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Delaware		13-3481443
State or other jurisdiction of		(I.R.S. Employer
incorporation or organization		Identification No.)
340 Pemberwick Road
Greenwich, Connecticut		06831
(Address of principal executive offices)		Zip Code

 

 

 

WILDER RICHMAN HISTORIC PROPERTIES II, L.P. AND SUBSIDIARIES

Part I - Financial Information
Table of Contents
Item 1.	Financial Statements	Page
	Consolidated Balance Sheets as of November 30, 2006 (Unaudited) and February 28, 2006	3
	Consolidated Statements of Operations for the three and nine month periodsended November 30, 2006 and 2005 (Unaudited)	4
	Consolidated Statements of Cash Flows for the nine months ended November 30, 2006 and 2005 (Unaudited)	6
	Notes to Financial Statements as of November 30, 2006 (Unaudited)	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	9
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	11
Item 4.	Controls and Procedures	11

		November 30, 2006				February 28, 2006
ASSETS
Cash and cash equivalents		$	44,294,548			$	4,184,690
Mortgage escrows and other deposits			788,158				1,181,280
Escrow - JCRA			2,000,000
Assets held for sale							39,371,221
Other assets			6,528				57,270
		$	47,089,234			$	44,794,461
LIABILITIES AND PARTNERS’ EQUITY
Liabilities
Accounts payable and accrued expenses		$	374,076			$	385,789
Accrued interest payable							40,775
State of New Jersey filing fee							25,600
Liabilities held for sale							27,178,813
Due to related parties			2,208,681				2,075,307
			2,582,757				29,706,284
MINORITY INTEREST			6,918,795				14,601,428
PARTNERS’ EQUITY			37,587,682				486,749
		$	47,089,234			$	44,794,461

 

See notes to consolidated financial statements.

 

 

		Three Months Ended November 30, 2006				Nine Months Ended November 30,  2006				Three Months Ended November 30,  2005				Nine Months Ended November 30,  2005
OPERATIONS
REVENUE
Interest		$	261,165			$	348,554			$	38,097			$	96,742
EXPENSES
Administrative			9,200				86,503				259				20,969
Investor service fees - affiliate			5,658				16,975				11,250				23,300
State of New Jersey Filing Fee			6,509				19,547				18,000				52,500
			21,367				123,025				29,509				96.769
INCOME (LOSS) FROM
CONTINUING OPERATIONS			239,798				225,529				8,588				(27	)
DISCONTINUED OPERATIONS
REVENUE
Rent			2,473,220				6,041,019				1,710,165				5,234,238
EXPENSES
Administrative			415,359				1,132,113				199,632				544,225
Operating			1,315,426				2,519,776				790,321				2,242,311
Management fee - affiliate			119,290				262,353				38,159				214,255
Investor service fees - affiliate			17,348				39,848				52,342				87,160
Financial			283,671				867,213				248,550				705,694
Depreciation and amortization			14,850				29,700				415,878				1,247,506
			2,165,944				4,851,003				1,744,882				5,041,151
OTHER INCOME
Gain on sale of real estate assets			28,002,756				28,002,756
Income (loss) from discontinued operations before minority interest			28,310,032				29,192,772				(34,717	)			193,087
Minority interest (income) loss of operating partnerships			7,692,306				7,682,633				(3	)			(2,848	)
INCOME (LOSS) FROM DISCONTINUED OPERATIONS			36,002,338				36,875,405				(34,720	)			190,239
NET INCOME (LOSS)		$	36,242,136			$	37,100,934			$	(26,132	)		$	190,212

 

 

-- continued --

 

 

 (Unaudited)

		Three Months Ended November 30, 2006				Nine Months Ended November 30,  2006				Three Months Ended November 30, 2005				Nine Months Ended November 30, 2005
NET INCOME (LOSS) ALLOCATED TO
Limited partners		$	35,879,715			$	36,729,925			$	(25,871	)		$	188,310
General partner			362,421				371,009				(261	)			1,902
		$	36,242,136			$	37,100,934			$	(26,132	)		$	190,212
NET INCOME (LOSS) ALLOCATED PER UNIT OF LIMITED PARTNERSHIP INTEREST (800 UNITS OF LIMITED PARTNERSHIP INTEREST)		$	44,849.64			$	45,912.41			$	(32.34	)		$	235.39
NET INCOME (LOSS) FROM CONTINUING OPERATIONS ALLOCATED PER UNIT OF LIMITED PARTNERSHIP INTEREST		$	296.75			$	279.09			$	10.63			$	( .03	)

 

See notes to consolidated financial statements.

 

		2006				2005
CASH FLOWS FROM OPERATING ACTIVITIES
Net income		$	37,100,934			$	190,212
Gain on sale of real estate assets			(28,002,756	)
Depreciation and amortization			29,700				1,247,506
Minority interest in income (loss) of operating partnerships			(7,682,633	)
Adjustment of current assets and liabilities at time of sale			(156,221	)			2,848
Decrease in tenant security deposits			743,813
Increase in JCRA escrow			(2,000,000	)
Increase (decrease) in other assets			50,742				(107,262	)
Decrease in accounts payable and accrued expenses			(11,714	)			(278,975	)
Decrease in accrued interest payable			(40,775	)
Decrease in State of New Jersey filing fee			(25,600	)			(45,500	)
Decrease in tenant security liability			(743,813	)
Increase in due to related parties			133,374				108,677
Net cash provided (used in) by operating activities			(604,949	)			1,116,506
CASH FLOWS FROM INVESTING ACTIVITIES
Sale of real estate assets			69,460,000
Cost of sales of real estate assets			(2,792,442	)
Purchase of fixed assets			(522,950	)			(1,530,753	)
Increase (decrease) in mortgage escrows and other deposits			1,005,199				(432,166	)
Net cash  provided by (used in) investing activities			67,149,807				(1,962,919	)
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of mortgages			(26,435,000	)
Distribution to limited partners			-				(680.000	)
Net cash used in financing activities			(26,435,000	)			(680,000	)
Net increase (decrease) in cash and cash equivalents			40,109,858				(1,526,413	)
Cash and cash equivalents at beginning of period			4,184,690				5,909,227
Cash and cash equivalents at end of period		$	44,294,548			$	4,382,814
SUPPLEMENTAL INFORMATION
Financial expenses paid		$	907,987			$	671,446

-- continued --

 

			2006				2005
CASH FLOWS FROM DISCONTINUED OPERATIONS
Net cash provided by operating activities		$	(457,486	)		$	779,982
Net cash provided by (used in) investing activities		$	67,149,807			$	(1,153,252	)
Net cash used in financing activities		$	(26,435,000	)

See notes to consolidated financial statements.

 

 

1.

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information.  They do not include all information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.  The results of operations are impacted significantly by the results of operations of the Operating Partnerships, which are provided on an unaudited basis during interim periods.  Accordingly, the accompanying consolidated financial statements are dependent on such unaudited information.  In the opinion of the General Partner, the financial statements include all adjustments necessary to reflect fairly the results of the interim periods presented. All adjustments are of a normal recurring nature. No significant events have occurred subsequent to February 28, 2006 which would require additional disclosures in the report under Regulation S-X, Rule 10-01 paragraph A-5, except as discussed in No. 2 and 3 below.

2.

During October 2005, the Operating General Partner commenced a process to receive proposals for the sale of the Property.  As a result, certain of the Operating Partnerships’ assets and liabilities are classified as held for sale in the accompanying consolidated balance sheet as of November 30, 2005. The Operating Partnerships received a written offer effective May 24, 2006 from a non-affiliate third party to purchase the real estate assets for $69,960,000. The purchaser however canceled the Agreement of Purchase and Sale in October, 2006 after the Operating General Partner was unable to obtain the approval of the sale from the tax exempt bond issuer. After such approval was obtained, the purchase price was renegotiated to $69,460,000. The sale of the assets took place on November 14, 2006.   At the Sale, the Operating Partnerships repaid in full all outstanding mortgages totaling $26,435,000 and deposited the Agency-required escrow of $2,000,000.  In addition, the Operating Partnerships incurred closing costs of $2,792,442 and made a distribution to the Partnership in the amount of $32,378,126, with an additional amount owing of $5,602,706.  The $2,000,000 escrow was set aside from Sale proceeds otherwise payable to the Operating General Partner pursuant to the terms of the limited partnership agreements of the Operating Partnerships.  Accordingly, if such amount or any portion thereof is released pursuant to the terms of the escrow agreement between the Operating Partnerships and the Agency, any such amount will be distributed to the Operating General Partner.   Since the Operating Partnerships have a calendar year end, the consolidated results of the Partnership have historically included activity for a different time period from the Operating Partnerships, which has not resulted in materially different operating results. In order to report the sale of the real estate assets and the remaining rental activity of the Operating Partnerships, the November 30, 2006 financial statements include Operating Partnerships results as of November 30, 2006, rather than September 30, 2006.  The results of operations for the nine months ended November 30, 2006 are not indicative of the results to be expected for the entire year as they include the gain from the sale of real estate assets and the remaining rental operating activities.

3.	Additional information, including the audited February 28, 2006 Financial Statements and the Summary of Significant Accounting Policies, is included in the Partnership's Annual Report on Form 10-K for the fiscal year ended February 28, 2006 on file with the Securities and Exchange Commission.

WILDER RICHMAN HISTORIC PROPERTIES II, L.P.

The Operating Partnerships received a written offer effective May 24, 2006 from a non-affiliate third party to purchase the real estate assets for $69,960,000. The offer was subject to various terms and conditions which resulted in an actual sales price of $69,460,000.The property was sold on November 14, 2006. See discussion below under “Liquidity and Capital Resources.”  The Partnership’s fiscal year for financial reporting purposes ends on the last day of February, while that of the Operating Partnerships ends on December 31.  Since the Operating Partnerships have a calendar year end, the consolidated results of the Partnership has historically included activity for a different time period from the Operating Partnerships, which has not resulted in materially different operating results.  In order to report the sale of the real estate assets and the remaining rental activity of the Operating Partnerships, the November 30, 2006 financial statements include Operating Partnerships results as of November 30, 2006. Accordingly, the results of operations reflected in the accompanying consolidated statements of operations are for the three and nine month periods ended November 30, 2006 and 2005 with respect to the Partnership, and for the three and eleven month period ended November 30, 2006 and the three and nine months ended September 30, 2005 with respect to the Operating Partnerships.

Wilder Richman Historic Properties II, L.P. has very limited operating activity; accordingly, the results of operations reflected in the accompanying consolidated statements of operations are highly representative of the Operating Partnerships.  The Property generated cash flow from operations (including activity in connect with the sale of the real estate assets) for the eleven months ended November 30, 2006 (see Results of Operations, below).  The Operating Partnerships' cash and cash equivalents as of November 30, 2006 have increased by approximately $40,257,000 compared to December 31, 2005.  The cash along with remaining mortgage escrows and deposits will be used to pay remaining liabilities of the Operating Partnerships. The balance will  be distributed to the Operating General Partner and Partnership.

As mentioned above, the Operating Partnership sold it assets on November 14, 2006 for $69,460,000. In December 2007, the general partner formed a liquidating trust, and all of the Registrant’s remaining assets have been transferred to such liquidating trust.  Registrant has also filed a Certificate of Dissolution with the Delaware Secretary of State.

The Operating General Partner sold the real estate assets of the Operating Partnership on November 14, 2006 for $69,460,000.  For the nine months ended November 30, 2006, the consolidated statement of operations of the Partnership reflects net income of $37,100,934 which includes gain on the sale of real estate assets of $28,002,756.  Since the Operating Partnership assets were held for sale, depreciation of the assets was not recorded in the current period.  The income from continuing operations increased by approximately $225,000 for the nine months ended November 30, 2006 as compared to the nine months ended November 30, 2005 primarily as a result of (i) an increase in interest revenue of approximately $252,000 resulting from higher cash balances combined with higher average interest rates, (ii) a increase in administrative expenses of approximately $65,000 resulting primarily from a increase in professional fees incurred by the Partnership and (iii) a decrease in the State of New Jersey filing fee of approximately $33,000.

Since the Operating Partnerships have a calendar year end, the consolidated results of the Partnership has historically included activity for a different time period from the Operating Partnerships, which has not resulted in materially different operating results.  In order to report the sale of the real estate assets and the remaining rental activity of the Operating Partnerships, the November 30, 2006 financial statements include Operating Partnerships results as of November 30, 2006. Accordingly, the results of operations reflected in the accompanying consolidated statements of operations are for three and eleven month period ended November 30, 2006. Discontinued operations includes approximately 10.5 months of activity through the date of sale .

Comparison of discontinued operations between current period and the prior year is not meaningful as the time frame are not the same: approximately 10.5 months ended November 30, 2006 as compared with nine months ended September 30, 2005. The average interest rate on the low floater bonds for the eleven months ended November 30, 2006 was 3.54% for the tax exempt bonds. The taxable bonds were paid off in November 2005.  The average occupancy for 2006 through the date of sale was approximately 91%.  The Operating Partnerships generated a cash surplus of approximately $40,257,000 as a result of rental activities and the sale of the real estate assets.

 

For the nine months ended November 30, 2005, the consolidated statement of operations of the Partnership reflects net income of $190,212, inclusive of depreciation and amortization expense of $1,247,506.  The loss from continuing operations decreased by approximately $136,000 for the nine months ended November 30, 2006 as compared to the nine months ended November 30, 2004 primarily as a result of (i) an increase in interest revenue of approximately $72,000 resulting from higher average cash and mortgage escrows and other deposits balances combined with higher average interest cash and expenses of approximately $37,000 resulting primarily from a decrease in professional fees incurred by the Partnership and (iii) a decrease in the State of New Jersey filing fee of approximately $32,000.  Interest expense for the nine months ended September 30, 2005, increased compared to the nine months ended September 30, 2004.  The average interest rate on the low floater bonds for the nine months ended September 30, 2005 was 2.26% for the tax exempt bonds and 2.94% for the taxable bonds.  Despite the continued favorable interest rates in 2005, the Operating Partnerships’ net cash flow declined as a result of the costs incurred in connection with planned capital expenditures.  The average occupancy for the nine months ended September 30, 2005 was approximately 95%.  The Operating Partnerships generated a cash deficit after required debt service payments and required replacement reserve deposits during the nine months ended September 30, 2005 of approximately $689,000, which includes required deposits to the principal reserve under the mortgages (approximately $356,000), deposits to required escrows (approximately $68,000), deposits to a voluntary replacement reserve account held by the Operating Partnerships (approximately $266,000) and planned capital improvements (approximately $1,531,000).

The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information, which requires the Partnership to make certain estimates and assumptions.  The following section is a summary of certain aspects of those accounting policies that may require subjective or complex judgments and are most important to the portrayal of the Partnership’s financial condition and results of operations.  The Partnership believes that there is a low probability that the use of different estimates or assumptions in making these judgments would result in materially different amounts being reported in the consolidated financial statements.

The Partnership sold its real estate assets on November 14, 2006.  Prior to that date, the Partnership recorded its real estate assets at cost less accumulated depreciation and, if there are indications that impairment existed, would have adjusted the carrying value of those assets in accordance with Statement of Financial Accounting Standard (“SFAS”) No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets."  Under SFAS No. 144, the long-lived assets of the Operating Partnerships are classified as held for sale in the accompanying consolidated balance sheet as of November 30, 2005 and are measured at the lower of their carrying amount or fair value less cost to sell.  Once classified as held for sale, depreciation of the assets ceases.

 

 

Item 1.	Legal Proceedings
	Registrant is not aware of any material legal proceedings.
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds
	None
Item 3.	Defaults Upon Senior Securities
	None
Item 4.	Submission of Matters to a Vote of Security Holders
	None
Item 5.	Other Information
	None
Item 6.	Exhibits   Exhibit 31.1 Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer Exhibit 31.2 Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer Exhibit 32.1 Section 1350 Certification of Chief Executive Officer Exhibit 32.2 Section 1350 Certification of Chief Financial Officer

 

Wilder Richman Historic Properties II, L.P.

Form 10-Q

November 30, 2006

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on it behalf by the undersigned thereunto duly authorized.

	WILDER RICHMAN HISTORIC PROPERTIES II, L.P.
	By: Wilder Richman Historic Corporation
	General Partner
Dated:  September 13, 2011	/s/ Richard Paul Richman
	Richard Paul Richman
	Chief Executive Officer
Dated: September 13, 2011	/s/ James Hussey
	James Hussey
	Chief Financial Officer

 

 

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