FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(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
-------- --------
Commission file number 0-21718
-------
BOSTON CAPITAL TAX CREDIT FUND III L.P.
- -----------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 52-1749505
- -------------------------------- -----------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Boston Place, Suite 2100, Boston, Massachusetts 02108
- -----------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 624-8900
--------------
- -----------------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report)
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 CAPITAL TAX CREDIT FUND III L.P.
--------------------------------------------------
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1997
-----------------------------------------------
TABLE OF CONTENTS
-----------------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements..............................
Balance Sheets....................................
Statements of Operations..........................
Statement of Changes in Partners' Capital.........
Statements of Cash Flows..........................
Notes to Financial Statements.....................
Item 2. Management's Discussion and Analysis of
Financial Condition and Results
of Operations.....................................
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K..................
Signatures........................................
Boston Capital Tax Credit Fund III L.P.
BALANCE SHEETS
June 30, March 31,
1997 1997
(Unaudited) (Audited)
ASSETS ------------ ------------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $130,854,297 $134,386,913
OTHER ASSETS
Cash and cash equivalents 3,720,206 3,925,706
Investments 1,343,447 1,393,309
Notes receivable 2,081,333 2,081,333
Deferred acquisition costs,
net of accumulated amortization (Note B) 1,740,585 1,757,808
Organization costs, net of
accumulated amortization (Note B) 181,902 220,083
Other assets 2,085,366 2,080,483
----------- -----------
$142,007,136 $145,845,635
=========== ===========
LIABILITIES
Accounts payable & accrued
expenses (Note C) $ 9,797 $ 4,681
Accounts payable affiliates 7,236,282 6,579,726
Capital contributions payable (Note D) 3,423,419 3,765,854
----------- -----------
10,669,498 10,350,261
----------- -----------
PARTNERS' CAPITAL
Limited Partners
Units of limited partnership interest,
$10 stated value per BAC; 22,000,000
authorized BACs; 21,996,102 issued and
outstanding, as of June 30, 1997 131,916,382 136,032,541
General Partner (576,258) (534,681)
Unrealized gain (loss)
on securities available for sale, net (2,486) (2,486)
----------- -----------
131,337,638 135,495,374
----------- -----------
$142,007,136 $145,845,635
=========== ===========
The accompanying notes are an integral part of these statements.
1
Boston Capital Tax Credit Fund III L.P.
BALANCE SHEETS
SERIES 15
----------------------------
June 30, March 31,
1997 1997
(Unaudited) (Audited)
ASSETS ----------- ---------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $17,925,808 $18,675,081
OTHER ASSETS
Cash and cash equivalents 101,264 246,845
Investments - -
Notes receivable 135,000 135,000
Deferred acquisition costs,
net of accumulated amortization (Note B) 265,419 268,047
Organization costs, net of
accumulated amortization (Note B) - -
Other assets 476,479 475,563
---------- ----------
$18,903,970 $19,800,536
========== ==========
LIABILITIES
Accounts payable and accrued
expenses (Note C) $ 1,145 $ 1,144
Accounts payable affiliates 1,949,706 1,812,693
Capital contributions payable (Note D) 34,528 178,680
---------- ----------
1,985,379 1,992,517
---------- ----------
PARTNERS' CAPITAL
Limited Partners
Units of limited partnership interest,
$10 stated value per BAC; 22,000,000
authorized BACs; 3,870,500 issued and
outstanding, as of June 30, 1997 17,082,076 17,962,610
General Partner (163,485) (154,591)
Unrealized gain (loss) on securities
available for sale, net - -
---------- ----------
16,918,591 17,808,019
---------- ----------
$18,903,970 $19,800,536
========== ==========
The accompanying notes are an integral part of these statements.
2
Boston Capital Tax Credit Fund III L.P.
BALANCE SHEETS
SERIES 16
----------------------------
June 30, March 31,
1997 1997
(Unaudited) (Audited)
ASSETS ----------- ---------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $33,022,385 $33,987,844
OTHER ASSETS
Cash and cash equivalents 1,178,120 1,183,424
Investments 273,390 283,537
Notes receivable - -
Deferred acquisition costs
net of accumulated amortization (Note B) 425,509 429,721
Organization costs, net of
accumulated amortization (Note B) 33,473 44,630
Other assets 9,028 8,790
---------- ----------
$34,941,905 $35,937,946
========== ==========
LIABILITIES
Accounts payable & accrued
expenses (Note C) $ 5,115 $ -
Accounts payable affiliates 1,916,101 1,743,106
Capital contributions payable (Note D) 146,817 155,225
---------- ----------
2,068,033 1,898,331
---------- ----------
PARTNERS' CAPITAL
Limited Partners
Units of limited partnership interest,
$10 stated value per BAC; 22,000,000
authorized BACs; 5,429,402 issued and
outstanding, as of June 30, 1997 33,012,363 34,166,449
General Partner (137,863) (126,206)
Unrealized gain (loss) on securities
available for sale, net (628) (628)
---------- ----------
32,873,872 34,039,615
---------- ----------
$34,941,905 $35,937,946
========== ==========
The accompanying notes are an integral part of these statements.
3
Boston Capital Tax Credit Fund III L.P.
BALANCE SHEETS
SERIES 17
----------------------------
June 30, March 31,
1997 1997
(Unaudited) (Audited)
ASSETS ----------- ---------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $30,279,330 $30,804,793
OTHER ASSETS
Cash and cash equivalents 531,118 539,185
Investments - -
Notes receivable 1,409,982 1,409,982
Deferred acquisition costs
net of accumulated amortization (Note B) 392,635 396,522
Organization costs, net of
accumulated amortization (Note B) 40,601 50,533
Other assets 1,329,686 1,329,684
---------- ----------
$33,983,352 $34,530,699
========== ==========
LIABILITIES
Accounts payable & accrued
expenses (Note C) $ - $ -
Accounts payable affiliates 1,742,156 1,593,932
Capital contributions payable (Note D) 1,840,259 1,844,259
---------- ----------
3,582,415 3,438,191
---------- ----------
PARTNERS' CAPITAL
Limited Partners
Units of limited partnership interest,
$10 stated value per BAC; 22,000,000
authorized BACs; 5,000,000 issued and
outstanding, as of June 30, 1997 30,526,607 31,211,262
General Partner (125,670) (118,754)
Unrealized gain (loss) on securities
available for sale, net - -
---------- ----------
30,400,937 31,092,508
---------- ----------
$33,983,352 $34,530,699
========== ==========
The accompanying notes are an integral part of these statements.
4
Boston Capital Tax Credit Fund III L.P.
BALANCE SHEETS
SERIES 18
----------------------------
June 30, March 31,
1997 1997
(Unaudited) (Audited)
ASSETS ------------ ----------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $22,898,136 $23,513,680
OTHER ASSETS
Cash and cash equivalents 729,242 766,409
Investments 167,403 173,619
Notes receivable 536,351 536,351
Deferred acquisition costs,
new of accumulated amortization (Note B) 289,129 291,983
Organization costs, net of
accumulated amortization (Note B) 41,837 49,526
Other assets 43,048 41,564
---------- ----------
$24,705,146 $25,373,132
========== ==========
LIABILITIES
Accounts payable & accrued
expenses (Note C) $ 130 $ 129
Accounts payable affiliates 836,601 741,114
Capital contributions payable (Note D) 717,635 755,887
---------- ----------
1,554,366 1,497,130
---------- ----------
PARTNERS' CAPITAL
Limited Partners
Units of limited partnership interest,
$10 stated value per BAC; 22,000,000
authorized BACs; 3,616,200 issued and
outstanding, as of June 30, 1997 23,229,875 23,947,845
General Partner (78,715) (71,463)
Unrealized gain (loss) on securities
available for sale, net (380) (380)
---------- ----------
23,150,780 23,876,002
---------- ----------
$24,705,146 $25,373,132
========== ==========
The accompanying notes are an integral part of these statements.
5
Boston Capital Tax Credit Fund III L.P.
BALANCE SHEETS
SERIES 19
----------------------------
June 30, March 31,
1997 1997
(Unaudited) (Audited)
ASSETS ------------ ----------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $26,728,638 $27,405,515
OTHER ASSETS
Cash and cash equivalents 1,180,462 1,189,843
Investments 902,654 936,153
Notes receivables - -
Deferred acquisition costs,
net of accumulated amortization (Note B) 367,893 371,535
Organization costs, net of
accumulated amortization (Note B) 65,991 75,394
Other assets 227,125 224,882
---------- ----------
$29,472,763 $30,203,322
========== ==========
LIABILITIES
Accounts payable & accrued
expenses (Note C) $ 3,407 $ 3,408
Accounts payable affiliates 791,718 688,881
Capital contributions payable (Note D) 684,180 831,803
---------- ----------
1,479,305 1,524,092
---------- ----------
PARTNERS' CAPITAL
Limited Partners
Units of limited partnership interest,
$10 stated value per BAC; 22,000,000
authorized BACs; 4,080,000 issued and
outstanding, as of June 30, 1997 28,065,461 28,744,375
General Partner (70,525) (63,667)
Unrealized gain (loss) on securities
available for sale, net (1,478) (1,478)
---------- ----------
27,993,458 28,679,230
---------- ----------
$29,472,763 $30,203,322
========== ==========
The accompanying notes are an integral part of these statements.
6
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
1997 1996
---- ----
Income
Interest income $ 40,067 $ 142,134
---------- ----------
Share of loss from Operating
Partnerships (Note D) (3,532,434) (3,861,444)
---------- ----------
Expenses
Professional fees 16,337 89,824
Fund management fee (Note C) 531,208 547,465
Amortization 55,405 61,529
General and administrative expenses 62,419 73,049
---------- ----------
665,369 771,867
---------- ----------
NET LOSS $(4,157,736) $(4,491,177)
========== ==========
Net loss allocated to limited
partners $(4,116,159) $(4,446,265)
========== ==========
Net loss allocated general
partner $ (41,577) $ (44,912)
========== ==========
Net loss per BAC $ (.95) $ ( .99)
========== ==========
The accompanying notes are an integral part of these statements.
7
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
SERIES 15
-----------------------
1997 1996
---- ----
Income
Interest income $ 1,593 $ 2,763
-------- --------
Share of loss from Operating
Partnerships (749,269) (800,082)
-------- --------
Expenses
Professional fees 2,962 21,689
Fund management fee (Note C) 125,388 119,161
Amortization 2,628 9,186
General and administrative expenses 10,774 8,152
-------- --------
141,752 158,188
-------- --------
NET LOSS $(889,428) $(955,507)
======== ========
Net loss allocated to limited
partners $(880,534) $(945,952)
======== ========
Net loss allocated to general
partner $ (8,894) $ (9,555)
======== ========
Net loss per BAC $ (.23) $ (.24)
======== ========
The accompanying notes are an integral part of these statements.
8
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
SERIES 16
------------------------
1997 1996
---- ----
Income
Interest income $ 8,862 $ 17,965
---------- ----------
Share of loss from Operating
Partnerships (965,282) (930,907)
---------- ----------
Expenses
Professional fees 8,077 16,418
Fund management fee (Note C) 169,345 130,625
Amortization 15,370 15,326
General and administrative expenses 16,531 14,059
---------- ----------
209,323 176,428
---------- ----------
NET LOSS $(1,165,743) $(1,089,370)
========== ==========
Net loss allocated to limited
partners $(1,154,086) $(1,078,476)
========== ==========
Net loss allocated to general
partner $ (11,657) $ (10,894)
========== ==========
Net loss per BAC $ (.21) $ (.19)
========== ==========
The accompanying notes are an integral part of these statements.
9
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
SERIES 17
------------------------
1997 1996
---- ----
Income
Interest income $ 4,158 $ 19,141
---------- ----------
Share of loss from Operating
Partnerships (525,396) (886,292)
---------- ----------
Expenses
Professional fees 1,737 27,669
Fund management fee (Note C) 141,843 147,980
Amortization 13,820 13,820
General and administrative expenses 12,933 9,964
---------- ----------
170,333 199,433
---------- ----------
NET LOSS $ (691,571) $(1,066,584)
========== ==========
Net loss allocated to limited
partners $ (684,655) $(1,055,918)
========== ==========
Net loss allocated to general
partner $ (6,916) $ (10,666)
========== ==========
Net loss per BAC $ (.14) $ (.21)
========== ==========
The accompanying notes are an integral part of these statements.
10
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
SERIES 18
----------------------
1997 1996
---- ----
Income
Interest income $ 7,242 $ 14,504
-------- --------
Share of loss from Operating
Partnerships (615,610) (664,669)
-------- --------
Expenses
Professional fees 1,539 9,351
Fund management fee (Note C) 94,632 86,826
Amortization 10,542 10,542
General and administrative expenses 10,141 9,510
-------- --------
116,854 116,229
-------- --------
NET LOSS $(725,222) $(766,394)
======== ========
Net loss allocated to limited
partners $(717,970) $(758,730)
======== ========
Net loss allocated to general
partner $ (7,252) $ (7,664)
======== ========
Net loss per BAC $ (.20) $ (.20)
======== ========
The accompanying notes are an integral part of these statements.
11
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
SERIES 19
----------------------
1997 1996
---- ----
Income
Interest income $ 18,212 $ 87,761
-------- --------
Share of loss from Operating
Partnerships (676,877) (579,494)
-------- --------
Expenses
Professional fees 2,022 14,697
Fund management fee (Note C) - 62,873
Amortization 13,045 12,655
General and administrative expenses 12,040 31,364
-------- --------
27,107 121,589
-------- --------
NET LOSS $(685,772) $(613,322)
======== ========
Net loss allocated to limited
partners $(678,914) $(607,189)
======== ========
Net loss allocated to general
partner $ (6,858) $ (6,133)
======== ========
Net loss per BAC $ (.17) $ (.15)
======== ========
The accompanying notes are an integral part of these statements.
12
Boston Capital Tax Credit Fund III L.P.
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
Three Months Ended June 30, 1997
(Unaudited)
Unrealized
gain (loss) on
securities
available
General for
Assignees Partner sale, net Total
--------- ------- --------- -----
Partners' capital
(deficit)
April 1, 1997 $136,032,541 $(534,681) $ (2,486) $135,495,374
Net change in
unrealized gain
(loss) on secur-
ities available
for sale - - - -
Net income (loss) (4,116,159) (41,577) - (4,157,736)
----------- -------- --------- -----------
Partners' capital
(deficit),
June 30, 1997 $131,916,382 $(576,258) $ (2,486) $131,337,638
=========== ======== ========== ===========
The accompanying notes are an integral part of these statements.
19
Boston Capital Tax Credit Fund III L.P.
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
Three Months Ended June 30, 1997
(Unaudited)
Unrealized
gain (loss) on
securities
available
General for
Assignees Partner sale,net Total
--------- ------- -------- -----
Series 15
- ---------
Partners' capital
(deficit),
April 1, 1997 $17,962,610 $ (154,591) $ - $17,808,019
Net change in
unrealized gain
(loss) on secur-
ities available
for sale - - - -
Net income (loss) (880,534) (8,894) - (889,428)
---------- -------- ---------- ----------
Partners' capital
(deficit),
June 30, 1997 $17,082,076 $ (163,485) $ - $16,918,591
========== ======== ========== ==========
Series 16
- ---------
Partners' capital
(deficit),
April 1, 1997 $34,166,449 $ (126,206) $ (628) $34,039,615
Net change in
unrealized gain
(loss) on secur-
ities available
for sale - - - -
Net income (loss) (1,154,086) (11,657) - $(1,165,743)
---------- -------- --------- ----------
Partners' capital
(deficit),
June 30, 1997 $33,012,363 $(137,863) $ (628) $32,873,872
========== ======== ========= ==========
The accompanying notes are an integral part of these statements.
20
Boston Capital Tax Credit Fund III L.P.
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
Three Months Ended June 30, 1997
(Unaudited)
Unrealized
gain (loss) on
securities
available
General for
Assignees Partner sale,net Total
--------- ------- -------- -----
Series 17
- ---------
Partners' capital
(deficit),
April 1, 1997 $31,211,262 $(118,754) $ - $31,092,508
Net change in
unrealized gain
(loss) on secur-
ities available
for sale - - - -
Net income (loss) (684,655) (6,916) - (691,571)
---------- -------- --------- ----------
Partners' capital
(deficit),
June 30, 1997 $30,526,607 $(125,670) $ - $30,400,937
========== ======== ========= ==========
Series 18
- ---------
Partners' capital
(deficit),
April 1, 1997 $23,947,845 $ (71,463) $ (380) $23,876,002
Net change in
unrealized gain
(loss) on secur-
ities available
for sale - - - -
Net income (loss) (717,970) (7,252) - (725,222)
---------- ------- --------- ----------
Partners' capital
(deficit),
June 30, 1997 $23,229,875 $(78,715) $ (380) $23,150,780
========== ======= ========= ==========
The accompanying notes are an integral part of these statements.
21
Boston Capital Tax Credit Fund III L.P.
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
Three Months Ended June 30, 1997
(Unaudited)
Unrealized
gain (loss) on
securities
available
General for
Assignees Partner sale,net Total
--------- ------- -------- -----
Series 19
- ---------
Partners' capital
(deficit),
April 1, 1997 $28,744,375 $ (63,667) $ (1,478) $28,679,230
Net change in
unrealized gain
(loss) on secur-
ities available
for sale - - - -
Net income (loss) (678,914) (6,858) - (685,772)
---------- -------- ---------- ----------
Partners' capital
(deficit),
June 30, 1997 $28,065,461 $ (70,525) $ (1,478) $27,993,458
========== ======== ========== ==========
22
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
1997 1996
---- ----
Cash flows from operating activities:
Net loss $ (4,157,736) $ (4,491,177)
Adjustments
Distributions from Operating
Partnerships 245 4,218
Amortization 55,405 61,529
Share of loss from Operating
Partnerships 3,532,434 3,861,444
Changes in assets and liabilities
(Decrease) Increase in accounts
payable and accrued expenses 5,116 (67,156)
Decrease (Increase) in accounts
receivable (3,965) 48,149
Decrease (Increase) in accounts
payable affiliates 656,557 645,430
---------- ----------
Net cash (used in) provided by
operating activities 88,056 62,437
---------- ----------
Cash flows from investing activities:
Acquisition costs repaid (paid) for
Operating Partnerships acquired or
to acquire - 15,000
Capital contributions paid to
Operating Partnerships (343,418) (2,681,665)
Advances to Operating Partnerships - 1,982,839
Investments 49,862 1,708,650
---------- -----------
Net cash (used in) provided by
investing activities (293,556) 1,024,824
---------- ----------
23
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
1997 1996
---- ----
Continued
- ---------
Cash flows from financing activity:
Credit adjusters received from
Operating Partnerships - 17,299
---------- ----------
Net cash (used in) provided by
financing activity - 17,299
---------- ----------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (205,500) 1,104,560
---------- ----------
Cash and cash equivalents, beginning 3,925,706 4,958,860
---------- ----------
Cash and cash equivalents, ending $ 3,720,206 $ 6,063,420
========== ==========
Supplemental schedule of noncash
investing and financing activates:
The fund has increased its investments
for unpaid capital contributions due to
the Operating Partnerships $ - $ 1,984,974
========== ==========
The accompanying notes are an integral part of these statements.
24
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 15
-------------------------
1997 1996
---- ----
Cash flows from operating activities:
Net loss $ (889,428) $ (955,507)
Adjustments
Distributions from Operating
Partnerships - 1,096
Amortization 2,628 9,186
Share of loss from Operating
Partnerships 749,269 800,082
Changes in assets and liabilities
(Decrease) increase in accounts
payable and accrued expenses 1 (67,501)
Decrease (Increase) in accounts
receivable - 934
Decrease (Increase) in accounts
payable affiliates 137,013 137,007
-------- --------
Net cash (used in) provided by
operating activities (517) (74,703)
-------- --------
Cash flows from investing activities:
Acquisition costs repaid (paid) for
Operating Partnerships acquired or
to acquire - 2,640
Capital contributions paid to Operating
Partnerships (145,064) (13,438)
Advances to Operating Partnerships - (31,920)
Investments - 151,594
-------- --------
Net cash (used in) provided by
investing activities (145,064) 108,876
-------- --------
25
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 15
----------------------
1997 1996
---- ----
Continued
- ---------
Cash flows from financing activity:
Credit adjusters received from
Operating Partnerships - -
-------- --------
Net cash (used in) provided by
financing activity - -
-------- --------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (145,581) 34,173
Cash and cash equivalents, beginning 246,845 163,428
-------- --------
Cash and cash equivalents, ending $ 101,264 $ 197,601
======== ========
Supplemental schedule of noncash investing
and financing activities
The Fund has increased its investments
for unpaid capital contributions due to
the Operating Partnerships $ - $ -
======== =========
The accompanying notes are an integral part of these statements.
26
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 16
-------------------------
1997 1996
---- ----
Cash flows from operating activities:
Net loss $(1,165,743) $(1,089,370)
Adjustments
Distributions from Operating
Partnerships 182 652
Amortization 15,370 15,326
Share of loss from Operating
Partnerships 965,282 930,907
Changes in assets and liabilities
(Decrease) increase in accounts
payable and accrued expenses 5,115 -
Decrease (Increase) in accounts
receivable (238) 1,895
Decrease (Increase) in accounts
payable affiliates 172,995 172,984
---------- ----------
Net cash (used in) provided by
operating activities (7,037) 32,394
---------- ----------
Cash flows from investing activities:
Acquisition costs repaid (paid) for
Operating Partnerships acquired or
to acquire - 3,700
Capital contributions paid to Operating
Partnerships (8,414) (570,602)
Advances to Operating Partnerships - 483,465
Investments 10,147 78,982
---------- ----------
Net cash (used in) provided by
investing activities 1,733 (4,455)
---------- ----------
27
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 16
-----------------------
1997 1996
---- -----
Continued
- ---------
Cash flows from financing activity:
Credit adjusters received from
Operating Partnerships - 17,299
--------- ----------
Net cash (used in) provided by
financing activity - 17,299
--------- ----------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (5,304) 45,238
Cash and cash equivalents, beginning 1,183,424 1,429,491
---------- ----------
Cash and cash equivalents, ending $ 1,178,120 $ 1,474,729
========== ==========
Supplemental schedule of noncash investing
and financing activities:
The Fund has increased its investments
for unpaid capital contributions due to
the Operating Partnerships $ - $ -
========== ==========
The accompanying notes are an integral part of these statements.
28
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 17
-------------------------
1997 1996
---- ----
Cash flows from operating activities:
Net loss $ (691,571) $(1,066,584)
Adjustments
Distributions from Operating
Partnerships 63 -
Amortization 13,820 13,820
Share of loss from Operating
Partnerships 525,396 886,292
Changes in assets and liabilities
(Decrease) increase in accounts
payable and accrued expenses - -
Decrease (Increase) in accounts
receivable - 26,886
Decrease (Increase) in accounts
payable affiliates 148,225 148,230
---------- ----------
Net cash (used in) provided by
operating activities (4,067) 8,644
---------- ----------
Cash flows from investing activities:
Acquisition costs repaid (paid) for
Operating Partnerships acquired or
to acquire - 3,410
Capital contributions paid to Operating
Partnerships (4,000) (150,370)
Advances to Operating Partnerships - (35,581)
Investments - 628,486
---------- ----------
Net cash (used in) provided by
investing activates (4,000) 445,945
---------- ----------
29
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 17
------------------------
1997 1996
---- ----
Continued
- ---------
Cash flows from financing activity:
Credit adjusters received from
Operating Partnerships - -
---------- ----------
Net cash (used in) provided by
financing activity - -
---------- ----------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (8,067) 454,589
Cash and cash equivalents, beginning 539,185 285,417
---------- ----------
Cash and cash equivalents, ending $ 531,118 $ 740,006
========== ==========
Supplemental schedule of noncash investing
and financing activities:
The Fund has increased its investments
for unpaid capital contributions due to
the Operating Partnerships $ - $ 1,984,974
========== ==========
The accompanying notes are an integral part of these statements.
30
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 18
-------------------------
1997 1996
---- ----
Cash flows from operating activities:
Net loss $ (725,222) $ (766,394)
Adjustments
Distributions from Operating
Partnerships - 2,470
Amortization 10,542 10,542
Share of loss from Operating
Partnerships 615,610 664,669
Changes in assets and liabilities
(Decrease) increase in accounts
payable and accrued expenses 1 -
Decrease (Increase) in accounts
receivable (1,484) 2,538
Decrease (Increase) in accounts
payable affiliates 95,487 95,424
---------- ----------
Net cash (used in) provided by
operating activities (5,066) 9,249
---------- ----------
Cash flows from investing activities:
Acquisition costs repaid (paid) for
Operating Partnerships acquired or
to acquire - 2,465
Capital contributions paid to Operating
Partnerships (38,317) (74,369)
Advances to Operating Partnerships - -
Investments 6,216 453,810
---------- ----------
Net cash (used in) provided by
investing activities (32,101) 381,906
---------- ----------
31
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 18
-----------------------
1997 1996
---- ----
Continued
- ---------
Cash flows from financing activity:
Credit adjusters received from
Operating Partnerships - -
--------- ----------
Net cash (used in) provided by
financing activity - -
--------- ----------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (37,167) 391,155
Cash and cash equivalents, beginning 766,409 529,400
--------- ----------
Cash and cash equivalents, ending $ 729,242 $ 920,555
========= ==========
Supplemental schedule of noncash investing
and financing activities:
The Fund has increased its investments
for unpaid capital contributions due to
the Operating Partnerships $ - $ -
========= =========
The accompanying notes are an integral part of these statements.
32
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 19
-------------------------
1997 1996
---- ----
Cash flows from operating activities:
Net loss $ (685,772) $ (613,322)
Adjustments
Distributions from Operating
Partnerships - -
Amortization 13,045 12,655
Share of loss from Operating
Partnerships 676,877 579,494
Changes in assets and liabilities
(Decrease) increase in accounts
payable and accrued expenses (1) 345
Decrease (Increase) in accounts
receivable (2,243) 15,896
Decrease (Increase) in accounts
payable affiliates 102,837 91,785
---------- ----------
Net cash (used in) provided by
operating activities 104,743 86,853
---------- ----------
Cash flows from investing activities:
Acquisition costs repaid (paid) for
Operating Partnerships acquired or
to acquire - 2,785
Capital contributions paid to Operating
Partnerships (147,623) (1,872,886)
Advances to Operating Partnerships - 1,566,875
Investments 33,499 395,778
---------- ----------
Net cash (used in) provided by
investing activities (114,124) 92,552
---------- ---------
33
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 19
------------------------
1997 1996
---- ----
Continued
- ---------
Cash flows from financing activity:
Credit adjusters received from
Operating Partnerships - -
---------- ----------
Net cash (used in) provided by
financing activity - -
---------- ----------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (9,381) 179,405
Cash and cash equivalents, beginning 1,189,843 2,551,124
---------- ----------
Cash and cash equivalents, ending $ 1,180,462 $ 2,730,529
========== ==========
Supplemental schedule of noncash investing
and financing activities:
The Fund has increased its investments
for unpaid capital contributions due to
the Operating Partnerships $ - $ -
========== ==========
The accompanying notes are an integral part of these statements.
34
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS
June 30, 1997
(Unaudited)
NOTE A - ORGANIZATION
Boston Capital Tax Credit Fund III L.P. (the "Fund") was formed under the laws
of the State of Delaware as of September 19, 1991 for the purpose of
acquiring, holding, and disposing of limited partnership interests in
Operating Partnerships which will acquire, develop, rehabilitate, operate and
own newly constructed, existing or rehabilitated low-income apartment
complexes ("Operating Partnerships"). The general partner of the Fund is
Boston Capital Associates III L.P., a Delaware limited partnership. Boston
Capital Associates, a Massachusetts general partnership, whose only two
partners are Herbert F. Collins and John P. Manning, the principals of Boston
Capital Partners, Inc., is the sole general partner of the general partner.
The limited partner of the general partner is Capital Investment Holdings, a
general partnership whose partners are certain officers and employees of
Boston Capital Partners, Inc., and its affiliates. The Assignor Limited
Partner is BCTC III Assignor Corp., a Delaware corporation which is
wholly-owned by Herbert F. Collins and John P. Manning.
Pursuant to the Securities Act of 1933, the Fund filed a Form S-11
Registration Statement with the Securities and Exchange Commission, effective
January 24, 1992 which covered the offering (the "Public Offering") of the
Fund's beneficial assignee certificates ("BACs") representing assignments of
units of the beneficial interest of the limited partnership interest of the
Assignor Limited Partner. The Fund registered 20,000,000 BACs at $10 per BAC
for sale to the public in one or more series. On September 4, 1993 the Fund
filed an amendment to Form S-11 with the Securities and Exchange Commission
which registered an additional 2,000,000 BACs at $10 per BAC for sale to the
public in one or more series. The registration for the additional BACs became
effective on October 6, 1993. Offers and sales of BACs in Series 15 through
19 of the Fund were completed and the last of the BACs in Series 15, 16, 17,
18 and 19 were issued by the Fund on June 26, 1992, December 28, 1992, June
17, 1993, September 22, 1993, and December 17, 1993, respectively. The Fund
sold 3,870,500 of Series 15 BACs, for a total of $38,705,000; 5,429,402 of
Series 16 BACs, for a total of $54,293,000; 5,000,000 of Series 17 BACs, for a
total of $50,000,000; 3,616,200 of Series 18 BACs, for a total of $36,162,000;
and 4,080,000 of Series 19 BACs, for a total of $40,800,000. The Fund issued
the last BACs in Series 19 on December 17, 1993. This concluded the Public
Offering of the Fund.
35
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1997
(Unaudited)
NOTE B - ACCOUNTING AND FINANCIAL REPORTING POLICIES
The condensed financial statements included herein as of December 31, 1996
and for the three months then ended have been prepared by the Fund, without
audit. The Fund accounts for its investments in Operating Partnerships
using the equity method, whereby the Fund adjusts its investment cost for
its share of each Operating Partnership's results of operations and for any
distributions received or accrued. Costs incurred by the Fund in acquiring
the investments in the Operating Partnerships are capitalized to the
investment account. The Fund's accounting and financial reporting policies
are in conformity with generally accepted accounting principles and include
adjustments in interim periods considered necessary for a fair presentation
of the results of operations. Such adjustments are of a normal recurring
nature.
Investment Securities
- ---------------------
The Fund has determined that all of it's investment securities are to be
categorized as securities available for sale. Securities classified as
available for sale are those debt securities that the Fund purchased that may
be liquidated prior to the maturity date should the need arise. These
securities are carried at approximate fair market value. All of the
investments held by the Fund are tax-exempt municipal bonds.
The amortized cost of securities available for sale as of June 30, 1997
by contractual maturity are as follows:
Amortized
Cost
-----------
Due in one year or less $1,345,933
Due after one year -
---------
Total $1,345,933
=========
The fair market value of the securities is $1,343,447. The difference being
an unrealized loss on securities available for sale of $2,486, as of
June 30, 1997.
36
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1997
(Unaudited)
NOTE - B ACCOUNTING AND FINANCIAL REPORTING POLICIES - CONTINUED
Amortized cost is the face value of the securities and any unamortized premium
or discount. The balance sheet reflects the fair market value under
investments.
Amortization
- ------------
The Fund amortizes organizational costs over 60 months. As of June 30, 1997
and 1996 the Fund has accumulated organization amortization totaling
$752,527 and $580,127 respectively. The breakdown of accumulated organization
amortization within the Fund as of June 30, 1997 and 1996 is as follows:
1997 1996
---- ----
Series 15 $167,077 $147,403
Series 16 194,437 149,806
Series 17 165,287 125,558
Series 18 108,458 77,704
Series 19 117,268 79,656
------- -------
$752,527 $580,127
======= =======
On July 1, 1995, the Fund began amortizing unallocated acquisition costs over
330 months from April 1, 1995. As of June 30, 1997 the Fund has accumulated
unallocated acquisition amortization totalling $152,753. The breakdown
of accumulated unallocated acquisition amortization within the fund as of
June 30, 1997 for Series 15, Series 16, Series 17, Series 18, and Series 19
is $23,751, $37,920, $35,116, $25,810 and $30,156, respectively.
NOTE C - RELATED PARTY TRANSACTIONS
The Fund has entered into several transactions with various affiliates of the
general partner, including Boston Capital Partners, Inc., and Boston Capital
Asset Management Limited Partnership (formerly Boston Capital Communications
Limited Partnership) as follows:
Boston Capital Partners, Inc. is entitled to asset acquisition fees for
selecting, evaluating, structuring, negotiating, and closing the Fund's
acquisition of interests in the Operating Partnerships. Prior to the quarter
ended June 30, 1997 all series had completed payment of all acquisition
fees due to Boston Capital Partners, Inc.
37
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1997
(Unaudited)
NOTE C - RELATED PARTY TRANSACTIONS - CONTINUED
An annual fund management fee based on .5 percent of the aggregate cost of all
apartment complexes owned by the Operating Partnerships, has been accrued to
Boston Capital Asset Management Limited Partnership (formerly Boston Capital
Communications Limited Partnership). The fund management fees accrued for the
quarter ended June 30, 1997 and 1996 are as follows:
1997 1996
---- ----
Series 15 $137,013 $138,004
Series 16 172,995 172,968
Series 17 148,224 148,230
Series 18 95,487 95,424
Series 19 102,837 91,785
------- -------
$656,556 $646,411
======= =======
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS
At June 30, 1997 and 1996, the Fund had limited partnership interests in
241 Operating Partnerships which own or are constructing apartment complexes.
The breakdown of Operating Partnerships within the Fund at June 30, 1997
and 1996 is as follows:
1997 1996
---- ----
Series 15 68 68
Series 16 64 65
Series 17 49 49
Series 18 34 34
Series 19 26 26
--- ---
241 242
=== ===
38
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1997
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS - CONTINUED
Under the terms of the Fund's investment in each Operating Partnership, the
Fund is required to make capital contributions to the Operating Partnerships.
These contributions are payable in installments over several years upon each
Operating Partnership achieving specified levels of construction and/or
operations. The contributions payable at June 30, 1997 and 1996 are as
follows:
1997 1996
---- ----
Series 15 $ 34,528 $ 189,312
Series 16 146,817 329,879
Series 17 1,840,259 2,157,418
Series 18 717,635 812,411
Series 19 684,180 5,374,706
--------- ----------
$3,423,419 $ 8,863,726
========= ==========
The Fund's fiscal year ends March 31st of each year, while all the Operating
Partnerships' fiscal years are the calendar year. Pursuant to the provisions
of each Operating Partnership Agreement, financial results for each of the
Operating Partnerships are provided to the Fund within 45 days after the close
of each Operating Partnership's quarterly period. Accordingly, the current
financial results available for the Operating Partnerships are for the three
months ended March 31, 1997.
39
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1997
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 15
---------------------------
1997 1996
---- ----
Revenues
Rental $ 2,308,177 $ 2,244,698
Interest and other 91,331 117,134
--------- ---------
2,399,508 2,361,832
--------- ---------
Expenses
Interest 725,350 789,249
Depreciation and amortization 945,223 1,019,191
Operating expenses 1,543,974 1,376,981
--------- ---------
3,214,547 3,185,421
--------- ---------
NET LOSS $ (815,039) $ (823,589)
========= =========
Net loss allocated to Boston
Capital Tax Credit Fund
III L.P. $ (749,269) $ (800,082)
========= =========
Net loss allocated to other
partners $ (8,150) $ (8,236)
========= =========
Net loss suspended $ (57,620) $ (15,271)
========= =========
The Fund accounts for its investments using the equity method of accounting.
Under the equity method of accounting, the partnership adjusts its investment
cost for its share of each Operating Partnership's results of operations and
for any distributions received or accrued. However, the Partnership
recognizes individual operating losses only to the extent of capital
contributions. Excess losses are suspended for use in future years to offset
excess income.
40
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1997
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 16
--------------------------
1997 1996
---- ----
Revenues
Rental $ 3,136,950 $ 2,971,994
Interest and other 243,004 228,830
---------- ----------
3,379,954 3,200,824
---------- ----------
Expenses
Interest 1,255,106 1,088,390
Depreciation and amortization 1,101,563 1,291,126
Operating expenses 1,998,317 1,761,618
---------- ----------
4,354,986 4,141,134
---------- ----------
NET LOSS $ (975,032) $ (940,310)
========== ==========
Net loss allocated to Boston
Capital Tax Credit Fund
III L.P. $ (965,282) $ (930,907)
========== ==========
Net loss allocated to other
partners $ (9,750) $ (9,403)
========== ==========
41
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1997
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three Months ended March 31,
(Unaudited)
Series 17
--------------------------
1997 1996
Revenues ---- ----
Rental $ 3,379,339 $ 2,671,852
Interest and other 123,355 92,198
---------- ---------
3,502,694 2,764,050
---------- ---------
Expenses
Interest 1,180,312 1,126,590
Depreciation and amortization 1,008,431 955,759
Operating expenses 1,844,653 1,576,946
---------- ---------
4,033,396 3,659,295
---------- ---------
NET LOSS $ (530,702) $ (895,245)
========== =========
Net loss allocated to Boston
Capital Tax Credit Fund
III L.P. $ (525,396) $ (886,292)
========== =========
Net loss allocated to other
partners $ (5,306) $ (8,953)
========== =========
42
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1997
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 18
----------------------------
1997 1996
Revenues ---- ----
Rental $ 1,518,521 $1,426,154
Interest and other 70,593 54,444
--------- ---------
1,589,114 1,480,598
--------- ---------
Expenses
Interest 564,891 531,238
Depreciation and amortization 727,004 669,337
Operating expenses 919,048 951,406
--------- ---------
2,210,943 2,151,981
--------- ---------
NET LOSS $ (621,829) $ (671,383)
========= =========
Net loss allocated to Boston
Capital Tax Credit Fund
III L.P. $ (615,610) $ (664,669)
========= =========
Net loss allocated to other
partners $ (6,219) $ (6,714)
========= =========
43
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1997
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 19
--------------------------
1997 1996
Revenues ---- ----
Rental $ 2,168,507 $ 1,923,243
Interest and other 65,317 52,937
--------- ---------
2,233,824 1,976,180
--------- ---------
Expenses
Interest 937,920 780,296
Depreciation and amortization 725,461 555,958
Operating expenses 1,254,158 1,225,273
--------- ---------
2,917,539 2,561,527
--------- ---------
NET LOSS $ (683,715) $ (585,347)
========= =========
Net loss allocated to Boston
Capital Tax Credit Fund
III L.P. $ (676,877) $ (579,494)
========= =========
Net loss allocated to other
partners $ (6,838) $ (5,853)
========= =========
44
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1997
(Unaudited)
NOTE D - INVESTMENT IN OPERATING PARTNERSHIPS-CONTINUED
In the prior year an Operating Partnership was admitted to Series 16 without
an initial outlay of capital. This short form admission was an agreement
between the Operating Partnership's General Partner and the General Partner,
that upon further due diligence, the Fund had the option to purchase the
Operating Partnership if it was in the best interest of the Fund. Subsequent
studies indicated that the Operating Partnership would not generate the
originally anticipated amount of credits, and the General Partner elected to
have the Fund's interest repurchased. As a result the number of Operating
Partnerships has decreased by one for Series 16 from the quarter ended
June 30, 1996.
When comparing the results of operations from the operating partnerships for
the three months ended June 30, 1997 and June 30, 1996 for Series 17 and 19,
variances, some material in nature, exist. The variances are the result of a
number of factors including an increase in the number of Operating
Partnerships which have completed construction, and an increase in the number
which have completed the lease-up phase. Smaller variances are anticipated in
future years since the Fund has finished acquiring Operating Partnerships,
construction is complete on all of the Operating Partnerships and most have
completed the lease-up phase.
NOTE E - TAXABLE LOSS
The Fund's taxable loss for the fiscal year ended March 31, 1998 is expected
to differ from its loss for financial reporting purposes. This is primarily
due to accounting differences in depreciation incurred by the Operating
Partnerships and also differences between the equity method of accounting
and the IRS accounting methods. No provision or benefit for income taxes has
been included in these financial statements since taxable income or loss
passes through to, and is reportable by, the partners and assignees
individually.
45
Item 2. Management's Discussions and Analysis of Financial Condition and
Results of Operations
Liquidity
- ---------
The Fund's primary source of funds is the proceeds of its Public Offering.
Other sources of liquidity will include (i) interest earned on capital
contributions held pending investment and on Working Capital Reserves and (ii)
cash distributions from operations of the operating Partnerships in which the
Fund has and will invest. Interest income is expected to decrease over the
life of the Fund as capital contributions are paid to the Operating
Partnerships and Working Capital Reserves are expended. The Fund does not
anticipate significant cash distributions from operations of the Operating
Partnerships.
The Fund is currently accruing the fund management fee. Pursuant to the
Partnership Agreement, such liabilities will be deferred until the Fund
receives sales of refinancing proceeds from Operating Partnerships which will
be used to satisfy such liabilities. The Fund's working capital and sources
of liquidity coupled with affiliated party liability accruals allow sufficient
levels of liquidity to meet the third party obligations of the Fund. The
Fund is currently unaware of any trends which would create insufficient
liquidity to meet future third party obligations.
Capital Resources
- -----------------
The Fund offered BACs in a Public Offering declared effective by the
Securities and Exchange Commission on January 24, 1992. The Fund received
$38,705,000, $54,293,000, $50,000,000, $36,162,000 and $40,800,000
representing 3,870,500, 5,429,402, 5,000,000, 3,616,200 and 4,080,000 BACs
from investors admitted as BAC Holders in Series 15, Series 16, Series 17,
Series 18, and Series 19, respectively. The Public Offering was completed on
December 17, 1993.
(Series 15) The Fund commenced offering BACs in Series 15 on January 24,
1992. Offers and sales of BACs in Series 15 were completed on June 26, 1992.
The Fund has committed proceeds to pay initial and additional installments of
capital contributions to 68 Operating Partnerships in the amount of
$28,257,701.
During the quarter ended June 30, 1997, $145,064 of Series 15 net offering
proceeds had been used to pay capital contributions. Series 15 net offering
proceeds in the amount of $34,528 remain to be used by the Fund to pay
remaining capital contributions to the Operating Partnerships that Series 15
has invested in as of June 30, 1997.
(Series 16) The Fund commenced offering BACs in Series 16 on July 13, 1992.
Offers and sales of BACs in Series 16 were completed on December 28, 1992.
The Fund has committed proceeds to pay initial and additional installments of
capital contributions to 64 Operating Partnerships in the amount of
$39,579,774.
46
During the quarter ended June 30, 1997, $8,414 of Series 16 net
offering proceeds had been used to pay capital contributions. Series 16 net
offering proceeds in the amount of $146,817 remain to be used by the Fund to
pay remaining capital contributions to the Operating Partnerships that Series
16 has invested in as of June 30, 1997.
(Series 17) The Fund commenced offering BACs in Series 17 on January 24,
1993. Offers and sales of BACs in Series 17 were completed on June 17, 1993.
The Fund has committed proceeds to pay initial and additional installments of
capital contributions to 49 Operating Partnerships in the amount of
$36,538,204.
During the quarter ended June 30, 1997, $4,000 of Series 17 net offering
proceeds had been used to pay capital contributions. Series 17 net offering
proceeds in the amount of $531,118 remain to be used by the Fund to pay
remaining capital contributions to the Operating Partnerships that Series 17
has invested in as of June 30, 1997.
(Series 18) The Fund commenced offering BACs in Series 18 on June 17, 1993.
Offers and sales of BACs in Series 18 were completed on September 22, 1993.
The Fund has committed proceeds to pay initial and additional installments of
capital contributions to 34 operating Partnerships in the amount of
$26,442,202.
During the quarter ended June 30, 1997 $38,317 of Series 18 net offering
proceeds had been used to pay capital contributions. Series 18 net offering
proceeds in the amount of $717,635 remain to be used by the Fund to pay
remaining capital contributions to the Operating Partnerships that Series 18
has invested in as of June 30, 1997.
(Series 19). The Fund commenced offering BACs in Series 19 on October 8,
1993. Offers and sales of BACs in Series 19 were completed on December 17,
1993. The Fund has committed proceeds to pay initial and additional
installments of capital contributions to 26 Operating Partnerships in the
amount of $29,614,506.
During the quarter ended June 30, 1997 $147,623 of Series 19 net
offering proceeds had been used to pay capital contributions. Series 19 net
offering proceeds in the amount of $684,180 remain to be used by the Fund to
pay remaining capital contributions to the Operating Partnerships that Series
19 has invested in as of June 30, 1997.
Results of Operations
- ---------------------
As of June 30, 1997 and 1996 the Fund held limited partnership interests
in 241 Operating Partnerships. In each instance the Apartment Complex
owned by the applicable Operating Partnership is eligible for the Federal
Housing Tax Credit. Occupancy of a unit in each Apartment Complex which
initially complied with the Minimum Set-Aside Test (i.e., occupancy by tenants
47
with incomes equal to no more than a certain percentage of area median income)
and the Rent Restriction Test (i.e., gross rent charged tenants does not
exceed 30% of the applicable income standards) is referred to hereinafter as
"Qualified Occupancy." Each of the Operating Partnerships and each of the
respective Apartment Complexes are described more fully in the Prospectus or
applicable report on Form 8-K. The General Partner believes that there is
adequate casualty insurance on the properties.
The results of operations for future periods are likely to vary from those
for the period ended June 30, 1997. The losses from Operating
Partnerships reported for this interim period are not necessarily indicative
of the results anticipated for future periods as some of these Operating
Partnerships are in the lease-up phase.
The Fund incurred a fund management fee to Boston Capital Asset Management
Limited Partnerships (formerly Boston Capital Communications Limited
Partnership) in an amount equal to .5 percent of the aggregate cost of
the apartment complexes owned by the Operating Partnerships, less the amount
of certain asset management and reporting fees paid by the Operating
Partnerships. The fund management fees incurred for the quarter ended
June 30, 1997 for Series 15, Series 16, Series 17, Series 18 and Series
19 were $125,388, $169,345, $141,843, $94,632, and $0, respectively.
The Fund's investment objectives do not include receipt of significant cash
distributions from the Operating Partnerships in which it has invested or
intends to invest. The Fund's investments in Operating Partnerships have been
and will be made principally with a view towards realization of Federal
Housing Tax Credits for allocation to its partners and BAC holders.
(Series 15) As of June 30, 1997 and 1996, the average qualified
occupancy for the series was 100% and 99.2%, respectively. The series had a
total of 68 properties at June 30, 1997 all of which were at 100%
qualified occupancy.
For the three months being reported Series 15 reflects a net loss from
Operating Partnerships of $815,039. When adjusted for depreciation,
which is a non-cash item, the Operating Partnerships reflect positive
operations of $130,184. This is an interim period estimate; it is not
necessarily indicative of the final year end results.
48
California Investors VII Limited Partnership was operating at a deficit due
to higher than projected operating expenses and a competitive rental market.
Operating shortfalls caused the accrual of accounts payable. The Operating
Partnership closed on a debt refinancing in the fourth quarter of 1996. The
favorable interest rate enabled the Operating Partnership to payoff the
accrued accounts payable and reduced the monthly debt payment. The
refinancing should also create increased operating stability for the Operating
Partnership.
The new management company at Hidden Cove continues to make improvements to
the tenant base and occupancy, which stands at 92% at June 30, 1997, however,
the property is still generating operating deficits. As such, the management
company is implementing cost saving measures to mitigate these deficits and
stabilize the property.
The Operating General Partner of School Street Limited Partnership I pledged
his general partnership interest in the Operating Partnership as collateral
for another loan. As this was a violation of the terms of the partnership
agreement, the Operating General Partner was removed and replaced. Operations
of the property are stable.
(Series 16) As of June 30, 1997 and 1996, the average qualified occupancy
for the series was 99.6% and 100%, respectively. The series had a total of
64 properties at June 30, 1997. Out of the total 62 had 100% qualified
occupancy.
For the three months being reported Series 16 reflects a net loss from
Operating Partnerships of $975,032. When adjusted for depreciation, which
is a non-cash item, the Operating Partnerships reflect positive operations of
$126,531. This is an interim period estimate; it is not necessarily
indicative of the final year end results.
The Operating General Partner of Mariner's Pointe Limited Partnership I and
Mariner's Pointe Limited Partnership II pledged his general partnership
interest to an unaffiliated lending institution in violation of the
partnership agreement. The management agent, an affiliate of the Operating
General Partner, has been replaced. Legal research is being conducted in
order to determine the best course of action regarding the General Partner
interests.
(Series 17) As of June 30, 1997 and 1996, the average qualified
occupancy for the series was 99.7% and 99.6%, respectively. The series had a
total of 49 properties at June 30, 1997. Out of the total 48 had 100%
qualified occupancy.
For the three months being reported Series 17 reflects a net loss from
Operating Partnerships of $530,702. When adjusted for depreciation, which
is a non-cash item, the Operating Partnerships reflect positive operations of
$477,729. This is an interim period estimate; it is not necessarily indicative
of the final year end results.
49
Annadale Housing Partners has reported net losses due to operational issues
associated with the property. The Operating Partnership has stabilized
since the completion of rehabilitation and occupancy has shown steady
improvement. Occupancy is at 91% as of June 30, 1997.
California Investors VII Limited Partnership was operating at a deficit due
to higher than projected operating expenses and a competitive rental market.
Operating shortfalls caused the accrual of accounts payable. The Operating
Partnership closed on a debt refinancing in the fourth quarter of 1996. The
favorable interest rate enabled the Operating Partnership to payoff the
accrued accounts payable and reduced the monthly debt payment. The
refinancing should also create increased operating stability for the Operating
Partnership.
The property owned by California Investors VI L.P. has experienced a reduction
in occupancy, which stands at 80% at June 30, 1997. The management company
is increasing their marketing efforts, as well as implementing capital
improvements to the property to attract tenants. These efforts should improve
occupancy and stabilize the property.
(Series 18) As of June 30, 1997 and 1996 the average qualified occupancy
for the series was 100% and 100% respectively. The series had a total of 34
properties at June 30, 1997 all of which were at 100% qualified
occupancy.
For the three months being reported Series 18 reflects a net loss from
Operating Partnerships of $621,829. When adjusted for depreciation, which
is a non-cash item, the Operating Partnerships reflect positive operations of
$105,165. This is an interim period estimate; it is not necessarily
indicative of the final year end results.
In August 1996 the General Partner was notified that Virginia Avenue Housing
Limited Partnership was named as defendant in a land encroachment complaint.
Efforts by the Operating General Partner to settle the complaint have been
unsuccessful. At this time, the Investment Limited Partner is examining the
possibility of Operating General Partner removal and the pursuit of a separate
settlement on behalf of the Operating Partnership.
(Series 19) As of June 30, 1997 and 1996 the average qualified occupancy
for the series was 100% and 98.3% respectively. The series had a total of 26
properties at June 30, 1997. All of which were at 100% qualified
occupancy.
For the three months being reported Series 19 reflects a net loss from
Operating Partnerships of $683,715. When adjusted for depreciation, which
is a non-cash item, the Operating Partnerships reflect positive operations of
$41,746. This is an interim period estimate; it is not necessarily indicative
of the final year end results.
50
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
a) Agreement of Limited Partnership of Annadale Housing
Partners (incorporated by reference from Registrants
current report on form 8-k as filed with the Securities
and Exchange Commission on April 4, 1997.)
b) Agreement of Limited Partnership of Jeremy Associated
Limited Partnership (Incorporated by reference from
registrants current report on form 8-k as filed with
the Securities and Exchange Commission on April 4, 1997.)
51
SIGNATURES
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 hereunto duly authorized.
BOSTON CAPITAL TAX CREDIT
FUND III L.P.
By: Boston Capital Associates III L.P.
By: C&M Associates d/b/a
Boston Capital Associates
Date: August 20, 1997 By: /s/ John P. Manning
-------------------
John P. Manning,
Partner & Principal Financial
Officer
52
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<NAME> BOSTON CAPITAL TAX CREDIT FUND III L.P.
<S> <C>
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<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> JUN-30-1997
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