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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, 1998
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: (813)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
Park III of this Form 10-K or any amendment to this Form 10-K. X
Number of Units
Title of Each Class March 31, 1998
Beneficial Assignee Certificates 2,256
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, 1998, 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, 1998. 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, 1998, 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, 1998 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 Rural
Economic and Community Development) ("RECD") 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 RECD 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, 1998 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 12.9% of the Series'
total assets, Series 3 is 11.3%, Series 4 is 6.9%, Series 5 is 11.7% and
Series 6 is 11.6%. The following table provides certain summary
information regarding the Project Partnerships in which Gateway had an
interest as of December 31, 1997:
SERIES 2
OCCU-
LOCATION OF # OF DATE PROPERTY PANCY
PARTNERSHIP PROPERTY UNIT ACQUIRED COST RATE
- ----------- ----------- ----- ------- -------- -----
Claxton Elderly Claxton, GA 24 9/90 $ 799,538 100%
Deerfield II Douglas, GA 24 9/90 854,562 83%
Hartwell Family Hartwell, GA 24 9/90 859,698 96%
Cherrytree Apts. Albion, PA 33 9/90 1,439,636 94%
Springwood Apts. Westfield, NY 32 9/90 1,510,355 100%
Lakeshore Apts. Tuskegee, AL 34 9/90 1,267,543 94%
Lewiston Lewiston, NY 25 10/90 1,233,935 100%
Charleston Charleston, AR 32 9/90 1,076,098 97%
Sallisaw II Sallisaw, OK 47 9/90 1,517,589 96%
Pocola Pocola, OK 36 10/90 1,245,870 89%
Inverness Club Inverness, FL 72 9/90 3,496,824 90%
Pearson Elderly Pearson, GA 25 9/90 781,460 92%
Richland Elderly Richland, GA 33 9/90 1,057,871 91%
Lake Park Lake Park, GA 48 9/90 1,794,542 96%
Woodland Terrace Waynesboro, GA 30 9/90 1,080,083 93%
Mt. Vernon Elderly Mt. Vernon, GA 21 9/90 700,935 95%
Lakeland Elderly Lakeland, GA 29 9/90 955,815 100%
Prairie Apartments Eagle Butte, SD 21 10/90 1,253,358 100%
Sylacauga Heritage Sylacauga, AL 44 12/90 1,750,941 98%
Manchester Housing Manchester, GA 49 1/91 1,779,793 90%
Durango C.W.W. Durango, CO 24 1/91 1,287,618 100%
Columbus Seniors Columbus, KS 16 5/92 509,315 94%
-----------
723 $28,253,379
==== ===========
The aggregate average effective rental per unit is $3,258 per year ($272
per month).
Inverness Club Ltd.'s fixed asset total is 12.3% 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 90% and its average effective annual
rental per unit was $4,506 ($375 per month) on December 31, 1997. 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, 1997 the real estate taxes were $69,705.
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 98%
Nowata Properties Oolagah, OK 32 8/90 1,148,484 94%
Waldron Properties Waldron, AR 24 9/90 860,273 92%
Roland II Roland, OK 52 10/90 1,804,010 96%
Stilwell Stilwell, OK 48 10/90 1,597,701 96%
Birchwood Apts. Pierre, SD 24 9/90 1,024,326 92%
Hornellsville Arkport, NY 24 9/90 1,097,600 100%
Sunchase II Watertown, SD 41 9/90 1,327,524 95%
CE McKinley II Rising Sun, MD 16 9/90 792,528 94%
Weston Apartments Weston, AL 10 11/90 339,949 90%
Countrywood Apts. Centreville, AL 40 11/90 1,519,764 98%
Wildwood Apts. Pineville, LA 28 11/90 1,084,325 89%
Hancock Hawesville, KY 12 12/90 440,425 100%
Hopkins Madisonville, KY 24 12/90 927,256 100%
Elkhart Apts. Elkhart, TX 54 1/91 1,527,684 83%
Bryan Senior Bryan, OH 40 1/91 1,185,879 97%
Brubaker Square New Carlisle, OH 38 1/91 1,452,506 95%
Southwood Savannah, TN 44 1/91 1,792,293 89%
Villa Allegra Celina, OH 32 1/91 1,133,557 97%
Belmont Senior Cynthiana, KY 24 1/91 935,143 96%
Heritage Villas Helena, GA 25 3/91 823,974 92%
Logansport Seniors Logansport, LA 32 3/91 1,086,394 100%
768 27,434,846
=== ===========
The average effective rental per unit is $2,963 per year ($247 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 $ 800,927 100%
Seneca Apartments Seneca, MO 24 2/91 719,101 92%
Eudora Senior Eudora, KS 36 3/91 1,257,482 97%
Westville Westville, OK 36 3/91 1,101,686 100%
Wellsville Senior Wellsville, KS 24 3/91 810,970 88%
Stilwell II Stilwell, OK 52 3/91 1,657,974 98%
Spring Hill Sr. Spring Hill, KS 24 3/91 1,036,369 96%
Smithfield Smithfield, UT 40 4/91 1,841,135 100%
Tarpon Heights Galliano, LA 48 4/91 1,493,434 100%
Oaks Apartments Oakdale, LA 32 4/91 1,032,509 100%
Wynnwood Common Fairchance, PA 34 4/91 1,665,785 100%
Chestnut Howard, SD 24 5/91 1,052,385 42%
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 6/91 991,966 100%
Sonora Seniors Sonora, TX 32 6/91 1,013,315 100%
Ozona Seniors Ozona, TX 24 6/91 759,843 100%
Fredericksburg Sr. Fredericksburg, TX 48 6/91 1,402,563 100%
St. Joseph St. Joseph, IL 24 6/91 976,046 96%
Courtyard Huron, SD 21 6/91 845,366 100%
Rural Development Ashland, ME 25 6/91 1,422,482 96%
Jasper Villas Jasper, AR 25 6/91 1,101,517 96%
Edmonton Senior Edmonton, KY 24 6/91 906,714 96%
Jonesville Manor Jonesville, VA 40 6/91 1,717,313 100%
Norton Green Norton, VA 40 6/91 1,694,371 100%
Owingsville Senior Owingsville, KY 22 8/91 848,044 100%
Timpson Seniors Timpson, TX 28 8/91 815,916 100%
Piedmont Barnesville, GA 36 8/91 1,289,047 92%
S.F. Arkansas City Arkansas City, KS 12 8/91 412,028 92%
879 32,609,749
==== ==========
The average effective rental per unit is $3,158 per year ($263 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 $ 1,517,995 95%
Effingham Effingham, IL 24 8/91 980,617 100%
S.F. Winfield Winfield, KS 12 8/91 400,920 100%
S.F.Medicine Lodge Medicine Lodge,KS 16 8/91 564,559 88%
S.F. Ottawa Ottawa, KS 24 8/91 707,449 100%
S.F. Concordia Concordia, KS 20 8/91 686,962 100%
Highland View Elgin, OR 24 9/91 877,808 100%
Carrollton Club Carrollton, GA 78 9/91 3,217,901 96%
Scarlett Oaks Lexington, SC 40 9/91 1,674,646 100%
Brooks Hill Ellijay, GA 44 9/91 1,748,738 95%
Greensboro Greensboro, GA 24 9/91 866,259 96%
Greensboro II Greensboro, GA 33 9/91 1,093,149 100%
Pine Terrace Wrightsville, GA 25 9/91 885,185 92%
Shellman Shellman, GA 27 9/91 905,064 100%
Blackshear Cordele, GA 46 9/91 1,592,318 98%
Crisp Properties Cordele, GA 31 9/91 1,124,037 97%
Crawford Crawford, GA 25 9/91 907,712 88%
Yorkshire Wagoner, OK 60 9/91 2,540,966 98%
Woodcrest South Boston, VA 40 9/91 1,574,776 93%
Fox Ridge Russellville, AL 24 9/91 889,941 100%
Redmont II Red Bay, AL 24 9/91 840,596 96%
Clayton Clayton, OK 24 9/91 871,530 96%
Alma Alma, AR 24 9/91 957,710 96%
Pemberton Village Hiawatha, KS 24 9/91 766,979 100%
Magic Circle Eureka, KS 24 9/91 776,127 100%
Spring Hill Spring Hill, KS 36 9/91 1,449,378 83%
Menard Retirement Menard, TX 24 9/91 761,873 96%
Wallis Housing Wallis, TX 24 9/91 574,824 96%
Zapata Housing Zapata, TX 40 9/91 1,238,405 93%
Mill Creek Grove, OK 60 11/91 1,741,669 98%
Portland II Portland, IN 20 11/91 721,098 100%
Georgetown Georgetown, OH 24 11/91 895,370 100%
Cloverdale Cloverdale, IN 24 1/92 939,030 96%
So. Timber Ridge Chandler, TX 44 1/92 1,280,424 100%
Pineville Pineville, MO 12 5/92 390,330 83%
Ravenwood Americus, GA 24 1/94 887,896 100%
1106 39,850,241
=== ===========
The average effective rental per unit is $3,093 per year ($258 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 $ 1,104,499 96%
Shannon O'Neill, NE 16 11/91 646,813 100%
Carthage Carthage, MO 24 1/92 696,667 96%
Mountain Crest Enterprise, OR 39 3/92 1,231,378 100%
Coal City Coal City, IL 24 3/92 1,198,636 96%
Blacksburg Terrace Blacksburg, SC 32 4/92 1,323,070 100%
Frazer Place Smyrna, DE 30 4/92 1,673,104 97%
Ehrhardt Ehrhardt, SC 16 4/92 685,776 100%
Sinton Sinton, TX 32 4/92 1,039,306 100%
Frankston Frankston, TX 24 4/92 674,981 100%
Flagler Beach Flagler Beach, FL 43 5/92 1,653,116 96%
Oak Ridge Williamsburg, KY 24 5/92 1,037,966 83%
Monett Monett, MO 32 5/92 957,761 100%
Arma Arma, KS 28 5/92 866,953 100%
Southwest City Southwest City, MO 12 5/92 386,336 100%
Meadowcrest Luverne, AL 32 6/92 1,203,738 100%
Parsons Parsons, KS 48 7/92 1,532,968 100%
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 63%
Pleasant Hill Somerset, KY 24 7/92 954,810 96%
Winter Park Mitchell, SD 24 7/92 1,244,473 96%
Cornell Watertown, SD 24 7/92 1,073,025 96%
Heritage Drive So. Jacksonville, TX 40 1/92 1,198,589 100%
Brodhead Brodhead, KY 24 7/92 954,068 88%
Mt. Village Mt. Vernon, KY 24 7/92 939,596 100%
Hazlehurst Hazlehurst, MS 32 8/92 1,181,404 100%
Sunrise Yankton, SD 33 8/92 1,362,501 100%
Stony Creek Hooversville, PA 32 8/92 1,650,995 91%
Logan Place Logan, OH 40 9/92 1,518,626 98%
Haines Haines, AK 32 8/92 3,030,343 88%
Maple Wood Barbourville, KY 24 8/92 1,007,744 100%
Summerhill Gassville, AR 28 9/92 841,241 100%
Dorchester St. George, SC 12 9/92 562,272 100%
Lancaster Mountain View, AR 33 9/92 1,381,329 100%
Autumn Village Harrison, AR 16 7/92 615,604 100%
Hardy Hardy, AR 24 7/92 931,560 96%
Dawson Dawson, GA 40 11/93 1,474,973 95%
1086 43,865,869
==== ===========
The average effective rental per unit is $3,333 per year ($278 per month).
Item 2 - Properties (continued):
A summary of the cost of the properties at December 31, 1997, 1996 and 1995
is as follows:
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
=========== =========== ============
12/31/96
SERIES 2 SERIES 3 SERIES 4
Land $ 1,012,180 $ 985,546 $ 1,188,112
Land Improvements 110,157 370,083 120,607
Buildings 26,256,812 24,975,936 29,950,050
Furniture and Fixtures 819,983 1,084,398 1,305,988
Construction in Progress 0 0 0
----------- ----------- -----------
Properties, at Cost 28,199,132 27,415,963 32,564,757
Less: Accum.Depreciation 5,649,101 7,624,569 6,264,280
----------- ----------- -----------
Properties, Net $22,550,031 $19,791,394 $26,300,477
=========== =========== ===========
SERIES 5 SERIES 6 TOTAL
Land $ 1,461,156 $ 1,779,755 $ 6,426,749
Land Improvements 71,068 449,010 1,120,925
Buildings 36,811,454 39,702,357 157,696,609
Furniture and Fixtures 1,468,845 1,821,854 6,501,068
Construction in Progress 0 0 0
----------- ----------- ------------
Properties, at Cost 39,812,523 43,752,976 171,745,351
Less: Accum.Depreciation 6,839,405 6,668,399 33,045,754
----------- ----------- ------------
Properties, Net $32,973,118 $37,084,577 $138,699,597
=========== =========== ===========
12/31/95
SERIES 2 SERIES 3 SERIES 4
Land $ 1,012,180 $ 985,546 $ 1,188,112
Land Improvements 110,157 368,152 119,812
Buildings 26,169,333 24,933,711 29,938,890
Furniture and Fixtures 860,825 1,077,495 1,257,453
Construction in Progress 0 0 0
----------- ----------- -----------
Properties, at Cost 28,152,495 27,364,904 32,504,267
Less: Accum.Depreciation 4,712,310 6,707,453 5,226,315
----------- ----------- -----------
Properties, Net $23,440,185 $20,657,451 $27,277,952
=========== =========== ===========
SERIES 5 SERIES 6 TOTAL
Land $ 1,460,628 $ 1,779,755 $ 6,426,221
Land Improvements 71,068 443,074 1,112,263
Buildings 36,787,328 39,683,190 157,512,452
Furniture and Fixtures 1,458,530 1,774,248 6,428,551
Construction in Progress 0 0 0
----------- ----------- ------------
Properties, at Cost 39,777,554 43,680,267 171,479,487
Less: Accum.Depreciation 5,473,574 5,205,351 27,325,003
----------- ----------- ------------
Properties, Net $34,303,980 $38,474,916 $144,154,484
=========== =========== ============
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, 1998, 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, 1998
Beneficial Assignee Certificates 2,256
General Partner Interest 2
Item 6. Selected Financial Data
FOR THE YEARS ENDED MARCH 31,:
SERIES 2 1998 1997 1996 1995 1994
---- ---- ---- ---- ----
Total
Revenues $ 41,272 $ 36,217 $ 36,532 $ 34,922 $ 34,150
Net Loss (337,693) (582,633) (591,355) (756,064) (742,342)
Equity in
Losses of
Project
Partnerships (288,412) (527,175) (537,111) (699,847) (683,315)
Total Assets 1,045,569 1,345,931 1,893,838 2,449,615 3,164,145
Investments
In Project
Partnerships 510,805 814,883 1,350,923 1,901,609 2,623,688
Per BAC: (A)
Tax Credits 166.40 166.40 166.30 166.30 166.30
Portfolio
Income 13.10 12.10 11.20 9.70 8.40
Passive Loss (147.90) (141.90) (126.10) (131.30) (144.50)
Net Loss (54.48) (94.00) (95.41) (121.99) (119.77)
FOR THE YEARS ENDED MARCH 31,:
SERIES 3 1998 1997 1996 1995 1994
---- ---- ---- ---- ----
Total
Revenues $ 65,111 $ 31,128 $ 31,179 $ 29,718 $ 29,691
Net Loss (221,508) (341,282) (470,880) (640,203) (750,197)
Equity in
Losses of
Project
Partnerships (198,168) (285,853) (421,996) (579,907) (687,550)
Total Assets 846,210 1,043,223 1,362,838 1,805,494 2,409,790
Investments
In Project
Partnerships 378,000 584,189 901,663 1,348,162 1,960,485
Per BAC: (A)
Tax Credits 176.60 176.40 176.65 175.12 176.65
Portfolio
Income 20.10 13.90 14.00 12.00 10.80
Passive Loss (154.10) (146.40) (143.30) (135.00) (139.60)
Net Loss (40.19) (61.93) (85.44) (116.17) (136.12)
Item 6. Selected Financial Data
FOR THE YEARS ENDED MARCH 31,:
SERIES 4 1998 1997 1996 1995 1994
---- ---- ---- ---- ----
Total
Revenues $ 44,309 $ 41,455 $ 42,246 $ 40,437 $ 39,361
Net Loss (485,415) (696,010) (705,639) (758,528) (705,387)
Equity in
Losses of
Project
Partnerships (421,886) (635,178) (644,865) (694,726) (637,858)
Total Assets 1,600,054 2,048,377 2,711,102 3,379,586 4,094,719
Investments
In Project
Partnerships 981,823 1,423,319 2,073,510 2,737,516 3,455,906
Per BAC: (A)
Tax Credits 168.60 168.60 168.60 168.30 168.70
Portfolio
Income 13.70 13.20 12.90 10.30 8.80
Passive Loss (157.20) (149.30) (142.30) (134.60) (136.20)
Net Loss (69.50) (99.65) (101.02) (108.60) (100.99)
FOR THE YEARS ENDED MARCH 31,:
SERIES 5 1998 1997 1996 1995 1994
---- ---- ---- ---- ----
Total
Revenues $ 54,417 $ 52,985 $ 54,273 $ 57,635 $ 55,260
Net Loss (813,502) (997,362) (781,436) (817,018) (1,036,710)
Equity in
Losses of
Project
Partnerships (728,729) (911,965) (700,127) (739,296) (953,919)
Total Assets 2,306,065 3,078,890 4,041,606 4,790,100 5,666,886
Investments
In Project
Partnerships 1,500,087 2,268,632 3,211,868 3,950,979 4,711,095
Per BAC: (A)
Tax Credits 164.60 164.70 164.60 162.20 155.60
Portfolio
Income 14.10 13.10 12.50 10.90 8.60
Passive Loss (141.60) (137.80) (124.30) (108.20) (145.10)
Net Loss (93.47) (114.60) (89.79) (93.88) (119.12)
Item 6. Selected Financial Data
FOR THE YEARS ENDED MARCH 31,:
SERIES 6 1998 1997 1996 1995 1994
---- ---- ---- ---- ----
Total
Revenues $ 49,707 $ 47,326 $ 48,446 $ 48,235 $ 52,737
Net Loss (870,137) (915,827) (821,024) (987,087) (1,190,078)
Equity in
Losses of
Project
Partnerships (761,923) (805,310) (710,986) (875,023) (1,080,864)
Total Assets 3,930,665 4,748,789 5,612,685 6,375,252 7,287,730
Investments
In Project
Partnerships 3,102,793 3,912,526 4,769,625 5,525,062 6,470,949
Per BAC: (A)
Tax Credits 165.50 165.40 165.40 161.70 150.20
Portfolio
Income 12.90 11.30 10.70 7.70 8.50
Passive Loss (124.30) (122.10) (117.30) (119.80) (137.20)
Net Loss (85.25) (89.72) (80.44) (96.71) (116.59)
(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, 1998, March 31, 1997 and March 31, 1996. The General and
Administrative expenses - General Partner and General and Administrative
expenses - Other for the year ended March 31, 1998 are comparable to March
31, 1997 and March 31, 1996.
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, 1998, 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 96% at December 31, 1997.
Equity in Losses of Project Partnerships decreased from $527,175 for the
year ended March 31, 1997 to $288,412 for the year ended March 31, 1998.
This decrease was due to additional suspended losses of $420,416 as these
losses would reduce the investment in certain Project Partnerships below
zero. Equity in Losses of Project Partnerships of $527,175 for the year
ended March 31, 1997 were comparable to the year ended March 31, 1996. 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 $959,697, $939,525 and $935,616 for the
years ended December 31, 1995, 1996, and 1997 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, 1998, the Series had $160,851 of short-term investments (Cash
and Cash Equivalents). It also had $373,913 in Zero Coupon Treasuries with
annual maturities providing $47,508 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
$337,693 for the year ending March 31, 1998. However, after adjusting for
Equity in Losses of Project Partnerships of $288,412 and the changes in
operating assets and liabilities, net cash used in operating activities was
$26,268, of which $33,989 was the Asset Management Fee actually paid. Cash
provided by investing activities totaled $48,588, consisting of $16,493 in
cash distributions from the Project Partnerships and $32,065 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, 1998 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 95% as of December 31, 1997.
Equity in Losses of Project Partnerships decreased from $421,996 for the
year ended March 31, 1996 to $285,853 for the year ended March 31, 1997 and
to $198,168 for the year ended March 31, 1998. These decreases were due to
suspended losses of $190,864, $343,378 and 463,688 for the years ended
March 31, 1996, 1997, and 1998 respectively. These losses would reduce the
investment in certain Project Partnerships below zero. (These Project
Partnerships reported depreciation and amortization of $940,084, $925,984
and $923,055 for the years ended December 31, 1995, 1996 and 1997,
respectively.) Overall, management believes these Project Partnerships
are operating as expected and are generating tax credits which meet
projections.
At March 31, 1998, the Series had $135,622 of short-term investments (Cash
and Cash Equivalents). It also had $332,588 in Zero Coupon Treasuries with
annual maturities providing $42,244 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
$221,508 for the year ended March 31, 1998. However, after adjusting for
Equity in Losses of Project Partnerships of $198,168 and the changes in
operating assets and liabilities, net cash used in operating activities was
$40,389, of which $41,807 was the Asset Management Fee actually paid. Cash
provided by investing activities totaled $66,086, consisting of $37,565,
adjusted by $34,966 included in Other Income, in cash distributions
received from the Project Partnerships and $28,521 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, 1998, 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 97% at December 31, 1997.
Equity in Losses of Project Partnerships decreased from $644,865 for the
year ended March 31, 1996 to $635,178 for the year ended March 31, 1997 and
to $421,886 for the year ended March 31, 1998. (These Project Partnerships
reported depreciation and amortization of $1,047,484, $1,043,887 and
$1,060,855 for the years ended December 31, 1995, 1996 and 1997,
respectively.) Overall, management believes these Project Partnerships
are operating as expected and are generating tax credits which meet
projections.
At March 31, 1998, the Series had $196,876 of short-term investments (Cash
and Cash Equivalents). It also had $421,355 in Zero Coupon Treasuries with
annual maturities providing $53,539 in fiscal year 1999 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
$485,415 for the year ended March 31, 1998. However, after adjusting for
Equity in Losses of Project Partnerships of $421,886 and the changes in
operating assets and liabilities, net cash used in operating activities was
$40,429, of which $44,276 was the Asset Management Fee actually paid. Cash
provided by investing activities totaled $54,532, consisting of $18,400 in
cash distributions from the Project Partnerships and $36,132 from matured
Zero Coupon Treasuries. There were no unusual events or trends to
describe.
A Project Partnership located in Howard, S.D. experienced significant
cash shortages from operations in 1997 due to low occupancy as a result of
layoffs at a local major employer. The local general partner partially
funded the deficit by lending $16,100 in 1997 and $6,030 to date in 1998.
Occupancy improved to 75% at June 30, 1998. 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, 1998, 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 96% as of December 31, 1997.
Equity in Losses of Project Partnerships increased from $700,127 for the
year ended March 31, 1996 to $911,965 for the year ended March 31, 1997 and
decreased to $728,729 for the year ended March 31, 1998. (These Project
Partnerships reported depreciation and amortization of $1,219,766,
$1,380,487 and $1,331,686 for the years ended December 31, 1995, 1996 and
1997, respectively.) Overall, management believes these Project
Partnerships are operating as expected and are generating tax credits which
meet projections.
At March 31, 1998, the Series had $280,813 of short-term investments (Cash
and Cash Equivalents). It also had $525,165 in Zero Coupon Treasuries with
annual maturities providing $66,709 in fiscal year 1999 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
$813,502 for the year ended March 31, 1998. However, after adjusting for
Equity in Losses of Project Partnerships of $728,729 and the changes in
operating assets and liabilities, net cash used in operating activities was
$53,416, of which $59,826 was the Asset Management Fee actually paid. Cash
provided by investing activities totaled $75,223 consisting of $30,188 in
cash distributions from the Project Partnerships and $45,035 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, 1998, 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 97% as of December 31, 1997.
Equity in Losses of Project Partnerships increased from $710,986 for the
year ended March 31, 1996 to $805,310 for the year ended March 31, 1997 and
decreased to $761,923 for the year ended March 31, 1998. (These Project
Partnerships reported depreciation and amortization of $1,437,632,
$1,477,003 and $1,474,599 for the years ended December 31, 1995, 1996 and
1997, respectively.) Overall, management believes these Project
Partnerships are operating as expected and are generating tax credits which
meet projections.
At March 31, 1998, the Series had $406,255 of short-term investments (Cash
and Cash Equivalents). It also had $421,617 in Zero Coupon Treasuries with
annual maturities providing $51,000 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
$870,137 for the year ended March 31, 1998. However, after adjusting for
Equity in Losses of Project Partnerships of $761,923 and the changes in
operating assets and liabilities, net cash used in operating activities was
$56,078, of which $58,983 was the Asset Management Fee actually paid. Cash
provided by investing activities totaled $65,597 of which $29,859 was
received in cash distributions from the Project Partnerships and $35,738
from matured Zero Coupon Treasuries. There were no unusual events or
trends to describe.
A Project Partnership located in Corbin, KY experienced cash shortages
from operations in 1997 due to low occupancy as a result of competition
from other newly constructed multi-family housing properties. The deficit
was funded with existing working capital earned in prior years. The
management company believes occupancy will improve as the town is thriving.
We expect the property to experience cash flow difficulties until occupancy
improves. Management does not expect any materially adverse effect to
Gateway from this Project Partnership.
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, 1998 and 1997 and the related
statements of operations, partners' equity, and cash flows of each of the
five Series for each of the three years in the period ended March 31,
1998. 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 represent the following percentages
of the Partnership's assets as of March 31, 1998 and 1997 and the equity in
their losses for each of the three years in the period ended March 31,
1998:
Assets Partnership Loss
March 31, Year Ended March 31,
-------- --------------------
1998 1997 1998 1997 1996
---- ---- ---- ---- ----
Series 2 32% 42% 79% 78% 80%
Series 3 25% 35% 72% 81% 76%
Series 4 44% 51% 76% 69% 64%
Series 5 39% 44% 67% 69% 71%
Series 6 39% 42% 66% 65% 52%
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,
1998 and 1997, and the results of their operations and their cash flows for
each of the three years in the period ended March 31, 1998, 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.
/s/ Spence, Marston, Bunch, Morris & Co.
SPENCE, MARSTON, BUNCH, MORRIS & CO.
Certified Public Accountants
Clearwater, Florida
July 2, 1998
PART I - Financial Information
Item 1. Financial Statements
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
MARCH 31, 1998 AND 1997
SERIES 2 1998 1997
---- ----
ASSETS
Current Assets:
Cash and Cash Equivalents $ 160,851 $ 138,561
Investments in Securities 47,501 45,757
---------- ----------
Total Current Assets 208,352 184,318
Investments in Securities 326,412 346,730
Investments in Project Partnerships, Net 510,805 814,883
---------- ----------
Total Assets $1,045,569 $1,345,931
========== ==========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners 46,190 43,644
---------- ----------
Total Current Liabilities 46,190 43,644
---------- ----------
Long-Term Liabilities:
Payable to General Partners 296,195 261,410
---------- ----------
Partners' Equity:
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's, of
which 37,228 at March 31, 1998 and 1997 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, 1998 and 1997, issued and
outstanding 749,952 1,084,268
General Partners (46,768) (43,391)
---------- ----------
Total Partners' Equity 703,184 1,040,877
---------- ----------
Total Liabilities and Partners' Equity $1,045,569 $1,345,931
========== ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
MARCH 31, 1998 AND 1997
SERIES 3 1998 1997
---- ----
ASSETS
Current Assets:
Cash and Cash Equivalents $ 135,622 $ 109,925
Investments in Securities 42,252 40,699
---------- -----------
Total Current Assets 177,874 150,624
Investments in Securities 290,336 308,410
Investments in Project Partnerships, Net 378,000 584,189
---------- -----------
Total Assets $846,210 $1,043,223
========== ===========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners 50,773 48,117
---------- -----------
Total Current Liabilities 50,773 48,117
---------- -----------
Long-Term Liabilities:
Payable to General Partners 234,783 212,944
---------- -----------
Partners' Equity:
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's, of which
37,228 at March 31, 1998 and 1997 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, 1998 and 1997, issued and
outstanding 602,863 822,156
General Partners (42,209) (39,994)
----------- -----------
Total Partners' Equity 560,654 782,162
----------- -----------
Total Liabilities and Partners' Equity $ 846,210 $1,043,223
=========== ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
MARCH 31, 1998 AND 1997
SERIES 4 1998 1997
---- ----
ASSETS
Current Assets:
Cash and Cash Equivalents $ 196,876 $ 182,773
Investments in Securities 53,529 51,562
----------- ----------
Total Current Assets 250,405 234,335
Investments in Securities 367,826 390,723
Investments in Project Partnerships, Net 981,823 1,423,319
----------- ----------
Total Assets $1,600,054 $2,048,377
=========== ==========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners 56,202 52,967
---------- ----------
Total Current Liabilities 56,202 52,967
---------- ----------
Long-Term Liabilities:
Payable to General Partners 280,718 246,861
---------- ----------
Partners' Equity:
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's, of which
37,228 at March 31, 1998 and 1997 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, 1998 and 1997, issued and outstanding 1,311,156 1,791 717
General Partners (48,022) (43,168)
Total Partners' Equity ----------- ----------
1,263,134 1,748,549
----------- ----------
Total Liabilities and Partners' Equity $ 1,600,054 $2,048,377
=========== ==========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
MARCH 31, 1998 AND 1997
SERIES 5 1998 1997
---- ----
ASSETS
Current Assets:
Cash and Cash Equivalents $ 280,813 $ 259,006
Investments in Securities 66,717 64,266
----------- ----------
Total Current Assets 347,530 323,272
Investments in Securities 458,448 486,986
Investments in Project Partnerships, Net 1,500,087 2,268,632
------------ ----------
Total Assets $2,306,065 $3,078,890
============ ===========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners 74,748 70,909
----------- ----------
Total Current Liabilities 74,748 70,909
----------- ----------
Long-Term Liabilities:
Payable to General Partners 274,507 237,669
----------- ----------
Partners' Equity:
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's, of which
37,228 at March 31, 1998 and 1997 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, 1998 and 1997, issued and outstanding 2,012,865 2,818,232
General Partners (56,055) (47,920)
----------- ----------
Total Partners' Equity 1,956,810 2,770,312
----------- -----------
Total Liabilities and Partners' Equity $2,306,065 $3,078,890
=========== ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
MARCH 31, 1998 AND 1997
SERIES 6 1998 1997
---- ----
ASSETS
Current Assets:
Cash and Cash Equivalents $ 406,255 $ 396,736
Investments in Securities 48,608 45,870
----------- ----------
Total Current Assets 454,863 442,606
Investments in Securities 373,009 393,657
Investments in Project Partnerships, Net 3,102,793 3,912,526
----------- ----------
Total Assets $3,930,665 $4,748,789
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners 70,482 66,605
----------- ----------
Total Current Liabilities 70,482 66,605
----------- ----------
Long-Term Liabilities:
Payable to General Partners 341,554 293,418
---------- ----------
Partners' Equity:
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's, of which
37,228 at March 31, 1998 and 1997 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, 1998 and 1997, issued and outstanding 3,572,169 4,433,605
General Partners (53,540) (44,839)
----------- ----------
Total Partnes' Equity 3,518,629 4,388,766
------------ ----------
Total Liabilities and Partnes' Equity $3,930,665 $4,748,789
=========== ==========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
MARCH 31, 1998 AND 1997
TOTAL SERIES 2 - 6 1998 1997
---- ----
ASSETS
Current Assets:
Cash and Cash Equivalents $1,180,417 $ 1,087,001
Investments in Securities 258,607 248,154
----------- -----------
Total Current Assets 1,439,024 1,335,155
Investments in Securities 1,816,031 1,926,506
Investments in Project Partnerships, Net 6,473,508 9,003,549
----------- -----------
Total Assets $9,728,563 $12,265,210
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners 298,395 282,242
----------- -----------
Total Current Liabilities 298,395 282,242
----------- -----------
Long-Term Liabilities:
Payable to General Partners 1,427,757 1,252,302
----------- -----------
Partners' Equity:
Assignor Limited Partner
Units of limited partnership interest
consisting of 40,000 authorized BAC's, of
which 37,228 at March 31, 1998 and 1997 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, 1998 and 1997, issued and
outstanding 8,249,005 10,949,978
General Partners (246,594) (219,312)
----------- -----------
Total Partners' Equity 8,002,411 10,730,666
----------- -----------
Total Liabilities and Partners' Equity $9,728,563 $12,265,210
============ ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MARCH 31,
SERIES 2 1998 1997 1996
---- ---- ----
Revenues:
Interest Income $ 37,434 $ 36,217 $ 36,532
Other Income 3,838 0 0
----------- ------------ -----------
Total Revenues 41,272 36,217 36,532
----------- ------------ -----------
Expenses:
Asset Management Fee-General
Partner 68,773 68,889 68,998
General and Administrative:
General Partner 8,267 6,792 6,812
Other 10,502 13,625 10,154
Amortization 3,011 2,369 4,812
----------- ------------ ----------
Total Expenses 90,553 91,675 90,776
----------- ------------ ----------
Loss Before Equity in Losses
of Project Partnerships (49,281) (55,458) (54,244)
Equity in Losses of Project
Partnerships (288,412) (527,175) (537,111)
----------- ------------ ----------
Net Loss $ (337,693) $ (582,633) $ (591,355)
=========== ============ ===========
Allocation of Net Loss:
Assignees (334,316) (576,807) (585,441)
General Partners (3,377) (5,826) (5,914)
----------- ------------ -----------
$ (337,693) $ (582,633) $ (591,355)
=========== ============ ===========
Net Loss Per Beneficial
Assignee Certificate $ (54.48) $ (94.00) $ (95.41)
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 YEAR ENDED MARCH 31,
SERIES 3 1998 1997 1996
---- ---- ----
Revenues:
Interest Income $ 30,145 $ 31,128 $ 31,179
Other Income 34,966 0 0
---------- ---------- ----------
Total Revenues 65,111 31,128 31,179
---------- ---------- ----------
Expenses:
Asset Management Fee-General
Partner 63,645 63,792 63,927
General and Administrative:
General Partner 8,481 7,102 7,104
Other 10,903 17,278 11,001
Amortization 5,422 (1,615) (1,969)
---------- ---------- ----------
Total Expenses 88,451 86,557 80,063
---------- ---------- ----------
Loss Before Equity in Losses
of Project Partnerships (23,340) (55,429) (48,884)
Equity in Losses of Project
Partnerships (198,168) (285,853) (421,996)
----------- ----------- -----------
Net Loss $ (221,508) $ (341,282) $ (470,880)
=========== =========== ===========
Allocation of Net Loss:
Assignees (219,293) (337,869) (466,171)
General Partners (2,215) (3,413) (4,709)
----------- ----------- -----------
$ (221,508) $ (341,282) $ (470,880)
=========== =========== ===========
Net Loss Per Beneficial
Assignee Certificate $ (40.19) $ (61.93) $ (85.44)
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 YEAR ENDED MARCH 31,
SERIES 4 1998 1997 1996
---- ---- ----
Revenues:
Interest Income $ 39,924 $ 41,455 $ 42,246
Other Income 4,385 0 0
--------- --------- ---------
Total Revenues 44,309 41,455 42,246
--------- --------- ---------
Expenses:
Asset Management Fee - General
Partner 78,133 78,270 78,384
General and Administrative:
General Partner 10,693 8,953 8,978
Other 13,417 17,019 12,268
Amortization 5,595 (1,955) 3,390
---------- --------- ----------
Total Expenses 107,838 102,287 103,020
---------- --------- ----------
Loss Before Equity in Losses
of Project Partnerships (63,529) (60,832) (60,774)
Equity in Losses of Project
Partnerships (421,886) (635,178) (644,865)
---------- ---------- ----------
Net Loss $(485,415) $(696,010) $(705,639)
========== ========== ==========
Allocation of Net Loss:
Assignees (480,561) (689,050) (698,583)
General Partners (4,854) (6,960) (7,056)
---------- ---------- ----------
$(485,415) $(696,010) $(705,639)
========== ========== ==========
Net Loss Per Beneficial
Assignee Certificate $ (69.50) $ (99.65) $ (101.02)
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 YEAR ENDED MARCH 31,
SERIES 5 1998 1997 1996
---- ---- ----
Revenues:
Interest Income $ 51,284 $ 52,985 $ 54,273
Other Income 3,133 0 0
---------- ---------- ---------
Total Revenues 54,417 52,985 54,273
---------- ---------- ---------
Expenses:
Asset Management Fee - General
Partner 96,663 96,844 97,010
General and Administrative:
General Partner 13,274 11,114 11,144
Other 16,492 19,418 14,676
Amortization 12,761 11,006 12,752
---------- ---------- ---------
Total Expenses 139,190 138,382 135,582
---------- ---------- ----------
Loss Before Equity in Losses
of Project Partnerships (84,773) (85,397) (81,309)
Equity in Losses of Project
Partnerships (728,729) (911,965) (700,127)
---------- ---------- ----------
Net Loss $(813,502) $(997,362) $(781,436)
========== ========== ==========
Allocation of Net Loss:
Assignees (805,367) (987,388) (773,622)
General Partners (8,135) (9,974) (7,814)
---------- ---------- ----------
$(813,502) $(997,362) $(781,436)
========== ========== ==========
Net Loss Per Beneficial
Assignee Certificate $ (93.47) $ (114.60) $ (89.79)
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 YEAR ENDED MARCH 31,
SERIES 6 1998 1997 1996
---- ---- ----
Revenues:
Interest Income $ 48,382 $ 47,326 $ 48,446
Other Income 1,325 0 0
---------- ---------- ---------
Total Revenues 49,707 47,326 48,446
---------- ---------- ---------
Expenses:
Asset Management Fee - General
Partner 107,120 107,403 107,665
General and Administrative:
General Partner 14,012 11,732 11,765
Other 17,513 16,660 16,398
Amortization 19,276 22,048 22,656
---------- ---------- ----------
Total Expenses 157,921 157,843 158,484
---------- ---------- ----------
Loss Before Equity in Losses
of Project Partnerships (108,214) (110,517) (110,038)
Equity in Losses of Project
Partnerships (761,923) (805,310) (710,986)
---------- ---------- ----------
Net Loss $(870,137) $(915,827) $(821,024)
========== ========== ==========
Allocation of Net Loss:
Assignees (861,436) (906,669) (812,814)
General Partners (8,701) (9,158) (8,210)
---------- ---------- ----------
$(870,137) $(915,827) $(821,024)
========== ========== ==========
Net Loss Per Beneficial
Assignee Certificate $ (85.25) $ (89.72) $ (80.44)
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 YEAR ENDED MARCH 31,
TOTAL SERIES 2 - 6 1998 1997 1996
---- ---- ----
Revenues:
Interest Income $ 207,169 $ 209,111 $ 212,676
Other Income 47,647 0 0
------------ ------------ -----------
Total Revenues 254,816 209,111 212,676
------------ ------------ -----------
Expenses:
Asset Management Fee-General
Partner 414,334 415,198 415,984
General and Administrative:
General Partner 54,727 45,693 45,803
Other 68,827 84,000 64,497
Amortization 46,065 31,853 41,641
------------ ----------- ----------
Total Expenses 583,953 576,744 567,925
------------ ----------- ----------
Loss Before Equity in Losses
of Project Partnerships (329,137) (367,633) (355,249)
Equity in Losses of Project
Partnerships (2,399,118) (3,165,481) (3,015,085)
------------ ------------ ------------
Net Loss $(2,728,255) $(3,533,114) $(3,370,334)
============ ============ ============
Allocation of Net Loss:
Assignees (2,700,973) (3,497,783) (3,336,631)
General Partners (27,282) (35,331) (33,703)
------------ ------------ ------------
$(2,728,255) $(3,533,114) $(3,370,334)
============ ============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE YEARS ENDED MARCH 31, 1998, 1997 AND 1996:
General
SERIES 2 Assignees Partners Total
--------- -------- -----
Balance at March 31, 1995 $ 2,246,516 $ (31,651) $ 2,214,865
Net Loss (585,441) (5,914) (591,355)
------------ ---------- ------------
Balance at March 31, 1996 1,661,075 (37,565) 1,623,510
Net Loss (576,807) (5,826) (582,633)
------------ ---------- ------------
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
============= ========== ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE YEARS ENDED MARCH 31, 1998, 1997 AND 1996:
General
SERIES 3 Assignees Partners Total
--------- -------- -----
Balance at March 31, 1995 $ 1,626,196 $ (31,872) $ 1,594,324
Net Loss (466,171) (4,709) (470,880)
------------ ----------- ------------
Balance at March 31, 1996 1,160,025 (36,581) 1,123,444
Net Loss (337,869) (3,413) (341,282)
------------ ----------- ------------
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
============ =========== ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE YEARS ENDED MARCH 31, 1998, 1997 AND 1996:
General
SERIES 4 Assignees Partners Total
--------- -------- -----
Balance at March 31, 1995 $ 3,179,350 $ (29,152) $ 3,150,198
Net Loss (698,583) (7,056) (705,639)
------------ ---------- ------------
Balance at March 31, 1996 2,480,767 (36,208) 2,444,559
Net Loss (689,050) (6,960) (696,010)
------------ ---------- ------------
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
============ ========== ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE YEARS ENDED MARCH 31, 1998, 1997 AND 1996:
General
SERIES 5 Assignees Partners Total
--------- -------- -----
Balance at March 31, 1995 $ 4,579,242 $ (30,132) $ 4,549,110
Net Loss (773,622) (7,814) (781,436)
------------ ---------- ------------
Balance at March 31, 1996 3,805,620 (37,946) 3,767,674
Net Loss (987,388) (9,974) (997,362)
------------ ---------- ------------
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
============ ========== ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE YEARS ENDED MARCH 31, 1998, 1997 AND 1996:
General
SERIES 6 Assignees Partners Total
--------- -------- -----
Balance at March 31, 1995 $ 6,153,088 $ (27,471) $ 6,125,617
Net Loss (812,814) (8,210) (821,024)
------------ ---------- ------------
Balance at March 31, 1996 5,340,274 (35,681) 5,304,593
Net Loss (906,669) (9,158) (915,827)
------------ ---------- ------------
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
============ ========== ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE YEARS ENDED MARCH 31, 1998, 1997 AND 1996:
General
TOTAL SERIES 2 - 6 Assignees Partners Total
--------- -------- -----
Balance at March 31, 1995 $ 17,784,392 $ (150,278) $ 17,634,114
Net Loss (3,336,631) (33,703) (3,370,334)
------------- ----------- -------------
Balance at March 31, 1996 14,447,761 (183,981) 14,263,780
Net Loss (3,497,783) (35,331) (3,533,114)
------------- ----------- -------------
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
============= =========== =============
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, 1998, 1997 AND 1996:
SERIES 2 1998 1997 1996
- -------- ---- ---- ----
Cash Flows from Operating
Activities:
Net Loss $ (337,693) $ (582,633) $ (591,355)
Adjustments to Reconcile Net
Loss to Net Cash Provided by
(Used in) Operating Activities:
Amortization 3,011 2,369 4,812
Accreted Interest Income on
Investments in Securities (27,118) (28,749) (29,127)
Equity in Losses of Project
Partnerships 288,412 527,175 537,111
Interest Income from
Redemption of Securities 13,627 10,358 7,238
Distributions Included in
Other Income (3,838) 0 0
Changes in Operating Assets
and Liabilities:
Decrease (Increase) in
Accounts Receivable 0 0 0
Increase in Payable to
General Partners 37,331 34,728 35,578
---------- ---------- ----------
Net Cash Used in Operating
Activities (26,268) (36,752) (35,743)
---------- ---------- ----------
Cash Flows from Investing
Activities:
Investments in Project
Partnerships 0 0 0
Acquisition Fees and Expenses 0 0 0
Distributions Received from
Project Partnerships 16,493 6,497 8,762
Redemption of Investment in
Securities 32,065 33,297 34,610
Increase (Decrease) in Payable
to:
Project Partnerships - Capital
Contributions 0 0 0
---------- ---------- ----------
Net Cash Provided by
Investing Activities 48,558 39,794 43,372
---------- ---------- ----------
Increase (Decrease) in Cash and
Cash Equivalents 22,290 3,042 7,629
Cash and Cash Equivalents at
Beginning of Year 138,561 135,519 127,890
---------- ---------- ----------
Cash and Cash Equivalents at
End of Year $ 160,851 $ 138,561 $ 135,519
========== ========== ==========
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, 1998, 1997 AND 1996:
SERIES 3 1998 1997 1996
- - ------ ---- ---- ----
Cash Flows from Operating
Activities:
Net Loss $ (221,508) $ (341,282) $ (470,880)
Adjustments to Reconcile Net
Loss to Net Cash Provided by
(Used in) Operating Activities:
Amortization 5,422 (1,615) (1,969)
Accreted Interest Income on
Investments in Securities (24,121) (25,571) (25,908)
Equity in Losses of Project
Partnerships 198,168 285,853 421,996
Interest Income from
Redemption of Securities 12,121 9,212 6,437
Distributions Included In
Other Income (34,966) 0 0
Changes in Operating Assets
and Liabilities:
Decrease (Increase) in
Accounts Receivable 0 0 0
Increase in Payable to
General Partners 24,495 22,486 27,408
---------- ---------- ----------
Net Cash Used in Operating
Activities (40,389) (50,917) (42,916)
---------- ---------- ----------
Cash Flows from Investing
Activities:
Investments in Project
Partnerships 0 0 0
Acquisition Fees and Expenses 0 0 0
Distributions Received from
Project Partnerships 37,565 33,237 26,471
Redemption of Investment in
Securities 28,521 29,617 30,785
Increase (Decrease) in Payable
to:
Project Partnerships - Capital
Contributions 0 0 0
---------- ---------- ----------
Net Cash Provided by
Investing Activities 66,086 62,854 57,256
---------- ---------- ----------
Increase (Decrease) in Cash and
Cash Equivalents 25,697 11,937 14,340
Cash and Cash Equivalents at
Beginning of Year 109,925 97,988 83,648
---------- ---------- ----------
Cash and Cash Equivalents at
End of Year $ 135,622 $ 109,925 $ 97,988
========== ========== ==========
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, 1998, 1997 AND 1996:
SERIES 4 1998 1997 1996
- -------- ---- ---- ----
Cash Flows from Operating
Activities:
Net Loss $ (485,415) $ (696,010) $ (705,639)
Adjustments to Reconcile Net
Loss to Net Cash Provided by
(Used in) Operating Activities:
Amortization 5,595 (1,955) 3,390
Accreted Interest Income on
Investments in Securities (30,559) (32,396) (32,822)
Equity in Losses of Project
Partnerships 421,886 635,178 644,865
Interest Income from
Redemption of Securities 15,357 11,676 8,155
Distributions Included In
Other Income (4,385) 0 0
Changes in Operating Assets
and Liabilities:
Decrease (Increase) in
Accounts Receivable 0 0 0
Increase in Payable to
General Partners 37,092 33,284 37,155
---------- ---------- ----------
Net Cash Used in Operating
Activities (40,429) (50,223) (44,896)
---------- ---------- ----------
Cash Flows from Investing
Activities:
Investments in Project
Partnerships 0 0 0
Acquisition Fees and Expenses 0 0 0
Distributions Received from
Project Partnerships 18,400 16,968 15,751
Redemption of Investment in
Securities 36,132 37,522 39,000
Increase (Decrease) in Payable
to:
Project Partnerships - Capital
Contributions 0 0