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 September 30, 2004
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
============ ============
September 30, March 31,
2004 2004
------------ ------------
(Unaudited)
ASSETS
Property and equipment - (at cost,
net of accumulated depreciation
of $66,146,433 and $63,733,516,
respectively) $ 78,258,055 $ 80,476,651
Cash and cash equivalents 2,296,068 2,492,636
Cash held in escrow 5,210,785 4,743,491
Deferred costs (net of accumulated
amortization of $2,082,662
and $1,988,501, respectively) 885,224 979,385
Other assets 1,466,678 1,247,703
------------ ------------
Total Assets $ 88,116,810 $ 89,939,866
============ ============
2
FREEDOM TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(continued)
============ ============
September 30, March 31,
2004 2004
------------ ------------
(Unaudited)
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Liabilities:
Mortgage notes payable $ 65,723,999 $ 66,285,158
Accounts payable and other
liabilities 2,099,979 1,771,574
Due to local general partners and
affiliates 3,819,895 3,922,555
Due to general partners and
affiliates (Note 2) 8,386,241 7,861,874
------------ ------------
Total Liabilities 80,030,114 79,841,161
------------ ------------
Minority interests 7,976,936 8,001,969
------------ ------------
Partners' Capital (Deficit):
Limited partners (72,896 BACs
issued and outstanding) 789,309 2,756,415
General partners (679,549) (659,679)
------------ ------------
Total Partners' Capital (Deficit) 109,760 2,096,736
------------ ------------
Total Liabilities and Partners'
Capital (Deficit) $ 88,116,810 $ 89,939,866
============ ============
The accompanying notes are an integral part of these consolidated condensed
financial statements.
3
FREEDOM TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
============================ ============================
Three Months Ended Six Months Ended
September 30, September 30,
---------------------------- ----------------------------
2004 2003 2004 2003
---------------------------- ----------------------------
Revenues
Rental income $ 3,780,526 $ 3,623,562 $ 7,528,881 $ 7,287,929
Other 412,340 414,400 729,538 741,321
------------ ------------ ------------ ------------
Total revenues 4,192,866 4,037,962 8,258,419 8,029,250
------------ ------------ ------------ ------------
Expenses
General and
administrative 653,914 688,221 1,354,310 1,456,369
General and
administrative-
related parties
(Note 2) 484,291 444,333 926,386 860,456
Operating and
other 405,343 335,582 809,666 727,976
Repairs and
maintenance 785,166 680,570 1,617,391 1,403,450
Real estate taxes 244,580 247,241 495,874 498,764
Insurance 205,654 170,297 382,421 335,557
Financial 1,100,351 1,172,494 2,171,116 2,275,984
Depreciation and
amortization 1,250,773 1,234,872 2,507,078 2,472,524
------------ ------------ ------------ ------------
Total expenses 5,130,072 4,973,610 10,264,242 10,031,080
------------ ------------ ------------ ------------
Loss before
minority interest (937,206) (935,648) (2,005,823) (2,001,830)
Minority interest
in loss of
subsidiary
partnerships 8,484 9,275 18,847 20,973
------------ ------------ ------------ ------------
Net loss $ (928,722) $ (926,373) $ (1,986,976) $ (1,980,857)
============ ============ ============ ============
Net loss - limited
partners $ (919,435) $ (917,109) $ (1,967,106) $ (1,961,048)
============ ============ ============ ============
Number of BACs
outstanding 72,896 72,896 72,896 72,896
============ ============ ============ ============
Net loss per BAC $ (12.61) $ (12.58) $ (26.98) $ (26.90)
============ ============ ============ ============
The accompanying notes are an integral part of these consolidated condensed
financial statements.
4
FREEDOM TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF
CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
Limited General
Total Partners Partners
----------- ----------- -----------
Partners' capital (deficit) -
April 1, 2004 $ 2,096,736 $ 2,756,415 $ (659,679)
Net loss (1,986,976) (1,967,106) (19,870)
----------- ----------- -----------
Partners' capital (deficit) -
September 30, 2004 $ 109,760 $ 789,309 $ (679,549)
=========== =========== ===========
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)
==========================
Six Months Ended
September 30,
--------------------------
2004 2003
--------------------------
Cash flows from operating activities:
Net loss $(1,986,976) $(1,980,857)
Adjustments to reconcile net loss
to net cash provided by
operating activities:
Depreciation and amortization 2,507,078 2,472,524
Minority interest in loss of
subsidiaries (18,847) (20,973)
Increase in cash held
in escrow (467,294) (451,664)
Increase in other assets (218,975) (154,961)
Increase in accounts payable
and other liabilities 328,406 657,303
Increase in due to general partners
and affiliates 524,367 432,715
Increase in due to local general
partners and affiliates 15,714 14,632
Decrease in due to local general
partners and affiliates (118,374) (103,214)
----------- -----------
Net cash provided by
operating activities 565,099 865,505
----------- -----------
Cash flows from investing activities:
Acquisition of property and
equipment (194,321) (286,094)
----------- -----------
Net cash used in investing
activities (194,321) (286,094)
----------- -----------
6
FREEDOM TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF
CASH FLOWS
(Unaudited)
(continued)
==========================
Six Months Ended
September 30,
--------------------------
2004 2003
--------------------------
Cash flows from financing activities:
Repayments of mortgage notes (561,160) (516,804)
Decrease in capitalization of
consolidated subsidiaries and
distributions attributable to
minority interest (6,186) (17,310)
----------- -----------
Net cash used in financing
activities (567,346) (534,114)
----------- -----------
Net (decrease) increase in cash and cash
equivalents (196,568) 45,297
Cash and cash equivalents at
beginning of period 2,492,636 2,247,128
----------- -----------
Cash and cash equivalents at
end of period $ 2,296,068 $ 2,292,425
=========== ===========
Supplemental disclosure of cash
flow information:
Cash paid during period for interest $ 2,041,339 $ 2,045,256
=========== ===========
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
September 30, 2004
(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 September 30. All subsidiaries have fiscal
quarters ending June 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 July 1
through September 30.
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, $19,000 and $21,000 for the three and six months ended September 30,
2004 and 2003, 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
present fairly the financial position of the Partnership as of September 30,
2004 and the results of operations for the three and six months ended September
30, 2004 and 2003 and cash flows for the six months ended September 30, 2004 and
8
FREEDOM TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS
September 30, 2004
(Unaudited)
2003. However, the operating results and cash flows for the six months ended
September 30, 2004 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, 2004.
9
FREEDOM TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS
September 30, 2004
(Unaudited)
Note 2 - Related Party Transactions
The costs incurred to related parties for the three and six months ended
September 30, 2004 and 2003 were as follows:
Three Months Ended Six Months Ended
September 30, September 30,
------------------- -------------------
2004 2003 2004 2003
------------------- -------------------
Partnership manage-
ment fees (a) $169,000 $169,000 $338,000 $338,000
Expense reimburse-
ment (b) 73,334 59,602 109,780 98,762
Local administra-
tive fee (c) 14,000 14,000 27,000 27,000
-------- -------- -------- --------
Total general and
administrative-
General Partners 256,334 242,602 474,780 463,762
-------- -------- -------- --------
Property manage-
ment fees
incurred to
affiliates of
the subsidiary
partnerships'
general
partners (d) 227,957 201,731 451,606 396,694
-------- -------- -------- --------
Total general and
administrative-
related parties $484,291 $444,333 $926,386 $860,456
======== ======== ======== ========
(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
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
10
FREEDOM TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS
September 30, 2004
(Unaudited)
amounting to approximately $6,546,000 and $6,208,000 were accrued and unpaid as
of September 30, 2004 and March 31, 2004, 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 of up to $2,500 per
year from each subsidiary partnership.
(d) Property management fees incurred by subsidiary partnerships amounted to
$269,748 and $268,168 and $536,131 and $528,826 for the three and six months
ended September 30, 2004 and 2003, respectively. Of these fees, $227,957 and
$201,731 and $451,606 and $396,694, respectively, were incurred to affiliates of
the subsidiary partnerships' general partners for the three and six months ended
September 30, 2004 and 2003, respectively.
Note 3 - Contingencies
Washington Brooklyn
- -------------------
On or about September 2003, two putative mortgagees commenced a mortgage
foreclosure action in the Supreme Court of the State of New York, Kings County
(the "Court"), entitled 150 BEACH 120th STREET INC. v. WASHINGTON BROOKLYN
11
FREEDOM TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS
September 30, 2004
(Unaudited)
LIMITED PARTNERSHIP, Index No. 35255/2003, seeking to foreclose on an alleged
$100,000 loan and mortgage against the real property (the "Apartment Complex")
owned by Washington Brooklyn Limited Partnership ("Washington"). Apparently, the
former general partner of Washington, BUFNY Houses of Brooklyn, Inc. ("BUFNY"),
allegedly granted two mortgages in the amounts of $225,000 and $100,000 secured
by the Apartment Complex. Each of the foregoing mortgages was granted without
the knowledge and consent of Freedom SLP, L.P. (the "Special Limited Partner")
or the Partnership (collectively the "Freedom LPs"), as required by Washington's
Amended and Restated Agreement of Limited Partnership (the "Partnership
Agreement"). The Freedom LPs believe that BUFNY did not use the alleged loan
proceeds for the benefit of Washington or the Apartment Complex. For these and
other reasons, the Freedom LPs contend that the alleged mortgages are invalid.
In addition, BUFNY allegedly failed to comply with the terms of either mortgage,
which resulted in the holders of the alleged $100,000 mortgage commencing the
foreclosure proceedings. BUFNY did not appear in or otherwise respond to the
foreclosure proceedings. The holders of the alleged $225,000 mortgage have not
yet, to the knowledge of the Freedom LPs, commenced any foreclosure proceedings.
Shortly after the Freedom LPs became aware of these foreclosure proceedings,
their counsel contacted counsel for the plaintiffs and mortgagees in an effort
to learn more about the alleged mortgages and to resolve the disputes relating
to the mortgages. When those efforts failed, the Freedom LPs filed a motion to
intervene in the foreclosure action and for leave to file a late answer on
behalf of themselves and Washington. The Freedom LPs contend that the mortgages
are invalid and that Washington is not liable for them or the underlying
indebtedness. In an order dated September 7, 2004, the Court granted the Freedom
LPs' motion to intervene and to file a late answer on behalf of the Partnership.
On or about September 21, 2004, the Freedom LPs, on behalf of themselves and the
Partnership, served an answer, counterclaims and crossclaims in defending
against the action. The answer denied the material allegations of the complaint
and asserted certain affirmative defenses, counterclaims and crossclaims. Among
other things, the Freedom LPs, on behalf of themselves and the Partnership,
added The Levites Organization, one of the two co-holders of the $225,000
12
FREEDOM TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS
September 30, 2004
(Unaudited)
mortgage for which the plaintiffs' complaint did not seek foreclosure, as an
additional counterclaim defendant, and the Freedom LPs assert that both the
$100,000 and $225,000 mortgages are invalid and void ab initio. The Freedom LPs
intend to defend the action and prosecute their counterclaims and crossclaims
vigorously. If the Court were to reject the Freedom LPs defenses and
counterclaims, then it is possible that the Apartment Complex might be
foreclosed upon and the Partnership might lose its title to and interests in the
Apartment Complex, as well as risk possible recapture of a portion of the tax
credits generated by Washington. However, the final outcome of this case cannot
be determined at this time.
In addition, due to BUFNY's breach of fiduciary duties and breaches of the
Partnership Agreement, the Special Limited Partner exercised its rights under
the Partnership Agreement to remove BUFNY as Washington's general partner and to
substitute itself as the new replacement general partner, effective April 26,
2004.
13
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 six months ended September 30,
2004, 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 $20,000, exclusive of Local
Partnerships' working capital, remains as of September 30, 2004.
During the six months ended September 30, 2004 and 2003, the distributions
received from the Local Partnerships approximated $27,000 and $3,400,
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 $6,546,000 and $6,208,000 were accrued and unpaid as of September
30, 2004 and March 31, 2004, 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 six months ended September 30, 2004, cash and cash equivalents of the
Partnership and its forty-two consolidated Local Partnerships decreased
approximately $197,000 due to acquisitions of property and equipment ($194,000),
a decrease in capitalization of consolidated subsidiaries attributable to
minority interest ($6,000) and repayments of mortgage notes ($561,000), which
exceeded cash provided by operating activities ($565,000). Included in the
adjustments to reconcile the net loss to cash provided by operating activities
is depreciation and amortization of approximately $2,507,000.
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
14
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 had their tax credits in
place. 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. As of December 31, 2002 all the Local Partnerships have completed their
tax credit periods and the Partnership has met its primary objective of
generating Housing Tax Credits ("Tax Credits") for qualified BACs holders.
However, each Local Partnership must continue to comply with the Tax Credit
requirements until the end of the 15 year Compliance Period ("Compliance
Period") in order to avoid recapture of the Tax Credits. The Compliance Period
will end between December 31, 2004 and December 31, 2007 with respect to the
Properties depending upon when the Compliance Period commenced.
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 included in the Partnership's Annual
Report on Form 10-K for the year ended March 31, 2004.
(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
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)
15
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.
Results of Operations
- ---------------------
The results of operations for the three and six months ended September 30, 2004
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 4% and
3% for the three and six months ended September 30, 2004 as compared to the
corresponding periods in 2003, primarily due to rental rate increases.
Total expenses, excluding operating and other, repairs and maintenance and
insurance, remained fairly consistent with a decrease of 1% for both the three
and six months ended September 30, 2004 as compared to the corresponding periods
in 2003.
Operating expenses increased by approximately $70,000 and $82,000 for the three
and six months ended September 30, 2004 as compared to the corresponding periods
in 2003, primarily due to an increase in fuel costs at one Local Partnership and
higher water and sewer costs at two other Local Partnerships.
Repairs and maintenance expenses increased by approximately $105,000 and
$214,000 for the three and six months ended September 30, 2004 as compared to
the corresponding periods in 2003, primarily due to painting and exterior
renovations at one Local Partnership, an increase in exterior repairs at a
second Local Partnership and an increase in turnover costs, building interior
and exterior costs at a third Local Partnership.
16
Insurance expense increased by approximately $35,000 and $47,000 for the three
and six months ended September 30, 2004 as compared to the corresponding periods
in 2003, 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.
Item 4. Controls and Procedures
(a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. The Principal Executive
Officer and Principal Financial Officer of Related Freedom Associates L.P. and
Freedom G.P. Inc., the general partners of the Partnership, has evaluated the
effectiveness of 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, as amended ("Exchange Act"), as of the end of the period covered by
this report. Based on such evaluation, such officer has concluded that, as of
the end of such period, the Partnership's disclosure controls and procedures are
effective.
(b) INTERNAL CONTROL OVER FINANCIAL REPORTING. There have not been any changes
in Partnership's internal control over financial reporting during the fiscal
quarter to which this report relates that have materially affected, or are
reasonably likely to materially affect, the Partnership's internal control over
financial reporting.
17
PART II. OTHER INFORMATION
Item 1. Legal Proceedings - See Item I. Financial Statements - Note 3.
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
(3A) The Partnership's Amended and Restated Agreement of Limited
Partnership, incorporated herein as an exhibit by reference to Exhibit A to the
Partnership's Prospectus, dated February 9, 1990, as supplemented by supplements
thereto dated December 7, 1990, May 10, 1991, July 10, 1991 and July 23, 1991
(as so supplemented, the "Prospectus"), filed with the Securities and Exchange
Commission on July 30, 1992, as part of Post-Effective Amendment No. 6 to the
Partnership's registration statement on Form S-11, File No. 33-30859
("Post-Effective Amendment No. 6")
(3B) The Partnership's Certificate of Limited Partnership, as filed with
Secretary of State of the State of Delaware on August 28, 1989, incorporated
herein as an exhibit by reference to Exhibit (3C) to the Partnership's
registration statement on Form S-11, File No. 33-30859, as filed with the
Securities and Exchange Commission on September 1, 1989 (the "Initial S-11")
(10A) Form of Subscription Agreement, incorporated herein as an exhibit
by reference to Exhibit B to the Prospectus as filed as part of Post-Effective
Amendment No. 6
(10B) Form of Purchase and Sale Agreement pertaining to the Part-
nership's acquisition of Local Partnership Interests, incorporated herein as an
exhibit by reference to Exhibit (10C) to the Initial S-11
(10C) Form of Amended and Restated Agreement of Limited Partnership of
Local Partnerships, incorporated herein as an exhibit by reference to Exhibit
(10D) to Pre-Effective Amendment No. 1 to the Partnership's
registration statement on Form S-11, File No.33-30859, as filed with the
Securities and Exchange Commission on December 21, 1989
18
(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 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: November 5, 2004
By: /s/ Alan P. Hirmes
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Alan P. Hirmes, President
(Principal Executive Officer and
Principal Financial Officer)
Date: November 5, 2004
By: /s/ Glenn F. Hopps
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Glenn F. Hopps, Treasurer
(Principal Accounting Officer)
and
By: FREEDOM GP INC.,
a General Partner
Date: November 5, 2004
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes, President
(Principal Executive Officer and
Principal Financial Officer)
Date: November 5, 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
September 30, 2004 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 Rules 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 September 30, 2004 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: November 5, 2004
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By: /s/ Alan P. Hirmes
------------------
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 September 30, 2004 as filed
with the Securities and Exchange Commission ("SEC") 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.
A signed original of this written statement required by Section 906 has been
provided to the Partnership and will be retained by the Partnership and
furnished to the SEC or its staff upon request.
By: /s/ Alan P. Hirmes
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Alan P. Hirmes
Principal Executive Officer and Principal Financial Officer
November 5, 2004