Back to GetFilings.com
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (FEE REQUIRES)
For the fiscal year ended March 31, 2000
Commission File Number 0-19022
Gateway Tax Credit Fund II Ltd.
(Exact name of Registrant as specified in its charter)
Florida 65-0142704
(State or other jurisdiction of ( I.R.S. Employer No.)
incorporation or organization)
880 Carillon Parkway, St. Petersburg, Florida 33716
(Address of principal executive offices) (Zip Code)
Registrant's Telephone No., Including Area Code: (727)573-3800
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Title of Each Class: Beneficial Assignee Certificates
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 (Sec. 229.405 of this chapter) is not contained
herein, and will 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
Number of Units
Title of Each Class March 31, 2000
Beneficial Assignee Certificates 2,310
General Partner Interest 2
DOCUMENTS INCORPORATED BY REFERENCE
Parts III and IV - Form S-11 Registration Statement and all amendments and
supplements thereto.
File No. 33-31821
PART I
Item 1. Business
Gateway Tax Credit Fund II Ltd. ("Gateway") is a Florida Limited
Partnership. The general partners are Raymond James Tax Credit Funds,
Inc., the Managing General Partner, and Raymond James Partners, Inc., both
sponsors of Gateway Tax Credit Fund II Ltd. and wholly-owned subsidiaries
of Raymond James Financial, Inc.
Pursuant to the Securities Act of 1933, Gateway filed a Form S-11
Registration Statement with the Securities and Exchange Commission,
effective September 12, 1989, which covered the offering (the "Public
Offering") of Gateway's Beneficial Assignee Certificates ("BACs")
representing assignments of units for the beneficial interest of the
limited partnership interest of the Assignor Limited Partner. The Assignor
Limited Partner was formed for the purpose of serving in that capacity for
the Fund and will not engage in any other business.
Gateway is engaged in only one industry segment, to acquire limited
partnership interests in unaffiliated limited partnerships ("Project
Partnerships"), each of which owns and operates one or more apartment
complexes eligible for Low-Income Housing Tax Credits under Section 42 of
the Internal Revenue Code ("Tax Credits"), received over a ten year period.
Subject to certain limitations, Tax Credits may be used by Gateway's
investors to reduce their income tax liability generated from other income
sources. Gateway will terminate on December 31, 2040, or sooner, in
accordance with the terms of its Limited Partnership Agreement. As of
March 31, 2000, Gateway had received capital contributions of $1,000 from
the General Partners and $37,228,000 from Assignees.
Gateway offered BACs in five series. BACs in the amounts of $6,136,000,
$5,456,000, $6,915,000, $8,616,000 and $10,105,000 for Series 2, 3, 4, 5,
and 6, respectively had been issued as of March 31, 2000. Each series is
treated as a separate partnership, investing in a separate and distinct
pool of Project Partnerships. Net proceeds from each series were used to
acquire Project Partnerships which are specifically allocated to such
series. Income or loss and all tax items from the Project Partnerships
acquired by each series are specifically allocated among the Assignees of
such series.
Operating profits and losses, cash distributions from operations and Tax
Credits are allocated 99% to the Assignees and 1% to the General Partners.
Profit or loss and cash distributions from sales of property will be
allocated as described in the Limited Partnership Agreement.
As of March 31, 2000, Gateway had invested in 22 Project Partnerships for
Series 2, 23 Project Partnerships for Series 3, 29 Project Partnerships for
Series 4, 36 Project Partnerships for Series 5 and 38 Project Partnerships
for Series 6. Gateway acquired its interests in these properties by
becoming a limited partner in the Project Partnerships that own the
properties. As of March 31, 2000 each series was fully invested in Project
Partnerships and management plans no new investments in the future.
The primary source of funds from the inception of each series has been
the capital contributions from Assignees. Gateway's operating costs are
funded using the reserves, established for this purpose, the interest
earned on these reserves and distributions received from Project
Partnerships.
All but two of the Project Partnerships are government subsidized with
mortgage loans from the Farmers Home Administration (now called United
States Department of Agriculture - Rural Development) ("USDA-RD") under
Section 515 of the Housing Act of 1949. These mortgage loans are made at
low interest rates for multi-family housing in rural and suburban areas,
with the requirement that the interest savings be passed on to low income
tenants in the form of lower rents. A significant portion of the project
partnerships also receive rental assistance from USDA-RD to subsidize
certain qualifying tenants.
The General Partners do not believe the Project Partnerships are subject
to the risks generally associated with conventionally financed
nonsubsidized apartment properties. Risks related to the operations of
Gateway are described in detail on pages 23 through 34 of the Prospectus,
as supplemented, under the Caption "Risk Factors" which is incorporated
herein by reference. The investment objectives of Gateway are to:
1) Provide tax benefits to Assignees in the form of Tax Credits
during the period in which each Project is eligible to claim tax
credits;
2) Preserve and protect the capital contribution of Investors;
3) Participate in any capital appreciation in the value of the
Projects; and
4) Provide passive losses to i) individual investors to offset
passive income from other passive activities, and ii) corporate
investors to offset business income.
The investment objectives and policies of Gateway are described in detail
on pages 34 through 40 of the Prospectus, as supplemented, under the
caption "Investment Objectives and Policies" which is incorporated herein
by reference.
Gateway's goal was to invest in a diversified portfolio of Project
Partnerships located in rural and suburban locations with a high demand for
low income housing. As of March 31, 2000 the investor capital
contributions were successfully invested in Project Partnerships which met
the investment criteria. Management anticipates that competition for
tenants will only be with other low income housing projects and not with
conventionally financed housing. With significant number of rural American
households living below the poverty level in substandard housing,
management believes there will be a continuing demand for affordable low
income housing for the foreseeable future.
Gateway has no direct employees. Services are performed by the Managing
General Partner and its affiliates and by agents retained by it. The
Managing General Partner has full and exclusive discretion in management
and control of Gateway.
Item 2. Properties
Gateway owns a majority interest in properties through its limited
partnership investments in Project Partnerships. The largest single
investment in a Project Partnership in Series 2 is 15.9% of the Series'
total assets, Series 3 is 10.8%, Series 4 is 7.7%, Series 5 is 12.3% and
Series 6 is 15.8%. The following table provides certain summary
information regarding the Project Partnerships in which Gateway had an
interest as of December 31, 1999:
Item 2 - Properties (continued):
SERIES 2
OCCU-
LOCATION OF # OF DATE PROPERTY PANCY
PARTNERSHIP PROPERTY UNIT ACQUIRED COST RATE
- ----------- ----------- ----- ------------------- -----
Claxton Elderly Claxton, GA 24 9/90 $ 799,538 96%
Deerfield II Douglas, GA 24 9/90 854,562 88%
Hartwell Family Hartwell, GA 24 9/90 859,698 100%
Cherrytree Apts. Albion, PA 33 9/90 1,439,636 97%
Springwood Apts. Westfield, NY 32 9/90 1,511,700 100%
Lakeshore Apts. Tuskegee, AL 34 9/90 1,267,543 97%
Lewiston Lewiston, NY 25 10/90 1,233,935 100%
Charleston Charleston, AR 32 9/90 1,076,098 91%
Sallisaw II Sallisaw, OK 47 9/90 1,517,589 91%
Pocola Pocola, OK 36 10/90 1,245,870 94%
Inverness Club Inverness, FL 72 9/90 3,496,824 96%
Pearson Elderly Pearson, GA 25 9/90 781,460 80%
Richland Elderly Richland, GA 33 9/90 1,057,871 91%
Lake Park Lake Park, GA 48 9/90 1,794,542 92%
Woodland Terrace Waynesboro, GA 30 9/90 1,079,691 93%
Mt. Vernon Elderly Mt. Vernon, GA 21 9/90 700,935 90%
Lakeland Elderly Lakeland, GA 29 9/90 955,815 100%
Prairie Apartments Eagle Butte, SD 21 10/90 1,258,895 76%
Sylacauga Heritage Sylacauga, AL 44 12/90 1,761,852 91%
Manchester Housing Manchester, GA 49 1/91 1,781,301 92%
Durango C.W.W. Durango, CO 24 1/91 1,293,170 100%
Columbus Seniors Columbus, KS 16 5/92 515,233 100%
----- ----------
723 $28,283,758
==== ===========
The aggregate average effective rental per unit is $3,372 per year ($281
per month).
Inverness Club Ltd.'s fixed asset total is 12.4% of the Series 2 total
Project Partnership fixed assets. Inverness Club was placed in service in
October 1991, is located on Florida's West Coast and operates as a
low-income 72 unit apartment facility for the elderly. It also offers an
optional congregate services package to all tenants. The property competes
for tenants with six other apartment properties in the area. The market
study estimated a demand for 100 elderly units.
Inverness Club's occupancy rate was 96% and its average effective annual
rental per unit was $5,007 ($417 per month) on December 31, 1999. The land
cost was $205,500 and the building cost was $3,291,324. The building is
depreciated using the straight line method over 27.5 years. Management
believes the property insurance coverage is adequate. For the year ended
December 31, 1999 the real estate taxes were $53,646.
Item 2 - Properties (continued):
SERIES 3
OCCU-
LOCATION OF # OF DATE PROPERTY PANCY
PARTNERSHIP PROPERTY UNIT ACQUIRED COST RATE
- ----------- ----------- ----- ------- -------- -----
Poteau II Poteau, OK 52 8/90 $ 1,789,148 98%
Sallisaw Sallisaw, OK 52 8/90 1,744,103 92%
Nowata Properties Oolagah, OK 32 8/90 1,148,484 84%
Waldron Properties Waldron, AR 24 9/90 860,273 96%
Roland II Roland, OK 52 10/90 1,804,010 92%
Stilwell Stilwell, OK 48 10/90 1,597,701 100%
Birchwood Apts. Pierre, SD 24 9/90 1,065,305 83%
Hornellsville Arkport, NY 24 9/90 1,100,170 96%
Sunchase II Watertown, SD 41 9/90 1,347,598 95%
CE McKinley II Rising Sun, MD 16 9/90 818,824 100%
Weston Apartments Weston, AL 10 11/90 339,949 100%
Countrywood Apts. Centreville, AL 40 11/90 1,519,764 100%
Wildwood Apts. Pineville, LA 28 11/90 1,084,325 93%
Hancock Hawesville, KY 12 12/90 440,425 100%
Hopkins Madisonville, KY 24 12/90 927,256 92%
Elkhart Apts. Elkhart, TX 54 1/91 1,563,885 96%
Bryan Senior Bryan, OH 40 1/91 1,187,114 100%
Brubaker Square New Carlisle, OH 38 1/91 1,457,668 92%
Southwood Savannah, TN 44 1/91 1,792,292 98%
Villa Allegra Celina, OH 32 1/91 1,139,316 97%
Belmont Senior Cynthiana, KY 24 1/91 935,143 100%
Heritage Villas Helena, GA 25 3/91 824,759 100%
Logansport Seniors Logansport, LA 32 3/91 1,086,394 100%
---- ----------
768 $ 27,573,906
==== ===========
The average effective rental per unit is $3,014 per year ($251 per month).
Item 2 - Properties (continued):
SERIES 4
OCCU-
LOCATION OF # OF DATE PROPERTY PANCY
PARTNERSHIP PROPERTY UNIT ACQUIRED COST RATE
- ----------- ----------- ---- -------- -------- ------
Alsace Soda Springs, ID 24 12/90 $ 807,287 83%
Seneca Apartments Seneca, MO 24 2/91 728,737 92%
Eudora Senior Eudora, KS 36 3/91 1,257,482 100%
Westville Westville, OK 36 3/91 1,101,686 83%
Wellsville Senior Wellsville, KS 24 3/91 810,970 100%
Stilwell II Stilwell, OK 52 3/91 1,657,974 90%
Spring Hill Sr. Spring Hill, KS 24 3/91 1,036,369 92%
Smithfield Smithfield, UT 40 4/91 1,841,135 95%
Tarpon Heights Galliano, LA 48 4/91 1,493,434 100%
Oaks Apartments Oakdale, LA 32 4/91 1,032,509 97%
Wynnwood Common Fairchance, PA 34 4/91 1,679,018 100%
Chestnut Howard, SD 24 5/91 1,057,315 71%
Apts -St. George St. George, SC 24 6/91 940,861 100%
Williston Williston, SC 24 6/91 1,002,600 100%
Brackettville Sr. Brackettville, TX 32 6/91 991,966 97%
Sonora Seniors Sonora, TX 32 6/91 1,013,315 100%
Ozona Seniors Ozona, TX 24 6/91 759,843 96%
Fredericksburg Sr. Fredericksburg, TX 48 6/91 1,402,563 98%
St. Joseph St. Joseph, IL 24 6/91 976,453 88%
Courtyard Huron, SD 21 6/91 848,626 100%
Rural Development Ashland, ME 25 6/91 1,422,482 100%
Jasper Villas Jasper, AR 25 6/91 1,101,517 88%
Edmonton Senior Edmonton, KY 24 6/91 906,714 96%
Jonesville Manor Jonesville, VA 40 6/91 1,723,784 95%
Norton Green Norton, VA 40 6/91 1,697,734 100%
Owingsville Senior Owingsville, KY 22 8/91 848,044 100%
Timpson Seniors Timpson, TX 28 8/91 815,916 96%
Piedmont Barnesville, GA 36 8/91 1,289,047 92%
S.F. Arkansas City Arkansas City, KS 12 8/91 412,028 92%
---- ---------
879 $32,657,409
==== ==========
The average effective rental per unit is $3,228 per year ($269 per month).
Item 2 - Properties (continued):
SERIES 5
OCCU-
LOCATION OF # OF DATE PROPERTY PANCY
PARTNERSHIP PROPERTY UNIT ACQUIRED COST RATE
- ----------- ----------- ---- -------- -------- -----
Seymour Seymour, IN 37 8/91 1,518,441 97%
Effingham Effingham, IL 24 8/91 980,617 100%
S.F. Winfield Winfield, KS 12 8/91 400,920 83%
S.F.Medicine Lodge Medicine Lodge,KS 16 8/91 564,559 100%
S.F. Ottawa Ottawa, KS 24 8/91 707,449 100%
S.F. Concordia Concordia, KS 20 8/91 686,962 95%
Highland View Elgin, OR 24 9/91 888,290 75%
Carrollton Club Carrollton, GA 78 9/91 3,217,901 96%
Scarlett Oaks Lexington, SC 40 9/91 1,675,974 100%
Brooks Hill Ellijay, GA 44 9/91 1,750,689 100%
Greensboro Greensboro, GA 24 9/91 866,259 96%
Greensboro II Greensboro, GA 33 9/91 1,088,664 97%
Pine Terrace Wrightsville, GA 25 9/91 885,186 88%
Shellman Shellman, GA 27 9/91 901,648 100%
Blackshear Cordele, GA 46 9/91 1,593,662 100%
Crisp Properties Cordele, GA 31 9/91 1,127,994 100%
Crawford Crawford, GA 25 9/91 907,712 92%
Yorkshire Wagoner, OK 60 9/91 2,553,154 97%
Woodcrest South Boston, VA 40 9/91 1,574,776 95%
Fox Ridge Russellville, AL 24 9/91 889,941 96%
Redmont II Red Bay, AL 24 9/91 840,596 100%
Clayton Clayton, OK 24 9/91 871,530 100%
Alma Alma, AR 24 9/91 957,710 100%
Pemberton Village Hiawatha, KS 24 9/91 766,979 92%
Magic Circle Eureka, KS 24 9/91 796,127 96%
Spring Hill Spring Hill, KS 36 9/91 1,449,378 100%
Menard Retirement Menard, TX 24 9/91 760,852 88%
Wallis Housing Wallis, TX 24 9/91 578,454 92%
Zapata Housing Zapata, TX 40 9/91 1,238,405 98%
Mill Creek Grove, OK 60 11/91 1,741,669 98%
Portland II Portland, IN 20 11/91 746,097 90%
Georgetown Georgetown, OH 24 11/91 931,542 100%
Cloverdale Cloverdale, IN 24 1/92 946,288 100%
So. Timber Ridge Chandler, TX 44 1/92 1,297,275 100%
Pineville Pineville, MO 12 5/92 397,085 92%
Ravenwood Americus, GA 24 1/94 900,996 100%
----- ---------
1,106 $40,001,781
==== ===========
The average effective rental per unit is $3,214 per year ($268 per month).
Item 2 - Properties (continued):
SERIES 6
OCCU-
LOCATION OF # OF DATE PROPERTY PANCY
PARTNERSHIP PROPERTY UNIT ACQUIRED COST RATE
- ----------- ----------- ----- -------- -------- -----
Spruce Pierre, SD 24 11/91 1,132,706 79%
Shannon O'Neill, NE 16 11/91 665,527 94%
Carthage Carthage, MO 24 1/92 723,610 96%
Mountain Crest Enterprise, OR 39 3/92 1,238,874 72%
Coal City Coal City, IL 24 3/92 1,221,905 100%
Blacksburg Terrace Blacksburg, SC 32 4/92 1,323,070 100%
Frazer Place Smyrna, DE 30 4/92 1,675,489 97%
Ehrhardt Ehrhardt, SC 16 4/92 685,776 94%
Sinton Sinton, TX 32 4/92 1,053,059 94%
Frankston Frankston, TX 24 4/92 674,981 100%
Flagler Beach Flagler Beach, FL 43 5/92 1,653,116 100%
Oak Ridge Williamsburg, KY 24 5/92 1,037,966 100%
Monett Monett, MO 32 5/92 962,304 97%
Arma Arma, KS 28 5/92 876,606 96%
Southwest City Southwest City, MO 12 5/92 389,366 83%
Meadowcrest Luverne, AL 32 6/92 1,203,738 97%
Parsons Parsons, KS 48 7/92 1,532,968 98%
Newport Village Newport, TN 40 7/92 1,613,724 100%
Goodwater Falls Jenkins, KY 36 7/92 1,393,363 100%
Northfield Station Corbin, KY 24 7/92 1,022,561 83%
Pleasant Hill Somerset, KY 24 7/92 954,810 88%
Winter Park Mitchell, SD 24 7/92 1,257,402 92%
Cornell Watertown, SD 24 7/92 1,084,258 92%
Heritage Drive So. Jacksonville, TX 40 1/92 1,207,110 100%
Brodhead Brodhead, KY 24 7/92 959,534 92%
Mt. Village Mt. Vernon, KY 24 7/92 943,158 88%
Hazlehurst Hazlehurst, MS 32 8/92 1,182,340 97%
Sunrise Yankton, SD 33 8/92 1,414,746 100%
Stony Creek Hooversville, PA 32 8/92 1,649,283 88%
Logan Place Logan, OH 40 9/92 1,523,772 95%
Haines Haines, AK 32 8/92 3,035,118 84%
Maple Wood Barbourville, KY 24 8/92 1,007,744 100%
Summerhill Gassville, AR 28 9/92 842,201 93%
Dorchester St. George, SC 12 9/92 562,272 100%
Lancaster Mountain View, AR 33 9/92 1,382,821 100%
Autumn Village Harrison, AR 16 7/92 615,604 100%
Hardy Hardy, AR 24 7/92 936,514 100%
Dawson Dawson, GA 40 11/93 1,474,973 98%
---- ---------
1,086 $44,114,369
==== ===========
The average effective rental per unit is $3,329 per year ($277 per month).
Item 2 - Properties (continued):
A summary of the cost of the properties at December 31, 1999, 1998 and 1997
is as follows:
12/31/99
SERIES 2 SERIES 3 SERIES 4
Land $ 1,012,180 $ 985,546 $ 1,188,112
Land Improvements 123,358 379,665 137,610
Buildings 26,249,454 25,015,969 29,894,951
Furniture and Fixtures 898,766 1,192,726 1,436,736
----------- ----------- -----------
Properties, at Cost 28,283,758 27,573,906 32,657,409
Less: Accum.Depreciation 8,394,446 10,647,074 9,323,398
----------- ----------- -----------
Properties, Net $ 19,889,312 $ 16,926,832 $ 23,334,011
=========== =========== ===========
SERIES 5 SERIES 6 TOTAL
Land $ 1,456,671 $ 1,779,755 $ 6,422,264
Land Improvements 66,384 517,455 1,224,472
Buildings 36,914,988 39,804,795 157,880,157
Furniture and Fixtures 1,563,738 2,012,364 7,104,330
----------- ----------- ------------
Properties, at Cost 40,001,781 44,114,369 172,631,223
Less: Accum.Depreciation 10,765,825 10,920,837 50,051,580
----------- ----------- ------------
Properties, Net $ 29,235,956 $ 33,193,532 $ 122,579,643
=========== =========== ============
12/31/98
SERIES 2 SERIES 3 SERIES 4
Land $1,012,180 $ 985,546 $ 1,188,112
Land Improvements 123,358 242,943 143,608
Buildings 26,240,151 25,157,917 29,897,293
Furniture and Fixtures 902,400 1,116,780 1,408,453
----------- ----------- ----------
Properties, at Cost
Less: Accum.Depreciation 28,278,089 27,503,186 32,637,466
7,497,204 9,442,106 8,340,684
Properties, Net ----------- ------------ ----------
$20,780,885 $18,061,080 $24,296,782
=========== =========== ===========
SERIES 5 SERIES 6 TOTAL
Land $ 1,456,671 $ 1,779,755 $ 6,422,264
Land Improvements 59,966 475,244 1,045,119
Buildings 36,889,183 39,742,035 157,926,579
Furniture and Fixtures 1,523,727 1,960,336 6,911,696
---------- ---------- -----------
Properties, at Cost 39,929,547 43,957,370 172,305,658
Less: Accum.Depreciation 9,481,184 9,550,937 44,312,115
---------- ---------- -----------
Properties, Net $30,448,363 $34,406,433 $127,993,543
=========== =========== ============
12/31/97
SERIES 2 SERIES 3 SERIES 4
Land $ 1,012,180 $ 985,546 $ 1,188,112
Land Improvements 118,113 242,943 123,230
Buildings 26,235,180 25,126,561 29,953,004
Furniture and Fixtures 887,906 1,079,796 1,345,403
Construction in Progress 0 0 9,011
---------- ---------- ----------
Properties, at Cost 28,253,379 27,434,846 32,618,760
Less: Accum.Depreciation 6,581,790 8,538,755 7,324,765
---------- ---------- ----------
Properties, Net $21,671,589 $18,896,091 $25,293,995
=========== =========== ===========
SERIES 5 SERIES 6 TOTAL
Land $ 1,461,156 $ 1,779,755 $ 6,426,749
Land Improvements 71,317 478,286 1,033,889
Buildings 36,827,233 39,721,640 157,863,618
Furniture and Fixtures 1,490,535 1,886,188 6,689,828
Construction in Progress 0 0 9,011
---------- ---------- -----------
Properties, at Cost 39,850,241 43,865,869 172,023,095
Less: Accum.Depreciation 8,170,490 8,136,483 38,752,283
---------- ---------- -----------
Properties, Net $31,679,751 $35,729,386 $133,270,812
=========== =========== ===========
Item 3. Legal Proceedings
Gateway is not a party to any material pending legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
As of March 31, 2000, no matters were submitted to a vote of security
holders, through the solicitation of proxies or otherwise.
PART II
Item 5. Market for the Registrant's Securities and Related Security Holder
Matters
(a) Gateway's Limited Partnership interests (BACs) are not publicly
traded. There is no market for Gateway's Limited Partnership
interests and it is unlikely that any will develop. No transfers of
Limited Partnership Interest or BAC Units are permitted without the
prior written consent of the Managing General Partner. There have
been several transfers from inception to date with most being from
individuals to their trusts or heirs. The Managing General Partner is
not aware of the price at which the units are transferred. The
conditions under which investors may transfer units is found under
ARTICLE XII - "Issuance of BAC'S" on pages A-29 and A-30 of the
Limited Partnership Agreement within the Prospectus, which is
incorporated herein by reference.
There have been no distributions to Assignees from inception
to date.
(b) Approximate Number of Equity Security Holders:
Title of Class Number of Holders
as of March 31, 2000
Beneficial Assignee Certificates 2,310
General Partner Interest 2
Item 6. Selected Financial Data
FOR THE YEARS ENDED MARCH 31,:
SERIES 2 2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Total
Revenues $ 40,198 $ 41,405 $ 41,272 $ 36,217 $ 36,532
Net Loss (166,538) (221,305) (337,693) (582,633) (591,355)
Equity in
Losses of
Project
Partnerships (115,544) (126,899) (288,412) (527,175) (537,111)
Total Assets 723,067 853,057 1,045,569 1,345,931 1,893,838
Investments
In Project
Partnerships 208,215 331,579 510,805 814,883 1,350,923
Per BAC: (A)
Tax Credits 166.30 166.30 166.40 166.40 166.30
Portfolio
Income 12.20 12.90 13.10 12.10 11.20
Passive Loss (141.60) (144.60) (147.90) (141.90) (126.10)
Net Loss (26.87) (35.71) (54.48) (94.00) (95.41)
FOR THE YEARS ENDED MARCH 31,:
SERIES 3 2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Total
Revenues $ 51,385 $ 44,329 $ 65,111 $ 31,128 $ 31,179
Net Loss (147,068) (187,324) (221,508) (341,282) (470,880)
Equity in
Losses of
Project
Partnerships (114,700) (105,820) (198,168) (285,853) (421,996)
Total Assets 545,897 669,866 846,210 1,043,223 1,362,838
Investments
In Project
Partnerships 100,190 218,820 378,000 584,189 901,663
Per BAC: (A)
Tax Credits 68.90 164.30 176.60 176.40 176.65
Portfolio
Income 12.80 14.10 20.10 13.90 14.00
Passive Loss (151.20) (145.00) (154.10) (146.40) (143.30)
Net Loss (26.69) (33.99) (40.19) (61.93) (85.44)
Item 6. Selected Financial Data
FOR THE YEARS ENDED MARCH 31,:
SERIES 4 2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Total
Revenues $ 48,997 $ 46,672 $ 44,309 $ 41,455 $ 42,246
Net Loss (235,491) (348,671) (485,415) (696,010) (705,639)
Equity in
Losses of
Project
Partnerships (175,823) (208,919) (421,886) (635,178) (644,865)
Total Assets 1,082,020 1,280,602 1,600,054 2,048,377 2,711,102
Investments
In Project
Partnerships 487,692 676,348 981,823 1,423,319 2,073,510
Per BAC: (A)
Tax Credits 168.60 168.60 168.60 168.60 168.60
Portfolio
Income 14.30 14.10 13.70 13.20 12.90
Passive Loss (137.50) (136.00) (157.20) (149.30) (142.30)
Net Loss (33.71) (49.92) (69.50) (99.65) (101.02)
FOR THE YEARS ENDED MARCH 31,:
SERIES 5 2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Total
Revenues $ 65,839 $ 64,661 $ 54,417 $ 52,985 $ 54,273
Net Loss (243,982) (403,555) (813,502) (997,362) (781,436)
Equity in
Losses of
Project
Partnerships (178,140) (300,042) (728,729) (911,965) (700,127)
Total Assets 1,728,422 1,932,914 2,306,065 3,078,890 4,041,606
Investments
In Project
Partnerships 951,449 1,145,581 1,500,087 2,268,632 3,211,868
Per BAC: (A)
Tax Credits 164.60 164.60 164.60 164.70 164.60
Portfolio
Income 14.30 14.40 14.10 13.10 12.50
Passive Loss (134.60) (149.20) (141.60) (137.80) (124.30)
Net Loss (28.03) (46.37) (93.47) (114.60) (89.79)
Item 6. Selected Financial Data
FOR THE YEARS ENDED MARCH 31,:
SERIES 6 2000 1999 1998 1997 1996
---- ---- --- ---- ----
Total
Revenues $ 54,234 $ 50,722 $ 49,707 $ 47,326 $ 48,446
Net Loss (531,947) (701,324) (870,137) (915,827) (821,024)
Equity in
Losses of
Project
Partnerships (433,597) (601,405) (761,923) (805,310) (710,986)
Total Assets 2,793,368 3,272,734 3,930,665 4,748,789 5,612,685
Investments
In Project
Partnerships 1,997,390 2,464,086 3,102,793 3,912,526 4,769,625
Per BAC: (A)
Tax Credits 165.50 165.50 165.50 165.40 165.40
Portfolio
Income 12.70 12.90 12.90 11.30 10.70
Passive Loss (126.50) (129.30) (124.30) (122.10) (117.30)
Net Loss (52.12) (68.54) (85.25) (89.72) (80.44)
(A) The per BAC tax information is as of December 31, the year end for tax
purposes.
The above selected financial data should be read in conjunction with the
financial statements and related notes appearing elsewhere in this report.
This statement is not covered by the auditor's opinion included elsewhere
in this report.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations, Liquidity and Capital Resources
Operations commenced on September 14, 1990, with the first admission of
Assignees in Series 2. The proceeds from Assignees' capital contributions
available for investment were used to acquire interests in Project
Partnerships.
As disclosed on the statement of operations for each Series, except as
described below, interest income is comparable for the years ended March
31, 2000, March 31, 1999 and March 31, 1998. The General and
Administrative expenses - General Partner and General and Administrative
expenses - Other for the year ended March 31, 2000 are comparable to March
31, 1999 and March 31, 1998.
The capital resources of each Series are used to pay General and
Administrative operating costs including personnel, supplies, data
processing, travel and legal and accounting associated with the
administration and monitoring of Gateway and the Project Partnerships. The
capital resources are also used to pay the Asset Management Fee due the
Managing General Partner, but only to the extent that Gateway's remaining
resources are sufficient to fund Gateway's ongoing needs. (Payment of any
Asset Management Fee unpaid at the time Gateway sells its interests in the
Project Partnerships is subordinated to the return of the investors'
original capital contributions).
The sources of funds to pay the operating costs of each Series are short
term investments and interest earned thereon, the maturity of U.S. Treasury
Security Strips ("Zero Coupon Treasuries") which were purchased with funds
set aside for this purpose, and cash distributed to the Series from the
operations of the Project Partnerships.
From inception, no Series has paid distributions and management does not
anticipate distributions in the future.
Series 2 - Gateway closed this series on September 14, 1990 after
receiving $6,136,000 from 375 Assignees. As of March 31, 2000, the series
had invested $4,524,678 in 22 Project Partnerships located in 10 states
containing 723 apartment units. Average occupancy of the Project
Partnerships was 94% at December 31, 1999.
Equity in Losses of Project Partnerships of $115,544 for the year ended
March 31, 2000 were comparable to the year ended March 31, 1999. Equity in
Losses of Project Partnerships decreased from $288,412 for the year ended
March 31, 1998 to $126,899 for the year ended March 31, 1999. This
decrease was due to additional suspended losses of $575,862 as these losses
would reduce the investment in certain Project Partnerships below zero. In
general, it is common in the real estate industry to experience losses for
financial and tax reporting purposes because of the non-cash expenses of
depreciation and amortization. (These Project Partnerships reported
depreciation and amortization of $935,616, $919,877 and $897,242 for the
years ended December 31, 1997, 1998, and 1999 respectively.) As a result,
management expects that this Series, as well as those described below, will
report its equity in Project Partnerships as a loss for tax and financial
reporting purposes. Overall, management believes the Project Partnerships
are operating as expected and are generating tax credits which meet
projections.
At March 31, 2000, the Series had $188,570 of short-term investments (Cash
and Cash Equivalents). It also had $326,282 in Zero Coupon Treasuries with
annual maturities providing $51,806 in fiscal year 1999 increasing to
$66,285 in fiscal year 2007. Management believes the sources of funds are
sufficient to meet current and ongoing operating costs for the foreseeable
future, and to pay part of the Asset Management Fee.
As disclosed on the statement of cash flows, the Series had a net loss of
$166,538 for the year ending March 31, 2000. However, after adjusting for
Equity in Losses of Project Partnerships of $115,544 and the changes in
operating assets and liabilities, net cash used in operating activities was
$21,967, of which $33,506 was the Asset Management Fee actually paid. Cash
provided by investing activities totaled $41,024, consisting of $11,727 in
cash distributions from the Project Partnerships and $29,297 from matured
Zero Coupon Treasuries. There were no unusual events or trends to describe.
Series 3 - Gateway closed this series on December 13, 1990 after receiving
$5,456,000 from 398 Assignees. As of March 31, 2000 the series had
invested $3,888,713 in 23 Project Partnerships located in 12 states
containing 768 apartment units. Average occupancy of the Project
Partnerships was 96% as of December 31, 1999.
Equity in Losses of Project Partnerships decreased from $198,168 for the
year ended March 31, 1998 to $105,820 for the year ended March 31, 1999 and
increased to $114,700 for the year ended March 31, 2000. The decrease was
due to suspended losses increasing from $463,688 to $548,603 for the years
ended March 31, 1998 and 1999 respectively. These losses would reduce the
investment in certain Project Partnerships below zero. A Project
Partnership had a change in Accounting Principle as a result of changing
its method of depreciating buildings. The effect of the change increased
the net loss of the Project Partnership for the year ended March 31, 2000
by approximately $278,000. As presented in Note 2, Gateway's share of net
loss increased from $654,423 in 1998 to $988,019 in 1999. Suspended Losses
increased from $548,603 for the year ended March 31, 1999 to $873,319 for
the year ended March 31, 2000. These losses would reduce the investment in
Project Partnerships below zero. (These Project Partnerships reported
depreciation and amortization of $923,055, $913,619 and $1,213,599 for the
years ended December 31, 1997, 1998 and 1999, respectively.) Overall,
management believes these Project Partnerships are operating as expected
and are generating tax credits which meet projections.
At March 31, 2000, the Series had $155,487 of short-term investments (Cash
and Cash Equivalents). It also had $290,220 in Zero Coupon Treasuries with
annual maturities providing $46,066 in fiscal year 1999 increasing to
$58,940 in fiscal year 2007. Management believes these sources of funds
are sufficient to meet the Series' current and ongoing operating costs for
the foreseeable future, and to pay part of the Asset Management Fee.
As disclosed on the statement of cash flows, the Series had a net loss of
$147,068 for the year ended March 31, 2000. However, after adjusting for
Equity in Losses of Project Partnerships of $114,700 and the changes in
operating assets and liabilities, net cash used in operating activities was
$34,008, of which $41,666 was the Asset Management Fee actually paid. Cash
provided by investing activities totaled $51,514, consisting of $25,455,
adjusted by $22,645 included in Other Income, in cash distributions
received from the Project Partnerships and $26,059 from matured Zero Coupon
Treasuries. There were no unusual events or trends to describe.
Series 4 - Gateway closed this series on May 31, 1991 after receiving
$6,915,000 from 465 Assignees. As of March 31, 2000, the series had
invested $4,952,519 in 29 Project Partnerships located in 16 states
containing 879 apartment units. Average occupancy of the Project
Partnerships was 95% at December 31, 1999.
Equity in Losses of Project Partnerships of $175,823 for the year ended
March 31, 2000 were comparable to the year ended March 31, 1999. Equity in
Losses of Project Partnerships decreased from $421,886 for the year ended
March 31, 1998 to $208,919 for the year ended March 31, 1999. This
decrease was due to additional suspended losses of $506,511 as these losses
would reduce the investment in certain Project Partnerships below zero.
(These Project Partnerships reported depreciation and amortization of
$1,060,885, $1,016,293 and $983,083 for the years ended December 31, 1997,
1998 and 1999, respectively.) Overall, management believes these Project
Partnerships are operating as expected and are generating tax credits which
meet projections.
At March 31, 2000, the Series had $226,648 of short-term investments (Cash
and Cash Equivalents). It also had $367,680 in Zero Coupon Treasuries with
annual maturities providing $58,383 in fiscal year 2000 increasing to
$74,700 in fiscal year 2007. Management believes these sources of funds
are sufficient to meet the Series' current and ongoing operating costs for
the foreseeable future, and to pay part of the Asset Management Fee.
As disclosed on the statement of cash flows, the Series had a net loss of
$235,491 for the year ended March 31, 2000. However, after adjusting for
Equity in Losses of Project Partnerships of $175,823 and the changes in
operating assets and liabilities, net cash used in operating activities was
$31,209, of which $42,629 was the Asset Management Fee actually paid. Cash
provided by investing activities totaled $50,225, consisting of $17,210 in
cash distributions from the Project Partnerships and $33,015 from matured
Zero Coupon Treasuries. There were no unusual events or trends to
describe.
A Project Partnership located in Howard, SD experienced significant cash
shortages from operations in 1998 and 1999 due to low occupancy as a result
of layoffs at a local major employer. The local general partner partially
funded the deficit by lending $22,000, $15,855 and $12,800 in 1997, 1998
and 1999 respectively. They also have deferred management fees totaling
$41,041 for these same years. The project had a rent increase of $40 per
unit as of January 1999. Management does not expect any materially adverse
effect to Gateway from this Project Partnership.
Series 5 - Gateway closed this series on October 11, 1991 after receiving
$8,616,000 from 535 Assignees. As of March 31, 2000, the series had
invested $6,164,472 in 36 Project Partnerships located in 13 states
containing 1,106 apartment units. Average occupancy of the Project
Partnerships was 97% as of December 31, 1999.
Equity in Losses of Project Partnerships decreased from $728,729 for the
year ended March 31, 1998 to $300,042 for the year ended March 31, 1999 and
to $178,140 for the year ended March 31, 2000. These decreases were due to
additional suspended losses of $680,755 and $713,592 for the years ended
March 31, 1999 and 2000 respectively, as these losses would reduce the
investment in certain Project Partnerships below zero. (These Project
Partnerships reported depreciation and amortization of $1,331,686,
$1,312,998 and $1,286,201 for the years ended December 31, 1997, 1998 and
1999, respectively.) Overall, management believes these Project
Partnerships are operating as expected and are generating tax credits which
meet projections.
At March 31, 2000, the Series had $318,707 of short-term investments (Cash
and Cash Equivalents). It also had $458,266 in Zero Coupon Treasuries with
annual maturities providing $72,745 in fiscal year 2000 increasing to
$93,075 in fiscal year 2007. Management believes these sources of funds
are sufficient to meet the Series' current and ongoing operating costs for
the foreseeable future, and to pay part of the Asset Management Fee.
As disclosed on the statement of cash flows, the Series had a net loss of
$243,982 for the year ended March 31, 2000. However, after adjusting for
Equity in Losses of Project Partnerships of $178,140 and the changes in
operating assets and liabilities, net cash used in operating activities was
$42,386, of which $58,738 was the Asset Management Fee actually paid. Cash
provided by investing activities totaled $68,099 consisting of $26,951 in
cash distributions from the Project Partnerships and $41,148 from matured
Zero Coupon Treasuries. There were no unusual events or trends to
describe.
Series 6 - Gateway closed this series on March 11, 1992 after receiving
$10,105,000 from 625 Assignees. As of March 31, 2000, the series had
invested $7,462,215 in 38 Project Partnerships located in 19 states
containing 1,086 apartment units. Average occupancy of the Project
Partnerships was 95% as of December 31, 1999.
Equity in Losses of Project Partnerships decreased from $761,923 for the
year ended March 31, 1998 to $601,405 for the year ended March 31, 1999 and
to $433,597 for the year ended March 31, 2000. These decreases were due to
additional suspended losses of $380,506 and $430,306 for the years ended
March 31, 1999 and 2000 respectively, as these losses would reduce the
investment in certain Project Partnerships below zero. (These Project
Partnerships reported depreciation and amortization of $1,474,599,
$1,414,757 and $1,371,839 for the years ended December 31, 1997, 1998 and
1999, respectively.) Overall, management believes these Project
Partnerships are operating as expected and are generating tax credits which
meet projections.
At March 31, 2000, the Series had $422,800 of short-term investments (Cash
and Cash Equivalents). It also had $373,178 in Zero Coupon Treasuries with
annual maturities providing $58,000 in fiscal year 1999 increasing to
$83,000 in fiscal year 2007. Management believes these sources of funds
are sufficient to meet the Series' current and ongoing operating costs for
the foreseeable future, and to pay part of the Asset Management Fee.
As disclosed on the statement of cash flows, the Series had a net loss of
$531,947 for the year ended March 31, 2000. However, after adjusting for
Equity in Losses of Project Partnerships of $433,597 and the changes in
operating assets and liabilities, net cash used in operating activities was
$46,912, of which $56,059 was the Asset Management Fee actually paid. Cash
provided by investing activities totaled $61,040 of which $26,174 was
received in cash distributions from the Project Partnerships and $34,866
from matured Zero Coupon Treasuries. There were no unusual events or
trends to describe.
Item 8. Financial Statements and Supplementary Data
INDEPENDENT AUDITOR'S REPORT
To the Partners of Gateway Tax Credit Fund II Ltd.
We have audited the accompanying balance sheets of each of the five
Series (Series 2 through 6) constituting Gateway Tax Credit Fund II Ltd. (a
Florida Limited Partnership) as of March 31, 2000 and 1999 and the related
statements of operations, partners' equity (deficit), and cash flows of
each of the five Series for each of the three years in the period ended
March 31, 2000. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits. We did not audit the
financial statements of certain underlying Project Partnerships owned by
Gateway Tax Credit Fund II Ltd. for each of the periods presented, the
investments in which are recorded using the equity method of accounting.
The investments in these partnerships total the following as of March 31,
2000 and 1999 and the equity in their losses total for each of the three
years in the period ended March 31, 2000:
Assets Partnership Loss
March 31, Year Ended March 31,
-------- --------------------
2000 1999 2000 1999 1998
---- ---- ---- ---- ----
Series 2 $ 90,889 $ $ 92,023 $ 107,106 $ 228,377
186,641
Series 3 38,455 118,646 79,587 65,214 143,165
Series 4 332,955 471,161 130,892 187,477 320,588
Series 5 599,300 690,078 83,458 74,842 485,727
Series 6 825,578 1,122,059 276,688 301,060 506,231
Those statements were audited by other auditors whose reports have been
furnished to us, and our opinion, insofar as it relates to the amounts
included for such underlying partnerships, is based solely on the reports
of the other auditors.
We conducted our audits in accordance with 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
and the reports of other auditors provide a reasonable basis for our
opinion.
In our opinion, based on our audits and the reports of other auditors,
the financial statements referred to above present fairly, in all material
respects, the financial position of each of the five Series (Series 2
through 6) constituting Gateway Tax Credit Fund II Ltd. as of March 31,
2000 and 1999, and the results of their operations and their cash flows for
each of the three years in the period ended March 31, 2000, in conformity
with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The schedules listed under
Item 14(a)(2) in the index are presented for purposes of complying with the
Securities and Exchange Commission's rules and are not part of the basic
financial statements. These schedules have been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in
our opinion, based on our audits and the reports of other auditors, fairly
state in all material respects the financial data required to be set forth
therein in relation to the basic financial statements taken as a whole.
As discussed in Note 2, one of the Project Partnerships, whose
financial statements were audited by other auditors, changed their method
of computing depreciation for the year ended December 31, 1999.
/s/ Spence, Marston, Bunch, Morris & Co.
SPENCE, MARSTON, BUNCH, MORRIS & CO.
Certified Public Accountants
Clearwater, Florida
July 6, 2000
PART I - Financial Information
Item 1. Financial Statements
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
MARCH 31, 2000 AND 1999
SERIES 2 2000 1999
---- ----
ASSETS
Current Assets:
Cash and Cash Equivalents $ 188,570 $ 169,513
Investments in Securities 51,800 49,538
---------- ----------
Total Current Assets 240,370 219,051
Investments in Securities 274,482 302,427
Investments in Project Partnerships, Net 208,215 331,579
---------- ----------
Total Assets $ 723,067 $ 853,057
========== ==========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 45,773 $ 44,229
---------- ----------
Total Current Liabilities 45,773 44,229
---------- ----------
Long-Term Liabilities:
Payable to General Partners 361,953 326,949
---------- ----------
Partners' Equity (deficit):
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's, of
which 37,228 at March 31, 2000 and 1999 have
been issued to the assignees
Assignees
Units of beneficial interest of the limited
partnership interest of the assignor limited
partner, $1,000 stated value per BAC, 37,228
at March 31, 2000 and 1999, issued and
outstanding 365,987 530,860
General Partners (50,646) (48,981)
---------- ----------
Total Partners' Equity 315,341 481,879
---------- ----------
Total Liabilities and Partners' Equity $ 723,067 $ 853,057
========== ==========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
MARCH 31, 2000 AND 1999
SERIES 3 2000 1999
---- ----
ASSETS
Current Assets:
Cash and Cash Equivalents $ 155,487 $ 137,981
Investments in Securities 46,075 44,063
--------- ----------
Total Current Assets 201,562 182,044
Investments in Securities 244,145 269,002
Investments in Project Partnerships, Net 100,190 218,820
---------- ----------
Total Assets $ 545,897 $ 669,866
========== ==========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 49,763 $ 48,298
---------- ----------
Total Current Liabilities 49,763 48,298
---------- ----------
Long-Term Liabilities:
Payable to General Partners 269,872 248,238
---------- ----------
Partners' Equity (deficit):
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's, of which
37,228 at March 31, 2000 and 1999 have been
issued to the assignees
Assignees
Units of beneficial interest of the limited
partnership interest of the assignor limited
partner, $1,000 stated value per BAC, 37,228 at
March 31, 2000 and 1999, issued and
outstanding 271,815 417,412
General Partners (45,553) (44,082)
----------- -----------
Total Partners' Equity 226,262 373,330
----------- -----------
Total Liabilities and Partners' Equity $ 545,897 $ 669,866
=========== ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
MARCH 31, 2000 AND 1999
SERIES 4 2000 1999
---- ----
ASSETS
Current Assets:
Cash and Cash Equivalents $ 226,648 $ 207,632
Investments in Securities 58,372 55,823
----------- -----------
Total Current Assets 285,020 263,455
Investments in Securities 309,308 340,799
Investments in Project Partnerships, Net 487,692 676,348
----------- -----------
Total Assets $ 1,082,020 $ 1,280,602
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 54,952 $ 53,248
---------- ----------
Total Current Liabilities 54,952 53,248
---------- ----------
Long-Term Liabilities:
Payable to General Partners 348,096 312,891
---------- ----------
Partners' Equity (deficit):
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's, of which
37,228 at March 31, 2000 and 1999 have been
issued to the assignees
Assignees
Units of beneficial interest of the limited
partnership interest of the assignor limited
partner, $1,000 stated value per BAC, 37,228 at
March 31, 2000 and 1999, issued and
Outstanding 732,836 965,972
General Partners (53,864) (51,509)
----------- -----------
Total Partners' Equity 678,972 914,463
----------- -----------
Total Liabilities and Partners' Equity $1,082,020 $ 1,280,602
=========== ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
MARCH 31, 2000 AND 1999
SERIES 5 2000 1999
---- ----
ASSETS
Current Assets:
Cash and Cash Equivalents $ 318,707 $ 292,994
Investments in Securities 72,753 69,576
----------- -----------
Total Current Assets 391,460 362,570
Investments in Securities 385,513 424,763
Investments in Project Partnerships, Net 951,449 1,145,581
------------ ------------
Total Assets $1,728,422 $ 1,932,914
============ ============
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 73,415 $ 71,427
----------- -----------
Total Current Liabilities 73,415 71,427
----------- -----------
Long-Term Liabilities:
Payable to General Partners 345,734 308,232
----------- -----------
Partners' Equity (deficit):
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's, of which
37,228 at March 31, 2000 and 1999 have been
issued to the assignees
Assignees
Units of beneficial interest of the limited
partnership interest of the assignor limited
partner, $1,000 stated value per BAC, 37,228 at
March 31, 2000 and 1999, issued and
Outstanding 1,371,804 1,613,346
General Partners (62,531) (60,091)
----------- -----------
Total Partners' Equity 1,309,273 1,553,255
----------- -----------
Total Liabilities and Partners' Equity $1,728,422 $ 1,932,914
=========== ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
MARCH 31, 2000 AND 1999
SERIES 6 2000 1999
---- ----
ASSETS
Current Assets:
Cash and Cash Equivalents $ 422,800 $ 408,672
Investments in Securities 55,114 52,341
----------- -----------
Total Current Assets 477,914 461,013
Investments in Securities 318,064 347,635
Investments in Project Partnerships, Net 1,997,390 2,464,086
----------- -----------
Total Assets $2,793,368 $ 3,272,734
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 69,212 $ 67,059
----------- -----------
Total Current Liabilities 69,212 67,059
----------- -----------
Long-Term Liabilities:
Payable to General Partners 438,798 388,370
----------- -----------
Partners' Equity (deficit):
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's, of which
37,228 at March 31, 2000 and 1999 have been
issued to the assignees
Assignees
Units of beneficial interest of the limited
partnership interest of the assignor limited
partner, $1,000 stated value per BAC, 37,228 at
March 31, 2000 and 1999, issued and
Outstanding 2,351,230 2,877,858
General Partners (65,872) (60,553)
---------- ----------
Total Partners' Equity 2,285,358 2,817,305
---------- ----------
Total Liabilities and Partners' Equity $2,793,368 $3,272,734
=========== ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
MARCH 31, 2000 AND 1999
TOTAL SERIES 2 - 6 2000 1999
---- ----
ASSETS
Current Assets:
Cash and Cash Equivalents $1,312,212 $ 1,216,792
Investments in Securities 284,114 271,341
----------- -----------
Total Current Assets 1,596,326 1,488,133
Investments in Securities 1,531,512 1,684,626
Investments in Project Partnerships, Net 3,744,936 4,836,414
----------- -----------
Total Assets $6,872,774 $ 8,009,173
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 293,115 $ 284,261
----------- -----------
Total Current Liabilities 293,115 284,261
----------- -----------
Long-Term Liabilities:
Payable to General Partners 1,764,453 1,584,680
----------- -----------
Partners' Equity (deficit):
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's, of
which 37,228 at March 31, 2000 and 1999 have
been issued to the assignees
Assignees
Units of beneficial interest of the limited
partnership interest of the assignor limited
partner, $1,000 stated value per BAC, 37,228
at March 31, 2000 and 1999, issued and
outstanding 5,093,672 6,405,448
General Partners (278,466) (265,216)
----------- -----------
Total Partners' Equity 4,815,206 6,140,232
----------- -----------
Total Liabilities and Partners' Equity $6,872,774 $ 8,009,173
============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MARCH 31,
SERIES 2 2000 1999 1998
---- ---- ----
Revenues:
Interest Income $ 33,028 $ 34,468 $ 37,434
Other Income 7,170 6,937 3,838
----------- ----------- -----------
Total Revenues 40,198 41,405 41,272
----------- ----------- -----------
Expenses:
Asset Management Fee-General
Partner 68,511 68,648 68,773
General and Administrative:
General Partner 8,181 7,433 8,267
Other 11,237 12,781 10,502
Amortization 3,263 46,949 3,011
----------- ----------- -----------
Total Expenses 91,192 135,811 90,553
----------- ----------- -----------
Loss Before Equity in Losses
of Project Partnerships (50,994) (94,406) (49,281)
Equity in Losses of Project
Partnerships (115,544) (126,899) (288,412)
----------- ----------- -----------
Net Loss $ (166,538) $ (221,305) $ (337,693)
=========== =========== ===========
Allocation of Net Loss:
Assignees $ (164,873) $ (219,092) $ (334,316)
General Partners (1,665) (2,213) (3,377)
----------- ----------- -----------
$ (166,538) $ (221,305) $ (337,693)
=========== =========== ===========
Net Loss Per Beneficial
Assignee Certificate $ (26.87) $ (35.71) $ (54.48)
Number of Beneficial Assignee =========== =========== ===========
Certificates Outstanding 6,136 6,136 6,136
=========== =========== ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MARCH 31,
Series 3 2000 1999 1998
---- ---- ----
Revenues:
Interest Income $ 28,740 $ 29,814 $ 30,145
Other Income 22,645 14,515 34,966
---------- ---------- ----------
Total Revenues 51,385 44,329 65,111
---------- ---------- ----------
Expenses:
Asset Management Fee-General
Partner 63,301 63,479 63,645
General and Administrative:
General Partner 8,552 7,771 8,481
Other 10,780 10,513 10,903
Amortization 1,120 44,070 5,422
---------- ---------- ----------
Total Expenses 83,753 125,833 88,451
---------- ---------- ----------
Loss Before Equity in Losses
of Project Partnerships (32,368) (81,504) (23,340)
Equity in Losses of Project
Partnerships (114,700) (105,820) (198,168)
----------- ----------- -----------
Net Loss $(147,068) $ (187,324) $ (221,508)
=========== =========== ===========
Allocation of Net Loss:
Assignees $ (145,597) $ (185,451) $ (219,293)
General Partners (1,471) (1,873) (2,215)
----------- ----------- -----------
$ (147,068) $ (187,324) $ (221,508)
=========== =========== ===========
Net Loss Per Beneficial
Assignee Certificate $ (26.69) $ (33.99) $ (40.19)
Number of Beneficial Assignee =========== =========== ===========
Certificates Outstanding 5,456 5,456 5,456
=========== =========== ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MARCH 31,
SERIES 4 2000 1999 1998
---- ---- ----
Revenues:
Interest Income $ 37,964 $ 39,022 $ 39,924
Other Income 11,033 7,650 4,385
--------- --------- ---------
Total Revenues 48,997 46,672 44,309
--------- --------- ---------
Expenses:
Asset Management Fee - General
Partner 77,832 77,989 78,133
General and Administrative:
General Partner 10,779 9,798 10,693
Other 13,398 12,805 13,417
Amortization 6,656 85,832 5,595
---------- ---------- ----------
Total Expenses 108,665 186,424 107,838
---------- ---------- ----------
Loss Before Equity in Losses
of Project Partnerships (59,668) (139,752) (63,529)
Equity in Losses of Project
Partnerships (175,823) (208,919) (421,886)
---------- ---------- ----------
Net Loss $(235,491) $(348,671) $(485,415)
========== ========== ==========
Allocation of Net Loss:
Assignees $(233,136) $(345,184) $(480,561)
General Partners (2,355) (3,487) (4,854)
---------- ---------- ----------
$(235,491) $(348,671) $(485,415)
========== ========== ==========
Net Loss Per Beneficial
Assignee Certificate $ (33.71) $ (49.92) $ (69.50)
Number of Beneficial Assignee ========== ========== ==========
Certificates Outstanding 6,915 6,915 6,915
========== ========== ==========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MARCH 31,
SERIES 5 2000 1999 1998
---- ---- ----
Revenues:
Interest Income $ 48,721 $ 50,132 $ 51,284
Other Income 17,118 14,529 3,133
---------- ---------- ----------
Total Revenues 65,839 64,661 54,417
---------- ---------- ----------
Expenses:
Asset Management Fee - General
Partner 96,241 96,461 96,663
General and Administrative:
General Partner 13,386 12,163 13,274
Other 15,895 19,611 16,492
Amortization 6,159 39,939 12,761
---------- ---------- ----------
Total Expenses 131,681 168,174 139,190
---------- ---------- ----------
Loss Before Equity in Losses
of Project Partnerships (65,842) (103,513) (84,773)
Equity in Losses of Project
Partnerships (178,140) (300,042) (728,729)
---------- ---------- ----------
Net Loss $(243,982) $(403,555) $(813,502)
========== ========== ==========
Allocation of Net Loss:
Assignees $(241,542) $(399,519) $(805,367)
General Partners (2,440) (4,036) (8,135)
---------- ---------- ----------
$(243,982) $(403,555) $(813,502)
========== ========== ==========
Net Loss Per Beneficial
Assignee Certificate $ (28.03) $ (46.37) $ (93.47)
Number of Beneficial Assignee ========== ========== ==========
Certificates Outstanding 8,616 8,616 8,616
========== ========== ==========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MARCH 31,
SERIES 6 2000 1999 1998
---- ---- ----
Revenues:
Interest Income $ 46,177 $ 46,807 $ 48,382
Other Income 8,057 3,915 1,325
---------- ---------- ----------
Total Revenues 54,234 50,722 49,707
---------- ---------- ----------
Expenses:
Asset Management Fee - General
Partner 106,486 106,815 107,120
General and Administrative:
General Partner 14,130 12,839 14,012
Other 16,986 17,635 17,513
Amortization 14,982 13,352 19,276
---------- ---------- ----------
Total Expenses 152,584 150,641 157,921
---------- ---------- ----------
Loss Before Equity in Losses
of Project Partnerships (98,350) (99,919) (108,214)
Equity in Losses of Project
Partnerships (433,597) (601,405) (761,923)
---------- ---------- ----------
Net Loss $(531,947) $(701,324) $(870,137)
========== ========== ==========
Allocation of Net Loss:
Assignees $(526,628) $(694,311) $(861,436)
General Partners (5,319) (7,013) (8,701)
---------- ---------- ----------
$(531,947) $(701,324) $(870,137)
========== ========== ==========
Net Loss Per Beneficial
Assignee Certificate $ (52.12) $ (68.54) $ (85.25)
Number of Beneficial Assignee ========== ========== ==========
Certificates Outstanding 10,105 10,105 10,105
========== ========== ==========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MARCH 31,
TOTAL SERIES 2 - 6 2000 1999 1998
---- ---- ----
Revenues:
Interest Income $ 194,630 $ 200,243 $ 207,169
Other Income 66,023 47,546 47,647
------------ ------------ ------------
Total Revenues 260,653 247,789 254,816
------------ ------------ ------------
Expenses:
Asset Management Fee-General
Partner 412,371 413,392 414,334
General and Administrative:
General Partner 55,028 50,004 54,727
Other 68,296 73,345 68,827
Amortization 32,180 230,142 46,065
------------ ------------ ------------
Total Expenses 567,875 766,883 583,953
------------ ------------ ------------
Loss Before Equity in Losses
of Project Partnerships (307,222) (519,094) (329,137)
Equity in Losses of Project
Partnerships (1,017,804) (1,343,085) (2,399,118)
------------ ------------ ------------
Net Loss $(1,325,026) $(1,862,179) $(2,728,255)
============ ============ ============
Allocation of Net Loss:
Assignees $(1,311,776) $(1,843,557) $(2,700,973)
General Partners (13,250) (18,622) (27,282)
------------ ------------ ------------
$(1,325,026) $(1,862,179) $(2,728,255)
============ ============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED MARCH 31, 2000, 1999 AND 1998:
General
SERIES 2 Assignees Partners Total
--------- -------- -----
Balance at March 31, 1997 $ 1,084,268 $(43,391) $ 1,040,877
Net Loss (334,316) (3,377) (337,693)
------------ ---------- ------------
Balance at March 31, 1998 749,952 (46,768) 703,184
Net Loss (219,092) (2,213) (221,305)
------------ ---------- -----------
Balance at March 31, 1999 530,860 (48,981) 481,879
Net Loss (164,873) (1,665) (166,538)
------------ ----------- -----------
Balance at March 31, 2000 $ 365,987 $ (50,646) $ 315,341
============ =========== ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED MARCH 31, 2000, 1999 AND 1998:
General
SERIES 3 Assignees Partners Total
--------- -------- -----
Balance at March 31, 1997 $ 822,156 $ (39,994) $ 782,162
Net Loss (219,293) (2,215) (221,508)
------------ ----------- ------------
Balance at March 31, 1998 602,863 (42,209) 560,654
Net Loss (185,451) (1,873) (187,324)
------------ ----------- -----------
Balance at March 31, 1999 417,412 (44,082) 373,330
Net Loss (145,597) (1,471) (147,068)
------------ ------------ -----------
Balance at March 31, 2000 $ 271,815 $ (45,553) $ 226,262
============ ============ ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED MARCH 31, 2000, 1999 AND 1998:
General
SERIES 4 Assignees Partners Total
--------- -------- -----
Balance at March 31, 1997 $1,791,717 $(43,168) $1,748,549
Net Loss (480,561) (4,854) (485,415)
------------ ---------- ------------
Balance at March 31, 1998 1,311,156 (48,022) 1,263,134
Net Loss (345,184) (3,487) (348,671)
------------ ---------- ------------
Balance at March 31, 1999 965,972 (51,509) 914,463
Net Loss (233,136) (2,355) (235,491)
------------ ---------- ------------
Balance at March 31, 2000 $ 732,836 $ (53,864) $ 678,972
============ ========== ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED MARCH 31, 2000, 1999 AND 1998:
General
SERIES 5 Assignees Partners Total
--------- -------- -----
Balance at March 31, 1997 $ 2,818,232 $ (47,920) $ 2,770,312
Net Loss (805,367) (8,135) (813,502)
------------ ----------- ------------
Balance at March 31, 1998 2,012,865 (56,055) 1,956,810
Net Loss (399,519) (4,036) (403,555)
------------ ----------- ------------
Balance at March 31, 1999 1,613,346 (60,091) 1,553,255
Net Loss (241,542) (2,440) (243,982)
------------ ----------- ------------
Balance at March 31, 2000 $ 1,371,804 $ (62,531) $ 1,309,273
============ =========== ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED MARCH 31, 2000, 1999 AND 1998:
General
SERIES 6 Assignees Partners Total
--------- -------- -----
Balance at March 31, 1997 $ 4,433,605 $ (44,839) $ 4,388,766
Net Loss (861,436) (8,701) (870,137)
------------ ---------- ------------
Balance at March 31, 1998 3,572,169 (53,540) 3,518,629
Net Loss (694,311) (7,013) (701,324)
------------ ----------- ------------
Balance at March 31, 1999
2,877,858 (60,553) 2,817,305
Net Loss (526,628) (5,319) (531,947)
------------ ----------- ------------
Balance at March 31, 2000 $ 2,351,230 $ (65,872) $ 2,285,358
============ =========== ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED MARCH 31, 2000, 1999 AND 1998:
General
TOTAL SERIES 2 - 6 Assignees Partners Total
--------- -------- -----
Balance at March 31, 1997 $ 10,949,978 $ (219,312) $ 10,730,666
Net Loss (2,700,973) (27,282) (2,728,255)
------------- ----------- -------------
Balance at March 31, 1998 8,249,005 (246,594) 8,002,411
Net Loss (1,843,557) (18,622) (1,862,179)
------------- ----------- -------------
Balance at March 31, 1999 6,405,448 (265,216) 6,140,232
Net Loss (1,311,776) (13,250) (1,325,026)
------------- ----------- -------------
Balance at March 31, 2000 $ 5,093,672 $(278,466) $4,815,206
============= =========== =============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2000, 1999 AND 1998:
SERIES 2 2000 1999 1998
- -------- ---- ---- ----
Cash Flows from Operating
Activities:
Net Loss $ (166,538) $ (221,305) $ (337,693)
Adjustments to Reconcile Net
Loss to Net Cash Used in
Operating Activities:
Amortization 3,263 46,949 3,011
Accreted Interest Income on
Investments in Securities (23,854) (25,554) (27,118)
Equity in Losses of Project
Partnerships 115,544 126,899 288,412
Interest Income from
Redemption of Securities 20,241 16,834 13,627
Distributions Included in
Other Income (7,170) (6,937) (3,838)
Changes in Operating Assets
and Liabilities:
Increase in Payable to
General Partners 36,547 28,793 37,331
---------- ---------- ----------
Net Cash Used in Operating
Activities (21,967) (34,321) (26,268)
---------- ---------- ----------
Cash Flows from Investing
Activities:
Distributions Received from
Project Partnerships 11,727 12,315 16,493
Redemption of Investment in
Securities 29,297 30,668 32,065
---------- ---------- ----------
Net Cash Provided by
Investing Activities 41,024 42,983 48,558
---------- ---------- ----------
Increase in Cash and
Cash Equivalents 19,057 8,662 22,290
Cash and Cash Equivalents at
Beginning of Year 169,513 160,851 138,561
---------- ---------- ----------
Cash and Cash Equivalents at
End of Year $188,570 $ 169,513 $ 160,851
========== ========== ==========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2000, 1999 AND 1998:
SERIES 3 2000 1999 1998
- - ------ ---- ---- ----
Cash Flows from Operating
Activities:
Net Loss $ (147,068) $ (187,324) $ (221,508)
Adjustments to Reconcile Net
Loss to Net Cash Used in
Operating Activities:
Amortization 1,120 44,070 5,422
Accreted Interest Income on
Investments in Securities (21,218) (22,729) (24,121)
Equity in Losses of Project
Partnerships 114,700 105,820 198,168
Interest Income from
Redemption of Securities 18,004 14,974 12,121
Distributions Included In
Other Income (22,645) (14,515) (34,966)
Changes in Operating Assets
and Liabilities:
Increase in Payable to
General Partners 23,099 10,980 24,495
---------- ---------- ----------
Net Cash Used in Operating
Activities (34,008) (48,724) (40,389)
---------- ---------- ----------
Cash Flows from Investing
Activities:
Distributions Received from
Project Partnerships 25,455 23,805 37,565
Redemption of Investment in
Securities 26,059 27,278 28,521
---------- ---------- ----------
Net Cash Provided by
Investing Activities 51,514 51,083 66,086
---------- ---------- ----------
Increase in Cash and
Cash Equivalents 17,506 2,359 25,697
Cash and Cash Equivalents at
Beginning of Year 137,981 135,622 109,925
---------- ---------- ----------
Cash and Cash Equivalents at
End of Year $ 155,487 $ 137,981 $ 135,622
========== ========== ==========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2000, 1999 AND 1998:
SERIES 4 2000 1999 1998
- -------- ---- ---- ----
Cash Flows from Operating
Activities:
Net Loss $ (235,491) $ (348,671) $ (485,415)
Adjustments to Reconcile Net
Loss to Net Cash Used in
Operating Activities:
Amortization 6,656 85,832 5,595
Accreted Interest Income on
Investments in Securities (26,881) (28,796) (30,559)
Equity in Losses of Project
Partnerships 175,823 208,919 421,886
Interest Income from
Redemption of Securities 22,808 18,970 15,357
Distributions Included In
Other Income (11,033) (7,650) (4,385)
Changes in Operating Assets
and Liabilities:
Increase in Payable to
General Partners 36,909 29,219 37,092
---------- ---------- ----------
Net Cash Used in Operating
Activities (31,209) (42,177) (40,429)
---------- ---------- ----------
Cash Flows from Investing
Activities:
Distributions Received from
Project Partnerships 17,210 18,374 18,400
Redemption of Investment in
Securities 33,015 34,559 36,132
---------- ---------- ----------
Net Cash Provided by
Investing Activities 50,225 52,933 54,532
---------- ---------- ----------
Increase in Cash and
Cash Equivalents 19,016 10,756 14,103
Cash and Cash Equivalents at
Beginning of Year 207,632 196,876 182,773
---------- ---------- ----------
Cash and Cash Equivalents at
End of Year $ 226,648 $ 207,632 $ 196,876
========== ========== ==========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2000, 1999 AND 1998:
SERIES 5 2000 1999 1998
- -------- ---- ---- ----
Cash Flows from Operating
Activities:
Net Loss $ (243,982) $ (403,555) $ (813,502)
Adjustments to Reconcile Net
Loss to Net Cash Used in
Operating Activities:
Amortization 6,159 39,939 12,761
Accreted Interest Income on
Investments in Securities (33,503) (35,890) (38,088)
Equity in Losses of Project
Partnerships 178,140 300,042 728,729
Interest Income from
Redemption of Securities 28,428 23,644 19,140
Distributions Included In
Other Income (17,118) (14,529) (3,133)
Changes in Operating Assets
and Liabilities:
Increase in Payable to
General Partners 39,490 30,403 40,677
---------- ---------- ----------
Net Cash Used in Operating
Activities (42,386) (59,946) (53,416)
---------- ---------- ----------
Cash Flows from Investing
Activities:
Distributions Received from
Project Partnerships 26,951 29,054 30,188
Redemption of Investment in
Securities 41,148 43,073 45,035
---------- ---------- ----------
Net Cash Provided by
Investing Activities 68,099 72,127 75,223
---------- ---------- ----------
Increase in Cash and
Cash Equivalents 25,713 12,181 21,807
Cash and Cash Equivalents at
Beginning of Year 292,994 280,813 259,006
---------- ---------- ----------
Cash and Cash Equivalents at
End of Year $ 318,707 $ 292,994 $ 280,813
========== ========== ==========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2000, 1999 AND 1998:
SERIES 6 2000 1999 1998
- -- ----- ---- ---- ----
Cash Flows from Operating
Activities:
Net Loss $ (531,947) $ (701,324) $ (870,137)
Adjustments to Reconcile Net
Loss to Net Cash Used in
Operating Activities:
Amortization 14,982 13,352 19,276
Accreted Interest Income on
Investments in Securities (28,202) (29,359) (30,091)
Equity in Losses of Project
Partnerships 433,597 601,405 761,923
Interest Income from
Redemption of Securities 20,134 15,983 12,262
Distributions Included In
Other Income (8,057) (3,915) (1,325)
Changes in Operating Assets
and Liabilities:
Increase in Payable to
General Partners 52,581 43,393 52,014
---------- ---------- ----------
Net Cash Used in Operating
Activities (46,912) (60,465) (56,078)
---------- ---------- ----------
Cash Flows from Investing
Activities:
Distributions Received from
Project Partnerships 26,174 27,865 29,859
Redemption of Investment in
Securities 34,866 35,017 35,738
---------- ---------- ----------
Net Cash Provided by
Investing Activities 61,040 62,882 65,597
---------- ---------- ----------
Increase in Cash and
Cash Equivalents 14,128 2,417 9,519
Cash and Cash Equivalents at
Beginning of Year 408,672 406,255 396,736
---------- ---------- ----------
Cash and Cash Equivalents at
End of Year $ 422,800 $ 408,672 $ 406,255
========== ========== ==========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2000, 1999 AND 1998:
TOTAL SERIES 2 - 6 2000 1999 1998
- ------------------ ---- ---- ----
Cash Flows from Operating
Activities:
Net Loss $(1,325,026) $(1,862,179) $(2,728,255)
Adjustments to Reconcile Net
Loss to Net Cash Used in
Operating Activities:
Amortization 32,180 230,142 46,065
Accreted Interest Income on
Investments in Securities (133,658) (142,328) (149,977)
Equity in Losses of Project
Partnerships 1,017,804 1,343,085 2,399,118
Interest Income from
Redemption of Securities 109,615 90,405 72,507
Distributions Included In
Other Income (66,023) (47,546) (47,647)
Changes in Operating Assets
and Liabilities:
Increase in Payable to
General Partners 188,626 142,788 191,609
----------- ----------- -----------
Net Cash Used in Operating
Activities (176,482) (245,633) (216,580)
----------- ----------- -----------
Cash Flows from Investing
Activities:
Distributions Received from
Project Partnerships 107,517 111,413 132,505
Redemption of Investment in
Securities 164,385 170,595 177,491
----------- ----------- -----------
Net Cash Provided by
Investing Activities 271,902 282,008 309,996
----------- ----------- -----------
Increase in Cash and
Cash Equivalents 95,420 36,375 93,416
Cash and Cash Equivalents at
Beginning of Year 1,216,792 1,180,417 1,087,001
----------- ----------- -----------
Cash and Cash Equivalents at
End of Year $1,312,212 $1,216,792 $1,180,417
=========== =========== ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000, 1999 AND 1998
NOTE 1 - ORGANIZATION:
Gateway Tax Credit Fund II Ltd. ("Gateway"), a Florida Limited
Partnership, was formed September 12, 1989, under the laws of Florida.
Operations commenced on September 14, 1990 for Series 2, September 28, 1990
for Series 3, February 1, 1991 for Series 4, July 1, 1991 for Series 5 and
January 1, 1992 for Series 6. Gateway has invested, as a limited partner,
in other limited partnerships ("Project Partnerships") each of which owns
and operates one or more apartment complexes expected to qualify for Low-
Income Housing Tax Credits. Gateway will terminate on December 31, 2040,
or sooner, in accordance with the terms of the Limited Partnership
Agreement. As of March 31, 2000, Gateway had received capital
contributions of $1,000 from the General Partners and $37,228,000 from
Beneficial Assignee Certificate investors (the "Assignees"). The fiscal
year of Gateway for reporting purposes ends on March 31.
Pursuant to the Securities Act of 1933, Gateway filed a Form S-11
Registration Statement with the Securities and Exchange Commission,
effective September 12, 1989, which covered the offering (the "Public
Offering") of Gateway's Beneficial Assignee Certificates ("BACs")
representing assignments of units for the beneficial interest of the
limited partnership interest of the Assignor Limited Partner. The Assignor
Limited Partner was formed for the purpose of serving in that capacity for
the Fund and will not engage in any other business.
Raymond James Partners, Inc. and Raymond James Tax Credit Funds, Inc.,
wholly-owned subsidiaries of Raymond James Financial, Inc., are the General
Partner and the Managing General Partner, respectively. The Managing
General Partner manages and controls the business of Gateway.
Gateway offered BACs in five series. BACs in the amounts of $6,136,000,
$5,456,000, $6,915,000, $8,616,000 and $10,105,000 for Series 2, 3, 4, 5
and 6, respectively had been issued as of March 31, 2000. Each Series is
treated as a separate partnership, investing in a separate and distinct
pool of Project Partnerships. Net proceeds from each Series are used to
acquire Project Partnerships which are specifically allocated to such
Series. Income or loss and all tax items from the Project Partnerships
acquired by each Series are specifically allocated among the Assignees of
such Series.
Operating profits and losses, cash distributions from operations and tax
credits are allocated 99% to the Assignees and 1% to the General Partners.
Profit or loss and cash distributions from sales of properties will be
allocated as formulated in the Limited Partnership Agreement.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES:
Basis of Accounting
Gateway utilizes the accrual basis of accounting whereby revenues are
recognized when earned and expenses are recognized when obligations are
incurred.
Gateway accounts for its investments as the limited partner in Project
Partnerships ("Investments in Project Partnerships"), using the equity
method of accounting, because management believes that Gateway does not
have a majority control of the major operating and financial policies of
the Project Partnerships in which it invests, and reports the equity in
losses of the Project Partnerships on a 3-month lag in the Statements of
Operations. Under the equity method, the Investments in Project
Partnerships initially include:
1)Gateway's capital contribution,
2)Acquisition fees paid to the General Partner for services rendered
in selecting properties for acquisition, and
3)Acquisition expenses including legal fees, travel and other
miscellaneous costs relating to acquiring properties.
Quarterly the Investments in Project Partnerships are increased or
decreased as follows:
1)Increased for equity in income or decreased for equity in losses
of the Project Partnerships,
2)Decreased for cash distributions received from the Project
Partnerships, and
3) Decreased for the amortization of the acquisition fees and expenses.
Amortization is calculated on a straight-line basis over 35 years, as this
is the average estimated useful life of the underlying assets. The
amortization expense is shown on the Statements of Operations.
Pursuant to the limited partnership agreements for the Project
Partnerships, cash losses generated by the Project Partnerships are
allocated to the general partners of those partnerships. In subsequent
years, cash profits, if any, are first allocated to the general partners to
the extent of the allocation of prior years' cash losses.
Since Gateway invests as a limited partner, and therefore is not obligated
to fund losses or make additional capital contributions, it does not
recognize losses from individual Project Partnerships to the extent that
these losses would reduce the investment in those Project Partnerships
below zero. The suspended losses will be used to offset future income from
the individual Project Partnerships. Distributions received from Project
Partnerships whose investment has been reduced to zero are included in
Other Income.
Gateway recognizes a decline in the carrying value of its investment in
the Project Partnerships when there is evidence of a non-temporary decline
in the recoverable amount of the investment. There is a possibility that
the estimates relating to reserves for non-temporary declines in carrying
value of the investments in Project Partnerships may be subject to material
near term adjustments.
Gateway, as a limited partner in the Project Partnerships, is subject to
risks inherent in the ownership of property which are beyond its control,
such as fluctuations in occupancy rates and operating expenses, variations
in rental schedules, proper maintenance and continued eligibility of tax
credits. If the cost of operating a property exceeds the rental income
earned thereon, Gateway may deem it in its best interest to voluntarily
provide funds in order to protect its investment.
Cash and Cash Equivalents
It is Gateway's policy to include short-term investments with an original
maturity of three months or less in Cash and Cash Equivalents. Short-term
investments are comprised of money market mutual funds.
Concentration of Credit Risk
Financial instruments which potentially subject Gateway to concentrations
of credit risk consist of cash investments in a money market mutual fund
that is a wholly-owned subsidiary of Raymond James Financial, Inc.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally
accepted accounting principles requires the use of estimates that affect
certain reported amounts and disclosures. These estimates are based on
management's knowledge and experience. Accordingly, actual results could
differ from these estimates.
Investment in Securities
Effective April 1, 1995, Gateway adopted Statement of Financial Accounting
Standards No. 115, Accounting for Certain Investments in Debt and Equity
Securities ("FAS 115"). Under FAS 115, Gateway is required to categorize
its debt securities as held-to-maturity, available-for-sale or trading
securities, dependent upon Gateway's intent in holding the securities.
Gateway's intent is to hold all of its debt securities (U. S. Government
Security Strips) until maturity and to use these reserves to fund Gateway's
ongoing operations. Interest income is recognized ratably on the U. S.
Government Strips using the effective yield to maturity.
Offering and Commission Costs
Offering and commission costs were charged against Assignees' Equity upon
the admission of Limited Partners.
Income Taxes
No provision for income taxes has been made in these financial statements,
as income taxes are a liability of the partners rather than of Gateway.
Change in Accounting Principle
One of the Project Partnerships changed its method of accounting for
depreciating their buildings from the straight line to the declining
balance method. The effect of this change was reported as a cumulative
effect of a change in accounting principle. The change increased the net
losses reported by the Project Partnerships by $277,849.
Reclassifications
For comparability, the 1999 and 1998 figures have been reclassified, where
appropriate, to conform with the financial statement presentation used in
2000.
NOTE 3 - INVESTMENT IN SECURITIES:
The March 31, 2000 Balance Sheet includes Investment in Securities
consisting of U.S. Government Security Strips which represents their cost,
plus accreted interest income of $152,647 for Series 2, $135,777 for Series
3, $172,016 for Series 4, $214,394 for Series 5 and $153,731 for Series 6.
For convenience, the Investment in Securities are commonly held in a
brokerage account with Raymond James and Associates, Inc. A separate
accounting is maintained for each series' share of the investments.