<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(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 15, 2000
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
----- EXCHANGE ACT OF 1934
Commission File Number 0-17015
LIBERTY TAX CREDIT PLUS L.P.
----------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3446500
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
625 Madison Avenue, New York, New York 10022
--------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212)421-5333
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>
PART I - Financial Information
Item 1. Financial Statements
<TABLE>
<CAPTION>
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
========== ==========
June 15, March 15,
2000 2000
---------- ----------
<S> <C> <C>
ASSETS
Property and equipment, at cost,
net of accumulated depreciation
of $102,060,512 and $99,818,713
respectively $156,610,796 $158,760,665
Cash and cash equivalents 5,271,814 5,940,310
Cash held in escrow 11,249,307 10,986,005
Accounts receivable - tenants 877,263 790,793
Deferred costs - net of accumulated
amortization of $3,062,342
and $2,998,109, respectively 3,505,073 3,182,228
Other assets 1,101,660 1,051,471
------------ ------------
Total assets $178,615,913 $180,711,472
============ ============
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<PAGE>
<CAPTION>
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
(continued)
========== ==========
June 15, March 15,
2000 2000
---------- ----------
<S> <C> <C>
LIABILITIES AND PARTNERS' DEFICIT
Liabilities:
Mortgage notes payable $158,447,078 $158,415,982
Accounts payable and other
liabilities 10,985,157 10,762,116
Due to local general partners and
affiliates 15,571,927 15,510,722
Due to general partners and
affiliates 5,377,016 5,092,462
Due to selling partners 1,058,257 1,058,257
------------ ------------
Total liabilities 191,439,435 190,839,539
------------ ------------
Minority interest 2,783,999 2,947,532
------------ ------------
Commitments and contingencies
(Note 4)
Partners' deficit:
Limited partners (15,987.5 BACs
issued and outstanding) (14,721,601) (12,214,998)
General partners (885,920) (860,601)
------------ ------------
Total partners' deficit (15,607,521) (13,075,599)
------------ ------------
Total liabilities and partners'
deficit $178,615,913 $180,711,472
============ ============
See Accompanying Notes to Consolidated Financial Statements.
</TABLE>
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<PAGE>
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
==================
Three Months Ended
June 15,
------------------
2000 1999
------------------
<S> <C> <C>
Revenues
Rental income $ 8,809,322 $ 8,477,869
Other 319,032 250,574
------------ -----------
9,128,354 8,728,443
------------ -----------
Expenses
General and administrative 1,639,980 1,567,396
General and administrative-
related parties (Note 2) 666,877 668,543
Repairs and maintenance 1,650,769 1,361,382
Operating and other 1,266,305 1,181,771
Taxes 372,190 368,198
Insurance 351,861 323,719
Financial 3,537,500 3,142,455
Depreciation and amortization 2,306,032 2,273,130
----------- -----------
Total expenses 11,791,514 10,886,594
---------- ----------
Loss before minority
interest (2,663,160) (2,158,151)
Minority interest in loss of
subsidiaries 131,238 111,940
----------- -----------
Net loss $(2,531,922) $(2,046,211)
============ ============
Net loss-limited partners $(2,506,603) $(2,025,749)
============ ============
Number of BACs outstanding 15,987.5 15,987.5
============ ============
Net loss per BAC $ (156.79) $ (126.71)
============ ============
See Accompanying Notes to Consolidated Financial Statements.
</TABLE>
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<PAGE>
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Consolidated Statement of Changes in Partners' Deficit
(Unaudited)
<TABLE>
<CAPTION>
===========================================
Limited General
Total Partners Partners
-------------------------------------------
<S> <C> <C> <C>
Partners'
deficit -
March 16, 2000 $(13,075,599) $(12,214,998) $ (860,601)
Net loss (2,531,922) (2,506,603) (25,319)
------------ ------------ ----------
Partners'
deficit -
June 15, 2000 $(15,607,521) $(14,721,601) $ (885,920)
============ ============ ==========
See Accompanying Notes to Consolidated Financial Statements.
</TABLE>
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<PAGE>
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Increase (decrease) in Cash and Cash Equivalents
(Unaudited)
<TABLE>
<CAPTION>
==================
Three Months Ended
June 15,
------------------
2000 1999
------------------
<S> <C> <C>
Cash flows from
operating activities:
Net loss $(2,531,922) $(2,046,211)
Adjustments to reconcile net loss
to net cash (used in) provided
by operating activities:
Depreciation and amortization 2,306,032 2,273,130
Minority interest in loss of
subsidiaries (131,238) (111,940)
(Increase) decrease in accounts
receivable-tenants (86,470) 187,983
Increase in other assets (50,189) (210,076)
Increase in accounts payable and
other liabilities 223,041 707,999
Increase in due to general partners
and affiliates 284,554 326,977
Increase in cash held
in escrow (420,701) (273,520)
------------ -----------
Net cash (used in) provided by
operating activities (406,893) 854,342
------------ -----------
Cash flows from investing activities:
Decrease (increase) in cash held
in escrow 157,399 (87,740)
Improvements to property and
equipment (91,930) (251,908)
------------ -----------
Net cash used in investing activities 65,469 (339,648)
------------ -----------
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<PAGE>
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Increase (decrease) in Cash and Cash Equivalents
(Unaudited)
(continued)
<CAPTION>
==========================
Three Months Ended
June 15,
--------------------------
2000 1999
--------------------------
<S> <C> <C>
Cash flows from financing activities:
Increase in deferred costs (387,078) 0
Decrease in due to selling partners 0 (27,865)
Proceeds from mortgage notes 7,500,000 0
Repayments of mortgage notes (7,468,904) (675,183)
Increase in due to local general
partners and affiliates 258,033 224,532
Decrease in due to local general
partners and affiliates (196,828) (115,839)
Decrease in capitalization of
consolidated subsidiaries
attributable to minority interest (32,295) (85,835)
--------- ----------
Net cash used in
financing activities (327,072) (680,190)
--------- ----------
Net decrease in cash and cash
equivalents (668,496) (165,496)
Cash and cash equivalents at
beginning of period 5,940,310 3,824,051
--------- ----------
Cash and cash equivalents at
end of period $ 5,271,814 $ 3,658,555
========== ==========
See Accompanying Notes to Consolidated Financial Statements.
</TABLE>
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<PAGE>
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 15, 2000
(Unaudited)
NOTE 1- GENERAL
The consolidated financial statements include the accounts of Liberty Tax Credit
Plus L.P. (the "Partnership") and 31 subsidiary partnerships ("subsidiary
partnerships" or Local Partnerships) in which the Partnership is a limited
partner. Through the rights of the Partnership and/or a general partner of the
Partnership ("General Partner"), which General Partner has a contractual
obligation to act on behalf of the Partnership, to remove the local general
partner of the subsidiary partnerships and to approve certain major operating
and financial decisions, the Partnership has a controlling financial interest in
the subsidiary partnerships. All intercompany accounts and transactions with the
subsidiary partnerships have been eliminated in consolidation.
For financial reporting purposes the Partnership's fiscal quarter ends on June
15. All subsidiary partnerships have fiscal quarters ending March 31. Accounts
of the subsidiary partnerships have been adjusted for intercompany transactions
from April 1 through June 15. The Partnership's quarter ends on June 15, in
order to allow adequate time for the subsidiary partnerships financial
statements to be prepared and consolidated. The books and records of the
Partnership are maintained on the accrual basis of accounting, in accordance
with generally accepted accounting principles ("GAAP").
In the opinion of the General Partners, the accompanying unaudited financial
statements contain all adjustments (consisting only of normal recurring
adjustments) necessary to present fairly the financial position of the
Partnership as of June 15, 2000 and the results of operations and cash flows for
the three months ended June 15, 2000 and 1999. However, the operating results
for the three months ended June 15, 2000 may not be indicative of the results
for the year.
Certain information and note disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principals
have been omitted or condensed. These consolidated financial statements should
be read in conjunction with the financial statements and notes thereto included
in the Partnership's Annual Report on Form 10-K for the period ended March 15,
2000.
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<PAGE>
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 15, 2000
(Unaudited)
Increases (decreases) in the capitalization of consolidated subsidiary
partnerships attributable to minority interest arise from cash contributions
from and cash distributions to the minority interest partners.
The Partnership's investment in each subsidiary partnership is equal to the
respective subsidiary partnership's partners' equity less minority interest
capital, if any. Losses attributable to minority interests which exceed the
minority interests' investment in subsidiary partnerships have been charged to
the Partnership. Such losses aggregated $68,000 and $64,000 for the three months
ended June 15, 2000 and 1999, respectively. In consolidation, all subsidiary
partnership losses are included in the Partnership's capital account except for
losses allocated to minority interest capital.
NOTE 2 - RELATED PARTY TRANSACTIONS
An affiliate of the General Partners has a 1% interest as a special limited
partner, in each of the subsidiary partnerships. An affiliate of the General
Partners also has a minority interest in certain subsidiary partnerships.
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<PAGE>
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 15, 2000
(Unaudited)
The costs incurred to related parties for the three months ended June 15, 2000
and 1999 were as follows:
<TABLE>
<CAPTION>
Three Months Ended
June 15,
----------------------
2000 1999
----------------------
<S> <C> <C>
Partnership management fees (a) $284,500 $284,500
Expense reimbursement (b) 29,175 33,796
Property management fees
incurred to affiliates of the
General Partners (c) 311,089 307,634
Local administrative fee (d) 18,000 18,500
------- -------
Total general and administrative-
General Partners 642,764 644,430
------- -------
Property management fees
incurred to affiliates of the
subsidiary partnerships'
general partners (c) 24,113 24,113
------- -------
Total general and administrative-
related parties $666,877 $668,543
======= =======
</TABLE>
(a) The General Partners are entitled to receive a partnership management fee,
after payment of all Partnership expenses, which together with the local annual
administrative fees will not exceed a maximum of 0.5% per annum of invested
assets (as defined in the Partnership Agreement), for administering the affairs
of the Partnership. The partnership management fee, subject to the foregoing
limitation, will be determined by the General Partners in their sole discretion
based upon their review of the Partnership's investments. Partnership management
fees owed to the General Partners amounting to approximately $4,786,000 and
$4,502,000 were accrued and unpaid as of June 15, 2000 and March 15, 2000,
respectively.
(b) The Partnership reimburses the General Partners and their affiliates for
actual Partnership operating expenses incurred by the General Partners and their
affiliates on the Partnership's behalf. The amount of
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<PAGE>
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 15, 2000
(Unaudited)
reimbursement from the Partnership is limited by the provisions of the
Partnership Agreement. Another affiliate of the General Partners performs asset
monitoring for the Partnership. These services include site visits and
evaluations of the subsidiary partnerships' performance. Expense reimbursements
and asset monitoring fees owed to Related Credit Properties L.P. amounting to
approximately $134,000 and $105,000 were accrued and unpaid as of June 15, 2000
and March 15, 2000, respectively.
The General Partners have continued advancing and allowing the accrual without
payment of the amounts set forth in (a) and (b) but are under no obligation to
do so.
(c) Property management fees incurred by subsidiary partnerships amounted to
$497,921 and $473,898 for the three months ended June 15, 2000 and 1999,
respectively. Of these fees $311,089 and $307,634 were incurred to affiliates of
the subsidiary partnerships' general partners. In addition, $24,113 and $24,113
were incurred to affiliates of the General Partners.
(d) Liberty Associates III L.P., the special limited partner of the subsidiary
partnerships, is entitled to receive a local administrative fee of up to $2,500
per year from each subsidiary partnership.
NOTE 3 - MORTGAGE NOTES PAYABLE
2108 BOLTON DRIVE ASSOCIATES, L.P. ("BOLTON)
--------------------------------------------
On February 1, 2000, Bolton refinanced its outstanding mortgage note payable.
The new mortgage in the amount of $7,500,000 is payable in monthly installments
of $58,094 including interest at the rate of 8.58% per annum through February
2007. At maturity, the remaining principal balance of approximately $7,080,000
will be due. Proceeds from the new mortgage were used to pay the prior mortgage
note payable, repay the balance advanced from the limited partner, establish
escrows, pay refinancing costs and to return capital of approximately $1,600,000
to the limited partners.
WALNUT PARK PLAZA ASSOCIATES ("WALNUT PARK")
--------------------------------------------
At December 31, 1999, Walnut Park was in default under the terms of the Bond
Indenture. On April 11, 2000, the Redevelopment Authority of the City of
Philadelphia issued bonds (the "New Bonds"), most of the proceeds of which were
applied to purchase other bonds (the "Old
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<PAGE>
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 15, 2000
(Unaudited)
Bonds") held by Municipal Capital Appreciation Partners I, L.P. ("MCAP"). Both
sets of bonds were secured by a mortgage on the low-income apartment project
(the "Project") owned by Walnut Park. MCAP has retained ownership of
approximately $3,000,000 of the Old Bonds, which are now secured by a second
mortgage on the Project, and which is subordinate to the $5,500,000 mortgage on
the Project which secures the New Bonds. In connection with that transaction,
the former general partner of Walnut Park, which was Whitney-Pitts, LLC,
withdrew from Walnut Park and was replaced by Walnut Park Management, Inc., a
Maryland corporation which is an affiliate of the current management agent for
the Project. In addition, Walnut Park granted MCAP an option to acquire the
Project at any time up to and including October 1, 2018. If that option is
exercised prior to October 30, 2003, the option price is set at the fair market
value of the Project. For any exercise of that option thereafter, the option
price is set at $1.00.
NOTE 4 - COMMITMENTS AND CONTINGENCIES
The following disclosure includes changes and/or additions to the disclosures
regarding the subsidiary partnerships which were included in the Partnership's
Annual Report on Form 10-K for the fiscal year ended March 15, 2000.
ROBIN HOUSING ASSOCIATES
------------------------
Robin Housing Associates ("Robin Housing") is a defendant in several personal
injury lawsuits. Robin Housing's insurance carrier intends to defend Robin
Housing vigorously. Management believes that the insurance coverage is adequate
to cover any liability arising from this action. Since it is too premature to
make an evaluation of the amount or range of Robin Housing's potential loss, it
is management's opinion that no accrual for potential losses is currently
warranted in the financial statements.
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<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
LIQUIDITY AND CAPITAL RESOURCES
The Partnership's capital has been invested in 31 Local Partnerships.
The Partnership's primary sources of funds are the cash distributions from
operations of the Local Partnerships in which the Partnership has invested.
These sources are available to meet obligations of the Partnership. During the
three months ended June 15, 2000 and 1999 such distributions amounted to
approximately $0 and $56,000, respectively. In addition, certain fees and
expense reimbursements owed to the General Partners amounting to approximately
$4,920,000 and $4,607,000 were accrued and unpaid as of June 15, 2000 and March
15, 2000, respectively. Without the General Partners' continued accrual without
payment of certain fees and expense reimbursements, the Partnership will not be
in a position to meet its obligations. The General Partners have continued
allowing the accrual without payment of these amounts but are under no
obligation to continue to do so.
For the three months ended June 15, 2000, cash and cash equivalents of the
Partnership and its 31 subsidiary partnerships decreased approximately $668,000.
This decrease is attributable to an increase in property and equipment
($92,000), an increase in deferred costs ($387,000), a decrease in
capitalization of consolidated subsidiaries attributable to minority interest
($32,000) and cash used in operating activities ($407,000) which exceeded a net
increase in due to local general partners and affiliates ($61,000), a decrease
in cash held in escrow ($157,000) and net proceeds and principal repayments of
mortgage notes ($31,000). Included in adjustments to reconcile the net loss to
cash used in operating activities is depreciation and amortization of
approximately $2,306,000.
For a discussion of contingencies affecting certain Local Partnerships, see Note
4 to the financial statements. Since the maximum loss the Partnership would be
liable for is its net investment in the respective Local Partnerships, the
resolution of the existing contingencies is not anticipated to impact future
results of operations, liquidity or financial condition in a material way.
However, the Partnership's loss of its investment in a Local Partnership will
eliminate the ability to generate future tax credits from such Local Partnership
and may also result in recapture of tax credits if the investment is lost before
the expiration of the compliance period.
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<PAGE>
Management is not aware of any trends or events, commitments or uncertainties
which have not otherwise been disclosed that will, or are likely to impact
liquidity in a material way. Management believes the only impact would be from
laws that have not yet been adopted. The portfolio is diversified by the
location of the properties around the United States so that if one area of the
country is experiencing downturns in the economy, the remaining properties in
the portfolio may be experiencing upswings. However, the geographic
diversifications of the portfolio may not protect against a general downturn in
the national economy.
All 31 Local Partnerships fully have or had their tax credits in place. The tax
credits are attached to the project for a period of ten years and are
transferable with the property during the remainder of such ten year period. If
the General Partners determined that a sale of a property is warranted, the
remaining tax credits would transfer to the new owner, thereby adding
significant value to the property on the market, which are not included in the
financial statement carrying amount. The Local Partnership's tax credits will
expire over the next year.
RESULTS OF OPERATIONS
Results of operations for the three months ended June 15, 2000 and 1999
consisted primarily of the results of the Partnership's investment in the
consolidated Local Partnerships.
Rental income increased approximately 4% for the three months ended June 15,
2000 as compared to the corresponding periods in 1999 primarily due to rental
rate increases.
Total expenses excluding repairs and maintenance and financial remained fairly
consistent with an increase of approximately 3% for the three months ended June
15, 2000 as compared to the corresponding periods in 1999.
Repairs and maintenance increased approximately $289,000 for the three months
ended June 15, 2000 as compared to the corresponding period in 1999 primarily
due to laundry room repairs at one Local Partnership, painting of the building
at a second Local Partnership and an increase in supplies and service contracts
at a third Local Partnership.
Financial increased approximately $395,000 for the three months ended June 15,
2000 as compared to the corresponding period in 1999 primarily due to a mortgage
refinancing at one Local Partnership.
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<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings - None
Item 2. Changes in Securities - None
Item 3. Defaults Upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders - None
Item 5. Other Information - None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
27 Financial Data Schedule (filed herewith)
(b) Reports on Form 8-K - None
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<PAGE>
SIGNATURES
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.
LIBERTY TAX CREDIT PLUS L.P.
----------------------------
(Registrant)
By: RELATED CREDIT PROPERTIES L.P.,
a General Partner
By:Related Credit Properties Inc.,
its General Partner
Date: July 19, 2000
By:/s/ Alan P. Hirmes
------------------
Alan P. Hirmes,
President and Chief Executive
Officer
(Principal Executive and Financial
Officer)
Date: July 19, 2000
By:/s/ Glenn F. Hopps
------------------
Glenn F. Hopps,
Treasurer
(Principal Accounting Officer)
By: LIBERTY ASSOCIATES III, L.P.,
a General Partner
By:Related Credit Properties L.P.,
its General Partner
By:Related Credit Properties Inc.,
its General Partner
Date: July 19, 2000
By:/s/ Alan P. Hirmes
------------------
Alan P. Hirmes,
President and Chief Executive
Officer
(Principal Executive and Financial
Officer)
Date: July 19, 2000
By:/s/ Glenn F. Hopps
------------------
Glenn F. Hopps,
Treasurer
(Principal Accounting Officer)
