UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ------- EXCHANGE ACT OF 1934
For the quarterly period ended December 15, 2003
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ------- EXCHANGE ACT OF 1934
Commission File Number 0-17015
LIBERTY TAX CREDIT PLUS L.P.
----------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3446500
- ------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
625 Madison Avenue, New York, New York 10022
- ---------------------------------------- --------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212)421-5333
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 whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes No X
----- -----
PART I - Financial Information
Item 1. Financial Statements
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
============= =============
December 15, March 15,
2003 2003
------------- -------------
ASSETS
Property and equipment, at cost,
net of accumulated depreciation
of $110,805,524 and $118,952,648
respectively $ 113,081,777 $ 133,543,024
Property and equipment -
held for sale, net of accumulated
depreciation of $8,460,371 and $0 8,952,525 0
Cash and cash equivalents 5,004,559 6,067,262
Cash held in escrow 13,482,707 13,328,404
Accounts receivable - tenants 719,309 780,278
Deferred costs - net of accumulated
amortization of $3,475,789
and $3,419,798, respectively 2,801,696 3,250,600
Other assets 1,603,662 1,583,913
------------- -------------
Total assets $ 145,646,235 $ 158,553,481
============= =============
2
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
(continued)
============= =============
December 15, March 15,
2003 2003
------------- -------------
LIABILITIES AND PARTNERS' DEFICIT
Liabilities:
Mortgage notes payable $ 139,064,547 $ 147,794,611
Accounts payable and other
liabilities 14,249,791 12,746,386
Due to local general partners and
affiliates 15,499,840 16,794,330
Due to general partners and
affiliates 8,218,930 7,727,769
Due to selling partners 1,183,680 1,303,680
------------- -------------
Total liabilities 178,216,788 186,366,776
------------- -------------
Minority interest 1,326,645 1,743,507
------------- -------------
Commitments and contingencies
(Note 4)
Partners' deficit:
Limited partners (15,987.5 BACs
issued and outstanding) (32,828,382) (28,531,390)
General partners (1,068,816) (1,025,412)
------------- -------------
Total partners' deficit (33,897,198) (29,556,802)
------------- -------------
Total liabilities and partners'
deficit $ 145,646,235 $ 158,553,481
============= =============
See accompanying notes to consolidated financial statements.
3
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
============================ ============================
Three Months Ended Nine Months Ended
December 15, December 15,
---------------------------- ----------------------------
2003 2002* 2003 2002*
---------------------------- ----------------------------
Revenues
Rental income $ 8,157,320 $ 8,419,178 $ 24,941,485 $ 26,328,074
Other 387,307 314,267 1,043,299 993,436
Gain on sale of
properties (Note 3) 0 0 1,808,199 6,585,801
------------ ------------ ------------ ------------
8,544,627 8,733,445 27,792,983 33,907,311
------------ ------------ ------------ ------------
Expenses
General and
administrative 1,431,986 1,436,963 4,557,531 4,344,906
General and
administrative-
related parties
(Note 2) 660,889 669,776 1,960,325 2,011,196
Repairs and
maintenance 2,062,051 1,724,332 5,581,148 5,115,684
Operating and
other 978,247 925,180 3,750,079 3,339,221
Taxes 509,609 499,450 1,250,302 1,298,309
Insurance 442,456 421,628 1,353,339 1,156,809
Financial 2,732,380 2,899,715 7,984,403 9,069,887
Depreciation and
amortization 1,935,603 2,414,562 6,168,292 6,760,711
------------ ------------ ------------ ------------
Total expenses 10,753,221 10,991,606 32,605,419 33,096,723
------------ ------------ ------------ ------------
(Loss) income before
minority
interest (2,208,594) (2,258,161) (4,812,436) 810,588
Minority interest
in loss of
subsidiaries 8,018 113,124 472,040 421,201
------------ ------------ ------------ ------------
Net (loss) income $ (2,200,576) $ (2,145,037) $ (4,340,396) $ 1,231,789
============ ============ ============ ============
Net (loss) income
- -limited partners $ (2,178,570) $ (2,123,587) $ (4,296,992) $ 1,219,471
============ ============ ============ ============
Number of BACs
outstanding 15,987.5 15,987.5 15,987.5 15,987.5
============ ============ ============ ============
Net (loss) income
per BAC $ (136.27) $ (132.82) $ (268.77) $ 76.28
============ ============ ============ ============
*Reclassified for comparative purposes.
See accompanying notes to consolidated financial statements.
4
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Consolidated Statement of Changes in Partners' Deficit
(Unaudited)
============================================
Limited General
Total Partners Partners
--------------------------------------------
Partners'
deficit -
March 16, 2003 $(29,556,802) $(28,531,390) $ (1,025,412)
Net loss (4,340,396) (4,296,992) (43,404)
------------ ------------ ------------
Partners'
deficit -
December 15, 2003 $(33,897,198) $(32,828,382) $ (1,068,816)
============ ============ ============
See accompanying notes to consolidated financial statements.
5
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Increase (decrease) in Cash and Cash Equivalents
(Unaudited)
=============================
Nine Months Ended
December 15,
-----------------------------
2003 2002
-----------------------------
Cash flows from
operating activities:
Net (loss) income $ (4,340,396) $ 1,231,789
Adjustments to reconcile net (loss)
income to net cash provided by
operating activities:
Gain on sale of properties (Note 3) (1,808,199) (6,585,801)
Depreciation and amortization 6,168,292 6,760,711
Minority interest in loss of
subsidiaries (472,040) (421,201)
Decrease in accounts
receivable-tenants 60,969 88,292
Increase in other assets (19,749) (370,245)
Increase in accounts payable and
other liabilities 2,057,055 833,355
Increase in due to general partners
and affiliates 536,161 718,508
Decrease (increase) in cash held in
escrow 63,754 (995,264)
------------ ------------
Net cash provided by operating
activities 2,245,847 1,260,144
------------ ------------
Cash flows from investing activities:
Proceeds from sale of properties 504,984 200,000
(Increase) decrease in cash held
in escrow (218,057) 1,249,986
Improvements to property and
equipment (776,519) (2,724,451)
------------ ------------
Net cash used in investing
activities (489,592) (1,274,465)
------------ ------------
6
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Increase (decrease) in Cash and Cash Equivalents
(Unaudited)
(continued)
=============================
Nine Months Ended
December 15,
-----------------------------
2003 2002
-----------------------------
Cash flows from financing activities:
Increase in deferred costs 0 (345,301)
Proceeds from mortgage notes 0 18,059,376
Repayments of mortgage notes (2,472,321) (18,220,159)
Decrease in due to selling partner 0 (30,000)
Increase in due to local general
partners and affiliates 739,428 381,193
Decrease in due to local general
partners and affiliates (1,141,243) (728,813)
Increase (decrease) in capitalization of
consolidated subsidiaries
attributable to minority interest 55,178 (101,710)
------------ ------------
Net cash used in financing activities (2,818,958) (985,414)
------------ ------------
Net decrease in cash and cash
equivalents (1,062,703) (999,735)
Cash and cash equivalents at
beginning of period 6,067,262 6,379,655
------------ ------------
Cash and cash equivalents at
end of period $ 5,004,559 $ 5,379,920
============ ============
Supplemental disclosures of noncash activities:
Increase in property and equipment-
held for sale reclassified from
property and equipment $ 8,952,525 $ 3,734,297
7
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Increase (decrease) in Cash and Cash Equivalents
(Unaudited)
(continued)
=============================
Nine Months Ended
December 15,
-----------------------------
2003 2002
-----------------------------
Summarized below are the
components of the gain on sale
of properties:
Decrease in property and
equipment, net of accumulated
depreciation $ 6,565,853 $ 6,081,229
Decrease in mortgage escrow
deposits 0 313,741
Decrease in prepaid expenses
and other assets 0 18,876
Decrease in accounts receivable 0 3,990
Decrease in deferred costs 0 188,591
Decrease in mortgage notes payable (6,377,743) (12,801,444)
Decrease in accounts payable,
accrued expenses and other
liabilities (553,650) (152,804)
Decrease in due to general partners
and affiliates (45,000) (37,980)
Decrease in due to local general
partner and affiliates (892,675) 0
See accompanying notes to consolidated financial statements.
8
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 15, 2003
(Unaudited)
Note 1 - General
The consolidated financial statements for the nine months ended December 15,
2003 and 2002, include the accounts of Liberty Tax Credit Plus L.P. (the
"Partnership") and 30 and 31 subsidiary partnerships (each a "subsidiary
partnership" or "Local Partnership"), respectively, in which the Partnership is
a limited partner. Through the rights of the Partnership and/or a general
partner of the Partnership (a "General Partner"), which General Partner has a
contractual obligation to act on behalf of the Partnership, to remove the
general partners of each subsidiary partnership (the "local general partners")
and to approve certain major operating and financial decisions, the Partnership
has a controlling financial interest in the subsidiary partnerships. All
intercompany accounts and transactions with the subsidiary partnerships have
been eliminated in consolidation.
For financial reporting purposes, the Partnership's fiscal quarter ends on
December 15. All subsidiary partnerships have fiscal quarters ending September
30. Accounts of the subsidiary partnerships have been adjusted for intercompany
transactions from October 1 through December 15. The Partnership's quarter ends
on December 15 in order to allow adequate time for the subsidiary partnerships
financial statements to be prepared and consolidated. The books and records of
the Partnership are maintained on the accrual basis of accounting, in accordance
with generally accepted accounting principles ("GAAP").
In the opinion of the General Partners, the accompanying unaudited financial
statements contain all adjustments (consisting only of normal recurring
adjustments) necessary to present fairly the financial position of the
Partnership as of December 15, 2003, the results of operations for the three and
nine months ended December 15, 2003 and 2002 and cash flows for the nine months
ended December 15, 2003 and 2002. However, the operating results and cash flows
for the nine months ended December 15, 2003 may not be indicative of the results
for the year.
Certain information and note disclosures which are normally included in
financial statements prepared in accordance with GAAP have been omitted or
condensed. These consolidated financial statements should be read in conjunction
9
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 15, 2003
(Unaudited)
with the financial statements and notes thereto included in the Partnership's
Annual Report on Form 10-K for the period ended March 15, 2003.
Increases (decreases) in the capitalization of consolidated subsidiaries
attributable to minority interest arise from cash contributions and cash
distributions to the minority interest partners.
The Partnership's investment in each subsidiary partnership is equal to the
respective subsidiary partnership's partners' equity less minority interest
capital, if any. Losses attributable to minority interests which exceed the
minority interests' investments in the subsidiary partnerships have been charged
to the Partnership. Such losses aggregate approximately $10,000 and $0 and
$10,000 and $0 for the three and nine months ended December 15, 2003 and 2002,
respectively. In consolidation, all subsidiary partnership losses are included
in the Partnership's capital account except for losses allocated to minority
interest capital.
Note 2 - Related Party Transactions
An affiliate of the General Partners has a 1% interest, as a special limited
partner, in each of the subsidiary partnerships. An affiliate of the General
Partners also has a minority interest in certain subsidiary partnerships.
10
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 15, 2003
(Unaudited)
The costs incurred to related parties for the three and nine months ended
December 15, 2003 and 2002 were as follows:
Three Months Ended Nine Months Ended
December 15, December 15,
----------------------- -----------------------
2003 2002 2003 2002
----------------------- -----------------------
Partnership manage-
ment fees (a) $ 269,250 $ 284,500 $ 807,750 $ 853,500
Expense reimburse-
ment (b) 59,865 44,620 142,014 109,551
Property management
fees incurred to af-
filiates of the Gen-
eral Partners (c) 27,441 30,186 82,323 90,557
Local administrative
fee (d) 14,000 16,000 42,000 48,000
---------- ---------- ---------- ----------
Total general and
administrative-
General Partners 370,556 375,306 1,074,087 1,101,608
---------- ---------- ---------- ----------
Property manage-
ment fees
incurred to affili-
ates of the local
general partners (c) 290,333 294,470 886,238 909,588
---------- ---------- ---------- ----------
Total general and
administrative-
related parties $ 660,889 $ 669,776 $1,960,325 $2,011,196
========== ========== ========== ==========
(a) The General Partners are entitled to receive a partnership management fee,
after payment of all Partnership expenses, which together with the local annual
administrative fees will not exceed a maximum of 0.5% per annum of invested
assets (as defined in the Partnership's Amended and Restated Agreement of
Limited Partnership), for administering the affairs of the Partnership. The
partnership management fee, subject to the foregoing limitation, will be
determined by the General Partners in their sole discretion based upon their
review of the Partnership's investments. Partnership management fees owed to the
11
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 15, 2003
(Unaudited)
General Partners amounting to approximately $7,708,000 and $7,151,000 were
accrued and unpaid as of December 15, 2003 and March 15, 2003, respectively.
(b) The Partnership reimburses the General Partners and their affiliates for
actual Partnership operating expenses incurred by the General Partners and their
affiliates on the Partnership's behalf. The amount of reimbursement from the
Partnership is limited by the provisions of the Partnership Agreement. Another
affiliate of the General Partners performs asset monitoring for the Partnership.
These services include site visits and evaluations of the subsidiary
partnerships' performance. Expense reimbursements and asset monitoring fees owed
to Related Credit Properties L.P., a General Partner, amounting to approximately
$45,000 and $61,000 were accrued and unpaid as of December 15, 2003 and March
15, 2003, respectively.
The General Partners have allowed for the accrual without payment of the amounts
set forth in (a) and (b) but are under no obligation to continue to do so.
(c) Property management fees incurred by the subsidiary partnerships amounted to
$435,229 and $455,627 and $1,354,736 and $1,439,879 for the three and nine
months ended December 15, 2003 and 2002, respectively. Of these fees, $290,333
and $294,470 and $886,238 and $909,588 were incurred to affiliates of the local
general partners. In addition, $27,441 and $30,186 and $82,323 and $90,557 were
incurred to affiliates of the General Partners.
(d) Liberty Associates III L.P., a General Partner and the special limited
partner of the subsidiary partnerships, is entitled to receive a local
administrative fee of up to $2,500 per year from each subsidiary partnership.
Note 3 - Sale of Properties
On May 19, 2003, the property and the related assets and liabilities of Silver
Blue Apartments, LTD., ("Silver Blue") were sold to an unaffiliated third party
for a purchase price of $3,500,000 resulting a gain of approximately $523,000.
The sale resulted in the liquidation of Silver Blue.
12
LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 15, 2003
(Unaudited)
On January 23, 2003, the property and the related assets and liabilities of
Ludlam Gardens Apartments, LTD. ("Ludlam") were sold to an unaffiliated third
party for a purchase price of $3,900,000 resulting a gain of approximately
$959,000. The sale resulted in the liquidation of Ludlam.
On January 16, 2003, the property and the related assets and liabilities of
Dixie Apartment Associates, LTD. ("Dixie") were sold to an unaffiliated third
party for a purchase price of $1,300,000 resulting a gain of approximately
$327,000. The sale resulted in the liquidation of Dixie.
On May 31, 2002, the Partnership sold its limited partnership interest in Apple
Creek Housing Associates, Ltd. to an unaffiliated third party purchaser for
$200,000 resulting in a gain of approximately $6,763,000.
Note 4 - Commitments and Contingencies
There have been no material changes and/or additions to the disclosures
regarding the subsidiary partnerships which were included in the Partnership's
Annual Report on Form 10-K for the fiscal year ended March 15, 2003, except as
noted below.
Walnut Park Plaza Associates, L.P.
- ----------------------------------
In December 2003, Walnut Park Associates, L.P. ("Walnut Park") was in default on
its mortgage. The mortgagor is pursuing a foreclosure action of the property.
The owner of the subordinate bonds of Walnut Park has submitted in writing, an
offer to purchase the debt held by the mortgagor plus any accrued interest and
penalties due to the default. If such proposal is accepted, then the mortgagor
will sell the property to the owner of the subordinate bonds in exchange for the
debt and will forgo the execution of the foreclosure.
13
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Liquidity and Capital Resources
- -------------------------------
The Partnership's capital has been invested in 31 Local Partnerships. As of
December 15, 2003, the properties and the related assets and liabilities of
three Local Partnerships and the limited partnership interest in one Local
Partnership were sold. For a discussion of the sale of the Local Partnerships,
see Note 3 to the financial statements.
The Partnership's primary source of funds is cash distributions from operations
of the Local Partnerships in which the Partnership has invested. Such funds are
available to meet obligations of the Partnership. During the nine months ended
December 15, 2003 and 2002, such distributions amounted to approximately
$115,000 and $248,000, respectively. In addition, partnership management fees
and expense reimbursements owed to the General Partners amounting to
approximately $7,753,000 and $7,212,000 were accrued and unpaid as of December
15, 2003 and March 15, 2003, respectively. Without the General Partners'
continued accrual without payment of the partnership management fees, the
Partnership will not be in a position to meet its obligations. The General
Partners have allowed for the accrual without payment of a portion of the
partnership management fees but are under no obligation to continue to do so.
For the nine months ended December 15, 2003, cash and cash equivalents of the
Partnership and its consolidated Local Partnerships decreased approximately
$1,063,000. This decrease is attributable to improvements to property and
equipment ($777,000), principal repayment of mortgage notes ($2,472,000), an
increase in cash held in escrow relating to investing activities ($218,000) and
a net decrease in due to local general partners and affiliates relating to
financing activities ($402,000) which exceeded net cash provided by operating
activities ($2,246,000), an increase in capitalization of consolidated
subsidiaries attributable to minority interest ($55,000) and proceeds from sales
of properties ($505,000). Included in adjustments to reconcile the net loss to
cash provided by operating activities is depreciation and amortization of
approximately ($6,168,000) and gain on sale of properties of ($1,808,000).
For a discussion of contingencies affecting certain Local Partnerships, see Note
4 to the financial statements. Since the maximum loss the Partnership would be
liable for is its net investment in the respective Local Partnerships, the
resolution of the existing contingencies is not anticipated to impact future
results of operations, liquidity or financial condition in a material way.
However, the Partnership's loss of its investment in a Local Partnership may
result in recapture of tax credits if the investment is lost before the
14
expiration of the applicable compliance period. In December 2003, Walnut Park
Associates, L.P. ("Walnut Park") was in default on it mortgage. The mortgagor is
pursuing a foreclosure action of the property. The compliance period for Walnut
Park has expired; thus, tax credits relating to this Local Partnership will not
be subject to recapture.
Management is not aware of any trends or events, commitments or uncertainties
which have not otherwise been disclosed that will, or are likely to impact
liquidity in a material way. Management believes the only impact would be from
laws that have not yet been adopted. The portfolio is diversified by the
location of the properties around the United States so that if one area of the
country is experiencing downturns in the economy, the remaining properties in
the Partnership's portfolio may be experiencing upswings. However, the
geographic diversification of the portfolio may not protect against a general
downturn in the national economy.
Critical Accounting Policies
- ----------------------------
In preparing the consolidated financial statements, management has made
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting periods. Actual results could differ
from those estimates. Set forth below is a summary of the accounting policies
that management believes are critical to the preparation of the consolidated
financial statements. The summary should be read in conjunction with the more
complete discussion of the Partnership accounting policies included in Note 2 to
the consolidated financial statements in the annual report on Form 10-K.
Property and Equipment
- ----------------------
Property and equipment to be held and used are carried at cost which includes
the purchase price, acquisition fees and expenses, and any other costs incurred
in acquiring the properties. The cost of property and equipment is depreciated
over their estimated useful lives using accelerated and straight-line methods.
Expenditures for repairs and maintenance are charged to expense as incurred;
major renewals and betterments are capitalized. At the time property and
equipment are retired or otherwise disposed of, the cost and accumulated
depreciation are eliminated from the assets and accumulated depreciation
15
accounts and the profit or loss on such disposition is reflected in earnings.
The Partnership complies with Statement of Financial Accounting Standards (SFAS)
No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets". A loss
on impairment of assets is recorded when management estimates amounts
recoverable through future operations and sale of the property on an
undiscounted basis are below depreciated cost. At that time property investments
themselves are reduced to estimated fair value (generally using discounted cash
flows).
At the time management commits to a plan to dispose of assets, said assets are
adjusted to the lower of carrying amount or fair value less costs to sell. These
assets are classified as property and equipment-held for sale and are not
depreciated. For the nine months ended December 15, 2003, the Partnership has
recorded property and equipment of $8,952,525 as held for sale.
Income Taxes
- ------------
The Partnership is not required to provide for, or pay, any federal income
taxes. Net income or loss generated by the Partnership is passed through to the
partners and is required to be reported by them. The Partnership may be subject
to state and local taxes in jurisdictions in which it operates. For income tax
purposes, the Partnership has a fiscal year ending December 31.
New Accounting Pronouncements
- -----------------------------
In January 2003, the Financial Accounting Standards Board issued FASB
Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46").
FIN 46 is applicable immediately for variable interest entities created after
January 31, 2003. For variable interest entities created before February 1,
2003, the provisions of FIN 46 are applicable no later than July 1, 2003. The
Partnership has not created any variable interest entities after January 31,
2003. In December 2003 the FASB redeliberated certain proposed modifications and
revised FIN 46 ("FIN 46 (R)"). The revised provisions are applicable no later
than the first reporting period ending after March 15, 2004. The adoption of FIN
46 and FIN 46 (R) is not anticipated to have a material impact on the
Partnership's financial reporting and disclosures.
In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." SFAS No. 150
changes the accounting for certain financial instruments that, under previous
guidance, could be classified as equity or "mezzanine" equity, by now requiring
those instruments to be classified as liabilities ( or assets in some
circumstances) in the Consolidated Balance Sheets. Further, SFAS No. 150
requires disclosure regarding the terms of those instruments and settlement
alternatives. The guidance in SFAS No. 150 generally was effective for all
16
financial instruments entered into or modified after May 31, 2003, and was
otherwise effective at the beginning of the first interim period beginning after
June 15, 2003. The Partnership has evaluated SFAS No. 150 and determined that it
does not have an impact on the Partnership's financial reporting and
disclosures.
Results of Operations
- ---------------------
The results of operations of the Partnership, as well as the Local Partnerships,
remained fairly consistent during the three and nine months ended December 15,
2003 and 2002, excluding gain on sale of properties, other income, repairs and
maintenance, operating, insurance, depreciation and amortization and capital
events with respect to Ludlam, Dixie and Silver Blue, which sold their
respective properties and the related assets and liabilities and Apple Creek, in
which the Partnership sold its limited partnership interest (the "Sold Assets").
The results of operations for the three and nine months ended December 15, 2003
and 2002 consisted primarily of the results of the Partnership's investment in
the consolidated Local Partnerships.
Rental income decreased approximately 3% and 5% for the three and nine months
ended December 15, 2003 as compared to the corresponding periods in 2002.
Excluding the Sold Assets, rental income remained fairly consistent for the
three and nine months ended December 15, 2003 and 2002.
Repairs and maintenance increased approximately $338,000 and $465,000 for the
three and nine months ended December 15, 2003 as compared to the corresponding
periods in 2002. Excluding the Sold Assets, repairs and maintenance increased
approximately $375,000 and $697,000, primarily due to an increase in repair and
maintenance contracts and materials and protection contracts at four Local
Partnerships and the rehabilitation of apartments at a fifth Local Partnership.
Operating increased approximately $53,000 and $411,000 for the three and nine
months ended December 15, 2003 as compared to the corresponding periods in 2002.
Excluding the Sold Assets, operating increased approximately $94,000 and
$484,000, primarily due to an increase in gas prices at the Local Partnerships.
Insurance increased approximately $21,000 and $197,000 for the three and nine
months ended December 15, 2003 as compared to the corresponding periods in 2002.
Excluding the Sold Assets, insurance increased approximately $43,000 and
$213,000, primarily due to an increase in insurance premiums at the Local
Partnerships.
17
Depreciation and amortization decreased approximately $479,000 and $592,000 for
the three and nine months ended December 15, 2003, as compared to the
corresponding periods in 2002. Excluding the Sold Assets, depreciation and
amortization decreased approximately $270,000 and $206,000, primarily due to the
write off of deferred costs relating to the refinancing of a loan at one Local
Partnership in 2002.
Financial decreased approximately $167,000 and $1,085,000 for the three and nine
months ended December 15, 2003, as compared to the corresponding periods in
2002, primarily due to decreases relating to the Sold Assets.
Gains on sale of properties will continue to fluctuate as a result of the
disposition of properties.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
None.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
- ------------------------------------------------
The Principal Executive Officer and Principal Financial Officer of Related
Credit Properties, L.P. and Liberty Associates III, L.P., each of which is a
general partner of Liberty Tax Credit Plus L.P. (the "Partnership"), has
evaluated the Partnership's disclosure controls and procedures (as such term is
defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of
1934 (the "Exchange Act") as of December 15, 2003 (the "Evaluation Date"). Based
on such evaluation, such officer has concluded that, as of the Evaluation Date,
the Partnership's disclosure controls and procedures are effective in alerting
him, on a timely basis, to material information relating to the Partnership
required to be included in the Partnership's reports filed or submitted under
the Exchange Act.
Changes in Internal Control Over Financial Reporting
- ----------------------------------------------------------
There has been no significant change in the Partnership's internal control over
financial reporting during the Partnership's fiscal quarter ended December 15,
2003 which has materially affected, or is reasonably likely to materially
affect, such internal control over financial reporting.
18
PART II. OTHER INFORMATION
Item 1. Legal Proceedings - None
Item 2. Changes in Securities and Use of Proceeds - None
Item 3. Defaults Upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders - None
Item 5. Other Information - None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
31.1 Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a).
32.1 Certification Pursuant to Rule 13a-14(b) or Rule 15d-14(b) and
Section 1350 of Title 18 of the United States Code (18 U.S.C. 1350).
(b) Reports on Form 8-K - None
19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
LIBERTY TAX CREDIT PLUS L.P.
----------------------------
(Registrant)
By: RELATED CREDIT PROPERTIES L.P.,
a General Partner
By: Related Credit Properties Inc.,
its General Partner
Date: January 20, 2004
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes,
President and Chief Executive
Officer
(Principal Executive and Financial
Officer)
Date: January 20, 2004
By: /s/ Glenn F. Hopps
------------------
Glenn F. Hopps,
Treasurer
(Principal Accounting Officer)
By: LIBERTY ASSOCIATES III, L.P.,
a General Partner
By: Related Credit Properties L.P.,
its General Partner
By: Related Credit Properties Inc.,
its General Partner
Date: January 20, 2004
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes,
President and Chief
Executive Officer
(Principal Executive and
Financial Officer)
Date: January 20, 2004
By: /s/ Glenn F. Hopps
------------------
Glenn F. Hopps,
Treasurer
(Principal Accounting
Officer)
Exhibit 31.1
CERTIFICATION PURSUANT TO RULE
13a-14(a) OR RULE 15d-14(a)
I, Alan P. Hirmes, Principal Executive Officer and Principal Financial Officer
of Related Credit Properties L.P. and Liberty Associates III, L.P. (the "General
Partners"), each of which is a general partner of Liberty Tax Credit Plus L.P.
(the "Partnership"), hereby certify that:
1. I have reviewed this quarterly report on Form 10-Q for the period
ending December 15, 2003 of the Partnership;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the Partnership as of, and for, the periods presented in
this quarterly report;
4. I am responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in
Exchange Act Rues 13a-15(f) and 15d-15(f)) for the Partnership and I
have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the Partnership, including its
consolidated subsidiaries, is made known to me by others within those
entities, particularly during the period in which this quarterly report
was being prepared;
b) designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under my
supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting
principles; and
c) evaluated the effectiveness of the Partnership's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures as of the end
of the period covered by this quarterly report based on such
evaluation; and
d) disclosed in this quarterly report any change in the Partnership's
internal control over financial reporting that occurred during the
period ending December 15, 2003 that has materially affected, or is
reasonably likely to materially affect, the Partnership's internal
control over financial reporting; and
5. I have disclosed, based on my most recent evaluation of internal
control over financial reporting, to the Partnership's auditors and to
the boards of directors of the General Partners:
a) all significant deficiencies and material weakness in the design or
operation of internal controls over financial reporting which are
reasonably likely to adversely affect the Partnership's ability to
record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Partnership's
internal controls over financial reporting.
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
Principal Executive Officer and
Principal Financial Officer
January 20, 2004
Exhibit 32.1
CERTIFICATION PURSUANT TO
RULE 13a-14(b) OR RULE 15d-14(b) AND
SECTION 1350
OF TITLE 18 OF THE UNITED STATES
CODE (18 U.S.C. 1350)
In connection with the Quarterly Report of Liberty Tax Credit Plus L.P. (the
"Partnership") on Form 10-Q for the period ending December 15, 2003 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Alan P. Hirmes, Principal Executive Officer and Principal Financial Officer
of Related Credit Properties L.P. and Liberty Associates III, L.P., the general
partners of the Partnership, certify, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Partnership.
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
Principal Executive Officer and Principal Financial Officer
January 20, 2004