November 12, 1999 Securities and Exchange Commission Filer Support, Edgar Operation Center, Stop 0-7 6432 General Green Way Alexandria, VA 22312 Boston Financial Tax Credit Fund VIII, A Limited Partnership Report on Form 10-QSB for Quarter Ended September 30, 1999 File Number 0-26522 Gentlemen: Pursuant to the requirements of Section 15(d) of the Securities Exchange Act of 1934, filed herewith is a copy of subject report. Very truly yours, /s/Stephen Guilmette Stephen Guilmette Assistant Controller TC8-Q2.DOC UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1999 -------------------------------------- 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 September 30, 1999 Commission file number 0-26522 ------------------- --------- Boston Financial Tax Credit Fund VIII, Limited Partnership (Exact name of registrant as specified in its charter) Massachusetts 04-3205879 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 101 Arch Street, Boston, Massachusetts 02110-1106 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (617) 439-3911 ----------------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No . BOSTON FINANCIAL TAX CREDIT FUND VIII (A Limited Partnership) TABLE OF CONTENTS PART I. FINANCIAL INFORMATION Page No. Item 1. Financial Statements Balance Sheet - September 30, 1999 (Unaudited) 1 Statements of Operations (Unaudited) - For the Three and Six Months Ended September 30, 1999 and 1998 2 Statement of Changes in Partners' Equity (Deficiency) (Unaudited) - For the Six Months Ended September 30, 1999 3 Statements of Cash Flows (Unaudited) - For the Six Months Ended September 30, 1999 and 1998 4 Notes to Financial Statements (Unaudited) 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 6 PART II - OTHER INFORMATION Items 1-6 8 SIGNATURE 9 BOSTON FINANCIAL TAX CREDIT FUND VIII (A Limited Partnership) BALANCE SHEET September 30, 1999 (Unaudited) Assets Cash and cash equivalents $ 57,593 Investments in Local Limited Partnerships (Note 1) 22,011,844 Marketable securities, at fair value 1,574,439 Other assets 18,047 ------------- Total Assets $ 23,661,923 ============= Liabilities and Partners' Equity Liabilities Accounts payable to affiliate $ 345,760 Accrued expenses 27,297 ------------- Total Liabilities 373,057 General, Initial and Investor Limited Partners' Equity 23,302,207 Net unrealized losses on marketable securities (13,341) ------------- Total Partners' Equity 23,288,866 ------------- Total Liabilities and Partners' Equity $ 23,661,923 ============= 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 Six Months Ended September 30, 1999 and 1998 Three Months Ended Six Months Ended September 30, September 30, September 30, September 30, 1999 1998 1999 1998 ------------- ------------- -------------- --------------- Revenue: Investment $ 21,534 $ 25,109 $ 44,273 $ 48,317 Other 350 700 1,150 1,450 ------------ ------------ ------------- ------------- Total Revenue 21,884 25,809 45,423 49,767 ------------ ------------ ------------- ------------- Expenses: Asset management fees, related party 51,555 50,765 103,110 101,530 General and administrative expenses (includes reimbursements to affiliates in the amounts of $36,901 and $36,305 in 1999 and 1998, respectively) 31,358 15,063 67,044 57,877 Amortization 7,485 9,986 14,971 19,972 ------------ ------------ ------------- ------------- Total Expenses 90,398 75,814 185,125 179,379 ------------ ------------ ------------- ------------- Loss before equity in losses of Local Limited Partnerships (68,514) (50,005) (139,702) (129,612) Equity in losses of Local Limited Partnerships (Note 1) (563,373) (490,504) (1,049,627) (930,339) ------------ ------------ ------------- ------------- Net Loss $ (631,887) $ (540,509) $ (1,189,329) $ (1,059,951) ============ ============ ============= ============= Net Loss allocated To General Partner $ (6,319) $ (5,406) $ (11,893) $ (10,600) To Limited Partners (625,568) (535,103) (1,177,436) (1,049,351) ------------ ------------ ------------- ------------- $ (631,887) $ (540,509) $ (1,189,329) $ (1,059,951) ============ ============ ============= ============= Net Loss per Limited Partnership Unit (36,497 Units) $ (17.14) $ (14.66) $ (32.26) $ (28.75) ============ ============= ============= ============= 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 Six Months Ended September 30, 1999 Net Initial Investor Unrealized General Limited Limited Gains Partner Partner Partners (Losses) Total Balance at March 31, 1999 $ (71,432) $ 100 $ 24,562,868 $ 1,053 $ 24,492,589 ------------- ----------- ------------- ---------- ------------- Comprehensive Loss: Net change in net unrealized gains on marketable securities available for sale - - - (14,394) (14,394) Net Loss (11,893) - (1,177,436) - (1,189,329) ------------- ----------- ------------- ---------- ------------- Comprehensive Loss (11,893) - (1,177,436) (14,394) (1,203,723) ------------- ----------- ------------- ---------- ------------- Balance at September 30, 1999 $ (83,325) $ 100 $ 23,385,432 $ (13,341) $ 23,288,866 ============= =========== ============= ========== ============= 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 Six Months Ended September 30, 1999 and 1998 1999 1998 ------------- ------------- Net cash used for operating activities $ (148,102) $ (21,772) ------------- ------------- Net cash provided by (used for) investing activities 25,665 (946) ------------- ------------- Net decrease in cash and cash equivalents (122,437) (22,718) Cash and cash equivalents, beginning of period 180,030 213,966 ------------- ------------- Cash and cash equivalents, end of period $ 57,593 $ 191,248 ============= ============= The accompanying notes are an integral part of these financial statements. BOSTON FINANCIAL TAX CREDIT FUND VIII (A Limited Partnership) NOTES TO FINANCIAL STATEMENTS (Unaudited) The unaudited financial statements presented herein have been prepared in accordance with the instructions to Form 10-QSB and do not include all of the information and note disclosures required by generally accepted accounting principles. These statements should be read in conjunction with the financial statements and notes thereto included with the Fund's Form 10-K for the year ended March 31, 1999. In the opinion of management, 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 June 30, 1999 and 1998. 1. Investments in Local Limited Partnerships The Fund has acquired limited partnership interests 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 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, Pike Place and West End Place, in which the Fund's interests are 79.20%, 77%, 90% and 90%, respectively. Another partnership sponsored by an affiliate of the General Partner owns the remaining 19.80% limited partnership 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 as of September 30, 1999: Capital Contributions paid to Local Limited Partnerships $ 29,264,859 Cumulative equity in losses of Local Limited Partnerships (7,844,406) Cumulative cash distributions received from Local Limited Partnerships (330,759) Investment in Local Limited Partnerships before adjustment 21,089,694 Excess of investment cost over the underlying net assets acquired: Acquisition fees and expenses 1,048,010 Accumulated amortization of acquisition fees and expenses (125,860) ------------- Investment in Local Limited Partnerships $ 22,011,844 ============= The Fund's share of net losses of the Local Limited Partnerships for the six months ended September 30, 1999 totaled $1,049,627. BOSTON FINANCIAL TAX CREDIT FUND VIII (A Limited Partnership) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Certain matters discussed herein constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Fund intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements and is including this statement for purposes of complying with these safe harbor provisions. Although the Fund believes the forward-looking statements are based on reasonable assumptions, the Fund can give no assurance that their 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, interest rates and unanticipated delays or expenses on the part of the Fund and its suppliers in achieving year 2000 compliance. Liquidity and Capital Resources As of September 30, 1999, the Fund had cash and cash equivalents of $57,593 as compared to $180,030 at March 31, 1999. This decrease is primarily attributable to purchases of marketable securities in excess of proceeds from sales and maturities of marketable securities and cash used for operations. These decreases are partially offset by cash distributions received from Local Limited Partnerships. As of September 30, 1999, approximately $1,259,000 of marketable securities has been designated as Reserves. The Reserves, as defined in the Partnership Agreement, 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 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 September 30, 1999, the Fund had no contractual or other obligation to any Local Limited Partnership, which had not been paid or provided for. 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 period ended September 30, 1999. It is expected that cash available for distribution, if any, will not be significant in fiscal year 2000. As funds from temporary investments are paid to Local Limited Partnerships, interest earnings on those funds decrease. In addition, some of the properties benefit from some type of federal or state subsidy, and as a consequence, are subject to restrictions on cash distributions. Results of Operations For the six months ended September 30, 1999, the Fund's operations resulted in a net loss of $1,189,329, as compared to $1,059,951 for the six months ended September 30, 1998. The increase in net loss is primarily attributable to an increase in equity in losses of Local Limited Partnerships due to a decrease in rental income at some properties where occupancy has decreased. Property Discussions The majority of properties are operating at break-even or are generating cash flow. Live Oaks Plantation, located in West Palm Beach, Florida, is experiencing operating deficits due primarily to occupancy fluctuations. As of June 30, 1999, occupancy was 75%, up from 67% in March. The fluctuations in occupancy are primarily due to the majority of first-year leases expiring and management's decision not to renew all the leases due to tenant collection problems. Further compounding the problem is competition from new affordable housing complexes in the area. Accordingly, management is developing a more aggressive marketing strategy. The Managing General Partner will be working closely with the Local General Partner and management agent to monitor operations. BOSTON FINANCIAL TAX CREDIT FUND VIII (A Limited Partnership) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Impact of Year 2000 The Managing General Partner's plan to resolve year 2000 issues involves the following four phases: assessment, remediation, testing and implementation. To date, the Managing General Partner has fully completed an assessment of all information systems that may not be operative subsequent to 1999 and has begun the remediation, testing and implementation phase on both hardware and software systems. Because the hardware and software systems of both the Partnership and Local Limited Partnerships are generally the responsibility of obligated third parties, the plan primarily involves ongoing discussions with and obtaining written assurances from these third parties that pertinent systems will be 2000 compliant. In addition, neither the Partnership nor the Local Limited Partnerships are incurring significant additional costs since such expenses are principally covered under service contracts with vendors. As of November 1999, the General Partner is in the final stages of its Year 2000 remediation plan and believes all major systems are compliant; any systems still being updated are not considered significant to the Partnership's operations. However, despite the likelihood that all significant year 2000 issues are expected to be resolved in a timely manner, the Managing General Partner has no means of ensuring that all systems of outside vendors or other entities that impact operations will be 2000 compliant. The Managing General Partner does not believe that the inability of third parties to address their year 2000 issues in a timely manner will have a material impact on the Partnership. However, the effect of non-compliance by third parties is not readily determinable. Management has also evaluated a worst case scenario projection with respect to the year 2000 and expects any resulting disruption of either the Managing General Partner's activities or any Local Limited Partnership's operations to be short-term inconveniences. Such problems, however, are not likely to fully impede the ability to carry out necessary duties of the Partnership. Moreover, because expected problems under a worst case scenario are not extensively detrimental, and because the likelihood that all systems affecting the Partnership will be compliant before 2000, the Managing General Partner has determined that a formal contingency plan that responds to material system failures is not necessary. Other Development Lend Lease Real Estate Investments, Inc., ("Lend Lease") the U.S. subsidiary of Lend Lease Corporation and the leading U.S. institutional real estate advisor, as ranked by assets under management, announced on July 29, 1999 it had reached a memorandum of understanding to acquire The Boston Financial Group Limited Partnership ("Boston Financial"). Lend Lease closed the acquisition of Boston Financial on November 3, 1999. Headquartered in New York and Atlanta, Lend Lease Corporation has regional offices in 12 cities nationwide. The company ranks as the leading U.S. manager of tax-exempt assets invested in real estate. Lend Lease is a subsidiary of Lend Lease Corporation, an international real estate and financial services group listed on the Australian Stock Exchange. Worldwide, Lend Lease Corporation operates from more than 30 cities on five continents: North America, Europe, Asia, Australia and South America. In addition to real estate investments, the Lend Lease Group operates in the areas of property development, project management and construction, and capital services (infrastructure). Financial services activities include funds management, life insurance, and wealth protection. 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 September 30, 1999. 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: November 12, 1999 BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP By: Arch Street VIII Limited Partnership, its General Partner /s/Randolph G. Hawthorne Randolph G. Hawthorne Managing Director, Vice President and Chief Operating Officer