SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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 31, 2003
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ----- EXCHANGE ACT OF 1934
Commission File Number 0-24652
FREEDOM TAX CREDIT PLUS L.P.
----------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3533987
- ------------------------------- -------------------
(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
FREEDOM TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
============= ============
December 31, March 31,
2003 2003
------------- ------------
(Unaudited)
ASSETS
Property and equipment - (at cost,
net of accumulated depreciation
of $62,501,334 and $58,927,642,
respectively) $81,121,704 $84,274,411
Cash and cash equivalents 2,445,009 2,247,128
Investment in marketable securities 0 109,498
Cash held in escrow 5,244,438 4,654,612
Deferred costs (net of accumulated
amortization of $1,948,751
and $1,821,322, respectively) 1,014,064 1,141,493
Other assets 1,459,320 1,240,691
----------- -----------
Total Assets $91,284,535 $93,667,833
=========== ===========
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FREEDOM TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(continued)
============= ============
December 31, March 31,
2003 2003
------------- ------------
(Unaudited)
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Liabilities:
Mortgage notes payable $66,588,293 $67,366,819
Accounts payable and other
liabilities 2,389,464 1,411,077
Due to local general partners and
affiliates 3,692,980 4,025,449
Due to general partners and
affiliates (Note 2) 7,548,300 6,933,531
----------- -----------
Total Liabilities 80,219,037 79,736,876
----------- -----------
Minority interests 8,033,051 8,079,257
----------- -----------
Partners' Capital (Deficit):
Limited partners (72,896 BACs
issued and outstanding) 3,682,769 6,470,255
General partners (650,322) (622,165)
Accumulated other comprehensive
income:
Unrealized loss on marketable
securities 0 3,610
----------- -----------
Total Partners' Capital (Deficit) 3,032,447 5,851,700
----------- -----------
Total Liabilities and Partners'
Capital (Deficit) $91,284,535 $93,667,833
=========== ===========
The accompanying notes are in integral part of these consolidated condensed
financial statements.
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FREEDOM TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF
OPERATIONS
(Unaudited)
============================ ============================
Three Months Ended Nine Months Ended
December 31, December 31,
---------------------------- ----------------------------
2003 2002 2003 2002
---------------------------- ----------------------------
Revenues
Rental income $ 3,680,546 $ 3,557,927 $10,968,475 $10,630,258
Other 349,842 363,086 1,091,163 1,041,218
Gain on sale of
marketable securities 4,966 0 4,966 0
----------- ----------- ----------- -----------
Total revenues 4,035,354 3,921,013 12,064,604 11,671,476
----------- ----------- ----------- -----------
Expenses
General and
administrative 679,023 640,432 2,135,392 2,024,814
General and
administrative-
related parties
Note 2) 409,783 396,350 1,270,239 1,232,405
Operating and
other 355,945 323,816 1,083,921 1,063,659
Repairs and
maintenance 719,531 675,201 2,122,981 1,904,865
Real estate taxes 251,926 251,520 750,690 742,956
Insurance 140,547 111,135 476,104 369,082
Financial 1,096,321 1,150,932 3,372,305 3,458,707
Depreciation and
amortization 1,228,597 1,261,144 3,701,121 3,784,399
----------- ----------- ----------- -----------
Total expenses 4,881,673 4,810,530 14,912,753 14,580,887
----------- ----------- ----------- -----------
Loss before
minority interest (846,319) (889,517) (2,848,149) (2,909,411)
Minority interest
in loss of
subsidiary
partnerships 7,923 9,468 28,896 29,501
----------- ----------- ----------- -----------
Net loss $ (838,396) $ (880,049) $(2,819,253) $(2,879,910)
=========== =========== =========== ===========
Net loss - limited
partners $ (830,012) $ (871,249) $(2,791,060) $(2,851,111)
=========== =========== =========== ===========
Number of BACs
outstanding 72,896 72,896 72,896 72,896
=========== =========== =========== ===========
Basic net loss
per BAC $ (11.34) $ (11.95) $ (38.24) $ (39.11)
=========== =========== =========== ===========
The accompanying notes are an integral part of these consolidated condensed
financial statements.
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FREEDOM TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
Accumulated
Other
Limited General Comprehensive Comprehensive
Total Partners Partners Income (loss) Loss
------------ ------------ ------------ ------------ ------------
Partners' capital (deficit) April 1, 2003 $ 5,851,700 $ 6,470,255 $ (622,165) $ 3,610
Comprehensive Loss: Net loss -
Nine months ended December 31, 2003 (2,819,253) (2,791,060) (28,193) $ (2,819,253)
Other Comprehensive Loss:
Net unrealized loss on marketable
securities 0 3,574 36 ( 3,610) 3,610
----------- ----------- ---------- ----------- ------------
Total Comprehensive Loss $ (2,815,643)
============
Partners' capital (deficit)
December 31, 2003 $ 3,032,447 $ 3,682,769 $ (650,322) $ 0
=========== =========== ========== ===========
The accompanying notes are an integral part of these consolidated condensed
financial statements.
-5-
FREEDOM TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF
CASH FLOWS
(Unaudited)
===========================
Nine Months Ended
December 31,
---------------------------
2003 2002
---------------------------
Cash flows from operating activities:
Net loss $ (2,819,253) $ (2,879,910)
Adjustments to reconcile net loss
to net cash provided by
operating activities:
Depreciation and amortization 3,701,121 3,784,399
Minority interest in loss of
subsidiaries (28,896) (29,501)
Gain on sale of marketable securities (4,966) 0
Increase in cash held
in escrow (589,826) (579,231)
Increase in other assets (218,629) (168,506)
Increase in accounts payable
and other liabilities 978,387 965,851
Increase in due to general partners
and affiliates 614,769 691,475
Increase in due to local general
partners and affiliates 13,126 82,623
Decrease in due to local general
partners and affiliates (345,595) (343,342)
------------ ------------
Net cash provided by
operating activities 1,300,238 1,523,858
------------ ------------
Cash flows from investing activities:
Acquisition of property and
equipment (420,985) (407,734)
Proceeds from sale of marketable
securities 114,464 0
------------ ------------
Net cash used in investing activities (306,521) (407,734)
------------ ------------
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FREEDOM TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF
CASH FLOWS
(Unaudited)
===========================
Nine Months Ended
December 31,
---------------------------
2003 2002
---------------------------
Cash flows from financing activities:
Proceeds from mortgage notes 0 340,600
Repayments of mortgage notes (778,526) (761,898)
Decrease in capitalization of
consolidated subsidiaries
attributable to minority interest (17,310) (16,575)
------------ ------------
Net cash used in financing
activities (795,836) (437,873)
------------ ------------
Net increase in cash and cash
equivalents 197,881 678,251
Cash and cash equivalents at
beginning of period 2,247,128 1,833,843
------------ ------------
Cash and cash equivalents at
end of period $ 2,445,009 $ 2,512,094
============ ============
Supplemental disclosure of cash
flow information:
Cash paid during period for
interest $ 3,106,061 $ 3,183,335
============ ============
The accompanying notes are an integral part of these consolidated condensed
financial statements.
-7-
FREEDOM TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS
December 31, 2003
(Unaudited)
Note 1 - General
The consolidated financial statements include the accounts of Freedom Tax Credit
Plus L.P. ("the Partnership") and 42 subsidiary partnerships ("subsidiaries",
"subsidiary partnerships" or "Local Partnerships") in which the Partnership is a
limited partner. Through the rights of the Partnership and/or an affiliate of a
General Partner, which affiliate has a contractual obligation to act on behalf
of the Partnership, to remove the general partner of the Local Partnerships and
to approve certain major operating and financial decisions, the Partnership has
a controlling financial interest in the Local Partnerships.
The Partnership's fiscal quarter ends December 31. All subsidiaries have fiscal
quarters ending September 30 in order to allow adequate time for the
subsidiaries' financial statements to be prepared and consolidated. Accounts of
the subsidiaries have been adjusted for intercompany transactions from October 1
through December 31.
All intercompany accounts and transactions have been eliminated in
consolidation.
Increases (decreases) in the capitalization of consolidated subsidiaries
attributable to minority interest arise from cash contributions from and cash
distributions to the minority interest partners.
Losses attributable to minority interests aggregated approximately $8,000,
$9,000, $29,000 and $30,000 for the three and nine months ended December 31,
2003 and 2002, respectively. The Partnership's investment in each subsidiary is
generally equal to the respective subsidiary's partners' equity less minority
interest capital, if any.
The books and records of the Partnership are maintained on the accrual basis of
accounting in accordance with accounting principles generally accepted in the
United States of America. In the opinion of the General Partners of the
Partnership, the accompanying unaudited financial statements contain all
adjustments (consisting only of normal recurring adjustments) necessary to
-8-
FREEDOM TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS
December 31, 2003
(Unaudited)
present fairly the financial position of the Partnership as of December 31,
2003, the results of operations for the three and nine months ended December 31,
2003 and 2002 and cash flows for the nine months ended December 31, 2003 and
2002. However, the operating results and cash flows for the nine months ended
December 31, 2003 may not be indicative of the results for the entire year.
Certain information and note disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America have been omitted or condensed. These condensed
financial statements should be read in conjunction with the financial statements
and notes thereto included in the Partnership's Annual Report on Form 10-K for
the year ended March 31, 2003.
-9-
FREEDOM TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS
December 31, 2003
(Unaudited)
Note 2 - Related Party Transactions
The costs incurred to related parties for the three and nine months ended
December 31, 2003 and 2002 were as follows:
============================ ============================
Three Months Ended Nine Months Ended
December 31, December 31,
---------------------------- ----------------------------
2003 2002 2003 2002
---------------------------- ----------------------------
Partnership manage-
ment fees (a) $ 169,000 $ 169,000 $ 507,000 $ 507,000
Expense reimburse-
ment (b) 28,461 23,486 127,223 110,816
Local administra-
tive fee (c) 13,000 13,000 40,000 40,000
----------- ---------- ---------- ----------
Total general and
administrative-
General Partners 210,461 205,486 674,223 657,816
Property manage-
ment fees
incurred to
affiliates of
the subsidiary
partnerships'
general
partners (d) 199,322 190,864 596,016 574,589
----------- ---------- ---------- ----------
Total general and
administrative-
related parties $ 409,783 $ 396,350 $1,270,239 $1,232,405
=========== ========== ========== ==========
(a) The General Partners are entitled to receive a partnership management fee,
after payment of all Partnership expenses, which together with the annual local
administrative fees, will not exceed a maximum of 0.5% per annum of invested
assets (as defined in the Partnership Agreement), for administering the affairs
of the Partnership. Subject to the foregoing limitation, the partnership
management fee will be determined by the General Partners in their sole
discretion based upon their review of the Partnership's investments. Unpaid
partnership management fees for any year will be accrued without interest and
will be payable from working capital reserves or to the extent of available
-10-
FREEDOM TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS
December 31, 2003
(Unaudited)
funds after the Partnership has made distributions to the Limited Partners and
BACs holders of sale or refinancing proceeds equal to their original capital
contributions plus a 10% priority return thereon (to the extent not theretofore
paid out of cash flow). Partnership management fees owed to the General Partners
amounting to approximately $6,039,000 and $5,532,000 were accrued and unpaid as
of December 31, 2003 and March 31, 2003, respectively. Without the General
Partners' continued accrual without payment, the Partnership will not be in a
position to meet its obligations. The General Partners have continued allowing
the accrual without payment of these amounts, but are under no obligation to
continue to do so. The Partnership is dependent upon the support of the General
Partners and certain of their affiliates in order to meet its obligations at the
Partnership level. The General Partners and these affiliates have agreed to
continue such support for the foreseeable future.
(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.
(c) Freedom SLP L.P., a special limited partner of the subsidiary partnerships,
is entitled to receive an annual local administrative fee from $0 to $2,500 per
year from each subsidiary partnership.
(d) Property management fees incurred by subsidiary partnerships amounted to
$265,654, $249,927, $794,480 and $760,746 for the three and nine months ended
December 31, 2003 and 2002, respectively. Of these fees, $199,322, $190,864,
$596,016 and $574,589, respectively, were incurred to affiliates of the
subsidiary partnerships' general partners for the three and nine months ended
December 31, 2003 and 2002, respectively.
-11-
FREEDOM TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS
December 31, 2003
(Unaudited)
Note 3 - 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 were originally applicable no later than December
15, 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 Condensed Balance Sheets. Further, SFAS No.
150 requires disclosure regarding the terms of those instruments and settlement
alternatives. The guidance in SFAS No. 150 generally is effective for all
financial instruments entered into or modified after May 31, 2003, and is
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.
-12-
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Liquidity and Capital Resources
- -------------------------------
The Partnership's sources of funds during the nine months ended December 31,
2003, include working capital reserves, interest earned on working capital and
distributions received from the Local Partnerships. None of these sources
generated substantial amounts of funds.
A working capital reserve of approximately $18,000, exclusive of Local
Partnerships' working capital, remains as of December 31, 2003.
During the nine months ended December 31, 2003 and 2002, the distributions
received from the Local Partnerships approximated $48,000 and $52,000,
respectively. Cash distributions from Local Partnerships are not expected to
reach a level sufficient to permit cash distributions to BACs holders. These
distributions as well as the working capital reserves referred to in the
preceding paragraph and the continued deferral by the General Partners of fees
owed to them will be used to meet the operating expenses of the Partnership.
Partnership management fees owed to the General Partners amounting to
approximately $6,039,000 and $5,532,000 were accrued and unpaid as of December
31, 2003 and March 31, 2003, respectively. Without the General Partners
continued accrual without payments, the Partnership will not be in a position to
meet its obligations. The General Partners have continued allowing the accrual
without payment of these amounts, but are under no obligation to do so and to
the extent cash flow becomes available, such fees will be paid. The Partnership
is dependent upon the support of the General Partners and certain of their
affiliates in order to meet its obligations at the Partnership level. The
General Partners and these affiliates have agreed to continue such support for
the foreseeable future.
During the nine months ended December 31, 2003, cash and cash equivalents of the
Partnership and its forty-two consolidated Local Partnerships increased
approximately $198,000 due to cash provided by operating activities ($1,300,000)
and proceeds from sale of marketable securities ($114,000) which exceeded
acquisitions of property and equipment ($421,000), a decrease in capitalization
of consolidated subsidiaries attributable to minority interest ($17,000) and
repayments of mortgage notes ($779,000). Included in the adjustments to
reconcile the net loss to cash provided by operating activities is depreciation
-13-
and amortization of approximately $3,701,000 and gain on sale of marketable
securities of approximately $5,000.
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 portfolio may not be experiencing downswings. However, the geographic
diversification of the portfolio may not protect against a general downturn in
the national economy. The Partnership has fully invested the proceeds of its
offering in 42 local partnerships, all of which have their tax credits in place.
The majority of these tax credits have expired in 2003. The tax credits are
attached to the property for a period of ten years and are transferable with the
property during the remainder of such ten year period. If trends in the real
estate market warranted the sale of a property, the remaining tax credits would
transfer to the new owner, thereby adding value to the property on the market.
However, such value declines each year and is not included in the financial
statement carrying amount.
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 Company's accounting policies included in Note 2 to
the consolidated financial statements in the annual report on Form 10-K.
(a) 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
-14-
equipment are retired or otherwise disposed of, the cost and accumulated
depreciation are eliminated from the assets and accumulated depreciation
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).
(b) 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 were originally applicable no later than December
15, 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 Condensed Balance Sheets. Further, SFAS No.
150 requires disclosure regarding the terms of those instruments and settlement
alternatives. The guidance in SFAS No. 150 generally is effective for all
-15-
financial instruments entered into or modified after May 31, 2003, and is
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 for the three and nine months ended December 31, 2003
continued to be in the form of rental income with corresponding expenses divided
among operations, depreciation and mortgage interest.
Rental income remained fairly consistent with increases of approximately 3% for
both the three and nine months ended December 31, 2003 as compared to the
corresponding periods in 2002, primarily due to rental rate increases.
Total expenses, excluding repairs and maintenance and insurance, remained fairly
consistent with changes of approximately 1% for both the three and nine months
ended December 31, 2003 as compared to the corresponding periods in 2002.
Repairs and maintenance expense increased by approximately $44,000 and $218,000
for the three and nine months ended December 31, 2003 as compared to the
corresponding periods in 2002, primarily due to fire damage repairs at one Local
Partnership and rehabilitation of apartments at three other Local Partnerships.
Insurance expense increased by approximately $29,000 and $107,000 for the three
and nine months ended December 31, 2003 as compared to the corresponding periods
in 2002, primarily due to an increase in insurance premiums at the Local
Partnerships.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
The Partnership is not exposed to market risk since its mortgage indebtedness
bears fixed rates of interest.
-16-
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
- ------------------------------------------------
The Principal Executive Officer and Principal Financial Officer of Related
Freedom Associates L.P. and Freedom GP Inc., which are the general partners of
Freedom Tax Credit Plus L.P. (the "Partnership"), have 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 31, 2003 (the "Evaluation Date"). Based on such
evaluation, such officers have concluded that, as of the Evaluation Date, the
Partnership's disclosure controls and procedures are effective in alerting them,
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 31,
2003 which has materially affected, or is reasonably likely to materially
affect, such internal control over financial reporting .
-17-
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
-18-
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
FREEDOM TAX CREDIT PLUS L.P.
(Registrant)
By: RELATED FREEDOM ASSOCIATES L.P.,
a General Partner
By: RELATED FREEDOM ASSOCIATES INC.,
General Partner
Date: February 9, 2004
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes, President
(Principal Executive and
Financial Officer)
Date: February 9, 2004
By: /s/ Glenn F. Hopps
Glenn F. Hopps, Treasurer
(Principal Accounting Officer)
and
By: FREEDOM GP INC.,
a General Partner
Date: February 9, 2004
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes, President
(Principal Executive and
Financial Officer)
Date: February 9, 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 Freedom Associates L.P. and Freedom GP Inc. (the "General Partners"),
each of which is a general partner of Freedom Tax Credit Plus L.P. (the
"Partnership"), hereby certify that:
1. I have reviewed this quarterly report on Form 10-Q for the period
ended December 31, 2003 of the Partnership;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit stating 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 or caused such
disclosure controls and procedures to be designed under my
supervision, 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 31, 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 weaknesses in the design
or operation of internal control 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 control over financial reporting.
Date: February 9, 2004
By: /s/ Alan P. Hirmes
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Alan P. Hirmes
Principal Executive Officer and
Principal Financial Officer
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 Freedom Tax Credit Plus L.P. (the
"Partnership") on Form 10-Q for the period ended December 31, 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 Freedom Associates L.P. and Freedom GP Inc., each of which is the
general partner 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
February 9, 2004