February 12, 1997 Securities and Exchange Commission Filer Support, Edgar Operation Center, Stop 0-7 6432 General Green Way Alexandria, VA 22312 Re: Boston Financial Tax Credit Fund VIII, A Limited Partnership Report on Form 10-Q Edgar for Quarter Ended December 31, 1996 File No. 0-26522 Dear Sir/Madam: Pursuant to the requirements of Rule 901(d) of Regulation S-T, enclosed is one copy of subject report. Very truly yours, /s/Veronica J. Curioso Veronica J. Curioso Assistant Controller TC8-10Q3.DOC UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 (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, 1996 ------------------------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to For Quarter Ended December 31, 1996 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 Sheets - December 31, 1996 (Unaudited) and March 31, 1996 1 Statements of Operations (Unaudited) - For the Three and Nine Months Ended December 31, 1996 and 1995 2 Statement of Changes in Partners' Equity (Deficiency) (Unaudited) - For the Nine Months Ended December 31, 1996 3 Statements of Cash Flows (Unaudited) - For the Nine Months Ended December 31, 1996 and 1995 4 Notes to Financial Statements (Unaudited) 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 PART II - OTHER INFORMATION Items 1-6 10 SIGNATURE 11 BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP BALANCE SHEETS December 31, March 31, 1996 1996 (Unaudited) Assets Current assets: Cash and cash equivalents $ 426,097 $ 71,715 Other current assets 19,258 33,038 ------------- -------------- Total current assets 445,355 104,753 Investments in Local Limited Partnerships (Note 2) 27,621,713 26,064,146 Restricted cash 495,389 1,369,364 Marketable securities, at fair value (Note 1) 1,359,721 3,709,881 Organization costs, net of accumulated amortization of $28,333 and $20,833 as of December 31 and March 31, 1996, respectively 21,667 29,167 ------------- -------------- Total Assets $ 29,943,845 $ 31,277,311 ============= ============== Liabilities and Partners' Equity Current liabilities: Accounts payable to affiliate $ 137,420 $ 81,501 Accrued expenses 28,734 20,858 ------------- -------------- Total current liabilities 166,154 102,359 ------------- -------------- General, Initial and Investor Limited Partners' Equity 29,786,794 31,175,486 Net unrealized losses on marketable securities (9,103) (534) ------------- -------------- Total Partners' Equity 29,777,691 31,174,952 ------------- -------------- Total Liabilities and Partners' Equity $ 29,943,845 $ 31,277,311 ============= ============== The accompanying notes are an integral part of these financial statements. BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP STATEMENTS OF OPERATIONS (Unaudited) For the Three and Nine Months Ended December 31, 1996 and 1995 Three Months Ended Nine Months Ended December 31, December 31, December 31, December 31, 1996 1995 1996 1995 ----------------- ---------------- ---------------- ---------------- Revenue: Investment $ (1,407) $ 108,030 $ 40,245 $ 395,394 Other 19,011 590 17,142 83,923 ----------- ---------- ------------- ---------- Total Revenue 17,604 108,620 57,387 479,317 ----------- ---------- ------------- ---------- Expenses: Asset management fees, related party 48,024 46,853 144,026 140,559 General and administrative expenses (includes reimbursements to an affiliate in the amounts of $76,868 and $77,992 in 1996 and 1995, respectively) 29,776 42,754 139,015 138,631 Amortization 7,974 6,785 23,928 17,597 ----------- ---------- ------------- ---------- Total Expenses 85,774 96,392 306,969 296,787 ----------- ---------- ------------- ---------- Income (loss) before equity in losses of Local Limited Partnerships (68,170) 12,228 (249,582) 182,530 Equity in losses of Local Limited Partnerships (292,406) (44,132) (1,139,110) (158,295) ------------ ---------- ------------- ----------- Net Income (Loss) $ (360,576) $ (31,904) $ (1,388,692) $ 24,235 =========== ========== ============= ========== Net Income (Loss) allocated: To General Partners $ (3,606) $ (320) $ (13,887) $ 241 To Limited Partners (356,970) (31,584) (1,374,805) 23,994 ----------- ---------- ------------- ---------- $ (360,576) $ (31,904) $ (1,388,692) $ 24,235 =========== ========== ============= ========== Net Income (Loss) per Limited Partnership Unit (36,497 Units) $ (9.79) $ (0.86) $ (37.67) $ 0.66 ======== ======== ========= ======== 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) (Unaudited) For the Nine Months Ended December 31, 1996 Initial Investor Net General Limited Limited Unrealized Partners Partners Partners Losses Total Balance at March 31, 1996 $ (4,592) $ 100 $ 31,179,978 $ (534) $ 31,174,952 Net change in net unrealized losses on marketable securities available for sale - - - (8,569) (8,569) Net Loss (13,887) - (1,374,805) - (1,388,692) ------------- --------- ------------ -------- ------------ Balance at December 31, 1996 $ (18,479) $ 100 $ 29,805,173 $ (9,103) $ 29,777,691 ============ ========= ============ ======== ============ The accompanying notes are an integral part of these financial statements. BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP STATEMENTS OF CASH FLOWS (Unaudited) For the Nine Months Ended December 31, 1996 and 1995 1996 1995 -------------- --------- Net cash provided by (used for) operating activities $ (239,457) $ 131,254 -------------- ------------- Cash flows from investing activities: Investment in Local Limited Partnerships (2,716,626) (6,326,528) Restricted Cash 873,975 - Cash distributions received from Local Limited Partnerships 4,409 - Purchases of marketable securities (3,953,712) (2,479,005) Proceeds from sales and maturities of marketable securities 6,386,681 2,614,887 Payment of acquisition expenses (888) (120,672) ------------- ------------- Net cash provided by (used for) investing activities 593,839 (6,311,318) ------------- ------------- Cash flows from financing activities: Refund of other issuance expenses - 5,832 ------------- ------------- Net cash provided by financing activities - 5,832 ------------- ------------- Net increase (decrease) in cash and cash equivalents 354,382 (6,174,232) Cash and cash equivalents, beginning of period 71,715 10,495,010 ------------- ------------- Cash and cash equivalents, end of period $ 426,097 $ 4,320,778 ============= ============= 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 generally accepted accounting principles. These statements should be read in conjunction with the financial statements and notes thereto included with the Partnership's 10-K for the year ended March 31, 1996. In the opinion of management, these financial statements include all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the Partnership's financial position and results of operations. The results of operations for the periods may not be indicative of the results to be expected for the year. Certain amounts in prior year financial statements have been reclassified herein to conform to current year presentation. 1. Marketable Securities A summary of marketable securities is as follows: Gross Gross Unrealized Unrealized Fair Cost Gains Losses Value Debt securities issued by the US Treasury $ 1,138,021 $ 367 $ (5,692) $ 1,132,696 Mortgage backed securities 230,803 - (3,778) 227,025 ------------ -------- ----------- ------------ Marketable securities at December 31, 1996 $ 1,368,824 $ 367 $ (9,470) $ 1,359,721 ============ ======== =========== ============ Debt securities issued by the US Treasury $ 1,465,038 $ 195 $ (2,839) $ 1,462,394 Other debt securities 2,245,377 2,500 (390) 2,247,487 ------------ -------- ---------- ------------ Marketable securities at March 31, 1996 $ 3,710,415 $ 2,695 $ (3,229) $ 3,709,881 ============ ======== ========== ============ The contractual maturities at December 31, 1996 are as follows: Fair Cost Value Due in one year or less $ 199,664 $ 200,031 Due in one year to five years 938,357 932,665 Mortgage backed securities 230,803 227,025 ------------ ------------ $ 1,368,824 $ 1,359,721 ============ ============ Actual maturities may differ from contractual maturities because some borrowers have the right to call or prepay obligations. Proceeds from the sales of fixed maturity securities were approximately $6,387,000 and $2,615,000 for the nine months ended December 31, 1996 and 1995, respectively. Included in investment income are gross gains of $93,253 and $41,560 for the nine months ended December 31, 1996 and 1995, respectively, and gross losses of $1,875 for the nine months ended December 31, 1996. BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP Notes to Financial Statements (Unaudited) (continued) 2. Investments in Local Limited Partnerships The Fund has acquired an interest in ten Local Limited Partnerships which own and operate multi-family housing complexes. The Fund, as Investor Limited Partner, pursuant to the Local Limited Partnership Agreements, has generally acquired a 99% interest in the profits, losses, tax credits and cash flows from operations of the Local Limited Partnerships, with the exception of Springwood, Hemlock Ridge and West End Place, which are 79.20%, 77% and 90%, respectively. An affiliate of the General Partner owns the remaining 19.80% Limited Partner interest in Springwood. Upon dissolution, proceeds will be distributed according to the partnership agreements. The following is a summary of Investments in Local Limited Partnerships at December 31, 1996 (unaudited): Capital Contributions paid to Local Limited Partnerships $ 28,813,499 Cumulative equity in losses of Local Limited Partnerships (2,181,818) Cumulative cash distributions received from Local Limited Partnerships (17,732) ------------ Investment in Local Limited Partnerships before adjustments 26,613,949 Excess of investment cost over the underlying net assets acquired: Acquisition fees and expenses 1,048,010 Accumulated amortization of acquisition fees and expenses (40,246) -------------- Investments in Local Limited Partnerships $ 27,621,713 ============= Summarized financial information as of September 30, 1996 (due to the Fund's policy of reporting the financial information of its Local Limited Partnership interests on a 90 day lag basis) of the ten Local Limited Partnerships in which the Fund has invested as of that date is as follows: Summarized Balance Sheets - September 30, 1996 (Unaudited) Assets: Investment property, net $ 70,452,548 Current assets 2,775,805 Other assets 2,732,102 ------------- Total Assets $ 75,960,455 ============= Liabilities and Partners' Equity: Long-term debt $ 38,705,939 Current liabilities 3,974,938 Other liabilities 5,428,255 ------------- Total Liabilities 48,109,132 Partners' Equity 27,851,323 ------------- Total Liabilities and Partners' Equity $ 75,960,455 ============= BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP 2. Investments in Local Limited Partnerships (continued) Summarized Income Statements (Unaudited) - For the Nine Months Ended September 30, 1996 Rental and other revenue $ 5,687,666 ------------- Expenses: Operating 2,711,930 Interest 2,328,235 Depreciation and amortization 1,868,667 ------------- Total Expenses 6,908,832 Net Loss $ (1,221,166) ============= Partnership's share of net loss $ (1,139,110) ============= Other Partners' share of net loss $ (82,056) ============= BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources At December 31, 1996, the Fund had cash and cash equivalents of $426,097 as compared to $71,715 at March 31, 1996. This increase is primarily attributable to proceeds from the sale of marketable securities, offset by cash paid for investments in Local Limited Partnerships, purchase of marketable securities, and net cash used for operations. The Fund had restricted cash of $495,389 at December 31, 1996 as compared to $1,369,364 at March 31, 1996. The decrease is the result of capital contributions made to one Local Limited Partnership in which the Fund has invested. As of December 31, 1996, approximately $1,620,000 of marketable securities and cash and cash equivalents have been designated as Reserves. The Reserves are established to be used for working capital of the Fund and contingencies related to the ownership of Local Limited Partnership interests. Management believes that the interest income earned on 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. 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, 1996, the Fund had no contractual or other obligation to any Local Limited Partnership, which had not been paid or provided for, except as disclosed above. In the event a Local Limited Partnership encounters operating difficulties requiring additional funds, the Fund might deem it in its best interest to voluntarily provide such funds in order to protect its investment. No such event has occurred to date. Cash Distributions No cash distributions were made during the nine months ended December 31, 1996. Results of Operations 1996 versus 1995 For the three and nine months ended December 31, 1996, the Fund's operations resulted in net losses of $360,576 and $1,388,692, respectively, as compared to a net loss of $31,904 and net income of $24,235 for the three and nine months ended December 31, 1995, respectively. The increase to the net loss position is primarily attributable to an increase in equity in losses of Local Limited Partnerships and a decrease in investment income. The increase in equity in losses of Local Limited Partnerships for the three and nine months ended December 31, 1996, as compared to the same periods in 1995, is primarily attributable to an increase in the number of operational Local Limited Partnerships during those periods. Since certain properties were under construction during the nine months ended December 31, 1995, the results of operations were not indicative of the results to be expected for the future, nor are they comparable to the 1996 period. The decline in investment income for the three and nine month periods is due primarily to lower average cash balances, as a result of the Fund's investment in Local Limited Partnerships. BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Property Discussions The Fund is invested in ten Local Limited Partnerships which own ten properties located in eight states. Two properties, representing 356 units, underwent rehabilitation, and eight properties, representing 1001 units, are new construction. All of the ten properties are complete, through initial lease-up and operating satisfactorily. 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 - None (b) Reports on Form 8-K - No reports on Form 8-K were filed during the quarter ended December 31, 1996. 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 12, 1997 BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP By: Arch Street VIII Limited Partnership, its General Partner /s/Georgia Murray Georgia Murray A Managing Director, Treasurer and Chief Financial Officer