make transfers in the secondary market to any purchaser which
represents that following such sale it will not own three (3%) percent or more
of the BACs outstanding. By the terms of the Standstill Agreement, Lehigh also
agreed to vote its BACs in the same manner as a majority of all voting BACs
holders; provided, however, Lehigh is entitled to vote its BACs as it determines
with regard to any proposal (i) to remove RFA as a general partner of the
Partnership or (ii) concerning the reduction of any fees, profits, distributions
or allocations for the benefit of RFA or its affiliates.
(3) As of May 17, 2005, Lehigh held 4,192.83 BACs and Lehigh II held 4,182.83
BACs which constitutes approximately 11.5% of the outstanding BACs owned.
(4) Each such party serves as a director and executive officer of the Managing
Member and owns an equity interest therein, except J. Michael Fried who owns
only an economic interest.
Item 13. Certain Relationships and Related Transactions
The Partnership has and will continue to have certain relationships with the
General Partners and their affiliates, as discussed in Item 11 which is
incorporated herein by reference thereto. However, there have been no direct
financial transactions between the Partnership and the directors and officers of
the General Partners.
Item 14. Principal Accountant Fees and Services
Audit Fees
- ----------
The aggregate fees by Friedman LLP and their respective affiliates
(collectively, "Friedman") for professional services rendered for the audit of
our annual financial statements for the years ended March 31, 2005 and 2004 and
for the reviews of the financial statements included in the Registrant's
Quarterly Reports on Form 10-Q for those years were $59,500 and $52,000,
respectively.
Audit Related Fees
- ------------------
None
Tax Fees
- --------
The aggregate fees by Weiser LLP (formerly, Rubin and Katz LLP) and their
respective affiliates (collectively, "Weiser") for professional services
rendered for the preparation of our annual tax returns for the years ended
December 31, 2004 and 2003 were $8,700 and $8,300, respectively.
All Other Fees
- --------------
None
The Partnership is not required to have, and does not have, a stand-alone audit
committee.
122
PART IV
Item 15. Exhibits and Financial Statement Schedules
Sequential
Page
----------
(a) 1. Financial Statements
--------------------
Report of Independent Registered Public Accounting Firm 14
Consolidated Balance Sheets as of March 31, 2005 and 2004 107
Consolidated Statements of Operations for the years ended March 31,
2005, 2004 and 2003 108
Consolidated Statements of Changes in Partners' Capital (Deficit) for
the years ended March 31, 2005, 2004 and 2003 109
Consolidated Statements of Cash Flows for the years ended March 31,
2005, 2004 and 2003 110
Notes to Consolidated Financial Statements 111
(a) 2. Financial Statement Schedules
-----------------------------
Report of Independent Registered Public Accounting Firm 129
Schedule I - Condensed Financial Information of Registrant 130
Schedule III - Real Estate and Accumulated Depreciation 133
All other schedules have been omitted because they are not required or
because the required information is contained in the financial
statements or notes thereto.
(a)3. Exhibits
--------
(3A) The Partnership's Amended and Restated Agreement of Limited
Partnership, incorporated herein as an exhibit by reference to Exhibit
A to the Partnership's Prospectus, dated February 9, 1990, as
supplemented by supplements thereto dated December 7, 1990, May 10,
1991, July 10, 1991 and July 23, 1991 (as so supplemented, the
"Prospectus"), filed with the Securities and Exchange Commission on
July 30, 1992, as part of Post-Effective Amendment No. 6 to the
Partnership's registration statement on Form S-11, File No. 33-30859
("Post-Effective Amendment No. 6")
(3B) The Partnership's Certificate of Limited Partnership, as filed with
Secretary of State of the State of Delaware on August 28, 1989,
incorporated herein as an exhibit by reference to Exhibit (3C) to the
Partnership's registration statement on Form S-11, File No. 33-30859,
as filed with the Securities and Exchange Commission on September 1,
1989 (the "Initial S-11")
(10A) Form of Subscription Agreement, incorporated herein as an exhibit by
reference to Exhibit B to the Prospectus as filed as part of
Post-Effective Amendment No. 6
(10B) Form of Purchase and Sale Agreement pertaining to the Partnership's
acquisition of Local Partnership Interests, incorporated herein as an
exhibit by reference to Exhibit (10C) to the Initial S-11
(10C) Form of Amended and Restated Agreement of Limited Partnership of
Local Partnerships, incorporated herein as an exhibit by reference to
Exhibit (10D) to Pre-Effective Amendment No. 1 to the Partnership's
registration statement on Form S-11, File No. 33-30859, as filed with
the Securities and Exchange Commission on December 21, 1989
(21) Subsidiaries of the Registrant 124
(31.1) Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a) 127
(32.1) Certification Pursuant to Rule 13a-14(b) or Rule 15d-14(b) and
Section 1350 of Title 18 of the United States Coded (18 U.S.C.
1350) 128
123
Item 15. Exhibits and Financial Statement Schedules (continued)
Jurisdiction
of
Organization
------------
(c) Subsidiaries of the Registrant (Exhibit 21)
Parkside Townhomes Associates PA
Twin Trees Apartments UT
Bennion Park Apartments (Mulberry) UT
Hunters Chase Apartments AL
Wilshire Park Apartments AL
Bethel Park Apartments OH
Zebulon Park Apartments OH
Tivoli Place Apartments TN
Northwood Apartments FL
Oxford Trace Apartments SC
Ivanhoe Apartments Limited Partnership UT
Washington Brooklyn Limited Partnership NY
C.H. Development Group Associates (Manhattan B) NY
Davidson Court Limited Partnership NY
Magnolia Mews Limited Partnership PA
The Oaks Village Limited Partnership NC
Greenfield Village Limited Partnership NC
CLM Equities Limited Partnership (Morris Avenue) NY
Victoria Manor Associates CA
Ogontz Hall Investors PA
Eagle Ridge Limited Partnership WI
Nelson Anderson Affordable Housing Limited Partnership NY
Conifer Irondequoit Associates (Abraham Lincoln) NY
Middletown Associates (Wilson Street) PA
Lauderdale Lakes Associates, Ltd. FL
Flipper Temple Associates Limited Partnership GA
220 Cooper Street Associates Limited Partnership NJ
Pecan Creek OK
363 Grand Vendome Associates Limited Partnership NY
New Augusta Ltd. (Rainer Villas) AL
Pine Shadow Apartments MS
Windsor Place Apartments AL
Brookwood Apartments, Ltd. AL
Heflin Hills Apartments, Ltd. AL
Shadowood Apts., Ltd. AL
Brittany Associates, Ltd. MS
Hidden Valley Apartments AL
Westbrook Square Limited Partnership MS
Warsaw Elderly Housing Ltd. (Royal Pines Apts.) KY
West Hill Square Apts., Ltd. AL
Elmwood Associates MS
Harmony Gate Associates CA
124
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.
FREEDOM TAX CREDIT PLUS L.P.
By: RELATED FREEDOM ASSOCIATES L.P.
a general partner
By: RELATED FREEDOM ASSOCIATES INC.,
general partner
Date: June 13, 2005
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes,
Director and President
By: FREEDOM GP INC.
a general partner
Date: June 13, 2005
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
Director and President
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the report has been signed below by the following persons on behalf
by the registrant and in the capacities and on the dates indicated:
Signature Title Date
- --------------------------- --------------------------------------------------- -------------
/s/ Alan P. Hirmes Director and President (Principal Executive and
- ------------------ Financial Officer) of Related Freedom Associates,
Alan P. Hirmes Inc. and Freedom GP Inc. June 13, 2005
-------------
/s/ Glenn F. Hopps Treasurer (Principal Accounting Officer) of Related
- ------------------
Glenn F. Hopps Freedom Associates, Inc. June 13, 2005
-------------
Exhibit 31.1
CERTIFICATION PURSUANT TO RULE
13A-14(A) OR RULE 15D-14(A)
I, Alan P. Hirmes, Principal Executive Officer and Principal Financial
Officer of Related Freedom Associates L.P. and Freedom GP Inc. (the
"General Partners"), each of which is a general partner of Freedom Tax
Credit Plus L.P. (the "Partnership"), hereby certify that:
1. I have reviewed this annual report on Form 10-K for the period ended
March 31, 2005 of the Partnership;
2. Based on my knowledge, this 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 period
covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows
of the Partnership as of, and for, the periods presented in this
report;
4. I am responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in
Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Partnership and
have:
a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under my supervision,
to ensure that material information relating to the Partnership,
including its consolidated subsidiaries, is made known to me by others
within those entities, particularly during the period in which this
report is being prepared;
b) designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under my
supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting
principles;
c) evaluated the effectiveness of the Partnership's disclosure controls
and procedures and presented in this report my conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
d) disclosed in this report any change in the Partnership's internal
control over financial reporting that occurred during the Partnership's
fourth fiscal quarter that has materially affected, or is reasonably
likely to materially affect, the Partnership's internal control over
financial reporting; and
5. I have disclosed, based on my most recent evaluation of internal
control over financial reporting, to the Partnership's auditors and to
the boards of directors of the General Partners:
a) all significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the Partnership's ability to
record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Partnership's
internal control over financial reporting.
Date: June 13, 2005
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
Principal Executive Officer and
Principal Financial Officer
Exhibit 32.1
CERTIFICATION PURSUANT
TO RULE 13A-14(B) OR RULE 15D-14(B)
AND SECTION 1350 OF TITLE 18
OF THE UNITED STATES CODE (18 U.S.C. 1350)
In connection with the Annual Report of Freedom Tax Credit Plus L.P. (the
"Partnership") on Form 10-K for the period ending March 31, 2005 as filed with
the Securities and Exchange Commission ("SEC") on the date hereof (the
"Report"), I, Alan P. Hirmes, Principal Executive Officer and Principal
Financial Officer of Related Freedom Associates L.P. and Freedom GP Inc., each
of which is the general partner of the Partnership, certify, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Partnership.
A signed original of this written statement required by Section 906 has been
provided to the Partnership and will be retained by the Partnership and
furnished to the SEC or its staff upon request.
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
Principal Executive Officer and
Principal Financial Officer
June 13, 2005
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
-------------------------------------------------------
ON FINANCIAL STATEMENT SCHEDULES
--------------------------------
TO THE PARTNERS OF
FREEDOM TAX CREDIT PLUS L.P. AND SUBSIDIARIES
In connection with our audit of the consolidated financial statements of FREEDOM
TAX CREDIT PLUS L.P. AND SUBSIDIARIES included in the Form 10-K as presented in
our opinion dated June 10, 2005, which is based in part on the reports of other
auditors, we have also audited supporting Schedule I as of March 31, 2005 and
2004 and for the years ended March 31, 2005 and 2004, and Schedule III as of
March 31, 2005 and 2004 and for the years ended March 31, 2005 and 2004. In our
opinion, based on our audits and the reports of the other auditors, these
schedules present fairly, when read in conjunction with the related financial
statements, the financial data required to be set forth therein.
/s/ Friedman LLP
New York, New York
June 10, 2005
129
FREEDOM TAX CREDIT PLUS L.P.
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
Summarized condensed financial information of registrant (not including
consolidated subsidiary partnerships)
CONDENSED BALANCE SHEETS
ASSETS
March 31,
--------------------------
2005 2004
----------- -----------
Cash and cash equivalents $ 81,271 $ 18,980
Investment in subsidiary partnerships, carried
on an equity basis 6,255,312 9,557,394
----------- -----------
Total assets $ 6,336,583 $ 9,576,374
=========== ===========
LIABILITIES AND PARTNER'S (DEFICIT) CAPITAL
Due to general partner and affiliates $ 8,400,538 $ 7,430,649
Accounts payable and other liabilities 54,874 44,916
----------- -----------
Total liabilities 8,455,412 7,475,565
----------- -----------
Partners' (deficit) capital (2,118,829) 2,100,809
----------- -----------
Total liabilities and partners' (deficit) capital $ 6,336,583 $ 9,576,374
=========== ===========
130
FREEDOM TAX CREDIT PLUS L.P.
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED STATEMENTS OF OPERATIONS
Year Ended March 31,
-----------------------------------------
2005 2004 2003
----------- ----------- -----------
Income
Other income $ 10,404 $ 35,374 $ 237
----------- ----------- -----------
Expenses
Equity in losses of subsidiary partnerships 3,163,835 2,813,143 2,808,962
General and administrative 115,972 69,472 60,045
General and administrative-related parties 950,235 907,723 884,977
----------- ----------- -----------
Total Expenses 4,230,042 3,790,338 3,753,984
----------- ----------- -----------
Net loss $(4,219,638) $(3,754,964) $(3,753,747)
=========== =========== ===========
131
FREEDOM TAX CREDIT PLUS L.P.
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED STATEMENTS OF CASH FLOWS
Year Ended March 31,
-----------------------------------------
2005 2004 2003
----------- ----------- -----------
Net loss $(4,219,638) $(3,751,426) $(3,753,747)
----------- ----------- -----------
Adjustments to reconcile net loss to net cash
used in operating activities:
Equity in losses of subsidiary partnerships 3,163,835 2,809,605 2,808,962
Increase (decrease) in liabilities:
Due to general partner and affiliates 969,889 900,629 920,768
Accounts payable and other liabilities 9,958 (391) (6,792)
----------- ----------- -----------
Total adjustments 4,143,682 3,709,843 3,722,938
----------- ----------- -----------
Net cash used in operating activities (75,956) (41,583) (30,809)
----------- ----------- -----------
Cash flows from investing activities:
Distributions from subsidiaries 138,247 15,544 54,651
----------- ----------- -----------
Net increase (decrease) in cash and cash equivalents 62,291 (26,039) 23,842
Cash and cash equivalents, beginning of year 18,980 45,019 21,177
----------- ----------- -----------
Cash and cash equivalents, end of year $ 81,271 $ 18,980 $ 45,019
=========== =========== ===========
132
FREEDOM TAX CREDIT PLUS L.P.
AND CONSOLIDATED PARTNERSHIPS
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
MARCH 31, 2005
Initial Cost to Partnership
----------------------------
Cost Purchase Price
Capitalized Adjustments (B)
Buildings and Subsequent to Buildings and
Description Encumbrances Land Improvements Acquisition Improvements
- ---------------------- ------------ ----------- ------------ ----------- ------------
Parkside Townhouses
York, PA $ 1,511,773 $ 263,231 $ 4,439,564 $ 65,514 $ 0
Twin Trees
Layton, UT 1,073,496 112,401 2,668,179 227,274 (47,642)
Bennion (Mulberry)
Taylorsville, UT 2,044,227 258,000 4,934,447 793,162 (22,842)
Hunters Chase
Madison, AL 2,353,689 411,100 5,616,330 (1,394,431) (713,028)
Bethel Park
Bethel, OH 1,802,305 141,320 5,365,882 459,563 (846,229)
Zebulon Park
Owensville, OH 1,515,413 165,000 4,187,880 410,159 (542,936)
Tivoli Place
Murphreesboro, TN 1,444,448 267,500 4,146,759 384,934 (207,625)
Northwood
Jacksonville, FL 2,608,748 494,900 6,630,321 558,052 (294,886)
Oxford Trace
Aiken, SC 674,628 162,000 1,725,512 (587,197) (161,049)
Wilshire
Huntsville, AL 1,613,857 178,497 4,014,281 (808,916) (432,405)
Ivanhoe
Salt Lake City, UT 364,138 41,000 1,136,915 33,554 0
Washington Avenue
Brooklyn, NY 0 42,485 2,843,351 73,904 0
C.H. Development
(Manhattan B)
New York, NY 1,339,669 3 3,294,688 46,902 0
Davidson Court
Staten Island, NY 0 96,892 773,052 37,064 0
Magnolia Mews
Philadelphia, PA 1,566,060 200,000 668,007 2,407,680 0
Oaks Village
Whiteville, NC 1,445,838 63,548 1,799,849 194,262 0
Greenfield Village
Dunn, NC 1,453,670 78,296 1,806,126 159,208 0
Morris Avenue (CLM
Equities)
Bronx, NY 2,171,329 2 4,767,049 424,304 0
Victoria Manor
Riverside, CA 2,127,795 615,000 5,340,962 (153,198) 0
Ogontz Hallz
Philadelphia, PA 2,184,553 0 328,846 3,438,280 0
Eagle Ridge
Stoughton, WI 1,515,287 321,594 2,627,385 181,348 0
Nelson Anderson
Bronx, NY 3,257,989 2 6,524,096 236,374 0
Conifer Irondequoit
(Abraham Lincoln)
Irondequoit, NY 2,716,898 20,000 5,407,108 96,415 0
Wilson Street Apts
(Middletown)
Middletown, PA 1,673,496 38,449 0 3,461,004 0
Lauderdale Lakes
Lauderdale Lakes, FL 4,729,322 873,973 3,976,744 5,817,148 0
Flipper Temple
Atlanta, GA 2,485,980 70,519 4,907,110 699,720 0
220 Cooper Street
Camden, NJ 931,275 41,000 0 3,678,841 0
Vendome
Brooklyn, NY 2,574,994 12,000 4,867,584 220,536 0
Pecan Creek
Tulsa, OK 996,583 50,000 1,484,923 232,054 0
Gross Amount at which Carried at Close of Period
------------------------------------------------
Buildings and
Description E Land Improvements Total (A)
- ---------------------- - ----------- ------------ -----------
Parkside Townhouses
York, PA $ 265,796 $ 4,502,513 $ 4,768,309
Twin Trees
Layton, UT 115,125 2,845,087 2,960,212
Bennion (Mulberry)
Taylorsville, UT 260,565 5,702,202 5,962,767
Hunters Chase
Madison, AL 413,665 3,506,306 3,919,971
Bethel Park
Bethel, OH 143,885 4,976,651 5,120,536
Zebulon Park
Owensville, OH 167,565 4,052,538 4,220,103
Tivoli Place
Murphreesboro, TN 270,065 4,321,503 4,591,568
Northwood
Jacksonville, FL 497,465 6,890,922 7,388,387
Oxford Trace
Aiken, SC 164,564 974,702 1,139,266
Wilshire
Huntsville, AL 181,060 2,770,397 2,951,457
Ivanhoe
Salt Lake City, UT 42,677 1,168,792 1,211,469
Washington Avenue
Brooklyn, NY 44,162 2,915,578 2,959,740
C.H. Development
(Manhattan B)
New York, NY 1,680 3,339,913 3,341,593
Davidson Court
Staten Island, NY 98,569 808,439 907,008
Magnolia Mews
Philadelphia, PA 201,677 3,074,010 3,275,687
Oaks Village
Whiteville, NC 65,225 1,992,434 2,057,659
Greenfield Village
Dunn, NC 79,973 1,963,657 2,043,630
Morris Avenue (CLM
Equities)
Bronx, NY 1,679 5,189,676 5,191,355
Victoria Manor
Riverside, CA 616,677 5,186,087 5,802,764
Ogontz Hallz
Philadelphia, PA 1,677 3,765,449 3,767,126
Eagle Ridge
Stoughton, WI 323,271 2,807,056 3,130,327
Nelson Anderson
Bronx, NY 1,679 6,758,793 6,760,472
Conifer Irondequoit
(Abraham Lincoln)
Irondequoit, NY 21,677 5,501,846 5,523,523
Wilson Street Apts
(Middletown)
Middletown, PA 40,126 3,459,327 3,499,453
Lauderdale Lakes
Lauderdale Lakes, FL 875,668 9,792,197 10,667,865
Flipper Temple
Atlanta, GA 72,196 5,605,153 5,677,349
220 Cooper Street
Camden, NJ 42,677 3,677,164 3,719,841
Vendome
Brooklyn, NY 13,677 5,086,443 5,100,120
Pecan Creek
Tulsa, OK 50,161 1,716,816 1,766,977
Life on which
Depreciation in
Year of Latest Income
Accumulated Construction/ Date Statements are
Description EDepreciation Renovation Acquired Computed (C)(D)
- ---------------------- ------------- ---------- ---------- ---------------
Parkside Townhouses
York, PA $ 2,321,286 1989 Sept. 1990 27.5
Twin Trees
Layton, UT 1,562,914 1989 Oct. 1990 27.5
Bennion (Mulberry)
Taylorsville, UT 3,195,776 1989 Oct. 1990 27.5
Hunters Chase
Madison, AL 2,536,093 1989 Oct. 1990 27.5
Bethel Park
Bethel, OH 2,903,087 1989 Oct. 1990 27.5
Zebulon Park
Owensville, OH 2,310,019 1989 Oct. 1990 27.5
Tivoli Place
Murphreesboro, TN 2,436,199 1989 Oct. 1990 27.5
Northwood
Jacksonville, FL 3,857,231 1989 Oct. 1990 27.5
Oxford Trace
Aiken, SC 822,529 1989 Oct. 1990 27.5
Wilshire
Huntsville, AL 1,777,281 1989 Oct. 1990 27.5
Ivanhoe
Salt Lake City, UT 558,468 1991 Jan. 1991 27.5
Washington Avenue
Brooklyn, NY 1,326,365 1991 Jan. 1991 27.5
C.H. Development
(Manhattan B)
New York, NY 1,899,111 1991 Jan. 1991 27.5
Davidson Court
Staten Island, NY 338,384 1991 Mar. 1991 27.5
Magnolia Mews
Philadelphia, PA 1,429,044 1991 Mar. 1991 27.5
Oaks Village
Whiteville, NC 1,022,569 1991 Mar. 1991 27.5
Greenfield Village
Dunn, NC 1,000,441 1991 Mar. 1991 27.5
Morris Avenue (CLM
Equities)
Bronx, NY 2,476,826 1991 Apr. 1991 27.5
Victoria Manor
Riverside, CA 2,535,743 1991 Apr. 1991 27.5
Ogontz Hallz
Philadelphia, PA 1,763,236 1990 Apr. 1991 27.5
Eagle Ridge
Stoughton, WI 1,726,130 1991 May 1991 27.5
Nelson Anderson
Bronx, NY 3,177,743 1991 June 1991 27.5
Conifer Irondequoit
(Abraham Lincoln)
Irondequoit, NY 2,724,208 1991 Sept. 1991 27.5
Wilson Street Apts
(Middletown)
Middletown, PA 1,457,843 1991 Sept. 1991 27.5
Lauderdale Lakes
Lauderdale Lakes, FL 3,355,927 1991 Oct. 1991 40
Flipper Temple
Atlanta, GA 2,297,704 1991 Oct. 1991 27.5
220 Cooper Street
Camden, NJ 1,756,429 1991 Dec. 1991 27.5
Vendome
Brooklyn, NY 3,192,913 1991 Dec. 1991 20
Pecan Creek
Tulsa, OK 689,233 1991 Dec. 1991 27.5
133
FREEDOM TAX CREDIT PLUS L.P.
AND CONSOLIDATED PARTNERSHIPS
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
MARCH 31, 2005
(continued)
Initial Cost to Partnership
----------------------------
Cost Purchase Price
Capitalized Adjustments (B)
Buildings and Subsequent to Buildings and
Description Encumbrances Land Improvements Acquisition Improvements
- ---------------------- ------------ ----------- ------------ ----------- ------------
New Augusta Ltd.
(Rainer Villas)
New Augusta, AL 703,253 15,000 939,681 111,779 0
Pine Shadow Apts
Waveland, MS 1,615,483 74,550 2,117,989 188,732 0
Windsor Place Apts
Wedowee, AL 752,818 40,000 904,888 54,075 0
Brookwood Apts
Foley, AL 1,245,754 68,675 1,517,190 83,523 0
Heflin Hills Apts
Heflin, AL 730,578 50,000 841,300 45,804 0
Shadowood Apts
Stevenson, AL 733,073 27,000 898,800 20,786 0
Brittany Apartments
DeKalb, MS 677,739 20,000 843,592 44,994 0
Hidden Valley Apts
Brewton, AL 1,206,699 68,000 1,637,840 99,559 0
Westbrook Square L.P.
Carthage, MS 1,010,019 40,000 1,254,957 62,522 0
Warsaw Elderly Housing
Ltd
Warsaw, KY 1,119,416 98,819 1,333,606 17,310 0
West Hill Square Apts
Ltd
Gordo, AL 756,177 60,000 954,020 46,245 0
Elmwood Assoc
Picayune, MS 697,568 81,500 829,183 43,580 0
Harmony Gate Assoc
Los Angeles, CA 3,693,310 0 9,757,807 57,491 0
----------- ----------- ------------ ----------- -----------
$65,119,347 $ 5,662,256 $120,113,803 $22,269,914 $(3,268,642)
=========== =========== ============ =========== ===========
Gross Amount at which Carried at Close of Period
------------------------------------------------
Buildings and
Description Land Improvements Total (A)
- ---------------------- ----------- ------------ -----------
New Augusta Ltd.
(Rainer Villas)
New Augusta, AL 15,161 1,051,299 1,066,460
Pine Shadow Apts
Waveland, MS 74,711 2,306,560 2,381,271
Windsor Place Apts
Wedowee, AL 40,161 958,802 998,963
Brookwood Apts
Foley, AL 68,836 1,600,552 1,669,388
Heflin Hills Apts
Heflin, AL 50,161 886,943 937,104
Shadowood Apts
Stevenson, AL 27,161 919,425 946,586
Brittany Apartments
DeKalb, MS 20,161 888,425 908,586
Hidden Valley Apts
Brewton, AL 68,161 1,737,238 1,805,399
Westbrook Square L.P.
Carthage, MS 40,161 1,317,318 1,357,479
Warsaw Elderly Housing
Ltd
Warsaw, KY 98,980 1,350,755 1,449,735
West Hill Square Apts
Ltd
Gordo, AL 60,161 1,000,104 1,060,265
Elmwood Assoc
Picayune, MS 81,661 872,602 954,263
Harmony Gate Assoc
Los Angeles, CA 161 9,815,137 9,815,298
----------- ------------ ------------
$ 5,720,520 $139,056,811 $144,777,331
=========== ============ ============
Life on which
Depreciation in
Year of Latest Income
Accumulated Construction/ Date Statements are
Description Depreciation Renovation Acquired Computed (C)(D)
- ---------------------- ------------ ---------- ---------- ---------------
New Augusta Ltd.
(Rainer Villas)
New Augusta, AL 377,188 1991 Dec. 1991 27.5
Pine Shadow Apts
Waveland, MS 1,006,955 1991 Dec. 1991 27.5
Windsor Place Apts
Wedowee, AL 356,296 1991 Dec. 1991 27.5
Brookwood Apts
Foley, AL 597,434 1991 Dec. 1991 27.5
Heflin Hills Apts
Heflin, AL 350,840 1991 Dec. 1991 27.5
Shadowood Apts
Stevenson, AL 338,951 1991 Dec. 1991 27.5
Brittany Apartments
DeKalb, MS 327,876 1990 Dec. 1991 27.5
Hidden Valley Apts
Brewton, AL 645,987 1991 Dec. 1991 27.5
Westbrook Square L.P.
Carthage, MS 484,461 1990 Dec. 1991 27.5
Warsaw Elderly Housing
Ltd
Warsaw, KY 471,302 1991 Dec. 1991 27.5
West Hill Square Apts
Ltd
Gordo, AL 361,680 1991 Dec. 1991 27.5
Elmwood Assoc
Picayune, MS 305,278 1991 Dec. 1991 27.5
Harmony Gate Assoc
Los Angeles, CA 4,485,693 1992 Jan.1992 27.5
-----------
$68,560,673
===========
(A) Aggregate cost for federal income tax purposes, $146,576,191.
(B) Rental guarantees and development deficit guarantees for GAAP purposes are
treated as a reduction of the asset.
(C) Furniture and fixtures, included with buildings and improvements, are
depreciated primarily by the straight line method over the estimated useful
lives ranging from 5 to 7 years.
(D) Since all properties were acquired as operating properties, depreciation is
computed using primarily the straight line method over the estimated useful
lives determined by the Partnership from date of acquisition.
(E) Reconciliation of Real Estate owned:
Cost of Property and Equipment Accumulated Depreciation
----------------------------------------------- -----------------------------------------------
Year Ended March 31,
-------------------------------------------------------------------------------------------------
2005 2004 2003 2005 2004 2003
------------- ------------- ------------- ------------- ------------- -------------
Balance at beginning of year $ 144,210,167 $ 143,202,053 $ 142,450,720 $ 63,733,516 $ 58,927,642 $ 54,178,153
Additions during year:
Improvements 749,123 1,017,659 751,333
Dispositions (181,959) (9,545) 0 (706) (5,513) 0
Depreciation expense 4,827,863 4,811,387 4,749,489
------------- ------------- ------------- ------------- ------------- -------------
Balance at close of year $ 144,777,331 $ 144,210,167 $ 143,202,053 $ 68,560,673 $ 63,733,516 $ 58,927,642
============= ============= ============= ============= ============= =============
At the time the local partnerships were acquired by Freedom Tax Credit Plus
L.P., the entire purchase price paid by Freedom Tax Credit Plus L.P. was pushed
down to the local partnerships as property and equipment with an offsetting
credit to capital. Since the projects were in the construction phase at the time
of acquisition, the capital accounts were insignificant at the time of purchase.
Therefore, there are no material differences between the original cost basis for
tax and GAAP.
134