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 September 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 September 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
September 30,
March 31,
1998
1998
(Unaudited)
(Audited)
ASSETS ------------
- ------------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $113,885,680
$121,032,270
OTHER ASSETS
Cash and cash equivalents 1,774,081
1,653,522
Investments 2,623,928
2,970,867
Notes receivable 2,056,333
2,056,333
Deferred acquisition costs,
net of accumulated amortization (Note B) 1,631,141
1,681,137
Organization costs, net of
accumulated amortization (Note B) 22,371
67,358
Other assets 2,100,209
1,728,300
-----------
- -----------
$124,093,743
$131,189,787
===========
===========
LIABILITIES
Accounts payable & accrued
expenses (Note C) $ 52,518 $
4,553
Accounts payable affiliates 10,256,063
8,703,412
Capital contributions payable (Note D) 2,569,849
2,726,063
-----------
- -----------
12,878,430
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 111,992,820
120,447,861
General Partner (777,507)
(692,102)
-----------
- -----------
111,215,313
119,755,759
-----------
- -----------
$124,093,743
$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
- ----------------------------
September 30,
March 31,
1998
1998
(Unaudited)
(Audited)
ASSETS -----------
- ---------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $15,107,081
$16,246,406
OTHER ASSETS
Cash and cash equivalents 102,191
156,717
Investments 128,028
125,000
Notes receivable 110,000
110,000
Deferred acquisition costs,
net of accumulated amortization (Note B) 252,280
257,535
Organization costs, net of
accumulated amortization (Note B) -
- -
Other assets 659,777
473,086
----------
- ----------
$16,359,357
$17,368,744
==========
==========
LIABILITIES
Accounts payable and accrued
expenses (Note C) $ 1,467 $
1,145
Accounts payable affiliates 2,802,710
2,360,745
Capital contributions payable (Note D) 32,922
32,922
----------
- ----------
2,837,099
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 13,719,707
15,156,864
General Partner (197,449)
(182,932)
----------
- ----------
13,522,258
14,973,932
----------
- ----------
$16,359,357
$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
- ----------------------------
September 30,
March 31,
1998
1998
(Unaudited)
(Audited)
ASSETS -----------
- ---------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $28,951,221
$30,777,843
OTHER ASSETS
Cash and cash equivalents 325,934
199,558
Investments 879,467
1,000,758
Notes receivable -
- -
Deferred acquisition costs
net of accumulated amortization (Note B) 404,446
412,871
Organization costs, net of
accumulated amortization (Note B) -
- -
Other assets 92,372
72,210
----------
- ----------
$30,653,440
$32,463,240
==========
==========
LIABILITIES
Accounts payable & accrued
expenses (Note C) $ 457 $
- -
Accounts payable affiliates 2,581,076
2,235,091
Capital contributions payable (Note D) 143,811
145,311
----------
- ----------
2,725,344
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 September 30, 1998 28,115,423
30,248,618
General Partner (187,327)
(165,780)
Unrealized gain (loss) on securities
available for sale, net -
- -
----------
- ----------
27,928,096
30,082,838
----------
- ----------
$30,653,440
$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
- ----------------------------
September 30,
March 31,
1998
1998
(Unaudited)
(Audited)
ASSETS -----------
- ---------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $26,094,462
$27,762,778
OTHER ASSETS
Cash and cash equivalents 370,237
388,024
Investments -
- -
Notes receivable 1,409,982
1,409,982
Deferred acquisition costs
net of accumulated amortization (Note B) 349,872
373,197
Organization costs, net of
accumulated amortization (Note B) -
10,804
Other assets 1,252,763
1,121,814
----------
- ----------
$29,477,316
$31,066,599
==========
==========
LIABILITIES
Accounts payable & accrued
expenses (Note C) $ 46,596 $
- -
Accounts payable affiliates 2,527,359
2,159,306
Capital contributions payable (Note D) 1,367,195
1,367,195
----------
- ----------
3,941,150
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 25,710,484
27,694,376
General Partner (174,318)
(154,278)
----------
- ----------
25,536,166
27,540,098
----------
- ----------
$29,477,316
$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
- ----------------------------
September 30,
March 31,
1998
1998
(Unaudited)
(Audited)
ASSETS ------------
- ----------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $19,874,634
$20,921,603
OTHER ASSETS
Cash and cash equivalents 263,064
301,444
Investments 354,324
474,000
Notes receivable 536,351
536,351
Deferred acquisition costs,
new of accumulated amortization (Note B) 274,863
280,569
Organization costs, net of
accumulated amortization (Note B) 3,395
18,772
Other assets 62,292
44,622
----------
- ----------
$21,368,923
$22,577,361
==========
==========
LIABILITIES
Accounts payable & accrued
expenses (Note C) $ 272 $
- -
Accounts payable affiliates 1,239,015
1,048,041
Capital contributions payable (Note D) 562,921
717,635
----------
- ----------
1,802,208
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 September 30, 1998 19,681,275
20,913,795
General Partner (114,560)
(102,110)
----------
- ----------
19,566,715
20,811,685
----------
- ----------
$21,368,923
$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
- ----------------------------
September 30, March 31,
1998
1998
(Unaudited)
(Audited)
ASSETS ------------
- ----------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $23,858,282
$25,323,640
OTHER ASSETS
Cash and cash equivalents 712,655
607,779
Investments 1,262,109
1,371,109
Notes receivables -
- -
Deferred acquisition costs,
net of accumulated amortization (Note B) 349,680
356,965
Organization costs, net of
accumulated amortization (Note B) 18,976
37,782
Other assets 33,005
16,568
----------
- ----------
$26,234,707
$27,713,843
==========
==========
LIABILITIES
Accounts payable & accrued
expenses (Note C) $ 3,726 $
3,408
Accounts payable affiliates 1,105,903
900,229
Capital contributions payable (Note D) 463,000
463,000
----------
- ----------
1,572,629
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 24,765,931
26,434,208
General Partner (103,853)
(87,002)
----------
- ----------
24,662,078
26,347,206
----------
- ----------
$26,234,707
$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 September 30,
(Unaudited)
1998 1997
---- ----
Income
Interest income $ 52,498 $ 51,860
---------- ----------
Share of loss from Operating
Partnerships (Note D) (3,221,843)
(2,953,785)
---------- ----------
Expenses
Professional fees 117,330 181,326
Fund management fee (Note C) 613,131 537,585
Amortization 42,963 55,405
General and administrative expenses 41,490 71,869
---------- ----------
814,914 846,185
---------- ----------
NET LOSS $(3,984,259)
$(3,748,110)
========== ==========
Net loss allocated to limited
partners $(3,944,414)
$(3,710,629)
========== ==========
Net loss allocated general
partner $ (39,845) $
(37,481)
========== ==========
Net loss per BAC $ (.09) $
(.85)
========== ==========
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 September 30,
(Unaudited)
SERIES 15
- -----------------------
1998
1997
----
- ----
Income
Interest income $ 2,344 $
630
--------
- --------
Share of loss from Operating
Partnerships (540,027)
(662,215)
--------
- --------
Expenses
Professional fees 30,642
46,746
Fund management fee (Note C) 131,763
110,595
Amortization 2,628
2,628
General and administrative expenses 7,845
12,262
--------
- --------
172,878
172,231
--------
- --------
NET LOSS $(710,561)
$(833,816)
========
========
Net loss allocated to limited
partners $(703,454)
$(825,478)
========
========
Net loss allocated to general
partner $ (7,107) $
(8,338)
========
========
Net loss per BAC $ (.18) $
(.21)
========
========
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 September 30,
(Unaudited)
SERIES 16
- ------------------------
1998
1997
----
- ----
Income
Interest income $ 16,303 $
15,685
--------
- --------
Share of loss from Operating
Partnerships (744,267)
(595,713)
--------
- --------
Expenses
Professional fees 30,244
47,673
Fund management fee (Note C) 162,005
152,486
Amortization 4,213
15,370
General and administrative expenses 10,542
18,349
--------
- --------
207,005
233,878
--------
- --------
NET LOSS $(934,969)
$(813,906)
========
========
Net loss allocated to limited
partners $(925,619)
$(805,767)
========
========
Net loss allocated to general
partner $ (9,350) $
(8,139)
========
========
Net loss per BAC $ (.17) $
(.14)
========
========
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 September 30,
(Unaudited)
SERIES 17
- ------------------------
1998
1997
----
- ----
Income
Interest income $ 1,809 $
3,594
--------
- --------
Share of loss from Operating
Partnerships (702,557)
(718,001)
--------
- --------
Expenses
Professional fees 22,890
33,229
Fund management fee (Note C) 138,342
114,981
Amortization 12,534
13,820
General and administrative expenses 8,822
14,416
--------
- --------
182,588
176,446
--------
- --------
NET LOSS $(883,356)
$(890,853)
========
========
Net loss allocated to limited
partners $(874,522)
$(881,944)
========
========
Net loss allocated to general
partner $ (8,834) $
(8,909)
========
========
Net loss per BAC $ (.18) $
(.18)
========
========
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 September 30,
(Unaudited)
SERIES 18
- ----------------------
1998
1997
----
- ----
Income
Interest income $ 7,280 $
8,310
--------
- --------
Share of loss from Operating
Partnerships (533,849)
(519,526)
--------
- --------
Expenses
Professional fees 18,052
28,026
Fund management fee (Note C) 80,434
78,936
Amortization 10,542
10,542
General and administrative expenses 6,617
11,764
--------
- --------
115,645
129,268
--------
- --------
NET LOSS $(642,214)
$(640,484)
========
========
Net loss allocated to limited
partners $(635,792)
$(634,079)
========
========
Net loss allocated to general
partner $ (6,422) $
(6,405)
========
========
Net loss per BAC $ (.17) $
(.18)
========
========
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 September 30,
(Unaudited)
SERIES 19
- ----------------------
1998
1997
----
- ----
Income
Interest income $ 24,762 $
23,641
--------
- --------
Share of loss from Operating
Partnerships (701,123)
(458,330)
--------
- --------
Expenses
Professional fees 15,502
25,652
Fund management fee (Note C) 100,587
80,587
Amortization 13,045
13,045 General and administrative expenses 7,664
15,078
--------
- --------
136,798
134,362
--------
- --------
NET LOSS $(813,159)
$(569,051)
========
========
Net loss allocated to limited
partners $(805,027)
$(563,361)
========
========
Net loss allocated to general
partner $ (8,132) $
(5,690)
========
========
Net loss per BAC $ (.20) $
(.14)
========
========
The accompanying notes are an integral part of these
statements.
12
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF OPERATIONS
Six Months Ended September 30,
(Unaudited)
1998 1997
---- ----
Income
Interest income $ 129,246 $ 91,928
---------- ----------
Share of loss from Operating
Partnerships (Note D) (7,131,081)
(6,486,219)
---------- ----------
Expenses
Professional fees 176,679 197,664
Fund management fee (Note C) 1,173,969 1,065,349
Amortization 94,985 110,810
General and administrative expenses 92,978 137,732
---------- ----------
1,538,611 1,511,555
---------- ----------
NET LOSS $(8,540,446)
$(7,905,846)
========== ==========
Net loss allocated to limited
, , partners $(8,455,041)
$(7,826,789)
========== ==========
Net loss allocated general
partner $ (85,405) $
(79,057)
========== ==========
Net loss per BAC $ (1.91) $
(1.78)
========== ==========
The accompanying notes are an integral part of these
statements.
13
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF OPERATIONS
Six Months Ended September 30,
(Unaudited)
SERIES 15
- -----------------------
1998
1997
----
- ----
Income
Interest income $ 4,976 $
2,223
---------- --
- --------
Share of loss from Operating
Partnerships (1,138,450)
(1,411,484)
---------- --
- --------
Expenses
Professional fees 46,307
49,708
Fund management fee (Note C) 248,701
235,983
Amortization 5,256
5,256
General and administrative expenses 17,936
23,036
---------- --
- --------
318,200
313,983
---------- --
- --------
NET LOSS $(1,451,674)
$(1,723,244)
==========
==========
Net loss allocated to limited
partners $(1,437,157)
$(1,706,012)
==========
==========
Net loss allocated to general
partner $ (14,517) $
(17,232)
==========
==========
Net loss per BAC $ (.37) $
(.44)
==========
==========
The accompanying notes are an integral part of these
statements.
14
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF OPERATIONS
Six Months Ended September 30,
(Unaudited)
SERIES 16
- ------------------------
1998
1997
----
- ----
Income
Interest income $ 46,053 $
24,547
--------- -
- --------
Share of loss from Operating
Partnerships (1,825,987)
(1,560,995)
---------- --
- --------
Expenses
Professional fees 44,038
55,750
Fund management fee (Note C) 298,694
321,831
Amortization 8,425
30,740
General and administrative expenses 23,651
34,880
---------- --
- --------
374,808
443,201
---------- --
- --------
NET LOSS $(2,154,742)
$(1,979,649)
==========
==========
Net loss allocated to limited
partners $(2,133,195)
$(1,959,853)
==========
==========
Net loss allocated to general
partner $ (21,547) $
(19,796)
==========
==========
Net loss per BAC $ (.39) $
(.36)
==========
==========
The accompanying notes are an integral part of these
statements.
15
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF OPERATIONS
Six Months Ended September 30,
(Unaudited)
SERIES 17
- ------------------------
1998
1997
----
- ----
Income
Interest income $ 3,556 $
7,753
---------- --
- --------
Share of loss from Operating
Partnerships (1,660,513)
(1,243,397)
----------
- ----------
Expenses
Professional fees 35,709
34,967
Fund management fee (Note C) 256,509
256,824
Amortization 34,129
27,639
General and administrative expenses 20,628
27,348
----------
- ----------
346,975
346,778
----------
- ----------
NET LOSS $(2,003,932)
$(1,582,422)
==========
==========
Net loss allocated to limited
partners $(1,983,892)
$(1,566,598)
==========
==========
Net loss allocated to general
partner $ (20,040) $
(15,824)
==========
==========
Net loss per BAC $ (.40) $
(.31)
==========
==========
The accompanying notes are an integral part of these
statements.
16
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF OPERATIONS
Six Months Ended September 30,
(Unaudited)
SERIES 18
- ----------------------
1998
1997
----
- ----
Income
Interest income $ 25,535 $
15,552
---------- --
- --------
Share of loss from Operating
Partnerships (1,040,838)
(1,135,136)
---------- --
- --------
Expenses
Professional fees 26,350
29,565
Fund management fee (Note C) 169,141
173,568
Amortization 21,084
21,084
General and administrative expenses 13,092
21,905
---------- --
- --------
229,667
246,122
---------- --
- --------
NET LOSS $(1,244,970)
$(1,365,706)
==========
==========
Net loss allocated to limited
partners $(1,232,520)
$(1,352,049)
==========
==========
Net loss allocated to general
partner $ (12,450) $
(13,657)
==========
==========
Net loss per BAC $ (.34) $
(.37)
==========
==========
The accompanying notes are an integral part of these
statements.
17
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF OPERATIONS
Six Months Ended September 30,
(Unaudited)
SERIES 19
- ----------------------
1998
1997
----
- ----
Income
Interest income $ 49,126 $
41,853
---------- --
- --------
Share of loss from Operating
Partnerships (1,465,293)
(1,135,207)
---------- --
- --------
Expenses
Professional fees 24,275
27,674
Fund management fee (Note C) 200,924
77,143
Amortization 26,091
26,091 General and administrative expenses 17,671
30,563
---------- --
- --------
268,961
161,471
---------- --
- --------
NET LOSS $(1,685,128)
$(1,254,825)
==========
==========
Net loss allocated to limited
partners $(1,668,277)
$(1,242,277)
==========
==========
Net loss allocated to general
partner $ (16,851) $
(12,548)
==========
==========
Net loss per BAC $ (.41) $
(.30)
==========
==========
The accompanying notes are an integral part of these
statements.
18
Boston Capital Tax Credit Fund III L.P.
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
Six Months Ended September 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) (8,455,041) (85,405) -
(8,540,446)
----------- -------- ---------
- -----------
Partners' capital
(deficit),
June 30, 1998 $111,992,820 $(777,507) $ -
$111,215,313
=========== ======== =========
===========
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
Six Months Ended September 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) (1,437,157) (14,517) -
(1,451,674)
---------- -------- ----------
- ----------
Partners' capital
(deficit),
June 30, 1998 $13,719,707 $ (197,449) $ -
$13,522,258
========== ======== ==========
==========
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) (2,133,195) (21,547) -
(2,154,742)
---------- -------- ---------
- ----------
Partners' capital
(deficit),
September 30, 1998 $28,115,423 $(187,327) $ -
$27,928,096
========== ======== =========
==========
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
Six Months Ended September 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) (1,983,892) (20,040) -
(2,003,932)
---------- -------- ---------
- ----------
Partners' capital
(deficit),
June 30, 1998 $25,710,484 $(174,318) $ -
$25,536,166
========== ======== =========
==========
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) (1,232,520) (12,450) -
(1,244,970)
---------- ------- ---------
- ----------
Partners' capital
(deficit),
June 30, 1998 $19,681,275 $(114,560) $ -
$19,566,715
========== ======= =========
==========
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
Six Months Ended September 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) (1,668,277) (16,851) -
(1,685,128)
---------- -------- ----------
- ----------
Partners' capital
(deficit),
September 30, 1998 $24,765,931 $(103,853) $ -
$24,662,078
========== ======== ==========
==========
The accompanying notes are an integral part of these
statements.
22
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Six Months Ended September 30,
(Unaudited)
1998
1997
----
- ----
Cash flows from operating activities:
Net loss $ (8,540,446) $
(7,905,846)
Adjustments
Distributions from Operating
Partnerships 15,507
17,436
Amortization 94,985
110,810
Share of loss from Operating
Partnerships 7,131,081 6,486,219
Changes in assets and liabilities
(Decrease) Increase in accounts
payable and accrued expenses 47,965
(129)
Decrease (Increase) in accounts
receivable (171,382)
(7,677)
Decrease (Increase) in accounts
payable affiliates 1,552,651
1,299,332
----------
- ----------
Net cash (used in) provided by
operating activities 130,361
145
----------
- ----------
Cash flows from investing activities:
Acquisition costs repaid (paid) for
Operating Partnerships acquired or
to acquire -
- -
Capital contributions paid to
Operating Partnerships (156,214)
(344,925)
Advances to Operating Partnerships (79,236)
- -
Investments 225,648
(142,968)
---------- -
- ---------
Net cash (used in) provided by
investing activities 9,802
(487,893)
----------
- ----------
23
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Six Months Ended September 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 (120,559)
(487,748)
----------
- ----------
Cash and cash equivalents, beginning 1,653,522
3,925,706
----------
- ----------
Cash and cash equivalents, ending $ 1,774,081 $
3,437,958
==========
==========
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.
24
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Six Months Ended September 30,
(Unaudited)
Series 15
- -------------------------
1998
1997
----
- ----
Cash flows from operating activities:
Net loss $(1,451,674)
$(1,723,244)
Adjustments
Distributions from Operating
Partnerships 874
3,017
Amortization 5,256
5,256
Share of loss from Operating
Partnerships 1,138,450
1,411,484
Changes in assets and liabilities
(Decrease) increase in accounts
payable and accrued expenses 322
1
Decrease (Increase) in accounts
receivable (444)
- -
Decrease (Increase) in accounts
payable affiliates 441,965
274,026
-------- -
- --------
Net cash (used in) provided by
operating activities 134,749
(29,460)
-------- -
- --------
Cash flows from investing activities:
Acquisition costs repaid (paid) for
Operating Partnerships acquired or
to acquire -
- -
Capital contributions paid to Operating
Partnerships -
(145,068)
Advances to Operating Partnerships (186,247)
- -
Investments (3,028)
- -
-------- -
- --------
Net cash (used in) provided by
investing activities (189,275)
(145,068)
-------- -
- --------
25
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Six Months Ended September 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 (54,526)
(174,528)
Cash and cash equivalents, beginning 156,717
246,845
--------
- --------
Cash and cash equivalents, ending $ 102,191 $
72,317
========
========
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
Six Months Ended September 30,
(Unaudited)
Series 16
- -------------------------
1998
1997
----
- ----
Cash flows from operating activities:
Net loss $(2,154,742)
$(1,979,649)
Adjustments
Distributions from Operating
Partnerships 635
2,653
Amortization 8,425
30,740
Share of loss from Operating
Partnerships 1,825,987
1,560,995
Changes in assets and liabilities
(Decrease) increase in accounts
payable and accrued expenses 457
- -
Decrease (Increase) in accounts
receivable (20,162)
(786)
Decrease (Increase) in accounts
payable affiliates 345,985
345,995
----------
- ----------
Net cash (used in) provided by
operating activities 6,585
(40,052)
----------
- ----------
Cash flows from investing activities:
Acquisition costs repaid (paid) for
Operating Partnerships acquired or
to acquire -
- -
Capital contributions paid to Operating
Partnerships (1,500)
(9,914)
Advances to Operating Partnerships -
- -
Investments 121,291
(29,262)
----------
- ----------
Net cash (used in) provided by
investing activities 119,791
(39,176)
----------
- ----------
27
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Six Months Ended September 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 126,376
(79,228)
Cash and cash equivalents, beginning 199,558
1,183,424
----------
- ----------
Cash and cash equivalents, ending $ 325,934 $
1,104,196
==========
==========
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
Six Months Ended September 30,
(Unaudited)
Series 17
- -------------------------
1998
1997
----
- ----
Cash flows from operating activities:
Net loss $(2,003,932)
$(1,582,422)
Adjustments
Distributions from Operating
Partnerships 7,803
5,570
Amortization 34,129
27,639
Share of loss from Operating
Partnerships 1,660,513
1,243,397
Changes in assets and liabilities
(Decrease) increase in accounts
payable and accrued expenses 46,596
- -
Decrease (Increase) in accounts
receivable (130,949)
(3,807)
Decrease (Increase) in accounts
payable affiliates 368,053
282,684
----------
- ----------
Net cash (used in) provided by
operating activities (17,787)
(26,939)
----------
- ----------
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)
----------
- ----------
29
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Six Months Ended September 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 (17,787)
(30,939)
Cash and cash equivalents, beginning 388,024
539,185
----------
- ----------
Cash and cash equivalents, ending $ 370,237 $
508,246
==========
==========
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.
30
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Six Months Ended September 30,
(Unaudited)
Series 18
- -------------------------
1998
1997
----
- ----
Cash flows from operating activities:
Net loss $(1,244,970)
$(1,365,706)
Adjustments
Distributions from Operating
Partnerships 6,130
1,132
Amortization 21,084
21,084
Share of loss from Operating
Partnerships 1,040,838
1,135,136
Changes in assets and liabilities
(Decrease) increase in accounts
payable and accrued expenses 272
(129)
Decrease (Increase) in accounts
receivable (3,390)
(367)
Decrease (Increase) in accounts
payable affiliates 190,974
190,953
----------
- ----------
Net cash (used in) provided by
operating activities 10,938
(17,897)
----------
- ----------
Cash flows from investing activities:
Acquisition costs repaid (paid) for
Operating Partnerships acquired or
to acquire -
- -
Capital contributions paid to Operating
Partnerships (154,714)
(38,320)
Advances to Operating Partnerships (14,280)
- -
Investments 119,676
(15.416)
----------
- ----------
Net cash (used in) provided by
investing activities (49,318)
(53,736)
----------
- ----------
31
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Six Months Ended September 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 (38,380)
(71,633)
Cash and cash equivalents, beginning 301,444
766,409
---------
- ----------
Cash and cash equivalents, ending $ 263,064 $
694,776
=========
==========
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
Six Months Ended September 30,
(Unaudited)
Series 19
- -------------------------
1998
1997
----
- ----
Cash flows from operating activities:
Net loss $(1,685,128)
$(1,254,825)
Adjustments
Distributions from Operating
Partnerships 65
5,064
Amortization 26,091
26,091
Share of loss from Operating
Partnerships 1,465,293
1,135,207
Changes in assets and liabilities
(Decrease) increase in accounts
payable and accrued expenses 318
(1)
Decrease (Increase) in accounts
receivable (16,437)
(2,717)
Decrease (Increase) in accounts
payable affiliates 205,674
205,674
----------
- ----------
Net cash (used in) provided by
operating activities (4,124)
114,493
----------
- ----------
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 109,000
(98,290)
----------
- ----------
Net cash (used in) provided by
investing activities 109,000
(245,913)
----------
- ---------
33
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Six Months Ended September 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 104,876
(131,420)
Cash and cash equivalents, beginning 607,779
1,189,843
----------
- ----------
Cash and cash equivalents, ending $ 712,655 $
1,058,423
==========
==========
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
September 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.
35
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 1998
(Unaudited)
NOTE B - ACCOUNTING AND FINANCIAL REPORTING POLICIES
The condensed financial statements included herein as of
September 30, 1998 and for the three and six 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
September 30, 1998 by contractual maturity are as follows:
Amortized
Cost
-----------
Due in one year or less $2,623,928
Due after one year -
---------
Total $2,623,928
=========
The fair market value of the securities is $2,623,928.
36
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 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 September 30, 1998 and 1997 the Fund has accumulated
organization amortization totaling
$912,057 and $790,707 respectively. The breakdown of accumulated
organization
amortization within the Fund as of September 30, 1998 and 1997 is
as follows:
1998 1997
---- ----
Series 15 $167,077 $167,077
Series 16 227,909 205,594
Series 17 205,888 175,219
Series 18 146,901 116,147
Series 19 164,282 126,670
------- -------
$912,057 $790,707
======= =======
On July 1, 1995, the Fund began amortizing unallocated
acquisition costs over 330 months from April 1, 1995. As of
September 30, 1998 the Fund has
accumulated unallocated acquisition amortization totaling
$262,197. The
breakdown of accumulated unallocated acquisition amortization
within the fund
as of September 30, 1998 for Series 15, Series 16, Series 17,
Series 18, and
Series 19 is $36,890, $58,983, $77,878, $40,077 and $48,369,
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 September 30, 1998 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
September 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 September 30, 1998 and 1997 are as follows:
1998 1997
---- ----
Series 15 $137,013 $137,013
Series 16 172,995 172,995
Series 17 141,342 142,488
Series 18 95,487 95,487
Series 19 102,837 102,837
------- -------
$649,674 $650,820
======= =======
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS
At September 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 September 30, 1998 and 1997 is as
follows:
Series 15 68
Series 16 64
Series 17 49
Series 18 34
Series 19 26
---
241
===
38
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 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 September 30, 1998 and
1997 are as follows:
1998 1997
---- ----
Series 15 $ 32,922 $ 34,528
Series 16 143,811 145,311
Series 17 1,367,195 1,840,259
Series 18 562,921 717,635
Series 19 463,000 684,180
--------- ----------
$2,569,849 $ 3,421,913
========= ==========
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 six months ended June 30,
1998.
39
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 1998
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Six months ended June 30,
(Unaudited)
Series 15
- ---------------------------
1998 1997
---- ----
Revenues
Rental $ 4,749,918 $
4,675,328
Interest and other 238,332
218,980
---------
- ---------
4,988,250
4,894,308
---------
- ---------
Expenses
Interest 1,429,297
1,508,149
Depreciation and amortization 1,871,234
2,034,327
Operating expenses 3,025,819
2,871,634
---------
- ---------
6,326,350
6,414,110
---------
- ---------
NET LOSS $(1,338,100)
$(1,519,802)
=========
=========
Net loss allocated to Boston
Capital Tax Credit Fund
III L.P. $(1,138,450)
$(1,411,484)
=========
=========
Net loss allocated to other
partners $ (13,381) $
(15,198)
=========
=========
Net loss suspended $ (186,269) $
(93,120)
=========
=========
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
September 30, 1998
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Six months ended June 30,
(Unaudited)
Series 16
- --------------------------
1998 1997
---- ----
Revenues
Rental $ 6,012,307 $
6,076,922
Interest and other 473,062
492,341
----------
- ----------
6,485,369
6,569,263
----------
- ----------
Expenses
Interest 2,112,658
2,140,469
Depreciation and amortization 2,277,728
2,257,796
Operating expenses 3,968,245
3,747,760
----------
- ----------
8,358,630
8,146,025
----------
- ----------
NET LOSS $(1,873,261)
$(1,576,762)
==========
==========
Net loss allocated to Boston
Capital Tax Credit Fund
III L.P. $(1,825,987)
$(1,560,995)
==========
==========
Net loss allocated to other
partners $ (47,274) $
(15,767)
==========
==========
Net loss suspended $ (28,541) $
- -
==========
==========
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.
41
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 1998
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Six Months ended June 30,
(Unaudited)
Series 17
- --------------------------
1998 1997
Revenues ---- ----
Rental $ 5,385,005 $
6,125,371
Interest and other 305,686
251,581
----------
- ---------
5,690,691
6,376,952
----------
- ---------
Expenses
Interest 2,083,741
2,296,620
Depreciation and amortization 2,104,727
1,993,456
Operating expenses 3,179,509
3,342,831
----------
- ---------
7,367,977
7,632,907
----------
- ---------
NET LOSS $(1,677,286)
$(1,255,955)
==========
=========
Net loss allocated to Boston
Capital Tax Credit Fund
III L.P. $(1,660,513)
$(1,243,397)
==========
=========
Net loss allocated to other
partners $ (16,773) $
(12,558)
==========
=========
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.
42
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 1998
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Six months ended June 30,
(Unaudited)
Series 18
- ----------------------------
1998 1997
Revenues ---- ----
Rental $ 3,062,836
$3,052,863
Interest and other 116,280
151,299
---------
- ---------
3,179,116
3,204,162
---------
- ---------
Expenses
Interest 1,105,161
1,116,578
Depreciation and amortization 1,370,740
1,426,453
Operating expenses 1,788,878
1,807,734
---------
- ---------
4,264,780
4,350,765
---------
- ---------
NET LOSS $(1,085,663)
$(1,146,603)
=========
=========
Net loss allocated to Boston
Capital Tax Credit Fund
III L.P. $(1,040,838)
$(1,135,136)
=========
=========
Net loss allocated to other
partners $ (10,857) $
(11,467)
=========
=========
Net loss suspended $ (33,969) $
- -
=========
=========
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.
43
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 1998
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Six months ended June 30,
(Unaudited)
Series 19
- --------------------------
1998 1997
Revenues ---- ----
Rental $ 4,396,231 $
4,338,435
Interest and other 155,810
148,618
---------
- ---------
4,552,041
4,487,053
---------
- ---------
Expenses
Interest 1,765,501
1,815,802
Depreciation and amortization 1,964,599
1,488,051
Operating expenses 2,302,035
2,329,874
---------
- ---------
6,032,135
5,633,727
---------
- ---------
NET LOSS $(1,480,094)
$(1,146,674)
=========
=========
Net loss allocated to Boston
Capital Tax Credit Fund
III L.P. $(1,465,293)
$(1,135,207)
=========
=========
Net loss allocated to other
partners $ (14,801) $
(11,467)
=========
=========
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.
44
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30,1998
(Unaudited)
NOTE D - INVESTMENT IN OPERATING PARTNERSHIPS-CONTINUED
When comparing the results of operations from the operating
partnerships for the six months ended June 30, 1998 and June 30,
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.
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 September 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 September 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.
46
During the quarter ended September 30, 1998, $1,500 of
Series 16 net
offering proceeds had been used to pay capital contributions.
Series 16 net
offering proceeds in the amount of $143,811 remain to be used by
the Fund to
pay remaining capital contributions to the Operating Partnerships
that Series
16 has invested in as of September 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 September 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
$370,237 remain to be used by the Fund to pay remaining capital
contributions to the Operating Partnerships that Series 17 has
invested in as of September 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 September 30, 1998, none of Series
18 net offering proceeds had been used to pay capital
contributions. Series 18 net offering proceeds in the amount of
$263,064 remain to be used by the Fund to pay remaining capital
contributions to the Operating Partnerships that Series 18 has
invested in as of September 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 September 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 September 30, 1998.
Results of Operations
- ---------------------
As of September 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
47
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 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 September 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
September 30, 1998 for Series 15, Series 16, Series 17, Series 18
and Series
19 were $131,763, $162,005, $138,342, $80,434, and $100,587
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 September 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 September 30, 1998, 68 of which were at
100%
qualified occupancy.
For the six months being reported Series 15 reflects a net
loss from
Operating Partnerships of $1,338,100. When adjusted for
depreciation,
which is a non-cash item, the Operating Partnerships reflect
positive
operations of $533,134. This is an interim period estimate; it
is not
necessarily indicative of the final year end results.
48
The physical occupancy of California Investors VII Limited
Partnership (Summit Ridge Apartments/Longhorn Pavillion) as of
September 30, 1998 was 89%. 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 Operating General Partner of Hidden Cove Apartments
(Hidden Cove) is funding the capital improvements plan
established by the new management company. As of the end of
September occupancy was at 95%. Once the repairs are completed
and operations have stabilized the Operating General Partner will
approach the first mortgage holder with a refinancing plan.
The Operating General Partner and the management company of
School Street I Limited Partnership (School Street Apts. I) were
removed and replaced during 1997. In the transition, occupancies
suffered and as a result, a leasing agent and new management
company were hired by the new Operating General Partner to rent
the vacant units. Due to the unresponsiveness of the management
company, a fourth management company was hired in October 1998.
Occupancy was at approximately 79% in October 1998. It is
anticipated that all units will be fully leased within the next
three months. In addition, 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 September 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 September 30, 1998. Out of the total,
61 had 100%
qualified occupancy.
For the six months being reported Series 16 reflects a net
loss from
Operating Partnerships of $1,873,261. When adjusted for
depreciation, which
is a non-cash item, the Operating Partnerships reflect positive
operations of
$404,467. 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 Operating Partnership Agreement.
As this was a violation of the terms of the agreement, the
Operating General Partner and the management company 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 continues to
focus on reducing the property's operating expenses and reducing
vacancies.
49
However, the property has not been operating profitably in the
second half of 1998. The Operating General Partner will be
monitoring the situation with the management company. 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 September 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 September 30, 1998. Out of the total
48 had 100%
qualified occupancy.
For the six months being reported Series 17 reflects a net
loss from
Operating Partnerships of $1,677,286. When adjusted for
depreciation, which,
is a non-cash item, the Operating Partnerships reflect positive
operations of $427,441. 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. The Operating
General Partner has initiated loan restructure discussions with
the first lender. The Investment General Partner continues to
monitor this situation closely. Occupancy is at 95% as of
September 30, 1998.
The physical occupancy of California Investors VII Limited
Partnership (Summit Ridge Apartments/Longhorn Pavillion) as of
September 30, 1998 was 89%. 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 September 30, 1998 was at 85%. The occupancy
problem appears to be related to the marketplace, but the
management company has replaced the site manager in hopes that
changes in personnel will stimulate new interest in the property.
The management company 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 November 1998. The curb appeal of the property has
improved with capital repairs completed during 1997.
(Series 18) As of September 30, 1998 and 1997 the average
qualified occupancy
for the series was 100%, for both years. The series had a total
of 34
properties at September 30, 1998, out of the total all had 100%
qualified occupancy.
50
For the six months being reported Series 18 reflects a net
loss from
Operating Partnerships of $1,085,663. When adjusted for
depreciation, which
is a non-cash item, the Operating Partnerships reflect positive
operations of
$285,077. 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 Operating
Partnership's interest in the disputed property. The appropriate
title information has been received by the Operating General
Partner and is in the process of execution. The delivery of
these documents will remove any uncertainty as to the
partnership's possession of the land.
(Series 19) As of September 30, 1998 and 1997 the average
qualified occupancy for the series was 99.8%, and 100%,
respectively. The series had a total of 26 properties at
September 30, 1998, 25 of which were at 100% qualified occupancy.
For the six months being reported Series 19 reflects a net
loss from
Operating Partnerships of $1,480,094. When adjusted for
depreciation, which
is a non-cash item, the Operating Partnerships reflect positive
operations of
$484,505. This is an interim period estimate; it is not
necessarily indicative
of the final year end results.
51
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
52
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: November 19, 1998 By: /s/ John P. Manning
-------------------
John P. Manning,
Partner & Principal
Financial
Officer
53
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<ARTICLE> CT
<CIK> 0000879555
<NAME> BOSTON CAPITAL TAX CREDIT FUND III LP
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-START> APR-01-1998
<PERIOD-END> SEP-30-1998
<TOTAL-ASSETS> 124,093,743
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 124,093,743
<TOTAL-REVENUES> 129,246
<INCOME-TAX> 0
<INCOME-CONTINUING> (8,669,692)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (8,540,446)
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