Attached files
file | filename |
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EX-32 - BCTC II CERTIFICATION 906 - BOSTON CAPITAL TAX CREDIT FUND II LTD PARTNERSHIP | b20615cert906mnt.htm |
EX-31 - BCTC II CERTIFICATION 302 - BOSTON CAPITAL TAX CREDIT FUND II LTD PARTNERSHIP | b20615cert302mnt.htm |
EX-31 - BCTC II CERTIFICATION 302 - BOSTON CAPITAL TAX CREDIT FUND II LTD PARTNERSHIP | b20615cert302jpm.htm |
EX-32 - BCTC II CERTIFICATION 906 - BOSTON CAPITAL TAX CREDIT FUND II LTD PARTNERSHIP | b20615cert906jpm.htm |
FORM 10-Q
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended June 30, 2015
or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission file number 0-19443
BOSTON CAPITAL TAX CREDIT FUND II LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Delaware |
04-3066791 |
(State or other jurisdiction |
(I.R.S. Employer |
of incorporation or organization) |
Identification No.) |
One Boston Place, Suite 2100, Boston, Massachusetts 02108
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617)624-8900
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 ý |
No
|
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes ý |
No |
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act (check one):
Large accelerated filer |
Accelerated filer |
Non-accelerated filer |
Smaller reporting company ý |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes |
No ý |
BOSTON CAPITAL TAX CREDIT FUND II LIMITED PARTNERSHIP
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED June 30, 2015
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION |
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Pages |
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Item 1. Condensed Financial Statements |
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Condensed Balance Sheets |
3-9 |
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Condensed Statements of Operations |
10-16 |
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Condensed Statements of Changes in |
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Condensed Statements of Cash Flows |
21-27 |
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Notes to Condensed Financial |
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Item 2. Management's Discussion and Analysis |
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Item 3. Quantitative and Qualitative |
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Item 4. Controls and Procedures |
55 |
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PART II - OTHER INFORMATION |
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Item 1. Legal Proceedings |
56 |
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Item 1A. Risk Factors |
56 |
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Item 2. Unregistered Sales of Equity |
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Item 3. Defaults Upon Senior Securities |
56 |
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Item 4. Mine Safety Disclosures |
56 |
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Item 5. Other Information |
56 |
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Item 6. Exhibits |
56 |
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Signatures |
57 |
Boston Capital Tax Credit Fund II Limited Partnership
CONDENSED BALANCE SHEETS
(Unaudited)
|
June 30, |
March 31, |
||
ASSETS |
||||
Cash and cash equivalents |
$ 1,649,670 |
$ 1,682,834 |
||
Other assets |
961,953 |
2,200 |
||
$ 2,611,623 |
$ 1,685,034 |
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LIABILITIES |
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Accounts payable |
$ 12,600 |
$ 12,600 |
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Accounts payable affiliates (Note C) |
15,164,518 |
15,075,966 |
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Capital contributions payable (Note D) |
169,974 |
169,974 |
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15,347,092 |
15,258,540 |
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PARTNERS' CAPITAL (DEFICIT) |
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Assignees |
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Units of limited partnership |
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General Partner |
(1,506,306) |
(1,514,685) |
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(12,735,469) |
(13,573,506) |
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$ 2,611,623 |
$ 1,685,034 |
The accompanying notes are an integral part of these condensed statements
Boston Capital Tax Credit Fund II Limited Partnership
CONDENSED BALANCE SHEETS
(Unaudited)
Series 7
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June 30, |
March 31, |
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ASSETS |
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Cash and cash equivalents |
$ - |
$ - |
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Other assets |
- |
- |
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$ - |
$ - |
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LIABILITIES |
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Accounts payable |
$ - |
$ - |
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Accounts payable affiliates (Note C) |
- |
- |
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Capital contributions payable (Note D) |
- |
- |
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- |
- |
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PARTNERS' CAPITAL (DEFICIT) |
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Assignees |
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Units of limited partnership |
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General Partner |
84,506 |
84,506 |
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- |
- |
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$ - |
$ - |
The accompanying notes are an integral part of these condensed statements
Boston Capital Tax Credit Fund II Limited Partnership
CONDENSED BALANCE SHEETS
(Unaudited)
Series 9
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June 30, |
March 31, |
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ASSETS |
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Cash and cash equivalents |
$ 157,479 |
$ 163,039 |
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Other assets |
- |
- |
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$ 157,479 |
$ 163,039 |
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LIABILITIES |
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Accounts payable |
$ - |
$ - |
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Accounts payable affiliates (Note C) |
6,565,265 |
6,548,768 |
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Capital contributions payable (Note D) |
- |
- |
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PARTNERS' CAPITAL (DEFICIT) |
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Assignees |
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Units of limited partnership |
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General Partner |
(398,916) |
(398,695) |
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(6,407,786) |
(6,385,729) |
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$ 157,479 |
$ 163,039 |
The accompanying notes are an integral part of these condensed statements
Boston Capital Tax Credit Fund II Limited Partnership
CONDENSED BALANCE SHEETS
(Unaudited)
Series 10
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June 30, |
March 31, |
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ASSETS |
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Cash and cash equivalents |
$ 199,394 |
$ 205,732 |
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Other assets |
- |
- |
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$ 199,394 |
$ 205,732 |
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LIABILITIES |
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Accounts payable |
$ - |
$ - |
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Accounts payable affiliates (Note C) |
1,516,103 |
1,503,758 |
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Capital contributions payable (Note D) |
- |
- |
|
1,516,103 |
1,503,758 |
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PARTNERS' CAPITAL (DEFICIT) |
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Assignees |
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Units of limited partnership |
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General Partner |
(208,080) |
(207,893) |
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(1,316,709) |
(1,298,026) |
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$ 199,394 |
$ 205,732 |
The accompanying notes are an integral part of these condensed statements
Boston Capital Tax Credit Fund II Limited Partnership
CONDENSED BALANCE SHEETS
(Unaudited)
Series 11
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June 30, |
March 31, |
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ASSETS |
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Cash and cash equivalents |
$ 205,615 |
$ 211,756 |
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Other assets |
574,796 |
- |
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$ 780,411 |
$ 211,756 |
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LIABILITIES |
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Accounts payable |
$ - |
$ - |
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Accounts payable affiliates (Note C) |
633,369 |
614,049 |
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Capital contributions payable (Note D) |
- |
- |
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633,369 |
614,049 |
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PARTNERS' CAPITAL (DEFICIT) |
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Assignees |
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Units of limited partnership |
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General Partner |
(213,215) |
(218,708) |
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147,042 |
(402,293) |
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$ 780,411 |
$ 211,756 |
The accompanying notes are an integral part of these condensed statements
Boston Capital Tax Credit Fund II Limited Partnership
CONDENSED BALANCE SHEETS
(Unaudited)
Series 12
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June 30, |
March 31, |
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ASSETS |
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Cash and cash equivalents |
$ 154,486 |
$ 160,021 |
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Other assets |
384,957 |
- |
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$ 539,443 |
$ 160,021 |
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LIABILITIES |
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Accounts payable |
$ - |
$ - |
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Accounts payable affiliates (Note C) |
3,162,067 |
3,149,077 |
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Capital contributions payable (Note D) |
9,241 |
9,241 |
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3,171,308 |
3,158,318 |
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PARTNERS' CAPITAL (DEFICIT) |
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Assignees |
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Units of limited partnership |
(2,354,416) |
(2,717,184) |
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General Partner |
(277,449) |
(281,113) |
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(2,631,865) |
(2,998,297) |
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$ 539,443 |
$ 160,021 |
The accompanying notes are an integral part of these condensed statements
Boston Capital Tax Credit Fund II Limited Partnership
CONDENSED BALANCE SHEETS
(Unaudited)
Series 14
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June 30, |
March 31, |
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ASSETS |
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Cash and cash equivalents |
$ 932,696 |
$ 942,286 |
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Other assets |
2,200 |
2,200 |
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$ 934,896 |
$ 944,486 |
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LIABILITIES |
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Accounts payable |
$ 12,600 |
$ 12,600 |
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Accounts payable affiliates (Note C) |
3,287,714 |
3,260,314 |
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Capital contributions payable (Note D) |
160,733 |
160,733 |
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3,461,047 |
3,433,647 |
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PARTNERS' CAPITAL (DEFICIT) |
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Assignees |
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Units of limited partnership |
(2,032,999) |
(1,996,379) |
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General Partner |
(493,152) |
(492,782) |
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(2,526,151) |
(2,489,161) |
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$ 934,896 |
$ 944,486 |
The accompanying notes are an integral part of these condensed statements
Boston Capital Tax Credit Fund II Limited Partnership
CONDENSED STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
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Income |
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Interest income |
$ 412 |
$ 280 |
Other income |
- |
51,672 |
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412 |
51,952 |
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Share of income from Operating |
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Expenses |
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Professional fees |
23,340 |
25,540 |
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Partnership management fee, net (Note C) |
83,396 |
60,419 |
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General and administrative expenses |
15,392 |
15,720 |
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NET INCOME(LOSS) |
$ 838,037 |
$ (49,537) |
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Net income(loss) allocated to assignees |
$ 829,658 |
$ (49,042) |
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Net income(loss) allocated to general partner |
$ 8,379 |
$ (495) |
Net income(loss) per BAC |
$ .04 |
$ (.00) |
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|
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|
The accompanying notes are an integral part of these condensed statements
Boston Capital Tax Credit Fund II Limited Partnership
CONDENSED STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
Series 7
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Income |
|||
Interest income |
$ - |
$ - |
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Other income |
- |
- |
- |
- |
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Share of income from Operating |
|
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Expenses |
|||
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|||
Professional fees |
- |
- |
|
Partnership management fee, net (Note C) |
- |
- |
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General and administrative expenses |
- |
- |
|
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NET INCOME(LOSS) |
$ - |
$ - |
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Net income(loss) allocated to assignees |
$ - |
$ - |
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Net income(loss) allocated to general partner |
$ - |
$ - |
Net income(loss) per BAC |
$ - |
$ - |
|
The accompanying notes are an integral part of these condensed statements
Boston Capital Tax Credit Fund II Limited Partnership
CONDENSED STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
Series 9
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Income |
|
|
|
|
Interest income |
$ 37 |
$ 29 |
|
Other income |
- |
- |
|
37 |
29 |
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Share of income from Operating |
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
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Professional fees |
3,810 |
3,975 |
|
Partnership management fee, net (Note C) |
15,197 |
18,630 |
|
General and administrative expenses |
3,087 |
3,171 |
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|
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NET INCOME(LOSS) |
$ (22,057) |
$ (25,747) |
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Net income(loss) allocated to assignees |
$ (21,836) |
$ (25,490) |
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Net income(loss) allocated to general partner |
$ (221) |
$ (257) |
Net income(loss) per BAC |
$ (.01) |
$ (.01) |
|
|
|
|
The accompanying notes are an integral part of these condensed statements
Boston Capital Tax Credit Fund II Limited Partnership
CONDENSED STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
Series 10
|
|
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Income |
|||
|
Interest income |
$ 53 |
$ 37 |
Other income |
- |
11,065 |
|
53 |
11,102 |
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Share of income from Operating |
|
|
|
Expenses |
|||
|
|||
Professional fees |
3,645 |
4,445 |
|
Partnership management fee, net (Note C) |
12,345 |
10,188 |
|
General and administrative expenses |
2,746 |
2,735 |
|
|
|
|
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NET INCOME(LOSS) |
$ (18,683) |
$ (6,266) |
|
Net income(loss) allocated to assignees |
$ (18,496) |
$ (6,203) |
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Net income(loss) allocated to general partner |
$ (187) |
$ (63) |
Net income(loss) per BAC |
$ (.01) |
$ (.00) |
|
The accompanying notes are an integral part of these condensed statements
Boston Capital Tax Credit Fund II Limited Partnership
CONDENSED STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
Series 11
|
|
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|
|
|
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Income |
|
|
|
|
Interest income |
$ 130 |
$ 44 |
|
Other income |
- |
15,822 |
130 |
15,866 |
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Share of income from Operating |
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
Professional fees |
4,635 |
4,605 |
|
Partnership management fee, net (Note C) |
18,320 |
100 |
|
General and administrative expenses |
2,636 |
2,561 |
|
|
|
|
|
|
|
|
|
NET INCOME(LOSS) |
$ 549,335 |
$ 8,790 |
|
|
|
|
|
|
Net income(loss) allocated to assignees |
$ 543,842 |
$ 8,702 |
|
|
|
|
Net income(loss) allocated to general partner |
$ 5,493 |
$ 88 |
|
|
|
|
|
Net income(loss) per BAC |
$ .22 |
$ .00 |
|
|
|
|
The accompanying notes are an integral part of these condensed statements
Boston Capital Tax Credit Fund II Limited Partnership
CONDENSED STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
Series 12
|
|
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|
|
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Income |
|
|
|
|
Interest income |
$ 65 |
$ 76 |
|
Other income |
- |
3,802 |
65 |
3,878 |
||
Share of income from Operating |
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
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Professional fees |
4,305 |
5,390 |
|
Partnership management fee, net (Note C) |
11,334 |
(2,258) |
|
General and administrative expenses |
2,951 |
2,976 |
|
|
|
|
|
|
|
|
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NET INCOME(LOSS) |
|
|
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|
|
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Net income(loss) allocated to assignees |
$ 362,768 |
$ (2,208) |
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Net income(loss) allocated to general partner |
$ 3,664 |
$ (22) |
Net income(loss) per BAC |
$ .12 |
$ (.00) |
|
|
|
|
The accompanying notes are an integral part of these condensed statements
Boston Capital Tax Credit Fund II Limited Partnership
CONDENSED STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
Series 14
|
|
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|
|
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|
Income |
|
|
|
|
Interest income |
$ 127 |
$ 94 |
|
Other income |
- |
20,983 |
|
127 |
21,077 |
|
Share of income from Operating |
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|||
Professional fees |
6,945 |
7,125 |
|
Partnership management fee, net (Note C) |
26,200 |
33,759 |
|
|
General and administrative expenses |
3,972 |
4,277 |
|
|
|
|
|
|
|
|
NET INCOME(LOSS) |
$ (36,990) |
$ (24,084) |
|
|
|
|
|
Net income(loss) allocated to assignees |
$ (36,620) |
$ (23,843) |
|
|
Net income(loss) allocated to general partner |
$ (370) |
$ (241) |
Net income(loss) per BAC |
$ (.01) |
$ (.00) |
|
The accompanying notes are an integral part of these condensed statements
Boston Capital Tax Credit Fund II Limited Partnership
CONDENSED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
Three Months Ended June 30,
(Unaudited)
|
|
|
|
|
|
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Partners' capital |
|
|
|
|
|
|
|
Net income(loss) |
829,658 |
8,379 |
838,037 |
|
|
|
|
Partners' capital |
|
|
|
|
|
|
|
The accompanying notes are an integral part of these condensed statements
Boston Capital Tax Credit Fund II Limited Partnership
CONDENSED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
Three Months Ended June 30,
(Unaudited)
|
|
General |
Total |
Series 7 |
|
|
|
Partners' capital |
|
|
|
|
|
|
|
Net income(loss) |
- |
- |
- |
|
|
|
|
Partners' capital |
|
|
|
|
|
|
|
|
|
|
|
Series 9 |
|
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Partners' capital |
|
|
|
|
|
|
|
Net income(loss) |
(21,836) |
(221) |
(22,057) |
|
|
|
|
Partners' capital |
|
|
|
|
|
|
|
The accompanying notes are an integral part of these condensed statements
Boston Capital Tax Credit Fund II Limited Partnership
CONDENSED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
Three Months Ended June 30,
(Unaudited)
|
|
General |
Total |
Series 10 |
|
|
|
Partners' capital |
|
|
|
|
|
|
|
Net income(loss) |
(18,496) |
(187) |
(18,683) |
|
|
|
|
Partners' capital |
|
|
|
|
|
|
|
|
|
|
|
Series 11 |
|
|
|
Partners' capital |
|
|
|
|
|
|
|
Net income(loss) |
543,842 |
5,493 |
549,335 |
|
|
|
|
Partners' capital |
|
|
|
|
|
|
|
The accompanying notes are an integral part of these condensed statements
Boston Capital Tax Credit Fund II Limited Partnership
CONDENSED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
Three Months Ended June 30,
(Unaudited)
|
|
General |
Total |
Series 12 |
|
|
|
Partners' capital |
|
|
|
|
|
|
|
Net income(loss) |
362,768 |
3,664 |
366,432 |
|
|
|
|
Partners' capital |
|
|
|
|
|
|
|
|
|
|
|
Series 14 |
|
|
|
Partners' capital |
|
|
|
|
|
|
|
Net income(loss) |
(36,620) |
(370) |
(36,990) |
|
|
|
|
Partners' capital |
|
|
|
|
|
|
|
The accompanying notes are an integral part of these condensed statements
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
|
2015 |
2014 |
||
Cash flows from operating activities: |
|
|
||
|
|
|
||
Net Income(loss) |
$ 838,037 |
$ (49,537) |
||
Adjustments to reconcile net income |
|
|
||
Share of Income from Operating |
|
|
||
Changes in assets and liabilities |
|
|
||
Increase in accounts |
|
|
||
|
|
|
||
Net cash (used in) provided by |
|
|
||
|
|
|
||
Cash flows from investing activities: |
|
|
||
|
|
|
||
Proceeds from the disposition of |
|
|
||
|
|
|
||
Net cash provided by |
|
|
||
|
|
|
||
INCREASE (DECREASE) IN CASH AND |
(33,164) |
68,198 |
||
|
|
|
||
Cash and cash equivalents, beginning |
1,682,834 |
1,095,990 |
||
|
|
|
||
Cash and cash equivalents, ending |
$ 1,649,670 |
$ 1,164,188 |
The accompanying notes are an integral part of these condensed statements
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 7
|
2015 |
2014 |
Cash flows from operating activities: |
|
|
|
|
|
Net Income(loss) |
$ - |
$ - |
Adjustments to reconcile net income |
|
|
Share of Income from Operating |
|
|
Changes in assets and liabilities |
|
|
Increase in accounts |
|
|
|
|
|
Net cash (used in) provided by |
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
Proceeds from the disposition of |
|
|
|
|
|
Net cash provided by |
|
|
|
|
|
INCREASE (DECREASE) IN CASH AND |
|
|
|
|
|
Cash and cash equivalents, beginning |
- |
- |
|
|
|
Cash and cash equivalents, ending |
$ - |
$ - |
The accompanying notes are an integral part of these condensed statements
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 9
|
2015 |
2014 |
Cash flows from operating activities: |
|
|
|
|
|
Net Income(loss) |
$ (22,057) |
$ (25,747) |
Adjustments to reconcile net income |
|
|
Share of Income from Operating |
- |
|
Changes in assets and liabilities |
|
|
Increase in accounts |
|
|
|
|
|
Net cash (used in) provided by |
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
Proceeds from the disposition of |
|
|
|
|
|
Net cash provided by |
|
|
|
|
|
INCREASE (DECREASE) IN CASH AND |
|
|
|
|
|
Cash and cash equivalents, beginning |
163,039 |
120,474 |
|
|
|
Cash and cash equivalents, ending |
$ 157,479 |
$ 113,357 |
|
|
|
The accompanying notes are an integral part of these condensed statements
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 10
|
2015 |
2014 |
Cash flows from operating activities: |
|
|
|
|
|
Net Income(loss) |
$ (18,683) |
$ (6,266) |
Adjustments to reconcile net income |
|
|
Share of Income from Operating |
|
|
Changes in assets and liabilities |
|
|
Increase in accounts |
|
|
|
|
|
Net cash (used in) provided by |
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
Proceeds from the disposition of |
|
|
|
|
|
Net cash provided by |
|
|
|
|
|
INCREASE (DECREASE) IN CASH AND |
(6,338) |
9,169 |
|
|
|
Cash and cash equivalents, beginning |
205,732 |
146,318 |
|
|
|
Cash and cash equivalents, ending |
$ 199,394 |
$ 155,487 |
|
|
|
The accompanying notes are an integral part of these condensed statements
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 11
|
2015 |
2014 |
Cash flows from operating activities: |
|
|
|
|
|
Net Income(loss) |
$ 549,335 |
$ 8,790 |
Adjustments to reconcile net income |
|
|
Share of Income from Operating |
|
|
Changes in assets and liabilities |
|
|
Increase in accounts |
|
|
|
|
|
Net cash (used in) provided by |
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
Proceeds from the disposition of |
|
|
|
|
|
Net cash provided by |
|
|
|
|
|
INCREASE (DECREASE) IN CASH AND |
|
|
|
|
|
Cash and cash equivalents, beginning |
211,756 |
156,017 |
|
|
|
Cash and cash equivalents, ending |
$ 205,615 |
$ 191,180 |
|
|
|
The accompanying notes are an integral part of these condensed statements
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 12
|
2015 |
2014 |
Cash flows from operating activities: |
|
|
|
|
|
Net Income(loss) |
$ 366,432 |
$ (2,230) |
Adjustments to reconcile net income |
|
|
Share of Income from Operating |
|
- |
Changes in assets and liabilities |
|
|
Increase in accounts |
|
|
|
|
|
Net cash (used in) provided by |
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
Proceeds from the disposition of |
|
|
|
|
|
Net cash provided by |
|
|
|
|
|
INCREASE (DECREASE) IN CASH AND |
|
|
|
|
|
Cash and cash equivalents, beginning |
160,021 |
297,212 |
|
|
|
Cash and cash equivalents, ending |
$ 154,486 |
$ 312,052 |
|
|
|
The accompanying notes are an integral part of these condensed statements
Boston Capital Tax Credit Fund II Limited Partnership
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 14
|
2015 |
2014 |
Cash flows from operating activities: |
|
|
|
|
|
Net Income(loss) |
$ (36,990) |
$ (24,084) |
Adjustments to reconcile net income |
|
|
Share of Income from Operating |
|
|
Changes in assets and liabilities |
|
|
Increase in accounts |
|
|
|
|
|
Net cash (used in) provided by |
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by |
|
|
|
|
|
INCREASE (DECREASE) IN CASH AND |
|
|
|
|
|
Cash and cash equivalents, beginning |
942,286 |
375,969 |
|
|
|
Cash and cash equivalents, ending |
$ 932,696 |
$ 392,112 |
|
|
|
The accompanying notes are an integral part of these condensed statements
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO CONDENSED FINANCIAL STATEMENTS
June 30, 2015
(Unaudited)
Boston Capital Tax Credit Fund II Limited Partnership (the "Partnership") was
formed under the laws of the State of Delaware as of September 28, 1989, for the purpose of acquiring, holding, and disposing of limited partnership interests in operating partnerships which will acquire, develop, rehabilitate, operate and own newly constructed, existing or rehabilitated low-income apartment complexes ("Operating Partnerships"). Effective as of June 1, 2001 there was a restructuring, and as a result, the Partnership's general partner was reorganized as follows. The general partner of the Partnership continues to be Boston Capital Associates II Limited Partnership, a Delaware limited partnership. The general partner of the general partner is BCA Associates Limited Partnership, a Massachusetts limited partnership, whose sole general partner is C&M Management, Inc., a Massachusetts corporation and whose limited partners are Herbert F. Collins and John P. Manning. Mr. Manning is the principal of Boston Capital Partners, Inc. The limited partner of the general partner is Capital Investment Holdings, a general partnership whose partners are certain officers and employees of Boston Capital Partners, Inc. and its affiliates. The assignor limited partner is BCTC II Assignor Corp., a Delaware corporation which is now wholly-owned by John P. Manning.
NOTE B - ACCOUNTING AND FINANCIAL REPORTING POLICIES
The condensed financial statements included herein as of June 30, 2015 and for the three months then ended have been prepared by the Partnership, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. No BACs with respect to Series 8 and Series 13 were offered. The Partnership accounts for its investments in Operating Partnerships using the equity method, whereby the Partnership adjusts its investment cost for its share of each Operating Partnership's results of operations and for any distributions received or accrued.
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
June 30, 2015
(Unaudited)
NOTE B - ACCOUNTING AND FINANCIAL REPORTING POLICIES - CONTINUED
Costs incurred by the Partnership in acquiring the investments in Operating Partnerships were capitalized to the investment account. The Partnership's accounting and financial reporting policies are in conformity with generally accepted accounting principles and include adjustments in interim periods considered necessary for a fair presentation of the results of operations. Such adjustments are of a normal recurring nature. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. It is suggested that these condensed financial statements be read in conjunction with the financial statements and the notes thereto included in the Partnership's Annual Report on Form 10-K for the fiscal year ended March 31, 2015.
NOTE C - RELATED PARTY TRANSACTIONS
The Partnership has entered into several transactions with various affiliates of the general partner, including Boston Capital Holdings, L.P. and Boston Capital Asset Management Limited Partnership, or BCAMLP, as follows:
Accounts payable affiliates at June 30, 2015 and 2014 represents
accrued general and administrative expenses, accrued partnership management fees, and advances from an affiliate of the general partner, which are payable to Boston Capital Holdings, L.P. and Boston Capital Asset Management Limited
Partnership.
An annual partnership management fee based on .5 percent of the aggregate
cost of all apartment complexes owned by the Operating Partnerships has been
accrued to Boston Capital Asset Management Limited Partnership. Since reporting fees collected by the series were added to reserves and not paid to Boston Capital Asset Management Limited Partnership, the amounts accrued are not net of reporting fees received.
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
June 30, 2015
(Unaudited)
NOTE C - RELATED PARTY TRANSACTIONS (continued)
The partnership management fee accrued for the quarters ended June 30, 2015 and 2014 are as follows:
|
2015 |
2014 |
$ - |
$ - |
|
Series 9 |
16,497 |
18,630 |
Series 10 |
12,345 |
15,435 |
Series 11 |
19,320 |
26,373 |
Series 12 |
12,990 |
17,070 |
Series 14 |
27,400 |
40,227 |
|
|
|
|
$ 88,552 |
$ 117,735 |
The partnership management fee paid for the quarters ended June 30, 2015 and 2014 are as follows:
|
2015 |
2014 |
Series 7 |
$ - |
$ - |
Series 9 |
- |
- |
Series 10 |
- |
- |
Series 11 |
- |
- |
Series 12 |
- |
- |
Series 14 |
- |
- |
|
|
|
|
$ - |
$ - |
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
June 30, 2015
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS
At June 30, 2015, and 2014 the Partnership had limited partnership interests in 57 and 75 Operating Partnerships, respectively, which own apartment complexes. The number of Operating Partnerships in which the Partnership had limited partnership interests at June 30, 2015 and 2014 by series is as follows:
|
2015 |
2014 |
- |
- |
|
Series 9 |
9 |
10 |
Series 10 |
7 |
9 |
Series 11 |
9 |
14 |
Series 12 |
9 |
13 |
Series 14 |
23 |
29 |
|
|
|
|
57 |
75 |
|
|
|
Under the terms of the Partnership's investment in each Operating Partnership, the Partnership is required to make capital contributions to the Operating Partnerships. These contributions are payable in installments over several years upon each Operating Partnership achieving specified levels of construction and/or operations.
The contributions payable at June 30, 2015 and 2014 by series are as
follows:
|
2015 |
2014 |
Series 7 |
$ - |
$ - |
Series 9 |
- |
- |
Series 10 |
- |
- |
Series 11 |
- |
- |
Series 12 |
9,241 |
9,241 |
Series 14 |
160,733 |
160,733 |
|
|
|
|
$169,974 |
$169,974 |
|
|
|
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
June 30, 2015
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS - Continued
During the three months ended June 30, 2015, the Partnership disposed of two Operating Partnerships. A summary of the disposition by Series for June 30, 2015 is as follows:
|
Operating Partnership Interest Transferred |
|
Sale of Underlying Operating Partnership |
|
Partnership Proceeds from Disposition * |
|
Gain on Disposition |
||
Series 7 |
- |
|
- |
|
$ |
- |
|
$ |
- |
Series 9 |
- |
|
- |
|
|
- |
|
|
- |
Series 10 |
- |
|
- |
|
|
- |
|
|
- |
Series 11 |
- |
|
1 |
|
|
- |
|
|
574,796 |
Series 12 |
- |
|
1 |
|
|
- |
|
|
384,957 |
Series 14 |
- |
|
- |
|
|
- |
|
|
- |
Total |
- |
|
2 |
|
$ |
- |
|
$ |
959,753 |
* Partnership proceeds from disposition does not include $574,796 and $384,957 recorded as a receivable as of June 30, 2015, for Series 11 and Series 12, respectively.
During the three months ended June 30, 2014, the Partnership disposed of one Operating Partnership. A summary of the disposition by Series for June 30, 2014 is as follows:
|
Operating Partnership Interest Transferred |
|
Sale of Underlying Operating Partnership |
|
Partnership Proceeds from Disposition |
|
Gain on Disposition |
||
Series 7 |
- |
|
- |
|
$ |
- |
|
$ |
- |
Series 9 |
- |
|
- |
|
|
- |
|
|
- |
Series 10 |
- |
|
- |
|
|
- |
|
|
- |
Series 11 |
1 |
|
- |
|
|
190 |
|
|
190 |
Series 12 |
- |
|
- |
|
|
- |
|
|
- |
Series 14 |
- |
|
- |
|
|
- |
|
|
- |
Total |
1 |
|
- |
|
$ |
190 |
|
$ |
190 |
The gain described above is for financial statement purposes only. There are significant differences between the equity method of accounting and the tax reporting of income and losses from Operating Partnership investments. The largest difference is the ability, for tax purposes, to deduct losses in excess of the Partnership's investment in the Operating Partnership. As such, the amount of gain recognized for tax purposes may be significantly higher than the gain recorded in the financial statements.
The Partnership's fiscal year ends March 31 of each year, while all the Operating Partnerships' fiscal years are the calendar year. Pursuant to the provisions of each Operating Partnership agreement, financial results for each of the Operating Partnerships are provided to the Partnership within 45 days after the close of each Operating Partnership's quarterly period. Accordingly, the current financial results available for the Operating Partnerships are for the three months ended March 31, 2015.
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
June 30, 2015
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS - Continued
COMBINED CONDENSED SUMMARIZED STATEMENTS OF OPERATIONS
Three Months Ended March 31,
(Unaudited)
|
2015 |
2014 |
|
|
|
|
|
Revenues |
|
|
|
|
Rental |
$ 2,452,174 |
$ 3,419,250 |
|
Interest and other |
39,822 |
61,713 |
|
2,491,996 |
3,480,963 |
|
|
|
|
|
Expenses |
|
|
|
|
Interest |
297,368 |
432,561 |
|
Depreciation and amortization |
571,199 |
836,052 |
Operating expenses |
1,928,836 |
2,606,781 |
|
|
2,797,403 |
3,875,394 |
|
|
|
|
|
NET LOSS |
$ (305,407) |
$ (394,431) |
|
|
|
|
|
|
Net loss allocated to Boston Capital |
|
|
|
|
|
|
|
|
|
|
|
Net loss allocated to other partners |
$ (3,053) |
$ (3,944) |
|
|
|
*Amounts include $302,354 and $390,487 for 2015 and 2014, respectively, of loss not recognized under the equity method of accounting.
The Partnership accounts for its investments using the equity method of
accounting. Under the equity method of accounting, the Partnership adjusts
its investment cost for its share of each Operating Partnership's results of
operations and for any distributions received or accrued. However, the
Partnership recognizes individual operating losses only to the extent of
capital contributions. Excess losses are suspended for use in future years to
offset excess income.
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
June 30, 2015
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS - Continued
COMBINED CONDENSED SUMMARIZED STATEMENTS OF OPERATIONS
Three Months Ended March 31,
(Unaudited)
Series 7
|
2015 |
2014 |
|
|
|
|
|
Revenues |
|
|
|
|
Rental |
$ - |
$ - |
|
Interest and other |
- |
- |
|
- |
- |
|
|
|
|
|
Expenses |
|
|
|
|
Interest |
- |
- |
|
Depreciation and amortization |
- |
- |
Operating expenses |
- |
- |
|
|
- |
- |
|
|
|
|
|
NET LOSS |
$ - |
$ - |
|
|
|
|
|
|
Net loss allocated to Boston Capital |
|
|
|
|
|
|
|
|
|
|
|
Net loss allocated to other partners |
$ - |
$ - |
|
|
|
*Amounts include $0 for 2015 and 2014, respectively, of loss not recognized under the equity method of accounting.
The Partnership accounts for its investments using the equity method of
accounting. Under the equity method of accounting, the Partnership adjusts
its investment cost for its share of each Operating Partnership's results of
operations and for any distributions received or accrued. However, the
Partnership recognizes individual operating losses only to the extent of
capital contributions. Excess losses are suspended for use in future years to
offset excess income.
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
June 30, 2015
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS - Continued
COMBINED CONDENSED SUMMARIZED STATEMENTS OF OPERATIONS
Three Months Ended March 31,
(Unaudited)
Series 9
|
2015 |
2014 |
|
|
|
|
|
Revenues |
|
|
|
|
Rental |
$ 467,129 |
$ 508,937 |
|
Interest and other |
6,873 |
15,187 |
|
474,002 |
524,124 |
|
|
|
|
|
Expenses |
|
|
|
|
Interest |
62,250 |
60,156 |
|
Depreciation and amortization |
114,888 |
129,186 |
|
Operating expenses |
356,403 |
377,155 |
|
533,541 |
566,497 |
|
|
|
|
|
NET LOSS |
$ (59,539) |
$ (42,373) |
|
|
|
|
|
|
Net loss allocated to Boston Capital |
|
|
|
|
|
|
|
|
|
|
|
Net loss allocated to other partners |
$ (595) |
$ (424) |
|
|
|
*Amounts include $58,944 and $41,949 for 2015 and 2014, respectively, of loss not recognized under the equity method of accounting.
The Partnership accounts for its investments using the equity method of
accounting. Under the equity method of accounting, the Partnership adjusts
its investment cost for its share of each Operating Partnership's results of
operations and for any distributions received or accrued. However, the
Partnership recognizes individual operating losses only to the extent of
capital contributions. Excess losses are suspended for use in future years to
offset excess income.
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
June 30, 2015
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED CONDENSED SUMMARIZED STATEMENTS OF OPERATIONS
Three Months Ended March 31,
(Unaudited)
|
2015 |
2014 |
|
|
|
|
|
Revenues |
|
|
|
|
Rental |
$ 317,199 |
$ 393,328 |
|
Interest and other |
5,445 |
9,008 |
|
322,644 |
402,336 |
|
|
|
|
|
Expenses |
|
|
|
|
Interest |
36,267 |
44,041 |
|
Depreciation and amortization |
73,359 |
95,775 |
|
Operating expenses |
270,110 |
318,457 |
|
379,736 |
458,273 |
|
|
|
|
|
NET LOSS |
$ (57,092) |
$ (55,937) |
|
|
|
|
|
|
Net loss allocated to Boston Capital |
|
|
|
|
|
|
|
|
|
|
|
Net loss allocated to other partners |
$ (571) |
$ (559) |
|
|
|
*Amounts include $56,521 and $55,378 for 2015 and 2014, respectively, of loss not recognized under the equity method of accounting.
The Partnership accounts for its investments using the equity method of
accounting. Under the equity method of accounting, the Partnership adjusts
its investment cost for its share of each Operating Partnership's results of
operations and for any distributions received or accrued. However, the
Partnership recognizes individual operating losses only to the extent of
capital contributions. Excess losses are suspended for use in future years to
offset excess income.
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
June 30, 2015
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED CONDENSED SUMMARIZED STATEMENTS OF OPERATIONS
Three Months Ended March 31,
(Unaudited)
|
2015 |
2014 |
|
|
|
|
|
Revenues |
|
|
|
Rental |
$ 478,779 |
$ 786,149 |
|
|
Interest and other |
7,003 |
7,810 |
|
485,782 |
793,959 |
|
|
|
|
|
Expenses |
|
|
|
|
Interest |
52,618 |
88,937 |
|
Depreciation and amortization |
116,773 |
191,696 |
|
Operating expenses |
353,130 |
546,486 |
|
522,521 |
827,119 |
|
|
|
|
|
NET LOSS |
$ (36,739) |
$ (33,160) |
|
|
|
|
|
|
Net loss allocated to Boston Capital |
|
|
|
|
|
|
|
|
|
|
|
Net loss allocated to other partners |
$ (367) |
$ (332) |
|
|
|
*Amounts include $36,372 and $32,828 for 2015 and 2014, respectively, of loss not recognized under the equity method of accounting.
The Partnership accounts for its investments using the equity method of
accounting. Under the equity method of accounting, the Partnership adjusts
its investment cost for its share of each Operating Partnership's results of
operations and for any distributions received or accrued. However, the
Partnership recognizes individual operating losses only to the extent of
capital contributions. Excess losses are suspended for use in future years to
offset excess income.
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
June 30, 2015
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED CONDENSED SUMMARIZED STATEMENTS OF OPERATIONS
Three Months Ended March 31,
(Unaudited)
|
2015 |
2014 |
|
|
|
|
|
Revenues |
|
|
|
|
Rental |
$ 291,141 |
$ 489,237 |
|
Interest and other |
10,317 |
7,122 |
|
301,458 |
496,359 |
|
|
|
|
|
Expenses |
|
|
|
|
Interest |
37,564 |
67,078 |
|
Depreciation and amortization |
65,427 |
107,402 |
|
Operating expenses |
219,803 |
382,312 |
|
322,794 |
556,792 |
|
|
|
|
|
NET LOSS |
$ (21,336) |
$ (60,433) |
|
|
|
|
|
|
Net loss allocated to Boston Capital |
|
|
|
|
|
|
|
|
|
|
|
Net loss allocated to other partners |
$ (213) |
$ (604) |
|
|
|
*Amounts include $21,123 and $59,829 for 2015 and 2014, respectively, of loss not recognized under the equity method of accounting.
The Partnership accounts for its investments using the equity method of
accounting. Under the equity method of accounting, the Partnership adjusts
its investment cost for its share of each Operating Partnership's results of
operations and for any distributions received or accrued. However, the
Partnership recognizes individual operating losses only to the extent of
capital contributions. Excess losses are suspended for use in future years to
offset excess income.
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
June 30, 2015
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED CONDENSED SUMMARIZED STATEMENTS OF OPERATIONS
Three Months Ended March 31,
(Unaudited)
|
2015 |
2014 |
|
|
|
|
|
Revenues |
|
|
|
|
Rental |
$ 897,926 |
$ 1,241,599 |
|
Interest and other |
10,184 |
22,586 |
|
908,110 |
1,264,185 |
|
|
|
|
|
Expenses |
|||
|
Interest |
108,669 |
172,349 |
|
Depreciation and amortization |
200,752 |
311,993 |
|
Operating expenses |
729,390 |
982,371 |
|
1,038,811 |
1,466,713 |
|
|
|
|
|
NET LOSS |
$ (130,701) |
$ (202,528) |
|
|
|
|
|
|
Net loss allocated to Boston Capital |
|
|
|
|
|
|
|
|
|
|
|
Net loss allocated to other partners |
$ (1,307) |
$ (2,025) |
|
|
|
*Amounts include $129,394 and $200,503 for 2015 and 2014, respectively, of loss not recognized under the equity method of accounting.
The Partnership accounts for its investments using the equity method of
accounting. Under the equity method of accounting, the Partnership adjusts
its investment cost for its share of each Operating Partnership's results of
operations and for any distributions received or accrued. However, the
Partnership recognizes individual operating losses only to the extent of
capital contributions. Excess losses are suspended for use in future years to
offset excess income.
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
June 30, 2015
(Unaudited)
The taxable loss for the calendar year ended December 31, 2015 is expected to differ from its loss for financial reporting purposes. This is primarily due to accounting differences in depreciation incurred by the Operating Partnerships and also differences between the equity method of accounting and the IRS accounting methods.
NOTE F - INCOME TAXES
The Partnership has elected to be treated as a pass-through entity for income tax purposes and, as such, is not subject to income taxes. Rather, all items of taxable income, deductions and tax credits are passed through to and are reported by its owners on their respective income tax returns. The Partnership's federal tax status as a pass-through entity is based on its legal status as a partnership. Accordingly, the Partnership is not required to take any tax positions in order to qualify as a pass-through entity. The Partnership is required to file and does file tax returns with the Internal Revenue Service and other taxing authorities. Accordingly, these financial statements do not reflect a provision for income taxes and the Partnership has no other tax positions, which must be considered for disclosure. Income tax returns filed by the Partnership are subject to examination by the Internal Revenue Service for a period of three years. While no income tax returns are currently being examined by the Internal Revenue Service, tax years since 2011 remain open.
Boston Capital Tax Credit Fund II Limited Partnership
NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
June 30, 2015
(Unaudited)
NOTE G - PLAN OF LIQUIDATION
On March 3, 2010, our General Partner recommended that the BAC holders approve a plan of liquidation and dissolution for the Partnership, or the "Plan." The Plan was approved by the BAC holders on July 1, 2010, and was adopted by the General Partner on July 1, 2010. Pursuant to the Plan, the General Partner is able to, without further action by the BAC holders:
- liquidate the assets and wind up the business of the Partnership;
- make liquidating distributions in cancellation of the BACs;
- dissolve the Partnership after the sale of all of the Partnership's assets; and
- take, or cause the Partnership to take, such other acts and deeds and shall do, or cause the Partnership to do, such other things, as are necessary or appropriate in connection with the dissolution, winding up and liquidation of the Partnership, the termination of the responsibilities and liabilities of the Partnership under applicable law, and the termination of the existence of the Partnership.
Since the approval of the Plan by the BAC holders, we have continued to seek to sell the assets of the Partnership and use the sale proceeds and/or other Partnership funds to pay all expenses in connection with such sales, pay or make provision for payment of all Partnership obligations and liabilities, including accrued fees, and unpaid loans to the General Partner, and distribute the remaining assets as set forth in the Partnership Agreement. We expected to complete the sale of the apartment complexes approximately three to five years after the BAC holders approval of the Plan, which was July 1, 2010. However, because of numerous uncertainties, the liquidation has taken longer than originally projected. At this time, the General Partner estimates that an additional two to four years will be needed to effectuate the liquidation as approved by the BAC holders, and the final liquidating distribution may occur months after all of the apartment complexes have been sold. As liquidation is not imminent, the Partnership will continue to report as a going concern.
For additional information regarding the sale of Partnership assets, see "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Annual Report on Form 10-K.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
This Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements including our intentions, hopes, beliefs, expectations, strategies and predictions of our future activities, or other future events or conditions. These statements are "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbors created by these acts. Investors are cautioned that all forward-looking statements involve risks and uncertainty, including, for example, the factors identified in Part I, Item 1A. "Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended March 31, 2015. Although we believe that the assumptions underlying these forward-looking statements are reasonable, any of the assumptions could be inaccurate, and there can be no assurance that the forward-looking statements included in this Report will prove to be accurate. In light of the significant uncertainties inherent in these forward-looking statements, the inclusion of this information should not be regarded as a representation by us or any other person that our objectives and plans will be achieved.
Liquidity
The Partnership's primary source of funds was the proceeds of its Public Offering. Other sources of liquidity include (i) interest earned on capital contributions unpaid for the three months ended June 30, 2015 or on working capital reserves, (ii) cash distributions from operations of the Operating Partnerships in which the Partnership has invested and (iii) proceeds received from the dispositions of the Operating Partnership that are returned to fund reserves. These sources of liquidity, along with the Partnership's working capital reserve, are available to meet the obligations of the Partnership. The Partnership does not anticipate significant cash distributions from operations of the Operating Partnerships.
The Partnership has recognized other income for the three months ended June 30, 2015 and 2014 in the amount of $0 and $51,672. The balance represents distributions received from Operating Partnerships, which the Partnership normally records as a decrease in the Investment in Operating Partnerships. Due to the equity method of accounting, the Partnership has recorded these distributions as other income.
The Partnership is currently accruing the partnership management fee. Partnership management fees accrued during the quarter ended June 30, 2015 were $88,552 and total partnership management fees accrued as of June 30, 2015 were $15,011,330. During the three months ended June 30, 2015, the Partnership did not pay any accrued partnership management fees. Pursuant to the Partnership Agreement, these liabilities will be deferred until the Partnership receives proceeds from sales of the Operating Partnerships, which will be used to satisfy these liabilities. The Partnership's working capital and sources of liquidity coupled with affiliated party liability accruals allow sufficient levels of liquidity to meet the third party obligations of the Partnership. The Partnership is currently unaware of any trends that would create insufficient liquidity to meet future third party obligations of the Partnership.
As of June 30, 2015, an affiliate of the general partner of the Partnership advanced a total of $153,188, on behalf of Series 12, to pay some operating expenses of the Partnership, and to make advances and/or loans to Operating Partnerships. These advances are included in Accounts payable affiliates. During the quarter ended June 30, 2015, the Partnership did not receive any repayment of advances.
All payables to affiliates will be paid, without interest, from available cash flow or the proceeds of sales or refinancing of the Partnership's interests in Operating Partnerships. During the quarter ended June 30, 2015, no payments were made to an affiliate of the general partner.
The Partnership offered BACs in a Public Offering declared effective by the Securities and Exchange Commission on October 25, 1989. The Partnership received and accepted subscriptions for $186,337,017 representing 18,679,738 BACs from investors admitted as BAC holders in Series 7 through Series 14 of the Partnership.
As of June 30, 2015 the Partnership had $1,649,670 remaining in cash and cash equivalents. Below is a table, which provides, by series, the equity raised, number of BACs sold, final date BACs were offered, number of properties held at June 30, 2015, and cash and cash equivalents.
|
|
|
|
|
Cash and |
7 |
$ 10,361,000 |
1,036,100 |
12/29/89 |
- |
$ - |
9 |
41,574,018 |
4,178,029 |
05/04/90 |
9 |
157,479 |
10 |
24,288,997 |
2,428,925 |
08/24/90 |
7 |
199,394 |
11 |
24,735,002 |
2,489,599 |
12/27/90 |
9 |
205,615 |
12 |
29,710,003 |
2,972,795 |
04/30/91 |
9 |
154,486 |
14 |
55,728,997 |
5,574,290 |
01/27/92 |
23 |
932,696 |
|
|
|
|
|
|
|
$186,398,017 |
18,679,738 |
|
57 |
$1,649,670 |
|
|
|
|
|
|
Reserve balances are remaining proceeds less outstanding capital contribution obligations, which have not been advanced or loaned to the Operating Partnerships. The reserve balances for Series 9,10,11,12 and 14 as of June 30, 2015 are $157,479, $199,394, $205,615, $145,245 and $771,963, respectively.
(Series 8) No BACs with respect to Series 8 were offered.
(Series 13) No BACs with respect to Series 13 were offered.
As of June 30, 2015 and 2014 the Partnership held limited partnership interests in 57 and 75 Operating Partnerships, respectively. In each instance the apartment complex owned by the applicable Operating Partnership is eligible for the federal housing tax credit. Initial occupancy of a unit in each apartment complex which initially complied with the minimum set-aside test (i.e., initial occupancy by tenants with incomes equal to no more than a certain percentage of area median income) and the rent restriction test (i.e., gross rent charged tenants does not exceed 30% of the applicable income standards) is referred to as "Qualified Occupancy." Each of the Operating Partnerships and each of the respective apartment complexes are described more fully in the Prospectus or applicable report on Form 8-K. The general partner believes that there is adequate casualty insurance on the properties.
The Partnership incurs an annual partnership management fee to the general partner of the Partnership and/or its affiliates in an amount equal to 0.5% of the aggregate cost of the apartment complexes owned by the Operating Partnerships, less the amount of various partnership management and reporting fees paid by the Operating Partnerships. The partnership management fees incurred and the reporting fees paid by the Operating Partnerships for the three months ended June 30, 2015 are as follows:
3 Months |
|
3 Months Management |
|
Series 7 |
$ - |
$ - |
$ - |
Series 9 |
16,497 |
1,300 |
15,197 |
Series 10 |
12,345 |
- |
12,345 |
Series 11 |
19,320 |
1,000 |
18,320 |
Series 12 |
12,990 |
1,656 |
11,334 |
Series 14 |
27,400 |
1,200 |
26,200 |
|
$ 88,552 |
$ 5,156 |
$ 83,396 |
|
|
|
|
The Partnership's investment objectives do not include receipt of significant cash distributions from the Operating Partnerships in which it has invested. The Partnership's investments in Operating Partnerships have been made principally with a view towards realization of federal housing tax credits for allocation to its partners and BAC holders.
(Series 7)
The series did not have any properties as of June 30, 2015 and 2014.
(Series 9)
As of June 30, 2015 and 2014, the average Qualified Occupancy for the series was 100%. The series had a total of 9 properties at June 30, 2015, all of which were at 100% Qualified Occupancy.
For the periods ended June 30, 2015 and 2014, Series 9 reflects loss from Operating Partnerships of $(59,539) and $(42,373), respectively, which includes depreciation and amortization of $114,888 and $129,186, respectively. This is an interim period estimate; it is not indicative of the final year end results.
In April 2014, the operating general partner of Kristin Park Apartments Limited entered into an agreement to sell the property to an entity affiliated with the operating general partner and the transaction closed on November 14, 2014. The sales price of the property was $1,376,484, which included the outstanding mortgage balance of approximately $1,291,484 and cash proceeds to the investment partnership of $85,000. Of the total proceeds received by the investment partnership, $2,000 represents reporting fees due to an affiliate of the investment partnership and the balance represents proceeds from the sale. Of the remaining proceeds, $5,000 was paid to BCAMLP for expenses related to the sale, which include third party legal costs. The remaining proceeds from the sale of $78,000 were returned to cash reserves held by Series 9. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the Operating Partnership has been recorded in the amount of $78,000 as of December 31, 2014.
The investment general partner will continue to monitor the following Operating Partnership because of operational or other issues. However, this Operating Partnership has exited its LIHTC compliance period and there is therefore no risk to past credit delivery.
Glenwood Hotel Investors
(Series 10)
As of June 30, 2015 and 2014, the average Qualified Occupancy for the series was 100%. The series had a total of 7 properties at June 30, 2015, all of which were at 100% Qualified Occupancy.
For the periods ended June 30, 2015 and 2014, Series 10 reflects net loss from Operating Partnerships of $(57,092) and $(55,937), respectively, which includes depreciation and amortization of $73,359 and $95,775, respectively. This is an interim period estimate; it is not indicative of the final year end results.
In February 2015, the investment general partner transferred their respective interests in Maidu Properties, A California Limited Partnership to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $867,063 and cash proceeds to the investment partnerships of $347,534, $391,899, and $810,567 for Series 10, Series 11, and Series 14, respectively. Of the total proceeds received, $2,803, $3,160, and $6,537 for Series 10, Series 11, and Series 14, respectively, were paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $344,731, $388,739 and $804,030 were returned to cash reserves held by Series 10, Series 11, and Series 14, respectively. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, a gain on the transfer of the Operating Partnership has been recorded in the amount of $344,731, $388,739, and $804,030 by Series 10, Series 11, and Series 14, respectively, as of March 31, 2015.
In December 2014, the investment general partner transferred its interest in Candlewick Place to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,144,978 and cash proceeds to the investment partnership of $80,000. Of the total proceeds received, $1,000 represents reporting fees due to an affiliate of the investment partnership and the balance represents proceeds from the transfer. Of the remaining proceeds, $3,000 was paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $76,000 were returned to cash reserves held by Series 10. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, a gain on the transfer of the Operating Partnership has been recorded in the amount of $76,000 as of December 31, 2014.
The investment general partner will continue to monitor the following Operating Partnerships because of operational or other issues. However, these Operating Partnerships have all exited their LIHTC compliance period and there is therefore no risk to past credit delivery.
Autumn Lane Limited Partnership
Meadowbrook Properties II, Limited Partnership
Stratford Square, Limited Partnership
(Series 11)
As of June 30, 2015 and 2014 the average Qualified Occupancy for the series was 100%. The series had a total of 9 properties at June 30, 2015, all of which were at 100% Qualified Occupancy.
For the periods ended June 30, 2015 and 2014, Series 11 reflects net loss from Operating Partnerships of $(36,739) and $(33,160), respectively, which includes depreciation and amortization of $116,773 and $191,696, respectively. This is an interim period estimate; it is not indicative of the final year end results.
In April 2013, the investment general partner transferred 49.99% of its interest in RPI Limited Partnership #18 to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,155,533 and cash proceeds to the investment partnership of $18,811. Of the proceeds received, $5,000 was paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $13,811 were returned to cash reserves held by Series 11. The remaining 50.01% investment limited partner interest in the Operating Partnership transferred in April 2014 for cash proceeds of $190, which were returned to the cash reserves held by Series 11. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. In addition, the investment general partner on behalf of the investment partnership entered into a residual receipt promissory note (the RRN) with the Operating Partnership for receipt of a residual payment. Under the terms of the RRN, if there is a capital transaction involving the property owned by the Operating Partnership at any time within 5 years from the initial transfer date, there would be a residual payment distributable to the investment partnership in accordance with the Operating Partnership Agreement in effect at the date the investment limited partner transferred its interest. Annual losses generated by the Operating Partnership, which were applied against the investment partnership's investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment in the Operating Partnership to zero. Accordingly, a gain on the transfer of the Operating Partnership of the proceeds from the transfer, net of the overhead and expenses, was recorded in the amount of $13,811 as of June 30, 2013, and $190 as June 30, 2014.
On September 29, 2014 the operating general partner of Elderly Housing of Macon, Limited Partnership sold the property to an entity affiliated with the operating general partner. The sales price of the property was $1,607,344, which included the outstanding mortgage balance of approximately $1,452,382 and cash proceeds to the investment partnership of $154,962. Of the total proceeds received by the investment partnership, $38,877 represents reporting fees due to an affiliate of the investment partnership and the balance represents proceeds from the sale. Of the remaining proceeds, $5,000 was paid to BCAMLP for expenses related to the sale, which include third party legal costs. The remaining proceeds from the sale of $111,085 were returned to cash reserves held by Series 11. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment partnership's investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the Operating Partnership of the proceeds from the sale, net of the overhead and expenses, was recorded in the amount of $111,085 as of September 30, 2014.
In December 2014, the investment general partner transferred its interest in Kaplan Manor Partnership to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $860,256 and cash proceeds to the investment partnership of $26,496. Of the total proceeds received, $2,500 was paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $23,996 were returned to cash reserves held by Series 11. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment partnership's investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment in the Operating Partnership to zero. Accordingly, a gain on the transfer of the Operating Partnership of the proceeds from the transfer, net of the overhead and expenses, was recorded in the amount of $23,996 as of December 31, 2014.
In December 2014, the investment general partner transferred its interest in Washington Manor Partnership to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $888,362 and cash proceeds to the investment partnership of $27,368. Of the total proceeds received, $2,500 was paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $24,868 were returned to cash reserves held by Series 11. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment partnership's investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment in the Operating Partnership to zero. Accordingly, a gain on the transfer of the Operating Partnership of the proceeds from the transfer, net of the overhead and expenses, was recorded in the amount of $24,868 as of December 31, 2014.
In February 2015, the investment general partner transferred their respective interests in Maidu Properties, A California Limited Partnership to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $867,063 and cash proceeds to the investment partnerships of $347,534, $391,899, and $810,567 for Series 10, Series 11, and Series 14, respectively. Of the total proceeds received, $2,803, $3,160, and $6,537 for Series 10, Series 11, and Series 14, respectively, were paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $344,731, $388,739 and $804,030 were returned to cash reserves held by Series 10, Series 11, and Series 14, respectively. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, a gain on the transfer of the Operating Partnership has been recorded in the amount of $344,731, $388,739, and $804,030 by Series 10, Series 11, and Series 14, respectively, as of March 31, 2015.
In April 2015, the operating general partner of Ivan Woods Limited Dividend Housing Association Limited Partnership entered into an agreement to sell the property to a non-affiliated entity and the transaction closed on June 26, 2015. The sales price of the property was $3,650,000, which included the outstanding mortgage balance of approximately $2,233,027 and total cash proceeds to the investment partnerships of $963,073. Of the total proceeds received by the investment partnerships, $1,989 and $1,331 for Series 11 and Series 12, respectively, will be paid to BCAMLP for expenses related to the sale, which include third party legal costs. The remaining proceeds from the sale of $574,796 and $384,957 will be returned to cash reserves held by Series 11 and Series 12, respectively. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnerships. After all outstanding obligations of the investment partnerships are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. Annual losses generated by the Operating Partnerships, which were applied against the investment partnership's investment in the Operating Partnerships in accordance with the equity method of accounting, had previously reduced the investment in the Operating Partnerships to zero. The sale proceeds were received in July 2015; so a receivable in the amount of $574,796 and $384,957 for Series 11 and Series 12, respectively, was recorded as of June 30, 2015. Accordingly, a gain on the sale of the Operating Partnerships of the proceeds from the sale, net of the overhead and expenses, was recorded in the amount of $574,796 and $384,957 for Series 11 and Series 12, respectively, as of June 30, 2015.
The investment general partner will continue to monitor the following Operating Partnership because of operational or other issues. However, this Operating Partnership has exited its LIHTC compliance period and there is therefore no risk to past credit delivery.
South Fork Heights, Limited
(Series 12)
As of June 30, 2015 and 2014, the average Qualified Occupancy for the series was 100%. The series had a total of 9 properties at June 30, 2015, all of which were at 100% Qualified Occupancy.
For the periods ended June 30, 2015 and 2014, Series 12 reflects net loss from Operating Partnerships of $(21,336) and $(60,433), respectively, which includes depreciation and amortization of $65,427 and $107,402, respectively. This is an interim period estimate; it is not indicative of the final year end results.
In December 2014, the investment general partner transferred its interest in Melville Plaza Partnership to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $824,349 and cash proceeds to the investment partnership of $25,427. Of the total proceeds received, $2,500 was paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $22,927 were returned to cash reserves held by Series 12. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, a gain on the transfer of the Operating Partnership has been recorded in the amount of $22,927 as of December 31, 2014.
In December 2014, the investment general partner transferred its interest in Oakleigh Partnership to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $845,207 and cash proceeds to the investment partnership of $26,054. Of the total proceeds received, $2,500 was paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $23,554 were returned to cash reserves held by Series 12. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, a gain on the transfer of the Operating Partnership has been recorded in the amount of $23,554 as of December 31, 2014.
In December 2014, the investment general partner transferred its interest in Oakwood Partnership to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $821,095 and cash proceeds to the investment partnership of $25,532. Of the total proceeds received, $2,500 was paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $23,032 were returned to cash reserves held by Series 12. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, a gain on the transfer of the Operating Partnership has been recorded in the amount of $23,032 as of December 31, 2014.
In April 2015, the operating general partner of Ivan Woods Limited Dividend Housing Association Limited Partnership entered into an agreement to sell the property to a non-affiliated entity and the transaction closed on June 26, 2015. The sales price of the property was $3,650,000, which included the outstanding mortgage balance of approximately $2,233,027 and total cash proceeds to the investment partnerships of $963,073. Of the total proceeds received by the investment partnerships, $1,989 and $1,331 for Series 11 and Series 12, respectively, will be paid to BCAMLP for expenses related to the sale, which include third party legal costs. The remaining proceeds from the sale of $574,796 and $384,957 will be returned to cash reserves held by Series 11 and Series 12, respectively. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnerships. After all outstanding obligations of the investment partnerships are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. Annual losses generated by the Operating Partnerships, which were applied against the investment partnership's investment in the Operating Partnerships in accordance with the equity method of accounting, had previously reduced the investment in the Operating Partnerships to zero. The sale proceeds were received in July 2015; so a receivable in the amount of $574,796 and $384,957 for Series 11 and Series 12, respectively, was recorded as of June 30, 2015. Accordingly, a gain on the sale of the Operating Partnerships of the proceeds from the sale, net of the overhead and expenses, was recorded in the amount of $574,796 and $384,957 for Series 11 and Series 12, respectively, as of June 30, 2015.
The investment general partner will continue to monitor the following Operating Partnerships because of operational or other issues. However, these Operating Partnerships have all exited their LIHTC compliance period and there is therefore no risk to past credit delivery.
Briarwick Apartments, Limited, A KY Limited Partnership
Jessup Limited Partnership
(Series 14)
As of June 30, 2015 and 2014, the average Qualified Occupancy for the series was 100%. The series had a total of 23 properties at June 30, 2015, all of which were at 100% Qualified Occupancy.
For the periods ended June 30, 2015 and 2014, Series 14 reflects net loss from Operating Partnerships of $(130,701) and $(202,528), respectively, which includes depreciation and amortization of $200,752 and $311,993, respectively. This is an interim period estimate; it is not indicative of the final year end results.
Lakeview Meadows LDHA L.P. (Lakeview Meadows) is a 53-unit elderly apartment complex located in Battle Creek, MI. On June 16, 2014, the property experienced a devastating fire, rendering all units uninhabitable. The cause was determined to be unattended smoking materials. All residents have been housed by family, friends, or the Red Cross. There were no injuries. The investment general partner received $2,427,668 from the insurance company which has been recorded as other income, as of December 31, 2014. The 15-year low-income housing tax credit compliance period for Lakeview Meadows LDHA L.P. ended on December 31, 2006.
In December 2014, the investment general partner transferred its interest in Lakeview Meadows LDHA to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,234,500 and nominal cash proceeds to the investment partnership. There were no cash proceeds available to pay expenses related to the transfer and no proceeds were returned to cash reserves held by Series 14. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, no gain on the transfer of the Operating Partnership has been recorded as of December 31, 2014.
In December 2014, the investment general partner transferred its interest in Blanchard Senior Apartments to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $553,590 and cash proceeds to the investment partnership of $23,424. Of the total proceeds received, $2,500 was paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $20,924 were returned to cash reserves held by Series 14. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership's investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, a gain on the transfer of the Operating Partnership of the proceeds from the transfer, net of the overhead and expense reimbursement, was recorded in the amount of $20,924 as of December 31, 2014.
In September 2014, the investment general partner transferred its interest in New River Overlook Associates to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,368,712 and cash proceeds to the investment partnership of $40,000. Of the total proceeds received, $3,000 was paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $37,000 were returned to cash reserves held by Series 14. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership's investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, a gain on the transfer of the Operating Partnership of the proceeds from the transfer, net of the overhead and expense reimbursement, was recorded in the amount of $37,000 as of September 30, 2014.
In December 2014, the investment general partner its interest in Hessmer Village Partnership to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $838,611 and cash proceeds to the investment partnership of $25,884. Of the total proceeds received, $2,500 was paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $23,384 were returned to cash reserves held by Series 14. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership's investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, a gain on the transfer of the Operating Partnership of the proceeds from the transfer, net of the overhead and expense reimbursement, was recorded in the amount of $23,384 as of December 31, 2014.
In February 2015, the investment general partner transferred their respective interests in Maidu Properties, A California Limited Partnership to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $867,063 and cash proceeds to the investment partnerships of $347,534, $391,899, and $810,567 for Series 10, Series 11, and Series 14, respectively. Of the total proceeds received, $2,803, $3,160, and $6,537 for Series 10, Series 11, and Series 14, respectively, were paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $344,731, $388,739 and $804,030 were returned to cash reserves held by Series 10, Series 11, and Series 14, respectively. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, a gain on the transfer of the Operating Partnership has been recorded in the amount of $344,731, $388,739, and $804,030 by Series 10, Series 11, and Series 14, respectively, as of March 31, 2015.
In January 2015, the investment general partner transferred its interest in Victoria Limited Partnership to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,144,922 and cash proceeds to the investment partnership of $130,400. Of the total proceeds received, $9,057 represents reporting fees due to an affiliate of the investment partnership and the balance represents proceeds from the transfer. Of the proceeds from the transfer, $3,000 was paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds from the transfer of approximately $118,343 were returned to cash reserves held by Series 14. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership's investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, a gain on the transfer of the Operating Partnership of the proceeds from the transfer, net of the overhead and expense reimbursement, was recorded in the amount of $118,343 as of March 31, 2015.
The investment general partner will continue to monitor the following Operating Partnership because of operational or other issues. However, this Operating Partnership has exited its LIHTC compliance period and there is therefore no risk to past credit delivery.
Bridge Coalition Limited Partnership
Off Balance Sheet Arrangements
None.
Critical Accounting Policies and Estimates
The financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (GAAP), which require the Partnership to make various estimates and assumptions. The following section is a summary of some 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 financial statements.
The Partnership is required to assess potential impairments to its long-lived assets, which are primarily investments in limited partnerships. The Partnership accounts for its investment in limited partnerships in accordance with the equity method of accounting since the Partnership does not control the operations of the Operating Partnerships. The purpose of an impairment analysis is to verify that the real estate investment balance reflected on the balance sheet does not exceed the value of the underlying investments.
If the book value of the Partnership's investment in an Operating Partnership exceeds the estimated value derived by management, which generally consists of the remaining future Low-Income Housing Credits allocable to the Partnership and the estimated residual value to the Partnership, the Partnership reduces its investment in the Operating Partnership.
In accordance with the accounting guidance for the consolidation of variable interest entities, the Partnership determines when it should include the assets, liabilities, and activities of a variable interest entity (VIE) in its financial statements, and when it should disclose information about its relationship with a VIE. The analysis that must be performed to determine which entity should consolidate a VIE focuses on control and economic factors. A VIE is a legal structure used to conduct activities or hold assets, which must be consolidated by a company if it is the primary beneficiary because it has (1) the power to direct the activities of the VIE that most significantly impact the VIE's economic performance and (2) the obligation to absorb losses or receive benefits that could potentially be significant to the VIE. If multiple unrelated parties share such power, as defined, no party will be required to consolidate the VIE. Further, the guidance requires continual reconsideration of the primary beneficiary of a VIE.
Based on this guidance, the Operating Partnerships in which the Partnership invests meet the definition of a VIE because the owners of the equity at risk in these entities do not have the power to direct their operations. However, management does not consolidate the Partnership's interests in these VIEs, as it is not considered to be the primary beneficiary since it does not have the power to direct the activities that are considered most significant to the economic performance of these entities. The Partnership currently records the amount of its investment in these partnerships as an asset on its balance sheets, recognizes its share of partnership income or losses in the statements of operations, and discloses how it accounts for material types of these investments in its financial statements. The Partnership's balance in investment in Operating Partnerships represents its maximum exposure to loss. The Partnership's exposure to loss on these partnerships is mitigated by the condition and financial performance of the underlying Housing Complexes as well as the strength of the general partners and their guarantee against credit recapture to the investors of the Partnership.
Recent Accounting Pronouncements
In February, 2015, the FASB issued ASU No. 2015-02, "Consolidation (Topic 810): Amendments to the Consolidation Analysis". This will improve certain areas of consolidation guidance for reporting organizations that are required to evaluate whether to consolidate certain legal entities such as limited partnerships, limited liability corporations, and securitization structures. ASU 2015-02 simplified and improves GAAP by: eliminating the presumption that a general partner should consolidate a limited partnership, eliminating the indefinite deferral of FASB Statement No. 167, thereby reducing the number of Variable Interest Entity (VIE) consolidation models from four to two (including the limited partnership consolidation model), and clarifying when fees paid to a decision maker should be a factor to include in the consolidation of VIEs. ASU 2015-02 will be effective for periods beginning after December 15, 2015. The Partnership is currently evaluating the potential impact of the adoption of this guidance on its financial statements.
Item 3 |
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Not Applicable |
Item 4 |
Controls and Procedures |
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(a) |
Evaluation of Disclosure Controls and Procedures |
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As of the end of the period covered by this report, the Partnership's general partner, under the supervision and with the participation of the Principal Executive Officer and Principal Financial Officer of C&M Management Inc., carried out an evaluation of the effectiveness of the Partnership's "disclosure controls and procedures" as defined under the Securities Exchange Act of 1934 Rules 13a-15 and 15d-15 with respect to each series individually, as well as the Partnership as a whole. Based on that evaluation, the Partnership's Principal Executive Officer and Principal Financial Officer have concluded that as of the end of the period covered by this report, the Partnership's disclosure controls and procedures with respect to each series individually, as well as the Partnership as a whole, were effective to ensure that information relating to any series or the Partnership as a whole required to be disclosed by it in the reports that it files or submits under the Securities Exchange Act of 1934 (i) is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and (ii) is accumulated and communicated to the Partnership's management, including the Partnership's Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. |
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(b) |
Changes in Internal Controls |
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There were no changes in the Partnership's internal control over financial reporting that occurred during the quarter ended June 30, 2015 that materially affected, or are reasonably likely to materially affect, the Partnership's internal control over financial reporting. |
PART II - OTHER INFORMATION
Item 1. |
Legal Proceedings |
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None |
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Item 1A. |
Risk Factors |
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There have been no material changes from the risk factors set forth under Part I, Item 1A. "Risk Factors" in our Form 10-K for the fiscal year ended March 31, 2015. |
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Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
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None |
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Item 3. |
Defaults upon Senior Securities |
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None |
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Item 4. |
Mine Safety Disclosures |
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Not Applicable |
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Item 5. |
Other Information |
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None |
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Item 6. |
Exhibits |
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(a)Exhibits |
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31.a Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, of John P. Manning, Principal Executive Officer, filed herein |
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31.b Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, of Marc N. Teal, Principal Financial Officer, filed herein |
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32.a Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of John P. Manning, Principal Executive Officer, filed herein |
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32.b Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Marc N. Teal, Principal Financial Officer, filed herein |
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101. The following materials from the Boston Capital Tax Credit Fund II L.P. Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2015 formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Balance Sheets, (ii) the Condensed Statements of Operations, (iii) the Condensed Statements of Changes in Partners' Capital (Deficit), (iv) the Condensed Statements of Cash Flows and (v) related notes, filed herein |
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities
Exchange Act of 1934, the Partnership has duly caused this Report to be
signed on its behalf by the undersigned, thereunto duly authorized.
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Boston Capital Tax Credit Fund II Limited Partnership |
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By: |
Boston Capital Associates II Limited |
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By: |
BCA Associates Limited Partnership, |
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By: |
C&M Management, Inc., |
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Date: August 13, 2015 |
/s/ John P. Manning |
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John P. Manning |
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Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Partnership and in the capacities and on the dates
indicated:
DATE: |
SIGNATURE: |
TITLE: |
August 13, 2015 |
/s/ John P. Manning John P. Manning |
Director, President |
DATE: |
SIGNATURE: |
TITLE: |
August 13, 2015 |
/s/ Marc N. Teal Marc N. Teal |
Chief Financial Officer |