November 12, 1997
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 September 30, 1997
File No. 0-10057
Dear Sir/Madam:
Pursuant to the requirements of Section 15(d) of the Securities Exchange Act of
1934, there is filed herewith one copy of subject report.
Very truly yours,
/s/Patricia Olsen-Goldberg
Patricia Olsen-Goldberg
Controller
BFAA-10Q3.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 September 30, 1997
-----------------------------------------------------------------
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 September 30, 1997 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 - September 30, 1997 (Unaudited)
and December 31, 1996 1
Statements of Operations (Unaudited) - For the Three and Nine
Months Ended September 30, 1997 and 1996 2
Statement of Changes in Partners' Equity (Deficiency) (Unaudited) -
For the Nine Months Ended September 30, 1997 3
Statements of Cash Flows (Unaudited) - For the Nine
Months Ended September 30, 1997 and 1996 4
Notes to the Financial Statements (Unaudited) 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II - OTHER INFORMATION
Items 1-6 9
SIGNATURE 10
<PAGE>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
(Unaudited)
Assets
<S> <C> <C>
Cash and cash equivalents $ 116,934 $ 124,878
Interest receivable 10,058 11,175
Marketable securities, at fair value 855,780 723,855
Other assets 2,034 3,560
Investments in Local Limited Partnerships (Note 1) - -
------------ ------------
Total Assets $ 984,806 $ 863,468
============ ============
Liabilities and Partners' Equity (Deficiency)
Liabilities:
Accounts payable to affiliates $ 4,939 $ 17,641
Accounts payable and accrued expenses 31,007 21,114
Notes payable and accrued interest (Note 1) - 1,223,750
------------ ------------
Total Liabilities 35,946 1,262,505
Partners' Equity (Deficiency) 948,860 (399,037)
------------ ------------
Total Liabilities and Partners' Equity (Deficiency) $ 984,806 $ 863,468
============ ============
</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
For the Three and Nine Months Ended September 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30, September 30, September 30,
1997 1996 1997 1996
------------- ------------- -------------- --------
Revenue:
<S> <C> <C> <C> <C>
Distribution $ - $ 25,613 $ 201,749 $ 132,277
Investment and other 14,847 17,264 45,414 41,309
----------- ----------- ----------- -----------
Total Revenue 14,847 42,877 247,163 173,586
----------- ----------- ----------- -----------
Expenses:
General and administrative
(includes reimbursement to affiliate in
the amounts of $55,001 and $56,617
in 1997 and 1996, respectively) 23,108 28,642 85,847 98,297
Interest - 13,750 23,394 41,250
Management Fees, related party - 2,561 20,175 13,228
----------- ----------- ----------- -----------
Total Expenses 23,108 44,953 129,416 152,775
----------- ----------- ----------- -----------
Income (loss) before extraordinary gain on
cancellation of indebtedness (8,261) (2,076) 117,747 20,811
Extraordinary gain on cancellation
of indebtedness (Note 1) - - 1,247,144 -
----------- ----------- ----------- -----------
Net Income (Loss) $ (8,261) $ (2,076) $ 1,364,891 $ 20,811
=========== =========== =========== ===========
Net Income (Loss) allocated:
To the General Partners $ (413) $ (103) $ 68,245 $ 1,041
To the Limited Partners (7,848) (1,973) 1,296,646 19,770
----------- ----------- ----------- -----------
$ (8,261) $ (2,076) $ 1,364,891 $ 20,811
=========== =========== =========== ===========
Income (Loss) before extraordinary
item allocated to the Limited
Partners per Limited Partnership
Unit (21,915 Units) $ (0.36) $ (0.09) $ 5.10 $ 0.90
========== =========== =========== ===========
Extraordinary gain on cancellation
of indebtedness allocated to the
Limited Partners per Limited
Partnership Unit (21,915 Units) $ - $ - $ 54.06 $ -
=========== =========== =========== ===========
Net Income (Loss) per Limited Partnership
Unit (21,915 Units) $ (0.36) $ (0.09) $ 59.16 $ 0.90
========== =========== =========== ===========
</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)
For the Nine Months Ended September 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Net
General Limited Unrealized
Partners Partners Gains Total
<S> <C> <C> <C> <C>
Balance at December 31, 1996 $ (907,980) $ 508,940 $ 3 $ (399,037)
Net change in net unrealized
gains on marketable
securities available for sale - - 307 307
Cash Distribution (Note 3) (17,301) - - (17,301)
Net Income 68,245 1,296,646 - 1,364,891
------------ ----------- ----------- ------------
Balance at September 30, 1997 $ (857,036) $ 1,805,586 $ 310 $ 948,860
============ =========== =========== ============
</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
For the Nine Months Ended September 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
------------- ---------
<S> <C> <C>
Net cash used for operating activities $ (60,105) $ (77,557)
------------- -------------
Cash flows from investing activities:
Purchases of marketable securities (349,170) (276,004)
Proceeds from sales and maturities of
marketable securities 216,883 548,834
Cash distributions received from Local
Limited Partnerships 201,749 132,277
------------- -------------
Net cash provided by investing activities 69,462 405,107
------------- -------------
Cash flows from financing activities:
Cash distribution (17,301) (328,725)
------------- -------------
Net cash used for financing activities (17,301) (328,725)
------------- -------------
Net decrease in cash and cash equivalents (7,944) (1,175)
Cash and cash equivalents, beginning 124,878 121,361
------------- -------------
Cash and cash equivalents, ending $ 116,934 $ 120,186
============= =============
</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, 1996. 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.
1. Investments in Local Limited Partnerships
As of September 30, 1997 and December 31, 1996, 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) Investment
<S> <C> <C> <C> <C>
Bear Creek $ 796,556 $ (77,551) $ (719,005) $ -
Buttonwood Tree 1,482,996 (1,468,085) (14,911) -
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 (687,453) (138,048) -
Pheasant Ridge 1,050,237 (924,712) (125,525) -
The Woods of Castleton 2,025,681 (2,025,681) - -
Westpark Plaza 1,846,469 (1,115,914) (730,555) -
Woodbridge 1,077,161 (1,044,146) (33,015) -
Woodmeade South 1,619,452 (1,619,452) - -
Youngstoun 935,861 (935,861) - -
-------------- ------------- -------------- ------------
Subtotal 18,586,328 (14,776,472) (3,035,892) 773,964
Less dispositions:
Oakdale Manor (1,522,621) 1,522,621 - -
Mountain View (422,593) 422,593 - -
Woodmeade South (1,619,452) 1,619,452 - -
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
September 30, 1997 $ 12,117,051 $ (10,355,992) $ (1,761,059) $ -
============== ============= ============== ============
Balance at
December 31, 1996 $ 13,639,672 $ (12,080,362) $ (1,559,310) $ -
============== ============= ============== ============
</TABLE>
<PAGE>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
Notes to the Financial Statements (continued)
(Unaudited)
1. Investments in Local Limited Partnerships (continued)
The Partnership's ownership interest in each Local Limited Partnership is
generally 99%. The Partnership's share of net loss for the nine months ended
September 30, 1997 is $332,058. For the nine months ended September 30, 1997,
the Partnership has not recognized $649,532 of equity in losses relating to nine
Local Limited Partnerships where cumulative equity in losses and cumulative
distributions has exceeded its total investments. Also, during the nine months
ended September 30, 1997, the Partnership recognized $115,725 of equity in
losses which were previously unrecognized.
As previously reported, the mortgagor for Oakdale Manor initiated foreclosure
proceedings. The foreclosure proceedings for Oakdale Manor were finalized on
June 3, 1997. As the Local Limited Partnership had a carrying value of zero, the
only financial statement effect was as cancellation of indebtedness income of
$1,247,144 on a purchase note payable and its accrued interest. See Note 2 for
additional detail.
2. Disposition of Investment in Local Limited Partnership
As expected, the new mortgagee for Oakdale Manor foreclosed on this property on
June 3, 1997. The only effect on the Partnership was cancellation of
indebtedness income related to a purchase note payable and its associated
accrued interest. No obligation was due on the purchase note payable as the note
was collateralized only by the Partnership's interest in Oakdale Manor, which,
at June 3, 1997, had a carrying value of zero. For tax purposes, the consequence
of the foreclosure is that investors may have a capital and/or ordinary gain and
resulting taxable income as a result of the disposal of this Local Limited
Partnership.
3. Partner's Equity
A distribution of $17,301 was made during the nine months ended September 30,
1997 which represents 1994 and 1995 cash flow distributions which were to be
paid to the General Partners.
<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 September 30, 1997, the Partnership had cash and cash equivalents of $116,934
compared with $124,878 at December 31, 1996. The decrease in cash and cash
equivalents is due to purchases of marketable securities in excess of proceeds
from sales and maturities of marketable securities, cash distributions paid to
the General Partners and cash used for operating activities offset by cash
distributions received from Local Limited Partnerships.
At September 30, 1997, approximately $937,000 has been reserved and is invested
in various securities. 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 the Local Limited
Partnerships, it has no contractual duty to provide additional funds to Local
Limited Partnerships beyond its specified investment. At September 30, 1997, 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 1997, 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 September 30,
1997 resulted in net loss of $8,261 as compared to net loss of $2,076 for the
same period in 1996. The slight increase in net loss is primarily attributable
to a decrease in distributions received from Local Limited Partnerships, offset
by interest incurred during this period of 1996 which was not incurred during
the same period of 1997.
The Partnership's results of operations for the nine months ended September 30
1997 resulted in net income of $1,364,891, as compared to net income of $20,811
for the same period in 1996. The increase in net income is primarily
attributable to cancellation of indebtedness income resulting from the
foreclosure on Oakdale Manor on June 3, 1997. Please refer to the section
entitled `Property Discussions' for more detail. This income was supplemented by
an increase in distribution income received from Local Limited Partnerships.
The equity in losses of Local Limited Partnerships is zero due to cumulative
losses and cumulative distributions in excess of the investment in the Local
Limited Partnerships. Distribution income was received from four Local Limited
Partnerships during the nine months ended September 30, 1997. Please refer to
the section entitled `Property Discussions' section for more information on the
property operations.
Property Discussions
The Partnership owns limited partnership interests in ten Local Limited
Partnerships which own and operate multi-family residential properties. The
Partnership also owns investments in securities in which its Reserves are held.
Four of the Local Limited Partnerships are operating at deficits (net loss
adjusted for depreciation, mortgage principal payments and replacement reserve
payments). In past years, the Local General Partners funded these deficits
either through non-interest bearing project expense loans or subordinated loans,
repayable only out of cash flow or proceeds from a sale or refinancing of the
given project. Once a project achieves break-even, substantial amounts of cash
flow derived from its operations will be used to repay project expense loans and
subordinated loans until the loans are repaid in full. To address current
deficits or other financial difficulties, Local General Partners are working to
increase rental income and reduce operating expenses, working with the lenders
to refinance property mortgages or seeking other sources of capital. Management
may make voluntary advances from the Partnership's Reserves to a Local Limited
Partnership encountering operating difficulties if it is deemed to be in the
best interest of the Partnership to provide such funds.
<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)
As discussed previously, Chelsea Village's mortgage was sold in the August 1996
HUD mortgage sale. The new lender has indicated that it expects full payment of
the current mortgage balance due or it will exercise its rights to foreclose on
the property. The Local General Partner continues to negotiate a satisfactory
arrangement with the mortgage buyer which may include a refinancing and
additional equity contribution. It is not expected that the refinancing will
generate taxable income to the partnership. The Partnership's ability to retain
its interest, currently carried at zero on the Partnership's financial
statements, in this Partnership depends upon a satisfactory outcome to these
negotiations.
As previously reported, the mortgages of Oakdale Manor and Woods of Castleton
were sold to separate buyers in HUD's May 1996 non-performing loan auction. As
expected, the new mortgagee for Oakdale Manor foreclosed on this property on
June 3, 1997. The only effect on the Partnership's financial statements will be
the cancellation of indebtedness income because the Partnership is a limited
partner and the purchase note payable and the corresponding interest accrued as
of December 31, 1996 are collateralized only by the Partnership's interest in
Oakdale Manor, which currently has a carrying value of zero. Investors may have
a capital and/or ordinary gain and resulting taxable income as a result of the
disposal of this Local Limited Partnership.
The Local General Partner of Woods of Castleton successfully refinanced the
mortgage during the third quarter. The Managing General Partner completed
negotiations with the Local General Partner and agreed to a modification of the
Partnership Agreement in conjunction with the refinancing. This modification
granted the Local General Partner the potential cash and residual benefits from
the property in exchange for their input of the capital required to complete the
refinancing transaction. The modification also includes provisions which allow
the Fund to exit from its interest in the Property at a time of its choosing.
The Managing General Partner believes that these concessions will have no
material affect on the Fund in the future given the current value of the
property.
<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 September 30, 1997.
<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/William E. Haynsworth Dated: November 13, 1997
---------------------------
By: William E. Haynsworth
Managing Director, Vice President and
Chief Operating Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 116,934
<SECURITIES> 855,780
<RECEIVABLES> 10,058
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 984,806<F1>
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 984,806<F2>
<SALES> 0
<TOTAL-REVENUES> 247,163<F3>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 106,022<F4>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 23,394
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 1,247,144
<CHANGES> 0
<NET-INCOME> 1,364,891
<EPS-PRIMARY> 59.17
<EPS-DILUTED> 0
<FN>
<F1> Includes other assets of $2,034.
<F2> Includes accounts payable to an affiliate of $4,939, accounts payable and
accrued expenses of $31,007 and total Partners' equity of $948,860. <F3>Includes
distribution revenue of $201,749 and investment and other revenue of $45,414.
<F4>Includes general and administrative expenses of $85,847 and asset management
fees of $20,175.
</FN>
</TABLE>
