February 11, 2000 Securities and Exchange Commission Filer Support, Edgar Operation Center, Stop 0-7 6432 General Green Way Alexandria, VA 22312 RE: Boston Financial Qualified Housing Tax Credits L.P. V Report on Form 10-Q for Quarter Ended December 31, 1999 File No. 0-19706 Gentlemen: Pursuant to the requirements of Section 15(d) of the Securities Exchange Act of 1934, filed herewith is one copy of subject report. Very truly yours, /s/Stephen Guilmette Stephen Guilmette Assistant Controller QH5-Q3.DOC UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 1999 ---------------------------------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 0-19706 Boston Financial Qualified Housing Tax Credits L.P. V (Exact name of registrant as specified in its charter) Massachusetts 04-3054464 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 101 Arch Street, Boston, MA 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 . BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) TABLE OF CONTENTS PART I - FINANCIAL INFORMATION Page No. - ------------------------------ Item 1. Financial Statements Combined Balance Sheets - December 31, 1999 (Unaudited) and March 31, 1999 1 Combined Statements of Operations (Unaudited) - For the Three and Nine Months Ended December 31, 1999 and 1998 2 Combined Statement of Changes in Partners' Equity (Deficiency) (Unaudited) - For the Nine Months Ended December 31, 1999 3 Combined Statements of Cash Flows (Unaudited) - For the Nine Months Ended December 31, 1999 and 1998 4 Notes to the Combined Financial Statements (Unaudited) 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 PART II - OTHER INFORMATION Items 1-6 11 SIGNATURE 12 BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) COMBINED BALANCE SHEETS December 31, 1999 and March 31, 1999 December 31, March 31, 1999 1999 (Unaudited) Assets Cash and cash equivalents $ 497,501 $ 450,450 Accounts receivable from affiliates, net - 173,739 Tenant security deposit escrow 3,805 3,758 Investments in Local Limited Partnerships, net of reserve for valuation of $590,197 (Note 1) 19,541,320 21,538,791 Marketable securities, at fair value 2,297,697 2,666,281 Prepaid assets 1,489 1,489 Rental property at cost, net of accumulated depreciation 761,438 778,843 Replacement reserve escrow 5,951 7,425 Other assets 30,242 32,658 ------------- ------------- Total Assets $ 23,139,443 $ 25,653,434 ============= ============= Liabilities and Partners' Equity Accounts payable to affiliates $ 12,971 $ 143,443 Accounts payable and accrued expenses 76,552 133,838 Mortgage note payable 704,555 706,873 Tenant security deposits payable 3,809 3,803 Deferred revenue 129,360 146,818 ------------- ------------- Total Liabilities 927,247 1,134,775 ------------- ------------- Minority interest in Local Limited Partnership 116,854 116,986 ------------- ------------- General, Initial and Investor Limited Partners' Equity 22,126,831 24,394,204 Net unrealized gains (losses) on marketable securities (31,489) 7,469 ------------- ------------- Total Partners' Equity 22,095,342 24,401,673 ------------- ------------- Total Liabilities and Partners' Equity $ 23,139,443 $ 25,653,434 ============= ============= The accompanying notes are an integral part of these combined financial statements. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) COMBINED STATEMENTS OF OPERATIONS For the Three and Nine Months Ended December 31, 1999 and 1998 (Unaudited) Three Months Ended Nine Months Ended December 31, December 31, December 31, December 31, 1999 1998 1999 1998 ------------- ------------- ------------- ------------- Revenue: Rental $ 30,330 $ 29,740 $ 90,446 $ 88,203 Investment 39,808 44,397 118,463 118,955 Other 7,012 14,572 51,314 88,120 ------------ ------------ ------------ ------------ Total Revenue 77,150 88,709 260,223 295,278 ------------ ------------ ------------ ------------ Expenses: General and administrative (includes reimbursements to an affiliate in the amounts of $81,414 and $78,611 in 1999 and 1998, respectively) 62,464 236,498 257,039 343,564 Asset management fees, related party 61,493 60,556 184,490 181,668 Rental operations, exclusive of depreciation 10,032 8,484 32,084 28,501 Bad debt expense - - 173,739 - Interest 17,656 18,429 52,970 54,794 Depreciation 6,775 10,590 20,326 31,767 Amortization 6,203 5,487 18,614 17,896 ------------ ------------ ------------ ------------ Total Expenses 164,623 340,044 739,262 658,190 ------------ ------------ ------------ ------------ Loss before minority interest in losses of Local Limited Partnerships and equity in losses of Local Limited Partnerships (87,473) (251,335) (479,039) (362,912) Minority interest in losses of Local Limited Partnership 34 74 132 259 Equity in losses of Local Limited Partnerships (Note 1) (761,707) (1,278,629) (1,788,466) (2,775,741) ------------ ------------ ------------ ------------ Net Loss $ (849,146) $ (1,529,890) $ (2,267,373) $ (3,138,394) ============ ============ ============ ============ Net Loss allocated: To General Partners $ (8,492) $ (15,299) $ (22,674) $ (31,384) To Limited Partners (840,654) (1,514,591) (2,244,699) (3,107,010) ------------ ------------ ------------ ------------ $ (849,146) $ (1,529,890) $ (2,267,373) $ (3,138,394) ============ ============ ============ ============ Net Loss per Limited Partnership Unit (68,929 Units) $ (12.20) $ (21.98) $ (32.57) $ (45.08) ============ ============ ============ ============= The accompanying notes are an integral part of these combined financial statements. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) COMBINED STATEMENT OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY) For the Nine Months Ended December 31, 1999 (Unaudited) Net Initial Investor Unrealized General Limited Limited Gain Partners Partner Partners (Losses) Total Balance at March 31, 1999 $ (348,164) $ 5,000 $ 24,737,368 $ 7,469 $ 24,401,673 ----------- --------- ------------- ----------- ------------- Comprehensive Loss: Net change in net unrealized gains on marketable securities available for sale - - - (38,958) (38,958) Net Loss (22,674) - (2,244,699) - (2,267,373) ----------- --------- ------------- ----------- ------------- Comprehensive Loss (22,674) - (2,244,699) (38,958) (2,306,331) ----------- --------- ------------- ----------- ------------- Balance at December 31, 1999 $ (370,838) $ 5,000 $ 22,492,669 $ (31,489) $ 22,095,342 =========== ========= ============= =========== ============= The accompanying notes are an integral part of these combined financial statements. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) COMBINED STATEMENTS OF CASH FLOWS For the Nine Months Ended December 31, 1999 and 1998 (Unaudited) 1999 1998 --------------- -------------- Net cash used for operating activities $ (470,039) $ (356,003) --------------- ------------- Cash flows from investing activities: Purchases of marketable securities (768,983) (2,125,108) Proceeds from sales and maturities of marketable securities 1,100,921 2,459,825 Additions to rental property (3,637) (765) Cash distributions received from Local Limited Partnerships 191,107 318,319 Advances to Local Limited Partnerships (180,000) - Repayment of advances to Local Limited Partnerships 180,000 - --------------- ------------- Net cash provided by investing activities 519,408 652,271 --------------- ------------- Cash flows from financing activities: Payment of mortgage principal (2,318) (494) Advance from affiliate - 1,000 --------------- ------------- Net cash provided by (used for) financing activities (2,318) 506 --------------- ------------- Net increase in cash and cash equivalents 47,051 296,774 Cash and cash equivalents, beginning 450,450 239,932 --------------- ------------- Cash and cash equivalents, ending $ 497,501 $ 536,706 =============== ============= Supplemental disclosure: Cash paid for interest $ 52,970 $ 54,794 =============== ============= The accompanying notes are an integral part of these combined financial statements. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) NOTES TO THE COMBINED 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 generally accepted accounting principles. These statements should be read in conjunction with the financial statements and notes thereto included with the Partnership's 10-K for the year ended March 31, 1999. In the opinion of management, these financial statements include all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the Partnership'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 General Partners have elected to report results of 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 included in the accompanying combined financial statements is as of September 30, 1999 and 1998. 1. Investments in Local Limited Partnerships The Partnership has acquired interests in twenty-six Local Limited Partnerships, excluding Burbank, which own and operate multi-family housing complexes, most of which are government-assisted. The Partnership, as Investor Limited Partner, pursuant to the various Local Limited Partnership Agreements, has acquired a 99% interest in the profits, losses, tax credits and cash flows from operations of each of the Local Limited Partnerships, with the exception of Strathern Park/Lorne Park Apartments and Huguenot Park, which interests are 95% and 88.6%, respectively. Upon dissolution, proceeds will be distributed according to each respective partnership agreement. The following is a summary of Investments in Local Limited Partnerships, excluding Burbank, at December 31, 1999: Capital contributions paid to Local Limited Partnerships and purchase price paid to withdrawing partners of Local Limited Partnerships $ 55,269,931 Cumulative equity in losses of Local Limited Partnerships (excluding cumulative unrecognized losses of $2,279,998) (34,391,494) Cumulative cash distributions received from Local Limited Partnerships (1,532,961) -------------- Investments in Local Limited Partnerships before adjustment 19,345,476 Excess of investment cost over the underlying net assets acquired: Acquisition fees and expenses 1,006,357 Accumulated amortization of acquisition fees and expenses (220,316) -------------- Investments in Local Limited Partnerships 20,131,517 Reserve for valuation of investment in Local Limited Partnership (590,197) -------------- $ 19,541,320 -------------- The Partnership's share of net losses of the Local Limited Partnerships, excluding Burbank, for the nine months ended December 31, 1999 totaled $2,832,024. For the nine months ended December 31, 1999, the Partnership has not recognized $1,043,558 of equity in losses relating to eight Local Limited Partnerships where cumulative equity in losses and cumulative distributions form Local Limited Partnerships exceeded its total investments in these Local Limited Partnerships. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued) (Unaudited) 2. Supplemental Combining Schedules Balance Sheets Boston Financial Qualified Housing Tax Credits Burbank Combined L.P. V (A) (B) Eliminations (A) Assets Cash and cash equivalents $ 497,001 $ 500 $ - $ 497,501 Tenant security deposit escrow - 3,805 - 3,805 Investments in Local Limited Partnerships, net 19,471,261 - 70,059 19,541,320 Marketable securities, at fair value 2,297,697 - - 2,297,697 Prepaid assets - 1,489 - 1,489 Rental property at cost, net of accumulated depreciation - 735,825 25,613 761,438 Replacement reserve escrow - 5,951 - 5,951 Other assets 30,242 - - 30,242 ------------- ---------------- --------------- -------------- Total Assets $ 22,296,201 $ 747,570 $ 95,672 $ 23,139,443 ============= ================ =============== ============== Liabilities and Partners' Equity Accounts payable to affiliates $ 12,971 $ 1,000 $ (1,000) $ 12,971 Accounts payable and accrued expenses 59,528 17,024 - 76,552 Mortgage note payable - 704,555 - 704,555 Tenant security deposits payable - 3,809 - 3,809 Deferred revenue 129,360 - - 129,360 ------------- ---------------- --------------- -------------- Total Liabilities 201,859 726,388 (1,000) 927,247 ------------- ---------------- --------------- -------------- Minority interest in Local Limited Partnership - - 116,854 116,854 ------------- ---------------- --------------- -------------- General, Initial and Investor Limited Partners' Equity 22,125,831 21,182 (20,182) 22,126,831 Net unrealized losses on marketable securities (31,489) - - (31,489) ------------- ---------------- --------------- -------------- Total Partners' Equity 22,094,342 21,182 (20,182) 22,095,342 ------------- ---------------- --------------- -------------- Total Liabilities and Partners' Equity $ 22,296,201 $ 747,570 $ 95,672 $ 23,139,443 ============= ================ =============== ============== (A) As of December 31, 1999. (B) As of September 30, 1999. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued) (Unaudited) 2. Supplemental Combining Schedules (continued) Statements of Operations Boston Financial Qualified Housing Tax Credits Burbank L.P. V (A) (B) Eliminations Combined Revenue: Rental $ - $ 90,446 $ - $ 90,446 Investment 118,289 174 - 118,463 Other 49,804 1,510 - 51,314 ------------- ------------- ------------- ------------- Total Revenue 168,093 92,130 - 260,223 ------------- ------------- ------------- ------------- Expenses: General and administrative 257,039 - - 257,039 Asset management fees, related party 184,490 - - 184,490 Rental operations, exclusive of depreciation - 32,084 - 32,084 Bad debt expense 174,739 - (1,000) 173,739 Interest - 52,970 - 52,970 Depreciation - 20,326 - 20,326 Amortization 18,614 - - 18,614 ------------- ------------- ------------- ------------- Total Expenses 634,882 105,380 (1,000) 739,262 ------------- ------------- ------------- ------------- Loss before minority interest in losses of Local Limited Partnership and equity in losses of Local Limited Partnerships (466,789) (13,250) 1,000 (479,039) Minority interest in losses of Local Limited Partnership - - 132 132 Equity in losses of Local Limited Partnership (1,801,584) - 13,118 (1,788,466) ------------- ------------- ------------- ------------- Net Loss $ (2,268,373) $ (13,250) $ 14,250 $ (2,267,373) ============= ============= ============= ============= (A) For the nine months ended December 31, 1999. (B) For the nine months ended September 30, 1999. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued) (Unaudited) 2. Supplemental Combining Schedules (continued) Statements of Cash Flows Boston Financial Qualified Housing Tax Credits Burbank L.P. V (A) (B) Eliminations Combined Net cash provided by (used for) operating activities $ (476,952) $ 6,913 $ - $ (470,039) ------------- -------------- --------------- -------------- Cash flows from investing activities: Purchases of marketable securities (768,983) - - (768,983) Proceeds from sales and maturities of marketable securities 1,100,921 - - 1,100,921 Additions to rental property - (3,637) - (3,637) Cash distributions received from Local Limited Partnerships 192,084 - (977) 191,107 Advances to Local Limited Partnerships (188,700) - 8,700 (180,000) Repayment of advances to Local Limited Partnerships 188,700 - (8,700) 180,000 ------------- -------------- --------------- -------------- Net cash provided by (used for) investing activities 524,022 (3,637) (977) 519,408 ------------- -------------- --------------- -------------- Cash flows from financing activities: Payment of mortgage principal - (2,318) - (2,318) Advance from affiliate - 8,700 (8,700) - Repayment of advance from affiliate - (8,700) 8,700 - Distribution to partner - (977) 977 - ------------- -------------- --------------- -------------- Net cash used for financing activities - (3,295) 977 (2,318) ------------- -------------- --------------- -------------- Net increase (decrease) in cash and cash equivalents 47,070 (19) - 47,051 Cash and cash equivalents, beginning 449,931 519 - 450,450 ------------- -------------- --------------- -------------- Cash and cash equivalents, ending $ 497,001 $ 500 $ - $ 497,501 ============= ============== =============== ============== (A) For the nine months ended December 31, 1999. (B) For the nine months ended September 30, 1999. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) 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 Partnership intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements and are including this statement for purposes of complying with these safe harbor provisions. Although the Partnership believes the forward-looking statements are based on reasonable assumptions, the Partnership can give no assurance that their 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, general economic and real estate conditions and interest rates. Liquidity and Capital Resources At December 31, 1999, the Partnership (including Burbank) had cash and cash equivalents of $497,501 as compared with $450,450 at March 31, 1999. The increase is primarily attributable to proceeds from sales and maturities of marketable securities in excess of purchases of marketable securities, as well as cash distributions received from Local Limited Partnerships. Approximately $2,237,000 of marketable securities has been designated as Reserves by the Managing General Partner. The Reserves, as defined in the Partnership Agreement, were established to be used for working capital of the Partnership and contingencies related to the ownership of Local Limited Partnership interests. Management believes that the investment income earned on the Reserves, along with cash distributions received from Local Limited Partnerships, will be sufficient to fund the Partnership's ongoing operations and any contingencies that may arise. Reserves may be used to fund Local Limited Partnership operating deficits if the Managing General Partner deems such funding appropriate. Since the Partnership invests as a limited partner, the Partnership has no contractual duty to provide additional funds to Local Limited Partnerships beyond its specified investment. Thus, at December 31, 1999, the Partnership had no contractual or other obligation to any Local Limited Partnership, which had not been paid or provided for. In the event a Local Limited Partnership encounters operating difficulties requiring additional funds, the Partnership might deem it in its best interest to provide such funds, voluntarily, in order to protect its investment. No such event has occurred to date. Cash Distributions No cash distributions were made during the nine months ended December 31, 1999. Results of Operations The Partnership's results of operations for the three and nine months ended December 31, 1999 resulted in net losses of $849,146 and $2,267,373, respectively, as compared to net losses of $1,529,890 and $3,138,394 for the same respective periods in 1998. The decrease in net loss is primarily attributable to a decrease in equity in losses of Local Limited Partnerships as well as a decrease in legal fees. These effects were partially offset by an increase in bad debts expense. Equity in losses of Local Limited Partnerships improved due to an increase in losses not recognized by the Partnership for Local Limited Partnerships whose cumulative equity in losses and cumulative distributions exceeded its total investment in those partnerships. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Property Discussions Historic New Center in Detroit, Michigan has been generating operating deficits due to low occupancy and collection problems. However, as previously reported, the Managing General Partner was successful in finalizing the negotiations with the lenders for a loan modification. This loan modification should allow the property to meet debt service coverage and provide capital for the physical improvements. In addition, a new property manager was hired in October 1998. The new property manager is focusing on implementing a new marketing strategy and improving rent collections. As of December 31, 1999, occupancy for Historic New Center improved slightly to 87%. Further, the property is operating just above break-even. However, bad debt expense continues to be high as a result of poor collections. The Managing General Partner continues to meet with property management on a monthly basis to monitor on this issue Westgate, located in North Dakota, had been experiencing declining occupancy. Occupancy as of December 31, 1999 was 98%. Affiliates of the Managing General Partner have been working with the Local General Partner who has raised some concerns over the long-term financial health of the property. In response to these concerns and to reduce possible future risk, the Managing General Partner consummated the transfer of 50% of the Partnership's capital and profits in the properties to an affiliate of the Local General Partner in November 1997. Subsequently, the Local General Partner transferred both its general partner interest and 48.5% of the partnership interest in Westgate to a non-profit general partner effective June 17, 1999. As a result of this change, the date when the Managing General Partner has the right to transfer the remaining interest to the new Local General Partner was amended to reflect the June 17, 1999 effective date. Accordingly, the Managing General Partner has the right to transfer the Partnership's remaining interest to the new Local General Partner any time after one year from June 17, 1999. Further, the new Local General Partner has the right to call the remaining interest after the tax credit period has expired. As previously reported, in 1997, the Local General Partner, of Wheeler House, located in Nashua, New Hampshire was removed due to financial insolvency and an affiliate of the Managing General Partner stepped in as temporary Local General Partner. As the new Local General Partner, the affiliate of the Managing General Partner negotiated with the lender on temporary debt restructuring to reduce interest rates and extend the due date of the loan to 1998 to protect the Partnership's investment and the remaining tax credits generated by the property. However, in December 1999, the Lender began foreclosure proceedings. The foreclosure was completed in early January, 2000. The foreclosure will result in recapture of credits of approximately $3.70 per unit which will be on your 2000 Schedule K-1 that will be filed in April of 2001. In addition, the foreclosure will result in the allocation of taxable income to the Partnership and loss of future benefits associated with this property. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) PART II OTHER INFORMATION Items 1-5 Not applicable Item 6 Exhibits and reports on Form 8-K (a) Exhibits - None (b) Reports on Form 8-K - No reports on Form 8-K were filed during the quarter ended December 31, 1999. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (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. DATED: February 11, 2000 BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V By: Arch Street V, Inc., its Managing General Partner /s/Randolph G. Hawthorne Randolph G. Hawthorne Managing Director, Vice President and Chief Operating Officer