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, 2004
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ------- EXCHANGE ACT OF 1934
Commission File Number 0-20476
INDEPENDENCE TAX CREDIT PLUS L.P.
---------------------------------
(Formerly known as Independence Tax Credit Plus Program)
(Exact name of registrant as specified in its charter)
Delaware 13-3589920
- ------------------------------- ----------------------
(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:
Beneficial Assignment Certificates (including underlying Limited
Partnership Interests)
(Title of Class)
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 Exchange Act Rule 12b-2). 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, 2003 was
$16,839,000, based on Limited Partner equity as of such date.
DOCUMENTS INCORPORATED BY REFERENCE
None
PART I
Item 1. Business.
General
- -------
Independence Tax Credit Plus L.P. (the "Partnership") is a limited partnership
which was formed under the laws of the State of Delaware on November 7, 1990.
The general partner of the Partnership is Related Independence Associates L.P.,
a Delaware limited partnership (the "General Partner"). The general partner of
the General Partner is Related Independence Associates Inc., a Delaware
corporation ("RIAI") and is an affiliate of Related Capital Company ("RCC").
On November 17, 2003, CharterMac acquired RCC, which is the indirect parent of
RCC Manager LLC, the sole shareholder of RIAI. Pursuant to the acquisition,
CharterMac acquired controlling interests in the General Partner. This
acquisition did not affect the Partnership or its day-to-day operations, as the
majority of the General Partner's management team remained unchanged.
On July 1, 1991, 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"),
managed by Related Equities Corporation (the "Dealer Manager"), pursuant to a
prospectus dated July 1, 1991, as supplemented by Master Supplement No. 1a
thereto dated April 28, 1992 and Master Supplement No. 2a thereto dated November
3, 1992 (as so supplemented, the "Prospectus").
The Partnership received $76,786,000 of gross proceeds from the Offering from
5,351 investors and no further issuance of BACs is anticipated.
The Partnership was formed to invest as a limited partner in other partnerships
("Local Partnerships") owning apartment complexes ("Apartment Complexes" or
"Properties") that are eligible for the low-income housing tax credit ("Housing
Tax Credit") enacted in the Tax Reform Act of 1986, some of which may also be
eligible for the historic rehabilitation tax credit ("Historic Tax Credit" and
together with Housing Tax Credits, "Tax Credits"). The Partnership's investment
in each Local Partnership represents from 98% to 98.99% of the Partnership's
interests in the Local Partnership. As of March 31, 2004, the Partnership had
acquired interests in twenty-eight Local Partnerships. As of March 31, 2004,
approximately $59,700,000 (not including acquisition fees of approximately
$4,500,000) of net proceeds had been invested in Local Partnerships of which
approximately $28,000 remains to be paid to the Local Partnerships, as certain
benchmarks such as occupancy levels must be attained prior to the release of the
funds. The Partnership does not intend to acquire additional properties. See
Item 2, Properties, below.
The investment objectives of the Partnership are to:
1. Entitle qualified BACs holders to Tax Credits over the period of the
Partnership's entitlement to claim Tax Credits (for each Property, generally ten
years from the date of investment or, if later, the date the Property is placed
in service; referred to herein as the "Credit Period") with respect to each
Apartment Complex.
2. Preserve and protect the Partnership's capital.
3. Participate in any capital appreciation in the value of the Properties and
provide distributions of Sale or Refinancing Proceeds upon the disposition of
the Properties.
4. Allocate passive losses to individual BACs holders to offset passive income
that they may realize from rental real estate investments and other passive
activities, and allocate passive losses to corporate BACs holders to offset
business income.
One of the Partnership's objectives is to entitle qualified BACs holders to Tax
Credits over the Credit Period. Each of the Local Partnerships in which the
Partnership has acquired an interest has been allocated by the relevant state
credit agencies the authority to recognize Tax Credits during the Credit Period
2
provided that the Local Partnership satisfies the rent restriction, minimum
set-aside and other requirements for recognition of the Tax Credits at all times
during such period. Once a Local Partnership has become eligible to recognize
Tax Credits, it may lose such eligibility and suffer an event of "recapture" if
its Property fails to remain in compliance with the Tax Credit requirements.
None of the Local Partnerships in which the Partnership has acquired an interest
has suffered an event of recapture.
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 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 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
(the "Compliance Period") in order to remain qualified to receive the credits.
Certain Apartment Complexes have extended compliance periods of up to fifty
years. The Partnership generated $7,001,508, $11,256,724 and $11,986,066 in Tax
Credits during the years ending December 31, 2003, 2002 and 2001, respectively.
There can be no assurance that the Partnership will achieve its investment
objectives as described above.
The Partnership is subject to the risks incident to potential losses arising
from the management and ownership of improved real estate. The Partnership can
also be affected by poor economic conditions generally, however no more than 21%
of the Properties are located in any single state. There are also substantial
risks associated with owning interests in properties, as does the Partnership,
which receive government assistance, for example the possibility that Congress
may not appropriate funds to enable HUD to make rental assistance payments. HUD
also restricts annual cash distributions to partners based on operating results
and a percentage of the owner's equity contribution. The Partnership cannot sell
or substantially liquidate its investments in subsidiary partnerships during the
period that the subsidy agreements are in existence, without HUD's approval.
Furthermore, there may not be market demand for apartments at full market rents
when the rental assistance contracts expire.
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 by the Partnership are subject to active competition from
similar properties in their respective vicinities. In addition, various other
limited partnerships have, in the past, and may, in the future, be formed by the
General Partner and/or its affiliates to engage in businesses which may be
competitive with the Partnership. The General Partner is also the general
partner of Independence Tax Credit Plus L.P. II.
Employees
- ---------
The Partnership does not have any direct employees. All services are performed
for the Partnership by its General Partner and its affiliates. The General
Partner receives compensation in connection with such activities as set forth in
Items 11 and 13. In addition, the Partnership reimburses the General Partner and
certain of its affiliates for expenses incurred in connection with the
performance by their employees of services for the Partnership in accordance
with the Partnership's Amended and Restated Agreement of Limited Partnership
(the "Partnership Agreement").
3
Item 2. Properties.
The Partnership holds a 98.99% limited partnership interest in twenty-seven and
a 98% limited partnership interest in one Local Partnership as of March 31,
2004. Set forth below is a schedule of the Local Partnerships including certain
information concerning their respective Apartment Complexes (the "Local
Partnership Schedule"). Further information concerning these Local Partnerships
and their Properties, including any encumbrances affecting the Properties, may
be found in Item 15, Schedule III.
Local Partnership Schedule
--------------------------
Name and Location % of Units Occupied at May 1,
------------------------------------------
(Number of Units) Date Acquired 2004 2003 2002 2001 2000
- ----------------- -------------- ------ ------ ------ ------ ------
Harbor Court Limited Partnership December 1991 100% 98% 100% 100% 98%
Staten Island, NY (40)
Old Public Limited Partnership December 1991 63% 93% 61% 85% 48%
Lawrenceburg, TN (30)
Lancaster Terrace Limited Partnership February 1992 89% 86% 97% 91% 97%
Salem, OR (104)
655 North Street Limited Partnership March 1992 94% 87% 83% 85% 80%
Baton Rouge, LA (195)
Landreth Venture March 1992 92% 96% 94% 90% 90%
Philadelphia, PA (47)
Homestead Apartments Associates Ltd. March 1992 96% 93% 97% 98% 96%
Homestead, FL (123)
Bethel Villa Associates, L.P. April 1992 100% 99% 97% 99% 96%
Wilmington, DE (150)
West Diamond Street Associates May 1992 96% 96% 100% 96% 100%
Philadelphia, PA (28)
Susquehanna Partners May 1992 98% 96% 94% 100% 85%
Philadelphia, PA (47)
Boston Bay Limited Partnership August 1992 99% 98% 100% 96% 98%
Boston, MA (88)
Morrant Bay Limited Partnership August 1992 99% 98% 97% 96% 98%
Boston, MA (130)
Hope Bay Limited Partnership August 1992 100% 100% 96% 100% 98%
Boston, MA (45)
Lares Apartments Limited Partnership August 1992 100% 100% 100% 100% 100%
Lares, PR (102)
Lajas Apartments Limited Partnership August 1992 100% 100% 100% 100% 100%
Lajas, PR (99)
Arlington-Rodeo Properties August 1992 97% 100% 90% 100% 100%
Los Angeles, CA (29)
4
Local Partnership Schedule (continued)
--------------------------------------
Name and Location % of Units Occupied at May 1,
------------------------------------------
(Number of Units) Date Acquired 2004 2003 2002 2001 2000
- ----------------- -------------- ------ ------ ------ ------ ------
Conifer Bateman Associates August 1992 96% 92% 88% 83% 83%
Lowville, NY (24)
Hampden Hall Associates, L.P. September 1992 93% 99% 95% 97% 100%
St. Louis, MO (75)
Chester Renaissance Associates September 1992 100% 100% 95% 95% 100%
Chester, PA (20)
Homestead Apts. II LTD October 1992 96% 96% 99% 95% 96%
Homestead, FL (112)
P.S. 157 Associates, L.P. November 1992 100% 100% 100% 100% 100%
New York, NY (73)
Cloisters Limited Partnership II November 1992 98% 98% 97% 100% 95%
Philadelphia, PA (65)
Creative Choice Homes II, LTD December 1992 98% 97% 98% 94% 97%
Opa-Locka, FL (328)
Milford Crossing Associates L.P. December 1992 96% 100% 94% 99% 100%
Milford, DE (73)
BX-7F Associates, L.P. January 1993 96% 100% 98% 99% 95%
Bronx, NY (85)
Los Angeles Limited Partnership May 1993 100% 100% 100% 100% 100%
Rio Piedras, PR (124)
Christine Apartments, L.P. June 1993 91% 100% 94% 100% 88%
Buffalo, NY (32)
Plainsboro Housing Partners, L.P. July 1993 99% 98% 99% 98% 98%
Plainsboro, NJ (126)
Rolling Green Associates, L.P. October 1993 97% 90% 84% 91% 94%
Syracuse, NY (395)
All leases are generally for periods not exceeding one to two years and no
tenant occupies more than 10% of the rentable square footage.
Rents from commercial tenants (to which average rental per square foot applies)
comprise less than 5% of the rental revenues of the Partnership. Maximum rents
for the residential units are determined annually by HUD and reflect
increases/decreases in consumer price indices in various geographic areas.
Market conditions, however, determine the amount of rent actually charged.
Management annually reviews the physical state of the Properties and suggests to
the respective general partners of the Local Partnerships ("Local General
Partners") budget improvements, which are generally funded from cash flow from
operations or release of replacement reserve escrows to the extent available.
Management annually 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.
5
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.
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 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 Tax Credit not available in the
first year will be available in the eleventh year. In certain cases, the
Partnership acquired its interest in a Local Partnership after the Local
Partnership had placed its Apartment Complex in service. In these cases, the
Partnership may be allocated Tax Credits only beginning in the month following
the month in which it acquired its interest and Tax Credits allocated in any
prior period were not available to the Partnership.
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, 2004, the Partnership had issued and outstanding 76,786 Limited
Partnership Interests, each representing a $1,000 capital contribution to the
Partnership, or an aggregate capital contribution of $76,786,000. All of the
issued and outstanding Limited Partnership Interests have been issued to
Independence Assignor Inc. (the "Assignor Limited Partner"), which has in turn
issued 76,786 BACs to the purchasers thereof for an aggregate purchase price of
$76,786,000. Each BAC represents all of the economic and virtually all of the
ownership rights attributable to a Limited Partnership Interest held by the
Assignor Limited Partner. BACs may be converted into Limited Partnership
Interests at no cost to the holder (other than the payment of transfer costs not
to exceed $100), but Limited Partnership Interests so acquired are not
thereafter convertible into BACs.
Neither the BACs nor the Limited Partnership Interests are traded on any
established trading market. The Partnership does not intend to include the BACs
for quotation on NASDAQ or for listing on any national or regional stock
exchange or any other established securities market. The Revenue Act of 1987
contained provisions which have an adverse impact on investors in "publicly
traded partnerships." Accordingly, the General Partner has imposed limited
restrictions on the transferability of the BACs and the Limited Partnership
Interests in secondary market transactions. These restrictions should prevent a
public trading market from developing but may 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.
As of May 4, 2004, the Partnership has approximately 4,629 registered holders of
an aggregate of 76,786 BACs.
All of the Partnership's general partnership interests, representing an
aggregate capital contribution of $1,000, are held by the General Partner.
There are no material legal restrictions in the Partnership Agreement on the
ability of the Partnership to make distributions. The Partnership has made no
distributions to the BACs holders as of March 31, 2004. The Partnership does not
anticipate providing cash distributions to its BACs holders other than from net
refinancing or sales proceeds.
6
Item 6. Selected Financial Data.
The information set forth below presents selected financial data of the
Partnership. Additional financial information is set forth in the audited
consolidated financial statements in Item 8 hereof.
Year Ended March 31,
---------------------------------------------------------------------------------
OPERATIONS 2004 2003 2002 2001 2000
- ---------- ------------- ------------- ------------- ------------- -------------
Revenues $ 21,664,974 $ 21,055,542 $ 20,573,977 $ 20,741,395 $ 20,786,356
Operating expenses (29,240,908) (26,413,948) (26,069,921) (26,200,525) (26,611,223)
------------- ------------- ------------- ------------- -------------
Loss before minority
interest (7,575,934) (5,358,406) (5,495,944) (5,459,130) (5,824,867)
Minority interest in loss of
subsidiaries 19,365 14,661 13,750 15,252 20,636
------------- ------------- ------------- ------------- -------------
Net loss $ (7,556,569) $ (5,343,745) $ (5,482,194) $ (5,443,878) $ (5,804,231)
============= ============= ============= ============= =============
Net loss per weighted
average BAC $ (97.45) $ (68.91) $ (70.70) $ (70.20) $ (74.85)
============= ============= ============= ============= =============
Year Ended March 31,
---------------------------------------------------------------------------------
FINANCIAL POSITION 2004 2003 2002 2001 2000
- ------------------ ------------- ------------- ------------- ------------- -------------
Total assets $ 139,042,443 $ 142,581,513 $ 147,768,441 $ 153,954,157 $ 159,362,792
============= ============= ============= ============= =============
Total liabilities $ 122,586,996 $ 118,327,823 $ 117,856,272 $ 117,841,568 $ 117,620,369
============= ============= ============= ============= =============
Minority interest $ 4,952,014 $ 5,193,688 $ 5,508,422 $ 6,226,648 $ 6,412,604
============= ============= ============= ============= =============
Total partners' capital $ 11,503,433 $ 19,060,002 $ 24,403,747 $ 29,885,941 $ 35,329,819
============= ============= ============= ============= =============
During the years ended March 31, 2004, 2003, 2002 and 2001, total assets
decreased primarily due to depreciation. During the year ended March 31, 2004,
total liabilities increased due to increased advances from an affiliate of the
General Partner to one Local Partnership and increased accounts payable from
operations at a second Local Partnership.
7
Selected Quarterly Financial Data (Unaudited)
Quarter Ended
--------------------------------------------------------------
June 30, September 30, December 31, March 31,
OPERATIONS 2003 2003 2003 2004
- ------------------------------ ----------- ------------ ----------- -----------
Revenues $ 5,273,977 $ 5,328,780 $ 5,373,347 $ 5,688,870
Operating ex-
penses (6,691,928) (6,660,651) (7,068,809) (8,819,520)
----------- ----------- ----------- -----------
Loss before minor-
ity interest (1,417,951) (1,331,871) (1,695,462) (3,130,650)
Minority interest in
loss of sub-
sidiaries 7,301 2,324 3,021 6,719
----------- ----------- ----------- -----------
Net loss $(1,410,650) $(1,329,547) $(1,692,441) $(3,123,931)
=========== =========== =========== ===========
Net loss per
weighted aver-
age BAC $ (18.19) $ (17.15) $ (21.82) $ (40.29)
=========== =========== =========== ===========
Quarter Ended
--------------------------------------------------------------
June 30, September 30, December 31, March 31,
OPERATIONS 2002 2002 2002 2003
- ------------------------------ ----------- ------------ ----------- -----------
Revenues $ 5,274,412 $ 5,321,842 $ 5,088,667 $ 5,370,621
Operating ex-
penses (6,067,443) (6,298,518) (6,476,130) (7,571,857)
----------- ----------- ----------- -----------
Loss before minor-
ity interest (793,031) (976,676) (1,387,463) (2,201,236)
Minority interest
in loss of sub-
sidiaries 6,875 2,113 1,022 4,651
----------- ----------- ----------- -----------
Net loss $ (786,156) $ (974,563) $(1,386,441) $(2,196,585)
=========== =========== =========== ===========
Net loss per
weighted aver-
age BAC $ (10.14) $ (12.57) $ (17.88) $ (28.32)
=========== =========== =========== ===========
Cash Distributions
- ------------------
There are no legal restrictions on the Partnership making distributions to BACs
holders; however, the Partnership has made no distributions to the BACs holders
as of March 31, 2004 and does not expect to be able to make distributions except
out of net sale proceeds when the Partnership begins to dispose of its
investments.
8
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Liquidity and Capital Resources
- -------------------------------
The Partnership's primary source of funds is the cash distributions from the
operations of the Local Partnerships. These cash distributions, which remain
relatively immaterial, are available to meet obligations of the Partnership.
Distributions of approximately $148,000, $186,000 and $102,000 were received
during the years ended March 31, 2004, 2003 and 2002, respectively. However,
management expects that the distributions received from the Local Partnerships
will increase, although not to a level sufficient to permit providing cash
distributions to BACs holders. These distributions, as well as the working
capital reserves and the continued deferral of fees payable to the General
Partner discussed below, will be used to meet the operating expenses of the
Partnership.
As of March 31, 2004, the Partnership has invested all of the net proceeds in
twenty-eight Local Partnerships. Approximately $28,000 of the purchase price
remains to be paid (all of which is held in escrow). During the year ended March
31, 2004, there were no payments made from escrow.
During the year ended March 31, 2004, cash and cash equivalents increased
approximately $205,000. This increase is due to cash provided by operating
activities ($2,575,000) which exceeded acquisitions of property and equipment
($610,000), an increase in cash held in escrow relating to investing activities
($451,000), an increase in deferred costs ($238,000), net proceeds and
repayments on mortgage notes ($362,000), a net decrease in due to local general
partners and affiliates relating to investing and financing activities
($487,000) and a decrease in capitalization of consolidated subsidiaries
attributable to minority interest ($222,000). Included in the adjustments to
reconcile the net loss to cash provided by operating activities is depreciation
and amortization ($5,754,000).
The Partnership's unconsolidated working capital reserve at March 31, 2004 was
approximately $33,000.
Partnership management fees owed to the General Partner amounting to
approximately $5,719,000 and $4,839,000 were accrued and unpaid as of March 31,
2004 and 2003, respectively. Without the General Partner's advances and
continued accrual without payment of certain fees and expense reimbursements,
the Partnership will not be in a position to meet its obligations. The General
Partner has continued to advance and allow the accrual without payment of these
amounts but is under no obligation to continue to do so.
For a discussion of contingencies affecting certain Local Partnerships, see
Results of Operations of Certain Local Partnerships, below. Since the maximum
loss the Partnership would be liable for is its net investment in the respective
subsidiary partnerships, the resolution of the existing contingencies is not
anticipated to impact future results of operations, liquidity or financial
condition in a material way. However, the Partnership's loss of its investment
in a Local Partnership will eliminate the ability to generate future Tax Credits
from such Local Partnership and may also result in recapture of Tax Credits if
the investment is lost before expiration of the Credit Period.
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 be experiencing upswings. 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 28 Local Partnerships, all of which fully have their Tax Credits in
place. The 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 Tax Credits would transfer to the new owner; thereby adding value
to the property on the market. However, such value declines each year and is not
included in the financial statement carrying amount.
9
Tabular Disclosure of Contractual Obligations
- ---------------------------------------------
The following table summarized the Partnership's commitments as of March 31,
2004 to make future payments under its debt agreements and other contractual
obligations.
Less than 1 - 3 3 -5 More than
Total 1 Year Years Years 5 Years
----------- ----------- ----------- ----------- -----------
Mortgage notes
payable (a) $92,838,355 $ 2,811,353 $ 6,024,855 $ 7,473,882 $76,528,265
Long term notes
payable (b) 1,528,820 1,528,850 0 0 0
----------- ----------- ----------- ----------- -----------
$94,367,205 $ 4,340,203 $ 6,024,855 $ 7,473,882 $76,528,265
=========== =========== =========== =========== ===========
(a) The mortgage notes are payable in aggregate monthly installments of
approximately $651,000, including principal and interest at rates varying
from 0% to 9% per annum, through the year 2048. Each subsidiary
partnership's mortgage note payable is collateralized by the land and
buildings of the respective subsidiary partnership, the assignment of
certain subsidiary partnership's rents and leases, and is without further
recourse.
(b) See Note 8 (B) ii in Item 8. Financial Statements and Supplementary Data.
Off Balance Sheet Arrangements
- ------------------------------
The Partnership has no off-balance sheet arrangements.
Critical Accounting Policies
- ----------------------------
In preparing the consolidated financial statements, management has made
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting periods. Actual results could differ
from those estimates. Set forth below is a summary of the accounting policies
that management believes are critical to the preparation of the consolidated
financial statements. The summary should be read in conjunction with the more
complete discussion of the Partnership's accounting policies included in Note 2
to the consolidated financial statements in this annual report on Form 10-K.
Property and Equipment
- ----------------------
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. The Partnership complies with Statement of Financial Accounting
Standards (SFAS) No. 144 "Accounting for the Impairment or Disposal of
Long-Lived Assets". 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 is 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.
At the time management commits to a plan to dispose of assets, said assets are
adjusted to the lower of carrying amount or fair value less costs to sell. These
assets are classified as property and equipment-held for sale and are not
depreciated.
Through March 31, 2004, the Partnership has recorded approximately $500,000 as
an aggregate loss on impairment of assets.
Income Taxes
- ------------
The Partnership is not required to provide for, or pay, any federal income
10
taxes. Net income or loss generated by the Partnership is passed through to the
partners and is required to be reported by them. The Partnership may be subject
to state and local taxes in jurisdictions in which it operates. For income tax
purposes, the Partnership has a fiscal year ending December 31.
New Accounting Pronouncements
- -----------------------------
In January 2003, the Financial Accounting Standards Board ("FASB") issued FASB
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 February 1,
2003, the provisions of FIN 46 were applicable no later than December 15, 2003.
The Partnership has not created any variable interest entities after January 31,
2003. In December 2003, the FASB redeliberated certain proposed modifications
and revised FIN 46 ("FIN 46 (R)"). The revised provisions are applicable no
later than the first reporting period ending after March 15, 2004. The adoption
of FIN 46 (R) is not anticipated to have a material impact on the Partnership's
financial reporting and disclosures.
In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity". SFAS No. 150
changes the accounting for certain financial instruments that, under previous
guidance, could be classified as equity or "mezzanine" equity, by now requiring
those instruments to be classified as liabilities ( or assets in some
circumstances) in the Consolidated Balance Sheets. Further, SFAS No. 150
requires disclosure regarding the terms of those instruments and settlement
alternatives. The guidance in SFAS No. 150 generally was effective for all
financial instruments entered into or modified after May 31, 2003, and was
otherwise effective at the beginning of the first interim period beginning after
June 15, 2003. The Partnership has evaluated SFAS No. 150 and determined that it
does not have an impact on the Partnership's financial reporting and
disclosures.
Results of Operations
- ---------------------
The following is a summary of the results of operations of the Partnership for
the years ended March 31, 2004, 2003 and 2002 (the 2003, 2002 and 2001 Fiscal
Years, respectively.)
The Partnership's results of operations for the 2003, 2002 and 2001 Fiscal Years
consisted primarily of the results of the Partnership's investment in the
twenty-eight Local Partnerships. The majority of Local Partnership income
continues to be in the form of rental income with the corresponding expenses
being divided among operations, depreciation and mortgage interest.
The net loss for the 2003, 2002 and 2001 Fiscal Years totaled $7,556,569,
$5,343,745 and $5,482,194, respectively.
The Partnership and BACs holders began to recognize Housing Tax Credits with
respect to a Property when the Credit Period for such Property commenced.
Because of the time required for the acquisition, completion and rent-up of
Properties, the amount of Tax Credits per BAC gradually increased over the first
three years of the Partnership. Housing Tax Credits not recognized in the first
three years will be recognized in the 11th through 13th years. The Partnership
generated $7,001,508, $11,256,724 and $11,986,066 of Housing Tax Credits during
the 2003, 2002 and 2001 tax years, respectively.
2003 vs. 2002
- -------------
Rental income increased approximately 4% for the 2003 Fiscal Year as compared to
the 2002 Fiscal Year, primarily due to rental rate increases.
Other income decreased approximately $118,000 for the 2003 Fiscal Year as
compared to the 2002 Fiscal Year due to a decrease in laundry and late fee
income at one Local Partnership and a write-off of a note payable and an utility
refund in the prior year at a second Local Partnership.
Total expenses, excluding repairs and maintenance, operating and insurance,
remained fairly consistent with a decrease of less than 1% for the 2003 Fiscal
Year as compared with the 2002 Fiscal Year.
Repairs and maintenance increased approximately $2,133,000 for the 2003 Fiscal
Year as compared to the 2002 Fiscal Year primarily due to flood repair expenses
at one Local Partnership and increased security costs, carpet replacement and
painting at a second Local Partnership.
11
Operating increased approximately $383,000 for the 2003 Fiscal Year as compared
to the 2002 Fiscal Year primarily due to increased water bills at one Local
Partnership and increased electricity and gas costs at several other Local
Partnerships.
Insurance increased approximately $284,000 for the 2003 Fiscal Year as compared
to the 2002 Fiscal Year primarily due to an increase in insurance premiums at
the Local Partnerships.
2002 vs. 2001
- -------------
Rental income remained fairly consistent with an increase of 3% for the 2002
Fiscal Year as compared to the 2001 Fiscal Year.
Other income decreased approximately $112,000 for the 2002 Fiscal Year as
compared to the 2001 Fiscal Year primarily due to a decrease in interest income
due to lower interest rates on cash and cash equivalent balances at the Local
Partnerships and Partnership level, as well as a decrease in grant income at one
Local Partnership.
Total expenses, excluding taxes and insurance, remained fairly consistent with a
decrease of approximately 1% for the 2002 Fiscal Year as compared with the 2001
Fiscal Year.
Taxes increased approximately $152,000 for the 2002 Fiscal Year as compared to
the 2001 Fiscal Year primarily due to fees associated with fighting the real
estate tax assessment at one Local Partnership.
Insurance increased approximately $415,000 for the 2002 Fiscal Year as compared
to the 2001 Fiscal Year primarily due to an increase in insurance premiums at
the Local Partnerships.
Other
- -----
The Partnership's investment as a limited partner in the Local Partnerships is
subject to the risks incident to the potential losses arising from management
and ownership of improved real estate. The Partnership's investments also could
be adversely affected by poor economic conditions, generally, which could
increase vacancy levels and rental payment defaults and by increased operating
expenses, any or all of which could threaten the financial viability of one or
more of the Local Partnerships.
There also are substantial risks associated with the operations of Apartment
Complexes receiving government assistance. These include governmental
regulations concerning tenant eligibility, which may make it more difficult to
rent apartments in the complexes; difficulties in obtaining government approval
for rent increases; limitations on the percentage of income which low and
moderate-income tenants may pay as rent; the possibility that Congress may not
appropriate funds to enable the Department of Housing and Urban Development to
make the rental assistance payments it has contracted to make; and that when the
rental assistance contracts expire there may not be market demand for apartments
at full market rents in a Local Partnership's Apartment Complex.
The Local Partnerships are impacted by inflation in several ways. Inflation
allows for increases in rental rates generally to reflect the impact of higher
operating and replacement costs. Furthermore, inflation generally does not
impact the fixed long-term financing under which real property investments were
purchased. Inflation also affects the Local Partnerships adversely by increasing
operating costs, such as fuel, utilities, and labor.
Item 7A. Quantitative and Qualitative Disclosure about Market Risk.
The Partnership does not have any market risk sensitive instruments.
12
Item 8. Financial Statements and Supplementary Data.
Sequential
Page
----------
(a) 1. Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm 14
Consolidated Balance Sheets at March 31, 2004 and 2003 78
Consolidated Statements of Operations for the Years Ended
March 31, 2004, 2003 and 2002 79
Consolidated Statements of Changes in Partners' Capital
(Deficit) for the Years Ended March 31, 2004, 2003 and
2002 80
Consolidated Statements of Cash Flows for the Years Ended
March 31, 2004, 2003 and 2002 81
Notes to Consolidated Financial Statements 82
13
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
-------------------------------------------------------
To the Partners of
Independence Tax Credit Plus L.P. and Subsidiaries
(A Delaware Limited Partnership)
We have audited the consolidated balance sheets of Independence Tax Credit Plus
L.P. and Subsidiaries (A Delaware Limited Partnership) as of March 31, 2004 and
2003, and the related consolidated statements of operations, changes in
partners' capital (deficit), and cash flows for the years ended March 31, 2004,
2003 and 2002 (the 2003, 2002 and 2001 Fiscal Years). These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits. We did not
audit the financial statements for twenty-seven (2003 Fiscal Year) and
twenty-eight (2002 and 2001 Fiscal Years) subsidiary partnerships whose losses
aggregated $5,925,149, $4,165,568 and $4,071,996 for the 2003, 2002 and 2001
Fiscal Years, respectively, and whose assets constituted 94% and 99% of the
Partnership's assets at March 31, 2004 and 2003, respectively, presented in the
accompanying consolidated financial statements. The financial statements for
twenty-six (2003 Fiscal Year) and twenty-seven (2002 and 2001 fiscal Years) of
these subsidiary partnerships were audited by other auditors whose reports
thereon have been furnished to us and our opinion expressed herein, insofar as
it relates to the amounts included for these subsidiary partnerships is based
solely upon the reports of the other auditors. The financial statements for one
of these subsidiary partnerships were unaudited.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (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, based upon our audits, and the reports of the other auditors
referred to above, the consolidated financial statements referred to in the
first paragraph present fairly, in all material respects, the financial position
of Independence Tax Credit Plus L.P. and Subsidiaries at March 31, 2004 and
2003, and the results of their operations and their cash flows for the years
ended March 31, 2004, 2003 and 2002, in conformity with U.S. generally accepted
accounting principles.
TRIEN ROSENBERG ROSENBERG
WEINBERG CIULLO & FAZZARI LLP
New York, New York
June 10, 2004
14
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Harbor Court L.P.
We have audited the accompanying balance sheets of Harbor Court L.P. as of
December 31, 2003 and 2002, and the related statements of income, 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 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 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 Harbor Court L.P., as of
December 31, 2003 and 2002, and the results of its income, the changes in
partners' equity 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 26, 2004
15
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Harbor Court L.P.
We have audited the accompanying balance sheets of Harbor Court L.P. as of
December 31, 2002 and 2001, and the related statements of income, 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 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 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 Harbor Court L.P., as of
December 31, 2002 and 2001, and the results of its income, the changes in
partners' equity 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
16
[Letterhead of Mack Roberts & Company, L.L.C.]
INDEPENDENT AUDITOR'S REPORT
The Partners
Lancaster Terrace Limited Partnership
Salem, Oregon
We have audited the balance sheets of Lancaster Terrace Limited Partnership as
of December 31, 2003 and 2002, 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 U.S. generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits 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 Lancaster Terrace Limited
Partnership as of December 31, 2003 and 2002, and the results of its operations
and its cash flows for the years then ended in conformity with U.S. generally
accepted accounting principles.
/s/ Mack, Roberts & Co., L.L.C.
Portland, Oregon
February 5, 2004
17
[Letterhead of Mack Roberts & Company, L.L.C.]
INDEPENDENT AUDITOR'S REPORT
The Partners
Lancaster Terrace Limited Partnership
Salem, Oregon
We have audited the balance sheets of Lancaster Terrace 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 U.S. generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits 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 Lancaster Terrace 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 U.S. generally
accepted accounting principles.
/s/ Mack, Roberts & Co., L.L.C.
Portland, Oregon
February 5, 2003
18
[Letterhead of Pailet, Meunier and LeBlanc, L.L.P.]
INDEPENDENT AUDITOR'S REPORT
To the Partners
655 North Street Limited Partnership
New Orleans, Louisiana
We have audited the accompanying balance sheets of 655 North Street Limited
Partnership, HUD Project No. 064-44801, as of December 31, 2003 and 2002, and
the related statements of income, changes in 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 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 and free of
material misstatement. An audit includes examining, or 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 655 North Street Limited
Partnership, HUD Project No. 064-44801, as of December 31, 2003 and 2002, and
the results of its operations, changes in 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 the CONSOLIDATED AUDIT
GUIDE FOR AUDITS OF HUD PROGRAMS issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated February 21, 2004, on our
consideration of 655 North Street Limited Partnership's internal control, and
reports dated February 21, 2004, on its compliance with specific requirements
applicable to major HUD programs and specific requirements applicable to Fair
Housing and Non-Discrimination. 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 audit.
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 pages 19 to 33 is presented for purposes of additional analysis and is not a
required part of the basic financial statements of the Project. 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/ Pailet, Meunier & LeBlanc, L.L.P.
Metairie, Louisiana
February 21, 2004
19
[Letterhead of Pailet, Meunier and LeBlanc, L.L.P.]
INDEPENDENT AUDITOR'S REPORT
To the Partners
655 North Street Limited Partnership
New Orleans, Louisiana
We have audited the accompanying balance sheets of 655 North Street Limited
Partnership, HUD Project No. 064-12001, as of December 31, 2002 and 2001, and
the related statements of income, changes in 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 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 and free of
material misstatement. An audit includes examining, or 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 655 North Street Limited
Partnership, HUD Project No. 064-12001, as of December 31, 2002 and 2001, and
the results of its operations, changes in 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 the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated February 10, 2003, on our
consideration of 655 North Street Limited Partnership's internal control, and
reports dated February 10, 2003, on its compliance with specific requirements
applicable to major HUD programs and specific requirements applicable to Fair
Housing and Non-Discrimination. 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 audit.
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 pages 21 to 28 is presented for purposes of additional analysis and is not a
required part of the basic financial statements of the Project. 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/ Pailet, Meunier & LeBlanc, L.L.P.
Metairie, Louisiana
February 10, 2003
20
[Letterhead of Reznick, Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Landreth Venture
We have audited the accompanying balance sheet of Landreth Venture as of
December 31, 2003 and 2002, and the related statements of profit and loss,
changes in 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 the financial
statements based on our audits.
We conducted our audit 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 Landreth Venture as of December
31, 2003 and 2002, 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.
In accordance with Government Auditing Standards, we have also issued our report
for the year ended December 31, 2003, dated January 30, 2004, on our
consideration of Landreth Venture's internal control over financial reporting
and on our tests of its compliance with certain provisions of laws, regulations,
contracts and grants. The 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.
Our audits were made for the purpose of forming an opinion on the basis
financial statements taken as a whole. The supplemental information on pages 27
through 30 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ Reznick Fedder & Silverman
Baltimore, Maryland
January 30, 2004
21
[Letterhead of Reznick, Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Landreth Venture
We have audited the accompanying balance sheet of Landreth Venture as of
December 31, 2002 and 2001, and the related statements of profit and loss,
changes in partners' equity (deficit) and cash flows for the year then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on the financial
statements based on our audit.
We conducted our audit 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 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 Landreth Venture 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 year then ended, in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report
for the year ended December 31, 2002, dated February 7, 2003, on our
consideration of Landreth Venture's internal control over financial reporting
and on our tests of its compliance with certain provisions of laws, regulations,
contracts and grants. The 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.
Our audits were made for the purpose of forming an opinion on the basis
financial statements taken as a whole. The supplemental information on pages 26
through 29 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ Reznick Fedder & Silverman
Baltimore, Maryland
February 7, 2003
22
[Letterhead of Friedman, Alpren & Green LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners
Homestead Apartments Associates, Ltd.
We have audited the accompanying balance sheet of HOMESTEAD APARTMENTS
ASSOCIATES, LTD. (a limited partnership) as of December 31, 2003, and the
related statements of operations, changes in partners' capital and cash flows
for the year then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with 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 HOMESTEAD APARTMENTS
ASSOCIATES, LTD. as of December 31, 2003, and the results of its operations and
its cash flows for the year then ended in conformity with accounting principles
generally accepted in the United States of America.
/s/ Friedman, Alpren & Green LLP
New York, New York
February 11, 2004
23
[Letterhead of Friedman, Alpren & Green LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners
Homestead Apartments Associates, Ltd.
We have audited the accompanying balance sheet of HOMESTEAD APARTMENTS
ASSOCIATES, LTD. (a limited partnership) as of December 31, 2002 and the related
statements of operations, changes in partners' capital and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with 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 HOMESTEAD APARTMENTS
ASSOCIATES, LTD. as of December 31, 2002, and the results of its operations, and
its cash flows for the year then ended in conformity with accounting principles
generally accepted in the United States of America.
/s/ Friedman, Alpren & Green LLP
New York, New York
January 25, 2003
24
[Letterhead of Friedman, Alpren & Green LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners
Homestead Apartments Associates, Ltd.
We have audited the accompanying balance sheet of HOMESTEAD APARTMENTS
ASSOCIATES, LTD. (a limited partnership) as of December 31, 2001 and the related
statements of operations, changes in partners' capital and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with 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 HOMESTEAD APARTMENTS
ASSOCIATES, LTD. as of December 31, 2001, and the results of its operations, and
its cash flows for the year then ended in conformity with accounting principles
generally accepted in the United States of America.
/s/Friedman, Alpren & Green LLP
New York, New York
January 30, 2002
25
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Bethel Villa Associates, L.P.
We have audited the accompanying balance sheets of Bethel Villa Associates, L.P.
as of December 31, 2003 and 2002, and the related statements of profit and loss
(on Form No. 92410), 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, or 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 Bethel Villa Associates, LP. as
of December 31, 2003 and 2002, 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.
In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated January 20,
2004 on our consideration of Bethel Villa Associates, L.P.'s internal control
and on its compliance with specific requirements applicable to major HUD and
DSHA programs and fair housing and non-discrimination. Those reports are in
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 supplemental information on pages 28
and 44 is presented for the 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.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland Taxpayer Identification Number:
January 20, 2004 52-1088612
Lead Auditor: James P. Martinko
26
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Bethel Villa Associates, L.P.
We have audited the accompanying balance sheets of Bethel Villa Associates, L.P.
as of December 31, 2002 and 2001, and the related statements of profit and loss
(on Form No. 92410), 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, or 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 Bethel Villa Associates, LP. 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.
In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated January 17,
2003 on our consideration of Bethel Villa Associates, L.P.'s internal control
and on its compliance with specific requirements applicable to major HUD and
DSHA programs and fair housing and non-discrimination. Those reports are in
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.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 27
and 33 is presented for the 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.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland Taxpayer Identification Number:
January 17, 2003 52-1088612
Lead Auditor: James P. Martinko
27
[Letterhead of Asher & Company Ltd.]
Independent Auditors' Report
The Partners
West Diamond Street Associates
T/A Sedgley Park Apartments
Marlton, New Jersey
We have audited the accompanying balance sheets of WEST DIAMOND STREET
ASSOCIATES T/A SEDGLEY PARK APARTMENTS (A LIMITED PARTNERSHIP), PHFA PROJECT NO.
O-0198, as of December 31, 2003 and 2002 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 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 WEST DIAMOND STREET ASSOCIATES
T/A SEDGLEY PARK APARTMENTS (A LIMITED PARTNERSHIP), PHFA PROJECT NO. O-0198, as
of December 31, 2003 and 2002, and the results of its operations, changes in its
Partners' capital 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 accompanying supplementary
information is presented for purposes of additional analysis and is not a
required part of the basic financial statements of WEST DIAMOND STREET
ASSOCIATES T/A SEDGLEY PARK APARTMENTS (A LIMITED PARTNERSHIP), PHFA PROJECT NO.
O-0198. 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 23, 2004 on our consideration of WEST DIAMOND STREET ASSOCIATES'
T/A SEDGLEY PARK APARTMENTS (A LIMITED PARTNERSHIP), PHFA PROJECT NO. O-0198,
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/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 23, 2004
28
[Letterhead of Asher & Company Ltd.]
Independent Auditors' Report
The Partners
West Diamond Street Associates
T/A Sedgley Park Apartments
Marlton, New Jersey
We have audited the accompanying balance sheets of WEST DIAMOND STREET
ASSOCIATES T/A SEDGLEY PARK APARTMENTS (A LIMITED PARTNERSHIP), PHFA PROJECT NO.
O-0198, 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 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 WEST DIAMOND STREET ASSOCIATES
T/A SEDGLEY PARK APARTMENTS (A LIMITED PARTNERSHIP), PHFA PROJECT NO. O-0198, as
of December 31, 2002 and 2001, and the results of its operations, changes in its
Partners' capital 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 accompanying supplementary
information 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 11, 2003 on our consideration of West Diamond Street Associates'
T/A Sedgley Park Apartments (A Limited Partnership), PHFA Project No. O-0198,
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/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 11, 2003
29
[Letterhead of J.H. Williams & Co., LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners
Susquehanna Partners (a Limited Partnership)
Philadelphia, Pennsylvania
We have audited the accompanying balance sheets of Susquehanna Partners (a
Limited Partnership) as of December 31, 2003 and 2002 and the related statements
of income, changes in partners' equity and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's general
partner and contracted management agent. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with 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 the Partnership's management and contracted
management agent, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Susquehanna Partners (a Limited
Partnership) at December 31, 2003 and 2002, and the results of its operations,
changes in partners' equity and cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
/s/ J.H. Williams & Co., LLP
Kingston, Pennsylvania
February 9, 2004
30
[Letterhead of J.H. Williams & Co., LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners
Susquehanna Partners (a Limited Partnership)
Philadelphia, Pennsylvania
We have audited the accompanying balance sheets of Susquehanna Partners (a
Limited Partnership) as of December 31, 2002 and 2001 and the related statements
of income, changes in partners' equity and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's general
partner and contracted management agent. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with 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 the Partnership's management and contracted
management agent, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Susquehanna Partners (a Limited
Partnership) at December 31, 2002 and 2001, and the results of its operations,
changes in partners' equity and cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
/s/ J.H. Williams & Co., LLP
Kingston, Pennsylvania
January 31, 2003
31
[Letterhead of Robert Ercolini & Company LLP]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Boston Bay Limited Partnership
Boston, Massachusetts
We have audited the accompanying balance sheet of Boston Bay Limited Partnership
(a Massachusetts Limited Partnership), MHFA Project No. 70-071-R, as of December
31, 2003, and the related statements of operations, partners' deficiency, 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 and the standards applicable to financial
statement 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 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 Boston Bay Limited Partnership
as of December 31, 2003, and the results of its operations, changes in partners'
deficiency, and its cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report
dated January 22, 2004 on our consideration of Boston Bay Limited Partnership's
internal control, a report dated January 22, 2004 on its compliance with laws
and regulations, and reports dated January 22, 2004 on its compliance with
specific requirements applicable to HUD programs. 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
audit.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 16 through 29) is presented for the purpose of additional
analysis and to comply with reporting requirements of the MassHousing and is not
a required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ Robert Ercolini & Company LLP
Boston, Massachusetts
January 22, 2004
32
[Letterhead of Robert Ercolini & Company LLP]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Boston Bay Limited Partnership
Boston, Massachusetts
We have audited the accompanying balance sheet of Boston Bay Limited Partnership
(a Massachusetts Limited Partnership), MHFA Project No. 70-071-R, as of December
31, 2002, and the related statements of operations, partners' deficiency, 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 and the standards applicable to financial
statement 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 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 Boston Bay Limited Partnership
as of December 31, 2002, and the results of its operations, changes in partners'
deficiency, and its cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report
dated January 16, 2003 on our consideration of Boston Bay Limited Partnership's
internal control, a report dated January 16, 2003 on its compliance with laws
and regulations, and reports dated January 16, 2003 on its compliance with
specific requirements applicable to HUD programs. 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
audit.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 15 through 28) is presented for the purpose of additional
analysis and to comply with reporting requirements of the MassHousing and is not
a required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ Robert Ercolini & Company LLP
Boston, Massachusetts
January 16, 2003
33
[Letterhead of Robert Ercolini & Company LLP]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Boston Bay Limited Partnership
Boston, Massachusetts
We have audited the accompanying balance sheet of Boston Bay Limited Partnership
(a Massachusetts Limited Partnership), MHFA Project No. 70-071-R, as of December
31, 2001, and the related statements of operations, partners' deficiency, 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 and the standards applicable to financial
statement 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 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 Boston Bay Limited Partnership
as of December 31, 2001, and the results of its operations, changes in partners'
deficiency, and its cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report
dated January 15, 2002 on our consideration of Boston Bay Limited Partnership's
internal control, a report dated January 15, 2002 on its compliance with laws
and regulations, and reports dated January 15, 2002 on its compliance with
specific requirements applicable to HUD programs. 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
audit.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 15 through 28) is presented for the purpose of additional
analysis and to comply with reporting requirements of the Massachusetts Housing
Finance Agency and is not a required part of the basic financial statements.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated in
all material respects in relation to the basic financial statements taken as a
whole.
/s/ Robert Ercolini & Company LLP
Boston, Massachusetts
January 15, 2002
34
[Letterhead of Robert Ercolini & Company LLP]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Morrant Bay Limited Partnership
Boston, Massachusetts
We have audited the accompanying balance sheet of Morrant Bay Limited
Partnership (a Massachusetts Limited Partnership), MHFA Project No. 70-095-R, as
of December 31, 2003, and the related statements of operations, partners'
deficiency, 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 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 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 Morrant Bay Limited Partnership
as of December 31, 2003, and the results of its operations, changes in partners'
deficiency, and its cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report
dated January 19, 2004 on our consideration of Morrant Bay Limited Partnership's
internal control, a report dated January 19, 2004 on its compliance with laws
and regulations, and reports dated January 19, 2004 on its compliance with
specific requirements applicable to HUD programs. 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
audit.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 16 through 29) is presented for the purpose of additional
analysis and to comply with reporting requirements of the MassHousing and is not
a required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ Robert Ercolini & Company LLP
Boston, Massachusetts
January 19, 2004
35
[Letterhead of Robert Ercolini & Company LLP]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Morrant Bay Limited Partnership
Boston, Massachusetts
We have audited the accompanying balance sheet of Morrant Bay Limited
Partnership (a Massachusetts Limited Partnership), MHFA Project No. 70-095-R, as
of December 31, 2002, and the related statements of operations, partners'
deficiency, 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 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 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 Morrant Bay Limited Partnership
as of December 31, 2002, and the results of its operations, changes in partners'
deficiency, and its cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report
dated January 17, 2003 on our consideration of Morrant Bay Limited Partnership's
internal control, a report dated January 17, 2003 on its compliance with laws
and regulations, and reports dated January 17, 2003 on its compliance with
specific requirements applicable to HUD programs. 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
audit.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 16 through 29) is presented for the purpose of additional
analysis and to comply with reporting requirements of the MassHousing and is not
a required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ Robert Ercolini & Company LLP
Boston, Massachusetts
January 17, 2003
36
[Letterhead of Robert Ercolini & Company LLP]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Morrant Bay Limited Partnership
Boston, Massachusetts
We have audited the accompanying balance sheet of Morrant Bay Limited
Partnership (a Massachusetts Limited Partnership), MHFA Project No. 70-095-R, as
of December 31, 2001, and the related statements of operations, partners'
deficiency, 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 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 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 Morrant Bay Limited Partnership
as of December 31, 2001, and the results of its operations, changes in partners'
deficiency, and its cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report
dated January 17, 2002 on our consideration of Morrant Bay Limited Partnership's
internal control, a report dated January 17, 2002 on its compliance with laws
and regulations, and reports dated January 17, 2002 on its compliance with
specific requirements applicable to HUD programs. 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
audit.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 16 through 29) is presented for the purpose of additional
analysis and to comply with reporting requirements of the Massachusetts Housing
Finance Agency and is not a required part of the basic financial statements.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated in
all material respects in relation to the basic financial statements taken as a
whole.
/s/ Robert Ercolini & Company LLP
Boston, Massachusetts
January 17, 2002
37
[Letterhead of Robert Ercolini & Company LLP]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Hope Bay Limited Partnership
Boston, Massachusetts
We have audited the accompanying balance sheet of Hope Bay Limited Partnership
(a Massachusetts Limited Partnership), MHFA Project No. 70-168-R, as of December
31, 2003, and the related statements of operations, partners' deficiency, 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 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 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 Hope Bay Limited Partnership as
of December 31, 2003, and the results of its operations, changes in partners'
deficiency, and its cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report
dated January 14, 2004 on our consideration of Hope Bay Limited Partnership's
internal control, a report dated January 14, 2004 on its compliance with laws
and regulations, and reports dated January 14, 2004 on its compliance with
specific requirements applicable to HUD programs. 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
audit.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 17 through 30) is presented for the purpose of additional
analysis and to comply with reporting requirements of the MassHousing and is not
a required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ Robert Ercolini & Company LLP
Boston, Massachusetts
January 14, 2004
38
[Letterhead of Robert Ercolini & Company LLP]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Hope Bay Limited Partnership
Boston, Massachusetts
We have audited the accompanying balance sheet of Hope Bay Limited Partnership
(a Massachusetts Limited Partnership), MHFA Project No. 70-168-R, as of December
31, 2002, and the related statements of operations, partners' deficiency, 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 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 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 Hope Bay Limited Partnership as
of December 31, 2002, and the results of its operations, changes in partners'
deficiency, and its cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report
dated January 20, 2003 on our consideration of Hope Bay Limited Partnership's
internal control, a report dated January 20, 2003 on its compliance with laws
and regulations, and reports dated January 20, 2003 on its compliance with
specific requirements applicable to HUD programs. 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
audit.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 15 through 28) is presented for the purpose of additional
analysis and to comply with reporting requirements of the MassHousing and is not
a required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ Robert Ercolini & Company LLP
Boston, Massachusetts
January 20, 2003
39
[Letterhead of Robert Ercolini & Company LLP]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Hope Bay Limited Partnership
Boston, Massachusetts
We have audited the accompanying balance sheet of Hope Bay Limited Partnership
(a Massachusetts Limited Partnership), MHFA Project No. 70-168-R, as of December
31, 2001, and the related statements of operations, partners' deficiency, 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 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 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 Hope Bay Limited Partnership as
of December 31, 2001, and the results of its operations, changes in partners'
deficiency, a