August 14, 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 June 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/Veronica Curioso
Veronica Curioso
Assistant Controller
BFAA-10Q2.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, 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 June 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 (I.R.S. Employer Identification No.)
incorporation or organization)
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, 1997 (Unaudited)
and December 31, 1996 1
Statements of Operations (Unaudited) - For the Three and Six
Months Ended June 30, 1997 and 1996 2
Statement of Changes in Partners' Equity (Deficiency) (Unaudited) -
For the Three and Six Months Ended June 30, 1997 3
Statements of Cash Flows (Unaudited) - For the Six
Months Ended June 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)
<TABLE>
<CAPTION>
BALANCE SHEETS
June 30, December 31,
1997 1996
(Unaudited)
Assets
<S> <C> <C>
Cash and cash equivalents $ 157,915 $ 124,878
Interest receivable 14,175 11,175
Marketable securities, at fair value 847,032 723,855
Other assets 2,543 3,560
Investments in Local Limited Partnerships (Note 1) - -
Total Assets $ 1,021,665 $ 863,468
Liabilities and Partners' Equity (Deficiency)
Liabilities:
Accounts payable to affiliates $ 31,082 $ 17,641
Accounts payable and accrued expenses 19,434 21,114
Notes payable and accrued interest (Note 1) - 1,223,750
Total Liabilities 50,516 1,262,505
Partners' Equity (Deficiency) 971,149 (399,037)
Total Liabilities and Partners' Equity (Deficiency) $ 1,021,665 $ 863,468
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
For the Three and Six Months Ended June 30, 1997 and 1996
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Revenue:
Distribution $ 137,934 $ 89,996 $ 201,749 $ 106,664
Investment and other 18,450 9,867 30,567 24,045
Total Revenue 156,384 99,863 232,316 130,709
Expenses:
General and administrative
(includes reimbursement to affiliate in
the amounts of $39,921 and $41,289
in 1997 and 1996, respectively) 36,643 33,882 62,739 69,655
Interest 9,644 13,750 23,394 27,500
Management Fees, related party 18,540 9,000 20,175 10,667
Total Expenses 64,827 56,632 106,308 107,822
Income before extraordinary gain on
cancellation of indebtedness 91,557 43,231 126,008 22,887
Extraordinary gain on cancellation
of indebtedness (Note 1) 1,247,144 - 1,247,144 -
Net Income $ 1,338,701 $ 43,231 $ 1,373,152 $ 22,887
Net Income allocated:
To the General Partners $ 66,935 $ 2,161 $ 68,658 $ 1,144
To the Limited Partners 1,271,766 41,070 1,304,494 21,743
$ 1,338,701 $ 43,231 $ 1,373,152 $ 22,887
Income before extraordinary
item allocated to the Limited
Partners per Limited Partnership
Unit (21,915 Units) $ 3.97 $ 1.87 $ 5.46 $ .99
Extraordinary gain on cancellation
of indebtedness allocated to the
Limited Partners per Limited
Partnership Unit (21,915 Units) $ 54.06 $ - $ 54.06 $ -
Net Income per Limited Partnership
Unit (21,915 Units) $ 58.03 $ 1.87 $ 59.52 $ .99
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY)
For the Six Months Ended June 30, 1997
(Unaudited)
Net
Unrealized
General Limited Gains
Partners Partners (Losses) 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 - - (2,966) (2,966)
Net Income 68,658 1,304,494 - 1,373,152
Balance at June 30, 1997 $ (839,322) $ 1,813,434 $ (2,963) $ 971,149
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 1997 and 1996
(Unaudited)
1997 1996
<S> <C> <C>
Net cash used for operating activities $ (41,994) $ (42,557)
Cash flows from investing activities:
Purchases of marketable securities (249,275) (276,008)
Proceeds from sales and maturities of
marketable securities 122,557 479,210
Cash distributions received from Local
Limited Partnerships 201,749 106,664
Net cash provided by investing activities 75,031 309,866
Cash flows from financing activities:
Cash distribution - (219,150)
Net cash used for financing activities - (219,150)
Net increase in cash and cash equivalents 33,037 48,159
Cash and cash equivalents, beginning 124,878 121,361
Cash and cash equivalents, ending $ 157,915 $ 169,520
</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 June 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 istributions
Local Limited Acquisition Costs (Losses) Received Net
Partnerships (Cumulative) (Cumulative) (Cumulative) (1) 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
June 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>
(1) Included in cash distributions received is cumulative distribution income of
$1,143,889 which was received from six Local Limited Partnerships with carrying
values of zero.
<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 six months ended June
30, 1997 is $168,990. For the six months ended June 30, 1997, the Partnership
has not recognized $459,211 of equity in losses relating to eight Local Limited
Partnerships where cumulative equity in losses and cumulative distributions have
exceeded its total investments. Also, during the six months ended June 30, 1997,
the Partnership recognized $88,472 of equity in losses which were previously
unrecognized.
As previously reported, the mortgagor for Oakdale Manor had 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.
<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, 1997, the Partnership had cash and cash equivalents of $157,915
compared with $124,878 at December 31, 1996. The increase in cash and cash
equivalents is due to cash distributions received from Local Limited
Partnerships offset by purchases of marketable securities in excess of proceeds
from sales and maturities of marketable securities and cash used for operating
activities.
At June 30, 1997, approximately $954,000 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 Local Limited
Partnerships, it has no contractual duty to provide additional funds to Local
Limited Partnerships beyond its specified investment. At June 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 and six months ended June
30 1997 resulted in net income of $1,338,701 and $1,373,152, respectively, as
compared to net income of $43,231 and $22,887, respectively, for the same
periods in 1996. These increases in net income are 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 six months ended June 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.
Three 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 previously reported, in March 1996 the local general partner of Mountain View
and Woodmeade South Apartments placed both of the properties into Chapter 11
bankruptcy. The Partnership relinquished its equity interest in these two Local
Limited Partnerships which had no impact on the Partnership financial
statements, because the Partnership's investment in the two Local Limited
Partnerships had a carrying value of zero. However, the Partnership's
relinquishment of its interest in these properties means that the Partnership
will get no future cash distributions from these properties. For tax purposes,
the 1996 tax returns were the final return for these partnerships. There was a
taxable gain associated with the disposal of the Local Limited Partnerships
which resulted in taxable income to the Partnership.
Since the August 1996 sale of Chelsea Village's mortgage, the Local General
Partner continues to negotiate a satisfactory arrangement with the mortgage
buyer. 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. The
Local General Partner of Woods of Castleton is working with various lenders
seeking a source of capital to refinance the mortgage; in the meantime, the
property has resumed making debt service payments to the new note holder. The
Managing General Partner completed negotiations with the Local General Partner
and agreed to a modification of the Partnership Agreement. 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 any
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. 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.
<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, 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/Vincent J. Costantini Dated: August 13, 1997
--------------------------------------
By: Vincent J. Costantini
Treasurer and Chief Financial Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 157,915
<SECURITIES> 847,032
<RECEIVABLES> 14,175
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,021,665<F1>
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 1,021,665<F2>
<SALES> 0
<TOTAL-REVENUES> 232,316<F3>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 82,914<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> 1,373,152
<EPS-PRIMARY> 59.52
<EPS-DILUTED> 0
<FN>
<F1> Includes other assets of $2,543.
<F2> Includes accounts payable to an affliate of $31,082, accounts payable and
accrued expenses of $19,434 and total Partners' equity of $971,149.
<F3>Represents distribution revenue of $201,749 and investment and other revenue
of $30,567.
<F4>Includes general and administrative expenses of $62,739 and asset
management fees of $20,175.
</FN>
