May 15, 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 March 31, 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/Dianne Groark
Dianne Groark
Assistant Controller
BFAA-10Q1.DOC
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
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 March 31, 1998
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 March 31, 1998 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)
BALANCE SHEET
<TABLE>
<CAPTION>
March 31,
1998
(Unaudited)
Assets
<S> <C>
Cash and cash equivalents $ 261,065
Interest receivable 11,710
Marketable securities, at fair value 787,282
Other assets 1,017
Investments in Local Limited Partnerships (Note 1) -
-----------
Total Assets $ 1,061,074
===========
Liabilities and Partners' Equity (Deficiency)
Liabilities:
Accounts payable to affiliates $ 23,007
Accounts payable and accrued expenses 8,750
-----------
Total Liabilities 31,757
Partners' Equity (Deficiency) 1,029,317
-----------
Total Liabilities and Partners' Equity (Deficiency) $ 1,061,074
===========
</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 Months Ended March 31, 1998 and 1997
(Unaudited)
Three Months Ended
<TABLE>
<CAPTION>
March March
1998 1997
<S> <C> <C>
Revenue:
Distribution $ 124,564 $ 63,815
Investment and other 12,169 12,117
----------- -----------
Total Revenue 136,733 75,932
----------- -----------
Expenses:
General and administrative
(includes reimbursement to affiliate in
the amounts of $20,037 and $16,055,
in 1998 and 1997, respectively) 30,884 26,096
Interest - 13,750
Management Fees, related party 12,456 1,635
----------- -----------
Total Expenses 43,340 41,481
----------- -----------
Net Income $ 93,393 $ 34,451
=========== ===========
Net Income allocated:
To the General Partners $ 4,670 $ 1,723
To the Limited Partners 88,723 32,728
----------- -----------
$ 93,393 $ 34,451
=========== ===========
Net Income per Limited Partnership
Unit (21,915 Units) $ 4.05 $ 1.49
=========== ===========
</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)
For the Three Months Ended March 31, 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
Net change in net unrealized
gains on marketable
securities available for sale - - 1,360 1,360
Net Income 4,670 88,723 - 93,393
------------ ----------- ----------- ------------
Balance at March 31, 1998 $ (853,082) $ 1,880,714 $ 1,685 $ 1,029,317
============ =========== =========== ============
</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 Three Months Ended March 31, 1998 and 1997
(Unaudited)
<TABLE>
<CAPTION>
1998 1997
------------- --------
<S> <C> <C>
Net cash provided by (used for) operating activities $ (36,506) $ 6,549
Net cash provided by investing activities 154,731 26,658
------------- -------------
Net increase in cash and cash equivalents 118,225 33,207
Cash and cash equivalents, beginning 142,840 124,878
------------- -------------
Cash and cash equivalents, ending $ 261,065 $ 158,085
============= =============
</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-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.
1. Investments in Local Limited Partnerships
As of March 31, 1998 and December 31, 1997, 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 $ 47,013 $ (843,569) $ -
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 (14,651,908) (3,160,456) 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
March 31, 1998 $ 12,117,051 $ (10,231,428) $ (1,885,623) $ -
============== ============= ============== ============
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
$1,268,453 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 three months ended
March 31, 1998 is $147,078. For the three months ended March 31, 1998, the
Partnership has not recognized $356,969 of equity in losses relating to seven
Local Limited Partnerships where cumulative equity in losses and cumulative
distributions have exceeded its total investments. Also, during the three months
ended March 31, 1998, the Partnership recognized $85,327 of equity in losses
which were previously unrecognized.
2. Significant Accounting Policies
The Financial Accounting Standards Board recently issued Statement of Financial
Accounting Standards No. 130, Reporting Comprehensive Income. The standard
requires that changes in comprehensive income be shown in a financial statement
that is displayed with the same prominence as other financial statements. The
Partnership has adopted the new standard effective January 1, 1998. The adoption
of this standard had no effect on the Partnership's net income or partner's
equity. Comprehensive income was $94,753 and $29,979 for the quarters ended
March 31, 1998 and 1997, respectively. Other comprehensive income is comprised
of net unrealized gains and losses on marketable securities available for sale
of $1,360 and ($4,472) for the quarters ended March 31, 1998 and 1997,
respectively.
<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 March 31, 1998, the Partnership had cash and cash equivalents of $261,065
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 March 31, 1998, approximately $1,017,000 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 March 31, 1998, investment in Local Limited Partnerships remained at zero
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 March 31, 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 three months ended March 31,
1998 resulted in net income of $93,393, as compared to net income of $34,451 for
the same period in 1997. The increase is primarily due to an increase in
distribution income received from Local Limited Partnerships. The increase is
partially offset by an increase in management fees which are based on
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 one Local Limited
Partnership during the three months ended March 31, 1998. Please refer to the
section entitled `Property Discussions' section for more information on the
property operations.
<PAGE>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - (continued)
Property Discussions
The Partnership owns limited partnership interests in 9 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 discussed previously, Chelsea Village's mortgage was sold in the August 1996
HUD mortgage sale. The new lender had indicated that it expected full payment of
the current mortgage balance due or it would exercise its rights to foreclose on
the property. However, the Local General Partner successfully negotiated a
refinancing. It is not expected that the refinancing will generate taxable
income to the Partnership.
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 Partnership 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 effect on the
Partnership 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 March 31, 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.
BOSTON FINANCIAL APARTMENTS
ASSOCIATES, L.P.
By BFTG Residential Properties, Inc.
its Managing General Partner
/s/Michael H. Gladstone Dated: May 15, 1998
By: Michael H. Gladstone
Director
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 261,065
<SECURITIES> 787,282
<RECEIVABLES> 11,710
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,061,074<F1>
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 1,029,317
<TOTAL-LIABILITY-AND-EQUITY> 1,061,074<F2>
<SALES> 0
<TOTAL-REVENUES> 136,733<F3>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 43,340<F4>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 93,393
<EPS-PRIMARY> 4.05
<EPS-DILUTED> 0
<FN>
<F1> Includes other assets of $1,017.
<F2> Includes accounts payable to an affiliate of $23,007 and accounts payable
and accrued expenses of $8,750.
<F3>Represents distribution revenue of $124,564 and investment and other revenue
of $12,169.
<F4>Includes general and administrative expenses of $30,884 and asset management
fees of $12,456.
</FN>
</TABLE>
