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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ------- EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2000
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ------- EXCHANGE ACT OF 1934
Commission File Number 33-37704-03
INDEPENDENCE TAX CREDIT PLUS L.P. II
------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3646846
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
625 Madison Avenue, New York, New York 10022
- -------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 421-5333
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Title of Class
--------------
Limited Partnership Interests and Beneficial Assignment 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 is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
DOCUMENTS INCORPORATED BY REFERENCE
None
Index to exhibits may be found on page 78
Page 1 of 89
PART I
Item 1. Business.
GENERAL
Independence Tax Credit Plus L.P. II (the "Partnership") is a limited
partnership which was formed under the laws of the State of Delaware on February
11, 1992. The general partner of the Partnership is Related Independence
Associates L.P., a Delaware limited partnership (the "General Partner"). The
general partner of the General Partner is Related Independence Associates Inc.,
a Delaware corporation ("RIAI").
On January 19, 1993, the Partnership commenced a public offering (the
"Offering") of Beneficial Assignment Certificates ("BACs") representing
assignments of limited partnership interests in the Partnership ("Limited
Partnership Interests"). The Partnership received $58,928,000 of gross proceeds
from the Offering (the "Gross Proceeds") from 3,475 investors ("BACs holders").
The Offering was terminated on April 7, 1994.
The Partnership's business is primarily to invest in other partnerships ("Local
Partnerships") owning apartment complexes ("Apartment Complexes" or
"Properties") that are eligible for the low-income housing tax credit ("Housing
Tax Credit") enacted in the Tax Reform Act of 1986, some of which may also be
eligible for the historic rehabilitation tax credit ("Historic Tax Credit"; and
together with Housing Tax Credits, "Tax Credits"). The Partnership's investment
in each Local Partnership represents 98.99% of the partnership interests in the
Local Partnership. As of March 31, 2000, the Partnership had acquired interests
in fifteen Local Partnerships and does not anticipate making any additional
investments. As of March 31, 2000, approximately $47,000,000 (not including
acquisition fees of approximately $3,502,000) of net proceeds has been invested
in fifteen Local Partnerships of which approximately $890,000 remains to be paid
to the Local Partnerships, as certain benchmarks such as occupancy levels must
be attained prior to the release of such funds. The Partnership does not intend
to acquire additional properties, however, the Partnership may be required to
pay for potential purchase price adjustments based on tax credit adjustor
clauses. See Item 2.
Properties, below.
INVESTMENT OBJECTIVES/GOVERNMENT INCENTIVES
The Partnership was formed to invest in Apartment Complexes that are eligible
for the Housing Tax Credit enacted in the Tax Reform Act of 1986. Some Apartment
Complexes may also be eligible for Historic Tax Credits. The investment
objectives of the Partnership are described below.
1. Entitle qualified BACs holders to Tax Credits over the period of the
Partnership's entitlement to claim Tax Credits (for each Property, generally ten
years from the date of investment or, if later, the date the Property is leased
to qualified tenants; referred to herein as the "Credit Period") with respect to
each Apartment Complex.
2. Preserve and protect the Partnership's capital.
3. Participate in any capital appreciation in the value of the Properties and
provide distributions of Sale or Refinancing Proceeds upon the disposition of
the Properties.
4. Allocate passive losses to individual BACs holders to offset passive income
that they may realize from rental real estate investments and other passive
activities, and allocate passive losses to corporate BACs holders to offset
business income.
-2-
One of the Partnership's objectives is to entitle qualified BACs holders to Tax
Credits over the Credit Period. Each of the Local Partnerships in which the
Partnership has acquired an interest has been allocated by the relevant state
credit agencies the authority to recognize Tax Credits during the Credit Period
provided that the Local Partnership satisfies the rent restriction, minimum
set-aside and other requirements for recognition of the Tax Credits at all times
during such period. Once a Local Partnership has become eligible to recognize
Tax Credits, it may lose such eligibility and suffer an event of "recapture" if
its Property fails to remain in compliance with the Tax Credit requirements.
None of the Local Partnerships in which the Partnership has acquired an interest
has suffered an event of recapture.
There can be no assurance that the Partnership will achieve its investment
objectives as described above.
COMPETITION
The real estate business is highly competitive and substantially all of the
properties acquired by the Partnership are expected to have active competition
from similar properties in their respective vicinities. Various other limited
partnerships may, in the future, be formed by the General Partner and/or its
affiliates to engage in businesses which may be competitive with the
Partnership.
EMPLOYEES
The Partnership does not have any direct employees. All services are performed
for the Partnership by the General Partner and its affiliates. The General
Partner receives compensation in connection with such activities as set forth in
Items 11 and 13. In addition, the Partnership reimburses the General Partner and
certain of its affiliates for expenses incurred in connection with the
performance by their employees of services for the Partnership in accordance
with the Partnership's Amended and Restated Agreement of Limited Partnership
(the "Partnership Agreement").
Item 2. Properties.
The Partnership holds a 98.99% limited partnership interest in fifteen Local
Partnerships as of March 31, 2000. Set forth below is a schedule of the Local
Partnerships including certain information concerning their respective Apartment
Complexes (the "Local Partnership Schedule"). Further information concerning
these Local Partnerships and their properties, including any encumbrances
affecting the properties, may be found in Item 14. Schedule III.
Local Partnership Schedule
--------------------------
% of Units Occupied at May 1,
Name and Location --------------------------------
(Number of Units) Date Acquired 2000 1999 1998 1997 1996
- ----------------- ------------- ---- ---- ---- ---- ----
Lincoln Renaissance
Reading, PA (52) April 1993 98% 90% 98% 100% 98%
United Germano-Millgate
Limited Partnership
Chicago, IL (350) October 1993 99% 98% 98% 98% 98%
Mansion Court Associates
Philadelphia, PA (30) November 1993 97% 97% 100% 93% 100%
-3-
Local Partnership Schedule
--------------------------
(continued)
% of Units Occupied at May 1,
Name and Location --------------------------------
(Number of Units) Date Acquired 2000 1999 1998 1997 1996
- ----------------- ------------- ---- ---- ---- ---- ----
Derby Run Associates, L.P.
Hampton, VA (160) February 1994 89% 82% 71% 94% 95%
Renaissance Plaza '93
Associates , L.P.
Baltimore, MD (95) February 1994 95% 99% 99% 99% 98%
Tasker Village Associates
Philadelphia, PA (28) May 1994 93% 93% 96% 93% 100%
Martha Bryant Manor, L.P.
Los Angeles, CA (77) September 1994 97% 93% 95% 92% 0%*
Colden Oaks
Limited Partnership
Los Angeles, CA (38) September 1994 100% 100% 92% 95% 97%
Brynview Terrace, L.P.
Los Angeles, CA (8) September 1994 100% 100% 100% 100% 0%*
NLEDC, L.P.
Los Angeles, CA (43) September 1994 100% 98% 95% 93% 93%
Creative Choice
Homes VI, Ltd.
Miami, FL (102) September 1994 100% 100% 98% 98% 98%
P&P Homes for the
Elderly, L.P.
Los Angeles, CA (107) September 1994 99% 97% 95% 68%(1) 0%*
Clear Horizons
Limited Partnership
Shreveport, LA (84) December 1994 98% 96% 90% 93% 95%
Neptune Venture, L.P.
Neptune Township, NJ (99) April 1995 97% 99% 98% 100% 35%(1)
Affordable Green Associates L.P.
New York, NY (41) April 1995 100% 100% 100% 100% 100%
*Properties in construction phase
(1) Properties in rent-up phase.
All leases are generally for periods not exceeding one to two years and no
tenant occupies more than 10% of the rentable square footage.
-4-
Rents from commercial tenants (to which average rental per square foot applies)
comprise less than 5% of the rental revenues of the Partnership. Maximum
allowable rents for the residential units are determined annually by HUD.
Management continuously reviews the physical state of the properties and
suggests to the respective Local General Partners budget improvements which are
generally funded from cash flow from operations or release of replacement
reserve escrows.
Management continuously reviews the insurance coverage of the properties and
believes such coverage is adequate.
See Item 1, Business, above for the general competitive conditions to which the
properties described above are subject.
Real estate taxes are calculated using rates and assessed valuations determined
by the township or city in which the property is located. Such taxes have
approximated 1% of the aggregate cost of the properties as shown in Schedule III
to the financial statements included herein.
In connection with investments in development-stage Apartment Complexes, the
General Partner generally required that the general partners of the Local
Partnerships ("Local General Partners") provide completion guarantees and/or
undertake to repurchase the Partnership's interest in the Local Partnership if
construction or rehabilitation was not completed substantially on time or on
budget ("Development Deficit Guarantees"). The Development Deficit Guarantees
generally also required the Local General Partner to provide any funds necessary
to cover net operating deficits of the Local Partnership until such time as the
Apartment Complex had achieved break-even operations. The General Partner
generally required that the Local General Partners undertake an obligation to
fund operating deficits of the Local Partnership (up to a stated maximum amount)
during a limited period of time (typically three to five years) following the
achievement of break-even operations ("Operating Deficit Guarantees"). Under the
terms of the Development and Operating Deficit Guarantees, amounts funded have
been treated as Operating Loans which will not bear interest and which will be
repaid only out of 50% of available cash flow or out of available net sale or
refinancing proceeds. In some instances, the Local General Partners are required
to undertake an obligation to comply with a Rent-Up Guaranty Agreement, whereby
the Local General Partner agrees to pay liquidating damages if predetermined
occupancy rates are not achieved. These payments are made without right of
repayment. In cases where the General Partner deems it appropriate, the
obligations of a Local General Partner under the Development Deficit (all of
which have expired as of March 31, 2000), Operating Deficit (all current
operating deficits expire within the next year) and/or Rent-Up Guarantees (all
rent-up deficit guarantees have expired as of March 31, 2000) are secured by
letters of credit and/or cash escrow deposits.
Housing Tax Credits with respect to a given Apartment Complex are available for
a ten-year period that commences when the property is placed into service.
However, the annual Tax Credits available in the year in which the Apartment
Complex is placed in service, must be prorated based upon the months remaining
in the year. The amount of the annual Tax Credit not available in the first year
will be available in the eleventh year. In certain cases, the Partnership
acquired its interest in a Local Partnership after the Local Partnership had
placed its Apartment Complex in service. In these cases, the Partnership may be
allocated Tax Credits only beginning in the month following the month in which
it acquired its interest and Tax Credits allocated in any prior period are not
available to the Partnership.
-5-
Item 3. Legal Proceedings.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
PART II
Item 5. Market for the Registrant's Common Equity and Related Security Holder
Matters.
As of March 31, 2000, the Partnership had issued and outstanding 58,928 Limited
Partnership Interests, each representing a $1,000 capital contribution to the
Partnership, or an aggregate capital contribution of $58,928,000 before volume
discounts of $2,000. All of the issued and outstanding Limited Partnership
Interests have been issued to Independence Assignor Inc. (the "Assignor Limited
Partner"), which has in turn issued 58,928 BACs to the purchasers thereof for an
aggregate purchase price of $58,928,000 reduced by volume discounts of $2,000.
Each BAC represents all of the economic and virtually all of the ownership
rights attributable to a Limited Partnership Interest held by the Assignor
Limited Partner. BACs may be converted into Limited Partnership Interests at no
cost to the holder (other than the payment of transfer costs not to exceed
$100), but Limited Partnership Interests so acquired are not thereafter
convertible into BACs.
Neither the BACs nor the Limited Partnership Interests are traded on any
established trading market. The Partnership does not intend to include the BACs
for quotation on NASDAQ or for listing on any national or regional stock
exchange or any other established securities market. The Revenue Act of 1987
contained provisions which have an adverse impact on investors in "publicly
traded partnerships." Accordingly, the General Partner has imposed limited
restrictions on the transferability of the BACs and the Limited Partnership
Interests in secondary market transactions. Implementation of the restrictions
should prevent a public trading market from developing and may adversely affect
the ability of an investor to liquidate his or her investment quickly. It is
expected that these procedures will remain in effect until such time, if ever,
as further revision of the Revenue Act of 1987 may permit the Partnership to
lessen the scope of the restrictions.
As of March 31, 2000, the Partnership has approximately 3,485 registered holders
of an aggregate of 58,928 BACs.
All of the Partnership's general partnership interests, representing an
aggregate capital contribution of $1,000, are held by the General Partner.
There are no material legal restrictions in the Partnership Agreement on the
ability of the Partnership to make distributions. However, the Partnership has
made no distributions to the BACs holders as of March 31, 2000. The Partnership
does not anticipate providing cash distributions to its BACs holders other than
from net refinancing or sales proceeds.
-6-
Item 6. Selected Financial Data.
The information set forth below presents selected financial data of the
Partnership. Additional financial information is set forth in the audited
consolidated financial statements in Item 8 hereof.
Year Ended March 31,
-----------------------------------------------------------------------
OPERATIONS 2000 1999 1998 1997 1996
- ---------- ----------- ----------- ------------ ------------ ------------
Revenues $ 8,211,451 $ 7,932,980 $ 7,905,546 $ 6,663,351 $ 5,325,045
Operating expenses (13,137,023) (12,665,156) (13,202,649) (10,687,879) (8,277,953)
Loss on impairment 0 0 (3,925,514) 0 0
of assets ---------- ---------- ----------- ----------- -----------
Loss before (4,925,572) (4,732,176) (9,222,617) (4,024,528) (2,952,908)
minority interest
Minority interest 10,908 11,063 10,710 8,916 8,519
in loss of ---------- ---------- ----------- ----------- -----------
subsidiaries
Net loss $(4,914,664) $(4,721,113) $ (9,211,907) $ (4,015,612) $ (2,944,389)
========== ========== =========== =========== ===========
Net loss per $ (82.57) $ (79.32) $ (154.76) $ (67.46) $ (49.47)
weighted average BAC ========== ========== =========== =========== ===========
March 31,
-----------------------------------------------------------------------
FINANCIAL POSITION 2000 1999 1998 1997 1996
- ------------------ ----------- ----------- ------------ ------------ ------------
Total assets $96,634,527 $99,844,837 $103,971,047 $112,831,500 $116,928,522
========== ========== =========== =========== ===========
Total liabilities $71,338,864 $69,550,289 $ 68,811,891 $ 68,438,976 $ 68,086,980
========== ========== =========== =========== ===========
Minority interest $ 68,012 $ 152,233 $ 295,728 $ 317,189 $ 750,595
========== ========== =========== =========== ===========
Total partners' $25,227,651 $30,142,315 $ 34,863,428 $ 44,075,335 $ 48,090,947
capital ========== ========== =========== =========== ===========
During the years ended March 31, 2000 and 1999, total assets decreased primarily
due to depreciation partially offset by improvements to property and equipment.
During the year ended March 31, 1998, total assets decreased primarily due to
depreciation, loss on impairment of assets and the repayments of amounts due to
local general partners and affiliates, partially offset by improvements to
property and equipment. During the year ended March 31, 1997, total assets
decreased primarily due to a decrease in cash and cash equivalents resulting
from construction in progress and acquisitions of property and equipment in
excess of net proceeds from mortgage and construction loans and also the
repayments of amounts due to local general partners and affiliates. This
decrease in cash and cash equivalents was partially offset by the increase in
construction in progress and acquisitions of property and equipment net of
depreciation. During the year ended March 31, 1996, total assets and liabilities
increased primarily due to the continued acquisition of Local Partnerships.
Property and equipment increased approximately $37,000,000 for the year ended
March 31, 1996. Construction in progress decreased approximately $19,000,000 and
$4,000,000 for the years ended March 31, 1997 and 1996. For the year ended March
31, 1996, the increase in property and equipment and construction in progress
was partially funded by capital contributions made to the Local Partnerships
resulting in a decrease in cash and cash equivalents. For the years ended March
31, 1997 and 1996, minority interest decreased due to distributions received by
the local general partners.
-7-
CASH DISTRIBUTIONS
The Partnership has made no distributions to the BACs holders as of March 31,
2000.
-8-
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
LIQUIDITY AND CAPITAL RESOURCES
GENERAL
The Partnership's primary source of funds is a working capital reserve and
interest thereon. This source of funds is available to meet obligations of the
Partnership.
As of March 31, 2000, the Partnership has invested approximately $47,000,000
(not including acquisition fees of approximately $3,502,000) of net proceeds in
fifteen Local Partnerships of which approximately $890,000 remains to be paid
(including approximately $631,000 being held in escrow) as certain benchmarks,
such as occupancy level, must be attained prior to the release of the funds. The
Partnership does not intend to acquire additional properties. Although the
Partnership will not be acquiring additional properties, the Partnership may be
required to fund potential purchase price adjustments based on tax credit
adjustor clauses. There were no such adjustments during the year ended March 31,
2000.
For the Fiscal Year ended March 31, 2000, cash and cash equivalents for the
Partnership and its fifteen consolidated Local Partnerships decreased
approximately $80,000. This decrease is primarily due to improvements to
property and equipment ($172,000), principal payments of mortgage notes
($352,000), a decrease in cash held in escrow from investing activities
($279,000) and a decrease in capitalization of consolidated subsidiaries
attributable to minority interest ($73,000) which exceeded cash provided by
operating activities ($790,000) and a net increase in due to local general
partners and affiliates relating to investing and financing activities
($13,000). Included in the adjustments to reconcile the net loss to cash
provided by operating activities is depreciation and amortization ($3,584,000).
At March 31, 2000, there is a balance of approximately $247,000 in the working
capital reserve. The General Partner believes that these reserves, plus cash
distributions received from the operations of the Local Partnerships, will be
sufficient (subject to the continued deferral of fees payable to the General
Partner) to fund the Partnership's ongoing operations for the foreseeable
future. During the years ended March 31, 2000, 1999 and 1998, respectively,
amounts received from operations of the Local Partnerships were approximately
$70,000, $66,000 and $52,000. Management anticipates receiving distributions in
the future, although not to a level sufficient to permit providing cash
distributions to BACs holders.
Partnership management fees owed to the General Partner amounting to
approximately $1,205,000 and $659,000 were accrued and unpaid as of March 31,
2000 and 1999, respectively (see Note 8). Without the General Partners' advances
and continued accrual without payment of certain fees and expense
reimbursements, the Partnership will not be in a position to meet its
obligations. The General Partner has continued advancing and allowing the
accrual without payment of these amounts but is under no obligation to continue
to do so.
The Partnership has negotiated Operating Deficit Guaranty Agreements with all
Local Partnerships by which the general partners of the Local Partnerships have
agreed to fund operating deficits for a specified period of time. The terms of
the Operating Deficit Guaranty Agreements vary for each Local Partnership, with
maximum dollar amounts to be funded for a specified period of time, generally
three years, commencing on the break-even date. The gross amount of the
Operating Deficit Guarantees aggregates approximately $5,670,000, $4,700,000 of
which has expired as of March 31, 2000. As of March 31, 2000 and 1999, $365,409
and $356,207 has been funded under the Operating Deficit Guaranty agreements.
All current oper-
-9-
ating deficit guarantees expire within the next year. Management does not expect
their expiration to have a material impact on liquidity, based on prior years'
fundings.
For a discussion of contingencies affecting certain Local Partnerships, see
Results of Operations of Certain Local Partnerships, below. Since the maximum
loss the Partnership would be liable for is its net investment in the respective
subsidiary partnerships, the resolution of the existing contingencies is not
anticipated to impact future results of operations, liquidity or financial
condition in a material way. However, the Partnership's loss of its investment
in a Local Partnership will eliminate the ability to generate future tax credits
from such Local Partnership and may also result in recapture of tax credits if
the investment is lost before expiration of the credit period.
Except as described above, management is not aware of any trends or events,
commitments or uncertainties, which have not otherwise been disclosed that will
or are likely to impact liquidity in a material way. Management believes the
only impact would be for laws that have not yet been adopted. The portfolio is
diversified by the location of the properties around the United States so that
if one area of the country is experiencing downturns in the economy, the
remaining properties in the portfolio may be experiencing upswings. However the
geographic diversification of the portfolio may not protect against a general
downturn in the national economy. The Partnership has invested the proceeds of
its offering in 15 Local Partnerships, all of which fully have their tax credits
in place. The tax credits are attached to the project for a period of ten years,
and are transferable with the property during the remainder of the ten-year
period. If trends in the real estate market warranted the sale of a property,
the remaining tax credits would transfer to the new owner; thereby adding
significant value to the property on the market, which are not included in the
financial statement carrying amount.
RESULTS OF OPERATIONS
Property and equipment to be held and used are carried at cost which includes
the purchase price, acquisition fees and expenses, construction period interest
and any other costs incurred in acquiring the properties. The cost of property
and equipment is depreciated over their estimated useful lives using accelerated
and straight-line methods. Expenditures for repairs and maintenance are charged
to expense as incurred; major renewals and betterments are capitalized. At the
time property and equipment are retired or otherwise disposed of, the cost and
accumulated depreciation are eliminated from the assets and accumulated
depreciation accounts and the profit or loss on such disposition is reflected in
earnings. A loss on impairment of assets is recorded when management estimates
amounts recoverable through future operations and sale of the property on an
undiscounted basis are below depreciated cost. At that time property investments
themselves are reduced to estimated fair value (generally using discounted cash
flows).
Through March 31, 2000, the Partnership has recorded approximately $3,926,000 as
a loss on impairment of assets.
The following is a summary of the results of operations of the Partnership for
the years ended March 31, 2000, 1999 and 1998 (the 1999, 1998 and 1997 Fiscal
Years, respectively). The net loss for the 1997 Fiscal Year includes a loss on
impairment of assets of approximately $3,926,000 (see Note 4 in Item 8.
Financial Statements and Supplementary Data).
The net loss for the 1999, 1998 and 1997 Fiscal Years totaled $4,914,664,
$4,721,113 and $9,211,907, respectively.
The Partnership and BACs holders began to recognize Tax Credits with respect to
a Property when the Credit Period for such Property commenced. Because of the
time required for the
-10-
acquisition, completion and rent-up of Properties, the amount of Tax Credits per
BAC gradually increased over the first three years of the Partnership. Housing
Tax Credits not recognized in the first three years will be recognized in the
11th through 13th years. The Partnership generated $8,728,115 , $8,806,766 and
$8,533,019 of Housing Tax Credits during the 1999, 1998 and 1997 tax years,
respectively.
1999 VS. 1998
The Partnership's results of operations for the 1999 and 1998 Fiscal Years
consisted primarily of the results of the Partnership's investment in fifteen
consolidated Local Partnerships. The majority of Local Partnership income
continues to be in the form of rental income with the corresponding expenses
being divided among operations, depreciation and mortgage interest.
Rental income increased approximately 4% for the year ended March 31, 2000 as
compared to 1999 primarily due to rental rate increases.
Total expenses, excluding repairs and maintenance, taxes and financial interest,
remained fairly consistent with a decrease of approximately 2% for the year
ended March 31, 2000 as compared to 1999.
Repairs and maintenance increased approximately $264,000 for the year ended
March 31, 2000 as compared to 1999 primarily due to interior painting and vinyl
floor replacement at one Local Partnership, tile, carpet and kitchen cabinet
replacement at a second Local Partnership and the hiring of a full time
landscaper along with increased security at a third Local Partnership.
Taxes increased approximately $81,000 for the year ended March 31, 2000 as
compared to 1999 primarily due to property tax exemptions received at one Local
Partnership in the year ended March 31, 1999.
Financial interest increased approximately $297,000 for the year ended March 31,
2000 as compared to 1999 primarily due to a prior period adjustment for
construction interest at one Local Partnership in the year ended March 31, 1999.
1998 VS. 1997
The Partnership's results of operations for the 1998 and 1997 Fiscal Years
consisted primarily of the results of the Partnership's investment in fifteen
consolidated Local Partnerships. The majority of Local Partnership income
continues to be in the form of rental income with the corresponding expenses
being divided among operations, depreciation and mortgage interest.
Rental income increased less than 1% for the year ended March 31, 1999 as
compared to 1998 primarily due to rental rate increases.
Other income decreased approximately $38,000 for the year ended March 31, 1999
as compared to 1998 primarily due to lower cash and cash equivalent balances at
the Partnership level.
Total expenses, excluding general and administrative-related parties, insurance,
financial interest and loss on impairment of assets remained fairly consistent
with a decrease of less than 1% for the year ended March 31, 1999 as compared to
1998.
General and administrative-related parties increased approximately $478,000 for
the year ended March 31, 1999 as compared to 1998 primarily due to an increase
in Partnership management fees payable to the General Partner.
-11-
Insurance expense decreased approximately $89,000 for the year ended March 31,
1999 as compared to 1998 primarily due to a reduction in coverage at two Local
Partnerships, a change in the insurance carrier at a third Local Partnership and
a reduction in insurance premium at a fourth Local Partnership.
Financial interest expense decreased approximately $925,000 for the year ended
March 31, 1999 as compared to 1998 primarily due to an over accrual of interest
at one Local Partnership for the year ended March 31, 1998.
A loss on impairment of assets amounting to $3,926,000 was recorded at one Local
Partnership for the year ended March 31, 1998.
RESULTS OF OPERATIONS OF CERTAIN LOCAL PARTNERSHIPS
CLEAR HORIZONS LIMITED PARTNERSHIP
At December 31, 1999, Clear Horizons Limited Partnership ("Clear Horizons")
current liabilities exceed its current assets by over $127,000. Although this
condition could raise substantial doubt about Clear Horizons' ability to
continue as a going concern, such doubt is alleviated as follows:
1. Included in current liabilities at December 31, 1999, is $135,994 owed to
related parties who have advised Clear Horizons that they do not intend to
pursue collection beyond Clear Horizons' ability to pay.
2. The Local General Partner of Clear Horizons has agreed to fund operating
deficits up to $250,000.
Accordingly, management believes that Clear Horizons has the ability to continue
as a going concern for at least one year from December 31, 1999.
OTHER
The Partnership's investment as a limited partner in the Local Partnerships is
subject to the risks of potential losses arising from management and ownership
of improved real estate. The Partnership's investments also could be adversely
affected by poor economic conditions generally, which could increase vacancy
levels and rental payment defaults and by increased operating expenses, any or
all of which could threaten the financing viability of one or more of the Local
Partnerships.
There also are substantial risks associated with the operation of Apartment
Complexes receiving government assistance. These include governmental
regulations concerning tenant eligibility, which may make it more difficult to
rent apartments in the complexes; difficulties in obtaining government approval
for rent increases; limitations on the percentage of income which low and
moderate-income tenants may pay as rent; the possibility that Congress may not
appropriate funds to enable the Department of Housing and Urban Development to
make the rental assistance payments it has contracted to make; and that when the
rental assistance contracts expire, there may not be market demand for
apartments at full market rents in a Local Partnership's Apartment Complex.
The Local Partnerships are impacted by inflation in several ways. Inflation
allows for increases in rental rates generally to reflect the impact of higher
operating and replacement costs. Inflation also affects the Local Partnerships
adversely by increasing operating costs as, for example, for such items as fuel,
utilities and labor.
-12-
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable.
-13-
Item 8. Financial Statements and Supplementary Data.
Sequential
Page
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(a) 1. Consolidated Financial Statements
Independent Auditors' Report 15
Consolidated Balance Sheets at March 31, 2000 and 1999 58
Consolidated Statements of Operations for the Years
Ended March 31, 2000, 1999 and 1998 59
Consolidated Statements of Changes in Partners' Capital
(Deficit) for the Years Ended March 31, 2000, 1999
and 1998 60
Consolidated Statements of Cash Flows for the Years
Ended March 31, 2000, 1999 and 1998 61
Notes to Consolidated Financial Statements 63
-14-
INDEPENDENT AUDITORS' REPORT
To the Partners of
Independence Tax Credit Plus L.P. II and Subsidiaries
(A Delaware Limited Partnership)
We have audited the consolidated balance sheets of Independence Tax Credit Plus
L.P. II and Subsidiaries (a Delaware Limited Partnership) as of March 31, 2000
and 1999, and the related consolidated statements of operations, changes in
partners' capital (deficit), and cash flows for the years ended March 31, 2000,
1999 and 1998 (the 1999, 1998 and 1997 Fiscal Years, respectively). The
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits. We did not audit the financial statements for fifteen (Fiscal 1999,
1998 and 1997) subsidiary partnerships whose losses aggregated $4,170,745,
$3,860,136 and $8,886,716 for the 1999, 1998 and 1997 Fiscal Years,
respectively, and whose assets constituted 96% of the Partnership's assets at
March 31, 2000 and 1999, presented in the accompanying consolidated financial
statements. The financial statements of these subsidiary partnerships were
audited by other auditors whose reports thereon have been furnished to us and
our opinion expressed herein, insofar as it relates to the amounts included for
these subsidiary partnerships, is based solely upon the reports of the other
auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
-15-
In our opinion, based upon our audits and the reports of other auditors, the
accompanying consolidated financial statements referred to above present fairly,
in all material respects, the financial position of Independence Tax Credit Plus
L.P. II and Subsidiaries at March 31, 2000 and 1999, and the results of their
operations and their cash flows for the years ended March 31, 2000, 1999 and
1998 in conformity with generally accepted accounting principles.
Trien Rosenberg Rosenberg
Weinberg Ciullo & Fazzari LLP
New York, New York
June 2, 2000
-16-
[Letterhead of Ziner, Kennedy & Lehan LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Lincoln Renaissance
We have audited the accompanying balance sheets of Lincoln Renaissance (a
Pennsylvania Limited Partnership) as of December 31, 1999 and 1998, and the
related statements of operations, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's general partners and contracted management agent. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Partnership's general partners and contracted management agent, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Lincoln Renaissance at December
31, 1999 and 1998, and the results of its operations, changes in partners'
equity and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/ Ziner, Kennedy & Lehman LLP
Quincy, Massachusetts
January 26, 2000
-17-
[Letterhead of Ziner & Company, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Lincoln Renaissance
We have audited the accompanying balance sheets of Lincoln Renaissance (a
Pennsylvania Limited Partnership) as of December 31, 1998 and 1997, and the
related statements of operations, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's general partners and contracted management agent. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Partnership's general partners and contracted management agent, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Lincoln Renaissance at December
31, 1998 and 1997, and the results of its operations, changes in partners'
equity and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/ Ziner & Company, P.C.
Boston, Massachusetts
January 30, 1999
-18-
[Letterhead of WIELAND & COMPANY, INC.]
INDEPENDENT AUDITOR'S REPORT
To the Partners
United - Germano - Millgate Limited Partnership
We have audited the accompanying balance sheets of United - Germano - Millgate
Limited Partnership (an Illinois limited partnership) as of December 31, 1999
and 1998, and the related statements of operations, partners' equity, and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States and the Illinois Housing Development Authority's Financial
Reporting and Audits Guidelines for Mortgagors of Multifamily Housing
Developments. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of United - Germano - Millgate
Limited Partnership as of December 31, 1999 and 1998, and the results of its
operations, changes in partners' equity, and cash flows for the years then ended
in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, the Illinois Housing
Development Authority's Financial Reporting and Audit Guidelines for Mortgagors
of Multifamily Housing Developments, and the Consolidated Audit Guide for Audits
of HUD Programs issued by the U.S. Department of Housing and Urban Development,
we have also issued a report dated February 14, 2000, on our consideration of
the internal control of United - Germano - Millgate Limited Partnership, and
reports dated February 14, 2000, on its compliance with specific requirements
applicable to major HUD and IHDA-assisted programs and specific requirements
applicable to Fair Housing and Non-Discrimination.
-19-
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information is presented for purposes of additional analysis and is not a
required part of the basic financial statements of United - Germano - Millgate
Limited Partnership. Such information has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Wieland & Company, Inc.
Engagement Partner: Paul H. Wieland
13 South Batavia Avenue
Batavia, Illinois 60510
(630) 761-8199
EIN 36-4025026
February 14, 2000
-20-
[Letterhead of WIELAND & COMPANY, INC.]
INDEPENDENT AUDITOR'S REPORT
To the Partners
United - Germano - Millgate Limited Partnership
We have audited the accompanying balance sheets of United - Germano - Millgate
Limited Partnership (an Illinois limited partnership) as of December 31, 1998
and 1997, and the related statements of operations, partners' equity, and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States and the Illinois Housing Development Authority's Financial
Reporting and Audits Guidelines for Mortgagors of Multifamily Housing
Developments. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of United - Germano - Millgate
Limited Partnership as of December 31, 1998 and 1997, and the results of its
operations, changes in partners' equity, and cash flows for the years then ended
in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, the Illinois Housing
Development Authority's Financial Reporting and Audit Guidelines for Mortgagors
of Multifamily Housing Developments, and the Consolidated Audit Guide for Audits
of HUD Programs issued by the U.S. Department of Housing and Urban Development,
we have also issued a report dated January 22, 1999, on our consideration of the
internal control of United - Germano - Millgate Limited Partnership, and reports
dated January 22, 1999 on its compliance with specific requirements applicable
to major HUD and IHDA-assisted programs and specific requirements applicable to
Fair Housing and Non-Discrimination.
-21-
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information is presented for purposes of additional analysis and is not a
required part of the basic financial statements of United - Germano - Millgate
Limited Partnership. Such information has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Wieland & Company, Inc.
Engagement Partner: Paul H. Wieland
1157 South Raddant Road
Batavia, Illinois 60510
(630) 761-8199
EIN 36-4025026
January 22, 1999
-22-
[Letterhead of Ziner, Kennedy & Lehan LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Mansion Court Associates
We have audited the accompanying balance sheets of Mansion Court Associates (a
Pennsylvania limited partnership) as of December 31, 1999 and 1998 and the
related statements of operations, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's general partners and contracted management agent. Our
responsibility is to express an opinion on these financial statements based on
our audits.
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 the
Partnership's general partners and contracted management agent, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Mansion Court Associates at
December 31, 1999 and 1998, and the results of its operations, changes in
partners' equity and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/ Ziner, Kennedy & Lehan LLP
Quincy, Massachusetts
January 20, 2000
-23-
[Letterhead of Ziner & Company, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Mansion Court Associates
We have audited the accompanying balance sheets of Mansion Court Associates (a
Pennsylvania limited partnership) as of December 31, 1998 and 1997 and the
related statements of operations, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's general partners and contracted management agent. Our
responsibility is to express an opinion on these financial statements based on
our audits.
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 the
Partnership's general partners and contracted management agent, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Mansion Court Associates at
December 31, 1998 and 1997, and the results of its operations, changes in
partners' equity and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/ Ziner & Company, P.C.
Boston, Massachusetts
January 18, 1999
-24-
[Letterhead of Wall, Einhorn & Chernitzer, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Derby Run Associates, L.P.
(A Virginia Limited Partnership)
Virginia Beach, Virginia
We have audited the accompanying balance sheet of Derby Run Associates, L.P., (A
Virginia Limited Partnership) as of December 31, 1999, and the related
statements of operations, partners' equity and cash flows for the year then
ended. These financial statements are the responsibility of the project's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly in all
material respects, the financial position of Derby Run Associates, L.P. as of
December 31, 1999, and the results of its operations, changes in partner's
equity and its cash flows for the year then ended in conformity with generally
accepted accounting principles.
The accompanying supplementary information shown on pages 12-18, is presented
for purposes of additional analysis and is not a required part of the basic
financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ Wall, Einhorn & Chernitzer, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
Norfolk, Virginia
February 1, 2000
-25-
[Letterhead of Burrus Paul & Turnbull]
INDEPENDENT AUDITORS' REPORT
To the Partners Virginia Housing Development Authority
Derby Run Associates, L.P.
601 S. Belvidere Street
Virginia Beach, Virginia
Richmond, Virginia 23220
We have audited the accompanying balance sheet of Derby Run Associates, L.P.,
Project No. 93-0625-C, as of December 31, 1998, and the related statement of
profit and loss (HUD Form 92410), partners' equity and cash flows for the year
then ended. These financial statements are the responsibility of the project's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly in all
material respects, the financial position of VHDA Project No. 93-0625-C as of
December 31, 1998 and the results of its operations, changes in partner's equity
and cash flows for the year then ended in conformity with generally accepted
accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
the report (page 10), is presented for purposes of additional analysis and is
not a required part of the basic financial statements for VHDA Project No.
93-0625-C. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the financial statements
taken as a whole.
/s/ Burrus Paul & Turnbull
CERTIFIED PUBLIC ACCOUNTANTS
Norfolk, Virginia
January 27, 1999
-26-
[Letterhead of Burrus Paul & Turnbull]
INDEPENDENT AUDITORS' REPORT
To the PartnersVirginia Housing Development Authority
Derby Run Associates, L.P.601 S. Belvidere Street
Virginia Beach, VirginiaRichmond, Virginia 23220
We have audited the accompanying balance sheet of Derby Run Associates, L.P.,
Project No. 93-0625-C, as of December 31, 1997, and the related statement of
profit and loss (HUD Form 92410), partners' equity and cash flows for the year
then ended. These financial statements are the responsibility of the project's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly in all
material respects, the financial position of VHDA Project No. 93-0625-C as of
December 31, 1997 and the results of its operations, changes in partner's equity
and cash flows for the year then ended in conformity with generally accepted
accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
the report (page 10), is presented for purposes of additional analysis and is
not a required part of the basic financial statements for VHDA Project No.
93-0625-C. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the financial statements
taken as a whole.
/s/ Burrus Paul & Turnbull
CERTIFIED PUBLIC ACCOUNTANTS
Norfolk, Virginia
February 11, 1998
-27-
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Renaissance Plaza 93 Associates, L.P.
We have audited the accompanying balance sheet of Renaissance Plaza 93
Associates, L.P. as of December 31, 1999, and the related statements of
operations, partners' equity (deficit) and cash flows for the year then ended.
These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Renaissance Plaza 93
Associates, L.P. as of December 31, 1999, and the results of its operations, the
changes in partners' equity (deficit) and cash flows for the year then ended, in
conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 23 through 33
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated January 26,
2000 on our consideration of Renaissance Plaza 93 Associates, L.P.'s internal
control and on its compliance with requirements applicable to DHCD-assisted
programs, and laws and regulations applicable to the financial statements.
/s/ Reznick Fedder & Silverman
Audit Principal: Robert J. Denmark
Bethesda, Maryland
Federal Employer Identification Number: 52-1088612
January 26, 2000
-28-
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Renaissance Plaza 93 Associates, L.P.
We have audited the accompanying balance sheet of Renaissance Plaza 93
Associates, L.P. as of December 31, 1998, and the related statements of profit
and loss (on HUD Form No. 92410), changes in partners' equity and cash flows for
the year then ended. These financial statements are the responsibility of the
partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Renaissance Plaza 93
Associates, L.P. as of December 31, 1998, and the results of its operations, the
changes in partners' equity and cash flows for the year then ended, in
conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 23 through 30
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information, except for that portion marked
"unaudited," on which we express no opinion, has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated January 21,
1999 on our consideration of Renaissance Plaza 93 Associates, L.P.'s internal
control and on its compliance with requirements applicable to CDA programs, fair
housing and non-discrimination and laws and regulations applicable to the
financial statements.
/s/ Reznick Fedder & Silverman
Audit Principal: Lester A. Kanis
Bethesda, Maryland
Federal Employer Identification Number: 52-1088612
January 21, 1999
-29-
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Renaissance Plaza 93 Associates, L.P.
We have audited the accompanying balance sheet of Renaissance Plaza 93
Associates, L.P. as of December 31, 1997, and the related statements of profit
and loss (on HUD Form No. 92410), changes in partners' equity and cash flows for
the year then ended. These financial statements are the responsibility of the
partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Renaissance Plaza 93
Associates, L.P. as of December 31, 1997, and the results of its operations, the
changes in partners' equity and cash flows for the year then ended, in
conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 23 through 34
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information, except for that portion marked
"unaudited," on which we express no opinion, has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated January 31,
1998 on our consideration of Renaissance Plaza 93 Associates, L.P.'s internal
control and on its compliance with requirements applicable to CDA programs, fair
housing and non-discrimination and laws and regulations applicable to the
financial statements.
/s/ Reznick Fedder & Silverman
Audit Principal: Lester A. Kanis
Bethesda, Maryland
January 31, 1998
-30-
[Letterhead of Ziner, Kennedy & Lehan LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Tasker Village Associates
We have audited the accompanying balance sheet of Tasker Village Associates (a
Pennsylvania limited partnership) as of December 31, 1999 and 1998, and the
related statements of operations, changes in partners' equity, and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's general partners and contracted management agent. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Partnership's general partners and contracted management agent, as well as
evaluating the overall financial statement presentation. We believe that our
audits provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Tasker Village Associates at
December 31, 1999 and 1998, and the results of its operations, changes in
partners' equity, and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/ Ziner, Kennedy & Lehan LLP
Quincy, Massachusetts
January 15, 2000
-31-
[Letterhead of Ziner & Company, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Tasker Village Associates
We have audited the accompanying balance sheet of Tasker Village Associates (a
Pennsylvania limited partnership) as of December 31, 1998 and 1997 and the
related statements of operations, changes in partners' equity, and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's general partners and contracted management agent. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Partnership's general partners and contracted management agent, as well as
evaluating the overall financial statement presentation. We believe that our
audits provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Tasker Village Associates at
December 31, 1998 and 1997, and the results of its operations, changes in
partners' equity, and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/ Ziner & Company, P.C.
Boston, Massachusetts
January 19, 1999
-32-
[Letterhead of Clifford R. Benn]
INDEPENDENT AUDITOR'S REPORT
General Partner
Martha Bryant Manor, L.P.
Los Angeles, California
I have audited the balance sheet of Martha Bryant Manor, L.P. at December 31,
1999 and the related statements of income, changes in partners' capital, and
cash flow for the year then ended. These financial statements are the
responsibility of Martha Bryant Manor, L.P.'s management. My responsibility is
to express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Martha Bryant Manor, L.P. at
December 31, 1999 and the results of its operations and its cash flow for the
year then ended. In conformity with generally accepted accounting principles.
/s/ Clifford R. Benn
Carson, California
February 23, 2000
-33-
[Letterhead of Clifford R. Benn]
INDEPENDENT AUDITOR'S REPORT
General Partner
Martha Bryant Manor, L.P.
Los Angeles, California
I have audited the balance sheet of Martha Bryant Manor, L.P. at December 31,
1998 and the related statements of income, changes in partners' capital, and
cash flow for the year then ended. These financial statements are the
responsibility of Martha Bryant Manor, L.P.'s management. My responsibility is
to express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Martha Bryant Manor, L.P. at
December 31, 1998 and the results of its operations and its cash flow for the
year then ended. In conformity with generally accepted accounting principles.
/s/ Clifford R. Benn
Carson, California
February 16, 1999
-34-
[Letterhead of Clifford R. Benn]
INDEPENDENT AUDITOR'S REPORT
General Partner
Martha Bryant Manor, L.P.
Los Angeles, California
I have audited the balance sheet of Martha Bryant Manor, L.P. at December 31,
1997 and the related statements of income, changes in partners' capital, and
cash flow for the year then ended. These financial statements are the
responsibility of Martha Bryant Manor, L.P.'s management. My responsibility is
to express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Martha Bryant Manor, L.P. at
December 31, 1997 and the results of its operations and its cash flow for the
year then ended. In conformity with generally accepted accounting principles.
As more fully described in Note 6, subsequent to the issuance of the
partnership's 1997 financial statements and my report thereon dated February 2,
1998, I became aware that those financial statements did not properly disclose
deferred mortgage interest payable. In my original report I expressed an
unqualified opinion on the 1997 financial statements, and my opinion on the
revised statements, as expressed herein, remains unqualified.
/s/ Clifford R. Benn
Carson, California
February 2, 1998, except as to the last paragraph above
and Notes 5 and 6, which are as of March 13, 1998
-35-
[Letterhead of MARVIN D. MASON]
To the Partners of
Colden Oaks, A California Limited Partnership
Los Angeles, California
I have audited the accompanying balance sheets of Colden Oaks, a California
Limited Partnership, as of December 31, 1999 and 1998, and the related
statements of operations, changes in partners' equity and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's general partners. My responsibility is to express an opinion on
these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Partnership's general partners, as well as evaluating the overall financial
statement presentation. I believe that my audit provides a reasonable basis for
my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Colden Oaks, a California Limited
Partnership as of December 31, 1999 and 1998, and the results of its operations,
changes in partners' equity and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
/s/ Marvin Mason
Certified Public Accountant
Encino, California
February 25, 2000
-36-
[Letterhead of MARVIN D. MASON]
To the Partners of
Colden Oaks, A California Limited Partnership
Los Angeles, California
I have audited the accompanying balance sheet of Colden Oaks, a California
Limited Partnership, as of December 31, 1997, and the related statements of
operations, changes in partners' capital and cash flows for the year then ended.
These financial statements are the responsibility of the Partnership's
management. My responsibility is to express an opinion on these financial
statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Colden Oaks, a California Limited
Partnership, at December 31, 1997, and the results of its operations and its
cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/ Marvin Mason
Encino, California
February 28, 1998
-37-
[Letterhead of Clifford R. Benn]
INDEPENDENT AUDITOR'S REPORT
General Partner
Brynview Terrace, L.P.
Los Angeles, California
I have audited the balance sheet of Brynview Terrace, L.P. at December 31, 1999
and the related statements of income, changes in partners' capital, and cash
flow for the year then ended. These financial statements are the responsibility
of Brynview Terrace, L.P.'s management. My responsibility is to express an
opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also include
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Brynview Terrace, L.P. at December
31, 1999 and the results of its operations and its cash flow for the year then
ended. In conformity with generally accepted accounting principles.
/s/ Clifford R. Benn, C.P.A.
Carson, California
February 17, 2000
-38-
[Letterhead of Clifford R. Benn]
INDEPENDENT AUDITOR'S REPORT
General Partner
Brynview Terrace, L.P.
Los Angeles, California
I have audited the balance sheet of Brynview Terrace, L.P. at December 31, 1998
and the related statements of income, changes in partners' capital, and cash
flow for the year then ended. These financial statements are the responsibility
of Brynview Terrace, L.P.'s management. My responsibility is to express an
opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also include
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Brynview Terrace, L.P. at December
31, 1998 and the results of its operations and its cash flow for the year then
ended. In conformity with generally accepted accounting principles.
/s/ Clifford R. Benn, C.P.A.
Carson, California
February 4, 1999
-39-
[Letterhead of Clifford R. Benn]
INDEPENDENT AUDITOR'S REPORT
General Partner
Brynview Terrace, L.P.
Los Angeles, California
I have audited the balance sheet of Brynview Terrace, L.P. at December 31, 1997
and the related statements of income, changes in partners' capital, and cash
flow for the year then ended. These financial statements are the responsibility
of Brynview Terrace, L.P.'s management. My responsibility is to express an
opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also include
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Brynview Terrace, L.P. at December
31, 1997 and the results of its operations and its cash flow for the year then
ended. In conformity with generally accepted accounting principles.
/s/ Clifford R. Benn, C.P.A.
Carson, California
February 24, 1998
-40-
[Letterhead of Robert J. Pacheco, CPA]
Independent Auditor's Report
To the Partners of NLEDC, L.P., A California Limited Partnership:
I have audited the accompanying balance sheet of NLEDC, L.P., a California
Limited Partnership, as of December 31, 1999, and the related statements of
income, changes in partners' capital, and cash flows for the year then ended.
These financial statements are the responsibility of the Partnership's
management. My responsibility is to express an opinion on these financial
statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that I plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of NLEDC, L.P., a California Limited
Partnership, at December 31, 1999, and the results of its operations, changes in
partners' capital and cash flows for the year then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U. S. Department of Housing and
Urban Development, I have also issued reports dated March 25, 1999, on my
consideration of the Partnership's internal control, on its compliance with
specific requirements applicable to nonmajor HUD programs and specific
requirements applicable to Fair Housing and Non-Discrimination.
/s/ Robert Pacheco
Pasadena, California
March 25, 2000
-41-
[Letterhead of Robert J. Pacheco, CPA]
Independent Auditor's Report
To the Partners of NLEDC, L.P., A California Limited Partnership:
I have audited the accompanying balance sheet of NLEDC, L.P., a California
Limited Partnership, as of December 31, 1998, and the related statements of
income, changes in partners' capital, and cash flows for the year then ended.
These financial statements are the responsibility of the Partnership's
management. My responsibility is to express an opinion on these financial
statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that I plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of NLEDC, L.P., a California Limited
Partnership, at December 31, 1998, and the results of its operations, changes in
partners' capital and cash flows for the year then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U. S. Department of Housing and
Urban Development, I have also issued reports dated February 25, 1999, on my
consideration of the Partnership's internal control, on its compliance with
specific requirements applicable to non-major HUD programs and specific
requirements applicable to Fair Housing and Non-Discrimination.
/s/ Robert Pacheco
Pasadena, California
February 25, 1999
-42-
[Letterhead of Robert J. Pacheco, CPA]
Independent Auditor's Report
To the Partners of NLEDC, L.P., A California Limited Partnership:
I have audited the accompanying balance sheet of NLEDC, L.P., a California
Limited Partnership, as of December 31, 1997, and the related statements of
income, changes in partners' capital, and cash flows for the year then ended.
These financial statements are the responsibility of the Partnership's
management. My responsibility is to express an opinion on these financial
statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that I plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of NLEDC, L.P., a California Limited
Partnership, at December 31, 1997, and the results of its operations, changes in
partners' capital and cash flows for the year then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U. S. Department of Housing and
Urban Development, I have also issued reports dated February 25, 1998, on my
consideration of the Partnership's internal control, on its compliance with
specific requirements applicable to non-major HUD programs and specific
requirements applicable to Affirmative Fair Housing.
/s/ Robert Pacheco
Robert J. Pacheco, CPA
Pasadena, California
February 25, 1998
-43-
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Creative Choice Homes VI, Ltd.
We have audited the accompanying balance sheet of Creative Choice Homes VI, Ltd.
as of December 31, 1999, and the related statements of operations, partners'
equity and cash flows for the year then ended. These financial statements are
the responsibility of the partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Creative Choice Homes VI, Ltd.
as of December 31, 1999, and the results of its operations, the changes in
partners' equity and cash flows for the year then ended, in conformity with
generally accepted accounting principles.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland
January 11, 2000
-44-
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Creative Choice Homes VI, Ltd.
We have audited the accompanying balance sheet of Creative Choice Homes VI, Ltd.
as of December 31, 1998, and the related statements of operations, partners'
equity and cash flows for the year then ended. These financial statements are
the responsibility of the partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Creative Choice Homes VI, Ltd.
as of December 31, 1998, and the results of its operations, the changes in
partners' equity and cash flows for the year then ended, in conformity with
generally accepted accounting principles.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland
February 5, 1999
-45-
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Creative Choice Homes VI, Ltd.
We have audited the accompanying balance sheet of Creative Choice Homes VI, Ltd.
as of December 31, 1997, and the related statements of operations, partners'
equity and cash flows for the year then ended. These financial statements are
the responsibility of the partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Creative Choice Homes VI, Ltd.
as of December 31, 1997, and the results of its operations, the changes in
partners' equity and cash flows for the year then ended, in conformity with
generally accepted accounting principles.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland
February 6, 1998
-46-
[Letterhead of SUAREZ ACCOUNTANCY CORPORATION]
Independent Auditor's Report
To the Partners
P & P Home for the Elderly, L.P.
Los Angeles, California
I have audited the accompanying balance sheet of P & P Home for the Elderly,
L.P. as of December 31, 1999, and the related statements of income, changes in
partners' capital, and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of P & P Home for the Elderly, L.P. at
December 31, 1999, and the results of its operations and cash flows for the year
then ended, in conformity with generally accepted accounting principles.
/s/ Suarez Accountancy Corporation
San Pedro, California
February 3, 2000
-47-
[Letterhead of SUAREZ ACCOUNTANCY CORPORATION]
Independent Auditor's Report
To the Partners
P & P Home for the Elderly, L.P.
Los Angeles, California
I have audited the accompanying balance sheet of P & P Home for the Elderly,
L.P. as of December 31, 1998, and the related statements of income, changes in
partners' capital, and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of P & P Home for the Elderly, L.P. at
December 31, 1998, and the results of its operations and cash flows for the year
then ended, in conformity with generally accepted accounting principles.
/s/ Suarez Accountancy Corporation
San Pedro, California
March 8, 1999
-48-
[Letterhead of SUAREZ ACCOUNTANCY CORPORATION]
Independent Auditor's Report
To the Partners
P & P Home for the Elderly, L.P.
Los Angeles, California
I have audited the accompanying balance sheet of P & P Home for the Elderly,
L.P. as of December 31, 1997, and the related statements of income, changes in
partners' capital, and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of P & P Home for the Elderly, L.P. at
December 31, 1997, and the results of its operations and cash flows for the year
then ended, in conformity with generally accepted accounting principles.
/s/ Suarez Accountancy Corporation
San Pedro, California
January 30, 1998
-49-
[Letterhead of COLE, EVANS & PETERSON]
INDEPENDENT AUDITORS' REPORT ON THE BASIC FINANCIAL STATEMENTS
AND SUPPLEMENTAL INFORMATION
Clear Horizons Limited Partnership
Shreveport, Louisiana
We have audited the accompanying balance sheet of Clear Horizons Limited
Partnership, at December 31, 1999, and the related statements of income, capital
and cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to in the first paragraph
above present fairly, in all material respects, the financial position of Clear
Horizons Limited Partnership, at December 31, 1999 and the results of its
operations, changes in capital, and cash flows for the year then ended in
conformity with generally accepted accounting principles.
Our audit was made primarily for the purpose of forming an opinion on the basic
financial statements for the year ended December 31, 1999 taken as a whole. The
supplementary Schedules 1 through 6 are presented for purposes of additional
analysis and are not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U. S. Department of Housing and
Urban Development, we have also issued a report dated February 9, 2000 on our
consideration of Clear Horizons Limited Partnership's internal control, and
reports dated February 9, 2000, on its compliance with laws and regulations,
compliance with specific requirements applicable to Affirmative Fair Housing,
and compliance with specific requirements applicable to major HUD-assisted
programs.
/s/ Cole, Evans & Peterson
Lead Auditor: Steven W. Hedgepeth
Federal ID No. 72-0506596
Shreveport, Louisiana
February 9, 2000
-50-
[Letterhead of COLE, EVANS & PETERSON]
INDEPENDENT AUDITORS' REPORT ON THE BASIC FINANCIAL STATEMENTS
AND SUPPLEMENTAL INFORMATION
Clear Horizons Limited Partnership
Shreveport, Louisiana
We have audited the accompanying balance sheet of Clear Horizons Limited
Partnership, at December 31, 1998, and the related statements of income, capital
and cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to in the first paragraph
above present fairly, in all material respects, the financial position of Clear
Horizons Limited Partnership, at December 31, 1998 and the results of its
operations, changes in capital, and cash flows for the year then ended in
conformity with generally accepted accounting principles.
Our audit was made primarily for the purpose of forming an opinion on the basic
financial statements for the year ended December 31, 1998 taken as a whole. The
supplementary Schedules 1 through 6 are presented for purposes of additional
analysis and are not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U. S. Department of Housing and
Urban Development, we have also issued a report dated February 12, 1999 on our
consideration of Clear Horizons Limited Partnership's internal control, and
reports dated February 12, 1999, on its compliance with laws and regulations,
compliance with specific requirements applicable to Affirmative Fair Housing,
and compliance with specific requirements applicable to major HUD-assisted
programs.
/s/ Cole, Evans & Peterson
Lead Auditor: Steven W. Hedgepeth
Federal ID No. 72-0506596
Shreveport, Louisiana
February 12, 1999
-51-
[Letterhead of COLE, EVANS & PETERSON]
INDEPENDENT AUDITORS' REPORT ON THE BASIC FINANCIAL STATEMENTS
AND SUPPLEMENTAL INFORMATION
Clear Horizons Limited Partnership
Shreveport, Louisiana
We have audited the accompanying balance sheet of Clear Horizons Limited
Partnership, at December 31, 1997, and the related statements of profit and
loss, capital and cash flows for the year then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to in the first paragraph
above present fairly, in all material respects, the financial position of Clear
Horizons Limited Partnership, at December 31, 1997 and the results of its
operations, changes in capital, and cash flows for the year then ended in
conformity with generally accepted accounting principles.
Our audit was made primarily for the purpose of forming an opinion on the basic
financial statements for the year ended December 31, 1997 taken as a whole. The
supplementary Schedules 1 through 5 are presented for purposes of additional
analysis and are not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U. S. Department of Housing and
Urban Development, we have also issued a report dated February 9, 1998 on our
consideration of Clear Horizons Limited Partnership's internal control, and
reports dated February 9, 1998, on its compliance with laws and regulations,
compliance with specific requirements applicable to Affirmative Fair Housing,
and compliance with specific requirements applicable to major HUD-assisted
programs.
/s/ Cole, Evans & Peterson
Lead Auditor: Steven W. Hedgepeth
Federal ID No. 72-0506596
Shreveport, Louisiana
February 9, 1998
-52-
[Letterhead of Ziner, Kennedy & Lehan LLP
INDEPENDENT AUDITORS' REPORT
To the Partners of
Neptune Venture, L.P.
We have audited the accompanying balance sheets of Neptune Venture, L.P. (a New
Jersey limited partnership) as of December 31, 1999 and 1998, and the related
statements of operations, changes in partners' equity and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's general partner and contracted management agent. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Partnership's general partner and contracted management agent, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Neptune Venture, L.P. at
December 31, 1999 and 1998, and the results of its operations, changes in
partners' equity and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/ Ziner, Kennedy & Lehan LLP
Quincy, Massachusetts
January 17, 2000
-53-
[Letterhead of Ziner & Company, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Neptune Venture, L.P.
We have audited the accompanying balance sheets of Neptune Venture, L.P. (a New
Jersey limited partnership) as of December 31, 1998 and 1997, and the related
statements of operations, changes in partners' equity and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's general partner and contracted management agent. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Partnership's general partner and contracted management agent, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Neptune Venture, L.P. at
December 31, 1998 and 1997, and the results of its operations, changes in
partners' equity and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
/s/ Ziner & Company, P.C.
Boston, Massachusetts
January 20, 1999
-54-
[Letterhead of Lawlor, O'Brien & Chervenak, LLC]
INDEPENDENT AUDITORS' REPORT
To the Partners
Affordable Green Associates, L.P.
We have audited the accompanying balance sheet of Affordable Green Associates,
L.P. as of December 31, 1999 and the related statements of operations, changes
in partners' capital, and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Affordable Green Associates,
L.P. as of December 31, 1999 and the results of its operations, changes in
partners' capital, and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
/s/ Lawlor, O'Brien & Chervenak, LLC
Totowa, New Jersey
February 15, 2000
-55-
[Letterhead of Lawlor, O'Brien & Chervenak, LLC]
INDEPENDENT AUDITORS' REPORT
To the Partners
Affordable Green Associates, L.P.
We have audited the accompanying balance sheet of Affordable Green Associates,
L.P. as of December 31, 1998 and the related statements of operations, changes
in partners' capital, and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial