-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Gaw9l3uL41d07B7agRuVKNNC3RYG79glA9kn1twPEOPhA4Fx963/eUIHkLD3BW7O kI8rZGRjtGYywtxII0+jwg== 0000950148-98-001398.txt : 19980521 0000950148-98-001398.hdr.sgml : 19980521 ACCESSION NUMBER: 0000950148-98-001398 CONFORMED SUBMISSION TYPE: 10-K405/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19980520 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: REAL ESTATE ASSOCIATES LTD V CENTRAL INDEX KEY: 0000702644 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 953768810 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405/A SEC ACT: SEC FILE NUMBER: 000-12438 FILM NUMBER: 98628670 BUSINESS ADDRESS: STREET 1: 9090 WILSHIRE BLVD STREET 2: STE 201 CITY: BEVERLY HILLS STATE: CA ZIP: 90211 BUSINESS PHONE: 3102782191 MAIL ADDRESS: STREET 1: 9090 WILSHIRE BLVD STREET 2: STE 201 CITY: BEVERLY HILLS STATE: CA ZIP: 90211 10-K405/A 1 FORM 10-K405, AMENDMENT #2 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A Amendment No. 2 Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Fiscal Year Ended DECEMBER 31, 1996 Commission File Number 0-12438 REAL ESTATE ASSOCIATES LIMITED V A CALIFORNIA LIMITED PARTNERSHIP I.R.S. Employer Identification No. 95-3768810 9090 WILSHIRE BLVD., SUITE 201, BEVERLY HILLS, CALIFORNIA 90211 Registrant's Telephone Number, Including Area Code (310) 278-2191 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] 2 PART I. ITEM 1. BUSINESS: Real Estate Associates Limited V ("REAL V" or the "Partnership") is a limited partnership which was formed under the laws of the State of California on May 7, 1982. On July 7, 1982, Real Estate Associates Limited V offered 1,950 units consisting of 3,900 Limited Partnership Interests and Warrants to purchase 3,900 Additional Limited Partnership Interests through a public offering, managed by Lehman Brothers, Inc. The general partners of REAL V are National Partnership Investments Corp. ("NAPICO"), a California Corporation (the "Corporate General Partner"), and National Partnership Investments Associates II, a limited partnership formed under the California Limited Partnership Act and consisting of Mr. Charles H. Boxenbaum and an unrelated individual, as limited partners and NAPICO as general partner ("NAPIA II"). The business of REAL V is conducted primarily by its general partners as REAL V has no employees of its own. NAPICO is a wholly owned subsidiary of Casden Investment Corporation ("CIC"), which is wholly owned by Alan I. Casden. The current members of NAPICO's Board of Directors are Charles H. Boxenbaum, Bruce E. Nelson, Alan I. Casden, Henry C. Casden and Brian D. Goldberg. REAL V holds limited partnership interests in nineteen local limited partnerships as of December 31, 1996. Primarily all of these limited partnerships own a low income housing project which is subsidized and/or has a mortgage note payable to or insured by agencies of the federal or local government. In order to stimulate private investment in low income housing, the federal government and certain state and local agencies have provided significant ownership incentives, including among others, interest subsidies, rent supplements, and mortgage insurance, with the intent of reducing certain market risks and providing investors with certain tax benefits, plus limited cash distributions and the possibility of long-term capital gains. There remain, however, significant risks. The long-term nature of investments in government assisted housing limits the ability of REAL V to vary its portfolio in response to changing economic, financial and investment conditions; such investments are also subject to changes in local economic circumstances and housing patterns, as well as rising operating costs, vacancies, rent collection difficulties, energy shortages and other factors which have an impact on real estate values. These projects also require greater management expertise and may have higher operating expenses than conventional housing projects. The partnerships in which REAL V has invested were, at least initially, organized by private developers who acquired the sites, or options thereon, and applied for applicable mortgage insurance and subsidies. REAL V became the principal limited partner in these local limited partnerships pursuant to arm's-length negotiations with these developers, or others, who act as general partners. As a limited partner, REAL V's liability for obligations of the local limited partnership is limited to its investment. The local general partner of the local limited partnership retains responsibility for developing, constructing, maintaining, operating and managing the project. Under certain circumstances, REAL V has the right to replace the general partner of the local limited partnership. Although each of the partnerships in which REAL V has invested generally owns a project which must compete in the market place for tenants, interest subsidies and rent supplements from governmental agencies make it possible to offer these dwelling units to eligible "low income" tenants at a cost significantly below the market rate for comparable conventionally financed dwelling units in the area. 3 During 1996, all of the projects in which REAL V had invested were substantially rented. The following is a schedule of the status as of December 31, 1996, of the projects owned by local limited partnerships in which REAL V is a limited partner. SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS IN WHICH REAL V HAS AN INVESTMENT DECEMBER 31, 1996
Units Authorized For Rental Assistance No. of Under Units Percentage of Name & Location Units Section 8 Occupied Total Units - --------------- ------ ----------- -------- ----------- Bickerdike Chicago, IL 140 140 134 96% Canoga Park Apartments Canoga Park, CA 14 14 14 100% Castle Park Apartments Normandy, MO 209 209 199 95% Centennial Townhomes Fort Wayne, IN 88 88 86 98% Creekside Gardens Loveland, CO 50 50 47 94% Del Haven Manor Jackson, MS 104 104 104 100% Fox Run Apartments Orange, TX 70 70 66 94% Grandview Place Apartments Missoula, MT 48 48 48 100% Hamlin Estates Los Angeles, CA 30 30 30 100% Heritage Square Texas City, TX 50 50 49 98% North River Club Apartments Oceanside, CA 56 56 55 98% Palm Springs Senior Citizens Housing 116 116 110 95% Palm Springs, CA
4 SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS IN WHICH REAL V HAS AN INVESTMENT DECEMBER 31, 1996 (CONTINUED)
Units Authorized For Rental Assistance No. of Under Units Percentage of Name & Location Units Section 8 Occupied Total Units - --------------- ------ ----------- -------- ----------- Panorama City I Los Angeles, CA 14 14 14 100% Panorama City II Los Angeles, CA 13 13 13 100% Pine Lake Terrace Apartments Garden Grove, CA 111 None 99 89% Plummer Village Los Angeles, CA 75 74 74 99% Ranger Apartments Ranger, TX 50 50 48 96% Richland Three Rivers Retirement Apartments Richland, WA 40 40 39 98% Robert Farrell Manor Los Angeles, CA 35 35 35 100% ------ ----- ------ TOTALS 1,313 1201 1,264 98% ====== ===== ======
5 ITEM 2. PROPERTIES: Through its investment in local limited partnerships, REAL V holds interests in real estate properties. See Item 1 and Schedule XI for information pertaining to these properties. ITEM 3. LEGAL PROCEEDINGS: As of December 31, 1996, REAL V's Corporate General Partner was a plaintiff or defendant in several lawsuits. None of these suits were related to REAL V. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS: Not applicable. PART II. ITEM 5. MARKET FOR THE REGISTRANT'S PARTNERSHIP INTERESTS AND RELATED SECURITY HOLDER MATTERS: The Limited Partnership Interests are not traded on a public exchange but were sold through a public offering managed by Lehman Brothers Inc. It is not anticipated that any public market will develop for the purchase and sale of any partnership interest. Limited Partnership interests may be transferred only if certain requirements are satisfied. At December 31, 1996, there were 1,497 registered holders of units in REAL V. No distributions have been made from the inception of the Partnership to December 31, 1996. The Partnership has invested in certain government assisted projects under programs which in many instances restrict the cash return available to project owners. The Partnership was not designed to provide cash distributions to investors in circumstances other than refinancing or disposition. 6 ITEM 6. SELECTED FINANCIAL DATA:
Year Ended December 31, ---------------------------------------------------------------------------- 1996 1995 1994 1993 1992 ------------- ----------- ------------ ------------ --------- Loss From Operations $ (287,542) $ (287,216) $ (305,798) $ (336,239) (289,477) Distributions From Limited Partnerships Recognized as Income 215,140 221,276 218,651 245,331 220,731 Equity in Income of Limited Partnerships and amortization of acquisition costs 371,644 455,651 393,230 262,614 252,969 ------------- ----------- ------------ ------------ --------- Net Income $ 299,242 $ 389,711 $ 306,083 $ 171,706 $ 184,223 ============= =========== ============ ============ ========= Net Income per Limited Partnership Interest $ 38 $ 50 $ 39 $ 22 23 ============= =========== ============ ============ ========= Total assets $ 3,259,178 $ 2,979,971 $ 2,592,397 $ 2,255,550 $ 2,091,002 ============= =========== ============ ============ ========= Investments in Limited Partnerships $ 1,305,672 $ 1,103,818 $ 884,383 $ 659,376 $ 653,364 ============= =========== ============ ============ =========
7 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL AND RESULTS OF OPERATIONS: LIQUIDITY The Partnership's primary sources of funds include interest income on money market funds and certificates of deposit and distributions from local partnership in which the Partnership has invested. CAPITAL RESOURCES REAL V received $9,750,000 in subscriptions for units of limited partnership interests (at $5,000 per unit) during the period July 7, 1982, to October 4, 1982, pursuant to a registration statement on Form S-11. As of March 31, 1983, REAL V received an additional $9,765,000 in subscriptions pursuant to the exercise of warrants and the sale of additional limited partnership interests. RESULTS OF OPERATIONS The Partnership was formed to provide various benefits to its partners as discussed in Item 1. It is anticipated that the local limited partnerships in which REAL V has invested could produce tax losses for as long as 20 years. Tax benefits will decline over time as the advantages of accelerated depreciation are greatest in the earlier years, as deductions for interest expense will decrease as mortgage principal is amortized and as the Tax Reform Act of 1986 limits the deductions available. At December 31, 1996, the Partnership has investments in 19 limited partnerships, all of which own housing projects that were substantially all rented. The Partnership, as a limited partner, is entitled to 75% to 99% of the profits and losses of the local limited partnerships. The Partnership accounts for its investments in the local limited partnerships on the equity method, thereby adjusting its investment balance by its proportionate share of the income or loss of the local limited partnerships. Equity in losses of limited partnerships is recognized in the financial statements until the limited partnership investment account is reduced to a zero balance. Losses incurred after the limited partnership investment account is reduced to zero are not recognized. Limited partners are not liable for losses beyond their contributed capital. At December 31, 1996, 1995 and 1994, the Partnership has a positive investment balance in only three local limited partnerships. Distributions received from limited partnerships are recognized as return of capital until the investment balance has been reduced to zero or to a negative amount equal to future capital contributions required. Subsequent distributions received are recognized as income. The total losses from the 19 local limited partnerships that were allocated to the Partnership were $59,000, $41,000 and $107,000 for the years ended December 31, 1996, 1995 and 1994, respectively. However, because losses incurred after the investment account is reduced to a zero balance are not recognized, the Partnership recognized equity in income of limited partnerships, substantially all from the three partnerships with a positive investment balance, of $371,644, $455,651 and $393,230 for the years ended December 31, 1996, 1995 and 1994. During the year ended December 31, 1996, the Partnership contributed $19,568 to a local limited partnership, thereby allowing the Partnership to recognize a loss from that partnership in that amount, which reduced the income recognized from the partnerships with positive investment balances. The cumulative amount of the unrecognized equity in losses of certain limited partnerships was approximately $6,389,000 and $5,949,000 as of December 31, 1996 and 1995, respectively. Distributions from the local limited partnerships in which the Partnership did not have a positive investment balance were $215,140, $221,276 and $218,651 for the years ended December 31, 1996, 1995 and 1994, respectively. These amounts were recognized as income on the accompanying statements of operations, in accordance with the equity method of accounting. As of December 31, 1996, 1995 and 1994, the Partnership has cash and cash equivalents of $1,953,506, $1,876,153 and $1,708,014, respectively. These amounts are on deposit primarily with one high credit quality financial institution. Approximately $1,905,000, $1,875,000 and $1,707,000 of the balance at December 31, 1996, 1995 and 1994, respectively, was invested in cash equivalents earning interest. This resulted in the Partnership earning $65,261, 8 $60,997 and $44,640 in interest income for the years ended December 31, 1996, 1995 and 1994, respectively. The amount of interest income varies with market rates available on deposits and with the amount of funds available for investment. Cash equivalents can be converted to cash to meet obligations of the Partnership as they arise. The Partnership intends to continue investing available funds in this manner. A recurring partnership expense is the annual management fee. The fee is payable to the Corporate General Partner of the Partnership and is calculated at 4 percent of the Partnership's invested assets. The management fee is paid to the Corporate General Partner for its continuing management of partnership affairs. The fee is payable beginning with the month following the Partnership's initial investment in a local limited partnership. Since the invested assets have not changed during each of the three years in the period ended December 31, 1996, management fees have remained constant at $254,448 for each of these years. Operating expenses, other than management fees, consist of legal and accounting fees for services rendered to the Partnership and administrative expenses, which were generally consistent for the three years presented. Legal and accounting fees were $50,013, $40,173 and $50,860 for the years ended December 31, 1996, 1995 and 1994, respectively. Administrative expenses were $48,342, $53,592 and $45,130 for the years ended December 31, 1996, 1995 and 1994, respectively. Included in administrative expenses are reimbursements to NAPICO for certain expenses, which totalled $19,287, $17,820 and $17,171 for the years ended December 31, 1996, 1995 and 1994, respectively. The results of operations of the local limited partnerships were fairly constant during the years ended December 31, 1996, 1995 and 1994. Contributing to the relative stability of operations at the local partnerships is the fact that a large portion of the local partnerships are operating apartment projects which are subsidized and have mortgage notes payable to or insured by agencies of the federal or local government. Currently, eighteen of the nineteen local partnerships are receiving rental subsidies. Total revenue for the 19 local partnerships has remained fairly constant, and was $12,644,000, $12,614,000 and $12,798,000 for the years ended December 31, 1996, 1995 and 1994, respectively. Total expenses for the 19 local partnerships remained fairly consistent, and were $12,702,000, $12,703,000 and $12,953,000 for the years ended December 31, 1996, 1995 and 1994, respectively. Expenses decreased by $250,000 from 1994 and 1995 primarily as a result of a decrease in depreciation expense of $236,000 from 1994 and 1995, due to certain items becoming fully depreciated. The total net loss for the 19 local partnerships for 1996, 1995 and 1994 aggregated $59,000, $89,000 and $155,000, respectively. The losses allocated to the partnership were $59,000, $41,000 and $107,000 for 1996, 1995 and 1994, respectively. The Partnership, as a limited partner in the local limited partnerships in which it has invested, is subject to the risks incident to the construction, management, and ownership of improved real estate. The Partnership investments are also subject to adverse general economic conditions, and accordingly, the status of the national economy, including substantial unemployment and concurrent inflation, could increase vacancy levels, rental payment defaults, and operating expenses, which in turn, could substantially increase the risk of operating losses for the projects. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA: The Financial Statements and Supplementary Data are listed under Item 14. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE: Not applicable. 9 REAL ESTATE ASSOCIATES LIMITED V (A California limited partnership) FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULES AND INDEPENDENT PUBLIC ACCOUNTANTS' REPORT DECEMBER 31, 1996 10 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Partners of Real Estate Associates Limited V (A California limited partnership) We have audited the accompanying balance sheets of Real Estate Associates Limited V (a California limited partnership) as of December 31, 1996 and 1995, and the related statements of operations, partners' equity (deficiency) and cash flows for each of the three years in the period ended December 31, 1996. Our audits also included the financial statement schedules listed in the index on item 14. These financial statements and financial statement schedules are the responsibility of the management of the Partnership. Our responsibility is to express an opinion on these financial statements and financial statement schedules based on our audits. We did not audit the financial statements of certain limited partnerships, the investments in which are reflected in the accompanying financial statements using the equity method of accounting. The investments in these limited partnerships represent 31 percent and 26 percent of total assets as of December 31, 1996 and 1995, respectively, and the equity in income of these limited partnerships represents 40 percent, 42 percent and 39 percent of the total net income of the Partnership for the years ended December 31, 1996, 1995 and 1994, respectively, and represent a substantial portion of the investee information in Note 2 and the financial statement schedules. The financial statements of these limited partnerships are audited by other auditors. Their reports have been furnished to us and our opinion, insofar as it relates to the amounts included for these limited partnerships, is based solely on the reports of the other auditors. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the 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 our audits and the reports of other auditors provide a reasonable basis for our opinion. In our opinion, based on our audits and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the financial position of Real Estate Associates Limited V as of December 31, 1996 and 1995, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1996 in conformity with generally accepted accounting principles. Also, in our opinion, based on our audits and the reports of other auditors, such financial statement schedules, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein. DELOITTE & TOUCHE LLP Los Angeles, California March 26, 1997 11 [LOGO] [PHILIP ROOTBERG & COMPANY, LLP LETTERHEAD] INDEPENDENT AUDITOR'S REPORT To the Partners West Town Housing Partners We have audited the accompanying balance sheet of West Town Housing Partners (a limited partnership) - F.H.A. Project No. 071-35490/IL06-0054-042 as of December 31,1996 and 1995, and the related statements of profit and loss, partners' capital and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of West Town Housing Partners - F.H.A. Project No. 071-35490/IL06-0054 042 as of December 31, 1996 and 1995, and the results of its operations, changes in partners' capital and its cash flows for the years then ended in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated February 3, 1997, on our consideration of the Partnership's internal control structure and a report dated February 3, 1997, on its compliance with laws and regulations. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental schedules listed on the preceding contents page are presented for purposes of additional analysis to comply with HUD reporting requirements and are not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ PHILIP ROOTBERG & COMPANY, LLP Chicago, Illinois February 3, 1997 12 [LOGO] [ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD] INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND ADDITIONAL FINANCIAL DATA REQUIRED BY THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT To the Partners of Young Israel-Canoga Park Limited Partnership We have audited the accompanying balance sheets of YOUNG ISRAEL-CANOGA PARK LIMITED PARTNERSHIP, FHA Project No. 122-35501-PM-L8 (the "Partnership") as of December 31, 1996 and 1995, and the related statements of income, changes in partners' deficiency and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Young Israel-Canoga Park Limited Partnership as of December 31, 1996 and 1995, and the results of its operations, changes in its partners' deficiency and its cash flows for the years then ended in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated February 17, 1997 on our consideration of the Partnership's internal control structure and a report dated February 17, 1997 on its compliance with laws and regulations. 13 Our audits were conducted for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying additional 1996 financial data shown on pages 13 through 19 are presented for the purpose of additional analysis and are not a required part of the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the 1996 financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ ALTSCHLER, MELVOIN AND GLASSER LLP Los Angeles, California February 17, 1997 14 [LOGO] [STONE CARLIE & COMPANY, L.C. LETTERHEAD] INDEPENDENT AUDITORS' REPORT The Partners Castle Park Associates Limited Partnership St. Louis, Missouri We have audited the accompanying balance sheet of Castle Park Associates Limited Partnership, Project No. 085-35328-PM-L8, as of December 31, 1996, and the related statements of profit and loss (on HUD Form No. 92410), 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 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 Castle Park Associates Limited Partnership as of December 31, 1996, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated January 22, 1997 on our consideration of the partnership's internal control structure and a report dated January 22, 1997 on its compliance with laws and regulations. Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information included on pages 14 through 20 is presented for purposes of additional analysis and is not a required part of the basic financial statements. This information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ STONE CARLIE & COMPANY, L.C. St. Louis, Missouri January 22, 1997 15 [LOGO] [EDWARD A. GEMMA LETTERHEAD] Independent Auditor's Report To The Partners Centennial Fort Wayne Associates (a Limited Partnership) Providence, Rhode Island I have audited the accompanying balance sheets of Centennial Fort Wayne Associates (a Limited Partnership), HUD Project No. 073-35456-PM-L8 as of December 31, 1996 and 1995, and the related statements of loss, cash flows and partners' equity for the years ended December 31, 1996 and 1995. These financial statements are the responsibility of the Project's management. My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that I 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. I believe that my audit provides a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of HUD Project No. 073-35456-PM-L8 as of December 31, 1996 and 1995, and the results of its operations and cash flows and partners' equity for the years then ended, in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, I have also issued a report dated January 22, 1997, on my consideration of the Partnership's internal control structure and reports dated January 22, 1997, on its compliance with specific requirements applicable to major HUD programs, specific requirements applicable to Affirmative Fair Housing, and compliance with laws and regulations. My audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supporting information included in the report (shown on pages 11 to 21) are presented for the purposes of additional analysis and are not a required part of the basic financial statements of HUD Project No. 073-35456-PM-L8. Such information has been subjected to the auditing procedures applied on the audit of the basic financial statements and, in my opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ EDWARD A. GEMMA East Providence, Rhode Island January 22, 1997 16 [LOGO] [LEHMAN BUTTERWICK & COMPANY PC LETTERHEAD] INDEPENDENT AUDITOR'S REPORT To the Partners Creekside Gardens Investment Company Loveland, Colorado We have audited the accompanying balance sheet of Creekside Gardens Investment Company, HUD Project No. 101-35343-PM-L8, as of December 31, 1996, and the related statement of profit and loss, changes in project equity (deficit) and cash flows for the year then ended. These financial statements are the responsibility of the Project's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards, Government Auditing Standards, issued by the Comptroller General of the United States, and the Consolidated Audit Guide for Audits of HUD Programs (the Guide), issued by the U.S. Department of Housing and Urban Development, Office of the Inspector General, in July 1993. Those standards and the Guide 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 Creekside Gardens Investment Company, HUD Project No. 101-35343-PM-L8, as of December 31,1996, and the results of its operations and changes in project equity (deficit) and cash flows for the year then ended in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The supporting data included in the report (shown on pages 11 through 15) are presented for the purpose of additional analysis and are not a required part of the financial statements of HUD Project No. 101-35343-PM-L8. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ LEHMAN, BUTTERWICK & COMPANY, P.C. Denver, Colorado January 23, 1997 17 [LOGO] [EUBANK & BETTS] INDEPENDENT AUDITORS' REPORT The Partners Delhaven Manor, Ltd. Jackson, Mississippi We have audited the accompanying balance sheet of Delhaven Manor, Ltd., a Mississippi limited partnership, (HUD Project No. 065-35350-PM-L8) as of December 31, 1996, and the related statements of profit and loss (Form 92410), partners' capital, and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Delhaven Manor, Ltd. as of December 31, 1996, and the results of its operations and the changes in partners' capital and cash flows for the year then ended in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U. S. Department of Housing and Urban Development, we have also issued a report dated January 29, 1997, on our consideration of Delhaven Manor, Ltd.'s internal control structure and reports dated January 29, 1997, on its compliance with specific requirements applicable to major HUD programs and specific requirements applicable to Affirmative Fair Housing. 18 Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental information included in Schedules 1, 2, 3 and 4 is presented for the purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ EUBANK & BETTS, PLLC Jackson, Mississippi January 29, 1997 19 [LOGO] [SCOTT & COMPANY LETTERHEAD] Independent Auditor's Report To the Partners of Fox Run Apartments, Ltd. Orange, Texas We have audited the accompanying balance sheet of Fox Run Apartments, Ltd., FHA Project No. 114-35351-PM-L8 (a limited partnership), as of December 31, 1996, and the related statements of profit and loss, changes in partners' equity and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards, Government Auditing Standards issued by the Comptroller General of the United States and the July, 1993, Consolidated Audit Guide for Audits of HUD Programs. 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 above mentioned financial statements present fairly, in all material respects, the financial position of Fox Run Apartments, Ltd. as of December 31, 1996, and the results of its operations and the changes in partners' equity and cash flows for the year then ended in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs, we have also issued a report dated January 29, 1997 on our consideration of the Partnership's internal control structure and two reports dated January 29, 1997 on its compliance with specific requirements applicable to major HUD programs and Affirmative Fair Housing. 20 Fox Run Apartments, Ltd. Independent Auditor's Report Page 2 Our audit was conducted for the purpose of forming an opinion on the financial statements taken as a whole. The supporting data (shown on pages 13 through 18) are presented for the purposes of additional analysis and are not a required part of the basic financial statements of Fox Run Apartments, Ltd. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly presented in all material respects in relation to the financial statements taken as a whole. /s/ SCOTT & COMPANY Pasadena, Texas January 29, 1997 Independent Auditor's Employer Identification Number 76-0120424 William F. Scott - Proprietor 21 [LOGO] [JUNKERMIER, CLARK, CAMPANELLA, STEVENS, PC LETTERHEAD] REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS To the Partners Grandview Place (A Limited Partnership) Missoula, Montana We have audited the balance sheets of Grandview Place (A Limited Partnership), HUD Project 093-35098 PM-L8, as of December 31, 1996 and 1995, and the related statements of operations, partners' deficit, and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with Generally Accepted Auditing Standards, Government Auditing Standards issued by the Comptroller General of the United States, and the Consolidated Audit Guide for Audits of HUD Programs, issued by the U.S. Department of Housing and Urban Development, Office of Inspector General, in July 1993. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Grandview Place (A Limited Partnership), as of December 31, 1996 and 1995, and the results of its operations and its cash flows for the years then ended in conformity with Generally Accepted Accounting Principles. In accordance with Government Auditing Standards, we have also issued reports dated January 24, 1997, on our consideration of Grandview Place's internal control structure and on its compliance with laws and regulations applicable to the basic financial statements. Furthermore, in accordance with the Consolidate Audit Guide, we have also issued reports dated January 24, 1997, on the major HUD programs. /s/ JUNKERMIER, CLARK, CAMPANELLA, STEVENS, P.C. Certified Public Accountants Kalispell, Montana January 24, 1997 22 [LOGO] [ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD] INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND ADDITIONAL FINANCIAL DATA REQUIRED BY THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT To the Partners of Hamlin Estates We have audited the accompanying balance sheets of HAMLIN ESTATES (a California limited partnership), FHA Project No. 122-35551-PM-L8 (the "Partnership") as of December 31, 1996 and 1995, and the related statements of operations, changes in partners' deficiency and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Hamlin Estates as of December 31, 1996 and 1995, and the results of its operations, changes in its partners' deficiency, and its cash flows for the years then ended, in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated February 17, 1997 on our consideration of the Partnership's internal control structure and a report dated February 17, 1997 on its compliance with laws and regulations. 23 Our audits were conducted for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying additional 1996 financial data shown on pages 13 through 19 are presented for purposes of additional analysis and are not a required part of the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the 1996 financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ ALTSCHULER, MELVOIN AND GLASSER LLP Los Angeles, California February 17, 1997 24 [LOGO] [SCOTT & COMPANY LETTERHEAD] To the Partners of Heritage Square, Ltd. Texas City, Texas Independent Auditor's Report We have audited the accompanying balance sheet of Heritage Square, Ltd., FHA Project No.114-35266-PM-L8 (a limited partnership), as of December 31, 1996, and the related statements of profit and loss, changes in partners' equity and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards, Government Auditing Standards issued by the Comptroller General of the United States and the July, 1993, Consolidated Audit Guide for Audits of HUD Programs. 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 above mentioned financial statements present fairly, in all material respects, the financial position of Heritage Square, Ltd. as of December 31, 1996, and the results of its operations and the changes in partners' equity and cash flows for the year then ended in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs, we have also issued a report dated February 4, 1997 on our consideration of the Partnership's internal control structure and two reports dated February 4, 1997 on its compliance with specific requirements applicable to major HUD programs and Affirmative Fair Housing. 25 Heritage Square, Ltd. Independent Auditor's Report Page 2 Our audit was conducted for the purpose of forming an opinion on the financial statements taken as a whole. The supporting data (shown on pages 13 through 18) are presented for the purposes of additional analysis and are not a required part of the basic financial statements of Heritage Square, Ltd. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly presented in all material respects in relation to the financial statements taken as a whole. /s/ SCOTT & COMPANY Pasadena, Texas February 4, 1997 Independent Auditor's Employer Identification Number 76-0120424 William F. Scott - Proprietor 26 [LOGO] [NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP LETTERHEAD] INDEPENDENT AUDITORS' REPORT The Partners Palm Springs Senior Citizens Complex Culver City, California We have audited the accompanying balance sheets of Palm Springs Senior Citizens Complex (a California partnership), CHFA Project No. 79-10-S, as of December 31, 1996 and 1995 and the related statements of operations, partners' equity and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Palm Springs Senior Citizens Complex as of December 31, 1996 and 1995, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards we have also issued a report dated January 22, 1997 on our consideration of Palm Springs Senior Citizens Complex's Internal Control Structure and on its compliance with laws and regulations applicable to the California , assistance programs. /s/ NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP Beverly Hills, California January 22, 1997 27 [LOGO] [ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD] INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND ADDITIONAL FINANCIAL DATA REQUIRED BY THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT To the Partners of Panorama City I We have audited the accompanying balance sheets of PANORAMA CITY I (a California limited partnership), FHA Project No. 122-35503-PM-L8 (the "Partnership"), as of December 31, 1996 and 1995, and the related statements of operations, changes in partners' deficiency and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Panorama City I as of December 31, 1996 and 1995, and the results of its operations, changes in its partners' deficiency, and its cash flows for the years then ended, in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated February 17, 1997 on our consideration of the Partnership's internal control structure and a report dated February 17, 1997 on its compliance with laws and regulations. Our audits were conducted for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying additional 1996 financial data shown on pages 13 through 19 are presented for purposes of additional analysis and are not a required part of the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the 1996 financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ ALTSCHULER, MELVOIN AND GLASSER LLP Los Angeles, California February 17, 1997 28 [LOGO] [ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD] INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND ADDITIONAL FINANCIAL DATA REQUIRED BY THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT To the Partners of Panorama City II We have audited the accompanying balance sheets of PANORAMA CITY II (a California limited partnership), FHA Project No. 122-35504-PM-L8 (the "Partnership"), as of December 31, 1996 and 1995, and the related statements of operations, changes in partners' deficiency and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards 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 signif icant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Panorama City II as of December 31, 1996 and 1995, and the results of its operations, changes in its partners' deficiency, and its cash flows for the years then ended, in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated February 17, 1997 on our consideration of the Partnership's internal control structure and a report dated February 17, 1997 on its compliance with laws and regulations. Our audits were conducted for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying additional 1996 financial data shown on pages 13 through 19 are presented for purposes of additional analysis and are not a required part of the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the 1996 financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ ALTSCHULER, MELVOIN AND GLASSER LLP Los Angeles, California February 17, 1997 29 [LOGO] [ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD] INDEPENDENT AUDITORS' REPORT To the Partners of Pine Lake Terrace Associates We have audited the accompanying balance sheets of PINE LAKE TERRACE ASSOCIATES (a limited partnership) as of December 31, 1996 and 1995, and the related statements of operations, changes in partners' deficiency and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Pine Lake Terrace Associates at December 31, 1996 and 1995, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. /s/ Altshuler, Melvoin and Glasser LLP Los Angeles, California January 29, 1997 30 [LOGO] [SCOTT & COMPANY LETTERHEAD] Independent Auditor's Report To the Partners of Ranger Apartments, Ltd. Ranger, Texas HUD Field Office Director Fort Worth, Texas We have audited the accompanying balance sheet of Ranger Apartments, Ltd., FHA Project No. 113-35067-PM-SR-L8 (a limited partnership), as of December 31, 1996, and the related statements of profit and loss, changes in partners' equity and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards, Government Auditing Standards issued by the Comptroller General of the United States and the July, 1993, Consolidated Audit Guide for Audits of HUD Programs. 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 above mentioned financial statements present fairly, in all material respects, the financial position of Ranger Apartments, Ltd. as of December 31, 1996, and the results of its operations and the changes in partners' equity and cash flows for the year then ended in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs, we have also issued a report dated January 27, 1997 on our consideration of the Partnership's internal control structure and two reports dated January 27, 1997 on its compliance with specific requirements applicable to major HUD programs and Affirmative Fair Housing. 31 Ranger Apartments, Ltd. Independent Auditor's Report Page 2 Our audit was conducted for the purpose of forming an opinion on the financial statements taken as a whole. The supporting data (shown on pages 12 through 17) are presented for the purposes of additional analysis and are not a required part of the basic financial statements of Ranger Apartments, Ltd. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly presented in all material respects in relation to the financial statements taken as a whole. /s/ SCOTT & COMPANY Pasadena, Texas January 27, 1997 Independent Auditor's Employer Identification Number 76-0120424 William F. Scott - Proprietor 32 [LOGO] [BADER MARTIN ROSS & SMITH, P.S. LETTERHEAD] Partners Richland Senior Associates, a limited partnership Richland, Washington Independent Auditors' Report We have audited the accompanying balance sheets of Richland Senior Associates, a limited partnership, Project No. 171-35196, as of December 31, 1996 and 1995, and the related statements of operations, partners' equity (deficit) and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Richland Senior Associates, a limited partnership, as of December 31, 1996 and 1995, and the results of its operations and its cash flows for the years then ended, in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued reports dated January 16, 1997, on our consideration of the partnership's internal control structure and on its compliance with laws and regulations. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supporting data required by HUD (shown on pages 13 to 21) is presented for purposes of additional analysis and is not a required part of the basic financial statements of the Partnership. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ BADER MARTIN ROSS & SMITH, P.S. Seattle, Washington January 16, 1997 33 [LOGO] [LITZ & COMPANY LETTERHEAD] Florence Gardens Development Co. aka Robert Farrell Manor 6330 San Vicente Boulevard, Suite 270 Los Angeles, California 90048 INDEPENDENT AUDITORS' REPORT Gentlemen: We have audited the accompanying balance sheet of Robert Farrell Manor(HUD Project No. 122-35545-PM-L8) as of December 31, 1996, and the related statements of profit and loss, changes in equity and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. 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.122-35545-PM-L8 as of December 31, 1996, and the results of its operations, changes in equity and cash flows for the year then ended in conformity with generally accepted accounting principles, applied on a basis consistent with prior periods and with HUD requirements. In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U. S. Department of Housing and Urban Development, we have also issued a report dated January 23, 1997 on our consideration of Robert Farrell Manor's internal control structure, and reports dated January 23, 1997 on its compliance with specific requirements applicable to major HUD programs and specific requirements applicable to Affirmative Fair Housing. Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supporting information, as shown in the attached Index, included in the report is presented for the purposes of additional analysis and is not a required part of the basic financial statements of HUD Project No. 122-35545-PM-L8. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ LITZ & COMPANY January 23, 1997 Erica M. Kish, CPA Litz & Company 8906 W. Olympic Boulevard Beverly Hills, CA 90211 (213) 272-1505 95-3537761 34 REAL ESTATE ASSOCIATES LIMITED V (a California limited partnership) BALANCE SHEETS DECEMBER 31, 1996 AND 1995 ASSETS
1996 1995 ----------- ----------- INVESTMENTS IN LIMITED PARTNERSHIPS (Note 2) $ 1,305,672 $ 1,103,818 CASH AND CASH EQUIVALENTS (Note 1) 1,953,506 1,876,153 ----------- ----------- TOTAL ASSETS $ 3,259,178 $ 2,979,971 =========== =========== LIABILITIES AND PARTNERS' EQUITY LIABILITIES: Accounts payable $ 9,978 $ 30,013 ----------- ----------- COMMITMENTS AND CONTINGENCIES (Notes 3 and 4) PARTNERS' EQUITY (DEFICIENCY): General partners (124,854) (127,847) Limited partners 3,374,054 3,077,805 ----------- ----------- 3,249,200 2,949,958 ----------- ----------- TOTAL LIABILITIES AND PARTNERS' EQUITY $ 3,259,178 $ 2,979,971 =========== ===========
The accompanying notes are an integral part of these financial statements. 35 REAL ESTATE ASSOCIATES LIMITED V (a California limited partnership) STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
1996 1995 1994 --------- --------- --------- INTEREST INCOME $ 65,261 $ 60,997 $ 44,640 --------- --------- --------- OPERATING EXPENSES: Legal and accounting 50,013 40,173 50,860 Management fees - general partner (Note 3) 254,448 254,448 254,448 Administrative (Note 3) 48,342 53,592 45,130 --------- --------- --------- Total operating expenses 352,803 348,213 350,438 --------- --------- --------- LOSS FROM OPERATIONS (287,542) (287,216) (305,798) DISTRIBUTIONS FROM LIMITED PARTNERSHIPS RECOGNIZED AS INCOME (Note 2) 215,140 221,276 218,651 EQUITY IN INCOME OF LIMITED PARTNERSHIP AND AMORTI- ZATION OF ACQUISITION COSTS (Note 2) 371,644 455,651 393,230 --------- --------- --------- NET INCOME $ 299,242 $ 389,711 $ 306,083 ========= ========= ========= NET INCOME PER LIMITED PARTNERSHIP INTEREST (Note 1) $ 38 $ 50 $ 39 ========= ========= =========
The accompanying notes are an integral part of these financial statements. 36 REAL ESTATE ASSOCIATES LIMITED V (a California limited partnership) STATEMENTS OF PARTNERS' EQUITY (DEFICIENCY) FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
General Limited Partners Partners Total ---------- ----------- ---------- EQUITY (DEFICIENCY), January 1, 1994 $ (134,805) $ 2,388,969 $2,254,164 Net income for 1994 3,061 303,022 306,083 ---------- ----------- ---------- EQUITY (DEFICIENCY), December 31, 1994 (131,744) 2,691,991 2,560,247 Net income for 1995 3,897 385,814 389,711 ---------- ----------- ---------- EQUITY (DEFICIENCY), December 31, 1995 (127,847) 3,077,805 2,949,958 Net income for 1996 2,993 296,249 299,242 ---------- ----------- ---------- EQUITY (DEFICIENCY), December 31, 1996 $ (124,854) $ 3,374,054 $3,249,200 ========== =========== ==========
The accompanying notes are an integral part of these financial statements. 37 REAL ESTATE ASSOCIATES LIMITED V (a California limited partnership) STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
1996 1995 1994 ---------- ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 299,242 $ 389,711 $ 306,083 Adjustments to reconcile net income to net cash used in operating activities: Equity in income of limited partnerships and amortization of acquisition costs (371,644) (455,651) (393,230) Increase (decrease) in accounts payable (20,035) (2,137) 30,764 ---------- ---------- ---------- Net cash used in operating activities (92,437) (68,077) (56,383) ---------- ---------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital contributions to limited partnerships (19,568) - - Distributions from limited partnerships recognized as a return of capital 189,358 236,216 168,223 ---------- ---------- ---------- Net cash provided by investing activities 169,790 236,216 168,223 ---------- ---------- ---------- NET INCREASE IN CASH AND CASH EQUIVALENTS 77,353 168,139 111,840 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 1,876,153 1,708,014 1,596,174 ---------- ---------- ---------- CASH AND CASH EQUIVALENTS, END OF YEAR $1,953,506 $1,876,153 $1,708,014 ========== ========== ==========
The accompanying notes are an integral part of these financial statements. 38 REAL ESTATE ASSOCIATES LIMITED V (a California limited partnership) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization Real Estate Associates Limited V (the "Partnership"), formed under the California Limited Partnership Act, was organized on May 7, 1982. The Partnership was formed to invest primarily in other limited partnerships, which own and operate primarily federal, state or local government-assisted housing projects. The general partners of the Partnership are National Partnership Investments Corp. (NAPICO), the corporate general partner, and National Partnership Investments Associates II (NAPIA II), a limited partnership. Casden Investment Corporation owns 100 percent of NAPICO's stock. The general partner of NAPIA II is NAPICO. The Partnership offered and issued 1,950 units of limited partner interests through a public offering. Each unit was comprised of two limited partner interests and a warrant granting the investor the right to purchase two additional limited partner interests. An additional 3,908 interests were issued from the exercise of warrants and the sale of interests associated with warrants not exercised. The general partners have a 1 percent interest in profits and losses of the Partnership. The limited partners have the remaining 99 percent interest in proportion to their respective investments. The Partnership shall be dissolved only upon the expiration of 52 complete calendar years (December 31, 2034) from the date of the formation of the Partnership or the occurrence of other events as specified in the Partnership agreement. Upon total or partial liquidation of the Partnership or the disposition or partial disposition of a project or project interest and distribution of the proceeds, the general partners will be entitled to a liquidation fee as stipulated in the Partnership agreement. The limited partners will have a priority return equal to their invested capital attributable to the project(s) or project interest(s) sold and shall receive from the sale of the project(s) or project interest(s) an amount sufficient to pay state and federal income taxes, if any, calculated at the maximum rate then in effect. The general partners' liquidation fee may accrue but shall not be paid until the limited partners have received distributions equal to 100 percent of their capital contributions. 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 reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Method of Accounting for Investments in Limited Partnerships The investments in limited partnerships are accounted for on the equity method. Acquisition, selection and other costs related to the acquisition of the projects have been capitalized as part of the investment account and are being amortized on a straight line basis over the estimated lives of the underlying assets, which is generally 30 years. 5 39 REAL ESTATE ASSOCIATES LIMITED V (a California limited partnership) NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1996 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Net Income Per Limited Partnership Interest Net income per limited partner interest was computed by dividing the limited partners' share of net income by the number of limited partnership interests outstanding during the year. The number of limited partnership interests was 7,808 for all years presented. Cash and Cash Equivalents Cash and cash equivalents consist of cash and bank certificates of deposit with an original maturity of three months or less. The Partnership has its cash and cash equivalents on deposit primarily with one high credit quality financial institution. Such cash and cash equivalents are in excess of the FDIC insurance limit. Impairment of Long-Lived Assets The Partnership reviews long-lived assets to determine if there has been any permanent impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If the sum of the expected future cash flows is less than the carrying amount of the assets, the Partnership recognizes an impairment loss. 2. INVESTMENTS IN LIMITED PARTNERSHIPS The Partnership holds limited partnership interests in 19 limited partnerships. The partnerships own residential low income rental projects consisting of 1,319 apartment units. The mortgage loans of these projects are payable to or insured by various governmental agencies. The Partnership, as a limited partner, is entitled to 75 percent to 99 percent of the profits and losses in these limited partnerships. Equity in losses of limited partnerships is recognized in the financial statements until the limited partnership investment account is reduced to a zero balance. Losses incurred after the limited partnership investment account is reduced to zero are not recognized. Limited partners are not liable for losses beyond their contributed capital. The cumulative amount of the unrecognized equity in losses of certain limited partnerships was approximately $6,389,000 and $5,949,000 as of December 31, 1996 and 1995, respectively. Distributions from the limited partnerships are accounted for as a return of capital until the investment balance is reduced to zero or to a negative amount equal to further capital contributions required. Subsequent distributions received are recognized as income. 6 40 REAL ESTATE ASSOCIATES LIMITED V (a California limited partnership) NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1996 2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED) The following is a summary of the investments in limited partnerships and reconciliation to the limited partnership accounts:
1996 1995 --------- ---------- Investment balance, beginning of year $1,103,818 $ 884,383 Capital contributions to limited partnership 19,568 - Equity in income of limited partnerships 379,156 463,163 Amortization of capitalized acquisition costs and fees (7,512) (7,512) Cash distributions recognized as a return of capital (189,358) (236,216) ----------- ----------- Investment balance, end of year $1,305,672 $1,103,818 ========== ==========
The difference between the investment in the accompanying balance sheets at December 31, 1996 and 1995, and the deficiency per the limited partnerships' combined financial statements is due primarily to cumulative unrecognized equity in losses of certain limited partnerships, costs capitalized to the investment account and cumulative distributions recognized as income. Selected financial information from the combined financial statements of the limited partnerships at December 31, 1996 and 1995 and for each of the three years in the period ended December 31, 1996 is as follows: Balance Sheets
1996 1995 -------- -------- (in thousands) Land and buildings, net $36,620 $38,311 ======= ======= Total assets $44,770 $46,029 ======= ======= Mortgages payable $49,989 $50,747 ======= ======= Total liabilities $53,423 $54,127 ======= ======= Deficiency of Real Estate Associates Limited V $(8,059) $(7,613) ======= ======= Deficiency of other partners $ (595) $ (485) ======= =======
7 41 REAL ESTATE ASSOCIATES LIMITED V (a California limited partnership) NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1996 2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED) Statements of Operations
1996 1995 1994 -------- -------- -------- (in thousands) Total revenue $12,644 $12,614 $12,798 ======= ======= ======= Interest expense $ 5,360 $ 5,517 $ 5,592 ======= ======= ======= Depreciation $ 1,902 $ 1,886 $ 2,122 ======= ======= ======= Total expenses $12,702 $12,703 $12,953 ======= ======= ======= Net loss $ (59) $ (89) $ (155) ======= ======= ======= Net loss allocable to the Partnership $ (59) $ (41) $ (107) ======= ======= =======
Land and buildings, above, have been adjusted for the amount by which the investment in the limited partnerships exceeds the Partnership's share of the net book value of the underlying net assets of the investee which are recorded at historical costs. Depreciation on the adjustment is provided for over the estimated remaining useful lives of the properties. An affiliate of NAPICO is the general partner in 4 of the limited partnerships included above, and another affiliate receives property management fees of approximately 5 to 6 percent of their revenue. The affiliate received property management fees of $42,600, $41,359 and $33,401 in 1996, 1995 and 1994, respectively The following sets forth the significant data for these partnerships, reflected in the accompanying financial statements using the equity method of accounting:
1996 1995 1994 -------- -------- -------- (in thousands) Total assets $ 3,744 $3,854 ======= ====== Total liabilities $ 4,864 $4,932 ======= ====== Deficiency of Real Estate Associates Limited V $(1,002) $ (970) ======= ====== Deficiency of other partners $ (117) $ (107) ======= ====== Total revenue $ 914 $ 914 $ 915 ======= ====== ====== Net loss $ (37) $ (56) $ (8) ======= ====== ======
8 42 REAL ESTATE ASSOCIATES LIMITED V (a California limited partnership) NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1996 3. FEES AND EXPENSES DUE GENERAL PARTNER Under the terms of the Restated Certificate and Agreement of Limited Partners, the Partnership is obligated to NAPICO for an annual management fee equal to .4 percent of the original invested assets of the limited partnerships. Invested assets is defined as the costs of acquiring project interests, including the proportionate amount of the mortgage loans related to the Partnership's interest in the capital accounts of the respective partnerships. The Partnership reimburses NAPICO for certain expenses. The reimbursement to NAPICO was $19,287, $17,820 and $17,171 in 1996, 1995 and 1994, respectively, and is included in operating expenses. 4. CONTINGENCIES The corporate general partner of the Partnership is a plaintiff in various lawsuits and has also been named as a defendant in other lawsuits arising from transactions in the ordinary course of business. In the opinion of management and the corporate general partner, the claims will not result in any material liability to the Partnership. 5. INCOME TAXES No provision has been made for income taxes in the accompanying financial statements since such taxes, if any, are the liability of the individual partners. The major differences in tax and financial reporting result from the use of different bases and depreciation methods for the properties held by the limited partnerships. Differences in tax and financial reporting also arise as losses are not recognized for financial reporting purposes when the investment balance has been reduced to zero or to a negative amount equal to further capital contributions required. 6. FAIR VALUE OF FINANCIAL INSTRUMENTS Statement of Financial Accounting Standards No. 107, "Disclosure about Fair Value of Financial Instruments," requires disclosure of fair value information about financial instruments. The carrying amount of assets and liabilities reported on the balance sheets that require such disclosure approximates fair value due to their short-term maturity. 7. FOURTH-QUARTER ADJUSTMENT The Partnership's policy is to record its equity in income (loss) of limited partnerships on a quarterly basis, using estimated financial information furnished by the various local operating general partners. The equity in income (loss) reflected in the accompanying annual financial statements is based primarily upon audited financial statements of the investee limited partnerships. The decrease of approximately $3,000, between the estimated nine-month equity in income and the actual 1996 year end equity in income has been recorded in the fourth quarter. 9 43 SCHEDULE REAL ESTATE ASSOCIATES LIMITED V INVESTMENTS IN LIMITED PARTNERSHIPS YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
Year Ended December 31, 1996 --------------------------------------------------------------------- Cash Equity Balance Capital Distri- In Balance January Contri- butions Income December Limited Partnerships 1, 1996 butions Received (Loss) 31, 1996 - -------------------- ---------- ------- --------- --------- ---------- Bickerdike $ 469,653 $ $ (89,144) $ 252,064 $ 632,573 Canoga Park (1,725) 1,766 41 Castlepark Centennial Ft. Wayne Creekside Gardens Del Haven Manor Fox Run Grandview Place 193,398 (91,967) 33,119 134,550 Hamlin Estate 19,568 (19,568) Heritage Estates North River Club Apts. Palm Springs Panorama City I Panorama City II Pine Lake Terrace Plummer Village Ranger Apts. Richland Elderly 440,767 (6,522) 104,263 538,508 Robert Farrell Manor ---------- ------- --------- --------- ---------- $1,103,818 $19,568 $(189,358) $ 371,644 $1,305,672 ========== ======= ========= ========= ==========
44 SCHEDULE (CONTINUED) REAL ESTATE ASSOCIATES LIMITED V INVESTMENTS IN LIMITED PARTNERSHIPS YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
Year Ended December 31, 1995 --------------------------------------------------------------------- Cash Balance Capital Distri- Equity Balance January Contri- butions In December Limited Partnerships 1, 1995 butions Received Income 31, 1995 - -------------------- ---------- ------- --------- --------- ---------- Bickerdike $275,290 $ $ (89,144) $ 283,507 $ 469,653 Canoga Park (6,124) 6,124 - Castlepark Centennial Ft. Wayne Creekside Gardens Del Haven Manor Fox Run Grandview Place 272,242 (126,112) 47,268 193,398 Hamlin Estate Heritage Estates North River Club Apts. Palm Springs Panorama City I Panorama City II Pine Lake Terrace Plummer Village (8,872) 8,872 Ranger Apts. Richland Elderly 336,851 (5,964) 109,880 440,767 Robert Farrell Manor -------- --------- --------- --------- ---------- $884,383 $ - $(236,216) $ 455,651 $1,103,818 ======== ========= ========= ========= ==========
45 SCHEDULE (CONTINUED) REAL ESTATE ASSOCIATES LIMITED V INVESTMENTS IN LIMITED PARTNERSHIPS YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
Year Ended December 31, 1994 --------------------------------------------------------------------- Cash Equity Balance Capital Distri- In Balance January Contri- butions Income December Limited Partnerships 1, 1994 butions Received (Loss) 31, 1994 - -------------------- ---------- ------- --------- --------- ---------- Bickerdike $134,059 $ $(89,144) $230,375 $275,290 Canoga Park Castlepark Centennial Ft. Wayne Creekside Gardens Del Haven Manor Fox Run Grandview Place 260,191 (70,824) 82,875 272,242 Hamlin Estate Heritage Estates North River Club Apts. Palm Springs Panorama City I Panorama City II Pine Lake Terrace Plummer Village Ranger Apts. Richland Elderly 265,126 (8,255) 79,980 336,851 Robert Farrell Manor -------- -------- --------- -------- -------- $659,376 $ - $(168,223) $393,230 $884,383 ======== ========= ========= ======== ========
46 SCHEDULE (Continued) REAL ESTATE ASSOCIATES LIMITED V INVESTMENTS IN LIMITED PARTNERSHIPS YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994 NOTES: 1. Equity in income and losses in investments in limited partnerships represents the Partnership's allocable share of the net results of operations from the limited partnerships for the year. Equity in losses of the limited partnerships will be recognized until the investment balance is reduced to zero or below zero to an amount equal to future capital contributions to be made by the Partnership. 2. Cash distributions from the limited partnerships are treated as a return of the investment and reduce the investment balance until such time as the investment is reduced to an amount equal to additional contributions. Distributions subsequently received will be recognized as income. 47 SCHEDULE III REAL ESTATE ASSOCIATES LIMITED V REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY HELD BY LOCAL LIMITED PARTNERSHIPS IN WHICH REAL V HAS INVESTMENTS DECEMBER 31, 1996
Number Outstanding of Mortgage Buildings, Furnishings Accumulated Partnership/Location Apts. Loan Land & Equipment Total Depreciation - -------------------- ------ ----------- ---------- ---------------------- ----------- ------------ Bickerdike 140 $ 7,366,536 $ 348,255 $ 8,147,914 $ 8,496,169 $ 3,002,349 Chicago, IL Canoga Park Apts. 14 782,044 197,662 840,371 1,038,033 414,766 Los Angeles, CA Castle Park Apts. 209 8,217,155 337,676 10,702,876 11,040,552 4,760,384 Normandy, MO Centennial Townhomes 88 2,579,416 80,987 2,947,009 3,027,996 1,165,854 Fort Wayne, IN Creekside Gardens 50 1,729,731 197,447 1,792,671 1,990,118 619,973 Loveland, CO Delhaven Manor 104 2,908,623 85,000 3,073,745 3,158,745 1,091,787 Jackson, MS Foxrun Apts., Ltd. 70 2,023,926 56,892 2,425,714 2,482,606 1,262,483 Orange, TX Grandview Place Apts. 48 1,635,930 183,000 1,899,802 2,082,802 677,981 Missoula, MT Hamlin Estates 30 1,752,698 652,117 2,021,252 2,673,369 982,162 Los Angeles, CA Heritage Square Inc. 50 1,486,597 106,000 1,659,105 1,765,105 894,841 Texas City, TX North River Club Apts. 56 2,548,141 298,559 2,611,118 2,909,677 1,259,708 Oceanside, CA Palm Springs Senior 116 4,238,435 - 5,198,495 5,198,495 2,649,250 Citizens Housing Palm Springs, CA Panorama City I 14 707,594 185,103 753,640 938,743 388,929 Los Angeles, CA Panorama City II 13 660,768 184,451 689,502 873,953 358,856 Los Angeles, CA Pine Lake Terrace Apts. 111 3,816,730 484,000 3,822,097 4,308,097 2,398,124 Garden Grove, CA Plummer Village 75 2,817,645 612,258 3,216,925 3,829,183 1,453,345 Los Angeles, CA Ranger Apts., Ltd. 55 1,674,849 40,508 2,237,441 2,277,949 1,381,457 Ranger, TX Richland Three Rivers 41 1,344,612 - 1,416,226 1,416,226 561,122 Retirement Apts. Richland, WA Robert Farrell Manor 35 1,697,632 263,860 1,923,374 2,187,234 672,907 Los Angeles, CA Additional carrying value of real 98,367 2,145,038 2,243,403 1,340,104 estate of investee limited partnerships not recorded on said limited partnerships ----- ----------- ---------- ----------- ----------- ----------- TOTAL 1,319 $49,989,062 $4,412,142 $59,524,313 $63,936,455 $27,316,382 ===== =========== ========== =========== =========== ===========
(A) This project was complete when REAL V entered the partnership. 48 SCHEDULE III (CONTINUED) REAL ESTATE ASSOCIATES LIMITED V REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY HELD BY LOCAL LIMITED PARTNERSHIPS IN WHICH REAL V HAS INVESTMENTS DECEMBER 31, 1996 NOTES: 1. Each local limited partnership is developing or has developed, owns and operates the housing project. Substantially all project costs, including construction period interest expense, are being capitalized by the limited partnerships. 2. Depreciation is provided for by various methods over the estimated useful lives of the projects. The estimated composite useful lives of the buildings are generally from 25 to 40 years. 3. Investments in property and equipment:
Buildings, Furnishings, And Land Equipment Total ---- --------- ----- Balance at January 1, 1994 $4,368,142 $58,653,422 $63,021,564 Net additions during 1994 - 548,623 548,623 ---------- ----------- ----------- Balance at December 31, 1994 4,368,142 59,202,045 63,570,187 Net additions during 1995 - 233,573 233,573 ---------- ----------- ----------- Balance at December 31, 1995 4,368,142 59,435,618 63,803,760 Net additions during 1996 44,000 88,695 132,695 ---------- ----------- ----------- Balance at December 31, 1996 $4,412,142 $59,524,313 $63,936,455 ========== =========== ===========
49 SCHEDULE III (CONTINUED) REAL ESTATE ASSOCIATES LIMITED V REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY HELD BY LOCAL LIMITED PARTNERSHIPS IN WHICH REAL V HAS INVESTMENTS DECEMBER 31, 1996
Buildings, Furnishings and Equipment ------------- ACCUMULATED DEPRECIATION: - ------------------------ Balance, January 1, 1994 $22,018,658 Net additions, 1994 1,707,315 ----------- Balance, December 31, 1994 23,725,973 Net additions, 1995 1,766,520 ----------- Balance, December 31, 1995 25,492,493 Net additions, 1996 1,823,889 ----------- Balance, December 31, 1996 $27,316,382 ===========
50 PART III. ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT: REAL ESTATE ASSOCIATES LIMITED V (the "Partnership") has no directors or executive officers of its own. National Partnership Investment Corp. ("NAPICO" or "the Managing General Partner") is a wholly-owned subsidiary of Casden Investment Company, an affiliate of The Casden Company. The following biographical information is presented for the directors and executive officers of NAPICO with principal responsibility for the Partnership's affairs. CHARLES H. BOXENBAUM, 67, Chairman of the Board of Directors and Chief Executive Officer of NAPICO. Mr. Boxenbaum has been associated with NAPICO since inception. He has been active in the real estate industry since 1960, and prior to joining NAPICO was a real estate broker with the Beverly Hills firm of Carl Rhodes Company. Mr. Boxenbaum has been a guest lecturer at national and state realty conventions, certified properties exchanger's seminars, Los Angeles Town Hall, National Association of Home Builders, International Council of Shopping Centers, Society of Conventional Appraisers, California Real Estate Association, National Institute of Real Estate Brokers, Appraisal Institute, various mortgage banking seminars, and the North American Property Forum held in London, England. In 1963, he was the winner of the Snyder Award, the highest annual award offered by the National Association of Real Estate Boards for Best Exchange. He is one of the founders and a past director of the First Los Angeles Bank, organized in November 1974. Mr. Boxenbaum was a member of the Board of Directors of the National Housing Council. Mr. Boxenbaum received his Bachelor of Arts degree from the University of Chicago. BRUCE E. NELSON, 45, President and a director of NAPICO. Mr. Nelson joined NAPICO in 1980 and became President in February 1989. He is responsible for the operations of all NAPICO sponsored limited partnerships. Prior to that he was primarily responsible for the securities aspects of the publicly offered real estate investment programs. Mr. Nelson is also involved in the identification, analysis, and negotiation of real estate investments. From February 1979 to October 1980, Mr. Nelson held the position of Associate General Counsel at Western Consulting Group, Inc., private residential and commercial real estate syndicators. Prior to that time Mr. Nelson was engaged in the private practice of law in Los Angeles. Mr. Nelson received his Bachelor of Arts degree from the University of Wisconsin and is a graduate of the University of Colorado School of Law. He is a member of the State Bar of California and is a licensed real estate broker in California and Texas. ALAN I. CASDEN, 51, Chairman of The Casden Company, an affiliate of Casden Properties (formerly CoastFed Properties), a director and member of the audit committee of NAPICO, and chairman of the Executive Committee of NAPICO. Mr. Casden is Chairman of the Board, Chief Executive Officer and sole shareholder of The Casden Company and Casden Investment Corporation. Prior to that, he was the president and chairman of Mayer Group, Inc., which he joined in 1975. He is also chairman of Mayer Management, Inc., a real estate management firm. Mr. Casden has been involved in approximately $3 billion of real estate financings and sales and has been responsible for the development and construction of more than 12,000 apartment units and 5,000 single-family homes and condominiums. 51 Mr. Casden is a member of the American Institute of Certified Public Accountants and of the California Society of Certified Public Accountants. Mr. Casden is a member of the advisory board of the National Multi-Family Housing Conference, the Multi-Family Housing Council, and the President's Council of the California Building Industry Association. He also serves on the advisory board to the School of Accounting of the University of Southern California. He holds a Bachelor of Science and a Masters in Business Administration degree from the University of Southern California. HENRY C. CASDEN, 53, President, Chief Operating Officer and Secretary of The Casden Company and a director and secretary of NAPICO. Mr. Casden has been President and Chief Operating Officer of The Casden Company, as well as a director of NAPICO since February 1988. He became secretary of both companies in late 1994. From 1982 to 1988, Mr. Casden was of counsel and a partner in the Los Angeles law firm of Troy, Casden & Gould. From 1978 to 1981, he was of counsel and a partner in the Los Angeles law firm of Loeb & Loeb. From 1972 to 1978, Mr. Casden was a member of the Beverly Hills law firm of Fink & Casden, Professional Corporation. Mr. Casden received his Bachelor of Arts degree from the University of California at Los Angeles, and is a graduate of the University of San Diego Law School. Mr. Casden is a member of the State Bar of California and has numerous professional affiliations. BRIAN D. GOLDBERG, 33, Chief Financial Officer of The Casden Company and a director of NAPICO. Mr. Goldberg joined The Casden Company in 1990 as Vice President of Finance and became Chief Financial Officer in March 1991. Prior to joining The Casden Company, Mr. Goldberg was with Arthur Andersen & Co., an international public accounting firm, from August 1985 until July 1990 in their Los Angeles office. He received his bachelor of science degree in Accounting from the University of Denver. Mr. Goldberg is a member of the American Institute of Certified Public Accountants and the California Society of Certified Public Accountants. SHAWN HORWITZ, 37, Executive Vice President and Chief Financial Officer. Mr. Horwitz joined NAPICO in 1990 and is responsible for the financial affairs of NAPICO and the limited partnerships sponsored by NAPICO. Prior to joining NAPICO, Mr. Horwitz was President of Star Sub Shops, Inc. a corporation engaged in the business of selling fast food franchises, was an audit manager in the real estate industry group for Altschuler, Melvin & Glasser for six years, and was an auditor with Arthur Young & Co. for 3 years. Mr. Horwitz received his Bachelor of Commerce degree in accounting from Rhodes University in South Africa and is a member of the Illinois Society of Certified Public Accountants, the American Institute of Certified Public Accountants and the South African Institute of Chartered Accountants. BOB SCHAFER, 55, Senior Vice President and Corporate Controller. Mr. Schafer joined NAPICO in 1984 and is the Corporate Controller responsible for the financial reporting function of the Company. Prior to this, he was a Group and Division Controller at Bergen Brunswig for over eight years, Controller at a Flintkote subsidiary for over four years, and Assistant Controller at an electronics subsidiary of General Electric for two years. Mr. Schafer is a member of the California Society of Certified Public Accountants. He holds a Bachelor of Science degree in accounting from Woodbury University, Los Angeles. 52 PATRICIA W. TOY, 67, Senior Vice President - Communications and Assistant Secretary. Mrs. Toy joined NAPICO in 1977, following her receipt of an MBA from the Graduate School of Management, UCLA. From 1952 to 1956, Mrs. Toy served as a U.S. Naval Officer in communications and personnel assignments. She holds a Bachelor of Arts Degree from the University of Nebraska. MARK L. WALTHER, 36, Executive Vice President, General Counsel and Assistant Secretary. Mr. Walther joined NAPICO in 1987 and is responsible for the legal affairs of the NAPICO sponsored limited partnerships. Prior to joining NAPICO, Mr. Walther worked in the San Francisco law firm of Browne and Kahn which specialized in construction litigation. Mr. Walther received his Bachelor of Arts Degree in Political Science from the University of California, Santa Barbara and is a graduate of the University of California, Davis, School of Law. He is a member of the State Bar of Hawaii. 53 ITEM 11. MANAGEMENT REMUNERATION AND TRANSACTIONS: Real Estate Associates Limited V has no officers, employees or directors. However, under the terms of the Restated Certificate and Agreement of Limited Partnership, the Partnership is obligated to pay the Corporate General Partner an annual management fee. The annual management fee is approximately equal to .4% of the invested assets, including the Partnership's allocable share of the mortgages related to real estate properties held by local limited partnerships. The fee is earned beginning in the month the Partnership makes its initial contribution to the limited partnership. In addition, the Partnership reimburses the Corporate General Partner for certain expenses. An affiliate of the Corporate General Partner is responsible for the on-site property management for certain properties owned by the limited partnerships in which the Partnership has invested. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT: (a) Security Ownership of Certain Beneficial Owners The General Partners own all of the outstanding general partnership interests of REAL V; no person is known to own beneficially in excess of 5% of the outstanding limited partnership interests. (b) At December 31, 1996, security ownership of management is as listed:
Percentage of Amount and Outstanding Nature of Limited Beneficial Partner Title of Class Beneficial Owner Owner Interests - -------------- ---------------- ---------- ----------- Limited Charles H. Boxenbaum Partnership 780 Latimer Road Interest Santa Monica, CA 90402 $10,000 * Limited Bruce E. Nelson Partnership 7036 Grasswood Avenue Interest Malibu, CA 90265 $ 5,000 *
* Cumulative limited partnership interests owned by corporate officers or the general partner is less than 1% interest of total outstanding limited partnership interests. 54 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS: The Partnership has no officers, directors or employees of its own. All of its affairs are managed by the Corporate General Partner, National Partnership Investments Corp. The Partnership is obligated to NAPICO for an annual management fee equal to .4 percent of the original invested assets of the limited partnerships. Invested assets is defined as the costs of acquiring project interests, including the proportionate amount of the mortgage loans related to the Partnership's interest in the capital accounts of the respective partnerships. The management fee was $254,448 for each of the three years in the period ended December 31, 1996. The Partnership reimburses NAPICO for certain expenses. The reimbursement to NAPICO was $19,287, $17,820 and $17,171 in 1996, 1995 and 1994, respectively, and is included in operating expenses. An affiliate of NAPICO is the general partner in 4 of the limited partnerships in which the Partnership has an investment, and another affiliate receives property management fees of approximately 5 to 6 percent of their revenue. The affiliate received property management fees of $42,600, $41,359 and $33,401 in 1996, 1995 and 1994, respectively. ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORT ON FORM 8-K: FINANCIAL STATEMENTS Report of Independent Public Accountants. Balance Sheets as of December 31, 1996 and 1995. Statements of Operations for the years ended December 31, 1996, 1995 and 1994. Statement of Partners' Equity (Deficiency) for the years ended December 31, 1996, 1995 and 1994. Statements of Cash Flows for the years ended December 31, 1996, 1995 and 1994. Notes to financial statements. FINANCIAL STATEMENT SCHEDULES APPLICABLE TO REAL ESTATE ASSOCIATES LIMITED V AND TO THE LIMITED PARTNERSHIPS IN WHICH REAL ESTATE ASSOCIATES LIMITED V HAS INVESTMENTS: Schedule - Investments in Limited Partnerships as of December 31, 1996, 1995 and 1994. Schedule III - Real estate and accumulated depreciation, December 31, 1996. The remaining schedules are omitted because the required information is included in the financial statements and notes thereto or they are not applicable or not required. EXHIBITS (3) Articles of incorporation and bylaws: The registrant is not incorporated. The Partnership Agreement was filed with Form S-11 #277645 which is hereby incorporated by reference. (10) Material contracts: The registrant is not party to any material contracts, other than the Restated Certificate and Agreement of Limited Partnership dated May 7, 1982, and the nineteen contracts representing the partnership investment in local limited partnerships as previously filed at the Securities Exchange Commission, File #277645 which is hereby incorporated by reference. REPORTS ON FORM 8-K No reports on Form 8-K were filed during the year ended December 31, 1996. 55 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 in the City of Los Angeles, State of California. REAL ESTATE ASSOCIATES LIMITED V By: NATIONAL PARTNERSHIP INVESTMENTS CORP. The General Partner /s/ Charles H. Boxenbaum - --------------------------------------------- Charles H. Boxenbaum Chairman of the Board of Directors and Chief Executive Officer March 27, 1997 /s/ Bruce E. Nelson - --------------------------------------------- Bruce E. Nelson Director and President March 27, 1997 /s/ Alan I. Casden - --------------------------------------------- Alan I. Casden Director March 27, 1997 /s/ Henry C. Casden - --------------------------------------------- Henry C. Casden Director March 27, 1997 /s/ Brian D. Goldberg - --------------------------------------------- Brian D. Goldberg Director March 27, 1997 /s/ Shawn D. Horwitz - --------------------------------------------- Shawn D. Horwitz Executive Vice President and Chief Financial Officer March 27, 1997 /s/ Bob E. Schafer - --------------------------------------------- Bob E. Schafer Senior Vice President and Corporate Controller March 27, 1997 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE PARTNERSHIP'S STATEMENTS OF EARNINGS AND BALANCE SHEETS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 12-MOS DEC-31-1996 JAN-01-1996 DEC-31-1996 1,953,506 0 0 0 0 1,953,506 0 0 3,259,178 9,978 0 0 0 0 3,249,200 3,259,178 0 652,045 0 0 353,803 0 0 299,242 0 299,242 0 0 0 299,242 0 0
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