Attached files
| file | filename |
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| EXCEL - IDEA: XBRL DOCUMENT - BOSTON FINANCIAL TAX CREDIT FUND PLUS | Financial_Report.xls |
| EX-32.2 - BOSTON FINANCIAL - BOSTON FINANCIAL TAX CREDIT FUND PLUS | tcpq3fy13ex32-2.htm |
| EX-32.1 - BOSTON FINANCIAL - BOSTON FINANCIAL TAX CREDIT FUND PLUS | tcpq3fy13ex32-1.htm |
| EX-31.1 - BOSTON FINANCIAL - BOSTON FINANCIAL TAX CREDIT FUND PLUS | tcpq3fy13ex31-1.htm |
| EX-31.2 - BOSTON FINANCIAL - BOSTON FINANCIAL TAX CREDIT FUND PLUS | tcpq3fy113ex31-2.htm |
NITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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[ X ]
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934
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For the quarterly period ended December 31, 2012
OR
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from _____________________________to
Commission file number 0-22104
Boston Financial Tax Credit Fund Plus, A Limited Partnership
(Exact name of registrant as specified in its charter)
Massachusetts 04-3105699
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
101 Arch Street, Boston, Massachusetts 02110-1106
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 439-3911
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 has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes X No__.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ___ Accelerated Filer ___
Non-accelerated filer ___ (Do not check if a smaller reporting company) Smaller reporting company X
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes___ No X .
BOSTON FINANCIAL TAX CREDIT FUND PLUS,
A Limited Partnership
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION Page No.
Item 1. Financial Statements
Condensed Balance Sheets (Unaudited) – December 31, 2012
and March 31, 2012 1
Condensed Statements of Operations (Unaudited) -
For the Three and Nine Months Ended December 31, 2012 and 2011 2
Condensed Statement of Changes in Partners' Equity (Unaudited) -
For the Nine Months Ended December 31, 2012 3
Condensed Statements of Cash Flows (Unaudited) -
For the Nine Months Ended December 31, 2012 and 2011 4
Notes to the Financial Statements (Unaudited) 5
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Item 2.
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Management's Discussion and Analysis of Financial
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Condition and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures About Market Risk 13
Item 4. Controls and Procedures 13
PART II. OTHER INFORMATION
Item 6. Exhibits 14
SIGNATURE 15
BOSTON FINANCIAL TAX CREDIT FUND PLUS,
A Limited Partnership
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CONDENSED BALANCE SHEETS
December 31, 2012 and March 31, 2012
(Unaudited)
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Assets
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December 31
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March 31
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||||||
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Cash and cash equivalents
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$ | 2,246,534 | $ | 1,476,153 | ||||
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Investments in Local Limited Partnerships (Note 1)
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1,157,774 | 988,520 | ||||||
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Accounts receivable from the disposition of investments in
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||||||||
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Local Limited Partnerships
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- | 873,000 | ||||||
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Other assets
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268 | 408 | ||||||
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Total Assets
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$ | 3,404,576 | $ | 3,338,081 | ||||
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Liabilities and Partners' Equity
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||||||||
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Due to affiliate
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$ | 9,008 | $ | 9,008 | ||||
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Accrued expenses
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21,111 | 24,186 | ||||||
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Total Liabilities
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30,119 | 33,194 | ||||||
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General, Initial and Investor Limited Partners' Equity
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3,374,457 | 3,304,887 | ||||||
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Total Liabilities and Partners' Equity
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$ | 3,404,576 | $ | 3,338,081 | ||||
The accompanying notes are an integral part of these financial statements.
BOSTON FINANCIAL TAX CREDIT FUND PLUS,
A Limited Partnership
CONDENSED STATEMENTS OF OPERATIONS
For the Three and Nine Months Ended December 31, 2012 and 2011
(Unaudited)
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Three Months Ended
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Nine Months Ended
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|||||||||||||||
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December 31,
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December 31,
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December 31,
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December 31,
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2012
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2011
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2012
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2011
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Revenue
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Investment
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$ | 936 | $ | 1,278 | $ | 4,012 | $ | 3,984 | ||||||||
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Cash distribution income
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- | - | 28,296 | - | ||||||||||||
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Total Revenue
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936 | 1,278 | 32,308 | 3,984 | ||||||||||||
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Expenses:
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Asset management fees, affiliate
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9,008 | 10,933 | 27,024 | 32,798 | ||||||||||||
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General and administrative
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(includes reimbursements to an affiliate
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in the amounts of $10,777 and $12,444 for the three months and $30,332 and
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$34,923 for the nine months ended
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December 31, 2012 and 2011,
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respectively)
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31,777 | 34,865 | 106,628 | 102,258 | ||||||||||||
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Amortization
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517 | 1,959 | 1,553 | 2,995 | ||||||||||||
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Total Expenses
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41,302 | 47,757 | 135,205 | 138,051 | ||||||||||||
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Loss before equity in income of
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Local Limited Partnerships and loss on
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disposition of investments in Local
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Limited Partnerships
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(40,366 | ) | (46,479 | ) | (102,897 | ) | (134,067 | ) | ||||||||
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Equity in income of Local Limited
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Partnerships (Note 1)
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63,539 | 144,304 | 174,476 | 197,503 | ||||||||||||
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Loss on disposition of investments in
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Local Limited Partnerships (Note 1)
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- | - | (2,009 | ) | - | |||||||||||
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Net Income
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$ | 23,173 | $ | 97,825 | $ | 69,570 | $ | 63,436 | ||||||||
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Net Income allocated:
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General Partners
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$ | 232 | $ | 978 | $ | 696 | $ | 634 | ||||||||
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Class A Limited Partners
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21,473 | 90,649 | 64,466 | 58,783 | ||||||||||||
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Class B Limited Partners
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1,468 | 6,198 | 4,408 | 4,019 | ||||||||||||
| $ | 23,173 | $ | 97,825 | $ | 69,570 | $ | 63,436 | |||||||||
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Net Income Per Limited Partner Unit
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Class A Limited Partners (34,643 Units)
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$ | 0.62 | $ | 2.62 | $ | 1.86 | $ | 1.70 | ||||||||
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Class B Limited Partners (3,290 Units)
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$ | 0.45 | $ | 1.88 | $ | 1.34 | $ | 1.22 | ||||||||
The accompanying notes are an integral part of these financial statements.
BOSTON FINANCIAL TAX CREDIT FUND PLUS,
A Limited Partnership
CONDENSED STATEMENT OF CHANGES IN PARTNERS' EQUITY
For the Nine Months Ended December 31, 2012
(Unaudited)
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Investor
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Investor
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Initial
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Limited
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Limited
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General
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Limited
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Partners,
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Partners,
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Partners
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Partner
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Class A
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Class B
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Total
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Balance at March 31, 2012
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$ | 33,049 | $ | 5,000 | $ | 3,260,571 | $ | 6,267 | $ | 3,304,887 | ||||||||||
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Net Income
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696 | - | 64,466 | 4,408 | 69,570 | |||||||||||||||
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Balance at December 31, 2012
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$ | 33,745 | $ | 5,000 | $ | 3,325,037 | $ | 10,675 | $ | 3,374,457 | ||||||||||
The accompanying notes are an integral part of these financial statements.
BOSTON FINANCIAL TAX CREDIT FUND PLUS,
A Limited Partnership
CONDENSED STATEMENTS OF CASH FLOWS
For the Nine Months Ended December 31, 2012 and 2011
(Unaudited)
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2012
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2011
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Net cash used for operating activities
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$ | (104,279 | ) | $ | (126,660 | ) | ||
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Cash flows from investing activities:
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Cash distributions received from Local Limited Partnerships
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1,660 | - | ||||||
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Proceeds received from disposition of investments in
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Local Limited Partnerships
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873,000 | - | ||||||
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Net cash provided by investing activities
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874,660 | - | ||||||
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Net increase (decrease) in cash and cash equivalents
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770,381 | (126,660 | ) | |||||
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Cash and cash equivalents, beginning
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1,476,153 | 1,382,389 | ||||||
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Cash and cash equivalents, ending
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$ | 2,246,534 | $ | 1,255,729 | ||||
The accompanying notes are an integral part of these financial statements.
BOSTON FINANCIAL TAX CREDIT FUND PLUS,
A Limited Partnership
NOTES TO THE FINANCIAL STATEMENTS
(Unaudited)
The unaudited financial statements presented herein have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by accounting principles generally accepted in the United States of America. These statements should be read in conjunction with the audited financial statements and notes thereto included with the Annual Report on Form 10-K of Boston Financial Tax Credit Fund Plus, a Limited Partnership (the “Fund”) for the year ended March 31, 2012. In the opinion of the managing general partner of the Fund, Arch Street VIII, Inc. (the “Managing General Partner”), these financial statements include all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the Fund’s financial position and results of operations. The results of operations for the periods may not be indicative of the results to be expected for the year.
The Managing General Partner has elected to report results of the limited partnerships or limited liability companies in which it invests (the “Local Limited Partnerships”) on a 90-day lag basis because the Local Limited Partnerships report their results on a calendar year basis. Accordingly, the financial information of the Local Limited Partnerships that is included in the accompanying financial statements is as of September 30, 2012 and 2011 and for the nine months then ended.
Generally, profits, losses, tax credits and cash flow from operations are allocated 99% to the Limited Partners and 1% to the General Partners. Net proceeds from a sale or refinancing will be allocated 95% to the Limited Partners and 5% to the General Partners, after certain priority payments. The General Partners may have an obligation to fund deficits in their capital accounts, subject to limits set forth in the Fund’s Amended and Restated Agreement of Limited Partnership (the “Partnership Agreement”). However, to the extent that the General Partners’ capital accounts are in a deficit position, certain items of net income may be allocated to the General Partners in accordance with the Partnership Agreement.
1. Investments in Local Limited Partnerships
The Fund currently has a limited partner interest in one Local Limited Partnership which was organized for the purpose of owning and operating government-assisted, multi-family housing complexes. The Fund's ownership interest in each Local Limited Partnership is 99%. The Fund may have negotiated or may negotiate options with the Local General Partners to purchase or sell the Fund’s interests in the Local Limited Partnerships at the end of the Compliance Period for nominal prices. In the event that Properties are sold to third parties, or upon dissolution of the Local Limited Partnerships, proceeds will be distributed according to the terms of each Local Limited Partnership agreement.
BOSTON FINANCIAL TAX CREDIT FUND PLUS,
A Limited Partnership
NOTES TO THE FINANCIAL STATEMENTS (continued)
(Unaudited)
1. Investments in Local Limited Partnerships (continued)
The following is a summary of investments in Local Limited Partnerships at December 31, 2012 and March 31, 2012:
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December 31
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March 31
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Capital contributions paid to Local Limited Partnerships and purchase
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price paid to withdrawing partners of Local Limited Partnerships
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$ | 2,479,708 | $ | 4,660,327 | ||||
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Cumulative equity in losses of Local Limited Partnerships (excluding
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cumulative unrecognized losses of $1,546,000 at March 31, 2012)
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1,011,824 | (1,145,942 | ) | |||||
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Cumulative cash distributions received from Local Limited Partnerships
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(1,987,583 | ) | (2,223,150 | ) | ||||
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Investments in Local Limited Partnerships before adjustments
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1,503,949 | 1,291,235 | ||||||
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Excess investment costs over the underlying assets acquired:
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Acquisition fees and expenses
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72,487 | 136,290 | ||||||
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Cumulative amortization of acquisition fees and expenses
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(40,662 | ) | (61,005 | ) | ||||
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Investments in Local Limited Partnerships before impairment
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1,535,774 | 1,366,520 | ||||||
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Cumulative impairment on investments in Local Limited Partnerships
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(378,000 | ) | (378,000 | ) | ||||
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Investments in Local Limited Partnerships
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$ | 1,157,774 | $ | 988,520 | ||||
The Fund has recorded an impairment for its investments in certain Local Limited Partnerships in order to appropriately reflect the estimated net realizable value of these investments.
The Fund’s share of the net income (losses) of the Local Limited Partnerships for the nine months ended December 31, 2012 and 2011 is ($92,566) and $61,990, respectively. For the nine months ended December 31, 2012 and 2011, the Fund has not recognized $291,561 and $183,758, respectively, of equity in losses relating to certain Local Limited Partnerships in which cumulative equity in losses and cumulative distributions exceeded its total investment in these Local Limited Partnerships. Previously unrecognized losses of $24,519 and $48,245 are included in losses recognized in the nine months ended December 31, 2012 and 2011, respectively.
During the nine months ended December 31, 2012, the Property owned by one of the Local Limited Partnerships was sold. The Fund's investment value at the time of the sale was $2,009 resulting in a loss on disposition of investments in Local Limited Partnerships of $2,009 for the nine months ended December 31, 2012.
During the nine months ended December 31, 2012, another Property owned by one of the Local Limited Partnerships was foreclosed by its lender. At the time of foreclosure, the Fund’s net investment value in the Local Limited Partnership was zero, therefore the foreclosure did not have a material impact on the Fund’s financial position, operations or cash flow. As of December 31, 2012, the Local Limited Partnership was effectively dissolved and the Fund no longer had an interest in this Local Limited Partnership.
BOSTON FINANCIAL TAX CREDIT FUND PLUS,
A Limited Partnership
NOTES TO THE FINANCIAL STATEMENTS (continued)
(Unaudited)
2. Significant Subsidiaries
The following Local Limited Partnerships invested in by the Fund represent more than 20% of the Fund’s total assets or equity as of December 31, 2012 or 2011 or net income (loss) for the three months then ended. The following financial information represents the performance of these Local Limited Partnerships for the three months ended September 30, 2012 and 2011:
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2012
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2011
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Pilot House Associates Limited Partnership
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Revenue
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$ | 325,472 | $ | 325,506 | ||||
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Net Income
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$ | 64,180 | $ | 77,969 | ||||
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Preston Place Associates Limited Partnership
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Revenue
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N/A | $ | 278,363 | |||||
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Net Income
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N/A | $ | 84,026 | |||||
BOSTON FINANCIAL TAX CREDIT FUND PLUS,
A Limited Partnership
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Certain matters discussed herein constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The use of words like “anticipate,” “estimate,” “intend,” “project,” “plan,” “expect,” “believe,” “could,” “will,” “may,” “might” and similar expressions are intended to identify such forward-looking statements. The Fund intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements and is including this statement for purposes of complying with these safe harbor provisions. Although the Fund believes the forward-looking statements are based on reasonable assumptions and current expectations, the Fund can give no assurance that its expectations will be attained. Actual results and timing of certain events could differ materially from those projected in or contemplated by the forward-looking statements due to a number of factors, including, without limitation: (i) possible reduction in rental income due to an inability to maintain high occupancy levels or adequate rental levels; (ii) possible adverse changes in general economic conditions and adverse local conditions, such as competitive overbuilding, a decrease in employment rates or adverse changes in real estate laws, including building codes; (iii) possible future adoption of rent control legislation which would not permit increased costs to be passed on to the tenants in the form of rent increases or which would suppress the ability of the Local Limited Partnership to generate operating cash flow; and (iv) general economic and real estate conditions and interest rates.
The Fund is a Massachusetts limited partnership organized to invest as a limited partner or member in other limited partnerships or limited liability companies (collectively, “Local Limited Partnerships”) which own and operate apartment complexes (each, a “Property”) which are eligible for low income housing tax credits (“Tax Credits”) that may be applied against the federal income tax liability of an investor. The Fund also invested in, for the benefit of the Class B Limited Partners, United States Treasury obligations from which the interest coupons have been stripped or in such interest coupons themselves (collectively, "Treasury STRIPS"). The Fund used approximately 28% of the Class B Limited Partners' capital contributions to purchase Treasury STRIPS with maturities of 13 to 18 years, with a total redemption amount equal to the Class B Limited Partners' capital contributions. The Fund’s objectives are to: (i) provide annual tax benefits in the form of Tax Credits which Limited Partners may use to offset their federal income tax liability; (ii) preserve and protect the Fund’s capital committed to Local Limited Partnerships; (iii) provide cash distributions from operations of Local Limited Partnerships; (iv) provide cash distributions from sale or refinancing transactions with the possibility of long term capital appreciation; and (v) provide cash distributions derived from investment in Treasury STRIPS to Class B Limited Partners after a period of approximately thirteen to eighteen years equal to their capital contributions. The Fund no longer owns any Tresasury STRIPS. The General Partners of the Fund are Arch Street VIII, Inc., which serves as the Managing General Partner, and Arch Street VI Limited Partnership. ALZA Corporation is the Class A Limited Partner of Arch Street VI Limited Partnership, Boston Financial BFG Investments, LLC is the Class B Limited Partner of Arch Street VI Limited Partnership and Arch Street VIII, Inc. is the general partner of Arch Street VI Limited Partnership. The General Partners are affiliates of Boston Financial Investment Management, LP (“Boston Financial”). The fiscal year of the Fund ends on March 31.
Critical Accounting Policies
The Fund’s accounting policies include those that relate to its recognition of investments in Local Limited Partnerships using the equity method of accounting. The Fund’s policy is as follows:
The Fund is involved with the Local Limited Partnerships in which it invests as a non-controlling equity holder. The investments in Local Limited Partnerships are made primarily to obtain federal income Tax Credits on behalf of the Fund’s investors. Such Tax Credits are not reflected on the books of the Fund. The Local Limited Partnerships are Variable Interest Entities ("VIEs”) because the owners of the equity at risk do not have the power to direct their operations. A VIE must be consolidated by the entity which is determined to be the VIE’s primary beneficiary which is the entity that has both (i) the power to direct the activities of the VIE and (ii) the obligation to absorb losses or receive benefits that could potentially be significant to the VIE. Additionally, a VIE requires continual reassessment of the primary beneficiary.
BOSTON FINANCIAL TAX CREDIT FUND PLUS,
A Limited Partnership
Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Critical Accounting Policies (continued)
The general partners of the Local Limited Partnerships (the “Local General Partners”), who are considered to be the primary beneficiaries, direct the activities of the Local Limited Partnerships and are responsible for maintaining compliance with the Tax Credit program and for providing subordinated financial support in the event operations cannot support debt and property tax payments. Because the Fund is not the primary beneficiary of these Local Limited Partnerships, it accounts for its investments using the equity method of accounting.
Under the equity method, the investments in Local Limited Partnerships are carried at cost, adjusted for the Fund’s share of net income or loss and for cash distributions from the Local Limited Partnerships. Equity in income or loss of the Local Limited Partnerships is included currently in the Fund's operations. A liability is recorded for delayed equity capital contributions to Local Limited Partnerships. In the event that a Local Limited Partnership records other comprehensive income or loss, the Fund will evaluate its impact on the Fund and determine whether it should be included as other comprehensive income or loss in the statement of partners’ equity. Under the equity method, a Local Limited Partnership investment will not be carried below zero. To the extent that a Local Limited Partnership with a carrying value of zero incurs additional losses, the excess losses will be suspended and offset against future income. Income from these Local Limited Partnerships will not be recorded until all of the related suspended losses have been offset. To the extent that a Local Limited Partnership with a carrying value of zero distributes cash to the Fund, the distribution is recorded as income in the Fund’s statement of operations.
The Fund's exposure to economic and financial statement losses is limited to its investment balance in the Local Limited Partnership and estimated future funding commitments. To the extent that the Fund does not receive the full amount of Tax Credits specified in its initial investment contribution agreement, it may be eligible to receive payments from the Local General Partner under the provisions of Tax Credit guarantees. The Fund may be subject to additional losses to the extent of any additional financial support that the Fund voluntarily provides in the future. The Fund, through its ownership percentages, may participate in Property disposition proceeds, the timing and amounts of which are unknown. The Fund does not guarantee any of the mortgages or other debt of the Local Limited Partnerships.
The Fund is subject to risks inherent in the ownership of Property which are beyond its control, such as fluctuations in occupancy rates and operating expenses, variations in rental schedules, proper maintenance of facilities and continued eligibility of Tax Credits. If the cost of operating a Property exceeds the rental income earned thereon, the Fund may deem it in its best interest to voluntarily provide funds and advances in order to protect its investment. The Fund assesses the collectability of any advances at the time the advance is made and records a reserve if collectability is not reasonably assured.
Periodically, the carrying value of each investment in Local Limited Partnership is tested for other-than-temporary impairment. If an other-than-temporary decline in carrying value exists, a provision is recorded to reduce the investment to the sum of the estimated remaining benefits. The estimated remaining benefits for each Local Limited Partnership consists of the estimated future benefit from tax losses and Tax Credits over the estimated life of the investment and the estimated residual proceeds at disposition. Estimated residual proceeds are allocated in accordance with the terms of the partnership agreement of each Local Limited Partnership. Generally, the carrying values of most Local Limited Partnerships will decline through losses and distributions. However, the Fund may record an impairment loss if the expiration of Tax Credits outpaces losses and distributions from a Local Limited Partnership.
Liquidity and Capital Resources
At December 31, 2012, the Fund has cash and cash equivalents of $2,246,534, as compared to $1,476,153 at March 31, 2012. The increase is primarily attributable to cash received from the disposition of investments in Local Limited Partnerships, partially offset by cash used for operating activities, including the payment of asset management fees.
BOSTON FINANCIAL TAX CREDIT FUND PLUS,
A Limited Partnership
Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Liquidity and Capital Resources (continued)
The Managing General Partner initially designated 4% of the Adjusted Gross Proceeds (which generally means Gross Proceeds minus the amounts committed to the acquisition of Treasury STRIPS) as Reserves, as defined in the Partnership Agreement. The Reserves were established to be used for working capital of the Fund and contingencies related to the ownership of Local Limited Partnership interests. The Managing General Partner may increase or decrease such Reserves from time to time, as it deems appropriate. At December 31, 2012 and March 31, 2012, approximately $2,226,000 and $1,452,000, respectively, has been designated as Reserves.
To date, professional fees relating to various Property issues totaling approximately $465,000 have been paid from Reserves. In the event a Local Limited Partnership encounters operating difficulties requiring additional funds, the Fund’s management might deem it in its best interest to voluntarily provide such funds in order to protect its investment. As of December 31, 2012, the Fund has advanced approximately $228,000 to Local Limited Partnerships to fund operating deficits.
The Managing General Partner believes that the investment income earned on the Reserves, along with cash distributions received from Local Limited Partnerships, to the extent available, will be sufficient to fund the Fund's ongoing operations. Reserves may be used to fund operating deficits, if the Managing General Partner deems funding appropriate. If Reserves are not adequate to cover the Fund’s operations, the Fund will seek other financing sources including, but not limited to, the deferral of asset management fees paid to an affiliate of the Managing General Partner or working with Local Limited Partnerships to increase cash distributions. To date, the Fund has used approximately $1,439,000 of operating funds and proceeds from sales of investments in Local Limited Partnerships to replenish Reserves.
Since the Fund invests as a limited partner, the Fund has no contractual duty to provide additional funds to Local Limited Partnerships beyond its specified investment. Thus, as of December 31, 2012, the Fund had no contractual or other obligation to any Local Limited Partnership which had not been paid or provided for.
Cash Distributions
No cash distributions were made during the nine months ended December 31, 2012 and 2011.
Results of Operations
Three Month Period
For the three months ended December 31, 2012, the Fund’s operations resulted in net income of $23,173, as compared to net income of $97,825 for the same period in 2011. The decrease in net income is primarily attributable to a decrease in equity in income of Local Limited Partnerships partially offset by a decrease in general and administrative expenses. The decrease in equity in income of Local Limited Partnerships is due to the disposition of a Local Limited Partnership as well as an increase in loss recorded by certain Local Limited Partnerships. General and administrative expenses decreased primarily due to decreased charges for operations and administrative expenses necessary for the operations of the Fund.
Nine Month Period
For the nine months ended December 31, 2012, the Fund’s operations resulted in net income of $69,570, as compared to net income of $63,436 for the same period in 2011. The increase in net income is primarily attributable to an increase in other income partially offset by a decrease in equity in income of Local Limited Partnerships. The increase in other income is due to an increase in distributions from a Local Limited Partnership in which the Fund no longer invests. The decrease in equity in income of Local Limited Partnerships is due to the disposition of a Local Limited Partnership as well as an increase in loss recorded by certain Local Limited Partnerships.
BOSTON FINANCIAL TAX CREDIT FUND PLUS,
A Limited Partnership
Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Portfolio Update
As of December 31, 2012, the Fund’s investment portfolio consists of a limited partner interest in one Local Limited Partnership, which owns and operates a multi-family apartment complex and which had generated, but no longer generates, Tax Credits. Since inception, the Fund generated Tax Credits, net of recapture, of approximately $1,467 per Class A Unit. Class B Unit investors have received Tax Credits, net of recapture, of approximately $1,056 per Limited Partner Unit. The aggregate amount of Tax Credits generated by the Fund is consistent with the objective specified in the Fund’s prospectus.
Properties that receive Tax Credits must remain in compliance with rent restriction and set-aside requirements for at least 15 calendar years from the date the Property is placed in service (the “Compliance Period”). Failure to do so would result in the recapture of a portion of the Property’s Tax Credits. The Compliance Period for the remaining Property expired on December 31, 2006.
The Managing General Partner will continue to closely monitor the operations of the Properties until the Fund’s remaining Local Limited Partnership interests are disposed. The Fund shall dissolve and its affairs shall be wound up upon the disposition of the final Local Limited Partnership interest and other assets of the Fund. Investors will continue to be Limited Partners, receiving Schedule K-1s and quarterly and annual reports, until the Fund is dissolved.
The Fund is not a party to any pending legal or administrative proceeding, and to the best of its knowledge, no legal or administrative proceeding is threatened or contemplated against it.
Property Discussions
The remaining Property in which the Fund has an interest had stabilized operations and operated above breakeven as of September 30, 2012. The Managing General Partner, in the normal course of the Fund’s business, is arranging for the future disposition of its interest in the remaining Local Limited Partnership. The following Property discussions focus on this Property and all such Properties in which the Fund disposed its interest since March 2012.
As previously reported, the Managing General Partner was exploring an exit strategy for Preston Place, located in Winchester, Virginia. The Local General Partner purchased the Fund’s interest on March 31, 2012. Net sales proceeds to the Fund totaled $873,000, or $23.01 per Unit. The Managing General Partner projects a 2012 taxable gain of approximately $890,000, or $23.46 per Unit. The Fund no longer has an interest in this Local Limited Partnership.
As previously reported, the Managing General Partner was exploring an exit strategy for Long Creek Court, located in Kittrell, North Carolina, that could have led to the Fund transferring its interest in the Local Limited Partnership. Negotiations progressed very slowly; however, a fee simple sale of the Property to a third party occurred on June 29, 2012. Distributions to the Fund totaled $1,660, or $0.04 per Unit. As a result of this sale, the Managing General Partner projects a 2012 taxable gain of approximately $300,000, or $7.91 per Unit. The Fund no longer has an interest in this Local Limited Partnership.
As previously reported, the Managing General Partner and Local General Partner of Tree Trail, located in Gainesville, Florida, were exploring an exit strategy that would have allowed for a late summer 2008 disposal of the Fund’s interest, via a sale of the underlying Property, in the Local Limited Partnership that owns and operates Tree Trail. Due to market conditions, the Managing General Partner had to reexamine the exit strategy for the Fund’s interest in this Local Limited Partnership. The Local General Partner did not make the October 1, 2010 debt service payment and intended to allow the debt to go into foreclosure. The lender initiated a consensual foreclosure with the Local General Partner that accelerated the process. A foreclosure occurred on November 30, 2012. The Compliance Period ended on December 31, 2007; therefore, there is no recapture risk at the Property. The Managing General Partner projects a 2012 taxable gain of approximately $1,250,000, or $32.95 per Unit. The Fund no longer has an interest in this Local Limited Partnership.
BOSTON FINANCIAL TAX CREDIT FUND PLUS,
A Limited Partnership
Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Property Discussions (continued)
As previously reported, the Managing General Partner has been negotiating an exit strategy that will dispose of the Fund’s interest in the Local Limited Partnership that owns and operates Pilot House, located in Newport News, Virginia. This transaction will likely occur in mid-2013, after the debt lockout expires on March 31, 2013. This transaction is projected to have sales proceeds of approximately $2,905,000, or approximately $76.58 per Unit. The terms of the possible disposition have not been agreed upon at this time. However, the Managing General Partner projects a 2013 taxable gain of approximately $2,900,000, or $76.45 per Unit.
BOSTON FINANCIAL TAX CREDIT FUND PLUS,
A Limited Partnership
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not Applicable
Item 4. Controls and Procedures
Disclosure Controls and Procedures
The Fund maintains disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended (“Exchange Act”) is recorded, processed, summarized and reported within the specified time periods. The Chief Executive Officer and Chief Financial Officer of the Managing General Partner (collectively, the “Certifying Officers”) are responsible for maintaining disclosure controls for the Fund. The controls and procedures established by the Fund are designed to provide reasonable assurance that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms.
As of the end of the period covered by this report, the Certifying Officers evaluated the effectiveness of the Fund’s disclosure controls and procedures. Based on the evaluation, the Certifying Officers concluded that as of December 31, 2012, the Fund’s disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management, including the Certifying Officers, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
The Certifying Officers have also concluded that there was no change in the Fund’s internal controls over financial reporting identified in connection with the evaluation of the Fund's controls that occurred during the Fund’s third fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Fund’s internal control over financial reporting.
BOSTON FINANCIAL TAX CREDIT FUND PLUS,
A Limited Partnership
PART II. OTHER INFORMATION
Item 6. Exhibits
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31.1
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Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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31.2
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Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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32.1
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Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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32.2
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Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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101.INS
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XBRL Instance Document*
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101.SCH
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XBRL Taxonomy Extension Schema Document*
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document*
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document*
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document*
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document*
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*
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Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise not subject to liability under that section. This exhibit shall not be deemed to be incorporated by reference into any filing, except to the extent that the Registrant specifically incorporates this exhibit by reference.
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BOSTON FINANCIAL TAX CREDIT FUND PLUS,
A Limited Partnership
SIGNATURE
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.
Date: February 14, 2013 BOSTON FINANCIAL TAX CREDIT FUND PLUS,
A LIMITED PARTNERSHIP
By: Arch Street VIII, Inc.,
its Managing General Partner
/s/Kenneth J. Cutillo
Kenneth J. Cutillo
President
Arch Street VIII, Inc.
(Chief Executive Officer)