FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended June 30, 2004
or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission file number 0-17679
BOSTON CAPITAL TAX CREDIT FUND LIMITED PARTNERSHIP.
(Exact name of registrant as specified in its charter)
|
Delaware |
04-3006542 |
|
(State or other jurisdiction |
(I.R.S. Employer |
|
of incorporation or organization) |
Identification No.) |
One Boston Place, Suite 2100, Boston, Massachusetts 02108
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617)624-8900
(Former name, former address and former fiscal year, if changed since last report)
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 preceeding 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 |
_ |
BOSTON CAPITAL TAX CREDIT FUND LIMITED PARTNERSHIP
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2004
TABLE OF CONTENTS
FOR THE QUARTER ENDED JUNE 30, 2004
Three Months Operations Series 1 *
Three Months Operations Series 2 * Three Months Operations Series 3 * Three Months Operations Series 4 14 Three Months Operations Series 5 15 Three Months Operations Series 6 16 STATEMENTS OF CHANGES IN PARTNERS CAPITAL 17 Cash Flows Series 2 23 Cash Flows Series 3 24 Cash Flows Series 4 25 Cash Flows Series 5 26 Cash Flows Series 6 27 Notes to Financial Statements * Note A Organization 28 Note B Accounting * Note C Related Party Transactions 29 Note D Investments 31Statement of operation
Combined Statements Series 1 32 Combined Statements_Series 2 33 Combined Statements Series 3 34 Combined Statements Series 4 35 Combined Statements Series 5 36 Combined Statements Series 6 37 Note E Taxable Loss 38 Liquidity 39 Capital Resources 39 Results of Operations 40 Critical_Accounting_Policies 48 Quantitative_and_Qualitative 48 Controls_and_Procedures 48 Part II Other Information 49 Signatures 50
Boston Capital Tax Credit Fund Limited Partnership
BALANCE SHEETS
|
|
June 30, 2004 (Unaudited) |
March 31, 2004 (Audited) |
|
ASSETS |
||
|
INVESTMENTS IN OPERATING PARTNERSHIPS (Note D) |
$ 7,018,055 |
$ 7,105,160 |
|
OTHER ASSETS |
||
|
Cash and cash equivalents |
2,245,617 |
2,321,739 |
|
Other assets |
337,412 |
312,412 |
|
|
|
|
|
$ 9,601,084 |
$ 9,739,311 |
|
|
LIABILITIES |
||
|
Accounts payable |
$ - |
$ - |
|
Accounts payable affiliates (note C) |
11,680,608 |
11,510,858 |
|
PARTNERS CAPITAL |
||
|
Assignees |
|
|
|
General Partner |
(870,707) |
(867,627) |
|
|
(2,079,524) |
(1,771,547) |
|
$ 9,601,084 |
$ 9,739,311 |
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund Limited Partnership
BALANCE SHEETS
Series 1
|
|
June 30, 2004 (Unaudited) |
March 31, 2004 (Audited) |
|
ASSETS |
||
|
INVESTMENTS IN OPERATING PARTNERSHIPS (Note D) |
$ - |
$ - |
|
OTHER ASSETS |
||
|
Cash and cash equivalents |
56,385 |
57,437 |
|
Other assets |
- |
- |
|
$ 56,385 |
$ 57,437 |
|
|
LIABILITIES |
||
|
Accounts payable |
$ - |
$ - |
|
Accounts payable affiliates (note C) |
2,464,387 |
2,421,834 |
|
PARTNERS CAPITAL |
||
|
Assignees |
|
|
|
General Partner |
(137,304) |
(136,868) |
|
(2,408,002) |
(2,364,397) |
|
|
$ 56,385 |
$ 57,437 |
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund Limited Partnership
BALANCE SHEETS
Series 2
|
|
June 30, 2004 (Unaudited) |
March 31, 2004 (Audited) |
|
ASSETS |
||
|
INVESTMENTS IN OPERATING PARTNERSHIPS (Note D) |
$ 32,406 |
$ 29,483 |
|
OTHER ASSETS |
||
|
Cash and cash equivalents |
5,765 |
4,947 |
|
Other assets |
312,206 |
312,206 |
|
$ 350,377 |
$ 346,636 |
|
|
LIABILITIES |
||
|
Accounts payable |
$ - |
$ - |
|
Accounts payable affiliates (note C) |
892,336 |
875,186 |
|
PARTNERS CAPITAL |
||
|
Assignees |
|
|
|
General Partner |
(74,762) |
(74,628) |
|
(541,959) |
(528,550) |
|
|
$ 350,377 |
$ 346,636 |
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund Limited Partnership
BALANCE SHEETS
Series 3
|
|
June 30, 2004 (Unaudited) |
March 31, 2004 (Audited) |
|
ASSETS |
||
|
INVESTMENTS IN OPERATING PARTNERSHIPS (Note D) |
$ - |
$ - |
|
OTHER ASSETS |
||
|
Cash and cash equivalents |
|
1,678,100 |
|
Other assets |
20,500 |
- |
|
$ 1,705,014 |
$ 1,678,100 |
|
|
LIABILITIES |
||
|
Accounts payable |
$ - |
$ - |
|
Accounts payable affiliates (note C) |
3,222,806 |
3,148,294 |
|
PARTNERS CAPITAL |
||
|
Assignees |
|
|
|
General Partner |
(267,092) |
(266,616) |
|
(1,517,792) |
(1,470,194) |
|
|
$ 1,705,014 |
$ 1,678,100 |
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund Limited Partnership
BALANCE SHEETS
Series 4
|
|
June 30, 2004 (Unaudited) |
March 31, 2004 (Audited) |
|
ASSETS |
||
|
INVESTMENTS IN OPERATING PARTNERSHIPS (Note D) |
$ 2,409,546 |
$ 2,523,132 |
|
OTHER ASSETS |
||
|
Cash and cash equivalents |
326,090 |
419,938 |
|
Other assets |
4,706 |
206 |
|
$ 2,740,342 |
$ 2,943,276 |
|
|
LIABILITIES |
||
|
Accounts payable |
$ - |
$ - |
|
Accounts payable affiliates (note C) |
2,825,336 |
2,834,178 |
|
PARTNERS CAPITAL |
||
|
Assignees |
|
|
|
General Partner |
(260,955) |
(259,014) |
|
(84,994) |
109,098 |
|
|
$ 2,740,342 |
$ 2,943,276 |
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund Limited Partnership
BALANCE SHEETS
Series 5
|
|
June 30, 2004 (Unaudited) |
March 31, 2004 (Audited) |
|
ASSETS |
||
|
INVESTMENTS IN OPERATING PARTNERSHIPS (Note D) |
$ 336,147 |
$ 326,846 |
|
OTHER ASSETS |
||
|
Cash and cash equivalents |
64,650 |
66,335 |
|
Other assets |
- |
- |
|
$ 400,797 |
$ 393,181 |
|
|
LIABILITIES |
||
|
Accounts payable |
$ - |
$ - |
|
Accounts payable affiliates (note C) |
345,237 |
337,056 |
|
PARTNERS CAPITAL |
||
|
Assignees |
|
|
|
General Partner |
(41,195) |
(41,189) |
|
55,560 |
56,125 |
|
|
$ 400,797 |
$ 393,181 |
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund Limited Partnership
BALANCE SHEETS
Series 6
|
|
June 30, 2004 (Unaudited) |
March 31, 2004 (Audited) |
|
ASSETS |
||
|
INVESTMENTS IN OPERATING PARTNERSHIPS (Note D) |
$ 4,239,956 |
$ 4,225,699 |
|
OTHER ASSETS |
||
|
Cash and cash equivalents |
108,213 |
94,982 |
|
Other assets |
- |
- |
|
$ 4,348,169 |
$ 4,320,681 |
|
|
LIABILITIES |
||
|
Accounts payable |
$ - |
$ - |
|
Accounts payable affiliates (note C) |
1,930,506 |
1,894,310 |
|
PARTNERS CAPITAL |
||
|
Assignees |
|
|
|
General Partner |
(89,399) |
(89,312) |
|
2,417,663 |
2,426,371 |
|
|
$ 4,348,169 |
$ 4,320,681 |
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund Limited Partnership
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
|
|
|
|
|
Income |
||
|
Interest income |
$ 4,092 |
$ 2,310 |
|
Miscellaneous income |
9,982 |
19,407 |
|
14,074 |
21,717 |
|
|
Share of income (loss) from Operating |
|
|
|
Expenses |
||
|
Professional fees |
18,337 |
20,130 |
|
Partnership management fees (Note C) |
180,232 |
176,292 |
|
General and administrative fees |
50,142 |
8,819 |
|
|
|
|
|
NET GAIN/(LOSS) |
$ (307,977) |
$ 1,562,257 |
|
Net income (loss) allocated to assignees |
$ (304,897) |
$ 1,546,634 |
|
Net income (loss) allocated to general partner |
|
|
|
Net income (loss) per BAC |
$ (.14) |
$ .50 |
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund Limited Partnership
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
Series 1
|
|
|
|
|
Income |
||
|
Interest income |
$ 58 |
$ 68 |
|
Miscellaneous income |
- |
9,384 |
|
58 |
9,452 |
|
|
Share of income (loss) from Operating |
- |
- |
|
Expenses |
||
|
Professional fees |
3,345 |
3,645 |
|
Partnership management fees (Note C) |
38,426 |
34,028 |
|
General and administrative fees |
1,892 |
1,566 |
|
|
|
|
|
NET LOSS |
$ (43,605) |
$ (29,787) |
|
Net loss allocated to assignees |
$ (43,169) |
$ (29,489) |
|
Net loss allocated to general partner |
|
|
|
Net loss per BAC |
$ (.03) |
$ (.02) |
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund Limited Partnership
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
Series 2
|
|
|
|
|
Income |
||
|
Interest income |
$ 6 |
$ 8 |
|
Miscellaneous income |
150 |
1,023 |
|
|
|
|
|
Share of income (loss) from Operating |
2,923 |
(4,695) |
|
Expenses |
||
|
Professional fees |
1,856 |
2,150 |
|
Partnership management fees |
13,436 |
14,704 |
|
General and administrative fees |
1,196 |
895 |
|
|
|
|
|
NET LOSS |
$ (13,409) |
$ (21,413) |
|
Net loss allocated to assignees |
$ (13,275) |
$ (21,199) |
|
Net loss allocated to general partner |
|
|
|
Net loss per BAC |
$ (.02) |
$ (.03) |
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund Limited Partnership
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
Series 3
|
|
|
|
|
Income |
||
|
Interest income |
$ 3,172 |
$ 1,980 |
|
Miscellaneous income |
8,901 |
7,800 |
|
12,073 |
9,780 |
|
|
Share of income (loss) from Operating |
|
|
|
Expenses |
||
|
Professional fees |
4,950 |
5,250 |
|
Partnership management fees (Note C) |
42,472 |
34,659 |
|
General and administrative expenses |
12,249 |
2,997 |
|
|
|
|
|
NET LOSS |
$ (47,598) |
$ 1,925,500 |
|
Net income (loss) allocated to assignees |
$ (47,122) |
$ 1,906,245 |
|
Net income (loss) allocated to general partner |
|
|
|
Net income (loss) per BAC |
$ (.02) |
$ .66 |
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund Limited Partnership
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
Series 4
|
|
|
|
|
Income |
||
|
Interest income |
$ 688 |
$ 19 |
|
Miscellaneous income |
- |
- |
|
688 |
19 |
|
|
Share of income (loss) from Operating |
(113,586) |
(293,479) |
|
Expenses |
||
|
Professional fees |
3,960 |
4,260 |
|
Partnership management fees (Note C) |
44,276 |
55,617 |
|
General and administrative fees |
32,958 |
2,026 |
|
|
|
|
|
NET LOSS |
$ (194,092) |
$ (355,363) |
|
Net loss allocated to assignees |
$ (192,151) |
$ (351,809) |
|
Net loss allocated to general partner |
|
|
|
Net loss per BAC |
$ (.06) |
$ (.12) |
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund Limited Partnership
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
Series 5
|
|
|
|
|
Income |
||
|
Interest income |
$ 67 |
$ 112 |
|
Miscellaneous income |
- |
1,200 |
|
67 |
1,312 |
|
|
Share of income (loss) from Operating |
9,301 |
(10,382) |
|
Expenses |
||
|
Professional fees |
1,500 |
1,800 |
|
Partnership management fees (Note C) |
7,681 |
9,043 |
|
General and administrative fees |
752 |
526 |
|
|
|
|
|
NET LOSS |
$ (565) |
$ (20,439) |
|
Net loss allocated to assignees |
$ (559) |
$ (20,235) |
|
Net loss allocated to general partner |
|
|
|
Net loss per BAC |
$ (.00) |
$ (.04) |
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund Limited Partnership
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
Series 6
|
|
|
|
|
Income |
||
|
Interest income |
$ 101 |
$ 123 |
|
Miscellaneous income |
931 |
- |
|
1,032 |
123 |
|
|
Share of income (loss) from Operating |
28,022 |
95,711 |
|
Expenses |
||
|
Professional fees |
2,726 |
3,025 |
|
Partnership management fees (Note C) |
33,941 |
28,241 |
|
General and administrative expenses |
1,095 |
809 |
|
|
|
|
|
NET INCOME |
$ (8,708) |
$ 63,759 |
|
Net income allocated to assignees |
$ (8,621) |
$ 63,121 |
|
Net income allocated to general partner |
|
|
|
Net income per BAC |
$ (.01) |
$ .05 |
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund Limited Partnership
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
Three Months Ended June 30,
(Unaudited)
|
|
|
|
|
|
Partners' capital |
|
|
|
|
|
|||
|
Net income (loss) |
(304,897) |
(3,080) |
(307,977) |
|
Partners' capital |
|
|
|
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund Limited Partnership
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
Three Months Ended June 30,
(Unaudited)
|
Assignees |
General |
Total |
|
|
Series 1 |
|||
|
Partners' capital |
|
|
|
|
|
|||
|
Net income (loss) |
(43,169) |
(436) |
(43,605) |
|
Partners' capital |
|
|
|
|
Series 2 |
|||
|
Partners' capital |
|
|
|
|
Net income (loss) |
(13,275) |
(134) |
(13,409) |
|
Partners' capital |
|
|
|
The accompanying notes are an integral part of these statements.
Boston Capital Tax Credit Fund Limited Partnership
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
Three Months Ended June 30,
(Unaudited)
|
Assignees |
General |
Total |
|
|
Series 3 |
|||
|
Partners' capital |
|
|
|
|
|
|||
|
Net income (loss) |
(47,122) |
(476) |
(47,598) |
|
Partners' capital |
|
|
|
|
Series 4 |
|||
|
Partners' capital |
|
|
|
|
Net income (loss) |
(192,151) |
(1,941) |
(194,092) |
|
Partners' capital |
|
|
|
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund Limited Partnership
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
Three Months Ended June 30,
(Unaudited)
|
Assignees |
General |
Total |
|
|
Series 5 |
|||
|
Partners' capital |
|
|
|
|
|
|||
|
Net income (loss) |
(559) |
(6) |
(565) |
|
Partners' capital |
|
|
|
|
Partners' capital |
|
|
|
|
|
|||
|
Net income (loss) |
(8,621) |
(87) |
(8,708) |
|
Partners' capital |
|
|
|
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund Limited Partnership
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
|
2004 |
2003 |
|
|
Cash flows from operating activities: |
||
|
Net Income (Loss) |
$ (307,977) |
$ 1,562,257 |
|
Adjustments |
||
|
Distributions from Operating |
|
|
|
Amortization |
- |
- |
|
Share of (Income) Loss from Operating Partnerships |
|
|
|
Changes in assets and liabilities |
||
|
Increase (Decrease) in accounts |
|
|
|
Decrease (Increase) in other |
|
|
|
Net cash (used in) provided by |
|
|
|
Cash flows from investing activity: |
||
|
Proceeds from sale of operating limited partnerships: |
|
|
|
Net cash (used in) provided by |
|
|
|
INCREASE (DECREASE) IN CASH AND CASH |
|
|
|
Cash and cash equivalents, beginning |
2,321,739 |
217,560 |
|
Cash and cash equivalents, ending |
|
|
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund Limited Partnership
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 1
|
2004 |
2003 |
|
|
Cash flows from operating activities: |
||
|
Net Income (Loss) |
$ (43,605) |
$ (29,787) |
|
Adjustments |
||
|
Distributions from Operating |
|
|
|
Amortization |
- |
- |
|
Share of (Income) Loss from Operating Partnerships |
|
|
|
Changes in assets and liabilities |
||
|
Increase (Decrease) in accounts |
|
|
|
Decrease (Increase) in other |
|
|
|
Net cash (used in) provided by |
|
|
|
Cash flows from investing activity: |
||
|
Proceeds from sale of operating limited partnerships: |
|
|
|
Net cash (used in) provided by |
|
|
|
INCREASE (DECREASE) IN CASH AND CASH |
|
|
|
Cash and cash equivalents, beginning |
57,437 |
46,413 |
|
Cash and cash equivalents, ending |
|
|
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund Limited Partnership
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 2
|
2004 |
2003 |
|
|
Cash flows from operating activities: |
||
|
Net Income (Loss) |
$ (13,409) |
$ (21,413) |
|
Adjustments |
||
|
Distributions from Operating |
|
|
|
Amortization |
- |
- |
|
Share of (Income) Loss from Operating Partnerships |
|
4,695 |
|
Changes in assets and liabilities |
||
|
Increase (Decrease) in accounts |
|
|
|
Decrease (Increase) in other |
|
|
|
Net cash (used in) provided by |
|
|
|
Cash flows from investing activity: |
||
|
Proceeds from sale of operating limited partnerships: |
|
|
|
Net cash (used in) provided by |
|
|
|
INCREASE (DECREASE) IN CASH AND CASH |
|
|
|
Cash and cash equivalents, beginning |
4,947 |
4,541 |
|
Cash and cash equivalents, ending |
|
|
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund Limited Partnership
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 3
|
2004 |
2003 |
|
|
Cash flows from operating activities: |
||
|
Net Income (Loss) |
$ (47,598) |
$ 1,925,500 |
|
Adjustments |
||
|
Distributions from Operating |
|
|
|
Amortization |
- |
- |
|
Share of (Income) Loss from Operating Partnerships |
|
|
|
Changes in assets and liabilities |
||
|
Increase (Decrease) in accounts |
|
|
|
Decrease (Increase) in other |
|
|
|
Net cash (used in) provided by |
6,414 |
23,862 |
|
Cash flows from investing activity: |
||
|
Proceeds from sale of operating limited partnerships: |
|
|
|
Net cash (used in) provided by |
|
|
|
INCREASE (DECREASE) IN CASH AND CASH |
|
|
|
Cash and cash equivalents, beginning |
1,678,100 |
9,099 |
|
Cash and cash equivalents, ending |
|
|
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund Limited Partnership
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 4
|
2004 |
2003 |
|
|
Cash flows from operating activities: |
||
|
Net Income (Loss) |
$ (194,092) |
$ (355,363) |
|
Adjustments |
||
|
Distributions from Operating |
|
|
|
Amortization |
- |
- |
|
Share of (Income) Loss from Operating Partnerships |
|
|
|
Changes in assets and liabilities |
||
|
Increase (Decrease) in accounts |
|
|
|
Decrease (Increase) in other |
|
|
|
Net cash (used in) provided by |
|
|
|
Cash flows from investing activity: |
||
|
Proceeds from sale of operating limited partnerships: |
|
|
|
Net cash (used in) provided by |
|
|
|
INCREASE (DECREASE) IN CASH AND CASH |
|
|
|
Cash and cash equivalents, beginning |
419,938 |
14,705 |
|
Cash and cash equivalents, ending |
|
|
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund Limited Partnership
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 5
|
2004 |
2003 |
|
|
Cash flows from operating activities: |
||
|
Net Income (Loss) |
$ (565) |
$ (20,439) |
|
Adjustments |
||
|
Distributions from Operating |
|
|
|
Amortization |
- |
- |
|
Share of (Income) Loss from Operating Partnerships |
|
|
|
Changes in assets and liabilities |
||
|
Increase (Decrease) in accounts |
|
|
|
Decrease (Increase) in other |
|
|
|
Net cash (used in) provided by |
|
|
|
Cash flows from investing activity: |
||
|
Proceeds from sale of operating limited partnerships: |
|
|
|
Net cash (used in) provided by |
|
|
|
INCREASE (DECREASE) IN CASH AND CASH |
|
|
|
Cash and cash equivalents, beginning |
66,335 |
76,346 |
|
Cash and cash equivalents, ending |
|
|
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund Limited Partnership
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 6
|
2004 |
2003 |
|
|
Cash flows from operating activities: |
||
|
Net Income (Loss) |
$ (8,708) |
$ 63,759 |
|
Adjustments |
||
|
Distributions from Operating |
|
|
|
Amortization |
- |
- |
|
Share of (Income) Loss from Operating Partnerships |
|
|
|
Changes in assets and liabilities |
||
|
Increase (Decrease) in accounts |
|
|
|
Decrease (Increase) in other |
|
|
|
Net cash (used in) provided by |
|
|
|
Cash flows from investing activity: |
||
|
Proceeds from sale of operating limited partnerships: |
|
|
|
Net cash (used in) provided by |
|
|
|
INCREASE (DECREASE) IN CASH AND CASH |
|
|
|
Cash and cash equivalents, beginning |
94,982 |
66,456 |
|
Cash and cash equivalents, ending |
|
|
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund Limited Partnership
NOTES TO FINANCIAL STATEMENTS
June 30, 2004
(Unaudited)
Boston Capital Tax Credit Fund Limited Partnership ("the Partnership") was formed under the laws of the State of Delaware as of September 1, 1988, for the purpose of acquiring, holding, and disposing of limited partnership interests in operating partnerships which have acquired, developed, rehabilitated, operate and own newly constructed, existing or rehabilitated low-income apartment complexes ("Operating Partnerships"). On August 22, 1988, American Affordable Housing VI Limited Partnership changed its name to Boston Capital Tax Credit Fund Limited Partnership. Effective as of June 1, 2001 there was a restructuring, and as a result, the Fund's general partner was reorganized as follows. The General Partner of the Fund continues to be Boston Capital Associates Limited Partnership, a Massachusetts limited partnership. The general partner of the General Partner is BCA Associates Limited Partnership, a Massachusetts limited partnership, whose sole general partner is C&M Management, Inc., a Massachus
etts corporation and whose limited partners are Herbert F. Collins and John P. Manning. Mr. Manning is the principal of Boston Capital Partners, Inc. The limited partner of the General Partner is Capital Investment Holdings, a general partnership whose partners are certain officers and employees of Boston Capital Partners, Inc., and its affiliates. The Assignor Limited Partner is BCTC Assignor Corp., a Delaware corporation which is now wholly-owned by John P. Manning.
Pursuant to the Securities Act of 1933, the Partnership filed a Form S-11 Registration Statement with the Securities and Exchange Commission, effective August 29, 1988, which covered the offering (the "Public Offering") of the Partnership's beneficial assignee certificates ("BACs") representing assignments of units of the beneficial interest of the limited partnership interest of the Assignor Limited Partner. The Partnership registered 10,000,000 BACs at $10 per BAC for sale to the public in six series. Offers and sales of BACs in Series 1 through Series 6 of the Partnership were completed and the last of the BACs in Series 6 were issued by the Partnership on September 29, 1989. The Partnership sold 1,299,900 of Series 1 BACs, 830,300 of Series 2 BACs, 2,882,200 of Series 3 BACs, 2,995,300 of Series 4 BACs, 489,900 of Series 5 BACs and 1,303,000 of Series 6 BACs. The Partnership is no longer offering and does not intend to offer any additional BACs.
Boston Capital Tax Credit Fund Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 2004
(Unaudited)
NOTE B - ACCOUNTING AND FINANCIAL REPORTING POLICIES
The condensed financial statements included herein as of June 30, 2004 and for the three months then ended have been prepared by the Partnership, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. The Partnership accounts for its investments in Operating Partnerships using the equity method, whereby the Partnership adjusts its investment cost for its share of each Operating Partnership's results of operations and for any distributions received or accrued. Costs incurred by the Partnership in acquiring the investments in Operating Partnerships are capitalized to the investment account. The Partnership's accounting and financial reporting policies are in conformity with generally accepted accounting principles and include adjustments in interim periods considered necessary for a fair presentation of the results of operations. Such adjustments are of a normal recurring nature. Certain information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. It is suggested that these condensed financial statements be read in conjunction with the financial statements and the notes thereto included in the Partnership's Annual Report on Form 10-K.
NOTE C - RELATED PARTY TRANSACTIONS
The Partnership has entered into several transactions with various affiliates of the general partner, including Boston Capital Holdings LP, Boston Capital Partners, Inc. and Boston Capital Asset Management Limited Partnership.
Accounts payable - affiliates at June 30, 2004 and 2003 represents accrued general and administrative expenses, accrued partnership management fees, and advances from an affiliate of the general partner, which are payable to Boston Capital Holdings LP, and Boston Capital Asset Management Limited Partnership.
General and administrative expenses incurred by Boston Capital Holdings LP, and Boston Capital Asset Management Limited Partnership were charged to each series' operations for the quarters ended June 30, 2004 and 2003 as follows:
|
2004 |
2003 |
|
|
Series 1 |
$ 127 |
$ 137 |
|
Series 2 |
314 |
338 |
|
Series 3 |
339 |
365 |
|
Series 4 |
382 |
411 |
|
Series 5 |
212 |
77 |
|
Series 6 |
127 |
137 |
|
$ 1,501 |
$ 1,465 |
|
Boston Capital Tax Credit Fund Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 2004
(Unaudited)
NOTE C - RELATED PARTY TRANSACTIONS (continued)
An annual partnership management fee based on .375 percent of the aggregate cost of all apartment complexes owned by the Operating Partnerships has been accrued to Boston Capital Asset Management Limited Partnership. Since reporting fees collected by the series were added to reserves and not paid to Boston Capital Asset Management LP, the amounts accrued are not net of reporting fees received. The partnership management fee accrued for the quarters ended June 30, 2004 and 2003 are as follows:
|
2004 |
2003 |
|
|
Series 1 |
$ 42,426 |
$ 42,426 |
|
Series 2 |
16,836 |
16,836 |
|
Series 3 |
53,672 |
56,294 |
|
Series 4 |
48,276 |
55,617 |
|
Series 5 |
8,181 |
9,429 |
|
Series 6 |
36,069 |
36,069 |
|
$205,460 |
$216,671 |
|
As of June 30, 2004, an affiliate of the general partner advanced a total of $597,504 to the Partnership to pay certain operating expenses of the Partnership, and to make advances and/or loans to Operating Partnerships. These advances are included in Accounts payable-affiliates. A total of $25,000 was advanced during the quarter ended June 30, 2004. Below is a summary, by series, of the total advances made to date.
|
2004 |
|
|
Series 1 |
$ 90,810 |
|
Series 2 |
75,000 |
|
Series 3 |
284,972 |
|
Series 4 |
146,722 |
|
$597,504 |
All payables to affiliates will be paid, without interest, from available cash flow or the proceeds of sales or refinancing of the Partnership's interests in Operating Partnerships.
Boston Capital Tax Credit Fund Limited Partnership
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 2004
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS
At June 30, 2004 and 2003, the Partnership had limited partnership interests in 93 and 101 Operating Partnerships, respectively, which own operating apartment complexes as follows:
|
Series |
2004 |
2003 |
|
1 |
18 |
18 |
|
2 |
8 |
8 |
|
3 |
30 |
31 |
|
4 |
18 |
24 |
|
5 |
4 |
5 |
|
6 |
15 |
15 |
|
93 |
101 |
Under the terms of the Partnership's investment in each Operating Partnership, the Partnership was required to make capital contributions to such Operating Partnerships. These contributions were payable in installments over several years upon each Operating Partnership achieving specified levels of construction and/or operations. At June 30, 2004 and 2003, all capital contributions had been paid.
The Partnership's fiscal year ends March 31 of each year, while all the Operating Partnerships' fiscal years are the calendar year. Pursuant to the provisions of each Operating Partnership Agreement, financial results for each of the Operating Partnerships are provided to the Partnership within 45 days after the close of each Operating Partnership's quarterly period. Accordingly, the current financial results available for the Operating Partnerships are for the three months ended March 31, 2004.
The combined unaudited summarized statements of operations of the Operating Partnerships for the three months ended March 31, 2004 and 2003 are as follows:
Boston Capital Tax Credit Fund Limited Partnership
NOTES TO FINANCIAL STATEMENTS
June 30, 2004
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three Months ended March 31,
(Unaudited)
Series 1
|
2004 |
2003 |
|
|
Revenues |
||
|
Rental |
$ 1,290,579 |
$ 1,337,332 |
|
Interest and other |
81,156 |
78,162 |
|
1,371,735 |
1,415,494 |
|
|
Expenses |
||
|
Interest |
288,822 |
315,031 |
|
Depreciation and amortization |
420,835 |
431,650 |
|
Operating expenses |
1,227,566 |
1,102,157 |
|
1,937,223 |
1,848,838 |
|
|
NET LOSS |
$ (565,488) |
$ (433,344) |
|
Net loss allocated to Boston |
|
|
|
Net loss allocated to other |
|
|
|
Net loss suspended |
$ (559,833) |
$ (429,011) |
The Partnership accounts for its investments using the equity method of accounting. Under the equity method of accounting, the Partnership adjusts its investment cost for its share of each Operating Partnerships results of operations and for any distributions received or accrued. However, the Partnership recognizes individual operating losses only to the extent of capital contributions. Excess losses are suspended for use in future years to offset excess income.
Boston Capital Tax Credit Fund Limited Partnership
NOTES TO FINANCIAL STATEMENTS
June 30, 2004
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three Months ended March 31,
(Unaudited)
Series 2
|
2004 |
2003 |
|
|
Revenues |
||
|
Rental |
$ 521,024 |
$ 477,028 |
|
Interest and other |
8,186 |
19,072 |
|
529,210 |
496,100 |
|
|
Expenses |
||
|
Interest |
62,470 |
70,224 |
|
Depreciation and amortization |
111,059 |
98,001 |
|
Operating expenses |
378,722 |
363,302 |
|
552,251 |
531,527 |
|
|
NET LOSS |
$ (23,041) |
$ (35,427) |
|
Net loss allocated to Boston |
|
|
|
Net loss allocated to other |
|
|
|
Net loss suspended |
$ (25,734) |
$ (30,378) |
The Partnership accounts for its investments using the equity method of accounting. Under the equity method of accounting, the Partnership adjusts its investment cost for its share of each Operating Partnerships results of operations and for any distributions received or accrued. However, the Partnership recognizes individual operating losses only to the extent of capital contributions. Excess losses are suspended for use in future years to offset excess income.
Boston Capital Tax Credit Fund Limited Partnership
NOTES TO FINANCIAL STATEMENTS
June 30, 2004
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three Months ended March 31,
(Unaudited)
Series 3
|
2004 |
2003 |
|
|
Revenues |
||
|
Rental |
$ 1,694,682 |
$ 1,794,576 |
|
Interest and other |
40,882 |
52,241 |
|
1,735,564 |
1,846,817 |
|
|
Expenses |
||
|
Interest |
390,949 |
461,534 |
|
Depreciation and amortization |
496,951 |
580,262 |
|
Operating expenses |
1,255,659 |
1,317,984 |
|
2,143,559 |
2,359,780 |
|
|
NET LOSS |
$ (407,995) |
$ (512,963) |
|
Net loss allocated to Boston |
|
|
|
Net loss allocated to other |
$ (4,080) |
$ (5,130) |
|
Net loss suspended |
|
|
The Partnership accounts for its investments using the equity method of accounting. Under the equity method of accounting, the Partnership adjusts its investment cost for its share of each Operating Partnerships results of operations and for any distributions received or accrued. However, the Partnership recognizes individual operating losses only to the extent of capital contributions. Excess losses are suspended for use in future years to offset excess income.
Boston Capital Tax Credit Fund Limited Partnership
NOTES TO FINANCIAL STATEMENTS
June 30, 2004
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three Months ended March 31,
(Unaudited)
Series 4
|
2004 |
2003 |
|
|
Revenues |
||
|
Rental |
$ 1,630,000 |
$ 1,744,760 |
|
Interest and other |
155,142 |
67,683 |
|
1,785,142 |
1,812,443 |
|
|
Expenses |
||
|
Interest |
467,249 |
524,796 |
|
Depreciation and amortization |
423,444 |
497,892 |
|
Operating expenses |
1,120,493 |
1,268,192 |
|
2,011,186 |
2,290,880 |
|
|
NET LOSS |
$ (226,044) |
$ (478,437) |
|
Net loss allocated to Boston |
|
|
|
Net loss allocated to other |
|
|
|
Net loss suspended |
$ (110,198) |
$ (180,174) |
The Partnership accounts for its investments using the equity method of accounting. Under the equity method of accounting, the Partnership adjusts its investment cost for its share of each Operating Partnerships results of operations and for any distributions received or accrued. However, the Partnership recognizes individual operating losses only to the extent of capital contributions. Excess losses are suspended for use in future years to offset excess income.
Boston Capital Tax Credit Fund Limited Partnership
NOTES TO FINANCIAL STATEMENTS
June 30, 2004
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three Months ended March 31,
(Unaudited)
Series 5
|
2004 |
2003 |
|
|
Revenues |
||
|
Rental |
$ 219,325 |
$ 205,671 |
|
Interest and other |
(141) |
14,153 |
|
219,184 |
219,824 |
|
|
Expenses |
||
|
Interest |
20,302 |
29,154 |
|
Depreciation and amortization |
56,596 |
58,375 |
|
Operating expenses |
153,229 |
185,831 |
|
230,127 |
273,360 |
|
|
NET LOSS |
$ (10,943) |
$ (53,536) |
|
Net loss allocated to Boston Capital Tax Credit Fund |
|
|
|
Net loss allocated to other |
|
|
|
Net loss suspended |
$ (20,135) |
$ (42,619) |
The Partnership accounts for its investments using the equity method of accounting. Under the equity method of accounting, the Partnership adjusts its investment cost for its share of each Operating Partnerships results of operations and for any distributions received or accrued. However, the Partnership recognizes individual operating losses only to the extent of capital contributions. Excess losses are suspended for use in future years to offset excess income.
Boston Capital Tax Credit Fund Limited Partnership
NOTES TO FINANCIAL STATEMENTS
June 30, 2004
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three Months ended March 31,
(Unaudited)
|
2004 |
2003 |
|
|
Revenues |
||
|
Rental |
$ 1,197,783 |
$ 1,154,315 |
|
Interest and other |
68,022 |
43,232 |
|
1,265,805 |
1,197,547 |
|
|
Expenses |
||
|
Interest |
243,164 |
224,753 |
|
Depreciation and amortization |
302,775 |
304,610 |
|
Operating expenses |
775,886 |
703,569 |
|
1,321,825 |
1,232,932 |
|
|
NET INCOME (LOSS) |
$ (56,020) |
$ (35,385) |
|
Net income (loss) allocated to Boston |
|
|
|
Net income (loss) allocated to other |
|
|
|
Net loss suspended |
$ (83,472) |
$ (130,742) |
The Partnership accounts for its investments using the equity method of accounting. Under the equity method of accounting, the Partnership adjusts its investment cost for its share of each Operating Partnerships results of operations and for any distributions received or accrued. However, the Partnership recognizes individual operating losses only to the extent of capital contributions. Excess losses are suspended for use in future years to offset excess income.
Boston Capital Tax Credit Fund Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 2004
(Unaudited)
The Partnership's taxable loss for the year ended December 31, 2004 is expected to differ from its loss for financial reporting purposes for the year ended March 31, 2005. This is primarily due to accounting differences in depreciation incurred by the Operating Partnerships and also differences between the equity method of accounting and the IRS accounting methods. No provision or benefit for income taxes has been included in these financial statements since taxable income or loss passes through to, and is reportable by, the partners and assignees individually.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
The Partnership's primary source of funds was the proceeds of its Public Offering. Other sources of liquidity include (i) interest earned on working capital reserves, and (ii) cash distributions from the Operating Partnerships in which the Partnership has invested. These sources of liquidity are available to meet the obligations of the Partnership.
The Partnership is currently accruing the annual partnership management fee. Partnership management fees accrued during the quarter ended June 30, 2004 were $205,460 and total partnership management fees accrued as of June 30, 2004 were $10,839,073. Pursuant to the Partnership Agreement, such liabilities will be deferred until the Partnership receives sales or refinancing proceeds from Operating Partnerships, which will be used to satisfy such liabilities.
The Partnership has also recorded other payables to affiliates of $841,534. The amount consists of advances to pay certain third party operating expenses of the Partnership, advances and/or loans to Operating Partnerships, and accrued overhead allocations. The breakout between series are: $126,154 in series 1, $115,673 in series 2, $363,427 in series 3, $205,408 in series 4, none in series 5, and $30,872 in series 6. These and any future advances or accruals will be paid, without interest, from available cash flow, reporting fees, or proceeds of sales or refinancing of the Partnership's interest in Operating Partnerships.
The Partnership offered BACs in a Public Offering declared effective by the Securities and Exchange Commission on August 29, 1988. The Partnership received and accepted subscriptions for $97,746,940 representing 9,800,600 BACs from investors admitted as BAC Holders in Series 1 through Series 6 of the Partnership. Offers and sales of BACs in Series 1 through Series 6 of the Partnership were completed and the last of the BACs in Series 6 were issued by the Partnership on September 29, 1989. At June 30, 2004 and 2003 the Partnership had limited partnership equity interests in 93 and 101 Operating Partnerships, respectively.
As of June 30, 2004 the Partnership had $2,245,617 remaining in cash and cash equivalents. Below is a table, which provides, by series, the equity raised, number of BACs sold, final date BACs were offered, number of properties acquired, and cash and cash equivalents. $1,652,567 of Series 3 and $293,914 of Series 4 cash and cash equivalents represent proceeds being held from the sale of seven Operating Partnerships as of June 30, 2004.
|
Series |
Equity |
BACs |
Final Close Date |
Number of Properties |
Proceeds Remaining |
|
1 |
$12,999,000 |
1,299,900 |
12/18/88 |
18 |
$ 56,385 |
|
2 |
8,303,000 |
830,300 |
03/30/89 |
8 |
5,765 |
|
3 |
28,822,000 |
2,882,200 |
03/14/89 |
30 |
1,684,514 |
|
4 |
29,788,160 |
2,995,300 |
07/07/89 |
18 |
326,090 |
|
5 |
4,899,000 |
489,900 |
08/22/89 |
4 |
64,650 |
|
6 |
12,935,780 |
1,303,000 |
09/29/89 |
15 |
108,213 |
|
$97,746,940 |
9,800,600 |
93 |
$2,245,617 |
At June 30, 2004 and 2003 the Partnership held limited partnership interests in 93 and 101 Operating Partnerships, respectively. In each instance the Apartment Complex owned by the applicable Operating Partnership is eligible for the Federal Housing Tax Credit. Initial occupancy of a unit in each Apartment Complex which initially complied with the Minimum Set-Aside Test (i.e., initial occupancy by tenants with incomes equal to no more than a certain percentage of area median income) and the Rent Restriction Test (i.e., gross rent charged tenants does not exceed 30% of the applicable income standards) is referred to hereinafter as "Qualified Occupancy." Each of the Operating Partnerships and each of the respective Apartment Complexes are described more fully in the Prospectus or applicable report on Form 8-K. The General Partner believes that there is adequate casualty insurance on the properties.
The Partnership incurs an annual partnership management fee to the General Partner and/or its affiliates in an amount equal to 0.375% of the aggregate cost of the Apartment Complexes owned by the Operating Partnerships, less the amount of certain partnership management and reporting fees paid by the Operating Partnerships. The annual partnership management fee is currently being accrued. It is anticipated that outstanding fees will be repaid from sale or refinancing proceeds. The annual partnership management fee charged to operations for the quarters ended June 30, 2004 and 2003, net of reporting fees received were $180,232 and $176,292, respectively.
The Partnership's investment objectives do not include receipt of significant cash distributions from the Operating Partnerships in which it has invested. The Partnership's investments in Operating Partnerships have been made principally with a view towards realization of Federal Housing Tax Credits for allocation to its partners and BAC holders. The Results of Operations reported herein are interim period estimates that may not necessarily be indicative of final year end results.
Series 1
As of June 30, 2004 and 2003, the average Qualified Occupancy for the series was 100%. The series had a total of eighteen properties at June 30, 2004, all of which were at 100% Qualified Occupancy.
For the three months being reported, the series reflects a net loss from Operating Partnerships of $565,488. When adjusted for depreciation, which is a non-cash item, the Operating Partnerships reflect negative operations of $144,653.
Genesee Commons Associates (River Park Commons) is a 402 unit property located in Rochester, New York. The property is at the end of the compliance period. On April 15, 2004, the general partner interest was transferred to Conifer Reality, L.L.C., who intends to resyndicate the property. It is anticipated that the property will file an application for an allocation of Low Income Housing Tax Credits (Tax Credits) in early 2005. If the property is allocated Tax Credits a sale could occur in the fall of 2005. The property has not made the minimum debt service payments outlined in the forbearance agreement since 1997. At this time, the mortgage holder has not taken adverse action. The property's financial trouble stems from lack of income due to low occupancy. Occupancy was 72% as of March 2004. The property cannot keep up with its Reserve Requirement deposits and accounts payable were $472,171 for 2003, an increase of 65% from 2002. In addition, the utility expense increased by 15% from 2002 to 2003 d ue to an inadequate heating system which cannot be replaced because of the structure of the building. The property itself is not in good physical condition, which is hindering its ability to stay competitive. Other factors that affect occupancy at this time, are a decrease in population in the area, and a depressed local economy. Maintenance and administrative expenses have come down in 2003 from 2002 and the operating account balance was strong at $59,172. The management company continues to work with local and state agencies to locate qualified residents. Also, the management company has developed a referral system with local non-profit agencies and churches. The Investment General Partner has requested second quarter 2004 information on the property, and continues to work diligently with the management company on strengthening property operations.
Kingston Property Associates (Broadway East Townhouses) is a 122 unit property located in Kingston, New York. Effective July 2003, the Operating General Partner interest for Kingston Property Associates Limited Partnership sold from TFG/New York Properties, Inc. to Kingston Winn Limited Partnership. Also, the management company changed from The Finch Group to an affiliate of the new Operating General Partner, Winn Residential. The Lender and the Operating General Partner have entered into a Forbearance Agreement, dated July 16, 2003, which prevents the Lender from filing foreclosure action or accelerating the indebtedness providing they follow the terms outlined. The new Operating General Partner is trying to re-syndicate the property. The Forbearance Agreement is in effect until the property is approved for Tax Credits. The Operating General Partner applied for the credits in 2003 but did not receive them. They re-applied in March 2004 and will find out in August whether or not they will receive them
. The Operating General Partner is confident they will receive them this time. The 15-year compliance period for Kingston Property Associates ended December 31, 2002.
Series 2
As of June 30, 2004 and 2003, the average Qualified Occupancy for the series was 100%. The series had a total of eight properties at June 30, 2004, all of which were at 100% Qualified Occupancy.
For the three months being reported the series reflects a net loss from the Operating Partnerships of $23,041. When adjusted for depreciation, which is a non-cash item, the Operating Partnerships reflect positive operations of $88,018.
Annadale Housing Partners (Annadale Apartments) has historically reported net losses due to operational issues associated with the property. In 2003, occupancy decreased from the previous year's level, averaging 81.92% for the year. As a result of the low occupancy the site staff was replaced during the fourth quarter of 2003. Due to the efforts of the new site staff and continued aggressive marketing occupancy has shown improvement in 2004, with June occupancy at 95%. Management has promoted events such as a food drive to bring the community together. A new advertisement has been running in the local paper offering the first months rent free at the Senior property. Expenses decreased from the prior year levels, however remain higher than the state average. Maintenance costs continue to be high due to the provisions of the loan agreements which stipulate that the Operating Partnership must spend a minimum of $55,000 per year on capital improvements, with the funding coming from operations. Capital i mprovements undertaken in 2003 included exterior painting of the buildings, completion of sprinkler installation and repairs, and carpet replacement. Despite the decreased occupancy and the high expenses, the Operating Partnership operated above breakeven in 2003, primarily due to the accrual of soft debt. A substantial rent increase went into effect in February 2004, and operating statements through June 2004 demonstrate that the Operating Partnership continues to operate above breakeven. The Investment General Partner will continue to monitor this Operating Partnership until property operations stabilize.
Series 3.
As of June 30, 2004 and 2003, the average Qualified Occupancy for the series was 100% and 99.9%, respectively. The series had a total of thirty properties at June 30, 2004, all of which were at 100% Qualified Occupancy.
For the three months being reported series reflects a net loss from the Operating Partnerships of $407,995. When adjusted for depreciation, which is a non-cash item, the Operating Partnerships reflect positive operations of $88,956. The net income per BAC reported in the prior year is primarily the result of income reported from the sale of two Operating Partnerships in the prior year. Additional information on the sale of the partnerships is provided below.
Central Parkway Towers' (Central Parkway Towers) average occupancy decreased to 41% as of June 30, 2004. The City of Cincinnati canceled support programs and the property's overall financial position has deteriorated significantly as a result of the decrease in occupancy. The Operating General Partner and the Investment General Partner will stabilize the property to the best of their abilities to reach the end of the compliance period on December 31, 2004, thereby avoiding the possibility of recapture of the tax credits. Occupancy is expected to drop below 30% by the end of third quarter. The Investment General Partner granted the Operating General Partner's request to change the Partnership Agreement to assign his interest to an LLC to limit his liability through the remaining term. Funding has been minimized, and the $5,000 monthly lease payments are no longer being made. Other necessary advances to keep the project operational through the end of 2004 will be made. The Investment General Partner ha
s funded $24,600 through second quarter. At the end of the compliance period the Investment General Partner will allow the lease to revert back to the Operating General Partner and will no longer have an interest in the Operating Partnership.
In an attempt to capitalize on the strong California real estate market the Operating General Partner of California Investors VI (Orchard Park) entered into an agreement to sell the property and the transaction closed in June 2003. As part of the purchase agreement, the buyer is required to maintain the property as affordable housing through the end of the tax credit compliance period, and to provide a recapture bond to avoid the recapture of the tax credits that have been taken. Sale proceeds due to Boston Capital Tax Credit Fund I-Series 3 (BCTC I) and Boston Capital Tax Credit Fund III-Series 17 (BCTC III) after repayment of advances made to the Operating Partnership are $453,144 and $31,790, respectively. Of the proceeds received $352,751 and $24,765, for Series 3 and Series 17, respectively, was distributed to the investors in July 2004. This represented a per BAC distribution of $.122 and $.005 for Series 3 and 17, respectively. The total returned to the investors was distributed based on the number
of BACs held by each investor at the time of the sale. The amounts for each series, while different in actual dollars, represent the same percentage of return to each Investment Partnership. The remaining proceeds total of $107,418 was paid to BCAMLP for fees and expenses related to the sale, and partial reimbursement of amounts payable to affiliates. The breakdown of the amount to be paid to BCAMLP is as follows: $10,000 represents reimbursement of expenses incurred related to sale, which includes but is not limited to due diligence, legal and mailing costs; $50,000 represents a fee for overseeing and managing the disposition of the property; and $47,418 represents a partial payment of accrued asset management fees.
In an attempt to capitalize on the strong California real estate market the Operating General Partner of Hidden Cove Apartments (Hidden Cove) entered into an agreement to sell the property and the transaction closed in May 2003. As part of the purchase agreement, the buyer is required to maintain the property as affordable housing through the end of the tax credit compliance period and, to provide a recapture bond to avoid the recapture of the tax credits that have been taken. Sale proceeds due to Boston Capital Tax Credit Fund I-Series 3 (BCTC I) and Boston Capital Tax Credit Fund III-Series 15 (BCTC III) are $1,572,368 and $136,352, respectively. The majority of the sale proceeds were received by the Investment Partnerships in May 2003, and the balance was
received in September 2003. Of the proceeds received $1,240,404 and $107,565, for Series 3 and Series 15, respectively was distributed to the investors in July 2004. This represented a per BAC distributions of $.430 and $.028 for Series 3 and 15, respectively. The total returned to the investors was distributed based on the number of BACs held by each investor. The amounts for each series, while different in actual dollars, represent the same percentage of return to each Investment Partnership. The remaining proceeds total of $360,750 was paid to BCAMLP for fees and expenses related to the sale and partial reimbursement of amounts payable to affiliates. The breakdown of the amount to be paid to BCAMLP is as follows: $10,000 represents reimbursement of expenses incurred related to sale, which includes but is not limited to due diligence, legal and mailing costs; $50,000 represents a fee for overseeing and managing the disposition of the property; and $300,750 represents a partial payment of outstandin g Asset Management Fees due to BCAMLP.
Series 4
As of June 30, 2004 and 2003, the average Qualified Occupancy for the series was 100%. The series had a total of eighteen properties at June 30, 2004, all of which were at 100% Qualified Occupancy.
For the three months being reported the series reflects a net loss from the Operating Partnerships of $226,044. When adjusted for depreciation, which is a non-cash item, the Operating Partnerships reflect positive operations of $197,400. The reduction in the net losses per BAC reported in the current year is due to the sale of Operating Partnerships. Additional information on the sale of the partnerships is provided below.
Central Parkway Towers' (Central Parkway Towers) average occupancy decreased to 41% as of June 30, 2004. The City of Cincinnati canceled support programs and the property's overall financial position has deteriorated significantly as a result of the decrease in occupancy. The Operating General Partner and the Investment General Partner will stabilize the property to the best of their abilities to reach the end of the compliance period on December 31, 2004, thereby avoiding the possibility of recapture of the tax credits. Occupancy is expected to drop below 30% by the end of third quarter. The Investment General Partner granted the Operating General Partner's request to change the Partnership Agreement to assign his interest to an LLC to limit his liability through the remaining term. Funding has been minimized, and the $5,000 monthly lease payments are no longer being made. Other necessary advances to keep the project operational through the end of 2004 will be made. The Investment General Partner ha
s funded $24,600 through second quarter. At the end of the compliance period the Investment General Partner will allow the lease to revert back to the Operating General Partner and will no longer have an interest in the Operating Partnership.
In February 2004, Boston Capital Tax Credit Fund I - Series 4 and Boston Capital Tax Credit Fund II-Series 14 negotiated a transfer of their Investment Limited Partner interest in Haven Park Partners II, A California LP (Glenhaven Park II) to the Operating General Partner for total proceeds of $715,000. Of the total received $4,500 actually was for payment of an outstanding reporting fee and $710,500 was proceeds from the transfer of the interest. Of the total proceeds received $504,941 was utilized to repay subordinated loans that had been made by Boston Capital Tax Credit Fund II-Series 14 and Haven Park Housing Corp. Remaining sale proceeds paid to Boston Capital Tax Credit Fund I-Series 4 (BCTC I) and Boston Capital Tax Credit Fund II-Series 14 (BCTC II) were $26,374 and $179,185, respectively. The allocation of the amounts between the two Investment Limited Partnerships was based on their percentage ownership in the Operating Partnership. Of the proceeds received, it is estimated that approximately
$5,793 and $39,360, for Series 4 and Series 14, respectively, will be distributed to the investors. Provided that these are the actual amounts distributed, the investor per BAC distributions will be $.002 and $.007, respectively, for Series 4 and 14. The total returned to the investors will be distributed based on the number of BACs held by each investor. The remaining proceeds total of $146,906 is anticipated to be paid to BCAMLP for fees and expenses related to the sale and partial reimbursement of amounts payable to affiliates. The breakdown of the amount to be paid to BCAMLP is as follows: $21,450 represents a fee for overseeing and managing the disposition of the property; $9,000 represents a reimbursement of expenses incurred which were associated with the disposition and $129,956 represents a partial payment of outstanding Asset Management Fees due to BCAMLP.
In February 2004, Boston Capital Tax Credit Fund I - Series 4 negotiated a sale of its Investment Limited Partner interest in Van Dyck Estates XVI-A, A California LP (Van Dyck Estates XVI-A) to the Operating General Partner for total proceeds to the Investment Limited Partnership of $515,000. Of the total received $7,500 actually was for payment of an outstanding reporting fee and $507,500 was proceeds from the sale of the interest. Of the total proceeds received $360,564 was utilized to repay subordinated loans that had been made by BCAMLP. Remaining sale proceeds paid to Series 4 were $146,936. Of the proceeds received, it is estimated that approximately $56,815 will be distributed to the investors. Provided that this is the actual amount distributed, the investor per BAC distributions will be $.02. The total returned to the investors will be distributed based on the number of BACs held by each investor. The remaining proceeds total of $90,121 is anticipated to be paid to BCAMLP for fees and expe nses related to the sale and partial reimbursement of amounts payable to affiliates. The breakdown of the amount to be paid to BCAMLP is as follows: $15,450 represents a fee for overseeing and managing the disposition of the property; $9,000 represents a reimbursement of expenses incurred which were associated with the disposition and $65,671 represents a partial payment of outstanding Asset Management Fees due to BCAMLP.
Auburn Trace Limited (Auburn Trace) is a 256 unit property located in Delray Beach, Florida that operated below breakeven in 2003. The primary cause of the negative cash flow was due to high operating expenses. The Operating General Partner is attempting to reduce operating expenses primarily in the areas of administration and maintenance. Maintenance costs increased in 2003 due to the replacement of air conditioner and water heater units and the addition of a security system at the property. Many units also had to be painted, carpeted and have cupboards replaced after tenant evictions. As
these maintenance projects are completed, maintenance expense should decrease significantly. Through the second quarter 2004, the property is generating cash and expenses have decreased. Physical occupancy has been consistently strong at this property, and is currently at 99% as of June 30, 2004. The Investment General Partner will continue working with the Operating General Partner to stabilize the property. The mortgage and property taxes, property insurance are current. The Operating General Partner continues to fund operating deficits.
In the prior fiscal year, Series 4 sold its Investment Partnership interest in Sunneyview II (Stoneridge Hill II) for total proceeds to the Investment Partnership or $212,000. Of the sale proceeds $175,000 was collected in August 2003 and the balance was collected in October 2003. Of the proceeds received $120,000 was distributed to the investors in July 2004, representing a per BAC distribution of $.04. The total returned to the investors was distributed based on the number of BACs held by each investor at the time of the sale. The remaining proceeds total of $92,000 was paid to Boston Capital Asset Management Limited Partnership (BCAMLP) for fees and expenses related to the sale and partial repayment of accrued asset management fees. The breakdown of the amount to be paid to BCAMLP is as follows: $10,000 represents reimbursement of expenses incurred related to sale, which includes but is not limited to due diligence, legal and mailing costs; $20,000 represents a fee for overseeing and managing the disposition of the property; and $62,000 is to pay down outstanding accrued asset management fees.
In January 2004, Boston Capital Tax Credit Fund I - Series 4 negotiated a sale of its Investment Limited Partner interest in Fuller Homes Limited Partnership (Fuller Townhomes) for total proceeds to the Investment Partnership of $40,909. Of the total proceeds received $11,000 will be utilized to repay subordinated loans that had been made by BCAMLP. The remaining proceeds total of $29,909 is anticipated to be paid to BCAMLP for expenses related to the sale and partial reimbursement of amounts payable to affiliates, as well as partial payment of outstanding Asset Management Fees due to BCAMLP.
In January 2004, Boston Capital Tax Credit Fund I - Series 4 negotiated a sale of its Investment Limited Partner interest in Montana Avenue Townhomes Limited Partnership (Montana Avenue Townhomes) for total proceeds to the Investment Partnership of $59,091. The total proceeds of $59,901 is anticipated to be paid to BCAMLP for expenses related to the sale and partial reimbursement of amounts payable to affiliates, as well as partial payment of outstanding Asset Management Fees due to BCAMLP.
In March 2004, Boston Capital Tax Credit Fund I - Series 4 negotiated a sale of its Investment Limited Partner interest in Topeka Residential Fund Three L.P. (Highland Village Duplexes) to the Operating General Partner for total proceeds to the Investment Limited Partnership of $14,500. Of the total received $2,000 actually was for payment of an outstanding reporting fees and $12,500 was proceeds from the sale of the interest. Of the total proceeds $4,000 is anticipated to be paid to BCAMLP for fees and expenses related to the sale. Of the proceeds received it is anticipated $8,500 will be distributed to the investors. Provided that this is the actual amount distributed, the per BAC distribution amount will be $.003.
Series 5
As of June 30, 2004 and 2003, the average Qualified Occupancy for the series was 100%. The series had a total of four properties at June 30, 2004, all of which were at 100% Qualified Occupancy.
For the three months being reported the series reflects a net loss from the Operating Partnerships of $10,943. When adjusted for depreciation, which is a non-cash item, the Operating Partnerships reflect positive operations of $45,653. The reduction in the net losses per BAC reported in the current year is due to the sale of Operating Partnerships. Additional information on the sale of the partnerships is provided below.
Annadale Housing Partners (Annadale Apartments) has historically reported net losses due to operational issues associated with the property. In 2003, occupancy decreased from the previous year's level, averaging 81.92% for the year. As a result of the low occupancy the site staff was replaced during the fourth quarter of 2003. Due to the efforts of the new site staff and continued aggressive marketing occupancy has shown improvement in 2004, with June occupancy at 95%. Management has promoted events such as a food drive to bring the community together. A new advertisement has been running in the local paper offering the first months rent free at the Senior property. Expenses decreased from the prior year levels, however remain higher than the state average. Maintenance costs continue to be high due to the provisions of the loan agreements which stipulate that the Operating Partnership must spend a minimum of $55,000 per year on capital improvements, with the funding coming from operations. Capital i mprovements undertaken in 2003 included exterior painting of the buildings, completion of sprinkler installation and repairs, and carpet replacement. Despite the decreased occupancy and the high expenses, the Operating Partnership operated above breakeven in 2003, primarily due to the accrual of soft debt. A substantial rent increase went into effect in February 2004, and operating statements through June 2004 demonstrate that the Operating Partnership continues to operate above breakeven. The Investment General Partner will continue to monitor this Operating Partnership until property operations stabilize.
TKO Investment Properties V (Heather Ridge Apartments) is a 56-unit family property located in Redding, California. As of June 30, 2004 occupancy is 100%, however the property is operating below breakeven due to high repair and capital expenses associated with a 16-year old rehab. The Operating General Partner has deferred management fees in order to increase cash flow and complete necessary repairs. Additionally, a $25 rent increase was implemented in June 2004. Sustained high occupancy and increased rents are expected to allow the property to breakeven in 2004.In February 2004, Boston Capital Tax Credit Fund I - Series 5 and Boston Capital Tax Credit Fund II - Series 14 negotiated a sale of their Investment Limited Partner interests in Glenhaven Park Partners (Glenhaven Park) to the Operating General Partner for total proceeds of $28,760. Of the total
received $6,000 actually was for payment of outstanding reporting fees and $22,760 was proceeds from the sale of the interests. The total sale proceeds received were used to repay subordinated loans that had been made by Boston Capital Tax Credit Fund II-Series 14. Total outstanding subordinated loans and advances made by Series 14 exceeded the repayment by $156,940. The unpaid loans and advances were written off by Boston Capital Tax Credit Fund II - Series 14.
Series 6
As of June 30, 2004 and 2003, the average Qualified Occupancy for the series was 100%. The series had a total of fifteen properties at June 30, 2004, all of which were at 100% Qualified Occupancy.
For the three months being reported the series reflects a net loss from the Operating Partnerships of $56,020. When adjusted for depreciation, which is a non-cash item, the Operating Partnerships reflect positive operations of $246,755.
Socorro Properties, Limited Partnership, (Los Pueblos Apartments) located in Socorro, New Mexico operated below breakeven throughout 2003. The primary reason for its negative cash flow is low occupancy, which averaged 78.39% for 2003. Occupancy has improved during the last quarter of 2003 and into 2004, averaging 87% for the first six months of 2004. Early in 2003, the property was without a maintenance technician, the property suffered from some deferred maintenance and unit turnover was delayed. The Operating General Partner sent a maintenance coordinator and another maintenance technician who cured the deferred maintenance in mid-2003. The property has a lot of traffic, but the turnover is very high. The property brought on a new maintenance technician at the beginning of the third quarter of 2003. The property has been able to operate above breakeven for the first two quarters of 2004.
The Operating General Partner of the Partnership Sherburne Housing Redevelopment Company, (Sherburne Senior Housing) has negotiated a sale of its Operating General Partner interest. This transaction was completed in August 2003. In addition to the transfer of Operating General Partner interest, an exit strategy has been put in place that will allow for the sale of the Investment Limited Partner interest to the new Operating General Partner at the end of the 15-year tax credit compliance period in December 2004.
Auburn Trace Limited (Auburn Trace) is a 256 unit property located in Delray Beach, Florida that operated below breakeven in 2003. The primary cause of the negative cash flow was due to high operating expenses. The Operating General Partner is attempting to reduce operating expenses primarily in the areas of administration and maintenance. Maintenance costs increased in 2003 due to the replacement of air conditioner and water heater units and the addition of a security system at the property. Many units also had to be painted, carpeted and have cupboards replaced after tenant evictions. As these maintenance projects are completed, maintenance expense should decrease significantly. Through the second quarter 2004, the property is generating cash and expenses have decreased. Physical occupancy has been consistently strong at this property, and is currently at 99% as of June 30, 2004. The Investment General Partner will continue working with the Operating General Partner to stabilize the property. T
he mortgage and property taxes, property insurance are current. The Operating General Partner continues to fund operating deficits.
Principal Accounting Policies and Estimates
The financial statements are prepared in accordance with accounting principles generally accepted in the United States of America, which requires the Partnership to make certain estimates and assumptions. A summary of significant accounting policies is provided in Note 1 to the financial statements. The following section is a summary of certain aspects of those accounting policies that may require subjective or complex judgments and are most important to the portrayal of Partnership's financial condition and results of operations. The Partnership believes that there is a low probability that the use of different estimates or assumptions in making these judgments would result in materially different amounts being reported in the financial statements.
The Partnership is required to assess potential impairments to its long-lived assets, which is primarily investments in limited partnerships. The Partnership accounts for its investment in limited partnerships in accordance with the equity method of accounting since the Partnership does not control the operations of the Operating Limited Partnership.
If the book value of the Partnership's investment in an Operating Partnership exceeds the estimated value derived by management, which generally consists of the remaining future Low-Income Housing Credits allocable to the Partnership and the estimated residual value to the Partnership, the Partnership reduces its investment in any such Operating Limited Partnership and includes such reduction in equity in loss of investment of limited partnerships.
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Not Applicable |
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Item 4 |
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(a) |
Evaluation of Disclosure Controls and Procedures |
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As of the end of the period covered by this report, the Partnership's General Partner, under the supervision and with the participation of the Principal Executive Officer and Principal Financial Officer of C&M Management, Inc. carried out an evaluation of the effectiveness of the Partnership's "disclosure controls and procedures" as defined in the Securities Exchange Act of 1934 Rules 13a-15 and 15d-15. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer have concluded that as of the end of the period covered by this report, the Partnership's disclosure controls and procedures were adequate and effective in timely alerting them to material information relating to the Partnership required to be included in the Partnership's periodic SEC filings. |
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(b) |
Changes in Internal Controls |
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There were no changes in the Partnership's internal control over financial reporting that occurred during the quarter ended June 30, 2004 that materially affected, or are reasonably likely to materially affect, the Partnership's internal control over financial reporting. |
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PART II - OTHER INFORMATION
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Item 1. |
Legal Proceedings |
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None |
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Item 2. |
Changes in Securities, Use of Proceeds, and Issuer Purchases of Equity Securities |
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None |
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Item 3. |
Defaults upon Senior Securities |
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None |
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Item 4. |
Submission of Matters to a Vote of Security |
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None |
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Item 5. |
Other Information |
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None |
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Item 6. |
Exhibits and Reports on Form 8-K |
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(a)Exhibits |
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31.a Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, of John P. Manning, Principal Executive Officer, filed herein |
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31.b Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, of Marc N. Teal, Principal Financial Officer, filed herein |
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32.a Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of John P. Manning, Principal Executive Officer, filed herein |
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32.b Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Marc N. Teal, Principal Financial Officer, filed herein |
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(b)Reports on Form 8-K |
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None |
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SIGNATURES
Pursuant to the requirements of Section 13 of the Securities
Exchange Act of 1934, the Partnership has duly caused this Report to be
signed on its behalf by the undersigned, thereunto duly authorized.
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Boston Capital Tax Credit Fund Limited Partnership |
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By: |
Boston Capital Associates Limited |
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By: |
BCA Associates Limited Partnership, |
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By: |
C&M Management, Inc., |
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Date: August 19, 2004 |
/s/ John P. Manning |
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John P. Manning |
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Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Partnership and in the capacities and on the dates
indicated:
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DATE: |
SIGNATURE: |
TITLE: |
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August 19, 2004 |
/s/ John P. Manning John P. Manning |
Director, President |
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DATE: |
SIGNATURE: |
TITLE: |
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August 19, 2004 |
/s/ Marc N. Teal Marc N. Teal |
Chief Financial Officer |