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, 2003
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ------- EXCHANGE ACT OF 1934
Commission File Number 0-24652
FREEDOM TAX CREDIT PLUS L.P.
----------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3533987
- ------------------------------- -------------------
(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
Beneficial Assignment Certificates and Limited Partnership Interests
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes No X
----- -----
The approximate aggregate book value of the voting and non-voting common
equity held by non-affiliates of the Registrant as of September 30, 2002 was
$8,207,000 based on Limited Partner equity as of such date.
Registrant's voting and non-voting common equity is not publicly traded.
DOCUMENTS INCORPORATED BY REFERENCE
None
CAUTIONARY STATEMENT FOR PURPOSES OF
THE "SAFE HARBOR" PROVISIONS OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
WHEN USED IN THIS ANNUAL REPORT ON FORM 10-K, THE WORDS "BELIEVES,"
"ANTICIPATES," "EXPECTS" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY
FORWARD-LOOKING STATEMENTS. STATEMENTS LOOKING FORWARD IN TIME ARE INCLUDED IN
THIS ANNUAL REPORT ON FORM 10-K PURSUANT TO THE "SAFE HARBOR" PROVISION OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH STATEMENTS ARE SUBJECT TO
CERTAIN RISKS AND UNCERTAINTIES WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY, INCLUDING, BUT NOT LIMITED TO, THOSE SET FORTH IN "MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS."
READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING
STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE HEREOF.
2
PART I
Item 1. Business.
General
- -------
Freedom Tax Credit Plus L.P. (the "Partnership") is a limited partnership which
was formed under the laws of the State of Delaware on August 28, 1989. The
General Partners of the Partnership are Related Freedom Associates L.P., a
Delaware limited partnership (the "Related General Partner"), and Freedom GP
Inc., a Delaware corporation (the "Freedom General Partner" and together with
the Related General Partner, the "General Partners"). The general partner of the
Related General Partner is Related Freedom Associates Inc., a Delaware
corporation. The General Partners are both affiliates of Related Capital
Company. On November 25, 1997, an affiliate of the Related General Partner
purchased 100% of the stock of the Freedom General Partner.
On February 9, 1990, the Partnership commenced a public offering (the
"Offering") of Beneficial Assignment Certificates ("BACs") representing
assignments of limited partnership interests in the Partnership ("Limited
Partnership Interests"), pursuant to a prospectus dated February 9, 1990, as
supplemented by supplements thereto dated December 7, 1990, May 10, 1991, July
10, 1991 and July 23, 1991 (as so supplemented, the "Prospectus").
The Partnership received $72,896,000 of the gross proceeds of the Offering from
4,780 investors, and the Offering was terminated on August 8, 1991. (See Item 8,
"Financial Statements and Supplementary Data," Note 1 of Notes to Consolidated
Financial Statements.)
Investment Objectives
- ---------------------
The Partnership was formed to invest as a limited partner in other limited
partnerships ("Local Partnerships"), each of which owns one or more leveraged
low-income multi-family residential 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, and some of which may also
be eligible for the historic rehabilitation tax credit ("Historic Tax Credit";
together with Housing Tax Credits, the "Tax Credits"). The Partnership's
investment in each Local Partnership represents 98% to 99% of the partnership
interests in the Local Partnership. As of March 31, 2003, the Partnership had
acquired interests in forty-two Local Partnerships. As of March 31, 2003,
approximately $58,000,000 of net proceeds had been invested in such Local
Partnerships, representing all of the Partnership's net proceeds available for
investment. Subsequent to March 31, 2003 and as of the date of this filing,
there have been no additional investments, nor are any other investments
expected. See Item 2, "Properties," below.
The investment objectives of the Partnership are described below.
1. Entitle qualified BACs holders to Housing Tax Credits over the Credit Period
(as defined below) 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.
3
One of the Partnership's objectives is to entitle qualified BACs holders to
Housing 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"). Each of the Local Partnerships in which the
Partnership has an interest has been allocated by the relevant state credit
agency the authority to recognize Housing 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 Housing Tax Credits at
all times during such period. Once a Local Partnership has become eligible to
recognize Housing Tax Credits, it may lose such eligibility and suffer an event
of "recapture" if its Property fails to remain in compliance with the Housing
Tax Credit requirements. None of the Local Partnerships in which the Partnership
has acquired an interest has suffered an event of recapture.
Housing Tax Credits with respect to a given Apartment Complex are available for
a ten-year period that commences when the property is leased to qualified
tenants. However, the annual Housing Tax Credits available in the year in which
the Apartment Complex is leased to qualified tenants must be prorated based upon
the months remaining in the year. The amount of the annual Housing Tax Credits
not available in the first year will be available in the eleventh year. Internal
Revenue Code Section 42 regulates the use of the Apartment Complexes as to
occupancy, eligibility, and unit gross rent, among other requirements. Each
Apartment Complex must meet the provisions of these regulations during each of
fifteen consecutive years in order to remain qualified to receive the credits.
Certain Apartment Complexes have extended compliance periods of up to fifty
years.
The Partnership continues to meet its primary objective of generating Housing
Tax Credits. However, there can be no assurance that the Partnership will
continue to achieve any or all of its investment objectives.
The Partnership also continues to meet its objective of allocating passive
losses to individual BACs holders to offset passive income that they may realize
from rental real estate investments and other passive activities, and allocating
passive losses to corporate BACs holders to offset business income.
As of March 31, 2003, cash distributions received from the Local Partnerships
have been relatively immaterial. Management expects that the distributions
received from the Local Partnerships will increase, although not to a level
sufficient to permit cash distributions to BACs holders. The Partnership does
not anticipate providing cash distributions to BACs holders in circumstances
other than refinancings or sales.
Segments
- --------
The Partnership operates in one segment, which is the investment in multi-family
residential property.
Competition
- -----------
The real estate business is highly competitive and substantially all of the
properties acquired are subject to active competition from similar properties in
their respective vicinities. In addition, various other limited partnerships
may, in the future, be formed by the General Partners and/or their affiliates to
engage in businesses which may compete with the Partnership.
4
Employees
- ---------
The Partnership does not have any direct employees. All services are performed
for the Partnership by its General Partners and their affiliates. The General
Partners receive compensation in connection with such activities as set forth in
Items 11 and 13. In addition, the Partnership reimburses the General Partners
and certain of their affiliates for expenses incurred in connection with the
performance by their employees of services for the Partnership in accordance
with the Partnership's Amended and Restated Agreement and Certificate of Limited
Partnership (the "Partnership Agreement").
Item 2. Properties.
The Partnership holds a 99%, 98.99% and 98% limited partnership interest in
nine, ten and twenty-three Local Partnerships, respectively. Set forth below is
a schedule of these Local Partnerships including certain information concerning
the 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 15 (a) 2; Schedule
III.
Local Partnership Schedule
--------------------------
% of Units Occupied at May 1,
Name and Location -------------------------------
(Number of Units) Date Acquired 2003 2002 2001 2000 1999
- ----------------- ------------- ---- ---- ---- ---- ----
Parkside Townhomes
York, PA (53) September 1990 89% 87% 94% 98% 100%
Twin Trees
Layton, UT (43) October 1990 95% 98% 100% 98% 100%
Bennion (Mulberry)
Taylorsville, UT (80) October 1990 88% 96% 94% 90% 98%
Hunters Chase
Madison, AL (91) October 1990 95% 93% 95% 89% 95%
Wilshire Park
Huntsville, AL (65) October 1990 88% 94% 95% 94% 89%
Bethel Park
Bethel, OH (84) October 1990 89% 80% 86% 95% 88%
Zebulon Park
Owensville, OH (66) October 1990 94% 95% 97% 96% 85%
Tivoli Place
Murphreesboro, TN (61) October 1990 92% 89% 88% 95% 98%
Northwood (Hartwood)
Jacksonville, FL (110) October 1990 92% 100% 95% 96% 97%
Oxford Trace
Aiken, SC (29) October 1990 97% 79% 97% 93% 97%
Ivanhoe Apts.
Salt Lake City, UT (19) January 1991 79% 95% 95% 100% 100%
5
Local Partnership Schedule
--------------------------
(continued)
-----------
% of Units Occupied at May 1,
Name and Location -------------------------------
(Number of Units) Date Acquired 2003 2002 2001 2000 1999
- ----------------- ------------- ---- ---- ---- ---- ----
Washington Brooklyn
Brooklyn, NY (24) January 1991 100% 100% 100% 100% 100%
Manhattan B (C.H. Development)
New York, NY (35) January 1991 100% 100% 97% 94% 94%
Davidson Court
Staten Island, NY (38) March 1991 100% 100% 100% 95% 97%
Magnolia Mews
Philadelphia, PA (63) March 1991 98% 100% 100% 100% 100%
Oaks Village
Whiteville, NC (40) March 1991 98% 100% 98% 98% 93%
Greenfield Village
Dunn, NC (40) March 1991 98% 100% 95% 100% 100%
Morris Avenue (CLM Equities)
Bronx, NY (58) April 1991 100% 100% 100% 100% 100%
Victoria Manor
Riverside, CA (112) April 1991 100% 100% 100% 98% 94%
Ogontz Hall
Philadelphia, PA (35) April 1991 100% 65%(a)100% 84% 97%
Eagle Ridge
Stoughton, WI (54) May 1991 89% 93% 96% 91% 96%
Nelson Anderson
Bronx, NY (81) June 1991 98% 96% 98% 99% 97%
Abraham Lincoln Apts.
Irondequoit, NY (69) September 1991 83% 94% 91% 100% 99%
Wilson Street Apts. (Middletown)
Middletown, PA (44) September 1991 98% 95% 91% 100% 98%
Lauderdale Lakes
Lauderdale Lakes, FL (172) October 1991 97% 96% 95% 94% 94%
Flipper Temple
Atlanta, GA (163) October 1991 97% 100% 96% 97% 100%
220 Cooper Street
Camden, NJ (29) December 1991 100% 93% 97% 100% 70%
Pecan Creek
Tulsa, OK (47) December 1991 92% 94% 98% 98% 91%
6
Local Partnership Schedule
--------------------------
(continued)
-----------
% of Units Occupied at May 1,
Name and Location -------------------------------
(Number of Units) Date Acquired 2003 2002 2001 2000 1999
- ----------------- ------------- ---- ---- ---- ---- ----
Vendome
Brooklyn, NY (24) December 1991 100% 100% 100% 100% 100%
Rainer Villas
New Augusta, MS (20) December 1991 85% 100% 100% 100% 100%
Pine Shadow Apts.
Waveland, MS (48) December 1991 98% 100% 100% 100% 100%
Windsor Place
Wedowee, AL (24) December 1991 100% 100% 100% 100% 100%
Brookwood Apts.
Foley, AL (38) December 1991 95% 98% 95% 97% 100%
Heflin Hills Apts.
Heflin, AL (24) December 1991 100% 100% 100% 96% 100%
Shadowood Apts.
Stevenson, AL (24) December 1991 100% 100% 100% 91% 96%
Brittany Apts.
DeKalb, MS (25) December 1991 100% 100% 100% 100% 100%
Hidden Valley Apts.
Brewton, AL (40) December 1991 100% 99% 100% 100% 100%
Westbrook Square
Carthage, MS (32) December 1991 97% 88% 88% 91% 91%
Royal Pines Apts. (Warsaw Elderly)
Warsaw, KY (36) December 1991 100% 100% 100% 100% 100%
West Hill Square
Gordo, AL (24) December 1991 100% 100% 100% 100% 100%
Elmwood Manor
Picayune, MS (24) December 1991 100% 100% 100% 100% 100%
Harmony Gate Apts.
Los Angeles, CA (70) January 1992 99% 97% 97% 96% 94%
(a) Property undergoing renovations.
None of the Local Partnership's assets or revenue balances are greater than 10%
of the total assets or revenue balances.
All leases are generally for periods not greater than one to two years and no
tenant occupies more than 10% of the rentable square footage.
7
Commercial tenants (to which average rental per square foot applies) comprise
less than 5% of the rental revenues of the Local Partnerships. Rents for the
residential units are determined annually by the U.S. Department of Housing and
Urban Development ("HUD") and reflect increases, if any, in consumer price
indices in various geographic areas.
Management of the General Partners periodically 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 of the General Partners periodically 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.
The General Partners generally required that the general partners of the Local
Partnerships ("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 Operating Deficit Guarantees, amounts funded are treated as
operating loans which do 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.
As of March 31, 2003, all Operating Deficit Guarantees have expired and $314,838
of operating loans are outstanding.
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, 2003, the Partnership had issued and has outstanding 72,896
Limited Partnership Interests, each representing a $1,000 capital contribution
to the Partnership, or an aggregate capital contribution of $72,896,000. All of
the issued and outstanding Limited Partnership Interests have been issued to
Freedom Assignor Inc. (the "Assignor Limited Partner"), which has in turn issued
72,896 BACs to the purchasers thereof for an aggregate purchase price of
$72,896,000. 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. As of May 6, 2003, the Partnership has 4,124
registered holders of an aggregate of 72,896 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
8
contained provisions which have an adverse impact on investors in "publicly
traded partnerships." Accordingly, the General Partners have imposed
restrictions limiting the transferability of the BACs and the Limited
Partnership Interests in secondary market transactions. These restrictions
should prevent a public trading market from developing that would adversely
affect the ability of an investor to liquidate his or her investment quickly. It
is expected that such procedures will remain in effect until such time, if ever,
as further revision of the Revenue Act of 1987 may permit the Partnership to
lessen the scope of the restrictions.
All of the Partnership's general partnership interests, representing an
aggregate capital contribution of $2,000, are held by the two General Partners.
There are no material restrictions in the Partnership Agreement on the ability
of the Partnership to make distributions. The Partnership has made no
distributions to the BACs holders as of March 31, 2003. The Partnership does not
anticipate providing cash distributions to its BACs holders other than from net
refinancing or sales proceeds.
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.
For the Years ended March 31,
------------------------------------------------------------------------------------
OPERATIONS 2003 2002 2001 2000 1999
- ---------- ------------ ------------ ------------ ------------ ------------
Revenues $ 15,732,226 $ 15,417,026 $ 14,946,838 $ 14,333,134 $ 13,968,742
Expenses (19,523,423) (19,207,657) (19,238,172) (18,617,952) (18,748,002)
Loss on impairment
of assets 0 0 (2,065,000) (500,000) 0
------------ ------------ ------------ ------------ ------------
Loss before
minority interest (3,791,197) (3,790,631) (6,356,334) (4,784,818) (4,779,260)
Minority interest 37,450 39,461 48,280 50,054 50,809
------------ ------------ ------------ ------------ ------------
Net loss $ (3,753,747) (3,751,170) (6,308,054) (4,734,764) (4,728,451)
============ ============ ============ ============ ============
Per BAC:
Net loss (50.98) (50.94) (85.67) (64.30) (64.22)
============ ============ ============ ============ ============
March 31,
------------------------------------------------------------------------------------
OPERATIONS 2003 2002 2001 2000 1999
- ---------- ------------ ------------ ------------ ------------ ------------
Total assets $ 93,667,833 $ 97,175,105 $100,937,211 $107,181,062 $111,946,154
============ ============ ============ ============ ============
Mortgage notes payable $ 67,366,819 $ 68,063,227 $ 69,021,892 $ 69,914,088 $ 70,447,844
============ ============ ============ ============ ============
Total liabilities $ 79,736,876 $ 79,553,880 $ 79,602,583 $ 79,522,764 $ 79,491,693
============ ============ ============ ============ ============
Total partners' capital $ 5,851,700 $ 9,605,982 $ 13,357,152 $ 19,669,754 $ 24,407,636
============ ============ ============ ============ ============
Cash Distributions
- ------------------
The Partnership has made no distributions to the BACs holders as of March 31,
2003.
9
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Liquidity and Capital Resources
- ------------------------------
General
- -------
During the year ended March 31, 2003, the primary sources of liquidity included
working capital, interest earned on working capital, and distributions received
from the Local Partnerships. None of these sources generated substantial amounts
of funds.
Working capital of approximately $45,000, exclusive of Local Partnerships'
working capital, remains as of March 31, 2003. It is used to pay operating
expenses of the Partnership, including Partnership management fees payable to
the General Partners and advances to Local Partnerships if warranted.
During the fiscal year ended March 31, 2003, cash and cash equivalents of the
Partnership and its forty-two Local Partnerships increased approximately
$413,000 due to cash provided by operating activities ($1,489,000), an increase
in capitalization of consolidated subsidiaries attributable to minority interest
($101,000) and a net increase in due to local general partners and affiliates
relating to investing and financing activities ($293,000) which exceeded capital
improvements ($751,000), increase in marketable securities ($1,000), increase in
deferred costs ($21,000) and net repayments of mortgage loans ($696,000).
Included in the adjustments to reconcile the net loss to cash provided by
operating activities is depreciation and amortization ($4,915,000).
During the years ended March 31, 2003 ("Fiscal Year 2003"), March 31, 2002
("Fiscal Year 2002"), and March 31, 2001 ("Fiscal Year 2001") the amounts
received from the Local Partnerships were $54,649, $3,637 and $26,796,
respectively. Cash distributions from Local Partnerships are not expected to
reach a level sufficient to permit cash distributions to BACs holders. These
distributions, as well as the working capital reserves referred to in the
paragraph above, will be used to meet the operating expenses of the Partnership.
Partnership management fees owed to General Partners amounting to approximately
$5,532,000 and $4,856,000 were accrued and unpaid as of March 31, 2003 and 2002,
respectively. Without the General Partners continued accrual without payment,
the Partnership will not be in a position to meet its obligations. The General
Partners have continued allowing the accrual without payment of these amounts,
but are under no obligation to continue to do so. The Partnership is dependent
upon the support of the General Partner and certain of its affiliates in order
to meet its obligations at the Partnership level. The General Partner and these
affiliates have agreed to continue such support for the foreseeable future.
Effective January 1, 1999 the State of California requires owners of a property
benefiting from FHA insured mortgages under Section 236 or 221(a)(3) to provide
a nine month notice of contract termination or prepayment of the FHA insured
loan. In addition, with respect to the Partnership's California investments, the
owner must offer the properties for sale to those entities who agree to maintain
the property as affordable housing.
On October 20, 1999 President Clinton signed the Fiscal Year 2000 VA, the HUD
Independent Agencies Appropriations Act (the "Appropriations Act"). The
Appropriations Act contains revisions to the HUD Mark-to-Market Program and
other HUD programs concerning the preservation of the HUD housing stock. On
December 29, 1999 HUD issued Notice H99-36 addressing "Project Based Section 8
Contracts Expiring in Fiscal Year 2000," reflecting the changes in the
Appropriations Act and superceding earlier HUD Notices 98-34, 99-08, 99-15,
99-21 and 99-32. Notice 99-36 clarifies many of the earlier uncertainties with
respect to the earlier HUD Section 8 Mark-to-Market Programs and continued the
10
Mark-to-Market Program which allows owners with Section 8 contracts to increase
the rents to market levels where contract rents are currently below market. As
of March 31, 2003, none of the Local Partnerships have opted to enter the
Mark-to-Market Program and therefore this has no impact on the Partnership.
Except as described above, management is not aware of any trends or events,
commitments or uncertainties, which have not otherwise been disclosed, that will
or are likely to impact liquidity in a material way. Management believes the
only impact would be from laws that have not yet been adopted. The portfolio is
diversified by the location of the properties around the United States so that
if one area of the country is experiencing downturns in the economy, the
remaining properties in the portfolio may not be affected. However, the
geographic diversification of the portfolio may not protect against a general
downturn in the national economy.
The Partnership has fully invested the proceeds of its offering in 42 Local
Partnerships, all of which have their Housing Tax Credits in place. The Housing
Tax Credits are attached to the property 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
Housing Tax Credits would transfer to the new owner, thereby adding significant
value to the property on the market.
New Accounting Pronouncements
- -----------------------------
In January 2003, the Financial Accounting Standards Board issued Financial
Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46").
FIN 46 is applicable immediately for variable interest entities created after
January 31, 2003. For variable interest entities created before January 31,
2003, the provisions of FIN 46 are applicable no later than July 1, 2003. The
Partnership has not identified any variable interest entities that were created
after January 31, 2003 and is currently evaluating the impact of the provisions
of FIN 46 on its consolidated financial statements.
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) when the property is considered to be impaired and the depreciated cost
exceeds estimated fair value.
During the years ended March 31, 2003 and 2002, the Partnership did not record a
loss on impairment of assets. During the year ended March 31, 2001, the
Partnership recorded $2,065,000 of losses on impairment of assets.
The following is a summary of the results of operations of the Partnership for
the fiscal years ended March 31, 2003, 2002 and 2001.
The Partnership's primary source of income continues to be rental income with
the corresponding expenses being divided among operations, depreciation, and
mortgage interest.
11
Rental income is recognized as rent becomes due. Rental payments received in
advance are deferred until earned. The Partnership received rental subsidies
which amounted to approximately $3,178,000, $2,953,000 and $2,904,000 for the
years ended March 31, 2003, 2002 and 2001, respectively. The related rental
subsidy programs have expiration dates that either expire subsequent to the year
2003 or terminate upon total disbursement of the assistance obligation.
2003 vs. 2002
- -------------
Rental income increased approximately 4% for the year ended March 31, 2003 as
compared to 2002, primarily due to rental rate increases.
Other income decreased approximately $225,000 for the year ended March 31, 2003
as compared to 2002, primarily due to lower interest rates on cash and cash
equivalent balances at the Local Partnership level.
Total expenses, excluding operating and other, remained fairly consistent with
an increase of less than 1% for the year ended March 31, 2003, as compared to
2002.
Operating and other increased approximately $302,000 for the year ended March
31, 2003 as compared to 2002, primarily due to an increase in insurance premiums
at the Local Partnerships.
2002 vs. 2001
- -------------
Rental income increased approximately 3% for the year ended March 31, 2002 as
compared to 2001 primarily due to rental rate increases.
No major expense categories, other than the loss on impairment of assets,
changed more than 6% for the year ended March 31, 2002 as compared to 2001.
Critical Accounting Estimates
- -----------------------------
The preparation of consolidated financial statements requires management to make
estimates and assumptions. These estimates and assumptions affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and the
reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates. The following accounting estimate is
considered critical by the Partnership.
The Partnership is required to assess potential impairments to its long-lived
assets, which is primarily property and equipment. If impairment indicators are
present, the Partnership must measure the fair value of the assets to determine
if adjustments are to be recorded.
Other
- -----
The Partnership continues to meet its primary objective of generating Housing
Tax Credits. Housing Tax Credits are generated by a Property over a ten-year
period commencing as each Property is leased to qualified tenants. During the
years ended March 31, 2003, 2002 and 2001, the Housing Tax Credits received by
the Partnership totaled $1,710,233, $6,782,384 and $11,106,285, respectively.
Based on the fact that all the Local Partnerships' tax credits will be expiring
in the year 2003, the Partnership expects the Tax Credits to be received in
fiscal year 2004 to be approximately $40,000.
The Partnership's investments as limited partners in the Local Partnerships are
subject to the risks incident to the management and ownership of improved real
12
estate. The Partnership's investments also could be adversely affected by poor
economic conditions generally, which could increase vacancy levels, rental
payment defaults and operating expenses, any or all of which could threaten the
financial viability of one or more of the Local Partnerships.
There are also 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 HUD 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
generally allows for increases in rental rates to reflect the impact of higher
operating and replacement costs. Inflation also affects the Local Partnerships
adversely by increasing operating costs as a result of higher costs of such
items as fuel, utilities and labor. However, continued inflation may result in
appreciated values of the Local Partnerships' Apartment Complexes over a period
of time as rental revenues and replacement costs continue to increase.
The Partnership does not anticipate that it will be in a position to make cash
distributions at any time prior to the disposition of the Properties. If
distributions of operating cash flow are made, it is expected that they will be
limited. As of March 31, 2003, no such distributions have been made.
Item 7a. Quantitative and Qualitative Disclosures about Market Risk.
The Partnership is not exposed to market risk since its mortgage indebtedness
bears fixed rates of interest.
13
Item 8. Financial Statements and Supplementary Data.
Sequential
Page
----------
(a) 1. Financial Statements
Independent Auditors' Reports 15
Consolidated Balance Sheets as of March 31, 2003 and 2002 107
Consolidated Statements of Operations for the years ended
March 31, 2003, 2002 and 2001 108
Consolidated Statements of Changes in Partners' Capital
(Deficit) for the years ended March 31, 2003, 2002 and 2001 109
Consolidated Statements of Cash Flows for the years ended
March 31, 2003, 2002 and 2001 110
Notes to Consolidated Financial Statements 112
14
INDEPENDENT AUDITORS' REPORT
----------------------------
TO THE PARTNERS OF
FREEDOM TAX CREDIT PLUS L.P.
We have audited the accompanying consolidated balance sheet of
FREEDOM TAX CREDIT PLUS L.P. AND SUBSIDIARIES as of March 31, 2003 and the
related consolidated statements of operations, changes in partners' capital
(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 did not
audit the financial statements of forty subsidiary partnerships, whose losses
aggregated $3,382,460 for the year ended March 31, 2003 and whose assets
constituted 91% of consolidated assets at March 31, 2003. Those statements were
audited by other auditors whose reports have been furnished to us, and our
opinion, insofar as it relates to the amounts included for these subsidiary
partnerships, is based solely on the reports of the other auditors.
We conducted our audit in accordance with auditing standards
generally accepted in the United States of America. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit and the reports of the other auditors provide a reasonable basis for our
opinion.
In our opinion, based on our audit and the reports of the other
auditors, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of FREEDOM TAX CREDIT
PLUS L.P. AND SUBSIDIARIES as of March 31, 2003 and the results of their
operations and their cash flows for the year ended March 31, 2003 in conformity
with accounting principles generally accepted in the United States of America.
/s/ Friedman, Alpren & Green, LLP
New York, New York
May 12, 2003
15
INDEPENDENT AUDITORS' REPORT
The Partners
Freedom Tax Credit Plus L.P.:
We have audited the accompanying consolidated balance sheet of Freedom Tax
Credit Plus L.P. and consolidated partnerships as of March 31, 2002, and the
related consolidated statements of operations, changes in partners' capital
(deficit), and cash flows for each of the years in the two-year period then
ended. In connection with our audits of the consolidated financial statements,
we also have audited the financial statement schedules as of March 31, 2002 and
for each of the years in the two-year period then ended. These consolidated
financial statements and the financial statement schedules are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these consolidated financial statements and the financial
statement schedules based on our audits. We did not audit the financial
statements of 25 and 26 of the consolidated partnerships, which statements
reflect combined assets constituting 46% as of March 31, 2002, and combined
revenues constituting 40%, and 47% for 2002 and 2001, respectively, of the
related consolidated totals. Those statements were audited by other auditors
whose reports have been furnished to us, and our opinion, insofar as it relates
to the amounts included for those partnerships, is based solely on the reports
of the other auditors.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits and the reports of
the other auditors provide a reasonable basis for our opinion.
In our opinion, based on our audits and the reports of the other auditors, the
consolidated financial statements referred to above present fairly, in all
material respects, the financial position of Freedom Tax Credit Plus L.P. and
consolidated partnerships as of March 31, 2002, and the results of their
operations and their cash flows for each of the years in the two-year period
then ended, in conformity with accounting principles generally accepted in the
United States of America. Also in our opinion, based on our audits and the
reports of the other auditors, as discussed above, the related financial
statement schedules, when considered in relation to the basic consolidated
financial statements taken as a whole, present fairly, in all material respects,
the information set forth therein.
/s/ KPMG LLP
New York, New York
May 18, 2002
16
[Letterhead of McKonly & Asbury LLP]
INDEPENDENT AUDITOR'S REPORT
The Partners of
Parkside Townhomes Associates Pennsylvania Housing Finance Agency
Lancaster, Pennsylvania Harrisburg, Pennsylvania
We have audited the accompanying balance sheets of Parkside Townhomes Associates
(a limited partnership), PHFA Project No. 0 - 90 as of December 31, 2002 and
2001, and the related statements of profit and loss, partners' equity, and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America and Government Auditing Standards issued by the
Comptroller General of the United States. Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the 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 Parkside Townhomes Associates
at December 31, 2002 and 2001, and its profit and loss, partners' equity, and
cash flows for the years then ended, in conformity with accounting principles
generally accepted in the United States of America.
In accordance with Government Auditing Standards and Pennsylvania Housing
Finance Agency's Financial Reporting Manual, we have also issued our report
dated February 6, 2003 on our consideration of Parkside Townhomes Associates'
internal control over financial reporting and our tests of its compliance with
certain provisions of laws, PHFA regulations, contracts and grants and have
rendered our reports thereon on pages 25 and 26. Those reports are an integral
part of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audits.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information on pages 18
through 24 is presented for the purpose of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the 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/ McKonly & Asbury LLP
Harrisburg, Pennsylvania
February 6, 2003
17
[Letterhead of McKonly & Asbury LLP]
INDEPENDENT AUDITOR'S REPORT
The Partners of
Parkside Townhomes Associates
Lancaster, Pennsylvania
We have audited the accompanying balance sheets of Parkside Townhomes Associates
(a limited partnership), PHFA Project No. 0 - 90 as of December 31, 2001 and
2000, and the related statements of profit and loss, partners' equity, and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America and Government Auditing Standards issued by the
Comptroller General of the United States. Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the 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 Parkside Townhomes Associates
at December 31, 2001 and 2000, and its profit and loss, partners' equity, and
cash flows for the years then ended, in conformity with accounting principles
generally accepted in the United States of America.
In accordance with Government Auditing Standards and Pennsylvania Housing
Finance Agency's Financial Reporting Manual, we have also issued our report
dated January 17, 2002 on our consideration of Parkside Townhomes Associates
internal control over financial reporting and our tests of its compliance with
certain provisions of laws, PHFA regulations, contracts and grants and have
rendered our reports thereon on pages 29 and 30. Those reports are an integral
part of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audits.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information on pages 18
through 24 is presented for the purpose of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the 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/ McKonly & Asbury LLP
Harrisburg, Pennsylvania
January 17, 2002
18
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Twin Trees Apartments, A Limited Partnership:
We have audited the accompanying balance sheets of Twin Trees Apartments, A
Limited Partnership as of December 31, 2002 and 2001, and the related statements
of loss, partners' capital, and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
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 Twin Trees Apartments, A
Limited Partnership as of December 31, 2002 and 2001, and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 7, 2003
19
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Twin Trees Apartments, A Limited Partnership:
We have audited the accompanying balance sheets of Twin Trees Apartments, A
Limited Partnership as of December 31, 2001 and 2000 and the related statements
of loss, partners' capital, and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
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 Twin Trees Apartments, A
Limited Partnership as of December 31, 2001 and 2000 and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 22 2002
20
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Bennion Park Apartments, A Limited Partnership:
We have audited the accompanying balance sheets of Bennion Park Apartments, A
Limited Partnership as of December 31, 2002 and 2001 and the related statements
of loss, partners' capital, and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
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 Bennion Park Apartments, A
Limited Partnership as of December 31, 2002 and 2001 and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 7, 2003
21
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Bennion Park Apartments, A Limited Partnership:
We have audited the accompanying balance sheets of Bennion Park Apartments, A
Limited Partnership as of December 31, 2001 and 2000 and the related statements
of loss, partners' capital, and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
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 Bennion Park Apartments, A
Limited Partnership as of December 31, 2001 and 2000 and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 22, 2002
22
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Hunters Chase Apartments,
A Limited Partnership:
We have audited the accompanying balance sheets of Hunters Chase Apartments, A
Limited Partnership as of December 31, 2002 and 2001 and the related statements
of loss, partners' capital (deficit), and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
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 Hunters Chase Apartments, A
Limited Partnership as of December 31, 2002 and 2001 and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 7, 2003
23
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Hunters Chase Apartments,
A Limited Partnership:
We have audited the accompanying balance sheets of Hunters Chase Apartments, A
Limited Partnership as of December 31, 2001 and 2000 and the related statements
of loss, partners' capital (deficit), and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
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 Hunters Chase Apartments, A
Limited Partnership as of December 31, 2001 and 2000 and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 22, 2002
24
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Wilshire Apartments, A Limited Partnership:
We have audited the accompanying balance sheets of Wilshire Apartments, A
Limited Partnership as of December 31, 2002 and 2001, and the related statements
of loss, partners' capital, and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
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 Wilshire Apartments, A Limited
Partnership as of December 31, 2002 and 2001, and the results of its operations
and its cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 7, 2003
25
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Wilshire Apartments, A Limited Partnership:
We have audited the accompanying balance sheets of Wilshire Apartments, A
Limited Partnership as of December 31, 2001 and 2000 and the related statements
of loss, partners' capital, and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
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 Wilshire Apartments, A Limited
Partnership as of December 31, 2001 and 2000 and the results of its operations
and its cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 22, 2002
26
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Bethel Park Apartments, A Limited Partnership:
We have audited the accompanying balance sheets of Bethel Park Apartments, A
Limited Partnership as of December 31, 2002 and 2001, and the related statements
of loss, partners' capital, and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
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 Bethel Park Apartments, A
Limited Partnership as of December 31, 2002 and 2001, and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 7, 2003
27
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Bethel Park Apartments, A Limited Partnership:
We have audited the accompanying balance sheets of Bethel Park Apartments, A
Limited Partnership as of December 31, 2001 and 2000 and the related statements
of loss, partners' capital, and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
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 Bethel Park Apartments, A
Limited Partnership as of December 31, 2001 and 2000 and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 22, 2002
28
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Zebulon Park Apartments, A Limited Partnership:
We have audited the accompanying balance sheet of Zebulon Park Apartments, A
Limited Partnership as of December 31, 2002, and 2001, and the related
statements of loss, partners' capital, and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
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 Zebulon Park Apartments, A
Limited Partnership as of December 31, 2002 and 2001, and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 7, 2003
29
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Zebulon Park Apartments, A Limited Partnership:
We have audited the accompanying balance sheets of Zebulon Park Apartments, A
Limited Partnership as of December 31, 2001 and 2000 and the related statements
of loss, partners' capital, and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
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 Zebulon Park Apartments, A
Limited Partnership as of December 31, 2001 and 2000 and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 22, 2002
30
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Tivoli Place Apartments, A Limited Partnership:
We have audited the accompanying balance sheets of Tivoli Place Apartments, A
Limited Partnership as of December 31, 2002, and 2001, and the related
statements of loss, partners' capital, and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
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 Tivoli Place Apartments, A
Limited Partnership as of December 31, 2002 and 2001, and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 7, 2003
31
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Tivoli Place Apartments, A Limited Partnership:
We have audited the accompanying balance sheets of Tivoli Place Apartments, A
Limited Partnership as of December 31, 2001 and 2000 and the related statements
of loss, partners' capital, and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
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 Tivoli Place Apartments, A
Limited Partnership as of December 31, 2001 and 2000 and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 22, 2002
32
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Northwood Apartments of Georgia,
A Limited Partnership:
We have audited the accompanying balance sheets of Northwood Apartments of
Georgia, A Limited Partnership as of December 31, 2002 and 2001 and the related
statements of loss, partners' capital, and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
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 Northwood Apartments of
Georgia, A Limited Partnership as of December 31, 2002 and 2001, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 7, 2003
33
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Northwood Apartments of Georgia,
A Limited Partnership:
We have audited the accompanying balance sheets of Northwood Apartments of
Georgia, A Limited Partnership as of December 31, 2001 and 2000 and the related
statements of loss, partners' capital, and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
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 Northwood Apartments of
Georgia, A Limited Partnership as of December 31, 2001 and 2000, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 22, 2002
34
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
Oxford Trace Apartments,
A Limited Partnership:
We have audited the accompanying balance sheets of Oxford Trace Apartments, A
Limited Partnership as of December 31, 2002 and 2001 and the related statements
of loss, partners' capital (deficit), and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
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 Oxford Trace Apartments, A
Limited Partnership as of December 31, 2002 and 2001, and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 7, 2003
35
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' REPORT
The Partners
A Limited Partnership:
We have audited the accompanying balance sheets of Oxford Trace Apartments, A
Limited Partnership as of December 31, 2001 and 2000 and the related statements
of loss, partners' capital (deficit), and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
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 Oxford Trace Apartments, A
Limited Partnership as of December 31, 2001 and 2000 and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Atlanta, Georgia
February 22, 2002
36
INDEPENDENT AUDITORS' REPORT
To the Partners of
Ivanhoe Apartments Limited Partnership
We have audited the accompanying balance sheet of Ivanhoe Apartments Limited
Partnership (a Limited Partnership) as of December 31, 2002 and 2001 and the
related statements of operations, changes in partners' capital and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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 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 Ivanhoe Apartments Limited
Partnership at December 31, 2002 and 2001, and the results of its operations and
cash flows for the years then ended, in conformity with accounting principles
generally accepted in the United States of America.
/s/ Lake, Hill & Myers
Salt Lake City, Utah
January 9, 2003
37
INDEPENDENT AUDITORS' REPORT
To the Partners of
Ivanhoe Apartments Limited Partnership
We have audited the accompanying balance sheet of Ivanhoe Apartments Limited
Partnership (a Limited Partnership) as of December 31, 2001 and 2000 and the
related statements of operations, changes in partners' capital and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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 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 Ivanhoe Apartments Limited
Partnership at December 31, 2001 and 2000, and the results of its operations and
cash flows for the years then ended, in conformity with accounting principles
generally accepted in the United States of America.
/s/ Lake, Hill & Myers
Salt Lake City, Utah
January 14, 2002
38
[Letterhead of Richard J. Klinkowitz]
To the Partners C-H DEVELOPMENT GROUP ASSOCIATES
(A LIMITED PARTNERSHIP)
625 Madison Avenue
New York, New York 10022
Gentlemen:
I have audited the accompanying balance sheet of C-H DEVELOPMENT GROUP
ASSOCIATES (a New York Limited Partnership) as of December 31, 2002 and the
related statement of operations, partners' equity 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 the audit.
I conducted the audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain a 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 the 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 C-H DEVELOPMENT GROUP ASSOCIATES as
of December 31, 2002 and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.
Respectfully submitted,
/s/ Richard J. Klinkowitz
Far Rockaway, New York
February 22, 2003
39
[Letterhead of Richard J. Klinkowitz]
To the Partners C-H DEVELOPMENT GROUP ASSOCIATES
(A LIMITED PARTNERSHIP)
625 Madison Avenue
New York, New York 10022
Gentlemen:
I have audited the accompanying balance sheet of C-H DEVELOPMENT GROUP
ASSOCIATES (a New York Limited Partnership) as of December 31, 2001 and the
related statement of operations, partners' equity 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 the audit.
I conducted the audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain a 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 the 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 C-H DEVELOPMENT GROUP ASSOCIATES as
of December 31, 2001 and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.
Respectfully submitted,
/s/ Richard J. Klinkowitz
Far Rockaway, New York
February 22, 2002
40
[Letterhead of Richard J. Klinkowitz]
To the Partners C-H DEVELOPMENT GROUP ASSOCIATES
(A LIMITED PARTNERSHIP)
625 Madison Avenue
New York, New York 10022
Gentlemen:
I have audited the accompanying balance sheet of C-H DEVELOPMENT GROUP
ASSOCIATES (a New York Limited Partnership) as of December 31, 2000 and the
related statement of operations, partners' equity 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 the audit.
I conducted the audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain a 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 the 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 C-H DEVELOPMENT GROUP ASSOCIATES as
of December 31, 2000 and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.
Respectfully submitted,
/s/ Richard J. Klinkowitz
Far Rockaway, New York
February 22, 2001
41
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS'REPORT
To the Partners
Davidson Court, L.P.
We have audited the accompanying balance sheets of Davidson Court, L.P. as of
December 31, 2002 and 2001, and the related statements of income, partners'
equity (deficit) and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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 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 Davidson Court, L.P., as of
December 31, 2002 and 2001, and the results of its operations, the changes in
partners' equity (deficit) and its cash flows for the years then ended, in
conformity with accounting principles generally accepted in the United States of
America.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland
January 25, 2003
42
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS'REPORT
To the Partners
Davidson Court, L.P.
We have audited the accompanying balance sheets of Davidson Court, L.P. as of
December 31, 2001 and 2000, and the related statements of operations, partners'
equity (deficit) and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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 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 Davidson Court, L.P., as of
December 31, 2001 and 2000, and the results of its operations, the changes in
partners' equity (deficit) and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland
January 31, 2001
43
[Letterhead of Haefele, Flanagan & Co., p.c.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Magnolia Mews Limited Partnership
Philadelphia, Pennsylvania
We have audited the accompanying balance sheet of MAGNOLIA MEWS LIMITED
PARTNERSHIP (a Pennsylvania Limited Partnership) as of December 31, 2002, 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 auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of MAGNOLIA MEWS LIMITED
PARTNERSHIP as of December 31, 2002, and the results of its operations, changes
in partners' equity and its cash flows for the year then ended in conformity
with accounting principles generally accepted in the United States of America.
/s/ Haefele, Flanagan & Co., p.c.
Moorestown, New Jersey
February 7, 2003
44
[Letterhead of Haefele, Flanagan & Co., p.c.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Magnolia Mews Limited Partnership
Philadelphia, Pennsylvania
We have audited the accompanying balance sheet of MAGNOLIA MEWS LIMITED
PARTNERSHIP (a Pennsylvania Limited Partnership) as of December 31, 2001, 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 MAGNOLIA MEWS LIMITED
PARTNERSHIP as of December 31, 2001, 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/ Haefele, Flanagan & Co., p.c.
Moorestown, New Jersey
February 8, 2002
45
[Letterhead of Haefele, Flanagan & Co., p.c.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Magnolia Mews Limited Partnership
Philadelphia, Pennsylvania
We have audited the accompanying balance sheet of MAGNOLIA MEWS LIMITED
PARTNERSHIP (a Pennsylvania Limited Partnership) as of December 31, 2000, 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 MAGNOLIA MEWS LIMITED
PARTNERSHIP as of December 31, 2000, 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/ Haefele, Flanagan & Co., p.c.
Moorestown, New Jersey
January 26, 2001
46
[Letterhead of Snipes, Gower & Associates, P.A.]
To the Partners
The Oaks Village Limited Partnership
Dunn, North Carolina
We have audited the accompanying balance sheets of The Oaks Village Limited
Partnership, RHS Project No. 38-024-561572445 as of December 31, 2002 and 2001,
and the related statements of operations, partners' equity (deficit), and cash
flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The Oaks Village Limited
Partnership, RHS Project No. 38-024-561572445 as of December 31, 2002 and 2001,
and the results of its operations, the changes in partners' equity (deficit) and
cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental information
on Page 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements of the partnership. Such
information has been subjected to the auditing procedures applied in the 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.
In accordance with Government Auditing Standards, we have also issued a report
dated January 24, 2003 on our consideration of The Oaks Village Limited
Partnership's internal control over financial reporting and our tests of its
compliance with certain provisions of laws, regulations, contracts and grants.
That report is an integral part of an audit performed in accordance with
Government Auditing Standards, and should be read in conjunction with this
report in considering the results of our audit.
/s/ Snipes, Gower & Assoc., P.A.
Dunn, North Carolina
January 24, 2003
47
[Letterhead of Snipes, Gower & Associates, P.A.]
To the Partners
The Oaks Village Limited Partnership
Dunn, North Carolina
We have audited the accompanying balance sheets of The Oaks Village Limited
Partnership, RHS Project No. 38-024-561572445 as of December 31, 2001 and 2000,
and the related statements of operations, partners' equity (deficit), and cash
flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America and Government Auditing Standards issued by the
Comptroller General of the United States. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The Oaks Village Limited
Partnership, RHS Project No. 38-024-561572445 as of December 31, 2001 and 2000,
and the results of its operations, the changes in partners' equity (deficit) and
cash flows for the years then ended in conformity with generally accepted
accounting principles generally accepted in the United States of America.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on Page 14
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report
dated January 18, 2002 on our consideration of The Oaks Village Limited
Partnership's internal control over financial reporting and our tests of its
compliance with certain provisions of laws, regulations, contracts and grants.
This report is an integral part of an audit performed in accordance with
Government Auditing Standards, and should be read in conjunction with this
report in considering the results of our audit.
/s/ Snipes, Gower & Assoc., P.A.
Dunn, North Carolina
January 18, 2002
48
[Letterhead of Snipes, Gower & Associates, P.A.]
To the Partners
Greenfield Village Limited Partnership
Dunn, North Carolina
We have audited the accompanying balance sheets of Greenfield Village Limited
Partnership, RHS Project No.: 38-043-561614646, as of December 31, 2002 and
2001, and the related statements of operations, partners' equity (deficit), and
cash flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit 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 Greenfield Village Limited
Partnership, RHS Project No.: 38-043-561614646 as of December 31, 2002 and 2001,
and the results of its operations, the changes in partners' equity (deficit) and
its cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplement information
on Page 14 is presented for purposes of additional analysis and is not a
required part of the basic financial statements of the partnership. Such
information has been subjected to the auditing procedures applied in the 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.
In accordance with Government Auditing Standards, we have also issued a report
dated January 22, 2003 on our consideration of Greenfield Village Limited
Partnership's internal control over financial reporting and our tests of its
compliance with certain provisions of laws, regulations, contracts and grants.
This report is an integral part of an audit performed in accordance with
Government Auditing Standards and should be read in conjunction with this report
in considering the results of our audit.
/s/ Snipes, Gower & Associates, P.A.
Dunn, North Carolina
January 22, 2003
49
[Letterhead of Snipes, Gower & Associates, P.A.]
The Partners
Greenfield Village Limited Partnership
Dunn, North Carolina
We have audited the accompanying balance sheets of Greenfield Village Limited
Partnership, RHS Project No.: 38-043-561614646, as of December 31, 2001 and
2000, and the related statements of operations, partners' equity (deficit), and
cash flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America and Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits, provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Greenfield Village Limited
Partnership, RHS Project No.: 38-043-561614646 as of December 31, 2001 and 2000,
and the results of its operations, the changes in partners' equity (deficit) and
its cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplement information on Page 14 is
presented for purposes of additional analysis and is not a required part of the
basic financial statements. Such information has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as whole.
In accordance with Government Auditing Standards, we have also issued a report
dated January 19, 2002 on our consideration of Greenfield Village Limited
Partnership's internal control over financial reporting and our tests of its
compliance with certain provisions of laws, regulations, contracts and grants.
This report is an integral part of an audit performed in accordance with
Government Auditing Standards and should be read in conjunction with this report
in considering the results of our audit.
/s/ Snipes, Gower & Associates, P.A.
Dunn, North Carolina
January 19, 2002
50
[Letterhead of KOCH GERINGER & CO., LLP]
INDEPENDENT AUDITOR'S REPORT
To the Partners
CLM Equities
We have audited the accompanying balance sheet of CLM Equities (A Limited
Partnership) as of December 31, 2002 and the related statements of operations,
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 auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of CLM Equities (A Limited
Partnership) as of December 31, 2002 and the results of its operations, changes
in its partners' equity and its cash flows for the year then ended in conformity
with accounting principles generally accepted in the United States of America.
/s/ Koch Geringer & Co., LLP
Certified Public Accountants
New York, New York
January 9, 2003
51
[Letterhead of KOCH GERINGER & CO., LLP]
INDEPENDENT AUDITOR'S REPORT
To the Partners
CLM Equities
We have audited the accompanying balance sheet of CLM Equities (A Limited
Partnership) as of December 31, 2001 and the related statements of operations,
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 auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of CLM Equities (A Limited
Partnership) as of December 31, 2001 and the results of its operations, changes
in its partners' equity and its cash flows for the year then ended in conformity
with accounting princip