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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 15, 2005
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 0-17015
LIBERTY TAX CREDIT PLUS L.P.
(Exact name of registrant as specified in its charter)
Delaware 13-3446500
- -------------------------------- ---------------------
(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:
Beneficial Assignment Certificates and Limited Partnership Interests
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes [ ] No [X]
The approximate aggregate book value of the voting and non-voting common
equity held by non-affiliates of the Registrant as of September 15, 2004, was
($36,440,000), based on Limited Partner equity (deficit) as of such date.
DOCUMENTS INCORPORATED BY REFERENCE
None
PART I
Item 1. Business.
General
- -------
Liberty Tax Credit Plus L.P. (the "Partnership") is a limited partnership which
was formed under the laws of the State of Delaware on June 26, 1987. The general
partners of the Partnership are Related Credit Properties L.P., a Delaware
limited partnership (the "Related General Partner") and Liberty Associates III
L.P., a Delaware limited partnership ("Liberty Associates", and together with
the Related General Partner, the "General Partners"). The Related General
Partner is also the special limited partner of the Partnership. The general
partner of the Related General Partner is Credit Properties GP LLC ("Credit
Properties"), a Delaware corporation. The general partner of Liberty Associates
is the Related General Partner. On November 17, 2003, CharterMac acquired
Related Capital Company, which is the indirect parent of RCC Manager L.L.C., the
managing member of Credit Properties. 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 November 20, 1987, 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 November 20, 1987, as
supplemented by the supplements thereto dated January 14, 1988 and March 14,
1988 (as so supplemented, the "Prospectus"). As of April 4, 1988 (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 $79,937,500 of gross
proceeds of the Offering from 5,525 investors.
The Partnership was formed to invest, as a limited partner, in other limited
partnerships (referred to herein as "Local Partnerships," "subsidiaries" or
"subsidiary partnerships") which own leveraged low and moderate-income
multifamily residential complexes ("Apartment Complexes") that are eligible for
the low-income housing tax credit ("Housing Tax Credit") enacted in the Tax
Reform Act of 1986, and to a lesser extent in Local Partnerships owning
properties ("Rehabilitation Projects"), and together with the Apartment
Complexes, the "Properties" that are eligible for the historic rehabilitation
tax credit (the "Historic Rehabilitation Tax Credit", and together with the
Housing Tax Credit, the "Tax Credits"). The Partnership's investment in each
Local Partnership represents a 20% to 98% interest in each of the Local
Partnerships. The Partnership does not anticipate making any additional
investments. As of March 15, 2005, the Partnership has disposed of ten of its 31
original Properties. Subsequently on March 29, 2005, the property and the
related assets and liabilities of Regent Street Associates, L.P. ("Regent
Street") were sold. See Item 2, Properties, below.
Liberty Associates is the special limited partner in all of the Local
Partnerships, as well as a general partner of the Partnership. Liberty
Associates has certain rights and obligations in its role as special limited
partner, which permit it to exercise control over the management and policies of
the Local Partnerships.
The investment objectives of the Partnership are to:
1. Entitle qualified BACs holders to substantial Housing Tax Credits (and
potentially Historic Rehabilitation Tax Credits) over the period of the
Partnership's entitlement to claim Tax Credits (for each Property, ten years
from the date of investment or, if later, the date the Property is placed in
service);
2. Participate in any capital appreciation in the value of the Properties and
provide distributions of sale or refinancing proceeds upon the disposition
of Properties;
3. Preserve and protect the Partnership's capital;
4. Provide cash distributions, when available, from the operations of
Properties; and
5. 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
active business income.
One of the Partnership's objectives is 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 "Tax Credit Period"). Each of the Local Partnerships in which the
Partnership has acquired an interest has been allocated by respective state
credit agencies the authority to recognize Tax Credits during the Tax 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") commencing at the
beginning of the Tax Credit Period. Once a Local Partnership has become eligible
to recognize Tax Credits, it may lose such eligibility and suffer an event of
"recapture" if its Property fails to remain in compliance with the Tax Credit
requirements at any time during the Compliance Period. None of the Local
Partnerships in which the Partnership has acquired an interest has suffered an
event of recapture.
The Tax Credits are attached to a Local Partnership for the Tax Credit Period
and are transferable with the property during the entirety of such ten year
period. If trends in the real estate market warranted the sale of a property,
the remaining Tax Credits would transfer to the new owner, thereby adding value
to the property on the market. However, such value declines each year and is not
included in the financial statement carrying amount. The Tax Credit Periods
expired at various times through December 31, 2003 with respect to the Local
Partnerships depending upon when the Tax Credit Period commenced.
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
2
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 $686 and $21,629 in Tax Credits during the 2003 and
2002 Fiscal Years, respectively. As of December 31, 2003 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 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 began to end on January 1, 2004 and
will continue through December 31, 2008 with respect to the Properties depending
upon when the Tax Credit Period commenced.
The Partnership also 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 investment and other passive activities, and allocating
passive losses to the corporate BACs holders to offset business income. At this
time, there can be no assurance that the Partnership will continue to meet this
investment objective
As of March 15, 2005, the Partnership has not met its investment objective of
providing cash distributions from the operations of the Properties. The
Partnership does not anticipate providing cash distributions to BACs holders
other than distributions of sale or refinancing proceeds upon the disposition of
Properties. Furthermore, at this time there can be no assurance that the
Partnership will achieve this investment objective. Subsequently, on April 15,
2005, a distribution from sales proceeds was made to the BAC Holders for
approximately $1,919,000 and to the general partner for approximately $19,000.
The Partnership is subject to the risks incident to potential losses arising
from the management and ownership of improved real estate. The Partnership can
also be affected by poor economic conditions generally. However, no more than
25% of the Properties are located in any single state.
The Partnership is the beneficiary of certain subsidy agreements pursuant to
which the United States Department of Housing and Urban Development ("HUD")
subsidizes the amount of rent that the Local Partnerships earn. There are
substantial risks associated with owning properties receiving government
assistance, such as 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 contracts expire.
Sales of Underlying Properties/Local Partnership Interests
- ----------------------------------------------------------
General
- -------
The Partnership is currently in the process of disposing of its investments. As
of March 15, 2005, the Partnership had disposed of ten of its thirty-one
original investments. Subsequently on March 29, 2005, the property and the
related assets and liabilities of Regent Street were sold. Also subsequently on
April 25, 2005, the Partnership entered into a contract to sell the Limited
Partnership interest in Fox Glenn Investors, L.P. ("Fox Glenn"). There can be no
assurance as to whether or when the sale will actually occur.
On February 17, 2005, the partnership's limited Partnership Interest in Redwood
Villa Associates ("Redwood") was sold to an unaffiliated third party purchaser
for $60,000, resulting in a gain of approximately $1,700,000 which will be
recognized in the Partnership's Form 10-Q for the quarter ended June 15, 2005.
On January 5, 2005, the property and the related assets and liabilities of Lund
Hill Associates, L.P. ("Lund Hill") were sold to an unaffiliated thirty party
purchaser for $6,500,000, resulting in a gain of approximately $1,100,000 which
will be recognized in the Partnership's Form 10-Q for the quarter ended June 15,
2005.
On December 29, 2004, the Partnership entered into an agreement for the sale of
its Limited Partnership Interest in Lancaster Towers Associates, LTD
("Lancaster") to an affiliate of the Local General Partner for a purchase price
of $449,750. The sales documents have been executed and the funds are being held
in escrow waiting for approval of the sale from the Department of Housing and
Urban Development ("HUD"). No assurances can be given that HUD will approve the
sale. Lancaster is being held as an Asset held for sale as of March 15, 2005.
On September 24, 2004, the property and the related assets and liabilities of
Autumn Park Associates, L.P. ("Autumn Park") were sold to an unaffiliated third
party for approximately $4,800,000. The proceeds were used to settle the
associated mortgage which had an outstanding balance of approximately
$3,600,000, and the balance was distributed to the partners. This amount
consisted of $900,000 paid in cash at the closing and $150,000 pursuant to one
promissory note. The note compounds interest at 10% and is due on October 30,
2005. The sale resulted in a gain of approximately $2,100,000.
On August 27, 2004, the property and the related assets and liabilities of 2108
Bolton Drive Associated, L.P. ("Bolton") were sold to an unaffiliated third
party for $8,891,000, resulting in a gain of approximately $1,700,000.
On July 30, 2004, the property and the related assets and liabilities of
Tanglewood Apartments, L.P. ("Tanglewood") were sold to an unaffiliated third
party for $3,425,000, resulting in a gain of approximately $1,100,000. The sale
resulted in the liquidation of Tanglewood.
On March 31, 2004, the Partnership's limited Partnership Interest in Walnut Park
Plaza ("Walnut") was sold to the local general partner for a purchase price of
$1 plus the assumption of all the related debt which totaled approximately
$7,700,000 resulting in a general partner contribution of approximately
$2,600,000. The sale resulted in the liquidation of Walnut.
3
On March 2, 2004, the Partnership signed a "Letter of Intent" with an
unaffiliated third party to purchase the Partnership's limited partnership
interest in Bayridge Associates, L.P. ("Bayridge") for a purchase price of
$1,100,000 plus the assumption of the existing debt. The closing is expected to
occur in 2006. No assurances can be given that the sale will actually occur.
On May 19, 2003, the property and the related assets and liabilities of Silver
Blue were sold to an unaffiliated third party for a purchase price of $3,500,000
resulting in a gain of approximately $400,000. Accrued interest on a note
related to the Local Partnership was forgiven resulting in forgiveness of
indebtedness income of approximately $114,000. The sale resulted in the
liquidation of Silver Blue.
On March 16, 2003, the Partnership recorded the transfer of the deed in lieu of
foreclosure to Bryden Road, one of the properties owned by Shiloh to an
unaffiliated third party. The outstanding mortgage balance paid by the third
party on the day of transfer was $189,871 resulting in a gain of $104,000, which
is included in gain on sale of properties.
On January 23, 2003, the property and the related assets and liabilities of
Ludlam Gardens Apartments, LTD. ("Ludlam") were sold to an unaffiliated third
party for a purchase price of $3,900,000 resulting in a gain of approximately
$1,000,000. The sale resulted in the liquidation of Ludlam.
On January 16, 2003, the property and the related assets and liabilities of
Dixie Apartment Associates, LTD. ("Dixie") were sold to an unaffiliated third
party for a purchase price of $1,300,000 resulting in a gain of approximately
$300,000. The sale resulted in the liquidation of Dixie.
On December 18, 2002, the Partnership entered into an agreement with the local
general partner to sell its remaining limited partnership interest in Shiloh for
a purchase price of $175,000. No assurance can be given that the closing will
actually occur.
On May 31, 2002, the Partnership's Limited Partnership interest in Apple Creek
Housing Associates, LTD. ("Apple Creek") was sold to an unaffiliated third party
purchaser for $200,000 resulting in a gain of approximately $6,800,000,
Segments
- --------
The Partnership operates in one segment, which is the investment in multi-family
residential properties.
Competition
- -----------
The real estate business is highly competitive and substantially all of the
Properties acquired by the Partnership are subject to active competition from
similar properties in their respective vicinities. In addition, various other
limited partnerships may, in the future, be formed by the General Partners
and/or their affiliates to engage in businesses which may be competitive 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 of Limited Partnership
(the "Partnership Agreement").
Item 2. Properties
The Partnership had acquired an interest as a limited partner in 31 Local
Partnerships. During the fiscal year ended March 15, 2005, the property and the
related assets and liabilities of four Local Partnerships were sold and the
limited partnership interest in two Local Partnership was sold. Through the
fiscal year ended March 15, 2005, the properties and the related assets and
liabilities of seven Local Partnerships and the limited partnership interests in
three Local Partnerships were sold. Subsequently on March 29, 2005, the property
and the related assets and liabilities of Regent Street were sold (see Note 15
in Item 8). Set forth below is a schedule of the Local Partnerships including
certain information concerning the Properties (the "Local Partnership
Schedule"). Further information concerning those Local Partnerships and their
Properties, including any encumbrances affecting the Properties, may be found in
Item 15, Schedule III.
Except for the seven Local Partnerships listed below, the following is the
allocation of ownership percentage for each of the Local Partnerships:
Local General Partner 1%
Special Limited Partner 1%
Limited Partner - Liberty Tax Credit Plus L.P. 98%
General Special Liberty Tax Other
Partner(s) Limited Partners Credit Plus L.P. LimitedPartners*
---------- ---------------- ---------------- ----------------
Shiloh Grove 5% 1% 94% 0%
Concourse Artists 1% 1% 79% 19%
Grand Concourse 1% 1% 79% 19%
Robin Housing 1% 1% 79% 19%
Willoughby - Wyckoff 1% 1% 79% 19%
Penn Alto 1% 1% 19.60% 78.40%
Sartain 1% 1% 71.54% 26.46%
*Each is an affiliate of the Partnership with the same management.
4
Local Partnership Schedule
--------------------------
% of Units Occupied at May 1,
Name and Location -----------------------------------------------
(Number of Units) Date Acquired 2005 2004 2003 2002 2001
- -------------------------------------- -------------- ------ ------ ------ ------ ------
B & C Housing Associates, L.P. December 1987 96 94 99 97 93
Tulsa, OK (220)
State Street 86 Associates, L.P. February 1988 99 100 98 99 97
Camden, NJ (200)
Fox Glenn Investors, L.P. March 1988 98 96 98 95 97
Seat Pleasant, MD (172)
Shiloh-Grove, L.P. (Mt. Vernon) February 1988 95 94 100 95 99
Columbus, OH (394)
Silver Blue Lake Apartments, LTD. February 1988 (c) (c) 96 93 87
Miami, FL (123)
Lancaster Towers Associates, LTD. May 1988 100 100 99 100 100
Lancaster, NY (157)
West Kinney Associates, L.P. June 1988 99 97 100 97 97
Newark, NJ (114)
Autumn Park Associates, L.P. June 1988 (d) 96 88 88 95
Wilsonville, OR (144)
Regent Street Associates, L.P. June 1988 (f) 94 90 100 94
Philadelphia, PA (80)
Magnolia Arms Associates, LTD. July 1988 89 92 98 99 90
Jacksonville, FL (232)
Greenleaf Associates, L.P. July 1988 100 100 97 94 97
Kansas City, Mo (195)
Alameda Towers Associates, L.P. July 1988 99 94 90 97 99
San Juan, PR (150)
Dixie Apartment Associates, LTD. July 1988 (a) (a) (a) 100 97
Miami, FL (29)
Ludlam Gardens Apartments, LTD. July 1988 (a) (a) (a) 99 99
Miami, FL (90)
Grove Parc Associates, L.P. (Woodlawn) July 1988 96 96 98 92 94
Chicago, IL (504)
2108 Bolton Drive Associates, L.P. July 1988 (d) 85 78 92 97
Atlanta, GA (358)
Apple Creek Housing Associates, LTD. June 1988 (b) (b) (b) 93 99
Arvado, CO (195)
Redwood Villa Associates September 1988 (e) 98 98 99 100
San Diego, CA (92)
Charles Drew Court Associates, L.P. September 1988 100 97 100 95 97
Atlantic City, NJ (38)
Walnut Park Plaza Associates, L.P. September 1988 (e) (e) 80 89 83
Philadelphia, PA (227)
Bayridge Associates, L.P. December 1988 74 90 91 91 97
Beaverton, OR (246)
United-Pennsylvanian, L.P. December 1988 99 95 99 97 99
Erie, PA (112)
5
Local Partnership Schedule
--------------------------
% of Units Occupied at May 1,
Name and Location -----------------------------------------------
(Number of Units) Date Acquired 2005 2004 2003 2002 2001
- -------------------------------------- -------------- ------ ------ ------ ------ ------
2051 Grand Concourse Associates, L.P. November 1988 97 95 98 91 100
Bronx, NY (63)
Concourse Artists Housing
Associates, L.P. November 1988 100 96 96 100 96
Bronx, NY (23)
Willoughby/Wycoff Housing
Associates, L.P. November 1988 93 94 99 100 87
Brooklyn, NY (68)
Robin Housing Associates, L.P. November 1988 96 99 96 98 93
Bronx, NY (100)
Lund Hill Associates, L.P. January 1989 (d) 100 100 100 100
Superior, WI (150)
Tanglewood Apartments, L.P. October 1988 (d) 97 94 98 93
Joplin, MO (176)
Quality Hill Historic District-
Phase II-A, L.P. March 1989 94 92 94 94 92
Kansas City, MO (49)
Penn Alto Associates, L.P. June 1989 90 83 84 83 82
Altoona, PA (150)
Sartain School Venture, L.P. August 1990 97 94 100 97 97
Philadelphia, PA (35)
(a) The properties and the related assets and liabilities were sold during the
fiscal year ended March 15, 2003 (see Note 10 in Item 8. Financial
Statements and Supplementary Data).
(b) The Partnership's limited partnership interest was sold during the fiscal
year ended March 15, 2003 (see Note 10 in Item 8. Financial Statements and
Supplementary Data).
(c) The property and the related assets and liabilities were sold during the
fiscal year ended March 15, 2004 (see Note 10 in Item 8. Financial
Statements and Supplementary Data).
(d) The property and the related assets and liabilities were sold during the
fiscal year ended March 15, 2005 (see Note 10 in Item 8. Financial
Statements and Supplementary Data).
(e) The Partnership's limited partnership interest was sold during the fiscal
year ended March 15, 2005 (see Note 10 in Item 8. Financial Statements and
Supplementary Data).
(f) The property and the related assets and liabilities were subsequently sold
on March 29, 2005 (see Note 15 in Item 8. Financial Statements and
Supplementary Data).
All development deficit, rent-up and operating deficit guarantees with respect
to the Properties have expired.
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 Partnership. Maximum rents for
the residential units are determined annually by HUD and reflect
increases/decreases in consumer price indices in various geographic areas.
Market conditions, however, determine the amount of rent actually charged.
Management annually reviews the physical state of the Properties and budgets
improvements when required, which improvements are generally funded from cash
flow from operations or release of replacement reserve escrows to the extent
available.
Management continuously 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.
Item 3. Legal Proceedings
None
Item 4. Submission of Matters to a Vote of Security Holders
None
6
PART II
Item 5. Market for the Registrant's Common Equity, Related Security Holder
Matters and Issuer Purchases of Equity Securities
The Partnership has issued 15,987.5 Limited Partnership Interests, each
representing a $5,000 capital contribution to the Partnership, for aggregate
gross proceeds of $79,937,500. All of the issued and outstanding Limited
Partnership Interests have been issued to Liberty Credit Assignor Inc. (the
"Assignor Limited Partner"), which has in turn issued BACs to the purchasers
thereof for an aggregate purchase price of $79,937,500. Each BAC represents all
of the economic and virtually all of the ownership rights attributable to a
Limited Partnership Interest held by the Assignor Limited Partner. BACs may be
converted into Limited Partnership Interests at no cost to the holder (other
than the payment of transfer costs not to exceed $100), but Limited Partnership
Interests so acquired are not thereafter convertible into BACs.
Neither the BACs nor the Limited Partnership Interests are traded on any
established public trading market. Because of the provisions of the Revenue Act
of 1987, unless there are further changes in such law, 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 limited restrictions on the transferability of the BACs and the
Limited Partnership Interests in secondary market transactions. The restrictions
should prevent a public trading market from developing and may adversely affect
the ability of an investor to liquidate his or her investment quickly. It is
expected that such procedures will remain in effect until such time, if ever, as
further revision of the Revenue Act of 1987 may permit the Partnership to lessen
the scope of the restrictions.
The Partnership has 5,614 registered holders of an aggregate of 15,987.5 BACs,
as of May 4, 2005.
All of the Partnership's general partnership interests, representing an
aggregate capital contribution of $2,000, are held by the two General Partners.
Certain Local Partnerships are subject to HUD restrictions which limit annual
cash distributions to partners and restrict the Local Partnerships from selling
or otherwise liquidating their assets without HUD's approval during the period
that the agreement with HUD is in existence.
There are no material legal restrictions in the Partnership Agreement on the
ability to make distributions. However, the Partnership has made no
distributions to the BACs holders as of March 15, 2005. The Partnership does not
anticipate providing cash distributions to the BACs holders other than
distributions of sale or refinancing proceeds upon the disposition of
Properties. Subsequently, on April 15, 2005, a distribution from sales proceeds
was made to the BAC Holders for approximately $1,919,000 and to the general
partner for approximately $19,000.
7
Item 6. Selected Financial Data
The information set forth below presents selected financial data of the
Partnership. Additional financial information is set forth in the audited
financial statements in Item 8 hereof.
Year Ended March 15,
----------------------------------------------------------------------------
OPERATIONS 2005 2004* 2003* 2002* 2001*
- ----------------------------------- ------------- ------------- ------------- ------------- -------------
Revenues $ 29,844,228 $ 26,689,044 $ 26,529,808 $ 26,758,300 $ 26,352,856
Operating expenses (33,310,695) (33,539,433) (31,883,011) (33,080,255) (32,933,805)
------------- ------------- ------------- ------------- -------------
Loss from operations before
minority interest (3,466,467) (6,850,389) (5,353,203) (6,321,955) (6,580,949)
Minority interest in loss of
subsidiaries from operations 22,634 10,736 377,948 411,863 461,278
------------- ------------- ------------- ------------- -------------
Loss from operations (3,443,833) (6,839,653) (4,975,255) (5,910,092) (6,119,671)
Income (loss) from discontinued
operations (including gain (loss)
on sale of properties, extraordinary
item and minority interest) (Note 12) 8,196,269 (284,137) 4,375,326 (2,010,058) (1,841,453)
------------- ------------- ------------- ------------- -------------
Net income (loss) $ 4,752,436 $ (7,123,790) $ (599,929) $ (7,920,150) $ (7,961,124)
============= ============= ============= ============= =============
Loss from operations per BAC $ (213.25) $ (423.53) $ (308,08) $ (365.97) $ (378.95)
Income (loss) from discontinued
operations per BAC 507,54 (17.60) 270.93 (124,47) (114.03)
------------- ------------- ------------- ------------- -------------
Net income (loss) per weighted
average BAC $ 294.29 $ (441.13) $ (37.15) $ (490.44) $ (492.98)
============= ============= ============= ============= =============
Year Ended March 15,
----------------------------------------------------------------------------
FINANCIAL POSITION 2005 2004* 2003 2002 2001
- ------------------------------------ ------------- ------------- ------------- ------------- -------------
Total assets $ 120,741,704 $ 146,186,305 $ 158,553,482 $ 170,552,302 $ 178,650,012
============= ============= ============= ============= =============
Total liabilities $(153,013,354) $(182,204,819) $(186,366,777) $(197,397,871) $(197,201,242)
============= ============= ============= ============= =============
Minority interest $ 321,605 $ (662,078) $ (1,743,507) $ (2,111,304) $ (2,485,493)
============= ============= ============= ============= =============
Total partners' deficit $ (31,950,045) $ (36,680,592) $ (29,556,802) $ (28,956,873) $ (21,036,723)
============= ============= ============= ============= =============
* Reclassified for comparative purposes.
During the years ended March 15, 2001 and 2002, total assets decreased primarily
due to depreciation, partially offset by net additions to property and
equipment. During the years ended March 15, 2003 through 2005, total assets and
liabilities decreased primarily due to the sale of Local Partnerships.
8
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Liquidity and Capital Resources
- -------------------------------
The Partnership's capital has been invested in 31 Local Partnerships. As of
March 15, 2005, the properties and the related assets and liabilities of eight
Local Partnerships and the limited partnership interest in two Local
Partnerships were sold (the "Sold Assets"). Subsequently on March 29, 2005, the
property and the related assets and liabilities of Regent Street were sold. For
a discussion of these sales, see Note 10 in Item 8.
Short-Term
- ----------
The Partnership's primary source of funds is cash distributions from operations
of the Local Partnerships in which the Partnership has invested. Such funds are
available to meet the obligations of the Partnership. During the years ended
March 15, 2005, 2004 and 2003, such distributions amounted to approximately
$4,698,000, $124,000 and $855,000, respectively. In addition, certain fees and
expense reimbursements owed to the General Partners amounting to approximately
$7,846,000, $8,002,000 and $7,212,000 were accrued and unpaid as of March 15,
2005, 2004 and 2003, respectively. In particular, partnership management fees
owed to the General Partners amounting to approximately $7,811,000 and
$7,911,000 were accrued and unpaid as of March 15, 2005 and 2004, respectively.
Furthermore, expense reimbursements and asset monitoring fees owed to the
General Partners amounting to approximately $35,000 and $90,000 were accrued and
unpaid as of March 15, 2005 and 2004, respectively. Without the General
Partners' continued accrual without payment of the partnership management fees,
the Partnership will not be in the position to meet its obligations. The General
Partners have allowed for the accrual without payment of the partnership
management fees but are under no obligation to continue to do so.
During the year ended March 15, 2005, cash and cash equivalents of the
Partnership decreased approximately $754,000. This decrease is attributable to
an increase in property and equipment ($2,188,000) and principal repayments of
mortgage notes ($5,923,000), which exceeded cash provided by operating
activities ($4,389,000), a net increase in due to local general partners and
affiliates ($1,768,000), a decrease in cash held in escrow ($666,000), an
increase in due to selling partners ($119,000) and a decrease in capitalization
of consolidated subsidiaries attributable to minority interest ($415,000).
Included in the adjustments to reconcile net income to net cash provided by
operating activities is depreciation and amortization of approximately
$6,498,000 and income from discontinued operations $8,196,000.
Total expenses for the years ended March 15, 2005 and 2004, excluding
depreciation and amortization, interest and general and administrative - related
parties, totaled $17,423,773 and $16,810,154, respectively. As of March 15, 2005
and 2004, accounts payable, accrued interest payable and security deposits
payable were as follows:
March 15,
------------------------------
2005 2004
------------- ------------
Accounts payable $ 2,436,882 $ 3,710,915
Accrued interest payable 7,885,329 7,625,566
Security deposits payable 624,852 876,745
------------- ------------
Total $ 10,947,063 $ 12,213,226
============= ============
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.
Accrued interest payable 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 Consolidated Balance Sheets.
A working capital reserve of approximately $5,796,000 remained unused at March
15, 2005. On April 15, 2005, a distribution from sales proceeds was made to the
limited partners of approximately $1,919,000 and to the general partner of
approximately $19,000.
The Partnership is not expected to have access to additional sources of
financing.
Long-Term
- ---------
On October 20, 1999, President Clinton signed FY 2000 VA, the HUD Independent
Agencies Appropriations Act. The Act contained 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 Act and superceding earlier HUD Notices 98-34, 99-08, 99-15,
99-21 and 99-32. Notice 99-36 clarified many of the earlier uncertainties with
respect to the earlier HUD Section 8 Mark-to-Market Programs and continued the
Mark-up-to-Market Program which allows owners with Section 8 contracts where
contract rents are currently below market to increase the rents to market
levels.
9
For a discussion of contingencies affecting certain Local Partnerships, see
Results of Operations of Certain Local Partnerships below. Since the maximum
loss the Partnership would be liable for is its net investment in the respective
Local Partnerships, the resolution of the existing contingencies is not
anticipated to impact future results of operations, liquidity or financial
condition in a material way. However, the Partnership's loss of its investment
in a Local Partnership may result in recapture of Tax Credits if the investment
is lost before expiration of the Compliance Period.
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 be experiencing upswings. However, the
geographic diversification of the portfolio may not protect against a general
downturn in the national economy.
Sale of Underlying Properties/Local Partnership Interests
- ---------------------------------------------------------
For a discussion of the sale of properties in which the Partnership owns direct
and indirect interests, see Note 10 of the Financial Statements.
Tabular Disclosure of Contractual Obligations
- ---------------------------------------------
The following table summarized the Partnership's commitments as of March 15,
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) $ 97,203,309 $ 5,015,281 $ 5,500,112 $ 14,048,508 $ 72,639,408
Notes payable to local
general partners (b) 9,034,498 3,994,498 0 0 5,040,000
------------ ------------ ------------ ------------ ------------
Total $106,237,807 $ 9,009,779 $ 5,500,112 $ 14,048,508 $ 77,679,408
============ ============ ============ ============ ============
(a) The mortgage notes are payable in aggregate monthly installments of
approximately $567,000 including principal and interest at rates varying
from 1% to 12% per annum, through 2036. Each subsidiary partnership's
mortgage note payable is collateralized by the land and buildings of the
respective subsidiary partnership and the assignment of certain subsidiary
partnership's rents and leases is without further recourse.
(b) See Note 8(g) in Item 8. Financial Statements and Supplementary Data.
Off Balance Sheet Arrangements
- ------------------------------
The Partnership has no off-balance sheet arrangements.
Critical Accounting Policies
- ----------------------------
In preparing the consolidated financial statements, management has made
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting periods. Actual results could differ
from those estimates. Set forth below is a summary of the accounting policies
that management believes are critical to the preparation of the consolidated
financial statements. The summary should be read in conjunction with the more
complete discussion of the Partnership's accounting policies included in Note 2
to the consolidated financial statements in this annual report on Form 10-K.
Property and Equipment
- ----------------------
Property and equipment to be held and used are carried at cost which includes
the purchase price, acquisition fees and expenses, 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.
In accordance with FASB 144, "Accounting for the Impairment of Disposal of
Long-Lived Assets", the results of discontinued operations are reported as a
separate component of income before extraordinary items on the Consolidated
Statements of Operations. Discontinued operations include the results of
operations and any gain or loss recognized for Local Partnerships that have been
disposed of or are held for sale. A gain or loss recognized on the disposal is
disclosed in the notes to the financials statements. Adjustments to amounts
previously reported in operations that are directly related to the disposal of a
Local Partnership are reclassified in the current period as discontinued
operations for comparability purposes. Assets and liabilities of a Local
Partnership that are classified as held for sale are presented separately in the
asset and liability sections, respectively, of the Consolidated Balance Sheets.
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).
Through March 15, 2005, the Partnership has not recorded any loss on impairment
of assets or reduction to estimated fair value.
10
Revenue Recognition
- -------------------
Rental income is earned primarily 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.
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 from operations include the following amounts at both the
Partnership and Local Partnership level:
March 15,
----------------------------------------
2005 2004 2003
---------- ---------- ----------
Interest $ 144,236 $ 115,745 $ 127,427
Other 484,139 500,086 563,389
---------- ---------- ----------
Total other revenue $ 628,375 $ 615,831 $ 690,816
========== ========== ==========
Other revenues from discontinued operations include the following amounts at
both the Partnership and Local Partnership level:
March 15,
----------------------------------------
2005 2004 2003
---------- ---------- ----------
Interest $ 60,870 $ 80,768 $ 93,398
Other 282,021 412,744 447,348
---------- ---------- ----------
Total other revenue $ 342,891 $ 493,512 $ 540,746
========== ========== ==========
Interest income is earned on cash and cash equivalent balances and cash held in
escrow balances. Other income includes income from forfeited security deposits,
late charges, laundry and vending income and other rental related items.
March 15,
----------------------------------------
2005 2004 2003
---------- ---------- ----------
Subsidy Income $4,007,686 $ 501,511 $ 479,595
========== ========== ==========
The subsidy income is related to Charles Drew Court Associates, L.P. ("Charles
Drew"). The Atlantic County Improvement Authority ("ACIA") entered into a
pledge/security agreement with Bank of America (formerly Fleet Bank, N.A.),
Charles Drew's mortgagor, under which ACIA pledged certificates of deposit
originally in the amount of $4,772,500. The funds, including interest earned
thereon, provided a subsidy to Charles Drew equal to the debt service on the
mortgage. The funds were used to payoff the mortgage in September 2004.
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.
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 period beginning after 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 issued FASB
Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46").
FIN 46 was 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 are applicable no later than July 1, 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 were applicable no later
than the first reporting period ending after March 15, 2004. The adoption of FIN
46 and FIN 46 (R) did 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
11
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
- ---------------------
The following is a summary of the results of operations of the Partnership for
the years ended March 15, 2005, 2004 and 2003 (the 2004, 2003 and 2002 Fiscal
Years, respectively).
The Partnership's revenues continue to consist primarily of the results of the
Partnership's investment in consolidated Local Partnerships. Sixteen of the
Local Partnerships receive HUD Section 8 subsidies which serve to stabilize the
revenues of these Local Partnerships. The majority of the Local Partnership
income continues to be in the form of rental income with the corresponding
expenses being divided among operations, depreciation, and mortgage interest.
The net income for the 2004 fiscal year totaled $4,752,436 and the net loss for
the 2003 and 2002 Fiscal Years totaled $7,123,790 and $599,929, respectively.
The 2003 fiscal year is net of an extraordinary gain of $113,565 which is
included in discontinued operations for the year ended March 15, 2004.
The Partnership generated $686 and $21,629 in Tax Credits during the 2003 and
2002 Fiscal Years, respectively. As of December 31, 2003 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 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 began to end on January 1, 2004 and
will continue through December 31, 2008 with respect to the Properties depending
upon when the Tax Credit Period commenced.
2004 vs. 2003
- -------------
Rental income decreased approximately 1% for the 2004 Fiscal Year as compared to
the 2003 Fiscal Year, primarily due to increased vacancy and recurring
concessions at one Local Partnership, a grant received in 2003 at a second Local
Partnership which also converted to a Mark to Market program during 2003 and a
decrease in tenants assistance payments in 2004 at a third Local Partnership.
Subsidy income increased approximately $3,507,000 for the 2004 Fiscal Year as
compared to the 2003 Fiscal Year, primarily due to a decrease in subsidy income
being received at one Local Partnership in 2004.
Total expenses, excluding insurance, remained fairly consistent with a decrease
of approximately 1% for the 2004 Fiscal Year as compared to the 2003 Fiscal
Year.
Insurance increased approximately $173,000 for the 2004 Fiscal Year as compared
to the 2003 Fiscal Year, primarily due to increases in insurance premiums at the
Local Partnerships.
2003 vs. 2002
- -------------
Rental income increased approximately 1%, for the 2003 Fiscal Year as compared
to the 2002 Fiscal Year primarily due to rental rate increases.
Total expenses, excluding operating, repairs and maintenance and depreciation
and amortization, remained fairly consistent with a decrease of approximately 2%
for the 2003 Fiscal Year as compared to the 2002 Fiscal Year.
Operating increased approximately $366,00 for the 2003 Fiscal Year as compared
to the 2002 Fiscal Year primarily due to an increase in gas and water expense at
several Local Partnerships.
Repairs and maintenance increased approximately $550,000, for the 2003 Fiscal
Year as compared to the 2002 Fiscal Year primarily due to an increase in
electrical and plumbing repairs, landscaping expense, security contracts,
maintenance salaries and general repairs due to high tenant turnover at one
Local Partnership, an increase in heating and air conditioning repairs, repair
contracts and maintenance salaries at a second Local Partnership and increases
in maintenance salaries and security contracts at a third Local Partnership.
Depreciation and amortization increased approximately $1,078,000, for the 2003
Fiscal Year as compared to the 2002 Fiscal Year primarily due to the resumption
of depreciation expense at one Local Partnership that was classified as an asset
held for sale in 2002, and therefore not depreciated in 2002.
Results of Operations of Certain Local Partnerships
- ---------------------------------------------------
Redwood Villa Associates, L.P.
- ------------------------------
Redwood Villa Associates, L.P. ("Redwood") has sustained operating losses since
its inception. For the 2004 Fiscal Year, Redwood experienced a loss of $199,278,
including $216,628 of depreciation and $4,554 of amortization, and at December
31, 2004 had a partners' deficit of $1,944,248. In addition, Redwood has been
able to defer ground lease payments that are due to a related party in the
cumulative amount of $388,647 and $363,147 as of December 31, 2004 and 2003,
respectively. These conditions raise substantial doubt about Redwood's ability
to continue as a going concern. Redwood's continuation as a going concern is
dependent upon its ability to achieve continued profitable operations or obtain
future capital contributions from the partners. The Local General Partner,
whenever possible, plans to reduce operating costs to achieve profitable
operations. The financial statements for the 2004, 2003 and 2002 Fiscal Years
for Redwood have been prepared assuming that Redwood will continue as a going
concern. The Partnership's investment in Redwood at March 15, 2005 and 2004 was
reduced to zero by prior years' losses and the minority interest balance was
approximately $393,000 and $397,000, respectively. Redwood's net loss after
minority interest amounted to approximately $195,000, $200,000 and $157,000 for
the 2004, 2003 and 2002 Fiscal Years, respectively. On February 17, 2005, the
Partnership's Limited Partnership interest in Redwood was sold.
12
Other
- -----
The Local Partnerships are impacted by inflation in several ways. Inflation
allows for increases in rental rates generally to reflect the impact of higher
operating and replacement costs. Furthermore, inflation generally does not
impact the fixed long-term financing under which real property investments were
purchased. Inflation also affects the Local Partnerships adversely by increasing
operating costs, such as fuel, utilities, and labor.
For a discussion of Mortgage Notes payable, see Note 7 to the Financial
Statements.
Item 7A. Quantitative and Qualitative Disclosure about Market Risk
The Partnership has mortgage notes that are payable in aggregate monthly
installments including principal and interest at rates varying from 1% to 12%
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 risk sensitive instruments.
13
Item 8. Financial Statements and Supplementary Data
Sequential
Page
----------
(a) 1. Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm 15
Consolidated Balance Sheets at March 15, 2005 and 2004 82
Consolidated Statements of Operations for the Years Ended March 15, 2005,
2004 and 2003 83
Consolidated Statements of Changes in Partners' Deficit for the Years
Ended March 15, 2005, 2004 and 2003 84
Consolidated Statements of Cash Flows for the Years Ended March 15, 2005,
2004 and 2003 85
Notes to Consolidated Financial Statements 87
14
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Partners of
Liberty Tax Credit Plus L.P. and Subsidiaries
(A Delaware Limited Partnership)
We have audited the consolidated balance sheets of Liberty Tax Credit Plus L.P.
(A Delaware Limited Partnership) and Subsidiaries as of March 15, 2005 and 2004,
and the related consolidated statements of operations, changes in partners'
deficit, and cash flows for the years ended March 15, 2005, 2004 and 2003 (the
2004, 2003 and 2002 Fiscal Years, respectively). These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits. We did not
audit the financial statements for 26 (Fiscal Year 2004), 29 (Fiscal Year 2003)
and 30 (Fiscal Year 2002) subsidiary partnerships whose income (losses)
aggregated $141,075 (2004 Fiscal Year), $(4,961,601) (2003 Fiscal Year), and
$(700,428) (2002 Fiscal Year) and whose assets constituted 94% and 93% of the
Partnership's assets at March 15, 2005 and 2004, presented in the accompanying
consolidated financial statements. The financial statements for these subsidiary
partnerships were audited by other auditors whose reports thereon have been
furnished to us and our opinion expressed herein, insofar as it relates to the
amounts included for these subsidiary partnerships, is based solely upon the
reports of the other auditors.
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 audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, based upon our audits, and the reports of the other auditors
referred to above, the accompanying consolidated financial statements referred
to in the first paragraph present fairly, in all material respects, the
financial position of Liberty Tax Credit Plus L.P. and Subsidiaries at March 15,
2005 and 2004 and the results of their operations and their cash flows for the
years ended March 15, 2005, 2004 and 2003, in conformity with U.S. generally
accepted accounting principles.
TRIEN ROSENBERG ROSENBERG
WEINBERG CIULLO & FAZZARI LLP
New York, New York
June 7, 2005
15
[ASHER & COMPANY LETTERHEAD]
Independent Auditor's Report
The Partners
B & C Housing Associates
T/A St. Thomas Square/Worthington Apartments
Marlton, New Jersey
We have audited the accompanying balance sheets of B & C Housing Associates T/A
St. Thomas Square/Worthington Apartments (A Limited Partnership), HUD Project
No. 118-94008, as of December 31, 2004 and 2003 and the related statements of
loss, Partners' capital and cash flows for the year 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 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 B & C Housing Associates T/A
St. Thomas Square/Worthington Apartments (A Limited Partnership), HUD Project
No. 118-94008, as of December 31, 2004 and 2003, and the results of its
operations, changes in its Partners' capital and its cash flows for the year
ended December 31, 2004 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 supplementary information is
presented for purposes of additional analysis and is not a required part of the
basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
In accordance with GOVERNMENT AUDITING STANDARDS we have also issued reports
dated January 11, 2005 on our consideration of B & C Housing Associates' T/A St.
Thomas Square/Worthington Apartments (A Limited Partnership), HUD Project No.
118-94008, internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts, and 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 or on compliance. Those reports are an integral
part of an audit performed in accordance with GOVERNMENT AUDITING STANDARDS and
should be read in conjunction with this report in considering the results of our
audit.
/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 11, 2005
16
[ASHER & COMPANY LETTERHEAD]
Independent Auditor's Report
The Partners
B & C Housing Associates
T/A St. Thomas Square/Worthington Apartments
Marlton, New Jersey
We have audited the accompanying balance sheets of B & C Housing Associates T/A
St. Thomas Square/Worthington Apartments (A Limited Partnership), HUD Project
No. 118-94008, as of December 31, 2003 and 2002 and the related statements of
loss, Partners' capital and cash flows for the year ended December 31, 2003.
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 B & C Housing Associates T/A
St. Thomas Square/Worthington Apartments (A Limited Partnership), HUD Project
No. 118-94008, as of December 31, 2003 and 2002, and the results of its
operations, changes in its Partners' capital and its cash flows for the year
ended December 31, 2003 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 supplementary information is
presented for purposes of additional analysis and is not a required part of the
basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
In accordance with GOVERNMENT AUDITING STANDARDS we have also issued reports
dated January 15, 2004 on our consideration of B & C Housing Associates' T/A St.
Thomas Square/Worthington Apartments (A Limited Partnership), HUD Project No.
118-94008, internal control and on our tests of its compliance with certain
provisions of laws, regulations, contracts, and grants. Those reports are an
integral part of an audit performed in accordance with GOVERNMENT AUDITING
STANDARDS and should be read in conjunction with this report in considering the
results of our audit.
/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 15, 2004
17
[FISHBEIN & COMPANY, P.C. Letterhead]
INDEPENDENT AUDITOR'S REPORT
Partners
State Street 86 Associates Limited Partnership
We have audited the accompanying balance sheets of STATE STREET 86 ASSOCIATES
LIMITED PARTNERSHIP (A Limited Partnership) 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 consideration of
internal control 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
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 State Street 86 Associates
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/ Fishbein & Company, P.C.
Horsham, Pennsylvania
January 18, 2005
18
[FISHBEIN & COMPANY, P.C. Letterhead]
INDEPENDENT AUDITOR'S REPORT
Partners
State Street 86 Associates Limited Partnership
We have audited the accompanying balance sheets of STATE STREET 86 ASSOCIATES
LIMITED PARTNERSHIP (A Limited Partnership) 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 State Street 86 Associates
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/ Fishbein & Company, P.C.
Elkins Park, Pennsylvania
January 21, 2004
19
[Fishbein & Company, P.C. Letterhead]
INDEPENDENT AUDITOR'S REPORT
Partners
Foxglenn Investors
We have audited the accompanying balance sheets of FOXGLENN INVESTORS (A Limited
Partnership) as of December 31, 2004 and 2003, and the related statements of
operations, partners' equity deficiency 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 consideration of
internal control 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. 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 Foxglenn Investors 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/ Fishbein & Company, P.C.
Horsham, Pennsylvania
January 15, 2005
20
[Fishbein & Company, P.C. Letterhead]
INDEPENDENT AUDITOR'S REPORT
Partners
Foxglenn Investors
We have audited the accompanying balance sheets of FOXGLENN INVESTORS (A Limited
Partnership) as of December 31, 2003 and 2002, and the related statements of
operations, partners' equity deficiency 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 Foxglenn Investors 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/ Fishbein & Company, P.C.
Elkins Park, Pennsylvania
January 15, 2004
21
[Bordman & Winnick CPAs Letterhead]
Independent Auditor's Report
To the Partners of
Shiloh Grove Limited Partnership
We have audited the accompanying balance sheet of SHILOH GROVE LIMITED
PARTNERSHIP, FHA PROJECT #043-35442 as of December 31, 2004, and the related
Statements of income, changes in partners' equity and cash flows for the year
then ended. These financial statements are the responsibility of SHILOH GROVE
LIMITED 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 SHILOH GROVE 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.
In accordance with GOVERNMENT AUDITING STANDARDS, we have also issued a report
dated February 15, 2005 on our consideration of SHILOH GROVE LIMITED
PARTNERSHIP's internal control and our tests of its compliance with certain
provisions of laws, regulations, contracts, and grants. 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
included in the report (shown on pages 12 to 16) and the Financial Data Template
is presented for purposes of additional analysis and is not a required part of
the basic financial statements of SHILOH GROVE 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/ Bordman & Winnick
Certified Public Accountants
West Bloomfield, MI
February 15, 2005
22
[Bordman & Winnick CPAs Letterhead]
Independent Auditor's Report
To the Partners
Shiloh Grove Limited Partnership
Beachwood, Ohio
We have audited the accompanying balance sheet of SHILOH GROVE LIMITED
PARTNERSHIP, FHA PROJECT #043-35442 as of December 31, 2003, and the related
Statements of income, changes in partners' equity and cash flows for the year
then ended. These financial statements are the responsibility of SHILOH GROVE
LIMITED PARTNERSHIP'S management. Our responsibility is to express an opinion on
these financial statements based on our audit. The financial statements of
SHILOH GROVE LIMITED PARTNERSHIP as of December 31, 2002, were audited by other
auditors whose report, dated February 21, 2003 expressed an unqualified opinion
on those statements.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of SHILOH GROVE 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.
In accordance with GOVERNMENT AUDITING STANDARDS, we have also issued a report
dated March 5, 2004 on our consideration of SHILOH GROVE LIMITED PARTNERSHIP's
internal control and our tests of its compliance with certain provisions of
laws, regulations, contracts, and grants. 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 were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental information
included in the report (shown on pages 12 to 16) and the Financial Data Template
is presented for purposes of additional analysis and is not a required part of
the basic financial statements of SHILOH GROVE 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/ Bordman & Winnick
Certified Public Accountants
West Bloomfield, MI
March 5, 2004
23
[Bordman & Winnick CPAs Letterhead]
Independent Auditor's Report
To the Partners of
Shiloh Grove Limited Partnership
We have audited the accompanying balance sheet of SHILOH GROVE LIMITED
PARTNERSHIP, FHA PROJECT #043-35445 as of December 31, 2004, and the related
Statements of income, changes in partners' equity and cash flows for the year
then ended. These financial statements are the responsibility of SHILOH GROVE
LIMITED 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 SHILOH GROVE 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.
In accordance with GOVERNMENT AUDITING STANDARDS, we have also issued a report
dated February 15, 2005 on our consideration of SHILOH GROVE LIMITED
PARTNERSHIP's internal control and our tests of its compliance with certain
provisions of laws, regulations, contracts, and grants. 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
included in the report (shown on pages 12 to 17) and the Financial Data Template
(shown on page 25 to 38) are presented for purposes of additional analysis and
is not a required part of the basic financial statements of SHILOH GROVE 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/ Bordman & Winnick
Certified Public Accountants
West Bloomfield, MI
February 15, 2005
24
[Bordman & Winnick CPAs Letterhead]
Independent Auditor's Report
To the Partners
Shiloh Grove Limited Partnership
Beachwood, Ohio
We have audited the accompanying balance sheet of SHILOH GROVE LIMITED
PARTNERSHIP, FHA PROJECT #043-35445 as of December 31, 2003, and the related
Statements of income, changes in partners' equity and cash flows for the year
then ended. These financial statements are the responsibility of SHILOH GROVE
LIMITED PARTNERSHIP'S management. Our responsibility is to express an opinion on
these financial statements based on our audit. The financial statements of
SHILOH GROVE LIMITED PARTNERSHIP as of December 31, 2002, were audited by other
auditors whose report, dated February 21, 2003 expressed an unqualified opinion
on those statements.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of SHILOH GROVE 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.
In accordance with GOVERNMENT AUDITING STANDARDS, we have also issued a report
dated March 5, 2004 on our consideration of SHILOH GROVE LIMITED PARTNERSHIP's
internal control and our tests of its compliance with certain provisions of
laws, regulations, contracts, and grants. 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 were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental information
included in the report (shown on pages 12 to 17) and the Financial Data Template
is presented for purposes of additional analysis and is not a required part of
the basic financial statements of SHILOH GROVE 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/ Bordman & Winnick
Certified Public Accountants
West Bloomfield, MI
March 5, 2004
25
[Baumgarten & Company LLP Letterhead]
Independent Auditor's Report
To the Partners
Shiloh Grove Limited Partnership
Beachwood, Ohio
We have audited the accompanying balance sheets of Shiloh Grove Limited
Partnership, (an Ohio Limited Partnership) as of December 31, 2002 and 2001, and
the related statements of income, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
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 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 Shiloh Grove Limited
Partnership as of December 31, 2002 and 2001, and the results of its operations,
changes in partners' equity and cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information included in these financial statements is presented for the purposes
of additional analysis and is not a required part of the basic financial
statements of Shiloh Grove Limited 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/ Baumgarten & Company LLP
Certified Public Accountants
Cleveland, Ohio
February 21, 2003
26
[FRIEDMAN ALPREN & GREEN LLP Letterhead]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Silver Blue Lake Apartments, Ltd.
We have audited the accompanying statements of income, changes in partners'
capital and cash flows of SILVER BLUE LAKE APARTMENTS, LTD. (a limited
partnership), FHA Project No. FL29-K005-009-124, for the period January 1, 2003
to June 18, 2003 (date of dissolution). 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 results of operations and cash flows of SILVER BLUE
LAKE APARTMENTS, LTD. for the period January 1, 2003 to June 18, 2003 (date of
dissolution), in conformity with accounting principles generally accepted in the
United States of America.
/s/ Friedman Alpren & Green LLP
New York, New York
September 18, 2003
27
[FRIEDMAN ALPREN & GREEN LLP Letterhead]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Silver Blue Lake Apartments, Ltd.
We have audited the accompanying balance sheet of SILVER BLUE LAKE APARTMENTS,
LTD. (a limited partnership), FHA Project No. FL29-K005-009-124, as of December
31, 2002, and the related statements of operations, changes in partners' capital
deficiency and cash flows for the year then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. 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 SILVER BLUE LAKE APARTMENTS,
LTD. as of December 31, 2002, and the results of its operations and its cash
flows for the year then ended in conformity with accounting principles generally
accepted in the United States of America.
/s/ Friedman Alpren & Green LLP
New York, New York
February 4, 2003
28
[Saltz, Shamis & Goldfarb, Inc. Letterhead]
Independent Auditor's Report
To the General and Limited Partners
Lancaster Towers Associates, L.P.
We have audited the accompanying balance sheets of Lancaster Towers Associates,
L.P. (A Delaware Limited Partnership), FHA Project No. 014-44031-LDC-R as of
December 31, 2004 and 2003, and the related statements of income, partners'
capital and cash flows for the years then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America and 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 Lancaster Towers Associates,
L.P. 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.
In accordance with GOVERNMENT AUDITING STANDARDS, we have also issued a report
dated January 13, 20054 on our consideration of Lancaster Towers Associates,
L.P.'s internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts, 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 over
compliance and the results of that testing, and not to provide an opinion on the
internal control over financial reporting or over 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.
The accompanying supplemental information (commencing on Page 22) is presented
for purposes of additional analysis and is not a required part of the basic
financial statements of Lancaster Towers Associates, L.P. Such information has
been subjected to the auditing procedures applied in the audit of the basic
financial statements, and, in our opinion, is fairly stated, in all material
respects, in relation to the financial statements taken as whole.
/s/ Saltz, Shamis & Goldfarb, Inc.
CERTIFIED PUBLIC ACCOUNTANTS
Cleveland, Ohio
January 13, 2005
29
[Bick-Fredman & Co Letterhead]
Independent Auditor's Report
To the General and Limited Partners
Lancaster Towers Associates, L.P.
We have audited the accompanying balance sheets of Lancaster Towers Associates,
L.P. (A Delaware Limited Partnership), FHA Project No. 014-44031-LDC-R as of
December 31, 2002 and 2001, and the related statements of income, partners'
capital and cash flows for the years then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America and 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 Lancaster Towers Associates,
L.P. as of December 31, 2002 and 2001, 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.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 10, 2003 on our
consideration of Lancaster Towers Associates, L.P.'s internal control and
reports dated January 10, 2003 on its compliance with specific requirements
applicable to major HUD programs and specific requirements applicable to Fair
Housing and Non-Discrimination, and specific requirements applicable to nonmajor
HUD program transactions. Those reports are an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.
/s/ Bick-Fredman & Co.
Cleveland, Ohio
January 10, 2003
30
[Asher & Company, Ltd. Letterhead]
Independent Auditors' Report
The Partners
West Kinney Associates, L.P.
T/A Willie T. Wright Plaza
Marlton, New Jersey
We have audited the accompanying balance sheets of West Kinney Associates, L.P.
T/A Willie T. Wright Plaza (A Limited Partnership) Project No. NJHMFA 607, 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 and the standards applicable to financial audits
contained in GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of West Kinney Associates, L.P.
T/A Willie T. Wright Plaza (A Limited Partnership) Project No. NJHMFA 607, as of
December 31, 2004 and 2003, and the results of its operations, changes in its
Partners' capital and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
In accordance with GOVERNMENT AUDITING STANDARDS, we have issued reports dated
January 12, 2005 on our consideration of West Kinney Associates, L.P.'s T/A
Willie T. Wright Plaza (A Limited Partnership) Project No. NJHMFA 607, internal
control over financial reporting and on our tests of its compliance with certain
provisions of laws, regulations, contracts and 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 or on compliance. Those reports are an integral part of an audit
performed in accordance with GOVERNMENT AUDITING STANDARDS and should be read in
conjunction with this report in considering the results of our audit.
/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 12, 2005
31
[Asher & Company, Ltd. Letterhead]
Independent Auditors' Report
The Partners
West Kinney Associates, L.P.
T/A Willie T. Wright Plaza
Marlton, New Jersey
We have audited the accompanying balance sheets of West Kinney Associates, L.P.
T/A Willie T. Wright Plaza (A Limited Partnership) Project No. NJHMFA 607, 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 and the standards applicable to financial audits
contained in GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of West Kinney Associates, L.P.
T/A Willie T. Wright Plaza (A Limited Partnership) Project No. NJHMFA 607, as of
December 31, 2003 and 2002, and the results of its operations, changes in its
Partners' capital and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
In accordance with GOVERNMENT AUDITING STANDARDS, we have issued reports dated
January 19, 2004 on our consideration of West Kinney Associates, L.P.'s T/A
Willie T. Wright Plaza (A Limited Partnership) Project No. NJHMFA 607, internal
control and on our tests of its compliance with certain provisions of laws,
regulations, contracts, and grants. Those reports are an integral part of an
audit performed in accordance with GOVERNMENT AUDITING STANDARDS and should be
read in conjunction with this report in considering the results of our audit.
/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 19, 2004
32
[MERINA & COMPANY, LLP Letterhead]
INDEPENDENT AUDITOR'S REPORT
To: The Partners
Autumn Park Associates Limited Partnership
We have audited the accompanying statement of profit and loss, changes in
partners' equity, and cash flows of Autumn Park Associates Limited Partnership,
for the period ended September 24, 2004 (date of dissolution). 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 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 the partnership and the results
of its operations and its cash flows for the period ended September 24, 2004
(date of dissolution), in conformity with accounting principles generally
accepted in the United States of America.
/s/ Merina & Company, LLP
West Linn, Oregon
January 7, 2005
33
[MERINA & COMPANY, LLP Letterhead]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Autumn Park Associates Limited Partnership
We have audited the accompanying balance sheets of Autumn Park Associates
Limited Partnership as of December 31, 2003 and 2002, and the related statements
of profit and loss, changes of partner' 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 audit.
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 the 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/ Merina & Company, LLP
West Linn, Oregon
February 26, 2004
34
[REZNICK GROUP, P.C. Letterhead]
INDEPENDENT AUDITORS' REPORT
To the Partners
Regent Street Associates
We have audited the accompanying balance sheets of Regent Street Associates as
of December 31, 2004 and 2003, and the 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.
As described in Note A to the financial statements, the Partnership's financial
statements have been prepared on the basis of accounting and reporting practices
prescribed by the Pennsylvania Housing Finance Agency (PHFA). These prescribed
practices are a comprehensive basis of accounting other than accounting
principles generally accepted in the United States of America.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Regent Street Associates 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, on the
basis of accounting described in Note A.
As discussed in Note K to the financial statements, the Partnership has executed
a purchase agreement for the sale of the property.
In accordance with GOVERNMENT AUDITING STANDARDS, we have also issued our report
dated February 11, 2005, on our consideration of Regent Street Associates'
internal control over financial reporting and on our tests of its compliance
with 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 audit.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The 2004 supplemental information on
pages 25 through 28 is presented for purposes of additional analysis and is not
a required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
This report is intended solely for the information and use of management and the
Pennsylvania Housing Finance Agency and is not intended to be and should not be
sued by anyone other than these specified parties.
/s/ Reznick Group, P.C.
Baltimore, Maryland
February 11, 2005
35
[REZNICK FEDDER & SILVERMAN Letterhead]
INDEPENDENT AUDITORS' REPORT
To the Partners
Regent Street Associates
We have audited the accompanying balance sheets of Regent Street Associates as
of December 31, 2003 and 2002, and the 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 Regent Street Associates 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.
In accordance with GOVERNMENT AUDITING STANDARDS and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports for the year
ended December 31, 2003, dated February 13, 2004, on our consideration of Regent
Street Associates' internal control and on its compliance with specific
requirements applicable to major HUD programs and specific requirements
applicable to Fair Housing and Non-Discrimination. Those reports are an integral
part of an audit performed in accordance with GOVERNMENT AUDITING STANDARDS and
should be read in conjunction with this report in considering the results of our
audit.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental information
on pages 27 through 40 is presented for purposes of additional analysis and is
not a required part of the basic financial statements of the Partnership. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in 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
Baltimore, Maryland
February 13, 2004
Lead Auditor: Michael A. Cumming
36
[Asher & Company, Ltd. Letterhead]
Independent Auditors' Report
The Partners
Magnolia Arms Associates, Ltd.
T/A Palm Terrace Apartments
Marlton, New Jersey
We have audited the accompanying balance sheets of Magnolia Arms Associates,
Ltd. T/A Palm Terrace 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 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 Magnolia Arms Associates, Ltd.
T/A Palm Terrace Apartments (A Limited Partnership) as of December 31, 2004 and
2003, and the results of its operations, changes in its Partners' capital and
its cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
February 23, 2005
37
[Asher & Company, Ltd. Letterhead]
Independent Auditors' Report
The Partners
Magnolia Arms Associates, Ltd.
T/A Palm Terrace Apartments
Marlton, New Jersey
We have audited the accompanying balance sheets of Magnolia Arms Associates,
Ltd. T/A Palm Terrace 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 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 Magnolia Arms Associates, Ltd.
T/A Palm Terrace Apartments (A Limited Partnership) as of December 31, 2003 and
2002, and the results of its operations, changes in its Partners' capital and
its cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 31, 2004
38
[Asher & Company, Ltd. Letterhead]
Independent Auditors' Report
The Partners
Greenleaf Associates, L.P.
Marlton, New Jersey
We have audited the accompanying balance sheets of Greenleaf Associates, L.P. (A
Limited Partnership), HUD Project No. 084-35341, as of December 31, 2004 and
2003, and the related statements of loss, Partners' capital and cash flows for
the year 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 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 Greenleaf Associates, L.P. (A
Limited Partnership), HUD Project No. 084-35341, as of December 31, 2004 and
2003, and the results of its operations, changes in its Partners' capital and
its cash flows for the year ended December 31, 2004 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 supplementary information is
presented for purposes of additional analysis and is not a required part of the
basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
In accordance with GOVERNMENT AUDITING STANDARDS, we have also issued reports
dated February 8, 2005 on our consideration of Greenleaf Associates, L.P.'s (A
Limited Partnership), HUD Project No. 084-35341, internal control over financial
reporting and on our tests of its compliance with certain provisions of laws,
regulations, contracts, and 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 or on
compliance. Those reports are an integral part of an audit performed in
accordance with GOVERNMENT AUDITING STANDARDS and should be read in conjunction
with this report in considering the results of our audit.
/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
February 8, 2005
39
[Asher & Company, Ltd. Letterhead]
Independent Auditors' Report
The Partners
Greenleaf Associates, L.P.
Marlton, New Jersey
We have audited the accompanying balance sheets of Greenleaf Associates, L.P. (A
Limited Partnership), HUD Project No. 084-94009, as of December 31, 2003 and
2002, and the related statements of loss, Partners' capital and cash flows for
the year ended December 31, 2003. 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 Greenleaf Associates, L.P. (A
Limited Partnership), HUD Project No. 084-94009, as of December 31, 2003 and
2002, and the results of its operations, changes in its Partners' capital and
its cash flows for the year ended December 31, 2003 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 supplementary information is
presented for purposes of additional analysis and is not a required part of the
basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
In accordance with GOVERNMENT AUDITING STANDARDS, we have also issued reports
dated January 23, 2004 on our consideration of Greenleaf Associates, L.P.'s (A
Limited Partnership), HUD Project No. 084-94009, internal control and on our
tests of its compliance with certain provisions of laws, regulations, contracts,
and grants. Those reports are an integral part of an audit performed in
accordance with GOVERNMENT AUDITING STANDARDS and should be read in conjunction
with this report in considering the results of our audit.
/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 23, 2004
40
[JOSE E. ROSARIO & CO. Letterhead]
INDEPENDENT AUDITOR'S REPORT
To the Partners of Puerto Rico Housing Finance Corporation
Alameda Towers Associates, L.P. San Juan, Puerto Rico
Rio Piedras, Puerto Rico
I have audited the accompanying balance sheets of Alameda Towers Associates,
L.P., HUD Project No. RQ-46-K-006-003, as of December 31, 2004 and 2003, and the
related statements of loss, changes in partners' capital, and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. My responsibility is to express an opinion on these
financial statements based on my audits.
I conducted my audits in accordance with auditing standards generally accepted
in the United States of America and Puerto Rico and the standards applicable to
financial audits contained in GOVERNMENT AUDITING STANDARDS issued by the
Comptroller General of the United States. Those standards require that I plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. I believe that my audits provide a reasonable
basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Alameda Towers Associates, L.P. as
of December 31, 2004 and 2003 and the results of its operations, changes in
partners' capital, and cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America and
Puerto Rico.
In accordance with GOVERNMENT AUDITING STANDARDS, I have also issued a report
dated February 3, 2005 on my consideration of Alameda Towers Associates, L.P.'s
internal control over financial reporting and on my tests of its compliance with
certain provisions of laws, regulations, contracts, grants, agreements and other
matters. The purpose of those reports are 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. 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 my audits.
My audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information on pages 13 to 18 is presented for purposes of additional analysis
and is not a required part of the basic financial statements of Alameda Towers
Associates, LP. Such information has been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in my opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/ Jose E. Rosario & Co.
License No. 961
Expires December 1, 2007
Stamp No. 2029007 of the Puerto Rico College of CPA was affixed to the original.
February 3, 2005
San Juan, Puerto Rico
41
[JOSE E. ROSARIO & CO. Letterhead]
INDEPENDENT AUDITOR'S REPORT
To the Partners of Puerto Rico Housing Finance Corporation
Alameda Towers Associates, L.P. San Juan, Puerto Rico
Rio Piedras, PR
I have audited the accompanying balance sheets of Alameda Towers Associates,
L.P. HUD Project No. RQ-46-K-006-003, as of December 31, 2003 and 2002, and the
related statements of loss, changes in partners' capital, and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. My responsibility is to express an opinion on these
financial statements based on my audits.
I conducted my audits in accordance with auditing standards generally accepted
in the United States of America and Puerto Rico and the standards applicable to
financial audits contained in GOVERNMENT AUDITING STANDARDS issued by the
Comptroller General of the United States. Those standards require that I plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. I believe that my audits provide a reasonable
basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Alameda Towers Associates, L.P. as
of December 31, 2003 and 2002 and the results of its operations, changes in
partners' capital, and cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America and
Puerto Rico.
In accordance with GOVERNMENT AUDITING STANDARDS, I have also issued a report
dated January 28, 2004 on my consideration of Alameda Towers Associates, L.P.'s
internal control and on my tests of its compliance with certain provisions of
laws, regulations, contracts, and grants. 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 my audits.
My audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information on pages 13 to 19 is presented for purposes of additional analysis
and is not a required part of the basic financial statements of Alameda Towers
Associates, LP. Such information has been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in my opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/ Jose E. Rosario & Co.
License No. 961 Expires December 1, 2004
Stamp No. 1931870 of the Puerto Rico College of CPA was affixed to the original.
January 28, 2004
San Juan, Puerto Rico
42
[Friedman, Alpren & Green, LLP Letterhead]
INDEPENDENT AUDITORS' REPORT
To the Partners
Dixie Apartment Associates, Ltd.
We have audited the accompanying statements of income, changes in partners'
capital and cash flows of DIXIE APARTMENT ASSOCIATES, LTD. (a limited
partnership), for the period January 1, 2003 to June 18, 2003 (date of
dissolution). 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 results of operations, changes in partners' capital
and cash flows of DIXIE APARTMENT ASSOCIATES, LTD. for the period January 1,
2003 to June 18, 2003 (date of dissolution), in conformity with accounting
principles generally accepted in the United States of America.
/s/ Friedman, Alpren & Green LLP
New York, New York
June 18, 2003
43
[Friedman, Alpren & Green, LLP Letterhead]
INDEPENDENT AUDITORS' REPORT
To the Partners
Dixie Apartment Associates, Ltd.
We have audited the accompanying balance sheet of Dixie Apartment Associates,
Ltd. (a limited partnership), as of December 31, 2002, and the related
statements of operations, changes in partners' capital deficiency and cash flows
for the year then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. 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 Dixie Apartment Associates,
Ltd. as of December 31, 2002, and the results of its operations and its cash
flows for the year then ended in conformity with accounting principles generally
accepted in the United States of America.
/s/ Friedman, Alpren & Green LLP
New York, New York
February 6, 2003
44
[Friedman, Alpren & Green LLP Letterhead]
INDEPENDENT AUDITORS' REPORT
- ----------------------------
To the Partners
Ludlam Gardens Apartments, Ltd.
We have audited the accompanying statements of income, changes in partners'
capital and cash flows of LUDLAM GARDENS APARTMENTS, LTD. (a limited
partnership) for the period January 1, 2003 to June 18, 2003 (date of
dissolution). 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 results of operations, changes in partners' capital
and cash flows of LUDLAM GARDENS APARTMENTS, LTD. for the period January 1, 2003
to June 18, 2003 (date of dissolution), in conformity with accounting principles
generally accepted in the United States of America.
/s/ Friedman, Alpren & Green LLP
New York, New York
June 18, 2003
45
[Friedman, Alpren & Green LLP Letterhead]
INDEPENDENT AUDITORS' REPORT
- ----------------------------
To the Partners
Ludlam Gardens Apartments, Ltd.
We have audited the accompanying balance sheet of Ludlam Gardens Apartments,
Ltd., (a limited partnership) as of December 31, 2002, and the related
statements of operations, changes in partners' capital deficiency and cash flows
for the year then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. 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 Ludlam Gardens Apartments, Ltd.
as of December 31, 2002, and the results of its operations and its cash flows
for the year then ended in conformity with accounting principles generally
accepted in the United States of America.
/s/ Friedman, Alpren & Green LLP
New York, New York
February 4, 2003
46
[REZNICK GROUP, P.C. Letterhead]
INDEPENDENT AUDITOR'S REPORT
To the Partners
GROVE PARC ASSOCIATES LIMITED PARTNERSHIP
We have audited the accompanying balance sheet of GROVE PARC ASSOCIATES LIMITED
PARTNERSHIP, FHA Project No. 071-11091 (An Illinois Limited Partnership) as of
December 31, 2004, and the related statement of operations, partners' 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. The financial
statements as of December 31, 2003, were audited by Friduss, Lukee, Schiff &
Co., P.C., who merged with Reznick Group, P.C. as of January 1, 2005, and whose
report dated March 18, 2004, expressed an unqualified opinion on those
statements.
We conducted our audit in accordance with U.S. generally accepted auditing
standards 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 GROVE PARC ASSOCIATES LIMITED
PARTNERSHIP as of December 31, 2004, and the results of its operations, changes
in its partners' deficit 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 also issued reports,
dated March 3, 2005 on our consideration of GROVE PARC ASSOCIATES LIMITED
PARTNERSHIP'S internal control, and on our tests of its compliance with certain
provisions of laws, regulations, contracts and grants. 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 audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental information
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information for the year ended December 31,
2004, has been subjected to the auditing procedures applied in the audit of the
basic financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Reznick Group, P.C.
Certified Public Accountants
Chicago, Illinois
March 3, 2005
47
[FRIDUSS, LUKEE, SCHIFF & CO., P.C. Letterhead]
INDEPENDENT AUDITOR'S REPORT
To the Partners
GROVE PARC ASSOCIATES LIMITED PARTNERSHIP
We have audited the accompanying balance sheet of GROVE PARC ASSOCIATES LIMITED
PARTNERSHIP, FHA Project No. 071-11091 (An Illinois Limited Partnership) as of
December 31, 2003, and the related statement of operations, partners' 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. The financial
statements of GROVE PARC ASSOCIATES LIMITED PARTNERSHIP as of December 31, 2002
were audited by other auditors, whose report dated, January 30, 2003, expressed
an unqualified opinion on those statements.
We conducted our audit in accordance with U.S. generally accepted auditing
standards 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 GROVE PARC ASSOCIATES LIMITED
PARTNERSHIP as of December 31, 2003, and the results of its operations, changes
in its partners' deficit 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 also issued reports,
dated March 18, 2004 on our consideration of GROVE PARC ASSOCIATES LIMITED
PARTNERSHIP'S internal control, and on our tests of its compliance with certain
provisions of laws, regulations, contracts and grants. 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 audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental information
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information for the year ended December 31,
2003 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/ Friduss, Lukee, Schiff & Co., P.C.
Chicago, Illinois
March 18, 2004
48
[PHILIP ROOTBERG & COMPANY, LLP Letterhead]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Grove Parc Associates Limited Partnership
We have audited the accompanying balance sheet of Grove Parc Associates Limited
Partnership (a limited partnership) as of December 31, 2002 and 2001, 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 U.S. generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Grove Parc Associates Limited
Partnership as of December 31, 2002 and 2001, and the results of its operations,
changes in its partners' deficit and its cash flows for the years then ended in
conformity with U.S. generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
listed on the preceding contents page are presented for purposes of additional
analysis and are 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/ Philip Rootberg & Company, LLP
Chicago, Illinois
January 30, 2003
49
[Michael Sczekan & Co., P.C. Letterhead]
INDEPENDENT AUDITOR'S REPORT
- ----------------------------
To the General Partners
Apple Creek Housing Associates, Ltd.
Arvada, Colorado
We have audited the accompanying Balance Sheet of Apple Creek Housing
Associates, Ltd. FHA Project Number 101-35515, as of May 31, 2002, and the
related statements of profit and loss, changes in project equity and cash flows
for the period January 1 through May 31, 2002. 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 audit.
We conducted our audit in accordance with generally accepted auditing standards
and GOVERNMENT AUDITING STANDARDS issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our 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 Apple Creek Housing Associates,
Ltd., as of May 31, 2002, and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.
In accordance with GOVERNMENT AUDITING STANDARDS and the CONSOLIDATED AUDIT
GUIDE FOR AUDITS OF HUD PROGRAMS we have also issued a report dated August 12,
2002, on our consideration of Apple Creek Housing Associates, Ltd.'s internal
control structure and reports dated August 12, 2002, on its compliance with laws
and regulations and compliance with specific requirements applicable to major
HUD programs and specific requirements applicable to Fair Housing and
Non-Discrimination.
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 on pages
13 through 18 is presented for the purposes of additional analysis and are not a
required part of the financial statements of Apple Creek Housing Associates,
Ltd. Such information has been subjected to the same auditing procedures applied
in the examination of the basic financial statements and, in our opinion, are
presented fairly in all material respects in relation to the financial
statements taken as a whole.
Respectfully submitted,
/s/ Michael Sczekan & Co., P.C.
Certified Public Accountants
Englewood, Colorado
August 12, 2002
50
[LEAF & COLE, LLP Letterhead]
INDEPENDENT AUDITORS' REPORT
To the Partners
Redwood Villa Associates
(A California Limited Partnership)
c/o San Diego Interfaith Housing Foundation
2130 Fourth Avenue
San Diego, California 92101
We have audited the balance sheet of Redwood Villa Associates (A California
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. The financial statements of Redwood Villa Associates as of December
31, 2003 were audited by other auditors whose report dated January 27, 2004,
expressed an unqualified opinion on those statements.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Redwood Villa Associates as of
December 31, 2004, and the results of its operations and its cash flows for the
period 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 10 to the
financial statements, the Partnership has sustained operating losses since
inception. For the year ended December 31, 2004, the Partnership experienced a
loss of $199,278 (including $216,628 of depreciation and $4,554 of amortization
expense) and as of that date, had a partners' (deficit) of $1,944,248.
These conditions raise substantial doubt about the Partnership's ability to
continue as a going concern. Management's plans regarding these matters are
described in Note 10. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
In accordance with Government Auditing Standards, we have also issued our report
dated January 26, 2005, on our consideration of Redwood Villa 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 audit.
51
To the Partners Page 2
Redwood Villa Associates
(A California Limited Partnership)
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying information in Schedules
I and II are presented for purposes of additional analysis and is not a required
part of the basic financial statements. The information in Schedule I has been
subjected to the 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 financial
statements of Redwood Villas Associates for the year ended December 2003, were
audited by other auditors whose report dated January 27, 2004, expressed an
unqualified opinion on those financial statements. Their report, as of the same
date stated that in their opinion, the supplementary information in Schedule I
was fairly stated in all material respects in relation to the basic financial
statements for the year ended December 31, 2003, taken as a whole. The
information in Schedule II, a portion of which is of a nonaccounting nature, has
not been subjected to the auditing procedures applied in the audit of the basic
financial statements, and we express no opinion on it.
/s/ Leaf & Cole, LLP
San Diego, California
January 26, 2005
52
[BRODSHATZER, WALLACE, SPOON & YIP Letterhead]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Redwood Villa Associates
(A Limited Partnership)
We have audited the balance sheets of Redwood Villa Associates (A Limited
Partnership) ("Partnership") as of December 31, 2003 and 2002, and the related
statements of operations, changes in 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 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 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 Redwood Villa Associates (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.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 2 to the
financial statements, the Partnership has sustained operating losses since
inception. For the year ended December 31, 2003, the Partnership experienced a
loss of $201,871 (including $212,076 of depreciation and $4,553 of amortization
expense) and as of that date, had a working capital deficiency of $754,531 and a
partners' (deficit) of $1,729,970.
These conditions raise substantial doubt about the Partnership's ability to
continue as a going concern. Management's plans regarding these matters are
described in Note 2. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
In accordance with GOVERNMENT AUDITING STANDARDS, we have also issued our report
dated January 27, 2004 on our consideration of Redwood Villa Associates' (A
Limited Partnership) internal control over financial reporting and our tests of
its compliance with certain provisions of laws, regulations, contracts and
grants.
/s/ Brodshatzer, Wallace, Spoon & Yip
San Diego, California
January 27, 2004
53
[Asher & Company, Ltd. Letterhead]
Independent Auditors' Report
- ----------------------------
The Partners
Charles Drew Court Associates, L.P.
Marlton, New Jersey
We have audited the accompanying balance sheets of Charles Drew Court
Associates, L.P. (A Limited Partnership) 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 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 Charles Drew Court Associates,
L.P. (A Limited Partnership) as of December 31, 2003 and 2002 and the results of
its operations, changes in its Partners' capital and its cash flows for the
years then ended in conformity with accounting principles generally accepted in
the United States of America.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
February 6, 2004
54
[Koch Group & Company, LLP Letterhead]
INDEPENDENT AUDITORS' REPORT
To The Partners
Walnut Park Plaza Associates, L.P.
We have audited the accompanying statement of financial position of Walnut Park
Plaza Associates, L.P. (A Pennsylvania Limited Partnership), as of March 31,
2004 and the related statements of operations, changes in partner's equity, and
cash flows for the three months then ended. These financial statements are the
responsibility of the Walnut Park Plaza Associates, L.P.'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 Walnut Park Plaza Associates,
L.P. (A Pennsylvania Limited Partnership), as of March 31, 2004 and the changes
in its net assets and its cash flows for the three months then ended in
conformity with generally accepted accounting principles.
/s/ Koch Group & Company, LLP
Certified Public Accountants
New York, New York
December 17, 2004
55
[Koch Group & Company, LLP Letterhead]
INDEPENDENT AUDITORS' REPORT
To The Partners
Walnut Park Plaza Associates, L.P.
We have audited the accompanying statement of financial position of Walnut Park
Plaza Associates, L.P. (A Pennsylvania Limited Partnership) as of December 31,
2003, and the related statements of operations, changes in partner's equity
(deficiency), cash flows for the year then ended. These financial statements are
the responsibility of the Walnut Park Plaza Associates, L.P.'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 Walnut Park Plaza Associates,
L.P. (A Pennsylvania Limited Partnership), as of December 31, 2003, and the
results of its operations, changes in its partner's equity (deficiency), and its
cash flows for the year then ended in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming the
Partnership will continue as a going concern. As discussed in Note 3 to the
financial statements, the Partnership has suffered recurring losses from
operations and is in default of certain obligation under the terms of the
mortgage loan. These conditions raise substantial doubt about the Partnership's
ability to continue as a going concern at December 31, 2003. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
/s/ Koch Group & Company, LLP
New York, New York
March 31, 2004, except for notes 8 and 11,
as to which the date is June 2, 2004
56
[Matthews, Carter and Boyce, P.C. Letterhead]
INDEPENDENT AUDITORS' REPORT
To The Partners
Walnut Park Plaza Associates
Philadelphia, Pennsylvania
We have audited the accompanying balance sheets of Walnut Park Plaza Associates
(a Pennsylvania Limited Partnership) as of December 31, 2002 and 2001, and the
related statements of operations, changes in partners' capital (deficit), and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing standards
and GOVERNMENT AUDITING STANDARDS issued by the Comptroller General of the
United States. Those standards require that we plan and perform the 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 amount 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 Walnut Park Plaza Associates 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, we have also issued a report
dated January 31, 2003, on our consideration of Walnut Park Plaza Associates
internal control and a report dated January 31, 2003 on its compliance with
laws, regulations, contracts and grants applicable to Walnut Park Plaza
Associates.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 10 to the
financial statements, the Partnership has suffered recurring losses from
operations and does not have sufficient cash flow from operations to pay current
liabilities, which raise substantial doubt about its ability to continue as a
going concern. Management's plans regarding those matters are also described in
Note 10. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/s/ Matthews, Carter and Boyce, P.C.
Fairfax, Virginia
January 31, 2003
57
[Favors & Associates, CPA's, P.S. Letterhead]
INDEPENDENT AUDITORS' REPORT
To the Partners
Bayridge Associates Limited Partnership
We have audited the accompanying balance sheet of Bayridge Associates Limited
Partnership as of December 31, 2004 and the related statements of operations,
partners' deficit and cash flows for the year then ended. These financial
statements are the responsibility of the entity'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 Bayridge 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/ Favors & Associates, CPA's, P.S.
Fircrest, Washington
February 16, 2005
58
[Richey May & Co. Letterhead]
INDEPENDENT AUDITORS' REPORT
To the Partners
Bayridge Associates Limited Partnership
Denver, Colorado
We have audited the accompanying balance sheet of Bayridge Associates 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. The financial statements of Bayridge Associates Limited Partnership
as of December 31, 2002 were audited by other auditors whose report dated
January 31, 2003 expressed an unqualified opinion on those statements.
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 Bayridge 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.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 11 and 12 is
presented for the purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of 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/ Richey May & Co.
Englewood, Colorado
January 16, 2004
59
[Reznick Fedder & Silverman Letterhead]
INDEPENDENT AUDITORS' REPORT
To the Partners
Bayridge Associates Limited Partnership
We have audited the accompanying balance sheets of Bayridge Associates Limited
Partnership as of December 31, 2002 and 2001, and the related statements of
operations, partners' equity (deficit) and cash flows for the year then ended.
These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits 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 Bayridge Associates Limited
Partnership, as of December 31, 2002 and 2001, and the results of its operations
and its cash flows for the years then ended, in conformity with accounting
principles generally accepted in the United States of America.
/s/ Reznick Fedder & Silverman
Atlanta, Georgia
January 31, 2003
60
[Habif, Arogeti & Wynne, LLP. Letterhead]
INDEPENDENT AUDITORS' REPORT
- ----------------------------
To the Partners of
United-Pennsylvanian Limited Partnership
We have audited the accompanying balance sheets of UNITED-PENNSYLVANIAN LIMITED
PARTNERSHIP [FHA Project No. R-251-8E] as of December 31, 2004 and 2003, and the
related statements of profit and loss, changes in 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 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 UNITED-PENNSYLVANIAN LIMITED
PARTNERSHIP as of December 31, 2004 and 2003, and the results of its operations,
its changes in partners' 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, issued by the Comptroller
General of the United States and the CONSOLIDATED AUDIT GUIDE FOR AUDITS OF HUD
PROGRAMS, issued by the U.S. Department of Housing and Urban Development, Office
of the Inspector General, we have also issued our reports dated January 27,
2005, on our consideration of UNITED-PENNSYLVANIAN LIMITED PARTNERSHIP's
internal control and on our tests of its compliance with certain provisions of
laws regulations, contracts, and grants. 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 supporting information included in
the report [shown on pages 14 through 21] is presented for the purpose 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/ Habif, Arogeti & Wynne, LLP
Atlanta, Georgia
January 27, 2005
61
[Habif, Arogeti & Wynne, LLP. Letterhead]
INDEPENDENT AUDITORS' REPORT
- ----------------------------
To the Partners of
United-Pennsylvanian Limited Partnership
We have audited the accompanying balance sheets of UNITED-PENNSYLVANIAN LIMITED
PARTNERSHIP [FHA Project No. R-251-8E] as of December 31, 2003 and 2002, and the
related statements of profit and loss, changes in 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 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 UNITED-PENNSYLVANIAN LIMITED
PARTNERSHIP as of December 31, 2003 and 2002, and the results of its operations,
its changes in partners' 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, issued by the Comptroller
General of the United States and the CONSOLIDATED AUDIT GUIDE FOR AUDITS OF HUD
PROGRAMS, issued by the U.S. Department of Housing and Urban Development, Office
of the Inspector General, we have also issued our reports dated January 28,
2004, on our consideration of UNITED-PENNSYLVANIAN LIMITED PARTNERSHIP's
internal control and on our tests of its compliance with certain provisions of
laws regulations, contracts, and grants. 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 supporting information included in
the report [shown on pages 14 through 21] is presented for the purpose 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/ Habif, Arogeti & Wynne, LLP
Atlanta, Georgia
January 28, 2004
62
[Marden, Harrison & Kreuter Certified Public Accountants, P.C. Letterhead]
INDEPENDENT AUDITORS' REPORT
- ----------------------------
To the Partners
2051 Grand Concourse Housing Associates
3743-A White Plains Road
Bronx, New York 10467
We have audited the accompanying balance sheets of 2051 Grand Concourse Housing
Associates (a limited partnership) as of December 31, 2004 and 2003, and the
related statements of operations, partners' capital (deficiency), 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 2051 Grand Concourse Housing
Associates 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.
Our audits were made for the purpose of forming an opinion on the basic
financial statements take as a whole. The accompanying information is presented
for purposes of additional analysis and is not a required part of the basic
financial statements. Such information has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Marden, Harrison & Kreuter
Certified Public Accountants, P.C
White Plains, New York
January 21, 2005
63
[Marden, Harrison & Kreuter Certified Public Accountants, P.C. Letterhead]
INDEPENDENT AUDITORS' REPORT
- ----------------------------
To the Partners
2051 Grand Concourse Housing Associates
3743-A White Plains Road
Bronx, New York 10467
We have audited the accompanying balance sheets of 2051 Grand Concourse Housing
Associates (a limited partnership) as of December 31, 2003 and 2002, and the
related statements of operations, partners' capital (deficiency), 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 2051 Grand Concourse Housing
Associates 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.
Our audits were made for the purpose of forming an opinion on the basic
financial statements take as a whole. The accompanying information is presented
for purposes of additional analysis and is not a required part of the basic
financial statements. Such information has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Marden, Harrison & Kreuter
Certified Public Accountants, P.C
White Plains, New York
January 23, 2004
64
[Marden, Harrison & Kreuter Certified Public Accountants, P.C. Letterhead]
INDEPENDENT AUDITORS' REPORT
- ----------------------------
To the Partners
Concourse Artists Housing Associates
3743-A White Plains Road
Bronx, New York 10467
We have audited the accompanying balance sheets of Concourse Artists Housing
Associates (a limited partnership) as of December 31, 2004 and 2003, and the
related statements of operations, partners' capital (deficiency), 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 Concourse Artists Housing
Associates 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.
Our audits were made for the purpose of forming an opinion on the basic
financial statements take as a whole. The accompanying information is presented
for purposes of additional analysis and is not a required part of the basic
financial statements. Such information has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Marden, Harrison & Kreuter
Certified Public Accountants, P.C.
White Plains, New York
January 21, 2005
65
[Marden, Harrison & Kreuter Certified Public Accountants, P.C. Letterhead]
INDEPENDENT AUDITORS' REPORT
- ----------------------------
To the Partners
Concourse Artists Housing Associates
3743-A White Plains Road
Bronx, New York 10467
We have audited the accompanying balance sheets of Concourse Artists Housing
Associates (a limited partnership) as of December 31, 2003 and 2002, and the
related statements of operations, partners' capital (deficiency), 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 Concourse Artists Housing
Associates 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.
Our audits were made for the purpose of forming an opinion on the basic
financial statements take as a whole. The accompanying information is presented
for purposes of additional analysis and is not a required part of the basic
financial statements. Such information has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Marden, Harrison & Kreuter
Certified Public Accountants, P.C.
White Plains, New York
January 23, 2004
66
[Marden, Harrison & Kreuter Certified Public Accountants, P.C. Letterhead]
INDEPENDENT AUDITORS' REPORT
- ----------------------------
To the Partners
Willoughby-Wyckoff Housing Associates
3743-A White Plains Road
Bronx, New York 10467
We have audited the accompanying balance sheets of Willoughby-Wyckoff Housing
Associates (a limited partnership) as of December 31, 2004 and 2003, and the
related statements of operations, partners' capital (deficiency), 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 Willoughby-Wyckoff Housing
Associates 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.
Our audits were made for the purpose of forming an opinion on the basic
financial statements take as a whole. The accompanying information is presented
for purposes of additional analysis and is not a required part of the basic
financial statements. Such information has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Marden, Harrison & Kreuter
Certified Public Accountants, P.C.
White Plains, New York
January 21, 2005
67
[Marden, Harrison & Kreuter Certified Public Accountants, P.C. Letterhead]
INDEPENDENT AUDITORS' REPORT
- ----------------------------
To the Partners
Willoughby-Wyckoff Housing Associates
3743-A White Plains Road
Bronx, New York 10467
We have audited the accompanying balance sheets of Willoughby-Wyckoff Housing
Associates (a limited partnership) as of December 31, 2003 and 2002, and the
related statements of operations, partners' capital (deficiency), 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 Willoughby-Wyckoff Housing
Associates 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.
Our audits were made for the purpose of forming an opinion on the basic
financial statements take as a whole. The accompanying information is presented
for purposes of additional analysis and is not a required part of the basic
financial statements. Such information has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Marden, Harrison & Kreuter
Certified Public Accountants, P.C.
White Plains, New York
January 23, 2004
68
[Marden, Harrison & Kreuter Certified Public Accountants, P.C. Letterhead]
INDEPENDENT AUDITORS' REPORT
- ----------------------------
To the Partners
Robin Housing Associates
3743-A White Plains Road
Bronx, New York 10467
We have audited the accompanying balance sheets of Robin Housing Associates (a
limited partnership) as of December 31, 2004 and 2003, and the related
statements of operations, partners' capital (deficiency), 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 Robin Housing Associates 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.
Our audits were made for the purpose of forming an opinion on the basic
financial statements take as a whole. The accompanying information is presented
for purposes of additional analysis and is not a required part of the basic
financial statements. Such information has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Marden, Harrison & Kreuter
Certified Public Accountants, P.C.
White Plains, New York
January 21, 2005
69
[Marden, Harrison & Kreuter Certified Public Accountants, P.C. Letterhead]
INDEPENDENT AUDITORS' REPORT
- ----------------------------
To the Partners
Robin Housing Associates
3743-A White Plains Road
Bronx, New York 10467
We have audited the accompanying balance sheets of Robin Housing Associates (a
limited partnership) as of December 31, 2003 and 2002, and the related
statements of operations, partners' capital (deficiency), 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 Robin Housing Associates 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.
Our audits were made for the purpose of forming an opinion on the basic
financial statements take as a whole. The accompanying information is presented
for purposes of additional analysis and is not a required part of the basic
financial statements. Such information has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Marden, Harrison & Kreuter
Certified Public Accountants, P.C.
White Plains, New York
January 23, 2004
70
[CARTER & COMPANY, CERTIFIED PUBLIC ACCOUNTANTS, LLC Letterhead]
INDEPENDENT AUDITORS' REPORT
To the Partners
Lund Hill Associates
We have audited the accompanying balance sheet of Lund Hill Associates, (a
limited partnership), WHEDA Project No. 021, as of December 31, 2004, and the
related statements of profit and loss, changes in partners' equity (deficit) and
cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on 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 my 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 Lund Hill Associates 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.
In accordance with GOVERNMENT AUDITING STANDARDS, we have also issued our
reports dated January 31, 2005 on our consideration of Lund Hill Associates
internal control over financial reporting and on our tests of its compliance
with certain provision of laws, regulations, contracts, and 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 or on compliance. 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
shown on pages 14-23 is presented for the purpose of additional analysis and is
not a required part of the basic financial statements of the Partnership. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.
/s/ Carter & Company
Destin, Florida
January 31, 2005
71
[CARTER & COMPANY, CERTIFIED PUBLIC ACCOUNTANTS, LLC Letterhead]
INDEPENDENT AUDITORS' REPORT
To the Partners
Lund Hill Associates
We have audited the accompanying balance sheet of Lund Hill Associates, (a
limited partnership), WHEDA Project No. 021, as of December 31, 2003, and the
related statements of operations, changes in partners' equity (deficit) and cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that my 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 Lund Hill 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.
In accordance with GOVERNMENT AUDITING STANDARDS, we have also issued our
reports dated January 16, 2004 on our consideration of Lund Hill Associates
internal control and on our tests of its compliance with certain provisions of
laws, regulations, contracts, and grants. 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.
The accompanying supplemental information (shown on pages 14-23) is presented
for purposes of additional analysis and is not a required part of the basic
financial statements of Lund Hill Associates. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Carter & Company
Atlanta, Georgia
January 16, 2004
72
[KENNETH W. BRYANT, CERTIFIED PUBLIC ACCOUNTANT Letterhead]
INDEPENDENT AUDITORS' REPORT
To the Partners
Lund Hill Associates
I have audited the accompanying balance sheet of Lund Hill Associates, (a
limited partnership), WHEDA Project No. 021, as of December 31, 2002, and the
related statements of profit and loss, changes in partners' equity (deficit),
and cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. My responsibility is to express
an opinion on these financial statements based on my audit.
I conducted my audit in accordance with auditing standards generally accepted in
the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of
the United States. Those standards require that I plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. I believe that my 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 Lund Hill 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.
In accordance with Government Auditing Standards, I have also issued my reports
dated February 7, 2003 on my consideration of Lund Hill Associates internal
control and on my tests of its compliance with certain provisions of laws,
regulations, contracts, and grants. 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 my audit.
The accompanying supplemental information (shown on pages 14-23) is presented
for purposes of additional analysis and is not a required part of the basic
financial statements of Lund Hill Associates. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in my opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Kenneth W. Bryant
Atlanta, Georgia
February 7, 2003
73
[RICK J. TANNEBERGER, CERTIFIED PUBLIC ACCOUNTANT Letterhead]
Independent Auditor's Report
- ----------------------------
The Partners
Tanglewood Apartments, A Limited Partnership
We have audited the accompanying balance sheets of Tanglewood Apartments, A
Limited Partnership, as of July 30, 2004 and December 31, 2003, and the related
statements of income, 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.
These 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 Tanglewood Apartments, A
Limited Partnership as of July 30, 2004 and December 31, 2003, and the results
of its operations and its cash flows for the period and year then ended in
conformity with accounting principles 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 supplementary information presented
on page 11 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/ Rick J. Tanneberger, CPA, P.A.
January 31, 2005
Fayetteville, Arkansas
74
[RICK J. TANNEBERGER, CERTIFIED PUBLIC ACCOUNTANT Letterhead]
Independent Auditor's Report
- ----------------------------
The Partners
Tanglewood Apartments, A Limited Partnership
We have audited the accompanying balance sheets of Tanglewood Apartments, A
Limited Partnership, as of December 31, 2003 and 2002, and the related
statements of income, 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 audit in accordance with generally accepted auditing standards.
These 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 Tanglewood 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 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 supplementary information presented
on page 12 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/ Rick J. Tanneberger, CPA, P.A.
Fayetteville, Arkansas
February 9, 2004
75
[RBG & CO. Letterhead]
Independent Auditors' Report
Partners
Quality Hill Historic District -
Phase II-A, L.P.
St. Louis, Missouri
We have audited the accompanying balance sheet of Quality Hill Historic
District-Phase II-A, L.P., a limited partnership, 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 consideration of
internal control 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 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 Quality Hill Historic
District-Phase II-A, 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/ Rubin, Brown, Gornstein & Co. LLP
St. Louis, Missouri
February 1, 2005
76
[RBG & CO. Letterhead]
Independent Auditors' Report
Partners
Quality Hill Historic District - Phase II-A, L.P.
St. Louis, Missouri
We have audited the accompanying balance sheet of Quality Hill Historic
District-Phase II-A, L.P., a limited partnership, as of December 31, 2003 and
2002, 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 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 Quality Hill Historic
District-Phase II-A, 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/ Rubin, Brown, Gornstein & Co. LLP
St. Louis, Missouri
February 3, 2004
77
[HAMILTON & MUSSER, P.C. LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
- ----------------------------
To the Partners of
Penn Alto Associates, Limited Partnership
Altoona, Pennsylvania 16601
We have audited the accompanying balance sheets of Penn Alto Associates, Limited
Partnership as of December 31, 2004 and 2003 and the related statements of
income, changes in partners' capital, and cash flows for the years then ended.
These financial statements are the responsibility of the company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for the opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Penn Alto Associates, 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.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The accompanying supplementary information on pages
9 and 10 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 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/ Hamilton & Musser, P.C.
Certified Public Accountants
Mechanicsburg, Pennsylvania
February 11, 2005
78
[HAMILTON & MUSSER, P.C. LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
- ----------------------------
To the Partners of
Penn Alto Associates, Limited Partnership
Altoona, Pennsylvania 16601
We have audited the accompanying balance sheets of Penn Alto Associates, Limited
Partnership as of December 31, 2003 and 2002 and the related statements of
income, changes in partners' capital, and cash flows for the years then ended.
These financial statements are the responsibility of the company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for the opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Penn Alto Associates, 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.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The accompanying supplementary information on pages
9 and 10 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 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/ Hamilton & Musser, P.C.
Certified Public Accountants
Mechanicsburg, Pennsylvania
February 19, 2004
79
[REZNICK GROUP, P.C. Letterhead]
INDEPENDENT AUDITORS' REPORT
To the Partners
Sartain School Venture
We have audited the accompanying balance sheets of Sartain School Venture 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 Sartain School Venture at
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 our report
for the year ended December 31, 2004, dated February 4, 2005, on our
consideration of Sartain School Venture's internal control over financial
reporting and on 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 audit was 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 audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ Reznick Group, P.C.
Baltimore, Maryland
February 4, 2005
80
[REZNICK FEDDER & SILVERMAN Letterhead]
INDEPENDENT AUDITORS' REPORT
To the Partners
Sartain School Venture
We have audited the accompanying balance sheets of Sartain School Venture as of
December 31, 2003 and 2002, and the related statements of profit and loss,
changes in 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 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 Sartain School Venture at
December 31, 2003 and 2002, and the results of its operations, the changes in
partners' 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 our report
for the year ended December 31, 2003, dated February 6, 2004, on our
consideration of Sartain School Venture's internal control over financial
reporting and on our tests of its compliance with certain provisions of laws,
regulations, contracts and grants. That report is an integral part of an audit
performed in accordance with GOVERNMENT AUDITING STANDARDS and should be read in
conjunction with this report in considering the results of our audit.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 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 audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ Reznick Fedder & Silverman
Baltimore, Maryland
February 6, 2004
81
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
March 15,
------------------------------
2005 2004*
------------ ------------
Operating Assets
Property and equipment, at cost, less accumulated
depreciation (Notes 2, 4, 7 and 10) $ 86,316,389 $113,980,774
Cash and cash equivalents (Notes 2, 3 and 11) 4,335,171 5,089,076
Cash held in escrow (Notes 3 and 5) 10,529,679 15,182,044
Accounts receivable - tenants 761,215 920,395
Deferred costs, less accumulated amortization
(Notes 2 and 6) 1,922,580 2,289,632
Other assets 1,230,423 1,373,958
------------ ------------
Total operating assets 105,095,457 138,835,879
------------ ------------
Discontinued Assets (Note 12)
Property and equipment held for sale, net of accumulated
depreciation (Note 4) 11,193,351 6,508,982
Net assets held for sale 4,452,896 841,444
------------ ------------
Total discontinued assets 15,646,247 7,350,426
------------ ------------
Total assets $120,741,704 $146,186,305
============ ============
LIABILITIES AND PARTNERS' DEFICIT
Operating Liabilities
Mortgage notes payable (Notes 3 and 7) $ 97,203,309 $129,470,161
Accounts payable 2,436,882 3,710,915
Accrued interest payable 7,885,329 7,625,566
Security deposits payable 624,852 876,745
Due to local general partners and affiliates (Note 8) 21,080,176 19,979,284
Due to general partners and affiliates (Note 8) 8,261,783 8,539,996
Due to selling partners 1,412,272 1,292,934
------------ ------------
Total liabilities 138,904,603 171,495,601
------------ ------------
Discontinued liabilities (Note 12)
Mortgage notes payable of assets held for sale (Note 7) 12,032,637 7,330,000
Net liabilities held for sale (including minority interest) 2,076,114 3,379,218
------------ ------------
Total discontinued liabilities 14,108,751 10,709,218
------------ ------------
Minority interests (Note 2) (321,605) 662,078
------------ ------------
Commitments and contingencies (Notes 7, 8 and 11)
Partners' deficit
Limited partners (15,987.5 BACs issued and outstanding)
(Note 1) (30,908,125) (35,583,942)
General partners (1,041,920) (1,096,650)
------------ ------------
Total partners' deficit (31,950,045) (36,680,592)
------------ ------------
Total liabilities and partners' deficit $120,741,704 $146,186,305
============ ============
* Reclassified for comparative purposes.
See accompanying notes to consolidated financial statements.
82
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended March 15,
-----------------------------------------
2005 2004* 2003*
----------- ----------- -----------
Operations:
Revenues
Rental income $25,208,167 $25,571,702 $25,359,397
Subsidy income (Note 1) 4,007,686 501,511 479,595
Other (Notes 1 and 11) 628,375 615,831 690,816
----------- ----------- -----------
Total revenues 29,844,228 26,689,044 26,529,808
----------- ----------- -----------
Expenses
General and administrative 4,939,204 5,137,476 4,561,511
General and administrative-related parties
(Note 8) 2,089,729 1,950,681 2,218,245
Repairs and maintenance 6,019,542 5,692,790 5,142,706
Operating 3,598,017 3,509,360 3,143,335
Taxes 1,164,459 1,062,854 1,096,978
Insurance 1,580,225 1,407,674 1,345,126
Interest 7,421,193 8,021,051 8,695,826
Depreciation and amortization 6,498,326 6,757,547 5,679,284
----------- ----------- -----------
33,310,695 33,539,433 31,883,011
----------- ----------- -----------
Loss from operations before minority interest (3,466,467) (6,850,389) (5,353,203)
Minority interest in loss of subsidiaries
from operations 22,634 10,736 377,948
----------- ----------- -----------
Loss from operations (3,443,833) (6,839,653) (4,975,255)
Discontinued Operations:
Income (loss) from discontinued operations
(including gain (loss) on sale of
properties) (Note 12) 8,196,269 (284,137) 4,375,326
----------- ----------- -----------
Net income (loss) $ 4,752,436 (7,123,790) (599,929)
=========== =========== ===========
Number of BACs outstanding 15,987.5 15,987.5 15,987.5
=========== =========== ===========
Loss from operations - limited partners $(3,409,395) $(6,771,256) $(4,925,503)
Income (loss) from discontinued operations
(including gain (loss) on sale of
properties) - limited partners 8,114,306 (281,296) 4,331,573
----------- ----------- -----------
Net income (loss) - limited partners $ 4,704,911 $(7,052,552) $ (593,930)
=========== =========== ===========
Loss from operations per BAC $ (213.25) $ (423.53) $ (308.08)
Income (loss) from discontinued operations
per BAC 507.54 (17.60) 270.93
----------- ----------- -----------
Net income (loss) per BAC $ 294.29 $ (441.13) $ (37.15)
=========== =========== ===========
* Reclassified for comparative purposes.
See accompanying notes to consolidated financial statements.
83
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
Limited General
Total Partners Partner
------------ ------------ ------------
Partners' deficit - March 16, 2002 $(28,956,873) $(27,937,460) $ (1,019,413)
Net loss, year ended March 15, 2003 (599,929) (593,930) (5,999)
------------ ------------ ------------
Partners' deficit - March 15, 2003 (29,556,802) (28,531,390) (1,025,412)
Net loss, year ended March 15, 2004 (7,123,790) (7,052,552) (71,238)
------------ ------------ ------------
Partners' deficit - March 15, 2004 (36,680,592) (35,583,942) (1,096,650)
Net income, year ended March 15, 2005 4,752,436 4,704,912 47,524
Noncash distribution to related party (29,389) (29,095) (294)
Noncash contribution due to write-off of
related party debt 7,500 0 7,500
------------ ------------ ------------
Partners' deficit - March 15, 2005 $(31,950,045) $(30,908,125) $ (1,041,920)
============ ============ ============
See accompanying notes to consolidated financial statements.
84
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Years Ended March 15,
----------------------------------------------
2005 2004* 2003*
------------ ------------ ------------
Cash flows from operating activities:
Net income (loss) $ 4,752,436 $ (7,123,790) $ (599,929)
------------ ------------ ------------
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
(Income) loss from discontinued operations (8,196,269) 284,137 (4,375,326)
Write-off of deferred costs 0 0 287,019
Cancellation of indebtedness income (68,571) (68,571) (68,571)
Accrued interest added to principal of mortgage note payable 228,613 215,618 197,846
Depreciation and amortization 6,498,326 6,757,547 5,679,284
(Increase) decrease in assets:
Cash held in escrow (40,801) 1,208,085 (399,440)
Accounts receivable - tenants 144,638 170,244 (151,192)
Other assets (180,779) 229,739 (683,797)
Increase (decrease) in liabilities:
Accounts payable and other liabilities 792,812 472,254 214,646
Due to general partners and affiliates 481,132 1,467,396 997,205
Minority interest in loss of subsidiaries (22,634) (10,736) (377,948)
------------ ------------ ------------
Total adjustments (363,533) 10,725,713 1,319,726
------------ ------------ ------------
Net cash provided by operating activities 4,388,903 3,601,923 719,797
------------ ------------ ------------
Cash flows from investing activities:
Improvements to property and equipment (2,187,824) (2,050,294) (2,866,782)
Decrease (increase) in cash held in escrow 665,769 (3,558,039) 2,007,618
------------ ------------ ------------
Net cash used in investing activities (1,522,055) (5,608,333) (859,164)
------------ ------------ ------------
Cash flows from financing activities:
Increase in deferred costs (18) (130,827) (459,668)
Increase in due to local general partners and affiliates 2,017,717 4,658,134 731,440
Decrease in due to local general partners and affiliates (249,391) (125,125) (390,190)
Increase (decrease) in due to selling partners 119,338 (10,746) 40,020
Proceeds from mortgage notes 0 14,396,048 15,209,376
Repayment of mortgage notes (5,923,190) (18,149,630) (15,403,198)
Decrease in capitalization of consolidated subsidiaries
attributable to minority interest 414,791 390,370 99,194
------------ ------------ ------------
Net cash (used in) provided by financing activities (3,620,753) 1,028,224 (173,026)
------------ ------------ ------------
Net decrease in cash and cash equivalents (753,905) (978,186) (312,393)
Cash and cash equivalents, beginning of year 5,089,076 6,067,262 6,379,655
------------ ------------ ------------
Cash and cash equivalents, end of year $ 4,335,171 $ 5,089,076 $ 6,067,262
============ ============ ============
Supplemental disclosure of cash flows information:
Cash paid during the year for interest $ 6,222,487 $ 7,988,167 $ 9,309,001
============ ============ ============
85
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(continued)
Years Ended March 15,
----------------------------------------------
2005 2004* 2003*
------------ ------------ ------------
Supplemental disclosures of noncash investing and financing
activities:
Distribution from sale to related party $ (29,389) $ 0 $ 0
Contribution from write-off of related party debt 7,500 0 0
Increase in accounts payable and other liabilities for
deferred loss on sale of properties 0 0 63,084
Summarized below are the components of the forgiveness of
indebtedness income:
Decrease in accounts payable, accrued expenses and other
liabilities $ 0 $ (133,565) $ 0
* Reclassified for comparative purposes.
See accompanying notes to consolidated financial statements.
86
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2005
NOTE 1 - General
Liberty Tax Credit Plus L.P., a Delaware limited partnership (the
"Partnership"), was organized on June 26, 1987, but had no activity until
October 1, 1987 (which date is considered to be inception for financial
accounting purposes). The Partnership had no operations until commencement of
the public offering on November 20, 1987.
The Partnership's business is to invest as a limited partner in other limited
partnerships ("Local Partnerships," "subsidiaries" or "subsidiary partnerships")
owning leveraged apartment complexes that are eligible for the low-income
housing tax credit (the "Low-Income Housing Tax Credit") enacted in the Tax
Reform Act of 1986, and to a lesser extent in Local Partnerships owning
properties that are eligible for the historic rehabilitation tax credit. The
Partnership had originally invested in 31 subsidiary partnerships. During the
year ended March 15, 2005, the Partnership sold the properties and the related
assets and liabilities of four Local Partnerships and the limited partnership
interest in two Local Partnerships. Through the year ended March 15, 2005, the
Partnership sold the properties and the related assets and liabilities of seven
Local Partnerships and its limited partnership interest in three Local
Partnerships. Subsequently on March 29, 2005, the property and the related
assets and liabilities of Regent Street Associates, L.P. ("Regent Street") were
sold. Also subsequently on April 25, 2005, the Partnership entered into a
contract to sell the Limited Partnership interest in Fox Glenn Investors, L.P.
("Fox Glenn"). There can be no assurance as to whether or when the sale will
actually occur.
The general partners of the Partnership are Related Credit Properties L.P., a
Delaware limited partnership (the "Related General Partner") and Liberty
Associates III L.P., a Delaware limited partnership ("Liberty Associates", and
together with the Related General Partner, the "General Partners"). The Related
General Partner is also the special limited partner of the Partnership. The
general partner of the Related General Partner is Credit Properties GP LLC
("Credit Properties"), a Delaware corporation. The general partner of Liberty
Associates is the Related General Partner. On November 17, 2003, CharterMac
acquired Related Capital Company, which is the indirect parent of RCC Manager
L.L.C., the managing member of Credit Properties. 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 terms of the Partnership's Amended and Restated Agreement of Limited
Partnership (the "Partnership Agreement") provide, among other things, that net
profits or losses and distributions of cash flow are, in general, allocated 99%
to the limited partners and BACs holders and 1% to the General Partners.
NOTE 2 - Summary of Significant Accounting Policies
a) Basis of Consolidation
The consolidated financial statements for the years ended March 15, 2005, 2004
and 2003 include the accounts of the Partnership and 28, 30 and 31 subsidiary
partnerships, respectively, in which the Partnership is a limited partner.
Through the rights of the Partnership and/or a General Partner, which General
Partner 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. All intercompany accounts and
transactions with the subsidiary partnerships have been eliminated in
consolidation.
For financial reporting purposes, the Partnership's fiscal year ends on March
15. All subsidiaries have fiscal years ending December 31. Accounts of
subsidiaries have been adjusted for intercompany transactions from January 1
through March 15. The Partnership's fiscal year ends on March 15 in order to
allow adequate time for the subsidiaries financial statements to be prepared and
consolidated. The books and records of the Partnership are maintained on the
accrual basis of accounting, in accordance with U.S. generally accepted
accounting principles ("GAAP"). Accounts of the subsidiary partnerships have
been adjusted for intercompany transactions from January 1 through March 15.
Increases (decreases) in the capitalization of consolidated subsidiary
partnerships attributable to minority interest arise from cash contributions and
cash distributions to the minority interest partners.
The Partnership's investment in each subsidiary partnership is equal to the
respective subsidiary partnership's partners' equity less minority interest
capital, if any. Losses attributable to minority interests which exceed the
minority interests' investment in subsidiary partnerships have been charged to
the Partnership. Such losses aggregated approximately $0, $192,000 and $15,000
for the years ended March 15, 2005, 2004 and 2003, respectively. In
consolidation, all subsidiary partnership losses are included in the
Partnership's capital account except for losses allocated to minority interest
capital.
b) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, cash in banks, and investments
in short-term highly liquid instruments purchased with original maturities of
three months or less.
c) 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
87
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2005
accumulated depreciation are eliminated from the assets and accumulated
depreciation accounts and the profit or loss on such disposition is reflected in
earnings.
In accordance with FASB 144, "Accounting for the Impairment of Disposal of
Long-Lived Assets", the results of discontinued operations are reported as a
separate component of income before extraordinary items on the Consolidated
Statements of Operations. Discontinued operations include the results of
operations and any gain or loss recognized for Local Partnerships that have been
disposed of or are held for sale. A gain or loss recognized on the disposal is
disclosed in the notes to the financials statements. Adjustments to amounts
previously reported in operations that are directly related to the disposal of a
Local Partnership are reclassified in the current period as discontinued
operations for comparability purposes. Assets and liabilities of a Local
Partnership that are classified as held for sale are presented separately in the
asset and liability sections, respectively, of the Consolidated Balance Sheets.
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).
Through March 15, 2005, the Partnership has not recorded any loss on impairment
of assets or reduction to estimated fair value.
d) Revenue Recognition
Rental income is earned primarily 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.
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 from operations include the following amounts at both the
Partnership and Local Partnership level:
March 15,
--------------------------------------
2005 2004 2003
---------- ---------- ----------
Interest $ 144,236 $ 115,745 $ 127,427
Other 484,139 500,086 563,389
---------- ---------- ----------
Total other revenue $ 628,375 $ 615,831 $ 690,816
========== ========== ==========
Other revenues from discontinued operations include the following amounts at
both the Partnership and Local Partnership level:
March 15,
--------------------------------------
2005 2004 2003
---------- ---------- ----------
Interest $ 60,870 $ 80,768 $ 93,398
Other 282,021 412,744 447,348
---------- ---------- ----------
Total other revenue $ 342,891 $ 493,512 $ 540,746
========== ========== ==========
Interest income is earned on cash and cash equivalent balances and cash held in
escrow balances. Other income includes income from forfeited security deposits,
late charges, laundry and vending income and other rental related items. Subsidy
income includes rent subsidy received from the Atlantic County Improvement
Authority at one Local Partnership.
March 15,
--------------------------------------
2005 2004 2003
---------- ---------- ----------
Subsidy Income $4,007,686 $ 501,511 $ 479,595
========== ========== ==========
The subsidy income is related to Charles Drew Court Associates, L.P. ("Charles
Drew"). The Atlantic County Improvement Authority ("ACIA") entered into a
pledge/security agreement with Bank of America (formerly Fleet Bank, N.A.),
Charles Drew's mortgagor, under which ACIA pledged certificates of deposit
originally in the amount of $4,772,500. The funds, including interest earned
thereon, provided a subsidy to Charles Drew equal to the debt service on the
mortgage. The funds were used to payoff the mortgage in September 2004.
88
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2005
e) Income Taxes
The Partnership is not required to provide for, or pay, any federal income
taxes. Net income or loss generated by the Partnership is passed through to the
partners and is required to be reported by them. The Partnership may be subject
to state and local taxes in jurisdictions in which it operates. For income tax
purposes, the Partnership has a fiscal year ending December 31 (Note 9).
f) Loss Contingencies
The Partnership records loss contingencies as a charge to income when
information becomes available which indicates that it is probable that an asset
has been impaired or a liability has been incurred as of the date of the
financial statements and the amount of loss can be reasonably estimated.
g) Use of Estimates
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly
actual results could differ from those estimates.
NOTE 3 - Fair Value of Financial Instruments
The following methods and assumptions were used to estimate the fair value of
each class of financial instruments (all of which are held for non-trading
purposes) for which it is practicable to estimate that value:
Cash and Cash Equivalents and Cash Held in Escrow
- ---------------------------------------------------------
The carrying amount approximates fair value.
Mortgage Notes Payable
- ----------------------
The fair value of mortgage notes payable is estimated, where practicable, based
on the borrowing rate currently available for similar loans.
The estimated fair values of the Partnership's mortgage notes payable from
operations are as follows:
March 15, 2005 March 15, 2004*
-------------------------- --------------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
----------- ----------- ----------- -----------
Mortgage notes payable for which it is:
Practicable to estimate fair value $35,830,552 $35,830,552 $82,559,517 $87,599,429
Not practicable $61,372,757 ** $46,910,644 **
The estimated fair values of the Partnership's mortgage notes payable from
discontinued operations are as follows:
March 15, 2005 March 15, 2004*
-------------------------- --------------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
----------- ----------- ----------- -----------
Mortgage notes payable for which it is:
Practicable to estimate fair value $ 3,755,369 $ 3,755,369 $ 0 $ 0
Not practicable $ 8,277,268 ** $ 7,330,000 **
* Reclassified for comparative purposes.
** 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.
The carrying amount of other financial instruments that require such disclosure
approximates fair value.
89
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2005
NOTE 4 - Property and Equipment
The components of property and equipment from operations are as follows:
March 15, Estimated
----------------------------- Useful Lives
2005 2004* (Years)
------------ ------------ ------------
Land $ 6,885,598 $ 9,181,203 --
Buildings and improvements 171,519,862 215,705,799 15 to 40
Other 4,751,068 5,924,632 3 to 20
------------ ------------
183,156,528 230,811,634
Less: Accumulated depreciation (96,840,139) (116,830,860)
------------ ------------
$ 86,316,389 $113,980,774
============ ============
* Reclassified for comparative purposes.
Included in property and equipment are $6,859,371 of acquisition fees paid to
the General Partners and $809,661 of acquisition expenses. In addition, as of
March 15, 2005, buildings and improvements include $2,870,719 of capitalized
interest.
In connection with the development or rehabilitation of the Properties, the
subsidiary partnerships have incurred developer's fees of $23,360,275 to the
local general partners and affiliates. Such fees have been included in the cost
of property and equipment.
Depreciation expense for the years ended March 15, 2005, 2004 and 2003 amounted
to $6,376,651, $6,343,627 and $5,504,926, respectively.
During the years ended March 15, 2005 and 2004, there were write-offs of
accumulated depreciation in the amounts of $26,367,372 and $6,388,660,
respectively, and $13,195,220 and $4,447,847 of these write-offs are related to
the discontinued assets.
The components of property and equipment held for sale from discontinued
operations are as follows:
March 15, Estimated
----------------------------- Useful Lives
2005 2004* (Years)
------------ ------------ ------------
Land $ 396,769 $ 454,707 --
Buildings and improvements 22,802,756 10,163,785 15 to 40
Other 1,189,046 338,337 3 to 20
------------ ------------
24,388,571 10,956,829
Less: Accumulated depreciation (13,195,220) (4,447,847)
------------ ------------
$ 11,193,351 $ 6,508,982
============ ============
Depreciation expense for the discontinued property and equipment for the years
ended March 15, 2005, 2004 and 2003 amounted to $1,188,335, $2,067,173 and
$2,400,391, respectively.
NOTE 5 - Cash Held in Escrow
Cash held in escrow consists of the following:
March 15,
---------------------------
2005 2004*
----------- -----------
Real estate taxes, insurance, and other $ 1,592,143 $ 1,928,811
Reserve for replacements 8,303,201 12,402,646
Other 634,335 850,587
----------- -----------
$10,529,679 $15,182,044
=========== ===========
* Reclassified for comparative purposes.
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LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2005
Cash held in escrow included in the discontinued assets consists of the
following:
March 15,
---------------------------
2005 2004*
----------- -----------
Real estate taxes, insurance, and other $ 301,972 $ 180,547
Reserve for replacements 3,426,996 149,096
Other 122,610 38,316
----------- -----------
$ 3,851,578 $ 367,959
=========== ===========
NOTE 6 - Deferred Costs
The components of other deferred costs and their periods of amortization are as
follows:
March 15,
----------------------------- Period
2005 2004* (Months)
------------ ------------ ------------
Operating guarantee fee $ 510,343 $ 510,443 60
Financing expenses 2,242,728 3,160,617 **
Supervisory salaries 783,020 783,020 60
Other 48,518 48,518 Various
------------ ------------
3,584,609 4,502,598
Less: Accumulated amortization (1,662,029) (2,212,966)
------------ ------------
$ 1,922,580 $ 2,289,632
============ ============
* Reclassified for comparative purposes. ** Over the life of the respective
mortgages.
Amortization of deferred costs for the years ended March 15, 2005, 2004 and 2003
amounted to $121,675, $413,920 and $174,358, respectively.
During the years ended March 15, 2005 and 2004, there were net decreases in
deferred costs of $917,989 and $2,167,801 and net decreases in accumulated
amortization of $672,612 and $1,620,753, respectively, due to write-offs and
reclasses into discontinued operations as summarized in the table below.
The discontinued assets components of other deferred costs and their periods of
amortization are as follows:
March 15,
----------------------------- Period
2005 2004* (Months)
------------ ------------ ------------
Financing expenses $ 250,557 $ 500,601 **
Less: Accumulated amortization (182,368) (181,173)
------------ ------------
$ 68,189 $ 319,428
============ ============
** Over the life of the respective mortgages.
Amortization of deferred costs in the discontinued assets for the years ended
March 15, 2005, 2004 and 2003 amounted to $182,464, $357,648 and $147,092,
respectively.
NOTE 7 - Mortgage Notes Payable
The mortgage notes are payable in aggregate monthly installments of
approximately $567,000 including principal and interest at rates varying from 1%
to 12% per annum, through 2036. Each subsidiary partnership's mortgage note
payable is collateralized by the land and buildings of the respective subsidiary
partnership and the assignment of certain subsidiary partnership's rents and
leases and is without further recourse.
91
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2005
Annual principal payment requirements as of March 15, 2005 for each of the next
five fiscal years and thereafter are as follows:
Fiscal Year Ending Amount
------------------ -----------
2005 $ 5,015,281
2006 2,865,736
2007 2,634,376
2008 11,713,972
2009 2,334,536
Thereafter 72,639,408
-----------
$97,203,309
===========
Accrued interest payable at March 15, 2005 and 2004 was approximately $7,885,000
and $7,626,000, 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.
Annual principal payment requirements as of March 15, 2005 for each of the next
five fiscal years and thereafter for the discontinuing liabilities are as
follows:
Fiscal Year Ending Amount
------------------ -----------
2005 $ 373,126
2006 984,532
2007 496,823
2008 731,743
2009 547,681
Thereafter 8,898,732
-----------
$12,032,637
===========
Accrued interest payable for the discontinued liabilities at March 15, 2005 and
2004 was approximately $711,000 and $2,053,000, 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.
In September 2004, Charles Drew Associates, L.P. ("Charles Drew") received funds
from a pledge/security agreement with Bank of America (formerly Fleet Bank,
N.A.), Charles Drew's mortgagor, under which the ACIA pledged certificates of
deposit originally in the amount of $4,772,500. The funds, including interest
earned thereon, provided a subsidy to the Partnership equal to the debt service
on the mortgage. The funds were used to payoff the mortgage in September 2004.
On October 21, 2003, Greenleaf Associates Limited Partnership's ("Greenleaf")
mortgage note was refinanced under the Mark-to-Market program sponsored by HUD.
The USGI, Inc. mortgage, in the amount of $4,257,383, was paid-off from proceeds
from a new HUD insured first mortgage held by Heartland Bank at a rate of 6.25%
in the amount of $796,200 and a second mortgage held by Secretary of Department
of Housing and Urban Development, Washington, D.C. at a rate of 1% in the amount
of $3,297,016. Also, a third mortgage provided by Secretary of Department of
Housing and Urban Development, Washington, D.C. at a rate of 1% in the amount of
$543,064 was obtained. The refinancing proceeds were committed to Greenleaf for
the purpose of paying the related finance costs totaling $48,786, and increasing
the amount of reserve for replacement by $276,218.
On June 17, 2003, Shiloh-Grove LP ("Shiloh") entered into a mortgage
restructuring agreement for the purpose of refinancing its existing mortgages
and adjusting rents to market rates related to its Mount Vernon Plaza II project
(FHA Project #043-35445). As part of the restructuring agreement, the
partnership refinanced its outstanding mortgage of $3,436,620 by obtaining three
new mortgages. One mortgage is held by Greystone Servicing Corporation, Inc. and
two are held by the Secretary of Housing and Urban Development in the amounts of
$564,000, $2,288,000 and $1,116,120, respectively. All three have maturity dates
of July 1, 2033. Principal and interest payments of $3,117 are made monthly on
the first mortgage and interest will accrue on the second and third mortgage at
the rate of 1% per annum. Tax and insurance escrow payments and replacement
reserve deposits are made monthly.
On April 25, 2003, Shiloh entered into a mortgage restructuring agreement for
the purpose of refinancing its existing mortgages and adjusting rents to market
rates related to its Mount Vernon Plaza I project (FHA project #043-35442). As
part of the restructuring agreement, the partnership refinanced its outstanding
mortgage of $4,710,536 by obtaining three new mortgages. One mortgage is held by
Greystone Servicing Corporation, Inc. and two are held by the Secretary of
Housing and Urban Development in the amounts of $972,400, $3,530,000 and
$1,288,848, respectively. All three have maturity dates of July 1, 2033.
Principal and interest payments of $5,706 are made monthly on the first mortgage
92
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2005
and interest will accrue on the second and third mortgage at the rate of 1% per
annum. Tax and insurance escrow payments and replacement reserve deposits are
made monthly.
See Note 10 and 11 for other subsidiary partnerships' financing activities.
NOTE 8 - Related Party Transactions
An affiliate of the General Partners has a 1% interest as a special limited
partner, in each of the subsidiary partnerships. An affiliate of the General
Partners also has a minority interest in certain subsidiary partnerships.
The costs incurred to related parties for the years ended March 15, 2005, 2004
and 2003 were as follows:
A) Related Party Fees
Years Ended March 15,
-----------------------------------------------
2005 2004* 2003*
------------ ------------- ------------
Partnership management fees (a) $ 1,025,500 $ 1,010,809 $ 1,122,750
Expense reimbursement (b) 167,875 187,009 146,661
Local administrative fee (d) 39,000 36,500 39,000
------------ ------------- ------------
Total general and administrative-General 1,232,375 1,234,318 1,308,411
Partners ------------ ------------- ------------
Property management fees incurred to
affiliates of the Local General Partners
(c) 857,354 716,363 909,834
------------ ------------- ------------
Total general and administrative-related
parties $ 2,089,729 $ 1,950,681 $ 2,218,245
============ ============= ============
* Reclassified for comparative purposes.
Related Party Fees - discontinued operations
Years Ended March 15,
-----------------------------------------------
2005 2004 2003
------------ ------------- ------------
Property management fees incurred to
affiliates of the General Partner $ 0 $ 100,073 $ 111,324
Local administrative fee (d) 8,125 15,000 27,500
------------ ------------- ------------
Total general and administrative-General 8,125 115,073 138,824
Partners ------------ ------------- ------------
Property management fees incurred to
affiliates of the Local General Partners
(c) 178,578 246,599 279,036
------------ ------------- ------------
Total general and administrative-related
parties $ 186,703 $ 361,672 $ 417,860
============ ============= ============
(a) The General Partners are entitled to receive a partnership management fee,
after payment of all Partnership expenses, which together with the local annual
administrative fees will not exceed a maximum of 0.5% per annum of invested
assets (as defined in the Partnership Agreement) for administering the affairs
of the Partnership. The partnership management fee, subject to the foregoing
limitation, will be determined by the General Partners in their sole discretion
based upon their review of the Partnership's investments. Partnership management
fees owed to the General Partners amounting to approximately $7,811,000 and
$7,911,000 were accrued and unpaid as of March 15, 2005 and 2004, respectively.
(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. Expense reimbursements and asset monitoring fees owed
to Related Credit Properties L.P. amounting to approximately $35,000 and $90,000
were accrued and unpaid as of March 15, 2005 and 2004, respectively.
The General Partners have allowed for the accrual without payment of the amounts
set forth in (a) and (b) but are under no obligation to continue to do so.
(c) Property management fees incurred by subsidiary partnerships in operations
amounted to $1,689,474, $1,826,298 and $1,902,472 for the years ended March 15,
2005, 2004 and 2003, respectively. Of these fees $1,035,932, $962,962 and
$1,188,870 was incurred to affiliates of the Local General Partners, which
includes $178,578, $246,599 and $279,036 of fee relating to discontinued
operations.
93
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2005
(d) Liberty Associates, the special limited partner of the subsidiary
partnerships, is entitled to receive a local administrative fee of up to $2,500
per year from each subsidiary partnership.
(e) Liberty Associates received cash distributions of approximately $7,000,
$4,000 and $7,000 during the years ended March 15, 2005, 2004 and 2003,
respectively.
Liberty Associates was allocated Low-Income Housing Tax Credits of approximately
$0, $10 and $200 for the taxable years ended March 15, 2005, 2004 and 2003,
respectively.
(f) Due to local general partners and affiliates at March 15, 2005 and 2004
consists of the following:
March 15,
-----------------------------
2005 2004
------------ ------------
Accrued ground lease $ 0 $ 363,147
Operating deficit advances 0 123,055
Operating advances 1,848,656 1,218,909
Development fee payable 132,448 132,448
Residual loan payable 52,500 52,500
Interest 8,322,836 7,386,949
Long-term notes payable (g) 9,034,498 8,968,086
Management and other fees 1,689,238 1,734,190
------------ -----------
$ 21,080,176 $ 19,979,284
============ ============
(f) Due to local general partners and affiliates at March 15, 2005 and 2004
included in the discontinued liabilities consists of the following:
March 15,
-----------------------------
2005 2004
------------ ------------
Operating deficit advances $ 123,055 $ 0
Accrued ground lease 388,647 0
Operating advances 221,015 0
------------ ------------
$ 732,717 $ 0
============ ============
(g) Long-term notes payable consist of the following:
March 15,
-----------------------------
2005 2004
------------ ------------
Grove Parc Associates L.P. ("Grove Parc")
- -----------------------------------------
This note bears interest at 7.39% compounded
annually on May 1 of each year. The note is
secured by a mortgage subordinate in rights
to mortgages securing the building loan.
Both principal and interest on the loan are
due and payable in full out of residual receipts
on April 29, 2010, or are immediately due and
payable upon refinancing or sale of the project. $ 5,040,000 $ 5,040,000
B & C Housing
- -------------
This promissory note bears interest on the
unpaid principal balance at prime plus 2% per
annum payable along with principal as and when
permitted by the partnership agreement and
payable only from surplus cash. 139,670 139,670
Shiloh
- ------
Two promissory notes each bearing interest at 6%. 3,788,416 3,788,416
This consulting fee is noninterest bearing and
is payable from surplus cash as defined by HUD. 9,000 0
Two loans from the general partner of Shiloh
bearing interest at 7.5% payable in monthly
installments of $773 57,412 0
------------ ------------
$ 9,034,498 $ 8,968,086
============ ============
94
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2005
The Partnership had negotiated Operating Deficit Guaranty Agreements with all
Local Partnerships by which the general partners of the Local Partnerships had
agreed to fund operating deficits for a specified period of time. The terms of
the Operating Deficit Guaranty Agreements varied for each Local Partnership,
with maximum dollar amounts to be funded for a specified period of time,
generally three years, commencing on the break-even date.
Amounts funded under the Operating Deficit Guaranty Agreements were treated as
non-interest bearing loans, which will be paid only out of available cash flow
or out of available net sale or refinancing proceeds. As of March 31, 2005,
there was approximately $123,000 advanced under the Operating Deficit Guaranty
Agreements. Any amounts funded under such agreements would be reflected under
"Due to local general partner and affiliates" on our financial statements. As of
March 31, 2005, all Operating Deficit Guaranty Agreements have expired.
NOTE 9 - Taxable Net Income
A reconciliation of the financial statement net income (loss) to the taxable net
income (loss) for the Partnership and its consolidated subsidiaries is as
follows:
Year Ended March 15,
-----------------------------------------------
2005 2004 2003
------------- ------------- -------------
Financial statement
Net income (loss) $ 4,752,436 $ (7,123,790) $ (599,929)
Difference between depreciation and amortization expense
recorded for financial reporting purposes and the
accelerated cost recovery system utilized for income tax
purposes (649,272) 1,068,460 (341,315)
Difference resulting from parent company having a different
fiscal year for income tax and financial reporting
purposes (95,219) (47,997) (54,280)
Difference between gain on sale of properties for financial
reporting purposes and for income tax purposes (1,258,696) (529,306) (406,824)
Difference between forgiveness of indebtedness income for
financial reporting purposes and for income tax purposes 0 (113,565) 0
Loss allocated to minority interest for income tax purposes 0 673,217 0
Differences resulting principally from rental income
recognized for income tax purposes and deferred for
financial reporting purposes and interest and other
operating expenses deducted for financial reporting
purposes not deducted for income tax purposes (653,896) 304,471 80,359
------------- ------------- -------------
Net income (loss) as shown on the income tax return for the
calendar year ended $ 2,095,353 $ (5,768,510) $ (1,321,989)
============= ============= =============
NOTE 10 - Sale of Properties
As of March 15, 2005, the Partnership sold the properties and the related assets
and liabilities of seven Local Partnerships and its Limited Partnership interest
in three Local Partnerships. Subsequently on March 29, 2005, the property and
the related assets and liabilities of Regent Street were sold. Also subsequently
on April 25, 2005, the Partnership entered into a contract to sell the Limited
Partnership interest in Fox Glenn. There can be no assurance as to whether or
when the sale will actually occur.
On February 17, 2005, the partnership's limited Partnership Interest in Redwood
Villa Associates ("Redwood") was sold to an unaffiliated third party purchaser
for $60,000, resulting in a gain of approximately $1,700,000 which will be
recognized in the Partnership's Form 10-Q for the quarter ended June 15, 2005.
On January 5, 2005, the property and the related assets and liabilities of Lund
Hill Associates, L.P. ("Lund Hill") were sold to an unaffiliated thirty party
purchaser for $6,500,000, resulting in a gain of approximately $1,100,000 which
will be recognized in the Partnership's Form 10-Q for the quarter ended June 15,
2005.
On December 29, 2004, the Partnership entered into an agreement for the sale of
its Limited Partnership Interest in Lancaster Towers Associates, LTD
("Lancaster") to an affiliate of the Local General Partner for a purchase price
of $449,750. The sales documents have been executed and the funds are being held
in escrow waiting for approval of the sale from the Department of Housing and
Urban Development ("HUD"). No assurances can be given that HUD will approve the
sale. Lancaster is being held as an Asset held for sale as of March 15, 2005.
On September 24, 2004, the property and the related assets and liabilities of
Autumn Park Associates, L.P. ("Autumn Park") were sold to an unaffiliated third
party for approximately $4,800,000. The proceeds were used to settle the
associated mortgage which had an outstanding balance of approximately
$3,600,000, and the balance was distributed to the partners. This amount
consisted of $900,000 paid in cash at the closing and $150,000 pursuant to one
promissory note. The note compounds interest at 10% and is due on October 30,
2005. The sale resulted in a gain of approximately $2,100,000.
95
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2005
On August 27, 2004, the property and the related assets and liabilities of 2108
Bolton Drive Associated, L.P. ("Bolton") were sold to an unaffiliated third
party for $8,891,000, resulting in a gain of approximately $1,700,000.
On July 30, 2004, the property and the related assets and liabilities of
Tanglewood Apartments, L.P. ("Tanglewood") were sold to an unaffiliated third
party for $3,425,000, resulting in a gain of approximately $1,100,000. The sale
resulted in the liquidation of Tanglewood.
On March 31, 2004, the Partnership's limited Partnership Interest in Walnut Park
Plaza ("Walnut") was sold to the local general partner for a purchase price of
$1 plus the assumption of all the related debt which totaled approximately
$7,700,000 resulting in a general partner contribution of approximately
$2,600,000. The sale resulted in the liquidation of Walnut.
On March 2, 2004, the Partnership signed a "Letter of Intent" with an
unaffiliated third party to purchase the Partnership's limited partnership
interest in Bayridge Associates, L.P. ("Bayridge") for a purchase price of
$1,100,000 plus the assumption of the existing debt. The closing is expected to
occur in 2006. No assurances can be given that the sale will actually occur.
On May 19, 2003, the property and the related assets and liabilities of Silver
Blue were sold to an unaffiliated third party for a purchase price of $3,500,000
resulting in a gain of approximately $400,000. Accrued interest on a note
related to the Local Partnership was forgiven resulting in forgiveness of
indebtedness income of approximately $114,000. The sale resulted in the
liquidation of Silver Blue.
On March 16, 2003, the Partnership recorded the transfer of the deed in lieu of
foreclosure to Bryden Road, one of the properties owned by Shiloh to an
unaffiliated third party. The outstanding mortgage balance paid by the third
party on the day of transfer was $189,871 resulting in a gain of $104,000, which
is included in gain on sale of properties.
On January 23, 2003, the property and the related assets and liabilities of
Ludlam Gardens Apartments, LTD. ("Ludlam") were sold to an unaffiliated third
party for a purchase price of $3,900,000 resulting in a gain of approximately
$1,000,000. The sale resulted in the liquidation of Ludlam.
On January 16, 2003, the property and the related assets and liabilities of
Dixie Apartment Associates, LTD. ("Dixie") were sold to an unaffiliated third
party for a purchase price of $1,300,000 resulting in a gain of approximately
$300,000. The sale resulted in the liquidation of Dixie.
On December 18, 2002, the Partnership entered into an agreement with the local
general partner to sell its remaining limited partnership interest in Shiloh for
a purchase price of $175,000. No assurance can be given that the closing will
actually occur.
On May 31, 2002, the Partnership's Limited Partnership interest in Apple Creek
Housing Associates, LTD. ("Apple Creek") was sold to an unaffiliated third party
purchaser for $200,000 resulting in a gain of approximately $6,800,000,
NOTE 11 - Commitments and Contingencies
a) Subsidiary Partnership - Going Concern
One subsidiary partnership, Redwood Villa Associates has significant
contingencies and uncertainties regarding its continuing operations which raise
substantial doubt about its ability to continue as a going concern. The
financial statements of this subsidiary partnership were prepared assuming that
it will continue as a going concern.
Redwood Villa Associates, L.P.
- ------------------------------
Redwood Villa Associates, L.P. ("Redwood") has sustained operating losses since
its inception. For the 2004 Fiscal Year, Redwood experienced a loss of $199,278,
including $216,628 of depreciation and $4,554 of amortization, and at December
31, 2004 had a partners' deficit of $1,944,248. In addition, Redwood has been
able to defer ground lease payments that are due to a related party in the
cumulative amount of $388,647 and $363,147 as of December 31, 2004 and 2003,
respectively. These conditions raise substantial doubt about Redwood's ability
to continue as a going concern. Redwood's continuation as a going concern is
dependent upon its ability to achieve continued profitable operations or obtain
future capital contributions from the partners. The Local General Partner,
whenever possible, plans to reduce operating costs to achieve profitable
operations. The financial statements for the 2004, 2003 and 2002 Fiscal Years
for Redwood have been prepared assuming that Redwood will continue as a going
concern. The Partnership's investment in Redwood at March 15, 2005 and 2004 was
reduced to zero by prior years' losses and the minority interest balance was
approximately $393,000 and $397,000, respectively. Redwood's net loss after
minority interest amounted to approximately $195,000, $200,000 and $157,000 for
the 2004, 2003 and 2002 Fiscal Years, respectively. On February 17, 2005, the
Partnership's limited partnership interest in Redwood was sold.
b) Lease Commitment
Redwood entered into a forty-year ground lease with a related party for the land
on which the building is built. As stipulated in the lease, the subsidiary
partnership agrees to pay all real estate taxes, license and permit fees, among
other charges that may be assessed upon the land or improvements. At December
31, 2003, Redwood was committed to minimum future rentals on the noncancellable
lease in the amount of $60,000 a year through 2028. The lease payments are
payable from available cash and at December 31, 2004 and 2003 the subsidiary
partnership has accrued lease payments of $388,647 and $363,147, respectively.
On February 17, 2005, the Partnership's limited partnership interest in Redwood
was sold.
96
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2005
c) Uninsured Cash and Cash Equivalents
The Partnership maintains its cash and cash equivalents in various banks.
Accounts at each bank are guaranteed by the Federal Deposit Insurance
Corporation (FDIC) up to $100,000. As of March 15, 2005, uninsured cash and cash
equivalents approximated $6,200,000.
d) Cash Distributions
Cash distributions from the Local Partnerships to the Partnership are restricted
by the provisions of the respective Local Partnership agreements and or HUD.
Such cash distributions are typically made from surplus cash flow.
e) Tax Credits
A portion of the Tax Credits could be subject to recapture in future years if
(i) a Local Partnership ceases to meet qualification requirements, or (ii) if
there is a decrease in the qualified basis of the Local Partnership property or
(iii) if there is a reduction in the Local Partnership interest in the property
at any time during the 15-year Compliance Period that began with the first tax
year of the Credit Period. As of December 31, 2003, the Tax Credit Period for
each Local Partnership had expired.
f) Other
The Partnership is subject to the risks incident to potential losses arising
from the management and ownership of improved real estate. The Partnership can
also be affected by poor economic conditions generally, however no more than 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
contracts expire.
Note 12 - Discontinued Operations
The following table summarizes the financial position of the Local Partnerships
that are classified as discontinued operations because the respective Local
Partnerships were classified as assets held for sale. As of March 15, 2005,
Lancaster, Lund Hill, Redwood and Regent Street were classified as discontinued
operations in the Consolidated Financial Statements. As of March 15, 2004,
Walnut was reclassified as a discontinued operation on the Consolidated Balance
Sheets.
Consolidated Balance Sheets:
March 15, March 15,
2005 2004
----------- -----------
Assets
Property and equipment - less
accumulated depreciation of $13,195,220
and $4,447,847, respectively $11,193,351 $ 6,508,982
Cash and cash equivalents 444,267 135,652
Cash held in escrow 3,851,578 367,959
Deferred costs, net of accumulated
amortization of $182,368 and $181,173,
respectively 68,189 319,428
Other assets 88,862 18,405
----------- -----------
Total assets $15,646,247 $ 7,350,426
=========== ===========
Liabilities
Mortgage notes payable $12,032,637 $ 7,330,000
Accounts payable and other liabilities 1,172,267 2,358,274
Due to local general partners and
affiliates 732,717 0
Due to general partners and affiliates 49,500 28,333
Minority interest 121,630 992,611
----------- -----------
Total liabilities $14,108,751 $10,709,218
=========== ===========
The following table summarizes the results of operations of the Local
Partnerships that are classified as discontinued operations. For the year ended
March 15, 2005, Lancaster, Lund Hill, Redwood and Regent Street, which were
classified as assets held for sale and Autumn Park, Bolton, Tanglewood and
Walnut, which were sold during the year, were all classified as discontinued
operations on the Consolidated Financial Statements. For the year ended March
15, 2004, Lancaster, Lund Hill, Redwood, Regent Street, Autumn Park, Bolton, and
Tanglewood, in order to present comparable results to the year ended March 15,
2005, Walnut, which was classified as an asset held for sale, and Silver Blue
and Bryden Road, which were sold during the year, were all classified as
discontinued operations on the Consolidated Financial Statements. For the year
97
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2005
ended March 15, 2003, Lancaster, Lund Hill, Redwood, Regent Street, Autumn Park,
Bolton, Tanglewood, Walnut, Silver Blue and Bryden Road, in order to present
comparable results to the year ended March 15, 2005, and Dixie, Ludlam and Apple
Creek, which were sold during the year, were classified as discontinued
operations on the Consolidated Financial Statements.
Consolidated Statements of Discontinued Operations:
Years Ended March 15,
---------------------------------------------
2005 2004 2003
------------ ------------ ------------
Revenues
Rental income $ 5,385,163 $ 7,738,862 $ 9,656,804
Other (Note 2) 342,891 493,512 540,746
Gain on sale of properties (Note 10) 4,851,895 1,798,361 6,763,125
------------ ------------ ------------
Total revenue 10,579,949 10,030,735 16,960,675
------------ ------------ ------------
Expenses
General and administrative 1,621,618 1,678,275 1,988,866
General and administrative-related parties (Note 8) 186,703 361,672 417,860
Repairs and maintenance 1,126,128 2,001,085 2,039,000
Operating 1,051,870 1,276,543 1,363,531
Taxes 340,505 522,665 687,813
Insurance 336,815 469,678 612,370
Interest 1,251,723 2,162,150 3,017,469
Depreciation and amortization 1,370,799 2,424,821 2,547,483
------------ ------------ ------------
Total expenses 7,286,161 10,896,889 12,674,392
------------ ------------ ------------
Income (loss) before minority interest 3,293,788 (866,154) 4,286,283
Extraordinary item - forgiveness of indebtedness in
income (Note 10) 0 113,565 0
Minority interest in loss of subsidiaries from
discontinued operations 4,902,481 468,452 89,043
------------ ------------ ------------
Total income (loss) from discontinued operations $ 8,196,269 $ (284,137) $ 4,375,326
(including gain on sale of properties) ============ ============ ============
Income (loss) - limited partners from discontinued
operations (including gain on sale of properties) $ 8,114,306 $ (281,296) $ 4,331,573
============ ============ ============
Number of BACs outstanding 15,987.5 15,987.5 15,987.5
============ ============ ============
Income (loss) discontinued operations (including gain on
sale of properties) per BAC $ 507.54 $ (17.60) $ 270.93
============ ============ ============
NOTE 13 - 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 period beginning after 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 issued FASB
Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46").
FIN 46 was 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 are applicable no later than July 1, 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 were applicable no later
than the first reporting period ending after March 15, 2004. The adoption of FIN
46 and FIN 46 (R) is not anticipated to 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
98
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2005
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 14 - 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. The fluctuations between the
quarters are primarily due to the sales of Local Partnerships (see Note 10).
Quarter Ended
---------------------------------------------------------------
June 15, September 15, December 15, March 15,
OPERATIONS 2004 2004 2004 2005
- --------------------------------------------------------- ------------ ------------ ------------ ------------
Revenues $ 6,361,609 $ 6,590,101 $ 6,561,049 $ 10,331,469
Operating expenses (8,322,993) (8,433,835) (8,489,471) (8,064,396)
------------ ------------ ------------ ------------
(Loss) income from operations before minority interest (1,961,384) (1,843,734) (1,928,422) 2,267,073
Minority interest in loss of subsidiaries from operations 3,677 7,949 7,943 3,065
------------ ------------ ------------ ------------
(Loss) income from operations (1,957,707) (1,835,785) (1,920,479) 2,270,138
Income (loss) from discontinued operations (including
gain (loss) of properties and minority interest) 2,952,593 (24,190) 4,226,062 1,041,804
------------ ------------ ------------ ------------
Net income (loss) $ 994,886 $ (1,859,975) $ 2,305,583 $ 3,311,942
============ ============ ============ ============
Net income (loss) - limited partnership $ 984,937 $ (1,841,375) $ 2,282,527 $ 3,278,823
============ ============ ============ ============
Net (loss) income per weighted average BAC from
operations $ (121.22) $ (113.68) $ (118.92) $ 140.58
Net income (loss) per weighted average BAC from
discontinued operations 182.83 (1.50) 261.69 64.51
------------ ------------ ------------ ------------
Net income (loss) per weighted average BAC $ 61.61 $ (115.18) $ 142.77 $ 205.09
============ ============ ============ ============
Quarter Ended
---------------------------------------------------------------
June 15, September 15, December 15, March 15,
OPERATIONS 2003* 2003* 2003* 2004*
- --------------------------------------------------------- ------------ ------------ ------------ ------------
Revenues $ 6,539,181 $ 6,727,124 $ 6,543,504 $ 6,879,235
Operating expenses (7,983,736) (8,295,062) (8,201,370) (9,059,265)
------------ ------------ ------------ ------------
Loss from operations before minority interest and
extraordinary item (1,444,555) (1,567,938) (1,657,866) (2,180,030)
Minority interest in loss (income) of subsidiaries from
operations 2,749 10,898 (5,112) 2,201
------------ ------------ ------------ ------------
Loss from operations (1,441,806) (1,557,040) (1,662,978) (2,177,829)
Income (loss) from discontinued operations (including
gain (loss) of properties, minority interest and
extraordinary item) 880,362 (21,336) (537,598) (605,565)
------------ ------------ ------------ ------------
Net loss $ (561,444) $ (1,578,376) $ (2,200,576) $ (2,783,394)
============ ============ ============ ============
Net loss - limited partnership $ (555,830) $ (1,562,592) $ (2,178,570) $ (2,755,560)
============ ============ ============ ============
Net loss per weighted average BAC from operations $ (89.28) $ (96.41) $ (102.98) $ (134.86)
Extraordinary item per BAC 0 7.03 0 0
Net income (loss) per weighted average BAC from
discontinued operations 54.51 (8.35) (33.29) (37.50)
------------ ------------ ------------ ------------
Net loss per weighted average BAC $ (34.77) $ (97.73) $ (136.27) $ (172.36)
============ ============ ============ ============
* Reclassified for comparative purposes.
99
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2005
NOTE 15 - Subsequent Events
On March 29, 2005, the property and the related assets and liabilities of Regent
Street were sold to an unaffiliated third party purchaser for the assumption of
the outstanding debt, resulting in a gain of $1,317,000, which will be
recognized on the Partnership's Form 10-Q dated June 15, 2005. Regent Street is
classified as an asset held for sale as of March 15, 2005.
On April 15, 2005, a distribution from sales proceeds was made to the limited
partners of approximately $1,919,000 and to the general partner of approximately
$19,000.
On April 25, 2005, the Partnership entered into a Redemption Agreement for the
sale of its Limited Partnership interest in Fox Glenn Investors, L.P. ("Fox
Glenn") to the Local General Partner. The sales documents have been executed and
the funds are being held in escrow. No assurances can be given that the sale
will actually occur.
100
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 Principal Executive
Officer and Principal Financial Officer of Related Credit Properties L.P. and
Liberty Associates III, L.P., the general partners of the Partnership, has
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. Based on such evaluation, such officer has
concluded that, as of the end of such period, the Partnership's disclosure
controls and procedures are effective.
(b) INTERNAL CONTROL OVER FINANCIAL REPORTING. There have not been any changes
in 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.
PART III
Item 10. Directors and Executive Officers of the Registrant
The Partnership has no directors or officers. The Partnership's affairs are
managed and controlled by the General Partners. 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
our General Partners, has adopted a code of ethics. See
http://www.chartermac.com.
On November 17, 2003, CharterMac acquired Related Capital Company, which is the
indirect parent of RCC Manager L.L.C., the managing member of the general
partner of the Related General Partners. Pursuant to the acquisition, CharterMac
acquired controlling interests in the General Partners. Alan P. Hirmes replaced
Stephen M. Ross as Director of the general partner of the Related General
Partner 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 Partner's management team remained unchanged.
Certain information concerning the directors and executive officers of Credit
Properties GP LLC, the general partner of the Related General Partner (which, in
turn, is the general partner of Liberty Associates), who may be deemed directors
or executive officers of the Partnership is set forth below.
Credit Properties GP LLC
- ----------------------------
Name Position
- ---------------------------- ----------------------
Alan P. Hirmes Director and President
Stuart J. Boesky Executive Vice President
Glenn F. Hopps Treasurer
Teresa Wicelinski Secretary
ALAN P. HIRMES, 50, has been a Certified Public Accountant in New York since
1978. Prior to joining Related Capital Company ("Capital") in October 1983, Mr.
Hirmes was employed by Weiner & Co., Certified Public Accountants. Mr. Hirmes is
also a Vice President of Capital. Mr. Hirmes graduated from Hofstra University
with a Bachelor of Arts degree. Mr. Hirmes also serves on the Board of Trustees
of 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
Capital. From 1983 to 1984 Mr. Boesky practiced law with the Boston law firm of
Kaye, Fialkow, Richard & Rothstein 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.
GLENN F. HOPPS, 42, joined Capital 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 Capital in June 1992, and prior to that date was
employed by Friedman, Alpren & Green, certified public accountants. Ms.
Wicelinski graduated from Pace University with a Bachelor of Arts degree in
Accounting.
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
executive officers of the General Partners for their services. However, under
the terms of the Amended and Restated Agreement of Limited Partnership of the
101
Partnership, the Partnership has entered into certain arrangements with the
General Partners and their affiliates which provide for compensation to be paid
to the General Partners and their affiliates. Such arrangements include (but are
not limited to) agreements to pay nonrecurring Acquisition Fees, a
nonaccountable Acquisition Expense allowance, a partnership management fee and
an accountable expense reimbursement. The General Partners are entitled, in the
aggregate, to 1% of all cash distributions and an additional 15% of
distributions from net sale or refinancing proceeds after the BACs holders have
received distributions of such proceeds equal to their original capital
contributions plus a 10% return thereon (to the extent not previously paid out
of cash flow). Certain directors and executive officers of the General Partners
receive compensation from the General Partners and their affiliates for services
performed for various affiliated entities which may include services performed
for the Partnership. Such compensation may be based in part on the performance
of the Partnership. See also Note 8 to the Financial Statements in Item 8, which
is incorporated in this Item 11 by reference thereto.
Tabular information concerning salaries, bonuses and other types of compensation
payable to executive officers has not been included in this annual report. As
noted above, the Partnership has no executive officers. The levels of
compensation payable to the General 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
The general partnership interests in the Partnership are owned as follows:
Name and Address of Amount and Nature of Percentage
Title of Class Beneficial Ownership Beneficial Ownership of Class
- --------------------------- ---------------------- -------------------- ----------
Related Credit
Properties L.P. $1,000 capital
General Partnership 625 Madison Avenue contribution-
Interest in the Partnership New York, NY 10022 directly owned 98%
Liberty Associates III
L.P. $1,000 capital
General Partnership 625 Madison Avenue contribution-
Interest in the Partnership New York, NY 10022 directly owned 2%
Liberty Associates III L.P. holds a 1% limited partnership interest in each
Local Partnership.
No person is known by the Partnership to be the beneficial owner of more than 5%
percent of the Limited Partnership Interests and/or the BACs; and none of the
General Partners nor any director or executive officer of any of the General
Partners owns any Limited Partnership Interests or BACs.
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 and also Note 8
to the Financial Statements in Item 8 above, which is incorporated herein by
reference thereto and as set forth above. However, there have been no direct
financial transactions between the Partnership and the directors and executive
officers of the General Partners.
Item 14. Principal Accountant Fees and Services
Audit Fees
- ----------
The aggregate fees billed by Trien Rosenberg Rosenberg Weinberg Ciullo and
Fazzari LLP and their respective affiliates (collectively, "Trien") for
professional services rendered for the audit of our annual financial statements
for the years ended March 15, 2005 and 2004 and for the reviews of the financial
statements included in the Partnership's Quarterly Reports on Form 10-Q for
those years were $56,400 and $56,400, respectively.
Audit Related Fees
- ------------------
None.
Tax Fees
- --------
The aggregate fees billed 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 approximately $8,400 and $8,000, respectively.
All Other Fees
- --------------
None.
The Partnership is not required to have, and does not have, a stand-alone audit
committee.
102
PART IV
Item 15. Exhibits and Financial Statement Schedules
Sequential
Page
----------
(a) 1. Consolidated Financial Statements
---------------------------------
Report of Independent Registered Public Accounting Firm 15
Consolidated Balance Sheets at March 15, 2005 and 2004 82
Consolidated Statements of Operations for the Years Ended March 15,
2005, 2004 and 2003 83
Consolidated Statements of Changes in Partners' Deficit for the
Years Ended March 15, 2005, 2004 and 2003 84
Consolidated Statements of Cash Flows for the Years Ended March 15,
2005, 2004 and 2003 85
Notes to Consolidated Financial Statements 87
(a) 2. Financial Statement Schedules
-----------------------------
Report of Independent Registered Public Accounting Firm 109
Schedule I - Condensed Financial Information of Registrant 110
Schedule III - Real Estate and Accumulated Depreciation 113
All other schedules have been omitted because the required
information is included in the financial statements and notes
thereto or they are not applicable or not required.
(a) 3. Exhibits
--------
(3A) Limited Partnership Agreement of Liberty Tax Credit Plus L.P. dated
October 9, 1987 **
(3B) Form of Amended and Restated Agreement of Partnership of Liberty
Tax Credit Plus L.P. (attached to
Prospectus as Exhibit A) **
(3C) Certificate of Limited Partnership of Liberty Tax Credit Plus L.P.,
together with amendments filed September 14, 1987 and October 8,
1987 **
(10A) Form of Subscription Agreement (attached to Prospectus as Exhibit
B) **
(10B) Form of Purchase Agreement for purchase of Local Partnership
Interests **
(10C) Form of Local Partnership Agreement **
103
Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(continued)
Sequential
Page
----------
(21) Subsidiaries of the Registrant - the Local Partnerships set forth
in Item 2 may be considered subsidiaries of the Registrant. 104
(31.1) Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a) 107
(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) 108
** Incorporated herein as an exhibit by reference to exhibits filed
with Amendment No. 1 to Liberty Tax Credit Plus L.P.'s Registration
Statement on Form S-11, file No. 33-15479
Jurisdiction
of
(b) Subsidiaries of the Registrant (Exhibit 21) Organization
------------------------------ ------------
B & C Housing Associates, L.P. OK
State Street 86 Associates, L.P. DE
Fox Glenn Investors, L.P. PA
Shiloh-Grove L.P. (Mt. Vernon) OH
Lancaster Towers Associates, LTD. DE
West Kinney Associates, L.P. NJ
Regent Street Associates, L.P. PA
Magnolia Arms Associates, L.P. FL
Greenleaf Associates, L.P. MO
Alameda Towers Associates, L.P. PR
Grove Parc Associates, L.P. (Woodlawn) IL
Redwood Villa Associates CA
Charles Drew Court Associates, L.P. NJ
Bayridge Associates, L.P. OR
United-Pennsylvanian, L.P. PA
2051 Grand Concourse Associates, L.P. NY
Concourse Artists Housing Associates, L.P. NY
Willoughby/Wycoff Housing Associates, L.P. NY
Robin Housing Associates, L.P. NY
Lund Hill Associates, L.P. DE
Quality Hill Historic District-Phase II-A, L.P. MO
Penn Alto Associates, L.P. PA
Sartain School Venture, L.P. PA
104
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.
LIBERTY TAX CREDIT PLUS L.P.
----------------------------
(Registrant)
By: RELATED CREDIT PROPERTIES L.P.,
a General Partner
By: Credit Properties GP LLC,
its General Partner
Date: June 9, 2005
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
President and Chief Executive Officer
(Principal Executive and
Financial Officer)
By: LIBERTY ASSOCIATES III, L.P.,
a General Partner
By: Related Credit Properties L.P.,
its General Partner
By: Related Credit Properties Inc.,
its General Partner
Date: June 9, 2005
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
President and Chief Executive Officer
(Principal Executive and
Financial Officer)
105
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated:
Signature Title Date
- ------------------------ ---------------------------------------------------------------- -------------
President and Chief Executive Officer, (principal executive and
financial officer) of Related Credit Properties Inc., general
partner of Related Credit Properties L.P. (a General Partner of
/s/ Alan P. Hirmes Registrant) which is also the general partner of Liberty
- ------------------
Alan P. Hirmes Associates III, L.P. (a General Partner of Registrant) June 9, 2005
------------
Treasurer (principal accounting officer) of Credit
Properties GP LLC, general partner of Related Credit
Properties L.P. (a General Partner of Registrant)
which is also the general
/s/ Glenn F. Hopps partner of Liberty Associates III, L.P. (a General Partner of
- ------------------ Registrant)
Glenn F. Hopps June 9, 2005
------------
106
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 Credit Properties L.P. and Liberty Associates III, L.P. (the "General
Partners"), each of which is a general partner of Liberty Tax Credit Plus L.P.
(the "Partnership"), hereby certify that:
1. I have reviewed this annual report on Form 10-K for the period ending
March 15, 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 report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the Partnership as of, and for, the periods presented in
this 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 our 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 9, 2005
------------
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
Principal Executive Officer and
Principal Financial Officer
107
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 Liberty Tax Credit Plus L.P. (the
"Partnership") on Form 10-K for the period ending March 15, 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 Credit Properties L.P. and Liberty Associates III,
L.P., the general partners 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 9, 2005
108
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
-------------------------------------------------------
To the Partners of
Liberty Tax Credit Plus L.P. and Subsidiaries
(A Delaware Limited Partnership)
In connection with our audits of the consolidated financial statements of
Liberty Tax Credit Plus L.P. and Subsidiaries included in the Form 10-K as
presented in our opinion dated June 7, 2005 on page 15 and based on the reports
of other auditors, we have also audited supporting Schedule I for the 2004, 2003
and 2002 Fiscal Years and Schedule III at March 15, 2005. In our opinion, and
based on the reports of the other auditors, these consolidated schedules present
fairly, when read in conjunction with the related consolidated financial
statements, the financial data required to be set forth therein.
TRIEN ROSENBERG ROSENBERG
WEINBERG CIULLO & FAZZARI LLP
New York, New York
June 7, 2005
109
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
Summarized condensed financial information of registrant (not including
consolidated subsidiary partnerships):
LIBERTY TAX CREDIT PLUS L.P.
CONDENSED BALANCE SHEETS
ASSETS
March 15,
----------------------------
2005 2004
----------- -----------
Cash and cash equivalents $ 5,796,076 $ 2,603,215
Investment in subsidiary partnerships 6,806,072 11,403,625
Other assets 204,148 78,236
----------- -----------
Total assets $12,806,296 $14,085,076
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Due to general partner and affiliates $ 7,846,137 $ 7,401,505
----------- -----------
Total liabilities 7,846,137 7,401,505
Partners' equity 4,960,159 6,683,571
----------- -----------
Total liabilities and partners' equity $12,806,296 $14,085,076
=========== ===========
Investments in subsidiary partnerships are recorded in accordance with the
equity method of accounting, wherein the investments are not reduced below zero.
Accordingly, partners' equity on the consolidated balance sheet will differ from
partners' equity shown above.
110
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
LIBERTY TAX CREDIT PLUS L.P.
CONDENSED STATEMENTS OF OPERATIONS
Years Ended march 15,
-------------------------------------------
2005 2004 2003
----------- ----------- -----------
Revenues $ 54,094 $ 12,850 $ 12,847
----------- ----------- -----------
Expenses
Administrative and management 326,341 187,487 142,844
Administrative and management-related parties 1,193,375 1,197,818 1,269,411
----------- ----------- -----------
Total expenses 1,519,716 1,385,305 1,412,255
----------- ----------- -----------
Loss from operations (1,465,622) (1,372,455) (1,399,408)
Gain on sale on investment in subsidiary partnerships 0 0 6,497,938
Equity in loss of subsidiary partnerships (*) (1,340,990) (1,422,006) (7,528,994)
Distribution income from subsidiary partnerships 1,112,589 41,217 577,613
----------- ----------- -----------
Net loss $(1,694,023) $(2,753,244) $(1,852,851)
=========== =========== ===========
(*) Includes suspended prior year losses in excess of investment in accordance
with equity method of accounting amounting to $7,694,855, $1,444,277 and
$6,336,652 for the years ended March 15, 2005, 2004, and 2003, respectively.
111
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
LIBERTY TAX CREDIT PLUS L.P.
CONDENSED STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents
2005 2004 2003
----------- ----------- -----------
Cash flows from operating activities:
Net loss $(1,694,023) $(2,753,244) $(1,852,851)
----------- ----------- -----------
Adjustments to reconcile net loss to net cash used
in operating activities:
Gain on sale on investment of subsidiary
partnerships 0 0 (6,497,938)
Equity in loss of subsidiary partnerships 1,340,990 1,422,006 7,528,994
Distribution income from subsidiary partnerships (1,112,589) (41,217) (577,613)
(Increase) decrease in assets:
Other assets (84,299) 24,143 (15,344)
Increase (decrease) in liabilities:
Due to general partners and affiliates 44,632 189,724 976,371
----------- ----------- -----------
Total adjustments 188,734 1,594,656 1,414,470
----------- ----------- -----------
Net cash used in operating activities (1,505,289) (1,158,588) (438,381)
----------- ----------- -----------
Cash flows from investing activities:
Proceeds from sale of investment in subsidiaries 0 0 200,000
Distributions from subsidiaries 4,698,150 124,039 854,659
----------- ----------- -----------
Net cash provided by investing activities 4,698,150 124,039 1,054,659
----------- ----------- -----------
Net increase (decrease) in cash and cash
equivalents 3,192,861 (1,034,549) 616,278
Cash and cash equivalents, beginning of year 2,603,215 3,637,764 3,021,486
----------- ----------- -----------
Cash and cash equivalents, end of year $ 5,796,076 $ 2,603,215 $ 3,637,764
=========== =========== ===========
112
LIBERTY TAX CREDIT PLUS L.P. AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 15, 2005
Initial cost to Partnership
-----------------------------
Cost Capitalized
Subsequent to
Buildings and Acquition:
Subsidiary Partnership's Residential Property Encumbrances Land Improvements Improvements
- ----------------------------------------------- ------------ ------------ ------------- ----------------
B & C Housing Associates, L.P.
Tulsa, OK $ 6,533,161 $ 727,300 $ 5,420,791 $ 3,029,463
State Street 86 Associates, L.P.
Camden, NJ 5,855,990 861,947 12,460,882 523,157
Fox Glenn Investors, L.P.
Seat Pleasant, MD 5,296,934 491,209 6,548,849 679,453
Shiloh Grove L.P. (Mt Vernon)(f)
Columbus, OH 9,673,497 764,874 16,618,743 1,899,047
Silver Blue Lake Apartments Ltd.(e)(i)
Miami, FL 0 537,204 4,755,176 (5,292,380)
Lancaster Towers Associates, Ltd.(i)(j)
Lancaster, NY 1,665,845 147,000 3,673,921 816,625
West Kinney Associates, L.P.
Newark, NJ 3,622,904 262,466 6,072,924 788,659
Autumn Park Associates, L.P. (g)(i)(j)
Wilsonville, OR 0 369,932 2,251,887 (2,621,819)
Regent Street Associates, L.P. (i)(j)
Philadelphia, PA 3,640,890 40,000 7,387,283 275,779
Magnolia Arms Associates, Ltd.
Jacksonville, FL 5,938,980 125,000 8,165,738 967,355
Greenleaf Associates L.P.
Kansas City, MO 4,576,602 695,000 5,125,103 391,935
Alameda Towers, Associates L.P.
San Juan, PR 8,375,573 644,000 15,157,047 1,120,404
Dixie Apartment Associates, Ltd. (c)
Miami, FL 0 194,480 1,354,562 (1,549,042)
Ludlam Gardens Apartments, Ltd. (c)
Miami, FL 0 755,057 3,943,234 (4,698,291)
Grove Parc Associates, L.P.
(Woodlawn)
Chicago, IL 11,674,747 600,000 9,386,536 11,736,487
2108 Bolton Drive Associates, L.P. (g)(i)(j)
Atlanta, GA 0 835,000 6,599,896 (7,434,896)
Apple Creek Housing Associates, Ltd. (d)
Arvada, CO 0 618,136 10,973,665 (11,591,801)
Redwood Villa Associates (h)(i)(j)
San Diego, CA 3,755,369 0 5,931,183 67,333
Charles Drew Court Associates, L.P.
Atlantic City, NJ 0 100 7,893,416 415,229
Walnut Park Plaza Associates, L.P. (h)(i)(j)
Philadelphia, PA 0 454,707 7,690,675 (8,145,382)
Bayridge Associates, L.P.
Beaverton, OR 9,725,554 917,682 488,333 11,603,888
United-Pennsylvanian, L.P.
Erie, PA 3,198,308 217,000 4,191,327 1,575,309
2051 Grand Concourse Associates, L.P.
Bronx, NY 3,371,281 31,500 5,221,117 66,375
Concourse Artists Housing Associates, L.P.
Bronx, NY 1,437,043 5,750 16,100 2,310,570
Willoughby-Wycoff Housing Associates, L.P.
Brooklyn, NY 4,056,038 17,000 47,600 6,173,703
Robin Housing
Bronx, NY 4,985,804 26,750 70,700 8,188,254
Gross Amount to which Carried at Close of Period
------------------------------------------------
Buildings and
Subsidiary Partnership's Residential Property Land Improvements Total
- ----------------------------------------------- ------------ ------------- ------------
B & C Housing Associates, L.P.
Tulsa, OK $ 729,685 $ 8,447,869 $ 9,177,554
State Street 86 Associates, L.P.
Camden, NJ 864,332 12,981,654 13,845,986
Fox Glenn Investors, L.P.
Seat Pleasant, MD 493,594 7,225,917 7,719,511
Shiloh Grove L.P. (Mt Vernon)(f)
Columbus, OH 713,114 18,569,550 19,282,664
Silver Blue Lake Apartments Ltd.(e)(i)
Miami, FL 0 0 0
Lancaster Towers Associates, Ltd.(i)(j)
Lancaster, NY 149,385 4,488,161 4,637,546
West Kinney Associates, L.P.
Newark, NJ 264,850 6,859,199 7,124,049
Autumn Park Associates, L.P. (g)(i)(j)
Wilsonville, OR 0 0 0
Regent Street Associates, L.P. (i)(j)
Philadelphia, PA 42,384 7,660,678 7,703,062
Magnolia Arms Associates, Ltd.
Jacksonville, FL 127,384 9,130,709 9,258,093
Greenleaf Associates L.P.
Kansas City, MO 697,384 5,514,654 6,212,038
Alameda Towers, Associates L.P.
San Juan, PR 646,384 16,275,067 16,921,451
Dixie Apartment Associates, Ltd. (c)
Miami, FL 0 0 0
Ludlam Gardens Apartments, Ltd. (c)
Miami, FL 0 0 0
Grove Parc Associates, L.P.
(Woodlawn)
Chicago, IL 602,384 21,120,639 21,723,023
2108 Bolton Drive Associates, L.P. (g)(i)(j)
Atlanta, GA 0 0 0
Apple Creek Housing Associates, Ltd. (d)
Arvada, CO 0 0 0
Redwood Villa Associates (h)(i)(j)
San Diego, CA 0 5,998,516 5,998,516
Charles Drew Court Associates, L.P.
Atlantic City, NJ 143,846 8,164,899 8,308,745
Walnut Park Plaza Associates, L.P. (h)(i)(j)
Philadelphia, PA 0 0 0
Bayridge Associates, L.P.
Beaverton, OR 920,066 12,089,837 13,009,903
United-Pennsylvanian, L.P.
Erie, PA 219,385 5,764,251 5,983,636
2051 Grand Concourse Associates, L.P.
Bronx, NY 33,885 5,285,107 5,318,992
Concourse Artists Housing Associates, L.P.
Bronx, NY 8,135 2,324,285 2,332,420
Willoughby-Wycoff Housing Associates, L.P.
Brooklyn, NY 19,386 6,218,917 6,238,303
Robin Housing
Bronx, NY 29,136 8,256,568 8,285,704
Life on which
Depreciation in
Year of Latest income
Accumulated Contruction/ Date Statement is
Subsidiary Partnership's Residential Property Depreciation Renovation Acquired Computed (a) (b)
- ----------------------------------------------- ------------ ------------ --------- ------------------
B & C Housing Associates, L.P.
Tulsa, OK $ 4,895,232 1987 Dec. 1987 27.5 years
State Street 86 Associates, L.P.
Camden, NJ 8,648,984 1987 Feb. 1988 27.5 years
Fox Glenn Investors, L.P.
Seat Pleasant, MD 4,382,345 1987 Mar. 1988 15 to 27.5 years
Shiloh Grove L.P. (Mt Vernon)(f)
Columbus, OH 9,749,012 1987 Feb. 1988 27.5 years
Silver Blue Lake Apartments Ltd.(e)(i)
Miami, FL 0 1987 Feb. 1988 27.5 years
Lancaster Towers Associates, Ltd.(i)(j)
Lancaster, NY 2,709,436 1987 May 1988 27.5 years
West Kinney Associates, L.P.
Newark, NJ 3,884,797 1983 June 1988 27.5 years
Autumn Park Associates, L.P. (g)(i)(j)
Wilsonville, OR 0 1988 June 1988 15 to 27.5 years
Regent Street Associates, L.P. (i)(j)
Philadelphia, PA 4,562,668 1987 June 1988 27.5 years
Magnolia Arms Associates, Ltd.
Jacksonville, FL 5,796,599 1987 July 1988 27.5 years
Greenleaf Associates L.P.
Kansas City, MO 3,587,343 1987 July 1988 27.5 years
Alameda Towers, Associates L.P.
San Juan, PR 6,340,167 1987 July 1988 40 years
Dixie Apartment Associates, Ltd. (c)
Miami, FL 0 1987 July 1988 27.5 years
Ludlam Gardens Apartments, Ltd. (c)
Miami, FL 0 1987 July 1988 27.5 years
Grove Parc Associates, L.P.
(Woodlawn)
Chicago, IL 10,628,604 1988 July 1988 27.5 to 31.5 years
2108 Bolton Drive Associates, L.P. (g)(i)(j)
Atlanta, GA 0 1988 July 1988 15 to 27.5 years
Apple Creek Housing Associates, Ltd. (d)
Arvada, CO 0 1988 June 1988 28 years
Redwood Villa Associates (h)(i)(j)
San Diego, CA 3,496,570 1988 Sept. 1988 27.5 years
Charles Drew Court Associates, L.P.
Atlantic City, NJ 5,124,911 1987 Sept. 1988 27.5 years
Walnut Park Plaza Associates, L.P. (h)(i)(j)
Philadelphia, PA 0 1988 Sept. 1988 35 years
Bayridge Associates, L.P.
Beaverton, OR 6,905,089 1988 Dec. 1988 15 to 27.5 years
United-Pennsylvanian, L.P.
Erie, PA 4,118,879 1988 Dec. 1988 15 to 25 years
2051 Grand Concourse Associates, L.P.
Bronx, NY 3,087,144 1986 Nov. 1988 27.5 years
Concourse Artists Housing Associates, L.P.
Bronx, NY 1,345,124 1986 Nov. 1988 27.5 years
Willoughby-Wycoff Housing Associates, L.P.
Brooklyn, NY 3,618,384 1987 Nov. 1988 27.5 years
Robin Housing
Bronx, NY 4,819,456 1986 Nov. 1988 27.5 years
113
LIBERTY TAX CREDIT PLUS L.P. AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 15, 2005
(continued)
Initial cost to Partnership
-----------------------------
Cost Capitalized
Subsequent to
Buildings and Acquition:
Subsidiary Partnership's Residential Property Encumbrances Land Improvements Improvements
- ----------------------------------------------- ------------ ------------ ------------- ----------------
Lund Hill Associates, L.P. (g) (i) (j)
Superior, WI 2,970,533 205,000 4,877,828 962,947
Tanglewood Apartments, L.P. (g) (i) (j)
Joplin, MO 0 114,932 5,233,022 (5,347,954)
Quality Hill Historic District-Phase II-A, L.P.
Kansas City, MO 3,605,473 215,181 6,403,141 217,102
Penn Alto Associates, L.P.
Altoona, PA 3,383,140 60,000 2,731,082 9,138,889
Sartain School Venture, L.P.
Philadelphia, PA 1,892,280 3,883 3,486,875 161,975
Less: Discontinued Operations (12,032,637) (4,271,448) (64,672,332) 44,555,209
------------ ------------ ------------ ------------
$ 97,203,309 $ 6,666,642 $115,506,304 $ 60,983,582
============ ============ ============ ============
Gross Amount to which Carried at Close of Period
------------------------------------------------
Buildings and
Subsidiary Partnership's Residential Property Land Improvements Total
- ----------------------------------------------- ------------ ------------- ------------
Lund Hill Associates, L.P. (g) (i) (j)
Superior, WI 205,000 5,840,775 6,045,775
Tanglewood Apartments, L.P. (g) (i) (j)
Joplin, MO 0 0 0
Quality Hill Historic District-Phase II-A, L.P.
Kansas City, MO 267,233 6,568,191 6,835,424
Penn Alto Associates, L.P.
Altoona, PA 93,905 11,836,066 11,929,971
Sartain School Venture, L.P.
Philadelphia, PA 9,126 3,643,607 3,652,733
Less: Discontinued Operations (396,769) (23,991,802) (24,388,571)
------------ ------------ ------------
$ 6,883,214 $176,273,314 $183,156,528
============ ============ ============
Life on which
Depreciation in
Year of Latest income
Accumulated Contruction/ Date Statement is
Subsidiary Partnership's Residential Property Depreciation Renovation Acquired Computed (a) (b)
- ----------------------------------------------- ------------ ------------ --------- ------------------
Lund Hill Associates, L.P. (g) (i) (j)
Superior, WI 2,422,874 1988 Jan. 1989 20 to 40 years
Tanglewood Apartments, L.P. (g) (i) (j)
Joplin, MO 0 1988 Oct. 1988 27.5 years
Quality Hill Historic District-Phase II-A, L.P.
Kansas City, MO 2,563,244 1988 Mar. 1989 20 to 40 years
Penn Alto Associates, L.P.
Altoona, PA 5,997,503 1989 June 1989 27.5 years
Sartain School Venture, L.P.
Philadelphia, PA 1,350,994 1989 Aug. 1990 15 to 40 years
Less: Discontinued Operations (13,195,220)
------------
$ 96,840,139
============
(a) 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 date of acquisition.
(b) Furniture and fixtures, included in buildings and improvements, are
depreciated primarily by the straight line method over their estimated
useful lives ranging from 3 to 20 years.
(c) The Property and the related assets and liabilities were sold during the
fiscal year ended March 15, 2003 and included as part of discontinued
operations. See Note 10 in Item 8, Financial Statements and Supplementary
Data.
(d) The Partnership's Local Partnership Interests in this Local Partnership was
sold during the fiscal year ended March 15, 2003. See Note 10 in Item 8,
Financial Statements and Supplementary Data.
(e) The Property and the related assets and liabilities were sold during the
fiscal year ended March 15, 2004 and included as part of discontinued
operations. See Note 10 in Item 8, Financial Statements and Supplementary
Data.
(f) The Partnership recorded the transfer of the deed in lieu of foreclosure to
Bryden Road, a property owned by Shiloh. See Note 10 in Item 8, Financial
Statements and Supplementary Data.
(g) The Property and the related assets and liabilities were sold during the
fiscal year ended March 15, 2005. See Note 10 in Item 8, Financial
Statements and Supplementary Data.
(h) The Partnership's Local Partnership Interests in these Local Partnerships
were sold during the fiscal year ended March 15, 2005. See Note 10 in Item
8., Financial Statements and Supplementary Data.
(i) These properties are included in discontinued operations for the year ended
March 15, 2004. See Note 12 in item 8, Financial Statements and
Supplementary Data.
(j) These properties are included in discontinued operations for the year ended
March 15, 2005. See Note 12 in item 8, Financial Statements and
Supplementary Data.
Cost or Property and Equipment Accumulated Depreciation
----------------------------------------------- -----------------------------------------------
Year Ended March 15,
--------------------------------------------------------------------------------------------------
2005 2004* 2003 2005 2004* 2003
------------- ------------- ------------- ------------- ------------- -------------
Balance at beginning of period $ 230,811,634 $ 252,495,672 $ 261,867,252 $ 116,830,860 $ 118,952,648 $ 117,564,191
Additions during period:
Improvements 2,187,824 2,100,148 3,112,269
Depreciation expense 7,564,986 8,410,800 7,905,317
Deduction during period:
Discontinued operations (49,842,930) (23,312,369) 0 (27,442,838) (10,060,771) 0
Dispositions 0 (471,817) (12,483,849) (112,869) (471,817) (6,516,860)
------------- ------------- ------------- ------------- ------------- -------------
Balance at end of period $ 183,156,528 $ 230,811,634 $ 252,495,672 $ 96,840,139 $ 116,830,860 $ 118,952,648
============= ============= ============= ============= ============= =============
* Reclassified for comparative purposes.
At the time the local partnerships were acquired by Liberty Tax Credit Plus
Limited Partnership, the entire purchase price paid by Liberty Tax Credit Plus
Limited Partnership 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.
114