November 14, 1997
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 VII, A Limited Partnership
Report on Form 10-Q for Quarter Ended September 30, 1997
File No. 0-24584
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/Patricia Olsen-Goldberg
Patricia Olsen-Goldberg
Controller
TC7-Q2.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 September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
For Quarter Ended September 30, 1997 Commission file number 0-24584
---------------------- -------------
Boston Financial Tax Credit Fund VII, A Limited Partnership
(Exact name of registrant as specified in its charter)
Massachusetts 04-3166203
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
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 VII, A LIMITED PARTNERSHIP
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION Page No.
- ------------------------------ --------
Item 1. Financial Statements
Balance Sheets - September 30, 1997 (Unaudited)
and March 31, 1997 1
Statements of Operations (Unaudited) - For the Three
and Six Months Ended September 30, 1997 and 1996 2
Statement of Changes in Partners' Equity (Deficiency)
(Unaudited) - For the Six Months Ended September 30, 1997 3
Statements of Cash Flows (Unaudited) -
For the Six Months Ended September 30, 1997 and 1996 4
Notes to Financial Statements (Unaudited) 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 6
PART II - OTHER INFORMATION
Items 1-6 8
SIGNATURE 9
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, March 31,
1997 1997
(Unaudited)
Assets
<S> <C> <C>
Cash and cash equivalents $ 403,957 $ 373,729
Marketable securities, at fair value 3,066,351 3,240,944
Restricted cash 245,821 239,155
Investments in Local Limited Partnerships (Note 1) 30,383,604 31,792,098
Organization costs, net of accumulated
amortization of $45,833 and $40,833,
respectively 4,167 9,167
Other assets 36,796 39,556
------------ ------------
Total Assets $ 34,140,696 $ 35,694,649
============ ============
Liabilities and Partners' Equity
Accounts payable to affiliates $ 292,458 $ 304,382
Accounts payable and accrued expenses 34,690 34,940
------------ ------------
Total Liabilities 327,148 339,322
------------ ------------
Commitments (Note 2)
General, Initial and Investor Limited Partners' Equity 33,817,283 35,405,419
Net unrealized losses on marketable securities (3,735) (50,092)
------------ ------------
Total Partners' Equity 33,813,548 35,355,327
------------ ------------
Total Liabilities and Partners' Equity $ 34,140,696 $ 35,694,649
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
For the Three and Six Months Ended September 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
September 30, September 30, September 30, September 30,
1997 1996 1997 1996
------------- ------------- ------------- ----------
<S> <C> <C> <C> <C>
Revenue:
Investment $ 51,514 $ 61,366 $ 100,095 $ 103,118
Other 7,148 250 24,490 66,833
----------- ----------- ------------ ------------
Total Revenue 58,662 61,616 124,585 169,951
----------- ----------- ------------ ------------
Expenses:
Asset management fee,
related party 71,097 68,826 142,194 137,652
General and administrative
(includes reimbursements
to an affiliate in the amounts
of $56,645 and $61,782 in
1997 and 1996, respectively) 46,354 53,981 111,471 119,859
Amortization 11,435 11,458 22,867 22,915
----------- ----------- ------------ ------------
Total Expenses 128,886 134,265 276,532 280,426
----------- ----------- ------------ ------------
Loss before equity in losses
of Local Limited Partnerships (70,224) (72,649) (151,947) (110,475)
Equity in losses of
Local Limited Partnerships (651,586) (644,393) (1,436,189) (1,239,583)
----------- ----------- ------------ ------------
Net Loss $ (721,810) $ (717,042) $ (1,588,136) $ (1,350,058)
=========== =========== ============ ============
Net Loss allocated:
To General Partners $ (7,218) $ (7,171) $ (15,881) $ (13,501)
To Limited Partners (714,592) (709,871) (1,572,255) (1,336,557)
----------- ----------- ------------ ------------
$ (721,810) $ (717,042) $ (1,588,136) $ (1,350,058)
=========== =========== ============ ============
Net Loss per Limited
Partnership Unit
(50,930 Units) $ (14.03) $ (13.94) $ (30.87) $ (26.24)
========== ========== =========== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY)
(Unaudited)
For the Six Months Ended September 30, 1997
<TABLE>
<CAPTION>
Net
Initial Investor Unrealized
General Limited Limited Gains
Partners Partners Partners (Losses) Total
<S> <C> <C> <C> <C> <C>
Balance at March 31, 1997 $ (90,267) $ 5,000 $ 35,490,686 $ (50,092) $ 35,355,327
Net change in net unrealized
losses on marketable securities
available for sale - - - 46,357 46,357
Net Loss (15,881) - (1,572,255) - (1,588,136)
--------- ------- ------------ --------- ------------
Balance at September 30, 1997 $(106,148) $ 5,000 $ 33,918,431 $ (3,735) $ 33,813,548
========= ======= ============ ========= ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(Unaudited)
For the Six Months Ended September 30, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
------------- ---------
<S> <C> <C>
Net cash used for operating activities $ (135,158) $ (106,372)
------------ -----------
Cash flows from investing activities:
Purchase of marketable securities (1,047,470) (498,336)
Proceeds from sales and maturities of
marketable securities 1,265,084 1,428,000
Cash distributions received from Local
Limited Partnerships 48,438 127,057
Investments in Local Limited Partnerships (94,000) (525,824)
Restricted cash (6,666) (5,631)
------------ -----------
Net cash provided by investing activities 165,386 525,266
------------ -----------
Net increase in cash and cash equivalents 30,228 418,894
Cash and cash equivalents, beginning of period 373,729 334,845
------------ -----------
Cash and cash equivalents, end of period $ 403,957 $ 753,739
============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND VII, 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 Partnership's 10-K for the year
ended March 31, 1997. 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 period may not be indicative of
the results to be expected for the year. Certain reclassifications have been
made to prior year financial statements to conform to the current year
presentation.
1. Investments in Local Limited Partnerships
The Fund has acquired interests in nineteen Local Limited Partnerships which own
and operate multi-family housing complexes. The Fund, as Investor Limited
Partner, pursuant to the various Local Limited Partnership Agreements, has
generally acquired a 99% interest, with the exception of Springwood which is
19.80%, in the profits, losses, tax credits and cash flows from operations of
each of the Local Limited Partnerships. Upon dissolution, proceeds will be
distributed according to each respective partnership agreement.
The following is a summary of Investments in Local Limited Partnerships at
September 30, 1997:
<TABLE>
<S> <C>
Capital Contributions paid to Local Limited Partnerships
and purchase price paid to withdrawing partners of
Local Limited Partnerships $ 39,283,961
Cumulative equity in losses of Local Limited Partnerships (9,702,243)
Cash distributions received from Local Limited Partnerships (341,441)
-------------
Investments in Local Limited Partnerships before adjustments 29,240,277
Excess of investment cost over the underlying net assets acquired:
Acquisition fees and expenses 1,252,338
Accumulated amortization of acquisition fees and expenses (109,011)
-------------
Investments in Local Limited Partnerships $ 30,383,604
=============
</TABLE>
The Partnership's share of the net losses of the Local Limited Partnerships for
the six months ended September 30, 1997 is $1,436,189.
2. Commitments
At September 30, 1997, 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 $658,000. In addition, the Fund has set aside
$217,000 in future capital contributions to one Local Limited Partnership.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
At September 30, 1997, the Fund had cash and cash equivalents of $403,957,
compared with $373,729 at March 31, 1997. The increase is primarily attributable
to proceeds from sales and maturities of marketable securities in excess of
purchases of marketable securities and cash distributions received from Local
Limited Partnerships. These increases to cash and cash equivalents are partially
offset by investments in Local Limited Partnerships and cash used for operating
activities.
As of September 30, 1997, approximately $2,506,000 of marketable securities has
been designated as Reserves by the Managing General Partner. The Reserves were
established to be used for working capital of the Fund and contingencies related
to the ownership of Local Limited Partnership interests. Management believes
that the interest income earned on 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.
At September 30, 1997, 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 $658,000. In addition, the Fund has set aside
$217,000 in future capital contributions to one Local Limited Partnership.
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, as of September 30, 1997, the Fund had no contractual or other
obligation to any Local Limited Partnership, which had not been paid or provided
for, except as described above.
In the event a Local Limited Partnership encounters operating difficulties
requiring additional funds, the Fund might deem it in its best interests to
provide such funds, voluntarily, in order to protect its investment. No such
event has occurred to date.
Cash Distributions
No cash distributions were made during the six months ended September 30, 1997.
Results of Operations
The Fund's results of operations for the three and six months ended September
30, 1997 resulted in a net loss of $721,810 and $1,588,136 as compared to a net
loss of $717,042 and $1,350,058 for the same periods in 1996. The increase in
net loss is primarily attributable to an increase in equity in losses of Local
Limited Partnerships and a decrease in other revenue. Equity in losses of Local
Limited Partnerships increased during the six months ended September 30, 1997,
as compared to September 30, 1996, due to an increase in general operating and
depreciation expenses of the Local Limited Partnerships. Other revenue decreased
during the six months ended September 30, 1997 as the result of a decrease in
escrow interest earned by the Partnership.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Property Discussions
Los Claveles II, located in Trujillio Alto, Puerto Rico, continues to experience
operating difficulties due to ongoing capital repair needs and management
issues. An affiliate of the Managing General Partner of the Partnership
successfully negotiated with the Local General Partners, lender and local
housing authority to replace the management agent for Los Claveles II as well as
its neighboring property, Los Claveles I. By consolidating management, the
Managing General Partner feels that it can achieve greater control over both
sites and attain certain operating efficiencies that will benefit both
properties. The new management agent assumed responsibility for the property in
December 1996 and has successfully obtained Section 8 subsidy increases. The
Local General Partners agreed to step down voluntarily and will be replaced by a
new general partner, once the workout plan is approved by the lender. In the
mean time, the Local General Partners executed a delegation agreement which
grants authority to an affiliate of the Managing General Partner to implement
the capital improvement plan and complete negotiations with the lender. The
lender continues to indicate its willingness to work with the Managing General
Partner and management agent to improve operations and cure defaults. Although
there appears to be sufficient resources to turn the project around, no
agreement has been reached with the lender to date.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
PART II OTHER INFORMATION
Items 1-5 Not applicable
Item 6 Exhibits and reports on Form 8-K
(a)Exhibits - None
(b)Reports on Form 8-K - No reports on Form 8-K were filed
during the quarter ended September 30, 1997.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
DATED: November 14, 1997 BOSTON FINANCIAL TAX CREDIT FUND VII,
A LIMITED PARTNERSHIP
By: Arch Street VII, Inc.,
its Managing General Partner
/s/William E. Haynsworth
William E. Haynsworth
Managing Director, Vice President and
Chief Operating Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> SEP-30-1997
<CASH> 403,957
<SECURITIES> 3,066,351
<RECEIVABLES> 000
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 000
<PP&E> 000
<DEPRECIATION> 000
<TOTAL-ASSETS> 34,140,696<F1>
<CURRENT-LIABILITIES> 000
<BONDS> 000
000
000
<COMMON> 000
<OTHER-SE> 33,813,548
<TOTAL-LIABILITY-AND-EQUITY> 34,140,696<F2>
<SALES> 000
<TOTAL-REVENUES> 124,585<F3>
<CGS> 000
<TOTAL-COSTS> 000
<OTHER-EXPENSES> 276,532<F4>
<LOSS-PROVISION> 000
<INTEREST-EXPENSE> 000
<INCOME-PRETAX> 000
<INCOME-TAX> 000
<INCOME-CONTINUING> 000
<DISCONTINUED> 000
<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> (1,588,136)<F5>
<EPS-PRIMARY> (30.87)
<EPS-DILUTED> 000
<FN>
<F1>Included in total assets is Investments in Local Limited Partnerships of
$30,383,604, Restricted cash $245,821, Organizational costs, net, of $4,167 and
Other assets of $36,796.
<F2>Included in Total liability and Equity is Accounts payable to affiliates of
$292,458 and accounts payable and accrued expenses $34,690.
<F3>Total revenue includes Investment of $100,095 and Other $24,490.
<F4>Included in Other Expenses is Asset Management fees of $142,194, General and
Administrative of $111,471, and Amortization of $22,867.
<F5>Net loss reflects Equity in losses of Local Limited Partnerships of
$1,436,189.
</FN>
</TABLE>
