November 12, 2004
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Boston Financial Qualified Housing Tax Credits L.P. V
Report on Form 10-QSB for the Quarter Ended September 30, 2004
File Number 0-19706
Dear Sir/Madam:
Pursuant to the requirements of Section 15(d) of the Securities Exchange Act of
1934, filed herewith one copy of subject report.
Very truly yours,
/s/Stephen Guilmette
Stephen Guilmette
Assistant Controller
QH5-Q2.DOC
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(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
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
Balance Sheet (Unaudited) - September 30, 2004 1
Statements of Operations (Unaudited) - For the Three and Six
Months Ended September 30, 2004 and 2003 2
Statement of Changes in Partners' Equity (Deficiency)
(Unaudited) - For the Six Months Ended September 30,
2004 3
Statements of Cash Flows (Unaudited) - For the Six
Months Ended September 30, 2004 and 2003 4
Notes to the Financial Statements (Unaudited) 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
Item 3. Controls and Procedures 12
PART II - OTHER INFORMATION
Items 1-6 13
SIGNATURE 14
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
(A Limited Partnership)
BALANCE SHEET
September 30, 2004
(Unaudited)
Assets
Cash and cash equivalents $ 3,037,481
Restricted cash 81,072
Marketable securities, at fair value 23,301
Investments in Local Limited Partnerships (Note 1) 8,987,844
Other assets 902
-------------
Total Assets $ 12,130,600
=============
Liabilities and Partners' Equity
Due to affiliate $ 205,366
Accrued expenses 39,625
Deferred revenue 81,072
-------------
Total Liabilities 326,063
-------------
General, Initial and Investor Limited Partners' Equity 11,803,992
Net unrealized gains on marketable securities 545
-------------
Total Partners' Equity 11,804,537
-------------
Total Liabilities and Partners' Equity $ 12,130,600
=============
The accompanying notes are an integral part of these financial statements.
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
(A Limited Partnership)
STATEMENTS OF OPERATIONS
For the Three and Six Months Ended September 30, 2004 and 2003
(Unaudited)
Three Months Ended Six Months Ended
September 30, September 30, September 30, September 30,
2004 2003 2004 2003
------------- ------------- ------------- ---------------
Revenue:
Investment $ 9,682 $ (3,383) $ 16,648 $ 14,949
Other - 40,172 83,264 138,506
------------- ------------- ------------- ---------------
Total Revenue 9,682 36,789 99,912 153,455
------------- ------------- ------------- ---------------
Expenses:
Asset management fees, affiliate 68,456 67,179 136,912 134,358
Provision for valuation of advances
to Local Limited Partnerships 85,505 - 134,958 59,952
General and administrative
(includes reimbursements
to an affiliate in the amounts
of $180,885 and $100,135
in 2004 and 2003, respectively) 116,616 90,020 233,745 166,970
Amortization 4,605 4,833 9,210 9,666
------------- ------------- ------------- ---------------
Total Expenses 275,182 162,032 514,825 370,946
------------- ------------- ------------- ---------------
Loss before equity in losses of
Local Limited Partnerships (265,500) (125,243) (414,913) (217,491)
Equity in losses of Local
Limited Partnerships (Note 1) (368,924) (321,038) (651,409) (596,417)
------------- ------------- ------------- ---------------
Net Loss $ (634,424) $ (446,281) $ (1,066,322) $ (813,908)
============= ============= ============= ===============
Net Loss allocated:
General Partners $ (6,344) $ (4,463) $ (10,663) $ (8,139)
Limited Partners (628,080) (441,818) (1,055,659) (805,769)
------------- ------------- -------------- ---------------
$ (634,424) $ (446,281) $ (1,066,322) $ (813,908)
============= ============= ============= ===============
Net Loss per Limited Partner
Unit (68,929 Units) $ (9.12) $ (6.41) $ (15.32) $ (11.69)
============= ============ ============= ===============
The accompanying notes are an integral part of these financial statements.
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
(A Limited Partnership)
STATEMENT OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY)
For the Six Months Ended September 30, 2004
(Unaudited)
Initial Investor Net
General Limited Limited Unrealized
Partners Partner Partners Gains Total
----------- ------------- ----------- ---------- ---------
Balance at March 31, 2004 $ (463,404) $ 5,000 $ 13,328,718 $ 819 $ 12,871,133
----------- --------- -------------- ----------- -------------
Comprehensive Loss:
Change in net unrealized gains
on marketable securities
available for sale - - - (274) (274)
Net Loss (10,663) - (1,055,659) - (1,066,322)
----------- --------- -------------- ----------- -------------
Comprehensive Loss (10,663) - (1,055,659) (274) (1,066,596)
----------- --------- -------------- ---------- -------------
Balance at September 30, 2004 $ (474,067) $ 5,000 $ 12,273,059 $ 545 $ 11,804,537
=========== ========= ============== =========== =============
The accompanying notes are an integral part of these financial statements.
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
For the Six Months Ended September 30, 2004 and 2003
(Unaudited)
2004 2003
------------- -----------
Net cash used for operating activities $ (179,601) $ (300,314)
Net cash provided by investing activities 179,404 484,653
------------- -----------
Net increase (decrease) in cash and cash equivalents (197) 184,339
Cash and cash equivalents, beginning 3,037,678 2,655,838
------------- -----------
Cash and cash equivalents, ending $ 3,037,481 $ 2,840,177
============= ===========
The accompanying notes are an integral part of these financial statements.
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
(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-QSB 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 financial statements and notes thereto included with the
Partnership's Form 10-KSB for the year ended March 31, 2004. In the opinion of
the Managing General Partner, 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 Managing General Partner of the Partnerships has 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 that is included in
the accompanying financial statements is as of June 30, 2004 and 2003.
1. Investments in Local Limited Partnerships
The Partnership has limited partnership interests in twenty-six Local Limited
Partnerships which were organized for the purpose of owning and operating
multi-family housing complexes, most of which are government-assisted. The
Partnership's ownership interest in each Local Limited Partnership is generally
99%, except for Strathern Park/Lorne Park, Huguenot Park and Westgate, where the
Partnership's ownership interests are 95%, 88.55% and 49.5%, respectively. The
Partnership may have negotiated or may negotiate options with the local general
partners to purchase or sell the Partnership's interests in the Properties at
the end of the tax credit compliance periods at nominal prices. In the event
that Properties are sold to third parties, proceeds will be distributed
according to the terms of each Local Limited Partnership agreement.
The following is a summary of investments in Local Limited Partnerships at
September 30, 2004:
Capital contributions and advances paid to Local Limited Partnerships and
purchase price paid to withdrawing partners of Local Limited Partnerships $ 55,848,498
Cumulative equity in losses of Local Limited Partnerships (excluding cumulative
unrecognized losses of $10,730,854) (42,341,097)
Cumulative cash distributions received from Local Limited Partnerships (4,006,938)
----------------
Investments in Local Limited Partnerships before adjustments 9,500,463
Excess of investment cost over the underlying assets acquired:
Acquisition fees and expenses 1,006,357
Cumulative amortization of acquisition fees and expenses (321,423)
----------------
Investments in Local Limited Partnerships before impairment allowance 10,185,397
Impairment allowance on investments in Local Limited Partnerships (1,197,553)
----------------
Investments in Local Limited Partnerships $ 8,987,844
================
For the six months ended September 30, 2004, the Partnership advanced $134,958
to one of the Local Limited Partnerships, all of which was impaired. The
Partnership has recorded an impairment allowance for its investments in certain
Local Limited Partnerships in order to appropriately reflect the estimated net
realizable value of these investments.
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
(A Limited Partnership)
Notes to the Financial Statements (continued)
(Unaudited)
1. Investments in Local Limited Partnerships (continued)
The Partnership's share of the net losses of the Local Limited Partnerships for
the six months ended September 30, 2004 is $1,742,739. For the six months ended
September 30, 2004, the Partnership has not recognized $1,091,815 of equity in
losses relating to Local Limited Partnerships where cumulative equity in losses
and distributions exceeded its total investment in these Local Limited
Partnerships. The Partnership recognized $485 of previously unrecognized losses
in the six months ended September 30, 2004.
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 is 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 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, general economic and real
estate conditions and interest rates.
Accounting Policies
The Partnership's accounting policies include those that relate to its
recognition of investments in Local Limited Partnerships using the equity method
of accounting. The Partnership's policy is as follows:
The Partnership accounts for its investments in Local Limited Partnerships using
the equity method of accounting because the Partnership does not have control
over the major operating and financial policies of the Local Limited
Partnerships in which it invests. Under the equity method, the investment is
carried at cost, adjusted for the Partnership'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
Partnership's operations. Under the equity method, a Local Limited Partnership
investment will not be carried below zero. To the extent that equity in losses
are incurred when the Partnership's carrying value of the respective Local
Limited Partnership has been reduced to a zero balance, the losses will be
suspended and offset against future income. Income from Local Limited
Partnerships, where cumulative equity in losses plus cumulative distributions
have exceeded the total investment in Local Limited Partnerships, will not be
recorded until all of the related unrecorded losses have been offset. To the
extent that a Local Limited Partnership with a carrying value of zero
distributes cash to the Partnership, that distribution is recorded as income on
the books of the Partnership and is included in "Other Revenue" in the
accompanying financial statements.
The Partnership has implemented policies and practices for assessing potential
impairment of its investments in Local Limited Partnerships. Real estate experts
analyze the investments to determine if impairment indicators exist. If so, the
investment is analyzed to consider the Partnership's ability to recover its
carrying value. If an other than temporary impairment in carrying value exits, a
provision to write down the asset to fair value will be recorded in the
Partnership's financial statements.
Liquidity and Capital Resources
At September 30, 2004, the Partnership had cash and cash equivalents of
$3,037,481, compared with $3,037,678 at March 31, 2004. The decrease is
primarily attributable to net cash used for operations and advances to one Local
Limited Partnership, partially offset by cash distributions received from Local
Limited Partnerships and proceeds from maturities of marketable securities.
The Managing General Partner initially designated 4% of the Gross Proceeds as
Reserves as defined in the Partnership Agreement. The Reserves were established
to be used for working capital of the Partnership 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 September 30, 2004, approximately $1,995,000 of cash, cash
equivalents and marketable securities has been designated as Reserves.
To date, professional fees relating to various Property issues totaling
approximately $223,000 have been paid from Reserves. To date, Reserve funds in
the amount of approximately $128,000 have also been used to make additional
capital contributions to one Local Limited Partnership. In the event a Local
Limited Partnership encounters
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Liquidity and Capital Resources (continued)
operating difficulties requiring additional funds, the Partnership's management
might deem it in its best interest to voluntarily provide such funds in order to
protect its investment. As of September 30, 2004, the Partnership has advanced
approximately $411,000 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
Partnership's ongoing operations. Reserves may be used to fund Partnership
operating deficits, if the Managing General Partner deems funding appropriate.
If Reserves are not adequate to cover the Partnership's operations, the
Partnership 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.
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 September 30, 2004, the Partnership
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 six months ended September 30, 2004.
Results of Operations
Three Month Period
The Partnership's results of operations for the three months ended September 30,
2004 resulted in a net loss of $634,424 as compared to a net loss of $446,281
for the same period in 2003. The increase in net loss is primarily attributable
to an increase in provision for valuation of advances to Local Limited
Partnerships, an increase in equity in losses of Local Limited Partnerships and
a decrease in other revenue. The increase in provision for valuation of advances
to Local Limited Partnerships is the result of an increase in advances made to
Local Limited Partnerships in 2004, as compared to the same three-month period
of 2003. Equity in losses of Local Limited Partnerships increased between years
due to an increase in losses of Local Limited Partnerships actually recognized
by the Partnership. The decrease in other revenue is attributable to fewer
distributions from Local Limited Partnerships with carrying values of zero, as
well as the timing of distributions recorded from Local Limited Partnerships.
Six Month Period
The Partnership's results of operations for the six months ended September 30,
2004 resulted in a net loss of $1,066,322 as compared to a net loss of $813,908
for the same period in 2003. The increase in net loss is primarily attributable
to an increase in provision for valuation of advances to Local Limited
Partnerships, an increase in general and administrative expenses, a decrease in
other revenue and an increase in equity in losses of Local Limited Partnerships.
The increase in provision for valuation of advances to Local Limited
Partnerships is the result of an increase in advances made to Local Limited
Partnerships in 2004, as compared to the same six-month period of 2003. The
increase in general and administrative expenses is primarily due to increased
charges from an affiliate of a General Partner for operational and
administrative expenses necessary for the operation of the Partnership. The
decrease in other revenue is attributable to fewer distributions from Local
Limited Partnerships with carrying values of zero, as well as the timing of
distributions recorded from Local Limited Partnerships. Equity in losses of
Local Limited Partnerships increased between years due to an increase in losses
of Local Limited Partnerships actually recognized by the Partnership.
<page>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Portfolio Update
The Partnership's investment portfolio consists of limited partnership interests
in twenty-six Local Limited Partnerships, each of which owns and operates a
multi-family apartment complex and each of which has generated Tax Credits.
Since inception, the Partnership has generated Tax Credits, net of recapture, of
approximately $1,512 per Limited Partner Unit, with an immaterial amount of Tax
Credits expected to be generated from 2004 through 2008. The aggregate amount of
Tax Credits generated by the Partnership is consistent with the objective
specified in the Partnership's prospectus.
Properties that receive low income housing Tax Credits must remain in compliance
with rent restriction and set-aside requirements for at least 15 years from the
date the Property is completed (the "Compliance Period"). Failure to do so would
result in the recapture of a portion of the Property's Tax Credits. Between 2005
and continuing through 2008, the Compliance Period of the twenty-six Properties
in which the Partnership has an interest will expire. The Managing General
Partner has negotiated agreements that will ultimately allow the Partnership to
dispose of its interest in eight Local Limited Partnerships. It is unlikely that
the disposition of any of these Local Limited Partnership interests will
generate any material cash distributions to the Partnership.
The Managing General Partner will continue to closely monitor the operations of
the Properties during the Compliance Period and will formulate disposition
strategies with respect to the Partnership's remaining Local Limited Partnership
interests. It is unlikely that the Managing General Partner's efforts will
result in the Partnership disposing of all of its remaining Local Limited
Partnership interests concurrently with the expiration of each Property's
Compliance Period. The Partnership shall dissolve and its affairs shall be wound
up upon the disposition of the final Local Limited Partnership interest and
other assets of the Partnership. Investors will continue to be Limited Partners,
receiving K-1s and quarterly and annual reports, until the Partnership is
dissolved.
On August 24, 2004, the Partnership and seven affiliates of the General Partners
(collectively, the "Partnerships"), and their general partners commenced
litigation against Everest Housing Investors 2, LLC and three other
Everest-related entities in Massachusetts state court, seeking a declaratory
judgment that certain materials the Everest entities sought to inspect are not
"books and records" of the Partnerships, and that the Everest entities are in
any case not entitled to inspect said information under applicable partnership
agreements, partnership law or otherwise. On October 7, 2004, the Everest
entities filed an answer and counterclaimed against the Partnerships and their
general partners, claiming that they breached applicable partnership agreements,
partnership law and their fiduciary duties to the Everest entities by failing to
make the purported "books and records" available. The defendants maintain that
Everest is not entitled to review the materials requested and/or use the
materials in secondary market transactions because, among other things, (i) the
materials requested are not "books and records" of the Partnerships, as that
term is defined in the relevant Partnership Agreements, (ii) Everest does not
seek to review them for a proper purpose, and (iii) that selective disclosure of
the information to Everest would give it an unfair informational advantage in
secondary market transactions, and could potentially violate federal and/or
state securities laws. Because of the preliminary nature of the Massachusetts
litigation, including but not limited to the fact that no discovery has taken
place, no estimate of a potential outcome can be made at this time.
Property Discussions
A majority of the Properties in which the Partnership has an interest have
stabilized operations and operate above break-even. A few Properties generate
cash flow deficits that the Local General Partners of those Properties fund
through project expense loans, subordinated loans or operating escrows. However,
some Properties have had persistent operating difficulties that could either: i)
have an adverse impact on the Partnership's liquidity; ii) result in their
foreclosure; or iii) result in the Managing General Partner deeming it
appropriate for the Partnership to dispose of its interest in the Local Limited
Partnership prior to the expiration of the Compliance Period. Also, the Managing
General Partner, in the normal course of the Partnership's business, may arrange
for the future disposition of its interest in certain Local Limited
Partnerships. The following Property discussions focus only on such Properties.
<page>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Property Discussions (continued)
As previously reported, the Local General Partner of Westover Station, located
in Newport News, Virginia, reached an agreement with the Property's lender to
refinance the debt on the Property. As part of the refinancing, which closed on
February 1, 2002, the Partnership received Sale or Refinancing Proceeds, as
defined in the Local Limited Partnership Agreement, of approximately $668,000.
The Managing General Partner, in accordance with and as permitted by the
Partnership Agreement, retained the entire amount of net proceeds in Reserves.
The Managing General Partner, on behalf of the Partnership, also negotiated an
agreement with the Local General Partner that will allow the Partnership to
dispose of its interest in the Property after the end of its Compliance Period,
which is December 31, 2006.
As previously reported, New Center, located in Detroit, Michigan, has
experienced operating difficulties for several years. The Property suffers from
poor location and security issues. Vandalism has caused an increase in
maintenance and repair expenses and has negatively affected the Property's
occupancy levels and tenant profile. Efforts to increase curb appeal and
increase qualified tenant traffic have not materially improved occupancy.
Advances from the Local General Partner and the Partnership have enabled the
Property to remain current on its mortgage obligations. The Managing General
Partner will continue to closely monitor the site manager's efforts to Improve
Property operations; however, due to the Property's continuing struggles, the
Managing General Partner is concerned about its long-term viability. Due to
these concerns, the Managing General Partner believes it is in the best interest
of the Property to replace the Local General Partner. Accordingly, the Managing
General Partner has been working with the Local General Partner to identify an
acceptable replacement. A replacement was identified and the necessary documents
to become the replacement Local General Partner are in the process of being
executed. The replacement of the Local General Partner is expected to occur
prior to the end of 2004. The replacement Local General Partner will provide to
the Partnership a Put Option Agreement that allows for the transfer of the
Partnership's interest to the replacement Local General Partner for a nominal
amount after the Property's Compliance Period ends on December 31, 2006.
As previously reported regarding Park Century (a/k/a Westgate), located in
Bismark, North Dakota, in order to protect the remaining Tax Credits generated
by the Property, the Managing General Partner consummated the transfer of 50% of
the Partnership's capital and profits in the Local Limited Partnership to an
affiliate of the Local General Partner in November 1997. The Managing General
Partner also had the right to transfer the Partnership's remaining interest to
the Local General Partner any time after one year from the initial transfer.
However, due to subsequent transfers by the Local General Partner of its
interest in the Property, the date on which the Managing General Partner had the
right to transfer the remaining interest did not occur until December 1, 2001.
The agreement allowed the Partnership to retain its full share of the Property's
Tax Credits until such time as the remaining interest is put to the new Local
General Partner. The Property generated its last Tax Credits during 2001. The
new Local General Partner also has the right to call the remaining interest
after the Compliance Period has expired.
As previously reported, in April 2000, a replacement site management company was
brought in to manage operations at Carib II and Carib III, located in St. Croix,
Virgin Islands. The replacement site management company stated its desire to
purchase the General and Limited Partner interests in the Properties and,
effective January 1, 2001, assumed the Local General Partner interest in the
Properties. Furthermore, the Managing General Partner negotiated a plan that
ultimately transfers the Partnership's interest in the Properties to the new
Local General Partner. The plan includes provisions to minimize the risk of
recapture.
As previously reported, a Property adjacent to Whispering Trace, located in
Woodstock, Georgia, began operations during 2001. Although the Property had
difficulties in completing initial lease-up due to a lack of qualified tenants,
its superior amenities and curb appeal provide a competitive advantage. Other
Tax Credit Properties as well as entry-level homes in the area have further
increased competition for tenants. In addition, local employers have had
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Property Discussions (continued)
layoffs, forcing some tenants to leave the area in search of employment. As a
result, occupancy at Whispering Trace has declined. The Property has incurred
significant capital expenditures in order to remain competitive in the
marketplace. As a result, debt service coverage is below appropriate levels. It
may become necessary for the Managing General Partner to use some of the
Partnership's Reserves to fund operating deficits. However, to date, advances
from the Local General Partner have allowed the Property to remain current on
its debt obligations.
As previously reported, the Managing General Partner negotiated an agreement
with an unaffiliated entity to have the ability to transfer the Partnership's
interest to an unaffiliated entity or its designee with respect to Cedar Lane I,
located in London, Kentucky, and Silver Creek II, located in Berea, Kentucky.
These Properties share a common Local General Partner. The Managing General
Partner has the right to put its interest in either of the Properties at any
time in exchange for a Contingent Note that grants the Partnership 50% of all
future net cash receipts from such Local Limited Partnership interest.
Schumaker Place Apartments, located in Salisbury, Maryland, has experienced
operating difficulties in recent quarters. Despite strong occupancy levels,
increased maintenance, insurance and real estate tax expenses have resulted in
deficits that have been funded from working capital. The Local General Partner
refinanced the Property in the second quarter of 2004, reducing the interest
rate and debt service payments on the Property's first mortgage. The reduced
debt service is expected to result in the achievement of operating surpluses by
the end of 2004. In connection with the Partnership's approval of this
refinancing, the Partnership and the Local General Partner entered into a put
agreement whereby the Partnership can transfer its interest in the Local
Partnership to the Local General Partner for a nominal amount any time after the
Property's Compliance Period ends on December 31, 2007.
<page>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
(A Limited Partnership)
CONTROLS AND PROCEDURES
Controls and Procedures
Based on the Partnership's evaluation as of the end of the period covered by
this report, the Partnership's executive vice president has concluded that the
Partnership's disclosure controls and procedures are effective to ensure that
information required to be disclosed in the reports that the Partnership files
or submits under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commission's rules and forms.
There have been no significant changes in the Partnership's internal controls or
in other factors that could significantly affect those controls subsequent to
the date of their evaluation.
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
31.1 Certification of Jenny Netzer pursuant to section 302
of the Sarbanes-Oxley Act of 2002
32.1 Certification of Jenny Netzer pursuant to section 906
of the Sarbanes-Oxley Act of 2002
(b) Reports on Form 8-K - No reports on Form 8-K were filed during
the quarter ended September 30, 2004
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: November 12, 2004 BOSTON FINANCIAL QUALIFIED HOUSING
TAX CREDITS L.P. V
By: Arch Street VIII, Inc.,
its Managing General Partner
/s/Jenny Netzer
Jenny Netzer
Executive Vice President
MMA Financial, LLC