-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Cu6ZJXavRV09793yNztQfr9vxH7lgkOO4N4mg3Q0m/lw0864QVGz2zihYkLIBacW hVQK+rgQEzLhtFB75TgyFA== 0000810663-97-000039.txt : 19970814 0000810663-97-000039.hdr.sgml : 19970814 ACCESSION NUMBER: 0000810663-97-000039 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970813 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L P IV CENTRAL INDEX KEY: 0000845035 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF APARTMENT BUILDINGS [6513] IRS NUMBER: 043044617 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-19765 FILM NUMBER: 97658142 BUSINESS ADDRESS: STREET 1: 101 ARCH ST 16TH FLR CITY: BOSTON STATE: MA ZIP: 02110-1106 BUSINESS PHONE: 6174393911 MAIL ADDRESS: STREET 2: 101 ARCH STREET 16TH FL CITY: BOSTON STATE: MA ZIP: 021101106 10-Q 1 QH4 1Q98 August 13, 1997 Securities and Exchange Commission Filer Support, Edgar Operation Center, Stop 0-7 6432 General Green Way Alexandria, VA 22312 Re: Boston Financial Qualified Housing Tax Credits L.P. IV Report on Form 10-Q for Quarter Ended June 30, 1997 File No. 0-19765 Gentlemen: Pursuant to the requirements of section 15(d) of the Securities Exchange Act of 1934, there is filed herewith a copy of subject report. Very truly yours, /s/Veronica J. Curioso Veronica J. Curioso Assistant Controller QH4-10Q1.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 June 30, 1997 ---------------------- 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 June 30, 1997 Commission file number 0-19765 -------------- ------------ Boston Financial Qualified Housing Tax Credits L.P. IV (Exact name of registrant as specified in its charter) Massachusetts 04-3044617 (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 . BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) TABLE OF CONTENTS PART I - FINANCIAL INFORMATION Page No. - ------------------------------ -------- Item 1. Combined Financial Statements Combined Balance Sheets - June 30, 1997 (Unaudited) and March 31, 1997 1 Combined Statements of Operations (Unaudited) - For the Three Months Ended June 30, 1997 and 1996 2 Combined Statement of Changes in Partners' Equity (Deficiency) (Unaudited) - For the Three Months Ended June 30, 1997 3 Combined Statements of Cash Flows (Unaudited) - For the Three Months Ended June 30, 1997 and 1996 4 Notes to Combined Financial Statements (Unaudited) 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10 PART II - OTHER INFORMATION Items 1-6 13 SIGNATURE 14 BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership)
COMBINED BALANCE SHEETS - June 30, 1997 and March 31, 1997 June 30, March 31, 1997 1997 (Unaudited) Assets Cash and cash equivalents $ 256,700 $ 288,153 Marketable securities, at fair value 1,020,371 1,056,590 Accounts receivable, net of allowance for bad debt of $355,349 and $337,793, respectively 20,161 23,778 Tenant security deposits 95,224 98,963 Investments in Local Limited Partnerships, net of reserve for valuation of $945,277 (Note 1) 19,201,225 19,593,420 Rental property at cost, net of accumulated depreciation and reserve for valuation of $5,857,280 and $5,670,590, respectively 15,060,043 15,217,196 Mortgagee escrow deposits 147,476 106,501 Deferred charges, net of $161,688 and $156,662 of accumulated amortization, respectively 204,156 209,182 Other assets 22,204 38,270 ------------- ------------ Total Assets $ 36,027,560 $ 36,632,053 ============= ============ Liabilities and Partners' Equity Mortgage notes payable $ 11,071,077 $11,111,888 Accounts payable to affiliates 419,200 390,926 Accounts payable and accrued expenses 427,229 366,076 Interest payable 594,088 507,457 Tenant security deposits payable 92,320 89,709 Payable to affiliated Developer 2,482,000 2,482,000 ------------- ------------ Total Liabilities 15,085,914 14,948,056 ------------- ------------ Minority interest in Local Limited Partnerships 401,649 421,489 ------------- ------------ General, Initial and Investor Limited Partners' Equity 20,542,810 21,267,760 Net unrealized losses on marketable securities (2,813) (5,252) ------------- ------------ Total Partners' Equity 20,539,997 21,262,508 ------------- ------------ Total Liabilities and Partners' Equity $ 36,027,560 $ 36,632,053 ============= ============
The accompanying notes are an integral part of the combined financial statements. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership)
COMBINED STATEMENTS OF OPERATIONS (Unaudited) For the Three Months Ended June 30, 1997 and 1996 1997 1996 ------------ ------- Revenue: Rental $ 452,882 $ 443,720 Investment 24,709 28,949 Other 74,488 13,701 ------------ ------------ Total Revenue 552,079 486,370 ------------ ------------ Expenses: Asset management fee, related party 57,480 64,343 General and administrative (includes reimbursement to affiliate in the amounts of $48,279 and $37,026, respectively) 90,575 60,394 Bad debt expense 17,556 200,394 Rental operations, exclusive of depreciation 256,956 274,535 Property management fee, related party 32,552 18,739 Interest 257,839 270,378 Depreciation 186,690 177,865 Amortization 27,869 32,678 ------------ ------------ Total Expenses 927,517 1,099,326 ------------ ------------ Loss before equity in losses of Local Limited Partnerships (375,438) (612,956) Equity in losses of Local Limited Partnerships (369,352) (578,259) Minority interest in losses of Local Limited Partnerships 19,840 23,031 ------------ ------------ Net Loss $ (724,950) $ (1,168,184) ============ ============ Net Loss allocated: To General Partners $ (7,250) $ (11,682) To Limited Partners (717,700) (1,156,502) ------------ ------------ $ (724,950) $ (1,168,184) ============ ============ Net Loss per Limited Partnership Unit (68,043 Units) $ (10.55) $ (17.00) ============ ============
The accompanying notes are an integral part of the combined financial statements. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) COMBINED STATEMENT OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY) (Unaudited) For the Three Months Ended June 30, 1997
Net Initial Investor Unrealized General Limited Limited Gains Partners Partners Partners (Losses) Total Balance at March 31, 1997 $ (378,408) $ 5,000 $ 21,641,168 $ (5,252) $ 21,262,508 Net change in net unrealized losses on marketable securities available for sale - - - 2,439 2,439 Net Loss (7,250) - (717,700) - (724,950) ---------- ------- ------------ --------- ------------- Balance at June 30, 1997 $ (385,658) $ 5,000 $ 20,923,468 $ (2,813) $ 20,539,997 ========== ======= ============ ========= =============
The accompanying notes are an integral part of the combined financial statements. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership)
COMBINED STATEMENTS OF CASH FLOWS (Unaudited) For the Three Months Ended June 30, 1997 and 1996 1997 1996 ------------ ------- Net cash provided by (used for) operating activities $ (2,305) $ 16,926 ----------- ----------- Cash flows from investing activities: Purchases of marketable securities (49,094) (437,069) Proceeds from sales and maturities of marketable securities 87,240 618,452 Cash distributions received from Local Limited Partnerships 64,034 64,804 Advances to Local Limited Partnerships (60,980) (241,440) Purchase of rental property and equipment (29,537) (39,034) ----------- ----------- Net cash provided by (used for) investing activities 11,663 (34,287) ----------- ----------- Cash flows from financing activities: Payment of mortgage principal (40,811) (73,414) ----------- ----------- Net cash used for financing activities (40,811) (73,414) ----------- ----------- Net decrease in cash and cash equivalents (31,453) (90,775) Cash and cash equivalents, beginning 288,153 414,451 ----------- ----------- Cash and cash equivalents, ending $ 256,700 $ 323,676 =========== =========== Supplemental disclosure: Cash paid for interest $ 171,208 $ 49,582 =========== ===========
The accompanying notes are an integral part of the combined financial statements. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) Notes to Combined 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, 1997. 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 restated herein to conform to current year presentation. 1. Investments in Local Limited Partnerships The Partnership uses the equity method to account for its limited partnership interests in twenty-six Local Limited Partnerships (excluding the Combined Entities) which own and operate multi-family housing complexes, most of which are government-assisted. The Partnership, as Investor Limited Partner pursuant to the various Local Limited Partnership Agreements which contain certain operating and distribution restrictions, has generally acquired a 99% interest in the profits, losses, tax credits and cash flows from operations of each of the Local Limited Partnerships. Upon dissolution, proceeds will be distributed according to each respective partnership agreement. The following is a summary of investments in Local Limited Partnerships, excluding the Combined Entities, at June 30, 1997:
Capital contributions paid to Local Limited Partnerships and purchase price paid to withdrawing partners of Local Limited Partnerships $ 43,318,237 Cumulative equity in losses of Local Limited Partnerships (includes cumulative unrecognized losses of $1,246,562) (24,757,319) Cash distributions received from Local Limited Partnerships (1,554,313) Investments in Local Limited Partnerships before adjustment 17,006,605 Excess of investment cost over the underlying net assets acquired: Acquisition fees and expenses 3,910,599 Accumulated amortization of acquisition fees and expenses (770,702) Investments in Local Limited Partnerships 20,146,502 Reserve for valuation of investments in Local Limited Partnerships (945,277) $ 19,201,225
The Partnership's share of the net losses of the Local Limited Partnerships, excluding the Combined Entities, for the three months ended June 30, 1997 is $656,007. For the three months ended June 30, 1997, the Partnership has not recognized $350,689 of equity in losses relating to eight Local Limited Partnerships where cumulative equity in losses and cumulative distributions exceeded its total investments in these Local Limited Partnerships. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) Notes to Combined Financial Statements (continued) (Unaudited) 2. Liquidation of Interests in Local Limited Partnerships The Managing General Partner has transferred all of the assets of seven of the Texas Partnerships, subject to their liabilities, to unaffiliated entities. The transfers of Grandview Terrace Apartments, Pecan Hills Apartments, Seagraves Garden Apartments, Hilltop Apartments and Bent Tree Housing were effective February 21, 1996, February 29, 1996, March 8, 1996, June 6, 1996 and November 20, 1996, respectively. Justin Place Apartments and Valley View Apartments were transferred July 9, 1997. Transfers of four of the remaining five Texas Partnerships are expected to take place in the third quarter of 1997. The Partnership will retain its interest in Gateway Village. For tax purposes, these events will result in both Section 1231 Gain and cancellation of indebtedness income. In addition, the transfer of ownership will result in a nominal amount of recapture of tax credits, since the Texas Partnerships represent only 3% of the Partnership's tax credits. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) Notes to Combined Financial Statements (continued) (Unaudited) 3. Supplemental Combining Schedules
Balance Sheets Boston Financial Qualified Housing Tax Credits Combined Combined L.P. IV (A) Entities (B) Eliminations (A) Assets Cash and cash equivalents $ 171,414 $ 85,286 $ - $ 256,700 Marketable securities, at fair value 1,020,371 - - 1,020,371 Accounts receivable, net 483,765 20,161 (483,765) 20,161 Tenant security deposits - 95,224 - 95,224 Investments in Local Limited Partnerships, net 19,298,876 - (97,651) 19,201,225 Rental property at cost, net - 15,060,043 - 15,060,043 Mortgagee escrow deposits - 147,476 - 147,476 Deferred charges, net - 204,156 - 204,156 Other assets 18,393 3,811 - 22,204 --------------- --------------- ------------- ------------ Total Assets $ 20,992,819 $ 15,616,157 $ (581,416) $ 36,027,560 =============== =============== ============= ============ Liabilities and Partners' Equity Mortgage notes payable $ - $ 11,071,077 $ - $ 11,071,077 Accounts payable to affiliates 383,665 519,300 (483,765) 419,200 Accounts payable and accrued expenses 69,157 358,072 - 427,229 Interest payable - 594,088 - 594,088 Tenant security deposits payable - 92,320 - 92,320 Payable to affiliated Developer - 2,482,000 - 2,482,000 --------------- --------------- ------------- ------------ Total Liabilities 452,822 15,116,857 (483,765) 15,085,914 --------------- --------------- ------------- ------------ Minority interest in Local Limited Partnerships - - 401,649 401,649 --------------- --------------- ------------- ------------ General, Initial and Investor Limited Partners' Equity 20,542,810 499,300 (499,300) 20,542,810 Net unrealized losses on marketable securities (2,813) - - (2,813) --------------- --------------- ------------- ------------ Total Partners' Equity 20,539,997 499,300 (499,300) 20,539,997 --------------- --------------- ------------- ------------ Total Liabilities and Partners' Equity $ 20,992,819 $ 15,616,157 $ (581,416) $ 36,027,560 =============== =============== ============= ============
(A) As of June 30, 1997. (B) As of March 31, 1997. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) Notes to Combined Financial Statements (continued) (Unaudited) 3. Supplemental Combining Schedules (continued)
Statements of Operations Boston Financial Qualified Housing Tax Credits Combined Combined L.P. IV (A) Entities (B) Eliminations (A) Revenue: Rental $ - $ 452,882 $ - $ 452,882 Investment 21,802 2,907 - 24,709 Other 65,659 8,829 - 74,488 --------------- --------------- ------------- ------------ Total Revenue 87,461 464,618 - 552,079 --------------- --------------- ------------- ------------ Expenses: Asset management fees, related party 57,480 - - 57,480 General and administrative 90,575 - - 90,575 Bad debt expense 17,556 - - 17,556 Rental operations, exclusive of depreciation - 256,956 - 256,956 Property management fee, related party - 32,552 - 32,552 Interest - 257,839 - 257,839 Depreciation - 186,690 - 186,690 Amortization 22,843 5,026 - 27,869 --------------- --------------- ------------- ------------ Total Expenses 188,454 739,063 - 927,517 --------------- --------------- ------------- ------------ Loss before equity in losses of Local Limited Partnerships (100,993) (274,445) - (375,438) Equity in losses of Local Limited Partnerships (623,957) - 254,605 (369,352) Minority interest in losses of Local Limited Partnerships - - 19,840 19,840 --------------- --------------- ------------- ------------ Net Loss $ (724,950) $ (274,445) $ 274,445 $ (724,950) =============== =============== ============= ============
(A) For the three months ended June 30, 1997. (B) For the three months ended March 31, 1997. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) Notes to Combined Financial Statements (continued) (Unaudited) 3. Supplemental Combining Schedules (continued)
Statements of Cash Flows Boston Financial Qualified Housing Tax Credits Combined Combined L.P. IV (A) Entities (B) Eliminations (A) Net cash provided by (used for) operating activities $ (86,513) $ 84,208 $ - $ (2,305) ----------- ------------ ------------ ------------ Cash flows from investing activities: Purchases of marketable securities (49,094) - - (49,094) Proceeds from sales and maturities of marketable securities 87,240 - - 87,240 Cash distributions received from Local Limited Partnerships 64,034 - - 64,034 Advances to Local Limited Partnerships (60,980) - - (60,980) Purchase of rental property and equipment - (29,537) - (29,537) ----------- ------------ ------------ ------------ Net cash provided by (used for) investing activities 41,200 (29,537) - 11,663 ----------- ------------ ------------ ------------ Cash flows from financing activities: Payment of mortgage principal - (40,811) - (40,811) ----------- ------------ ------------ ------------ Net cash used for financing activities - (40,811) - (40,811) ----------- ------------ ------------ ------------ Net increase (decrease) in cash and cash equivalents (45,313) 13,860 - (31,453) Cash and cash equivalents, beginning 216,727 71,426 - 288,153 ----------- ------------ ------------ ------------ Cash and cash equivalents, ending $ 171,414 $ 85,286 $ - $ 256,700 =========== ============ ============ ============
(A) For the three months ended June 30, 1997. (B) For the three months ended March 31, 1997. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources The Partnership (including the Combined Entities) had a decrease in cash and cash equivalents of $31,453 from $288,153 at March 31, 1997 to $256,700 at June 30, 1997. The decrease is attributable to cash used for operations and repayment of mortgage principal and purchase of rental property and equipment by the Combined Entities. These decreases were offset by proceeds from sales and maturities of marketable securities in excess of purchases of marketable securities and cash distributions received from Local Limited Partnerships. The Managing General Partner initially designated 4% of the Gross Proceeds as Reserves. The Reserves were established to be used for working capital of the Partnership and contingencies related to the ownership of Local Limited Partnership interests. Funds totaling approximately $1,093,000 have been withdrawn from the reserve account to pay legal fees relating to various property issues. This amount includes approximately $1,039,000 for the Texas Partnerships. To date, Reserve funds in the amount of $304,000 have been used to make additional capital contributions to a Local Limited Partnership. To date, the Partnership has used approximately $904,000 of operating funds to replenish reserves. At June 30, 1997, approximately $1,153,000 of cash, cash equivalents and marketable securities has been designated as Reserves. Management 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 Partnership's ongoing operations. Reserves may be used to fund Partnership operating deficits, if the Managing General Partner deems funding appropriate. If Reserves are not adequate to cover the Partnership's operations, the Partnership will seek other financing sources including, but not limited to, the deferral of Asset Management Fees to an affiliate of the Managing General Partner or working with Local Limited Partnerships to increase cash distributions. In the event a Local Limited Partnership encounters operating difficulties requiring additional funds, the Partnership's management might deem it in its best interests to voluntarily provide such funds in order to protect its investment. To date, in addition to the $1,093,000 noted above, the Partnership has also advanced approximately $716,000 to the Texas Partnerships to fund operating deficits. Approximately $360,000 has also been advanced to two other Local Limited Partnerships. Since the Partnership invests as a limited partner, the Partnership has no contractual obligation to provide additional funds to Local Limited Partnerships beyond its specified investment. Thus, at June 30, 1997, the Partnership 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 three months ended June 30, 1997. Results of Operations The Partnership's results of operations for the three months ended June 30, 1997 resulted in a net loss of $724,950 as compared to a net loss of $1,168,184 for the same period in 1996. The decrease in net loss is primarily attributable to a decrease in equity in losses of Local Limited Partnerships, an increase in other revenue and a decrease in bad debt expense. The decrease in equity in losses of Local Limited Partnerships is due to an increase in losses not recognized by the Partnership for Local Limited Partnerships whose cumulative equity in losses and cumulative distributions exceeded its total investment in those partnerships. The increase in other revenue is due to distribution income recognized for these partnerships. The decrease in bad debt expense is the result of advances made to one Local Limited Partnership during the three months ended March 31, 1996 which were reserved for. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Property Discussions Prior to the transfer of seven of the Texas Partnerships, Limited Partnership interests had been acquired in thirty-seven Local Limited Partnerships which are located in thirteen states, Washington, D.C. and Puerto Rico. Fifteen of the properties with 1,440 apartments were newly constructed, and twenty-two of the properties with 2,061 apartments were rehabilitated. Most of the Local Limited Partnerships have stable operations, operating at break-even or generating operating cash flow. A few properties are experiencing operating difficulties and cash flow deficits due to a variety of reasons. The Local General Partners of those properties have funded operating deficits through project expense loans, subordinated loans or payments from operating escrows. In instances where the Local General Partners have stopped funding deficits because their obligation to do so has expired or otherwise, the Managing General Partner is working with the Local General Partners to increase operating income, reduce expenses or refinance the debt at lower interest rates in order to improve cash flow. Audobon Apartments, located in Massachusetts, is operating below break-even primarily due to decreased rental subsidy assistance, increased operating expenses and adverse market conditions. During the first quarter, the management agent was replaced with a local unaffiliated firm. The Local General Partner has also obtained preliminary approval for additional operating subsidies from the state and released from lender escrows to fund certain cash deficits. The Managing General Partner continues to work with the lender to develop a satisfactory workout. It is likely that a workout would require an advance from Partnership reserves. Despite improving occupancy at BK Apartments, located in Jamestown, North Dakota, the property continues to generate operating deficits. The lender recently issued a default notice and is threatening to foreclose. Affiliates of the Managing General Partner continue to negotiate with the Local General Partner and lender to cure the mortgage default and complete required capital repairs. The Managing General Partner made a proposal to the bondholder for its consideration. If negotiations are not successful, it is likely that a foreclosure will occur prior to the end of the fourth quarter which will result in recapture and the allocation of taxable income to the Partnership. Bentley Court, located in Columbia, South Carolina, continues to generate significant deficits despite the July 1996 debt refinancing. As we previously reported, an agreement was set up with the lender which enabled an affiliate of the Managing General Partner to become an additional General Partner and a substitute management agent, subject to lender approval, with the right to take control of the property, if it becomes necessary. In addition, the agreement stipulates that if the Local Limited Partnership defaults on the agreement the lender has the right to remove the management company. The Managing General Partner will continue to monitor property operations closely. Operating deficits are currently being funded by the Local General Partner. At Findlay Market (Cincinnati, Ohio), reconstruction of the property units damaged by fire was completed in December 1996, and lease-up is currently underway. As previously reported, in order to reconstruct the units, the Partnership agreed to advance up to $345,000 to help cover the funding shortfall between the insurance proceeds, lender funding and a City grant. To date, the Partnership has advanced approximately $294,000 of this amount. However, the property continues to generate operating deficits which caused the default of the first mortgage. At this juncture, the lender is not amenable to a cure of the mortgage and is expected to exercise its rights to foreclose on the mortgage during the third quarter 1997. Despite these indications, the Managing and Local General Partners continue to negotiate with the lender in hopes of averting the foreclosure. A foreclosure of this property will result in recapture of tax credits and the allocation of taxable income to the Partnership. The Managing General Partner has transferred all of the assets of seven of the Texas Partnerships, subject to their liabilities, to unaffiliated entities. The transfers of Grandview Terrace Apartments, Pecan Hills Apartments, Seagraves Garden Apartments, Hilltop Apartments and Bent Tree Housing were effective February 21, 1996, February 29, 1996, March 8, 1996, June 6, 1996 and November 20, 1996, respectively. Justin Place Apartments and BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Property Discussions (continued) Valley View Apartments were transferred on July 9, 1997. Transfers of four of the remaining five Texas Partnerships are expected to take place in the third quarter of 1997. The Partnership will retain its interest in Gateway Village. For tax purposes, these events will result in both Section 1231 Gain and cancellation of indebtedness income. In addition, the transfer of ownership will result in a nominal amount of recapture of tax credits, since the Texas Partnerships represent only 3% of the Partnership's tax credits. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (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 June 30, 1997. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (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: August 13, 1997 BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV By: Arch Street IV, Inc., its Managing General Partner /s/Vincent J. Costantini Vincent J. Costantini Treasurer and Chief Financial Officer EX-27 2 QH4 FINANCIAL DATA SCHEDULE FOR FY 1998 1ST QTR
5 3-MOS MAR-31-1998 JUN-30-1997 256,700 1,020,371 20,161 000 000 000 15,060,043 000 36,027,560 000 000 000 000 000 20,539,997 36,027,560 000 552,079 000 000 669,678 000 257,839 000 000 000 000 000 000 (724,950) (10.55) 000 Included in total assets: Investments in Local Limited Partnerships of $19,201,225, Deferred charges, net $204,156, Tenant security deposits $95,224, Mortgagee escrow deposits $147,476 and other assets $22,204. Included in Total Liabilities and Equity: Mortgage notes payable of $11,071,077, Accounts payable to affiliates of $419,200, Accounts payable and accrued expenses of $427,229, Interest payable of $594,088, Tenant security deposits payable of $92,320, Payable to affiliated developer of $2,482,000 and Minority interest in Local Limited Partnerships of $401,649. Total revenue includes: Rental of $452,882, Investment of $24,709 and Other of $74,488. Included in Other Expenses: Asset management fees of $57,480, General and administrative of $90,575, Rental operations, exclusive of depreciation of $256,956, Bad debt of $17,556, Property management fees of $32,552, Depreciation of $186,690 and Amortization of $27,869. Net loss reflects: Equity in losses of Local Limited Partnerships of $369,352 and Minority interest in losses of Local Limited Partnerships of $19,840.
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