June 27, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Boston Financial Tax Credit Fund VIII, A Limited Partnership
Form 10-K Annual Report for the Year Ended March 31, 1997
Commission File Number 0-26522
Gentlemen:
Pursuant to the requirements of Section 15(d) of the Securities Exchange Act of
1934, there is filed herewith one copy of the subject report.
Very truly yours,
/s/ Veronica Curioso
Veronica Curioso
Assistant Controller
TC810K.9
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended Commission file number
March 31, 1997 33-68088
BOSTON FINANCIAL TAX CREDIT FUND VIII, A
LIMITED PARTNERSHIP (Exact name of
registrant as specified in its charter)
Massachusetts 04-3205879
- -------------------------- ---------------------------
(State of organization) (I.R.S. Employer
Identification No.)
101 Arch Street, 16th Floor
Boston, Massachusetts 02110-1106
- ------------------------------- ---------------------------
(Address of Principal (Zip Code)
executive office)
Registrant's telephone number, including area code 617/439-3911
Securities registered pursuant to Section 12(b) of the Act:
Name on each exchange on
Title of each class which registered
- ------------------------------- ---------------------------------
None None
Securities registered pursuant to Section 12(g) of the Act:
UNITS OF LIMITED PARTNERSHIP INTEREST
(Title of Class)
200,000
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 __
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Subsection 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ X ]
State the aggregate sales price of partnership units held by non affiliates of
the registrant.
$36,497,000 as of March 31, 1997
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE: LIST THE FOLLOWING DOCUMENTS IF
INCORPORATED BY REFERENCE AND THE PART OF THE FORM 10-K INTO WHICH THE DOCUMENT
IS INCORPORATED: (1) ANY ANNUAL REPORT TO SECURITY HOLDERS: (2) ANY PROXY OR
INFORMATION STATEMENT: AND (3) ANY PROSPECTUS FILED PURSUANT TO RULE 424(b) OR
(c) UNDER THE SECURITIES ACT OF 1933.
Part of Report on
Form 10-K into
Which the Document
Documents incorporated by reference is Incorporated
Report on Form 8-K dated April 8, 1994 Part I, Item 1
Report on Form 8-K dated June 14, 1994 Part I, Item 1
Acquisition Reports Part I, Item 1
Prospectus - Sections Entitled:
"Investment Objectives and Policies -
Principal Investment Objectives" Part I, Item 1
"Investment Risks" Part I, Item 1
"Estimated Use of Proceeds" Part III, Item 13
"Management Compensation and Fees" Part III, Item 13
"Profits and Losses for Tax Purposes, Tax
Credits and Cash Distributions" Part III, Item 13
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP
ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED MARCH 31, 1997
TABLE OF CONTENTS
Page No.
PART I
Item 1 Business K-3
Item 2 Properties K-5
Item 3 Legal Proceedings K-10
Item 4 Submission of Matters to a Vote of
Security Holders K-10
PART II
Item 5 Market for the Registrant's Units and
Related Security Holder Matters K-10
Item 6 Selected Financial Data K-11
Item 7 Management's Discussion and Analysis of
Financial Condition and Results of Operations K-12
Item 8 Financial Statements and Supplementary Data K-14
Item 9 Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure K-14
PART III
Item 10 Directors and Executive Officers
of the Registrant K-14
Item 11 Management Remuneration K-16
Item 12 Security Ownership of Certain Beneficial
Owners and Management K-16
Item 13 Certain Relationships and Related Transactions K-17
PART IV
Item 14 Exhibits, Financial Statement Schedule and
Reports on Form 8-K K-19
SIGNATURES K-20
<PAGE>
PART I
Item 1. Business
Boston Financial Tax Credit Fund VIII, A Limited Partnership (the "Fund") is a
Massachusetts limited partnership formed on August 25, 1993 under the laws of
the Commonwealth of Massachusetts. The Fund's partnership agreement
("Partnership Agreement") authorizes the sale of up to 200,000 Units of limited
partnership interest at $1,000 per Unit in series. The first series offered
50,000 Units. On July 29, 1994, the Fund held its final investor closing. In
total the Fund had raised $36,497,000 ("Gross Proceeds") through the sale of
36,497 Units. Such amounts exclude a fractional unregistered Unit previously
acquired for $100 by the Initial Limited Partner. The offering of Units
terminated on March 29, 1995.
The Fund is engaged solely in the business of real estate investment. A
presentation of information about industry segments is not applicable and would
not be material to an understanding of the Fund's business taken as a whole.
The Fund has invested as a limited partner in other limited partnerships ("Local
Limited Partnerships") which own and operate residential apartment complexes
("Properties") some of which are expected to benefit from some form of federal,
state or local assistance programs and all of which qualify for low-income
housing tax credits ("Tax Credits") added to the Internal Revenue Code (the
"Code") by the Tax Reform Act of 1986. The investment objectives of the Fund
include the following: (i) to provide investors with annual tax credits which
they may use to reduce their federal income taxes; (ii) to provide limited cash
distributions from the operations of apartment complexes; and (iii) to preserve
and protect the Fund's capital. There cannot be any assurance that the Fund will
attain any or all of these investment objectives. A more detailed discussion of
these investment objectives, along with the risks in achieving them is contained
in the sections of the Prospectus entitled "Investment Objectives and Policies -
Principal Investment Objectives" and "Investment Risks", which are herein
incorporated by this reference.
Table A on the following page lists the properties owned by the Local Limited
Partnerships in which the Fund had invested as of March 31, 1997. Item 7 of this
Report contains other significant information with respect to such Local Limited
Partnerships. The terms of the acquisition of each Local Limited Partnership
interest have been described in the Form 8-Ks and a supplement to the Prospectus
listed in Part IV of this Report on Form 10-K; such descriptions are
incorporated herein by this reference.
<PAGE>
TABLE A
SELECTED LOCAL LIMITED
PARTNERSHIP DATA
<TABLE>
<CAPTION>
Property owned by Local Date
Limited Partnerships* Interest
Location Acquired
- --------------------------- -------------------- ------------
<S> <C> <C>
Green Wood Gallatin, TN 03/02/94
Webster Court Kent, WA 05/13/94
Springwood Tallahassee, FL 12/15/94
Meadow Wood of Pella Pella, IA 06/03/94
Hemlock Ridge Livingston Manor, NY 04/29/94
Pike Place Fort Smith, AR 01/31/94
West End Place Springdale, AR 01/12/94
Oak Knoll Renaissance Gary, IN 11/01/94
Beaverdam Creek Mechanicsville, VA 11/16/94
Live Oaks Plantation West Palm Beach, FL 06/28/94
</TABLE>
* The Fund's interest in profits and losses of each Local Limited Partnership
arising from normal operations is generally 99%, except for Springwood which
is 79.20%, Hemlock Ridge which is 77%, and Pike Place and West End Place
which are 90%. Profits and losses arising from sale or refinancing
transactions are allocated in accordance with the respective Local Limited
Partnership Agreement.
Although the Fund's investments in Local Limited Partnerships are not subject to
seasonal fluctuations, the Fund's equity in losses of Local Limited
Partnerships, to the extent it reflects the operations of individual Properties,
may vary from quarter to quarter based upon changes in occupancy and operating
expenses as a result of seasonal factors.
<PAGE>
Each Local Limited Partnership has, as its general partners ("Local General
Partners"), one or more individuals or entities not affiliated with the Fund or
its General Partner. In accordance with the partnership agreements under which
such entities are organized ("Local Limited Partnership Agreements"), the Fund
depends on the Local General Partners for the management of each Local Limited
Partnership. As of March 31, 1997, the following Local Limited Partnerships have
a common Local General Partner or affiliated group of Local General Partners
accounting for the specified percentage of the original investment in Local
Limited Partnerships: (i) Green Wood and Springwood representing 21.73% have
Flournoy Development Company as Local General Partner; (ii) Pike Place and West
End Place representing 12.9% have Lindsey Management Company as Local General
Partner. The Local General Partners of the remaining Local Limited Partnerships
are identified in the Acquisition Reports which are herein incorporated by
reference.
The Properties owned by Local Limited Partnerships in which the Fund invest are,
and will continue to be, subject to competition from existing and future
apartment complexes in the same areas. The success of the Fund will depend on
many outside factors, most of which are beyond the control of the Fund and which
cannot be predicted at this time. Such factors include general economic and real
estate market conditions, both on a national basis and in those areas where the
Properties are located, the availability and cost of borrowed funds, real estate
tax rates, operating expenses, energy costs and government regulations. In
addition, other risks inherent in real estate investment may influence the
ultimate success of the Fund, including: (i) possible reduction in rental income
due to an inability to maintain high occupancy levels or adequate rental levels;
(ii) possible adverse changes in general economic conditions and adverse local
conditions, such as competitive overbuilding, or a decrease in employment or
adverse changes in real estate laws, including building codes; and (iii) the
possible future adoption of rent control legislation which would not permit
increased costs to be passed on to the tenants in the form of rent increases, or
which suppress the ability of the Local Limited Partnerships to generate
operating cash flow. Since most of the Properties benefit from some form of
government assistance, the Fund is subject to the risks inherent in that area
including decreased subsidies, difficulties in finding suitable tenants and
obtaining permission for rent increases. In addition, any Tax Credits allocated
to investors with respect to a Property are subject to recapture to the extent
that the Property or any portion thereof ceases to qualify for the Tax Credits.
Other future changes in federal and state income tax laws affecting real estate
ownership or limited partnerships could have a material and adverse affect on
the business of the Fund.
The Fund is managed by Arch Street VIII Limited Partnership, the sole General
Partner of the Fund. To economize on direct and indirect payroll costs, the
Fund, which does not have any employees, reimburses The Boston Financial Group
Limited Partnership, an affiliate of the General Partner, for certain expenses
and overhead costs. A complete discussion of the management of the Fund is set
forth in Item 10 of this Report.
Item 2. Properties
The Fund owns limited partnership interests in ten Local Limited Partnerships
which own and operate Properties, some of which benefit from some form of
federal, state, or local assistance programs and all of which qualify for the
Tax Credits added to the Code by the Tax Reform Act of 1986. The Fund's
ownership interest in the Local Limited Partnerships is generally 99%, with the
exception of Springwood which is 79.20%, Hemlock Ridge which is 77%, and Pike
Place and West End Place which are 90%.
<PAGE>
All of the Local Limited Partnerships have received an allocation of Tax Credits
from the relevant state tax credit agency. In general, the Tax Credit runs for
ten years from the date the Property is placed in service. The required holding
period (the "Compliance Period") of the Properties is fifteen years. During
these fifteen years, the Properties must satisfy rent restrictions, tenant
income limitations and other requirements, as promulgated by the Internal
Revenue Service, in order to maintain eligibility for the Tax Credit at all
times during the Compliance Period. Once a Local Limited Partnership has become
eligible for the Tax Credits, it may lose such eligibility and suffer an event
of recapture if its Property fails to remain in compliance with the
requirements. To date, none of the Local Limited Partnerships have suffered an
event of recapture of Tax Credits.
In addition, some of the Local Limited Partnerships have obtained one or a
combination of different types of loans such as: i) below market rate interest
loans; ii) loans provided by a redevelopment agency of the town or city in which
the property is located at favorable terms; or iii) loans that have repayment
terms that are based on a percentage of cash flow.
The following schedule provides certain key information on the Local Limited
Partnership interests acquired by the Partnership.
<PAGE>
<TABLE>
<CAPTION>
Capital Contributions Mtge. loans Occupancy
Local Limited Partnership Number Total Committed Paid Through payable at at
Property Name of at March 31, March 31, December 31, Type of March 31,
Property Location Apt. Units 1997 1997 1996 Subsidy* 1997
- -------------------------- ------------ ----------------- -------------- -------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Green Wood Apartments,
a Limited Partnership
Green Wood Apartments
Gallatin, TN 164 $3,825,916 $3,825,916 $5,268,002 None 90%
Webster Court Apartments
a Limited Partnership
Webster Court Apartments
Kent, WA 92 2,318,078 2,318,078 2,890,712 None 89%
Springwood Apartments
a Limited Partnership (1)
Springwood Apartments
Tallahassee, FL 113 2,504,393 2,504,393 3,966,075 None 97%
Meadow Wood Associates
of Pella, a Limited Partnership
Meadow Wood of Pella
Pella, IA 30 893,808 893,808 1,151,128 Section 8 96%
RMH Associates, a Limited
Partnership (1)
Hemlock Ridge
Livingston Manor, NY 100 1,697,298 1,697,298 2,224,315 Section 8 91%
Pike Place, a Limited
Partnership (1)
Pike Place
Fort Smith, AR 144 1,915,328 1,915,328 3,362,591 None 99%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Capital Contributions Mtge. loans Occupancy
Local Limited Partnership Number Total Committed Paid Through payable at at
Property Name of at March 31, March 31, December 31, Type of March 31,
Property Location Apt. Units 1997 1997 1996 Subsidy* 1997
- ------------------------ ------------ ------------- --------------- ---------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
West End Place, a Limited
Partnership (1)
West End Place
Springdale, AR 120 1,843,010 1,843,010 2,967,168 None 100%
Oak Knoll Renaissance, a
Limited Partnership
Oak Knoll Renaissance
Gary, IN 256 4,922,412 4,465,862 5,479,042 Section 8 100%
Beaverdam Creek Associates,
a Limited Partnership (2)
Beaverdam Creek
Mechanicsville, VA 120 3,629,140 3,629,140 3,393,438 None 100%
Schickedanz Brothers Palm
Beach Limited
Live Oaks Plantation
West Palm Beach, FL 218 5,587,953 5,587,953 7,887,047 None 89%
----- ------------- ------------ ------------
1,357 $29,137,336 $28,680,786 $38,589,518
====== =========== =========== ===========
</TABLE>
(1) Boston Financial Tax Credits Fund VIII has 79.20% interest in
Springwood Apartments, L.P., a 77% interest in RMH Associates,
L.P., and a 90% interest in Pike Place, L.P. and West End Place,
L.P. The mortgage payable balances represent 100% of the
outstanding balances.
(2) The amount paid includes funds advanced under a promissory note
agreement with Boston Financial Tax Credit Fund VIII, a Limited
Partnership.
*Section 8 This subsidy, which is authorized under Section 8 of Title II of
the Housing and Community Development Act of 1974, allows qualified
low-income tenants to pay 30% of their monthly income as rent with
the balance paid by the federal government.
<PAGE>
Four Local Limited Partnerships invested in by the Fund each represent more than
10% of the total capital contributions to be made to Local Limited Partnerships
by the Fund. These Local Limited Partnerships are as follows: (i) Green Wood
Apartments Limited Partnership with Flournoy Development Company as Local
General Partner; (ii) Oak Knoll Renaissance Limited Partnership with Ronald M.
Gatton Redevelopment Services as Local General Partner; (iii) Beaverdam Creek
Associates Limited Partnership with Castle Development Corporation as Local
General Partner; and (iv) Schickedanz Brothers Palm Beach Limited Partnership
which owns Live Oaks Plantation and has Schickedanz Enterprise as its Local
General Partner.
Green Wood Apartments Limited Partnership, representing 13.1% of the total
original investment in the Local Limited Partnerships, has obtained a $5,322,000
mortgage loan payable at 8.860% per annum with monthly payments of principal and
interest in the amount of $42,287 due through August 1, 2110.
Oak Knoll Renaissance Limited Partnership, representing 16.9% of the total
original investment in the Local Limited Partnerships, has obtained a mortgage
loan payable at 10.125% per annum with monthly payments of principal and
interest in the amount of $52,205 due through June 1, 2018. The construction
loan of $5,676,337 with the City of Gary, Indiana, was repaid in 1996 when
permanent financing was obtained.
Beaverdam Creek Associates Limited Partnership ("Beaverdam Creek LP"),
representing 12.4% of the total original investment in the Local Limited
Partnerships, had obtained a construction loan in the original principal amount
of $3,970,000 from the Virginia Housing and Development Authority ("VHDA"). The
loan is evidenced by three mortgage notes, one in the amount of $2,420,000 from
VHDA, one in the amount of $550,000 from First Union National Bank of Virginia
("First Union") as a Supplemental Mortgage Loan and the third in the amount of
$1,000,000 from Virginia Housing Partnership Revolving Fund ("VHPRF"). The VHDA
mortgage note bears interest at 10.62% per annum. The First Union mortgage note
bears interest at it's current prime rate plus 1% per annum. The VHPRF mortgage
note bears interest at 8% per annum during the construction period and 5% per
annum thereafter.
Final closing of the construction loan occurred on December 15, 1995. The
permanent loans from VHDA and VHPRF of $2,420,000 and $1,000,000, respectively,
are to be repaid on a level annuity basis by 360 equal payments of principal and
interest of $22,354 and $5,368 as established by VHDA at final closing. The
$550,000 mortgage loan from First Union was paid in full as of December, 1995.
Additionally, on November 16, 1994, Beaverdam Creek LP entered into a promissory
note agreement with Boston Financial Tax Credit Fund VIII, a Limited
Partnership, an investor Limited Partner. $2,563,040 was advanced under the
agreement. The promissory note was unsecured and bore interest at the rate of 7%
per annum. All outstanding principal and accrued interest in connection with
this note were deemed paid and classified as capital contributions by the Local
Limited Partnership upon final closing of the mortgage during fiscal year 1996.
Schickedanz Brothers Palm Beach Limited Partnership, representing 19.2% of the
total original investment in the Local Limited Partnerships entered into two
loan agreements. The first is a construction loan agreement with First Housing
Development Corporation of Florida ("First Housing") with a principal amount not
to exceed $6,150,000. This loan was refinanced on June 28, 1996 and the new loan
is with Newport Mortgage Company, L.P., in the original amount of $6,493,000.
The loan bears interest at a rate of 8.94% per annum with monthly payments of
principal and interest in the amount of $51,964 due through July 7, 2026.
The second is a Home loan agreement with the Florida Housing Finance Agency,
with a principal amount not to exceed $1,531,000. Interest on the unpaid
principal balance shall be due at the Applicable Federal Rate ("AFR") for long
term obligations as of the commencement date of the loan. Interest shall be
payable at 3% per annum commencing on June 30, 1995. Deferred interest is
compounded annually and is due together with the principal balance on February
28, 2025. As of December 31, 1996, total funds in the amount of $1,416,000 have
been drawn on the loan.
The duration of the leases for occupancy in the Properties described above will
be six to twelve months. The General Partners believe the Properties described
herein are adequately covered by insurance.
Additional information required under this Item, as it pertains to the Fund, is
contained in Items 1, 7 and 8 of this Report.
Item 3. Legal Proceedings
The Fund is not a party to any pending legal or administrative proceeding, and
to the best of its knowledge, no legal or administrative proceeding is
threatened or contemplated against it.
Item 4. Submission of Matters to a Vote of Security Holders
None.
PART II
Item 5. Market for the Registrant's Units and Related Security Holder Matters
There is no public market for the Units, and it is not expected that a public
market will develop. If a Limited Partner desires to sell Units, the buyer of
those Units will be required to comply with the minimum purchase and retention
requirements and investor suitability standards imposed by applicable federal or
state securities laws and the minimum purchase and retention requirements
imposed by the Fund. The price to be paid for the Units, as well as the
commissions to be received by any participating broker-dealers, will be subject
to negotiation by the Limited Partner seeking to sell his Units. Units will not
be redeemed or repurchased by the Fund.
The Partnership Agreement does not impose on the Fund or its General Partner any
obligation to obtain periodic appraisals of assets or to provide Limited
Partners with any estimates of the current value of Units.
As of March 31, 1997, there were 1,393 record holders of Units of the Fund.
Cash distributions, when made, are paid annually. For the years ended March 31,
1997, 1996 and 1995, no cash distributions were made.
<PAGE>
Item 6. Selected Financial Data
The following table sets forth selected financial information regarding the
Fund's financial position and operating results. This information should be read
in conjunction with Management's Discussion and Analysis of Financial Condition
and Results of Operations and the Financial Statements and Notes thereto, which
are included in Items 7 and 8 of this Report.
<TABLE>
<CAPTION>
March 31, March 31, March 31, March 31,
1997 1996 1995 1994
<S> <C> <C> <C> <C>
Revenue $ 100,536 $ 511,713 $ 763,502 $ 60
Equity in losses of Local Limited
Partnerships (1,922,556) (881,551) (161,157) -
Net income (loss) (2,247,908) (782,504) 160,473 (37,214)
Per Limited Partnership Unit (A) (60.98) (21.23) 5.52 (6.02)
Cash, cash equivalents and marketable securities 1,716,088 3,781,596 12,070,602 3,863,840
Investment in Local Limited
Partnerships, at original cost 29,861,509 27,143,995 20,014,349 2,087,172
Total assets (B) 29,078,258 31,277,311 32,240,835 6,000,179
Cash Distribution - - - -
Other data:
Passive loss (C) (2,936,579) (1,638,463) (511,934) -
Per Limited Partnership Unit (C) (79.66) (44.44) (13.89) -
Portfolio income (C) 161,828 764,632 628,323 -
Per Limited Partnership Unit (C) 4.39 20.74 17.04 -
Low-Income Housing Tax Credit (C) 5,234,045 3,307,725 313,289 -
Per Limited Partnership Unit (C) 141.98 89.72 8.50 -
Local Limited Partnership interests
owned at end of period 10 10 10 1
</TABLE>
(A) Per Limited Partnership Unit data is based upon 36,497 units for the years
ended March 31, 1997 and 1996, and a weighted average number of units
outstanding of 28,774 and 6,123 for the year ended March 31, 1995 and the
period December 6, 1993 to March 31, 1994, respectively.
(B) Total assets include the net investment in Local Limited Partnerships.
(C) Income Tax information is as of December 31, the year end of the Fund for
income tax purposes. Per Limited Partnership Unit data is based upon the
final investor closing held on July 29, 1994 for a total of 36,497
outstanding Units.
Allocations to individual investors for the tax year ended December 31, 1994 are
based on the individual's admission date to the Fund.
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Liquidity and Capital Resources
At March 31, 1997, the Fund had cash and cash equivalents of $273,412 as
compared to $71,715 at March 31, 1996. This increase is primarily attributable
to proceeds from sales and maturities of marketable securities exceeding cash
paid for investments in Local Limited Partnerships, the purchase of marketable
securities and operating activities.
The Fund also has restricted cash of $503,031 at March 31, 1997. These funds
represent escrowed funds to be applied to future capital contributions to be
made to one of the Local Limited Partnerships in which the Fund has invested.
The funds are scheduled to be released on July 31, 1997.
As of March 31, 1997, approximately $1,549,000 of marketable securities has been
designated as Reserves. The Reserves are 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 March 31, 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 Agreement and
total approximately $457,000.
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, as of March 31, 1997, the Fund had no contractual or other
obligation to any Local Limited Partnership, which had not been paid or provided
for, except as disclosed above.
In the event a Local Limited Partnership encounters operating difficulties
requiring additional funds, the Fund might deem it in its best interests to
voluntarily provide such funds, in order to protect its investment. No such
event has occurred to date.
Cash Distributions
No cash distributions were made during the year ended March 31, 1997. It is
expected that cash available for distribution, if any, will not be significant
in fiscal year 1998. As funds from temporary investments are paid to Local
Limited Partnerships, interest earnings on those funds decrease. In addition,
some of the properties benefit from some type of federal or state subsidy, and
as a consequence, are subject to restrictions on cash distributions.
Results of Operations
1997 versus 1996
For the year ended March 31, 1997, the Fund's operations resulted in a net loss
of $2,247,908, as compared to $782,504 for the year ended March 31, 1996. The
increase in net loss is attributable to an increase in equity in losses of Local
Limited Partnerships and a decrease in investment and other income.
The change in equity in losses of Local Limited Partnerships for the year ended
March 31, 1997, as compared to the same period in 1996 is primarily attributable
to the timing of construction completion. Since many of the properties were
under construction during the year ended December 31, 1995, the results of
operations for the period ended December 31, 1995 were not comparable to the
results of operations for the year ended December 31, 1996.
<PAGE>
1996 versus 1995
For the year ended March 31, 1996, the Fund's operations resulted in a net loss
of $782,504, as compared to net income of $160,473 for the year ended March 31,
1995. The change to a net loss position is attributable to an increase in equity
in losses of Local Limited Partnerships and a decrease in investment income.
The change in equity in losses of Local Limited Partnerships for the year ended
March 31, 1996, as compared to the same period in 1995 is primarily attributable
to an increase in the number of operational Local Limited Partnerships from five
as of March 31, 1995 to ten as of March 31, 1996. The decline in investment
income is due primarily to lower average cash balances, as a result of the
Fund's investment in Local Limited Partnerships.
Effect of recently issued Accounting Standard
The Financial Accounting Standards Board has issued Statement of Accounting
Standards No. 121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of, which is effective for fiscal years
beginning after December 15, 1996. This standard requires that long-lived assets
be reviewed for recoverability. Impairment losses are recognized when events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. The Fund adopted the new standard for the year ending March 31,
1997, however, it did not have a significant effect on financial position or
results of operations.
Low-Income Housing Tax Credits
The 1996 and 1995 tax credits were $141.98 and $89.72 per Unit, respectively.
The 1994 tax credits per Unit were allocated to investors based on the
individual's admission date to the Partnership. Investors admitted during the
first closing received $17.25 per Unit. Investors admitted in later closings
received a lower amount. Tax Credits are not available for a property until the
property is placed in service and its apartment units are occupied by qualified
tenants. In the first year the Tax Credit is claimed, the allowable credit
amount is determined using an averaging convention to reflect the number of
months that units comprising the qualified basis were occupied by qualified
tenants during the year. To the extent that the full amount of the annual credit
is not allocated in the first year, an additional credit in such amount is
available in the 11th taxable year.
As of December 31, 1995, all of the properties had been placed in service, and
generated Tax Credits in 1995. Some of the properties had less than a full year
of operations in the period ended December 31, 1995. They were subject to the
averaging convention mentioned above and therefore, the Fund did not receive a
full allocation of Tax Credits with respect to those properties in 1995. The Tax
Credits per Limited Partnership Unit have stabilized at approximately $142 per
unit, as properties have reached completion and have become fully leased. Since
the Tax Credits have stabilized, the annual amount allocated to investors is
expected to remain the same for about seven years. In years eight through ten,
the credits are expected to decrease as Properties reach the end of the ten year
credit period.
Property Discussions
The Fund is invested in ten Local Limited Partnerships which own ten properties
located in eight states. Two properties, representing 356 units, underwent
rehabilitation, and eight properties, representing 1001 units, are new
construction. All of the ten properties are complete, through initial lease-up
and operating satisfactorily.
<PAGE>
Inflation and Other Economic Factors
Inflation had no material impact on the operations or financial condition of the
Fund for the years ended March 31, 1997, 1996, and 1995.
Since some of the properties are expected to benefit from some form of
government assistance, the Fund is subject to the risks inherent in that area
including decreased subsidies, difficulties in finding suitable tenants and
obtaining permission for rent increases. In addition, any Tax Credits allocated
to investors with respect to a property are subject to recapture to the extent
that the property or any portion thereof ceases to qualify for the Tax Credits.
Certain of the properties in which the Fund invests may be located in areas
suffering from poor economic conditions. Such conditions could have an adverse
effect on the rent or occupancy levels at such properties. Nevertheless,
management believes that the generally high demand for below market rate housing
will tend to negate such factors. However, no assurance can be given in this
regard.
Item 8. Financial Statements and Supplementary Data
Information required under this Item is submitted as a separate section of this
Report. See Index on page F-1 hereof.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
On November 10, 1995, the firm of Arthur Andersen LLP was dismissed as the
principal accountant to audit the registrant's financial statements. The report
on the financial statements of the registrant by Arthur Andersen LLP for the
year ending March 31, 1995 did not contain any adverse opinion or disclaimer of
opinion, and was not qualified or modified as to uncertainty, audit scope, or
accounting principles. The decision to change accountants was approved by the
Board of Directors of the General Partner of the registrant.
During the year ending March 31, 1995 and for the subsequent interim period,
April 1, 1995 through November 10, 1995, there were no disagreements with Arthur
Andersen LLP on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure.
The firm of Coopers & Lybrand L.L.P. has been engaged as principal accountant to
audit the registrant's financial statements.
PART III
Item 10. Directors and Executive Officers of the Registrant
The General Partner of the Fund is Arch Street VIII Limited Partnership, a
Massachusetts limited partnership (the "General Partner"), an affiliate of The
Boston Financial Group Limited Partnership ("Boston Financial"), a Massachusetts
limited partnership.
The General Partner was formed in August 1993. William E. Haynsworth is the
Chief Operating Officer of the General Partner, and has the primary
responsibility for evaluating, selecting and negotiating investments for the
Fund. The Investment Committee of the General Partner approves all investments.
The names and positions of the principal officers and the directors of the
General Partner are set forth below.
<PAGE>
Name Position
Georgia Murray President, Managing Director, Treasurer
and Chief Financial Officer
Fred N. Pratt, Jr. Managing Director
William E. Haynsworth Managing Director and Chief
Operating Officer
Paul F. Coughlan Vice President
Peter G. Fallon, Jr. Vice President
Randolph G. Hawthorne Vice President
A. Harold Howell Vice President
Jenny Netzer Vice President
The General Partner provides day-to-day management of the Fund. Compensation is
discussed in Item 11 of this report. Such day-to-day management does not
include the management of the properties.
The business experience of each of the persons listed above is described
below. There is no family relationship between any of the persons listed in
this section.
Georgia Murray, age 46, is a graduate of Newton College of the Sacred Heart
(B.A., 1972). She joined Boston Financial Management Company in 1973 and is
currently a Senior Vice President of Boston Financial. Ms. Murray is a member of
the Senior Leadership Team and Board of Directors, and leads the Property
Management division. Previously, she led the company's Institutional Tax Credit
Team and managed Boston Financial's Investment Real Estate and Asset Management
divisions. Ms. Murray currently serves as a Director of Atlantic Bank and Trust
Co., President of the Institute for Multi-Family Housing, director of the
Investment Program Association, and member of the Direct Investment Committee of
the Securities Industry Association. Previously, she served as the Industry
Advisor to the Management Policy Review Committee of the Massachusetts Housing
Finance Agency and as a commissioner of the Boston Public Facilities Department.
Fred N. Pratt, Jr., age 52, graduated from Tufts University and the Amos Tuck
School of Business Administration at Dartmouth College. Mr. Pratt was one of
the original employees of Boston Financial when it was founded in late 1969. He
currently serves as Boston Financial's Chief Executive Officer and Chairman
of the Board of Directors of the General Partner of Boston Financial.
William E. Haynsworth, age 57, graduated from Dartmouth College and Harvard Law
School. Mr. Haynsworth was Acting Executive Director of the Massachusetts
Housing Finance Agency, where he was also General Counsel, prior to becoming a
Vice President of Boston Financial in 1977 and a Senior Vice President in 1986.
He has also served as Director of Non-Residential Development of the Boston
Redevelopment Authority and as an associate of the law firm of Goodwin, Procter
& Hoar in Boston. Mr. Haynsworth is a member of the firm's Senior Leadership
Team and participates in the structuring of real estate investments and the
development of new business opportunities.
Paul F. Coughlan, age 53, is a graduate of Brown University (A.B., 1965) and
served in the United States Navy before entering the securities business in
1969. He was employed as an Account Executive by Bache & Company until 1972, and
then by Reynolds Securities Inc. He joined Boston Financial in 1975 and is
currently a Senior Vice President on the Institutional Tax Credit Team.
Peter G. Fallon, Jr., age 58, graduated from the College of The Holy Cross
(B.S., 1960) and Babson College (M.B.A., 1965). He joined Boston Financial in
1970, shortly after its formation, and is currently a Senior Vice President and
a member of the Investment Real Estate Division with responsibility for the
marketing of the firm's Institutional Tax Credit product.
<PAGE>
Randolph G. Hawthorne, age 47, is a graduate of Massachusetts Institute of
Technology (B.S., 1971) and Harvard Graduate School of Business (M.B.A., 1973).
He joined Boston Financial in 1973 and has served as Treasurer and managed the
firm's Investment Real Estate division. He is a Senior Vice President serving on
the Investment Acquisitions Team with 22 years of experience in property
acquisitions. Mr. Hawthorne has primary responsibility for structuring real
estate investments and developing new business opportunities. He is a member of
the Investment Committee. He is Chairman of the National Multi Housing Council,
a past president of the National Housing and Rehabilitation Association, a
member of the Residential Development Council of the Urban Land Institute as
well as a member of the Advisory Board of the Berkeley Real Estate Center at the
University of California. A speaker at industry conferences, he is also on the
Editorial Advisory Board of the Tax Credit Advisor.
A. Harold Howell, age 56, graduated from Harvard College and the Amos Tuck
School of Business Administration at Dartmouth College. He has been employed by
Boston Financial since 1970. For most of this time he has been active in the
overall administration of Boston Financial and its affiliates but has also been
involved in other areas of its business. Mr. Howell has served as head of Boston
Financial's Property Management Division and also as its Chief Financial Officer
and Chief Executive Officer. He currently is a Senior Vice President and is in
charge of a program being developed for properties managed by Boston Financial
whereby heads-of-households who want to further their education can enroll in a
program on-site which teaches economic self sufficiency, computer and internet
skills, problem solving skills and related real-world skills. Mr. Howell
recently spent a two year sabbatical from Boston Financial as a Visiting
Professor at the Instituto de Estudios Superiores de la Empresa, a highly
regarded International M.B.A. Program in Barcelona, Spain. While there, he
taught courses in business strategy and real estate finance.
Jenny Netzer, age 41, is a graduate of Harvard University (B.A., 1976) and
received a Master's in Public Policy from Harvard's Kennedy School of Government
in 1982. She joined Boston Financial in 1987 and is a Senior Vice President
leading the Institutional Tax Credit Team, which is responsible for developing,
marketing and managing institutional tax credit products. Previously, she led
the company's new business initiatives, helping guide the company's efforts in
the areas of publicly-traded real estate securities and senior housing. She is
also a member of the Senior Leadership Team, which is responsible for the
strategic direction of the company. Prior to working on new business
initiatives, Ms. Netzer managed the firm's Asset Management division. Before
joining Boston Financial, she was Deputy Budget Director for the Commonwealth of
Massachusetts. Ms. Netzer was also Assistant Controller at Yale University and
has been a member of the Watertown Zoning Board of Appeals.
Item 11. Management Remuneration
Neither the partners of Arch Street VIII Limited Partnership, nor any other
individual with significant involvement in the business of the Fund receives any
current or proposed remuneration from the Fund.
<PAGE>
Item 12. Security Ownership of Certain Beneficial Owners and Management
As of March 31, 1997, the following entities are the only entities known
to the Partnership to be the beneficial owners of more than 5% of the Units
outstanding:
<TABLE>
<CAPTION>
Amount
Title of Class Name and Address of Beneficially Percent of
Beneficial Owner Owned Class
- --------------- ------------------------------- -------------- -------------
<S> <C> <C>
Limited Pierce National Life Insurance 2,079 Units 5.7%
Partner P.O. Box 19035
Greenville, SC 29602
Limited Eli Lilly and Company 5,220 Units 14.3%
Partner Lilly Corporate Center
Indianapolis, IN 46285
</TABLE>
The equity securities registered by the Fund under Section 12(g) of the Act
consist of 200,000 Units, 36,497 of which had been sold to the public as of
March 31, 1997. Holders of Units are permitted to vote on matters affecting the
Fund only in certain unusual circumstances and do not generally have the right
to vote on the operation or management of the Fund.
As of March 31, 1997, Arch Street VIII, Inc. owns a fractional (unregistered)
Unit not included in the Units sold to the public.
Except as described in the preceding paragraph, neither Arch Street VIII, Inc.,
Arch Street VIII Limited Partnership, Boston Financial, nor any of their
executive officers, directors, partners or affiliates is the beneficial owner of
any Units. None of the foregoing persons possesses a right to acquire beneficial
ownership of Units.
The General Partner does not know of any existing arrangement that might at a
later date result in a change in control of the Fund.
Item 13. Certain Relationships and Related Transaction
The Fund is required to pay certain fees to and reimburse certain expenses of
the General Partner or its affiliates (including Boston Financial) in connection
with the organization of the Fund and the offering of Units. The Fund is also
required to pay certain fees to and reimburse certain expenses of the General
Partner or its affiliates (including Boston Financial) in connection with the
administration of the Fund and its acquisition and disposition of investments in
Local Limited Partnerships. In addition, the General Partner is entitled to
certain Fund distributions under the terms of the Partnership Agreement. Also,
an affiliate of the General Partner will receive up to $10,000 from the sale or
refinancing proceeds of each Local Limited Partnership, if it is still a limited
partner at the time of such transaction. All such fees, expenses and
distributions paid in the years ended March 31, 1997, 1996 and 1995 are
described below and in the sections of the Prospectus entitled "Estimated Use of
Proceeds", "Management Compensation and Fees" and "Profits and Losses for Tax
Purposes, Tax Credits and Cash Distributions". Such sections are incorporated
herein by reference.
The Fund is permitted to enter into transactions involving affiliates of the
General Partner, subject to certain limitations established in the Partnership
Agreement.
Information required under this Item is contained in Note 5 to the Financial
Statements presented as a separate section of this Report. The affiliates of the
Managing Partner which have received or will receive fee payments and expense
reimbursements from the Partnership are as follows:
<PAGE>
Organizational fees and expenses and selling expenses
In accordance with the Partnership Agreement, the Fund is required to pay
certain fees to and reimburse expenses of the General Partner and others in
connection with the organization of the Fund and the offering of its Limited
Partnership Units. Selling commissions, fees and accountable expenses related to
the sale of the Units totaling $4,664,369 have been charged directly to Limited
Partners' equity. In connection therewith, $2,828,918 of selling expenses and
$1,835,451 of offering expenses incurred on behalf of the Fund have been paid to
an affiliate of the General Partner. The Fund may be required to pay a
non-accountable expense allowance for marketing expense equal to a maximum of 1%
of Gross Proceeds. The Fund has capitalized an additional $50,000 which was
reimbursed to an affiliate of the General Partner. Total organization and
offering expenses exclusive of selling commissions and underwriting advisory
fees did not exceed 5.5% of the Gross Proceeds and organizational and offering
expenses, inclusive of selling commissions and underwriting advisory fees, did
not exceed 15.0% of the Gross Proceeds. Payments made and expenses reimbursed in
the years ended March 31, 1997, 1996 and 1995, are as follows:
<TABLE>
<CAPTION>
1997 1996 1995
------------ ----------- --------
<S> <C> <C> <C>
Organizational fees and expenses
and selling expenses $ - $ (5,832) $ 3,958,903
</TABLE>
Acquisition fees and expenses
In accordance with the Partnership Agreement, the Fund is required to pay
acquisition fees to and reimburse acquisition expenses of the General Partner or
its affiliates for selecting, evaluating, structuring, negotiating, and closing
the Partnership's investments in Local Limited Partnerships. Acquisition fees
total 6% of the gross offering proceeds. Acquisition expenses which include such
expenses as legal fees and expenses, travel and communications expenses, costs
of appraisals, accounting fees and expenses, are expected to total 1.5% of the
gross offering proceeds. Acquisition fees totaling $2,189,820 for the closing of
the Fund's Local Limited Partnership Investments were paid to an affiliate of
the General Partner. Acquisition expenses totaling $335,196 were reimbursed to
an affiliate of the General Partner. Payments made and expenses reimbursed in
the years ended March 31, 1997, 1996 and 1995 are as follows:
<TABLE>
<CAPTION>
1997 1996 1995
------------ ----------- --------
<S> <C> <C> <C>
Acquisition fees and expenses $ 888 $ 144,429 $2,068,027
</TABLE>
Asset Management Fees
An affiliate of the General Partner receives a base amount of .544% (as adjusted
by the CPI factor) of Gross Proceeds annually as an Asset Management Fee for
administering the affairs of the Fund. Asset Management Fees incurred in the
years ended March 31, 1997, 1996 and 1995, are as follows:
<TABLE>
<CAPTION>
1997 1996 1995
------------ ----------- --------
<S> <C> <C> <C>
Asset Management Fees $ 193,635 $ 188,630 $ 221,684
</TABLE>
<PAGE>
Salaries and benefits expense reimbursement
An affiliate of the General Partner is reimbursed for the cost of certain
salaries and benefits expenses which are incurred by an affiliate of the General
Partner on behalf of the Fund. The reimbursements are based upon the size and
complexity of the Partnership's operations. Reimbursements made in the years
ended March 31, 1997, 1996 1995, are as follows:
<TABLE>
<CAPTION>
1997 1996 1995
------------ ----------- --------
<S> <C> <C> <C>
Salaries and benefits expense reimbursement $ 108,120 $ 119,711 $ 100,693
</TABLE>
Property Management Fees
BFPM, an affiliate of the Managing General Partner, currently manages Beaverdam
Creek, a property in which the Partnership has invested. The property management
fee charged is equal to 4% of cash receipts. Included in operating expenses in
the summarized income statements in Note 3 to the Financial Statements is
$27,556 and $11,388 of fees earned by BFPM for the years ended March 31, 1997
and 1996, respectively. Property construction was completed in September, 1995,
as a result, no fees were earned prior to the year ended March 31, 1996.
Cash distributions paid to the General Partners
In accordance with the Partnership Agreement, the General Partner of the Fund,
Arch Street VIII Limited Partnership, receives 1% of cash distributions made to
partners. As of March 31, 1997, the Fund has not paid any cash distributions to
partners.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a)(1) and (2) Documents filed as a part of this Report
In response to this portion of Item 14, the financial statements, financial
statement schedules and the auditors' report relating thereto, are submitted as
a separate section of this Report. See Index on page F-1 hereof.
The reports of auditors of the Local Limited Partnerships relating to the audits
of the financial statements of such Local Limited Partnerships appear in Exhibit
(28)(1) of this Report.
All other financial statement schedules and exhibits for which provision is made
in the applicable accounting regulations of the Securities and Exchange
Commission are not required under related instructions or are inapplicable, and
therefore have been omitted.
(a)(3) See Exhibit Index contained herein.
(a)(3)(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the quarter ended March 31, 1997.
(a)(3)(c) Exhibits
Number and Description in Accordance
with Item 601 of Regulation S-K
-------------------------------
27. Financial Data Schedule
28. Additional Exhibits
(a) 28.1 Reports of Other Independent Auditors
(b) Audited financial statements of Local
Limited Partnerships
None.
(a)(3)(d) None.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP
By: Arch Street VIII, Limited Partnership
its General Partner
By: /s/William E. Haynsworth Date:
William E. Haynsworth,
Managing Director and
Chief Operating Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the General Partner of the
Fund and in the capacities and on the dates indicated:
By: /s/William E. Haynsworth Date:
William E. Haynsworth,
Managing Director and
Chief Operating Officer
By: /s/Fred N. Pratt, Jr. Date:
Fred N. Pratt, Jr.,
A Managing Director
<PAGE>
Item 8. Financial Statements and Supplementary Data
BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP
ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED MARCH 31, 1997
INDEX
Page No.
Report of Independent Accountants
For the years ended March 31, 1997 and 1996 F-2
For the year ended March 31, 1995 F-3
Financial Statements
Balance Sheets - March 31, 1997 and 1996 F-4
Statements of Operations - Years Ended
March 31, 1997, 1996 and 1995 F-5
Statements of Changes in Partners' Equity (Deficiency)
- Years Ended March 31, 1997, 1996 and 1995 F-6
Statements of Cash Flows - Years Ended
March 31, 1997, 1996 and 1995 F-7
Notes to Financial Statements F-8
Financial Statement Schedule
Schedule III - Real Estate and Accumulated
Depreciation F-15
Other schedules have been omitted as they are either not required or the
information required to be presented therein is available elsewhere in the
financial statements and the accompanying notes and schedules.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners
Boston Financial Tax Credit Fund VIII, A Limited Partnership:
We have audited the accompanying balance sheets of Boston Financial Tax Credit
Fund VIII, A Limited Partnership ("the Fund") as of March 31, 1997 and 1996 and
the related statements of operations, changes in partners' equity (deficiency)
and cash flows and the financial statement schedule listed in Item 14(a) of
this Report on Form 10-K, for the years ended March 31, 1997 and 1996. These
financial statements and the financial statement schedule are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and the financial statement schedule
based on our audits. As of March 31, 1997 and 1996, 89% and 80% of total assets,
and for the years ended March 31, 1997 and 1996, 100% of the equity in losses of
Local Limited Partnerships, reflected in the financial statements of the Fund,
relate to Local Limited Partnerships for which we did not audit the financial
statements. The financial statements of these Local Limited Partnerships were
audited by other auditors whose reports have been furnished to us, and our
opinion, insofar as it relates to those investments in Local Limited
Partnerships, is based solely on the reports of other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, based on our audits and the reports of other auditors, the
financial statements referred to above present fairly, in all material respects,
the financial position of Boston Financial Tax Credit Fund VIII, A Limited
Partnership, as of March 31, 1997 and 1996, and the results of its operations
and its cash flows for the years ended March 31, 1997 and 1996, in conformity
with generally accepted accounting principles. In addition, in our opinion, the
financial statement schedule referred to above, when considered in relation to
the basic financial statements taken as a whole, presents fairly,in all material
respects, the information required to be included therein.
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
June , 1997
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners
Boston Financial Tax Credit Fund VIII, A Limited Partnership:
We have audited the accompanying statements of operations, partners' equity and
cash flows of Boston Financial Tax Credit Fund VIII, A Limited Partnership ("the
Fund") for the year ended March 31, 1995. These financial statements are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements based on our audit. We did not audit the
financial statements of the Local Limited Partnerships for the year ended March
31, 1995, the investments in which are recorded using the equity method of
accounting (see Note 3).The equity in losses of these partnerships represents
100% of the equity in loss of the Local Limited Partnerships for the year ended
March 31, 1995. Those financial statements were audited by other auditors whose
reports have been furnished to us, and our opinion, insofar as it relates to
those investments in Local Limited Partnerships, is based solely on the reports
of other auditors.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit and the reports of other auditors, provide a
reasonable basis for our opinion.
In our opinion, based on our audit and the reports of other auditors, the
financial statements referred to above present fairly, in all material respects,
the results of operations and cash flows of Boston Financial Tax Credit Fund
VIII, A Limited Partnership, for the year ended March 31, 1995, in conformity
with generally accepted accounting principles.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Boston, Massachusetts
June 16, 1995
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP
BALANCE SHEETS
March 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
------------ -------
<S> <C> <C>
Assets
Cash and cash equivalents $ 273,412 $ 71,715
Investments in Local Limited Partnerships (Note 3) 26,813,245 26,064,146
Restricted cash (Note 2) 503,031 1,369,364
Marketable securities, at fair value (Notes 1 and 4) 1,442,676 3,709,881
Organization costs, net of accumulated amortization
of $30,833 in 1996 and $20,833 in 1995 19,167 29,167
Other assets 26,727 33,038
------------ ------------
Total Assets $ 29,078,258 $ 31,277,311
============ ===========
Liabilities and Partners' Equity
Liabilities
Accounts payable to affiliate (Notes 2 and 5) $ 128,791 $ 81,501
Accrued expenses 38,729 20,858
------------ ------------
Total Liabilities 167,520 102,359
------------ ------------
Commitments (Note 6)
General, Initial and Investor Limited Partners' Equity 28,927,578 31,175,486
Net unrealized losses on marketable securities (16,840) (534)
------------ ------------
Total Partners' Equity 28,910,738 31,174,952
------------ ------------
Total Liabilities and Partners' Equity $ 29,078,258 $ 31,277,311
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
For the Years Ended March 31, 1997, 1996 and 1995
<TABLE>
<CAPTION>
1997 1996 1995
----------- ----------- -------
<S> <C> <C> <C>
Revenue:
Investment $ 81,930 $ 419,359 $ 717,241
Other 18,606 92,354 46,261
------------ --------- ----------
Total Revenue 100,536 511,713 763,502
------------ --------- ----------
Expenses:
Asset management fees, related party (Note 5) 193,635 188,630 221,684
General and administrative (includes
reimbursements to an affiliate in the
amounts of $108,120, $119,711 and $100,693
in 1997, 1996 and 1995, respectively) (Note 5) 195,069 192,506 207,900
Amortization 37,184 31,530 12,288
------------ --------- ----------
Total Expenses 425,888 412,666 441,872
------------ --------- ----------
Income (Loss) before equity in losses of
Local Limited Partnerships (325,352) 99,047 321,630
Equity in losses of Local Limited
Partnerships (Note 3) (1,922,556) (881,551) (161,157)
------------ --------- ----------
Net Income (Loss) $ (2,247,908) $(782,504) $ 160,473
============ ========= ==========
Net Income (Loss) allocated:
To General Partners $ (22,479) $ (7,825) $ 1,605
To Limited Partners (2,225,429) (774,679) 158,868
------------ --------- ----------
$ (2,247,908) $(782,504) $ 160,473
============ ========= ==========
Net Income (Loss) per Limited Partnership Unit (36,497
Units for the years ended
March 31, 1997 and 1996, and a weighted average of
28,774 Units for the year ended March 31, 1995) $ (60.98) $ (21.23) $ 5.52
=========== ========= ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP
STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY)
For the Years Ended March 31, 1997, 1996 and 1995
<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, 1994 $ 1,628 $ 100 $ 5,324,860 $ - $ 5,326,588
Capital contributions - - 30,374,000 - 30,374,000
Less:
Selling commissions and
underwriting advisory fees - - (2,354,385) - (2,354,385)
Other issuance expenses - - (1,554,518) - (1,554,518)
-------- ------- ------------ -------- -------------
Net capital received - - 26,465,097 - 26,465,097
-------- ------- ------------ -------- -------------
Unrealized gains on
marketable securities
held for sale - - - 16,232 16,232
Net Income 1,605 - 158,868 - 160,473
-------- ------- ------------ -------- -------------
Balance at March 31, 1995 3,233 100 31,948,825 16,232 31,968,390
Refund of other issuance
expenses - - 5,832 - 5,832
Net change in net unrealized gains
on marketable securities
available for sale - - - (16,766) (16,766)
Net Loss (7,825) - (774,679) - (782,504)
-------- ------- ------------ -------- -------------
Balance at March 31, 1996 (4,592) 100 31,179,978 (534) 31,174,952
Net change in net unrealized losses
on marketable securities
available for sale - - - (16,306) (16,306)
Net Loss (22,479) - (2,225,429) - (2,247,908)
-------- ------- ------------ -------- -------------
Balance at March 31, 1997 $(27,071) $ 100 $ 28,954,549 $(16,840) $ 28,910,738
======== ======= ============ ======== =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
For the Years Ended March 31, 1997, 1996 and 1995
<TABLE>
<CAPTION>
1997 1996 1995
------------- ------------- --------
<S> <C> <C> <C>
Cash flows from operating activities:
Net Income (Loss) $ (2,247,908) $ (782,504) $ 160,473
Adjustments to reconcile net income (loss) to net
cash provided by (used for) operating activities:
Equity in losses of Local Limited Partnerships 1,922,556 881,551 161,157
Amortization 37,184 31,530 12,288
(Gain) loss on sale of securities 1,618 (41,560) (356,338)
Interest income on interim loan - (86,627) (46,087)
Increase (decrease) in cash arising from
changes in operating assets and liabilities:
Other assets 6,311 (3,716) (29,322)
Accounts payable to affiliate 47,290 (130,629) 189,199
Accrued expenses 17,871 (39,457) 57,141
------------- ------------- ------------
Net cash provided by (used for) operating activities (215,078) (171,412) 148,511
------------- ------------- ------------
Cash flows from investing activities:
Investment in Local Limited Partnerships (2,716,626) (6,923,298) (17,526,201)
Proceeds from the sale of Local
Limited Partner interest - 260,840 -
Restricted cash 866,333 (1,369,364) -
Purchases of marketable securities (4,152,845) (6,716,573) (192,185,939)
Proceeds from sales and maturities of
marketable securities 6,402,126 4,607,078 190,982,917
Payment of acquisition expenses (888) (119,721) (926,450)
Cash distributions received from Local
Limited Partnerships 18,675 3,323 10,000
------------- ------------- ------------
Net cash provided by (used for) investing activities 416,775 (10,257,715) (19,645,673)
------------- ------------- ------------
Cash flows from financing activities:
Capital contributions received, net of commissions - - 28,019,615
Refund (payment) of other issuance expenses - 5,832 (1,841,283)
Payment of organizational costs - - (50,000)
------------- ------------- ------------
Net cash provided by financing activities - 5,832 26,128,332
------------- ------------- ------------
Net increase (decrease) in cash and cash equivalents 201,697 (10,423,295) 6,631,170
Cash and cash equivalents, beginning of period 71,715 10,495,010 3,863,840
------------- ------------- ------------
Cash and cash equivalents, end of period $ 273,412 $ 71,715 $10,495,010
============= ============= ===========
</TABLE>
Non-cash investing activity:
In 1995, the Partnership was issued a note receivable in the amount of
$260,840, in conjunction with the sale of a partial interest in a Local
Limited Partnership. This note was repaid during the year ended March 31, 1996.
In 1996, the Partnership converted $2,563,040 of interim notes receivable from
Beaverdam Creek to capital contributions.
The accompanying notes are an integral part of these financial statements.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
1. Organization
Boston Financial Tax Credit Fund VIII, A Limited Partnership (the "Fund") is a
Massachusetts limited partnership organized to invest in other limited
partnerships ("Local Limited Partnerships") which own and operate apartment
complexes which are eligible for low income housing tax credits which may be
applied against the federal income tax liability of an investor.
Arch Street VIII Limited Partnership ("Arch Street L.P."), a Massachusetts
limited partnership consisting of Arch Street VIII, Inc., a Massachusetts
corporation ("Arch Street, Inc.") as the sole general partner and the Boston
Financial Group Limited Partnership, a Massachusetts limited partnership as sole
limited partner, is the sole General Partner of the Fund. Arch Street L.P. and
Arch Street, Inc. are affiliates of The Boston Financial Group Limited
Partnership, a Massachusetts limited partnership ("Boston Financial"). An
affiliate of Arch Street, L.P. ("SLP Affiliate") is a special limited partner in
each Local Limited Partnership in which the Fund invests, with the right to
become a general partner under certain circumstances. The fiscal year of the
Fund ends on March 31.
The Partnership Agreement authorizes the sale of up to 200,000 Units of limited
partnership interests ("Units") at $1,000 per Unit in series. The first series
offered 50,000 Units. Boston Financial Securities, Inc., an affiliate of the
General Partner, has received selling commissions and underwriting advisory fees
in the amount of 6.5% and 1.25%, respectively, of Gross Proceeds for Units sold
by the entity as a soliciting dealer. On July 29, 1994, the Fund held its final
investor closing. In total, the Fund received $36,497,000 of capital
contributions from investors admitted as Limited Partners for 36,497 Units.
The Partnership Agreement provides that all cash available for distribution will
be distributed 99% to the Limited Partners and 1% to the General Partner. Sale
or refinancing proceeds generally will be distributed first, to the Limited
Partners in an amount equal to their adjusted capital contributions; second, to
the General Partner in an amount equal to its capital contributions; third, to
the General Partner (after payment of the 6% return as set forth in Section
4.2.3 of the Partnership Agreement, and of any accrued but unpaid Subordinated
Disposition Fee, a fee equal to 1% of the sales price of a property owned by a
Local Limited Partnership) in such amount as is necessary to cause the General
Partner to have received 5% of all distributions to the Partners; and lastly,
95% to the Limited Partners and 5% to the General Partner.
Profits and losses for tax purposes arising from general operations and tax
credits generally will be allocated 99% to the Limited Partners and 1% to the
General Partner. However, as set forth in the Partnership Agreement, profits and
losses for tax purposes arising from a sale or refinancing generally will be
allocated among the Partners in such manner as is necessary to cause their
respective capital accounts to reflect the amount that would be distributable to
them in accordance with the priorities set forth in the preceding paragraph, if
all of the Fund's assets were sold for their federal adjusted basis and the Fund
were then liquidated.
Under the terms of the Partnership Agreement, the Fund initially designated 5%
of the Gross Proceeds from the sale of Units as a reserve for working capital of
the Fund and contingencies related to ownership of Local Limited Partnership
interests. The General Partner may increase or decrease such amounts from time
to time, as it deems appropriate. At March 31, 1997, the General Partner has
designated approximately $1,549,000 of marketable securities as such Reserve.
2. Significant Accounting Policies
Basis of Presentation
The Fund accounts for its investments in Local Limited Partnerships using the
equity method of accounting, because the Fund does not have a majority control
of the major operating and financial policies of the Local Limited Partnerships
in which it invests. Under the equity method, the investment is carried at cost,
adjusted for the Fund's share of income or loss of the Local Limited
Partnerships, additional investments and cash distributions from the Local
Limited Partnerships. Equity in income or loss of the Local Limited Partnerships
is included currently in the Fund's operations. The fund has no obligation to
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (continued)
2. Significant Accounting Policies (continued)
fund liabilities of the Local Limited Partnerships beyond its investment,
therefore, a Local Limited Partnerships investment will not be carried below
zero. To the extent that equity losses are incurred when a Local Limited
Partnership's respective investment balance has been reduced to zero, the losses
will be suspended to be used against future income.
Excess investment costs over the underlying net assets acquired have arisen from
acquisition fees paid and expenses reimbursed to an affiliate of the Fund. These
fees and expenses are included in Investments in Local Limited Partnerships and
are being amortized on a straight-line basis over 35 years.
The Fund recognizes a decline in the carrying value of its investment in Local
Limited Partnerships when there is evidence of a non-temporary decline in the
recoverable amount of the investment. There is a possibility that the estimates
relating to reserves for non-temporary declines in carrying value of investments
in Local Limited Partnerships may be subject to material near term adjustments.
The Partnership, as a limited partner in the Local Limited Partnerships, is
subject to risks inherent in the ownership of property which are beyond its
control, such as fluctuations in occupancy rates and operating expenses,
variations in rental schedules, proper maintenance and continued eligibility of
tax credits. If the cost of operating a property exceeds the rental income
earned thereon, the Partnership may deem it in its best interest to voluntarily
provide funds in order to protect its investment.
The General Partners have decided 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 December 31, 1996, 1995 and 1994.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Cash Equivalents
Cash and cash equivalents consist of short-term money market instruments with
maturities of 90 days or less at acquisition and approximate fair value.
Restricted Cash
The Fund has restricted cash in an escrow account to be used for future capital
contributions related to its investment in one Local Limited Partnership, which
are scheduled to be released on July 31, 1997. Interest earned on this deposit
is payable to the local general partner. At March 31, 1997, $49,898 of interest
is included in accounts payable to an affiliate.
Marketable Securities
The Partnership's investments in securities are classified as "Available for
Sale" securities and reported at fair value as reported by the brokerage firm at
which the securities are held. Realized gains and losses from the sales of
securities are based on the specific identification method. Unrealized gains and
losses are excluded from earnings and reported as a separate components of
partners' equity.
Deferred Fees
Costs incurred in connection with the organization of the Fund, amounting
to $50,000, have been deferred and are being amortized on a straight-line
basis over 60 months.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (continued)
2. Significant Accounting Policies (continued)
Income Taxes
No provision for income taxes has been made as the liability for such taxes is
an obligation of the partners of the Fund.
Reclassifications
Certain amounts in prior year financial statements have been reclassified herein
to conform to current year presentation.
Effect of recently issued Accounting Standard
The Financial Accounting Standards Board has issued Statement of Accounting
Standards No. 121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of, which is effective for fiscal years
beginning after December 15, 1995. This standard requires that long-lived assets
be reviewed for recoverability. Impairment losses are recognized when events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. The Fund adopted the new standard for its year ending March 31,
1997, however, it had no significant effect on its financial position or results
of operations.
3. Investments in Local Limited Partnerships
The Fund has acquired an interest in ten Local Limited Partnerships which own
and operate multi-family housing complexes. The Fund, as Investor Limited
Partner, pursuant to the Local Limited Partnership Agreements, has generally
acquired a 99% interest in the profits, losses, tax credits and cash flows from
operations of the Local Limited Partnerships, with the exception of Springwood,
Hemlock Ridge, Pike Place and West End Place which are 79.20%, 77%, 90% and 90%,
respectively. Another partnership sponsored by an affiliate of the General
Partner owns the remaining 19.80% Limited Partnership interest in Springwood.
Upon dissolution, proceeds will be distributed according to the partnership
agreements.
The following is a summary of Investments in Local Limited Partnerships at March
31, 1997, 1996 and 1995:
<TABLE>
<CAPTION>
1997 1996 1995
------------- ------------- --------
<S> <C> <C> <C>
Capital Contributions paid to Local
Limited Partnerships $ 28,813,499 $ 26,096,873 $ 19,086,948
Cumulative equity in losses of Local
Limited Partnerships (2,965,264) (1,042,708) (161,157)
Cumulative cash distributions received
from Local Limited Partnerships (31,998) (13,323) (10,000)
------------- ------------ ------------
Investments in Local Limited Partnerships
before adjustments 25,816,237 25,040,842 18,915,791
Excess of investment cost over the underlying net assets acquired:
Acquisition fees and expenses 1,048,010 1,047,122 927,401
Accumulated amortization of acquisition
fees and expenses (51,002) (23,818) (2,288)
------------- ------------ ------------
Investments in Local Limited Partnerships $ 26,813,245 $ 26,064,146 $ 19,840,904
============ ============ ============
</TABLE>
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (continued)
3. Investments in Local Limited Partnerships (continued)
On November 16, 1994, the Fund entered into a promissory note agreement with one
Local Limited Partnership. $2,563,040 was advanced under the agreement. The
promissory note was uncollateralized and bore interest at the rate of 7% per
annum. All outstanding principal and accrued interest in connection with this
note was classified as a capital contribution by the Local Limited Partnership
on final closing of the mortgage during fiscal year 1996.
Summarized financial information as of December 31, 1996, 1995 and 1994, (due to
the Fund's policy of reporting the financial information of its Local Limited
Partnership interests on a 90 day lag basis) of the ten Local Limited
Partnerships in which the Fund was invested in as of the that date is as
follows:
Summarized Balance Sheets - as of December 31,
<TABLE>
<CAPTION>
1996 1995 1994
------------ ------------ ----------
<S> <C> <C> <C>
Assets:
Investment property, net $ 69,714,031 $72,182,803 $41,102,015
Current assets 975,295 1,426,201 3,084,486
Other assets 2,397,633 1,482,127 6,483,304
------------ ------------ -------------
Total Assets $ 73,086,959 $75,091,131 $50,669,805
============ =========== ===========
Liabilities and Partners' Equity:
Long-term debt $ 38,197,782 $32,215,729 $22,777,318
Current liabilities 1,768,369 5,254,907 7,278,750
Other liabilities 5,853,703 11,498,129 8,847,535
------------ ------------ -------------
Total Liabilities 45,819,854 48,968,765 38,903,603
Fund's Equity 25,784,519 24,398,930 10,854,292
Other Partners' Equity 1,482,586 1,723,436 911,910
------------ ------------ -------------
Total Liabilities and Partners' Equity $ 73,086,959 $75,091,131 $50,669,805
============ =========== ===========
</TABLE>
Summarized Income Statements - for
the year ended December 31,
<TABLE>
<S> <C> <C> <C>
Rental and other income $ 7,594,918 $ 4,565,920 $ 539,156
------------ ------------ -------------
Expenses:
Operating 3,691,624 1,990,693 406,694
Depreciation and amortization 2,841,824 1,817,463 176,565
Interest 3,169,226 1,777,036 130,623
------------ ------------ -------------
Total Expenses 9,702,674 5,585,192 713,882
------------ ------------ -------------
Net Loss $ (2,107,756) $ (1,019,272) $ (174,726)
============ ============ ==============
Fund's share of net loss $ (1,922,556) $ (881,551) $ (161,157)
============ ============ ==============
Other Partners' share of net loss $ (185,200) $ (137,721) $ (13,569)
============ ============ ==============
</TABLE>
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (continued)
3. Investments in Local Limited Partnerships (continued)
The Fund's equity as reflected by the Local Limited Partnerships of $25,784,519
differs from the Fund's Investments in Local Limited Partnerships of $25,816,237
principally because of differences in miscellaneous items.
4. Marketable Securities
A summary of marketable securities is as follows:
<TABLE>
<CAPTION>
Gross Gross
Unrealized Unrealized Fair
Cost Gains Losses Value
<S> <C> <C> <C> <C>
Debt securities issued by the
US Treasury $ 1,237,287 $ 78 $ (12,799) $ 1,224,566
Mortgage backed securities 222,229 - (4,119) 218,110
----------- ----------- ----------- -----------
Marketable securities
at March 31, 1997 $ 1,459,516 $ 78 $ (16,918) $ 1,442,676
=========== =========== =========== ===========
Debt securities issued by the
US Treasury $ 1,465,038 $ 195 $ (2,839) $ 1,462,394
Other debt securities 2,245,377 2,500 (390) 2,247,487
----------- ----------- ----------- -----------
Marketable securities
at March 31, 1996 $ 3,710,415 $ 2,695 $ (3,229) $ 3,709,881
=========== =========== =========== ===========
</TABLE>
The contractual maturities at March 31, 1997 are as follows:
<TABLE>
<CAPTION>
Fair
Cost Value
<S> <C> <C>
Due in one year or less $ 1,137,537 $ 1,125,754
Due in one to five years 99,750 98,812
Mortgage backed securities 222,229 218,110
----------- -----------
$ 1,459,516 $ 1,442,676
=========== ===========
</TABLE>
Proceeds from sales and maturities were approximately $6,402,000, $4,607,000 and
$190,983,000 in 1997, 1996 and 1995, respectively. Included in investment income
are gross gains of $257 and gross losses of $1,875 which were realized on the
sales in the year ended March 31, 1997, and gross gains of $41,560 and $356,338
which were realized on the sales in the years ended March 31, 1996 and 1995,
respectively.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (continued)
5. Transactions with Affiliates
In accordance with the Partnership Agreement, the Fund is required to pay
certain fees to and reimburse expenses of the General Partner and others in
connection with the organization of the Fund and the offering of its Limited
Partnership Units. Selling commissions, fees and accountable expenses related to
the sale of the Units totaling $4,664,369 have been charged directly to Limited
Partners' equity. In connection therewith, $2,828,918 of selling expenses and
$1,835,451 of offering expenses incurred on behalf of the Fund have been paid to
an affiliate of the General Partner. The Fund may be required to pay a
non-accountable expense allowance for marketing expense equal to a maximum of 1%
of Gross Proceeds. The Fund has capitalized an additional $50,000 which was
reimbursed to an affiliate of the General Partner. Total organization and
offering expenses exclusive of selling commissions and underwriting advisory
fees may not exceed 5.5% of the Gross Proceeds and organizational and offering
expenses, inclusive of selling commissions and underwriting advisory fees, may
not exceed 15.0% of the Gross Proceeds.
In accordance with the Partnership Agreement, the Fund is required to pay
acquisition fees to and reimburse acquisition expenses of the General Partner or
its affiliates for selecting, evaluating, structuring, negotiating and closing
the Fund's investments in Local Limited Partnerships. Acquisition fees total
6.0% of Gross Proceeds. Acquisition expenses which include such expenses as
legal fees and expenses, travel and communications expenses, costs of
appraisals, accounting fees and expenses, are expected to total 1.5% of Gross
Proceeds. Acquisition fees totaling $2,189,820 have been paid to an affiliate of
the General Partner for the closing of the Fund's Local Limited Partnership
Investments. Approximately $1,477,000 of these fees are classified as capital
contributions to Local Limited Partnerships in Note 3 to the Financial
Statements. Acquisition expenses totaling $335,196 at March 31, 1997 have been
reimbursed to an affiliate of the General Partner.
An affiliate of the General Partner receives the base amount of .526% (as
adjusted by the CPI factor) of Gross Proceeds annually as an Asset Management
Fee for administering the affairs of the Fund. Asset Management Fees of
$193,635, $188,630 and $221,684 for the years ended March 31, 1997, 1996 and
1995, respectively, have been included in expenses. Included in accounts payable
to affiliates at March 31, 1997 and 1996 is $55,934 and $48,071 of Asset
Management Fees due to an affiliate of the General Partner.
An affiliate of the General Partner is reimbursed for the actual cost of the
Fund's operating expenses. Included in general and administrative expenses for
the years ended March 31, 1997, 1996 and 1995, is $108,120, $119,711 and
$100,693, respectively, that the Fund has paid as reimbursement for salaries and
benefits. As of March 31, 1997 and 1996, $22,960 and $13,704, respectively, is
payable to an affiliate of the General Partner for salaries and benefits.
BFPM, an affiliate of the Managing General Partner, currently manages Beaverdam
Creek, a property in which the Partnership has invested. The property management
fee charged is equal to 4% of cash receipts. Included in operating expenses in
the summarized income statements in Note 3 to the Financial Statements is
$27,556 and $11,388 of fees earned by BFPM for the years ended March 31, 1997
and 1996, respectively. Property construction was completed in September, 1995,
as a result, no fees were earned prior to the year ended March 31, 1996.
6. Commitments
At March 31, 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 Agreement and
total approximately $457,000.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (continued)
7. Federal Income Taxes
A reconciliation of the loss reported in the Statements of Operations
for the fiscal years ended March 31, 1997, 1996 and 1995 to the loss reported
for federal income tax purposes for the years ended December 31, 1997, 1996
and 1995 is as follows:
<TABLE>
<CAPTION>
1997 1996 1995
--------------- -------------- --------
<S> <C> <C> <C>
Net Income (Loss) per Statement of Operations $ (2,247,908) $ (782,504) $ 160,473
Adjustment for equity in losses of Local Limited
Partnerships for financial reporting purposes
over (under) equity in losses for tax purposes (557,984) (240,809) 17,776
Adjustment to reflect March 31, fiscal year-end
to December 31, tax year-end (7,036) 144,148 (109,312)
Related party expenses not paid at December 31,
not deductible for tax purposes 95,955 46,853 45,917
Related party expense paid in current year but expensed
for financial reporting purposes in prior year (46,853) (45,917) -
Adjustment for amortization for financial reporting
purposes over (under) amortization for tax purposes (10,925) 4,398 1,535
------------- ------------ -----------
Net Income (Loss) for federal income tax purposes $ (2,774,751) $ (873,831) $ 116,389
============== ============ ===========
</TABLE>
The carrying value of the Fund's Investment in Local Limited Partnerships is
approximately $904,000 greater for financial reporting purposes than for tax
return purposes because (i) differences in the equity in losses of the Local
Limited Partnerships for tax and financial reporting purposes primarily due to
accelerated depreciation used for tax purposes and (ii) the differences in the
amortization of acquisition fees for financial reporting and tax purposes.
<PAGE>
Boston Financial Tax Credit Fund VIII, A Limited Partnership
Schedule III - Real Estate and Accumulated Depreciation
of Property owned by Local Limited Partnerships
Which Registrant has Invested at March 31, 1997
<TABLE>
<CAPTION>
COST OF INTEREST AT ACQU'N DATE
------------------------------------
NET IMPROVEMENTS
NUMBER TOTAL BUILDINGS / CAPITALIZED
OF ENCUM- IMPROVEMENTS SUBSEQUENT TO
DESCRIPTION UNITS BRANCES * LAND & EQUIPMENT ACQUISITION
Low and Moderate
Income Apartment Complexes
<S> <C> <C> <C> <C> <C>
Green Wood Apartments 164 $5,268,002 $412,500 $7,774,612 $662,116
Gallatin, TN
Webster Court Apartments 92 2,890,712 296,423 5,003,633 10,461
Kent, WA
Springwood Apartments (2) 113 3,966,075 296,280 2,937,028 4,248,155
Tallahassee, FL
Meadowwood of Pella 30 1,151,128 101,910 1,135,077 789,977
Pella, IA
Hemlock Ridge 100 2,224,315 42,368 6,327,906 1,745,603
Livingston Manor, NY
Pike Place Apartments 144 3,362,591 312,000 5,336,336 0
Fort Smith, AR
West End Place 120 2,967,168 250,000 4,681,280 0
Springdale, AR
Oak Knoll Renaissance 256 5,479,042 1 1,346,557 9,157,842
Gary, IN
Beaverdam Creek 120 3,393,438 360,000 499,907 6,669,126
Mechanicsville, VA
Live Oak Plantation 218 7,887,047 1,767,000 1,998,509 10,199,211
West Palm Beach, FL
==================================================================================
1357 $38,589,518 $3,838,482 $37,040,845 $33,482,491
==================================================================================
</TABLE>
(1)Total aggregate for Federal Income Tax purposes is approximately $74,362,000.
(2)Boston Financial Tax Credit Fund VIII has an 80% ownership
interest in Springwood Apartments, A Limited Partnership.
* Mortgage notes payable generally represent
non-recourse financing of low-income housing
projects payable with terms of up to 40 years
with interest payable at rates ranging from 5.65%
to 10.62%. The Partnership has not guaranteed any
of these mortgage notes payable.
<PAGE>
Boston Financial Tax Credit Fund VIII, A Limited Partnership
Schedule III - Real Estate and Accumulated Depreciation
of Property owned by Local Limited Partnerships
Which Registrant has Invested at March 31, 1997
(continued)
<TABLE>
<CAPTION>
GROSS AMOUNT AT WHICH CARRIED AT DECEMBER 31, 1996 LIFE ON
-----------------------------------------------------------
WHICH
BUILDINGS DEPRECIATION
AND ACCUMULATED DATE IS COMPUTED DATE
DESCRIPTION LAND IMPROVEMENTS TOTAL DEPRECIATION BUILT (YEARS) ACQUIRED
- ----------- ---- ------------ ----- ------------ ----- ------- --------
Low and Moderate
Income Apartment
Complexes
<S> <C> <C> <C> <C> <C> <C>
Green Wood Apartments $412,500 $8,436,728 $8,849,228 $646,185 2/95 10 & 30 years 3/02/94
Gallatin, TN
Webster Court Apartments 296,423 5,014,094 $5,310,517 298,504 8/94 40 & 12 years 5/13/94
Kent, WA
Springwood Apartments (2) 296,280 7,185,183 $7,481,463 747,191 9/95 10 & 30 years 12/15/94
Tallahassee, FL
Meadowwood of Pella 88,909 1,938,055 $2,026,964 89,977 8/95 Useful Lives 6/03/94
Pella, IA
Hemlock Ridge 42,368 8,073,509 $8,115,877 655,708 5/95 Useful Lives 4/29/94
Livingston Manor, NY
Pike Place Apartments 312,000 5,336,336 $5,648,336 431,656 12/94 7 & 27.5 years 1/31/94
Fort Smith, AR
West End Place 250,000 4,681,280 $4,931,280 363,737 12/94 7 & 27.5 years 1/12/94
Springdale, AR
Oak Knoll Renaissance 222,591 10,281,809 $10,504,400 573,532 11/95 Useful Lives 11/01/94
Gary, IN
Beaverdam Creek 1,250,365 6,278,668 $7,529,033 343,626 9/95 Useful Lives 11/16/94
Mechanicsville, VA
Live Oak Plantation 1,792,680 12,172,040 $13,964,720 497,671 11/95 Useful Lives 6/28/94
West Palm Beach, FL
=============================================================
$4,964,116 $69,397,702 $74,361,818 $4,647,787
=============================================================
</TABLE>
<PAGE>
Boston Financial Tax Credit Fund VIII, A Limited Partnership
Schedule III - Real Estate and Accumulated Depreciation
of Property owned by Local Limited Partnerships
Which Registrant has Invested at March 31, 1997
(continued)
A reconciliation of the carrying amount of real estate and accumulated
depreciation for the years ended December 31, 1996, 1995 and 1994.
<TABLE>
<CAPTION>
Real Estate Investments 1996 1995 1994
- ------------------------------- ---------------- -------------------- --------------------
<S> <C> <C> <C>
Balance at beginning of period $74,142,268 $40,879,327 $ -
Additions during period 219,550 33,262,941 40,879,327
Less retirements during period 0 0 0
---------------- -------------------- --------------------
Balance at close of period $74,361,818 $74,142,268 $40,879,327
================ ==================== ====================
</TABLE>
<TABLE>
<CAPTION>
Accumulated Depreciation 1996 1995 1994
- ------------------------------- ---------------- -------------------- --------------------
<S> <C> <C> <C>
Balance at beginning of period $1,959,465 $ 174,709 $ -
Depreciation 2,688,322 1,784,756 174,709
Less retirements 0 0 0
---------------- -------------------- --------------------
Balance at close of period $4,647,787 $1,959,465 $174,709
================ ==================== =======================
</TABLE>
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND VIII
(A Limited Partnership)
Annual Report on form 10-K
For The Year Ended March 31, 1997
Reports of Independent Auditors
<PAGE>
[Letterhead]
[LOGO]
Keiter, Stevens, Hurst, Gary & Shreaves
A Professional Corporation
REPORT OF INDEPENDENT AUDITORS
To the Partners of
Beaverdam Creek Associates, L.P.
We have audited the accompanying statement of assets, liabilities and partners'
capital of Beaverdam Creek Associates, L.P., a Virginia Limited Partnership (the
"Partnership") as of December 31, 1996 and the related statements of changes in
partners' capital accounts, profit and loss, and cash flows for the year then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the assets, liabilities and partners' capital of
Beaverdam Creek Associates, L.P. as of December 31, 1996, and the results of its
operations and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data required by the Virginia
Housing Authority included herein is presented for the purposes of additional
analysis and is not a required part of the financial statements. Such
information has been subjected to the auditing procedures applied in the audit
of the financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.
/s/ Keiter, Stevens, Hurst, Gary & Shreaves
Keiter, Stevens, Hurst, Gary & Shreaves
January 29, 1997
<PAGE>
[Letterhead]
[LOGO]
Keiter, Stevens, Hurst, Gary & Shreaves
A Professional Corporation
REPORT OF INDEPENDENT AUDITORS
To the Partners of
Beaverdam Creek Associates, L.P.
We have audited the accompanying statement of assets, liabilities and partners'
capital of Beaverdam Creek Associates, L.P., a Virginia Limited Partnership (the
"Partnership") as of December 31, 1995 and the related statements of changes in
partners' capital accounts, profit and loss, and cash flows for the year then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the assets, liabilities and partners' capital of
Beaverdam Creek Associates, L.P. as of December 31, 1995, and the results of its
operations and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data required by the Virginia
Housing Authority included herein is presented for the purposes of additional
analysis and is not a required part of the financial statements. Such
information has been subjected to the auditing procedures applied in the audit
of the financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.
/s/ Keiter, Stevens, Hurst, Gary & Shreaves
Keiter, Stevens, Hurst, Gary & Shreaves
February 14, 1996
<PAGE>
[Letterhead]
[LOGO]
Keiter, Stevens, Hurst, Gary & Shreaves
A Professional Corporation
REPORT OF INDEPENDENT AUDITORS
To the Partners of
Beaverdam Creek Associates, L.P.
We have audited the accompanying statement of assets, liabilities and partners'
capital of Beaverdam Creek Associates, L.P., a Virginia Limited Partnership (the
"Partnership") as of December 31, 1994, and the related statements of changes in
partners' capital accounts, profit and loss, and cash flows for the year then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the , the assets, liabilities and partners' capital of
Beaverdam Creek Associates, L.P. as of December 31, 1995, and the results of its
operations and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data required by the Virginia
Housing Authority included herein is presented for the purposes of additional
analysis and is not a required part of the financial statements. Such
information has been subjected to the auditing procedures applied in the audit
of the financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.
/s/ Keiter, Stevens, Hurst, Gary & Shreaves
Keiter, Stevens, Hurst, Gary & Shreaves
January 31, 1995
<PAGE>
[Letterhead]
[LOGO]
KPMG Peat Marwick LLP
Independent Auditors' Report
The Partners
Green Wood Apartments,
A Limited Partnership:
We have audited the balance sheets of Green Wood Apartments, A Limited
Partnership as of December 31, 1996 and 1995, and the related statements of
loss, partners' capital (deficit), and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position of Green Wood Apartments, A Limited
Partnership as of December 31, 1996 and 1995, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/ KPMG Peat Marwick LLP
February 7, 1997
<PAGE>
[Letterhead]
[LOGO]
KPMG Peat Marwick LLP
Independent Auditors' Report
The Partners
Green Wood Apartments,
A Limited Partnership:
We have audited the balance sheets of Green Wood Apartments, A Limited
Partnership as of December 31, 1995 and 1994, and the related statements of
loss, partners' capital (deficit), and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position of Green Wood Apartments, A Limited
Partnership as of December 31, 1995 and 1994, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/ KPMG Peat Marwick LLP
February 9, 1996
<PAGE>
[Letterhead]
[LOGO]
HASSON LAIBLE & CO., P.S.
INDEPENDENT AUDITOR'S REPORT
To the General Partners of
Webster Court Apartments Limited Partnership:
We have audited the accompanying balance sheet of Webster Court Apartments,
Limited Partnership, a Washington Limited Partnership, as of December 31, 1996,
and the related statements of income and partners' equity, and cash flows for
the year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Webster Court Apartments,
Limited Partnership as of December 31, 1996, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/ Hasson Laible & Co.
Seattle, Washington
March 31, 1997
[LOGO]
HASSON LAIBLE & CO., P.S.
INDEPENDENT AUDITOR'S REPORT
To the General Partners of
Webster Court Apartments Limited Partnership:
We have audited the accompanying balance sheet of Webster Court Apartments,
Limited Partnership, a Washington Limited Partnership, as of December 31, 1995,
and the related statements of income and partners' equity, and cash flows for
the year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Webster Court Apartments,
Limited Partnership as of December 31, 1995, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/ Hasson Laible & Co.
Seattle, Washington
February 28, 1996
<PAGE>
[Letterhead]
[LOGO]
EDDIE I. HASSON & CO., P.S.
INDEPENDENT AUDITOR'S REPORT
To the General Partners of
Webster Court Apartments Limited Partnership:
We have audited the accompanying balance sheet of Webster Court Apartments,
Limited Partnership, a Washington Limited Partnership, as of December 31, 1994
and the related statements of income and partners' equity, and cash flow for the
year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Webster Court Apartments,
Limited Partnership as of December 31, 1994, and the results of its operations
and its cash flow for the year then ended, in conformity with generally accepted
accounting principles.
/s/ Eddie Hasson & Co
Seattle, Washington
March 6, 1995
<PAGE>
[Letterhead]
[LOGO]
KPMG Peat Marwick LLP
Independent Auditors' Report
The Partners
Springwood Apartments, A Limited Partnership:
We have audited the accompanying balance sheets of Springwood Apartments, A
Limited Partnership as of December 31, 1996 and 1995, and the related statements
of loss, partners' capital, and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Springwood Apartments, A
Limited Partnership as of December 31, 1996 and 1995 and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
February 7, 1997
<PAGE>
[Letterhead]
[LOGO]
KPMG Peat Marwick LLP
Independent Auditors' Report
The Partners
Springwood Apartments, A Limited Partnership:
We have audited the accompanying balance sheets of Springwood Apartments, A
Limited Partnership as of December 31, 1995 and 1994, and the related statements
of loss, partners' capital, and cash flows for the year ended December 31, 1995.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Springwood Apartments, A
Limited Partnership as of December 31, 1995 and 1994 and the results of its
operations and its cash flows for the year ended December 31, 1995 in conformity
with generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
February 16, 1996
<PAGE>
Letterhead]
[LOGO]
Reznick Fedder & Silverman
INDEPENDENT AUDITORS' REPORT
To the Partners RMH Associates, L.P.
We have audited the accompanying balance sheets of RMH Associates, L.P. as of
December 31, 1996 and 1995, and the related statements of income and expense and
cash flows in the form prescribed by New York State Division of Housing and
Community Renewal (DHCR) for the year ended December 31, 1996. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of RMH Associates, L.P. as of
December 31, 1996 and 1995, and the results of its operations and its cash flows
for the year ended December 31, 1996, in conformity with generally accepted
accounting principles.
Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information on pages 27 through 40
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information, except for the information
marked "unaudited", on which we express no opinion, has been subjected to the
auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
<PAGE>
In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated February 4,
1997 on our consideration of RMH Associates, L.P. internal control structure and
on its compliance with specific requirements applicable to non major HUD
programs, affirmative fair housing, and laws and regulations applicable to the
financial statements.
/s/Reznick Fedder & Silverman
Bethesda, Maryland Federal Employer
February 4, 1997 Identification Number:
52-1088612
Audit Principal: Lester A. Kanis
<PAGE>
[Letterhead]
[LOGO]
Reznick Fedder & Silverman
INDEPENDENT AUDITORS' REPORT
To the Partners RMH Associates, L.P.
We have audited the accompanying balance sheets of RMH Associates, L.P. as of
December 31, 1995 and 1994, and the related statements of operations and cash
flows in the form prescribed by New York State Division of Housing and Community
Renewal (DHCR) for the year ended December 31, 1995. These financial statements
are the responsibility of the partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of RMH Associates, L.P. as of
December 31, 1995 and 1994, and the results of its operations and its cash flows
for the year ended December 31, 1995, in conformity with generally accepted
accounting principles.
Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information on pages 28 through 43
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information, except for the information
marked "unaudited", on which we express no opinion, has been subjected to the
auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued reports
dated January 31, 1996 on our consideration of RMH Associates, L.P. internal
control structure and on its compliance with specific requirements applicable to
non major HUD programs, affirmative fair housing, and laws and regulations
applicable to the financial statements.
/s/Reznick Fedder & Silverman
Bethesda, Maryland Federal Employer
January 31, 1996 Identification Number:
52-1088612
Audit Principal: Lester A. Kanis
<PAGE>
[Letterhead]
[LOGO]
VMcHC & S Vroman, McGowen, Hurst, Clark & Smith P.C.
INDEPENDENT AUDITOR'S REPORT
To the Partners
Meadow Wood Associates of Pella, L.P.
Des Moines, Iowa
We have audited the accompanying balance sheets of Meadow Wood Associates of
Pella, L.P. (a limited partnership), as of December 31, 1996 and 1995, and the
related statements of operations, partners' capital, and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Meadow Wood Associates of
Pella, L.P., as of December 31, 1996 and 1995, and the results of its
operations, changes in its partners' capital, and its cash flows for the years
then ended, in conformity with generally accepted accounting principles.
/s/ Vroman, McGowen, Hurst, Clark & Smith P.C.
Des Moines, Iowa
January 31, 1997
<PAGE>
[Letterhead]
[LOGO]
VMcHC & S Vroman, McGowen, Hurst, Clark & Smith P.C.
INDEPENDENT AUDITOR'S REPORT
To the Partners
Meadow Wood Associates of Pella, L.P.
Des Moines, Iowa
We have audited the accompanying balance sheets of Meadow Wood Associates of
Pella, L.P. (a limited partnership), as of December 31, 1995 and 1994, and the
related statements of operations, partners' capital, and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Meadow Wood Associates of
Pella, L.P., as of December 31, 1995 and 1994, and the results of its
operations, changes in its partners' capital, and its cash flows for the years
then ended, in conformity with generally accepted accounting principles.
/s/ Vroman, McGowen, Hurst, Clark & Smith P.C.
Des Moines, Iowa
January 31, 1996
<PAGE>
[Letterhead]
[LOGO]
Rick J. Tanneberger
Certified Public Accountant
Independent Auditor's Report
The Partners
Pike Place, A Limited Partnership
We have audited the accompanying balance sheets of Pike Place, A Limited
Partnership, as of December 31, 1996 and 1995, and the related statements of
income, partners' capital and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audits in accordance with generally accepted auditing
standards. These standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Pike Place, A Limited
Partnership as of December 31, 1996 and 1995, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information presented
on page 11 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
February 13, 1997
<PAGE>
[Letterhead]
[LOGO]
Rick J. Tanneberger
Certified Public Accountant
Independent Auditor's Report
The Partners
Pike Place, A Limited Partnership
We have audited the accompanying balance sheets of Pike Place, A Limited
Partnership, as of December 31, 1995 and 1994, and the related statements of
income, partners' capital and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audits in accordance with generally accepted auditing
standards. These standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Pike Place, A Limited
Partnership as of December 31, 1995 and 1994, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information presented
on page 11 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
February 19, 1996
<PAGE>
[Letterhead]
[LOGO]
Rick J. Tanneberger
Certified Public Accountant
Independent Auditor's Report
The Partners
West End Place, A Limited Partnership
We have audited the accompanying balance sheets of West End Place, A Limited
Partnership, as of December 31, 1996 and 1995, and the related statements of
income, partners' capital and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audits in accordance with generally accepted auditing
standards. These standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of West End Place, A Limited
Partnership as of December 31, 1996 and 1995, and the results of its operations
and its cash flows for the years then ended, in conformity with generally
accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information presented
on page 11 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
February 12, 1997
<PAGE>
[Letterhead]
[LOGO]
Rick J. Tanneberger
Certified Public Accountant
Independent Auditor's Report
The Partners
West End Place, A Limited Partnership
We have audited the accompanying balance sheets of West End Place, A Limited
Partnership, as of December 31, 1995 and 1994, and the related statements of
income, partners' capital and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audits in accordance with generally accepted auditing
standards. These standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of West End Place, A Limited
Partnership as of December 31, 1995 and 1994, and the results of its operations
and its cash flows for the years then ended, in conformity with generally
accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information presented
on page 11 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
February 19, 1996
<PAGE>
[Letterhead]
[LOGO]
Haran & Associates Ltd
Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT
To the Partners
OAK KNOLL RENAISSANCE LIMITED PARTNERSHIP
Gary, Indiana
We have audited the accompanying balance sheet of OAK KNOLL RENAISSANCE LIMITED
PARTNERSHIP (a Limited Partnership) as of December 31, 1996,and the related
statements of profit and loss, changes in partners' equity and statement of cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statements presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position of OAK KNOLL RENAISSANCE LIMITED
PARTNERSHIP as of December 31, 1996, and the results of its operations and its
cash flows for the year then ended, in conformity with generally accepted
accounting principles.
The accompanying supplementary information shown on Page 16 through 20 is
presented for purposes of additional analysis and is not a required part
of the basic financial statements. Such information has been subjected to
the auditing procedures applied in the audit of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the financial statements taken as a whole.
/s/ Haran & Associates Ltd
Haran & Associates Ltd
Certified Public Accountant
Wilmette, Illinois
Illinois Certificate No. 060-002892
Empoyer Identification No. 36-3097692
January 18, 1997
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Haran & Associates Ltd
Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT
To the Partners
OAK KNOLL RENAISSANCE LIMITED PARTNERSHIP
Gary, Indiana
We have audited the accompanying balance sheet of OAK KNOLL RENAISSANCE LIMITED
PARTNERSHIP (a Limited Partnership) as of December 31, 1995,and the related
statements of profit and loss, changes in partners' equity and statement of cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statements presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position of OAK KNOLL RENAISSANCE LIMITED
PARTNERSHIP as of December 31, 1995, and the results of its operations and its
cash flows for the year then ended, in conformity with generally accepted
accounting principles.
The accompanying supplementary information shown on Page 14 is presented for
purposes of additional analysis and is not a required part of the basic
financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ Haran & Associates Ltd
Haran & Associates Ltd
Certified Public Accountant
Wilmette, Illinois
Illinois Certificate No. 060-002892
Empoyer Identification No. 36-3097692
February 2, 1996
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Reznick Fedder & Silverman
INDEPENDENT AUDITORS' REPORT
To the Partners
Schickendanz Bros. - Palm Beach Ltd.
We have audited the accompanying balance sheet of Schickendanz Bros. - Palm
Beach Ltd. as of December 31, 1996, and the related statements of operations,
partners' equity and cash flows for the year then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Schickendanz Bros. - Palm Beach
Ltd. as of December 31, 1996, and the results of its operations and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
/s/Reznick Fedder & Silverman
Atlanta, Georgia
January 21, 1997
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[Letterhead]
[LOGO]
Reznick Fedder & Silverman
INDEPENDENT AUDITORS' REPORT
To the Partners
Schickendanz Bros. - Palm Beach Ltd.
We have audited the accompanying balance sheet of Schickendanz Bros. - Palm
Beach Ltd. as of December 31, 1995, and the related statements of operations,
partners' equity and cash flows for the year then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Schickendanz Bros. - Palm Beach
Ltd. as of December 31, 1995, and the results of its operations and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
/s/Reznick Fedder & Silverman
Bethesda, Maryland
January 30, 1996
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SCHWEITZER & DOBOSZ
March 13, 1995
To the Partners
Schickendanz Bros
Palm Beach Limited
Riviera Beach, Florida
We have reviewed the accompanying statement of asssets, liabilities and
partners' capital of Schickendanz Bros. - Palm Beach Limited as of December 31,
1994, and the related statements of revenue, expenses and partners' capital and
cash flows from inception (June 28, 1994) to December 31, 1994 in accordance
with Statements on Standards for Accounting and Review Services issued by the
American Institute of Certified Public Accountants. All information included in
these financial statements is the representation of the management of
Schickendanz Bros. Palm Beach Limited.
A review consists principally of inquiries of Company personnel and analytical
procedures applied to financial data. It is substantially less in scope than
examination in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements in order for them to be in
conformity with generally accepted accounting principals
/s/ Schweitzer & Dobosz
SCHWITZER & DOBOSZ
Certfified Public Accountants
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 273,412
<SECURITIES> 1,442,676
<RECEIVABLES> 000
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 000
<PP&E> 000
<DEPRECIATION> 000
<TOTAL-ASSETS> 29,078,258<F1>
<CURRENT-LIABILITIES> 167,520<F2>
<BONDS> 000
000
000
<COMMON> 000
<OTHER-SE> 28,910,738
<TOTAL-LIABILITY-AND-EQUITY> 29,078,258
<SALES> 000
<TOTAL-REVENUES> 100,536<F3>
<CGS> 000
<TOTAL-COSTS> 000
<OTHER-EXPENSES> 425,888<F4>
<LOSS-PROVISION> 000
<INTEREST-EXPENSE> 000
<INCOME-PRETAX> 000
<INCOME-TAX> 000
<INCOME-CONTINUING> 000
<DISCONTINUED> 000
<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> (2,247,908)<F5>
<EPS-PRIMARY> (60.98)
<EPS-DILUTED> 000
<FN>
<F1>Included in total assets: Investments in Local Limited Partnerships of
$26,813,245, Restricted cash of $503,031, Organizational costs, net of
$19,167 and other assets of $26,727.
<F2> Liabilities include Accounts payable to affiliate of $128,791 and
Accrued expenses of $38,729.
<F3>Total revenue includes: Investment of $81,930 and Other of $18,606.
<F4>Included in Other Expenses: Asset Management fees of $193,635, General and
Administrative of $195,069, and Amortization of $37,184.
<F5>Net loss includes: Equity in losses of Local Limited Partnerships of
$1,922,556.
</FN>
</TABLE>
