SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Fiscal Year Ended December 31, 1995
Commission File Number 2-84474
APT HOUSING PARTNERS LIMITED PARTNERSHIP
A Massachusetts Limited Partnership
I.R.S. Employer Identification No. 04-2791736
500 West Cummings Park, Suite 6050, Woburn, Massachusetts 01801
Registrant's Telephone Number, Including Area Code (617)
935-4200
Securities Registered Pursuant to Section 12(b) or 12(g) of the
Act:
NONE
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed with the commission by Section 13
or 15(d) of the Securities Exchange Act of 1934 during the
preceding twelve months (or 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
TOTAL NUMBER OF PAGES 139
INDEX TO EXHIBITS AT PAGE 136
PART I
ITEM 1. BUSINESS:
General
APT HOUSING PARTNERS LIMITED PARTNERSHIP (the "Partnership") is
a limited partnership which was formed under the laws of the
Commonwealth of Massachusetts on June 8, 1983. The General
Partner of the Partnership is APT Asset Management, Inc., a
Massachusetts corporation. APT Asset Management, Inc. is a
wholly owned subsidiary of APT Financial Services, Inc. (a
Delaware Corporation) whose majority shareholder is John M.
Curry.
The Partnership's business is to invest, as a limited partner,
in Local Limited Partnerships owning government-assisted housing
developments and to provide its partners current tax benefits,
potential appreciation in real estate investments, distribution
of net capital transaction proceeds and distributable cash to
the extent available.
On September 30, 1983, the Partnership offered for sale 9,000
units of limited partnership interests at $1,000 each pursuant
to a prospectus dated September 30, 1983. The offering was
subsequently amended on March 30, 1984 to provide for 3,700
units of limited partnership interests at $1,000 each. The
public offering was managed by American Investment Team, Inc.
("AIT") ("the dealer manager"), an affiliate of the General
Partner of the Partnership. The minimum investment allowed was
$5,000.
The Partnership received $3,700,000 of subscriptions for limited
partnership interests during the period September 30, 1983
through April 30, 1984 from 329 Investors. No further issuance
of partnership interests is anticipated.
The net proceeds ($3,071,000) of the public offering were
primarily used to purchase limited partnership interests in
existing multi-family rental housing development known as
Ashland Commons Associates, Rockledge Apartments Associates and
Historic Cohoes II. The Partnership's investments in each Local
Limited Partnership represents 95.5%, 97% and 97%, respectively.
On December 18, 1986 the Partnership withdrew its 97% investment
interest in Historic Cohoes II and received its original
investment of $1,321,234 from the Local Limited Partnership. A
distribution of the same amount was made to the Limited Partners
on April 3, 1987.
Federal, state or local government agencies have provided
significant incentives in order to stimulate private investment
in government-assisted housing. The intent of these incentives
was to reduce certain market risks and provide investors (i) tax
benefits, (ii) limited cash distributions and (iii) long-term
capital appreciation. Notwithstanding these factors, there
remain significant risks. These risks include, but are not
limited to, the financial strength of the local general
partners. The long-term nature of investments in
government-assisted housing limits the ability of the
Partnership to vary its investment portfolio in response to
changing economic, financial and investment conditions; such
investments are also subject to changes in local economic
circumstances and housing patterns which have an impact on real
estate values. These housing developments also require greater
management expertise and may have higher operating expenses than
conventional housing developments.
The Partnership became the principal limited partner in these
Local Limited Partnerships pursuant to Local Limited Partnership
agreements entered into with the local general partners. As a
limited partner, the Partnership's liability for obligations of
the Local Limited Partnerships is limited to its investment. The
local general partners of the Local Limited Partnerships retain
responsibility for maintaining, operating and managing the
housing developments. Under certain circumstances, the
Partnership has the right to replace the local general partner
of the Local Limited Partnerships.
John M. Curry is a General Partner in one of the Local Limited
Partnerships. An affiliated company in which John M. Curry is
the President, is the General Partner in the other Local Limited
Partnership.
Although each of the Local Limited Partnerships in which the
Partnership has invested owns a housing development which must
compete for tenants in the market place, the rental assistance
and below market interest rates on mortgage financing provided
by government-assisted housing programs make it possible to
offer apartments to eligible tenants at a cost to the tenant
significantly below the market rate for comparable
conventionally-financed apartments in the area.
The Internal Revenue Service (IRS) scrutinizes, in general, "tax
shelters" that generate tax losses in any taxable year. The
Local Limited Partnerships will deduct certain fees such as
General Partners' fees and other expenses on the basis that such
expenses constitute ordinary and necessary expenses of carrying
on the business. If the federal income tax information return
filed annually by the Partnership or by any Local Limited
Partnership are audited, no assurance can be given as to what
extent the deductions claimed for these fees will be allowed.
Any disallowance by the IRS that is not successfully rebutted
will have the effect of increasing the taxable income or
decreasing the taxable loss of each Limited Partner for the year
in question.
The Limited Partners do not have a right to participate in the
management of the Partnership or its operations. However, a
majority in interest of the Limited Partners have the authority
to (1) approve or disapprove the sale of all or substantially
all of the assets of the Partnership in a single transaction or
a related series of transactions, (2) dissolve the Partnership,
(3) remove the General Partner, for cause, or (4) elect a
substitute General Partner. Limited Partners holding 10% or
more of the limited partnership interests have the right to call
meetings of the Partnership and propose amendments to the
Partnership Agreement.
As a Limited Partner of each of the Local Limited Partnerships,
the Partnership does not have the right to participate in the
management of such Local Limited Partnerships or their
operations. The Partnership retains certain rights with respect
to voting on or approving certain matters, including the sale of
the housing developments. By the existence or exercise of such
rights, it could be asserted that the Partnership was taking
part in the control of the Local Limited Partnerships'
operations and should thereby incur liability for all debts and
obligations of the Local Limited Partnerships. If this were
found to be the case, the Partnership interest in one Local
Limited Partnership could be reached by creditors of another
Local Limited Partnership. The Partnership has received
opinions of counsel for the Local Limited Partnerships that the
existence and exercise of such rights will not subject it to
liability as a Local General Partner of the Local Limited
Partnership.
Holders of the Partnership's limited partnership interests will
need to bear the economic risk of their investment for an
indefinite period of time. Transferability of the limited
partnership interests is restricted so as not to cause a
termination of the Partnership for tax purposes. In California,
Maine, New Hampshire, Pennsylvania and South Carolina,
transferability of the limited partnership interests is
restricted to transferees meeting the investor suitability
standards. In addition, a transfer of limited partnership
interests is subject to the consent of the General Partner,
which may be withheld in its sole discretion.
Losses recognized for tax purposes from the ownership and
operations of the housing developments decline over time. This
occurs because the tax advantages of accelerated depreciation
are greatest in earlier years and decline over the life of the
housing developments, and because those portions of the level
mortgage payment attributable to deductible interest likewise
decrease with the passage of time. In addition, the benefits to
be received in the form of tax savings in future years may
decline as a result of the enactment of the Tax Reform Act of
1986, depending on the individual circumstances of each Limited
Partner. For these reasons, among others, it is not anticipated
that any public market will develop for the purchase and sale of
limited partnership interests. Consequently, holders of limited
partnership interests in the Partnership may not be able to
liquidate their investments in the event of an emergency and
limited partnership interests probably will not be readily
acceptable as collateral for loans. Moreover, should a limited
partner dispose of his limited partnership interest, he will
realize taxable income to the extent that his allocable share of
the mortgage debt obligations plus the other consideration he
receives upon such disposition exceeds his tax basis, while at
the same time he may not receive sufficient cash to pay such
taxes.
Competition
The real estate rental business in which the Local Limited
Partnerships are engaged is highly competitive and the
properties owned by the Local Limited Partnerships are expected
to be subject to active competition from similar properties in
their respective vicinities. The Local Limited Partnerships
compete with many other entities providing residential rental
housing through government-assisted and conventionally-financed
housing developments. Some of these entities are owned by large
real estate operators with significantly greater resources than
the Partnership as well as local organizations which own and
operate a relatively small number of properties. The Local
Limited Partnerships believe that they have a reputation for
providing safe, clean, quality residential housing which enables
them to compete effectively for tenants. While the Local
Limited Partnerships believe that they will continue to compete
effectively for tenants, there can be no assurance that they
will do so or that they will not encounter further increased
competition in the future due to changes in the various
government-assisted housing programs and from rehabilitated or
new housing developments in their respective vicinities.
Employees
The Partnership does not have any direct employees. All
services are performed for the Partnership by its General
Partner and its affiliates. The General Partner receives
compensation in connection with such activities as set forth in
Item 11. In addition, the Partnership reimburses the General
Partner and certain of its affiliates for expenses incurred in
connection with the performance by their employees of services
for the Partnership in accordance with the Partnership's Amended
and Restated Agreement and Certificate of Limited Partnership
(the "Partnership Agreement").
ITEM 2. PROPERTIES:
The Partnership holds limited partnership interests in two (2)
Local Limited Partnerships as of December 31, 1995. Set forth is
a schedule of the Local Limited Partnerships including certain
information concerning the Apartment Complexes.
Name and Location % of Units Occupied
(Number of Units) Date Acquired at December 31,
1995 1994 1993 1992 1991
Ashland Commons Associates March 30, 1984 99%
100% 99% 100% 100%
Ashland, MA (96)
Rockledge Apartments Associates June 22,
1984 98.2% 100% 100% 100% 100%
Wakefield, MA (60)
The Local Limited Partnerships in which the Partnership has
invested own existing Apartment Complexes which receive either
Federal or State subsidies. The U.S. Department of Housing and
Urban Development (HUD), through the Federal Housing
Administration (FHA), administers a variety of subsidy programs
for low- and moderate-income housing developments. The Federal
programs generally provide one of a combination of the following
forms of assistance: (i) mortgage loan insurance (ii) rental
subsidies, (iii) reduction of mortgage interest payments.
i) HUD provides mortgage insurance for rental housing projects
pursuant to a number of sections of Title II of the National
Housing Act ("NHA") including, among others, Section 236 and
Section 221(d)(4). Under these programs, HUD will generally
provide insurance equal to 90% of the total replacement cost to
limited-distribution owners. Mortgages are provided by
institutions approved by HUD, including banks, savings and loan
companies and local housing authorities. Section 221(d)(4) of
the NHA provides for federal insurance of private construction
and permanent mortgage loans to finance new construction of
rental apartment complexes containing five or more units.
ii) Many of the tenants in HUD insured projects receive some
form of rental assistance payments, primarily through the
Section 8 Housing Assistance Payments Program ("Section 8
Program"). Apartment Complexes receiving assistance through the
Section 8 Program will generally have limitations on the amount
of rent which may be charged. One requirement imposed by HUD
regulations effective for apartment complexes initially approved
for Section 8 payments on or after November 5, 1979 is to limit
the amount of the owner's annual cash distributions from
operations to 10% of the owner's equity investment in an
apartment complex if the apartment complex is intended for
occupancy by families and to 6% of the owner's equity investment
in an apartment complex intended for occupancy by elderly
persons. The owner's equity investment in the apartment complex
is 10% of the project's replacement cost as determined by HUD.
HUD recently released the American Community Partnerships Act
(the "ACPA"). The ACPA is HUD's blueprint for providing for the
nation's housing needs in an era of static or decreasing budget
authority. Two key proposals in the ACPA that could affect the
Local Limited Partnerships are: A discontinuation of
project-based Section 8 subsidy payments and an attendant
reduction in debt on properties that were supported by the
Section 8 payments. The ACPA calls for a transition during
which the project-based Section 8 would be converted to a
tenant-based voucher system. Any FHA insured debt would then be
"marked-to-market"; that is, revalued in light of the reduced
income stream, if any. The impact of ACPA, if enacted in its
present form, is not presently determinable.
Several industry sources have already commented to HUD and
Congress that in the event the ACPA were fully enacted in its
present form, the reduction in mortgage indebtedness would be
considered taxable income to limited partners in the
Partnership. Legislative relief has been proposed to exempt
"mark-to-market" debt from cancellation of indebtedness income
treatment.
iii) The Section 236 Program, as well as providing mortgage
insurance, also provides a subsidy which reduces the debt
service on a project mortgage, thereby enabling the owner to
charge the tenants lower rents for their apartments. Interest
credit subsidy payments are made monthly by HUD directly to the
mortgagee of the project. Each payment is in an amount equal to
the difference between (i) the monthly payment required by the
terms of the mortgage to pay principal and interest and (ii) the
monthly payment which would have been required for principal and
interest if the mortgage loan provided for interest at the rate
of 1%. These payments are credited against the amounts
otherwise due from the owner of the project, who makes monthly
payments of the balance.
All tenant 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 budgets improvements when required which are
generally funded from cash flow from operations or release of
replacement reserve escrows. No improvements are expected to
require additional financing.
See Item 1, Business, above for the general competitive
conditions to which the properties described herein are subject.
Real estate taxes are calculated using rates and assessed
valuations determined by the town or city in which the property
is located.
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 LIMITED PARTNERSHIP
INTERESTS AND RELATED SECURITY HOLDER MATTERS:
Limited partnership interests are not traded in a public market
but were sold through a public offering managed by American
Investment Team, Inc. It is not anticipated that any public
market will develop for the purchase and sale of any limited
partnership interest. Limited partnership interests may be
transferred only if certain requirements are satisfied. As of
March 15, 1996, there were 329 registered holders of an
aggregate of 3,700 units of limited partnership interests in the
Partnership.
The Partnership has invested in Local Limited Partnerships
owning housing developments which receive governmental
assistance under programs which restrict the cash return
available to housing development owners. The Partnership does
not anticipate providing significant cash distributions to its
limited partners in circumstances other than a refinancing or
sale. On February 24, 1995, the Partnership distributed
$200,000 to the partners, of which $196,000 or $52.97 per unit
of limited partnership interest, was distributed to the Limited
Partners. The Partnership does not anticipate that it will make
any further cash distributions.
ITEM 6. SELECTED FINANCIAL DATA:
The information set forth below presents selected financial data
of the Partnership. Additional financial information is set
forth in the audited financial statements in Part IV, Item 14,
beginning on page 15.
Year Ended December 31,
OPERATIONS 1,995 1,994 1,993 1,992 1,991
Revenue $ 1,884 $ 4,843 $ 1,507 $ 2,179 $ 1,063
Expenses 46,948 46,713 47,799 48,711 49,906
Loss before share of losses of and distri- butions from the
Local Limited Partnerships ( 45,064) ( 41,870) (
46,292) ( 46,532) ( 48,843)
Distribution from Local Limited
Partnership 87,064 82,255 96,546 125,629 74,530
Share of losses of Local Limited Partnerships - -
- -
Net income $ 42,000 $ 40,385 $ 50,254 $ 79,097 $ 25,687
Net income per weighted average limited part- nership
unit $ 11.12 $ 10.70 $ 13.31 $ 20.95 $ 6.80
FINANCIAL POSITION
December 31,
1,995 1,994 1,993 1,992 1,991
Total assets $ 20,946 $ 179,140 $ 138,681 $ 87,823 $ 4,162
Investment in Local Limited
Partnerships $ -0- $ -0- $ -0- $ -0- $ -0
Total
liabilities $ 17,578 $ 17,772 $ 17,698 $ 17,094 $ 12,530
Total partners' capital
(deficiency) $ 3,368 $ 161,368 $ 120,983 $ 70,729 ($ 8,368)
Cash distributions per limited partnership
unit $ 52.97 $ -0- $ -0- $ -0- $ -0
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 were the proceeds of
its public offering. Other sources of liquidity include
interest earned on funds and cash distributions from operations
of the Local Limited Partnerships in which the Partnership has
invested. These sources of liquidity are available to meet
obligations of the Partnership.
The Partnership received $3,700,000 in gross proceeds from the
sale of partnership interests pursuant to the public offering,
resulting in net proceeds available for investment, after volume
discounts, establishment of working capital reserves, payment of
sales commissions, acquisition fees and offering expenses, of
$3,071,000.
As of December 31, 1995, the Partnership has invested all of the
net proceeds available for investment.
The Partnership's commitment to investments requiring initial
capital contributions has been paid. The Partnership has no
other significant capital commitments.
HUD recently released the American Community Partnerships Act
(the "ACPA"). The ACPA is HUD's blueprint for providing for the
nation's housing needs in an era of static or decreasing budget
authority. Two key proposals in the ACPA that could affect the
Local Limited Partnerships are: A discontinuation of project
based Section 8 subsidy payments and an attendant reduction in
debt on properties that were supported by the Section 8
payments. The ACPA calls for a transition during which the
project based Section 8 would be converted to a tenant based
voucher system. Any FHA insured debt would them be
"marked-to-market", that is revalued in light of the reduced
income stream, if any. The impact of ACPA, if enacted in its
present form, is not presently determinable.
Several industry sources have already commented to HUD and
Congress that in the event the ACPA were fully enacted in its
present form, the reduction in mortgage indebtedness would be
considered taxable income to limited partners in the
Partnership. Legislative relief has been proposed to exempt
"mark-to-market" debt from cancellation of indebtedness income
treatment.
Cash distributions received from a Local Limited Partnership
amounted to $87,064, $82,255, and $96,546 during the years ended
December 31, 1995, 1994 and 1993, respectively. These
distributions were used to meet the Partnership's obligations
and, in 1995, to make distributions to its partners. The
Partnership has invested in Local Limited Partnerships owning
housing developments which receive governmental assistance under
programs which restrict the cash return available to the housing
development owners. The Partnership believes that it will
continue to receive cash distributions from a Local Limited
Partnership in an amount sufficient to meet its operating
expenses. However, there can be no assurance that cash
distributions received will be adequate to allow the Partnership
to make any further cash distributions to its partners.
Management is not aware of any trends or events, commitments or
uncertainties that will impact liquidity in a material way.
Management believes the only impact would be for laws that have
not yet been adopted.
Results of Operations
The Partnership was formed to provide various benefits to its
limited partners as discussed in Part I, Item 1 of this Report.
It is anticipated that the Local Limited Partnerships in which
the Partnership has invested will primarily produce tax losses
of approximately $17,000 per $5,000 investment in approximately
14 to 17 full years of Partnership operations, with
approximately $11,000 of such tax losses occurring during the
first 5 full years of Partnership operations (assuming the
applicability of current laws, regulations and court decisions).
The benefits received in the form of tax savings may be reduced
due to the enactment of the Tax Reform Act of 1986, depending on
the individual circumstances of each Limited Partner. There can
be no assurance that the Partnership will be able to attain its
investment objectives. The Partnership will not seek to sell
its interest in any housing development or Local Limited
Partnership until proceeds of such sale would supply sufficient
cash to enable its Limited Partners to pay applicable taxes.
Proceeds of such sales will not be reinvested. It is not
expected that any of the Local Limited Partnerships in which the
Partnership has invested will generate cash flow sufficient to
provide for distributions to Limited Partners in any material
amount.
Except for the operating balance of cash, the Partnership's
assets consist primarily of limited partnership interests in
Local Limited Partnerships owning government-assisted housing
developments. The Partnership accounts for its investments in
the Local Limited Partnerships using the equity method of
accounting. Under the equity method of accounting, the
investment cost is subsequently adjusted for the Partnership's
share of each Local Limited Partnership's results of operations
and cash distributions. The Partnership's share in the loss of
each Local Limited Partnership is not recognized to the extent
that the investment balance would become negative. For the
years ended December 31, 1995, 1994 and 1993, the aggregate
share of losses of the Local Limited Partnerships attributable
to the Partnership and not included in the statements of income
for those years amounted to $22,868, $67,109, and $51,651,
respectively. At December 31, 1995 and 1994, the Partnership's
cumulative share of losses of the Local Limited Partnerships
exceeded its investments by $383,764 and $360,896, respectively,
and, accordingly, have not been reflected in the Partnership's
financial statements in accordance with the equity method of
accounting because the investment balances have been reduced to
zero.
The Partnership's net income in 1995, 1994 and 1993 was due
primarily to cash distributions received of $87,064, $82,255,
and $96,546, respectively, from one Local Limited Partnership
which offset the Partnership's net operating expenses in these
years resulting in net income of $42,000, $40,385, and $50,254,
respectively.
The Partnership incurs an annual program management fee payable
to American Investment Team, Inc. ("AIT"), an affiliate of the
General Partner, for managing the affairs of the Partnership and
for providing investor services to the limited partners. The
fee to AIT is equal to .5% of invested assets plus the Local
Limited Partnerships' annualized outstanding nonrecourse debt.
The fee amounted to $37,353, $37,547, and $37,723 for 1995, 1994
and 1993, respectively.
Administrative expenses consist of professional fees.
Other
The Partnership's investment as a Limited Partner in the Local
Limited Partnerships is subject to the risks incident to the
potential losses arising from management and ownership of
improved real estate. The Partnership's investments also could
be adversely affected by poor economic conditions, generally,
which could increase vacancy levels, increase rental payment
defaults, or increase operating expenses. Any or all of these
circumstances could threaten the financial viability of one or
both of the Local Limited Partnerships.
There are also substantial risks associated with the operations
of Apartment Complexes receiving government assistance. These
include: governmental regulations concerning tenant eligibility
which may make it more difficult to rent apartments in the
complexes; difficulties in obtaining government approval for
rent increases; limitations on the percentage of income which
low and moderate income tenants may pay as rent; the possibility
that Congress may not appropriate funds to enable the U.S.
Department of Housing and Urban Development to make the rental
assistance payments it has contracted to make; and that, when
the rental assistance contracts expire, there may not be market
demand for apartments at full market rents in a Local Limited
Partnership's Apartment Complex.
The Local Limited 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 Limited
Partnerships adversely by increasing operating costs, such as
fuel, utilities and labor.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA:
The financial statements and supplementary data required by this
item are set forth under Item 14 of Part IV beginning on page 15
and are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE:
Effective December 1, 1995, APT Housing Partners Limited
Partnership ("Partnership") dismissed its prior certifying
accountants, Tonneson & Company, C.P.A.'s P.C. ("T&C"). T&C's
reports on the Partnership's financial statements during the two
most recent fiscal years and all subsequent interim periods
preceding December 1, 1995 contained no adverse opinion or
disclaimers of opinion, and were not qualified as to
uncertainty, audit scope or accounting principles. The decision
to change accountants was approved by the Partnership's General
Partner.
During the last two fiscal years and the subsequent interim
period to December 1, 1995, there were no disagreements between
the Partnership and T&C on any matters of accounting principles
or practices, financial statement disclosure, or auditing scope
or procedure, which disagreements, if not resolved to the
satisfaction of T&C, would have caused it to make a reference to
the subject matter of the disagreements in connection with its
reports. Also, during the aforementioned period, there occurred
no "reportable events" described in Item 304(a)(1)(v) of
Regulation S-K of the Commission.
Effective December 8, 1995, the Partnership engaged Robert
Ercolini & Company as its new principal certifying accountants.
The Partnership did not consult with Robert Ercolini & Company
regarding accounting advice prior to its engagement.
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 the General
Partner. Certain information concerning the director and
executive officers of the General Partner is set forth below:
JOHN M. CURRY, BS, MBA, CPM, GSP, RR, 53, is the founder,
Chairman, Director, and Shareholder of APT Financial Services,
Inc., and its subsidiaries. Mr. Curry has been responsible for
the construction of over 4,000 units of multi-family housing at
a cost of over $120,000,000 and 240,000 square feet of
commercial space. Mr. Curry is a graduate of the University of
San Francisco (BS, 1968) and the Harvard Graduate School of
Business Administration (MBA, 1970). He is a licensed Real
Estate Broker in Massachusetts and New York and a licensed
Builder in Massachusetts. His professional memberships include
the Institute of Real Estate Management with the classification
of Certified Property Manager, the Greater Boston Real Estate
Board, Builders Association of Greater Boston, and is listed in
Who's Who in America.
JEFF E. EWING, BS, CPA, 30, is the President, Chief Financial
Officer, Director and Shareholder of APT Financial Services,
Inc. Mr. Ewing joined the company in December 1992, becoming
its controller, and in December 1994, he became the Company's
President and Chief Financial Officer. He is responsible for
new business development, corporate operations and the
development, implementation and review of all financial
reporting systems as well as compliance with applicable tax and
regulatory requirements. Prior to joining APT, Mr. Ewing was
employed by Congress Realty Group of Companies as assistant
controller and the accounting firm of Robert Ercolini and
Company as a senior auditor. Mr. Ewing is a Certified Public
Accountant in the Commonwealth of Massachusetts and a NASD
registered Financial and Operations Principal. Mr. Ewing
received his B.S. in Accountancy from Bentley College and is a
member of the American Institute of Certified Public Accountants
and the Massachusetts Society of Certified Public Accountants.
THERESE M. COCHRAN, CPM, 38, is a Director and Shareholder of
APT Financial Services, Inc. and the President of American
Properties Team, Inc., a wholly-owned subsidiary of APT
Financial Services, Inc. She is responsible for the operations
of the management company and new business development. Ms.
Cochran currently serves as an Executive Member of the Community
Associates Institute, is the Chairperson of the CAI Legislative
Action Committee and is a member of the Institute of Real Estate
Management having earned the designation of Certified Property
Manager.
ELLIOT J. FEINER, BA, MBA, 57, is a Director and Shareholder of
APT Financial Services, Inc. and its subsidiaries. Mr. Feiner
graduated from Brown University (BA-Economics, 1959) and Suffolk
University (MBA, 1962). He is a Certified Public Accountant.
Mr. Feiner was Vice President of Finance for FMR Investment
Management Services, Inc., a subsidiary of the Fidelity Group,
and is currently self-employed.
J. STEWART HARVEY, JR., BSBA, MBA, 63, is a Director and
Shareholder of APT Financial Services, Inc., and its
subsidiaries. Mr. Harvey is Managing Director of Aberdeen
American Inc., an investment firm. He has held the position
since 1985. Prior to this, Mr. Harvey was Vice President and
Director of Gardner and Preston Moss, Inc. He was Vice
President and Director of Research for Fidelity Management and
Research Company, the largest mutual funds firm in the country.
Mr. Harvey is a graduate of Boston University (BSBA, 1960) and
Northeastern University (MBA-Finance, 1966).
MICHAEL LEMOYNE KENNEDY, BA, JD, 37, is a Director and
Shareholder of APT Financial Services, Inc., and its
subsidiaries. Mr. Kennedy is Chairman of Citizens Energy
Corporation, a non-profit energy company. Citizens Energy,
through its partnership with Medco Containment, provides at
cost, AZT to low-income AIDS patients in several states. Mr.
Kennedy is a graduate of Harvard College (BA, 1980) and the
University of Virginia Law School (JD, 1984). Mr. Kennedy is
also an active member of the boards of the Robert F. Kennedy
Memorial, the John F. Kennedy Library Foundation, the Friends of
Boston's Long Island Shelter, and The Pacific National Bank,
Santa Ana, CA.
ROBERT E. HALLAGAN, BS, MBA, 52, is a Director and Shareholder
of APT Financial Services, Inc., and its subsidiaries. Mr.
Hallagan is President of Heidrick & Struggles, Inc., a worldwide
executive search firm. He has been associated with the company
since 1976. Prior to this, he was an Executive Vice President
and Treasurer for Hawthorne Securities, and for the Boston Stock
Exchange. Mr. Hallagan is a graduate of Deerfield Academy,
Williams College (BS, 1966), and Harvard Graduate School of
Business (MBA, 1970).
AFFILIATES:
APT FINANCIAL SERVICES INC., ("APT" OR "Company") is a Delaware
corporation organized on April 19, 1983. The Company's
principal office is located at 500 West Cummings Park, Woburn,
MA. APT Financial Services, Inc. and its wholly-owned
subsidiaries, American Properties Team, Inc., APT Asset
Management, Inc. and American Investment Team, Inc. form a real
estate service company providing property management, asset
management, syndication, development and investor services to
third-party owners, affiliates and partners.
AMERICAN PROPERTIES TEAM, INC. ("APT") is a Massachusetts
corporation organized on March 4, 1977. APT provides property
management services to both multi-family and commercial
properties. Currently, APT manages over 5,000 units of
multi-family housing and 75,000 square feet of commercial space
in Massachusetts, New York and Indiana. Of the 5,000 units
under management, 1,200 are subsidized units through Federal and
State programs including Section 8, Section 13A, and Section 236.
APT ASSET MANAGEMENT, INC. is a Massachusetts corporation
organized on August 17, 1982. The company has developed over
$100 million in residential and commercial properties. In
addition, APT Asset Management, Inc. serves as the General
Partner for ten real estate limited partnerships one of which is
publicly registered. The company conducts strategic planning
for the limited partnerships including development,
recapitalization, refinancing and sales.
AMERICAN INVESTMENT TEAM, INC. ("AIT") is a Massachusetts
corporation organized on August 13, 1982. AIT is a NASD
registered broker-dealer for both public and private placements.
The company serves as investor services agent for over 570
clients who have invested $30 million of equity in the Company's
developments.
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 directors or officers of the General Partner for
their services. Under the terms of the Partnership Agreement,
the General Partner and affiliates are entitled to receive
compensation from the Partnership in consideration of certain
services rendered to the Partnership by such parties. In
addition, an affiliate of the General Partner, American
Investment Team, Inc., receives from the Partnership an annual
program management fee equal to .5% of invested assets plus the
Local Limited Partnerships' annualized outstanding nonrecourse
mortgage debt. The Local Limited Partnerships pay fees ranging
from 4.5% to 6% of gross revenue collected to American
Properties Team, Inc., an affiliate of the General Partner, for
management of properties owned by the Local Limited Partnerships.
Further, the Local Limited Partnerships have incurred the
following fees from inception with their local general partners
or affiliates:
Fee Amount Recipient
Development Fee $ 46,566 John M. Curry
Construction Supervision Fee 584,143 Local General Partners
Fee for Agreement to Repurchase 246,492 Local General
Partners
Fee for Agreement to Fund Completion 61,550 Local General
Partners
Fee for Agreement to Fund
Operating Deficits 39,674 Local General Partners
Rent-up Fee 214,240 Local General Partners
Administrative & Reporting Fee 180,530 American Investment
Team, Inc.
$ 1,373,195
Included in the above fees of the Local Limited Partnerships are
fees totaling $618,929 paid or to be paid to John M. Curry or
affiliated companies.
Tabular information concerning salaries, bonuses and other types
of compensation payable to executive officers has not been
included in the 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:
(a) Security Ownership of Certain Beneficial Owners
The General Partner owns all of the outstanding general
partnership interests of APT Housing Partners Limited
Partnership. One person is known to own beneficially in excess
of 5% of the outstanding limited partnership interests.
As of March 15, 1996, the ownership interests by the General
Partner and its affiliates and holders of 5% or greater of
outstanding limited partnership interests is as listed:
Title of Class Name and Address of Beneficial Ownership Amount
and Nature of Beneficial Ownership Percentage of Class
General Partnership Interest APT Asset Management, Inc. 500 West
Cummins Park Suite 6050 Woburn, MA 01801 $ 2,000 Capital
contribution- directly owned 2.000%
Limited Partnership Interest John M. Curry 211 Commodore Dr.
Jupiter, FL 33477 $ 5,000 Capital contribution- (5
units) directly owned 0.13
Chistopher Burden 731 Hospital Trust Bldg. Providence, RI
02903 $ 275,000 Capital contribution- (275 units) directly
owned 7.43
(b) Changes in Control
None
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS:
The Partnership has and will continue to have certain
relationships with affiliates of the General Partner, as
discussed in Item 11 and also Note 5 to the financial statements
in Item 14, which is incorporated herein by reference. However,
there have been no direct financial transactions between the
Partnership and the directors and officers of the General
Partner.
PART IV
ITEM 14. FINANCIAL STATEMENTS, SCHEDULES, EXHIBITS AND REPORT ON
FORM 8K: Page
(a) 1. Financial Statements
Independent Auditor's Report of Robert Ercolini & Company 16
- -17
Independent Auditor's Report of Tonneson & Company C.P.A.s,
P.C. 18
Balance Sheets as of December 31, 1995 and 1994 19
Statements of Income for the years ended
December 31, 1995, 1994 and 1993 20
Statements of Partners' Capital (Deficiency) for the years
ended
December 31, 1995, 1994 and 1993 21
Statements of Cash Flows for the years ended
December 31, 1995, 1994 and 1993 22
Notes to Financial Statements 23 - 26
(a) 2. Financial Statement Schedules
Schedules Applicable to Local Limited Partnerships
Schedule III - Real Estate and Accumulated Depreciation as of
December 31, 1995 27
Schedule IV - Mortgage Loans on Real Estate as of December 31,
1995 28
All other financial statement schedules have been omitted
because
the required information is shown in the financial statements
or
notes thereto or they are not applicable.
Individual financial statements of the Local Limited
Partnerships
for the years ended December 31, 1995, 1994 and 1993
-Ashland Commons Associates 29 - 104
-Rockledge Apartments Associates 105 - 135
(a) 3. Exhibits
The exhibits listed on the accompanying Index to Exhibits on
page
136 are filed as part of this report or incorporated herein by
reference.
(b) Reports on Form 8-K
The Partnership filed a report on Form 8-K dated December 1,
1995
reporting a change in registrant's certifying accountants under
Item 4.
INDEPENDENT AUDITOR'S REPORT
To the Partners of
APT Housing Partners Limited Partnership
Woburn, Massachusetts
We have audited the balance sheet of APT Housing Partners
Limited Partnership (a Massachusetts Limited Partnership) as of
December 31, 1995, and the related statements of income,
partners' capital (deficiency), and cash flows for the year then
ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an
opinion on these financial statements based on our audit. We
did not audit the financial statements of Ashland Commons
Associates and Rockledge Apartments Associates ("Local Limited
Partnerships"), the investments in which, as discussed in Note 3
to the financial statements, are accounted for by the equity
method of accounting. The Partnership's cumulative share of
losses of and distributions from the Local Limited Partnerships
have exceeded its investments therein. Accordingly, the
Partnership has reduced the investments to zero and has
suspended application of the equity method. The financial
statements of the Local Limited Partnerships were audited by
other auditors whose reports have been furnished to us, and our
opinion, insofar as it relates to the amounts included for the
Local Limited Partnerships, is based solely on the reports of
the other auditors. The financial statements of APT Housing
Partners Limited Partnership as of December 31, 1994 and 1993,
were audited by other auditors whose report dated February 18,
1995, expressed an unqualified opinion on those statements.
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, based on our audit and the reports of other
auditors, the 1995 financial statements referred to above
present fairly, in all material respects, the financial position
of APT Housing Partners Limited Partnership as of December 31,
1995, and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted
accounting principles.
Our audit was made for the purpose of forming an opinion on the
basic 1995 financial statements taken as a whole. The
supplemental schedules listed in the accompanying index on page
15 are presented for purposes of complying with the Securities
and Exchange Commission's rules and are not a required part of
the basic financial statements. These schedules have been
subjected to the auditing procedures applied in the audit of the
basic financial statements. In our opinion, which insofar as it
relates to amounts included for the Local Limited Partnerships,
is based on the reports of other auditors, these schedules
fairly state in all material respects the financial data
required to be set forth therein in relation to the basic 1995
financial statements taken as a whole.
Robert Ercolini & Company
Boston, Massachusetts
March 22, 1996
INDEPENDENT AUDITOR'S REPORT
To the Partners of
APT Housing Partners Limited Partnership
We have audited the balance sheet of APT Housing Partners
Limited Partnership (a Massachusetts Limited Partnership) as of
December 31, 1994, and the related statements of income,
partners' capital (deficit) and cash flows for the years ended
December 31, 1994 and 1993. 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 statement presentation. We believe that
our audits 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 APT Housing Partners Limited Partnership as of December 31,
1994, and the results of its operations and its cash flows for
the years ended December 31, 1994 and 1993 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 schedules listed in the accompanying index on page
15 are presented for purposes of complying with the Securities
and Exchange Commission's rules and are not a required part of
the basic financial statements. Information for 1994 and 1993
has been subjected to the auditing procedures applied in the
audit of the basic financial statements, and in our opinion,
fairly state in all material respects the financial data
required to be set forth therein in relation to the basic
financial statements taken as a whole.
Tonneson & Company C.P.A.'s P.C.
Wakefield, Massachusetts
February 18, 1995
APT HOUSING PARTNERS LIMITED PARTNERSHIP
BALANCE SHEETS
ASSETS
December 31,
1995 1994
Investment in Local Limited Partnerships $ - $ -
Cash and cash equivalents 20,946 179,140
Total assets $ 20,946 $ 179,140
LIABILITIES AND PARTNERS' CAPITAL (DEFICIENCY)
Liabilities:
Accrued expenses - Affiliate $ 9,078 $ 9,272
Professional fees 8,500 8,500
Total liabilities 17,578 17,772
Commitments and contingencies
Partners' capital (deficiency):
General partner ( 39,258) ( 36,098)
Limited partner, 3,700 partnership units authorized, issued
and outstanding 42,626 197,466
Total partners' capital (deficiency) 3,368 161,368
Total liabilities and partners' capital
(deficiency) $ 20,946 $ 179,140
APT HOUSING PARTNERS LIMITED PARTNERSHIP
STATEMENTS OF INCOME
For the years ended December 31,
1995 1994 1,993
Interest income $ 1,884 $ 4,843 $ 1,507
Operating expenses:
Management fees - affiliate 37,353 37,547 37,723
Administrative 9,595 9,166 10,076
Total operating expenses 46,948 46,713 47,799
Loss before share of losses of and distributions from Local
Limited Partnerships ( 45,064) ( 41,870) ( 46,292)
Distribution from Local Limited
Partnership 87,064 82,255 96,546
Share of losses of Local Limited Partnerships - -
-
Net income $ 42,000 $ 40,385 $ 50,254
Limited partners' interest in net income
$ 41,160 $ 39,577 $ 49,249
Weighted average number of outstanding limited partnership
units 3,700 3,700 3,700
Net income per limited partnership
unit $ 11.12 $ 10.70 $ 13.31
APT HOUSING PARTNERS LIMITED PARTNERSHIP
STATEMENTS OF PARTNERS' CAPITAL (DEFICIENCY)
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
General Limited
Partner Partners Total
Balance, December 31, 1992 ($ 37,911) $ 108,640 $ 70,729
Net income 1,005 49,249 50,254
Balance, December 31, 1993 ( 36,906) 157,889 120,983
Net income 808 39,577 40,385
Balance, December 31, 1994 ( 36,098) 197,466 161,368
Net income 840 41,160 42,000
Distributions ( 4,000) ( 196,000) ( 200,000)
Balance, December 31, 1995 ($ 39,258) $ 42,626 $ 3,368
APT HOUSING PARTNERS LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
For the years ended December 31,
1995 1994 1993
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 42,000 $ 40,385 $ 50,254
Adjustments to reconcile net income to net cash provided by
operating activities:
Change in operating assets and liabilities:
Increase (decrease) in accrued expenses (
194) 74 604
Net cash provided by operating activities 41,806
40,459 50,858
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to limited partners ( 196,000) - -
Distributions to general partner ( 4,000) - -
Net cash used in financing activities ( 200,000) -
-
Net increase (decrease) in cash and cash equivalents (
154,194) 40,459 50,858
Cash and cash equivalents, beginning of year 179,140
138,681 87,823
Cash and cash equivalents, end of
year $ 20,946 $ 179,140 $ 138,681
APT HOUSING PARTNERS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1. Organization and summary of significant accounting policies:
Organization:
APT Housing Partners Limited Partnership ("the Partnership"),
organized as a Massachusetts Limited Partnership on June 8,
1983, was formed to invest in other Local Limited Partnerships
("the Local Limited Partnerships") which own and operate
existing residential rental housing developments that are
financed or operated with assistance from Federal, state and/or
local governmental agencies. The Partnership has limited
partnership interests in two Local Limited Partnerships, with a
total of 156 residential apartment units, located within the
Commonwealth of Massachusetts.
The general partner of the Partnership is APT Asset Management,
Inc. The Partnership Agreement, as amended, authorized the
issuance of 3,700 limited partnership units, all of which were
issued and are outstanding.
Use of estimates:
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements, and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Investment in Local Limited Partnerships:
The Partnership accounts for its investments in the Local
Limited Partnerships by the equity method. Accordingly, the
investments are carried at cost, adjusted for the Partnership's
proportionate share of earnings or losses. The Partnership's
share of losses on an investment is recognized only to the
extent of the investment. Distributions received are reflected
as reductions of the investments. Once an investment balance
has been reduced to zero, subsequent distributions received by
the Partnership are recognized as income.
Income taxes:
Federal and state income taxes are not included in the
accompanying financial statements because these taxes, if any,
are the responsibility of the individual Partners.
Statement of cash flows:
For purposes of the statement of cash flows, the Partnership
considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents. Cash
equivalents consist of money market funds and, at December 31,
1994, a short-term U.S. Treasury bill with a carrying value of
$99,642. Cash equivalents are carried at cost which
approximates their market values.
APT HOUSING PARTNERS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - CONTINUED
1. Organization and summary of significant accounting policies
continued:
Net income per limited partnership unit:
Net income per limited partnership unit is computed by dividing
net income available to limited partnership units by the
weighted average number of outstanding limited partnership units
during the year.
Reclassifications:
Certain reclassifications have been made to the 1994 and 1993
financial statements to conform with the presentation format of
the 1995 financial statements.
2. Allocation of benefits:
In accordance with the Partnership Agreement, income, losses,
credits and distributions are allocated 2% to the General
Partner and 98% to the Limited Partners.
During 1995, the Partnership made distributions of $4,000 to
the General Partner and $196,000 to the Limited Partners. The
distributions to the Limited Partners amounted to $52.97 per
limited partnership unit.
3. Investment in Local Limited Partnerships:
The Partnership has investments in two Local Limited
Partnerships, Ashland Commons Associates ("Ashland") and
Rockledge Apartments Associates ("Rockledge"). The
Partnership's investments consist of $1,143,695 for a 95.5%
limited partnership interest in Ashland which owns an apartment
complex of 96 units located in Ashland, Massachusetts and
$543,900 for a 97% limited partnership interest in Rockledge
which owns an apartment complex of 60 units located in
Wakefield, Massachusetts.
The Local Limited Partnerships receive governmental assistance
under programs which restrict the payment of annual cash
distributions to the owners to specified maximum distributable
amounts and to available surplus cash, as defined in the
applicable Regulatory Agreement between the governmental agency
and the Local Limited Partnership. Undistributed amounts are
cumulative and may be distributed in subsequent years if there
is available surplus cash. Based upon the Partnership's
ownership interest in each of the Local Limited Partnerships,
the maximum annual distributable amounts that can be made to the
Partnership from Ashland and Rockledge are $87,903 and $9,552,
respectively.
For the years ended December 31, 1995, 1994 and 1993, the
aggregate share of losses of the Local Limited Partnerships
attributable to the Partnership amounted to $22,868, $67,109,
and $51,651, respectively. The Partnership's cumulative share
of losses of the Local Limited Partnerships exceeded its
investments by $383,764 at December 31, 1995 and $360,896 at
December 31, 1994. Accordingly, the
APT HOUSING PARTNERS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - CONTINUED
3. Investment in Local Limited Partnerships - continued:
investments have been reduced to zero and have not been
reflected in the accompanying financial statements, and the
Partnership has discontinued the application of the equity
method. The Partnership will resume applying the equity method
only after its allocable share of the net income of the Local
Limited Partnerships equals the share of net losses not
previously recognized during the period the equity method was
suspended.
During 1995, 1994 and 1993, the Partnership received
distributions of $87,064, $82,255, and $96,546, respectively,
from Ashland which were received subsequent to the reduction of
the Partnership's investment balance to zero. Accordingly,
these distributions have been included as income in the
accompanying statements of income.
Summarized audited balance sheet information on a combined
basis for the Local Limited Partnerships as of December 31, 1995
and 1994 was as follows:
December 31,
1995 1994
Rental property $ 7,597,934 $ 7,597,934
Accumulated depreciation ( 3,507,367) ( 3,241,178)
Cash and cash equivalents 525,355 450,756
Restricted assets and deposits 487,541 422,900
Other assets 131,550 178,196
Total assets 5,235,013 5,408,608
Mortgage loans payable 6,035,522 6,075,751
Other liabilities 245,547 268,505
Total liabilities 6,281,069 6,344,256
Partners' capital (deficiency) ($ 1,046,056) ($ 935,648)
Composition of partners' capital (deficiency):
General partners ($ 87,855) ($ 87,380)
Limited Partners ( 958,201) ( 848,268)
Partners' capital (deficiency) ($ 1,046,056) ($ 935,648)
Summarized audited income statement information on a combined
basis for the Local Limited Partnerships for the years ended
December 31, 1995, 1994 and 1993 was as follows:
For the year ended December 31,
1995 1994 1993
Revenues $ 1,662,624 $ 1,742,732 $ 1,707,743
Net income (loss) ($ 19,241) ($ 70,337) ($ 54,449)
APT HOUSING PARTNERS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - CONTINUED
4. Cash and cash equivalents:
The Partnership maintains cash and cash equivalent balances in
a financial institution located in the Commonwealth of
Massachusetts. Accounts in the institution are insured by the
Federal Deposit Insurance Corporation (FDIC) up to $100,000. At
December 31, 1995 and 1994, the Partnership's cash and cash
equivalent balances in this financial institution were fully
insured.
In addition, the Partnership had a short-term U.S. Treasury
bill with a carrying value of $99,642 at December 31, 1994. U.S.
Treasury bills are backed by the full faith and credit of the
U.S. Government. The Treasury bill matured on January 26, 1995.
5. Transactions with related parties:
American Investment Team, Inc., an affiliate of the General
Partner of the Partnership, receives an annual program
management fee. This fee is for managing the affairs of the
Partnership and for providing investor services to the Limited
Partners. The fee is equal to .5% of invested assets plus the
Local Limited Partnerships' annualized outstanding nonrecourse
mortgage debt. Program management fees charged to operations
for the years ended December 31, 1995, 1994 and 1993 amounted to
$37,353, $37,547, and $37,723, respectively. Of these amounts,
$9,078 and $9,272 remained unpaid at December 31, 1995 and 1994,
respectively.
6. Fair value of financial instruments:
Commencing with the year ended December 31, 1995, the
Partnership is required to disclose the fair value of its
financial instruments in accordance with Statement of Financial
Accounting Standards No. 107.
The fair values of the Partnership's financial instruments have
been determined at a specific point in time, based on relevant
market information and information about the financial
instrument. Estimates of fair value are subjective in nature
and involve uncertainties and matters of significant judgment
and therefore cannot be determined with precision. Changes in
assumptions could affect the estimates.
The carrying amounts of cash and cash equivalents and accrued
expenses at December 31, 1995 approximate their fair values
because of the short-term maturity of these instruments.
APT HOUSING PARTNERS LIMITED PARTNERSHIP
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION OF LOCAL LIMITED
PARTNERSHIPS
Property Pledged as Collateral
DECEMBER 31, 1995
Initial Cost to Partnership Cost Capitalized Subsequent
to Gross Amount at which Carried At Close of Period Year of
Con- Life on which Depreciation in Latest Income
Description Encumbrances Land Buildings and
Improvements Acquisition: Improvements Land Building and
Improvements Total (c) Accumulated Depreciation struction/
Renovation Date Acquired Statement is Computed
Apartment Complexes
Rockledge Apartments Associates Wakefield,
MA (a) $ 90,000 $ 1,426,190 $ 462,170 $ 90,000 $ 1,888,360
$ 1,978,360 $ 1,012,960 1973 June, 1984 25 years
Ashland Commons Associates Ashland, MA (a) 215,210
5,560,343 ( 155,979) (b) 215,210 5,404,364
5,619,574 2,494,407 1982 March, 1984 25 years
$ 305,210 $ 6,986,533 $ 306,191 $ 305,210 $ 7,292,724 $ 7
,597,934 $ 3,507,367
(a) Properties are subject to mortgage notes as shown in
Schedule IV.
(b) Net of retirements
(c)The aggregate cost for Federal income tax purposes at
December 31 ,1995 is as follows:
Rockledge Apartments Associates - $ 1,978,360
Ashland Commons Associates - 4,970,347
Total $ 6,948,707
Cost of Property and Equipment Accumulated Depreciation
Year Ended December 31,
1995 1994 1993 1995 1994 1993
Balance at beginning of
period $ 7,597,934 $ 7,597,934 $ 7,597,934 $ 3,241,178 $ 2,
974,989 $ 2,708,800
Additions during period: Improvements
Depreciation expense 266,189 266,189 266,189
Reductions during period: Dispositions
Balance at end of
period $ 7,597,934 $ 7,597,934 $ 7,597,934 $ 3,507,367 $ 3,
241,178 $ 2,974,989
APT HOUSING PARTNERS LIMITED PARTNERSHIP
SCHEDULE IV
MORTGAGE LOANS ON REAL ESTATE OF LOCAL LIMTIED PARTNERSHIPS
DECEMBER 31, 1995
Mortgage Loan Interest rate(s) Final Maturity Date Periodic
Payment Terms Prior Liens Face Amount of Mortgages Carrying
Amount of Mortgages (a) Principal Amount of Loans Subject to
Delinquent Principal or Interest
Rockledge Apartments
Associates 7.5485% 7/1/19 monthly None $ 1,477,000 $ 1,274,506
None
Ashland Commons Associates 11.728% 5/1/24 monthly None
5,108,100 4,761,016 None
$ 6,585,100 $ 6,035,522
(a)The aggregate carrying amounts for Federal income tax
purposes at December 31, 1995 is the same as those amounts
listed above.
Carrying Amount of Mortgages
Year Ended December 31,
1995 1994 1993
Balance at beginning of period Additions during period: New
mortgage loans Other
(describe) $ 6,075,751 $ 6,112,416 $ 6,145,866
Deductions during period: Payments of principal ( 40,229) (
36,665) ( 33,450)
Other (describe)
Balance at end of period $ 6,035,522 $ 6,075,751 $ 6,112,416
INDEX TO EXHIBITS
Sequentially
Exhibit Numbered
No. Description Page
(3) Articles of Incorporation and By-laws: The registrant is
not incorporated. The partnership Agreement was filed with the
registrant's Registration Statement on Form S-11 (#2-84474) and
is incorporated herein by reference.
(10.1) Purchase and Sale Agreement, dated as of March 30, 1984,
relating to Ashland Commons Associates (filed with Registrant's
Form 8-K dated March 30, 1984 and incorporated herein by
reference).
(10.2) Purchase and Sale Agreement, dated as of April 30, 1984,
relating to Historic Cohoes, II (filed with Registrant's Form
8-K dated April 30, 1984 and incorporated herein by reference).
(10.3) Purchase and Sale Agreement, dated as of June 22, 1984,
relating to Rockledge Apartment Associates (filed with
Registrant's Form 8-K dated June 22, 1984 and incorporated
herein by reference).
(10.4) Withdrawal of APT Housing Partners Limited Partners as a
Limited Partner in a Local Limited Partnership, dated as of
December 18, 1986, relating to Historic Cohoes, II, (filed with
Registrant's Form 8-K dated March 30, 1987 and incorporated
herein by reference).
(16) Letter regarding change in certifying accountant. 137
(27) Financial data schedule. 138
TONNESON & COMPANY C.P.A.'s P.C.
CERTIFIED PUBLIC ACCOUNTANTS
530 Edgewater Drive
Wakefield, MA 01880
(617) 245-9999
Fax (617) 245-8731
December 8, 1995
Securities and Exchange Commission
450 5th Street N.W.
Washington, DC 20549
Gentlemen:
We have been furnished with a copy of the response to item 4 of
Form 8-K for the event that occurred on December 1, 1995, to be
filed by our former client, APT Housing Partners Limited
Partnership. We agree with the statements made in response to
that Item insofar as they relate to our Firm.
Sincerely,
Tonneson & Company C.P.A.'s P.C.
APT HOUSING PARTNERS LIMITED PARTNERSHIP
FINANCIAL DATA SCHEDULE
This schedule contains summary financial information extracted
from the balance sheets and statements of income on pages 19
through 20 of the Partnership's 1995 Annual Report on Form 10-K
and is qualified in its entirety by reference to such financial
statements.
Item Number Item Description Year End 1995
5-02(1) Cash and cash items $ 20,946
5-02(2) Marketable securities -0
5-02(3)(a)(1) Notes and accounts receivable-trade -0
5-02(4) Allowance for doubtful accounts -0
5-02(6) Inventory -0
5-02(9) Total current assets 20,946
5-02(13) Property, plant and equipment -0
5-02(14) Accumulated depreciation -0
5-02(18) Total assets 20,946
5-02(21) Total current liabilities 17,578
5-02(22) Bonds, mortgages and similar debt -0
5-02(28) Preferred stock-mandatory redemption -0
5-02(29) Preferred stock-no mandatory redemption -0
5-02(30) Common stock -0
5-02(31) Other stockholders' equity 3,368
5-02(32) Total liabilities and stockholders' equity 20,946
Item Number Item Description Year Ended 1995
5-03(b)1(a) Net sales of tangible products $ -0
5-03(b)1 Total revenues 88,948
5-03(b)2(a) Cost of tangible goods sold -0
5-03(b)2 Total costs and expenses applicable to sales and
revenues -0
5-03(b)3 Other costs and expenses 46,948
5-03(b)5 Provision for doubtful accounts and notes -0
5-03(b)(8) Interest and amortization of debt discount -0
5-03(b)(10) Income before taxes and other items 42,000
5-03(b)(11) Income tax expense -0
5-03(b)(14) Income/loss continuing operations 42,000
5-03(b)(15) Discontinued operations -0
5-03(b)(17) Extraordinary items -0
5-03(b)(18) Cumulative effect- changes in accounting
principles -0
5-03(b)(19) Net income or loss 42,000
5-03(b)(20) Earnings per share-primary 11.12
5-03(b)(20) Earnings per share-fully diluted 11.12
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.
APT HOUSING PARTNERS LIMITED PARTNERSHIP
By: APT Asset Management, Inc.
General Partner
By:
Date John M. Curry - President
APT ASSET MANAGEMENT, INC.
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
REPORT ON FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1995
CONTENTS
Page
Auditors' Report 3
Financial Statements:
Balance Sheet 4
Statement of Profit and Loss 5
Statement of Partners' Deficit 6
Statement of Cash Flows 7
Summary of Accounting Policies 9
Notes to Financial Statements 10
January 20, 1996
To the Partners of
Ashland Commons Associates
Woburn, Massachusetts
We have audited the accompanying balance sheet of HUD Project
No. 023-35279 of the Ashland Commons Associates (a limited
partnership) as of December 31, 1995 and the related statements
of profit and loss, partners' deficit and cash flows for the
year then ended. These financial statements are the
responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards and Government Auditing Standards, issued by
the Comptroller General of the United States. 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 HUD Project No. 023-35279 as of December 31, 1995, and the
results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting
principles.
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
BALANCE SHEET
DECEMBER 31, 1995
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents $ 320,686
Tenants: Accounts Receivable 3,452
Property Insurance 534
Mortgage Insurance 9,920
Total Current Assets 334,592
DEPOSITS HELD IN TRUST - FUNDED
Tenants' Security Deposits (Contra) 12,643
Total Deposits Held in Trust 12,643
RESTRICTED DEPOSITS AND FUNDED RESERVES
Mortgage Escrow Deposits 68,513
Reserve for Replacements 185,439
Residual Receipts 61,366
Total Deposits 315,318
FIXED ASSETS
Land 215,210
Building (Mortgaged) - Note 2 5,404,364
Less Accumulated Depreciation 2,494,407
3,125,167
OTHER ASSETS
Deferred Charges 103,249
$ 3,890,969
LIABILITIES AND PARTNERS' DEFICIT
CURRENT LIABILITIES
Accounts Payable $ 89,787
Accrued Interest Payable 46,531
Mortgage Payable - Current Portion 22,187
Rent Deferred Credits 87
Total Current Liabilities 158,592
DEPOSIT LIABILITIES
Tenants' Security Deposits (Contra) 12,643
Total Deposits Liabilities 12,643
LONG-TERM LIABILITIES
Mortgage Loan Payable - Note 2 4,761,016
Less: Current Portion 22,187
Total Long-Term Liabilities 4,738,829
Total Liabilities 4,910,064
COMMITMENTS AND CONTINGENCIES - NOTES 2,3, AND 4
PARTNERS' DEFICIT - Note 4:
General Partners (96,827)
Limited Partners (922,268)
Total Partners' Deficit (1,019,095)
$ 3,890,969
See accompanying summary of accounting policies
and notes to financial statements.
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
STATEMENT OF PROFIT AND LOSS
FOR THE YEAR ENDED DECEMBER 31, 1995
REVENUES:
Rental income, less vacancies of $13,882 $ 1,218,926
Interest income 32,704
Miscellaneous income 2,289
Total revenues 1,253,919
COST OF OPERATIONS:
Repairs and maintenance $ 148,377
Salaries and wages 108,719
Real estate taxes 75,666
Management fee (Note 3) 48,177
Utilities 42,785
Administrative 30,978
Insurance 35,487
Payroll taxes 11,179 501,368
Income before interest expenses,
and depreciation and amortization 752,551
INTEREST EXPENSE, including MIP of $23,852 583,309
Income before depreciation and amortization 169,242
DEPRECIATION AND AMORTIZATION 206,104
NET LOSS $ (36,862)
Net Loss to General Partners $ 1,659
Net Loss to Limited Partners $ 35,203
See accompanying summary of accounting policies
and notes to financial statements.
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
STATEMENT OF PARTNERS' DEFICIT
FOR THE YEAR ENDED DECEMBER 31, 1995
General
Limited
Total Partner
Partners
BALANCE, at December 31, 1994 $ (891,066) $ (91,066)
$ (800,000)
Net loss for the period (36,862) (1,659) (35,203)
Distributions (91,167) (4,102) (87,065)
BALANCE, at December 31, 1995 $ (1,019,095) $ (96,827)
$ (922,268)
Percent of interest in profit
and losses 100% 4.5%
95.5%
See accompanying summary of accounting policies
and notes to financial statements.
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1995
OPERATING ACTIVITIES:
Rental Income $ 1,233,270
Interest Income 32,704
Other Income 2,289
1,268,263
Administrative expenses 30,847
Management fee 47,676
Operating and maintenance expenses 187,102
Payrolls 108,201
Utilities 33,702
Real estate taxes and escrow deposits 75,678
Payroll taxes 11,179
Insurance 40,132
Interest on mortgage 559,650
Mortgage insurance premium 23,769
Tenant security deposits (341)
1,117,595
Net cash provided by operating activities 150,668
INVESTING ACTIVITIES:
Increase in residual receipts fund (11,965)
Increase in reserve for replacements - net (22,245)
Net cash used by investing activities (34,210)
FINANCING ACTIVITIES:
Expenses not realted to project operations (878)
Partners' distributions (91,167)
Mortgage principal payments (19,743)
Net cash used by financing activities (111,788)
Net increase in cash and cash equivalents 4,670
CASH AND CASH EQUIVALENTS, at beginning of year 316,016
CASH AND CASH EQUIVALENTS, at end of year $ 320,686
See accompanying summary of accounting policies
and notes to financial statements.
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1995
(Continued)
Cash Flows from Operating Activities:
Net loss
$ (36,862)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and Amortization 206,104
Expense not related to project operations 878
Changes in operating assets and liabilities:
Decrease in accounts receivable 14,612
Increase in tenants' rents receivable (323)
Decrease in prepaid expenses 25,100
Decrease in tenants' security deposits 1,155
Increase in mortgage escrow deposits (29,564)
Decrease in accounts payable and accrued
expenses (29,673)
Decrease in tenants' security deposits
payable (814)
Increase in prepaid rents 55
Net cash provided by operating activities $ 150,668
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING
Financial Statements are prepared on the accrual basis and all
development and construction costs were capitalized. The
partnership, for tax purposes, charged to expense certain costs,
such as interest and real estate taxes during construction.
Accordingly, the cost of property and equipment shown in these
statements includes $649,227 which has been deducted for tax
purposes.
The balance sheet does not give effect to any assets that the
partners may have outside their interest in the partnership, nor
to any personal obligations, including income taxes, of the
individual partners.
PROPERTY, EQUIPMENT AND DEPRECIATION
Property and equipment are stated at cost. Depreciation of
buildings is based on a 25 year life using the straight-line
method for financial reporting purposes. For income tax
purposes, accelerated depreciation methods are used.
AMORTIZATION
Amortization of financing costs is based on a forty year life
using the straight-line method for both financial reporting and
income tax purposes.
INCOME TAXES
The partnership, as an entity, is not subject to income tax.
The partners' share of the loss for tax purposes is includable
in their income tax returns.
CASH AND CASH EQUIVALENTS
For purposes of statement of cash flows, the Partnership
considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents.
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - GENERAL
Ashland Commons Associates is a Massachusetts limited
partnership which was formed on September 29, 1982 for the
purpose of owning, rehabilitating and operating a multi-unit
apartment complex containing 96 residential units under the
provisions of Section 221 (d)(4) of the National Housing Act.
NOTE 2 - MORTGAGE LOAN PAYABLE
The mortgage note is insured by the Federal Housing
Administration (FHA) and is payable in monthly installments of
approximately $48,283, including interest at 11.728% per annum,
through 2024. Annual principal payments will average
approximately $28,401 each year for the next five years.
The partnership is required to make monthly payments of $2,094
into a fund for replacements. Withdrawals from this fund can
only be made upon the approval of the Federal Housing
Commissioner.
The partnership and its partners have no personal liability on
the mortgage loan; the mortgaged property is the only collateral
for the loan.
NOTE 3 - RELATED PARTY TRANSACTIONS
The partnership pays a 4.5% management fee based on gross
revenues collected, which, at present, is capped at $41.82 PUPM,
to an affiliate of a general partner, and also $506 per month
for data processing. Further, the management company is
reimbursed at cost for salaries and wages and related employee
expenses such as payroll taxes, health insurance, disability
insurance, workers compensation and other insurance.
NOTE 4 - CAPITAL DISTRIBUTION RESTRICTION
No distribution of assets may be made except from "surplus cash"
as defined in the regulatory agreement with the Federal Housing
Administration. Total distributions are limited to $92,045 per
annum as allowed by MHFA.
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
REPORT ON FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1995
CONTENTS
Page
Auditors' Report 3
Financial Statements:
Balance Sheet 4
Statement of Profit and Loss 5
Statement of Partners' Equity (Deficit) 6
Statement of Cash Flows 7
Summary of Accounting Policies 8
Notes to Financial Statements 9
January 24, 1996
To the Partners of
Rockledge Apartments Associates
Woburn, Massachusetts
We have audited the accompanying balance sheet of MHFA Project
No. 71-187-N of the Rockledge Apartments Associates (a limited
partnership) as of December 31, 1995 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 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 MHFA Project No. 71-187-N as of December 31, 1995, and the
results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting
principles.
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
BALANCE SHEET
DECEMBER 31, 1995
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents $ 204,669
Tenants: Accounts Receivable 14,340
Total Current Assets 219,009
DEPOSITS HELD IN TRUST - FUNDED
Tenants' Security Deposits (Contra) 24,086
Total Deposits Held in Trust 24,086
RESTRICTED DEPOSITS AND FUNDED RESERVES
Mortgage Escrow Deposits 17,420
Reserve for Replacements 118,074
Total Deposits 135,494
FIXED ASSETS
Land 90,000
Building (Mortgaged) - Note 2 1,888,360
Less Accumulated Depreciation 1,012,960
965,400
OTHER ASSETS
Deferred Charges 55
$ 1,344,044
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts Payable $ 26,862
Accrued Interest Payable 2,104
Mortgage Payable - Current Portion 21,979
Total Current Liabilities 50,945
DEPOSIT LIABILITIES
Tenants' Security Deposits (Contra) 23,868
Total Deposits Liabilities 23,868
LONG-TERM LIABILITIES
Note payable to affiliate - Note 3 43,665
Mortgage Loan Payable - Note 2 1,274,506
Less: Current Portion 21,979
Total Long-Term Liabilities 1,296,192
Total Liabilities 1,371,005
COMMITMENTS AND CONTINGENCIES - NOTES 2,3, AND 4
PARTNERS' EQUITY (DEFICIT) - Note 4:
General Partners 8,972
Limited Partners (35,933)
Total Partners' Deficit (26,961)
$ 1,344,044
See accompanying summary of accounting policies
and notes to financial statements.
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
STATEMENT OF PROFIT AND LOSS
FOR THE YEAR ENDED DECEMBER 31, 1995
REVENUES:
Rental income, less vacancies of $5,838 $ 392,567
Interest income 15,258
Miscellaneous income 880
Total revenues 408,705
COST OF OPERATIONS:
Repairs and maintenance $ 89,579
Salaries and wages 47,910
Real estate taxes 43,163
Management fee (Note 4) 23,586
Utilities 44,090
Administrative 28,711
Insurance 5,578
Payroll taxes and employee
benefits 12,508 295,125
Income before interest expenses,
and depreciation and amortization 113,580
INTEREST EXPENSE (Notes 2 and 3) 30,822
Income before depreciation and amortization 82,758
DEPRECIATION AND AMORTIZATION 65,137
NET INCOME $ 17,621
Net Income to General Partners $ 529
Net Income to Limited Partners $ 17,092
See accompanying summary of accounting policies
and notes to financial statements.
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
STATEMENT OF PARTNERS' DEFICIT
FOR THE YEAR ENDED DECEMBER 31, 1995
General
Limited
Total Partner
Partners
BALANCE, at December 31, 1994 $ (44,582) $ 3,686
$ (48,268)
Net Income for the period 17,621 5,286 12,335
BALANCE, at December 31, 1995 $ (26,961) $ 8,972
$ (35,933)
Percent of interest in profit
and losses 100% 3%
97%
See accompanying summary of accounting policies
and notes to financial statements.
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1995
OPERATING ACTIVITIES:
Net income $ 17,621
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and Amortization 65,137
Changes in operating assets and liabilities:
Increase in tenants' rents receivable (3,540)
Decrease in prepaid expenses 5,745
Increase in tenants' security deposits (3,256)
Increase in mortgage escrow deposits (3,394)
Increase in accounts payable 5,757
Increase in tenants' security deposits
payable 3,619
Decrease in prepaid rents (90)
Net cash provided by operating activities 87,599
INVESTING ACTIVITIES:
Decrease in reserve for replacements - net 4,628
FINANCING ACTIVITIES:
Note payable to affiliate principal payments (1,812)
Mortgage principal payments (20,486)
Net cash used by financing activities (22,298)
Net increase in cash and cash equivalents 69,929
CASH AND CASH EQUIVALENTS, at beginning of year 134,740
CASH AND CASH EQUIVALENTS, at end of year $ 204,669
Disclosure of Accounting Policy and Supplemental Information:
Supplemental Disclosures of Cash Flow information:
Cash paid during the year for interest $ 114,191
See accompanying summary of accounting policies
and notes to financial statements.
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING
Financial Statements are prepared on the accrual basis and all
development and construction costs were capitalized.
The balance sheet does not give effect to any assets that the
partners may have outside their interest in the partnership, nor
to any personal obligations, including income taxes, of the
individual partners.
PROPERTY, EQUIPMENT AND DEPRECIATION
Property and equipment are stated at cost. Depreciation of
buildings and equipment is based on a twenty-five year life and
a five year life respectively. The ACRS method is used for tax
purposes.
INCOME TAXES
The partnership, as an entity, is not subject to income tax.
The partners' share of the loss for tax purposes is includable
in their income tax returns.
CASH AND CASH EQUIVALENTS
For purposes of statement of cash flows, the Partnership
considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents.
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - GENERAL
Rockledge Apartments Associates is a Massachusetts limited
partnership which was formed on February 24, 1973 for the
purpose of owning, rehabilitating and operating a multi-unit
apartment complex containing 60 residential units.
NOTE 2 - MORTGAGE LOAN PAYABLE
The mortgage note is payable to the Massachusetts Housing
Finance Agency (MHFA) over a forty year period, in monthly
installments of approximately $3,841 (after interest subsidy
payments of $6,597 monthly), including interest at 7.5485% per
annum, through 2018. Principal payments for the next five years
are as follows:
1996 21,979
1997 23,584
1998 25,310
1999 27,116
2000 29,163
The partnership is required to make monthly payments of $7,858
to MHFA for real estate taxes, insurance, and a reserve for
replacements. Withdrawals must have the approval of MHFA.
The partnership and its partners have no personal liability on
the mortgage loan; the mortgaged property is the only collateral
for the loan.
NOTE 3 - NOTES PAYABLE
The note payable to affiliate bears interest at the rate of 12%
per annum for a period of 15 years at which time the note is
payable in full. Interest is payable only from Distributable
Cash and residual amounts of Net Capital Transactions proceeds.
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 4 - RELATED PARTY TRANSACTIONS
The partnership pays a monthly management fee of 6% rents
collected to an affiliate of a general partner and an annual fee
of $1,862 to another affiliate of a general partner.
NOTE 5 - CAPITAL DISTRIBUTION RESTRICTION
No distribution of assets may be made except from "surplus cash"
as defined in the regulatory agreement with the MHFA. Annual
distributions are limited to $9,847, as allowed by MHFA.