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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For The Quarterly Period Ended December 31, 2004
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 (IRS Employer No.)
incorporation or organization)
880 Carillon Parkway, St. Petersburg, Florida 33716
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (727)567-4830
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
Number of Units
Title of Each Class December 31, 2004
Beneficial Assignee Certificates:
$1,000 per certificate 37,228
DOCUMENTS INCORPORATED BY REFERENCE
Parts I and II, 2004 Form 10-K, filed with the
Securities and Exchange Commission on July 13, 2004
Parts III and IV - Form S-11 Registration Statement
and all amendments and supplements thereto
File No. 33-31821
PART I - Financial Information
Item 1. Financial Statements
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
|
SERIES 2 |
December 31, 2004
- ----------
(Unaudited) |
March 31, 2004
- ---------
(Audited) |
|
ASSETS
Current Assets:
Cash and Cash Equivalents
Investments in Securities
Total Current Assets
Investments in Securities
Investments in Project Partnerships, Net
Total Assets
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners
Total Current Liabilities
Long-Term Liabilities:
Payable to General Partners
Partners' Equity (deficit):
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's,
of which 6,136 at December 31, 2004
and March 31, 2004 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, 6,136 at December
31, 2004 and March 31, 2004, issued and
outstanding
General Partners
Total Partners' Deficit
Total Liabilities and Partners' Deficit |
$ 238,004
62,374
- ----------
300,378
60,129
20,481
- -----------
$ 380,988
===========
$ 44,049
- -----------
44,049
- -----------
514,904
- -----------
(122,386)
(55,579)
- ----------(177,965)
- ----------
$ 380,988
==========
|
$ 221,084
61,300
- ----------
282,384
115,551
47,597
- ----------
$ 445,532
==========
$ 63,359
- ----------
63,359
- ----------
467,036
- ----------
(30,215)
(54,648)
- ----------
(84,863)
- ----------
$ 445,532
==========
|
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
|
SERIES 3 |
December 31, 2004
- ---------
(Unaudited) |
March 31, 2004
- ----------
(Audited) |
|
ASSETS
Current Assets:
Cash and Cash Equivalents
Investments in Securities
Total Current Assets
Investments in Securities
Investments in Project Partnerships, Net
Total Assets
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners
Total Current Liabilities
Long-Term Liabilities:
Payable to General Partners
Partners' Equity (deficit):
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's,
of which 5,456 at December 31, 2004 and
March 31, 2004 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, 5,456 at December 31, 2004
and March 31, 2004, issued and outstanding
General Partners
Total Partners' Deficit
Total Liabilities and Partners' Deficit |
$ 223,840
55,480
- ----------
279,320
53,484
0
- ----------$ 332,804
==========
$ 48,160
- ----------
48,160
- ----------
414,991
- ----------
(81,228)
(49,119)
- ----------
(130,347)
- ----------
$ 332,804
==========
|
$ 187,419
54,525
- ----------
241,944
102,780
0
- ----------
$ 344,724
==========
$ 63,415
- ----------
63,415
- ----------
353,758
- ----------
(23,909)
(48,540)
- ----------
(72,449)
- ----------
$ 344,724
==========
|
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
|
SERIES 4 |
December 31, 2004
- ---------
(Unaudited) |
March 31, 2004
- ----------
(Audited) |
|
ASSETS
Current Assets:
Cash and Cash Equivalents
Investments in Securities
Total Current Assets
Investments in Securities
Investments in Project Partnerships, Net
Total Assets
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners
Total Current Liabilities
Long-Term Liabilities:
Payable to General Partners
Partners' Equity (deficit):
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's,
of which 6,915 at December 31, 2004 and
March 31, 2004 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, 6,915 at December 31, 2004
and March 31, 2004, issued and outstanding
General Partners
Total Partners' Deficit
Total Liabilities and Partners' Deficit
|
$ 314,388
70,288
- ----------
384,676
67,758
0
- ----------
$ 452,434
==========
$ 54,719
- ----------
54,719
- ----------
551,114
- ----------
(91,210)
(62,189)
- ----------
(153,399)
- ----------
$ 452,434
==========
|
$ 273,485
69,078
- ----------
342,563
130,212
0
- ----------
$ 472,775
==========
$ 66,784
- ----------
66,784
- ----------
482,520
- ----------
(15,109)
(61,420)
- ----------
(76,529)
- ----------
$ 472,775
==========
|
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
|
SERIES 5 |
December 31, 2004
- ---------
(Unaudited) |
March 31, 2004
- ----------
(Audited) |
|
ASSETS
Current Assets:
Cash and Cash Equivalents
Restricted Cash
Investments in Securities
Total Current Assets
Investments in Securities
Investments in Project Partnerships, Net
Total Assets
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners
Total Current Liabilities
Long-Term Liabilities:
Payable to General Partners
Partners' Equity (deficit):
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's,
of which 8,616 at December 31, 2004 and
March 31, 2004 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, 8,616 at December 31, 2004
and March 31, 2004, issued and outstanding
General Partners
Total Partners' Equity
Total Liabilities and Partners' Equity |
$ 244,526
157,126
87,604
- ----------
489,256
84,452
49,573
- ----------
$ 623,281
===========
$ 71,156
- -----------
71,156
- -----------
397,519
- -----------
228,683
(74,077)
- -----------
154,606
- -----------
$ 623,281
===========
|
$ 349,174
0
86,098
- -----------
435,272
162,292
229,630
- -----------
$ 827,194
===========
$ 96,999
- -----------
96,999
- -----------
464,362
- -----------
338,798
(72,965)
- -----------
265,833
- -----------
$ 827,194
===========
|
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
|
SERIES 6 |
December 31, 2004
- ---------
(Unaudited) |
March 31, 2004
- ----------
(Audited) |
|
ASSETS
Current Assets:
Cash and Cash Equivalents
Investments in Securities
Total Current Assets
Investments in Securities
Investments in Project Partnerships, Net
Total Assets
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners
Total Current Liabilities
Long-Term Liabilities:
Payable to General Partners
Partners' Equity (deficit):
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's,
of which 10,105 at December 31, 2004
and March 31, 2004 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, 10,105 at December 31, 2004
and March 31, 2004, issued and outstanding
General Partners
Total Partners' Equity
Total Liabilities and Partners' Equity |
$ 376,987
74,893
- ----------
451,880
144,750
802,631
- ----------
$ 1,399,261
===========
$ 66,824
- -----------
66,824
- -----------
710,669
- -----------
704,276
(82,508)
- -----------
621,768
- -----------
$ 1,399,261
===========
|
$ 401,535
70,976
- -----------
472,511
136,979
858,488
- -----------
$1,467,978
===========
$ 90,272
- -----------
90,272
- -----------
610,503
- -----------
848,257
(81,054)
- -----------
767,203
- -----------
$1,467,978
===========
|
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
|
TOTAL SERIES 2 - 6 |
December 31, 2004
- ---------
(Unaudited) |
March 31, 2004
- ----------
(Audited) |
|
ASSETS
Current Assets:
Cash and Cash Equivalents
Restricted Cash
Investments in Securities
Total Current Assets
Investments in Securities
Investments in Project Partnerships, Net
Total Assets
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners
Total Current Liabilities
Long-Term Liabilities:
Payable to General Partners
Partners' Equity (deficit):
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's,
of which 37,228 at December 31, 2004 and
March 31, 2004 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 December 31, 2004
and March 31, 2004, issued and outstanding
General Partners
Total Partners' Equity
Total Liabilities and Partners' Equity |
$ 1,397,745
157,126
350,639
- ----------
1,905,510
410,573
872,685
- ----------
$ 3,188,768
==========
$ 284,908
- ----------284,908
- ----------
2,589,197
- ----------
638,135
(323,472)
- -----------
314,663
- -----------
$ 3,188,768
===========
|
$1,432,697
0
341,977
- -----------
1,774,674
647,814
1,135,715
- -----------
$3,558,203
===========
$ 380,829
- -----------
380,829
- -----------
2,378,179
- -----------
1,117,822
(318,627)
- -----------
799,195
- -----------
$3,558,203
===========
|
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 31,
(Unaudited)
|
SERIES 2 |
2004
- ---- |
2003
- ---- |
|
Revenues:
Interest Income
Other Income
Total Revenues
Expenses:
Asset Management Fee-General Partner
General and Administrative:
General Partner
Other
Amortization
Total Expenses
Loss Before Equity in Losses of Project
Partnerships
Equity in Losses of Project
Partnerships
Net Loss
Allocation of Net Loss:
Assignees
General Partners
Net Loss Per Beneficial Assignee Certificate
Number of Beneficial Assignee
Certificates Outstanding |
$ 3,156
3,702
- ----------
6,858
- -----------
16,956
8,280
1,550
174
- ----------
26,960
- ----------
(20,102)
(8,631)
- ----------
$ (28,733)
==========
(28,446)
(287)
- ----------
$ (28,733)
==========
$ (4.64)
==========
6,136
==========
|
$ 3,568
3,793
- ----------
7,361
- -----------
17,005
7,036
1,054
174
- ----------
25,269
- ----------
(17,908)
(6,356)
- ----------
$ (24,264)
==========
(24,021)
(243)
- ----------
$ (24,264)
==========
$ (3.91)
==========
6,136
==========
|
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 31,
(Unaudited)
|
SERIES 3 |
2004
- ---- |
2003
- ---- |
|
Revenues:
Interest Income
Other Income
Total Revenues
Expenses:
Asset Management Fee-General Partner
General and Administrative:
General Partner
Other
Amortization
Total Expenses
Loss Before Equity in Losses of
Project Partnerships
Equity in Losses of Project Partnerships
Net Loss
Allocation of Net Loss:
Assignees
General Partners
Net Loss Per Beneficial Assignee Certificate
Number of Beneficial Assignee
Certificates Outstanding |
$ 2,830
5,380
- ----------
8,210
- ----------
15,756
8,656
1,458
0
- ----------
25,870
- ----------
(17,660)
0
- ----------
$ (17,660)
==========
(17,483)
(177)
- ----------
$ (17,660)
==========
$ (3.20)
==========
5,456
==========
|
$ 3,171
0
- ----------
3,171
- ----------
15,665
7,355
941
129
- ----------
24,090
- ----------
(20,919)
(2,386)
- ----------
$ (23,305)
==========
(23,072)
(233)
- ----------
$ (23,305)
==========
$ (4.23)
==========
5,456
==========
|
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 31,
(Unaudited)
|
SERIES 4 |
2004
- ---- |
2003
- ---- |
|
Revenues:
Interest Income
Other Income
Total Revenues
Expenses:
Asset Management Fee-General Partner
General and Administrative:
General Partner
Other
Amortization
Total Expenses
Loss Before Equity in Losses of
Project Partnerships
Equity in Losses of Project Partnerships
Net Loss
Allocation of Net Loss:
Assignees
General Partners
Net Loss Per Beneficial Assignee Certificate
Number of Beneficial Assignee
Certificates Outstanding |
$ 3,690
1,884
- ----------
5,574
- -----------
19,362
10,915
2,005
0
- ----------
32,282
- ----------
(26,708)
0
- ----------
$ (26,708)
==========
(26,441)
(267)
- ----------
$ (26,708)
==========
$ (3.82)
==========
6,915
==========
|
$ 4,052
0
- ----------
4,052
- -----------
19,318
9,274
1,154
309
- ----------
30,055
- ----------
(26,003)
(3,740)
- ----------
$ (29,743)
==========
(29,446)
(297)
- ----------
$ (29,743)
==========
$ (4.26)
==========
6,915
==========
|
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 31,
(Unaudited)
|
SERIES 5 |
2004
- ---- |
2003
- ---- |
|
Revenues:
Interest Income
Other Income
Total Revenues
Expenses:
Asset Management Fee-General Partner
General and Administrative:
General Partner
Other
Amortization
Total Expenses
Loss Before Equity in Losses of
Project Partnerships
Equity in Losses of Project Partnerships
Net Loss
Allocation of Net Loss:
Assignees
General Partners
Net Loss Per Beneficial Assignee Certificate
Number of Beneficial Assignee
Certificates Outstanding |
$ 4,254
2,172
- ----------
6,426
- -----------
23,795
13,550
1,970
1,141
- ----------
40,456
- ----------
(34,030)
(2,970)
- ----------
$ (37,000)
==========
(36,630)
(370)
- ----------
$ (37,000)
==========
$ (4.25)
==========
8,616
==========
|
$ 5,054
750
- ----------
5,804
- -----------
23,870
11,513
1,846
1,202
- ----------
38,431
- ----------
(32,627)
(38,651)
- ----------
$ (71,278)
==========
(70,565)
(713)
- ----------
$ (71,278)
==========
$ (8.19)
==========
8,616
==========
|
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 31,
(Unaudited)
|
SERIES 6 |
2004
- ---- |
2003
- ---- |
|
Revenues:
Interest Income
Other Income
Total Revenues
Expenses:
Asset Management Fee-General Partner
General and Administrative:
General Partner
Other
Amortization
Total Expenses
Loss Before Equity in Losses of
Project Partnerships
Equity in Losses of Project Partnerships
Net Loss
Allocation of Net Loss:
Assignees
General Partners
Net Loss Per Beneficial Assignee Certificate
Number of Beneficial Assignee
Certificates Outstanding |
$ 5,193
10,174
- ---------
15,367
- ----------
26,238
14,302
2,475
2,101
- ---------
45,116
- ---------
(29,749)
(19,247)
- ---------
$ (48,996)
=========
(48,506)
(490)
- ---------
$ (48,996)
=========
$ (4.80)
=========
10,105
=========
|
$ 5,247
1,000
- ---------
6,247
- ----------
26,344
12,153
1,955
2,224
- ---------
42,676
- ---------
(36,429)
(80,244)
- ---------
$(116,673)
=========
(115,506)
(1,167)
- ---------
$(116,673)
=========
$ (11.43)
=========
10,105
=========
|
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 31,
(Unaudited)
|
TOTAL SERIES 2 - 6 |
2004
- ---- |
2003
- ---- |
|
Revenues:
Interest Income
Other Income
Total Revenues
Expenses:
Asset Management Fee-General Partner
General and Administrative:
General Partner
Other
Amortization
Total Expenses
Loss Before Equity in Losses of
Project Partnerships
Equity in Losses of Project Partnerships
Net Loss
Allocation of Net Loss:
Assignees
General Partners |
$ 19,123
23,312
- ----------
42,435
- -----------
102,107
55,703
9,458
3,416
- ----------
170,684
- ----------
(128,249)
(30,848)
- ----------
$(159,097)
==========
(157,506)
(1,591)
- ----------
$(159,097)
==========
|
$ 21,092
5,543
- ----------
26,635
- -----------
102,202
47,331
6,950
4,038
- ----------
160,521
- ----------
(133,886)
(131,377)
- ----------
$(265,263)
==========
(262,610)
(2,653)
- ----------
$(265,263)
==========
|
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED DECEMBER 31,
(Unaudited)
|
SERIES 2 |
2004
- ---- |
2003
- ---- |
|
Revenues:
Interest Income
Other Income
Total Revenues
Expenses:
Asset Management Fee-General Partner
General and Administrative:
General Partner
Other
Amortization
Total Expenses
Loss Before Equity in Losses of Project Partnerships
Equity in Losses of Project Partnerships
Net Loss
Allocation of Net Loss:
Assignees
General Partners
Net Loss Per Beneficial Assignee Certificate
Number of Beneficial Assignee Certificates Outstanding |
$ 8,458
7,647
- ----------
16,105
- -----------
50,868
23,576
9,246
522
- ----------
84,212
- ----------
(68,107)
(24,995)
- ----------
$ (93,102)
==========
(92,171)
(931)
- ----------
$ (93,102)
==========
$ (15.02)
===========
6,136
===========
|
$ 10,691
5,750
- ----------
16,441
- -----------
51,014
25,206
6,289
522
- ----------
83,031
- ----------
(66,590)
(24,498)
- ----------
$ (91,088)
==========
(90,177)
(911)
- ----------
$ (91,088)
==========
$ (14.70)
===========
6,136
===========
|
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED DECEMBER 31,
(Unaudited)
|
SERIES 3 |
2004
- ---- |
2003
- ---- |
|
Revenues:
Interest Income
Other Income
Total Revenues
Expenses:
Asset Management Fee-General Partner
General and Administrative:
General Partner
Other
Amortization
Total Expenses
Loss Before Equity in Losses of Project Partnerships
Equity in Losses of Project Partnerships
Net Loss
Allocation of Net Loss:
Assignees
General Partners
Net Loss Per Beneficial Assignee Certificate
Number of Beneficial Assignee Certificates Outstanding |
$ 7,553
14,382
- ---------
21,935
- ----------
47,268
24,648
7,917
0
- ---------
79,833
- ---------
(57,898)
0
- ---------
$ (57,898)
=========
(57,319)
(579)
- ---------
$ (57,898)
=========
$ (10.51)
=========
5,456
=========
|
$ 9,487
16,317
- ---------
25,804
- ----------
46,994
26,352
6,570
387
- ---------
80,303
- ---------
(54,499)
(4,682)
- ---------
$ (59,181)
=========
(58,589)
(592)
- ---------
$ (59,181)
=========
$ (10.74)
=========
5,456
=========
|
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED DECEMBER 31,
(Unaudited)
|
SERIES 4 |
2004
- ---- |
2003
- ---- |
|
Revenues:
Interest Income
Other Income
Total Revenues
Expenses:
Asset Management Fee-General Partner
General and Administrative:
General Partner
Other
Amortization
Total Expenses
Loss Before Equity in Losses of Project Partnerships
Equity in Losses of Project Partnerships
Net Loss
Allocation of Net Loss:
Assignees
General Partners
Net Loss Per Beneficial Assignee Certificate
Number of Beneficial Assignee Certificates Outstanding |
$ 9,707
12,521
- ----------
22,228
- -----------
58,086
31,078
9,934
0
- ----------
99,098
- ----------
(76,870)
0
- ----------
$ (76,870)
==========
(76,101)
(769)
- ----------
$ (76,870)
==========
$ (11.01)
==========
6,915
==========
|
$ 12,095
26,141
- ----------
38,236
- -----------
57,954
33,225
8,458
927
- ----------
100,564
- ----------
(62,328)
(11,354)
- ----------
$ (73,682)
==========
(72,945)
(737)
- ----------
$ (73,682)
==========
$ (10.55)
==========
6,915
==========
|
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED DECEMBER 31,
(Unaudited)
|
SERIES 5 |
2004
- ---- |
2003
- ---- |
|
Revenues:
Interest Income
Other Income
Total Revenues
Expenses:
Asset Management Fee-General Partner
General and Administrative:
General Partner
Other
Amortization
Total Expenses
Loss Before Equity in Losses of Project Partnerships
Equity in Losses of Project Partnerships
Net Loss
Allocation of Net Loss:
Assignees
General Partners
Net Loss Per Beneficial Assignee Certificate
Number of Beneficial Assignee Certificates Outstanding |
$ 11,813
18,732
- ----------
30,545
- -----------
71,385
38,580
12,067
3,423
- ----------
125,455
- ----------
(94,910)
(16,317)
- ----------
$ (111,227)
==========
(110,115)
(1,112)
- ----------
$ (111,227)
==========
$ (12.78)
==========
8,616
==========
|
$ 15,216
13,242
- ----------
28,458
- -----------
71,610
41,246
10,550
3,606
- ----------
127,012
- ----------
(98,554)
(96,938)
- ----------
$ (195,492)
==========
(193,537)
(1,955)
- ----------
$ (195,492)
==========
$ (22.46)
==========
8,616
==========
|
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED DECEMBER 31,
(Unaudited)
|
SERIES 6 |
2004
- ---- |
2003
- ---- |
|
Revenues:
Interest Income
Other Income
Total Revenues
Expenses:
Asset Management Fee-General Partner
General and Administrative:
General Partner
Other
Amortization
Total Expenses
Loss Before Equity in Losses of Project Partnerships
Equity in Losses of Project Partnerships
Net Loss
Allocation of Net Loss:
Assignees
General Partners
Net Loss Per Beneficial Assignee Certificate
Number of Beneficial Assignee Certificates Outstanding |
$ 13,954
27,127
- ----------
41,081
- -----------
78,714
40,723
13,077
6,303
- ----------
138,817
- ----------
(97,736)
(47,699)
- ----------
$ (145,435)
==========
(143,981)
(1,454)
- ----------
$ (145,435)
==========
$ (14.25)
==========
10,105
==========
|
$ 15,779
11,502
- ----------
27,281
- -----------
79,032
43,537
12,466
6,672
- ----------
141,707
- ----------
(114,426)
(155,495)
- ----------
$ (269,921)
==========
(267,222)
(2,699)
- ----------
$ (269,921)
==========
$ (26.44)
==========
10,105
==========
|
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED DECEMBER 31,
(Unaudited)
|
TOTAL SERIES 2 - 6 |
2004
- ---- |
2003
- ---- |
|
Revenues:
Interest Income
Other Income
Total Revenues
Expenses:
Asset Management Fee-General Partner
General and Administrative:
General Partner
Other
Amortization
Total Expenses
Loss Before Equity in Losses of
Project Partnerships
Equity in Losses of Project Partnerships
Net Loss
Allocation of Net Loss:
Assignees
General Partners |
$ 51,485
80,409
- ----------
131,894
- -----------
306,321
158,605
52,241
10,248
- ----------
527,415
- ----------
(395,521)
(89,011)
- ----------
$ (484,532)
==========
(479,687)
(4,845)
- ----------
$ (484,532)
===========
|
$ 63,268
72,952
- ----------
136,220
- -----------
306,604
169,566
44,333
12,114
- ----------
532,617
- ----------
(396,397)
(292,967)
- ----------
$ (689,364)
==========
(682,470)
(6,894)
- ----------
$ (689,364)
===========
|
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY (Deficit)
FOR THE NINE MONTHS ENDED DECEMBER 31, 2004 AND 2003
(Unaudited)
|
SERIES 2
|
Assignees
- --------- |
General
Partners
(Deficit)
- -------- |
Total
- ----- |
|
Balance at March 31, 2003
Net Loss
Balance at December 31, 2003
Balance at March 31, 2004
Net Loss
Balance at December 31, 2004 |
$ 61,063
(90,177)
- ----------
$ (29,114)
===========
$ (30,215)
(92,171)
- -----------
$ (122,386)
=========== |
$ (53,726)
(911)
- ----------
$ (54,637)
==========
$ (54,648)
(931)
- ----------
$ (55,579)
========== |
$ 7,337
(91,088)
- -----------
$ (83,751)
===========
$ (84,863)
(93,102)
- -----------
$ (177,965)
=========== |
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY (Deficit)
FOR THE NINE MONTHS ENDED DECEMBER 31, 2004 AND 2003
(Unaudited)
|
SERIES 3
|
Assignees
- --------- |
General
Partners
(Deficit)
- -------- |
Total
- ----- |
|
Balance at March 31, 2003
Net Loss
Balance at December 31, 2003
Balance at March 31, 2004
Net Loss
Balance at December 31, 2004
|
$ 52,562
(58,589)
- -----------
$ (6,027)
===========
$ (23,909)
(57,319)
- -----------
$ (81,228)
===========
|
$ (47,768)
(592)
- -----------
$ (48,360)
===========
$ (48,540)
(579)
- -----------
$ (49,119)
===========
|
$ 4,794
(59,181)
- ----------
$ (54,387)
===========
$ (72,449)
(57,898)
- -----------
$ (130,347)
===========
|
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY (Deficit)
FOR THE NINE MONTHS ENDED DECEMBER 31, 2004 AND 2003
(Unaudited)
|
SERIES 4
|
Assignees
- --------- |
General
Partners
(Deficit)
- -------- |
Total
- ----- |
|
Balance at March 31, 2003
Net Loss
Balance at December 31, 2003
Balance at March 31, 2004
Net Loss
Balance at December 31, 2004
|
$ 82,068
(72,945)
- -----------
$ 9,123
===========
$ (15,109)
(76,101)
- -----------
$ (91,210)
===========
|
$ (60,438)
(737)
- ----------
$ (61,175)
==========
$ (61,420)
(769)
- -----------
$ (62,189)
===========
|
$ 21,630
(73,682)
- ----------
$ (52,052)
==========
$ (76,529)
(76,870)
- ----------
$(153,399)
==========
|
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY (Deficit)
FOR THE NINE MONTHS ENDED DECEMBER 31, 2004 AND 2003
(Unaudited)
|
SERIES 5
|
Assignees
- --------- |
General
Partners
(Deficit)
- -------- |
Total
- ----- |
|
Balance at March 31, 2003
Net Loss
Balance at December 31, 2003
Balance at March 31, 2004
Net Loss
Balance at December 31, 2004 |
$ 601,187
(193,537)
- ------------
$ 407,650
============
$ 338,798
(110,115)
- ------------
$ 228,683
============
|
$ (70,315)
(1,955)
- -----------
$ (72,270)
===========
$ (72,965)
(1,112)
- -----------
$ (74,077)
===========
|
$ 530,872
(195,492)
- ------------
$ 335,380
============
$ 265,833
(111,227)
- ------------
$ 154,606
============
|
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY (Deficit)
FOR THE NINE MONTHS ENDED DECEMBER 31, 2004 AND 2003
(Unaudited)
|
SERIES 6
|
Assignees
- --------- |
General
Partners
(Deficit)
- -------- |
Total
- ----- |
|
Balance at March 31, 2003
Net Loss
Balance at December 31, 2003
Balance at March 31, 2004
Net Loss
Balance at December 31, 2004 |
$ 1,140,076
(267,222)
- -----------
$ 872,854
============
$ 848,257
(143,981)
- ------------
$ 704,276
============
|
$ (78,106)
(2,699)
- ----------
$ (80,805)
===========
$ (81,054)
(1,454)
- -----------
$ (82,508)
===========
|
$ 1,061,970
(269,921)
- -----------
$ 792,049
============
$ 767,203
(145,435)
- ------------
$ 621,768
============
|
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY (Deficit)
FOR THE NINE MONTHS ENDED DECEMBER 30, 2004 AND 2003
(Unaudited)
|
TOTAL SERIES 2 - 6
|
Assignees
--------- |
General
Partners
(Deficit)
- -------- |
Total
- ----- |
|
Balance at March 31, 2003
Net Loss
Balance at December 31, 2003
Balance at March 31, 2004
Net Loss
Balance at December 31, 2004 |
$ 1,936,956
(682,470)
- -----------
$ 1,254,486
============
$ 1,117,822
(479,687)
- ------------
$ 638,135
============
|
$ (310,353)
(6,894)
- ----------
$ (317,247)
===========
$ (318,627)
(4,845)
- -----------
$ (323,472)
===========
|
$ 1,626,603
(689,364)
- -----------
$ 937,239
============
$ 799,195
(484,532)
- ------------
$ 314,663
============
|
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED DECEMBER 31, 2004 AND 2003
(Unaudited)
|
SERIES 2
- -------- |
2004
- ---- |
2003
- ---- |
|
Cash Flows from Operating Activities:
Net Loss
Adjustments to Reconcile Net Loss to Net
Cash Used in Operating Activities:
Amortization
Accreted Interest Income on Investments
in Securities
Equity in Losses of Project Partnerships
Interest Income from Redemption of
Securities
Distributions Included in Other Income
Changes in Operating Assets and Liabilities:
Increase in Accounts Receivable
Increase in Payable to General Partners
Net Cash Used in Operating Activities
Cash Flows from Investing Activities:
Distributions Received from Project
Partnerships
Redemption of Investment in Securities
Net Cash Provided by Investing Activities
Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year |
$ (93,102)
522
(6,952)
24,995
37,583
(7,147)
0
28,558
- ----------
(15,543)
- ----------
8,748
23,715
- ----------
32,463
- ----------
16,920
221,084
- ----------
$ 238,004
==========
|
$ (91,088)
522
(9,824)
24,498
33,934
(5,750)
(1,957)
3,803
- ----------
(45,862)
- ----------
7,350
24,653
- ----------
32,003
- ----------
(13,859)
243,155
- ----------
$ 229,296
==========
|
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED DECEMBER 31, 2004 AND 2003
(Unaudited)
|
SERIES 3
- -------- |
2004
- ---- |
2003
- ---- |
|
Cash Flows from Operating Activities:
Net Loss
Adjustments to Reconcile Net Loss to Net
Cash Used in Operating Activities:
Amortization
Accreted Interest Income on Investments
in Securities
Equity in Losses of Project Partnerships
Interest Income from Redemption of Securities
Distributions Included in Other Income
Changes in Operating Assets and Liabilities:
Increase in Payable to General Partners
Net Cash Provided by (Used in) Operating Activities
Cash Flows from Investing Activities:
Distributions Received from Project
Partnerships
Redemption of Investment in Securities
Net Cash Provided by Investing Activities
Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year |
$ (57,898)
0
(6,184)
0
33,432
(14,382)
45,978
- ----------
946
- ----------
14,382
21,093
- ----------
35,475
- ----------
36,421
187,419
- ----------
$ 223,840
==========
|
$ (59,181)
387
(8,738)
4,682
30,183
(16,317)
9,178
- ----------
(39,806)
- ----------
16,317
21,928
- ----------
38,245
- ----------
(1,561)
201,450
- ----------
$ 199,889
==========
|
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED DECEMBER 31, 2004 AND 2003
(Unaudited)
|
SERIES 4
- -------- |
2004
- ---- |
2003
- ---- |
|
Cash Flows from Operating Activities:
Net Loss
Adjustments to Reconcile Net Loss to Net
Cash Used in Operating Activities:
Amortization
Accreted Interest Income on Investments
in Securities
Equity in Losses of Project Partnerships
Interest Income from Redemption of
Securities
Distributions Included in Other Income
Changes in Operating Assets and Liabilities:
Increase in Payable to General Partners
Net Cash Provided by (Used in) Operating Activities
Cash Flows from Investing Activities:
Distributions Received from Project
Partnerships
Redemption of Investment in Securities
Net Cash Provided by Investing Activities
Increase in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year |
$ (76,870)
0
(7,834)
0
42,355
(12,513)
56,529
- ----------
1,667
- ----------
12,513
26,723
- ----------
39,236
- ----------
40,903
273,485
- ----------
$ 314,388
==========
|
$ (73,682)
927
(11,070)
11,354
38,238
(26,141)
23,743
- ----------
(36,631)
- ----------
26,140
27,781
- ----------
53,921
- ----------
17,290
273,896
- ----------
$ 291,186
==========
|
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED DECEMBER 31, 2004 AND 2003
(Unaudited)
|
SERIES 5
- -------- |
2004
- ---- |
2003
- ---- |
|
Cash Flows from Operating Activities:
Net Loss
Adjustments to Reconcile Net Loss to Net
Cash Used in Operating Activities:
Amortization
Accreted Interest Income on Investments
in Securities
Equity in Losses of Project Partnerships
Interest Income from Redemption of Securities
Distributions Included in Other Income
Changes in Operating Assets and Liabilities:
(Decrease) Increase in Payable to General Partners
Net Cash Used in Operating Activities
Cash Flows from Investing Activities:
Distributions Received from Project
Partnerships
Redemption of Investment in Securities
Net Cash Provided by Investing Activities
Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year |
$ (111,227)
3,423
(9,764)
16,317
52,790
(18,732)
(92,686)
- ----------
(159,879)
- ----------
21,923
33,308
- ----------
55,231
- ----------
(104,648)
349,174
- ----------
$ 224,526
==========
|
$ (195,492)
3,606
(13,797)
96,938
47,658
(13,242)
6,205
- ----------
(68,124)
- ----------
17,505
34,624
- ----------
52,129
- ----------
(15,995)
385,402
- ----------
$ 369,407
==========
|
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED DECEMBER 31, 2004 AND 2003
(Unaudited)
|
SERIES 6
- ------- |
2004
- ---- |
2003
- ---- |
|
Cash Flows from Operating Activities:
Net Loss
Adjustments to Reconcile Net Loss to Net
Cash Used in Operating Activities:
Amortization
Accreted Interest Income on Investments
in Securities
Equity in Losses of Project Partnerships
Distributions Included in Other Income
Changes in Operating Assets and Liabilities:
Increase in Payable to General Partners
Net Cash Used in Operating Activities
Cash Flows from Investing Activities:
Distributions Received from Project
Partnerships
Net Cash Provided by Investing Activities
Decrease in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year |
$ (145,435)
6,303
(11,688)
47,699
(27,127)
76,718
- ----------
(53,530)
- ----------
28,982
- ----------
28,982
- ----------
(24,548)
401,535
- ----------
$ 376,987
==========
|
$ (269,921)
6,672
(14,444)
155,495
(11,502)
16,660
- ----------
(117,040)
- ----------
13,941
- ----------
13,941
- ----------
(103,099)
447,585
- ----------
$ 344,486
==========
|
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED DECEMBER 31, 2004 AND 2003
(Unaudited)
|
TOTAL SERIES 2 - 6
- -------- |
2004
- ---- |
2003
- ---- |
|
Cash Flows from Operating Activities:
Net Loss
Adjustments to Reconcile Net Loss to Net
Cash Used in Operating Activities:
Amortization
Accreted Interest Income on Investments
in Securities
Equity in Losses of Project Partnerships
Interest Income from Redemption of Securities
Distributions Included in Other Income
Changes in Operating Assets and Liabilities:
Increase in Accounts Receivable
Increase in Payable to General Partners
Net Cash Used in Operating Activities
Cash Flows from Investing Activities:
Distributions Received from Project
Partnerships
Redemption of Investment in Securities
Net Cash Provided by Investing Activities
Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year |
$ (484,532)
10,248
(42,422)
89,011
166,160
(79,901)
0
115,097
- ----------
(226,339)
- ----------
86,548
104,839
- ----------
191,387
- ----------
(34,952)
1,432,697
- ----------
$ 1,397,745
==========
|
$ (689,364)
12,114
(57,873)
292,967
150,013
(72,952)
(1,957)
59,589
- ----------
(307,463)
- ----------
81,253
108,986
- ----------
190,239
- ----------
(117,224)
1,551,488
- ----------
$ 1,434,264
==========
|
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
DECEMBER 31, 2004
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 December 31, 2004, 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 December 31, 2004. 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 sole 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 is shown as amortization expense 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.
Gateway reviews its investment in the Project Partnerships to determine if there has been any permanent impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable. If the sum of the expected future cash flows is less than the carrying amount of the investment, Gateway recognizes an impairment loss. No impairment loss has been recognized in the accompanying financial statements.
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.
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.
Reclassifications
For comparability, the 2003 figures have been reclassified, where appropriate, to conform with the financial statement presentation used in 2004.
Basis of Preparation
The unaudited financial statements presented herein have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles. These statements should be read in conjunction with the financial statements and notes thereto included with the Partnership's Form 10-K for the year ended March 31, 2004. In the opinion of management these financial statements include adjustments, consisting only of normal recurring adjustments, necessary to fairly summarize the Partnership's financial position and results of operations. The results of operations for the periods may not be indicative of the results to be expected for the year.
Recent Accounting Pronouncements
In January 2003, the FASB issued FASB Interpretation No. 46 ("FIN46"), "Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51." FIN46 requires certain variable interest entities to be consolidated by the primary beneficiary of the entity if the equity investors in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. FIN46 is effective for all new variable interest entities created or acquired after January 31, 2003. For variable interest entities created or acquired prior to February 1, 2003, the provisions of FIN46 must be applied for the first interim or annual period ending after December 15, 2004. Gateway has evaluated the effect of the adoption of FIN46 and has determined that consolidation is not required.
NOTE 3 - INVESTMENT IN SECURITIES:
The December 31, 2004 Balance Sheet includes Investment in Securities consisting of U.S. Government Security Strips which represents their cost, plus accreted interest income of $78,125 for Series 2, $69,491 for Series 3, $88,038 for Series 4, $109,728 for Series 5 and $130,705 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.
| |
Estimated Market
Value
- ----------------- |
Cost Plus Accreted
Interest
- ----------------- |
Gross Unrealized
Gains and (Losses)
- ---------------- |
|
Series 2 |
$ 127,035 |
$ 122,503 |
$ 4,532 |
|
Series 3 |
112,959 |
108,964 |
3,995 |
|
Series 4 |
143,164 |
138,046 |
5,118 |
|
Series 5 |
178,380 |
172,056 |
6,324 |
|
Series 6 |
229,259 |
219,643 |
9,616 |
As of December 31, 2004, the cost and accreted interest of debt securities by contractual maturities is as follows:
| |
Series 2
- -------- |
Series 3
- -------- |
Series 4
- -------- |
|
Due within 1 year |
$ 62,374 |
$ 55,480 |
$ 70,288 |
|
After 1 year through 5 years |
60,129 |
53,484 |
67,758 |
|
Total Amount Carried on
Balance Sheet |
---------
$ 122,503
========== |
---------
$ 108,964
========== |
---------
$ 138,046
========== |
| |
Series 5
- -------- |
Series 6
- -------- |
Total
- -------- |
|
Due within 1 year |
$ 87,604 |
$ 74,893 |
$ 350,639 |
|
After 1 year through 5 years |
84,452 |
144,750 |
410,573 |
|
Total Amount Carried on
Balance Sheet |
---------
$ 172,056
========== |
---------
$ 219,643
========== |
---------
$ 761,212
========== |
NOTE 4 - RELATED PARTY TRANSACTIONS:
The Payable to General Partners primarily represents the asset management fees owed to the General Partners at the end of the period. It is unsecured, due on demand and, in accordance with the limited partnership agreement, non-interest bearing. Within the next 12 months, the Managing General Partner does not intend to demand payment on the portion of Asset Management Fees payable classified as long-term on the Balance Sheet.
For the nine months ended December 31, 2004 and 2003 the General Partners and affiliates are entitled to compensation and reimbursement for costs and expenses incurred by Gateway as follows:
Asset Management Fee - The Managing General Partner is entitled to be paid an annual asset management fee equal to 0.25% of the aggregate cost of Gateway's interest in the projects owned by the Project Partnerships. The asset management fee will be paid only after all other expenses of Gateway have been paid. These fees are included in the Statements of Operations.
2004 2003
------- ------
Series 2 $ 50,868 $ 51,014
Series 3 47,268 46,994
Series 4 58,086 57,954
Series 5 71,385 71,610
Series 6 78,714 79,032
--------- ---------
Total $ 306,321 $ 306,604
========= =========
General and Administrative Expenses - The Managing General Partner is reimbursed for general and administrative expenses of Gateway on an accountable basis. This expense is included in the Statements of Operations.
2004 2003
------- ------
Series 2 $ 23,576 $ 25,206
Series 3 24,648 26,352
Series 4 31,078 33,225
Series 5 38,580 41,246
Series 6 40,723 43,537
--------- -------
Total $ 158,605 $ 169,566
========= =========
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS:
As of December 31, 2004, the Partnership had acquired a 99% interest in the profits, losses and tax credits as a limited partner in 148 Project Partnerships for the Series which own and operate government assisted multi-family housing complexes (Series 2 - 22,Series 3 - 23, Series 4 - 29, Series 5 - 36 and Series
6 - 38).
Cash flows from operations are allocated according to each partnership agreement. Upon dissolution proceeds will be distributed according to each partnership agreement.
The following is a summary of Investments in Project Partnerships as of:
|
SERIES 2 |
DECEMBER 31, 2004
- ---------------- |
MARCH 31, 2004
- ------------- |
|
Capital Contributions to Project Partner-
ships and purchase price paid for limited
partner interests in Project Partnerships
Cumulative equity in losses of Project
Partnerships (1)
Cumulative distributions received from
Project Partnerships
Investment in Project Partnerships before
Adjustment
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses
Accumulated amortization of acquisition
fees and expenses
Investments in Project Partnerships |
$ 4,524,678
(4,724,753)
(86,006)
- -----------
(286,081)
390,838
(84,276)
- -----------
$ 20,481
============
|
$ 4,524,678
(4,699,758)
(84,405)
- -----------
(259,485)
390,838
(83,756)
- -----------
$ 47,597
============
|
(1) In accordance with the Partnership's accounting policy to not carry Investments in Project Partnerships below zero, cumulative suspended losses of $4,742,022 for the period ended December 31, 2004 and cumulative suspended losses of $4,358,678,for the year ended March 31, 2004 are not included.
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
The following is a summary of Investments in Project Partnerships as of:
|
SERIES 3 |
DECEMBER 31, 2004
- ---------------- |
MARCH 31, 2004
- ------------- |
|
Capital Contributions to Project Partner-
ships and purchase price paid for limited
partner interests in Project Partnerships
Cumulative equity in losses of Project
Partnerships (1)
Cumulative distributions received from
Project Partnerships
Investment in Project Partnerships before
Adjustment
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses
Accumulated amortization of acquisition
fees and expenses
Investments in Project Partnerships |
$ 3,888,713
(4,133,478)
(164,417)
- ---------
(409,182)
491,746
(82,564)
- ----------
$ 0
===========
|
$ 3,888,713
(4,133,478)
(164,417)
- ----------
(409,182)
491,746
(82,564)
- ----------
$ 0
===========
|
(1) In accordance with the Partnership's accounting policy to not carry Investments in Project Partnerships below zero, cumulative suspended losses of $5,498,198 for the period ended December 31, 2004 and cumulative suspended losses of $5,123,116 for the year ended March 31, 2004 are not included.
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
The following is a summary of Investments in Project Partnerships as of:
|
SERIES 4 |
DECEMBER 31, 2004
- --------------- |
MARCH 31, 2004
- ------------- |
|
Capital Contributions to Project Partner-
ships and purchase price paid for limited
partner interests in Project Partnerships
Cumulative equity in losses of Project
Partnerships (1)
Cumulative distributions received from
Project Partnerships
Investment in Project Partnerships before
Adjustment
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses
Accumulated amortization of acquisition
fees and expenses
Investments in Project Partnerships |
$ 4,952,519
(5,268,905)
(124,819)
- -----------
(441,205)
562,967
(121,762)
- ----------
$ 0
===========
|
$ 4,952,519
(5,268,905)
(124,819)
- ----------
(441,205)
562,967
(121,762)
- ----------
$ 0
===========
|
(1) In accordance with the Partnership's accounting policy to not carry Investments in Project Partnerships below zero, cumulative suspended losses of $4,533,091 for the period ended December 31, 2004 and cumulative suspended losses of $4,113,695 for the year ended March 31, 2004 are not included.
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
The following is a summary of Investments in Project Partnerships as of:
|
SERIES 5 |
DECEMBER 31, 2004
- ---------------- |
MARCH 31, 2004
- ------------- |
|
Capital Contributions to Project Partner-
ships and purchase price paid for limited
partner interests in Project Partnerships
Cumulative equity in losses of Project
Partnerships (1)
Cumulative distributions received from
Project Partnerships
Investment in Project Partnerships before
Adjustment
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses
Accumulated amortization of acquisition
fees and expenses
Investments in Project Partnerships |
$ 6,164,472
(6,264,145)
(356,805)
- ----------
(456,478)
650,837
(144,786)
- ----------
$ 49,573
===========
|
$ 6,164,472
(6,247,828)
(196,488)
- ----------
(279,844)
650,837
(141,363)
- ----------
$ 229,630
===========
|
(1) In accordance with the Partnership's accounting policy to not carry Investments in Project Partnerships below zero, cumulative suspended losses of $5,413,213 for the period ended December 31, 2004 and cumulative suspended losses of $4,928,362 for the year ended March 31, 2004 are not included.
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
The following is a summary of Investments in Project Partnerships as of:
|
SERIES 6 |
DECEMBER 31, 2004
- ---------------- |
MARCH 31, 2004
- -------------- |
|
Capital Contributions to Project Partner-
ships and purchase price paid for limited
partner interests in Project Partnerships
Cumulative equity in losses of Project
Partnerships (1)
Cumulative distributions received from
Project Partnerships
Investment in Project Partnerships before
Adjustment
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses
Accumulated amortization of acquisition
fees and expenses
Investments in Project Partnerships |
$ 7,462,215
(7,026,740)
(215,246)
- ----------
220,229
785,179
(202,777)
- ----------
$ 802,631
===========
|
$ 7,462,215
(6,979,041)
(213,391)
- ----------
269,783
785,179
(196,474)
- ----------
$ 858,488
===========
|
(1) In accordance with the Partnership's accounting policy to not carry Investments in Project Partnerships below zero, cumulative suspended losses of $3,674,248 for the period ended December 31, 2004 and cumulative suspended losses of $3,303,141 for the year ended March 31, 2004 are not included.
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
The following is a summary of Investments in Project Partnerships as of:
|
TOTAL SERIES 2 - 6 |
DECEMBER 31, 2004
- ---------------- |
MARCH 31, 2004
- -------------- |
|
Capital Contributions to Project Partner-
ships and purchase price paid for limited
partner interests in Project Partnerships
Cumulative equity in losses of Project
Partnerships (1)
Cumulative distributions received from
Project Partnerships
Investment in Project Partnerships before
Adjustment
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses
Accumulated amortization of acquisition
fees and expenses
Investments in Project Partnerships |
$ 26,992,597
(27,418,021)
(947,293)
- ----------
(1,372,717)
2,881,567
(636,165)
- ----------
$ 872,685
===========
|
$ 26,992,597
(27,329,010)
(783,520)
- -----------
(1,119,933)
2,881,567
(625,919)
- -----------
$ 1,135,715
===========
|
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with the Partnership's policy of presenting the financial information of the Project Partnerships on a three month lag, below is the summarized financial information for the Series' Project Partnerships as of September 30, of each year:
|
SEPTEMBER 30, |
|
SERIES 2
|
2004
- ---- |
2003
- ---- |
|