August 13, 1998
Securities and Exchange Commission
Filer Support, Edgar
Operation Center, Stop 0-7
6432 General Green Way
Alexandria, VA 22312
Re: Boston Financial Tax Credit Fund Plus, A Limited Partnership
Report on Form 10-Q for Quarter Ended June 30, 1998
File No. 0-22104
Gentlemen:
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
TCP-10Q1.DOC
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under 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, 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 June 30, 1998 Commission file number 0-22104
---------------------- ---------
Boston Financial Tax Credit Fund Plus, A Limited Partnership
---------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Massachusetts 04-3105699
-------------------------------- -------------------
(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 TAX CREDIT FUND PLUS, A LIMITED PARTNERSHIP
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION Page No.
Item 1. Financial Statements
Balance Sheets - June 30, 1998 (Unaudited)
and March 31, 1998 1
Statements of Operations (Unaudited) -
For the Three Months Ended June 30, 1998 and 1997 2
Statement of Changes in Partners' Equity (Deficiency)
(Unaudited) - For the Three Months Ended June 30, 1998 3
Statements of Cash Flows (Unaudited) -
For the Three Months Ended June 30, 1998 and 1997 4
Notes to 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
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND PLUS, A LIMITED PARTNERSHIP
BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, March 31,
1998 1998
(Unaudited)
Assets
<S> <C> <C>
Cash and cash equivalents $ 129,437 $ 216,829
Marketable securities, at fair value 1,596,188 1,401,639
Other investments (Note 3) 1,460,280 1,432,375
Investments in Local Limited Partnerships, net of
reserve for valuation of $1,554,780 (Note 1) 15,903,801 16,342,634
Other assets 25,438 21,859
---------------- ---------------
Total Assets $ 19,115,144 $ 19,415,336
================ ===============
Liabilities and Partners' Equity
Accounts payable to affiliates $ 1,076,972 $ 1,042,390
Accounts payable and accrued expenses 350,094 357,328
---------------- ---------------
Total Liabilities 1,427,066 1,399,718
---------------- ---------------
Commitments (Note 4)
General, Initial and Investor Limited Partners' Equity 17,680,019 18,009,741
Net unrealized gain on marketable securities 8,059 5,877
---------------- ---------------
Total Partners' Equity 17,688,078 18,015,618
---------------- ---------------
Total Liabilities and Partners' Equity $ 19,115,144 $ 19,415,336
================ ===============
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND PLUS, A LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
For the Three Months Ended June 30, 1998 and 1997
(Unaudited)
<TABLE>
<CAPTION>
1998 1997
------------- -------------
(Note 1)
Revenue:
<S> <C> <C>
Rental $ - $ 28,645
Investment 23,011 21,251
Accretion of Original Issue Discount (Note 3) 27,905 25,825
Other 1,426 16,803
------------- -------------
Total Revenue 52,342 92,524
------------- -------------
Expenses:
Asset management fees, related party 42,040 42,662
General and administrative (includes reimbursements
to an affiliate in the amounts of $18,400 and
$29,837 respectively) 49,329 55,425
Rental operations, exclusive of depreciation - 22,716
Property management fees, related party - 2,756
Interest - 7,055
Depreciation - 12,396
Amortization 7,215 8,051
------------- -------------
Total Expenses 98,584 151,061
------------- -------------
Loss before equity in losses of Local
Limited Partnerships and minority interest (46,242) (58,537)
Equity in losses of Local Limited Partnerships (Note 1) (283,480) (60,282)
Minority interest in loss of Local Limited Partnership - 137
------------- -------------
Net Loss $ (329,722) $ (118,682)
============= =============
Net Income (Loss) per Limited Partnership Unit:
Class A Unit (34,643 Units) $ (9.57) $ (3.87)
============= =============
Class B Unit (3,290 Units) $ 1.59 $ 5.07
============= =============
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND PLUS, A LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY)
For the Three Months Ended June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Investor Investor
Initial Limited Limited Net
General Limited Partners, Partners, Unrealized
Partners Partner Class A Class B Gains Totals
<S> <C> <C> <C> <C> <C>
Balance at March 31, 1998 $ (151,122) $ 5,000 $ 15,654,223 $ 2,501,640 $ 5,877 $ 18,015,618
Net Income (Loss) (3,576) - (331,392) 5,246 - (329,722)
Net change in net unrealized
gains on marketable securities
available for sale - - - - 2,182 2,182
---------- -------- ------------ ----------- ----------- ------------
Balance at June 30, 1998 $ (154,698) $ 5,000 $ 15,322,831 $ 2,506,886 $ 8,059 $ 17,688,078
========== ======== ============ =========== =========== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND PLUS, A LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
For the Three Months Ended June 30, 1998 and 1997
(Unaudited)
<TABLE>
<CAPTION>
1998 1997
------------- -------------
(Note 1)
<S> <C> <C>
Net cash used for operating activities $ (43,249) $ (51,709)
------------- -------------
Cash flows from investing activities:
Investment in Local Limited Partnership - (10,753)
Return of investment in Local Limited Partnership - 463,864
Purchases of marketable securities (250,664) (497,577)
Proceeds from sales and maturities of marketable securities 58,383 403,939
Restricted cash - (150,727)
Cash distributions received from Local
Limited Partnerships 148,138 16,922
------------- -------------
Net cash provided by (used for) investing activities (44,143) 225,668
------------- -------------
Net increase (decrease) in cash and cash equivalents (87,392) 173,959
Cash and cash equivalents, beginning 216,829 381,519
------------- -------------
Cash and cash equivalents, ending $ 129,437 $ 555,478
============= =============
Supplemental disclosure of cash flow activity:
Cash paid for interest $ - $ 7,055
============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND PLUS, A LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
The unaudited financial statements presented herein have been prepared in
accordance with the instructions to Form 10-Q 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 Fund's 10-K for the year ended
March 31, 1998. In the opinion of management, these financial statements include
all adjustments, consisting only of normal recurring adjustments, necessary to
present fairly the Fund'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. Certain reclassifications have been made to prior period
financial statements to conform to current period classifications.
The Managing General Partner has elected to report results of the Local Limited
Partnerships on a 90 day lag basis, because the Local Limited Partnerships
report their results on a calendar year basis. Accordingly, the financial
information about the Local Limited Partnerships that is included in the
accompanying financial statements is as of March 31, 1998 and 1997.
1. Investments in Local Limited Partnerships
The Fund uses the equity method to account for its limited partner interests in
twenty-five Local Limited Partnerships which own and operate multi-family
housing complexes, most of which are government assisted. The Fund, as Investor
Limited Partner pursuant to the various Local Limited Partnership Agreements,
has generally acquired a 99% interest in the profits, losses, tax credits and
cash flows from operations of each of the Local Limited Partnerships except for
an 82%, 98.75% and 97.9% interest in Livingston Arms, Metropolitan and New
Garden Place, respectively. Upon dissolution, proceeds will be distributed
according to each respective partnership agreement.
As previously reported, as of March 31, 1998, the Managing General Partner
transferred all of the assets of the Combined Entity, Leatherwood, subject to
its liabilities, to an unaffiliated entity.
The following is a summary of Investments in Local Limited Partnerships at June
30, 1998:
<TABLE>
<CAPTION>
<S> <C>
Capital contributions paid to Local Limited Partnerships and purchase price paid
to withdrawing partners of Local Limited
Partnerships $ 26,757,518
Cumulative equity in losses of Local Limited Partnerships (excluding
cumulative unrecognized losses of $1,179,130) (9,686,447)
Cash distributions received from Local Limited Partnerships (570,021)
-------------
Investments in Local Limited Partnerships before adjustments 16,501,050
Excess of investment cost over the underlying net assets acquired:
Acquisition fees and expenses 1,122,226
Accumulated amortization of acquisition fees and expenses (164,695)
-------------
17,458,581
Reserve for valuation (1,554,780)
Investments in Local Limited Partnerships $ 15,903,801
=============
</TABLE>
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND PLUS, A LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (continued)
(Unaudited)
1. Investments in Local Limited Partnerships (continued)
The Fund's share of the net losses of the Local Limited Partnerships, for the
three months ended June 30, 1998 is $348,309. For the three months ended June
30, 1998, the Fund has not recognized $64,829 of equity in losses relating to
three Local Limited Partnerships in which cumulative equity in losses have
exceeded its total investment.
2. Effect of Recently Issued Accounting Standard
The Financial Accounting Standards Board recently issued Statement of Financial
Accounting Standards No. 130, Reporting Comprehensive Income. The Fund has
adopted the new standard effective April 1, 1998. The adoption of this standard
had no effect on the Fund's net income or partner's equity. Comprehensive loss
was $327,540 and $45,482 for the quarters ended June 30, 1998 and 1997,
respectively. Comprehensive loss includes the change in net unrealized gains and
losses on marketable securities available for sale of $2,182 and $5,813 for the
quarters ended June 30, 1998 and 1997, respectively.
3. Other Investments
Other investments consists of the aggregate cost of the Treasury STRIPS
purchased by the Fund for the benefit of the Class B Limited Partners. The
amortized cost and current fair value at June 30, 1998 is composed of the
following:
Aggregate cost of Treasury STRIPS $ 918,397
Accumulated accretion of
Original Issue Discount 541,883
-----------
$ 1,460,280
Maturity dates for the STRIPS held at June 30, 1998 range from February 15, 2007
to May 15, 2010 with a final maturity value of $3,290,000.
4. Commitments
At June 30, 1998, the Fund has committed to make future capital contributions
and pay future purchase price installments on its investments in Local Limited
Partnerships. These future payments are contingent upon the achievement of
certain criteria as set forth in the Local Limited Partnership Agreements and
total approximately $340,000.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND PLUS, A LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
At June 30, 1998, the Fund had cash and cash equivalents of $129,437 as compared
with $216,829 at March 31, 1998. The decrease is primarily attributable to
purchases of marketable securities in excess of proceeds from sales and
maturities of marketable securities and cash used for operations. These
decreases are partially offset by cash distributions received from Local Limited
Partnerships.
Under the terms of the Partnership Agreement, the Fund initially designated 4%
of the Adjusted Gross Proceeds (which generally means Gross Proceeds minus the
amounts committed to the acquisition of Treasury STRIPS) from the sale of Units
as a reserve for working capital of the Fund and contingencies related to the
ownership of Local Limited Partnership interests. The Managing General Partner
may increase or decrease such Reserves from time to time, as it deems
appropriate. Funds totaling approximately $312,000 have been withdrawn from the
Reserve account to pay legal and other fees relating to various property issues.
This amount includes approximately $304,000 relating to the Texas Partnerships.
At June 30, 1998, approximately $1,029,000 of cash, cash equivalents and
marketable securities have been designated as Reserves. Management believes that
the investment income earned on the Reserves, along with cash distributions
received from Local Limited Partnerships, to the extent available, will be
sufficient to fund the Fund's ongoing operations. Reserves may be used to fund
operating deficits, if the Managing General Partner deems funding appropriate.
If Reserves are not adequate to cover Fund operations, the Fund will seek other
funding sources including, but not limited to, the deferral of Asset Management
Fees to an affiliate of the General Partner or working with Local Limited
Partnerships to increase cash distributions.
At June 30, 1998, the Fund has committed to make future capital contributions
and pay future purchase price installments on its investments in Local Limited
Partnerships. These future payments are contingent upon the achievement of
certain criteria as set forth in the Local Limited Partnership Agreements and
total approximately $340,000.
Since the Fund invests as a limited partner, the Fund has no contractual duty to
provide additional funds to Local Limited Partnerships beyond its specified
investment. Thus, at June 30, 1998, the Fund had no contractual or other
obligation to any Local Limited Partnership which had not been paid or provided
for, except as noted above. In the event a Local Limited Partnership encounters
operating difficulties requiring additional funds, the Fund might deem it in its
best interest to provide such funds, voluntarily, in order to protect its
investment. In addition to the $304,000 noted above, the Fund has also advanced
approximately $62,000 to the Texas Partnerships to fund operating deficits.
Cash Distributions
No cash distributions were made during the three months ended June 30, 1998.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND PLUS, A LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Results of Operations
The Fund's result of operations for the three months ended June 30, 1998
resulted in a net loss of $329,722 as compared to a net loss of $118,682 for the
same period in 1997. The increase in net loss is primarily attributable to a
decrease in rental revenue and an increase in equity in losses of Local Limited
Partnerships. These are offset by a decrease in rental operations, property
management fees, interest and depreciation. The change in rental revenue, rental
operations, property management fees, interest and depreciation are due to the
Combined Entity being transferred to an unaffiliated entity during the fourth
quarter of 1997, which removed the Combined Entity from the financial statements
of the Fund for the quarter ended June 30, 1998. Equity in losses of Local
Limited Partnerships increased due to a decrease in unrecognized losses. This
decrease is attributable to losses relating to prior years being unrecognized in
the quarter ended June 30, 1997.
Property Discussions
All of the properties owned by the Local Limited Partnerships in which the Fund
has invested have been completed and have achieved initial lease-up. Operations
at most properties are stable, and a majority of the properties are operating at
break-even or generating operating cash flow. However, a few properties are
experiencing significant issues. In most cases, the Local General Partners are
funding operating deficits through project expense loans, subordinated loans or
payments from operating escrows. In instances where the Local General Partners
have stopped funding deficits because their obligation to do so has expired or
otherwise, the Managing General Partner is working with the Local General
Partner to increase operating income, reduce expenses or refinance the debt in
order to improve property cash flow.
As previously reported, despite the 1994 debt restructure, Bancroft Street
Apartments, located in Toledo, Ohio, continues to experience operating deficits
primarily due to occupancy issues and deteriorating market conditions. Occupancy
as of June 30, 1998 was 79%. The management agent is currently trying to address
these problems by enhancing tenant screening and marketing efforts, as well as
implementing on-site tenant social programs. The Managing General Partner will
be working closely with the management agent and Local General Partner to
discuss capital improvements, debt restructuring and enhance marketing efforts.
Occupancy for Broadway Tower, located in Revere, Massachusetts, has improved and
as of June 30, 1998 was 100%. However, the property is still experiencing some
operating deficits. As previously reported, in 1997, the Local General Partner
successfully negotiated with the local housing authority for Section 8 rent
increases and has begun implementing plans to decrease expenses associated with
tenant turnover and maintenance contracts. The property is currently covering
its operating expenses and debt service with funds from operations and from
funding by the Local General Partner.
As previously reported, Metropolitan Apartments, located in Chicago, Illinois,
has been experiencing occupancy problems. Strict leasing policies have been
implemented and occupancy as of March 31, 1998 was 85%. Successful occupancy
levels at the property depend upon locating tenants which meet these strict
leasing policies. It is possible that Fund Reserves may be required to fund
operating deficits if the Local General Partner is unwilling to fund future
deficits. To help mitigate some of these deficits, the Local and Managing
General Partners are working with the lender to substitute fixed rate debt for
the variable rate mortgage currently on the property.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND PLUS, A LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Property Discussions (continued)
Primrose, located in Grand Forks, North Dakota, Phoenix Housing, located in
Moorhead, Minnesota, and Sycamore, located in Sioux Falls, South Dakota, which
have the same Local General Partner, have been performing satisfactorily.
However, affiliates of the Managing General Partner have been working with the
Local General Partner who has raised some concerns over the long-term financial
health of the properties. In 1997, in an effort to reduce possible future risk,
the Managing General Partner consummated the transfer of 50% of the Fund's
capital and profits in Primrose, Phoenix Housing and Sycamore to an affiliate of
the Local General Partner. The Managing General Partner has the right to
transfer the Fund's remaining interest to the Local General Partner any time
after one year has elapsed. The Fund will retain its full share of tax credits
until such time as the remaining interest is put to the Local General Partner.
In addition, the Local General Partner has the right to call the remaining
interest after the tax credit period has expired.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND PLUS, 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, 1998.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND PLUS, 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 13, 1998 BOSTON FINANCIAL TAX CREDIT FUND PLUS,
A LIMITED PARTNERSHIP
By: Arch Street VI, Inc.,
its Managing General Partner
/s/Randolph G. Hawthorne
Randolph G. Hawthorne
Managing Director, Vice President and
Chief Operating Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-END> JUN-30-1998
<CASH> 129,437
<SECURITIES> 1,596,188
<RECEIVABLES> 000
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 000
<PP&E> 000
<DEPRECIATION> 000
<TOTAL-ASSETS> 19,115,144<F1>
<CURRENT-LIABILITIES> 000
<BONDS> 000
<COMMON> 000
000
000
<OTHER-SE> 17,688,078
<TOTAL-LIABILITY-AND-EQUITY> 19,115,144<F2>
<SALES> 000
<TOTAL-REVENUES> 52,342<F3>
<CGS> 000
<TOTAL-COSTS> 000
<OTHER-EXPENSES> 98,584<F4>
<LOSS-PROVISION> 000
<INTEREST-EXPENSE> 000
<INCOME-PRETAX> 000
<INCOME-TAX> 000
<INCOME-CONTINUING> 000
<DISCONTINUED> 000
<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> (329,722)<F5>
<EPS-PRIMARY> (9.57)
<EPS-DILUTED> 000
<FN>
<F1>Included in Total Assets is Other assets $25,438, Investments in Local Limited Partnerships $15,903,801 and
Other investments $1,460,280.
<F2>Included in Total Liability and Equity is Accounts payable to affiliates $1,076,972 and Accounts payable and
accrued expenses $350,094.
<F3>Total Revenues includes Investment $23,011, Accretion of Original Issue Discount $27,905 and Other $1,426.
<F4>Included in Other Expenses is Asset Management fees $42,040, General and Administrative $49,329, and
Amortization $7,215.
<F5>Net Loss reflects: Equity in losses of Local Limited Partnerships $283,480.
</FN>
</TABLE>
