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, 1998
-----------------
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, 1998
-----------------------------------------------
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,
1998
1998
(Unaudited)
(Audited)
ASSETS ------------
- ------------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $117,113,785
$121,032,270
OTHER ASSETS
Cash and cash equivalents 1,644,220
1,653,522
Investments 2,852,127
2,970,867
Notes receivable 2,056,333
2,056,333
Deferred acquisition costs,
net of accumulated amortization (Note B) 1,656,139
1,681,137
Organization costs, net of
accumulated amortization (Note B) 40,334
67,358
Other assets 1,905,168
1,728,300
-----------
- -----------
$127,268,106
$131,189,787
===========
===========
LIABILITIES
Accounts payable & accrued
expenses (Note C) $ 11,428 $
4,553
Accounts payable affiliates 9,485,760
8,703,412
Capital contributions payable (Note D) 2,571,349
2,726,063
-----------
- -----------
12,068,537
11,434,028
-----------
- -----------
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, 1998 115,937,234
120,447,861
General Partner (737,665)
(692,102)
-----------
- -----------
115,199,569
119,755,759
-----------
- -----------
$127,268,106
$131,189,787
===========
===========
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,
1998
1998
(Unaudited)
(Audited)
ASSETS -----------
- ---------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $15,647,122
$16,246,406
OTHER ASSETS
Cash and cash equivalents 154,593
156,717
Investments 125,000
125,000
Notes receivable 110,000
110,000
Deferred acquisition costs,
net of accumulated amortization (Note B) 254,907
257,535
Organization costs, net of
accumulated amortization (Note B) -
- -
Other assets 573,708
473,086
----------
- ----------
$16,865,330
$17,368,744
==========
==========
LIABILITIES
Accounts payable and accrued
expenses (Note C) $ 3,150 $
1,145
Accounts payable affiliates 2,596,441
2,360,745
Capital contributions payable (Note D) 32,922
32,922
----------
- ----------
2,632,513
2,394,812
----------
- ----------
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, 1998 14,423,160
15,156,864
General Partner (190,343)
(182,932)
----------
- ----------
14,232,817
14,973,932
----------
- ----------
$16,865,330
$17,368,744
==========
==========
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,
1998
1998
(Unaudited)
(Audited)
ASSETS -----------
- ---------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $29,695,515
$30,777,843
OTHER ASSETS
Cash and cash equivalents 225,758
199,558
Investments 1,000,758
1,000,758
Notes receivable -
- -
Deferred acquisition costs
net of accumulated amortization (Note B) 408,658
412,871
Organization costs, net of
accumulated amortization (Note B) -
- -
Other assets 86,263
72,210
----------
- ----------
$31,416,952
$32,463,240
==========
==========
LIABILITIES
Accounts payable & accrued
expenses (Note C) $ 494 $
- -
Accounts payable affiliates 2,408,081
2,235,091
Capital contributions payable (Note D) 145,311
145,311
----------
- ----------
2,553,886
2,380,402
----------
- ----------
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, 1998 29,041,044
30,248,618
General Partner (177,978)
(165,780)
Unrealized gain (loss) on securities
available for sale, net -
- -
----------
- ----------
28,863,066
30,082,838
----------
- ----------
$31,416,952
$32,463,240
==========
==========
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,
1998
1998
(Unaudited)
(Audited)
ASSETS -----------
- ---------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $26,797,065
$27,762,778
OTHER ASSETS
Cash and cash equivalents 399,189
388,024
Investments -
- -
Notes receivable 1,409,982
1,409,982
Deferred acquisition costs
net of accumulated amortization (Note B) 361,535
373,197
Organization costs, net of
accumulated amortization (Note B) 872
10,804
Other assets 1,154,797
1,121,814
----------
- ----------
$30,123,440
$31,066,599
==========
==========
LIABILITIES
Accounts payable & accrued
expenses (Note C) $ 2,082 $
- -
Accounts payable affiliates 2,334,642
2,159,306
Capital contributions payable (Note D) 1,367,195
1,367,195
----------
- ----------
3,703,919
3,526,501
----------
- ----------
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, 1998 26,585,005
27,694,376
General Partner (165,484)
(154,278)
----------
- ----------
26,419,521
27,540,098
----------
- ----------
$30,123,440
$31,066,599
==========
==========
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,
1998
1998
(Unaudited)
(Audited)
ASSETS ------------
- ----------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $20,414,613
$20,921,603
OTHER ASSETS
Cash and cash equivalents 264,168
301,444
Investments 349,000
474,000
Notes receivable 536,351
536,351
Deferred acquisition costs,
new of accumulated amortization (Note B) 277,716
280,569
Organization costs, net of
accumulated amortization (Note B) 11,083
18,772
Other assets 62,740
44,622
----------
- ----------
$21,915,671
$22,577,361
==========
==========
LIABILITIES
Accounts payable & accrued
expenses (Note C) $ 294 $
- -
Accounts payable affiliates 1,143,528
1,048,041
Capital contributions payable (Note D) 562,921
717,635
----------
- ----------
1,706,743
1,765,676
----------
- ----------
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, 1998 20,317,066
20,913,795
General Partner (108,138)
(102,110)
----------
- ----------
20,208,928
20,811,685
----------
- ----------
$21,915,671
$22,577,361
==========
==========
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,
1998
1998
(Unaudited)
(Audited)
ASSETS ------------
- ----------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $24,559,470
$25,323,640
OTHER ASSETS
Cash and cash equivalents 600,512
607,779
Investments 1,377,369
1,371,109
Notes receivables -
- -
Deferred acquisition costs,
net of accumulated amortization (Note B) 353,323
356,965
Organization costs, net of
accumulated amortization (Note B) 28,379
37,782
Other assets 27,660
16,568
----------
- ----------
$26,946,713
$27,713,843
==========
==========
LIABILITIES
Accounts payable & accrued
expenses (Note C) $ 5,408 $
3,408
Accounts payable affiliates 1,003,068
900,229
Capital contributions payable (Note D) 463,000
463,000
----------
- ----------
1,471,476
1,366,637
----------
- ----------
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, 1998 25,570,959
26,434,208
General Partner (95,722)
(87,002)
----------
- ----------
25,475,237
26,347,206
----------
- ----------
$26,946,713
$27,713,843
==========
==========
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)
1998 1997
---- ----
Income
Interest income $ 76,746 $ 40,067
---------- ----------
Share of loss from Operating
Partnerships (Note D) (3,909,238)
(3,532,434)
---------- ----------
Expenses
Professional fees 35,385 16,337
Fund management fee (Note C) 560,837 531,208
Amortization 52,024 55,405
General and administrative expenses 75,452 62,419
---------- ----------
723,698 665,369
---------- ----------
NET LOSS $(4,556,190)
$(4,157,736)
========== ==========
Net loss allocated to limited
partners $(4,510,627)
$(4,116,159)
========== ==========
Net loss allocated general
partner $ (45,563) $
(41,577)
========== ==========
Net loss per BAC $ (1.02) $
(.95)
========== ==========
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
- -----------------------
1998
1997
----
- ----
Income
Interest income $ 2,631 $
1,593
--------
- --------
Share of loss from Operating
Partnerships (598,423)
(749,269)
--------
- --------
Expenses
Professional fees -
2,962
Fund management fee (Note C) 116,938
125,388
Amortization 2,628
2,628
General and administrative expenses 25,757
10,774
--------
- --------
145,322
141,752
--------
- --------
NET LOSS $(741,115)
$(889,428)
========
========
Net loss allocated to limited
partners $(733,704)
$(880,534)
========
========
Net loss allocated to general
partner $ (7,411) $
(8,894)
========
========
Net loss per BAC $ (.19) $
(.23)
========
========
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
- ------------------------
1998
1997
----
- ----
Income
Interest income $ 29,750 $
8,862
--------
- --------
Share of loss from Operating
Partnerships (1,081,720)
(965,282)
--------
- --------
Expenses
Professional fees 13,793
8,077
Fund management fee (Note C) 136,688
169,345
Amortization 13,107
15,370
General and administrative expenses 4,214
16,531
--------
- --------
167,802
209,323
--------
- --------
NET LOSS $(1,219,772)
$(1,165,743)
=========
========
Net loss allocated to limited
partners $(1,207,574)
$(1,154,086)
=========
========
Net loss allocated to general
partner $ (12,198) $
(11,657)
=========
========
Net loss per BAC $ (.22) $
(.21)
=========
========
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
- ------------------------
1998
1997
----
- ----
Income
Interest income $ 1,746 $
4,158
-------- --
- --------
Share of loss from Operating
Partnerships (957,936)
(525,396)
--------
- ----------
Expenses
Professional fees 12,819
1,737
Fund management fee (Note C) 118,167
141,843
Amortization 21,595
13,820
General and administrative expenses 11,806
12,933
--------
- ----------
164,387
170,333
--------
- ----------
NET LOSS $(1,120,577) $
(691,571)
=========
==========
Net loss allocated to limited
partners $(1,109,371) $
(684,655)
=========
==========
Net loss allocated to general
partner $ (11,206) $
(6,916)
=========
==========
Net loss per BAC $ (.22) $
(.14)
========
==========
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
- ----------------------
1998
1997
----
- ----
Income
Interest income $ 18,255 $
7,242
--------
- --------
Share of loss from Operating
Partnerships (506,989)
(615,610)
--------
- --------
Expenses
Professional fees -
1,539
Fund management fee (Note C) 88,707
94,632
Amortization 10,542
10,542
General and administrative expenses 14,774
10,141
--------
- --------
114,023
116,854
--------
- --------
NET LOSS $(602,757)
$(725,222)
========
========
Net loss allocated to limited
partners $(596,729)
$(717,970)
========
========
Net loss allocated to general
partner $ (6,028) $
(7,252)
========
========
Net loss per BAC $ (.17) $
(.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
- ----------------------
1998
1997
----
- ----
Income
Interest income $ 24,364 $
18,212
--------
- --------
Share of loss from Operating
Partnerships (764,170)
(676,877)
--------
- --------
Expenses
Professional fees 8,773
2,022
Fund management fee (Note C) 100,337
- -
Amortization 13,045
13,045 General and administrative expenses 10,008
12,040
--------
- --------
132,163
27,107
--------
- --------
NET LOSS $(871,969)
$(685,772)
========
========
Net loss allocated to limited
partners $(863,249)
$(678,914)
========
========
Net loss allocated to general
partner $ (8,720) $
(6,858)
========
========
Net loss per BAC $ (.22) $
(.17)
========
========
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, 1998
(Unaudited)
Unrealized
gain (loss) on
securities
available
General for
Assignees Partner sale, net
Total
--------- ------- ---------
- -----
Partners' capital
(deficit)
April 1, 1998 $120,447,861 $(692,102) $ -
$119,755,759
Net change in
unrealized gain
(loss) on secur-
ities available
for sale - - -
- -
Net income (loss) (4,510,627) (45,563) -
(4,556,190)
----------- -------- ---------
- -----------
Partners' capital
(deficit),
June 30, 1998 $115,937,234 $(737,665) $ -
$115,199,569
=========== ======== ==========
===========
The accompanying notes are an integral part of these
statements.
13
Boston Capital Tax Credit Fund III L.P.
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
Three Months Ended June 30, 1998
(Unaudited)
Unrealized
gain (loss) on
securities
available
General for
Assignees Partner sale,net
Total
--------- ------- --------
- -----
Series 15
- ---------
Partners' capital
(deficit),
April 1, 1998 $15,156,864 $ (182,932) $ -
$14,973,932
Net change in
unrealized gain
(loss) on secur-
ities available
for sale - - -
- -
Net income (loss) (733,704) (7,411) -
(741,115)
---------- -------- ----------
- ----------
Partners' capital
(deficit),
June 30, 1998 $14,423,160 $ (190,343) $ -
$14,232,817
========== ======== ==========
==========
Series 16
- ---------
Partners' capital
(deficit),
April 1, 1998 $30,248,618 $ (165,780) $ -
$30,082,838
Net change in
unrealized gain
(loss) on secur-
ities available
for sale - - -
- -
Net income (loss) (1,207,574) (12,198) -
(1,219,772)
---------- -------- ---------
- ----------
Partners' capital
(deficit),
June 30, 1998 $29,041,044 $(177,978) $ -
$28,863,066
========== ======== =========
==========
The accompanying notes are an integral part of these
statements.
14
Boston Capital Tax Credit Fund III L.P.
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
Three Months Ended June 30, 1998
(Unaudited)
Unrealized
gain (loss) on
securities
available
General for
Assignees Partner sale,net
Total
--------- ------- --------
- -----
Series 17
- ---------
Partners' capital
(deficit),
April 1, 1998 $27,694,376 $(154,278) $ -
$27,540,098
Net change in
unrealized gain
(loss) on secur-
ities available
for sale - - -
- -
Net income (loss) (1,109,371) (11,206) -
(1,120,577)
---------- -------- ---------
- ----------
Partners' capital
(deficit),
June 30, 1998 $26,585,005 $(165,484) $ -
$26,419,521
========== ======== =========
==========
Series 18
- ---------
Partners' capital
(deficit),
April 1, 1998 $20,913,795 $(102,110) $ -
$20,811,685
Net change in
unrealized gain
(loss) on secur-
ities available
for sale - - -
- -
Net income (loss) (596,729) (6,028) -
(602,757)
---------- ------- ---------
- ----------
Partners' capital
(deficit),
June 30, 1998 $20,317,066 $(108,138) $ -
$20,208,928
========== ======= =========
==========
The accompanying notes are an integral part of these
statements.
15
Boston Capital Tax Credit Fund III L.P.
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
Three Months Ended June 30, 1998
(Unaudited)
Unrealized
gain (loss) on
securities
available
General for
Assignees Partner sale,net
Total
--------- ------- --------
- -----
Series 19
- ---------
Partners' capital
(deficit),
April 1, 1998 $26,434,208 $ (87,002) $ -
$26,347,206
Net change in
unrealized gain
(loss) on secur-
ities available
for sale - - -
- -
Net income (loss) (863,249) (8,720) -
(871,969)
---------- -------- ----------
- ----------
Partners' capital
(deficit),
June 30, 1998 $25,570,959 $ (95,722) $ -
$25,475,237
========== ======== ==========
==========
The accompanying notes are an integral part of these
statements.
16
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
1998
1997
----
- ----
Cash flows from operating activities:
Net loss $ (4,556,190) $
(4,157,736)
Adjustments
Distributions from Operating
Partnerships 9,244
245
Amortization 52,024
55,405
Share of loss from Operating
Partnerships 3,909,238 3,532,434
Changes in assets and liabilities
(Decrease) Increase in accounts
payable and accrued expenses 4,793
5,116
Decrease (Increase) in accounts
receivable (77,932)
(3,965)
Decrease (Increase) in accounts
payable affiliates 784,429
656,557
----------
- ----------
Net cash (used in) provided by
operating activities 125,606
88,056
----------
- ----------
Cash flows from investing activities:
Acquisition costs repaid (paid) for
Operating Partnerships acquired or
to acquire -
- -
Capital contributions paid to
Operating Partnerships (154,714)
(343,418)
Advances to Operating Partnerships (98,934)
- -
Investments 118,740
49,862
---------- -
- ---------
Net cash (used in) provided by
investing activities 134,908
(293,556)
----------
- ----------
17
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
1998
1997
----
- ----
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 (9,302)
205,500
----------
- ----------
Cash and cash equivalents, beginning 1,653,522
3,925,706
----------
- ----------
Cash and cash equivalents, ending $ 1,644,220 $
3,720,206
==========
==========
Supplemental schedule of noncash
investing and financing activates:
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.
18
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 15
- -------------------------
1998
1997
----
- ----
Cash flows from operating activities:
Net loss $ (741,115) $
(889,428)
Adjustments
Distributions from Operating
Partnerships 861
- -
Amortization 2,628
2,628
Share of loss from Operating
Partnerships 598,423
749,269
Changes in assets and liabilities
(Decrease) increase in accounts
payable and accrued expenses 2,005
1
Decrease (Increase) in accounts
receivable (1,688)
- -
Decrease (Increase) in accounts
payable affiliates 235,696
137,013
-------- -
- --------
Net cash (used in) provided by
operating activities 96,810
(517)
-------- -
- --------
Cash flows from investing activities:
Acquisition costs repaid (paid) for
Operating Partnerships acquired or
to acquire -
- -
Capital contributions paid to Operating
Partnerships -
(145,064)
Advances to Operating Partnerships (98,934)
- -
Investments -
- -
-------- -
- --------
Net cash (used in) provided by
investing activities (98,934)
(145,064)
-------- -
- --------
19
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 15
- ----------------------
1998
1997
----
- ----
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 (2,124)
(145,581)
Cash and cash equivalents, beginning 156,717
246,845
--------
- --------
Cash and cash equivalents, ending $ 154,593 $
101,264
========
========
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.
20
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 16
- -------------------------
1998
1997
----
- ----
Cash flows from operating activities:
Net loss $(1,219,772)
$(1,165,743)
Adjustments
Distributions from Operating
Partnerships 607
182
Amortization 4,214
15,370
Share of loss from Operating
Partnerships 1,081,720
965,282
Changes in assets and liabilities
(Decrease) increase in accounts
payable and accrued expenses 494
5,115
Decrease (Increase) in accounts
receivable (14,053)
(238)
Decrease (Increase) in accounts
payable affiliates 172,990
172,995
----------
- ----------
Net cash (used in) provided by
operating activities 26,200
(7,037)
----------
- ----------
Cash flows from investing activities:
Acquisition costs repaid (paid) for
Operating Partnerships acquired or
to acquire -
- -
Capital contributions paid to Operating
Partnerships -
(8,414)
Advances to Operating Partnerships -
- -
Investments -
10,147
----------
- ----------
Net cash (used in) provided by
investing activities -
1,733
----------
- ----------
21
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 16
- -----------------------
1998 1997
----
- -----
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 26,200
(5,304)
Cash and cash equivalents, beginning 199,558
1,183,424
----------
- ----------
Cash and cash equivalents, ending $ 225,758 $
1,178,120
==========
==========
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.
22
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 17
- -------------------------
1998
1997
----
- ----
Cash flows from operating activities:
Net loss $(1,120,577) $
(691,571)
Adjustments
Distributions from Operating
Partnerships 7,776
63
Amortization 21,595
13,820
Share of loss from Operating
Partnerships 957,936
525,396
Changes in assets and liabilities
(Decrease) increase in accounts
payable and accrued expenses -
- -
Decrease (Increase) in accounts
receivable (32,983)
- -
Decrease (Increase) in accounts
payable affiliates 177,418
148,225
----------
- ----------
Net cash (used in) provided by
operating activities 11,165
(4,067)
----------
- ----------
Cash flows from investing activities:
Acquisition costs repaid (paid) for
Operating Partnerships acquired or
to acquire -
- -
Capital contributions paid to Operating
Partnerships -
(4,000)
Advances to Operating Partnerships -
- -
Investments -
- -
----------
- ----------
Net cash (used in) provided by
investing activates -
(4,000)
----------
- ----------
23
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 17
- ------------------------
1998 1997
---- ----
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 11,165
(8,067)
Cash and cash equivalents, beginning 388,024
539,185
----------
- ----------
Cash and cash equivalents, ending $ 399,189 $
531,118
==========
==========
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.
24
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 18
- -------------------------
1998
1997
----
- ----
Cash flows from operating activities:
Net loss $ (602,757) $
(725,222)
Adjustments
Distributions from Operating
Partnerships -
- -
Amortization 10,542
10,542
Share of loss from Operating
Partnerships 506,989
615,610
Changes in assets and liabilities
(Decrease) increase in accounts
payable and accrued expenses 294
1
Decrease (Increase) in accounts
receivable (18,118)
(1,484)
Decrease (Increase) in accounts
payable affiliates 95,488
95,487
----------
- ----------
Net cash (used in) provided by
operating activities (7,562)
(5,066)
----------
- ----------
Cash flows from investing activities:
Acquisition costs repaid (paid) for
Operating Partnerships acquired or
to acquire -
- -
Capital contributions paid to Operating
Partnerships (154,714)
(38,317)
Advances to Operating Partnerships -
- -
Investments 125,000
6,216
----------
- ----------
Net cash (used in) provided by
investing activities (29,714)
(32,101)
----------
- ----------
25
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 18
- -----------------------
1998 1997
---- ----
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 (37,276)
(37,167)
Cash and cash equivalents, beginning 301,444
766,409
---------
- ----------
Cash and cash equivalents, ending $ 264,168 $
729,242
=========
==========
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 19
- -------------------------
1998
1997
----
- ----
Cash flows from operating activities:
Net loss $ (871,969) $
(685,772)
Adjustments
Distributions from Operating
Partnerships -
- -
Amortization 13,045
13,045
Share of loss from Operating
Partnerships 764,170
676,877
Changes in assets and liabilities
(Decrease) increase in accounts
payable and accrued expenses 2,000
(1)
Decrease (Increase) in accounts
receivable (11,090)
(2,243)
Decrease (Increase) in accounts
payable affiliates 102,837
102,837
----------
- ----------
Net cash (used in) provided by
operating activities (1,007)
104,743
----------
- ----------
Cash flows from investing activities:
Acquisition costs repaid (paid) for
Operating Partnerships acquired or
to acquire -
- -
Capital contributions paid to Operating
Partnerships -
(147,623)
Advances to Operating Partnerships -
- -
Investments (6,260)
33,499
----------
- ----------
Net cash (used in) provided by
investing activities (6,260)
(114,124)
----------
- ---------
27
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 19
- ------------------------
1998 1997
---- ----
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 (7,267)
(9,381)
Cash and cash equivalents, beginning 607,779
1,189,843
----------
- ----------
Cash and cash equivalents, ending $ 600,512 $
1,180,462
==========
==========
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.
NOTES TO FINANCIAL STATEMENTS
June 30, 1998
(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.
29
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1998
(Unaudited)
NOTE B - ACCOUNTING AND FINANCIAL REPORTING POLICIES
The condensed financial statements included herein as of December
31, 1997
and for the three and nine 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.
The amortized cost of securities available for sale as of June
30, 1998
by contractual maturity are as follows:
Amortized
Cost
-----------
Due in one year or less $2,852,127
Due after one year -
---------
Total $2,852,127
=========
The fair market value of the securities is $2,852,127.
30
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1998
(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,
1998 and 1997 the Fund has accumulated organization amortization
totaling
$894,093 and $752,527 respectively. The breakdown of accumulated
organization
amortization within the Fund as of June 30, 1998 and 1997 is as
follows:
1998 1997
---- ----
Series 15 $167,077 $167,077
Series 16 227,909 194,437
Series 17 205,016 165,287
Series 18 139,212 108,458
Series 19 154,879 117,268
------- -------
$894,093 $752,527
======= =======
On July 1, 1995, the Fund began amortizing unallocated
acquisition costs over
330 months from April 1, 1995. As of June 30, 1998 the Fund has
accumulated unallocated acquisition amortization totaling
$237,199. The
breakdown of accumulated unallocated acquisition amortization
within the fund
as of June 30, 1998 for Series 15, Series 16, Series 17, Series
18, and
Series 19 is $34,263, $54,770, $66,216, $37,224 and $44,726,
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, 1998 all series had completed payment of all
acquisition
fees due to Boston Capital Partners, Inc.
31
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1998
(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, 1998 and 1997 are as follows:
1998 1997
---- ----
Series 15 $137,013 $137,013
Series 16 172,995 172,995
Series 17 141,342 148,224
Series 18 95,487 95,487
Series 19 102,837 102,837
------- -------
$649,674 $656,556
======= =======
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS
At June 30, 1998 and 1997, 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, 1998
and 1997 is as follows:
1998 1997
---- ----
Series 15 68 68
Series 16 64 64
Series 17 49 49
Series 18 34 34
Series 19 26 26
--- ---
241 241
=== ===
32
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1998
(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, 1998 and 1997
are as
follows:
1998 1997
---- ----
Series 15 $ 32,922 $ 34,528
Series 16 145,311 146,817
Series 17 1,367,195 1,840,259
Series 18 562,921 717,635
Series 19 463,000 684,180
--------- ----------
$2,571,349 $ 3,423,419
========= ==========
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, 1998.
33
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1998
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 15
- ---------------------------
1998 1997
---- ----
Revenues
Rental $ 2,361,861 $
2,308,177
Interest and other 108,691
91,331
---------
- ---------
2,470,552
2,399,508
---------
- ---------
Expenses
Interest 716,760
725,350
Depreciation and amortization 929,837
945,223
Operating expenses 1,510,079
1,543,974
---------
- ---------
3,156,676
3,214,547
---------
- ---------
NET LOSS $ (686,124) $
(815,039)
=========
=========
Net loss allocated to Boston
Capital Tax Credit Fund
III L.P. $ (598,423) $
(749,269)
=========
=========
Net loss allocated to other
partners $ (6,861) $
(8,150)
=========
=========
Net loss suspended $ (80,834) $
(57,620)
=========
=========
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.
34
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1998
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 16
- --------------------------
1998 1997
---- ----
Revenues
Rental $ 2,967,061 $
3,136,950
Interest and other 233,688
243,004
----------
- ----------
3,200,749
3,379,954
----------
- ----------
Expenses
Interest 1,030,920
1,255,106
Depreciation and amortization 1,159,007
1,101,563
Operating expenses 2,123,215
1,998,317
----------
- ----------
4,313,142
4,354,986
----------
- ----------
NET LOSS $(1,112,393) $
(975,032)
==========
==========
Net loss allocated to Boston
Capital Tax Credit Fund
III L.P. $(1,081,720) $
(965,282)
==========
==========
Net loss allocated to other
partners $ (30,673) $
(9,750)
==========
==========
35
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1998
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three Months ended March 31,
(Unaudited)
Series 17
- --------------------------
1998 1997
Revenues ---- ----
Rental $ 2,610,299 $
3,379,339
Interest and other 163,805
123,355
----------
- ---------
2,774,104
3,502,694
----------
- ---------
Expenses
Interest 1,032,783
1,180,312
Depreciation and amortization 1,132,381
1,008,431
Operating expenses 1,576,552
1,844,653
----------
- ---------
3,741,716
4,033,396
----------
- ---------
NET LOSS $ (967,612) $
(530,702)
==========
=========
Net loss allocated to Boston
Capital Tax Credit Fund
III L.P. $ (957,936) $
(525,396)
==========
=========
Net loss allocated to other
partners $ (9,676) $
(5,306)
==========
=========
36
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1998
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 18
- ----------------------------
1998 1997
Revenues ---- ----
Rental $ 1,526,479
$1,518,521
Interest and other 57,354
70,593
---------
- ---------
1,583,833
1,589,114
---------
- ---------
Expenses
Interest 549,159
564,891
Depreciation and amortization 681,994
727,004
Operating expenses 877,378
919,048
---------
- ---------
2,108,531
2,210,943
---------
- ---------
NET LOSS $ (524,698) $
(621,829)
=========
=========
Net loss allocated to Boston
Capital Tax Credit Fund
III L.P. $ (506,989) $
(615,610)
=========
=========
Net loss allocated to other
partners $ (5,247) $
(6,219)
=========
=========
Net loss suspended $ (12,462) $
- -
=========
=========
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.
37
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1998
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 19
- --------------------------
1998 1997
Revenues ---- ----
Rental $ 2,172,136 $
2,168,507
Interest and other 59,513
65,317
---------
- ---------
2,231,649
2,233,824
---------
- ---------
Expenses
Interest 881,904
937,920
Depreciation and amortization 984,268
725,461
Operating expenses 1,137,366
1,254,158
---------
- ---------
3,003,538
2,917,539
---------
- ---------
NET LOSS $ (771,889) $
(683,715)
=========
=========
Net loss allocated to Boston
Capital Tax Credit Fund
III L.P. $ (764,170) $
(676,877)
=========
=========
Net loss allocated to other
partners $ (7,719) $
(6,838)
=========
=========
38
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30,1998
(Unaudited)
NOTE D - INVESTMENT IN OPERATING PARTNERSHIPS-CONTINUED
When comparing the results of operations from the operating
partnerships for
the three months ended March 31, 1998 and March 31, 1997 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, 1999
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.
39
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, 1998, none of Series 15 net
offering proceeds had been used to pay capital contributions.
Series 15
net offering proceeds in the amount of $32,922 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, 1998.
(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.
40
During the quarter ended June 30, 1998, none of Series 16 net
offering proceeds had been used to pay capital contributions.
Series 16 net
offering proceeds in the amount of $145,311 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, 1998.
(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, 1998, none of Series 17 net
offering
proceeds had been used to pay capital contributions. Series 17
net offering
proceeds in the amount of $399,189 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, 1998.
(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, 1998, $154,714 of Series 18 net
offering
proceeds had been used to pay capital contributions. Series 18
net offering
proceeds in the amount of $264,168 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, 1998.
(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, 1998, none of Series 19 net
offering proceeds had been used to pay capital contributions.
Series 19 net
offering proceeds in the amount of $463,000 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, 1998.
Results of Operations
- ---------------------
As of June 30, 1998 and 1997 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
41
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
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, 1998. 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, 1998 for Series 15, Series 16, Series 17, Series 18 and
Series
19 were $116,938, $136,688, $118,167, $88,707, and $100,337
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, 1998 and 1997, the average qualified
occupancy for the series was 100% for both years. The series had
a
total of 68 properties at June 30, 1998, 68 of which were at 100%
qualified occupancy.
For the three months being reported Series 15 reflects a net loss
from
Operating Partnerships of $686,124. When adjusted for
depreciation,
which is a non-cash item, the Operating Partnerships reflect
positive
operations of $243,713. This is an interim period estimate; it
is not
necessarily indicative of the final year end results.
42
The physical occupancy of California Investors VII Limited
Partnership (Summit Ridge Apartments/Longhorn Pavillion) as of
June 30, 1998 was 92%. The
property had previously suffered operational difficulties due to
more expensive debt and high expenses. All indications are that,
despite a difficult marketplace, the property is competing
effectively. As a result of a diligent effort to control costs,
the property has generated a positive operational cash flow year-
to-date. The Operating General Partner is optimistic about the
continued positive prospects for this property.
During the first quarter of 1998 occupancy for Hidden Cove
Apartments
Hidden Cove) began to drop slightly and accounts receivable from
tenants
started to rise. A resulting site visit to the property revealed
poor
maintenance upkeep by the management company. As a result, the
Operating General Partner is in the process of hiring a new
management company.
The Operating General Partner of School Street I Limited
Partnership (School Street Apts. I) pledged his general
partnership interest in the
Operating Partnership as collateral for another loan. Since this
was a violation of the terms of the partnership agreement, the
Operating General Partner was removed and replaced during 1997.
In the transition, occupancies suffered and as a result, a
leasing agent was hired by the new Operating General Partner to
rent the vacant units. Occupancy was at approximately 83% in
August 1998. It is anticipated that all units will be fully
leased by the end of the third quarter. In addition, the
Operating General Partner hired a new managing agent effective
June 1998, and a refinancing application has been
filed with the state housing agency, in hopes to further improve
operations.
Any capital needs are anticipated to be addressed as part of the
refinancing package.
(Series 16) As of June 30, 1998 and 1997, the average qualified
occupancy for the series was 99.6% for both years. The series had
a
total of 64 properties at June 30, 1998. 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 $1,112,393. When adjusted for
depreciation, which
is a non-cash item, the Operating Partnerships reflect positive
operations of
$46,614. 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
(Mariner's Pointe Apartment and Mariners's Pointe Apartments II)
pledged his general partner interest to an unaffiliated lending
institution in violation of the partnership agreement. As this
was a violation of the terms of the partnership agreement, the
Operating General Partner and management agent were removed and
replaced during 1997. The property operated with deficits during
1997 due to vacancies, uncollected rents and high operating
expenses. The new management company has been focusing on
reducing the property's operating expenses and reducing
vacancies.
43
As a result the property is operating above break-even in the
second quarter of 1998 and average occupancy is at 99%. In
addition the Operating General.
Partner will be filing refinancing applications with the lender
by year-end to further improve operations
(Series 17) As of June 30, 1998 and 1997, the average qualified
occupancy for the series was 99.7% for both years. The series
had a
total of 49 properties at June 30, 1998. 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 $967,612. When adjusted for
depreciation, which,
is a non-cash item, the Operating Partnerships reflect positive
operations of $164,769. This is an interim period estimate; it is
not necessarily indicative of the final year end results.
Annadale Housing Partners (Annadale Apartments) has reported
net losses due to operational issues associated with the
property. Although occupancy has stabilized, economic factors
relevant to the marketplace prevent the necessary rental income
to be generated to cover the operational expenses. Occupancy is
at 92% as of June 30, 1998.
The physical occupancy of California Investors VII Limited
Partnership (Summit Ridge Apartments/Longhorn Pavillion) as of
June 30, 1998 was 92%. The property had previously suffered
operational difficulties due to more expensive debt and high
expenses. All indications are that, despite a difficult
marketplace, the property is competing effectively. As a result
of a diligent effort to control costs, the property has generated
a positive operational cash flow year-to-date. The Operating
General Partner is optimistic about the continued positive
prospects for this property.
The property owned by California Investors VI L.P. (Orchard
Park) continues to suffer from physical occupancy issues.
Occupancy at June 30, 1998 was at 86%. The occupancy problem
appears to be related to the marketplace, but the management
agent has replaced the site manager in hopes that changes in
personnel will stimulate new interest in the property.
Management continues to be aggressive with marketing the property
and conducting active outreach. The Operating General Partner,
with the assistance of a consultant, is developing a new
marketing campaign, which will be implemented during the 3rd or
4th quarter of 1998. The curb appeal of the property has
improved with capital repairs completed at the property in 1997.
(Series 18) As of June 30, 1998 and 1997 the average qualified
occupancy
for the series was 99.9% and 100%, respectively. The series had
a total of 34
properties at June 30, 1998, out of the total 33 had 100%
qualified occupancy.
44
For the three months being reported Series 18 reflects a net loss
from
Operating Partnerships of $524,698. When adjusted for
depreciation, which
is a non-cash item, the Operating Partnerships reflect positive
operations of
$157,296. This is an interim period estimate; it is not
necessarily
indicative of the final year end results.
In August 1996 the Investment General Partner was notified
that Virginia Avenue Affordable Limited Partnership (Kristine
Apartments) was named as defendant in a land encroachment
complaint. Initial efforts to settle the complaint were
unsuccessful, but recently a judgement was issued by which the
operating partnership would receive an appropriate quit claim
deed and other title related documents confirming the
partnership's interest in the disputed property.
(Series 19) As of June 30, 1998 and 1997 the average qualified
occupancy
for the series was 100% for both years. The series had a total
of 26
properties at June 30, 1998, all of which were at 100% qualified
occupancy.
For the three months being reported Series 19 reflects a net loss
from
Operating Partnerships of $771,888. When adjusted for
depreciation, which
is a non-cash item, the Operating Partnerships reflect positive
operations of
$212,380. This is an interim period estimate; it is not
necessarily indicative
of the final year end results.
45
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
46
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, 1998 By: /s/ John P. Manning
-------------------
John P. Manning,
Partner & Principal
Financial
Officer
47
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