August 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 June 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
BFAAQ2.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 June 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 June 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>
PART I - FINANCIAL INFORMATION Page No.
- ------------------------------ --------
<S> <C>
Item 1. Financial Statements
Balance Sheet - June 30, 1999 (Unaudited) 1
Statements of Operations (Unaudited) - For the Three and Six
Months Ended June 30, 1999 and 1998 2
Statement of Changes in Partners' Equity (Deficiency) (Unaudited) -
For the Six Months Ended June 30, 1999 3
Statements of Cash Flows (Unaudited) - For the Six
Months Ended June 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
June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Assets
<S> <C>
Cash and cash equivalents $ 76,878
Interest receivable 13,114
Marketable securities, at fair value 1,166,320
Other assets 492
Investments in Local Limited Partnerships (Note 1) -
----------------
Total Assets $ 1,256,804
================
Liabilities and Partners' Equity (Deficiency)
Liabilities:
Accounts payable to affiliate $ 25,973
Accounts payable and accrued expenses 32,225
----------------
Total Liabilities 58,198
Partners' Equity 1,198,606
----------------
Total Liabilities and Partners' Equity $ 1,256,804
================
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 Six Months Ended June 30, 1999 and 1998
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30, June 30 June 30,
1999 1998 1999 1998
------------- ------------- ------------- --------------
Revenue:
<S> <C> <C> <C> <C>
Distribution Income $ 189,235 $ 74,042 $ 189,235 $ 198,606
Investment and other 19,817 21,627 32,787 33,796
------------- ------------- ------------- -------------
Total Revenue 209,052 95,669 222,022 232,402
------------- ------------- ------------- -------------
Expenses:
General and administrative
(includes reimbursement to
to affiliate in the amounts
of $32,233 and $34,311 in
1999 and 1998, respectively) 31,580 32,173 63,380 63,057
Management Fees, related party 18,924 7,404 18,924 19,860
------------- ------------- ------------- -------------
Total Expenses 50,504 39,577 82,304 82,917
------------- ------------- ------------- -------------
Net Income $ 158,548 $ 56,092 $ 139,718 $ 149,485
============= ============= ============= =============
Net Income allocated:
To the General Partners $ 7,928 $ 2,804 $ 6,986 $ 7,474
To the Limited Partners 150,620 53,288 132,732 142,011
------------- ------------- ------------- -------------
$ 158,548 $ 56,092 $ 139,718 $ 149,485
============= ============= ============= =============
Net Income per Limited Partnership
Unit (21,915 Units) $ 6.88 $ 2.43 $ 6.06 $ 6.48
============= ============= ============= ============
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 Six Months Ended June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Net
General Limited Unrealized
Partners Partners Gains (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 Income 6,986 132,732 - 139,718
Net change in net unrealized
gains on marketable
securities available for sale - - (10,623) (10,623)
------------ ------------- ------------- -------------
Comprehensive Income (Loss) 6,986 132,732 (10,623) 129,095
------------ ------------- ------------- -------------
Balance at June 30, 1999 $ (844,358) $ 2,046,477 $ (3,513) $ 1,198,606
========== ============= ============= =============
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 Six Months Ended June 30, 1999 and 1998
(Unaudited)
<TABLE>
<CAPTION>
1999 1998
------------- -------------
<S> <C> <C>
Net cash used for operating activities $ (30,695) $ (36,433)
Net cash provided by (used for) investing activities (51,725) 144,972
------------- -------------
Net increase (decrease) in cash and cash equivalents (82,420) 108,539
Cash and cash equivalents, beginning 159,298 142,840
------------- -------------
Cash and cash equivalents, ending $ 76,878 $ 251,379
============= =============
</TABLE>
The accompanying notes are integral part of these financial statements.
<PAGE>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
11
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
As of June 30, 1999 and December 31, 1998, 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 $ 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 - -
-------------- ------------- -------------- -------------
(6,469,277) 4,420,480 1,274,833 (773,964)
Balance at
June 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 six months ended
June 30, 1999 is $416,812. For the six months ended June 30, 1999, the
Partnership has not recognized $702,787 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, 1999, the Partnership recognized $96,740 of equity in losses,
which were 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 are 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 their suppliers in achieving year 2000 compliance.
Liquidity and Capital Resources
At June 30, 1999, the Partnership had cash and cash equivalents of $76,878
compared with $159,298 at December 31, 1998. The decrease in cash and cash
equivalents is primarily the result of the purchase of marketable securities.
This is offset by proceeds from the sale of marketable securities and cash
distributions received from Local Limited Partnerships.
At June 30, 1999, approximately $1,185,000 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 June 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 June 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 six months ended June 30, 1999
resulted in net income of $139,718, as compared to net income of $149,485 for
the same period in 1998. The decrease is primarily due to a decrease 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 Partnership's total
investment in the Local Limited Partnerships. 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 operates 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 Chelsea Village
successfully negotiated a refinancing 1998. 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 in 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 that 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 the 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 the service contracts with vendors. As of August 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,
<PAGE>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
Impact of the Year 2000 (continued)
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 in early 1999, the Managing General Partner has
determined that a formal contingency plan that responds to material system
failures is not necessary.
Other Development
Lend Lease Real Estate Investments, Inc., 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 has reached a memorandum
of understanding to acquire The Boston Financial Group Limited Partnership. The
transaction remains subject to final due diligence, legal agreements, and
regulatory approvals with no guarantee that the acquisition will be completed.
The two companies are targeting to complete the transactions by the end of
September.
Headquartered in New York and Atlanta, Lend Lease Real Estate Investments, Inc.
has regional offices in 12 cities nationwide. Worldwide, Lend Lease Real Estate
Investments operates from more than 30 cities on five continents: North America,
Europe, Asia, Australia and South America. The company ranks as the leading U.S.
manager of tax-exempt assets invested in real estate. It is a subsidiary of Lend
Lease Corporation, an international real estate and financial services group
listed on the Australian Stock Exchange. 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 June 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: August 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
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 76,878
<SECURITIES> 1,166,320
<RECEIVABLES> 13,114
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,256,804<F1>
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 1,198,606
<TOTAL-LIABILITY-AND-EQUITY> 1,256,804<F2>
<SALES> 0
<TOTAL-REVENUES> 222,022<F3>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 82,304<F4>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 139,718
<EPS-BASIC> 6.06
<EPS-DILUTED> 0
<FN>
<F1> Includes other assets of $492.
<F2> Includes accounts payable to an affiliate of $25,973, accounts payable and accrued expenses of $32,225.
<F3>Represents distribution revenue of $189,235 and investment and other revenue of $32,787.
<F4>Represents general and administrative expenses of $63,380 and asset management fees of $18,924.
</FN>
</TABLE>
