November 12, 1999
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, 1999
File Number 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, 1999
-----------------------
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, 1999 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)
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
PART I - FINANCIAL INFORMATION Page No.
- ------------------------------ --------
Item 1. Financial Statements
Balance Sheet - September 30, 1999 (Unaudited) 1
Statements of Operations (Unaudited) - For the Three and Nine
Months Ended September 30, 1999 and 1998 2
Statement of Changes in Partners' Equity (Deficiency) (Unaudited) -
For the Nine Months Ended September 30, 1999 3
Statements of Cash Flows (Unaudited) - For the Nine
Months Ended September 30, 1999 and 1998 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 10
SIGNATURE 11
</TABLE>
<PAGE>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
BALANCE SHEET
September 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Assets
<S> <C>
Cash and cash equivalents $ 58,038
Interest receivable 12,047
Marketable securities, at fair value 1,159,062
Investments in Local Limited Partnerships (Note 1) -
--------------
Total Assets $ 1,229,147
==============
Liabilities and Partners' Equity
Liabilities:
Accounts payable to affiliate $ 4,345
Accounts payable and accrued expenses 31,061
--------------
Total Liabilities 35,406
Partners' Equity 1,193,741
--------------
Total Liabilities and Partners' Equity $ 1,229,147
==============
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, 1999 and 1998
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30, September 30, September 30,
1999 1998 1999 1998
-------------- ------------- ------------- --------------
Revenue:
<S> <C> <C> <C> <C>
Distribution income $ - $ - $ 189,235 $ 198,606
Investment and other 15,110 13,961 47,897 47,757
-------------- ------------- ------------- --------------
Total Revenue 15,110 13,961 237,132 246,363
-------------- ------------- ------------- --------------
Expenses:
General and administrative
(includes reimbursements to affiliate in
the amounts of $46,362 and $48,794
in 1999 and 1998, respectively) 20,465 22,448 83,845 85,505
Management fees, related party - - 18,924 19,860
-------------- ------------- ------------- --------------
Total Expenses 20,465 22,448 102,769 105,365
-------------- ------------- ------------- --------------
Net Income (Loss) $ (5,355) $ (8,487) $ 134,363 $ 140,998
============== ============= ============= ==============
Net Income (Loss) allocated:
To General Partners $ (268) $ (424) $ 6,718 $ 7,050
To Limited Partners (5,087) (8,063) 127,645 133,948
-------------- ------------- ------------- --------------
$ (5,355) $ (8,487) $ 134,363 $ 140,998
============== ============= ============= ==============
Net Income (Loss) per Limited Partnership
Unit (21,915 Units) $ (0.23) $ (0.37) $ 5.83 $ 6.11
============== ================= ============= ==============
The accompanying notes are integral part of these financial statements.
</TABLE>
<PAGE>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
STATEMENT OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY)
For the Nine Months Ended September 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Net
Unrealized
General Limited Gains
Partners Partners (Losses) Total
<S> <C> <C> <C> <C>
Balance at December 31, 1998 $ (851,344) $ 1,913,745 $ 7,110 $ 1,069,511
------------ ------------- ------------- -------------
Comprehensive Income (Loss):
Net change in net unrealized gains
on marketable securities
available for sale - - (10,133) (10,133)
Net Income 6,718 127,645 - 134,363
------------ ------------- ------------- -------------
Comprehensive Income (Loss) 6,718 127,645 (10,133) 124,230
------------ ------------- ------------- -------------
Balance at September 30, 1999 $ (844,626) $ 2,041,390 $ (3,023) $ 1,193,741
============ ============= ============= =============
The accompanying notes are integral part of these financial statements.
</TABLE>
<PAGE>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1999 and 1998
(Unaudited)
<TABLE>
<CAPTION>
1999 1998
------------- -------------
<S> <C> <C>
Net cash used for operating activities $ (57,497) $ (60,949)
------------- -------------
Net cash provided by (used for) investing activities (43,763) 71,353
------------- -------------
Net increase (decrease) in cash and cash equivalents (101,260) 10,404
Cash and cash equivalents, beginning 159,298 142,840
------------- -------------
Cash and cash equivalents, ending $ 58,038 $ 153,244
============= =============
</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 Form 10-K for the
year ended December 31, 1998. 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
<TABLE>
<CAPTION>
As of September 30, 1999 and December 31, 1998, 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 $ 173,739 $ (970,295) $ -
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 (1,032,294) (814,175) -
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 (14,388,631) (3,423,733) 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 (773,964)
-------------- ------------- -------------- ------------
Balance at
September 30, 1999 $ 12,117,051 $ (9,968,151) $ (2,148,900) $ -
============== ============= ============== ============
Balance at
December 31, 1998 $ 12,117,051 $ (10,157,386) $ (1,959,665) $ -
============== ============= ============== ============
(1) Included in cash distributions received is cumulative distribution income
of $1,531,730 which was received from six Local Limited Partnerships with
carrying values of zero.
</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 losses for the nine months ended
September 30, 1999 totaled $642,012. For the nine months ended September 30,
1999, the Partnership has not recognized $970,546 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, 1999, the Partnership recognized $139,299 of
equity in losses, which was previously unrecognized.
<PAGE>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Certain matters discussed herein constitute forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. The
Partnership intends such forward-looking statements to be covered by the safe
harbor provisions for forward-looking statements and is including this statement
for purposes of complying with these safe harbor provisions. Although the
Partnership believes the forward-looking statements are based on reasonable
assumptions, the Partnership can give no assurance that their expectations will
be attained. Actual results and timing of certain events could differ materially
from those projected in or contemplated by the forward-looking statements due to
a number of factors, including, without limitation, general economic and real
estate conditions, interest rates and unanticipated delays or expenses on the
part of the Partnership and its suppliers in achieving year 2000 compliance.
Liquidity and Capital Resources
At September 30, 1999, the Partnership had cash and cash equivalents of $58,038
compared with $159,298 at December 31, 1998. The decrease in cash and cash
equivalents is a result of net cash used for operations and the purchase of
marketable securities. These increases are partially offset by cash
distributions received from Local Limited Partnerships and proceeds from the
sales and maturities of marketable securities.
At September 30, 1999, approximately $1,182,000 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, 1999, investment in Local Limited Partnerships remained at
zero, unchanged from December 31, 1998.
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, 1999, 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 1999 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,
1999 resulted in net income of $134,363, as compared to net income of $140,998
for the same period in 1998. The decrease is primarily due to a decrease in
distribution income received from Local Limited Partnerships. The decrease is
partially offset by a decrease in general and administrative expenses and
management fees.
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. 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 (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.
The Local General Partner for Westgate Park has recently received some interest
in purchasing the property from three different potential buyers. Currently,
Management is working with the Local General Partner in exploring a feasible
sale strategy whereby the Partnership may obtain a return of capital on the sale
of the property.
Impact of Year 2000
The Managing General Partner's plan to resolve year 2000 issues involves the
following four phases: assessment, remediation, testing and implementation. To
date, the Managing General Partner has fully completed an assessment of all
information systems that may not be operative subsequent to 1999 and has begun
the remediation, testing and implementation phase on both hardware and software
systems. Because the hardware and software systems of both the Partnership and
Local Limited Partnerships are generally the responsibility of obligated third
parties, the plan primarily involves ongoing discussions with and obtaining
written assurances from these third parties that pertinent systems will be 2000
compliant. In addition, neither the Partnership nor the Local Limited
Partnerships are incurring significant additional costs since such expenses are
principally covered under service contracts with vendors. As of November 1999,
the General Partner is in the final stages of its Year 2000 remediation plan and
believes all major systems are compliant; any systems still being updated are
not considered significant to the Partnership's operations. However, despite the
likelihood that all significant year 2000 issues are expected to be resolved in
a timely manner, the Managing General Partner has no means of ensuring that all
systems of outside vendors or other entities that impact operations will be 2000
compliant. The Managing General Partner does not believe that the inability of
third parties to address their year 2000 issues in a timely manner will have a
material impact on the Partnership. However, the effect of non-compliance by
third parties is not readily determinable.
Management has also evaluated a worst case scenario projection with respect to
the year 2000 and expects any resulting disruption of either the Managing
General Partner's activities or any Local Limited Partnership's operations to be
short-term inconveniences. Such problems, however, are not likely to fully
impede the ability to carry out necessary duties of the Partnership. Moreover,
because expected problems under a worst case scenario are not extensively
detrimental, and because the likelihood that all systems affecting the
Partnership will be compliant before 2000, the Managing General Partner has
determined that a formal contingency plan that responds to material system
failures is not necessary.
<PAGE>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Other Development
Lend Lease Real Estate Investments, Inc., ("Lend Lease") the U.S. subsidiary of
Lend Lease Corporation and the leading U.S. institutional real estate advisor,
as ranked by assets under management, announced on July 29, 1999 it had reached
a memorandum of understanding to acquire The Boston Financial Group Limited
Partnership ("Boston Financial"). Lend Lease closed the acquisition of Boston
Financial on November 3, 1999.
Headquartered in New York and Atlanta, Lend Lease Corporation has regional
offices in 12 cities nationwide. The company ranks as the leading U.S. manager
of tax-exempt assets invested in real estate. Lend Lease is a subsidiary of Lend
Lease Corporation, an international real estate and financial services group
listed on the Australian Stock Exchange. Worldwide, Lend Lease Corporation
operates from more than 30 cities on five continents: North America, Europe,
Asia, Australia and South America. In addition to real estate investments, the
Lend Lease Group operates in the areas of property development, project
management and construction, and capital services (infrastructure). Financial
services activities include funds management, life insurance, and wealth
protection
<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, 1999.
<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 12, 1999 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-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 58,038
<SECURITIES> 1,159,062
<RECEIVABLES> 12,047
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,229,147
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 1,193,741
<TOTAL-LIABILITY-AND-EQUITY> 1,229,147<F1>
<SALES> 0
<TOTAL-REVENUES> 237,132<F2>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 102,769<F4>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 134,363
<EPS-BASIC> 5.83
<EPS-DILUTED> 0
<FN>
<F1>Includes Accounts payable to affiliate of $4,345 and Accounts payable and
accrued expenses of $31,061. <F2>Represents Distribution revenue of $189,235 and
Investment and other revenue of $47,897 <F3>Includes General and administrative
expenses of $83,845 and Management fees of $18,924 .
</FN>
</TABLE>
