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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- - ------- EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2001
OR
_____ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 33-89968
INDEPENDENCE TAX CREDIT PLUS L.P. IV
(Exact name of registrant as specified in its charter)
Delaware 13-3809869
- - -------------------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
625 Madison Avenue, New York, New York 10022
- - -------------------------------------- -----------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 421-5333
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Interests and Beneficial Assignment Certificates
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ____
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
DOCUMENTS INCORPORATED BY REFERENCE
None
CAUTIONARY STATEMENT FOR PURPOSES OF
THE "SAFE HARBOR" PROVISIONS OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
WHEN USED IN THIS ANNUAL REPORT ON FORM 10-K, THE WORDS "BELIEVES,"
"ANTICIPATES," "EXPECTS" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY
FORWARD-LOOKING STATEMENTS. STATEMENTS LOOKING FORWARD IN TIME ARE INCLUDED IN
THIS ANNUAL REPORT ON FORM 10-K PURSUANT TO THE "SAFE HARBOR" PROVISION OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH STATEMENTS ARE SUBJECT TO
CERTAIN RISKS AND UNCERTAINTIES WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY, INCLUDING, BUT NOT LIMITED TO, THOSE SET FORTH IN "MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS."
READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING
STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE HEREOF.
PART I
Item 1. Business.
General
- - -------
Independence Tax Credit Plus L.P. IV (the "Partnership") is a limited
partnership which was formed under the laws of the State of Delaware on February
22, 1995. The general partner of the Partnership is Related Independence L.L.C.,
a Delaware limited liability company (the "General Partner").
On July 6, 1995, the Partnership commenced a public offering (the "Offering") of
Beneficial Assignment Certificates ("BACs") representing assignments of limited
partnership interests in the Partnership ("Limited Partnership Interests"),
managed by Related Equities Corporation (the "Dealer Manager"), pursuant to a
prospectus dated July 6, 1995 (the "Prospectus").
The Partnership has received $45,844,000 of Gross Proceeds of the Offering from
2,759 investors ("BACs holders"). The solicitation for the subscription of BACs
was terminated as of May 22, 1996 and the final closing occurred on August 15,
1996.
The Partnership's business is primarily to invest in other partnerships ("Local
Partnerships") owning apartment complexes ("Apartment Complexes" or
"Properties") that are eligible for the low-income housing tax credit ("Housing
Tax Credit") enacted in the Tax Reform Act of 1986, some of which may also be
eligible for the historic rehabilitation tax credit ("Historic Tax Credit";
together with Housing Tax Credits, "Tax Credits"). As of March 31, 2001, the
Partnership has acquired an interest in fourteen Local Partnerships, all of
which have been consolidated. The Partnership's investments in Local
Partnerships represent from 98.99% to 99.89% interests except for one investment
which is a 58.12% interest. As of March 31, 2001, the Partnership has invested
approximately $37,735,000 (including approximately $1,161,000 classified as a
loan repayable from sale/refinancing proceeds in accordance with the
Contribution Agreement and not including acquisition fees of approximately
$1,771,000) of net proceeds in fourteen Local Partnerships of which
approximately $2,418,000 remains to be paid to the Local Partnerships (including
approximately $496,000 being held in escrow) as certain benchmarks, such as
occupancy level, are attained prior to the release of the funds. The Partnership
has completed acquiring additional properties, but the Partnership may be
required to fund potential purchase price adjustments based on tax credit
adjustor clauses. See Item 2, Properties, below.
The Partnership has been formed to invest in Apartment Complexes that are
eligible for the Housing Tax Credit enacted in the Tax Reform Act of 1986. Some
Apartment Complexes may also be eligible for Historic Rehabilitation Tax Credits
("Historic Complexes"). The investment objectives of the Partnership are
described below.
1. Entitle qualified BACs holders to Housing Tax Credits over the period of the
Partnership's entitlement to claim Tax Credits (for each Property, generally ten
years from the date of investment or, if later, the date the Property is leased
to qualified tenants; referred to herein as the "Credit Period") with respect to
each Apartment Complex.
2. Preserve and protect the Partnership's capital.
3. Participate in any capital appreciation in the value of the Properties and
provide distributions of Sale or Refinancing Proceeds upon the disposition of
the Properties.
4. Allocate passive losses to individual BACs holders to offset passive income
that they may realize from rental real estate investments and other passive
activities, and allocate passive losses to corporate BACs holders to offset
business income.
One of the Partnership's objectives is to entitle qualified BACs holders to
Housing Tax Credits over the Credit Period. Each of the Local Partnerships in
which the Partnership has acquired an interest has been allocated by the
relevant state credit agencies the authority to recognize Tax Credits during the
Credit Period provided that the Local Partnership satisfies the rent
restriction, minimum set-aside and other requirements for recognition of the Tax
Credits at all times during such period. Once a Local Partnership has become
eligible to recognize Tax Credits, it may lose such eligibility and suffer an
event of "recapture" if its Property fails to remain in compliance with the Tax
Credit requirements. None of the Local Partnerships in which the Partnership has
acquired an interest has suffered an event of recapture.
There can be no assurance that the Partnership will achieve its investment
objectives as described above.
The Partnership is subject to the risks incident to potential losses arising
from the management and ownership of improved real estate and poor economic
conditions.
Competition
- - -----------
The real estate business is highly competitive and substantially all of the
properties acquired by the Partnership are expected to have active competition
from similar properties in their respective vicinities. In addition, various
other limited partnerships may, in the future, be formed by the General Partner
and/or its affiliates to engage in businesses which may be competitive with the
Partnership.
Employees
- - ---------
The Partnership does not have any direct employees. All services are performed
for the Partnership by the General Partner and its affiliates. The General
Partner receives compensation in the connection with such activities as set
forth in Items 11 and 13. In addition, the Partnership reimburses the General
Partner and certain of its affiliates from expenses incurred in connection with
the performance by their employees of services for the Partnership in accordance
with the Partnership's Amended and Restated Agreement of Limited Partnership
(the "Partnership Agreement").
Item 2. Properties.
As of March 31, 2001, the Partnership has acquired an interest in fourteen Local
Partnerships, all of which have been consolidated. Except for the interest in
New Zion Apartments, L.P. ("New Zion"), the Partnership's investment in each
Local Partnership represents 98.99% or 99.89% of the partnership interests in
the Local Partnership. The Partnership's investment in New Zion represents
58.12% of the partnership interest in the subsidiary partnership (the other
41.86% limited partnership interest is owned by an affiliate of the Partnership,
with the same management). Through the rights of the Partnership and/or an
affiliate of the General Partner, which affiliate has a contractual obligation
to act on behalf of the Partnership, to remove the general partner and to
approve certain major operating and financial decisions, the Partnership has a
controlling financial interest in all of the Local Partnerships it has invested.
Set forth below is a schedule of the Local Partnerships including certain
information concerning their respective Apartment Complexes (the "Local
Partnership Schedule"). Further information concerning the Local Partnerships
and their properties, including any encumbrances affecting the properties may be
found in Item 14. Schedule III .
Local Partnership Schedule
--------------------------
Percentage of Units
Name and Location Occupied at May 1,
---------------------------
(Number of Units) Date Acquired 2001 2000 1999 1998 1997
- - ----------------- ------------- ---- ---- ---- ---- ----
BX-8A Team Associates, L.P. October 1995 95% 95% 98% 98% 100%
Bronx, NY (41)
Westminster Park Plaza
(a California Limited Partnership) June 1996 98% 96% 99% 94% 96%
Los Angeles, CA (130)
Fawcett Street Limited Partnership June 1996 98% 98% 95% 93% 93%
Tacoma, WA (60)
Figueroa Senior Housing November 1996 99% 99% 97% 99% 0%*
Limited Partnership
Los Angeles, CA (66)
NNPHI Senior Housing December 1996 99% 100% 99% 99% 0%*
Limited Partnership
Los Angeles, CA (75)
Belmont/McBride Apartments January 1997 100% 98% 93% 100% 0%*
Limited Partnership
Paterson, NJ (42)
Sojourner Douglass, L.P. February 1997 95% 100% 100% 100%
Paterson, NJ (20)
New Zion Apartments October 1997 100% 99% 98% 0%*
Limited Partnership
Shreveport, LA (100)
Bakery Village Urban Renewal December 1997 99% 100% 99% 0%*
Associates, L.P.
Montclair, NJ (125)
Marlton Housing Partnership, L.P. May 1998 100% 100% 0%*
(a Pennsylvania limited partnership)
Philadelphia, PA (25)
GP Kaneohe Limited Partnership July 1999 100% 0%**
Kaneohe, HI (44)
KSD Village Apartments, Phase II, Ltd. July 1999 88% 75%
Danville, KY (16)
Kanisa Apartments, Ltd. October 1999 92% 92%
Fayette County, KY (59)
Guymon Housing Partners, L.P. December 1999 100% 92%
Guymon, OK (92)
* Properties still in construction phase.
** Project substantially completed but no certificate of occupancy recieved.
Leases are generally for periods not greater than one to two years and no tenant
occupies more than 10% of the rentable square footage.
Management continuously reviews the physical state of the properties and
suggests to the respective Local General Partners budget improvements which are
generally funded from cash flow from operations or release of replacement
reserve escrows.
Management annually reviews the insurance coverage of the properties and
believes such coverage is adequate.
See Item 1, Business, above for the general competitive conditions to which the
properties described above are subject.
Real estate taxes are calculated using rates and assessed valuations determined
by the township or city in which the property is located. Such taxes have
approximated less than 1% of the aggregate cost of the properties as shown in
Schedule III to the financial statements included herein.
In connection with investments in development-stage Apartment Complexes, the
General Partner generally requires that the general partners of the Local
Partnerships ("Local General Partners") provide completion guarantees and/or
undertake to repurchase the Partnership's interest in the Local Partnership if
construction or rehabilitation is not completed substantially on time or on
budget ("Development Deficit Guarantees"). The Development Deficit Guarantees
generally also require the Local General Partner to provide any funds necessary
to cover net operating deficits of the Local Partnership until such time as the
Apartment Complex has achieved break-even operations. The General Partner
generally requires that the Local General Partners undertake an obligation to
fund operating deficits of the Local Partnership (up to a stated maximum amount)
during a limited period of time (typically three to five years) following the
achievement of break-even operations ("Operating Deficit Guarantees"). Under the
terms of the Development and Operating Deficit Guarantees, amounts funded will
be treated as Operating Loans which will not bear interest and will be repaid
only out of 50% of available cash flow or out of available net sale or
refinancing proceeds. In some instances, the Local General Partners are required
to undertake an obligation to comply with a Rent-Up Guaranty Agreement, whereby
the Local General Partner agrees to pay liquidated damages if predetermined
occupancy rates are not achieved. These payments are made without right of
repayment. In cases where the General Partner deems it appropriate, the
obligations of a Local General Partner under the Development Deficit, Operating
Deficit and/or Rent-Up Guarantees are secured by letters of credit and/or cash
escrow deposits.
Housing Tax Credits with respect to a given Apartment Complex are available for
a ten-year period that commences when the property is rented to qualified
tenants. However, the annual Tax Credits available in the year in which the
Apartment Complex is placed in service must be prorated based upon the months
remaining in the year. The amount of the annual Tax Credit not available in the
first year will be available in the eleventh year. In certain cases, the
Partnership acquired its interest in a Local Partnership after the Local
Partnership had placed its Apartment Complex in service. In these cases, the
Partnership may be allocated Tax Credits only beginning in the month following
the month in which it acquired its interest and Tax Credits allocated in any
prior period are not available to the Partnership.
Item 3. Legal Proceedings.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None.
PART II
Item 5. Market for the Registrant's Common Equity and Related Security Holder
Matters.
As of March 31, 2001, the Partnership had issued and outstanding 45,844 Limited
Partnership Interests, each representing a $1,000 capital contribution to the
Partnership, or an aggregate capital contribution of $45,844,000. All of the
issued and outstanding Limited Partnership Interests have been issued to
Independence Assignor Inc. (the "Assignor Limited Partner"), which has in turn
issued 45,844 BACs to the purchasers thereof for an aggregate purchase price of
$45,844,000. Each BAC represents all of the economic and virtually all of the
ownership rights attributable to a Limited Partnership Interest held by the
Assignor Limited Partner. BACs may be converted into Limited Partnership
Interests at no cost to the holder (other than the payment of transfer costs not
to exceed $100), but Limited Partnership Interests so acquired are not
thereafter convertible into BACs.
Neither the BACs nor the Limited Partnership Interests are traded on any
established trading market. The Partnership does not intend to include the BACs
for quotation on NASDAQ or for listing on any national or regional stock
exchange or any other established securities market. The Revenue Act of 1987
contained provisions which have an adverse impact on investors in "publicly
traded partnerships." Accordingly, the General Partner plans to impose limited
restrictions on the transferability of the BACs and the Limited Partnership
Interests in secondary market transactions. Implementation of the restrictions
should prevent a public trading market from developing and may adversely affect
the ability of an investor to liquidate his or her investment quickly. It is
expected that such procedures will remain in effect until such time, if ever, as
further revision of the Revenue Act of 1987 may permit the Partnership to lessen
the scope of the restrictions.
As of May 16, 2001, the Partnership has approximately 2,496 registered holders
of an aggregate of 45,844 BACs.
All of the Partnership's general partnership interests, representing an
aggregate capital contribution of $1,000, are held by the General Partner.
There are no material legal restrictions in the Partnership Agreement on the
ability of the Partnership to make distributions.
The Partnership has made no distributions to the BACs holders as of March 31,
2001. The Partnership does not anticipate providing cash distributions to its
BACs holders other than from net refinancing or sales proceeds.
In January 2001, affiliates of Everest Properties, Inc. ("Everest") conducted a
tender offer for up to 1,336.16 BACs. In connection with a prior tender offer
for BACs, an affiliate of the General Partner entered into a standstill
agreement dated as of April 23, 1997 (The "Standstill"), which precluded Everest
from independently soliciting BACs (by tender offer or otherwise). At Everest's
request, the General Partner caused its affiliate to release Everest from the
Standstill for the limited purpose of permitting Everest to make its tender
offer. In connection with such arrangements, Everest agreed to cover all of the
Partnership's expenses with respect to processing the tender offer including
mailing costs, legal fees and other administrative costs incurred by the
Partnership. These reimbursements resulted in aggregate payments to the
Partnership of $41,344 which are reflected as "other income" on the financial
statements for Fiscal Year 2000.
Item 6. Selected Financial Data.
The information set forth below presents selected financial data of the
Partnership. There were no operations prior to commencement of the Offering of
BACs on July 6, 1995. Additional financial information is set forth in the
audited financial statements in Item 8 hereof.
Year Ended March 31,
OPERATIONS
- - ---------- -------- -------- -------- -------- ------
2001 2000 1999 1998 1997
----------- ----------- ----------- ----------- ----
Revenues $ 5,848,287 $ 5,318,859 $3,435,562 $2,655,915 $1,820,050
Operating expenses(9,641,822) (8,505,735) (4,682,110) (3,223,943) (1,761,475)
---------- ---------- ---------- ---------- ---------
(Loss) income (3,793,535) (3,186,876)(1,246,548) (568,028) 58,575
before minority
interest
Minority interest
in loss (income) 19,869 6,438 (21,185) 16,171 1,544
of subsidiary ------ ----- ------- ------ -----
partnership
Net (loss) income $(3,773,666) $(3,180,438) $(1,267,733) $ (551,857) $60,119
========== ========== ========== ========== =======
Net (loss) income
per weighted $ (81.49) $ (68.68) $ (27.38) $ (11.92) $ 1.46
========== ========= ======== ========== =====
average BAC
March 31,
FINANCIAL POSITION
- - ------------------ -------- -------- -------- --------
2001 2000 1999 1998 1997
----------- ----------- ----------- ----------- ----
Total assets $80,941,604 $86,387,370 $79,501,249 $73,996,062 $57,381,058
========== ========== ========== ========== ==========
Total liabilities $46,542,781 $48,314,082 $39,394,161 $32,736,900 $17,025,235
========== ========== ========== ========== ==========
Minority interest
$2,097,716 $1,998,515 $851,877 $ 736,218 $(718,978)
========= ========= ======= ======= ========
Total partners' $32,301,107 $36,074,773 $39,255,211 $40,522,944 $41,074,801
========== ========== ========== ========== ==========
capital (deficit)
During the year ended March 31, 2001, total assets decreased approximately
$5,446,000 due to depreciation and amortization and a reduction in investments
available for sale. During the years ended March 31, 2000, 1999 and 1998 total
assets increased primarily due to the proceeds from mortgage and construction
loans which were utilized in the investment of Local Partnerships amounting to
approximately $10,500,000, $3,400,000 and $11,900,000, respectively. During the
year ended March 31, 1997 total assets increased primarily due to an increase in
cash and cash equivalents and investments available for sale primarily due to
capital contributions which were not fully expended amounting to approximately
$13,300,000. For the years ended March 31, 2000, 1999, 1998 and 1997 total
assets and liabilities increased primarily due to the continued acquisition of
Local Partnerships. For the year ended March 31, 2001, property and equipment
decreased approximately $1,152,000 primarily due to depreciation expense, and
for the years ended March 31, 2000, 1999, 1998 and 1997 property and equipment
increased approximately $28,900,000, $12,100,000, $14,000,000 and $17,500,000,
respectively. During the years ended March 31, 2001, 2000, 1999, 1998 and 1997
mortgage notes increased approximately $1,100,000, $5,000,000, $1,400,000,
$8,100,000 and $9,200,000, respectively.
Cash Distributions
- - ------------------
The Partnership has made no distributions to the BACs holders as of March 31,
2001.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Liquidity and Capital Resources
- - -------------------------------
The Partnership's primary source of funds include (i) interest earned on Gross
Proceeds which are invested in tax-exempt money market instruments pending
acquisition of Local Partnerships and (ii) working capital reserve and interest
thereon. All these sources are available to meet obligations of the Partnership.
The Partnership has received $45,844,000 in gross proceeds for BACs pursuant to
a public offering, resulting in net proceeds available for investment of
approximately $36,446,000 after volume discounts, payment of sales commissions,
acquisition fees and expenses, organization and offering expenses and
establishment of a working capital reserve.
As of March 31, 2001, the Partnership has invested approximately $37,735,000
(including approximately $1,161,000 classified as a loan repayable from
sale/refinancing proceeds in accordance with the Contribution Agreement and not
including acquisition fees of approximately $1,771,000) of net proceeds in
fourteen Local Partnerships of which approximately $2,418,000 remains to be paid
to the Local Partnerships (including approximately $496,000 being held in
escrow) as certain benchmarks, such as occupancy level, are attained prior to
the release of the funds. During the year ended March 31, 2001, approximately
$1,410,000 was paid to Local Partnerships, including purchase price adjustments
(of which approximately $134,000 was released from escrow). The Partnership has
completed acquiring additional properties, but the Partnership may be required
to fund potential purchase price adjustments based on tax credit adjustor
clauses. Such adjustments resulted in a net increase in purchase price of
approximately ($65,000) during the year ended March 31, 2001.
For the year ended March 31, 2001, cash and cash equivalents of the Partnership
and its fourteen consolidated Local Partnerships decreased approximately
($679,000) due to cash used in operating activities ($690,000), net payments of
mortgage and construction loans ($1,552,000), a decrease in accounts payable
relating to investing activities ($94,000), acquisition of property and
equipment ($291,000), an increase in deferred costs ($19,000) and a net decrease
in due to local general partners and affiliates relating to investing activities
($1,348,000) which exceeded a decrease in cash held in escrow relating to
investing activities ($134,000), a decrease in investments available-for-sale
($3,100,000) and an increase in capitalization of consolidated subsidiaries
attributable to minority interest ($79,000). Included in the adjustments to
reconcile the net loss to cash used in operations is depreciation and
amortization of approximately $2,512,000.
A working capital reserve has been established from the Partnership's funds
available for investment, which includes amounts which may be required for
potential purchase price adjustments based on tax credit adjustor clauses. At
March 31, 2001, approximately $878,000 of this reserve remained unused. The
General Partner believes that these reserves, plus any cash distributions
received from the operations of the Local Partnerships, will be sufficient to
fund the Partnership's ongoing operations for the foreseeable future. During the
year ended March 31, 2001, distributions from Local Partnerships amounted to
approximately $179,000. Management anticipates receiving distributions in the
future, although not to a level sufficient to permit providing cash
distributions to the BACs holders.
The Partnership had negotiated Operating Deficit Guaranty Agreements with the
development stage Local Partnerships by which the general partners of such Local
Partnerships and/or their affiliates have agreed to fund operating deficits for
a specified period of time. The terms of the Operating Deficit Guaranty
Agreements vary for each of these Local Partnerships, with maximum dollar
amounts to be funded for a specified period of time, generally three years,
commencing on the break-even date. As of March 31, 2001, 2000 and 1999, the
gross amounts of the Operating Deficit Guarantees aggregate approximately
$3,332,000, $3,332,000 and $2,665,000, respectively, none of which have expired
as of March 31, 2001. All current Operating Deficit Guarantees expire within the
next three years. As of March 31, 2001, nothing has been funded under the
Operating Deficit Guaranty Agreements. Amounts funded under such agreements will
be treated as non-interest bearing loans, which will be paid only out of 50% of
available cash flow or out of available net sale or refinancing proceeds.
Partnership management fees owed to the General Partner amounting to
approximately $720,000 and $415,000 were accrued and unpaid as of March 31, 2001
and 2000, respectively.
The Partnership has invested all of the net proceeds available for investment in
fourteen Local Partnerships, of which all will generate tax credits in 2001. Due
to increased market demand for investments in properties that were eligible to
receive tax credits at the time the Partnership was investing its capital and
limitations on the types of investments which may be obtained by the Partnership
the purchase price for interests in Local Partnerships which are qualified for
purchase by the Partnership have increased. As a result of these changes,
management does not believe that the Partnership has been able to invest the
proceeds available for investment in a manner which will enable the Partnership
to achieve tax credits in the range of $140-150 for each $1,000 BAC each year in
which the Partnership is receiving its full entitlement of tax credits.
Management is not aware of any trends or events, commitments or uncertainties,
which have not otherwise been disclosed that will or are likely to impact
liquidity in a material way. Management believes the only impact would be from
laws that have not yet been adopted. The portfolio will be diversified by the
location of the properties around the United States so that if one area of the
country is experiencing downturns in the economy, the remaining properties in
the portfolio may be experiencing upswings. However the geographic
diversification of the portfolio may not protect against a general downturn in
the national economy. The tax credits will be attached to the project for a
period of ten years, and will be transferable with the property during the
remainder of such ten-year period. If the General Partner determines that a sale
of a property is warranted, the remaining tax credits would transfer to the new
owner; thereby adding significant value to the property on the market, which
potential increase in value is not included in the financial statement carrying
amount.
Results of Operations
- - ---------------------
Property and equipment to be held and used are carried at cost which includes
the purchase price, acquisition fees and expenses, construction period interest
and any other costs incurred in acquiring the properties. The cost of property
and equipment is depreciated over their estimated useful lives using accelerated
and straight-line methods. Expenditures for repairs and maintenance are charged
to expense as incurred; major renewals and betterments are capitalized. At the
time property and equipment are retired or otherwise disposed of, the cost and
accumulated depreciation are eliminated from the assets and accumulated
depreciation accounts and the profit or loss on such disposition is reflected in
earnings. A loss on impairment of assets is recorded when management estimates
amounts recoverable through future operations and sale of the property on an
undiscounted basis are below depreciated cost. At that time property investments
themselves are reduced to estimated fair value (generally using discounted cash
flows) when the property is considered to be impaired and the depreciated cost
exceeds estimated fair value.
Through March 31, 2001, the Partnership has not recorded any loss on impairment
of assets or reductions to estimated fair value.
The following is a summary of the results of operations of the Partnership for
the years ended March 31, 2001, 2000 and 1999 (the 2000, 1999 and 1998 Fiscal
Years).
The net loss for the 2000, 1999 and 1998 Fiscal Years totaled $3,773,666,
$3,180,438 and $1,267,733, respectively.
The Partnership and BACs holders began recognizing Housing Tax Credits with
respect to a property when the credit period for such property commenced.
Because of the time required for the acquisition, completion and rent-up of
properties, the amount of Tax Credits per BAC has gradually increased over the
first three years of the Partnership. Housing Tax Credits not recognized in the
first three years will be recognized in the 11th through 13th years. The
Partnership generated $5,506,354, $4,846,123 and $2,659,921 of Housing Tax
Credits and $0, $6,450,724 and $0 Historic Tax Credits during the 2000, 1999 and
1998 tax years, respectively.
The Partnership's results of operations for the years ended March 31, 2001, 2000
and 1999 consisted primarily of (1) approximately $119,000, $339,000 and
$597,000 of tax-exempt interest income earned on funds not currently invested in
Local Partnerships and (2) the results of the Partnership's investment in
fourteen, fourteen and ten consolidated Local Partnerships, respectively.
2000 vs. 1999
- - -------------
For the twelve months ended March 31, 2001 as compared to the corresponding
period in 2000, all categories of income and expenses increased except for real
estate taxes which decreased approximately $79,000 primarily due to the reversal
of accrued taxes that were subsequently abated at one Local Partnership. The
results of operations are not comparable due to construction and rent up of
properties, and are not reflective of future operations of the Partnership due
to uncompleted property construction and rent up of properties. In addition,
interest income will continue to decrease in future periods since a substantial
portion of the proceeds from the Offering will be included in or released to
Local Partnerships.
1999 vs. 1998
- - -------------
During the year ended March 31, 2000, all categories of income and expenses
increased except for other income and the results of operations are not
comparable due to the continued acquisition, construction and rent up of
properties and are not reflective of future operations of the Partnership due to
uncompleted property construction and rent-up of properties. In addition,
interest income will decrease in future periods since a substantial portion of
the proceeds from the Offering will be invested in Local Partnerships. Other
income decreased approximately $300,000 for the year ended March 31, 2000 as
compared to the corresponding period in 2000 primarily due to a decrease in
interest income as a result of the acquisition of and the release of proceeds to
the Local Partnerships.
Other
- - -----
The Partnership's investment as a limited partner in the Local Partnerships is
subject to the risks of potential losses arising from management and ownership
of improved real estate. The Partnership's investments also could be adversely
affected by poor economic conditions generally, which could increase vacancy
levels and rental payment defaults and by increased operating expenses, any or
all of which could threaten the financial viability of one or more of the Local
Partnerships.
There also are substantial risks associated with the operation of Apartment
Complexes receiving government assistance. These include governmental
regulations concerning tenant eligibility, which may make it more difficult to
rent apartments in the complexes; difficulties in obtaining government approval
for rent increases; limitations on the percentage of income which low and
moderate income tenants may pay as rent; the possibility that Congress may not
appropriate funds to enable HUD to make the rental assistance payments it has
contracted to make; and that when the rental assistance contracts expire there
may not be market demand for apartments at full market rents in a Local
Partnership's Apartment Complex.
The Local Partnerships are impacted by inflation in several ways. Inflation
allows for increases in rental rates generally to reflect the impact of higher
operating and replacement costs. Inflation also affects the Local Partnerships
adversely by increasing operating costs as, for example, for such items as fuel,
utilities and labor. However, continued inflation should allow for appreciated
values of the Local Partnerships' Apartment Complexes over a period of time as
rental revenues and replacement costs continue to increase.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
- - --------------------------------------------------------------------
None.
Item 8. Financial Statements and Supplementary Data.
Sequential
Page
---------------
(a) 1. Consolidated Financial Statements
Independent Auditors' Report 15
Consolidated Balance Sheets at March 31, 2001 and 2000 46
Consolidated Statements of Operations for the Years Ended
March 31, 2001, 2000 and 1999 47
Consolidated Statements of Changes in Partners' Capital
(Deficit) for the Years Ended March 31, 2001, 2000 and 1999 48
Consolidated Statements of Cash Flows for the Years Ended
March 31, 2001, 2000 and 1999 49
Notes to Consolidated Financial Statements 51
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Partners of
Independence Tax Credit Plus L.P. IV and Subsidiaries
We have audited the accompanying consolidated balance sheets of Independence Tax
Credit Plus L.P. IV (a Delaware limited partnership) and Subsidiaries as of
March 31, 2001 and 2000, and the related consolidated statements of operations,
changes in partners' capital and cash flows for the years ended March 31, 2001,
2000 and 1999 (the 2000, 1999 and 1998 fiscal years). These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits. We did not
audit the financial statements of twelve subsidiary partnerships (2000 and 1999
fiscal years), and nine subsidiary partnerships (1998 fiscal year) whose losses
aggregated $3,049,692, $2,675,329 and $1,188,735 for the years ended March 31,
2001, 2000 and 199, respectively, and whose assets constituted 87% and 86% of
consolidated assets at March 31, 2001 and 2000, respectively, presented in the
accompanying consolidated financial statements. Those statements were audited by
other auditors whose reports have been furnished to us, and our opinion, insofar
as it relates to the amounts included for these subsidiary partnerships, is
based solely on the reports of the other auditors.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits and the reports of
the other auditors provide a reasonable basis for our opinion.
In our opinion, based on our audits and the reports of the other auditors, the
consolidated financial statements referred to above present fairly, in all
material respects, the financial position of Independence Tax Credit Plus L.P.
IV and Subsidiaries as of March 31, 2001 and 2000, and the results of their
operations and their cash flows for the years ended march 31, 2001 and 2000, and
the results of their operations and their cash flows for the years ended March
31, 2001, 2000 and 1999 in conformity with accounting principles generally
accepted in the United States of America.
/s/ Friedman Alpren & Green LLP
Friedman Alpren & Green LLP
New York, New York
June 2, 2001
[LETTERHEAD OF REZNICK FEDDER & SILVERMAN]
INDEPENDENT AUDITORS' REPORT
To the Partners
Westminster Park Plaza
We have audited the accompanying balance sheets of Westminster Park Plaza (a
California limited partnership) as of December 31, 2000 and 1999, and the
related statements of operations, partners' equity (deficit) and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with 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 statements 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 Westminster Park Plaza as of
December 31, 2000 and 1999, and the results of its operations, partners' equity
(deficit) and its cash flows for the years then ended, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information is presented
for purposes of additional analysis and is not a required part of the basic
financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Reznick Fedder & Silverman
Atlanta, Georgia
January 31, 2001
[LETTERHEAD OF REZNICK FEDDER & SILVERMAN]
INDEPENDENT AUDITORS' REPORT
To the Partners
Westminster Park Plaza
We have audited the accompanying balance sheets of Westminster Park Plaza (a
California limited partnership) as of December 31, 1999 and 1998, and the
related statements of operations, 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 audits 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 statements 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 Westminster Park Plaza as of
December 31, 1999 and 1998, and the results of its operations, the changes in
partners' deficit and its cash flows for the years then ended, in conformity
with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 13
to 15 is presented for purposes of additional analysis and is not a required
part of the basic financial statements. Such information has been subjected to
the auditing procedures applied in the audit of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the basic financial statements taken as a whole.
/s/ Reznick Fedder & Silverman
Boston, Massachusetts
January 26, 2000
[LETTERHEAD OF MCDANIEL & HALLSTROM]
To the Partners
FAWCETT STREET LIMITED PARTNERSHIP
Tacoma, Washington
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying balance sheets of FAWCETT STREET LIMITED
PARTNERSHIP as of December 31, 2000 and 1999, and the related statements of
operations, partners' equity and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our 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 FAWCETT STREET LIMITED
PARTNERSHIP as of December 31, 2000 and 1999, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/ McDaniel & Hallstrom, CPA's
Tacoma, Washington
February 7, 2001
[LETTERHEAD OF MCDANIEL & HALLSTROM]
To the Partners
FAWCETT STREET LIMITED PARTNERSHIP
Tacoma, Washington
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying balance sheets of FAWCETT STREET LIMITED
PARTNERSHIP as of December 31, 1999 and 1998, and the related statements of
operations, partners' equity and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our 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 FAWCETT STREET LIMITED
PARTNERSHIP as of December 31, 1999 and 1998, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/ McDaniel & Hallstrom, CPA's
Tacoma, Washington
February 1, 2000
[LETTERHEAD OF CLIFFORD R. BENN]
INDEPENDENT AUDITOR'S REPORT
General Partner
Figueroa Senior Housing Limited Partnership
Los Angeles, California
I have audited the balance sheet of Figueroa Senior Housing Limited Partnership
at December 31, 2000, and the related statements of loss, changes in partners'
capital, and cash flow for the year then ended. These financial statements are
the responsibility of Figueroa Senior Housing Limited Partnership's management.
My responsibility is to express an opinion on these financial statements based
on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also include
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Figueroa Senior Housing Limited
Partnership at December 31, 2000 and the results of its operations for the year
then ended in conformity with generally accepted accounting principles.
/s/ Clifford Benn, CPA
Carson, California
February 9, 2001
[LETTERHEAD OF CLIFFORD R. BENN]
INDEPENDENT AUDITOR'S REPORT
General Partner
Figueroa Senior Housing Limited Partnership
Los Angeles, California
I have audited the balance sheet of Figueroa Senior Housing Limited Partnership
at December 31, 1999, and the related statements of loss, changes in partners'
capital, and cash flow for the year then ended. These financial statements are
the responsibility of Figueroa Senior Housing Limited Partnership's management.
My responsibility is to express an opinion on these financial statements based
on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also include
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Figueroa Senior Housing Limited
Partnership at December 31, 1999 and the results of its operations for the year
then ended in conformity with generally accepted accounting principles.
/s/ Clifford Benn, CPA
Carson, California
February 25, 2000
[LETTERHEAD OF CLIFFORD R. BENN]
INDEPENDENT AUDITOR'S REPORT
General Partner
Figueroa Senior Housing Limited Partnership
Los Angeles, California
I have audited the balance sheet of Figueroa Senior Housing Limited Partnership
at December 31, 1998, and the related statements of loss, changes in partners'
capital, and cash flow for the year then ended. These financial statements are
the responsibility of Figueroa Senior Housing Limited Partnership's management.
My responsibility is to express an opinion on these financial statements based
on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also include
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Figueroa Senior Housing Limited
Partnership at December 31, 1998 and the results of its operations for the year
then ended in conformity with generally accepted accounting principles.
/s/ Clifford Benn, CPA
Carson, California
February 24, 1999
[LETTERHEAD OF CLIFFORD R. BENN]
INDEPENDENT AUDITOR'S REPORT
General Partner
NNPHI Senior Housing, L.P.
Los Angeles, California
I have audited the balance sheet of NNPHI Senior Housing, L.P. at December 31,
2000, and the related statements of loss, changes in partners' capital, and cash
flow for the year then ended. These financial statements are the responsibility
of NNPHI Senior Housing, L.P.'s management. My responsibility is to express an
opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also include
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of NNPHI Senior Housing, L.P. at
December 31, 2000 and the results of its operations for the year then ended in
conformity with generally accepted accounting principles.
/s/ Clifford Benn, CPA
Carson, California
February 14, 2001
[LETTERHEAD OF CLIFFORD R. BENN]
INDEPENDENT AUDITOR'S REPORT
General Partner
NNPHI Senior Housing, L.P.
Los Angeles, California
I have audited the balance sheet of NNPHI Senior Housing, L.P. at December 31,
1999, and the related statements of loss, changes in partners' capital, and cash
flow for the year then ended. These financial statements are the responsibility
of NNPHI Senior Housing, L.P.'s management. My responsibility is to express an
opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also include
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of NNPHI Senior Housing, L.P. at
December 31, 1999 and the results of its operations for the year then ended in
conformity with generally accepted accounting principles.
/s/ Clifford Benn, CPA
Carson, California
February 23, 2000
[LETTERHEAD OF CLIFFORD R. BENN]
INDEPENDENT AUDITOR'S REPORT
General Partner
NNPHI Senior Housing, L.P.
Los Angeles, California
I have audited the balance sheet of NNPHI Senior Housing, L.P. at December 31,
1998, and the related statements of loss, changes in partners' capital, and cash
flow for the year then ended. These financial statements are the responsibility
of NNPHI Senior Housing, L.P.'s management. My responsibility is to express an
opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also include
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of NNPHI Senior Housing, L.P. at
December 31, 1998 and the results of its operations for the year then ended in
conformity with generally accepted accounting principles.
/s/ Clifford Benn, CPA
Carson, California
February 11, 1999
[LETTERHEAD OF REZNICK FEDDER & SILVERMAN]
INDEPENDENT AUDITORS' REPORT
To the Partners
Belmont/McBride Apartments Limited Partnership
We have audited the accompanying balance sheets of Belmont/McBride Apartments
Urban Renewal Associates Limited Partnership as of December 31, 2000 and 1999,
and the related statements of operations, partners' equity (deficit) and cash
flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with 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, the financial statements referred to above present fairly, in
all material respects, the financial position of Belmont/McBride Apartments
Urban Renewal Associates Limited Partnership as of December 31, 2000 and 1999,
and the results of its operations, the changes in partners' equity (deficit) and
cash flows for the year then ended, in conformity with generally accepted
accounting principles.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland
February 21, 2001
[LETTERHEAD OF REZNICK FEDDER & SILVERMAN]
INDEPENDENT AUDITORS' REPORT
To the Partners
Belmont/McBride Apartments Limited Partnership
We have audited the accompanying balance sheets of Belmont/McBride Apartments
Urban Renewal Associates Limited Partnership as of December 31, 1999 and 1998,
and the related statements of operations, partners' equity (deficit) and cash
flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our 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 Belmont/McBride Apartments
Urban Renewal Associates Limited Partnership as of December 31, 1999 and 1998,
and the results of its operations, the changes in partners' equity (deficit) and
cash flows for the year then ended, in conformity with generally accepted
accounting principles.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland
January 29, 2000
[LETTERHEAD OF COLE, EVANS & PETERSON]
INDEPENDENT AUDITORS' REPORT ON THE BASIC FINANCIAL
STATEMENTS AND SUPPLEMENTAL INFORMATION
To the Partners
New Zion Apartments Limited Partnership
Shreveport, Louisiana
We have audited the accompanying balance sheet of New Zion Apartments Limited
Partnership, HUD Project No. LA48E000011, at December 31, 2000, and the related
statements of income, partners' capital and cash flows for the year then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with 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 in the first paragraph
above present fairly, in all material respects, the financial position of New
Zion Apartments Limited Partnership, HUD Project No. LA48E000011, at December
31, 2000 and the results of its operations, changes in capital, and cash flows
for the year then ended in conformity with generally accepted accounting
principles.
Our audit was made primarily for the purpose of forming an opinion on the basic
financial statements for the year ended December 31, 2000 taken as a whole. The
supplementary Schedules 1, 2 and 3 are presented for purposes of additional
analysis and are not a required part of the basic financial statements. Such
information has been subjected to the audit 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.
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 16, 2001 on our
consideration of New Zion Apartments Limited Partnership's internal control, and
reports dated February 16, 2001, on its compliance with laws and regulations,
compliance with specific requirements applicable to Fair Housing and
Non-Discrimination, and compliance with specific requirements applicable to
major HUD-assisted programs. Those reports are an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.
/s/ Cole, Evans & Peterson
Federal ID No. 72-0506596
Lead Auditor: Steven W. Hedgepeth
February 16, 2001
Shreveport, Louisiana
[LETTERHEAD OF COLE, EVANS & PETERSON]
INDEPENDENT AUDITORS' REPORT ON THE BASIC FINANCIAL
STATEMENTS AND SUPPLEMENTAL INFORMATION
To the Partners
New Zion Apartments Limited Partnership
Shreveport, Louisiana
We have audited the accompanying balance sheet of New Zion Apartments Limited
Partnership, HUD Project No. LA48E000011, at December 31, 1999, and the related
statements of income, partners' capital and cash flows for the year then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with 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 in the first paragraph
above present fairly, in all material respects, the financial position of New
Zion Apartments Limited Partnership, HUD Project No. LA48E000011, at December
31, 1999 and the results of its operations, changes in capital, and cash flows
for the year then ended in conformity with generally accepted accounting
principles.
Our audit was made primarily for the purpose of forming an opinion on the basic
financial statements for the year ended December 31, 1999 taken as a whole. The
supplementary Schedules 1, 2 and 3 are presented for purposes of additional
analysis and are not a required part of the basic financial statements. Such
information has been subjected to the audit 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.
As discussed in Note 13 to the financial statements, the Partnership has changed
its method of accounting for organization costs.
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 12, 2000 on our
consideration of New Zion Apartments Limited Partnership's internal control, and
reports dated February 12, 2000, on its compliance with laws and regulations,
compliance with specific requirements applicable to Fair Housing and
Non-Discrimination, and compliance with specific requirements applicable to
major HUD-assisted programs.
/s/ Cole, Evans & Peterson
Federal ID No. 72-0506596
Lead Auditor: Steven W. Hedgepeth
February 12, 2000
Shreveport, Louisiana
[LETTERHEAD OF COLE, EVANS & PETERSON]
INDEPENDENT AUDITORS' REPORT ON THE BASIC FINANCIAL
STATEMENTS AND SUPPLEMENTAL INFORMATION
To the Partners
New Zion Apartments Limited Partnership
Shreveport, Louisiana
We have audited the accompanying balance sheet of New Zion Apartments Limited
Partnership, HUD Project No. 059-35004, at December 31, 1998, and the related
statements of income, partners' capital and cash flows for the year then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with 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 in the first paragraph
above present fairly, in all material respects, the financial position of New
Zion Apartments Limited Partnership, HUD Project No. 059-35004, at December 31,
1998 and the results of its operations, changes in capital, and cash flows for
the year then ended in conformity with generally accepted accounting principles.
Our audit was made primarily for the purpose of forming an opinion on the basic
financial statements for the year ended December 31, 1998 taken as a whole. The
supplementary Schedules 1, 2 and 3 are presented for purposes of additional
analysis and are not a required part of the basic financial statements. Such
information has been subjected to the audit 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.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated February 10, 1999 on our
consideration of New Zion Apartments Limited Partnership's internal control, and
reports dated February 10, 1999, on its compliance with laws and regulations,
compliance with specific requirements applicable to Fair Housing and
Non-Discrimination, and compliance with specific requirements applicable to
major HUD-assisted programs.
/s/ Cole, Evans & Peterson
Lead Auditor: Steven W. Hedgepeth
Shreveport, Louisiana
Federal ID No. 72-0506596
February 10, 1999
[LETTERHEAD OF REZNICK FEDDER & SILVERMAN]
INDEPENDENT AUDITORS' REPORT
To the Partners
Bakery Village Urban Renewal Associates, L.P.
We have audited the accompanying balance sheet of Bakery Village Urban Renewal
Associates, L.P. as of December 31, 2000, and the related statements of
operations, partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bakery Village Urban Renewal
Associates, L.P. as of December 31, 2000, and the results of its operations, the
changes in partners' equity and its cash flows for the year then ended, in
conformity with generally accepted accounting principles.
/s/ Reznick Fedder & Silverman
Baltimore, Maryland
January, 12, 2001
[LETTERHEAD OF REZNICK FEDDER & SILVERMAN]
INDEPENDENT AUDITORS' REPORT
To the Partners
Bakery Village Urban Renewal Associates, L.P.
We have audited the accompanying balance sheet of Bakery Village Urban Renewal
Associates, L.P. as of December 31, 1999, and the related statements of
operations, partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bakery Village Urban Renewal
Associates, L.P. as of December 31, 1999, and the results of its operations, the
changes in partners' equity and its cash flows for the year then ended, in
conformity with generally accepted accounting principles.
/s/ Reznick Fedder & Silverman
Baltimore, Maryland
January, 20,2000
[LETTERHEAD OF REZNICK FEDDER & SILVERMAN]
INDEPENDENT AUDITORS' REPORT
To the Partners
Bakery Village Urban Renewal Associates, L.P.
We have audited the accompanying balance sheet of Bakery Village Urban Renewal
Associates, L.P. as of December 31, 1998, and the related statements of
operations, partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bakery Village Urban Renewal
Associates, L.P. as of December 31, 1998, and the results of its operations, the
changes in partners' equity and its cash flows for the year then ended, in
conformity with generally accepted accounting principles.
/s/ Reznick Fedder & Silverman
Baltimore, Maryland
February 25, 1999
[LETTERHEAD OF ZINER, KENNEDY & LEHAN LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Marlton Housing Partnership, L.P.
We have audited the accompanying balance sheets of Marlton Housing Partnership,
L.P. (a Pennsylvania limited partnership) as of December 31, 2000 and 1999, and
the related statements of operations, changes in partners' equity and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's general partners. 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. 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 the
Partnership's general partners, 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 Marlton Housing Partnership,
L.P. at December 31, 2000 and 1999, and the results of its operations, the
changes in its partners' equity and its cash flows for the years then ended in
conformity with generally accepted accounting principles.
/s/ Ziner, Kennedy, &Lehan LLP
January 26, 2001
Boston, Massachusetts
[LETTERHEAD OF ZINER, KENNEDY & LEHAN LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Marlton Housing Partnership, L.P.
We have audited the accompanying balance sheets of Marlton Housing Partnership,
L.P. (a Pennsylvania limited partnership) as of December 31, 1999 and 1998, and
the related statements of operations, changes in partners' equity and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's general partners. 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. 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 the
Partnership's general partners, 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 Marlton Housing Partnership,
L.P. at December 31, 1999 and 1998, and the results of its operations, the
changes in its partners' equity and its cash flows for the years then ended in
conformity with generally accepted accounting principles.
/s/ Ziner, Kennedy, &Lehan LLP
January 28, 2000
Quincy, Massachusetts
[LETTERHEAD OF DWYER PEMBERTON AND COULSON, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners of
GP Kaneohe Limited Partnership
We have audited the accompanying balance sheet of GP Kaneohe Limited
Partnership, as of December 31, 2000 and the related statements of operations,
changes in partners' capital, and cash flows for the year then ended. These
financial statements are the responsibility of the entity'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 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 GP Kaneohe Limited
Partnership as of December 31, 2000, and the results of its operations, the
changes in its partners' capital and its cash flows for the years 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 10, 2001, on our
consideration of GP Kaneohe Limited Partnership's internal control,
and reports dated January 10, 2001, on its compliance specific requirements
applicable to major HUD programs and specific requirements applicable to Fair
Housing and Non-Discrimination. Those reports are an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information included in
this report on page 9 is presented for purposes of additional analysis and is
not a required part of the basic financial statements for GP Kaneohe Limited
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 basic financial
statements taken as a whole.
/s/ Dwyer, Pemberton & Coulson
Tacoma, Washington
January 10, 2001
[LETTERHEAD OF DWYER PEMBERTON AND COULSON, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners of
GP Kaneohe Limited Partnership
We have audited the accompanying balance sheet of GP Kaneohe Limited
Partnership, as of December 31, 1999 and the related statements of income,
changes in partners' capital, and cash flows for the year then ended. These
financial statements are the responsibility of the entity'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 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 GP Kaneohe Limited
Partnership as of December 31, 1999, and the results of its operations, the
changes in its partners' capital and its cash flows for the years 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 29, 2000 on our
consideration of GP Kaneohe Limited Partnership's internal control,
and reports dated February 29, 2000, on its compliance specific requirements
applicable to major hud programs and specific requirements applicable to Fair
Housing and Non-Discrimination
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
this report on pages 9 through 11 is presented for purposes of additional
analysis and is not a required part of the basic financial statements for GP
Kaneohe Limited 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 basic
financial statements taken as a whole.
/s/ Dwyer, Pemberton & Coulson
Tacoma, Washington
February 29,2000
[LETTERHEAD OF MILLER, MAYER, SULLIVAN, & STEVENS, LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners of
KSD Village Apartments, Phase II, Ltd,
We have audited the accompanying balance sheet of KSD Village Apartments, Phase
II, Ltd. as of December 31, 2000 and the related statements of operations,
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.
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 KSD Village Apartments, Phase
II, Ltd. as of December 31, 2000, and the results of its operations, partners'
equity (deficit) and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.
/s/ Miller, Mayer, Sullivan, & LLP
Lexington, Kentucky
January 11, 2001
[LETTERHEAD OF MILLER, MAYER, SULLIVAN, & STEVENS, LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners of
KSD Village Apartments, Phase II, Ltd,
We have audited the accompanying balance sheet of KSD Village Apartments, Phase
II, Ltd. as of December 31, 1999 and the related statements of operations,
partners' equity (deficit),and cash flows for the for the period inception
September 18,1999 through December 31,1999. 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 KSD Village Apartments, Phase
II, Ltd. as of December 31, 1999, and the results of its operations, partners'
equity (deficit) and its cash flows for the period then ended, in conformity
with generally accepted accounting principles.
/s/ Miller, Mayer, Sullivan, & LLP
Lexington, Kentucky
January 31, 2000
[LETTERHEAD OF MILLER, MAYER, SULLIVAN, & STEVENS, LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Kanisa Apartments Ltd.
We have audited the accompanying balance sheet of Kanisa Apartments, Ltd.,
complex no. 083-98017-YHA, as of December 31, 2000 and the related statements of
operations, 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. 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 Kanisa Apartments, Ltd., as of
December 31, 2000, and the results of its operations, changes in partners'
equity (deficit), and its 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 2, 2001, on our
consideration of Kanisa Apartments, Ltd.'s internal controls and reports dated
February 2, 2001, on its compliance with specific requirements applicable to
major HUD programs and specific requirements applicable to Fair Housing and
Non-Discrimination. Those reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental data
included in this report is presented for purposes of additional analysis and is
not a required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated, in all material respects, in
relation to the basic financial statements taken as a whole.
/s/ Miller, Mayer, Sullivan, & Stevens, LLP
Lexington, Kentucky
February 2, 2001 EIN: 61-0866166
Lead Auditor: Darren C. Johnson, CPA
Audit Principal: John T. Miller, CPA
[LETTERHEAD OF MILLER, MAYER, SULLIVAN, & STEVENS, LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Kanisa Apartments Ltd.
We have audited the accompanying balance sheet of Kanisa Apartments, Ltd., (a
limited partnership) as of December 31, 1999 and the related statements of
operations, partners' equity (deficit),and cash flows for the period inception
October 11,1999 through December 31,1999. 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 Kanisa Apartments, Ltd., as of
December 31, 1999, and the results of its operations, partners'
equity (deficit) and its cash flows for the period inception October 11,1999
through December 31, 1999, in conformity with generally accepted accounting
principles.
/s/ Miller, Mayer, Sullivan, & Stevens, LLP
Lexington, Kentucky
February 8, 2000
[LETTERHEAD OF THOMAS HANKINS]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Guymon Housing Partners Limited Partnership
d/b/a Blue Quail Apartments
I have audited the accompanying balance sheets of Guymon Housing Partners
Limited Partnership, d/b/a Blue Quail Apartments as of December 31, 2000 and
1999 and the related statements of operations, changes in partners' capital, and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. My responsibility is to express
an opinion on these financial statements based on my audit.
I conducted my 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 overall financial statement presentation. I believe that my audit
provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Guymon Housing Partners Limited
Partnership, d/b/a Blue Quail Apartments December 31, 2000 and 1999, and the
results of its operations and its cash flows for the years then ended, in
conformity with generally accepted accounting principles.
/s/ Thomas Hankins
Fort Smith, Arkansas
February 13, 2001
INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
March 31,
---------------------------
2001 2000
--------- -----------
Property and equipment - at cost, less accumulated
depreciation (Notes 2 and 4) $73,299,379 $74,451,342
Cash and cash equivalents (cost approximates market)
(Notes 2 and 10) 3,705,003 4,384,477
Investments available-for-sale (Note 2) 0 3,100,000
Cash held in escrow (Note 5) 2,589,217 1,670,171
Deferred costs, less accumulated
amortization (Notes 2 and 6) 957,834 2,008,609
Other assets 390,171 772,771
------------ ------------
Total assets $80,941,604 $86,387,370
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Liabilities:
Mortgage notes payable (Note 7) $36,661,016 $35,515,034
Construction loans payable (Note 7) 545,374 3,243,234
Accounts payable and other liabilities 5,684,359 4,942,532
Due to local general partners and affiliates (Note 8) 2,480,285 3,822,627
Due to general partner and affiliates (Note 8) 1,171,747 790,655
----------- ------------
Total liabilities 46,542,781 48,314,082
---------- ----------
Minority interest 2,097,716 1,998,515
----------- -----------
Commitments and contingencies (Note 10)
Partners' capital (deficit):
Limited partners (100,000 BACs authorized;
45,844 issued and outstanding) (Note 1) 32,385,629 36,121,558
General partner (84,522) (46,785)
----------- -------------
Total partners' capital (deficit) 32,301,107 36,074,773
---------- ----------
Total liabilities and partners' capital (deficit) $80,941,604 $86,387,370
========== ==========
The accompanying notes are an integral part of these consolidated financial
statements.
INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended March 31,
2001 2000 1999
------------ ---------- -------
Revenues
Rental income $ 5,144,150 $ 4,744,101 $ 2,561,056
Other income (principally interest income) 704,137 574,758 874,506
---------- ---------- -----------
5,848,287 5,318,859 3,435,562
---------- ---------- ----------
Expenses
General and administrative 1,933,018 1,608,923 915,872
General and administrative-related parties
(Note 8) 615,973 567,675 410,506
Repairs and maintenance 870,657 694,613 418,470
Operating and other 695,761 561,033 290,932
Taxes 161,939 240,559 130,787
Insurance 227,947 214,181 142,360
Interest 2,624,336 2,243,387 1,015,611
Depreciation and amortization 2,512,191 2,375,364 1,357,572
---------- ---------- ----------
Total expenses 9,641,822 8,505,735 4,682,110
---------- ---------- ----------
Net loss before minority interest (3,793,535) (3,186,876) (1,246,548)
Minority interest in loss (income) of subsidiary
partnerships 19,869 6,438 (21,185)
------------ ------------ ------------
Net loss $(3,773,666) $(3,180,438) $(1,267,733)
========== ========== ==========
Net loss - limited partners $(3,735,929) $(3,148,634) $(1,255,056)
========== ========== ==========
Number of BACs outstanding 45,844 45,844 45,844
============ =========== ============
Net loss per weighted average BAC $ (81.49)$ (68.68)$ (27.38)
============= ============= ==========
The accompanying notes are an integral part of these consolidated financial
statements.
INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
FOR THE YEARS ENDED MARCH 31, 2001, 2000 and 1999
Limited General
Total Partners Partner
----- -------- -------
Partners' capital (deficit) - April 1, 1998 $40,522,944 $40,525,248 $(2,304)
Net loss (1,267,733) (1,255,056) (12,677)
----------- ----------- -------
Partners' capital (deficit) - March 31, 1999 39,255,211 39,270,192 (14,981)
Net loss (3,180,438) (3,148,634) (31,804)
----------- ----------- -------
Partners' capital (deficit) - March 31, 2000 36,074,773 36,121,558 (46,785)
Net loss (3,773,666) (3,735,929) (37,737)
----------- ----------- -------
Partners' capital (deficit) - March 31, 2001$32,301,107 $32,385,629 $(84,522)
========== ========== =======
The accompanying notes are an integral part of these consolidated financial
statements.
INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended March 31,
2001 2000 1999
------------- ---------- ---------
Cash flows from operating activities:
Net loss $ (3,773,666)$ (3,180,438)$ (1,267,733)
----------- ------------ ------------
Adjustments to reconcile net loss to net
cash (used in) provided by operating activities:
Depreciation and amortization 2,512,191 2,375,364 1,357,572
Minority interest in loss (income) of subsidiary
partnerships 19,869 6,438 (21,185)
Increase in cash held in escrow (1,052,845) (721,115) (178,228)
Decrease (increase) in other assets 382,600 (369,038) (1,288)
Increase (decrease) in accounts payable and other
liabilities 835,064 1,673,546 (1,004,522)
Increase in due from local general partners
and affiliates 5,604 210,894 24,684
Decrease in due from local general partners
and affiliates (165) (11,695) (203,828)
Increase (decrease) in due to general partner and
affiliates 381,092 320,918 (37,650)
----------- ---------------------------
Total adjustments 3,083,410 3,485,312 (64,445)
---------- --------------------------
Net cash (used in) provided by operating
activities (690,256) 304,874 (1,332,178)
---------- ------------------------
Cash flows from investing activities:
Acquisition of property and equipment (290,772) (18,204,458) (6,863,569)
Increase in construction in progress 0 0 (9,949,738)
Decrease in cash held in escrow 133,799 691,089 992,394
Increase in other assets 0 0 (10,875)
(Decrease) increase in accounts payable and other
liabilities (93,237) 88,349 116,106
Increase in due to local general partners
and affiliates 176,512 1,037,873 4,864,498
Decrease in due to local general partners
and affiliates (1,524,293) (4,949,852) (470,435)
Decrease in investments available-for-sale 3,100,000 10,950,000 2,950,000
(Increase) decrease in deferred costs (18,681) 124,369 (36,660)
----------- --------------------------
Net cash provided by (used in) investing
activities 1,483,328 (10,262,630) (8,408,279)
--------------------- ------------
Cash flows from financing activities:
Proceeds from mortgage notes 1,311,309 5,682,291 1,492,455
Repayments of mortgage notes (243,027) (652,247) (81,553)
Proceeds from construction loans 0 8,106,210 5,004,863
Repayments of construction loans (2,620,160) (2,586,366) (3,047,357)
Increase in deferred costs 0 (786,020) (43,897)
Increase in capitalization of consolidated
subsidiaries attributable to minority interest 79,332 1,140,200 42,370
-------------------------------------
Net cash (used in) provided by financing
activities (1,472,546) 10,904,068 3,366,881
----------- ---------------------
Net (decrease) increase in
cash and cash equivalents (679,474) 946,312 (6,373,576)
Cash and cash equivalents at
beginning of year 4,384,477 3,438,165 9,811,741
---------- ----------- -----------
Cash and cash equivalents at end of year $ 3,705,003 $ 4,384,477 $ 3,438,165
========== =========== ===========
Supplemental disclosure of cash flow information:
Cash paid during the year for interest,
net of amounts capitalized $ 1,500,022 $ 1,034,111 $ 706,423
========== =========== ============
Supplemental disclosures of noncash investing and financing activities:
Property and equipment reclassified from
construction in progress $ 0 $12,796,728 $ 6,447,994
Property and equipment reclassified from
deferred costs 979,963 0 0
Construction loans converted to mortgage loans 77,700 11,702,805 0
Increase in property and equipment due to
the purchase of minority interest 0 0 94,474
The accompanying notes are an integral part of these consolidated financial
statements.
INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2001
NOTE 1 - General
Independence Tax Credit Plus L.P. IV (a Delaware limited partnership) (the
"Partnership") was organized on February 22, 1995 and commenced a public
offering on July 6, 1995. The general partner of the Partnership is Related
Independence L.L.C., a Delaware limited liability company (the "General
Partner").
The Partnership's business is to invest in other partnerships ("Local
Partnerships," "subsidiaries" or "subsidiary partnerships") owning apartment
complexes that are eligible for the low-income housing tax credit ("Housing Tax
Credit") enacted in the Tax Reform Act of 1986, some complexes may also be
eligible for the historic rehabilitation tax credit ("Historic Tax Credit";
together with Housing Tax Credits, "Tax Credits").
As of March 31, 2001, the Partnership has acquired limited partnership interests
in fourteen subsidiary partnerships, all of which have been consolidated. The
Partnership does not anticipate acquiring limited partnership interests in
additional subsidiary partnerships. The Partnership's investments in Local
Partnerships represent from 98.99% to 99.89% interests, except for one
investment which is a 58.12% interest.
The Partnership was authorized to issue a total of 100,000 ($100,000,000)
Beneficial Assignment Certificates ("BACs") which have been registered with the
Securities and Exchange Commission for sale to the public. Each BAC represents
all of the economic and virtually all of the ownership rights attributable to a
limited partnership interest. The solicitation for the subscription of BAC's was
terminated as of May 22, 1996 and the final closing occurred on August 15, 1996.
The Partnership had raised a total of $45,844,000 representing 45,844 BACs.
NOTE 2 - Summary of Significant Accounting Policies
a) Basis of Accounting
For financial reporting purposes, the Partnership's fiscal year ends on March
31. All subsidiaries have fiscal years ending December 31. Accounts of the
subsidiaries have been adjusted for intercompany transactions from January 1
through March 31. The Partnership's fiscal year ends March 31 in order to allow
adequate time for the subsidiaries financial statements to be prepared and
consolidated. The books and records of the Partnership are maintained on the
accrual basis of accounting, in accordance with generally accepted accounting
principles.
b) Basis of Consolidation
The consolidated financial statements include the accounts of the Partnership
and fourteen, fourteen and ten subsidiary partnerships for the years ended March
31, 2001, 2000 and 1999, respectively, in which the Partnership is a limited
partner. Through the rights of the Partnership and/or an affiliate of the
General Partner, which affiliate has a contractual obligation to act on behalf
of the Partnership, to remove the general partner of the subsidiary local
partnerships and to approve certain major operating and financial decisions, the
Partnership has a controlling financial interest in the subsidiary partnerships.
All intercompany accounts and transactions with the subsidiary partnerships have
been eliminated in consolidation.
Acquisition of Partnership interests are recorded under the purchase method of
accounting. During the years ended March 31, 2001, 2000 and 1999 zero, four and
one multifamily properties with an aggregate of 0, 211, and 25 units,
respectively were acquired in separate transactions from unaffiliated sellers.
Increases (decreases) in the capitalization of the consolidated subsidiaries
attributable to minority interests arise from cash contributions from and cash
distributions to the minority interest partners.
Losses attributable to minority interests which exceed the minority interests'
investment in a subsidiary have been charged to the Partnership. Such losses
aggregated approximately $46,000, $25,000 and $23,000 for the years ended March
31, 2001, 2000 and 1999, respectively. The Partnership's investment in each
subsidiary is equal to the respective subsidiary's partners' equity less
minority interest capital, if any. In consolidation, all subsidiary partnership
losses are included in the Partnership's capital account except for losses
allocated to minority interest capital.
c) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, cash in banks, and investments
in short-term highly liquid investments purchased with original maturities of
three months or less.
d) Investments Available-For-Sale
At inception, the Partnership adopted the provisions of the Financial Accounting
Standards Board's Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities." At March 31,
2001 and 2000, the Partnership has classified its securities as available for
sale.
Available-for-sale securities are carried at fair value with net unrealized gain
(loss) reported as a separate component of partners' capital until realized. A
decline in the market value of any available-for-sale security below cost that
is deemed other than temporary is charged to earnings, resulting in the
establishment of a new cost basis for the security.
At March 31, 2001 and 2000, the Partnership's investments classified as
investments available-for-sale are carried at cost which approximates fair
market value, have maturities of less than one year and consist of municipal
bonds and municipal bond instruments. As further clarification, the maturities
of the investments are approximately one month and therefore there are no
material unrealized gains or losses.
e) Property and Equipment
Property and equipment to be held and used are carried at cost which includes
the purchase price, acquisition fees and expenses, construction period interest
and any other costs incurred in acquiring the properties. The cost of property
and equipment is depreciated over their estimated useful lives using accelerated
and straight-line methods. Expenditures for repairs and maintenance are charged
to expense as incurred; major renewals and betterments are capitalized. At the
time property and equipment are retired or otherwise disposed of, the cost and
accumulated depreciation are eliminated from the assets and accumulated
depreciation accounts and the profit or loss on such disposition is reflected in
earnings. A loss on impairment of assets is recorded when management estimates
amounts recoverable through future operations and sale of the property on an
undiscounted basis are below depreciated cost. At that time property investments
themselves are reduced to estimated fair value (generally using estimated future
discounted net cash flows) when the property is considered to be impaired and
the depreciated cost exceeds estimated fair value.
At the time management commits to a plan to dispose of assets, said assets are
adjusted to the lower of carrying amount or fair value less costs to sell. These
assets are classified as property and equipment-held for sale and are not
depreciated. There are no assets classified as property and equipment-held for
sale through March 31, 2001.
Through March 31, 2001, the Partnership has not recorded any loss on impairment
of assets or reductions to estimated fair value.
f) Income Taxes
The Partnership is not required to provide for, or pay, any federal income
taxes. Net income or loss generated by the Partnership is passed through to the
partners and is required to be reported by them. The Partnership may be subject
to state and local taxes in jurisdictions in which it operates. For income tax
purposes, the Partnership has a fiscal year ending December 31 (Note 9).
g) Organization and Offering Costs
Costs incurred to organize the Partnership, including but not limited to legal,
accounting and registration fees, are considered organization expenses. These
costs are expensed as incurred. Pursuant to the provisions of Statement of
Position No. 98-5, "Reporting on the Cost of Start-Up Activities", issued by the
American Institute of Certified Public Accountants, the balance of the
unamortized organization costs of approximately $101,000 was expensed during the
year ended March 31, 2000.
Costs incurred in connection with obtaining permanent mortgage financing are
amortized over the lives of the related mortgage notes. Costs incurred to sell
BACs, including brokerage fees and the nonaccountable expense allowance, are
considered selling and offering expenses. These costs are charged directly to
limited partners' capital.
h) Deferred Acquisition Costs
Acquisition costs and fees incurred in connection with the purchase of interests
in certain subsidiary partnerships have been capitalized as property costs.
i) Loss Contingencies
The Partnership records loss contingencies as a charge to income when
information becomes available which indicates that it is probable that an asset
has been impaired or a liability has been incurred as of the date of the
financial statements and the amount of loss can be reasonably estimated.
j) Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
NOTE 3 - Fair Value of Financial Instruments
The following methods and assumptions were used to estimate the fair value of
each class of financial instruments for which it is practicable to estimate that
value:
Cash and Cash Equivalents and Cash Held in Escrow
- - -------------------------------------------------
The carrying amount approximates fair value.
Mortgage Notes Payable
- - ----------------------
The fair value of mortgage notes payable and construction loans payable is
estimated, where practicable, based on the borrowing rate currently available
for similar loans.
The estimated fair values of the Partnership's mortgage notes payable and
construction loans payable are as follows:
March 31, 2001 March 31, 2000
-------------------------------- ------------------------
Carrying Carrying
Amount Fair Value Amount Fair Value
------ ---------- ------ ----------
Mortgage notes payable for which it is:
Practicable to estimate fair value $28,951,985 $28,816,971 $31,493,637 $31,343,201
Not practicable $ 7,709,031 (a) $ 4,021,397 (a)
Construction loans payable for which it is:
Practicable to estimate fair value $ 545,374 $ 545,374 $ 3,243,234 $ 3,243,234
Not practicable $ 0 $ 0
(a) Management believes it is not practicable to estimate the fair value of
certain mortgage notes payable because mortgage programs with similar
characteristics are not currently available to the partnerships.
The carrying amount of other assets and liabilities reported on the consolidated
balance sheets that require such disclosure approximates fair value.
Due to General Partner and Affiliates and Due to Local General Partners and
- - --------------------------------------------------------------------------------
Affiliates
- - ----------
Management believes it is not practical to estimate the fair value of due to
general partner and affiliates and due to local general partners and affiliates
because market information on such unique loans are not currently available to
the partnerships.
NOTE 4 - Property and Equipment
The components of property and equipment and their estimated useful lives are as
follows:
Estimated
March 31, Useful Lives
---------------------------
2001 2000 (Years)
------------ ----------- ---------
Land $ 3,307,496 $ 3,306,472
Building and improvements 75,904,022 74,671,748 27.5
Furniture and fixtures 1,088,213 1,050,776 5-7
----------- -----------
80,299,731 79,028,996
Less: Accumulated depreciation (7,000,352) (4,577,654)
----------- -----------
$73,299,379 $74,451,342
========== ==========
Included in property and equipment at March 31, 2001 and 2000, was $2,750,640
and $979,963, respectively, of acquisition fees paid to the General Partner and
$708,031 of third party acquisition expenses. In addition, as of March 31, 2001
and 2000, building and improvements and construction in progress includes
$212,418 of capitalized interest.
In connection with the rehabilitation of the properties, the subsidiary
partnerships have incurred developer's fees of $4,235,495 to the local general
partners and affiliates as of both March 31, 2001 and 2000. Such fees have been
included in the cost of property and equipment.
Depreciation expense for the years ended March 31, 2001, 2000 and 1999 amounted
to $2,422,698, $2,149,854 and $1,293,501, respectively.
NOTE 5 - Cash Held in Escrow
Cash held in escrow consists of the following:
March 31,
----------------------------
2001 2000
--------- ---------
Purchase price payments* $ 495,501 $ 629,300
Real estate taxes, insurance and other 2,093,716 1,040,871
--------- ---------
$2,589,217 $1,670,171
========= =========
*Represents amounts to be paid to seller upon completion of properties under
construction and upon meeting specified rental achievement criteria.
NOTE 6 - Deferred Costs
The components of deferred costs and their periods of amortization are as
follows:
March 31,
-----------------------------------------
2001 2000 Period
---------- ------- -------
Financing costs $1,001,424 $ 769,429 *
Deferred acquisition and other costs 177,692 1,372,594
---------- ---------
1,179,116 2,142,023
Less: Accumulated amortization (221,282) (133,414)
---------- ----------
$ 957,834 $2,008,609
========== =========
*Over the life of the related mortgage note.
Amortization expense for the years ended March 31, 2001, 2000 and 1999 amounted
to $89,493, $225,510 and $64,071, respectively.
During the years ended March 31, 2001 and 2000, $1,625 and $209,353 of fully
amortized deferred costs were written off, respectively.
NOTE 7 - Mortgage and Construction Loans Payable
The mortgage and construction loans are payable in aggregate monthly
installments of approximately $152,000 including principal and interest with
rates varying from 0% to 9.36% per annum and have maturity dates ranging from
2004 through 2051. The loans are collateralized by the land and buildings of the
subsidiary partnerships, the assignment of certain subsidiary partnerships'
rents and leases, and are without further recourse.
Annual principal payment on the permanent debt requirements for mortgage notes
payable for each of the next five fiscal years and thereafter are as follows:
Fiscal Year Amount
- - ----------- ------
2001 $ 2,060,232
2002 298,175
2003 322,324
2004 389,453
2005 429,319
Thereafter 33,161,513
----------
$36,661,016
===========
The mortgage agreements generally require monthly deposits to replacement
reserves and monthly deposits to escrow accounts for real estate taxes, hazard
and mortgage insurance and other expenses (Note 5).
As of December 31, 2000 and 1999, two subsidiary partnerships have construction
loan commitments totaling approximately $4,503,000 with outstanding balances of
approximately $545,000 and $3,243,000, respectively.
NOTE 8 - Related Party Transactions
An affiliate of the General Partner has a .01% interest as a special limited
partner in each of the Local Partnerships.
Pursuant to the Partnership Agreement and the Local Partnership Agreements, the
General Partner and affiliate receive their pro-rata share of profits, losses
and tax credits.
The General Partner and its affiliates perform services for the Partnership. The
costs incurred for the years ended March 31, 2001, 2000 and 1999 are as follows:
A) Acquisition Fees
The General Partner is entitled to an acquisition fee equal to 6.0% of the gross
proceeds of the offering paid upon investor closings, for its services in
connection with assisting in the selection and evaluation of Local Partnerships,
in acquiring apartment complexes and supervising the construction of the
complexes. Such fees are capitalized as property costs.
B) Guarantees
The Partnership had negotiated Operating Deficit Guaranty Agreements with the
development stage Local Partnerships by which the general partners of such Local
Partnerships and/or their affiliates have agreed to fund operating deficits for
a specified period of time. The terms of the Operating Deficit Guaranty
Agreements vary for each of these Local Partnerships, with maximum dollar
amounts to be funded for a specified period of time, generally three years,
commencing on the break-even date. As of March 31, 2001, 2000 and 1999, the
gross amounts of the Operating Deficit Guarantees aggregate approximately
$3,332,000, $3,332,000 and $2,665,000, respectively, none of which have expired
as of March 31, 2001. All current Operating Deficit Guarantees expire within the
next three years. As of March 31, 2001, $0 has been funded under the Operating
Deficit Guaranty Agreements. Amounts funded under such agreements will be
treated as non-interest bearing loans, which will be paid only out of 50% of
available cash flow or out of available net sale or refinancing proceeds.
C) Related Party Expenses
Expenses incurred to related parties for the years ended March 31, 2001, 2000
and 1999 were as follows:
Year Ended March 31,
2001 2000 1999
------------ ------------ -----------
Partnership management fees (a) $ 329,923 $ 307,266 $ 277,478
Expense reimbursements (b) 132,549 127,058 83,667
Local administrative fees (d) 43,000 38,000 19,000
----------- ----------- -----------
Total general and administrative-
General Partner 505,472 472,324 380,145
---------- ---------- ----------
Property management fees incurred
to affiliates of the subsidiary partnerships'
general partners (c) 110,501 95,351 30,361
---------- ----------- -----------
Total general and administrative-
related parties $ 615,973 $ 567,675 $ 410,506
========== ========== ==========
(a) The General Partner is entitled to receive a partnership management fee,
after payment of all Partnership expenses, which together with the annual local
administrative fees will not exceed a maximum of 0.5% per annum of invested
assets (as defined in the Partnership Agreement), for administering the affairs
of the Partnership. Subject to the foregoing limitation, the partnership
management fee will be determined by the General Partner in its sole discretion
based upon its review of the Partnership's investments. Unpaid partnership
management fees for any year will be accrued without interest and will be
payable only to the extent of available funds after the Partnership has made
distributions to the limited partners of sale or refinancing proceeds equal to
their original capital contributions plus a 10% priority return thereon (to the
extent not previously paid out of cash flow). Partnership management fees owed
to the General Partner amounting to approximately $720,000 and $415,000 were
accrued and unpaid as of March 31, 2001 and 2000, respectively.
(b) The Partnership reimburses the General Partner and its affiliates for actual
Partnership operating expenses incurred by the General Partner and its
affiliates on the Partnership's behalf. The amount of reimbursement from the
Partnership is limited by the provisions of the Partnership Agreement. Another
affiliate of the General Partner performs asset monitoring for the Partnership.
These services include site visits and evaluations of the subsidiary
partnerships' performance.
(c) Property management fees incurred by the Local Partnerships amounted to
$345,771, $327,308 and $177,091 for the years ended March 31, 2001, 2000 and
1999, respectively. Of these fees, $110,501, $95,351 and $30,361 was incurred to
affiliates of the subsidiary partnerships' general partners.
(d) Independence SLP IV L.P., a special limited partner of the subsidiary
partnerships, is entitled to receive a local administrative fee of up to $5,000
per year from each subsidiary partnership.
D) Due to Local General Partners and Affiliates
Due to local general partners and affiliates consists of the following:
March 31,
-----------------------
2001 2000
---------- ----------
Development fee payable $1,874,383 $2,807,385
Operating advances 0 64,922
General partner loan payable 134,285 0
General partner loan receivable (82,302) 0
Construction advances 346,182 346,182
Construction costs payable 64,708 464,086
Management and other fees 143,029 140,052
---------- ----------
$2,480,285 $3,822,627
========= =========
NOTE 9 - Income Taxes
A reconciliation of the financial statement net loss to the income tax loss for
the Partnership and its consolidated subsidiaries follows:
Year Ended December 31,
2000 1999 1998
------------ ----------- -----------
Financial statement net loss $(3,773,666) $(3,180,438) $(1,267,733)
Differences between depreciation and
amortization expense for financial
reporting purposes
and income tax purposes (262,761) (138,624) (113,752)
Differences resulting from parent
company having a different
fiscal year for income tax and
financial reporting purposes
Tax exempt interest income (142,015) (431,217) (666,301)
Other, including accruals for financial
reporting purposes not
deductible for income tax
purposes until paid (65,563) 530,867 77,968
------------ ----------- -----------
Net loss as shown on the income
tax returns $(4,301,368) $(3,074,178) $(2,011,489)
========== ========== ==========
NOTE 10 - Commitments and Contingencies
a) Uninsured Cash and Cash Equivalents
The Partnership and its subsidiary partnerships maintain their cash and cash
equivalents in various banks. The accounts at each bank are insured by the
Federal Deposit Insurance Corporation for up to $100,000. At March 31, 2001,
uninsured cash and cash equivalents approximated $2,829,000.
b) Leases
One subsidiary partnership is leasing the land on which the Project is located,
for a term of 65 years starting on July 14, 1982. At December 31, 2000, the
subsidiary partnership is obligated to pay rent of $1 per annum.
c) Other
The Partnership is subject to the risks incident to potential losses arising
from the management and ownership of improved real estate and poor economic
conditions.
The Partnership and BACs holders will begin to recognize Housing Tax Credits
with respect to a property when the credit period for such property commences.
Because of the time required for the acquisition, completion and rent-up of
properties, it is expected that the amount of Tax Credits per BAC will gradually
increase over the first three years of the Partnership. Housing Tax Credits not
recognized in the first three years will be recognized in the 11th through 13th
years. The Partnership generated $5,506,354, $4,846,123 and $2,659,921 of
Housing Tax Credits and $0, $6,450,724 and $0 Historic Tax Credits during the
2000, 1999 and 1998 tax years, respectively.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None
PART III
Item 10. Directors and Executive Officers of the Registrant.
The Partnership has no directors or executive officers. The Partnership's
affairs are managed and controlled by Related Independence L.L.C. ("RILLC"), the
General Partner. The members of RILLC are Related General II, L.P., a Delaware
limited partnership ("RGII), Alan P. Hirmes and Stuart J. Boesky. RCMP, Inc., a
Delaware corporation ("RCMP") is the sole general partner of RGII. The executive
officers and directors of the General Partner of RCMP are as follows:
Name Position
- - ---- --------
Stephen M. Ross Director and President of RCMP
Alan P. Hirmes President and Member of RILLC
Andrew D. Augenblick Director and Executive Vice President of RCMP
Michael J. Wechsler Director and Executive Vice President of RCMP
Stuart J. Boesky Senior Vice President and Member of RILLC
Marc D. Schnitzer Vice President of RILLC
Denise L. Kiley Vice President of RILLC
Glenn F. Hopps Treasurer of RILLC
Teresa Wicelinski Secretary of RILLC
STEPHEN M. ROSS, 61, is a Director of RILLC. Mr. Ross is also President,
Director and shareholder of The Related Realty Group, Inc., the General Partner
of The Related Companies, L.P. He graduated from the University of Michigan
School of Business Administration with a Bachelor of Science degree and from
Wayne State University School of Law with a Juris Doctor degree. Mr. Ross then
received a Master of Laws degree in taxation from New York University School of
Law. He joined the accounting firm of Coopers & Lybrand in Detroit as a tax
specialist and later moved to New York, where he worked for two large Wall
Street investment banking firms in their real estate and corporate finance
departments. Mr. Ross formed the predecessor of The Related Companies, L.P. in
1972 to develop, manage, finance and acquire subsidized and conventional
apartment developments. Mr. Ross also serves on the Board of Trustees of Charter
Municipal Mortgage Acceptance Company.
ALAN P. HIRMES, 46, is President of RILLC. Mr. Hirmes has been a Certified
Public Accountant in New York since 1978. Prior to joining Related in October
1983, Mr. Hirmes was employed by Weiner & Co., Certified Public Accountants. Mr.
Hirmes is also a Vice President of Capital. Mr. Hirmes graduated from Hofstra
University with a Bachelor of Arts degree. Mr. Hirmes also serves on the Board
of Directors of Aegis Realty, Inc. and Charter Municipal Mortgage Acceptance
Company.
ANDREW D. AUGENBLICK, 40, is a Director and Executive Vice President of RCMP.
Mr. Augenblick is also an Executive Vice President of The Related Companies,
L.P. Prior to joining Related in 1985, he was with McKinsey & Company. Mr.
Augenblick graduated from Dartmouth College when he received a Bachelor of Arts
Degree and from the Harvard Graduate School of Business Administration when he
received a Masters degree in Business Administration.
MICHAEL J. WECHSLER, 62, is a Director and Executive Vice President of RCMP. Mr.
Wechsler joined the predecessor of The Related Companies, L.P. in 1987 as Chief
Operating Officer and Executive Vice President and is the Chief Operating
Officer and Executive Vice President of the Related Realty Group, Inc. Prior to
that, he was Senior Vice President and a Managing Director of the Real Estate
Division of Chemical Bank with overall responsibility for administration and
lending activities of the Division in 25 states and New York City. He supervised
a diversified portfolio of construction and real estate loans of over $3.5
billion. Mr. Wechsler attended the Massachusetts Institute of Technology when he
received a Bachelor of Science degree in Civil Engineering and received his
Masters in Business Administration from the Harvard Graduate School of Business
Administration.
STUART J. BOESKY, 45, is a Vice President of RILLC. Mr. Boesky practiced real
estate and tax law in New York City with the law firm of Shipley & Rothstein
from 1984 until February 1986 when he joined Capital. From 1983 to 1984 Mr.
Boesky practiced law with the Boston law firm of Kaye Fialkow Richard &
Rothstein (which subsequently merged with Strook & Strook & Lavan) and from 1978
to 1980 was a consultant specializing in real estate at the accounting firm of
Laventhol & Horwath. Mr. Boesky graduated from Michigan State University with a
Bachelor of Arts degree and from Wayne State School of Law with a Juris Doctor
degree. He then received a Master of Laws degree in Taxation from Boston
University School of Law. Mr. Boesky also serves on the Board of Directors of
Aegis Realty, Inc., Charter Municipal Mortgage Acceptance Company and American
Mortgage Acceptance Company.
MARC D. SCHNITZER, 40, is a Vice President of RILLC. He is responsible both for
financial restructurings of real estate properties and directing Related's
acquisitions of properties generating Housing Tax Credits. Mr. Schnitzer
received a Masters of Business Administration from The Wharton School of the
University of Pennsylvania in December 1987 before joining Related in January
1988. From 1983 to January 1986, he was a financial analyst for the First Boston
Corporation in New York. Mr. Schnitzer graduated summa cum laude with a Bachelor
of Science in Business Administration from the School of Management at Boston
University in May 1983.
DENISE L. KILEY, 41, is responsible for overseeing the due diligence and asset
management of the multifamily residential properties invested in RCC sponsored
corporate, public and private equity and debt funds. Prior to joining Related in
1990, Ms. Kiley had experience acquiring, financing and asset managing
multifamily residential properties. From 1981 through 1985 she was an auditor
with Price Waterhouse. Ms. Kiley holds a Bachelor of Science in Accounting from
Boston College.
GLENN F. HOPPS, 38, is Treasurer of RILLC. Prior to joining Related in December,
1990, Mr. Hopps was employed by Marks Shron & Company and Weissbarth, Altman and
Michaelson, certified public accountants. Mr. Hopps graduated from New York
State University at Albany with a Bachelor of Science Degree in Accounting.
TERESA WICELINSKI, 35, is Secretary of RILLC. Prior to joining Related in June
1992, Ms. Wicelinski was employed by Friedman, Alpren & Green, certified public
accountants. Ms. Wicelinski graduated from Pace University with a Bachelor of
Arts Degree in Accounting.
Item 11. Executive Compensation.
The Partnership has no officers or directors. The Partnership does not pay or
accrue any fees, salaries or other forms of compensation to members or officers
of the General Partner for their services. However, under the terms of the
Partnership Agreement, the Partnership has entered into certain arrangements
with the General Partner and its affiliates, which provide for compensation to
be paid to the General Partner and its affiliates. Such arrangements include
(but are not limited to) agreements to pay nonrecurring Acquisition Fees, a
nonaccountable Acquisition Expense allowance, an accountable expense
reimbursement and Subordinated Disposition Fees to the General Partner and/or
its affiliates. In addition, the General Partner is entitled to a subordinated
interest in Cash from Sales or Financings and a 1% interest in Net Income, Net
Loss, Distributions of Adjusted Cash from Operations and Cash from Sales or
Financings. Certain members and officers of the General Partner receive
compensation from the General Partner and its affiliates for services performed
for various affiliated entities which may include services performed for the
Partnership. The maximum annual partnership management fee paid to the General
Partner is 0.5% of invested assets. See Note 8 to the Financial Statements in
Item 8 above, which is incorporated herein by reference.
Tabular information concerning salaries, bonuses and other types of compensation
payable to executive officers has not been included in this annual report. As
noted above, the Partnership has no executive officers. The levels of
compensation payable to the General Partner and/or its affiliates is limited by
the terms of the Partnership Agreement and may not be increased therefrom on a
discretionary basis.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
Name and address of Amount and Nature of Percentage
Title of Class Beneficial Ownership Beneficial Ownership of Class
- - -------------- -------------------- -------------------- -----------
General Partnership Related Independence $1,000 capital 100%
Interest in the L.L.C. contribution
Partnership 625 Madison Avenue -directly owned
New York, NY 10022
Independence SLP IV L.P., a limited partnership whose general partner is the
general partner of the General Partner of the Partnership and which acts as the
special limited partner of each Local Partnership, holds a .01% limited
partnership interest in the Local Partnerships. See Note 8 to the Financial
Statements in Item 8 above, which information is incorporated herein by
reference thereto.
Except as set forth below no person is known by the Partnership to be the
beneficial owner of more than five percent of the Limited Partnership Interests
and/or BACs; and neither the General Partner nor any director or officer of the
General Partner beneficially owns any Limited Partnership Interests or BACs. The
following table sets forth the number of BACs beneficially owned as of June 18,
2001 by (i) each BACs holder known to the Partnership to be a beneficial owner
of more than 5% of the BACs, (ii) each director and executive officer of the
General Partner of RCMP and (iii) the directors and executive officers of the
General Partners of RCMP as a group. Unless otherwise noted, all BACs are owned
directly with sole voting and dispositive powers.
Amount and Nature of Percentage
Name of Beneficial Owner (1) Beneficial Ownership of Class
- - ---------------------------- -------------------- ------------------
Lehigh Tax Credit Partners, Inc. 2,868.06(2) 6.3%
J. Michael Fried 2,868.06(2)(3) 6.3%
Andrew D. Augenblick -- --
Michael J. Wechsler -- --
Alan P. Hirmes 2,868.06(2)(3) 6.3%
Stuart J. Boesky 2,868.06(2)(3) 6.3%
Stephen M. Ross 2,868.06(2)(3) 6.3%
Marc D. Schnitzer 2,868.06(2)(3) 6.3%
Glenn F. Hopps -- --
Teresa Wicelinski -- --
All directors and executive
officers of the general partner
of the Related General Partner as
a group (nine persons) 2,868.06(2)(3) 6.3%
(1) The address for each of the persons in the table is 625 Madison Avenue, New
York, New York 10022.
(2) As set forth in Schedule 13D filed by Lehigh Tax Credit Partners III L.L.C.
("Lehigh III") and Lehigh Tax Credit Partners, Inc. (the "Managing Member") on
January 25, 1999 with the Securities and Exchange Commission (the "Commission")
and pursuant to a letter agreement dated October 6, 1998 among the Partnership,
Lehigh III and Related Independence Associates IV L.P. ("RIA") (the "Standstill
Agreement"), Lehigh III agreed that, prior to October 6, 2008 (the "Standstill
Expiration Date"), it will not and it will cause certain affiliates not to (i)
seek to propose to enter into, directly or indirectly, any merger,
consolidation, business combination, sale or acquisition of assets, liquidation,
dissolution or other similar transaction involving the Partnership, (ii) form,
join or otherwise participate in a "group" (within the meaning of Section
13(d)(3) of the Act) with respect to any voting securities of the Partnership,
except that those affiliates bound by the Standstill Agreement will not be
deemed to have violated it and formed a "group" solely by acting in accordance
with the Standstill Agreement, (iii) disclose in writing to any third party any
intention, plan or arrangement inconsistent with the terms of the Standstill
Agreement, or (iv) loan money to, advise, assist or encourage any person in
connection with any action inconsistent with the terms of the Standstill
Agreement, Lehigh III also agreed to vote its BACs in the same manner as a
majority of all voting BACs holders; provided, however, Lehigh is entitled to
vote its BACs as it determines with regard to any proposal (i) to remove RIA as
a general partner of the Partnership or (ii) concerning the reduction of any
fees, profits, distributions or allocations for the benefit of RIA or its
affiliates. The discussion herein of the Standstill Agreement is subject to and
qualified in its entirety by reference to such agreement, a copy of which is
attached hereto as an exhibit and incorporated herein by reference. The
addresses of each of the Partnership, Lehigh III and RIA is 625 Madison Avenue,
New York, New York 10022.
(3) Each such party serves as a director and executive officer of the Managing
Member and owns an equity interest therein except J. Michael Fried who owns only
an economic interest.
Item 13. Certain Relationships and Related Transactions.
The Partnership has and will continue to have certain relationships with the
General Partner and its affiliates, as discussed in Item 11 and also Note 8 to
the Financial Statements in Item 8 above, which is incorporated herein by
reference thereto. However, there have been no direct financial transactions
between the Partnership and the members and officers of the General Partner.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
Sequential
Page
----------
(a) 1. Financial Statements
Independent Auditors' Report 15
Consolidated Balance Sheets at March 31, 2001 and 2000 46
Consolidated Statements of Operations for the Years Ended
March 31, 2001, 2000 and 1999 47
Consolidated Statements of Changes in Partners' Capital
(Deficit) for the Years Ended March 31, 2001, 2000 and 1999 48
Consolidated Statements of Cash Flows for the Years Ended
March 31, 2001, 2000 and 1999 49
Notes to Consolidated Financial Statements 51
(a) 2. Consolidated Financial Statement Schedules
Independent Auditors' Report 71
Schedule I - Condensed Financial Information of Registrant 72
Schedule III - Real Estate and Accumulated Depreciation 75
All other schedules have been omitted because they are not required or
because the required information is contained in the financial
statements or notes thereto.
(a) 3. Exhibits
(3A) Agreement of Limited Partnership of Independence Tax Credit Plus L.P. IV as
adopted on February 22, 1995*
(3B) Form of Amended and Restated Agreement of Limited Partnership of
Independence Tax Credit Plus L.P. IV, attached to the Prospectus as Exhibit A**
(3C) Certificate of Limited Partnership of Independence Tax Credit Plus L.P. IV
as filed on February 22, 1995*
(10A) Form of Subscription Agreement attached to the Prospectus as Exhibit B**
(10B) Escrow Agreement between Independence Tax Credit Plus L.P. IV and Bankers
Trust Company*
(10C) Form of Purchase and Sales Agreement pertaining to the Partnership's
acquisition of Local Partnership Interests*
(10D) Form of Amended and Restated Agreement of Limited Partnership of Local
Partnerships*
(21) Subsidiaries of the Registrant 68
*Incorporated herein as an exhibit by reference to exhibits filed with
Post-Effective Amendment No. 4 to the Registration Statement on Form
S-11 {Registration No. 33-89968}
**Incorporated herein as an exhibit by reference to exhibits filed with
Post-Effective Amendment No. 8 to the Registration Statement on Form
S-11 {Registration No. 33-89968}
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(continued)
Jurisdiction
(c) Subsidiaries of the Registrant (Exhibit 21) of Organization
------------------------------ ---------------
BX-8A Team Associates, L.P. NY
Westminster Park Plaza CA
Fawcett Street Limited Partnership WA
Figueroa Senior Housing Limited Partnership CA
NNPHI Senior Housing Limited Partnership CA
Belmont/McBride Apartments Limited Partnership NJ
New Zion Apartments Limited Partnership LA
Bakery Village Urban Renewal Associates, L.P. NJ
Sojourner Douglass, L.P. NJ
Marlton Housing Partnership, L.P. PA
GP Kaneohe Limited Partnership HI
KSD Village Apartments, Phase II, Ltd. KY
Kanisa Apartments, Ltd. KY
Guymon Housing Partners, L.P. OK
(d) Not applicable
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
INDEPENDENCE TAX CREDIT PLUS L.P. IV
(Registrant)
By: RELATED INDEPENDENCE L.L.C.,
a General Partner
Date: June 13, 2001 By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
President and Member
(principal executive and
financial officer)
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:
Signature Title Date
- - ----------------------- ------------------------ ------------------
President and Chief Executive Officer
Director and President of RCMP, Inc.,
the general partner of Related
/s/ Stephen M. Ross General II L.P., a Member of Related
- - -------------------
Stephen M. Ross Independence L.L.C. June 13, 2001
President and Member of
Related Independence L.L.C.
/s/ Alan P. Hirmes (principal executive and
- - ------------------
Alan P. Hirmes financial officer) June 13, 2001
Director and Executive Vice President
of RCMP, Inc., the general partner of
/s/ Andrew D. Augenblick Related General II L.P., a Member of
- - ------------------------
Andrew D. Augenblick Related Independence L.L.C. June 13, 2001
Director and Executive Vice President
of RCMP, Inc., the general partner of
/s/ Michael J. Wechsler Related General II L.P., a Member of
- - -----------------------
Michael J. Wechsler Related Independence L.L.C. June 13, 2001
/s/ Stuart J. Boesky Vice President and Member of
- - --------------------
Stuart J. Boesky Related Independence L.L.C. June 13, 2001
/s/ Glenn F. Hopps Treasurer of Related Independence
- - ------------------
Glenn F. Hopps L.L.C. (principal accounting officer) June 13, 2001
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENT SCHEDULES
-------------------------------------------------------------
To the Partners of
Independence Tax Credit Plus L.P. IV and Subsidiaries
In connection with our audits of the consolidated financial statements of
Independence Tax Credit Plus L.P. IV and Subsidiaries included in the Form 10-K
as presented in our opinion dated June 2, 2001, which is based in part on the
reports of other auditors, we have also audited supporting Schedule I as of
March 31, 2001 and 2000 and for the years ended March 31, 2001, 2000 and 1999
and Schedule III as of March 31, 2001 and for the years ended March 31, 2001,
2000 and 1999. In our opinion, based on our audits and the reports of the other
auditors, these schedules present fairly, when read in conjunction with the
related financial statements, the financial data required to be set forth
therein.
/s/ Friedman Alpren & Green LLP
Friedman Alpren & Green LLP
New York, New York
June 2, 2001
INDEPENDENCE TAX CREDIT PLUS L.P. IV
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
(Not Including Consolidated Subsidiary Partnerships)
CONDENSED BALANCE SHEETS
ASSETS
March 31,
---------------------------
2001 2000
----------- ----------
Cash and cash equivalents $ 2,800,511 $ 1,129,135
Investments available for sale 0 3,100,000
Investment in subsidiary partnerships 27,825,827 29,136,689
Cash held in escrow 495,501 629,300
Other assets 2,099,410 2,592,061
----------- -----------
Total assets $33,221,249 $36,587,185
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Due to general partner and affiliates $ 872,555 $ 472,321
Other liabilities 47,587 40,091
------------ ------------
Total liabilities 920,142 512,412
Partners' capital 32,301,107 36,074,773
---------- ----------
Total liabilities and partners' capital $33,221,249 $36,587,185
========== ==========
INDEPENDENCE TAX CREDIT PLUS L.P. IV
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
(Not Including Consolidated Subsidiary Partnerships)
CONDENSED STATEMENTS OF OPERATIONS
Year Ended March 31,
2001 2000 1999
----------- ---------- ----------
Revenues
Interest income $ 161,204 $ 338,749 $ 596,606
---------- ---------- -----------
Expenses
Administrative and management 245,743 183,303 119,837
Administrative and management-related parties462,472 434,324 374,452
Amortization 0 15,000 10,000
----------- ------------ ------------
Total expenses 708,215 632,627 504,289
----------- ----------- -----------
(Loss) income from operations (547,011) (293,878) 92,317
Equity in loss of subsidiary partnerships(3,226,655) (3,474,316) (1,360,050)
---------- ---------- ----------
Net loss $(3,773,666) $(3,180,438) $(1,267,733)
========== ========== ==========
INDEPENDENCE TAX CREDIT PLUS L.P. IV
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
(Not Including Consolidated Subsidiary Partnerships)
CONDENSED STATEMENTS OF CASH FLOWS
Year Ended March 31,
2001 2000 1999
----------- ----------- ----------
Cash flows from operating activities:
Net loss $ (3,773,666)$ (3,180,438) $(1,267,733)
----------- ------------ ----------
Adjustments to reconcile net loss to
net cash provided by (used in) operating activities:
Amortization 0 15,000 10,000
Equity in loss of subsidiary partnerships 3,226,655 3,474,316 1,360,050
Decrease (increase) in other assets 492,651 (353,919) (1,081,919)
Increase (decrease) in liabilities:
Due to general partner and affiliates 400,234 216,854 (40,850)
Other liabilities 7,496 26,098 11,150
------------- ------------- ------------
Total adjustments 4,127,036 3,378,349 258,431
----------- ----------- -----------
Net cash provided by (used in) operating
activities 353,370 197,911 (1,009,302)
---------- ---------- --------------
Cash flows from investing activities:
Decrease in investments available for sale 3,100,000 10,950,000 2,950,000
Decrease in cash held in escrow 133,799 691,089 992,394
Investments in subsidiary partnerships (1,915,793) (12,373,218) (6,808,326)
----------- ----------- ----------
Net cash provided by (used in) investing
activities 1,318,006 (732,129) (2,865,932)
--------- ------------ --------
Net increase (decrease) in cash and cash
equivalents 1,671,376 (534,218) (3,875,234)
Cash and cash equivalents, beginning
of year 1,129,135 1,663,353 5,538,587
----------- ---------- ----------
Cash and cash equivalents, end of year $ 2,800,511 $ 1,129,135 $ 1,663,353
=========== ========== ==========
INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 31, 2001
Cost Capitalized
Initial Cost to Partnership Subsequent to
--------------------------
Buildings and Acqusition:
Description Encumbrances Land Improvements Improvements
- - --------------------------------------------- ------------ ---- ------------ ------------
Apartment Complexes
BX-8A Team Associates, L.P. $ 1,848,534 $5,467 $2,667,819 $149,334
Bronx, NY
Westminster Park Plaza 7,920,888 1,197,697 8,093,774 1,939,639
Los Angeles, CA
Fawcett Street Limited Partnership 2,034,145 390,654 4,247,465 188,181
Tacoma, WA
Figueroa Senior Housing Limited Partnership 3,019,669 279,000 4,978,250 530,628
Los Angeles, CA
NNPHI Senior Housing Limited Partnership 3,941,616 709,657 6,135,419 323,533
Los Angeles, CA
Belmont/McBride Apartments 2,887,945 154,934 5,627,693 2,371,944
Limited Partnership
Paterson, NJ
Sojourner Douglass, L.P. 1,977,352 141,297 2,573,950 112,727
Paterson, NJ
New Zion Apartments Limited Partnership 1,105,224 20,000 2,688,770 76,839
Shreveport, LA
Bakery Village Urban Renewal 4,631,108 50,000 14,912,416 2,731,224
Associates, L.P.
Montclair, NJ
Marlton Housing Partnership, L.P. 1,849,000 2,648 1,547,121 1,731,531
Philadelphia, PA
GP Kaneohe Limited Partnership 2,178,595 0 3,306,828 43,110
Kaneohe, HI
KSD Village Apartments, Phase II Ltd. 481,764 0 887,539 29,272
Danville, KY
Kanisa Apartments Ltd. 1,558,542 106,592 4,846,543 102,813
Fayette County, KY
Guymon Housing Partners, L.P. 1,772,008 84,918 4,238,907 73,598
Guymon, OK
-------- -------- --------- --------
$37,206,390 $3,142,864 $66,752,494 $10,404,373
========== ========= ========== ==========
Life on which
Depreciation in
Gross Amount at which Carried At Close of Period
-------------------------------------------------- Year of Latest Income
Buildings and Accumulated Construction/ Date Statements are
Description Land Improvements Total Depreciation Renovation Acquired Computed(a)
- - -------------------------------------------- ---- ------------ ----- ------------ ------------ -------- ----------
Apartment Complexes
BX-8A Team Associates, L.P. $11,579 $2,811,041 $2,822,620 $ 499,913 1995-96 Oct. 1995 27.5 years
Bronx, NY
Westminster Park Plaza 1,292,427 9,938,683 11,231,110 1,141,893 1996-97 June 1996 27.5 years
Los Angeles, CA
Fawcett Street Limited Partnership 396,383 4,429,917 4,826,300 707,343 1996-97 June 1996 27.5 years
Tacoma, WA
Figueroa Senior Housing Limited Partnership 291,377 5,496,501 5,787,878 568,488 1996-97 Nov. 1996 27.5 years
Los Angeles, CA
NNPHI Senior Housing Limited Partnership 715,387 6,453,222 7,168,609 660,507 1996-97 Dec. 1996 27.5 years
Los Angeles, CA
Belmont/McBride Apartments 182,633 7,971,938 8,154,571 816,852 1997-98 Jan. 1997 27.5 years
Limited Partnership
Paterson, NJ
Sojourner Douglass, L.P. 143,996 2,683,978 2,827,974 377,415 1997-98 Feb. 1997 27.5 years
Paterson, NJ
New Zion Apartments Limited Partnership 22,699 2,762,910 2,785,609 378,863 1997-98 Oct. 1997 27.5 years
Shreveport, LA
Bakery Village Urban Renewal 52,699 17,640,941 17,693,640 1,002,122 1997-98 Dec. 1997 27.5 years
Associates, L.P.
Montclair, NJ
Marlton Housing Partnership, L.P. 4,355 3,276,945 3,281,300 134,267 1998-99 May 1998 27.5 years
Philadelphia, PA
GP Kaneohe Limited Partnership 613 3,349,325 3,349,938 155,066 1999-00 July 1999 7-40 years
Kaneohe, HI
KSD Village Apartments, Phase II Ltd. 612 916,198 916,810 37,763 1999-00 July 1999 10-40 years
Danville, KY
Kanisa Apartments Ltd. 107,205 4,948,743 5,055,948 164,122 1998-99 Oct. 1999 5-40 years
Fayette County, KY
Guymon Housing Partners, L.P. 85,531 4,311,893 4,397,424 355,738 1998-99 Dec. 1999 27.5 years
Guymon, OK
-------- -------- -------- --------
$3,307,496 $76,992,235 $80,299,731 $ 7,000,352
========= ========== ========== ==========
(a) Depreciation is computed using primarily the straight-line method over the
estimated useful lives determined by the Partnership date of acquisition.
INDEPENDENCE TAX CREDIT PLUS L.P. IV
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 31, 2001
Cost of Property and Equipment Accumulated Deprecitaion
-------------------------------------- --------------------------------------
Year Ended March 31,
2001 2000 1999 2001 2000 1999
----------------------------------------------------------------------------------------------------------------------------
Balance at beginning of year $79,028,996 $48,027,810 $34,621,773 $4,577,654 $2,427,800 $1,134,299
Additions during year:
Land, building and improvements 1,270,735 31,001,186 13,406,037
Depreciation expense _________ _________ _________ 2,422,698 2,149,854 1,293,501
--------- --------- ---------
Balance at close of year $80,299,731 $79,028,996 $48,027,810 $7,000,352 $4,577,654 $2,427,800
========== ========== ========== ========= ========= =========
At the time the Local Partnerships were acquired by Independence Tax Credit Plus
L.P. IV, the entire purchase price paid by Independence Tax Credit Plus L.P. IV
was pushed down to the Local Partnerships as property and equipment with an
offsetting credit to capital.