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
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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
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 12b -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 12b -2 of the Exchange Act).
Yes No X .
___ ____
BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION Page No.
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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 12
Item 4. Controls and Procedures 12
PART II - OTHER INFORMATION
Items 1-6 13
SIGNATURE 14
CERTIFICATIONS 15
BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP
BALANCE SHEET
December 31, 2008
(Unaudited)
Assets
_______
Cash and cash equivalents $ 101,011
Investments in Local Limited Partnerships (Note 1) 5,318,704
------------------------
Total Assets $ 5,419,715
========================
Liabilities and Partners' Equity
_______________________________
Due to affiliate(s) $ 589,177
Accrued expenses 39,593
------------------------
Total Liabilities 628,770
------------------------
Partners' Equity 4,790,945
------------------------
Total Liabilities and Partners' Equity $ 5,419,715
========================
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, 2008 and 2007
(Unaudited)
Three Months Ended Nine Months Ended
December December December December
31, 31, 31, 31,
2008 2007 2008 2007
------------- ------------- ------------ ------------
Revenue
Investment $ 327 $ 9,237 $ 2,703 $ 40,336
Other - - - 222,790
------------- ------------- ------------ ------------
Total Revenue 327 9,237 2,703 263,126
------------- ------------- ------------ ------------
Expenses::
Asset management fees, affiliate 65,786 63,195 197,358 189,585
Provision for valuation allowance on
investments in Local Limited
Partnerships (Note 1) 495,000 - 495,000 -
General and administrative
(includes reimbursement to an affiliate
in the amounts of $55,218 and $52,310
for the nine months ended
December 31, 2008 and 2007, respectively) 46,506 62,027 137,187 171,622
Amortization 2,968 2,556 8,904 8,904
------------- ------------- ------------ ------------
Total Expenses 610,260 127,778 838,449 370,111
------------- ------------- ------------ ------------
Income (Loss) before equity in income
(losses) of Local Limited Partnerships (609,933) (118,541) (835,746) (106,985)
Equity in income (losses) of Local Limited
Partnerships (Note 1) 97,191 (11,714) 28,302 205,122
------------- ------------- ------------ ------------
Net Income (Loss) $(512,742) $(130,255) $(807,444) $ 98,137
============= ============= ============ ============
Net Income (Loss) allocated:
General Partners $ (5,127) $ (1,303) $ (8,074) $ 982
Limited Partners (507,615) (128,952) (799,370) 97,155
------------- ------------- ------------ ------------
$(512,742) $(130,255) $(807,444) $ 98,137
============= ============= ============ ============
Net Income (Loss) Per Limited Partner
Unit (36,497 Units) $ (13.91) $ (3.53) $ (21.90) $ 2.67
============= ============= ============ ============
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
For the Nine Months Ended December 31, 2008
(Unaudited)
Initial Investor
General Limited Limited
Partners Partner Partner Total
--------------- -------------- -------------- ---------------
Balance at March 31, 2008 $ 55,984 $ 100 $ 5,542,305 $5,598,389
Net Loss (8,074) - (799,370) (807,444)
--------------- -------------- -------------- ---------------
Balance at December 31, 2008 $ 47,910 $ 100 $ 4,742,935 $4,790,945
=============== ============== ============== ===============
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, 2008 and 2007
(Unaudited)
2008 2007
---------------- ----------------
Net cash used for operating activities $ (509,413) $ (488,371)
Net cash provided by investing activities 141,048 128,391
---------------- ----------------
Net decrease in cash and cash equivalents (368,365) (359,980)
Cash and cash equivalents, beginning 469,376 857,886
---------------- ----------------
Cash and cash equivalents, ending $ 101,011 $ 497,906
================ ================
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-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 Form10-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 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, 2008 and 2007.
Generally, profits, losses, tax credits and cash flows from operations are
allocated 99% to the Limited Partners and 1% to the General Partner. Net
proceeds from a sale or refinancing will be allocated 95% to the Limited
Partners and 5% to the General Partner, 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 nine 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 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, 2008:
Capital contributions and advances paid to Local Limited Partnerships
$ 26,647,252
Cumulative equity in losses of Local Limited Partnerships
(excluding cumulative unrecognized losses of $2,326,143)
(15,326,648)
Cumulative cash distributions received from Local Limited Partnerships
(2,317,841)
----------------------
Investments in Local Limited Partnerships before adjustments
9,002,763
Excess investment costs over the underlying assets acquired:
Acquisition fees and expenses 1,003,989
Cumulative amortization of acquisition fees and expenses (331,980)
----------------------
Investments in Local Limited Partnerships before valuation allowance 9,674,772
Valuation allowance on investments in Local Limited Partnerships (4,356,068)
----------------------
Investments in Local Limited Partnerships $ 5,318,704
======================
BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (continued)
(Unaudited)
1. 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 loss of the Local Limited Partnerships for the nine
months ended December 31, 2008 is $675,176. For the nine months ended December
31, 2008, the Fund has not recognized $703,478 of equity in losses relating to
five Local Limited Partnerships where cumulative equity in losses and cumulative
distributions exceeded its total investment in the Local Limited Partnership.
2. 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 changes.
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 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 $101,011.
BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (continued)
(Unaudited)
3. 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
----------------- ----------------
Beaverdam Creek Associates, A Limited Partnership
Revenue $ 280,031 $ 307,744
Net Income $ 16,676 $ 42,953
Oak Knoll Renaissance, Limited Partnership
Revenue $ 510,978 $ 468,455
Net Loss $ (9,200) $ (37,036)
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 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 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 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 ($5,813,704 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. 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 VIII, 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 $101,011, as
compared to $469,376 at March 31, 2008. The decrease is primarily attributable
to cash used for operating activities partially offset by cash distributions
received from Local Limited Partnerships.
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, 2008, $101,011 has been designated as Reserves.
To date, professional fees relating to various Property issues totaling
approximately $69,000 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 $1,208,000 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 $447,000 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
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, the Fund had no contractual or other
obligation to any Local Limited Partnership which had not been paid or provided
for.
Cash Distributions
No cash distributions were made during the nine months ended December 31, 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 $512,742 as compared to a net loss of $130,255 for the three
months ended December 31, 2007. The increase in net loss is primarily
attributable to an increase in impairment on investment in Local Limited
Partnerships, partially offset by an increase in equity in income of Local
Limited Partnerships. Impairment on investments in Local Limited Partnerships
increased due to the Fund recording a valuation allowance on its investments in
certain Local Limited Partnerships. The increase in equity in income of Local
Limited Partnerships is primarily due to a decrease in equity in losses for the
three months ended December 31, 2008 as compared to the three months ended
December 31, 2007.
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, 2008, the Fund's operations resulted in a
net loss of $807,444 as compared to a net income of $98,137 for the nine months
ended December 31, 2007. The decrease in net income is primarily attributable to
an increase in impairment on investment in Local Limited Partnerships, a
decrease in other income, a decrease in equity in income of Local Limited
Partnerships, and a decrease in investment revenue. Impairment on investments in
Local Limited Partnerships increased due to the Fund recording a valuation
allowance on its investments in certain Local Limited Partnerships. The decrease
in other income is due to a decrease in distributions from Local Limited
Partnerships that were written off. The decrease in equity in income of Local
Limited Partnerships is primarily due to an increase in unrecognized losses by
the Fund of Local Limited Partnerships with carrying values of zero. The Fund
had a decrease in investment revenue during the period ended December 31, 2008
related to a reimbursement of interest that the Fund had received in the prior
year.
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's objectives are to:
(i) provide investors with annual tax credits which they may use to reduce
their federal income tax liability; (ii) provide limited cash distributions
from the operations of apartment complexes; and (iii) preserve and protect
the Fund's capital. Arch Street VIII Limited Partnership("Arch Street L.P."),
a Massachusetts limited partnership consisting of Arch Street VIII,
Inc., a Massachusetts corporation ("Arch Street, Inc.") as the sole general
partner and MMA as the sole limited partner, is the sole General Partner of
the Fund. Arch Street L.P. and Arch Street, Inc. are affiliates of MMA.
The fiscal year of the Fund ends on March 31.
As of December 31, 2008, the Fund's investment portfolio consists of limited
partnership interests in nine 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 of approximately $1,429
per Limited Partner Unit. The aggregate amount of Tax Credits generated by the
Fund was consistent with the objective specified in the Fund'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 calendar years
from the date the property is placed in service (the "Compliance Period").
Failure to do so would result in the recapture of a portion of the property's
Tax Credits. Between December 31, 2008 and December 31, 2010 the Compliance
Period of the nine 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.
The General Partner has negotiated an agreement that will ultimately allow the
Fund to dispose of its interest in one Local Limited Partnership. The Fund has
not disposed of any Local Limited Partnership interests during the nine months
ended December 31, 2008.
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.
BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Property Discussions
Four of the Properties in which the Fund has an interest had stabilized
operations and operated above breakeven at September 30, 2008. Three Properties
have generated cash flow deficits in prior periods that the Local General
Partners of those Properties funded through project expense loans, subordinated
loans or operating escrows. However, a few Properties have previously
experienced 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, in the event below breakeven operations recur. 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, 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 the net proceeds in Reserves.
As previously reported, turnover at Green Wood Apartments, located in Gallatin,
Tennessee, as a result of few employment opportunities in the immediate area,
was the main cause for below breakeven operations at the Property. Rental
concessions, provided in an effort to alleviate the turnover issue, had proven
successful, at least in the short term, as rental revenue increased to a level
sufficient to result in above breakeven operations at June 30, 2006. Occupancy
averaged 92% throughout the six-month period ending June 30, 2006 while debt
service coverage and working capital were at acceptable levels as of June 30,
2006. As a result of a prior agreement, Green Wood Apartments was sold on
November 30, 2006. This sale resulted in net proceeds to the Fund of $528,320 or
$14.60 per Unit and resulted in 2006 taxable income of $459,116, or $12.68 per
Unit. For financial reporting purposes, $176,323 represented repayment of prior
advances made to the Local Limited Partnership and $351,997 represents gain on
sale. Upon a reconciliation of cash balances after disposition, the Fund
received additional proceeds of $194,970, or $5.38 per Unit, in September 2007.
As a result of these additional proceeds, the Fund incurred 2007 taxable income
equivalent to the additional proceeds. The Managing General Partner, in
accordance with and as permitted by the Partnership Agreement, retained the
entire amount of net proceeds in Reserves. The Fund no longer has an interest in
this Local Limited Partnership.
As previously reported, the Managing General Partner anticipated the Fund's
interest in the Local Limited Partnership that owns SpringWood Apartments,
located in Tallahassee, Florida, would be terminated upon the sale of the
Property in the third quarter of 2008, a transaction that could have resulted in
net sales proceeds to the Fund of approximately $1,600,000, or $44.20 per Unit.
In July 2008, the potential buyer withdrew their interest to purchase this
Property. The Managing General Partner is currently exploring alternative exit
strategies for this Local Limited Partnership interest. The Managing General
Partner anticipates the Fund's interest in the Local Limited Partnership will
terminate upon the sale of the Property in August 2009, a transaction that could
result in a net sales proceeds to the Fund of approximately $880,000, or $24.11
per Unit.
BOSTON FINANCIAL TAX CREDIT FUND VIII, 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 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
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 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.
Date: February 17, 2009 BOSTON FINANCIAL TAX CREDIT FUND VIII,
A LIMITED PARTNERSHIP
By: Arch Street VIII Limited Partnership,
its General Partner
/s/Greg Judge
-------------------------------
Greg Judge
President
Arch Street VIII Limited Partnership