Item 1. Business
Boston Financial Apartments Associates, L.P. (the "Partnership") is a limited partnership formed on July 21, 1981 under the Uniform Limited Partnership Act of the State of Delaware. The Partnership raised $21,910,000 of equity ("Gross Proceeds") through the sale of limited partnership interests of $1,000 per unit with a minimum purchase of five units. Such amounts exclude five unregistered units previously acquired for $1,000 each by the initial limited partner, an affiliate of the general partners.
The Partnership is engaged solely in the business of real estate investment. Therefore, the Partnership's business is considered one segment and is presented in that manner.
The Partnership has invested as a limited partner in other limited partnerships ("Local Limited Partnerships") which own and operate multi-family residential properties ("Properties") which are assisted by federal, state or local government agencies pursuant to programs which do not significantly restrict distributions to owners or the rate of return on investments in such Properties. The investment objectives of the Partnership include the following: (i) to preserve and protect the Partnership's capital; (ii) to provide capital appreciation through appreciation in value of the Properties; (iii) to provide "tax losses" during the early years of the Partnership's operations which the Limited Partner may use to offset income from other sources; (iv) to provide annual cash distributions to Partners derived from distributions to the Partnership from Local Limited Partnerships; and (v) to build additional equity through reduction of mortgage loans of the Local Limited Partnerships. There can be no assurance that the Partnership will attain any or all of these investment objectives.
After completing its program of investment in Local Limited Partnerships during 1983, the Partnership purchased interests in 15 Local Limited Partnerships, each of which owned a Property with first mortgage financing provided under the Section 221(d)(4) insurance program of the United States Department of Housing and Urban Development ("HUD"). The original cost of real estate owned by Local Limited Partnerships, inclusive of equity payments by the Partnership, was $86,660,000.
On December 31, 1993, the Partnership transferred its interest in Captain's Landing Associates, Ltd. to an unrelated party for a nominal amount. Also, on January 12, 1994, Oakwood Terrace Associates, Ltd. was sold in a foreclosure auction conducted by HUD. As a result of the foreclosure, the Partnership disposed of its interest in the property. The Managing General Partner of Overland Station Investment Company sold the property on January 12, 1995. From the sale, the Partnership received $1,274,833 which was used to pay down an acquisition note payable and make a distribution. In addition, on March 24, 1996, the Local General Partner of Mountain View, Ltd. and Woodmeade South, Ltd. placed both of the properties into Chapter 11 bankruptcy. Consequently, the Partnership relinquished its equity interest in these two Local Limited Partnerships. A more detailed discussion of the transactions is contained under Property Dispositions in Item 2
Item 2. Properties
The Partnership owns limited partnership interests in ten Local Limited Partnerships which own and operate multi-family residential properties. The Partnership also owns investments in securities in which its Reserves are held.
Three of the Local Limited Partnerships are operating at deficits (net loss adjusted for depreciation, mortgage principal payments and replacement reserve payments). In past years, the Local General Partners funded these deficits either through non-interest bearing project expense loans or subordinated loans, repayable only out of cash flow or proceeds from a sale or refinancing of the given project. Once a project achieves break-even, substantial amounts of cash flow derived from its operations will be used to repay project expense loans and subordinated loans until the loans are repaid in full. To address current deficits or other financial difficulties, Local General Partners are working to increase rental income and reduce operating expenses, working with the lenders to refinance property mortgages or seeking other sources of capital. Management may make voluntary advances from the Partnership's Reserves to a Local Limited Partnership encountering operating difficulties if it is deemed to be in the best interest of the Partnership to provide such funds.
As previously reported, in March 1996 the local general partner of Mountain View and Woodmeade South Apartments placed both of the properties into Chapter 11 bankruptcy. In order for the Partnership to retain an equity interest in these properties, the bankruptcy plan required that the Partnership make additional contributions. Management of the Partnership decided that additional contributions would not be in the best interest of the Partnership. Consequently, the Partnership relinquished its equity interest in these two Local Limited Partnerships. The Partnership's relinquishment of its equity interest in these Local Limited Partnerships will have no impact on the Partnership financial statements, because the Partnership is a limited partner and the two Local Limited Partnerships currently have a carrying value of zero. However, the Partnership will be precluded from realizing any residual value upon liquidation. For tax purposes, the 1996 tax returns will be the final return for these partnerships. There will be a taxable gain associated with the disposal of the Local Limited Partnerships which will result in taxable income to the Partnership.
Since the August 1996 sale of Chelsea Village's mortgage, the Local General Partner is continuing in its efforts to negotiate a satisfactory arrangement with the buyer. The Partnership's ability to retain its interest, currently carried at zero on the Partnership's financial statements, in this partnership depends upon a satisfactory outcome to these negotiations.
As previously reported, the mortgages of Oakdale Manor and Woods of Castleton were sold to separate buyers in HUD's May 1996 non-performing loan auction. The Local General Partner of Woods of Castleton is working with various lenders seeking a source of capital to refinance the mortgage; in the meantime, the property has resumed making debt service payments to the new note holder. The new mortgagor for Oakdale Manor has initiated foreclosure proceedings. In response, the local general partner filed Chapter 11 bankruptcy and received a temporary Stay of Foreclosure. If the bankruptcy plan ultimately approved by the lender requires the Partnership to make additional capital contributions, the Partnership will relinquish its interest in the Property. If the Partnership does relinquish its interest in Oakdale, the only effect on the Partnership's financial statements will be the cancellation of indebtedness income since the Partnership is a limited partner and the purchase note payable and the corresponding interest accrued as of December 31, 1996 are collateralized only by the Partnership's interest in Oakdale Manor, which currently has a carrying value of zero. However, the Partnership will be precluded from realizing any residual value upon liquidation of Oakdale Manor. Depending upon the outcome of the foreclosure and bankruptcy proceedings, investors face significant risk of incurring taxable gain associated with the disposal of the Local Limited Partnership, which will result in taxable income for the limited partners.
Three of the Local Limited Partnerships have submitted financial statements to the Partnership with modified reports expressing substantial doubt as to their ability to continue as going concerns ("going concern reports"). These partnerships are Chelsea Village, The Woods of Castleton, and Oakdale Manor. In general, auditors modify their reports in this regard when substantial doubt has been raised about a partnership's ability to obtain sufficient financial resources to meet its obligations.
Two of the Local Limited Partnerships, Woodmeade South Associates, LP and Mountain View Associates, Ltd., did not submit audited financial statements because they are in bankruptcy.
At this time, the Partnership has a zero investment balance in all of the Local Limited Partnerships. A zero investment balance occurs when the Partnership's cumulative losses and distributions from such investment equal or exceed its original investment in such Local Limited Partnership.
Property Dispositions
As previously reported, on December 31, 1993, the Partnership transferred its interest in Captain's Landing to an unrelated purchaser for an amount equal to the Partnership's costs associated with the transfer. The transfer of the interest resulted in a capital gain which could be used by the investor to offset passive losses, both current and suspended.
As previously reported, HUD foreclosed on Oakwood Terrace on January 12, 1994. The disposition of this interest did not have any effect on income for financial reporting purposes, as the net investment balance of the interest is zero. However, for tax purposes, a consequence of the foreclosure is that the Partnership received allocations of capital gain and cancellation of debt income. At the individual investor level, the capital gain and cancellation of debt income can be offset by passive losses, both current and suspended.
The managing general partner of Overland Station Investment Company sold the property on January 12, 1995. From the sale, the Partnership has recognized $2,067,424 of equity in income. This amount was offset by the recognition of $18,627 of previously unrecognized equity in losses. Also, as a result of the sale, the Partnership has recognized a loss on the sale of Overland Station in the amount of $773,964. This amount represents the Local Limited Partnership's net book value on the Partnership's books.
The Partnership received proceeds from the Overland sale in the amount of $1,274,833. The Partnership used a portion of the sales proceeds to pay down $624,833 of an acquisition note payable and accrued interest with respect to this property which totaled $685,833. The $61,000 balance of these obligations has been canceled and is recorded as income on the Partnership's financial statements. The Partnership has distributed the balance of the sales proceeds plus accrued interest in the amount of $657,450.
On March 24, 1996, the local general partner of Mountain View and Woodmeade South Apartments placed these properties into Chapter 11 bankruptcy. Consequently, the Partnership relinquished its equity interest in these Local Limited Partnerships, the result of which had no effect on income for financial reporting purposes as the net investment balance on these interests is zero. However, there is a taxable gain associated with the disposal of these Local Limited Partnerships.
Item 3.
Item 3. Legal Proceedings
The Partnership is not a party to any pending legal or administrative proceeding, and to the best of its knowledge, no legal or administrative proceeding is threatened or contemplated against it.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders
None.
PART II
Item 5.
Item 5. Market for the Registrant's Units and Related Security Holder Matters
There is no public market for the Units, and it is not expected that any public market will develop.
The Partnership Agreement does not impose on the Partnership or its General Partners any obligation to obtain periodic appraisals of assets or to provide Limited Partners with any estimates of the current value of Units, and the Partnership does not currently obtain such appraisals or provide such estimates of value.
The Second Amended and Restated Agreement and Certificate of Limited Partnership of the Partnership, as amended (the "Partnership Agreement"), imposes certain restrictions on the transfer of Units. For example, a transfer will not be permitted if: (i) counsel for the Partnership is of the opinion that such transfer would result, when considered with all other transfers within the previous twelve months, in the Partnership's being considered to have been terminated within the meaning of Section 708 of the Internal Revenue Code of 1986, as amended, or would result in the Partnership's being treated as a corporation for Federal income tax purposes; (ii) counsel for the Partnership shall determine that such transfer would violate any applicable federal or state securities laws (including those pertaining to investor suitability standards); or (iii) transferor or the transferee would thereafter hold less than five Units, except for transfers by gift or inheritance, inter-family transfers, transfers resulting from family dissolutions and certain other transactions. The Partnership need not recognize any transfer of Units unless an instrument of assignment complying with certain requirements set forth in the Partnership Agreement is filed with the Partnership and recorded on the Partnership's books, and the transferring parties reimburse the Partnership for any expenses incurred by it in connection with the transfer. Limited Partners seeking to transfer Units may also be subject to the securities laws of the state in which the transfer is to take place, in that certain states have imposed restrictions on the transfer of Units in the Partnership. For the years ended December 31, 1996, 1995, and 1994, a total of 35, 82 and 36 Units, respectively, were transferred on the resale market. There were 2,324, 2,331 and 2,380 record holders of Units of the Partnership at December 31, 1996, 1995 and 1994, respectively.
Cash distributions, when made, are paid annually. Cash available for distribution has been and, in the future, will be derived almost exclusively from distributions of cash flow from operations of the Local Limited Partnerships. Such cash is not expected to be significant in 1997, and the return on investment to Limited Partners will consist primarily of net losses for federal income tax purposes used to offset Limited Partner passive income from the Partnership and other sources. Information concerning the actual distributions made in the current year and prior years is included in Item 6
Item 6. Selected Financial Data
The table on the following page sets forth selected financial information regarding the Partnership's financial position and operating results. This information should be used in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations and the Financial Statements and Notes thereto, which are included in this Report on Form 10-K.
Item 6. Selected Financial Data (continued)
(A) Per Limited Partnership Unit data is based upon a 95% share of income and losses, except the gain on foreclosure of Oakwood Terrace and the loss on the sale of Overland Station which is based upon a 99% share of gain resulting from the transaction, and the number of Units outstanding at the end of each year (21,915). (B) Total assets does not represent the current value of the Partnership's investment in Local Limited Partnerships. (C) Each Partner's taxable income or loss from the Partnership is equal to his allocable share of taxable income or loss in the Partnership, without regard to the cash generated or distributed by the Partnership. (D) Cash distributions in 1992 through 1994 represent cash flow generated in the year previous to that presented. In 1995, the cash distribution is from the proceeds from the sale of Overland Station. Cash distributions in 1996 represent cash flow generated in 1994 and 1995. Since the inception of the Partnership, distributions have represented a return of capital.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition andResults of Operations
Liquidity and Capital Resources
At December 31, 1996, the Partnership had cash and cash equivalents of $124,878 compared with $121,361 at December 31, 1995. The increase in cash and cash equivalents is a result of cash distributions received from Local Limited Partnerships and the proceeds from the sale and maturities of marketable securities. These increases are offset by net cash used by operations, the purchase of marketable securities and cash distributions paid to the limited partners.
At December 31, 1996, approximately $810,000 has been reserved and is invested in various securities. The Reserves as defined in the Partnership Agreement were established to be used for working capital of the Partnership and contingencies related to the ownership of Local Limited Partnership interests. Reserves may be used to fund Partnership operating deficits if the Managing General Partner deems funding appropriate in order to protect its investment.
As of December 31, 1996, investment in Local Limited Partnerships remained at zero from December 31, 1995.
Since April 1, 1985, the Partnership has been obligated to pay interest from its own funds on the Oakdale note. The Partnership negotiated with the seller of Oakdale to defer these payments, and as such, since October 1, 1986 interest has been accrued but not paid. The note was due on April 1, 1995. During 1996, the local general partner of Oakdale Manor filed chapter 11 bankruptcy. If the bankruptcy plan approved by the lender requires the Partnership to make additional capital contributions, the Partnership will relinquish its interest in Oakdale Manor. If the Partnership does relinquish its interest in Oakdale, the Partnership will not repay the Oakdale note and accrued interest. The only effect on the Partnership's financial statements will be the cancellation of indebtedness income, since the Partnership is a limited partner and the note and interest are collateralized only by the Partnership's interest in Oakdale Manor, which currently has a carrying value of zero. However, if the Partnership relinquishes its interest, it will be precluded from realizing any residual value of Oakdale upon liquidation. If the Partnership's interest is retained, the note will be repaid as cash flow allows. For tax purposes, a consequence of the foreclosure will be that the Partnership will receive allocations of capital gain and cancellation of indebtedness income. At the individual investor level, the capital gain and cancellation of indebtedness income can be offset by passive losses, both current and suspended.
Since the Partnership has invested as a limited partner, it has no contractual duty to provide additional funds to Local Limited Partnerships beyond its specified investment. The Partnership's contractual obligations have been fully met, except for a limited recourse note described in Note 5 to the Financial Statements in Item 14(a) of the Report on Form 10-K. Thus, at December 31, 1996, 1995 and 1994, it did not have any contractual or other obligation to any Local Limited Partnership which had not been paid or provided for.
Future cash distributions will be derived almost exclusively from distributions of net cash provided by operations of the Local Limited Partnerships. Such cash is not expected to be significant in 1997, and therefore, there is no assurance that adequate cash will be available to warrant cash distributions in future years. As of December 31, 1996, approximately $17,000 of unpaid distributions are due to the General Partners and will be paid in 1997.
Results of Operations
1996 versus 1995
The Partnership's results of operations for the year ended December 31, 1996 resulted in a net loss of $3,906, as compared to a net income of $1,404,655 in 1995. The net income position in 1995 is due to equity in income of Local Limited Partnerships generated by the sale of Overland Station as discussed below. Distribution income also decreased in 1996 due to decreased cash flows from property operations.
1995 versus 1994
The Partnership's results of operations for the year ended December 31, 1995 resulted in net income of $1,404,655, as compared to a net loss of $233,134 in 1994. The change to a net income position is due to the 1995 equity in income of Local Limited Partnerships generated by the sale of Overland Station. The income was supplemented by cancellation of indebtedness income, also due to the Overland Station sale, an increase in cash distribution income received from Local Limited Partnerships and an increase in investment income. Offsetting these increases in income items was the loss on the disposition of Overland Station and an increase in asset management fees, as defined by the Partnership Agreement.
Inflation and Other Economic Factors
Inflation had no material impact on the operations or financial condition of the Partnerships for the three years ended December 31, 1996.
Item 8.
Item 8. Financial Statements and Supplementary Data
Information required under this Item is submitted as a separate section of this Report on Form 10-K. See Index to Financial Statements and Schedules on page hereof.
Item 9.
Item 9. Disagreements on Accounting and Financial Disclosure
None.
PART III
Item 10.
Item 10. Directors and Executive Officers of the Registrant
The managing general partner of the Partnership is BFTG Residential Properties, Inc., a Massachusetts corporation (the "Managing General Partner" or "BFTG"), and is an affiliate of The Boston Financial Group Limited Partnership ("Boston Financial"), a Massachusetts limited partnership. The names, positions and ages of the executive officers and directors of BFTG are set forth below:
Name Position Age
A. Harold Howell Director 55
William E. Haynsworth Vice President and Director 57
Georgia Murray Vice President, Treasurer, Clerk and Director 46
Fred N. Pratt, Jr. President, Chief Executive Officer and Director 52
The other general partner of the Partnership is Milk Street Housing Associates, L.P., a Massachusetts limited partnership ("Milk Street"). Milk Street was originally formed as Franklin Housing Associates, but its name was changed on December 8, 1981 to enable it to qualify to do business in Delaware. Messrs. Howell and Pratt are general partners of Milk Street.
The Partnership is a party to an agreement with Boston Financial, pursuant to which Boston Financial will provide day-to-day management services for the Partnership's investments in Local Limited Partnerships. Boston Financial receives certain compensation for these services as discussed in Item 13 of this Report.
There is no family relationship between any of the persons listed in this section.
The business experience of each of the persons listed above is described below:
A. Harold Howell, age 55, graduated from Harvard College and the Amos Tuck School of Business Administration at Dartmouth College. He has been employed by Boston Financial since 1970. For most of this time, he has been active in the overall administration of Boston Financial and its affiliates but has also been involved in other areas of its business. Mr. Howell has served as head of Boston Financial's Property Management Division and also as its Chief Financial Officer and Chief Executive Officer. He currently is a Senior Vice President and is in charge of a program being developed for properties managed by Boston Financial whereby heads-of-households who want to further their education can enroll in a program on-site which teaches economic self sufficiency, computer and internet skills, problem solving skills and related real-world skills. Mr. Howell recently spent a two year sabbatical from Boston Financial as a Visiting Professor at the Instituto de Estudios Superiores de la Empresa, a highly regarded International M.B.A. Program in Barcelona, Spain. While there, he taught courses in business strategy and real estate finance.
William E. Haynsworth, age 57, graduated from Dartmouth College and Harvard Law School. Mr. Haynsworth was Acting Executive Director of the Massachusetts Housing Finance Agency, where he was also General Counsel, prior to becoming a Vice President of Boston Financial in 1977 and a Senior Vice President in 1986. He has also served as Director of Non-Residential Development of the Boston Redevelopment Authority and as an associate of the law firm of Goodwin, Procter & Hoar in Boston. Mr. Haynsworth is a member of the firm's Senior Leadership Team and participates in the structuring of real estate investments and the development of new business opportunities.
Georgia Murray, age 46, is a graduate of Newton College of the Sacred Heart (B.A., 1972). She joined Boston Financial Management Company in 1973 and is currently a Senior Vice President of Boston Financial. Ms. Murray currently serves on the firm's Senior Leadership Team and is involved in the structuring and selling of institutional tax credit products. Previously, she managed Boston Financial's Investment Real Estate and Asset Management divisions. She also serves as a director of Atlantic Bank and Trust Company.
Fred N. Pratt, Jr., age 52, graduated from Tufts University and the Amos Tuck School of Business Administration at Dartmouth College. Mr. Pratt was oneof the original employees of Boston Financial when it was founded in late 1969. He currently serves as Boston Financial's Chief Executive Officer and Chairman of the Board of the General Partner of Boston Financial.
Item 11.
Item 11. Management Remuneration
Neither the directors and officers of BFTG nor any other individual with significant involvement in the business of the Partnership receives any current or proposed remuneration from the Partnership.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The equity securities registered by the Partnership under Section 12(g) of the Act consist of 22,000 Units, of which 21,910 were sold to the public. Holders of Units are permitted to vote on matters affecting the Partnership only in certain unusual circumstances and do not generally have the right to vote on the operation or management of the Partnership. No limited partner is known to the Partnership to be the beneficial owner of more than 5% of the outstanding Units.
BFTG Property Ventures, Inc., an affiliate of the General Partners, owns five (unregistered) Units.
Except as described in the preceding paragraph, neither BFTG, Milk Street, Boston Financial, nor any of their executive officers, directors, partners or affiliates is the beneficial owner of any Units. None of the foregoing persons possesses a right to acquire beneficial ownership of Units.
There exists no arrangement known to the Partnership, the operation of which may at a subsequent date result in a change in control of the Partnership.
Item 13.
Item 13. Certain Relationships and Related Transactions
Information required under this Item is contained in Note 7 to the Financial Statements included in this Report on Form 10-K. The affiliates of the Managing General Partner which have received or may receive fee payments and expense reimbursements from the Partnership are described below:
The Partnership is permitted to enter into transactions involving affiliates of the Managing General Partner, subject to certain limitations established in the Partnership Agreement.
Under an agreement between the Partnership and Boston Financial (as successor by merger to Fund Service Corporation), Boston Financial provides day-to-day management services in connection with the Partnership's investments in Local Limited Partnerships and receives certain reimbursements for such services. Currently, Boston Financial receives an annual fee (the "Management Fee") equal to 10% of the Partnership's share of cash flow from Local Limited Partnerships. However, the Management Fee is subject to certain limitations and to reduction under certain circumstances and is non-cumulative and
payable only out of available Partnership funds. Since inception, Management Fees amounting to $141,471 have been paid to Boston Financial.
Information concerning cash distributions and other fees paid or payable to the Managing General Partner and its affiliates and expenses reimbursed or reimbursable to Boston Financial and its affiliates, during each of the three years ended December 31, 1996 is presented below and in Note 7 to the Financial Statements included in Item 8 of this Report on Form 10-K.
PART IV
Item 14.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a)(1) and (a)(2) Documents filed as a part of this Report
In response to this portion of Item 14, the financial statements, financial statement schedule and auditor's report relating thereto are submitted as a separate section of this Report on Form 10-K. See Index to Financial Statements and Schedules on page hereof.
The reports of other auditors relating to the audits of the financial statements of Local Limited Partnerships, which were referred to and relied upon in the report of independent certified public accountants and in the Partnership's financial statements and financial statement schedule, appear in Exhibit (28)(a) of this report.
All other financial statement schedules and exhibits for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under related instructions or are inapplicable and therefore have been omitted.
(a)(3) and (c) Exhibits
Page Number or Number and Description in Accordance with Incorporation Item 601 of Regulation S-K by Reference to
4. Instruments defining the rights of security holders, including indentures
4.1 Second Amended and Restated Agreement Exhibit C to Report and Certificate of Limited Partner- on Form 10-K for 1981 ship dated as of February 1, 1982
Page Number or Number and Description in Accordance with Incorporation Item 601 of Regulation S-K by Reference to
10.1.1 Management Agreement between Boston Exhibit 10A to Regis- Financial Apartments Associates, L.P., tration Statement on and Fund Service Corporation dated as Form S-11 [File No. of August 31, 1981 2-73448] dated August 31, 1981
10.1.2 Amendment No. 1, dated January 1 Exhibit 10A to 1982, to Management Agreement with Amendment No. 1 to Fund Service Corporation dated as Registration State- of August 31, 1981 ment on Form S-11 [File No. 2-73448] dated October 14,
28. Additional Exhibits
(a) 28.1 Reports of Other Auditors
(b) Audited financial statements of Investee Local Limited Partnerships
None
(c) Reports on Form 8-K
No Reports on Form 8-K were filed during the fourth quarter ended December 31, 1996.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
By: BFTG Residential Properties, Inc., its Managing General Partner
By: /s/William E. Haynsworth Date: March 27, 1997 ------------------------------- William E. Haynsworth Vice President and Director
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 Registrant and in the capacities and on the dates indicated:
By: /s/Fred N. Pratt, Jr. Date: March 27, 1997 ------------------------------------ Fred N. Pratt, Jr. Chief Executive Officer of Boston Financial Group Limited Partnership
By: BFTG Residential Properties, Inc., its Managing General Partner
By: /s/William E. Haynsworth Date: March 27, 1997 ------------------------------- William E. Haynsworth Vice President and Director
Item 14 (a). Financial Statements and Supplementary Data
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P. (A Limited Partnership) 1996 FORM 10-K ANNUAL REPORT
INDEX
Sequential Page No. Page No.
Report of Independent Accountants
Financial Statements:
Balance Sheets - December 31, 1996 and 1995
Statements of Operations - For the Years Ended December 31, 1996, 1995 and 1994
Statements of Partners' Equity (Deficiency) - For the Years Ended December 31, 1996, 1995, and 1994
Statements of Cash Flows - For the Years Ended December 31, 1996, 1995 and 1994
Notes to the Financial Statements
Financial Statement Schedule:
Schedule III - Real Estate and Accumulated Depreciation
All other schedules are omitted as they are not applicable or not required, or the information is provided in the financial statements or the notes thereto.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of Boston Financial Apartments Associates, L.P. (A Limited Partnership)
We have audited the balance sheets of Boston Financial Apartments Associates, L.P. (a limited partnership) ("the Partnership") as of December 31, 1996 and 1995 and the related statements of operations, partners' equity (deficiency), and cash flows and the financial statement schedule listed in Item 14 (a) of this Report on Form 10-K for each of the three years in the period ended December 31, 1996. These financial statements and financial statement schedule are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. The Partnership accounts for its investments in Local Limited Partnerships, as discussed in Note 2 of the notes to the financial statements, using the equity method of accounting. In each of the three years ended December 31, 1996, 1995, and 1994, 100 percent of equity in income (losses), reflected in the financial statements of the Partnership, relates to investments in Local Limited Partnerships for which we did not audit the financial statements. The financial statements of these Local Limited Partnerships were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to those investments in Local Limited Partnerships, is based solely upon the reports of the other auditors.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, based on our audits and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the financial position of the Partnership at December 31, 1996 and 1995, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1996 in conformity with generally accepted accounting principles. In addition, in our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information required to be included therein.
Boston, Massachusetts COOPERS & LYBRAND L.L.P. March 25, 1997
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P. (A Limited Partnership)
BALANCE SHEETS
December 31, 1996 and 1995
The accompanying notes are an integral part of the financial statements.
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P. (A Limited Partnership)
STATEMENTS OF OPERATIONS For the Years Ended December 31, 1996, 1995 and 1994
The accompanying notes are an integral part of the financial statements.
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P. (A Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY (DEFICIENCY)
For the Years Ended December 31, 1996, 1995 and 1994
The accompanying notes are an integral part of the financial statements.
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P. (A Limited Partnership)
STATEMENTS OF CASH FLOWS For the Years Ended December 31, 1996, 1995 and 1994
The accompanying notes are an integral part of the financial statements.
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P. (A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. Organization
Boston Financial Apartment Associates, L.P. ("the Partnership") is a limited partnership formed on July 21, 1981 under the Uniform Limited Partnership Act of the State of Delaware. The Partnership was organized to invest, as a limited partner, in other limited partnerships ("Local Limited Partnerships") which own and operate multi-family residential properties.
BFTG Residential Properties, Inc. ("the Managing General Partner") is an affiliate of The Boston Financial Group Limited Partnership ("Boston Financial").Milk Street Housing Associates, L.P. (originally organized under the name Franklin Housing Associates), the other general partner, is a limited partnership of which the partners are employees or former employees of Boston Financial. The initial limited partner is BFTG Property Ventures, Inc., an affiliate of Boston Financial.
During 1981 and 1982, the Partnership sold limited partnership units producing gross offering proceeds of $21,910,000. Such amounts exclude five unregistered units previously acquired for $1,000 each by the initial limited partner.
Profits and losses are allocated 95% to the Limited Partners and 5% to the General Partners. In the case of certain events defined in the Partnership Agreement, the allocation of the related profits and losses would be different from that described above. Profits and losses arising from a sale or refinancing are generally allocated 99% to the Limited Partners and 1% to the General Partners.
Cash Available for Distribution, as defined in the Partnership Agreement, is allocated 95% to the Limited Partners and 5% to the General Partners. Approximately $17,000 of unpaid distributions to the General Partners as of December 31, 1996 will be paid in 1997.
Sale or Refinancing Proceeds, as defined in the Partnership Agreement, will be allocated first to the Limited Partners in the amount of their Adjusted Capital Contribution, as defined, and then 85% to the Limited Partners and 15% to the General Partners, after adjustment for certain priority distributions.
At December 31, 1996, the General Partner has designated approximately $810,000 as Reserves. Such Reserves may be increased or decreased as deemed appropriate from time to time by the Managing General Partner. Substantially all of these Reserves are invested for the purpose of providing revenue to the Partnership for ongoing operations and contingencies.
2. Significant Accounting Policies
The Partnership accounts for its investments in Local Limited Partnerships using the equity method of accounting. Under the equity method, the investment is carried at cost, adjusted for the Partnership's share of net income or loss and for cash distributions from the Local Limited Partnerships; equity in income or loss of the Local Limited Partnerships is included currently in the Partnership's operations. Under the equity method, a Local Limited Partnership investment will not be carried below zero. To the extent that equity in losses are incurred when the Partnership's carrying value of the respective Local Limited Partnership has been reduced to a zero balance, the losses will be suspended and offset against future income. Income from Partnership investments where cumulative equity in loss plus cumulative distributions have exceeded the total investment in Local Limited Partnerships will not be recorded until all of the related unrecorded losses have been offset. To the extent that a Local Limited Partnership with a carrying value of zero distributes cash to the Partnership, that distribution is recorded as income on the books of the Partnership and is presented as "Distribution Income" in the accompanying financial statements.
To the extent that the Partnership's investment in a Local Limited Partnership exceeded the Partnership's share of fair value of net assets at the time of such investment, such amounts are being amortized over the life of the
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P. (A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (continued)
2. Significant Accounting Policies (continued)
principal assets of the Local Limited Partnership (39 years). Such amortization is included in the equity in loss of the Local Limited Partnership.
Cash and cash equivalents consist of short-term money market instruments with maturities of ninety days or less at acquisition.
Marketable securities consists primarily of U.S. Treasury Notes, mortgage-backed and various other asset-backed investment vehicles. The Partnership's marketable securities are classified as "Available for Sale" securities and reported at fair value as reported by the brokerage firm at which the securities are held. All marketable securities have fixed maturities. Realized gains or losses from the sales of securities are based on the specific identification method. Unrealized gains and losses are excluded from earnings and reported in separate components of partners' equity.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
No provision for income taxes has been made as the liability for such taxes is an obligation of the partners of the Partnership.
Certain amounts in the prior year financial statements have been reclassified herein to conform with current year presentation.
3. Marketable Securities
A summary of marketable securities at December 31, 1996 and 1995 is as follows:
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P. (A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (continued)
3. Marketable Securities (continued)
The contractual maturities at December 31, 1996 are as follows:
Actual maturities for asset backed securities may differ from contractual maturities because some borrowers have the right to call or prepay obligations. Proceeds from the sales of marketable securities were approximately $590,000, $1,410,000 and $1,347,000 during the years ended December 31, 1996, 1995 and 1994, respectively. Included in investment income are gross gains of $4,592 and gross losses of $3,029 that were realized on the sales in 1996, gross gains of $11,081 and gross losses of $7,840 that were realized on the sales in 1995 and gross gains of $297 and gross losses of $29,042 that were realized on the sales in 1994.
4. Investment in Local Limited Partnerships
As of December 31, 1996 and 1995, the Partnership's Investment in Local Limited Partnerships, at cost, was as follows:
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P. (A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (continued)
4. Investment in Local Limited Partnerships (continued)
(1) Included in cash distributions received is cumulative distribution income of $942,140 which was received from five Local Limited Partnerships with carrying values of zero.
Summarized financial information from the combined financial statements of all Local Limited Partnerships in which the Partnership has invested at December 31, 1996, 1995 and 1994 is as follows:
Summarized Balance Sheets - as of December 31
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P. (A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (continued)
4. Investment in Local Limited Partnerships (continued)
As discussed in Note 8, the managing general partner of Overland Station Investment Company, a Local Limited Partnership in which the Partnership has invested, sold the property on January 12, 1995. From the sale, the Partnership has recognized $2,067,424 of equity in income. This amount was offset by the recognition of $18,627 of previously unrecognized equity in losses.
The Partnership has not recognized equity losses of $890,665, $1,556,474 and $1,786,335 in the years ended December 31, 1996, 1995 and 1994, respectively. These unrecognized losses relate to Local Limited Partnerships whose cumulative equity in losses and cumulative distributions have exceeded their total investment.
5. Notes Payable and Accrued Interest
Purchase Notes, bearing interest at 10%, had been issued by the Partnership with respect to its investments in certain Local Limited Partnerships. Subject to conditions of the note agreements, interest is payable principally from cash distributions received from the respective Local Limited Partnerships. The principal amounts, together with any accrued but unpaid interest, will be due at maturity or earlier upon sale of the Local Limited Partnership's assets. The notes and interest are collateralized by the Partnership's interest in the Local Limited Partnership, with recourse limited to such collateral. For the years ended December 31, 1996, 1995, and 1994 interest in the amount of $55,000, $55,000 and $85,000, respectively, has been charged to operations.
As discussed in Note 8, the managing general partner of Overland Station Investment Company, a Local Limited Partnership in which the Partnership has invested, sold the property on January 12, 1995. The Partnership received sales proceeds in the amount of $1,274,833. The Partnership used a portion of the sales proceeds to pay down $624,833 of an acquisition note payable and accrued interest which totaled $685,833. The $61,000 balance of these obligations has been canceled and is recorded as such on the Partnership's financial statements.
Since April 1, 1985, the Partnership has been obligated to pay interest from its own funds on the Oakdale note. The Partnership negotiated with the seller of Oakdale to defer these payments, and as such, since October 1, 1986 interest has been accrued but not paid. The note was due on April 1, 1995. During 1996, the local general partner of Oakdale Manor filed chapter 11 bankruptcy. If the bankruptcy plan approved by the lender requires the Partnership to make additional capital contributions, the Partnership will relinquish its interest in Oakdale Manor. If the Partnership does relinquish its interest in Oakdale, the only effect on the Partnership's financial statements will be the cancellation of indebtedness income since the Partnership is a limited partner and the note and interest are collateralized only by the Partnership's interest in Oakdale Manor, which currently has a carrying value of zero. However, if the Partnership relinquishes its interest, it will be precluded from realizing any residual value of Oakdale upon liquidation. For tax purposes, a consequence of the foreclosure will be that the Partnership will receive allocations of capital gain and cancellation of indebtedness income. At the individual investor level, the capital gain and cancellation of indebtedness income can be offset by passive losses, both current and suspended. The balances of notes payable and accrued interest are as follows:
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P. (A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (continued)
6. Federal Income Taxes
The following schedule reconciles the reported financial statement income or loss to the income or loss reported on Form 1065, US. Partnership Return of Income:
The carrying value of the Partnership's Investment in Local Limited Partnerships for financial reporting purposes was approximately $37,120,000 and $44,400,000 greater than the carrying value of such assets for tax purposes in 1996 and 1995, respectively. The differences were partially a result of the fact that, for financial reporting purposes, the Partnership does not recognize equity losses from a Local Limited Partnership once a Local Limited Partnership's carrying value has been reduced to zero. Such unrecognized losses totaled approximately $15,900,000 and $19,391,000 at December 31, 1996 and 1995, respectively. The remaining differences were mainly due to accelerated depreciation taken for tax purposes. The carrying value of all other assets and liabilities was the same for financial reporting and tax purposes.
7. Transactions with Affiliates
Included in general and administrative expenses are amounts that the Partnership has paid or are payable to an affiliate of the Managing General Partner for reimbursement of salaries and benefits.
In accordance with the Partnership Agreement, Boston Financial currently receives a Management Fee equal to 10% of the Partnership's share of Cash Flow from Local Limited Partnerships. However, the fee is subject to certain limitation and to reduction under certain circumstances. The fee is non-cumulative and is payable only from available Partnership funds. Management Fees totaling $13,228, $26,059 and $10,098 were incurred during 1996, 1995 and 1994, respectively, which relate to cash distributions received in those years. At December 31, 1996, $8,361 of Management Fees were payable to Boston Financial.
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P. (A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (continued)
8. Disposition of Investments in Local Limited Partnership
Bankruptcy plans for Woodmeade South Apartments and Mountain View Apartments became effective on March 24, 1996. In order for the Partnership to retain an equity interest in these properties, the bankruptcy plan required that the Partnership make additional contributions. Management of the Partnership decided that additional contributions would not be in the best interest of the Partnership. Consequently, the Partnership relinquished its equity interest in these two Local Limited Partnerships. These bankruptcies did not have an effect on the Partnership for financial reporting purposes since the Partnership is a limited partner and the two Local Limited Partnerships had a carrying value of zero. However, the Partnership will be precluded from realizing any residual value of the properties upon liquidation.
The managing general partner of Overland Station Investment Company sold the property on January 12, 1995. From the sale, the Partnership has recognized $2,067,424 of equity in income. This amount was offset by the recognition of $18,627 of previously unrecognized equity in losses. Also, as a result of the sale, the Partnership has recognized a loss on the sale of Overland Station in the amount of $773,964. This amount represents the remaining carrying value of the partnership's investment in the Local Limited Partnership.
The Partnership received sales proceeds in the amount of $1,274,833, $450,000 of which was received in 1994. The Partnership used a portion of the sales proceeds to pay down $624,833 of an acquisition note payable and accrued interest which totaled $685,833. The $61,000 balance of these obligations has been canceled and is recorded as such on the Partnership's financial statements. The Partnership has distributed the balance of the sales proceeds plus accrued interest in the amount of $657,450.
On January 12, 1994, the United States Department of Housing and Urban Development held a foreclosure auction to dispose of the property owned by Oakwood Terrace Associates, Ltd. The property sold for $1,790,000, all of which was remitted to HUD to repay a portion of the mortgage. The disposition of this interest did not have any effect on income of the Partnership for financial reporting purposes, as the net investment balance of the interest was zero.
BOSTON FINANCIAL APARTMENT ASSOCIATES, L.P. (A Limited Partnership) Schedule III REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 1996
(a) There is no difference between the aggregate cost for Federal income tax purposes and the aggregate cost at which the assets are carried on the books at the close of the period.
* Mortgage notes payable represent non-recourse financing of low-income housing projects payable with terms of up to 40 years with interest payable at rates ranging from 7.1% to 9.75%. The Partnership has not guaranteed any of these mortgage notes payable.
Independent Auditors' Report
The Partners Bear Creek Apartments Associates:
We have audited the accompanying balance sheet of Bear Creek Apartments Associates (a Limited Partnership), FHA Project No. 053-11082-PM as of December 31, 1996, and the related statements of profit and loss (HUD Form 92410), changes in partners' capital (deficit), and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Bear Creek Apartments Associates as of December 31, 1996, and the results of its operations and its cash flows for the year then ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issue a report dated January 31, 1997 on our consideration of Bear Creek Apartments Associate's internal control structure and a report dated January 31, 1997 on its compliance with laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information included in Schedules 1 through 4 is presented for the purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statement, and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
January 31, 1997
KPMG - Peat Marwick LLP
Independent Auditors' Report
The Partners Bear Creek Apartments Associates:
We have audited the accompanying balance sheet of Bear Creek Apartments Associates (a Limited Partnership), FHA Project No. 053-35071-PM as of December 31, 1995, and the related statements of profit and loss (HUD Form 92410), changes in partners' capital (deficit), and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Bear Creek Apartments Associates as of December 31, 1995, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issue a report dated February 2, 1996, on our consideration of Bear Creek Apartments Associate's internal control structure, and a report dated February 2, 1996, on its compliance with laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supporting information included in Schedules 1 through 4 is presented for the purpose of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statement, and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
February 2, 1996 KPMG - Peat Marwick LLP
Report of Independent Auditors
The Partners of Bear Creek Apartments Associates and the Federal Housing Administration
We have audited the accompanying balance sheet of Bear Creek Apartments Associates (a Limited Partnership), FHA Project No. 053-35071-PM as of December 31, 1994, and the related statements of profit and loss (HUD Form 92410), changes in partners' capital (deficit), and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Bear Creek Apartments Associates (a limited partnership), as of December 31, 1994, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The supplemental information listed on pages 12 through 18 is presented for the purposes of additional analysis and is not a required part of the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statement, and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
Ernst & Young LLP
January 26, 1995
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The General Partner Buttonwood Tree Apartments, Ltd.
We have audited the accompanying balance sheet of Buttonwood Tree Apartments, Ltd., HUD Project No. 102-35166-L8-PM as of December 31, 1996, and the related statements of profit and loss, changes in partners' deficit and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Buttonwood Tree Apartments, Ltd., HUD Project No. 102-35166-L8-PM as of December 31, 1996, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issue a report dated January 15, 1997 on our consideration of Buttonwood Tree Apartments, Ltd., HUD Project No. 102-35166-L8-PM's internal control structure and report dated January 15, 1997 on its compliance with laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information (shown on pages 12 to 17) is presented for the purposes of additional analysis and are not a required part of the basic financial statements of Buttonwood Tree Apartments, Ltd. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
Grant Thorton LLP Wichita, Kansas January 15, 1997
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The General Partner Buttonwood Tree Apartments, Ltd.
We have audited the accompanying balance sheet of Buttonwood Tree Apartments Ltd., HUD Project No. 102-35166-L8-PM as of December 31, 1995, and the related statements of profit and loss, changes in partners' deficit, and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Buttonwood Tree Apartments Ltd., HUD Project No. 102-35166-L8-PM as of December 31, 1995, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issue a report dated January 11, 1996, on our consideration of Buttonwood Tree Apartments, Ltd., HUD Project No. 102-35166-L8-PM's internal control structure, and reports dated January 11, 1996, on its compliance with specific requirements applicable to major HUD programs and specific requirements.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information (shown on pages 12 to 17) is presented for the purpose of additional analysis and are not a required part of the basic financial statements of Buttonwood Tree Apartments, Ltd. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statement, and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
Grant Thorton LLP Wichita, Kansas January 11, 1996
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The General Partner Buttonwood Tree Apartments, Ltd.
We have audited the accompanying balance sheet of Buttonwood Tree Apartments Ltd., HUD Project No. 102-35166-L8-PM as of December 31, 1994, and the related statements of profit and loss, changes in partners' deficit, and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Buttonwood Tree Apartments, Ltd., HUD Project No. 102-35166-L8-PM as of December 31, 1994, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information included in the report is presented for the purposes of additional analysis and are not a required part of the basic financial statements of Buttonwood Tree Apartments, Ltd. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statement, and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
Grant Thorton LLP Wichita, Kansas January 13, 1995
Report of Independent Auditors
To the Partners Chelsea Village, L.P.
We have audited the accompanying balance sheet of Chelsea Village, a limited Partnership, as of December 31, 1996, and the related statements of profit and loss, partners' capital deficit and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Chelsea Village at December 31, 1996, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
As discussed in Note 2 to the financial statements, the Partnership's recurring deficiencies in cash flow raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supporting data listed on the contents page is presented for the purpose of additional analysis and is not a required part of the financial statements of the Partnership. Such data has been subjected to the auditing procedures applied in our audit of the financial statements, and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
Ernst & Young LLP
January 22, 1997
Report of Independent Auditors
To the Partners Chelsea Village, L.P.
We have audited the accompanying balance sheet of Chelsea Village, a limited Partnership -- Project No. 073-35437-PM as of December 31, 1995, and the related statements of profit and loss, changes in partners' capital deficit and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Chelsea Village at December 31, 1995, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issue a report entitled "Independent Auditors' Report on Internal Control Based on an Audit of the Financial Statements in Accordance with Government Auditing Standards" dated January 22, 1996 on our consideration of the Partnership's internal control structure, and a report entitled "Independent Auditors' Report on Compliance with Laws and Regulations in Accordance with Government Auditing Standards" dated January 22, 1996, on its compliance with applicable laws and regulations.
As discussed in Note 2 to financial statements, the Partnership's recurring deficiencies in cash flow raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supporting data listed on the contents page is presented for the purpose of additional analysis and is not a required part of the financial statements of the Partnership. Such data has been subjected to the auditing procedures applied in our audit of the financial statements, and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
Ernst & Young LLP
January 22, 1996
Report of Independent Auditors
To the Partners Chelsea Village, L.P.
We have audited the accompanying balance sheet of Chelsea Village, a limited Partnership -- Project No. 073-35437-PM as of December 31, 1994 and 1993, and the related statements of profit and loss, changes in partners' capital deficit and cash flows for each of the three years in the period ended December 31, 1994. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Chelsea Village at December 31, 1994 and 1993, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
As discussed in Note B to financial statements, the Partnership's recurring deficiencies in cash flow raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Ernst & Young LLP
January 17, 1995
ACCOUNTANTS' COMPILATION REPORT
To the Partners Oakdale Manor, Ltd. Beaumont, Texas
We have compiled the accompanying balance sheet of Oakdale Manor, Ltd. (a Texas limited Partnership) as of December 31, 1996, and the related statements of operations and changes in partners' capital (deficit) and cash flows for the year then ended, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants.
A compilation is limited to presenting in the form of financial statements information that is the representation of management. We have not audited or reviewed the accompanying financial statements and, accordingly, do not express an opinion or any other form of assurance of them.
On August 5, 1996, the Project filed a petition for relief under Chapter 11 of the federal bankruptcy laws in the United States Bankruptcy Court for the Eastern District of Texas, Beaumont, Texas. The accompanying financial statements have been prepared assuming the Project will continue as a going concern. As shown in the financial statements, the Project incurred a net loss of $199,550 during the year ended December 31, 1996, and, as of that date, the Project's total liabilities exceeded its total assets by $1,880,903. The Project defaulted on the mortgage in 1987 and the mortgage was placed for collection with HUD who subsequently sold the mortgage in 1996. These factors, among others, raise substantial doubt about the Project's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
February 22, 1997
Independent Auditors' Report
To the Partners HUD Field Office Director Oakdale Manor, Ltd. Houston, Texas
We have audited the accompanying balance sheets of Oakdale Manor, Ltd. (a Texas limited partnership), HUD Project No. 114-3526-PM as of December 31, 1995, and the related statements of operations and changes in partners' capital (deficit), and cash flows for the years then ended. These financial statements are the responsibility of the partners. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Oakdale Manor, Ltd. as of December 31, 1995, and the results of its operations and its cash flows and its changes in partners' capital (deficit), and cash flows for the year then ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD programs issued by the U.S. Department of Housing and Urban Development, we have also issued a report dated February 19, 1996, on our consideration of Oakdale Manor, Ltd.'s internal control structure, and reports dated February 19, 1996, on its compliance with specific requirements applicable to major HUD programs, specific requirements applicable to Affirmative Fair Housing and specific requirements applicable to nonmajor HUD program transactions.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental information shown on pages 9 to 15 is presented for the purpose of additional analysis and are not a required part of the basic financial statements the Partnership. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements, and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
The accompanying financial statements have been prepared assuming the Project will continue as a going concern. As shown in the financial statements, the Project incurred a net loss of $211,258 during the year ended December 31, 1995, and, as of that date, the Project's total liabilities exceeded its total assets by $1,681,353. The Project defaulted on the mortgage in 1987 and the mortgage was placed with HUD for collection. These factors, among others, raise substantial doubt about the Project's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Funchess, Mills, White & Co. February 19, 1996
Independent Auditors' Report
To the Partners HUD Field Office Director Oakdale Manor, Ltd. Houston, Texas
We have audited the accompanying balance sheet of Oakdale Manor, Ltd. (a Texas limited partnership), HUD Project No. 114-3526-PM as of December 31, 1994, and the related statements of operations, changes in partners' capital (deficit), and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Oakdale Manor, Ltd. as of December 31, 1994, and the results of its operations and its cash flows and its changes in partners' capital (deficit), for the year then ended, in conformity with generally accepted accounting principles.
Funchess, Mills, White & Co. February 20, 1995
Report of Independent Accountants
January 22, 1996
To the Partners of Overland Station Investment Company
We have audited the accompanying statement of net assets in liquidation of the Overland Station Investment Company as of October 31, 1995, and the related statements of changes in net assets in liquidation for the period January 1, 1995 to October 31, 1995. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in Note 2 the Partnership received final payment on the sale of the Project on January 30, 1995 and commenced liquidation shortly thereafter. As a result, the Partnership has changed its basis of accounting for periods subsequent to December 31, 1994 from the going concern basis to a liquidation basis.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets in liquidation of the Partnership as of October 31, 1995 and the changes in its net assets in liquidation for the period from January 1, 1995 to October 31, 1995 in conformity with generally accepted accounting principles applied on the basis described in the preceding paragraph.
Price Waterhouse LLP
Report of Independent Accountants
February 23, 1995
To the Partners of Overland Station Investment Company
We have audited the accompanying balance sheet of the Overland Station Investment Company as of December 31, 1994 and 1993, and the related statements of operations and partners' deficit and of cash flows for the years then ended. These financial statements are the responsibility of the Overland Station Investment Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing. These standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provides a reasonable basis for our opinion.
In our opinion, the financial statements audited by us present fairly, in all material respects, financial position of Overland Station Investment Company at December 31, 1994 and 1993, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
Price Waterhouse LLP
February 4, 1997
Independent Auditors' Report - Unqualified Opinion
Park Hill Associates Lexington, Kentucky
We have audited the accompanying balance sheet of Park Hill Associates, HUD Project No. 083-35147-PM (a limited partnership), as of December 31, 1996, and the related statements of income, changes in partners' equity, and cash flows for the year then ended. These financial statements are the responsibility of the Project's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that out audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Park Hill Associates at December 31, 1996, and the results of its operations, changes in partner's capital and cash flows for the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, we have also issued a report dated February 4, 1997, on our consideration of Park Hill Associates' internal control structure, and reports dated February 4, 1997, on its compliance with specific requirements applicable to major HUD programs and specific requirements applicable to Affirmative Fair Housing.
McCurry & Associates, CPA, PC Johnson City, Tennessee EIN 62-1337124
Engagement Partner/Officer Kenneth W. McCurry, CPA 401 Elm Street Johnson City, TN 37601 (423) 926-4784
Independent Auditors' Report - Unqualified Opinion
January 24, 1996
Park Hill Associates Lexington, Kentucky
We have audited the accompanying balance sheet of Park Hill Associates, HUD Project No. 083-35147-PM (a limited partnership), as of December 31, 1995, and the related statements of income, partners' equity, and cash flows for the year then ended. These financial statements are the responsibility of the Project's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Park Hill Associates, at December 31, 1995, and the results of its operations, changes in partner's capital and cash flows for the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD programs issued by the U.S. Department of Housing and Urban Development, we have also issued a report dated January 24, 1996, on our consideration of Park Hill Associates' internal control structure, and reports dated January 24, 1996, on its compliance with specific requirements applicable to major HUD programs and specific requirements applicable to Affirmative Fair Housing.
McCurry & Associates, CPA, PC
January 24, 1995
Independent Auditors' Report - Unqualified Opinion
Park Hill Associates Lexington, Kentucky
We have audited the accompanying balance sheet of Park Hill Associates, Project No. 083-35147-PM (a limited partnership), as of December 31, 1994, and the related statements of income, partners' equity, and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Park Hill Associates, at December 31, 1994, and the results of its operations and cash flows and its analysis of net worth for the year then ended in conformity with generally accepted accounting principles.
McCurry & Associates, CPA, PC
INDEPENDENT AUDITORS' REPORT
To the Partners of HUD Field Office Director PHEASANT RIDGE LIMITED PARTNERSHIP Chicago, Illinois Moline, Illinois
We have audited the accompanying balance sheet of PHEASANT RIDGE LIMITED PARTNERSHIP, Project No. 071-35240, as of December 31, 1996, and the related statements of profit and loss, changes in partners' equity and statement of cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to in the first paragraph present fairly, in all material respects, the financial position of PHEASANT RIDGE LIMITED PARTNERSHIP, as of December 31, 1996, and its profit and loss, changes in partners' equity, and its cash flows for the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report dated January 10, 1997 on our consideration of PHEASANT RIDGE LIMITED PARTNERSHIP'S internal control structure and reports dated January 10, 1997 on its compliance with specific requirements applicable to Major HUD Programs, specific requirements applicable to Affirmative Fair Housing and specific requirements applicable to Nonmajor HUD Programs.
The accompanying supplementary information (shown on pages 12 to 17), is presented for the purpose of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statement and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
Haran & Associates, Ltd Certified Public Accountants Wilmette, Illinois Illinois Certificate No. 060-002892 Federal Certification No. 36-3097692 Audit Partner: James E. Haran (847)853-2580
January 10, 1997
INDEPENDENT AUDITORS' REPORT
To the Partners of HUD Field Office Director PHEASANT RIDGE LIMITED PARTNERSHIP Chicago, Illinois Moline, Illinois
We have audited the accompanying balance sheet of PHEASANT RIDGE LIMITED PARTNERSHIP, Project No. 071-35240 as of December 31, 1995, and the related statements of profit and loss, changes in partners' equity and statement of cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to in the first paragraph present fairly, in all material respects, the financial position of PHEASANT RIDGE LIMITED PARTNERSHIP as of December 31, 1995, and its profit and loss, changes in partners' equity, and its cash flows for the year then ended then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report dated January 8, 1996, on our consideration of PHEASANT RIDGE LIMITED PARTNERSHIP'S internal control structure, and reports dated January 8, 1996, on its compliance with specific requirements applicable to major HUD programs and specific requirements applicable to Nonmajor HUD Programs.
The accompanying supplementary information (shown on pages 12 to 17), is presented for the purpose of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statement, and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
Haran & Associates, Ltd
January 8, 1996
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners Pheasant Ridge Apartments Associates
We have audited the accompanying balance sheet of the Pheasant Ridge Apartments Associates, an Illinois Limited Partnership, HUD Project No. 071-35240 as of December 31, 1994, and the related statements of revenues and expenses, changes in partners' equity (deficit), and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Pheasant Ridge Apartments Associates as of December 31, 1994, and results of its operations and cash flows for the year then ended in conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supporting information included in the report (shown on pages 11 to 19), are presented for the purpose of additional analysis and are not a required part of the basic financial statements of Pheasant Ridge Apartments Associates. Such information has been subjected to the auditing procedures applied in the audit of the financial statement and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
Coopers & Lybrand L.L.P
Des Moines, Iowa January 6, 1995
Report of Independent Accountants
February 19, 1997
To the Partners of Westpark Plaza Investors
We have audited the accompanying balance sheet of the Westpark Plaza Investors (FHA Project No. 136-35581-PM) as of December 31, 1996 and 1995 and the related statements of operations and partners' deficit and cash flows for the years then ended. These financial statements are the responsibility of the Westpark Plaza Investors' management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Westpark Plaza Investors as of December 31, 1996 and 1995, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards we have also issue a report dated February 19, 1997 on our consideration of Westpark Plaza Investors' internal control structure and reports dated February 19, 1997 on its compliance with specific requirements applicable to major HUD programs and Affirmative Fair Housing.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supporting information included in this report (shown on Schedules 1 through 7) is presented for the purposes of additional analysis and is not a required part of the basic financial statements of Westpark Plaza Investors. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
Price Waterhouse LLP
Report of Independent Accountants
February 23, 1996
To the Partners of Westpark Plaza Investors
We have audited the accompanying balance sheet of the Westpark Plaza Investors (FHA Project No. 136-35581-PM) as of December 31, 1995 and 1994, and the related statements of operations and partners' deficit and cash flows for the years then ended. These financial statements are the responsibility of the Westpark Plaza Investors' management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Westpark Plaza Investors as of December 31, 1995 and 1994, and the results of its operations and cash flows for the years then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards we have also issue a report dated February 23, 1996, on our consideration of Westpark Plaza Investors' internal control structure, and reports dated February 23, 1996 on its compliance with specific requirements applicable to major HUD programs and Affirmative Fair Housing.
Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supporting information included in this report (Schedules 1 through 7) is presented for the purpose of additional analysis and are not a required part of the basic financial statements of Westpark Plaza Investors. Such data has been subjected to the auditing procedures applied in the audit of the financial statements, and, in our opinion, if fairly stated in all material respects in relation to the financial statements taken as a whole.
Price Waterhouse LLP
Report of Independent Auditors
To the Partners of Woodbridge Apts. of Bloomington II, L.P.
We have audited the accompanying balance sheet of Woodbridge Apartments of Bloomington, II L.P., a limited partnership--Project No. 073-35520-PM, as of December 31, 1996, and the related statements of profit and loss, partners' capital deficit and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Woodbridge Apartments of Bloomington II, L.P. at December 31, 1996, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have issue a report entitled "Independent Auditors' Report on Internal Control Based on an Audit of the Financial Statements in Accordance with Government Auditing Standards" dated January 22, 1997 on our consideration of the Partnership's internal control and a report entitled "Independent Auditors' Report on Compliance with Laws and Regulations in Accordance with Government Auditing Standards" dated January 22, 1997 on its compliance with applicable laws and regulations.
Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The supporting data listed on the contents page is presented for the purposes of additional analysis and is not a required part of the financial statements of the Partnership. Such data has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
January 22, 1997
Ernst & Young LLP
Report of Independent Auditors
To the Partners of Woodbridge Apts. of Bloomington II, L.P.
We have audited the accompanying balance sheet of Woodbridge Apartments of Bloomington, II L.P.--Project No. 073-35520-PM as of December 31, 1995, and the related statements of profit and loss, partners' capital deficit and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Woodbridge Apts. of Bloomington II, L.P. at December 31, 1995, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have issue a report entitled "Independent Auditors' Report on Internal Control Based on an Audit of the Financial Statements in Accordance with Government Auditing Standards" dated January 22, 1996 on our consideration of the Partnership's internal control structure, and a report entitled "Independent Auditors' Report on Compliance with Laws and Regulations in Accordance with Government Auditing Standards" dated January 22, 1996, on its compliance with applicable laws and regulations.
Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The supporting data listed on the contents page is presented for the purpose of additional analysis and is not a required part of the financial statements of the Partnership. Such data has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
January 22, 1996
Ernst & Young LLP
Report of Independent Auditors
To the Partners Woodbridge Apts. of Bloomington II, L.P.
We have audited the balance sheets of Woodbridge Apartments of Bloomington II, L.P. a limited Partnership--Project No. 073-35520-PM as of December 31, 1994 and 1993, and the related statements of profit and loss, partners' capital deficit and cash flows for each of the three years in the period ended December 31, 1994. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Woodbridge Apts. of Bloomington II, L.P. at December 31, 1994 and 1993, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1994, in conformity with generally accepted accounting principles.
As discussed in Note B to the financial statements, the Partnership's recurring deficiencies in cash flow raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Ernst & Young LLP
January 17, 1995
REPORT OF INDEPENDENT AUDITORS
To the Partners The Woods of Castleton
We have audited the accompanying balance sheet of The Woods of Castleton, a limited partnership--Project Number 073-35402-PM, as of December 31, 1996, and the related statements of profits and loss, partners' capital deficit and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The Woods of Castleton at December 31, 1996, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have issued a report entitled "Independent Auditors' Report on Internal Control Based on an Audit of the Financial Statements in Accordance with Government Auditing Standards" dated January 22, 1997 on our consideration of the Partnership's internal control and a report entitled "Independent Auditors' Report on Compliance with Laws and Regulations in Accordance with Government Auditing Standards" dated January 22, 1997 on its compliance with applicable laws and regulations.
As discussed in Note 2 to the financial statements, the Partnership's recurring deficiencies in cash flow raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The supporting data listed on the contents page is presented for purposes of additional analysis and is not a required part of the financial statements of the Partnership. Such data has been subjected to the auditing procedures applied in our audit of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
Ernst & Young LLP
January 22, 1997
Report of Independent Auditors
To the Partners The Woods of Castleton
We have audited the accompanying balance sheet of The Woods of Castleton, a limited partnership--Project Number 073-35402-PM, as of December 31, 1995, and the related statements of profits and loss, partners' capital deficit, and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The Woods of Castleton at December 31, 1995, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issue a report entitled "Independent Auditors' Report on Internal Control Based on an Audit of the Financial Statements in Accordance with Government Auditing Standards" dated January 22, 1996, on our consideration of the Partnership's internal control structure, and a report entitled "Independent Auditors' Report on Compliance with Laws and Regulations in Accordance with Government Auditing Standards" dated January 22, 1996, on its compliance with applicable laws and regulations.
As discussed in Note 2 to financial statements, the Partnership's recurring deficiencies in cash flow raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The supporting data listed on the contents page is presented for the purpose of additional analysis and is not a required part of the financial statements of the Partnership. Such data has been subjected to the auditing procedures applied in the audit of the financial statements, and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
Ernst & Young LLP
January 22, 1996
REPORT OF INDEPENDENT AUDITORS To the Partners The Woods of Castleton
We have audited the accompanying balance sheet of The Woods of Castleton, a limited partnership--Project Number 073-35402-PM, as of December 31, 1994 and 1993, and the related statements of profits and loss, partners' capital deficit and cash flows for each of the three years in the period ended December 31, 1994. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The Woods of Castleton at December 31, 1994 and 1993, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1994, in conformity with generally accepted accounting principles.
As discussed in Note B to financial statements, the Partnership's recurring deficiencies in cash flow raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Ernst & Young LLP
January 17, 1995
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============================================================================= Independent Auditors' Report
The Partners Youngstoun Apartments, Phase II:
We have audited the accompanying balance sheet of Youngstoun Apartments, Phase II (a Limited Partnership), FHA Project No. 052-35323-PM-L8, as of December 31, 1996, and the related statements of profit and loss (HUD Form 92410), changes in partners' deficit and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Youngstoun Apartments, Phase II as of December 31, 1996, and the results of its operations and its cash flows for the year then ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report dated January 31, 1997 on our consideration of Youngstoun Apartments, Phase II's internal control structure and a report dated January 31, 1997 on its compliance with laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information included in Schedules 1 through 4 is presented for the purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
KPMG - Peat Marwick LLP January 31, 1997
February 2, 1996 Independent Auditors' Report
The Partners Youngstoun Apartments, Phase II:
We have audited the accompanying balance sheet of Youngstoun Apartments, Phase II (a Limited Partnership), FHA Project No. 052-35323-PM-L8 as of December 31, 1995, and the related statements of profit and loss (HUD Form 92410), changes in partners' deficit, and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Youngstoun Apartments, Phase II as of December 31, 1995, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report dated February 2, 1996, on our consideration of Youngstoun Apartments, Phase II's internal control structure, and a report dated February 2, 1996, on its compliance with laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information included in Schedules 1 through 4 is presented for the purpose of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements, and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. KPMG - Peat Marwick LLP
February 2, 1996
Report of Independent Auditors
The Partners of Youngstoun Apartments, Phase II and the Federal Housing Administration
We have audited the accompanying balance sheet of Youngstoun Apartments, Phase II, FHA Project No. 052-35323-PM-L8 as of December 31, 1994, and the related statements of profit and loss (HUD Form 92410), changes in partners' deficit and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Youngstoun Apartments, Phase II, as of December 31, 1994, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the financial statements taken as a whole. The supplementary information listed on pages 12 through 18 is presented for the purpose of additional analysis and is not a required part of the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements, and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
Ernst & Young LLP
January 18, 1995
INDEPENDENT AUDITOR'S REPORT
The Partners Woodmeade South Associates, Ltd.
We have audited the accompanying balance sheet of Woodmeade South Associates, Ltd. (a limited partnership), F.H.A. Project No. 087-35104-PM as of December 31, 1994, and the related statements of profit and loss, changes in partners' deficit and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Woodmeade South Associates, Ltd. (a limited partnership), as of December 31, 1994, and the results of its operations, changes in partners' deficit and cash flows for the year then ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the Partnership will continue as a going concern. As discussed in notes 5 and 7 to the financial statements, the Partnership is in default on the mortgage at December 31, 1994 primarily as a result of continuing operating losses in excess of the amounts funded by the general partners. As a result, the mortgage note has been assigned to the Department of Housing and Urban Development (HUD). On September 14, 1992, a provisional workout agreement was approved by HUD. This situation raises substantial doubt about the ability of the Partnership to continue as a going concern. The financial statements do not include any adjustment that might result from the outcome of this uncertainty.
Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The supporting data included in Schedules 1 through 4 is presented for the purpose of additional analysis and are not a required part of the basic financial statements of Woodmeade South Associates, Ltd. (a limited partnership). Such information has been subjected to the auditing procedures applied in the audit of the basic financial statement, and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
Maggart & Associates, P.C. Nashville, Tennessee February 9, 1995
INDEPENDENT AUDITOR'S REPORT
The Partners Mountain View Associates, Ltd.
We have audited the accompanying balance sheet of Mountain View Associates, Ltd. (a limited partnership), FHA Project No. 087-35121-PM as of December 31, 1994, and the related statements of profit and loss, changes in partners' deficit and cash flows for the year then ended. These financial statements are the responsibility of the partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Mountain View Associates, Ltd. (a limited partnership), as of December 31, 1994, and the results of its operations, changes in partners' deficit and cash flows for the year then ended in conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the financial statements taken as a whole. The supporting data included in Schedules 1 through 4 is presented for the purpose of additional analysis and are not a required part of the basic financial statements of Mountain View Associates, Ltd. (a limited partnership). Such information has been subjected to the auditing procedures applied in the audit of the basic financial statement, and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
Maggart & Associates, P.C. Nashville, Tennessee February 5, 1995