August 11, 1999
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-QSB Edgar for Quarter Ended June 30, 1999
File Number 0-22104
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
TCP-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 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 0-22104
------------------- ------------------
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 Sheet - June 30, 1999 (Unaudited) 1
Statements of Operations (Unaudited) -
For the Three Months Ended June 30, 1999 and 1998 2
Statement of Changes in Partners' Equity (Deficiency)
(Unaudited) - For the Three Months Ended June 30, 1999 3
Statements of Cash Flows (Unaudited) -
For the Three Months Ended June 30, 1999 and 1998 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
The accompanying notes are an integral part of these
financial statements.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND PLUS, A LIMITED PARTNERSHIP
BALANCE SHEET
June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Assets
<S> <C>
Cash and cash equivalents $ 117,124
Marketable securities, at fair value 1,233,252
Other investments (Note 2) 1,577,777
Investments in Local Limited Partnerships, net of
reserve for valuation of $1,554,780 (Note 1) 14,392,482
Advances to affiliate 30,000
Other assets 15,935
---------------
Total Assets $ 17,366,570
===============
Liabilities and Partners' Equity
Accounts payable to affiliates $ 1,245,794
Accounts payable and accrued expenses 29,995
---------------
Total Liabilities 1,275,789
Commitments (Note 3)
General, Initial and Investor Limited Partners' Equity 16,095,100
Net unrealized losses on marketable securities (4,319)
Total Partners' Equity 16,090,781
Total Liabilities and Partners' Equity $ 17,366,570
===============
</TABLE>
The accompanying notes are an integral part of these
financial statements.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND PLUS, A LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
For the Three Months Ended June 30, 1999 and 1998
(Unaudited)
<TABLE>
<CAPTION>
1999 1998
------------- -------------
Revenue:
<S> <C> <C>
Investment $ 18,072 $ 23,011
Accretion of Original Issue Discount (Note 2) 30,152 27,905
Other 12,732 1,426
------------- -------------
Total Revenue 60,956 52,342
------------- -------------
Expenses:
Asset management fees, related party 40,833 42,040
General and administrative (includes reimbursements
to an affiliate in the amounts of $20,567 and
$18,400, respectively) 46,283 49,329
Amortization 7,215 7,215
------------- -------------
Total Expenses 94,331 98,584
------------- -------------
Loss before equity in losses of Local
Limited Partnerships and minority interest (33,375) (46,242)
Equity in losses of Local Limited Partnerships (Note 1) (283,569) (283,480)
------------- -------------
Net Loss $ (316,944) $ (329,722)
============= =============
Net Income (Loss) per Limited Partnership Unit:
Class A Unit (34,643 Units) $ (9.28) $ (9.57)
============= =============
Class B Unit (3,290 Units) $ 2.48 $ 1.59
============= =============
</TABLE>
The accompanying notes are an integral part of these
financial statements.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND PLUS, A LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY)
For the Three Months Ended June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Investor Investor Net
Initial Limited Limited Unrealized
General Limited Partners, Partners, Gains
Partners Partner Class A Class B (Losses) Totals
<S> <C> <C> <C> <C> <C> <C>
Balance at March 31, 1999 $ (168,252) $ 5,000 $ 14,066,938 $ 2,508,358 $ 4,665 $ 16,416,709
---------- --------- -------------- ----------- ----------- --------------
Comprehensive Income (Loss):
Net change in net unrealized
gains on marketable
securities available for sale - - - - (8,984) (8,984)
Net Income (Loss) (3,471) - (321,633) 8,160 - (316,944)
---------- --------- -------------- ----------- ----------- --------------
Comprehensive Income (Loss) (3,471) - (321,633) 8,160 (8,984) (325,928)
---------- --------- -------------- ----------- ----------- --------------
Balance at June 30, 1999 $ (171,723) $ 5,000 $ 13,745,305 $ 2,516,518 $ (4,319) $ 16,090,781
========== ========= ============== =========== =========== ==============
</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, 1999 and 1998
(Unaudited)
<TABLE>
<CAPTION>
1999 1998
------------- -------------
<S> <C> <C>
Net cash used for operating activities $ (18,995) $ (43,249)
------------- -------------
Net cash provided by (used for) investing activities 48,985 (44,143)
------------- -------------
Net increase (decrease) in cash and cash equivalents 29,990 (87,392)
Cash and cash equivalents, beginning 87,134 216,829
------------- -------------
Cash and cash equivalents, ending $ 117,124 $ 129,437
============= =============
The accompanying notes are an integral part of these
financial statements.
</TABLE>
<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-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 Fund's Form 10-K for the year
ended March 31, 1999. 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.
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, 1999 and 1998.
1. Investments in Local Limited Partnerships
The Fund uses the equity method to account for its limited partnership 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.
<TABLE>
<CAPTION>
The following is a summary of Investments in Local Limited Partnerships at June
30, 1999:
<S> <C>
Capital contributions paid to Local Limited Partnerships and purchase price paid
to withdrawing partners of Local Limited Partnerships $ 26,857,518
Cumulative equity in losses of Local Limited Partnerships (excluding
cumulative unrecognized losses of $276,667) (11,106,589)
Cash distributions received from Local Limited Partnerships (732,338)
-------------
Investments in Local Limited Partnerships before adjustments 15,018,591
Excess of investment costs over the underlying net assets acquired:
Acquisition fees and expenses 1,122,226
Accumulated amortization of acquisition fees and expenses (193,555)
-------------
15,947,262
Reserve for valuation (1,554,780)
Investments in Local Limited Partnerships $ 14,392,482
=============
</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, 1999 is $353,856. For the three months ended June
30, 1999, the Fund has not recognized $70,287 of equity in losses relating to
three Local Limited Partnerships in which cumulative equity in losses have
exceeded its total investment.
2. 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, 1999 is composed of the
following:
Aggregate cost of Treasury STRIPS $ 918,397
Accumulated accretion of
Original Issue Discount 659,380
$ 1,577,777
Maturity dates for the STRIPS held at June 30, 1999 range from February 15,
2007 to May 15, 2010 and have a final maturity value of $3,290,000.
3. Commitments
At June 30, 1999, 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 $240,000.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND PLUS, 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 Fund
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 Fund
believes the forward-looking statements are based on reasonable assumptions, the
Fund 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 Fund and their suppliers in achieving year 2000 compliance.
Liquidity and Capital Resources
At June 30, 1999, the Fund had cash and cash equivalents of $117,124, as
compared with $87,134 at March 31, 1999. The increase is primarily attributable
to proceeds from marketable securities sales and maturities of marketable
securities and cash distributions received from Local Limited Partnerships.
These increases are partially offset by cash used to purchase marketable
securities.
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 $348,000 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, 1999, approximately $1,071,000 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, 1999, 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 $240,000.
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, 1999, 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.
Cash Distributions
No cash distributions were made during the three months ended June 30, 1999.
<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, 1999
resulted in a net loss of $316,944 as compared to a net loss of $329,722 for the
same period in 1998. The decrease in primarily attributable to an increase in
other revenue and a decrease in general and administrative expense. These are
offset by a decrease in investment revenue.
Property Discussions
Operations at most properties are stable and a majority of the properties are
operating at break-even or are 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 Partners to increase operating income, reduce expenses or
refinance the debt at lower interest rates in order to improve cash flow.
As previously reported, Bancroft Street Apartments, located in Toledo, Ohio,
continues to experience significant operating deficits due to occupancy issues
and deteriorating market conditions. Occupancy as of March 31, 1999 was 56%. The
management agent is trying to address these problems by enhancing tenant
screening and marketing efforts, as well as implementing on-site tenant social
programs. However, given the severity of the operating deficits, it is possible
that the Partnership will not be able to retain its interest in the property
through 1999. A foreclosure would result in recapture of credits for investors,
the allocation of taxable income to the Partnership and loss of future benefits
associated with this property. The Managing General Partner and Local General
Partner are currently in negotiations with the lender. The Managing General
Partner is closely monitoring this property.
Occupancy for Broadway Tower, located in Revere, Massachusetts, has improved to
98% as of March 31, 1999. 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. The Managing General Partner continues to
closely monitor this property.
As previously reported, Metropolitan Apartments, located in Chicago, Illinois,
has been experiencing occupancy problems. In 1998, management revised its
marketing plan and implemented new leasing policies. Occupancy as of March 31,
1999 remained the same as the previous quarter at 90%. However, the property
continues to operate at a deficit. It is possible that Fund Reserves may be
required to fund operating deficits. The Managing General Partner and Local
General Partner are working together to develop a plan to help mitigate some of
the deficits.
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
Partnership's capital and profits in Primrose, Phoenix Housing and Sycamore to
an affiliate of the Local General Partner. Subsequently, effective June 17,
1999, the Local General Partner transferred both its general partner interest
and transferred the 48.5% of its interest in capital and profits in Primrose,
Phoenix Housing and Sycamore to a non affiliated, non-profit general partner. As
a result, of this transfer the Managing General Partner has the right to put
the Partnership's remaining interest to the new Local General Partner any
time after one year from the June 17, 1999 effective date has elapsed. The
Partnership 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
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Property Discussions (continued)
Findley Place Apartments, located in Minneapolis, Minnesota has been
experiencing operating deficits due to significant capital needs. The Managing
General Partner, the Local General Partner and the new management agent are
working together to develop a plan that will address the occupancy issues,
capital needs and long-term strategy for this property. The Managing General
Partner is closely monitoring this 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 Fund 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 Fund 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 compliants; any systems still being updated are not
considered significant to the Fund'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 Fund. 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 Fund. Moreover, because
expected problems under a worst case scenario are not extensively detrimental,
and because the likelihood that all systems affecting the Fund 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.
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>
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>
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 11, 1999 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-31-2000
<PERIOD-END> JUN-30-1999
<CASH> 117,124
<SECURITIES> 1,233,252
<RECEIVABLES> 000
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 000
<PP&E> 000
<DEPRECIATION> 000
<TOTAL-ASSETS> 17,366,570<F1>
<CURRENT-LIABILITIES> 000
<BONDS> 000
<COMMON> 000
000
000
<OTHER-SE> 16,090,781
<TOTAL-LIABILITY-AND-EQUITY> 17,366,570<F2>
<SALES> 000
<TOTAL-REVENUES> 60,956<F3>
<CGS> 000
<TOTAL-COSTS> 000
<OTHER-EXPENSES> 94,331<F4>
<LOSS-PROVISION> 000
<INTEREST-EXPENSE> 000
<INCOME-PRETAX> 000
<INCOME-TAX> 000
<INCOME-CONTINUING> 000
<DISCONTINUED> 000
<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> (316,944)<F5>
<EPS-BASIC> (9.28)
<EPS-DILUTED> 000
<FN>
<F1>Included in Total Assets is Other assets $15,935, Investments in Local
Limited Partnerships $14,392,482, Other investments $1,577,777, and Advances to
affiliates of $30,000. <F2>Included in Total Liability and Equity is Accounts
payable to affiliates $1,245,794 and Accounts payable and accrued expenses
$29,995. <F3>Total Revenues includes Investment $18,072, Accretion of Original
Issue Discount $30,152 and Other $12,732. <F4>Included in Other Expenses is
Asset Management fees $40,833, General and Administrative $46,283, and
Amortization $7,215. <F5>Net Loss reflects: Equity in losses of Local Limited
Partnerships $283,569. </FN>
</TABLE>
