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, 2008
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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 0-22104
Boston Financial Tax Credit Fund Plus, A Limited Partnership
- ------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Massachusetts 04-3105699
_________________________ ___________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
101 Arch Street, Boston, Massachusetts 02110-1106
_______________________________________ _______________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 439-3911
----------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No .
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12 b-2 of the Exchange Act.
Large accelerated filer ___ Accelerated Filer ___
Non-accelerated filer ___(Do not check if a Smaller reporting company X
smaller reporting company) ____
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12 b-2 of the Exchange Act).
Yes No X .
___ ____
BOSTON FINANCIAL TAX CREDIT FUND PLUS,
A Limited Partnership
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION Page No.
- ------------------------------ --------
Item 1. Financial Statements
Balance Sheet (Unaudited) - December 31, 2008 1
Statements of Operations (Unaudited) -
For the Three and Nine Months Ended December 31, 2008 and 2007 2
Statement of Changes in Partners' Equity
(Unaudited) - For the Nine Months Ended December 31, 2008 3
Statements of Cash Flows (Unaudited) -
For the Nine Months Ended December 31, 2008 and 2007 4
Notes to the Financial Statements (Unaudited) 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures About Market Risk 15
Item 4. Controls and Procedures 15
PART II - OTHER INFORMATION
Items 1-6 16
SIGNATURE 17
CERTIFICATIONS 18
BOSTON FINANCIAL TAX CREDIT FUND PLUS,
A Limited Partnership
BALANCE SHEET
December 31, 2008
(Unaudited)
Assets
_______
Cash and cash equivalents $ 4,422,688
Investments in Local Limited Partnerships (Note 1) 2,351,270
Other investments (Note 2) 1,255,450
Accounts receivable 38,604
------------------------
Total Assets $ 8,068,012
========================
Liabilities and Partners' Equity
________________________________
Due to affiliate(s) $ 78,985
Accrued expenses 49,664
------------------------
Total Liabilities 128,649
------------------------
General, Initial and Investor Limited Partners' Equity 7,939,363
------------------------
Total Liabilities and Partners' Equity $ 8,068,012
========================
The accompanying notes are an integral part of these financial statements.
BOSTON FINANCIAL TAX CREDIT FUND PLUS,
A Limited Partnership
STATEMENTS OF OPERATIONS
For the Three and Nine Months Ended December 31, 2008 and 2007
(Unaudited)
Three Months Ended Nine Months Ended
December 31, December 31, December 31, December 31,
2008 2007 2008 2007
-------------- ----------------- ------------- -------------
Revenue
Investment $ 16,435 $ 11,738 $ 41,545 $ 54,388
Accretion of Original Issue Discount(Note 2) 32,301 48,145 127,475 151,129
Other 45,960 1,760 54,294 135,038
-------------- -------------- -------------- -------------
Total Revenue 94,696 61,643 223,314 340,555
-------------- -------------- -------------- -------------
Expenses::
Asset management fees, affiliate 39,813 42,271 119,439 126,812
Provision for valuation allowance on
advances to Local Limited Partnerships
(Note 1) 82,223 - 82,223 -
Provision for valuation allowance on
investments in Local Limited
Partnerships (Note 1) - - 266,000 -
General and administrative
(includes reimbursement to affiliate in
the
amounts of $111,138 and $108,253
for the nine months ended
December 31, 2008 and 2007, respectively) 63,903 66,356 218,063 236,048
Amortization 1,818 2,162 5,800 6,489
-------------- -------------- -------------- -------------
Total Expenses 187,757 110,789 691,525 369,349
-------------- -------------- -------------- -------------
Loss before equity in income
of Local Limited Partnerships
and gain (loss) on sale of investments
in Local Limited Partnerships (93,061) (49,146) (468,211) (28,794)
Equity in income of Local Limited
Partnerships (Note 1) 148,015 154,718 252,670 272,462
Gain (loss) on sale of investments in Local
Limited Partnerships (Note 1) (87,720) - 2,098,101 75,001
-------------- -------------- -------------- -------------
Net Income (Loss) $(32,766) $105,572 $1,882,560 $318,669
============== ============== ============== =============
Net Income (Loss) allocated:
General Partners $(9,127) $ 1,056 $ 4,656 $ (2,140)
Class A Limited Partners (52,359) 52,763 1,638,402 158,820
Class B Limited Partners 28,720 51,753 239,502 161,989
-------------- -------------- -------------- -------------
$(32,766) $105,572 1,882,560 $318,669
============== ============== ============== =============
Net Income (Loss) Per Limited Partner Unit
Class A Limited Partners (34,643 Units) $ (1.51) $ 1.52 $ 47.29 $ 4.58
============== ============== ============== =============
Class B Limited Partners (3,290 Units) $ 8.73 $ 15.73 $ 72.80 $ 49.24
============== ============== ============== =============
The accompanying notes are an integral part of these financial statements.
BOSTON FINANCIAL TAX CREDIT FUND PLUS,
A Limited Partnership
STATEMENT OF CHANGES IN PARTNERS' EQUITY
For the Nine Months Ended December 31, 2008
(Unaudited)
Investor Investor
Initial Limited Limited
General Limited Partners, Partners,
Partners Partner Class A Class B Total
------------- ----------- ------------- ------------- -------------
Balance at March 31, 2008 $ 74,738 $ 5,000 $4,741,559 $2,652,506 $7,473,803
Limited Partners distribution - - - (1,417,000) (1,417,000)
Net Income 4,656 - 1,638,402 239,502 1,882,560
------------- ----------- ------------- ------------- -------------
Balance at December 31, 2008 $ 79,394 $ 5,000 $6,379,961 $1,475,008 $7,939,363
============= =========== ============= ============= =============
The accompanying notes are an integral part of these financial statements.
BOSTON FINANCIAL TAX CREDIT FUND PLUS,
A Limited Partnership
STATEMENTS OF CASH FLOWS
For the Nine Months Ended December 31, 2008 and 2007
(Unaudited)
2008 2007
---------------- ----------------
-
Net cash used for operating activities $ (425,835) $ (104,229)
Net cash provided by investing activities 5,213,353 718,109
Net cash used for financing activities (1,417,000) (532,669)
---------------- ----------------
Net increase in cash and cash equivalents 3,370,518 81,211
Cash and cash equivalents, beginning 1,052,170 1,132,010
---------------- ----------------
Cash and cash equivalents, ending $ 4,422,688 $ 1,213,221
================ ================
The accompanying notes are an integral part of these financial statements.
BOSTON FINANCIAL TAX CREDIT FUND PLUS,
A Limited Partnership
NOTES TO THE FINANCIAL STATEMENTS
(Unaudited)
The unaudited financial statements presented herein have been prepared in
accordance with the instructions to Form 10-Q and do not include all of the
information and note disclosures required by accounting principles generally
accepted in the United States of America. These statements should be read in
conjunction with the financial statements and notes thereto included with the
Fund's Form 10-KSB for the year ended March 31, 2008. 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
Fund's financial position and results of operations. The results of operations
for the periods may not be indicative of the results to be expected for the
year.
The Managing General Partner has elected to report results of the Local Limited
Partnerships on a 90 day lag basis because the Local Limited Partnerships report
their results on a calendar year basis. Accordingly, the financial information
of the Local Limited Partnerships that is included in the accompanying financial
statements is as of September 30, 2008 and 2007.
Generally, profits, losses, tax credits and cash flow from operations are
allocated 99% to the Limited Partners and 1% to the General Partners. Net
proceeds from a sale or refinancing will be allocated 95% to the Limited
Partners and 5% to the General Partners, after certain priority payments. The
General Partners may have an obligation to fund deficits in their capital
accounts, subject to limits set forth in the Partnership Agreement. However, to
the extent that the General Partners' capital accounts are in a deficit position
certain items of net income may be allocated to the General Partners in
accordance with the Partnership Agreement.
1. Investments in Local Limited Partnerships
The Fund has limited partnership interests in twelve 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 each Local Limited Partnership is 99%, except for Metropolitan, New
Garden Place and Findley Place, where the Fund's ownership interests are 98.75%,
97.9% and 98%, respectively. 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 Properties are sold to a third party, 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, 2008:
Capital contributions and advances paid to Local Limited Partnerships
and purchase price paid to withdrawing partners of Local Limited Partnerships $ 15,733,727
Cumulative equity in losses of Local Limited Partnerships
(excluding cumulative unrecognized losses of $4,300,192) (7,778,949)
Cumulative cash distributions received from Local Limited Partnerships (3,536,606)
--------------------
Investments in Local Limited Partnerships before adjustments 4,418,172
Excess investment costs over the underlying assets acquired:
Acquisition fees and expenses 465,788
Cumulative amortization of acquisition fees and expenses (160,148)
--------------------
Investments in Local Limited Partnerships before valuation allowance 4,723,812
Valuation allowance on investments in Local Limited Partnerships (2,372,542)
--------------------
Investments in Local Limited Partnerships $ 2,351,270
====================
BOSTON FINANCIAL TAX CREDIT FUND PLUS,
A Limited Partnership
NOTES TO THE FINANCIAL STATEMENTS (continued)
(Unaudited)
1. Investments in Local Limited Partnerships (continued)
For the nine months ended December 31, 2008, the Fund advanced $32,223 to one of
the Local Limited Partnerships, all of which was reserved. In addition, net
advances of $50,000 paid to one Local Limited Partnership in previous years were
reserved for in fiscal year 2009.
The Fund has also recorded a valuation 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 the net losses of the Local Limited Partnerships for the
nine months ended December 31, 2008 is $743,743. For the nine months ended
December 31, 2008, the Fund has not recognized $996,413 of equity in losses
relating to certain Local Limited Partnerships in which cumulative equity in
losses and cumulative distributions exceeded its total investment in these Local
Limited Partnerships.
During the nine months ended December 31, 2008, the Fund sold its interests in
seven Local Limited Partnerships, resulting in a net gain of $2,098,101.
2. Other Investments
Other investments consists of the aggregate cost of the Treasury STRIPS
purchased by the Fund for the benefit of the Class B Limited Partners. The
amortized cost at December 31, 2008 is composed of the following:
Aggregate cost of Treasury STRIPS $ 373,553
Accumulated accretion of Original Issue Discount 881,897
---------------
$ 1,255,450
===============
The fair value of these securities at December 31, 2008 is $1,340,376. Maturity
dates for the STRIPS range from May 15, 2009 to May 15, 2010 with a final
maturity value of $1,344,000.
3. New Accounting Principle
FIN48-3
In December 2008, the Financial Accounting Standards Board (`FASB") issued
Interpretation No. 48-3 "Effective Date of FASB Interpretation No. 48 for
Certain Nonpublic Enterprises" ("FIN48-3"). FIN48-3 deferred the effective date
of FIN48 for certain nonpublic organizations. The deferred effective date is
intended to give the FASB additional time to develop guidance on the application
of FIN48 by pass-through and not-for-profit entities. The General Partner may
modify the Fund's disclosures if the FASB's guidance regarding the application
of FIN48 to pass-through entities chnages.
SFAS No. 157
In September 2006, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 157, "Fair Value Measurements" ("SFAS No. 157"), which provides enhanced
guidance for using fair value to measure assets and liabilities. SFAS No. 157
establishes a common definition of fair value, provides a framework for
measuring fair value under U.S. generally accepted accounting principles and
expands disclosure requirements about fair value measurements. SFAS No. 157 is
effective for financial statements issued in fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years. In February
2008, the FASB issued FASB Staff Position 157-2, "Effective Date of FASB
Statement No. 157", which delays the effective date of SFAS No. 157 for all
nonfinancial assets and liabilities except those that are recognized or
disclosed at fair value in the financial statements on at least an annual basis
until November 15, 2008. The Fund adopted the provisions of SFAS No. 157 for
financial assets and liabilities recognized at fair value on a recurring basis
effective April 1, 2008. The partial adoption of SFAS No. 157 did not have a
material impact on the Fund's financial statements. The Fund does not
BOSTON FINANCIAL TAX CREDIT FUND PLUS,
A Limited Partnership
NOTES TO THE FINANCIAL STATEMENTS (continued)
(Unaudited)
3. New Accounting Principle (continued)
expect the adoption of the remaining provisions of SFAS No. 157 to have a
material effect on the Fund's financial position, operations or cash flow. This
standard requires that a Fund measure its financial assets and liabilities using
inputs from the three levels of the fair value hierarchy. A financial asset or
liability classification within the hierarchy is determined based on the lowest
level input that is significant to the fair value measurement. The three levels
are as follows:
Level 1 - Inputs are unadjusted quoted prices in active markets for
identical assets or liabilities that the Fund has the ability to
access at the measurement date.
Level 2 - Inputs include quoted prices for similar assets and
liabilities in active markets, quoted prices for identical or
similar assets or liabilities in markets that are not active,
inputs other than quoted prices that are observable for the
asset or liability and inputs that are derived principally from
or corroborated by observable market data by correlation or
other means (market corroborated inputs).
Level 3 - Unobservable inputs reflect the Fund's judgments about the
assumptions market participants would use in pricing the asset
or liability since limited market data exists. The Fund develops
these inputs based on the best information available, including
the Fund's own data.
Financial assets accounted for at fair value on a recurring basis at December
31, 2008 include cash equivalents of $4,422,688.
4. Significant Subsidiaries
The following Local Limited Partnerships invested in by the Fund represent more
than 20% of the Fund's total assets or equity as of December 31, 2008 or 2007 or
net losses for the three months ended either December 31, 2008 or 2007. The
following financial information represents the performance of these Local
Limited Partnerships for the three months ended September 30, 2008 and 2007:
2008 2007
---------------- ---------------
Pilot House Associates Limited Partnership
Revenue $ 297,508 $ 296,054
Net Income (Loss) $ (11,070) $ 48,462
Preston Place Associates Limited Partnership
Revenue $ 269,174 $ 263,344
Net Income $ 51,066 $ 65,477
45th Vincennes Limited Partnership
Revenue $ 23,722 $ 31,816
Net Loss $ (31,522) $ (15,941)
Hudson Square Apartments Limited Partnership
Revenue $ 176,034 $ 155,684
Net Income $ 25,186 $ 44,060
Linden Square Ltd Div Housing Assoc Limited Partnership
Revenue $ 178,048 $ 174,361
Net Loss $ (25,236) $ (11,893)
BOSTON FINANCIAL TAX CREDIT FUND PLUS,
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 use of
words like "anticipate," "estimate," "intend," "project," "plan," "expect,"
"believe," "could," and similar expressions are intended to identify such
forward-looking statements. The Fund intends such forward-looking statements to
be covered by the safe harbor provisions for forward-looking statements and is
including this statement for purposes of complying with these safe harbor
provisions. Although the Fund believes the forward-looking statements are based
on reasonable assumptions, 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 policies include those that relate to its recognition of
investments in Local Limited Partnerships using the equity method of accounting.
The Fund's policy is as follows:
The Local Limited Partnerships in which the Fund invests are Variable Interest
Entities ("VIE"s). The Fund is involved with the VIEs as a non-controlling
limited partner equity holder. The investments in the Local Limited Partnerships
are made primarily to obtain tax credits on behalf of the Fund's investors. The
general partners of the Local Limited Partnerships, who are considered to be the
primary beneficiaries, control the day-to-day operations of the Local Limited
Partnerships. The general partners are also responsible for maintaining
compliance with the tax credit program and for providing subordinated financial
support in the event operations cannot support debt and property tax payments.
The Fund, through its ownership percentages, may participate in property
disposition proceeds. The timing and amounts of these proceeds are unknown but
can impact the Fund's financial position, results of operations or cash flows.
Because the Fund is not the primary beneficiary of these VIEs, it accounts for
its investments in the Local Limited Partnerships using the equity method of
accounting. As a result of its involvement with the VIEs, the Fund's exposure to
economic and financial statement losses is limited to its investments in the
VIEs ($2,351,270 at December 31, 2008). The Fund may be subject to additional
losses to the extent of any financial support that the Fund voluntarily provides
in the future. 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. A liability
is recorded for delayed equity capital contributions to Local Limited
Partnerships. 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 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 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
other-than-temporary declines in values of its investments in Local Limited
Partnerships. Periodically, the carrying values of the investments are compared
to their respective fair values. If an other-than-temporary decline in carrying
value exists, a provision to reduce the asset to fair value, as calculated based
primarily on remaining tax benefits, will be recorded in the Fund's financial
statements. The tax benefits for each Local Limited Partnership consist of
future tax losses, tax credits and residual receipts at disposition. Included in
the residual receipts calculation is current net operating income capitalized at
the regional rate specific to each Local Limited Partnership. Generally, the
carrying values of most Local Limited Partnerships will decline through losses
and distributions in amounts sufficient to prevent other-than-temporary
impairments. However, the Fund may record similar impairment losses in the
future if the expiration of tax credits outpaces losses and distributions from
any of the Local Limited Partnerships.
BOSTON FINANCIAL TAX CREDIT FUND PLUS,
A Limited Partnership
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Liquidity and Capital Resources
At December 31, 2008, the Fund had cash and cash equivalents of $4,422,688 as
compared to $1,052,170 at March 31, 2008. The increase is primarily attributable
to proceeds from the sale of investments in Local Limited Partnerships and cash
distributions received from Local Limited Partnerships, partially offset by cash
used for operating activities, payment of asset management fees, and advances to
a Local Limited Partnership.
The Managing General Partner initially designated 4% of the Adjusted Gross
Proceeds (which generally means Gross Proceeds minus the amounts committed to
the acquisition of Treasury STRIPS) as Reserves, as defined in the Partnership
Agreement. The Reserves were established to be used for working capital of the
Fund and contingencies related to the ownership of Local Limited Partnership
interests. The Managing General Partner may increase or decrease such Reserves
from time to time, as it deems appropriate. At December 31, 2008, approximately
$713,000 has been designated as Reserves.
To date, professional fees relating to various Property issues totaling
approximately $464,000 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, 2008,
the Fund has advanced approximately $303,000 to Local Limited Partnerships to
fund operating deficits.
The Managing General Partner believes that the investment income earned on the
Reserves, along with cash distributions received from Local Limited
Partnerships, to the extent available, will be sufficient to fund the Fund's
ongoing operations. Reserves may be used to fund operating deficits, if the
Managing General Partner deems funding appropriate. To date, the Fund has not
used any of Reserves to fund operations. If Reserves are not adequate to cover
the Fund's operations, the Fund will seek other financing sources including, but
not limited to, the deferral of Asset Management Fees paid to an affiliate of
the Managing General Partner or working with Local Limited Partnerships to
increase cash distributions.
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, 2008, except as otherwise disclosed, the
Fund had no contractual or other obligation to any Local Limited Partnership
which had not been paid or provided
for.
Cash Distributions
Cash distributions of $1,417,000 were made to the Investor Limited Partners,
Class B during the nine months ended December 31, 2008.
Results of Operations
Three Month Period
For the three months ended December 31, 2008, the Fund's operations resulted in
a net loss of $32,766, as compared to a net income of $105,572 for the same
period in 2007. The decrease in net income is primarily due to an increase in
loss on sale of investments in Local Limited Partnerships, an increase in
provision for valuation allowance on advances to Local Limited Partnerships, and
a decrease in income from accretion of Original Issue Discount, partially offset
by an increase in other income and an increase in investment revenue. The
increase in loss on sale of investments in Local Limited Partnerships is due to
the transfer of three Local Limited Partnerships during the current quarter that
resulted in a net loss. The increase in provision for valuation allowance on
advances to Local Limited Partnerships is the result of a reserve for advances
made to one Local Limited Partnership. The decrease in income from accretion of
Original Issue Discount is due to T-Strips that matured in November 2008
resulting in lower accretion income for the current quarter. The increase in
other income is due to an increase in distributions from Local Limited
Partnerships with carrying values of zero. It also relates to the timing of
asset management fees received by the Fund from Local Limited Partnerships. The
increase in investment revenue is due to an increase in the average balance of
funds held for investment.
BOSTON FINANCIAL TAX CREDIT FUND PLUS,
A Limited Partnership
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Results of Operations (continued)
Nine Months Period
For the nine months ended December 31, 2008, the Fund's operations resulted in a
net income of $1,882,560, as compared to a net income of $318,669 for the same
period in 2007. The increase in net income is primarily attributable to an
increase in gain on sale of investments in Local Limited Partnerships, partially
offset by an increase in provision for valuation allowance on investments in
Local Limited Partnerships, an increase in provision for valuation allowance on
advances to Local Limited Partnerships, and a decrease in other income. The
increase in gain on sale of investments in Local Limited Partnerships is the
result of a net gain related to the sale of seven Local Limited Partnerships
during the nine months ended December 31, 2008. Provision for valuation
allowance on investments increased due to the Fund recording an impairment
allowance for its investment in a certain Local Limited Partnership. The
increase in provision for valuation allowance on advances to Local Limited
Partnerships is the result of a reserve for advances made to one Local Limited
Partnership. The decrease in other income is primarily attributable to a
decrease in cash distributions received from previously-disposed Local Limited
Partnerships, partially offset by an increase in distributions from Local
Limited Partnerships with carrying values of zero.
Portfolio Update
The Fund is a Massachusetts limited partnership organized to invest in Local
Limited Partnerships which own and operate apartment complexes which are
eligible for low income housing tax credits that may be applied against the
federal income tax liability of an investor. The Fund also invests in, for the
benefit of the Class B Limited Partners, United States Treasury obligations from
which the interest coupons have been stripped or in such interest coupons
themselves (collectively "Treasury STRIPS"). The Fund used approximately 28% of
the Class B Limited Partners' capital contributions to purchase Treasury STRIPS
with maturities of 13 to 18 years, with a total redemption amount equal to the
Class B Limited Partners' capital contributions. The Fund's objectives are to:
(i) provide annual tax benefits in the form of tax credits which Limited
Partners may use to offset their Federal income tax liability; (ii) preserve and
protect the Fund's capital committed to Local Limited Partnerships; (iii)
provide cash distributions from operations of Local Limited Partnerships; (iv)
provide cash distributions from Sale or Refinancing transactions with the
possibility of long term capital appreciation; and (v) provide cash
distributions derived from investment in Treasury STRIPS to Class B Limited
Partners after a period of approximately thirteen to eighteen years equal to
their Capital Contributions. Arch Street VIII, Inc., a Massachusetts
corporation, is the Managing General Partner of the Fund. Arch Street VI Limited
Partnership, a Massachusetts limited partnership whose general partner consists
of Arch Street, Inc., is also a General Partner. Both of the General Partners
are affiliates of MMA. The fiscal year of the Fund ends on March 31.
On November 15, 2008, the Fund received $880,000, or approximately $267.47 per
Class B Unit, as the Fund's investment in four U. S. Treasury STRIPS matured.
The Managing General Partner distributed these funds to Class B Limited Partners
in November 2008. On August 15, 2008 the Fund received $537,000, or $163.22 per
Class B unit, as the Fund's investment in four Treasury STRIPS matured. The
Managing General Partner distributed these funds to Class B Limited Partners in
August 2008.
On August 15, 2007, the Fund received $342,000 or $103.95, per Class B unit, as
the Fund's second, in a series of sixteen, investment in Treasury STRIPS
matured. The Managing General Partner distributed these funds to Class B Limited
Partners in September 2007. On February 15, 2007 the Fund received $187,000 or
$56.87 per Class B unit, as the Fund's initial investment in Treasury STRIPS
matured. The Managing General Partner distributed these funds to Class B Limited
Partners in August 2007.
The next scheduled maturity date is May 15, 2009, when one U.S. Treasury STRIP,
in the amount of $236,000, or $71.73 per Class B Unit, will mature. The Managing
General Partner will distribute these proceeds in May 2009, to the Limited
Partners recognized as holders of the Class B Units on the date these Treasury
STRIPS mature. Five
BOSTON FINANCIAL TAX CREDIT FUND PLUS,
A Limited Partnership
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Portfolio Update (continued)
additional securities, totaling $1,108,000, or $336.77 per Class B Unit, are
scheduled to mature between August 15, 2009 and May 15, 2010.
As of December 31, 2008, the Fund's investment portfolio consisted of limited
partnership interests in twelve 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 generated Tax Credits, net of recapture,
of approximately $1,467 per Class A Unit. Class B Unit investors have received
Tax Credits, net of recapture, of approximately $1,056 per Limited Partner Unit.
Properties that receive low income housing tax credits must remain in compliance
with rent restriction and set-aside requirements for at least 15 calendar years
from the date the Property is placed in service. Failure to do so would result
in the recapture of a portion of the Property's Tax Credits. The Compliance
Period for eleven of the remaining twelve properties expired on or before
December 31, 2008, while one property's Compliance Period ends December 31,
2009. The Fund disposed of seven Local Limited Partnership interests during the
nine month period ending December 31, 2008. In addition, the Managing General
Partner negotiated agreements that will ultimately dispose of the Fund's
interest in three more Local Limited Partnerships in 2009.
The Managing General Partner will continue to closely monitor the operations of
the Properties during their Compliance Periods and will formulate disposition
strategies with respect to the Fund's remaining Local Limited Partnership
interests. It is unlikely that the Managing General Partner's efforts will
result in the Fund disposing of all of its remaining 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.
The Fund is not a party to any pending legal or administrative proceeding, and
to the best of its knowledge, no legal or administrative proceeding is
threatened or contemplated against it.
Property Discussions
A majority of the Properties in which the Fund has an interest had stabilized
operations and operated above breakeven through September 30, 2008. Several
Properties generated cash flow deficits that the Local General Partners of those
Properties funded 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 Fund's liquidity; (ii)
result in their foreclosure; or (iii) result in the Managing 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
Managing 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 Managing General Partner and Local General Partner
of Meadow Wood, located in Smyrna, Tennessee had reached an agreement that would
result in the early 2007 sale of this Property. On January 23, 2007, the
Property was sold, resulting in net proceeds to the Fund of $1,174,546, or
$30.96 per Unit. During the three month period ending September 30, 2007, the
Fund received additional sales proceeds of $75,000, or $1.98 per Unit, upon a
reconciliation of tax and utility expenses. This sale resulted in 2007 taxable
income of $1,165,374, or $30.72 per Unit. The Fund no longer has an interest in
this Local Limited Partnership.
As previously reported, on March 21, 2007, the Managing General Partner
exercised the Fund's put option and transferred its interest in the Local
Limited Partnership that owned Broadway Tower, located in Revere, Massachusetts,
for $50,000 or $1.32 per Unit. Proceeds related to this sale were received on
April 18, 2007. The sale of this Local Limited Partnership resulted in 2007
taxable income of $749,398, or $19.76 per Unit. The Fund retained an economic
interest in the transferred Property in the form of a contingent note equal to
10% of Related
BOSTON FINANCIAL TAX CREDIT FUND PLUS,
A Limited Partnership
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Property Discussions (continued)
Party Payments, as defined in the contingent note agreement. The Fund no longer
has an interest in this Local Limited Partnership.
As previously reported, due to concerns over the long-term financial health of
Primrose located in Grand Forks, North Dakota and Sycamore, located in Sioux
Falls, South Dakota, the Managing General Partner developed a plan that would
ultimately result in the transfer of the Fund's interests in each Local Limited
Partnerships. Both Local Limited Partnerships have the same Local General
Partner. In 1997, in an effort to reduce possible future risk, the Managing
General Partner consummated the transfer of 50% of the Fund's interest in
capital and profits in these Local Limited Partnerships to an affiliate of the
Local General Partner. Effective June 17, 1999, the Local General Partner
transferred both its general partner interest and 48.5% of its interest in
capital and profits in the Local Limited Partnerships to a non-affiliated,
non-profit general partner. Effective August 31, 2000, the former Local General
Partner withdrew its remaining interest in each of the Local Limited
Partnerships. In July 2008, the Managing General Partner transferred the Fund's
remaining interest in both Primrose and Sycamore to the Local General Partner.
As expected, these transfers, effectively dated January 1, 2008, did not result
in any proceeds to the Fund. The Managing General Partner is currently
projecting a 2008 taxable loss of approximately $127,000, or $3.35 per Unit,
from Primrose, and taxable income of approximately $140,000, or $3.69 per Unit,
from Sycamore. As previously reported, with regard to Sycamore and Primrose, the
Fund received its full share of Tax Credits. In addition, the Local General
Partner had the right to call the remaining interest subsequent to the
Compliance Period, which expired on December 31, 2007. The Fund no longer has an
interest in these two Local Limited Partnerships.
As previously reported, the Managing General Partner anticipated that the Fund's
interest in the Local Limited Partnership that owns Cottages of Aspen, located
in Oakdale, Minnesota, would be terminated upon the sale of the underlying
Property in mid-2008. On June 4, 2008, the Fund's interest was transferred,
resulting in net sales proceeds to the Fund of $2,570,481, or $67.76 per Unit.
The Managing General Partner estimates this sale will result in 2008 taxable
income projected to be approximately $3,017,000, or $79.53, per Unit. The Fund
no longer has an interest in this Local Limited Partnership.
The Fund's interest in the Local Limited Partnership that owns Livingston Arms,
located in Poughkeepsie, New York, terminated upon the sale of the underlying
Property on September 1, 2008, resulting in net sales proceeds to the Fund of
$10,000, or $0.26 per Unit. The Managing General Partner is currently projecting
a 2008 loss of approximately $318,000, or $8.38 per Unit. The Fund no longer has
an interest in this Local Limited Partnership.
As previously reported, the Managing General Partner estimated a late 2008
disposition, via a transfer to the Local General Partner, of the Fund's interest
in the Local Limited Partnership that owns Atkins Glen, located in Stoneville,
South Carolina. On October 1, 2008, the Fund's interest was transferred. The
Fund received $3,334, or $0.09 per Unit. The Managing General Partner is
currently projecting 2008 taxable income of approximately $285,000, or $7.51 per
Unit. The Fund no longer has an interest in this Local Limited Partnership.
As previously reported, occupancy for the three month period ending June 30,
2008, improved to 83% while working capital and debt service coverage levels
remained below acceptable levels at 45th and Vincennes, located in Chicago,
Illinois. As of September 30, 2008, occupancy improved to 89%; however, working
capital and debt service coverage levels remained below acceptable levels. A
representative of the Managing General Partner visited the Property in December
2007 to reassess the management agent and physical condition of the Property and
noted that the Property remains in need of significant improvement. Although
advances from the Local General Partner enabled the Property to remain current
on its loan obligations, the Managing General Partner believes that the Local
General Partner and its affiliated management company are not adequately
performing their responsibilities with respect to the Property. The Managing
General Partner has expressed their concerns to the Local General Partner and
will continue to closely monitor the Property's operations. Based on the results
of a market valuation, which confirmed the property's value to be less than its
outstanding debt, the Managing General Partner will assign the Partnership's
interest to the Local General Partner, upon receipt of official documentation
from HUD approving the Transfer of Physical Assets application. The Assignment
was dated October 31, 2008, effectively terminating the
BOSTON FINANCIAL TAX CREDIT FUND PLUS,
A Limited Partnership
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Property Discussions (continued)
Fund's interest in the Local Limited Partnership. The Managing General Partner
does not expect this disposition to result in any proceeds to the Partnership or
result in a significant taxable event for Limited Partners. The Property's
Compliance Period ended on December 31, 2007. The Fund no longer has an interest
in this Local Limited Partnership.
As previously reported, the Managing General Partner anticipated that the Fund's
interest in the Local Limited Partnership that owns and operates Hudson Square,
located in Baton Rouge, Louisiana, will be terminated either upon the sale of
the underlying Property, or a sale of the Fund's interest, in early 2009. Based
on a 2007 valuation, the Managing General Partner expected a sale to result in
approximately $1,200,000, or $31.63 per Unit. However, due to current market
conditions, the disposition resulted in net sales proceeds of $925,000, or
$24.39 per Unit, and a loss of approximately $934,000, or $24.62 per Unit. The
sale took place on December 12, 2008. The Fund no longer has an interest in this
Local Limited Partnership.
As previously reported, as a result of concerns regarding the then-existing
operating deficits and capital requirements of Findley Place, located in
Minneapolis, Minnesota, in 1999 the Managing General Partner developed a plan
that will ultimately result in the transfer of the Fund's interest in the Local
Limited Partnership. On March 1, 2000, the Managing General Partner consummated
the transfer of 1% of the Fund's interest in losses, 48.5% of its interest in
profits and 30% of its capital account to the Local General Partner. The
Managing General Partner has the right to put the Fund's remaining interest to
the Local General Partner any time after March 1, 2001. In addition, the Local
General Partner has the right to call the remaining interest after the
Compliance Period has expired, which was December 31, 2008. The Property
operated at above breakeven for the nine-month period ending September 30, 2008,
due mainly in part to achieving 99% occupancy throughout the same period. The
disposition of the Limited Partnership interest in Findley Place took place on
January 16, 2009. This transaction resulted in net proceeds to the Fund of
$5,000, or $0.13 per Unit. The Fund no longer has an interest in this Local
Limited Partnership.
As previously reported, New Garden Place, located in Gilmer, North Carolina, in
early 2004 the Local General Partner requested and the Fund provided its
approval to a refinancing of the Property's first mortgage. The new first
mortgage, which closed in April 2004, had a lower interest rate and lower annual
debt service payment than the original mortgage, thereby increasing the
Property's cash flow. In connection with the Fund's approval of this
refinancing, the Fund and the Local General Partner entered into a put agreement
whereby the Fund can transfer its interest in the Local Limited Partnership to
the Local General Partner for a nominal amount any time after the Property's
Compliance Period ends on December 31, 2008. The Managing General Partner
currently estimates an early 2009 put of its interest.
As previously reported, Metropolitan Apartments, located in Chicago, Illinois,
continues to incur operating deficits. As of September 30, 2008, occupancy
decrease from 90% at June 30, 2008 to 86% and working capital and debt service
coverage levels remained below acceptable levels. The decline was mainly
attributable to the rising cost of natural gas and an increase in debt service
caused by the property's five year adjustable rate first mortgage being reset in
late 2007. The deficit was funded by advances from the Management Agent, an
affiliate of the Local General Partner. The Local General Partner, having
exceeded their working capital obligation, will no longer continue to fund
deficits. The Managing General Partner, as part of a disposition agreement with
the Local General Partners to jointly fund operating deficits from Fund
reserves, advanced $50,000 in 2007 and about $33,000 more in 2008, to address
the need for structural repairs as cited in the City of Chicago's report of
recent building code violations. Although the Managing General Partner will
endeavor to recover all advances upon disposition, which is currently expected
to occur in mid-2009, their collection is in jeopardy as the potential purchase
price for the Fund's interest has declined due to the Chicago multifamily
market's overall weakness. The Property remains current on its debt service
obligations. The Compliance Period for the Property ended December 31, 2008.
BOSTON FINANCIAL TAX CREDIT FUND PLUS,
A Limited Partnership
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Property Discussions (continued)
As previously reported, the Managing General Partner and Local General Partner
of Tree Trail, located in Gainesville, Florida, were exploring an exit strategy
that would have allowed for a late summer 2008 disposal of the Fund's interest,
via a sale of the underlying Property, in the Local Limited Partnership that
owns and operates Tree Trail. Due to current market conditions, the Managing
General Partner is reexamining the exit strategy for the Fund's interest in this
Local Limited Partnership and anticipates an August 2009 disposition.
As previously reported, the Managing General Partner estimates a mid-2009
disposition, via a transfer to the Local General Partner, of the Fund's interest
in the Local Limited Partnership that owns Vista Villa, located in Saginaw
County, Michigan. The Managing General Partners does not presently expect this
transaction to result in any net sales proceeds to the Fund. The Managing
General Partner is currently projecting taxable income of approximately
$194,000, or $5.11 per Unit.
As previously reported the Managing General Partner and Local General Partner of
Pilot House, located in Newport News, Virginia, were exploring an exit strategy
that could have resulted in a mid-2008 disposal of the Fund's interest in the
Local Limited Partnership that owns Pilot House, for approximately $1,650,000 or
$43.50 per Unit. The Managing General Partner continues to negotiate the sale of
the Fund's interest in this Local Limited Partnership. Terms of a possible
disposition have not been agreed upon at this time.
As previously reported, the Managing General Partner anticipated that the Fund's
interest in the Local Limited Partnership that owns Walker Woods II, located in
Dover, Delaware, would be terminated upon the sale of the Property in late 2008.
Although no deal is pending at this time, the Managing General Partner will
continue to explore an exit strategy that may lead to a 2009 disposition.
As previously reported, the Managing General Partner is currently exploring an
exit strategy for Jardines de Juncos, located in Juncos, Puerto Rico, that could
lead to a 2009 disposition. Net sales proceeds to the Fund, if any, are unknown
at this time.
The Managing General Partner is currently exploring an exit strategy for Kings
Grant Court, located in Statesville, North Carolina. A sale of the Partnership's
interest is expected in January 2009. Net sales proceeds to the Fund, if any,
are unknown at this time.
BOSTON FINANCIAL TAX CREDIT FUND PLUS,
A Limited Partnership
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Non Applicable
CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
We conducted an evaluation of the effectiveness of the design and operation of
our disclosure controls and procedures, as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange
Act, to ensure that information required to be disclosed by us in the reports
filed or submitted by us under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the Securities
Exchange Commission's rules and forms, including to ensure that information
required to be disclosed by us in the reports filed or submitted by us under the
Exchange Act is accumulated and communicated to management to allow timely
decisions regarding required disclosure. Based on that evaluation, management
has concluded that as of December 31, 2008, our disclosure controls and
procedures were effective.
Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in Exchange Act Rules
13a-15(f) and 15d-15(f). Our management conducted an assessment of the
effectiveness of our internal control over financial reporting. This assessment
was based upon the criteria for effective internal control over financial
reporting established in Internal Control -- Integrated Framework, issued by the
Committee of Sponsoring Organizations of the Treadway Commission.
The Fund's internal control over financial reporting involves a process designed
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. Internal control over financial
reporting includes the controls themselves, as well as monitoring of the
controls and internal auditing practices and actions to correct deficiencies
identified. Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements.
Management assessed the effectiveness of the Fund's internal control over
financial reporting as of December 31, 2008. Based on this assessment,
management concluded that, as of December 31, 2008, the Fund's internal control
over financial reporting was effective.
BOSTON FINANCIAL TAX CREDIT FUND PLUS,
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
31.2 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
32.2 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, 2008.
BOSTON FINANCIAL TAX CREDIT FUND PLUS,
A Limited Partnership
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: February 17, 2009 BOSTON FINANCIAL TAX CREDIT FUND PLUS,
A LIMITED PARTNERSHIP
By: Arch Street VIII, Inc.,
its Managing General Partner
/s/Greg Judge
______________
Greg Judge
President
Arch Street VIII, Inc.