August 13, 1996
Securities and Exchange Commission
Filer Support, Edgar
Operation Center, Stop 0-7
6432 General Green Way
Alexandria, VA 22312
Re: Boston Financial Apartments Associates, L.P.
Report on Form 10-Q Edgar for Quarter Ended June 30, 1996
File No. 0-10057
Dear Sir/Madam:
Pursuant to the requirements of Rule 901(d) of Regulation S-T, enclosed is one
copy of subject report.
Very truly yours,
Marie D. Reynolds
Assistant Controller
BFAAQ2.DOC
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
For Quarter Ended June 30, 1996 Commission file number 0-10057
Boston Financial Apartments Associates, L.P.
(Exact name of registrant as specified in its charter)
Delaware 04-2734133
(State or other jurisdiction of incorporation (I.R.S. Employer Identification
or organization) No.)
101 Arch Street, Boston, Massachusetts 02110-1106
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (617) 439-3911
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No .
<PAGE>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION Page No.
- ------------------------------ --------
Item 1. Financial Statements
Balance Sheets - June 30, 1996 (Unaudited)
and December 31, 1995 1
Statements of Operations (Unaudited) - For the Three
and Six Months Ended June 30, 1996 and 1995 2
Statements of Changes in Partners' Equity (Deficiency)
(Unaudited) -For the Six Months Ended June 30, 1996 3
Statements of Cash Flows (Unaudited) - For the Six
Months Ended June 30, 1996 and 1995 4
Notes to the Financial Statements (Unaudited) 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II - OTHER INFORMATION
Items 1-6 10
SIGNATURE 11
<PAGE>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
(Unaudited)
Assets
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 169,520 $ 121,361
Interest receivable 4,632 18,444
Other current assets 4,577 5,594
------------- -------------
Total current assets 178,729 145,399
Marketable securities, at fair value (Note 1) 786,422 998,083
Investments in Local Limited Partnerships (Note 2) - -
------------- -------------
Total Assets $ 965,151 $ 1,143,482
============= =============
Liabilities and Partners' Deficiency
Current liabilities:
Accounts payable to an affiliate $ 19,789 $ 8,972
Accounts payable and accrued expenses 18,160 20,667
Notes payable and accrued interest 1,196,250 1,168,750
------------- -------------
Total current liabilities 1,234,199 1,198,389
Partners' Deficiency (269,048) (54,907)
------------- -------------
Total Liabilities and Partners' Deficiency $ 965,151 $ 1,143,482
============= =============
</TABLE>
The accompanying notes are an integral part of these
financial statements.
<PAGE>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
For the Three and Six Months Ended June 30, 1996 and 1995
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1996 1995 1996 1995
------------- ------------- -------------- --------
Revenue:
<S> <C> <C> <C> <C>
Distribution $ 89,996 $ 100,301 $ 106,664 $ 217,008
Investment and other 9,867 13,888 24,045 36,905
----------- ----------- ----------- -----------
Total Revenue 99,863 114,189 130,709 253,913
----------- ----------- ----------- -----------
Expenses:
General and administrative expense
(includes reimbursement to affiliate in
the amounts of $41,289 and $39,539
in 1996 and 1995, respectively) 33,882 37,193 69,655 67,325
Interest 13,750 13,750 27,500 27,500
Management Fees, related party 9,000 10,030 10,667 21,701
----------- ----------- ----------- -----------
Total Expenses 56,632 60,973 107,822 116,526
----------- ----------- ----------- -----------
Income before loss on liquidation of interest
in Local Limited Partnership,
equity in income of Local Limited
Partnerships and cancellation of indebtedness 43,231 53,216 22,887 137,387
Loss on liquidation of interest in Local
Limited Partnership - - - (773,964)
Equity in income of Local Limited
Partnerships - - - 1,980,282
----------- ----------- ----------- -----------
Income before extraordinary item 43,231 53,216 22,887 1,343,705
Extraordinary gain on cancellation
of indebtedness - - - 61,000
----------- ----------- ----------- -----------
Net Income $ 43,231 $ 53,216 $ 22,887 $ 1,404,705
=========== =========== =========== ===========
Net Income allocated:
To the General Partners $ 2,161 $ 2,660 $ 1,144 $ 101,193
To the Limited Partners 41,070 50,556 21,743 1,303,512
----------- ----------- ----------- -----------
$ 43,231 $ 53,216 $ 22,887 $ 1,404,705
=========== =========== =========== ===========
Income before extraordinary
item allocated to the Limited
Partners per Limited Partnership
Unit (21,915 Units) $ 1.87 $ 2.31 $ .99 $ 56.84
========== =========== =========== ===========
Extraordinary gain on cancellation
of indebtedness allocated to the
Limited Partners per Limited
Partnership Unit (21,915 Units) $ - $ - $ - $ 2.65
=========== =========== =========== ===========
Net Income per Limited Partnership
Unit (21,915 Units) $ 1.87 $ 2.31 $ .99 $ 59.49
========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these
financial statements.
<PAGE>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
STATEMENT OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY)
(Unaudited)
For the Six Months Ended June 30, 1996
<TABLE>
<CAPTION>
Net
Unrealized
General Limited Gains
Partners Partners (Losses) Total
<S> <C> <C> <C> <C>
Balance at December 31, 1995 $ (907,785) $ 841,376 $ 11,502 $ (54,907)
Cash distribution - (219,150) - (219,150)
Net change in net unrealized
gains on marketable securities
available for sale - - (17,878) (17,878)
Net income 1,144 21,743 - 22,887
------------ ----------- -------- -----------
Balance at June 30, 1996 $ (906,641) $ 643,969 $ (6,376) $ (269,048)
============ =========== ======== ===========
</TABLE>
The accompanying notes are an integral part of these
financial statements.
<PAGE>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
For The Six Months Ended June 30, 1996 and 1995
<TABLE>
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
Net cash used for operating activities $ (42,557) $ (42,824)
------------ ------------
Cash flows from investing activities:
Purchases of marketable securities (276,008) (564,241)
Proceeds from sales and maturities of
marketable securities 479,210 681,709
Cash distributions received from Local
Limited Partnerships 106,664 1,041,841
------------ ------------
Net cash provided by investing activities 309,866 1,159,309
------------ ------------
Cash flow from financing activities:
Cash distribution (219,150) (657,450)
Payment of note payable and accrued interest - (624,833)
------------ ------------
Net cash used for financing activities (219,150) (1,282,283)
------------ ------------
Net increase (decrease) in cash and cash equivalents 48,159 (165,798)
Cash and cash equivalents, beginning 121,361 350,435
------------ ------------
Cash and cash equivalents, ending $ 169,520 $ 184,637
============ ============
</TABLE>
The accompanying notes are an integral part of these
financial statements.
<PAGE>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
Notes to the Financial Statements
(Unaudited)
The unaudited financial statements presented herein have been prepared in
accordance with the instructions to Form 10-Q and do not include all of the
information and note disclosures required by generally accepted accounting
principles. These statements should be read in conjunction with the financial
statements and notes thereto included with the Partnership's 10-K for the year
ended December 31, 1995. In the opinion of management, these financial
statements include all adjustments, consisting only of normal recurring
adjustments, necessary to present fairly the Partnership's financial position
and results of operations. The results of operations for the periods may not be
indicative of the results to be expected for the year. Certain reclassifications
have been made to prior period financial statements to conform to current period
classifications.
1. Marketable Securities
A summary of marketable securities is as follows:
<TABLE>
<CAPTION>
Gross Gross
Unrealized Unrealized Fair
Cost Gains Losses Value
<S> <C> <C> <C> <C>
Debt securities issued by the US
Treasury and other US government
corporations and agencies $ 533,128 $ 1,447 $ (4,185) $ 530,390
Mortgage backed securities 223,945 - (3,534) 220,411
Other debt securities 35,725 - (104) 35,621
----------- --------- -------- -----------
Balance at June 30, 1996 $ 792,798 $ 1,447 $ (7,823) $ 786,422
=========== ========= ======== ===========
Debt securities issued by the US
Treasury and other US
government agencies $ 729,567 $ 9,410 $ - $ 738,977
Mortgage backed securities 97,453 259 - 97,712
Other debt securities 159,561 2,094 (261) 161,394
----------- --------- -------- -----------
Balance at December 31, 1995 $ 986,581 $ 11,763 $ (261) $ 998,083
=========== ========= ======== ===========
</TABLE>
The contractual maturities at June 30, 1996 are as follows:
Fair
Cost Value
Due in one year or less $ 130,799 $ 132,113
Due in one year to five years 438,054 433,898
Mortgage backed securities 223,945 220,411
---------- ----------
$ 792,798 $ 786,422
========== ==========
<PAGE>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
Notes to the Financial Statements (continued)
(Unaudited)
1. Marketable Securities (continued)
Actual maturities may differ from contractual maturities because some issuers
have the right to call or prepay obligations. Proceeds from the sales of fixed
maturities were approximately $479,000 and $682,000 during the six months ended
June 30, 1996 and 1995, respectively. Gross gains of $11,782 and $2,425 and
gross losses of $2,363 and $4,027 were realized on these sales for the six
months ended June 30, 1996 and 1995, respectively.
2. Investments in Local Limited Partnerships
As of June 30, 1996 and December 31, 1995, the Partnership's Investment in Local
Limited Partnerships, at cost, was as follows:
<TABLE>
<CAPTION>
Capital Contribu- Net Equity Cash
tions and Related in Income Distributions
Local Limited Acquisition Costs (Losses) Received Net
Partnerships (Cumulative) (Cumulative) (Cumulative) (1) Investment
- ----------------------------- ----------------- ------------ ------------------ ------------
<S> <C> <C> <C> <C>
Bear Creek $ 796,556 $ (200,574) $ (595,982) $ -
Buttonwood Tree 1,482,996 (1,482,996) - -
Captain's Landing 1,057,682 (1,057,682) - -
Chelsea Village 2,076,589 (2,076,589) - -
Mountain View 422,593 (422,593) - -
Oakdale Manor 1,522,621 (1,522,621) - -
Oakwood Terrace 614,643 (614,643) - -
Overland Station 1,232,286 816,511 (1,274,833) 773,964
Park Hill 825,501 (713,066) (112,435) -
Pheasant Ridge 1,050,237 (972,180) (78,057) -
The Woods of Castleton 2,025,681 (2,025,681) - -
Westpark Plaza 1,846,469 (1,115,914) (730,555) -
Woodbridge 1,077,161 (1,060,493) (16,668) -
Woodmeade South 1,619,452 (1,619,452) - -
Youngstoun 935,861 (935,861) - -
-------------- ------------- -------------- ------------
Subtotal 18,586,328 (15,003,834) (2,808,530) 773,964
Less dispositions:
Overland Station (1,232,286) (816,511) 1,274,833 (773,964)
Captain's Landing (1,057,682) 1,057,682 - -
Oakwood Terrace (614,643) 614,643 - -
-------------- ------------- -------------- ------------
Balance at
June 30, 1996 $ 15,681,717 $ (14,148,020) $ (1,533,697) $ -
============== ============= ============== ============
Balance at
December 31, 1995 $ 15,681,717 $ (14,254,684) $ (1,427,033) $ -
============== ============= ============== ============
</TABLE>
<PAGE>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
Notes to the Financial Statements (continued)
(Unaudited)
2. Investments in Local Limited Partnerships (continued)
(1) Included in cash distributions received is cumulative distribution income of
$916,527 which was received from six Local Limited Partnerships with carrying
values of zero.
Summarized financial information from the combined financial statements of all
Local Limited Partnerships in which the Partnership has invested is as follows:
<TABLE>
<CAPTION>
Summarized Balance Sheets - June 30, 1996 (Unaudited)
Assets:
<S> <C>
Current assets $ 1,800,535
Other assets 3,771,142
Investment property, net 33,834,570
-------------
Total Assets $ 39,406,247
=============
Liabilities and Partners' Deficiency:
Current liabilities $ 5,401,002
Other debt 5,391,583
Long-term debt 55,211,647
-------------
Total Liabilities 66,004,232
Partners' Deficiency (26,597,985)
-------------
Total Liabilities and Partners' Deficiency $ 39,406,247
=============
Summarized Income Statements - For the
Six Months Ended June 30, 1996 (Unaudited)
Rental and other revenue $ 5,714,114
-------------
Expenses:
Operating 2,956,236
Interest 2,261,563
Depreciation and amortization 1,048,465
-------------
Total Expenses 6,266,264
Net Loss $ (552,150)
=============
Partnership's share of net loss $ (545,007)
=============
Other Partners' share of net loss $ (7,143)
=============
</TABLE>
For the six months ended June 30, 1996, the Partnership has not recognized
$708,935 of equity in losses relating to thirteen Local Limited Partnerships
where cumulative equity in losses and cumulative distributions have exceeded its
total investments. Also, during the six months ended June 30, 1996, the
Partnership recognized $57,264 of equity in losses which were previously
unrecognized.
<PAGE>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
At June 30, 1996, the Partnership had cash and cash equivalents of $169,520
compared with $121,361 at December 31, 1995. The increase in cash and cash
equivalents is due primarily to cash distributions received from Local Limited
Partnerships and proceeds received from the sales and maturities of marketable
securities, partially offset by distributions paid to limited partners and net
cash used for operating activities.
At June 30, 1996, approximately $918,000 of cash, cash equivalents and
marketable securities have been designated as reserves. The reserves as defined
in the Partnership Agreement were established to be used for working capital of
the Partnership and contingencies related to the ownership of Local Limited
Partnership interests. Reserves may be used to fund Partnership operating
deficits, if the Managing General Partner deems funding appropriate in order to
protect its investment.
Since the Partnership has invested as a limited partner in all Local Limited
Partnerships, it has no contractual duty to provide additional funds to Local
Limited Partnerships beyond its specified investment. At June 30, 1996, it did
not have any contractual or other obligation to any Local Limited Partnership
which had not been paid or provided for.
Future cash distributions will be derived almost exclusively from distributions
of net cash provided by operations of the Local Limited Partnerships. Such cash
is not expected to be significant in 1996, and therefore, there is no assurance
that adequate cash will be available to warrant cash distributions in future
years.
Results of Operations
The Partnership's results of operations for the three months ended June 30, 1996
resulted in net income of $43,231 as compared to net income of $53,216 for the
same period in 1995. The slight decrease in net income is primarily attributable
to a decrease in distributions received from Local Limited Partnerships during
the comparable periods.
The Partnership's result of operations for the six months ended June 30, 1996
resulted in a net income of $22,887 as compared to net income of $1,404,705 for
the same period in 1995. The 1995 income position was attributable to equity in
income generated by the sale of Overland Station. This income was supplemented
by cancellation of indebtedness income, also resulting from the Overland Station
sale. Offsetting these items was a loss on the liquidation of the Overland
Station investment. The distribution income from Local Limited Partnerships is
significantly lower in 1996.
Equity in losses of Local Limited Partnerships is zero for the three and six
months ended June 30, 1996 and 1995, due to cumulative losses in excess of the
investments in the Local Limited Partnerships. Distributions were received from
two Local Limited Partnerships. Please refer to the property discussions section
for more information on property operations.
Property Discussions
HUD has a program to sell all performing and non-performing mortgages in a
public auction that is scheduled to take place on a region-by-region basis over
the next few years. The mortgages of Oakdale Manor and Woods of Castleton, were
sold at the May 1996 HUD non-performing loan auction. The Local General Partner
of Woods of Casteton has been in contact with the buyer of the property's
mortgage. At this time the property will continue to make its debt service
payments. As for the Oakdale Manor mortgage, the mortgage purchaser has
initiated foreclosure proceedings and plans to resell the property. Based on the
property's market, age, condition and its debt
<PAGE>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Property Discussions (continued)
level, the Managing General Partner has decided that additional capital
contributions would not be in the best interest of the Partnership. In the
likely event that the Partnership relinquishes its equity interest in this Local
Limited Partnership, it will not result in a material impact on the Partnership
financial statements, since the Partnership is a limited partner and the Local
Limited Partnership currently has a carrying value of zero. For tax purposes,
there may be a gain on disposal of the Local Limited Partnership recognized by
the Partnership. Limited Partners of the Partnership may also incur a recapture
tax. The total tax liability for the Limited Partners will depend on the extent
they have used current and suspended losses from this investment.
Chelsea Village's mortgage was originally scheduled to be in the May 1996
auction, however this mortgage will now be included in an August 1996 auction.
The continued feasibility of this property may depend on the ability of the
Local General Partner or the Partnership or their respective affiliates to
purchase the mortgage or to negotiate a satisfactory arrangement with the buyer.
As previously reported, the local general partner of Mountain View Apartments
and Woodmeade South Apartments placed both of the properties into Chapter 11
bankruptcy. The effective date of the bankruptcy plan was March 24, 1996. In
order for the Partnership to retain an equity interest in these two properties,
the bankruptcy plan required that the Partnership make additional contributions.
Management of the Partnership has decided that additional contributions would
not be in the best interest of the Partnership. The Partnership's relinquishment
of its equity interest in these two Local Limited Partnerships will have no
material impact on the Partnership financial statements, since the Partnership
is a limited partner and the two Local Limited Partnerships currently have
carrying values of zero. For tax purposes, there may be a gain on disposal of
the Local Limited Partnership recognized by the Partnership. Limited Partners of
the Partnership will incur a recapture tax. The total tax liability for the
Limited Partners will depend on the extent they have used current and suspended
losses from this investment.
At Youngstoun Apartments II, located in Hagerstown, Maryland, occupancy has
improved through the second quarter of 1996. The property's occupancy was 91% at
June 30, 1996, compared to 81% at March 31, 1996. This improvement should result
in lower operating deficits.
Property Dispositions
As previously reported, the Managing General Partner of Overland Station
Investment Company sold the property on January 12, 1995. The results of this
transaction are reflected in the June 30, 1995 financial information included in
this report. Please refer to Form 10-K dated December 31, 1995 for additional
information.
<PAGE>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
PART II OTHER INFORMATION
Items 1-5 Not applicable
Item 6 Exhibits and reports on Form 8-K
(a)Exhibits - None
(b)Reports on Form 8-K - No reports on Form 8-K were filed
during the quarter ended June 30, 1996.
<PAGE>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
SIGNATURE
Pursuant to the requirements 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.
BOSTON FINANCIAL APARTMENTS
ASSOCIATES, L.P.
By: BFTG Residential Properties, Inc.
its Managing General Partner
/s/ Fred N. Pratt, Jr. Dated: August 13, 1996
By: Fred N. Pratt, Jr.
President, Chief Executive Officer
and Director
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 169,520
<SECURITIES> 786,422
<RECEIVABLES> 4,632
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,577
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 965,151
<CURRENT-LIABILITIES> 1,234,199<F1>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> (269,048)
<TOTAL-LIABILITY-AND-EQUITY> 965,151
<SALES> 0
<TOTAL-REVENUES> 130,709<F2>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 80,322<F3>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 27,500
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 22,887
<EPS-PRIMARY> .99
<EPS-DILUTED> 0
<FN>
<F1>Includes: Accounts payable to an affiliate of $19,789, Accounts payable and
accrued expenses of $18,160 and $1,196,250 of Notes payable and accrued
interest.
<F2>Represents Distribution income of $106,664 and Investment and other income
of $24,045.
<F3>Includes $69,655 of General and administrative expenses and $10,667 of
Management fees.
</FN>
