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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended June 30, 2001
Commission file number 33-24537
CENTURY PACIFIC TAX CREDIT HOUSING FUND II
(Exact name of registrant as specified in its charter)
CALIFORNIA 95-4178283
(State of other jurisdiction of (IRS Employer
incorporation of organization) Identification Number)
1925 Century Park East, Suite 1900
Los Angeles, CA 90067
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(800) 262-8242
No Change
(Former name, former address and former fiscal year if changed since last
report)
Indicate by a 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 [ ]
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CENTURY PACIFIC TAX CREDIT HOUSING FUND II
TABLE OF CONTENTS
Page
PART I FINANCIAL INFORMATION
Item 1 FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA . . . . . . . . . . . . . . . . . . . . . . 3
PART II OTHER INFORMATION . . . . . . . . . . . . . . . (Not Applicable)
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***********************************************
* FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA *
***********************************************
CENTURY PACIFIC TAX CREDIT HOUSING FUND II
BALANCE SHEET
(Unaudited)
June 30, March 31,
2000 2001
---------- ----------
ASSETS
Cash $1,233 $2,562
Advance to General Partners 871 871
Investments in Limited Part-
nerships (Note 4) 0 0
---------- ----------
$2,104 $3,433
========== ==========
LIABILITIES AND PARTNERS' EQUITY
Accounts Payable and Accrued Expenses $4,500 $5,800
Amounts Payable to Related Parties
(Note 3) 1,864,351 1,854,951
Advance from Affiliates 40,594 40,594
---------- ----------
1,909,445 1,901,345
---------- ----------
Commitments and Contingencies
Partners' Equity, per accompanying
statement
General Partners (68,127) (68,033)
Limited Partners (1,839,214) (1,829,879)
---------- ----------
(1,907,341) (1,897,912)
---------- ----------
$2,104 $3,433
========== ==========
The accompanying notes are an integral part of this statement.
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CENTURY PACIFIC TAX CREDIT HOUSING FUND II
STATEMENT OF INCOME
(Unaudited)
Three Months Ended
June 30,
2001 2000
------- -------
REVENUES:
Other income $0 $100
------- -------
0 100
------- -------
EXPENSES:
General & Adm. (Note 3) 9,429 9,575
Equity in Net Losses of
Operating Partnership
(Note 4) 0 79,828
------- -------
9,429 89,403
------- -------
Net Loss $9,429 $89,303
======= =======
The accompanying notes are an integral part of this statement.
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CENTURY PACIFIC TAX CREDIT HOUSING FUND II
STATEMENT OF PARTNERS' EQUITY
June 30, 2001
(Unaudited)
General Limited
Partners Partners Total
-------- ----------- -----------
Balance at March 31, 2001 ($68,033) ($1,829,879) ($1,897,912)
Net Income (Loss) (94) (9,335) (9,429)
-------- ----------- -----------
Equity (Deficit) at
June 30, 2001 ($68,127) ($1,839,214) ($1,907,341)
======== =========== ===========
Percentage Interest
June 30, 2001 1% 99% 100%
======== =========== ===========
The accompanying notes are an integral part of this statement.
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CENTURY PACIFIC TAX CREDIT HOUSING FUND II
STATEMENT OF CASH FLOWS
(Unaudited)
Three Months Ended
June 30,
2001 2000
------- -------
Cash Flow from Financing
Activities:
Increase (Decrease) in Amounts
Payable to Related Parties $9,400 $11,081
-------- --------
Net Cash Provided By Financing
Activities $9,400 $11,081
======== ========
Cash Flow from Operating
Activities:
Transfer Fee Income Received $0 $100
General & Admin. Expenses (9,429) (9,575)
Increase(Decrease) in Accts Pay (1,300) (1,521)
-------- --------
Net Cash Used in Operating
Activities $(10,729) $(10,996)
======== ========
Net Increase (Decrease) in Cash
and Cash Equivalents ($1,329) $85
Cash and Cash Equivalents at
Beginning of Period 2,562 2,376
-------- --------
Cash and Cash Equivalents at
End of Period $1,233 $2,461
======== ========
The accompanying notes are an integral part of this statement.
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CENTURY PACIFIC TAX CREDIT HOUSING FUND II
a California limited partnership
NOTES TO FINANCIAL STATEMENTS
For the Quarter Ended June 30, 2001
NOTE 1 - DESCRIPTION OF THE PARTNERSHIP AND ITS ORGANIZATION:
Century Pacific Tax Credit Housing Fund II, a California limited partnership
(the "Partnership" or "CPTCHF II") was formed on September 2, 1988 for the
purpose of raising capital and selling limited partnership interests and then
acquiring limited partnership interests in partnerships (the "Operating
Partnerships") owning and operating existing residential apartment properties
(the "Properties").
The general partners of the Partnership are Century Pacific Capital II
Corporation, a California corporation, ("CPII") and Irwin Jay Deutch, an
individual (collectively, the "General Partners"). The General Partners and
affiliates of the General Partners (the "General Partners and Affiliates")
have interest in the Partnership and receive compensation from the Partnership
and the Operating Partnerships (Note 3).
The Properties qualify for the "Low-Income Housing Tax Credit" established
by Section 42 of the Tax Reform Act of 1986 (the "Low-Income Housing Tax
Credit"). These properties are leveraged low-income multifamily residential
complexes and some receive one or more forms of assistance from federal,
state or local governments, or agencies (the "Government Agencies") while
others do not receive any subsidy from Government Agencies although some may
have mortgage loans insured by a Government Agency.
In September 1988, the Partnership began raising capital from sales of limited
partnership interests, at $1,000 per unit. The limited partnership offering
closed as of December 31, 1989, with 5,754 units having been sold.
As of June 30, 2001, the Partnership acquired limited partnership interest of
90% in Washington Courts Limited Partnership and 60% in Laurel-Clayton Limited
Partnership, two existing Operating Partnerships which own apartment rental
properties.
Basis of Presentation
The accompanying unaudited financial statements of Century Pacific Tax Credit
Housing Fund II (the "Company") as of June 30, 2001 and March 31, 2001 (the
March 31, 2001 financial information included herein has been extracted from
the Company's audited financial statements on Form 10-K) and for the three
months ended June 30, 2001 have been prepared in
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accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X under the Securities and Exchange Act of 1934. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of the Company's management, all adjustments (consisting of only
normal recurring adjustments) considered necessary to present fairly the
financial statements have been made.
The statement of operations for the three months ended June 30,2001 are not
necessarily indicative of the results that may be expected for the entire
year. These statements should be read in conjunction with the financial
statements and related notes thereto included on Form 10-K for the year
ended March 31, 2001.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Method of Accounting for Investments in Operating Partnerships
The Partnership uses the equity method to account for its investment in the
Operating Partnerships in which it has invested (Note 4).
Under the equity method of accounting, the investment is carried at cost and
adjusted for the Partnership's share of the Operating Partnerships' results
of operations and by cash distributions received. Equity in the loss of each
Operating Partnership allocated to the Partnership is not recognized to the
extent that the investment balance would become negative.
Basis of Accounting
The Partnership maintains its financial records on the tax basis. Memorandum
entries, while not recorded in the records of the Partnership, have been made
in the financial statements to reflect generally accepted accounting
principles.
On August 7, 1991, management of the Partnership changed from a calendar
year end to a fiscal year end of March 31 for financial reporting purposes.
Accordingly, the Partnership's quarterly periods end June 30, September 30,
and December 31. The Operating Partnerships, for financial reporting purposes,
have a calendar year. The Partnership, as well as the Operating Partnerships,
have a calendar year for income tax purposes.
Syndication Costs
Public offering costs have been recorded as a direct reduction to the capital
accounts of the Limited Partners.
Organization, Acquisition and Other Costs
Costs incurred in organizing the Partnership and expenditures made by the
Partnership in connection with its acquiring limited
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partnership interest in Operating Partnerships are deferred and amortized
over a period of sixty months on a straight-line basis or capitalized as
investments in Operating Partnerships. Other fees and expenses of the
Partnership are recognized as expenses in the period the related services
are received.
Income Taxes
No provision has been made for income taxes in the accompanying financial
statements since such taxes and/or the recapture of the Low-Income Housing
Tax Credits benefits received, if any, are the liability of the individual
partners. The Partnership uses the accrual method of accounting for tax
purposes.
Statement of Cash Flows - Cash and Cash Equivalents
For the purpose of the statement of cash flows, the Partnership considers all
highly liquid instruments purchased with an original maturity date of three
months or less to be cash equivalents.
NOTE 3 - TRANSACTIONS WITH THE GENERAL PARTNERS AND AFFILIATES OF THE
GENERAL PARTNERS:
The General Partners of the Partnership are CPII and Irwin Jay Deutch. Century
Pacific Placement Corporation ("CPPC"), an affiliate of the General Partners,
served as the broker-dealer-manager for sales of the limited partnership
interests in the Partnership. Century Pacific Realty Corporation ("CPRC"), an
affiliate of CPII, is a general partner in each of the Operating Partnerships.
The General Partners have an aggregate one percent interest in the
Partnership. CPRC has a one-half percent interest in each of the Operating
Partnerships.
The General Partners and their Affiliates receive compensation and
reimbursement of expenses from the Partnership, as set forth in the limited
partnership agreement, for their services in managing the Partnership and its
business. Pursuant to the partnership agreement, the Partnership is required
to pay CPII an annual Management Fee for its services in connection with the
management affairs of the Partnership. The annual Management Fee is equal to
.5% of Invested Assets (as defined by the partnership agreement). The General
Partners and Affiliates also receive compensation and reimbursement of
expenses from the Operating Partnerships. This compensation and reimbursement
include services provided to the Partnership during its offering stage,
acquisition stage and operational stage.
NOTE 4 - INVESTMENTS IN OPERATING PARTNERSHIPS:
The following is a summary of the Partnership's investments in Operating
Partnerships:
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Three Months
Ended Jun 30, Year Ended
2001 March 31, 2000
------------- --------------
Cash Contribution to Operating
Partnerships to fund purchase of
beneficial interest in Properties $4,536,020 $4,536,020
Equity in net losses of Operating
Partnerships (4,536,020) (4,536,020)
---------- ----------
$0 $0
========== ==========
The Properties in which the Operating Partnerships hold beneficial interests
are as follows:
Name of
Operating Partnership Property Name Location
- ----------------------- ----------------- ------------------------
Washington Courts, L.P. Washington Courts Chicago, Illinois
Laurel-Clayton, L.P. Plumley Village Worcester, Massachusetts
The following combined statements of operations is prepared on the accrual
basis and summarizes the operations of the Operating Partnerships for the
three months ended June 30, 2001 and June 30, 2000.
COMBINED STATEMENT OF OPERATIONS OF PROPERTIES
ACQUIRED BY THE OPERATING PARTNERSHIPS IN WHICH
CENTURY PACIFIC TAX CREDIT HOUSING FUND II HAS INVESTED
(Unaudited)
Three Months Ended
June 30,
2001 2000
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REVENUES:
Rental Income $1,337,337 $1,279,475
Other 20,475 16,672
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1,357,812 1,296,147
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EXPENSES:
Operating, General
and Administrative 1,011,394 1,085,970
Depreciation 263,891 290,875
Interest 115,451 116,070
---------- ----------
1,390,736 1,492,915
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Net Income (Loss) ($32,924) ($196,768)
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THIRD QUARTER 2000 PROPERTY SUMMARY
PLUMLEY VILLAGE - Worcester, Massachusetts
Plumley Village consists of 430 units situated on approximately 16 acres of
land adjacent to Downtown Worcester. There is one 16 story high-rise and three
low-rise structures on the site. The property has good freeway access and is
convenient to stores, churches and hospitals.
The property is 98% occupied during the quarter. Cash flow was sufficient
to cover operating expenses. Property rents were last increased in May 1995,
bringing the annual gross potential rental revenue to approximately
$4,292,000.
WASHINGTON COURTS - Chicago, Illinois
Washington Courts consists of 103 units on several sites in the Austin
neighborhood of Chicago. The property is convenient to banks, schools,
churches and commercial areas.
The property averaged a 94% occupancy rate during the quarter. Cash flow
was sufficient to cover operating expenses. Property rents were increased
1.0% in May 1996, increasing the annual gross potential rental revenue to
approximately $1,059,000.
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* * *
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
CENTURY PACIFIC TAX CREDIT HOUSING FUND II
a California limited partnership
By: Century Pacific Capital II Corporation,
a California Corporation
General Partner
By: /s/ Irwin J. Deutch
-----------------------------
Irwin J. Deutch, President
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