November 9, 1998
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-QSB Edgar for Quarter Ended September 30, 1998
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/Stephen Guilmette
Stephen Guilmette
Assistant Controller
BFAA-10Q3.DOC
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(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, 1998
-----------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
---------------- ------------------------
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
incorporation or organization) Identification 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)
BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
September 30,
1998
Assets
<S> <C>
Cash and cash equivalents $ 153,244
Interest receivable 12,129
Marketable securities, at fair value 952,510
Other assets 1,967
Investment in Local Limited Partnerships (Note 1) -
--------------
Total Assets $ 1,119,850
==============
Liabilities and Partners' Equity (Deficiency)
Liabilities:
Accounts payable to affiliate $ 4,958
Accounts payable and accrued expenses 31,098
--------------
Total Liabilities 36,056
Partners' Equity (Deficiency) 1,083,794
--------------
Total Liabilities and Partners' Equity (Deficiency) $ 1,119,850
==============
The accompanying notes are integral part of these financial statements
</TABLE>
<PAGE>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
STATEMENTS OF OPERATIONS
For the Three and Nine Months Ended September 30, 1998 and 1997
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30, September 30, September 30,
1998 1997 1998 1997
-------------- ------------- ------------- --------------
Revenue:
<S> <C> <C> <C> <C>
Distribution $ - $ - $ 198,606 $ 201,749
Investment and other 13,961 14,847 47,757 45,414
-------------- ------------- ------------- --------------
Total Revenue 13,961 14,847 246,363 247,163
-------------- ------------- ------------- --------------
Expenses:
General and administrative
(includes reimbursement to affiliate in
the amounts of $48,794 and $55,001
in 1998 and 1997, respectively) 22,448 23,108 85,505 85,847
Interest - - - 23,394
Management fees, related party - - 19,860 20,175
-------------- ------------- ------------- --------------
Total Expenses 22,448 23,108 105,365 129,416
-------------- ------------- ------------- --------------
Income (loss) before extraordinary gain on
cancellation of indebtedness (8,487) (8,261) 140,998 117,747
Extraordinary gain on cancellation
of indebtedness - - - 1,247,144
-------------- ------------- ------------- --------------
Net Income (Loss) $ (8,487) $ (8,261) $ 140,998 $ 1,364,891
============== ============= ============= ==============
Net Income (Loss) allocated:
To the General Partners $ (424) $ (413) $ 7,050 $ 68,245
To the Limited Partners (8,063) (7,848) 133,948 1,296,646
-------------- ------------- ------------- --------------
$ (8,487) $ (8,261) $ 140,998 $ 1,364,891
============== ============= ============= ==============
Income (Loss) before extraordinary
item allocated to the Limited
Partners per Limited Partnership
Unit (21,915 Units) $ (0.37) $ (0.36) $ 6.11 $ 5.10
============== ============= ============= ==============
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) $ (0.37) $ (0.36) $ 6.11 $ 59.16
============== ============= ============= =============
</TABLE>
The accompanying notes are 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, 1998
(Unaudited)
<TABLE>
<CAPTION>
Net
General Limited Unrealized
Partners Partners Gains Total
<S> <C> <C> <C> <C>
Balance at December 31, 1997 $ (857,752) $ 1,791,991 $ 325 $ 934,564
------------- ----------- ----------- -----------
Comprehensive Income:
Net Income 7,050 133,948 - 140,998
Change in net unrealized gains
on marketable securities
available for sale - - 8,232 8,232
------------- ----------- ----------- -----------
Comprehensive Income 7,050 133,948 8,232 149,230
------------- ----------- ----------- -----------
Balance at September 30, 1998 $ (850,702) $ 1,925,939 $ 8,557 $ 1,083,794
============= =========== =========== ===========
</TABLE>
The accompanying notes are 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, 1998 and 1997
(Unaudited)
<TABLE>
<CAPTION>
1998 1997
------------- -------------
<S> <C> <C>
Net cash used for operating activities $ (60,949) $ (60,105)
Net cash provided by investing activities 71,353 69,462
Net cash used for financing activities - (17,301)
------------- -------------
Net increase (decrease) in cash and cash equivalents 10,404 (7,944)
Cash and cash equivalents, beginning 142,840 124,878
------------- -------------
Cash and cash equivalents, ending $ 153,244 $ 116,934
============= =============
</TABLE>
The accompanying notes are 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-QSB 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, 1997. 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.
<TABLE>
<CAPTION>
1. Investments in Local Limited Partnerships
As of September 30, 1998 and December 31, 1997, the Partnership's Investment in
Local Limited Partnerships, at cost, was as follows:
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 $ 47,013 $ (843,569) $ -
Buttonwood Tree 1,482,996 (1,415,154) (67,842) -
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 (1,094,803) (751,666) -
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 (14,577,866) (3,234,498) 773,964
-------------- ------------- -------------- ------------
Less dispositions:
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 - -
Oakdale Manor (1,522,621) 1,522,621 - -
-------------- ------------- -------------- ------------
Subtotal (6,469,277) 4,420,480 1,274,833 (733,964)
-------------- ------------- -------------- ------------
Balance at
September 30, 1998 $ 12,117,051 $ (10,157,386) $ (1,959,665) $ -
============== ============= ============== ============
Balance at
December 31, 1997 $ 12,117,051 $ (10,355,992) $ (1,761,059) $ -
============== ============= ============== ============
</TABLE>
(1) Included in cash distributions received is cumulative distribution income of
$1,342,495 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 losses for the nine months ended
September 30, 1998 is $756,380. For the nine months ended September 30, 1998,
the Partnership has not recognized $1,091,648 of equity in losses relating to
nine Local Limited Partnerships where cumulative equity in losses and cumulative
distributions have exceeded its total investments. Also, during the nine months
ended September 30, 1998, the Partnership recognized $136,662 of equity in
losses which were previously unrecognized.
2. Effect of Recently Issued Accounting Standard
In June, 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income." The
Statement, which is effective for fiscal years beginning after December 15,
1997, requires that the Partnership display an amount representing total
comprehensive income for the period in its financial statements. The Partnership
adopted the new standard effective January 1, 1998.
<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, 1998, the Partnership had cash and cash equivalents of $153,244
compared with $142,840 at December 31, 1997. The increase in cash and cash
equivalents is a result of cash distributions received from Local Limited
Partnerships and proceeds from the sale and maturities of marketable securities.
These increases are offset by net cash used for operations and the purchase of
marketable securities.
At September 30, 1998, approximately $1,066,000 has been reserved and is
partially 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.
As of September 30, 1998, investment in Local Limited Partnerships remained at
zero, unchanged from December 31, 1997.
Since the Partnership has invested as a limited partner, it has no contractual
duty to provide additional funds to Local Limited Partnerships beyond its
specified investment. The Partnership's contractual obligations have been fully
met. Thus, at September 30, 1998, 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 1998 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 nine months ended September 30,
1998 resulted in net income of $140,998 as compared to net income of $1,364,891
for the same period in 1997. The decrease is primarily due to cancellation of
indebtedness income resulting from the foreclosure on Oakdale Manor on June 3,
1997.
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 three Local Limited
Partnerships during the nine months ended September 30, 1998. Please refer to
the section entitled `Property Discussions' for more information on property
operations.
<PAGE>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Property Discussions
The Partnership owns limited partnership interests in nine 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.
As previously reported, the Local General Partner of Woods of Castleton
successfully refinanced the mortgage during the third quarter of 1997. 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.
Impact of Year 2000
The Managing General Partner has assessed the Partnership's exposure to date
sensitive computer software programs that may not be operative subsequent to
1999 and has executed a requisite course of action to minimize Year 2000 risk
and ensure that neither significant costs nor disruption of normal business
operations are encountered. However, due to the inherent uncertainty that all
systems of outside vendors or other companies on which the Partnership and/or
Local Limited Partnerships rely will be compliant, the Partnership remains
susceptible to consequences of the Year 2000 issue.
<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, 1998.
<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.
DATED: November 9, 1998 BOSTON FINANCIAL APARTMENTS
ASSOCIATES, L.P.
By: BFTG Residential Properties, Inc.
its Managing General Partner
/s/Michael H. Gladstone
-----------------------
Michael H. Gladstone
Director
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 153,244
<SECURITIES> 952,510
<RECEIVABLES> 12,129
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,119,850<F1>
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 1,083,794
<TOTAL-LIABILITY-AND-EQUITY> 1,119,850<F2>
<SALES> 0
<TOTAL-REVENUES> 246,363<F3>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 105,365<F4>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 140,998
<EPS-PRIMARY> 6.11
<EPS-DILUTED> 0
<FN>
<F1> Includes Other assets of $1,967.
<F2> Includes Accounts payable to affiliate of $4,958 and Accounts payable and accrued expenses of $31,098.
<F3>Represents Distribution revenue of $198,606 and Investment and other revenue of $47,757.
<F4>Includes General and administrative expenses of $85,505 and Management fees of $19,860.
</FN>
</TABLE>
