February 14, 2006
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Boston Financial Tax Credit Fund VIII, A Limited Partnership
Report on Form 10-QSB for the Quarter Ended December 31, 2005
File Number 0-26522
Dear Sir/Madam:
Pursuant to the requirements of Section 15(d) of the Securities Exchange Act of
1934, filed herewith is a copy of subject report.
Very truly yours,
/s/Stephen Guilmette
Stephen Guilmette
Assistant Controller
TC8-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 December 31, 2005
--------------------------------------
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 0-26522
Boston Financial Tax Credit Fund VIII, A Limited Partnership
(Exact name of registrant as specified in its charter)
Massachusetts 04-3205879
- --------------------------------- -----------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
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 .
BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION Page No.
- ------------------------------ --------
Item 1. Financial Statements
Balance Sheet (Unaudited) - December 31, 2005 1
Statements of Operations (Unaudited) - For the Three and Nine
Months Ended December 31, 2005 and 2004 2
Statement of Changes in Partners' Equity (Deficiency)
(Unaudited) - For the Nine Months Ended December 31, 2005 3
Statements of Cash Flows (Unaudited) - For the Nine
Months Ended December 31, 2005 and 2004 4
Notes to the Financial Statements (Unaudited) 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II - OTHER INFORMATION
Items 1-6 12
SIGNATURE 13
CERTIFICATIONS 14
BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP
BALANCE SHEET
December 31, 2005
(Unaudited)
Assets
Cash and cash equivalents $ 262,212
Investment securities, at fair value (Note 1) 274,180
Investments in Local Limited Partnerships (Note 2) 7,207,592
Other assets 2,855
---------------
Total Assets $ 7,746,839
===============
Liabilities and Partners' Equity
Due to affiliate $ 677,068
Accrued expenses 56,696
---------------
Total Liabilities 733,764
---------------
General, Initial and Investor Limited Partners' Equity 7,015,512
Net unrealized losses on investment securities (2,437)
---------------
Total Partners' Equity 7,013,075
---------------
Total Liabilities and Partners' Equity $ 7,746,839
===============
The accompanying notes are an integral part of these financial statements.
BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
For the Three and Nine Months Ended December 31, 2005 and 2004
(Unaudited)
Three Months Ended Nine Months Ended
December 31, December 31, December 31, December 31,
2005 2004 2005 2004
---------------- ---------------- ---------------- --------------
Revenue
Investment $ 10,447 $ 1,454 $ 28,271 $ 4,093
---------------- ---------------- ---------------- --------------
Total Revenue 10,447 1,454 28,271 4,093
---------------- ---------------- ---------------- --------------
Expenses:
Asset management fees, related party 59,627 57,721 178,879 174,239
Provision for valuation of advances to
Local Limited Partnerships (Note 2) - 73,076 - 73,076
Provision for valuation of investments
in Local Limited Partnerships
(Note 2) 11,633 - 11,633 -
General and administrative
(includes reimbursement to affiliate
in the amounts of $46,297 and
$84,079 in 2005 and 2004,
respectively) 35,097 47,046 123,866 140,106
Amortization 3,437 7,032 17,502 21,096
---------------- ---------------- ---------------- --------------
Total Expense 109,794 184,875 331,880 408,517
---------------- ---------------- ---------------- --------------
Loss before equity in losses of
Local Limited Partnerships (99,347) (183,421) (303,609) (404,424)
Equity in losses of Local Limited
Partnerships (Note 2) (245,543) (121,986) (538,436) (507,056)
---------------- ---------------- ---------------- --------------
Net Loss $ (344,890) $ (305,407) $ (842,045) $ (911,480)
================ ================ ================ ==============
Net Loss allocated:
General Partners $ (3,449) $ (3,054) $ (8,420) $ (9,115)
(3,054)
Limited Partners (341,441) (302,353) (833,625) (902,365)
---------------- ---------------- ---------------- --------------
$ (344,890) $ (305,407) $ (842,045) $ (911,480)
================ ================ ================ ==============
Net Loss Per Limited Partner
Unit (36,497) Units $ (9.35) $ (8.28) $ (22.84) $ (24.72)
================ ================ ================ ==============
The accompanying notes are an integral part of these financial statements.
BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY)
For the Nine Months Ended December 31, 2005
(Unaudited)
Net
Initial Investor Unrealized
General Limited Limited Gains
Partners Partner Partner (Losses) Total
Balance at March 31, 2005 $ (237,771) $ 100 $ 8,095,228 $ 44 $ 7,857,601
----------- ----------- -------------- ------------- --------------
Comprehensive Loss:
Change in net unrealized
gains on investment
securities available for sale - - - (2,481) (2,481)
Net Loss (8,420) - (833,625) - (842,045)
----------- ----------- -------------- ------------ --------------
Comprehensive Loss (8,420) - (833,625) (2,481) (844,526)
----------- ----------- -------------- ------------ --------------
Balance at December 31, 2005 $ (246,191) $ 100 $ 7,261,603 $ (2,437) $ 7,013,075
=========== =========== ============== ============ ==============
The accompanying notes are an integral part of these financial statements.
BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
For the Nine Months Ended December 31, 2005 and 2004
(Unaudited)
2005 2004
------------- ---------
Net cash used for operating activities $ (815,093) $ (38,278)
Net cash provided by investing activities 744,919 43,567
------------- --------------
Net increase (decrease) in cash and cash equivalents (70,174) 5,289
Cash and cash equivalents, beginning 332,386 341,433
------------- --------------
Cash and cash equivalents, ending $ 262,212 $ 346,722
============= ==============
The accompanying notes are an integral part of these financial statements.
BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP
NOTES TO 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
Fund's Form 10-KSB for the year ended March 31, 2005. In the opinion of the
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 General Partner of the Fund has elected to report results of the Local
Limited Partnerships in which the Fund has a limited partnership interest on a
90 day lag basis because the Local Limited Partnerships report their results on
a calendar year basis. Accordingly, the financial information about the Local
Limited Partnerships that is included in the accompanying financial statements
is as of September 30, 2005 and 2004.
1. Investment Securities
The Fund's investment securities are classified as "Available for Sale" and are
carried at fair value as reported by the brokerage firms at which they are held,
with unrealized gains or losses excluded from earnings and reported as a
separate component of partner's equity.
2. Investments in Local Limited Partnerships
The Fund has limited partnership interests in ten Local Limited Partnerships,
which were organized for the purpose of owning and operating multi-family
housing complexes, all of which are government assisted. The Fund's ownership
interest in the Local Limited Partnerships is 99%, with the exception of
Springwood, which is 79.20%, Hemlock Ridge, which is 77% and Pike Place and West
End Place, which are 90%. 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 at nominal
prices. In the event that Local Limited Partnerships are sold to a third
parties, or upon dissolution of the Local Limited Partnerships, 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
December 31, 2005:
Capital contributions and advances paid to Local Limited Partnerships
and purchase price paid to withdrawing partners of Local Limited Partnerships $ 30,513,168
Cumulative equity in losses of Local Limited Partnerships (excluding cumulative
unrecognized losses of $2,394,078) (19,137,226)
Cumulative cash distributions received from Local Limited Partnerships (2,127,316)
---------------
Investments in Local Limited Partnerships before adjustments 9,248,626
Excess investment costs over the underlying assets acquired:
Acquisition fees and expenses 1,048,010
Cumulative amortization of acquisition fees and expenses (304,976)
---------------
Investments in Local Limited Partnerships before impairment allowance 9,991,660
Impairment allowance on investments in Local Limited Partnerships (2,784,068)
---------------
Investments in Local Limited Partnerships $ 7,207,592
===============
BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (continued)
(Unaudited)
2. Investments in Local Limited Partnerships (continued)
The Fund 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.
The Fund's share of net losses of the Local Limited Partnerships for the nine
months ended December 31, 2005 is $818,156. For the nine months ended December
31, 2005, the Fund has not recognized $279,720 of equity in losses relating to
two Local Limited Partnerships where cumulative equity in losses and cumulative
distributions exceeded its total investment in the Local Limited Partnership.
3. Significant Equity Investees
The following Local Limited Partnerships invested in by the Fund represent more
than 20% of the Fund's total assets or equity as of either December 31,
2005 or 2004 or net losses for the three months ended either December 31, 2005
or 2004. The following financial information represents the performance of these
Local Limited Partnerships for the three months ended December 31, 2005
and/or 2004:
Beaverdam Creek Associates, a Limited Partnership 2005 2004
------------------------------------------------- ------------- -------------
Revenue $ 296,782 $ 306,576
Net Income (Loss) $ (41,178) $ 43,749
Oak Knoll Renaissance, a Limited Partnership
Revenue $ 494,656 $ 517,514
Net Income $ (47,393) $ 32,636
Live Oaks Plantation
Revenue $ N/A $ 456,961
Net Loss $ N/A $ (69,474)
<page>
BOSTON FINANCIAL TAX CREDIT FUND VIII, 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 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, 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, general economic and real estate
conditions and interest rates.
Critical Accounting Policies
The Fund's accounting polices 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 accounts for its investments in Local Limited Partnerships using the
equity method of accounting. Under the equity method, the investment is 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.
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
Fund'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 Fund investments 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 Fund, that distribution is
recorded as income on the books of the Fund and is included in "Other Revenue"
in the accompanying financial statements.
The Fund has implemented policies and practices for assessing potential
impairment of its investments in Local Limited Partnerships. The investments
are reviewed for impairment whenever events or changes in circumstances
indicate that the Fund may not be able to
recover its carrying value. If an other than temporary impairment in carrying
value exists, a provision to reduce the asset to fair value will be recorded in
the Fund's financial statements.
In January 2003, the FASB issued Interpretation No. 46 ("Interpretation"),
"Consolidation of Variable Interest Entities", which provides new criteria for
determining whether or not consolidation accounting is required. The
Interpretation, which was modified in December 2003 in order to address certain
technical and implementation issues, requires the Fund to consider consolidation
or provide additional disclosures of financial information for Local Limited
Partnerships meeting the definition of a Variable Interest Entity ("VIE"). The
Fund was required to apply the Interpretation to the Local Limited Partnerships
meeting the definition of a VIE as of March 31, 2005.
This Interpretation requires consolidation by the Fund of the Local Limited
Partnerships' assets and liabilities and results of operations if the Fund
determined that the Local Limited Partnerships were VIEs and that the Fund was
the "Primary Beneficiary". Minority interests may be recorded for the Local
Limited Partnerships' ownership share attributable to other investors. Where
consolidation of Local Limited Partnerships is not required, additional
financial information disclosures of Local Limited Partnerships may be required.
The Fund has assessed the Interpretation and concluded that it is not the
Primary Beneficiary of any of the Local Limited Partnerships that meet the
definition of a VIE. The Fund is involved with those VIEs as a non-controlling
limited partner equity holder. The Fund is required to disclose its maximum
exposure to economic and financial statement losses as a result of its
involvement with the VIEs. The Fund's exposure to economic and financial
statement losses from the VIEs is limited to its investment in the VIEs
($7,207,592 at December 31, 2005). The Fund may be subject to additional losses
to the extent of any financial support that the Fund voluntarily provides in the
future.
BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Liquidity and Capital Resources
At December 31, 2005, the Fund had cash and cash equivalents of $262,212, as
compared to $332,386 at March 31, 2005. This decrease is primarily attributable
to cash used for operations and purchases of investment securities and is
partially offset by cash distributions received from Local Limited Partnerships.
Cash used for operations includes $775,000 paid to the General Partner for Asset
Management Fees.
The General Partner initially designated 5% of the Gross Proceeds 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 General Partner may increase or
decrease such Reserves from time to time, as it deems appropriate. At December
31, 2005, $536,392 of cash, cash equivalents and investment securities has been
designated as Reserves.
To date, professional fees relating to various Property issues totaling
approximately $62,000 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, 2005, the Fund has
advanced approximately $1,248,000 to Local Limited Partnerships to fund
operating deficits.
The 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 General Partner deems
funding appropriate.
To date, the Fund has used approximately $22,000 of operating funds to replenish
Reserves. 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 General Partner or working
with Local Limited Partnerships to increase cash distributions.
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, 2005, 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 to Limited Partners during the nine months ended
December 31, 2005. It is not expected that cash available for distribution, if
any, will be significant during the 2006 calendar year. Based on the results of
Property operations, most of the Local Limited Partnerships are not expected to
distribute significant amounts of cash to the Fund as such amounts may be needed
to fund Property operating costs. In addition, some of the Properties benefit
from some type of federal or state subsidy and, as a consequence, are subject to
restrictions on cash distributions.
Results of Operations
Three Month Period
For the three months ended December 31, 2005, the Fund's operations resulted in
a net loss of $344,890, as compared to $305,407 for the three months ended
December 31, 2004. The increase in net loss is primarily attributable to an
increase in equity in losses of Local Limited Partnerships and an increase in
provision for valuation of investments. The increase in equity in losses of
Local Limited Partnerships is primarily due to an increase in property operating
expenses at some of the Properties. The increase in provision for valuation of
investments in Local Limited Partnerships is a result of the Partnership
recognizing non-temporary declines in the carrying value of its investment in
certain Local Limited Partnerships.
BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Results of Operations (continued)
Nine Month Period
For the nine months ended December 31, 2005, the Fund's operations resulted in a
net loss of $842,045, as compared to $911,480 for the nine months ended December
31, 2004. The decrease in net loss is primarily attributable to a decrease in
provision for valuation of advances to Local Limited Partnerships and an
increase in investment revenue and is partially offset by an increase in equity
in losses of Local Limited Partnerships. The decrease in provision for valuation
of advances to Local Limited Partnerships is the result of a decrease in
advances made to Local Limited Partnerships during the current year. The
increase in investment revenue is due to an increase in the average balance of
funds held for investments.
Portfolio Update
The Fund's investment portfolio consists of limited partnership interests in ten
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 Fund has generated Tax Credits of approximately $1,379 per Limited Partner
Unit, with approximately $53 of Tax Credits expected to be generated for 2005,
the expected final year of Tax Credits. In the aggregate, actual and estimated
Tax Credits will enable the Fund to meet the objective specified in the Fund's
prospectus.
Properties that receive low income housing Tax Credits must remain in compliance
with rent restrictions 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 2008
and continuing through 2009, the Compliance Period of the ten Properties in
which the Fund has an interest will expire. It is unlikely that the General
Partner will be able to dispose of the Fund's Local Limited Partnership
interests concurrently with the expiration of each Property's Compliance Period.
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 K-1s and quarterly and
annual reports, until the Fund is dissolved.
On August 24, 2004, the Fund, Boston Financial Qualified Housing Tax Credits
L.P., Boston Financial Qualified Housing Tax Credits L.P. II, Boston Financial
Qualified Housing Tax Credits L.P. III, Boston Financial Qualified Housing Tax
Credits L.P. IV, Boston Financial Qualified Housing Tax Credits L.P. V, Boston
Financial Tax Credit Fund Plus, A Limited Partnership and Boston Financial Tax
Credit Fund VII, A Limited Partnership (collectively, the "Partnerships"), and
their general partners commenced litigation against Everest Housing Investors 2,
LLC ("Everest 2") and several other Everest-related entities (collectively, the
"Everest 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 counterclaim against the Partnerships and their purported 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. On January 12, 2005, the
Partnerships served a motion to amend their complaint to, among other things,
add a claim based on Everest 2's breach of a November 24, 2003 letter agreement
which compelled Everest 2 to keep confidential certain information
contemporaneously disseminated by four of the Partnerships to Everest 2. Having
received no opposition within the specified time, the Partnerships filed the
motion to amend with the proposed first amended complaint on January 31, 2005.
The Court has granted this Motion, and the discovery process is continuing.
BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Portfolio Update (continued)
The Partnerships maintain that the Everest Entities are not entitled to review
the materials requested and/or use the materials in secondary market
transactions because, among other things: (i) they are not "books and records"
of the Partnerships; (ii) the Everest Entities do not seek to review them for a
proper purpose; and (iii) selective disclosure of the information to the Everest
Entities would give them an unfair informational advantage in secondary market
transactions and may violate federal and/or state securities laws. The
Partnerships have not formed an opinion that an unfavorable outcome is either
probable or remote. Therefore, the Partnerships' counsel refrains from
expressing an opinion as to the likely outcome of the case or the range of any
loss.
Property Discussions
Most of the Properties in which the Fund 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, a few
Properties have had persistent operating difficulties that could either: i) have
an adverse impact on the Fund's liquidity; ii) result in their foreclosure; or
iii) result in the General Partner deeming it appropriate for the Fund to
dispose of its interest in the Local Limited Partnership prior to the expiration
of the Compliance Period. Also, the General Partner, in the normal course of the
Fund'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.
As previously reported, the Local General Partner of Live Oaks Plantation,
located in West Palm Beach, Florida, indicated a desire to transfer its interest
in the Local Limited Partnership to a replacement Local General Partner.
Accordingly, the General Partner began working with the Local General Partner to
identify an acceptable replacement. Negotiations to replace the Local General
Partner were then delayed due to an audit by the Internal Revenue Service
("IRS"). The audit focused on the tax treatment of certain items, such as land
improvements, impact fees, utility fees and developer fees. In April 2002, the
Florida office of the IRS issued their report indicating an eligible basis
reduction of approximately $1,000,000, which would reduce the amount of Tax
Credits and losses generated by the Property. The Local General Partner filed an
appeal of the report to the Washington D.C. office of the IRS. The appeal was
successful, and during April 2004 a settlement was reached whereby the eligible
basis was reduced by approximately $93,000. As a result, the Fund had recapture
of previously taken Tax Credits of approximately $2 per Unit. Tax Credits for
2005 will also be reduced by approximately $0.25 per Unit.
Subsequent to reaching a settlement with the IRS, negotiations to replace the
Local General Partner resumed. Effective June 28, 2004, an affiliate of the
General Partner replaced the Local General Partner. In June 2005, the Local
General Partner interest was transferred from the affiliate of the General
Partner to a replacement Local General Partner. While occupancy and working
capital levels at the Property have consistently remained adequate, the Property
generated significant operating deficits in 2001 and 2002. The Fund funded
slightly more than $1,000,000 of deficits from Fund Reserves. The General
Partner anticipates that cash from operations will continue to fund the monthly
debt service. Occupancy at the Property averaged 88% for the three months ended
September 30, 2005, while debt service coverage and working capital have
remained above appropriate levels during the same period.
As previously reported, turnover at Green Wood Apartments, located in Gallatin,
Tennessee, as a result of few employment opportunities in the immediate area,
continues to cause a decline in Property operations. Rental concessions, in an
effort to alleviate the turnover issue, along with higher utility and
administrative expenses, continue to hinder the Property's ability to operate at
above breakeven. Despite an overall improvement in occupancy levels since 2004,
occupancy and debt service coverage both remain below appropriate levels as of
September 30, 2005. The Local General Partner continues to fund the operating
deficits, enabling the Property to remain current on its loan obligations. The
General Partner will continue to closely monitor Property operations.
BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Property Discussions (continued)
As previously reported, Meadow Wood of Pella, located in Pella, Iowa, had
experienced operating deficits in recent quarters due to reduced revenues
resulting from low occupancy and high expenses. While very acceptable levels of
occupancy over the six months ended September 30, 2005 have alleviated revenue
issues, high expenses, mainly administrative and insurance, resulted in an
operating deficit for the six months ended September 30, 2005.This operating
deficit was funded by the Property's operating reserve as well as working
capital. The Local General Partner has fulfilled its working capital obligation
and will no longer fund operating deficits. A recent modification to the
Property's HOME loan resulting in a reduction to the required annual debt
service payment beginning in 2006 is expected to lead to an improvement in
operations. The Property remains current on its debt service. The General
Partner will continue to closely monitor Property operations.
As previously reported, in 2004 the Local General Partner of Beaverdam Creek,
located in Mechanicsville, Virginia, requested approval for a refinancing on the
Property's first mortgage. As part of the agreement to provide the General
Partner's approval of the refinancing, a put agreement was entered into whereby
the Fund has the right to transfer its interest in the Local Limited Partnership
for a nominal price at any time after December 31, 2009, the end of the
Property's Compliance Period. As a result of the refinancing, which closed on
May 4, 2005, the Fund received Sale or Refinancing Proceeds, as defined in the
Local Limited Partnership Agreement, of $890,727. The General Partner, in
accordance with and as permitted by the Partnership Agreement, retained the
entire amount of net proceeds in Reserves.
BOSTON FINANCIAL TAX CREDIT FUND VIII, 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 Principal Executive Officer and
Principal Financial Officer pursuant to section 302 of
the Sarbanes-Oxley Act of 2002
32.1 Certification of Principal Executive Officer and
Principal Financial Officer 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 December 31, 2005.
BOSTON FINANCIAL TAX CREDIT FUND VIII, 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 14, 2006 BOSTON FINANCIAL TAX CREDIT FUND VIII,
A LIMITED PARTNERSHIP
By: Arch Street VIII Limited Partnership,
its General Partner
/s/Jenny Netzer
Jenny Netzer
Executive Vice President
MMA Financial, LLC